Across the world, poor and inefficient infrastructure poses a major socio-economic challenge that government and businesses need to address. It is imperative to note that without efficient and robust infrastructure services, infrastructure economies cannot meet their full growth potential and thus economic and human development will suffer.
This infrastructure gap and the concerns on how to find the money to fill it are the fulcrums of current debate. But this particular ideology overshadows the idea of an equally compelling imperative-to improve the planning, delivery and operation of infrastructure to get more, higher quality capacity for less money and to boost ...view middle of the document...
Bias towards building new capacity rather enabling existing assets:
Governments tend to favor building of new assets or major expansions over operational improvements or demand-management measures that would achieve the same results with existing facilities.
Primary transport agencies formed today, focus on creating and maintaining new infrastructure, and completely undermine the idea of management of current assets, i.e. for e.g. building new roads rather than ensuring an optimal current infrastructure usage. There has been a study showing that every new infrastructure coming up only temporarily provides the relief of congestion as it in turn infuses more demand and eventually leaving congestion as before. This further burdens the government and authorities with additional maintenance costs and further exploitation of environment.
3. Weak regulation and informality in infrastructure construction:
Over the past twenty years data reflect that the labor productivity in the infrastructure sector has wither perished or remained stagnant. While in the other economic sectors there has been a considerable improvement. The basic reason behind this observation is the highly fragmented industry and the employment of unskilled labor, and poor quality of living standards. The workers remain undocumented and the information flow among the workers is almost nil (primarily reasoned by high rate of illiteracy)
This sector has never realized economies of scale and has hardly worked for adopting the possible best practices as the sector involves a lot of ad-hoc participation and erratic demands. The sector suffers an under-investment in R&D and slow growth per worker.
4. Capability constraints:
Industry suffers an inefficient administration which lacks to adopt the practices to improve the conditions of worker by promoting education and adopting better advanced techniques. The planning and execution is informal and doesn’t go through a structured analysis leading to levels of inefficiency.
II. WAYS TO IMPROVE INFRASTRUCTURE EFFICIENCY
• IMPROVING PROJECT SELECTION:
One of the easiest ways to cut down infrastructure development costs and at the same time maximizing the utility is to select the right combination of projects. Further, the default way to invest in additional physical capacity without taking in to account the closer cheaper alternatives of better planning of land use, resolving bottlenecks and managing demand for e.g. say through public transit.
Following are the possible objective...