TAKING THE
LONGIRELAND ANNUAL REVIEW 2019 VIEW
INDUSTRY SPOTLIGHT Taking stock of the island of Ireland’s 2018 construction industry performance and predictions for 2019 and beyond SIX STEPS TOWARDS IMPROVING INFRASTRUCTURE RESILIENCE Resilience preparedness and how to manage potential future threats OUR FUTURE CITIES Where investment is needed to ensure our cities support sustainable growth FOREWORD
Welcome to our new look Ireland on housing, economic growth and TAKING THE Annual Review 2019. As a company international market changes and committed to building a better world, shocks in the Republic of Ireland we’re always looking to improve and (ROI). We’re also delighted to include strengthen how we do things from an interview with Belfast City Council our delivery of infrastructure projects Chief Executive, Suzanne Wylie, LONG VIEW to the research we conduct and who offers her insight into foreign conversations we share with colleagues, investment, the changing face of retail clients and organisations. Our goal is and smart city initiatives in Northern to unlock the transformational change Ireland (NI). and innovation required to move the In this year’s industry spotlight industry forward. commentary we take stock of This year, to get a better the island’s 2018 economic and understanding of the long view of the construction performance and reveal construction industry in the island of the changes we see ahead, including our Ireland, we’ve changed things up a little prediction that in 2019, tender price by asking senior industry professionals inflation in NI will increase by around to tell us what their biggest challenges 2.5 per cent and moderate slightly to an will be over the next 10–20 years. We average of six per cent across ROI. We also wanted to know how prepared they also anticipate construction industry feel to respond. Our survey results on output in ROI to grow by 20 per cent in the following pages reveal an industry 2019 to €24 billion and by six per cent that is optimistic, with 77 per cent of to £3.2 billion in NI. respondents anticipating growth. The By taking a long view of the results also indicate an industry that is construction industry now, we can speed feeling the impact of a deepening skills up the development of innovations shortage, political upheaval and lack of and ideas needed to design and build public funding. tomorrow’s infrastructure, buildings and Furthering the long view places that respond to the challenges conversation, we’ve included thought ahead. By keeping the conversation leadership articles written by AECOM going and by working together we’ll experts addressing a number of key be better prepared for the future and issues affecting the industry as it moves able to make the most of tomorrow’s towards becoming more sustainable, opportunities. Enjoy this year’s read. resilient and digitally-enabled. We We look forward to working with you hear from Mark Gantly, President of to build a more resilient future for the American Chamber of Commerce construction in the island of Ireland. Ireland, about the topic of foreign direct investment, and interview the Ireland Leadership Team economist, Jim Power, who comments
Cover image Image of the island of Ireland captured by a NASA satellite Image credit: Jacques Descloitres, MODIS Rapid To read a digital version of our Ireland Annual Review 2019 visit: Response Team at NASA GSFC (Wikimedia Commons) ireland.aecom.com CONTENTS 4 8 11 14 EXECUTIVE SUMMARY AND OUR FUTURE CITIES FDI AND EMBRACING AN INTERVIEW WITH … KEY FINDINGS CONSTANT CHANGE The island of Ireland’s Suzanne Wylie, Chief A snapshot of our survey population is growing. So ROI remains one of the Executive, Belfast City results from senior industry how do we ensure our main fastest growing economies Council, who shares her professionals, revealing key cities support sustainable in Europe, with US thoughts on the long view findings around expected growth? Landscape business investment a big for Belfast, commenting future industry growth, architects Paul Tully and contributor. Mark Gantly, on the Belfast City Region challenges ahead and Edward Frampton suggest President of the American Deal, the changing face of preparedness for the future. where investment should Chamber of Commerce retail and the opportunities be targeted to ensure our Ireland, offers four steps technology can bring to the cities remain affordable, to ensuring the future capital city. vibrant and resilient places success of foreign direct to live and work. investment in ROI. 16 20 24 28 SIX STEPS TOWARDS IMPROVING INDUSTRY SPOTLIGHT THREE WAYS TO REDUCE WATER AN INTERVIEW WITH … INFRASTRUCTURE RESILIENCE INDUSTRY ENERGY USE What lies ahead for ROI Economist, Jim Power, Extreme weather and and NI’s construction Water companies are who shares his insight into cyber-attacks threaten industries? Can we expect hugely dependent on ROI’s future economic our transport networks. growth over the next 10–20 energy to deliver their outlook, providing expert Transport planners John years and what changes services, costing them a commentary on potential Humphreys and Beatriz might we see? We take lot of money and making challenges to delivering Martinez Pastor discuss the stock of 2018 construction it harder to meet stringent Ireland 2040, VAT and importance of resilience industry performance water industry regulations. housing supply and ROI’s preparedness and how to across the two regions and In response, water industry resilience to withstand future manage potential threats make some predictions specialist David McCune shocks such as international in six steps. around output and tender looks at opportunities market changes. prices for 2019 and beyond. for water companies to make their processes less energy hungry. 30 34 HOW TO BUILD COLLABORATIVE ACKNOWLEDGEMENTS AVIATION TEAMS Learn about our Air travel is booming contributors’ expertise globally, requiring airports and experience plus to be improved and contact details. expanded. Transportation specialist Derval Cummins and aviation programme manager Joe Glowacki suggest six steps to achieving the level of collaboration required to deliver complex aviation infrastructure projects successfully.
3 TAKING THE LONG VIEW
Executive summary
AECOM’s survey results and thought leadership-led OUR SURVEY RESPONDENTS discussion reveal and respond to some of the big issues facing construction across the island of Ireland. Public sector building Despite complexities and changes ahead, we can report that the general outlook is one of positivity, with a commitment from industry professionals to keep 34% building the resilience required to forge ahead. Commercial
onstruction professionals The industry will need to continue 24% across the island of Ireland embracing innovation if it is to see their businesses growing respond and adapt to the digital, on average by as much as a environmental and societal changes Civil infrastructure quarter in the coming two demanding more efficient project decades. That’s one of the key delivery. However, it is clear from Cfindings in our annual survey. our respondents that more needs to 13% Amid such optimism, and despite be done, with almost half believing differences around planning, governing they are only ‘average’ at adopting bodies and tax, among other factors, innovative delivery models. It is Residential we see that ROI and NI face similar also clear our respondents see challenges. These range from population Dublin as the city across the island growth and skills shortages, to making the most progress towards increasing resilience and environmental delivering future-ready, smart civil 11% and cyber threats. infrastructure, with Cork and Belfast So, to the specific challenges and how following behind. Water the industry is preparing to meet them. In response, and to ensure our With a greater desire for regional industry is sustainable and resilient in connectivity, the rapid introduction the long term, we believe we need to of smart technology and continuing deliver projects more collaboratively, 7% population growth, industry and design our cites to be smarter and more governments need to adapt. However, connected and affordable; invest in many respondents told us they felt that more efficient processes; maintain and Other the industry is not evolving fast enough strengthen our FDI offer; and embed to meet these changing needs. resilience into infrastructure design. The availability of people with the Achieving these will take time, effort 5% right skills, too, remains a significant and mapping out a shared vision for challenge not only across the island but the future between communities and the world. And while most respondents private and public sectors that sets out Airports see engineering as the most crucial skill the best route forward. The long view required to keep the industry moving starts now. forward over the next 10–20 years, only 3% 15 per cent feel they are fully prepared to source the right talent. Industrial 3%
Survey results compiled from responses from 70 senior construction industry professionals from across the island of Ireland.
4 Key findings
AN OVERALL POSITIVE OUTLOOK ROI’S ABILITY TO DEVELOP AND ATTRACT TALENT IS AT LEAST AS IMPORTANT Almost eight out of 10 respondents TO EMPLOYERS WHO WE SPEAK TO, anticipate their business to increase AS A SPECIFIC CORPORATE TAX RATE. in 2019, with almost half of them THE ATLANTIC ECONOMIC CORRIDOR expecting a growth rate of 5-25 per STRETCHING FROM CORK THROUGH cent. However, almost half of our 77% LIMERICK, SHANNON AND GALWAY WILL respondents see resources as the most BECOME A WELCOME COUNTERBALANCE TO significant challenge in growing their DUBLIN AS INFRASTRUCTURE INVESTMENT business over the next five years. IS DELIVERED. — SURVEY RESPONDENT
SKILLS REMAIN THE KEY CHALLENGE AHEAD
Top three factors impacting the delivery of major projects in the next 10–20 years. 40% 33% 27%
Skills/talent shortages Lack of public funding Political change/upheaval
Almost two thirds believe they are Funding shortages and complex very good to excellent at planning, procurement approaches are the integrating and collaborating with top reasons why projects fail to ‘get project partners on project delivery. 63% off the ground’. 57%
Engineering will be the most Only 15 per cent feel fully prepared important skill/talent to the to meet the challenge of sourcing the industry in the next 10–20 years. 23% right skills/talent. 15%
5 TAKING THE LONG VIEW
MORE INNOVATION IS NEEDED
Dublin is ranked as the city making the most progress towards delivering future-ready, smart, civil infrastructure. Cork and Belfast follow behind with similar results.
49%
Belfast 24% 27% 52%
Cork 23% 25% 80%
Dublin 20%
Innovatory Stagnant Backwards
Over half believe the industry is not 43 per cent agree their organisations evolving fast enough to meet the are only ‘average’ when adopting changing needs of society. 56% innovative delivery models. 43%
THERE IS A NEED TO MOVE AWAY FROM THERE HAVE BEEN CONTINUOUS CHANGES A SINGULAR ENGINEERING FOCUS ON TO THE ROI PLANNING SYSTEM RESULTING PROJECTS TO AN UNDERSTANDING THAT IN CONFUSION, INERTIA AND DELAYS, SUCCESSFUL PROJECTS ARE MULTI- CREATING WHAT IS A DEFUNCT SYSTEM. DISCIPLINARY, COLLABORATIVE THERE IS A NEED TO SCRAP THE EXISTING AND RELIANT ON SUCCESSFUL SYSTEM AND COME OUT WITH A NEW, STAKEHOLDER ENGAGEMENT. INNOVATIVE, COHESIVE AND EFFICIENT — MODEL FOR ALL SIDES. SURVEY RESPONDENT — SURVEY RESPONDENT
6 PREPAREDNESS FOR THE FUTURE
Looking ahead to future challenges, only half of our survey respondents say they feel WE NEED TO BEGIN TO PLAN FOR SIGNIFICANT prepared enough to source the right talent. Fifty per cent also feel unprepared to manage POPULATION INCREASE IN THE NEXT 20 future cyber threats. Meanwhile, some 38 per cent believe they are fully prepared to YEARS. RIGHT NOW WE ARE PLANNING FOR reduce their impact on the environment. NOW, NOT FOR THE FUTURE. — SURVEY RESPONDENT 15%
Sourcing the right 50% 35% skills/talent 27%
Attaining necessary 45% 28% funding 35%
Sourcing the right materials (on time and 48% 17% within budget) 35%
Navigating complex 30% 35% regulation 35%
Delivering complex, multi-partner projects 30% 35% at pace 38%
Reducing/limiting 35% 27% environmental impacts 27%
Adapting to/adopting disruptive new 44% 29% technologies 23%
Managing the 31% 46% cyber threat
Fully prepared Prepared Not prepared
7 TAKING THE LONG VIEW OUR FUTURE Populations across the island of Ireland are expected to grow significantly over the coming 20 years. Landscape architects Paul Tully and Edward Frampton CITIES look at where investment must be prioritised in our main cities to ensure they support sustainable growth and remain attractive and affordable places to live, work and visit.
he island of Ireland’s main over two million, with Belfast alone cities from Belfast and looking to support an extra 66,000 Dublin to Cork and Derry- people and 24,000 jobs by 2035, Londonderry are growing according to the city’s draft Local fast. According to Ireland’s Development Plan 2035. National Planning Framework, Faced with similar challenges, anT extra one million people will be including housing shortages, we need living in ROI by 2040, with the need for to make the most of development around 660,000 extra jobs. Similarly, and redevelopment opportunities NI’s population is set to grow by in our cities to ensure they remain around 4.2 per cent by 2026 1, to just sustainable, affordable, vibrant,
8 resilient and well-connected places to a cultural shift away from cars to more live, visit and work. To ensure our cities sustainable transport will enhance A VIBRANT NEW CITY- are fit for the future, we believe urban overall city resilience by reducing A CULTURAL CENTRE DISTRICT investment needs to be targeted. Here, carbon emissions and air pollution SHIFT AWAY we suggest five opportunity areas: while improving health. FROM CARS Tivoli Docks, Cork
TO MORE A major transformational project for Sustainable, active transport Spaces for people SUSTAINABLE Cork, Tivoli Docks is a 61-hectare People need to be able to move more We need to create spaces that favour TRANSPORT WILL site along the north quays of the efficiently within, to and from our people and city life, support wellbeing ENHANCE CITY River Lee directly east of Cork city cities if they are to remain accessible and provide cultural and sporting RESILIENCE. centre. With over three kilometres and attractive places to live — and to opportunities. The redevelopment of — of waterfront to the south, a rolling support social cohesion and economic Cork’s North, South and Tivoli Docks hillside residential landscape to growth. Recent projects that support is a good example. We’re currently the north, as well as key transport improved connectivity include Belfast’s developing masterplans for the connection opportunities along Glider bus system, which moves people sites, imagining what the city’s vast both the N8 road and the Cork- in and out of the city from west to east, waterfront docklands could look like Midleton rail line, the site possesses running at seven to 10-minute intervals. over the next 10–50 years. With the a unique and exciting development Meanwhile, Dublin’s Metrolink project capacity for 10,000 residential units, opportunity for Cork and its region. is included in the National Development commercial, leisure and office space, Plan 2018–2027 as a key solution to the scheme has the potential to add connect Swords and Dublin Airport with unique open spaces and high-quality the city centre, improving accessibility public realm to the city. and journey times for a potential 50 To create the vibrant, open, green million passengers per year. community spaces and amenities Crucially, transport infrastructure needed to support growth and attract needs to work with the form of our people, we need to create healthy cities. This could be achieved through streets and secure spaces that focus on designating car-free areas and through people and that are accessible for all. multi-modal transportation systems Streets need to be recognised as public that link driving, public transport and places, with parks and open spaces active transport modes such as walking designed for city life while also catering and cycling to wayfinding. Encouraging for the needs of wildlife and ecology.
Aerial view of Tivoli Docks site Image credit: Rob O’Connor
Tivoli is unique in that it has all the ingredients to become a best practice urban regeneration project and a model in sustainable development that meets national, regional and local objectives, creating a vibrant and inclusive community that supports low energy use and low emissions in accordance with climate change adaptation principles. AECOM’s multidisciplinary team is helping Cork City Council formulate its vision for the site, which includes a sustainable new city district with the capacity to deliver 4500 residential units with a population of 12,000 residents, towards the development of a Local Development Plan. Glider bus system, Donegall Square, Belfast
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1 www.belfasttelegraph.co.uk/news/northern-ireland/northern-ireland-population-to-hit-almost-2m-by-2026-with-25-rise-in-people-aged-65-and-over-36849262.html
9 TAKING THE LONG VIEW
Smarter services PUTTING LIFE BACK INTO A CITY’S HEART Investing in ‘smarter’ ways of doing things will be crucial to solving future Belfast restore and revitalise project problems, such as the use of real time Following the fire in Primark’s Bank Additional lighting and window dressing information to improve connections and Buildings in the heart of Belfast city, is helping to brighten areas which would transport links. Our cities need to plan multiple streets were cut off as a safety previously have been underused. what “smart” means for them, identify cordon surrounded the damaged which technologies they already have structure. As a result, traffic has been Family orientated attractions, including and bring resources and people together. restricted, footfall in the area has a temporary stage, outdoor cinema, The All Ireland Smart Cities Forum reduced dramatically and employment artwork and street entertainment have is a great cross-border initiative has been affected, with an estimated been added at various locations to bringing together city officials from £3 million a month economic impact. revitalise the area and offer additional Belfast, Dublin, Cork, Limerick, Galway, reasons to visit the city centre. Longer Waterford and Derry-Londonderry to AECOM was asked by Belfast City term proposals include permanent share, learn about and advance smart Council to look at ways to encourage seating installations, pocket parks city programmes. Meanwhile, Belfast’s footfall back into the city and help local and projections on vacant buildings to 20 ‘Smart Hubs’ rolled out across the traders adversely affected. As a short- provide attractive areas to visit. capital city in October 2018, created term measure we installed AstroTurf by London company Pulse, provide with colourful boxed seating areas and The fire was an unprecedented shock free Wi-Fi, mobile phone charging and planting along the closed roads and to the city and required many parties to public information messages, as well bus lanes. Market stalls along Donegall come together rapidly to discuss options, as data-capture services monitoring Place have provided a temporary place with AECOM liaising not only with council footfall and pollution levels. They’re of business for traders who have been departments and traders, but also Market the first such hubs in the UK and also relocated for safety. Place Europe, Cathedral Quarter Trust, DfI provide an instant link to emergency Roads, and other statutory bodies. services and a defibrillator.
Faster, more innovative housing construction The draft Belfast Local Development Plan includes plans to create new neighbourhoods, setting aside land for 31,600 homes between 2020–2035. ROI meanwhile aims to provide 40 per cent of its future housing needs by building and renewing existing stock in built-up areas, including its cities. So how do we hit these targets affordably and sustainably? We need to deliver homes faster and cheaper through innovations such as off-site manufacturing, where components are built in factories to excellent design standards with programmes delivered in around half Boxed seating area near Primark Bank Buildings, Belfast the time of traditional construction, significantly reducing costs and materials waste while increasing There’s also the potential for more are well integrated with high quality public energy efficiency. efficient use of existing city centre buildings realm design. Placing greater emphasis on We also need to make housing more such as converting upper floors into introducing sustainable drainage systems accessible. Innovations in flexible apartments, helping to bolster city centre (SuDS) such as green roofs and permeable housing present an opportunity for economics and sustainability of the high paving into new developments will not only policymakers to progress important street. Finally, good integrated design should improve flood resilience but also an area’s urban policy priorities. Housing units ensure the interface between living space visual appeal. with smaller footprints inherently lead and city infrastructure is complimentary, Cork, a city built within the River Lee, to increased density and may promote with the transition between public and has a street structure that reflects the river more efficient and sustainable use of private space carefully considered. that flows beneath it. Our work in the South resources. While per-square-foot rents Docks reimagines this 250-acre zone as a in many existing micro-units exceed sustainable resilient city district that has Resilience to shocks that of their larger counterparts, With all of the island of Ireland's major inbuilt flood resilience through a network of per-unit rents can be lower, providing cities being coastal, designing for resilience open spaces that positively act as flood water more housing within ranges that more against flooding is fundamental, but we storage while also defining the character of people can afford. must ensure that engineering solutions the district.
10 AND EMBRACING CONSTANT CHANGE
With a skilful workforce and a competitive, pro-business economy, ROI retains its crown as one of the fastest growing economies in Europe. And US business investment is a particularly FDI dynamic area and major contributor to the economy. So, what does it take to continue this success story? Drawing on his extensive experience and offering four steps for the future is Mark Gantly writing in his role as President of the American Chamber of Commerce Ireland.
or many people, foreign direct investment (FDI) is seen as a fairly recent phenomenon. But it’s now more than a century since large American corporations looked across the FAtlantic to extend their operations. In 1917, and choosing Cork as its first purpose-built base outside the US, Henry Ford & Son set up an ambitious manufacturing plant and was soon turning out tractors and Model Ts by the hundred. Mark Gantly Henry had a strong Irish pedigree — President of the American Chamber his father had moved to the US in the of Commerce Ireland mid-19th century during the Famine. To this day, a replica Model T Ford can be found in the centre of Ballinascarthy and financial services. They directly in west Cork where the Fords farmed employ more than 155,000 people in for more than 300 years. In the ensuing the ROI economy, and there’s at least century since Ford’s return, ROI has a further 100,000 employed in support opened its doors to dozens of US and supply chains. This accounts for corporations from Pfizer to Facebook around 20 per cent of all employment and Intel to Dell. in ROI and, with a US$446 billion total According to figures from the investment, almost 70 per cent of all American Chamber of Commerce foreign direct investment. (AmCham) Ireland, there are more What many people don’t often than 700 US companies with bases acknowledge is that, like the Ford story, in ROI. The emphasis is toward this is a two-way street. There are more innovation and technology in than 700 ROI companies exporting to industries such as information and the US, and there are 100,000 people communications, biotechnology, employed by ROI affiliated entities in pharmaceuticals, medical technologies 50 US states.
11 TAKING THE LONG VIEW
US Investment ROI investment in ROI in the US
ROI is the gateway to Europe The value of research for many US companies accessing and development European international markets spending by US affiliates of majority ROI owned firms 12% of all US investment into in 2015 was $3.9 billion Europe goes to ROI +700 +700 US companies in ROI ROI companies exporting to the US Over 400 ROI companies with operations in the US +155,000 +100,000 Direct employees of US companies in ROI People employed by ROI affiliated entities +100,000 +2,000 Indirect employees supported by US companies in ROI Locations in all 50 states across the US +$446bn +$85.5bn Total investment stock of the US in ROI Total investment stock of ROI in the US in 2015
Statistics from the American Chamber of Commerce 2018 US-Ireland Business Report
move ahead at a pace and there is with greater levels of responsibility. The FDI story so far REGARDLESS My own employer, Hewlett Packard, the uncertainty around Brexit. It’s OF THE SECTOR, Regardless of the sector, the major is now close to celebrating its first interesting to note that there was a ACCESS TO TALENT factor that will drive investment half century in ROI. During this time, big push around FDI in the early 70s WILL BE THE in the future is access to talent. we have seen FDI grow significantly. when ROI was preparing to join what MAJOR FACTOR That talent, both homegrown and Investors have benefitted from the was then the European Economic DRIVING FUTURE international is increasingly mobile. great pool of young and well-educated Community in 1973. INVESTMENT. For them to choose ROI as their long- talent, from the fact that ROI is an We have weathered much change — term base will be driven largely by appealing place to live and provides since then, and will surely weather lifestyle factors — quality of housing, easy access to European markets, more, so we know that the route transport infrastructure, healthcare and from the pro-business economy to continued success is to always and education. In addressing these bolstered by a corporation tax rate anticipate change, then be prepared challenges, the AmCham's view is of 12.5 per cent (since 2003), and tax to be flexible and adaptable. Based on that speed of execution, not quality of treaties with 72 countries. To cap it all, my experience, here are some ideas for vision, will drive our future success. the ROI economy grew by 7.3 per cent existing and prospective investors in in 2017, with GDP expected to grow by navigating the way ahead. 4.7 per cent in 2018 and 3.9 per cent in 2019 according to the Economic The FDI long view and Social Research Institute’s latest ROI’s track record of success in FDI quarterly commentary. is the envy of many. That success is not just in attracting new FDI, it’s also in retaining and transforming Moving with the times But, of course, times are constantly the installed base. The inclination changing and business needs to of existing companies is to do more respond. Technology and innovation here, also to entrust the ROI entity
12 FOUR STEPS TOWARDS THE FUTURE 1/ 2/ 3/ 4/ KNOW YOUR LOVE CHANGE INVEST FOR IMPROVE QUALITY NEIGHBOURS GROWTH OF LIFE
Whether it’s pharma It’s true of all business, but This is a message to FDI In the past five years we in Cork, IT in Dublin or especially true of FDI — you companies, infrastructure have seen a significant ‘med tech’ in Galway, FDI always need to adapt to providers and particularly change in the priorities companies have tended to survive. Transformation to government. Economic for FDI companies. form clusters. And there’s a is the route to absorbing success and growth are Their attention has shifted great deal that’s positive to change, adapting and then inextricably linked to towards attracting and be said about the power of a forging ahead. US FDI in ROI infrastructure. These range retaining the best talent. critical mass of like-minded is remarkably resilient. That from reliable and affordable To retain this talent we ventures. For existing can be largely attributed to water and power to better need to look to our cities companies there are its ability to anticipate and broadband, roads and to invest in improving opportunities to be found adapt to change. public transportation. ROI quality of life — and that’s by partnering with start- has made great progress everything from new ups or academic research in many of these areas, but homes and better office groups that are prominent there is a lot more to do. buildings to leisure and on the scene. For incoming We have many of the right cultural amenities. At investors, you know things mapped out in the present around 17 per you’ll have a ready-made Project Ireland 2040 plan, cent of the total population community and support but we need to execute. was not born in ROI, in network. While AmCham US multinationals that has traditionally been seen proportion rises to 27 per as the voice of the large FDI cent. Given the diversity companies, it is actually the of the workforce, we also emerging FDI sector that is need to put inclusion at the fastest growing part of the centre of our agenda our membership. — it will be a major differentiator for attracting FDI in the future.
FOR EXISTING COMPANIES THERE ARE OPPORTUNITIES TO BE FOUND BY PARTNERING WITH START-UPS OR ACADEMIC RESEARCH GROUPS. INCOMING INVESTORS KNOW THEY’LL HAVE A READY-MADE COMMUNITY AND SUPPORT NETWORK.
13 TAKING THE LONG VIEW
Suzanne Wylie CHIEF EXECUTIVE, BELFAST CITY COUNCIL
INTERVIEWED BY AECOM'S TREVOR LEAKER, REGIONAL LEADER, NI, AND JODY WILKINSON, PROJECT DIRECTOR
Suzanne has been Belfast City Council Chief Executive since July 2014. She is the council’s first female chief executive and leads its City Plan, the Belfast Agenda 2035, which focuses on inclusive growth and connecting neighbourhoods and people to the opportunities it creates. Belfast City Council is the largest council in NI, with 2,700 staff, and is responsible for providing services to the city’s 333,000 people.
UK Chancellor Philip having good infrastructure in place Many European cities are Q Hammond’s commitment and promoting the right narrative, Q becoming increasingly car- of £350 million towards the we will continue to attract FDI. We WE NEED TO SOLVE free. What more can Belfast do Belfast Region City Deal in the are also focused on supporting the REAL CITY to reduce congestion? Autumn Budget is great news. growth of small businesses as well PROBLEMS USING What will the investment mean as start ups. Just take cyber security TECHNOLOGY The recent investment in public for the Greater Belfast area? for example. We are now a well- RATHER THAN BE A transport was absolutely needed. recognised hub across the island. TECHNOLOGY LED. The Glider operates west and east, The deal has the potential to — but one of our City Deal projects is A create up to 20,000 jobs and Belfast City Council is actively to run it north and south, and out increase productivity. It focuses Q encouraging more city-centre beyond the city boundaries. The on our growth sectors: FinTech, living. What is needed to make Transport Hub and its ability to advanced manufacturing, health the plan work? handle many more passengers will and life sciences, cyber security, be another game changer. data analytics and tourism and Any successful city has people living creative industries. The money A in the heart of it. We have long- Parking also needs to be smarter. will be invested in our wider established communities in Belfast, Too many people circle the city infrastructure, allowing these which we need to embrace and help centre looking for a space with growth sectors to really flourish. flourish, but we also need more no smart technology to show For example, we are working housing and more people living in availability. We really need to alongside universities to create the city centre. reduce the number of workers research and development hubs for parking in the city all day. That’s each of these sectors and on digital The Belfast Local Development Plan why public transport needs to be projects that will create smarter (LDP) 2035 talks about 8,000 new top quality, good value and very districts and better connectivity homes in the city centre itself. The timely to get people in and home across the region. The deal will also public sector can help by making quickly from more strategic places include tourism and regeneration space available and taking a focused like ‘park and ride’ facilities. projects, along with employability approach to planning. and skills programmes to create the Our cycling network is making right pipeline of jobs. We also need the private sector to great strides, but we need to join it co-invest alongside us. The LDP is up more. We’re adding more Belfast With the lack of a Stormont targeting a total of 32,000 new homes Bikes and reassessing station Q Executive, how can the council in Belfast over the next 20 years. We locations so they’re in the best-used help restore foreign investors’ want to retain more of our young areas. The city also needs to be faith in NI? people and bring back those who more walkable. went to university elsewhere; that’s We continue to see new companies a real challenge and why focusing on Retailers are struggling across A investing in NI, with 75 per cent creating good jobs is really important. Q all cities and our High Streets of FDI companies reinvesting and We also have 15,000 students coming are going to look very different expanding. Certainty is a key issue into the city through the new Ulster in 10 years. With this in mind, for businesses setting up here and University campus. Alongside and considering the aftermath some have looked to the council Queen’s students, that’s going to of the Bank Buildings fire, how as a stable governance system, still create a great dynamism within the is the council addressing the making decisions, still supporting city. Our regeneration plans are changing face of retail? investment and co-investing to ambitious but need stress-testing make projects a reality. Alongside against what is currently happening A fire at a heritage building in a Invest NI, we help FDI companies in the heart of our main city after the A city centre crossroads has led us to set up their businesses and source Bank Buildings fire. It’s important we rethink how Belfast should up its employees. If we really focus on have a strong city, for the good of the game as a vibrant commercial and tying down the skills available, entire region. living space.
14 We’ve been meeting with your IF WE LOOK AT REALLY 100 RESILIENT CITIES Q Smart Belfast team, looking at the opportunities technology SUCCESSFUL PLACES WHERE PROGRAMME (100RC) can bring to Belfast. How do you see technology improving The 100RC supports 100 cities RETAIL WORKS BEST, THERE’S the city? globally in tackling issues of globalisation, urbanisation and A MIX OF ATTRACTIONS, We need to solve real city climate change by developing problems using technology rather a resilience strategy. A WHICH CAN INCLUDE VISITOR than be technology led. Think of car parking, live transport AECOM is a key strategy FACILITIES, OFFICES, AN ARTS feeds, tourism footfall and waste partner for the programme, management — these areas use working with a number of the AND CULTURAL SCENE, AND technology strategically and that’s cities to develop processes the approach we’d like to take. We INCREASINGLY, RESIDENTIAL as part of their resiliency want to have a smart district in the strategies. So far we have city and have been working with SPACE — THAT’S WHAT worked directly with 30 cities Belfast Harbour, which wants a including Rome, Christchurch, smart port to improve logistics. WE REALLY WANT TO SEE Melbourne, San Francisco, This approach could be developed Berkeley, Oakland, Bangkok, out to the city centre too. IN BELFAST. Jakarta and Quito. — We want to be 5G enabled to improve connectivity and also to test new technology. Dublin’s In the short term we are focusing Smart Docklands is promoted as on supporting traders with a the Europe’s most connected two financial support package and square kilometres, attracting some getting the cordon taken back as big technology companies to invest. quickly as possible. Medium term For me it’s about joining it all up to is about driving footfall back into see smart technology adding to an the centre. Longer term, if we look overall city strategy. at really successful places where retail works best, there’s a mix of attractions which can include visitor facilities, offices, an arts and cultural scene, and increasingly, residential space — that’s what we really want to see in Belfast. People come into the city centre for a wider experience and shopping is only part of this.
We also joined the 100 Resilient Cities Programme. This allows us to tap into expertise right across the globe and demonstrate how we need to be capable of responding to the quick shocks and longer-term stresses we may face.
Suzanne Wylie Chief Executive, Belfast City Council
15 TAKING THE LONG VIEW STEPS TOWARDS IMPROVING INFRASTRUCTURE RESILIENCE
The island of Ireland's transport networks and 6services are increasingly vulnerable to the impacts of extreme weather events and human attack and could benefit from increased protection, write transport planners John Humphreys and Beatriz Martinez Pastor.
16 npredictable weather events building confidence in the future for are having a negative impact on all of us. the economy. This was shown While it’s not possible to predict or during Storm Emma in February avoid all hazards or threats, they can 2018 when the majority of be managed. A strong resiliency plan STEPS TOWARDS WAITING IS NOT ROI’s transport network was can reduce the risk and impact of an Ushut down for almost a week. This event and speed the recovery, which AN OPTION — caused significant losses for the ROI dramatically reduces the cost in terms economy from business to education, of physical, social and economic loss. START SMALL OR and restricted access to services. Since In building a plan, we suggest six steps extreme weather events like Storm towards improving resilience. IMPROVING START BIG — BUT Emma are more likely to occur due to the influence of climate change, it is 1/ ACT NOW START NOW. increasingly important for the island of Ireland to develop strategies to prepare There is no time like the present. — and mitigate their effects. Whether creating new infrastructure INFRASTRUCTURE At the same time, as the world systems and networks or upgrading becomes digitally connected, our existing assets, the earlier resilience is exposure to hacking increases and considered, the more effective, efficient cyber-attacks can impact more people. and economical the solutions will be. So resilience preparedness should not Ideally, discussions start at concept RESILIENCE simply consider the impact of extreme stage, making it possible to achieve weather events, but also the possibility resilience and security by design of network disruption from cyber crime. throughout the project.
Connected problems require 2/ THINK BROAD converged solutions The changing urban and infrastructure An effective resilience plan must landscape has created the need for integrate across the physical and logical holistic, industry-wide solutions (also known as digital) domains. For for identifying and managing risks. example, most recent cyber-attacks are Resilience is not a one-dimensional or described as ‘blended’ attacks meaning static issue and a significant disruption they exploited vulnerabilities both in the will exploit any existing vulnerability. physical and digital domains. The same For these reasons, and because we systems approach also applies to major do not know the nature of all future weather events such as hurricanes. threats, it is important that we build In the US, one of the major issues in adaptive security and resiliency into restoring power following Hurricane infrastructure as early as possible, Sandy was the inability to connect to ideally from the start. critical data centres necessary to restart For this reason, three phases of sections of the grid. analysis are required when considering resilience: 3/ TEAM UP // Before the event: develop measures prior to the disruption to reduce the In the same way that disaster has negative impacts. no respect for borders, effective resilience must cut across all silos and // During the event: take steps to boundaries. From logistics departments protect infrastructure during and IT to asset and facility managers, the disruption. everyone needs to participate and // After the event: develop mitigation collaborate in finding the best and most strategies to achieve a swift recovery. innovative solutions.
Turning adversity into opportunity 4/ PRIORITISE As any risk manager will attest, risk cannot be eliminated altogether. With broad agreement that spending on However, transportation organisations resilience protection is an investment, can become better at planning for infrastructure owners must first identify adaptation and mitigation strategies. and prioritise their critical assets and The goal should be to manage risk essential functions. This is crucial to effectively and to understand at what ensuring that the limited resources level to mitigate, transfer or even are being spent to protect the highest Queen's Bridge and Queen Elizabeth II Bridge over the River Lagan, Belfast accept some risk. Building plans and priority assets and processes. preparedness needs to be part of
17 TAKING THE LONG VIEW
INCREASING YORK STREET INTERCHANGE FLOOD RESILIENCE
York Street Interchange is a major However, the risk of flooding junction in Belfast linking the city’s associated with various underpasses three busiest roads: Westlink, the proposed within the scheme linking M2 and M3. The Interchange lies strategic traffic would not only within the coastal floodplain of threaten road users but also carry the Belfast Lough and is at risk of a one risk of major remediation costs. The in 200 year flooding event or greater, resulting downtime on the strategic which would not only overwhelm the routes would significantly hamper any interchange but also inundate Belfast major incident response. city centre and significant areas of east Belfast, damaging property, AECOM partnered with the affecting livelihoods and requiring Department for Infrastructure and substantial funding and co-ordinated Northern Ireland Rivers Agency to recovery response from numerous protect the scheme design with local government agencies. additional flood resilient solutions to protect the underpasses. These We are delivering a £125–165 million added measures will allow the upgrade of the interchange to underpass to remain accessible address bottlenecks and improve for emergency services following traffic flow to this strategic route. a major flooding event to assist in Belfast’s recovery.
18 5/ ASSESS PRIORITISING NATIONAL SECONDARY ROADS Like any effective business plan: goals, objectives and metrics are needed National Secondary Roads (NSRs) We are working with Transport to measure effectiveness. During the account for almost half of ROI's Infrastructure Ireland (TII) to evaluation of resilience, it is important National Road Network, or around understand the varying roles played to consider the potential risks which five per cent of all of ROI's roads. by different NSRs, depending on could affect the infrastructure. It is While they may only account for what their users need. This work has vital that any business consistently 20 per cent of daily traffic on the identified those roads that need to evaluates potential hazards and threats country’s national roads, some NSRs be open all the time due to a lack then measures and evaluates its cater for high volumes of traffic, of alternative routes, so that they resilience plan, policies and procedures while others are vital routes for can be targeted for investment to determine their effectiveness at people in rural areas who would be to improve their resilience during mitigating these critical hazards and isolated without them; overall, NSRs adverse conditions. This will help threats. And the only constant is change. are integral to the performance of TII make better use of its resources We know the threats are dynamic and ROI’s entire road network. within a limited budget while while we may not be able to predict improving long-term performance the nature or timing of the change, we and resilience of NSRs. must assume it will change and be agile and ready to adapt. This assessment is vital to evaluating the effectiveness of investments made in resilience and changes that might be necessary. 6/ TAKE ACTION Consider the resilience protection already in place; there will almost certainly be opportunities to optimise and leverage what already exists. And remember that you may be able to share the costs with others who stand to benefit from future resilience investments. Waiting is not an option — start small or start big — but start now.
M50, Dublin
19 TAKING THE LONG VIEW
Industry spotlight
here’s no doubt that when we take stock of 2018 construction performance across the island of Ireland it was a case of two varying perspectives. While NI’s industry is growing, Brexit andT the collapsed devolved government cast somewhat of a cloud of uncertainty over the region. ROI on the other hand experienced continued positivity. So, what is the long view for the island of Ireland’s construction industry? The consensus for 2019 is positive, as confirmed in our survey, with 77 per cent of our respondents envisaging an increase in business in 2019, half of who expect a growth rate of five to 25 per cent. That said, there are a range of factors that could potentially impact on performance in 2019 and beyond, not least of which is Brexit. Our survey results reveal that funding shortages, complex procurement approaches and inflexible permission 77% processes are the top three reasons why projects fail to ‘get off the ground’, with resource shortages seen as the key challenge in growing business over the next five years. 50%
23% 13% 9% 2% 3%
(Increase 77%, Decrease 8%, Stay the same 15%) Brexit issues Funding Resources Market size Market Competition Environmental Environmental CHALLENGES AFFECTING GROWTH IN ANTICIPATED GROWTH IN 2019* NEXT 5 YEARS* *Results based on AECOM survey
20 Let’s take a closer look at the changes we’ve seen and those that we anticipate across the industry in each region. Northern Ireland
must stop. The policies now being of course an opportunity longer term for Survival and growth This is our third year of debating implemented will help ensure the public £1bn Belfast to reconsider what the future of Brexit and a (non-functioning) sector gets better value for money from retailing looks like in the city centre as will be injected devolved government, yet the economy consultants and contractors alike and into the local well as the shape of and activity in those hasn’t imploded and there’s no when more projects come to market we economy over the respective streets. Being a member of significant unemployment. In fact, should expect significant interest. next 10 years the 100 Resilient Cities will no doubt the exact opposite has happened: help Belfast deal with these challenges. unemployment fell from 4.7 per cent Private sector: a robust to 4.3 per cent in 2018 and, as we performance discussed in 2017, the economy has The private sector has continued to not only survived but grown, albeit perform in a robust manner with fewer modestly, with the construction difficulties in obtaining funding and industry experiencing three quarters demand holding for both commercial of growth over the past twelve months and residential buildings, with house (Q3 + Q4 2017 and Q2 2018). This is prices continuing to rise with Q2 further demonstrated in wage inflation, 2018 prices 4.4 per cent higher than which stood at 4.2 per cent in 2018 — the same period in the previous year joint highest in the UK regions. according to the Northern Ireland House Price Index. An additional four per cent growth is expected by 2022, Public sector: uncertainty yet Primark Bank Buildings, Belfast making the region one of the best better value ahead Generally, feedback is one of frustration performing in the UK. If house prices The Chancellor’s 2018 Autumn at the slow rate at which public sector are seen as a barometer of domestic Statement confirmed that the projects are coming to market. This economy performance, we should be Belfast Region City Deal (BRCD) is almost certainly down to the lack encouraged by a steady recovery rather was successful. City Deals are of an Executive and the uncertainty than one of erratic growth. bespoke packages of funding with surrounding civil servants’ ability to make the BRCD comprising six councils decisions. However, when some clarity in the surrounding regions. This will Challenges and opportunities is brought to this, we can perhaps expect Belfast suffered the significant loss of inject somewhere in the region of £1 to see a flurry of public sector projects the Primark Bank Buildings in August billion into the local economy over being tendered. This will obviously 2018, which has without question the next 10 years with significant be welcomed by the industry and is suppressed footfall in the retail heart amounts of investment in innovation necessary to ensure the sustainability of of the city. NI-wide retail footfall was and digital, tourism-led regeneration, the industry longer term. down 4.6 per cent in the immediate infrastructure and employability and In 2018 the Department of Finance’s aftermath, with a 30 per cent reduction skills. With the potential to create Construction and Procurement Delivery in Belfast. However, out of this terrible up to 20,000 new jobs, this is a good engaged with industry to recognise that event, opportunity must come. opportunity to get public and private fees and tender prices for public sector The knock-on effect of sectors collaborating to deliver real projects need to be at more sustainable retailers relocating should opportunities for Belfast and the levels and that the race to the bottom stoke the market and it is wider region.
13.4% § Housing output ↑ 7.1%* Planning applications for major ↑ developments received in NI Infrastructure output ↑ 5.4%* during 2017/18 (those with important economic, social and † environmental Implications) House prices ↑ 4.4% 32%ǁ ‡ No. of cranes in Belfast ↑ 4.6% (between 2017–2018) Retail footfall ↓ (in September 2018)
*NISRA †Land and Property Services ‡Springboard §Department for Infrastructure ǁDeloitte
21 TAKING THE LONG VIEW
Republic of Ireland
ROI’s tender prices increased in A benchmark for the future Sectors: mixed results in 2018, If we take ROI’s construction industry 2018 as demand and output continued 6% growth in 2019 average performance over the past to grow, along with pressures on Throughout 2018, residential was one predicted increase in 22 years as the benchmark for future tender prices in 2019 limited resources this entails, with the of the most talked about sectors in performance over the next 22 years to variation in regional demand impacting ROI’s general news due to chronic 2040, it is in a good place based on the on tender prices, seen as an estimated shortages in key urban areas. Actual potential future scenarios highlighted increase of 4.5 per cent in the regions, increases in housing completions have in the construction output chart 7.5 per cent in Dublin and an overall been slow relative to demand, in part opposite. Taking the average annual average of 6.5 per cent in 2018. In 2019 due to the time lag involved; however, growth in the value of construction we expect tender price inflation will there are some positive signs with the output from 1996–2018 of 4.33 per moderate slightly to an average of six number of units obtaining planning cent, and applying this on a year-on- per cent nationally with four per cent permission in the first quarter up year basis, industry output in 2040 in the regions and seven per cent in 80 per cent on the same period in would be circa €51 billion. In the chart Dublin. However, as is always the case, 2017. One major concern tempering we run three other scenarios of a there will be sectors and locations that this positive sign is that of viability, high initial growth, low initial growth will fall outside such averages. particularly in relation to apartment and cyclical growth but arriving at A further factor to be considered developments. In many cases the costs the same end point to illustrate how with construction costs in the broader may exceed the sale price available; differently that journey might be. Of sense, rather than unit rates specifically, planning permissions granted may lay course, the standard “past performance is that of regulatory and industry dormant until the viability gap is no guarantee of future results” standards and related matters. is bridged. caveat must apply and as a small open A clear example of this, which has ROI’s commercial and FDI sectors economy, construction industry future been on the agenda, is the Nearly Zero continue to perform strongly. Public performance is very much linked to the Emission Building. Coming into effect sector capital spend in areas such economy as a whole. on newly completed public buildings as health and education has also after 31 December 2018 and on newly grown year on year. Activity in civil completed private buildings with a infrastructure has been sluggish; Costs, pressures and completion date post 31 December 2020, however, there is optimism that the tender prices The introduction of the Sectoral it is having an impact on overall costs sector will see an upturn in 2019. Employment Order (SEO) increase and needs to be considered on a project- of 10 per cent for general craftsmen by-project basis. and labourers in October 2017 and for mechanical services in March 2018 undoubtedly impacted on construction costs and tender prices in 2018. In contrast, material cost price increases have been more modest, with the weakened value of sterling a factor. We estimate construction costs increased on average by 3.5 per cent in 2018 and predict an increase of 2.5 per
cent for 2019. Sean O'Casey Bridge, Dublin
37%‡ 3.5%* No. of cranes in Dublin ↑ from Sept 2017-Sept 2018 Construction costs ↑ in 2018 and predict an increase of 2.5 % for 2019 § † 6.5% 30.3% § Tender prices ↑ in 2018, estimated increase of 6% Residential unit completions ↑ (first six months 2018 compared to in 2019 same period in 2017) 13.8% † † Construction employment ↑ Value of construction output† ↑ 17.6% Q2 2018 on Q2 2017
*AECOM †CSO ‡Irish Times §AECOM, Ireland Tender Price Index
22 Republic of Ireland's construction output 1996–2040
Value of construction output 60,000 Future output*: constant trend 55,000 Future Output*: initial low-growth trend Future Output*: initial high-growth trend 50,000 Future Output*: cyclical trend 45,000
40,000
35,000
€m 30,000
25,000
20,000
15,000
10,000
5,000
0 2011 2012 2014 2017 2013 2015 2016 2019 2018 2010 1997 2024 1996 1999 1998 2021 2031 2025 2026 2027 2028 2022 2032 2023 2037 2029 2020 2035 2001 2036 2039 2033 2034 2038 2030 2007 2002 2040 2003 2005 2009 2004 2006 2008 2000
Year
*The future output trend lines are all based on reaching a hypothetical value of construction output of €50.8 billion in 2040, based on +4.33% per annum increase equivalent to the average increase over the past 22 years. The four trend lines are to illustrate a number of potential pathways to the same end result.
Source: DKM Construction Industry Review and Outlook (various years), CSO Indices and AECOM estimates
Build resilience now
Ultimately, the complexity of the more needs to be done, particularly Managing tomorrow's issues Life and economic development is industry continues to expand, as does around the key challenges identified in never simple, with problems of the the frequency of issues requiring our survey. future being very different than those dialogue and action. Collaboration between industry we face today. While there is an air of Building resilience now is vital to us representatives and policy makers optimism about the prospects for the developing a stronger long-term view is key to identifying the measures years ahead, given the cyclical nature and in helping manage tomorrow’s needed to respond to these and wider of the industry, we also have to prepare issues. Progress is being made on a business and societal challenges, and in for setbacks. range of industry issues such as smart helping to maintain a more sustainable technology and modular, but a lot industry long term.
TOP 3 SKILLS Engineering 23% MOST IMPORTANT TO DEVELOPING THE Project and 19% INDUSTRY OVER THE cost management NEXT 10–20 YEARS Strategy/ 18% scenario planning
23 TAKING THE LONG VIEW THREE WAYS TO REDUCE WATER INDUSTRY ENERGY USE
Pumping and treating water and wastewater uses CERTAINTY OF a lot of energy, costing water companies huge OPERATIONAL COSTS sums of money and making it harder for them to AND THE NEED TO meet tough economic and environmental targets. Water industry specialist David McCune proposes BUILD RESILIENCE three innovative ways to make water processes ARE DRIVING more efficient and less energy hungry. WATER COMPANIES TO REDUCE THEIR ENERGY DEPENDENCE. —
24 round the world, water reduce their energy dependence. This Meanwhile, Irish Water continues its companies are under is no small challenge considering multi-billion euro capital investment pressure to cut their energy TO REALLY DRIVE the island’s continuing population programme to bring its aging assets up use, not only to reduce DOWN LONG-TERM growth and that water companies face to current standards to comply with costs but also to increase ENERGY USE, increasingly tough environmental environmental requirements. Across resilience and reduce their THE INDUSTRY standards driven by the Northern the region there are still towns and environmentalA impact. MUST MAKE ITS Ireland Environment Agency and villages without wastewater treatment Across the island of Ireland, public PROCESSES MORE Environmental Protection Agency. facilities, discharging largely untreated water utilities spend an estimated EFFICIENT. When we also consider the ever- effluent into the environment. Tackling €100 million of their annual operational — increasing scrutiny of public this will inevitably lead to greater energy budgets on energy needed to abstract, expenditure, as governed by the Utility consumption. But this also presents treat and pump water and wastewater Regulator and the Commission for an opportunity to shape the future and to and from customers. This produces Regulation of Utilities, it is clear that make energy efficiency a key driver carbon emissions and ties up money local water utilities need to take a from the concept stage of new projects, that could otherwise be invested in multifaceted approach to cutting their resulting in long-term efficiency savings. improving their asset base. energy use and costs. Irish Water has already dedicated All energy-hungry industries are Northern Ireland Water — NI’s significant investment in this area of affected by global energy market largest electricity user — is uniquely its operations with approximately 200 fluctuations, leading to uncertainty positioned to make a positive distinct energy efficiency projects 2 around operational costs. This impact in cutting the country’s progressed in 2017 including pumping, uncertainty makes it hard for water energy consumption and reducing lighting and heating. companies to deliver affordable carbon emissions. For example, the While progress is good so far, there and reliable services to customers, company’s recently completed £7 is more that can be done. To really impacting on their overall resilience. million solar farm at Dunore Point 1 is drive down long-term energy use, the Certainty of operational costs and expected to save £500,000 in energy industry must look at ways to make its the need to build resilience are two costs and around 2,000 tonnes of processes more efficient. Here are three key drivers for water companies to carbon every year. innovative ways how.
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1 www.solarpowerportal.co.uk/news/northern_irish_utility_turns_to_solar_to_save_500000_each_year 2 www.ervia.ie/ervia-annual-report/19843_Irish_Water_AR_2017_Full_V16.pdf
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TAKING THE LONG VIEW
1/ 2/ FOR WATER-INTENSIVE REUSE INDUSTRIAL INVEST IN MORE INDUSTRIES SUCH AS WATER EFFICIENT KIT FISH PRODUCTION AND PHARMACEUTICALS, In 2018, the Commission for Another way to tackle high Regulation of Utilities Water and energy use is to invest in more THE POTENTIAL TO RE-USE Energy, CRU Ireland, published Irish energy-efficient equipment. For Water’s proposals for a new tariff example, water companies use a WATER REPRESENTS A framework which will apply to Irish lot of electricity to pump air into SIGNIFICANT OPPORTUNITY. Water’s non-domestic customers. wastewater, which is needed to treat The framework will ultimately lead to a it. Microbubbles, or miniature gas review of pre-treatment and licensing bubbles, can speed up sewage break with corresponding cost impacts down because they have a large affecting hundreds of businesses. For surface-area-to-volume ratio. water-intensive industries such as fish production and pharmaceuticals, the In partnership with the University of potential to re-use water represents a Sheffield, AECOM is testing a fluidic significant opportunity. oscillator device, which rapidly pulses air through conventional wastewater AECOM has worked with a paper mill treatment diffusers to generate to develop a new system that both microbubbles, without using more recovers water and fibre from its main energy. Fast vibrations caused by the process and reuses treated effluent fluidic oscillator ‘flick’ air bubbles off as part of its paper production the diffuser into the water before they process. Using this system, the paper increase in size — a key problem for mill discharges less water back into standard systems. The technology the sewer or environment and has can be easily fitted to existing and reduced supplied water by as much new-build wastewater treatment as 65 per cent. plants. While still in development, the results indicate a 40 per cent This means industry can avoid improvement in the rate of oxygen treating larger volumes of wastewater transfer. This significantly reduces to increasingly high standards the amount of energy used to as required by regulators, while breakdown the sewage, continuing to meet discharge drastically cutting costs consents. The knock-on benefit and carbon emissions. for water companies is that they too have to treat and supply less water. This provides existing treatment works and networks the extra capacity to cope with future demands such as population growth without having to spend money on costly upgrades.
65% A new system developed by AECOM and a paper mill reduces supplied water by as much as 65 per cent and discharges less water back into the sewer or environment.
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3/ LEARN FROM OTHER INDUSTRIES
For decades, the manufacturing and pharmaceutical industries have been using statistical process control methods, a branch of mathematics, to intelligently measure and monitor their production systems to make them more efficient. It is a transferrable approach.
For example, in the water industry, too much dissolved oxygen (DO) in an activated sludge plant can lead to wasteful electricity consumption. However, too little oxygen reduces the quality of effluent produced. This fine balance is difficult to maintain using current water industry control methods as they do not take into account multiple variables such as the concentration of what enters a system, or equipment wear. Through statistical analysis, which we’re currently applying within the water industry, it is possible to intelligently manage oxygen levels to break down sewage as efficiently as possible — optimising energy use.
This approach gives stretched operational and maintenance teams the foresight to prioritise and direct their resources toward solving issues before failures occur, avoiding potential regulatory penalties. Water companies can also use statistical control methods to determine average failure rates to inform whole- life cost decisions and benchmark equipment, leading to better capital investment risk management decisions. As an example, does process equipment brand ‘A’ cost WE’RE TESTING A more in whole-life terms because it needs more manual intervention or MICROBUBBLE TECHNOLOGY energy than brand ‘B’, despite being cheaper to buy? Statistical control INDICATING IMPROVED can be applied to any control variable, not just DO, including chlorine doses OXYGEN TRANSFER OF in water networks, pumping station levels and booster pressures in 40 PER CENT, SIGNIFICANTLY potable mains, to name a few. REDUCING ENERGY USED TO BREAK DOWN SEWAGE. —
27 TAKING THE LONG VIEW
Jim Power ECONOMIST, JIM POWER ECONOMICS
INTERVIEWED BY AECOM'S JOHN O'REGAN, REGIONAL LEADER, ROI
As one of ROI’s leading and best-known economic analysts, Jim has a wealth of experience in delivering insightful economic forecasts, commentary and analysis to both ROI and international audiences. He writes regularly for national newspapers and contributes to radio and TV discussions.
Where is ROI in the economic In a nutshell, out to 2040, FDI will Q cycle and can we take a ‘long have to remain a key part of ROI’s view’ of how it could evolve economic model but we will need by 2040? to ensure we have a sufficiently strong indigenous economy. I think ROI is the textbook example of a developing the regions should be a A small open economy and, as we particular focus. discovered in 2007–2008, our vulnerability to negative external What do you see as the most developments is incredibly Q exciting elements of the strong. Over the past couple of Ireland 2040 Plan? years we have seen the flipside to this in that we have benefitted To me the most exciting parts enormously from very positive A — they are not rocket science so global economic developments, maybe only an economist can get not least the European Central excited by them — are: the plan Jim Power Bank interest rate policy and the to stem urban sprawl; moving synchronised recovery in most of towards a low carbon sustainable the world’s major economies. economy; and the focus on bridge has to be a part of our long- regional economic development. term strategy. Developing ports, Looking forward to 2040, we I like that Ireland 2040 is not IN A NUTSHELL, particularly outside of Dublin, must recognise where we have promising investment in industry OUT TO 2040, FDI WILL which is up against capacity come from. A key challenge and jobs in every village and HAVE TO REMAIN A constraints, is key to achieving is our massive dependence town across ROI — I believe that KEY PART OF ROI’S this. Thirdly, I would like to see on FDI and the fact that our is a pipe dream. Creating hubs ECONOMIC MODEL significant investment in all areas corporate tax structure is getting of economic activity around the BUT WE WILL NEED of education across the economy, increasingly unwelcome attention larger towns and cities that people TO ENSURE WE HAVE particularly third level education. internationally. Demographics can travel to for work purposes A SUFFICIENTLY represent a key challenge for the is key. STRONG INDIGENOUS What differentiates ROI and will global economy, particularly in ECONOMY. determine its success or failure out Western Europe, a fact that will Which sectors have the most — to 2040 is the quality of its labour have significant implications for Q potential to contribute to force. So to me, investment in health and pensions expenditure, economic growth? education is absolutely paramount. and which will also threaten the tax base as populations age. It is essential that we create a What are the biggest This will increase the impetus A counter balance to Dublin. That Q challenges to delivering to maximise tax revenues and is not to suggest for one moment Ireland 2040? countries deemed to be using tax that we stop investing in Dublin; policy to steal taxes from other the Metro should be delivered. I The challenges to delivery include countries will not be viewed believe we need serious investment A the capacity of the construction favourably. I think we will hold in city transport infrastructure in sector — which is definitely not onto the 12.5 per cent corporate Dublin, Cork, Limerick, Galway an unsurmountable challenge; the tax rate — although it will become and Waterford. planning system; and the political more difficult, but there will be an will, which worries me most. It is a undoubted momentum to ensure Secondly, I believe investment long road and after every election that business pays tax where the in ports and airports is very the focus seems to go astray. We economic activity actually occurs important, particularly in the must ensure that the focus remains and not where the balance sheet context of Brexit. The reduction clearly on delivering Ireland 2040, resides. This is a challenge for ROI. in the importance of the UK land although some flexibility may be required as circumstances change.
28 How will the maturity of the Q ROI construction sector affect our capacity to deliver the National Development Plan?
Ten years ago, the ROI A construction sector was hit with a catastrophic shock. In terms of commercial development delivery over the past two to three years, the ROI construction sector has shown its capabilities and is responding really positively. I don’t for one moment criticise the ROI construction sector for failing to deliver on the housing side, the problems are very much due to poor policy and weak policy makers. It should not be rocket science to deliver sufficient housing, but we lack the institutional capacity to do so.
The housing crisis has received Q much warranted commentary in the past year, with calls for reduced VAT to stimulate supply. What are your thoughts on this and our current policy?
Housing delivery problems Do you believe ROI has the A include economics and viability. Q resilience to withstand As I see it, the margins are way international market changes too narrow to justify significant and shocks, such as Brexit? investment in residential. Obviously, the site cost is a key The secret to economic input but also of consideration is A sustainability is to manage the fact approximately 40 per cent your economy as prudently as of the price of building a house possible. When we are hit with goes to the State on developer an external shock, our ability to levies, VAT etc. There’s a need deal with it determines success WHAT DIFFERENTIATES to address these, either through or failure. In 2007–2008, for a ROI IS THE QUALITY OF reducing the VAT rate or relaxing variety of reasons, we had very developer levies. I believe that if little resilience to deal with the ITS LABOUR FORCE. SO you tax something less, you get shock of the global financial more from it and vice versa. So I crisis. Today, the most immediate TO ME, INVESTMENT would, on balance, be in favour potential shock is Brexit. As an of reducing the VAT rate. It is too economy, I think Dublin will IN EDUCATION IS easy to say that cutting the VAT benefit from a hard or soft Brexit. rate will just increase profitability, With a hard Brexit, the regions ABSOLUTELY PARAMOUNT. adding to developers’ margins, will become more of a concern, but we need ways of guarding which is why I think Ireland 2040 against that. Obviously, this is is really important. While Ireland — one of the biggest challenges 2040 stretches well beyond politically because anything the immediate Brexit crisis, as that is deemed to be helping we gradually move towards its developers is politically toxic. targets, the regional economies Sometimes politics is the enemy will become more resilient to to implementing plans. deal with shocks like Brexit.
National University of Ireland, Galway
29 TAKING THE LONG VIEW HOW TO BUILD COLLABORATIVE AVIATION TEAMS
Airports across the island of Ireland face increasing passenger numbers and will need to be improved and expanded to cope with future demand. Transportation specialist Derval Cummins and aviation programme manager Joe Glowacki discuss how to set up the effective collaboration needed to deliver these highly complex aviation projects successfully.
30 ore people are flying than the airport in 2017 — up 700,000 ever before. Globally from 2016 — with VINCI Airports, around 7.8 billion air the airport’s new owner, expected passengers are expected to support continued investment in to travel in 2036 — that’s capital expansion programmes. UNIFYING CLIENTS, nearly double the four Cork, Kerry and Knock (ROI West) CONSULTANTS, Mbillion who flew in 2017, according to airports all recorded strong growth in International Air Transport Association 2017–2018 as well. SUB-CONSULTANTS, (IATA) figures 1. It’s thought that new The rise in both domestic and routes, and lower airfares due to more international air travel will bring CONTRACTORS competition and efficient planes, are economic and social benefits to cities helping to fuel the boom. and countries around the world. It will AND THE LOCAL Passenger numbers at Dublin also put a strain on our airports. To Airport — the island’s busiest — have meet demand and support long-term WORKFORCE IS increased by 55 per cent 2 over the growth, aviation infrastructure from past five years according to the daa, terminals to runways will need to be ESSENTIAL TO with a record-breaking 29.6 million modernised and expanded. passengers 3 travelling through the Integrated and diverse teams BRINGING THESE airport in 2017. This trend is set to operating collaboratively are continue, with the daa planning to critical to delivering these large and PROJECTS TO LIFE. invest a reported €900 million4 by 2023 highly complex projects. Unifying — on expansion projects at the airport, in stakeholders — from clients, addition to its plans for a new runway, consultants and sub-consultants allowing it to accommodate up to 40 through to contractors and the million passengers per year. local workforce — is essential to Belfast International Airport is bringing these projects to life. experiencing a surge in demand too: So how do you create the level of 5.84 million 5 passengers passed through collaboration required?
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1 www.iata.org/pressroom/pr/Pages/2017-10-24-01.aspx 2 www.dublinairport.com/latest-news/detail/daa-releases-2017-annual-results 3 www.dublinairport.com/latest-news/detail/dublin-airport-sets-new-passenger-record 4 www.avionews.com/en/item/1214096-dublin-eur-900-million-to-expand-the-airport.html 5 www.belfasttelegraph.co.uk/news/northern-ireland/belfast-international-airport-sets-sight-on-6-million-passengers-for-2018-36461599.html
31 TAKING THE LONG VIEW SIX STEPS TO COLLABORATIVE WORKING
To start, a collaborative approach to team formation and management is required. Project leadership needs to take an active role in setting the tone and establishing an integrated unit from the top down. Based on our experience of delivering airport infrastructure worldwide, we suggest six crucial steps to building collaborative team environments: 1/ 3/ ESTABLISH AND DOCUMENT OPERATE ON A SINGLE, SHARED PRINCIPLES AND INTEGRATED INFORMATION CORE VALUES TECHNOLOGY PLATFORM
Set up principles and values early Standardise your IT platform to ensure on and develop them as a team seamless and consistent reporting, forms — this is a critical first step document control and communication. in developing common goals. At At Orlando International Airport, San Diego International Airport we implemented an on-premise (SAN), after helping to deliver an SharePoint technology framework, US$864 million green build terminal providing an intranet and records expansion project, we developed a management system for 500 airport detailed lessons-learned assessment customers including airlines and benefiting future SAN projects. ground handlers, across 20-plus city and Greater Orlando Airports Authority departments. This included 2/ integrated document collaboration and reporting using cloud hosting for DEVELOP COMMON POLICIES design and construction documents AND PROCEDURES on the US$1.5 billion Automated People Mover Complex and new South Terminal. Having this common Create these in collaboration across technology platform enabled the team stakeholders and most importantly, to better communicate and collaborate 5/ use them consistently. Organising a across scopes and disciplines. INTEGRATED, basic framework of policies at the start DIVERSE TEAMS CO-LOCATE AND CREATE of a project will contribute to effective OPERATING VENUES FOR COLLABORATION major programme delivery. We blend 4/ COLLABORATIVELY our foundational materials with our ARE CRITICAL TO AND DISCUSSION clients’ business practices to create a ESTABLISH CLEAR ROLES DELIVERING THESE tailored and structured set of policies, HIGHLY COMPLEX Outfit participants with key project recently using this approach to AND RESPONSIBILITIES PROJECTS. materials, goals and objectives develop procedures at San Francisco — so everyone has common ground International Airport, ensuring we Match project needs with individual on which to collaborate. At San have a common set of requirements talent and project goals. Create a path Francisco International Airport to manage a US$1.2 billion terminal that links each person’s success with (SFO) our design-build contractor reconstruction programme. the success of the project. As part of assembled a ‘big room’ on the our project and cost management work SFO campus, creating a project at Los Angeles International Airport headquarters for the team. As the (LAX), we combined our resources with project management team, we co- our client, Los Angeles World Airport, to located with SFO staff, the designer become a collaborative and integrated and the builder to programme, design, organisation. We developed roles and and build the US$1.2 billion Terminal responsibilities for the project with both 1 Center Project. The approach TO MEET DEMAND AND client and consultant staff competing enhanced communications, SUPPORT LONG-TERM for those positions. This allowed technology transfer, problem solving GROWTH, AVIATION staff to focus their CVs for roles they and overall comradery of a team of INFRASTRUCTURE WILL were most interested in with the best approximately 240 people at the NEED TO BE MODERNISED candidate selected for each position height of the project’s design and AND EXPANDED. following screening and interviews. preconstruction development phase.
