Transport infrastructure development: Ways to unlock growth, integration

Asset owners are not only responsible for basic transportation infrastructure but their asset planning decisions also have an impact on an economy’s longer-term priorities. A broad perspective on infrastructure planning has an impact on fostering economic development, urban planning and affecting livability of cities. Thus, asset owners need to move away from a “single asset view” of traditional transport planning to building efficient and effective integrated multi-modal transport networks. International economic cooperation forums like the B20 and G20-country coalitions have repeatedly made recommendations to countries urging them to broaden their planning perspective and shift their vision from optimising networks to integrating networks.

However, more often than desired, project decisions are driven by subjective considerations like pressure to early project commitment, preference for highly visible projects, the desire to avoid controversies or response to political interests. In addition, the viability assessment of large projects has increasingly been commissioned using short-term and single-asset cost-benefit analysis. This leads to a myopic project pipeline and countering this necessitates some key guiding principles for holistic planning.

We have touched upon the key elements that enable asset owners to undertake a holistic planning approach. 

Mastering asset fundamentals

Transport infrastructure asset owners must embrace an inclusive, life cycle-oriented project prioritisation strategy. Once network plans are created, owners evaluate the potential of assets, based on network objectives, direct welfare impacts, second-order effects like environmental impact, and delivery readiness. For existing assets, owners must leverage efficiency and capacity enhancement planning to augment asset value and curtail unnecessary costs of new construction. In developing assets that improve, or at least maintain, economic and social welfare over the long term, comprehensive multi-criteria asset analysis is crucial. Clear prioritisation basis impact and delivery readiness assessment reveal feasible winners. With the advancement in technology and the onset of big data analytics, it becomes easier to convene rigorous and objective project evaluations with accurate results.

Emphasising network solutions over asset solutions

Across the world, countries, have faced underutilisation or excessive congestion in certain transport modes due to non-integrated asset planning. In India, for example, coastal shipping accounts for close to six per cent of the country’s total domestic freight due to poor hinterland connectivity. An effective transport network relies heavily on efficient road systems integrated with airports, railway stations, ports and logistics hubs. Transport infrastructure asset owners need to adopt an integrated inter-modal plan through a three-pronged analysis, including fundamental, strategic and tactical levers that focus on network design, impact and optimisation respectively. 

Consider the expansion of the Rotterdam port in Netherlands, where capacity was increased three times. Hinterland strategies were integrated into the expansion plan to ensure the trunk roads, railways and waterways connecting to the port had sufficient capacity to handle increased container volumes.

Integrated transport and land-use planning

The desire for quality urban amenities and easy access to transit modes is a major driving factor in investments made by transport infrastructure asset owners. Forward-thinking owners are developing compact establishments, typically within a half mile distance of transit stations called transit-oriented developments (TOD). TOD is an exciting and fast growing trend in creating sustainable and connected communities. These establishments integrate urban mass transit systems with mixed-use spaces (commercial, residential and civic) to increase location efficiency, reduce congestion by boosting multimodal transit ridership and provide an attractive sense of community. In northern Virginia, TODs have added 15 million square feet of commercial space, 20,000 residences and two million square feet of retail.

Transport infrastructure asset owners must build capabilities that conduct robust, data-driven and proactive asset planning and selection processes that explicitly avoid the short-term, dependent, uni-modal bias of the past. Every new development in transport infrastructure needs to have an underpinning consideration for linkage to other modes of transit as well as geographies. Owners should be adept at gearing urban development by strategically integrating transit modes, transport networks and land uses. Holistic planning is the key to unlock future growth and global integration.
Vasanta is principal and Subudhi is partner and leads the infrastructure practice for The Boston Consulting Group 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel