Aecom Review 2020

FOUNDATIONS OF FUTURE GROWTH BUILDING A CONNECTED, SUSTAINABLE IRELAND CREATING INCLUSIVE COMMUNITIES

Taking a holistic approach to the social impact of infrastructure

DELIVERING ON HIGH HOPES

Securing social and economic benefits from large-scale infrastructure

UNLOCKING SMARTER INFRASTRUCTURE

How to get set for smart and unleash its transformational potential

Ireland Annual Review 2020

FOUNDATIONS OF FUTURE GROWTH

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FOREWORD FOUNDATIONS OF FUTURE GROWTH

Welcome to our 2020 Ireland Review. As a company we are committed to unlocking the transformational change and innovation required to move our industry forward across the island of Ireland.

Following on from last year's in ‘Taking the Long View’ of the construction industry, we’ve moved forward to consider how we can help build the foundations of future growth, creating a connected and sustainable legacy for future generations.

As part of this, we surveyed 250 construction professionals across the island of Ireland, along with 58 companies in the US; to gauge industry sentiment on key themes.

Our survey results on the following pages reveal how climate implications and social value are making a greater impact on how businesses plan longer term, along with the rising acknowledgement of how vital good infrastructure is to economic and societal prosperity.

To further conversations on developing infrastructure to suit future needs, we have been fortunate to collaborate with several industry leaders in producing the content of our publication.

Helen Hughes from Transport Infrastructure Ireland joins us to discuss how we move the industry towards a circular approach to waste, while Paul Harper from Northern Ireland Water gives us his insights on how we can all benefit from using assets more efficiently.

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Discussing the impacts of transformative projects across the region, we hear from Dublin Airport’s Vincent Harrison and Niall Gleeson of Irish Water, while Trevor Anderson from Belfast Harbour shares the benefits gained from becoming more digitally-enabled.

As always, in our industry spotlight commentary, we take stock of both Northern Ireland (NI) and the Republic of Ireland’s (RoI) economic and construction performance in 2019, predicting that in 2020, tender price inflation in NI will increase by 3.5% and just over 4% across RoI as a whole.

We hope you enjoy this year’s read, and we look forward to working with you to build these foundations for a connected and sustainable future.

Island of Ireland leadership team

INVESTING IN LONG-TERM GROWTH

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CREATING INCLUSIVE INFRASTRUCTURE

GREENING INFRASTRUCTURE

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EXECUTIVE SUMMARY

CREATING INCLUSIVE INFRASTRUCTURE

INVESTING IN LONG-TERM GROWTH

GREENING INFRASTRUCTURE

32

40

How speaking to industry leading experts has helped us to build a picture about the foundations needed to ensure sustainable and successful future growth on the island.

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How the focus is changing to consider the social impact of infrastructure at every stage, from the initial planning and design, through to the dayto-day operation.

TRANSFORMING INFRASTRUCTURE UNLOCKING SMARTER – DELIVERING ON HIGH HOPES INFRASTRUCTURE The challenges and benefits of delivering on large-scale infrastructure projects, to unlock economic and social opportunities across the island.

How technology can be applied cost effectively, to increase efficiency and automation in infrastructure projects.

Looking at the importance of infrastructure investment in attracting international businesses; and how the region maintains its status as one of Europe's leading destinations for investors.

With climate risk at the forefront of public conscience; how can the infrastructure sector tackle climate change across the island.

INDUSTRY SPOTLIGHT

What trends and performance have we seen in the NI and RoI construction industries in 2019, and what we can expect to see into 2020 and beyond.

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FOUNDATIONS OF FUTURE GROWTH

Executive summary Across the island of Ireland, AECOM has surveyed 250 construction industry professionals and spoken to industry leading experts about the issues facing them today. Our research findings help build a picture about the current state of infrastructure on the island.

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here is currently a step-change underway in recognising the strategic importance of infrastructure across the island - the ambition is to develop the foundations of future growth now, that will build an infrastructure legacy for the future. Coupled with this is an increasing recognition of the role infrastructure plays in boosting the economy and helping communities flourish, whilst meeting emerging challenges such as climate and social impact.

Infrastructure provides the links in people’s everyday lives – from the home they live in, to their daily commute, to the office they work in. Interestingly, when infrastructure works at its best, is when it is hardly noticed; and the priority of infrastructure must always be that it is oriented around the needs of communities and businesses. It is there to make life better for people by connecting them to opportunities and services, enabling them to realise their potential, keeping

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them in touch with friends and family and hopefully contributing to a sustainable level of prosperity.

With a rapidly growing and productive workforce across the island of Ireland, a sideeffect has been capacity constraints arising from the current infrastructure. Building a resilient infrastructure network requires wide stakeholder buy-in from both the private and public sectors simultaneously. New modern office spaces will only succeed if they are tied in alongside affordable housing and public transport to link communities to workplaces, whilst linking the region to the global economy.

We believe that building the foundations for future growth will be an iterative approach that incorporates making smart improvements and upgrades to current legacy infrastructure alongside investing in transformative infrastructure fit for the future.

For tomorrow’s infrastructure to leave behind a legacy of success, its design must not only be functional but also be inclusive, sustainable and connected to meet people’s needs.

Whilst current infrastructure provision is under pressure to deliver future growth and prosperity, this provides significant opportunity for the construction industry to consider how it will deliver infrastructure today that will be fit for future demand too. By considering the legacy of infrastructure from the outset, we believe it builds an inclusive culture ensuring a more holistic approach in how we design and build infrastructure. This involves thinking about the social impact infrastructure projects will deliver and how they will connect in with the pre-existing infrastructure in place.

Furthermore, as the island looks to develop its regions and spread the economic growth outside of the major city centres of Dublin and Belfast, it means considering how to build self-sustaining regional hubs and what all their infrastructure requirements are to facilitate population growth– be that property, water, power, road, rail and increasingly broadband internet connectivity.

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FOUNDATIONS OF FUTURE GROWTH

CREATING INCLUSIVE INFRASTRUCTURE Inclusive infrastructure is about making people’s everyday lives easier. To achieve this, the social impact of infrastructure needs to be considered at every stage from the initial planning and design through to the day-to-day operation. AECOM’s Derval Cummins, European Advisory Leader discusses how the focus has shifted to value a holistic approach in thinking about how infrastructure can best meet the needs of all its customers.

HOW IMPORTANT IS THE CONCEPT OF SOCIAL IMPACT WITHIN YOUR BUSINESS? All 30% 46%

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t its best, infrastructure can change the behaviour and habits of the people it serves; driving a wide social impact.

Infrastructure, and the services it enables, can connect and empower otherwise isolated individuals, improve a country’s overall efficiency and inspire a future generation of innovators.

However, different customers will have different needs and experiences. Creating a positive social impact doesn’t happen by chance; it means incorporating stakeholder concerns into the planning stage and then educating people in the delivery to make sure everyone benefits.

15%

Infrastructure for all – why it matters

The United Nation’s (UN) Sustainable Development Goals (SDGs) are the blueprint to achieve a more sustainable and inclusive future for all. Its ‘2030 Agenda for Sustainable Development’ is underpinned by three pillars of sustainability: social, economic and environmental, and also includes a commitment to “Leave No One Behind”. Project Ireland 2040 closely aligns its ten National Strategic Outcomes (NSO) with the 17 UN SDGs, notably NSO 10: Access to Quality Childcare, Education and Health Services. Integrating social inclusion into the heart of infrastructure design is key to meeting this commitment, which may also mean retrofitting existing infrastructure including transport systems, public spaces and housing to become more inclusive.

All project stakeholders need to ensure processes and expertise are in place so all groups in society are assisted by the infrastructure that is put in place.

With expert spokespeople for the most vulnerable groups in society at the senior decision maker level, public and private stakeholders can use new infrastructure to help meet these objectives.

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Decision-making can be assisted by placing a greater emphasis on valuing the social impacts of transport and other infrastructure within the project appraisal process. This is about understanding the benefits people get from being able to access all the opportunities and services that society and the economy have to offer.

The population needs across the island of Ireland are changing. In RoI ESRI projections indicate the number of people aged over 65 will more than double to 1.3 million people by 2040, making up approximately 23% of the population.

The 2016 Census showed approximately 650,00 people with a disability in Ireland, comprising around 13% of the population.

1 in 5

In NI, 1 in 5 live with a disability and the population has seen a 30% increase in the 85-and-over age group in the last decade.

Similarly, the Northern Ireland Statistics and Research Agency (NISRA) estimates that 1 in 5 live with a disability and the population has seen a 30% increase in the 85-and-over age group in the last decade. These shifting demographics and societal needs place additional strains on public finances for infrastructure such as transport, housing and healthcare. Effective infrastructure planning is a proactive move to help reduce reactive spending in the future.

Within our survey of construction professionals, social impact matters - three quarters of respondents say it is either extremely or very important to their business. Just like our respondents, we understand that to deliver what both the client expects and the customer needs, social implications must be incorporated into project design to consider the impacts on the wider community. We carry out stakeholder engagement throughout our design processes to ensure we understand who we are designing infrastructure for.

5% 4%

Republic of Ireland 27% 43% 6%

19%

5%

For example, when designing hospitals, there is a careful balance to be struck between the practical engineering and clinical design considerations and the need to design buildings which make the experience as comfortable as possible for patients.

As the lead multi-disciplinary designer of multiple projects at the Royal Victoria Hospital site in Belfast, it was vital to undertake a series of rigorous meetings with clinical staff and differing patient groups, including children and young people.

Through engaging with different stakeholder groups, we can better understand accommodation needs, gain unique insights into their experiences and preferences for a hospital environment to aid both patient wellbeing and staffing needs.

Project Ireland 2040’s National Development Plan 2018 – 2027 commits significant investment in public transport to achieve NSO 4: Sustainable Mobility though the BusConnects and DART Expansion programmes, and Metrolink. These will be delivered to the latest standards of accessibility, connecting citizens to more places throughout the Dublin area.

The BusConnects programme will transform the entire bus network in Dublin, it is this extensive coverage that will provide a very significant social impact – making a difference to many people.

Northern Ireland 36% 49% 8% 4% 3%

Extremely important

Moderately important Not at all important

Very important

Slightly important

The BusConnects programme will transform the entire bus network in Dublin

Transport is not all about infrastructure, it merely enables travel to happen whether by bus, train, tram, bicycle or foot. The quality, affordability, safety, security and customer care is all important. This also applies to the operation of roads particularly in a digital future with increasing levels of vehicle automation and connection to the infrastructure..

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FOUNDATIONS OF FUTURE GROWTH

Empowering the customer

CASE STUDY ROYAL VICTORIA HOSPITAL – CHILDREN’S HOSPITAL, BELFAST This new £125m facility at the Royal Victoria Hospital will bring together paediatric facilities from multiple sites to become Northern Ireland’s regional children’s hospital.

The ten-storey building will accommodate 155 inpatients, most of whom will be in single rooms with private ensuites, with ward facilities providing play and parent areas. Ten theatres and an emergency department capable of catering for up to 45,000 patients per annum, 10,000 more than is currently capable.

As one of the tallest hospital buildings in Northern Ireland, the patient bedrooms are strategically placed on the upper floors to capture the sweeping views of the city. This ensures a strong visual focus for visitors and patients internally. Additionally, as part of the health and wellbeing criteria our design maximises the capturing of daylight and creating a connection with the outdoor.

Looking at the building from a child’s perspective and putting the child’s needs at the centre of the project, our team incorporated key features to help ease a child’s time in hospital. Not only will the hospital provide world-class medical facilities to treat more children, it also creates a non-clinical, engaging and healing environment providing huge benefits for communities across the Province.

Infrastructure is meant to last. However, nothing stays the same and while infrastructure is designed for one era, it must continue to function into another. For infrastructure to be futureproofed, its users need to feel engaged and enhanced by it through their daily use. Our survey respondents state the top three benefits of incorporating social impact into their business model are:

1/

IMPROVES THE SUSTAINABILITY OF INFRASTRUCTURE ASSETS

2/

IMPROVES OVERALL PROJECT MANAGEMENT

3/

IMPROVES THE QUALITY OF INFRASTRUCTURE ASSETS

For example, NI Water is currently working with farming stakeholders to see if changes can be made in how farming operations impact the water sources upstream. NI Water has identified if farmers were to change their practice to reduce the pesticides that go into the water stream close to the source, it will reduce pressures on the systems downstream to filter and treat the water.

Building up these stakeholder relationships is key to ensuring infrastructure becomes better understood and valued as an asset that needs to be both protected and preserved by all. It widens the public awareness of how integral infrastructure is and how we use it, despite most often taking it for granted.

By choosing three diverse benefits from across the supply chain, it shows how integral social impact is in the construction sector’s mindset, seeing the benefits to not only project management and delivery, but also in the output itself in better quality and more sustainable results in the long run.

Paul Harper, Director of Asset Delivery at Northern Ireland Water agrees that empowering and educating stakeholders improves infrastructure outcomes for everyone; NI Water’s 2021-2046 strategy aims to take a more holistic, interconnected approach that considers social impact across all processes.

“Looking at it from a source to tap and then a sink to sea we can begin to better appreciate how things connect together. If you touch one part of the system, it trickles right around.”

LOOKING AT IT FROM A SOURCE TO TAP AND THEN A SINK TO SEA WE CAN BEGIN TO BETTER APPRECIATE HOW THINGS CONNECT TOGETHER. IF YOU TOUCH ONE PART OF THE SYSTEM, IT TRICKLES RIGHT AROUND. — PAUL HARPER, DIRECTOR OF ASSET DELIVERY AT NORTHERN IRELAND WATER 8

When infrastructure is so interconnected, small iterative improvements can be combined together to make large scale changes in improving the functionality of the infrastructure for everyone.

This means understanding the full cycle of how infrastructure is being used and by who. By taking a step back and looking at the whole journey, it means infrastructure providers can see where there is potential for different stakeholder groups to change their behaviour to either improve the performance or reduce the strain placed on the infrastructure.

Royal Victoria Hospital, Children's Hospital, Belfast

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FOUNDATIONS OF FUTURE GROWTH

Enfranchising the citizen

New infrastructure projects will always leave a footprint on the communities they are built in.

For those communities, feeling included and invested in the infrastructure surrounding them can be critical for it being viewed as a success and embraced as a local asset.

Better engagement between infrastructure authorities and service providers and the citizen or customer is needed. This will serve two purposes: Firstly, if authorities and service providers understand more about how and why people use infrastructure, they can design services accordingly. Given that infrastructure is often a scarce resource, they can work with customers to see where they could change their behaviour to place less demand on the system.

As Paul describes, a priority for NI Water is reducing the amount of water processed through the system. “As it is a circular system, the aim is to extract less water overall. That comes down to education among the whole population. The less we have to extract, the less we have to pump, the less we have to treat and so forth.”

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Secondly, by integrating lessons about infrastructure into the school curriculum, the trickledown effect of this should help inspire engineers and designers of the future. By building these relationships between the infrastructure sector and education providers, the social impact is generated through a co-sharing of knowledge and experience can help to position infrastructure at the heart of communities.

The social impact of infrastructure – from cradle to grave

AECOM recognises that considering the social impact of projects is only going to grow in importance across the island of Ireland. Engaging with stakeholders is vital in this process to get a full understanding of what their needs from the infrastructure are, and to think of innovative ways that the design can incorporate these.

CASE STUDY RAINWATER GARDEN, CLANDEBOYE PRIMARY SCHOOL At Clandeboye Primary School, AECOM has built a sustainable drainage solution for rainwater to prevent the risk of flooding to the school. The project was delivered in partnership with NI Water and the Department for Infrastructure, Education Authority.

When designing the project, a specific focus was to design something that would be beneficial and educational to the school environment. One part of this was thinking how to use the playground space in a way that would work alongside the children’s play. The design included a storm tank, with flows being released into a shallow stream to create a ‘duck race’ for the children. Whilst this was challenging for AECOM to incorporate into the design, it was one of the project’s biggest successes in impressing the teachers and board of governors.

Samuel Donaldson, Principal Water Engineer leading the design of this scheme states, “having the opportunity to take a challenging flood risk reduction scheme and turn it into an outdoor classroom not only improves the environment but leaves a lasting legacy in educating future generations on the workings of the world around them”.

The project has given the school the opportunity to extend their outdoor learning and increase the students understanding of the wider ecosystem that their school is based in. The main storage area is in two ponds at the bottom of the school campus where children are able to have lessons on nature and pond dipping as well as the area having a directly functional role too for preventing flooding.

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FOUNDATIONS OF FUTURE GROWTH

INVESTING IN LONG-TERM GROWTH The island of Ireland is well renowned for its success in attracting Foreign Direct Investment (FDI). But how can the region maintain its status as one of Europe's leading destinations for investors? Greg Flynn, Head of Project Management and Advisory Services, provides his opinion on the importance of infrastructure investment for attracting international businesses.

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epublic of Ireland (RoI), and especially Dublin, has gained a reputation as a successful, businessfriendly gateway to the EU for inward investors, with access to talented employees and tax incentives. Over 200,000 people in RoI are employed by FDI companies, with this number continuing to grow.

Likewise, Northern Ireland (NI) offers a highly attractive package of financial incentives, recruitment and training, research and development support tailored to the needs of investing companies.

The region benefited from 35 new FDI projects during 2018 mainly in the fintech and cyber security sectors, representing an increase of 25 percent on the previous year, according to the Department for International Trade. .

Growing Inward Investment

To understand the motives behind this growth, we asked US investors why they would consider investing in the island. Four distinct attractions include:

• 16% ENGLISH-SPEAKING REGION

• 14% STABLE GOVERNMENT AND OPEN ECONOMY

• 12% BUSINESS-FRIENDLY REGULATORY REGIME

• 12% OPEN, LIBERAL ECONOMY, INTEGRATED INTO GLOBAL TRADE

Northern Ireland’s Tech Skills Pipeline Belfast is now the world’s number one destination for FinTech development investment projects ranking as the top city in Europe for new FDI software development. Specialising in attracting tech professionals, around 10,000 people are now employed in technology roles within the financial and professional services sector, a quarter of the total workforce for these sectors in Northern Ireland for the likes of Citi, Allstate, Liberty Mutual, First Derivatives, Deloitte and PwC. They are drawn to the city for the potential cost savings it offers, with salaries 40% lower and property costs 65% lower than those offered in London.

Belfast’s technology talent pipeline is futureproofed too, with Queen’s University and Ulster University both specialising in research into cyber security, machine learning and AI.

CASE STUDY LINKEDIN LinkedIn now has a workforce of 1,700 in Dublin, coming from 55 different countries and over half of whom are Irish nationals. AECOM embraced LinkedIn’s vision for Ireland and helped in successfully delivering its impressive EMEA headquarters, which opened in 2017, on time, on budget, and with 100% client satisfaction.

This was a big project, which moved at a fast pace and involved working with LinkedIn teams both in Dublin and San Francisco, so precise planning, constant communication and collaborative technologies were the key to delivering this project on time and on budget. We were involved from site search, due diligence and acquisition; through to designing, costing, procuring and managing the works on site. Building Information Modelling (BIM) was a very big part of the programme.

Embracing technology is indisputable – it enabled us to bring about greater efficiencies to the project and reduce any potential risks.

Following AECOM’s successful project management of the project we were asked to set up a Project Delivery Optimisation (PDO) team to apply this process across LinkedIn’s growing portfolio of global workplaces.

To facilitate this, AECOM’s PDO team developed a bespoke digital ‘Project Management Playbook’. The Playbook, is to be used in the onboarding of external project managers,

design teams and general contractors. It will provide guidance on LinkedIn’s project processes, reporting and document management as well as helping upskill team members to use the latest digital tools for efficient delivery.

Alongside, our collaboration with LinkedIn’s design and build team, we are engaging with the wider Global Workplace Services (GWS) team to help realise their aspirations.

During this early project stage, we worked closely with LinkedIn's sourcing team to develop template documents and define consistent processes that can accelerate procurement and agreement of external partners. Our focus is to drive smarter, faster and better project delivery to build out high-quality LinkedIn offices wherever they’re located.

Our unique offer provides the LinkedIn's design and build team, with centralised support for external teams as well as internal stakeholders.

In addition, our experts are performing ongoing project health checks to ensure the information available — in near real-time —to the GWS team is accurate and up-to-date.

Ultimately, the goal of PDO is to enable successful project execution across LinkedIn’s portfolio, defining processes and best practice from day one to completion.

LinkedIn EMEA HQ, Dublin

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FOUNDATIONS OF FUTURE GROWTH

Future outlook

Whilst the economic prospects for the island look positive, continued growth in international investment is beginning to place a strain on current infrastructure, particularly in large urban centres like Dublin and Belfast. From our survey of construction professionals across the island, a third (33%) do not think there is currently enough infrastructure in place to meet future economic growth.

Addressing these capacity bottlenecks in physical infrastructure is becoming more pressing. Our survey respondents acknowledge that to ensure the island of Ireland sustains its enviable track record, there are many areas of infrastructure development that need to take place. Access to good quality homes, hospitals and schools, high quality transport networks across road, rail and air, office space, affordable energy and fast broadband are all factors in determining not only whether to invest in the island of Ireland but also whether people want to live and thrive in the region. For those that work for foreign owned companies in Ireland, 77% said that infrastructure provision was either extremely or very important in influencing the decision of their company to locate in Ireland.

Only by addressing these infrastructure issues will the island ensure it has the human capital necessary to facilitate further growth. Central to this is being able to design, deliver and innovate across the infrastructure pipeline currently in place – including the financing – to keep the region in a globally competitive position with inward investors.

FROM OUR SURVEY OF CONSTRUCTION PROFESSIONALS ACROSS THE ISLAND, A THIRD (33%) DO NOT THINK THERE IS CURRENTLY ENOUGH INFRASTRUCTURE IN PLACE TO MEET FUTURE ECONOMIC GROWTH. — AECOM

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HOW IMPORTANT WAS INFRASTRUCTURE IN SHAPING YOUR DECISION TO LOCATE IN IRELAND? All

33% 44% 18% 2% 3%

28% 44% 25% 3%

Northern Ireland

40%

44% 3% 3% Extremely important Very important Moderately important Slightly important Not at all important

The metropolitan area of Dublin accounts for 53% of national GDP and 43% of employment. Between 2000 and 2016 it generated 65% of the national GDP growth. However, Dublin is already struggling to meet demand with both housing and healthcare under pressure - rents in Dublin are 8.8% higher than just a year ago —negatively impacting desired international investment.

Likewise, in Northern Ireland, the Belfast City Council area accounts for 18 per cent of the population and 30 per cent of all jobs in Northern Ireland.

However, Project Ireland 2040 is focused on a long-term strategy with key investments to improve the country’s growth and resiliency.

The National Development Plan sets out a proposal to provide €116 billion in funding – for example €8.5 billion will be invested in water and €6.6 billion on national roads by 2027.

Republic of Ireland

10%

Increasing capacity

With an extra one million people expected to reside in Ireland by 2040, key to these plans is increasing accessibility and the movement of people in a sustainable way – to work, education, healthcare and leisure.

Plenty of plans are underway, especially in Dublin as an evergrowing city. For example, MetroLink, an ambitious highcapacity, high-frequency rail line, will serve crucial destinations from Swords, Dublin Airport and the Mater Hospital, to Dublin City

University and Trinity College, and provide faster reliable journey times. BusConnects aims to greatly improve services across the Dublin region, increasing capacity and efficiency with more vehicles and frequency.

Likewise, the DART Expansion Programme will increase the movement of people and better connect with the city’s other transport links, and the Luas Green Line Capacity Enhancement project will also improve capacity, catering for its growing demand, as seen by passengers increases from 30.5 million in 2013 to 41.8 million in 2018.

CASE STUDY DUBLIN AIRPORT As domestic and international travel increases and the growing trend of FDI companies in Ireland, more pressure is on airports to provide greater services. Dublin Airport – Ireland’s busiest - welcomed almost 31.5 million passengers through its doors in 2018, and with major capital investment programme planned, that number is set to grow to over 40 million passengers a year.

This investment will deliver new capacity in the northern end of the airport close to Terminal 1 and the southern apron area close to Terminal 2.

With greater transport links planned to and from the airport, more services and improved airport terminal design, passenger experiences will improve and help boost the economy further.

AECOM has been working with Dublin Airport Authority (daa) on a variety of projects from a new Masterplan for Dublin Airport - looking at everything from surface access and baggage handling through to the environmental inputs – and multidisciplinary design services for the Capacity Development Plan to help the airport operate efficiently and grow sustainably.

Acting as lead consultant and technical advisor to daa, we defined the Capital Investment Programme (CIP) 2020-2024 for the Commission for Aviation Regulation (CAR), comprising recommendations for infrastructure development and providing high level design, construction sequencing and cost planning for key elements of infrastructure including terminals, piers, airfield, surface access, drainage and utilities.

AECOM coordinated all feasibility studies including supervising 10 multi-disciplinary design and cost consulting teams on behalf of daa. We acted as technical coordinator, programme manager, PSDP, programme scheduler and risk manager, capacity planner and central point of contact for daa by managing deliverables across projects and ensuring the production of a technically and commercially sound proposal for submission to CAR. We also served as key stakeholder interface between daa and any internal and external stakeholders coordinating the demands of the airport into the various feasibility studies.

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FOUNDATIONS OF FUTURE GROWTH

Brexit: bounce or block?

There is little doubt that Brexit has and will continue to cause uncertainty and negative economic impacts for the both the Irish and Northern Irish economies, especially in

addressing the cross-border challenges that arise. Our survey respondents outline the top two potential barriers for the island attracting increased inward investment as Brexit related: top was the impact it will have on cross-border

trade within the island of Ireland (23%) and followed by the ongoing political uncertainty that surrounds Brexit (18%).

WHICH OF THE FOLLOWING IS THE BIGGEST POTENTIAL BARRIER TO INCREASED FDI GROWTH? 23%

The Impact of Brexit on cross border trade within island of Ireland

19% 30% 18%

The ongoing political uncertainty surrounding Brexit

15% 22%

13%

The increasing cost of living

18% 6%

EU and OECD tax reforms impacting on Irelands's coporation tax

10% 9% 11%

Lack of good quality and affordable housing

With Brexit there is an opportunity to redesign and consolidate networks across the island. For example, if procurement is done in the UK for EU production, the function could in the future be relocated or centralised within a hub located within Ireland. In addition, where UK production activities exists for EU markets, there may be an incentive to relocate production, or at least the process of finishing goods, to an EU location. Setting up warehousing and distribution networks could also be considered. Distribution may see volume shift from orders going via the UK to the EU, US or other markets, potentially creating an impact on freight rates. Systems may need extensive work to reconfigure information such as raw materials, transport options, supplier, invoicing, duties or VAT. This provides the island with an exciting opportunity to continue to break into global supply chains. Major disruption is happening globally in nearly every industry due to factors like digital transformation and environmental sustainability, this is creating opportunities to supply new types of products and services into global supply chains. But the island must be ready with the relevant infrastructure in place to welcome in these new opportunities.

8% 10% 6% 6%

Lack of connectivity with regional and rural communities

However, Brexit also presents several opportunities across the island. The potential for Northern Ireland to have unique dual access to both the UK and EU markets, could see increased investment aligned against this exclusive characteristic. It remains to be seen whether this will come to fruition or whether having to comply with EU rules and UK rules simply results in higher business costs within Northern Ireland. Until the final conditions have emerged it will be difficult to predict what the economic impact on Northern Ireland or the wider island of Ireland will look like.

9% 1% 6%

Broadband and speed penetration

7% 3%

The capacity constraints with major infrastructure (roads, rail)

6% 5% 9%

Lack of access to high-skilled talent

5% 4% 6%

Failure to address impact of climate change and sustainability

5% 4% 6%

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Total Republic of Ireland Northern Ireland

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FOUNDATIONS OF FUTURE GROWTH

INTERVIEW WITH...

JOHN O’REGAN, DIRECTOR OF AECOM IRELAND IGNAZIO BELLINI, PROJECT MANAGER

AECOM HAS BENEFITTED FROM THE INWARD MIGRATION OF A TALENTED WORKFORCE INTO OUR OFFICES ACROSS THE ISLAND. IGNAZIO BELLINI MOVED TO DUBLIN FROM AECOM’S NEW YORK OFFICE IN JUNE 2018 TO TAKE UP A ROLE AS A PROJECT MANAGER. WE SPOKE TO IGNAZIO AND JOHN O’REGAN, DIRECTOR OF AECOM IRELAND ABOUT WHY DUBLIN IS INCREASINGLY APPEALING AS A CITY FOR ASPIRING TALENT. Why did you decide to move to Ireland?

I: “I came to Ireland a little bit by chance.

However, what I have found and seen is a very lively environment. Dublin is a great city to live in and right now it’s certainty a very positive environment for people working in the construction industry. There are so many new developments happening – people are willing to invest in infrastructure developments so I think this is going to continue to move fast and expand rapidly.”

Why do you think Ireland has been able to expand so quickly?

J: “Our current talent pool is both educated but also flexible and positive. It is a workforce that has adapted very quickly to changes

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over the years through manufacturing, big tech, pharma and we’ve built a very adaptable workforce. So that’s one aspect, the other is kind of the existing confidence that success brings. With such a high level of FDI coming into the country, there are success stories of global companies investing in Ireland; the Amazons, the Googles, the Facebooks, more and more companies are being drawn to Ireland.”

Do you think that Ireland’s economy will continue to expand into the future?

I: “From what I have seen, there’s a lot of investment from the private sector to develop buildings and business centres. I can tell there is a lot going on and many new projects keep appearing under our eyes. I am keen to see the public sector grow infrastructure developments at an increased pace.”

flexible about time and place - we’ve got this program called ‘Freedom to Grow’ which is where people can pretty much work anywhere they want to as long as it works for their client and their team.”

What is key to retaining a talented international workforce at AECOM?

J: “Diversity and inclusion are core to the way AECOM works. We’ve been particularly successful in building a diverse workforce through our international reputation. People know they are coming to a flexible, diverse and inclusive workplace. That extends to people changing careers as they progress through the business. We’ve taken people into administration positions who moved on into professional, technical and leadership roles."

Ignazio Bellini

Do you think that more people will continue to move to work in Ireland?

I: “In terms of workforce, Ireland is really attracting a lot of talent from abroad, so I do not foresee that changing. One of the challenges though is that it might not be evident from the outside all that Ireland has to offer. However, when I moved here action is happening and attention is being given to growth.”

John O’Regan

How does AECOM attract the best talent internationally to its local offices? J: “AECOM is very fortunate

because of the fantastic projects that we have for people to work on, both in Ireland and internationally. We also have a progressive approach to how people work and are very

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FOUNDATIONS OF FUTURE GROWTH

GREENING INFRASTRUCTURE Climate risk has been brought to the forefront of public conscience over recent years as the consequences of manmade climate change become more apparent. AECOM’s Fergus Hayes, Environment Director for Ireland and Robert Spencer, Head of Sustainable Development, discuss how the infrastructure sector across the island of Ireland can help tackle our climate crisis with Helen Hughes, Director of Professional Services at Transport Infrastructure Ireland.

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here is a growing expectation for businesses to do their part in adopting sustainable approaches and reduce carbon footprints. Failure to do so can not only result in financial consequences, but also reputational damage. Within the infrastructure sector, these risks are a game of catch-up. The industry must not only overcome their current sustainability challenges, but also be part of the solution for the future.

Step-change in behaviour to meet climate change targets Industry stakeholders are feeling the importance to collaborate in an environment defined by common

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goals, such as the UN Sustainable Development Goals (SDGs), progressive attitudes and shared knowledge. Only then will the industry play a pivotal role in transforming the island from idle partner to global leader in tackling the climate crisis.

The UK became the first major economy to adopt a binding commitment to achieve Net Zero greenhouse gas emissions by 2050. An ambitious target, but one that other EU countries, including the Republic of Ireland (ROI), will almost certainly have to follow.

Currently, ROI is evaluated against the EU’s 2020 targets, which includes a 20% cut in greenhouse gas emissions from

https://ec.europa.eu/clima/policies/strategies/2020_en

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35%

Ireland requires at least a 35% reduction in emissions against 1990 levels by 2030

1990 levels1, but it’s lagging and certain to miss these targets.

The 2019 Climate Change Performance Index (CCPI) ranks ROI 48th out of the 60 countries, and whilst the UK is ranked 8th, the UK Climate Change Committee assessed that Northern Ireland requires at least a 35% reduction in emissions against 1990 levels by 2030. The most recent Department of Agriculture, Environment and Rural Affairs (DAERA) projections of greenhouse gas emissions show that the region is unlikely to achieve this reduction.

It is clear; greater climate mitigation efforts are needed to move the island’s sustainability agenda forward.

ALMOST TWO-THIRDS OF THE ISLAND’S CONSTRUCTION PROFESSIONALS (65%) STATE THAT CLIMATE CHANGE CONSIDERATIONS ARE EITHER EXTREMELY OR VERY IMPORTANT TO SHAPING THEIR FUTURE BUSINESS MODEL.

Climate change mitigation is high on the priority list

10m CASE STUDY

Reversing the island’s emissions trajectory will rely heavily on major infrastructure adjustments, therefore the industry needs Caption text to lead the charge on climate change mitigation to bring the sustainability agenda to the forefront of project planning, design and delivery. And it appears that the desired sentiment within the industry is already present - almost two-thirds of the island’s construction professionals (65%) state that climate change considerations are either extremely or very important to shaping their future business model.

Helen Hughes details the steps Transport Infrastructure Ireland (TII), is taking to move its agenda forward: ‘we have a clear and concise corporate strategy for reducing emissions as an organisation. Furthermore, we are mainstreaming carbon mitigation programmes across all the projects we deliver.’ It appears acknowledgement of the issues within the industry is evident, the challenge then, is how to shift this awareness into action.

CUSTOM CARBON ASSESSMENT TOOL, TII With EU regulation changes on climate change impact, Transport Infrastructure Ireland (TII) needed a way to calculate and assess the carbon emissions associated with its road and light rail projects as part of their Environmental Impact Assessments.

AECOM developed a custom carbon assessment tool to calculate and analyse the carbon emissions associated with TII’s road and light rail projects. Following a workshop with TII staff and suppliers who would be the eventual end users, AECOM designed a tool, taking into account the specific Irish context that current ‘off the shelf’ tools lacked, such as the effect of carbon loss from peat removal - a more significant issue in the geography of the island of Ireland.

The tool was able to assess the main sources of carbon emissions throughout the lifecycle of a project, from high level early design, to construction, use and maintenance, and end of life to identify emissions hotspots and understand where carbon savings can be made.

The tool also allows users to model carbon impacts of different design options for varying levels of design information and enable understanding of relative carbon impacts to influence decision making and reduce carbon emissions of new infrastructure developments.

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FOUNDATIONS OF FUTURE GROWTH

2/ MEETING

AECOM SUGGESTS THREE KEY APPROACHES TO HELP GET THE INDUSTRY ON TRACK:

ACTIONABLE, CLEAR AND MEASURABLE TARGETS While many businesses currently have sustainability and environmental strategies in place, it is critical that these are built with the endeavour of meeting uniform and measurable targets. Helen Hughes is clear in citing that a lack of clarity on targets can result in a barrier to forming a sustainable solution, ‘Fundamentally, we think that the UN Sustainability goals should really form part of our project appraisal, so that they become embedded into the process when we are selecting projects.’

1/ INDUSTRY-WIDE

COLLABORATION IS KEY Industry-wide collaboration is key to ensure good intentions translate into positive actions. Successful climate mitigation relies upon an organised, consistent approach where commonly agreed targets are achieved by bringing together different stakeholders with different perspectives, alongside knowledge and skills transfers between partners.

Climate change and diminishing resource availability are driving major infrastructure organisations to seek greater resilience and efficiencies with planning, development and delivery of major programmes across the UK and Ireland. With this in mind, AECOM founded the Major Infrastructure–

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Resources Optimisation Group (MIROG) in 2013 as a forum for the UK’s infrastructure operators to collaborate across the circular economy theme and to meet the challenge of delivering major infrastructure in a constrained economy.

The first forum of its kind in the infrastructure sector, MI-ROG has inspired and facilitated workflows on asset life cycle, carbon performance, circular economy planning, critical materials availability, materials exchange and sustainable procurement and supply chains.

The group benchmarks approaches, shares best practice and collaborates across projects, seeking greater resilience and efficiencies with planning, development and delivery of major programmes. The programme has been a huge success, showcasing how the synergies and perspectives gained through collaboration can result in effective and frictionless effort to combat the climate crisis. So, what can be learnt from the organisation’s success?

AECOM FOUNDED THE MAJOR INFRASTRUCTURE–RESOURCES OPTIMISATION GROUP (MI-ROG) IN 2013 AS A FORUM FOR THE UK’S INFRASTRUCTURE OPERATORS TO COLLABORATE ACROSS THE CIRCULAR ECONOMY THEME AND TO MEET THE CHALLENGE OF DELIVERING MAJOR INFRASTRUCTURE IN A CONSTRAINED ECONOMY.

The number of stakeholders within each infrastructure project can be substantial, and much like health and safety practices, there is a need to ensure standardisation to avoid unintended negative consequences. Helen encapsulates this point eloquently ‘we need everybody to be on the same page when considering sustainable outcomes. Currently there is a large variation in understanding of what ‘operational sustainably’ means. As an industry we must reach a common understanding’. Upon achieving an industry consensus on what the sustainability objectives should be, the next step becomes measuring success or failure in meeting them.

TII's approach is forward-thinking by making the sustainability agenda a tangible measure within the organisation and amongst their partners. And our survey results show that TII’s approach is not atypical of the wider industry. Our research outlines that construction professionals across the island of Ireland are continuing to call for best proactive guidance and a clear legal framework on how to embed recycle and reuse within their business.

3/ FROM OBSTACLE TO OPPORTUNITY

Once all stakeholders form a multilateral approach, attitudes within the industry need to move beyond short-term cost bearing barriers to project success, to an agenda that embeds a sustainable approach into the long-term planning of all project delivery.

Unfortunately, the current perception within the industry is one of short-termism.

A failure to grasp the potential risks of climate change is unlikely to drive the rapid change required by the industry to improve on performance. This is despite there already being examples showcasing the potential financial benefits of embracing sustainability as a business objective.

Here, Hughes outlines the importance of directly incentivising organisations to become more sustainable, ‘I think we can do better when looking at our supply chain, particularly when we are specifying and procuring projects, that we reward contractors that use products and have more sustainable practices’. It is direct intervention that may be necessary to force a step change in approach from the Irish construction industry, as waiting for the attitudinal change to occur organically may take precious time that the island can ill afford.

THE NUMBER OF STAKEHOLDERS WITHIN EACH INFRASTRUCTURE PROJECT CAN BE SUBSTANTIAL, AND MUCH LIKE HEALTH AND SAFETY PRACTICES, THERE IS A NEED TO ENSURE STANDARDISATION TO AVOID UNINTENDED NEGATIVE CONSEQUENCES.

That said, AECOM is already working with a number of forward-thinking clients to focus on the positive benefits of perceiving sustainability as an opportunity that can innovate, improve best practice as well as reduce project costs, be that through reducing costs spent on raw materials or through repurposing ‘waste’ products. This includes our work with Highways England on developing and implementing its Circular Economy Strategy and delivering designingout waste workshops for multiple Network Rail projects.

Circular approach to combat waste Helen Hughes outlines TII’s progression in using the ‘circular’ approach to combat waste, “Management guidelines that focus on minimising the waste generation form part of the planning at an early stage. We are trying to minimise both the mass haul in the movement and transport of materials for the project and reducing the amount that must be exported off site. The aim of the project should be to build something that is self contained and not creating large amounts of waste, and that has to factored into the design.”

This is supported by the wider construction profession with 27% of our survey respondents seeing ‘circular economy’ as extremely important to the way their organisation uses resources.

27% 27% of our survey respondents see ‘circular economy’ as extremely important to the way their organisation uses resources.

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FOUNDATIONS OF FUTURE GROWTH

From project delivery to finding macro-solutions

This sustainable model has begun to influence behaviour outside of project delivery, as the role of infrastructure in greening the entire island becomes increasingly acknowledged. The wider agenda focuses on how infrastructure can impact the societal and economic behaviours that result in increased emissions.

The power of a change in perspective and capability is best illustrated when considering the island’s dispersed population. This was once seen as a major barrier to reducing emissions due to the number of journeys undertaken by private vehicles.

However, Hughes demonstrates how this characteristic is now being capitalised upon, ‘the focus on major heavy rail networks is limited: the focus instead is on developing the interurban connections in rural and regional areas to their respective city centres.’ Hughes goes further outlining the ambition to reduce transport emissions as fewer long individual journeys being necessary; ‘We really want to focus on reducing demand on the network and that is partly about land use planning facilitating compact growth in city centres and minimising the need for travel so that people live and work close enough or have public transport options to get between work and where they live.’

Sustainability is at the heart of this approach. Hughes outlines just how far the ambition extends, ‘It is very much trying to change behaviour, so people only travel when they need to, it’s about demand management or getting efficient use of the network. Even when you have 100% electric vehicles on the road there remains a carbon impact, you have to look at the whole life-cycle’. This notion underpins how far the circular economy ethos is being relayed.

IT IS VERY MUCH TRYING TO CHANGE BEHAVIOUR, SO PEOPLE ONLY TRAVEL WHEN THEY NEED TO, IT’S ABOUT DEMAND MANAGEMENT OR GETTING EFFICIENT USE OF THE NETWORK. EVEN WHEN YOU HAVE 100% ELECTRIC VEHICLES ON THE ROAD THERE REMAINS A CARBON IMPACT, YOU HAVE TO LOOK AT THE WHOLE LIFE-CYCLE. — HELEN HUGHES, DIRECTOR OF PROFESSIONAL SERVICES AT TRANSPORT INFRASTRUCTURE IRELAND.

Working for numerous infrastructure clients across the industry, from roads, rail and aviation to water and power, AECOM is not only helping to educate on sustainable approaches but is seeing a step change in client attitudes in seeking tailored solutions to tackle their sustainable agenda in a more targeted and efficient manner.

Undoubtedly the desired future for the island’s infrastructure is local, sustainable and green. And the ambition to generate dramatic change is clear - the Irish government’s 2040 plans outline 26 distinct national programmes and 11 investment projects targeting climate change2 . With the success of programmes such as MIROG to build targeting, it is important to note how crucial stakeholder collaboration has become.

Forming strong relationships built on shared goals, incentives and knowledge is the key to unlocking the island's green potential and catapult it from a region lagging behind its neighbours to one leading the charge.

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FOUNDATIONS OF FUTURE GROWTH

TRANSFORMING INFRASTRUCTURE

DELIVERING ON HIGH HOPES Investment in large-scale infrastructure can unlock economic and social opportunities to transform how we live. AECOM’s David McKillen, Head of Dams and Reservoirs in the UK and Ireland, assesses the benefits transformative projects can deliver and weighs up the challenges they face.

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he aim of high-ticket infrastructure projects is to transform a region’s economy and the livelihood of its citizens, with benefits from access to water and electricity to the transport of people and goods. Existing infrastructure also needs to be maintained or updated to cope with changes in demand.

The scale of such projects brings complex challenges, such as environmental concerns, intricate financing, shifting social and demographic needs, stakeholder management and the complications from integrating new schemes with ageing legacy infrastructure.

Challenges versus ambitions

With ambitious plans hoping to deliver improved infrastructure across the island of Ireland, the value they bring to the economy and users must outweigh the risks placed on constraints of budgets, lengthy schedules and managing public scrutiny. To date, projects have had a chequered success rate across the island.

We asked construction professionals across the island of Ireland about the main challenges to the delivery of large infrastructure projects. Our survey

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showed nearly half citing the government’s lack of planning (46%) or lack of funding (45%). This rose to over to 50 percent for construction professionals in Northern Ireland (NI).

Within NI, the lack of a devolved government has stunted decisions on infrastructure since January 2017. The Institute of Directors estimates political stasis has paused or slowed down up to £2 billion worth of projects.

Despite difficult circumstances, some major projects have maintained momentum across Northern Ireland, such as the Royal Victoria Hospital’s new Maternity Hospital and the A6 Londonderry to Dungiven scheme. AECOM played a key design role in both projects.

Within the Republic of Ireland (RoI) public scrutiny of large infrastructure projects remains high. Whilst crucial in serving the population, hospitals are considered the least well delivered projects according to our survey, largely due to the delays and cost overruns at the National Children’s Hospital in Dublin.

Road and airport delivery ranked as the great successes, with the motorway system across the island cited as having the greatest longterm economic impact. These improved road

and motorway networks provide critical connections across regional hubs while also improving public transport links.

Ambitious plans

Project Ireland 2040 is the Republic of Ireland government’s long-term overarching strategy for making integrated infrastructure investment decisions.

Project Ireland 2040 has an ambitious aim for balanced regional development across the country, with population expected to increase by 1 million people over the next two decades. Twenty-five per cent of this growth is anticipated for Dublin.

However, like many modern cities, Dublin’s infrastructure is struggling to cope with ballooning population demand and the stresses this adds to current systems. In anticipation of this growth, the National Development Plan (NDP) is a 10-year strategy to invest €115 billion in upgrading infrastructure across roads, ports, rail and aviation to increase accessibility across Ireland’s key cities.

As society changes and grow, demands on infrastructure are altered with some assets requiring an overhaul.

As part of Project Ireland 2040, plans are progressing to develop public transport networks through the BusConnects and DART expansion programmes, and the MetroLink – all providing greater connections across the Dublin region to cope with a growing and aging population.

The water industry in ROI is one sector looking at a step change in approach, requiring substantial investment into both large projects and smaller initiatives that work to improve the bigger picture.

Niall Gleeson, Managing Director of Irish Water comments, “Irish Water is committed to protecting the environment and supporting Ireland’s social and economic growth through appropriate investment in water services. We are delivering a very significant capital investment programme, in the next few years, to improve the quality of water and wastewater services, future-proof the supply and improve resilience, conserve water supplies and tackle leakage.”

He continues, “Our investment is in programmes like the National Leakage Reduction Programme, which will involve an investment of €500m in this programme over four years to tackle a significant leakage problem. Equally important is the investment in standalone projects, like the €400 million staged upgrade of Ringsend

Wastewater Treatment Plant and the Cork Lower Harbour Project which will stop the discharge of the equivalent of 40,000 wheelie bins of raw sewage into Cork Harbour.”

“We attach great importance to ensuring that our investment policies are aligned to the national strategic outcomes outlined in the National Development Plan (2018–2027) and to the wider infrastructure policy of Government.”

Within aviation, Dublin Airport has seen rapid growth since 2013, jumping from 20 million passengers a year to 31.5 million.

However, the growth of the airport is not over yet, with a €2.5 billion major capital investment programme planned, those passenger numbers are set to grow to over 40 million a year.

With a strategic focus on the construction of MetroLink, a high-capacity, high-frequency rail line, passenger journey times to and from the airport will improve, while also easing internal congestion in the airport itself.

AECOM has been working with daa on a variety of projects for the airport to help it operate efficiently and grow sustainably.

Most recently, as lead consultant and technical advisor, we defined the Capital Investment Programme (CIP) 2020-2024 for the Commission for Aviation Regulation

(CAR), comprising recommendations for infrastructure development and provided high level design, construction sequencing and cost planning for key elements of infrastructure including terminals, piers, airfield, surface access, drainage and utilities.

WE ATTACH GREAT IMPORTANCE TO ENSURING THAT OUR INVESTMENT POLICIES ARE ALIGNED TO THE NATIONAL STRATEGIC OUTCOMES OUTLINED IN THE NATIONAL DEVELOPMENT PLAN (2018–2027) AND TO THE WIDER INFRASTRUCTURE POLICY OF GOVERNMENT. — NIALL GLEESON, MANAGING DIRECTOR OF IRISH WATER

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INFRASTRUCTURE EDITION

CASE STUDY

THINKING AHEAD TO SUPPORT AMBITIONS

NATIONAL WATER NETWORKS IMPROVEMENTS, SCOTLAND Across the world, the water industry is facing a myriad of challenges, from climate change and population growth, to ageing infrastructure and tougher regulations. Irish Water knows these challenges only too well as Niall Gleeson, Irish Water MD confirms, “Ireland’s water services are severely stressed and do not meet the country’s needs, which means we have to prioritise our investment decisions to ensure that we use the funds available to deliver infrastructure which will have the biggest benefit to communities and businesses and safeguard the environment”.

of Scotland’s entire national water network. This includes new assets, renewals, modifications, maintenance and refurbishment of water networks and pumping stations – an investment of £360 million between 2015 and 2021.

It has been progressing a 25year strategy to achieve a more sustainable and secure drinking water supply, while managing leakages, efficient wastewater treatment and environmental protection to better cope with demand, both now and into the future.

AECOM has deployed 170 employees to the CWA providing a range of technical services from civil and geotechnical engineering to network modelling and dam design, while also employing apprentices and graduates throughout the programme giving opportunities to young people.

Scotland has been tackling some of the same issues, and its strategic, longterm planning with partners offers a good example.

In recognition of the effectiveness of this arrangement, Scottish Water renewed the contract and expanded the scope of services of our Alliance to cover 2021-2027. We will continue to deliver all clean water infrastructure for Scotland, with the expansion now delivering wastewater infrastructure work. This will likely add £100m per annum investment into the future of Scotland’s water infrastructure.

From programme and commercial management to engineering design and construction, Caledonia Water Alliance (CWA) — a partnership between AECOM and Morrison Utility Services— is designing and delivering the rehabilitation and replacement

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As part of this partnership, AECOM has been involved in numerous water network interventions including capital maintenance, water quality, network enhancements and improvements in overall resilience of Scottish Water’s water supply network all aimed at achieving world class customer service for Scottish Water.

Our experience in managing complex, long-term, multi-project programmes allows us to work with clients to help validate their overall strategy, establish design and construction standards, oversee the work of project delivery firms, and manage performance issues concerning budget, schedule and stakeholder concerns. Additionally, our global perspective and knowledge-sharing abilities allow us to apply innovative thinking across the infrastructure industry, with our teams always looking for new ways to solve complex engineering, environmental and construction challenges.

As well as pressure to achieve desired technical and economic returns, one of the biggest challenges for major projects is delivering on ambition and how to create the social value for communities.

With a long history of delivering large and complex infrastructure schemes globally, AECOM invests in three major areas to help ensure we can play a key role in supporting the infrastructure sector reach it’s potential, deliver our clients’ ambitions and meet public expectations.

Maintaining public trust: Holding strong relationships across the island’s public sector and supply chains forms an integral part of the AECOM approach, in helping clients achieve ambitious infrastructure objectives. With public sector spending comes an increased social responsibility to ensure transparency at every stage of a project.

Ensuring costs and timings are diligently managed is paramount in this process, as is embracing longer-term views of strategic investment to create legacies for future generations.

Collaborative conversations across the sector with stakeholders can increase confidence in the value of infrastructure investment and instil a sense of ownership to all.

Maximising integration: Across all current and future infrastructure plans, there is the necessity to maximise return on investment and exceed public expectations.

However, to achieve this, different infrastructure sectors need to partner in order to understand the whole picture encompassed within these transformative projects. With diligent planning, expert design, efficient delivery, and importantly, informed operational phases, the benefits of transformative projects can extend across the island's infrastructure in its entirety and continue across the project’s lifetime. Embracing new technology throughout design, construction and operations can also vastly improve integration and efficiency across the lifecycle, while offering better transparency into cost and risk implications.

By actively evolving to meet the challenges that these large-scale infrastructure projects present, we will strive to transform their challenging perception into a positive economic and social reality for the island.

Investing in our people: We bring together a combination of skillsets and experience, perspectives and proficiencies. Bringing talent together under one roof helps efficiently manage project risks, increase innovation and value, and ensure return on investment is maximised. New infrastructure projects have a vast array of objectives extending to climate change mitigation, technological advancement and cross border regulation. Having an array of specialisms working together seamlessly allows for a more favourable outcome.

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INTERVIEW WITH...

VINCENT HARRISON MANAGING DIRECTOR, DUBLIN AIRPORT

VINCENT HARRISON IS THE MANAGING DIRECTOR OF DUBLIN AIRPORT. HE GAVE US A BRIEF SNAPSHOT OF THE EXPANSION PLANS FOR THE AIRPORT OVER THE NEXT SEVEN YEARS, WITH A €2.5 BILLION INVESTMENT IN INFRASTRUCTURE. When building the second terminal at Dublin Airport, what were the specific challenges you faced in managing a project of this scale?

I will start with financing, whilst we are independent of annual state capital budgeting, we are entirely self-funded through our own activities. Whilst we aren’t bound by annual state budgets which is good, we have to manage our capability within our own resources.

Secondly, with both our customers, passengers and a wide range of stakeholders, we need to engage and plan for long term capital projects around different needs and different business models. Within the environment we are in we need to develop plans that our customers want to buy into and have the confidence that they are prepared to grow their businesses in Ireland.

We must not lose sight of this at is underpins the viability of our future.

In terms of cooperating with the government, be that locally or nationally, around large-scale infrastructure projects, do you face any difficulties here?

The planning environment in Ireland is complex and also appears to be underresourced to address the many requirements

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for infrastructural investment that we face as a country. Additionally, unlike many developments of a stand alone nature, the airport is an evolving system - constantly changing to meet evolving demands, different aircraft types and new passenger requirements. Infrastructure is also developed over time and needs to be flexible to meet demands over a 40-50 year horizon.

This requires a master plan as a guide to the future but one which can be adapted over time. The airport itself is of the scale of a small city and needs to develop holistically, however the planning environment is one which is more designed toward discrete planning applications and decisions on development on a piecemeal basis. There are many bodies involved in the planning process and this of course can lead to lengthy delivery timelines.

What are the wider advantages for Dublin and Ireland of having an increased capacity at the airport?

Terminal 2 opened in 2010. In the period prior to its opening air traffic declined substantially and the requirement for this capacity was publicly questioned. However, traffic growth rebounded and from 2014-2018 growth of over 50% was experienced. At a national level, the impact of Dublin airport is 3.1% GDP, and Dublin Airport facilitates 139,700 jobs in the Republic of Ireland. And obviously when the economy does well, the airport does well and vice versa.

they had been held dormant for ten years when arguably that was the time to invest.

There is a lot of focus on housing right now, rightly because we have a housing shortage, but it is almost as though that agenda takes all the oxygen out of everything else.

However, we are looking two or three years ahead when the houses are built but without the transport infrastructure around them. If I had a criticism of policy in general it is a lack of integrated planning, rather than a lack of energy.

Vincent Harrison

Do you think that the right additional infrastructure and policy is currently in place to allow Ireland to grow for the future?

Certainly, public transport hasn’t been invested in enough. The plans to have a metro between the city and Dublin airport and beyond have been reactivated now, but

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FOUNDATIONS OF FUTURE GROWTH

UNLOCKING SMARTER INFRASTRUCTURE

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he application of big data analytics to drive increased efficiency and automation in managing buildings and infrastructure is the eventual big win, however this requires taking a step back to see how technology can be applied cost effectively now to deliver this smart infrastructure in the future.

Ambitions to roll out smart infrastructure across the island of Ireland are considerable. And with resource constraints widespread, the island stands to uniquely benefit from its adoption. The ‘All Ireland Smart Cities Forum’ underpins the extent to which the island is looking to propel its infrastructure into the 4th industrial revolution, unlocking additional capacity and fuelling regional prosperity. As a crossborder community, it is focused on the advancement of cities in both the Republic of Ireland and Northern Ireland through the deployment of, and value creation generated by smart programmes.

The ability to deliver against these aspirations will depend heavily on industry and government working together to fuel initiatives that deliver projects quicker, cheaper, and ultimately, more successfully.

How hard is it to be smart?

Delivering large scale infrastructure is traditionally slow, and performance is sub-optimal. Low productivity and outdated construction practices can delay much needed improvement. This is compounded by insufficient talent in the industry, material resource constraints and out-dated procurement practices that are inhibiting the application of digital solutions. In short, it is hard to invest in smart practices. However, we are starting to see a smarter industry appetite.

Across the island, infrastructure professionals recognise the benefits smart technologies can bring, with particular excitement surrounding increased efficiencies and improved project and risk management – almost half (46%) of the island’s construction practitioners see efficiency during design and build of projects as an immediate effect of the application of smart technologies.

Smart infrastructure promises so much potential, but for many businesses delivering ‘smart’ remains far from clear. Paul Wilson, Director of Digital Project Delivery EMEA at AECOM delivers his perspective on how organisations can get set for smart and unlock its transformational potential.

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46%

of the island’s construction practitioners see efficiency during design and build of projects as an immediate effect of the application of smart technologies. .

CASE STUDY BIG DATA IMPROVING CYCLING INFRASTRUCTURE It is vital to understand how cyclists currently use our cities roads and what their experiences of these facilities are, however information can be hard to find and of a poor quality; the advancement of technology has the potential to transform our understanding and improve our future cycle networks.

As part of the Smart Dublin Programme run by Dublin City Council, the Smart Cycling Challenge involved the data collection from 500 participants on their regular cycling trips using bicycle lights developed and supplied by Northern Irish company, See.Sense.

The See.Sense bicycle lights uses unique sensor technology to monitor real-time information including:

1/CYCLISTS’ ROUTES AND MOVEMENT PATTERNS 2/SPEED AND DWELL TIMES 3/ROAD SURFACE QUALITY 4/COLLISIONS OR NEAR-MISS EVENTS 5/CYCLIST FEEDBACK This provided information on 7000 journeys covering almost 34,000km in Dublin. The See.Sense and AECOM teams collaborated to use this data to develop a methodology for understanding the Quality of Service of existing cycle networks, with a particular focus on pavement quality, journey time delays and routing.

The conclusion of the study is that the vast data gathered by cyclists on their daily commute can generate useful information, in a cost effective way and produce a tool for planners to develop cycle networks, while also identifying maintenance priorities to improve safety. This information can be shared with city planners with the aim of building better infrastructure to improve public safety and make cycling more convenient, which in turn will help reduce congestion and lower city pollution.

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WHAT DO YOU FORESEE AS BEING THE MOST IMMEDIATE BENEFITS OF SMART TECHNOLOGY WITHIN THE SECTOR YOU OPERATE IN? 46% 47% 46%

Efficiency during design and build of projects

Efficiency and sustainability of assets in use

41% 27% 11%

1/ A CULTURE OF CHANGE

45% 42%

Maintenance and reduce running costs of assets

Management information

43%

39%

Project management and risk management

44%

32% 35%

15% 17%

All

This model leads to three long-term interventions, which result in digital delivery being embedded into business-as-usual, leading to long-term improvements in efficiency, innovation and performance:

Republic of Ireland

Northern Ireland

2/ EFFICIENT WORKING PRACTICES

This is a very positive industry shift. Teams at AECOM are focused on promoting digital delivery across all client projects, helping to drive the industry forwards. We have seen first-hand how digital delivery can transform the design process, hasten construction and improve performance through knowledge capture, interdisciplinary workflows and application of lessons learnt and automation to deliver smarter infrastructure faster.

The integration of smart technologies through AECOM’s digital delivery platform supports closer public and private sector workstreams, reducing planning and procurement times and improving communication, resulting in more cost-effective projects delivered on time. This is good news for all parties and the economy on the island of Ireland.

Digital delivery – conversation to action framework

Digital transformation is ongoing, across the industry as a whole. At AECOM we are helping clients with their digital delivery journey, setting them up for success now and in the future as technological change continues apace. Ultimately, our aim is to highlight all aspects of digital delivery to our clients so they can make informed decisions about the technologies that will unlock the most benefit and deliver over the long-term.

To move conversation into action, we developed a staged process to assist clients in creating their bespoke version of what successful digital delivery looks like – driving efficiencies, innovations and performance through managing effective information

AECOM DIGITAL DELIVERY FRAMEWORK

1/ 2/ 3/ 34

FOUNDATIONAL LAYER - GOVERNANCE AND LEADERSHIP, PROCESS, PRODUCTION, KNOWLEDGE AND SKILLS REQUIRED TRANSITION STAGE – ROLES AND RESPONSIBILITIES, DOCUMENTED PROCESSES, KEY ACTIVITIES, STANDARDISATION, DEVELOPING CAPACITY AND CAPABILITY MANAGED APPROACH – DAY-TO-DAY MANAGEMENT, ASSETS REQUIRED, INTEGRATED SYSTEMS, ORGANISATIONAL EXPERTISE.

management, workflows and organisational culture. Careful analysis of what is needed at the foundation level develops a digital delivery approach that works efficiently across the project and/or program without causing significant disruption. Technical as well as digital expertise ensures a truly integrated digital delivery approach that is relevant and appropriate for each client.

3/ REAL TIME DATA

Real time data management is rapidly improving the industry’s ability to make more informed decisions far earlier in the design process as well as capture and transfer knowledge within a single project or even across multiple projects. As a result, errors are reduced, and learnings and adjustments can be implemented to maximum impact.

Strong data management can also offer real-time troubleshooting information to keep delivery running smoothly and provide feedback at the end of the process to fuel future developments. Data’s role in long-term client success is invaluable, and with a good framework, clients can operate and manage the data independently, enabling them to make future decisions autonomously with a clear view of the impact.

However, with a greater reliance on data comes an increased risk of a data breach. And this is not lost on the island’s industry professionals with the biggest risks outlined as cyber attacks (54%) and complying with data protection legislation (42%). Cybersecurity and safe data management is a vital priority during the design process, it is crucial that all aspects of data management, both short and longterm are founded in best practice and take into consideration all the unique aspects of each client.

WHAT ARE THE RISK FACTORS ASSOCIATED WITH GROWING RELIANCE ON DATA?

MANAGEMENT With every client requiring a bespoke approach, understanding the knowledge of internal client teams and combining it with the digital expertise of the AECOM team is a complex process. A phased approach that considers the client’s working culture and practices from the beginning is imperative. With a combination of empathy, evidence and energy, we can focus on encouraging the use of new technologies by providing the structures and knowledge to do so. The benefits of this should be immediately evident to the client themselves, creating momentum to embrace smart technologies.

54%

Cyber security (exposure of assets to cyber-attacks)

47% 57% 42% 39% 44%

Complying with data protection legislation (e.g. GDPR)

37%

Cyber resilience (business interruption arising from cyber outages)

44% 33%

Data: risk and reward

BIM Level 2 and ISO requirements have been a positive push in terms of making the industry think more carefully about what innovation in the design process looks like and how it can be implemented practically into efficient working practices. By designing a digital delivery framework, clients can create dynamic, futureproof workflows and processes that do not frustrate development or delay production. It is a challenge to ensure that any asset meets the performance requirements of the future. With the framework in place, client teams can adjust to resource requirements, further innovations and external demands much more quickly, enhancing the performance of infrastructure assets considerably.

26% 23% 28%

Lack of skilled technology workers

Cost of storing and managing additional data

All

Republic of Ireland

12% 14% 11%

Northern Ireland

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FOUNDATIONS OF FUTURE GROWTH

Once again, the phased approach to digital delivery helps AECOM respond to these risks. By assessing cyber and data protection risk at a framework level, all potential avenues are assessed. It means building systems that silo and store information in a secure and compliant way from the start, so that these don’t become issues that need to be addressed further down the line. Moving from the macro-profile of the project risk down to the minutiae of particular workflows and processes, this phased approach supports best practice.

The framework comes first

So, whilst a phased framework is not the first area of development that springs to mind when considering digital delivery, it is perhaps the most important. From unlocking the skillsets of experienced client-side individuals to managing potential cybersecurity risks, a considered framework will provide a clear platform for industry stakeholders to begin their digital delivery journey in partnership with AECOM and others.

Through building digital infrastructure that simultaneously embeds systems in the day-to-day process and upskills personnel on how to use those systems, it provides client organisations with the tools and knowledge to remain on the digital transformation journey that will be ongoing.

Get set, smart

When smart solutions start to overtake traditional methods, we will see significant change and disruption. With stretched labour resource across the region, those organisations who have upskilled their personnel to leverage the current and future advantages of digital solutions will reap the benefits.

Therefore, the challenge is for businesses to implement a digital delivery framework as soon as possible to promote a culture of positive change, spearheading innovation, building smart infrastructure and unlocking its tremendous potential for the island of Ireland.

36

CASE STUDY HIGHWAYS ENGLAND - M6 JUNCTION 21A TO 26 SMART MOTORWAY Within civil engineering, the requirements and demands are pushing design processes beyond their traditional limits. Delivering better and more intelligent infrastructure projects has become paramount in today’s world. In order to adapt to these requirements quickly and efficiently means working smarter, not just harder.

In the north west of England, Highways England has plans underway to upgrade a 10-mile stretch of the M6 between junctions 21a and 26 to a smart motorway. In order to increase efficiency as part of this project we developed and implemented new processes and technology parametric and automated design.

By using parametric design software, we have been able to reduce design and modelling costs by approximately 20%. This has been achieved by developing a set of standard templates and scripts to facilitate the foundation of a digital twin model.

These are available within a centralised project library, comprising Highways England digital component library (DCL) and project specific components. As a direct result of this process, we can see reductions in redesign and return greater quality to our client.

As the project moves towards construction, a high level of graphical detail is required to allow build activities to be undertaken from the model.

Therefore, we are employing design automation techniques and embedding design rules, parameters and constraints, to provide greater

accuracy and consistency within our designs, removing unnecessary and repetitive design processes. As a direct result, we have confirmed that producing higher level detailed models at earlier stages can provide enhanced levels of buildability and value engineering.

Having the freedom to develop and deploy greater levels of information into our digital model is building the foundation blocks of our linear infrastructure digital twin model. The information collected feeds directly into the 4D programming process and 5D costing model. Having linked the model to these programmes, AECOM has started to integrate the life cycle of an asset and create the foundation of a digital twin.

This dynamic connection can provide clients with visual insight into information once lost within countless reports. This process also standardises and aligns our team to the one common goal of digital information, which focuses efforts where needed and removes waste by automating processes.

With the use of parametric and automated design techniques and processes, the biggest time saver occurs within the change management control aspect of engineering design. By configuring and coding our programmes, we can handle design changes faster, with greater quality and higher accuracy, all aligned to the project criteria outlined with the project requirements.

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INTERVIEW WITH...

TREVOR ANDERSON, DIRECTOR OF INFRASTRUCTURE AND BUSINESS TRANSFORMATION AT BELFAST HARBOUR TREVOR ANDERSON, DIRECTOR OF INFRASTRUCTURE AND BUSINESS TRANSFORMATION AT BELFAST HARBOUR TALKS TO AECOM ABOUT HOW IT IS TAKING A SMARTER APPROACH TO FUTURE GROWTH. What are Belfast Harbour’s aspirations for the next 15 years?

A visit to any modern port’s website or strategic plan will reveal references like ‘smart port’ and digital transformation, and Belfast Harbour is no exception. Our strategic ambition sets out ‘A Vision to 2035’, to be the world’s best regional port and key economic hub, as Northern Ireland’s leading gateway for trade and tourism. This means creating an iconic Belfast waterfront district, working in partnership to develop attractive and safe places where people want to work, live, invest and visit. Five core themes underpin the delivery of this vision, including the creation of a ‘smart port’ with best in class digital and telecoms infrastructure.

Belfast Harbour handles more than 70% of the region’s seaborne imports and exports and the 2,000-acre Harbour Estate hosts more than 5 million annual visits, including 1.75 million ferry and cruise ship passengers. It is also home to a vibrant mix of 760 businesses working across multiple sectors, including marine logistics, commercial, residential, financial, IT, tourism and creative industries.

How do you see technology impacting Belfast Harbour’s operations over the coming 15 years?

With such a concentration of economic activity and vital infrastructure, the success of Belfast Harbour and its tenants has a direct impact on the success of the wider economy. As port industry leaders, our technical operations continually evolve to 38

meet the changing needs of our customers and become ‘smarter’ to help unlock new levels of efficiency and open new avenues for improvement.

reducing the time that lorries spend in the Port, improving hauliers’ operating costs and reducing CO2 from exhaust emissions.

Digital technologies are finding new solutions to traditional challenges, creating the opportunity for much wider sharing of data across the entire port community.

High speed communications and Artificial Intelligence (AI), Augmented Reality (AR) and Virtual Reality (VR) are also opening up new possibilities. The value creation from these new opportunities is core to making our digital agenda truly transformational.

What are the challenges in developing these solutions?

How are ports changing as technology advances?

While the benefits of a community solution are clear, there are significant delivery challenges. Firstly, there are many players to co-ordinate and not all may be ready to participate. This not only presents a significant communication and co-ordination challenge, but also a technical infrastructure challenge in providing the integration to multiple systems while respecting commercial sensitivities and the needs of cyber security.

Previously, ports were perceived primarily as gateways for the flow of goods; today we recognise that we have a broader role to play within a complex web of supply chains. In this sense, Belfast Harbour is a key economic hub where multiple service providers such as cargo owners, hauliers, stevedores, shipping agents, freight forwards and shipping lines interact with each other and Government and regulatory bodies to move cargo efficiently.

How will technology help going forward?

With so much interconnected activity happening within the Port and the supply chain, information exchange is key. Partners range from global organisations with modern IT systems to local SMEs with more limited digital infrastructure. There is an opportunity for Belfast Harbour to play a key facilitation role by providing the infrastructure to support the efficient sharing of information or by empowering participants in the process with information to enable them to make more informed decisions.

If we look at the lower complexity end, equipment sensors will provide remote status information avoiding the need for staff to undertake frequent inspection visits. Such status information will also prevent problems from occurring by warning of anomalies before significant service failures or costly breakdowns occur.

In this way, a haulage firm with limited IT systems could, as a member of such a port community system, access timely information on cargo movements and in turn help them plan work for lorries and drivers more efficiently. This system would also help streamline documentation procedures,

Belfast Harbour’s geographic footprint of 3,000 acres of land and sea requires significant asset management. Such assets range from streetlights or sewage pumping stations to cranes and complex engineering equipment.

We will use innovations in digital technology to aid the management and maintenance of the physical asset base across the Estate.

Ever more intelligent CCTV solutions can improve safety and security through video analytics, with AI quickly recognising emerging situations to report for action. While today, this solution requires an extensive fibre optic infrastructure, 5G is beginning to provide more flexible installation options and mobile personal access to CCTV images to Belfast Harbour personnel in the field.

More complex communications solutions will transform our field maintenance operations and deliver greater value. While servicing our geographically widespread assets, our technicians will benefit by leveraging the power of technologies such as 5G, AR and ‘wearable tech’ to provide them with hands-free access to technical information via an AR eyepiece. By way of a camera on the eyepiece, our engineers back at home base will see what the technicians sees and will be able to provide guidance by voice communication or by annotating instructions on the technicians’ field of view. Such technology is exciting and truly transformative and will deliver significant safety and efficiency benefits.

Many forward-thinking companies are investing in a ‘digital twin’ to plan, track, monitor and manage large scale sites or portfolios. Is this something Belfast Harbour is considering?

We are leveraging digital technology in the development cycle of our infrastructure and assets. Belfast Harbour is a major developer, not just of port infrastructure but of real estate including offices, film studios, leisure and public realm space. By adopting more advanced digital methods, for example using Building Information Management (BIM) techniques, our engineering teams can more efficiently plan, design, construct and manage our buildings and infrastructure.

Almost everything within the modern port is developed with data. This includes detailed underwater survey data which we have developed into a digital dataset, with the assistance of a local SME. With this information we can track and visualise seabed changes or calculate the amount of material to be dredged. Other examples include the as-designed and as-built digital datasets that define our buildings and infrastructure, or

the simulated traffic flows that are used to optimise road infrastructure design.

All these digital datasets are being collated into a digital twin of Belfast Harbour which will be a multi-layered digital representation of the Port.

At its highest level it will appear as a map upon which the user can choose to select and view different layers. There will also be dynamic status information, for example, on calibrated items or operational status information which is fed from IoT sensors for equipment such as cranes. We are also exploring how this digital twin can be visualised and how to make the information available to field personnel through mobility solutions.

In the future, secure, high-speed, low-latency communications infrastructure will be key to meeting other emerging digital needs and opportunities. Over time, autonomous vehicles could, for example, be used within ports, enabled by communication technologies such as 5G.

How can technology help Belfast Harbour meet sustainability targets?

As part of our strategic ambitions to become one of the world’s most sustainable ports, we’ve already adopted measures such as replacing lights on quays and our 30km road network with energy efficient units that will reduce lighting energy consumption by more than 50%.

Designed with sustainability in mind, we have a new self-powered solar and wind LED lighting tower and a ‘smart flower’ that helps to power our new cruise terminal with solar energy. Ultimately, being a ‘smart’ port will enable us to digitise, decarbonise and decentralise energy usage by, amongst other things, creating a green micro-energy grid throughout the Harbour Estate.

The same ethos extends to our plans to develop world-class public realm spaces and new interactive experiences supported by 5G and public Wi-Fi. In our City Quays development, for instance, we’ve installed smart benches that allow the public to charge their devices using solar energy. By supporting a clean environment and using tech to enhance personal experiences we believe that a digital transformation will help make Belfast Harbour a testbed to pilot new innovations.

In delivering these strategic goals we’ve committed to taking a proactive approach to developing stakeholder partnerships, creating synergies to yield value in ways that we couldn’t have anticipated.

To help deliver decarbonisation we’ve already established a consortium of SMEs to conceptualise a smart energy district with the support of NI Electricity and Belfast City Council. Together we will help facilitate firms who wish to develop and test smart solutions within Belfast Harbour Estate.

Ultimately, it’s about the power of information and working collaboratively to maximise opportunities. We’re genuinely excited about how technology can drive innovation in ways that just weren’t possible even a couple of years ago. We have the scale and scope to support a smart transformation that can put Belfast Harbour and Northern Ireland to the fore of the digital revolution.

Trevor Anderson

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INDUSTRY OUTLOOK NORTHERN IRELAND

I INDUSTRY SPOTLIGHT 2020 40

t’s been a mixed bag of opportunity for the Northern Ireland (NI) construction industry in 2019. Although there has been little or no growth, and in some sectors contraction in the industry there has been some positive signs in the volume of public sector work coming to market. There is still no denying the uncertainty brought about by political instability in NI and the United Kingdom (UK) generally is holding back investment in private capital projects. However as ever, we are optimistic that whatever happens in the next few months we will at least have some direction.

AECOM is hopeful that the pent-up demand for private sector capital investment will be unlocked as market conditions are clarified in the UK generally. However, it is noted that that whilst there has been a general trend of growth in the local industry since 2014 there has been a recent dip of 1.5 percent in the last 12 months. This slight contraction in output is largely down to a noticeable reduction on housing of 10.7 percent in Q2 of 2019. We are hopeful that is just a blip in the Q2 stats and that we will see a rebound in housing over the next couple of quarters.

On a brighter note infrastructure investment has been growing strongly and is 27.6 percent higher than this time a year ago. The volume of infrastructure is now at its highest level since 2012.

Talent Supply

Labour availability is becoming an issue for certain key trades and we understand that electrical and plumbing trades along with brick layers are particularly hard to secure for key projects. This is likely to do with the opportunities for these key trades in Republic of Ireland (RoI) and Great Britain (GB). In GB there is a shortage of key trades

JODY WILKINSON, DIRECTOR, PROJECT AND COST CONSULTANCY, NORTHERN IRELAND

due the effects of the uncertainty around availability of European Union (EU) labour.

This labour availability issue is driving changes in our industry, particularly with the private sector where off site manufacturing and modular construction methods are becoming more mainstream for hotels, student accommodation and residential. It is not thought this will alleviate all labour shortages, but it is helping.

Tenders & Contracts

Despite parts of the market being subdued we are noting inflationary pressures on tender prices and some material prices. For example, for materials from China such as granite and other quarried products where inflation has been seen of up to 20 percent in the last year.

General construction tender price inflation has been around 5 percent for the year to Q4 2019. We believe this is driven in part by a busier market in the Republic of Ireland and the continued success of NI contractors winning work in Great Britain and choosing to price work in NI at similar rates.

As in ROI, the continued shortage of labour in key areas coupled with the effects of whatever will happen with the UK’s trading relationship with the EU will likely continue to put upward pressure on tender prices. When coupled with a weakening outlook for the local economy, making it hard to contextualise what impact this will have in the next year.

The last twelve months overall have been stable. However we consider the next twelve months will bring some opportunity to NI, whether it’s with Construction & Procurement Delivery (CPD) procurement methodologies allowing a more sustainable construction market in the public sector or with some clarity coming from the the current political instability giving local private and FDI investment the confidence to invest.

• THE INTRODUCTION OF MEAN NARROW AVERAGE AS A MEANS FOR CALCULATING THE COMMERCIAL ELEMENT OF A TENDER. • THE READINESS OF CPD TO ACCEPT THAT ALTERNATIVE PROCUREMENT METHODOLOGIES TO DESIGN AND BUILD SHOULD BE CONSIDERED WHEN APPROPRIATE. • THE OPPORTUNITY FOR SME PROFESSIONAL PRACTICES TO PARTNER WITH LARGER PRACTICES TO ACCESS DESIGN COMPETITIONS ENCOURAGING NEW TALENT INTO OUR INDUSTRY. • CIVIL SERVANTS DEMONSTRATING WILLINGNESS TO WORK WITH INDUSTRY TO TRY PUSH FORWARD CAPITAL PROJECTS THAT MAY HAVE BEEN HELD UP IN THE CURRENT POLITICAL DEADLOCK.

Given the seemingly contradictory statistics and general feel of the market, assuming an orderly exit from the EU and no further shocks to the value of sterling, AECOM is projecting tender price increases of 3.5 percent in NI for the next 12 months.

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FOUNDATIONS OF FUTURE GROWTH

42

Annual GDP Growth

Construction Employment Growth

18 20 19

17

20

16

20

15

20

14

20

13

20

12

20

11

20

10

20

09

20

08

20

07

20

06

20

05

20

04

20

03

20

02

20

01

20

00

T

he construction sector is subject to procyclical fluctuations, shifting between periods of accelerated growth in output and periods of stagnation or contraction. Construction and the wider economy are intrinsically linked, and the cranes dotted around the skylines of our cities are a visible manifestation of a growing economy. Following the shrinkage of the construction sector from 2007 by almost two-thirds, the sector faces coordination, timing and resourcing constraints.

20

Construction costs are the key driver of tender prices and in this regard labour costs continue to increase. The latest Sectoral Employment Order saw increases in October 2019 of 2.7 percent and a further 2.7 percent due in October 2020.

In respect of materials costs increased by approximately 1.5 percent in 2019 and looking forward to 2020 a level of uncertainty exists arising from Brexit with potential tariffs and / or increased logistic costs potentially arising. AECOM anticipate construction cost increases of circa 2.2 percent in 2020.

There appears to be increasing disquiet in the industry towards public works contracts and their unsuitability for the construction industry of today.

Whilst some elements need review, it is important to acknowledge that there are other parts that bring benefits to the management of construction projects.

When they were being introduced, there was a widespread expectation that there would be a marked shift in tenders to account for the increased risk being passed to contractors. Of course, the almost simultaneous crash resulted in this not materialising. Over a decade later, some changes to the contracts would be welcome and action is needed to encourage wider participation in public sector contracts.

The regions are finally starting to see an upturn. Initiatives such as the development of Advanced Technology Units by IDA Ireland around the country in Monaghan, Sligo, Galway, Limerick and Cork give confidence to the market.

Arising from the commercial and human resources pressures highlighted earlier associated with Dublin, companies are increasingly looking at the value achievable and importantly the potential of regional locations for attracting and retaining employees, we see this impacting on the market with speculative office developments in Galway, Cork and Limerick.

DR CATHERINE MURRAY, ASSOCIATE DIRECTOR, ECONOMICS

99

Tenders and Contracts

It remains a concern that the headline increases in value of construction output could be significantly taken up by tender price inflation. This will present a real challenge in delivering all on the objectives in Ireland 2040.

If tender prices continue to rise, the competitiveness of the industry will be increasingly under ressure. This is probably most evident in the residential sector where the viability of projects continues to be challenging.

– which is sometimes considered full employment – most employers in the industry continue to face the challenge of recruiting and retaining staff. For the Greater Dublin Area, it is particularly challenging, where there is a premium to attract staff due to the higher cost of living leading to an extended commute.

There is an increasing trend amongst employers, partly driven by staff retention and partly by advances in the use of technology, to facilitate employees working from home or in other flexible office solutions.

20

The Public Capital Programme figures included in Budget 2020 are estimating an outturn of a 24 percent increase in Exchequer capital spending in 2019 on that spent in 2018. This increase included significant increases in Department of Transport, Tourism and Sport and Department of Housing, Planning and Local Government. The figures included for 2020 are estimating an 11 percent increase with the focus being on the same departments plus increases in Health and Communications, Climate Action and Environment.

AECOM projects tender price increases of 5 percent in Dublin and 3.5 percent in the regions in 2020. In respect of construction output, last year we presented a range of scenarios averaging a projected €22.5bn for 2019. We anticipate further growth in the value of construction output in 2020, though at a reduced level of circa 10 percent.

RECENT ECONOMIC TRENDS ACROSS THE CONSTRUCTION INDUSTRY IN THE REPUBLIC OF IRELAND

19

I

n 2019, ROI saw the seventh successive year of growth in construction. The strong performance in 2019 was driven by a combination of continued investment in the commercial sector, gradual recovery in the residential sector and a 24 percent increase in public sector capital spend.

AECOM expect infrastructure investment to be strong in the coming years with investment in airports, public transport, broadband, water and utilities generally.

Other sectors continuing to expand will be the residential and hi-tech sectors.

TOMÁS KELLY, DIRECTOR, PROGRAMME AND COST CONSULTANCY, IRELAND

Annual GDP Growth

INDUSTRY OUTLOOK – REPUBLIC OF IRELAND

Annual Construction employment Growth

Source: Central Statistics Office (2019) Labour Force Survey and National Accounts

Dublin and the regions

As the economy continues to grow and an unemployment rate of circa 5 percent

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Acknowledgements

Productivity shows the relationship between the output and input needed to undertake the work, including labour, all technology and equipment, and is a measure of efficiency in the economy. An analysis of gross value added per employee across varying sized construction firms indicates:

•

Businesses with less than 10 employees have the highest levels of productivity since 2013

•

Small (10-49 employees) and medium (50-249 employees) firms are lagging behind the large and micro firms, with productivity levels below the industry average.

person employed

Large firms (over 250 employees) had significant increases in their productivity levels, returning to pre-recession levels by 2016

Gross Value Added (€1000s) per

•

We would like to thank all of our contributors involved with this publication.

2008 Micro

It should be noted that the Irish construction industry is comprised of a high proportion of self-employed people, or small firms who are subcontracted to larger contracting firms.

Small

2010

2011

Medium

Year

2012

2013

Large

2014

All Firms

2015

2016

Linear (All Firms)

ConstructionEmployment (thousands)

Source: Central Statistics Office (2019) Sectoral Statistics: People employed in construction

ConstructionEmployment

Capital Allocation Government (Constant Prices)

Gross Capital Fixed Formation Construction and Buildings

Source: Central Statistics Office (2019) (various datasets) Government Capital Expenditure and Construction Output

While this story of boom and bust growth in the construction industry is familiar and part of business cycles, there are significant differences in the current cycle from the construction-fuelled growth of the 2000s, and lessons that need to be remembered.

The economy is not reliant on the construction sector for growth as it was at the peak of the Celtic Tiger boom. At the end of 2006 for instance, 11 percent of Ireland’s labour force was employed in construction. Today, this figure is just over 6 percent, similar to levels seen in the 1990s. There were 140,000 employed in the construction sector in 2019 compared to 240,000 in 2007.

44

Derval Cummins, Director, Transportation: . Derval leads our transportation advisory services across UK and ROI. With over 30 years’ global experience delivering innovative solutions to transport clients, her capability spans economic and financial analysis, governance, risk management, customer service, contracting, operations, planning and engineering.

She is currently working on strategic schemes for the National Transport Authority, Transport Infrastructure Ireland and Dublin Airport Authority.

Fergus Hayes, Director, Environment: Fergus is a chartered engineer with over 30 years' experience focused on the interaction between industrial/infrastructure development and the environment. Key areas of experience include due diligence, environmental impact assessment and permitting, environmental compliance, air quality impact assessment, pollution control, emission monitoring and air quality assessments for both public and private sector projects. He works across an array of sectors including airports, data centres, pharmaceutical and power, and manages large global portfolios.

Robert Spencer, Director, Sustainable Development: Robert brings over 20 years of global expertise to social and environmental sustainability projects, across all client's markets and geographies. Projects include a natural capital approach for National Grid’s estate; Highways England’s circular economy action plan; and evaluating Norway’s climate change and forestry international development programme.

Robert chairs MI-ROG - Major Infrastructure Resources Optimisation Group – bringing together the UK’s major infrastructure operators to collaborate on the circular economy.

derval.cummins@aecom.com

fergus.hayes@aecom.com

robert.spencer@aecom.com

Greg Flynn, Director, Project Management and Advisory Services: Greg is responsible for the delivery of project management services to both public and private clients across a variety of sectors and procurement routes. Greg has great ability to take and develop a brief, formulate a plan, establish a team and manage all aspects of the project from inception and business case, through to completion and occupation by the client. Clients include National University of Ireland Galway, LinkedIn, Citibank and daa.

Ignazio Bellini, Project Manager: As a certified project management professional, Ignazio has international experience delivering highimpact projects for private clients, public agencies and international organisations across the whole lifecycle. Projects include Dublin Airport Capital Investment Programme, the $200 million South Ferry Terminal Station Rehabilitation Project in New York and an NGO Emergency Response review in Guayaquil, Ecuador.

John O’Regan, Director: John is regional leader in ROI for all of AECOM’s disciplines associated with buildings and places. John leads a team of over 100 consultants, delivering projects nationally from offices in Dublin, Galway, Limerick and Cork. As a Chartered Quantity Surveyor and project manager, his experience ranges from commercial buildings for FDI clients, to large scale public sector and publicprivate partnership projects. John’s specialist skills include establishing the appropriate conditions for project success and early stage strategic cost and procurement advice.

greg.flynn@aecom.com

ignazio.bellini@aecom.com

john.o'regan@aecom.com

19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18

Construction Output €billion

Government capital spending rose from €3.8 billion in 2012 to €8.1 billion in 2020.

The National Development Plan 2018-2027 addressed the underinvestment in infrastructure over the recession period, and the importance of Government capital expenditure for the industry is clear from 2011 to 2014. Going forward, the National Development Plan gives a degree of certainty to the construction industry over the next decade, but also highlights the need to manage cost inflation within the sector, particularly relating to labour supply and skills within the sector.

2009

In the coming decade, the construction sector will need to address challenges and transitions that will have significant social and economic impact, including transitioning to a low carbon economy, preparing for a downturn, dealing with digital and technological advances and paradigmatic shifts in the face of continuous change.

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FOUNDATIONS OF FUTURE GROWTH

Offices

Paul Wilson, Director, Digital Project Delivery: Paul leads AECOM’s digital and technical excellence across our EMEA business. He helps implement digital technologies to support more integrated and collaborative ways of working to meet future needs of infrastructure. Working across sectors and geographies, he assists clients in developing and implementing efficient solutions to design, construct and maintain physical built assets throughout their entire lifecycle.

paul.g.wilson@aecom.com

David McKillen, Technical Director, Dams and Reservoirs UK&I: David is responsible for engineering teams across general civil infrastructure, water and wastewater engineering construction and related planning and environmental impacts. He is a member of the Supervising Panel of Engineers under the UK Reservoirs Act 1975 and currently involved in the safety management of over 85 reservoirs across Ireland. He has managed a wide variety of major infrastructure projects, understanding the critical programme and financial issues inherent within these working environments.

Jody Wilkinson, Director, Project and Cost Management: Jody has 17 years’ experience delivering project and cost management services in many sectors including leisure, tourism, commercial and retail. He is commercially aware with a good appreciation of how effective project management can assist with budgetary constraints. Recent clients have included Belfast City Council, BBC, Belfast Metropolitan College, EY, and Lisburn City & Castlereagh Council.

david.mckillen@aecom.com

jody.wilkinson@aecom.com

BELFAST

Dr Catherine Murray, Associate Director, Economics: As an economist, Catherine brings critical assessment and systems-thinking approaches to her work, while retaining a strong research focus and attention to detail. She returned to Dublin after working in New Zealand as an economic expert for 14 years across both public and private sectors. She has a considerable understanding of the water sector, having been involved in a range of flooding, natural hazards, coastal, green stormwater and resilience planning schemes.

tomas.kelly@aecom.com

catherine.murray2@aecom.com

9th & 10 th Floors The Clarence West Building 2 Clarence Street West Belfast BT2 7GP +44 (0) 28 9060 7200 The Studio Cleaver House 1–3 Donegall Square N Belfast BT1 5YE +44 (0) 28 9060 7200

Cork

DUBLIN

GALWAY

LIMERICK

Tomás Kelly, Director, Cost Management: As a chartered quantity surveyor, Tomás coordinates cost management service across our regional offices within ROI. Tomás heads up AECOM’s Irish Research Department which conducts internal research and projects commissioned by external bodies. His experience ranges from delivering health and education projects to commercial and industrial schemes, with clients including Health Service Executive, National University of Ireland Galway and the IDA.

Belfast

DERRY/ LONDONDERRY

1st Floor, Montrose House Douglas Business Centre Carrigaline Road, Douglas Cork T12 H90H +353 (0) 21 4365 006

Derry/Londonderry River House 12–14 John Street Londonderry BT48 6JY +44 (0) 28 7126 9676

Dublin

24 Lower Hatch Street Dublin 2 D02 TY88 +353 (0) 1 676 3671 4th Floor Adelphi Plaza Georges Street Upper Dun Laoghaire Co. Dublin A96 T927 +353 (0) 1 238 3100

Galway

Block 6 Galway Technology Park Parkmore Galway H91 W3OF +353 (0) 91 530 199

Limerick

The Gallery, The Old Savoy Complex, 13 Bedford Row, Limerick V94 VY47 +353 (0)61 318 870

CORK

Special thanks to Helen Hughes from TII, Paul Harper from Northern Ireland Water, Vincent Harrison of daa, Niall Gleeson from Irish Water and Trevor Anderson from Belfast Harbour for their time and insights.

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ireland.aecom.com

47

About AECOM AECOM is the world’s premier infrastructure firm, delivering professional services throughout the project lifecycle — from planning, design and engineering to consulting and construction management. We partner with our clients in the public and private sectors to solve their most complex challenges and build legacies for generations to come. On projects spanning transportation, buildings, water, governments, energy and the environment, our teams are driven by a common purpose to deliver a better world.

AECOM is a Fortune 500 firm with revenue of approximately $20.2 billion during fiscal year 2018.

See how we deliver what others can only imagine at ireland.aecom.com and @AECOM.

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