32 PROJECT LEADERSHIP NEEDS TO SET THE TONE AND ESTABLISH AN INTEGRATED UNIT FROM THE TOP DOWN. —
6/ ESTABLISH THE MANTRA AMSTERDAM AIRPORT SCHIPHOL OF ‘CHECK YOUR BUSINESS To cater for increasing passenger fast-tracked design in just one year. CARD AT THE DOOR’ numbers and as part of a wider The pier, which is on target to capital works programme at achieve a Gold Certification Promote this mindset among all team Schiphol airport, our global team in Leadership in Energy and members by emphasising their role of aviation experts from across the Environmental Design (LEED®) on the project team, rather than their UK, Holland and the US have been rating, will provide Schiphol with title or position with their employer. At working as one, alongside local eight new gates; five for narrow- Dallas Fort Worth Airport (DFW) we’ve architectural firm cepezed, since body aircrafts on the north side, and integrated with DFW and brought 2017 to design a new pier and airside three Multiple Aircraft Ramp System together six sub-consultants under infrastructure at Schiphol Airport. gates for wide-body aircraft on the a Project Excellence Team banner The team has supported and advised south, which can also be used for and logo with all staff referring to the client on a range of issues, from six narrow-body aircraft, helping to themselves as part of this team rather technical and sustainable solutions increase the airport’s capacity by than an employee of a firm. We perform to cost estimating and international 14 million passengers per year. work as one unified team supporting design standards, delivering the DFW as we deliver over US$1 billion of capital improvements. Amsterdam Airport Schiphol, Netherlands
33 TAKING THE LONG VIEW
Acknowledgements
We would like to thank all of our contributors involved with this publication.
OUR FUTURE CITIES CLIENT INTERVIEWERS SIX STEPS TOWARDS IMPROVING INFRASTRUCTURE RESILIENCE
Paul Tully, Technical Director, Trevor Leaker, Director: Trevor Dr. Beatriz Martinez Pastor, Transport Landscape and Urban Design: is a regional leader at AECOM in Planner: As a senior consultant within Responsible for AECOM’s large NI urban NI, overseeing work ranging from our transport planning team, Beatriz design and landscape team, Paul has global projects for the UK Foreign designs efficient and robust traffic extensive experience in designing and & Commonwealth Office, to various networks. Recent projects include project managing the delivery of public ongoing projects for the Royal the National Road Strategy 2040 and parks, urban and town centre public Group of Hospitals in Belfast. He National Secondary Roads Classification realms and regeneration schemes is an award-winning architect, with across ROI, helping to improve from inception to completion. He a belief in innovative, eclectic and resilience. Prior to joining AECOM, also oversees landscape and visual environmentally integrated design, Beatriz was an assistant lecturer within impact assessments for major road from interior design to city-making. the School of Civil Engineering at improvement schemes throughout NI, He is currently a member of the University College Dublin after gaining and has represented DfI Roads as expert RSUA’s Design Quality Panel and an a Ph.D. in Civil Engineering from Trinity witness at public inquiries. expert adviser to the NI government’s College Dublin. Ministerial Advisory Group.
[email protected] [email protected] [email protected]
Edward Frampton, Associate, John O’Regan, Director: John is Dr. John Humphreys, Senior Landscape Architecture and Urban regional leader in ROI for all of AECOM’s Consultant, Town and Transport Design: Leading AECOM’s urban disciplines associated with buildings Planning: John has over seven years’ design projects across ROI, Edward’s and places. John leads a team of over experience in sustainable land-use experience includes delivering 100 consultants, delivering projects and transport planning research and large scale mixed use schemes, nationally from offices in Dublin, Galway, practice. He has in-depth knowledge residential developments and public Limerick and Cork. As a Chartered of spatial and statistical analysis realm design. Edward is a Civic Trust Quantity Surveyor and project of travel and land-use data used to Awards Assessor and member of the manager, his experience ranges from inform transport policy and strategy Academy of Urbanism. For the past commercial buildings for FDI clients, to formulation. Using his expertise, he 10 years Edward has been involved large scale public sector and public- has helped deliver the Dunboyne in shaping and reimagining Cork’s private partnership projects. John’s Transport Strategy, TII Luas F Line future, and is currently involved in specialist skills include establishing Route Appraisal and TII National Roads multiple regeneration developments the appropriate conditions for project 2040 Strategy. at Cork docklands, including the success and early stage strategic cost public realm plan. and procurement advice.
[email protected] john.o'[email protected] [email protected]
34 HOW TO AVOID DATA CENTRE INDUSTRY SPOTLIGHT THREE WAYS TO REDUCE WATER PLANNING DELAYS INDUSTRY ENERGY USE
Shauna Woods, Senior Planner: With Tomás Kelly, Director, Cost David McCune, Director, Water, over 10 years’ experience in planning, Management: As a chartered quantity Ports and Power: As a Chartered Civil Shauna is responsible for a broad surveyor, Tomás coordinates cost Engineer and project manager, David portfolio of AECOM’s public and private management service across our specialises in designing and managing sector projects. She has comprehensive regional offices within ROI. Tomás heads water industry programmes in ROI, knowledge of both NI and ROI planning up AECOM’s Irish Research Department the UK and Middle East. He is a Fellow systems and has an excellent track which conducts internal research and of the Institution of Civil Engineers record liaising with statutory authorities, projects commissioned by external (ICE) and is an ICE supervising civil government bodies and communities. bodies. His experience ranges from engineer. David takes a keen interest in She has helped deliver numerous delivering health and education projects the professional development of staff, notable projects, including Facebook's to commercial and industrial schemes, mentoring trainees and leading on the Data Centre and associated Strategic with clients including Health Service Work+ Apprenticeship Programme. Infrastructure Development substation, Executive, National University of Ireland He is currently a member of the Civil Omagh Enhanced Local Hospital and Galway and Kennedy Wilson. Engineering Industrial Liaison Panel at Banbridge Masterplan. Ulster University. [email protected] [email protected] [email protected]
HOW TO BUILD COLLABORATIVE AVIATION TEAMS
Barry Sheridan, Associate Director, Jody Wilkinson, Project Director, Derval Cummins, Director, Environment: Barry manages the Project and Cost Management: Jody Transportation: Derval leads our delivery of AECOM’s environmental has 16 years’ experience delivering transportation advisory services solutions across ROI including site project and cost management services across UK and ROI. With over 30 years’ selection, due diligence, planning, in many sectors including leisure, global experience delivering innovative impact assessments, licencing and tourism, commercial and retail. He solutions to transport clients, her permitting across power, aviation and is commercially aware with a good capability spans economic and financial transportation. Barry has also worked appreciation of how effective project analysis, governance, risk management, on data centres in Scandinavia, the management can assist with budgetary customer service, contracting, Middle East, and ROI where he managed constraints. Recent clients have operations, planning and engineering. the delivery of Facebook’s Clonee Data included Belfast City Council, BBC, She is currently working on strategic Centre Campus from site selection Belfast Metropolitan College, EY, and schemes for the National Transport through to gaining planning approval. He Lisburn City & Castlereagh Council. Authority, Transport Infrastructure has also managed the delivery of a Noise Ireland and Dublin Airport Authority. and Flight Track Monitoring System at Dublin Airport, the first of its kind in ROI. [email protected] [email protected] [email protected]
Special thanks to Suzanne Wylie, Belfast City Council CEO, Jim Power, economist, and Mark Gantly, President of the American Chamber of Commerce Ireland, for their time and insights.
35 TAKING THE LONG VIEW
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