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Too often, budgets fall apart long before the construction site – back in the office, where spreadsheets miss the complexity of constructability. To prevent budget blowouts, we need to start building in our heads first.
Everyone working on large infrastructure and construction projects knows the story: every dollar counts, and every delay can send costs spiralling.
The pressures on infrastructure delivery are well-known: labour shortages, productivity challenges, supply chain disruptions, and the escalating impact of climate change, to name a few. Budgets are stretched thin. In 2023, the federal government axed 50 “high risk” infrastructure projects; now state governments are grappling with budget blowouts on their ‘big builds’.
But the stakes continue to rise. Australia’s $743 billion, five-year pipeline of building, transport and utilities projects is increasingly dominated by ‘mega-projects’. According to Infrastructure Australia, the average value of road and rail projects more than doubled between 2015 and 2020, rising from $430 million to $1.1 billion.
Larger budgets bring greater risks. Mega-projects inherently carry higher levels of uncertainty, placing immense pressure on market participants to maintain financial stability while ensuring projects are delivered on time and on budget.
I’ve spent nearly four decades working on close to 2,000 projects – roads, rail, ports, airports and water infrastructure – and I’ve learned that the foundation of cost certainty is built on four essentials: accurate first-principles estimating; a solid grasp of constructability; a well-aligned schedule; and thorough risk assessment.
Yet, for many clients, the second step – constructability – is overlooked. It’s a step that can make or break an estimate, and ultimately determine the success of a project.
“Constructability is the extent to which a project’s design is developed to allow for efficient, safe and cost-effective construction. It’s about envisioning every step before a single beam is lifted or a square metre of concrete is poured.”
From concept to concrete
To be truly effective, a cost estimate must factor in not only materials and labour but also the practical realities of “how to” build the project.
Constructability is the extent to which a project’s design is developed to allow for efficient, safe and cost-effective construction. It’s about envisioning every step before a single beam is lifted or a square metre of concrete is poured.
Research confirms the financial benefits of constructability reviews. For example, a 2017 study of transport infrastructure projects in the United States found that such reviews can yield conservative savings of 1.25% of the total project budget.
While these findings are compelling, my own experience comes from applying constructability principles on real world projects. Take, for instance, when my team undertook the cost estimates for Brisbane Airport’s $1.2 billion runway upgrade in 2007. With little more than conceptual designs and limited site data, we relied on a deep understanding of constructability. This allowed us to deliver an estimate that, even a decade later, stood the test of time—with the runway being completed for $1.1 billion in 2019.
On the other hand, many road and light rail projects in Australia have underestimated the challenges and risks of construction, especially on brownfield sites with significant underground services, resulting in significant cost blow-outs.
The same principles apply to every infrastructure project. Constructability requires forethought and planning of staging and temporary works and a willingness to work through every phase of the project to ensure practicality and efficiency. It’s about more than crunching numbers on a spreadsheet; it’s about mentally constructing the project from the ground up, so the true costs of the project are understood.
Anticipating challenges and optimising design
Constructability is a forward-thinking approach that addresses issues before they arise. By identifying potential challenges early, we’re able to optimise designs and adjust methods to save both time and money. This feedback loop allows us to suggest design tweaks or alternative approaches that lead to significant savings. This is true value engineering – ensuring that each choice we make enhances the project’s value.
Take, for example, one of the dozens of large-scale bridge projects I’ve worked on over the years. Beyond designing for aesthetics or functionality, we consider the entire construction process, from staging to traffic management to worker safety to work site sizes and locations. Missing these considerations often results in unanticipated delays and costly rework.
The benefits of prioritising constructability are clear: fewer delays, fewer defects, and a higher-quality outcome. When projects are rushed out the door without a sufficient constructability review, problems tend to emerge later, often when solving them is costly and time-consuming. By catching these issues early, we reduce the likelihood of delays and budget blowouts.
Hands-on knowledge matters
In Australia’s infrastructure sector, cost blowouts often make headlines. Behind many of these headlines is a rushed estimating process. The push to announce a new project can force a hurried estimate, often before full analysis of the project’s requirements and risks. The pressure to provide a quick number can result in a hasty “reverse-engineered” cost.
By not allowing sufficient time for a proper constructability review, clients set themselves up for budget issues down the line. Without a clear understanding of the project’s unique requirements the risk of costly variations increases. These variations inevitably come with a heftier price tag than if issues were addressed from the outset.
What sets RP Infrastructure apart is our hands-on experience. Our team is made up of engineers who’ve built real projects and who understand the nuances of construction. We don’t rely solely on data or historical benchmarks; we’re continually out in the field, observing new technologies and techniques, learning from current projects, and bringing that knowledge back to our work. This real-world insight allows us to ensure that our cost estimates aren’t just numbers on paper but figures that hold up under the pressures of actual construction.
Breaking the cycle of cost overruns
While 100% certainty is impossible on multi-year mega-projects, we should all be striving for greater certainty. To enhance cost confidence, we need to break the cycle of rushed estimates and hasty budgeting. When clients prioritise constructability, they strengthen the backbone of their project, reducing risks, controlling costs and improving the quality of the final product. Greater certainty is within reach – but we must know how to build each project in our heads first.
Fast Facts
- Billion-dollar leap: The largest tendered project’s value has skyrocketed from $50 million in 1990 to $8 billion in 2015.
- Money on the move: The average value of road and rail projects more than doubled from 2015 to 2020, rising from $430 million to $1.1 billion.
- Costs keep climbing: Projects across sectors (land transport, water and energy) face average cost increases of 10-39% from announcement to delivery.
- On track for overruns: A staggering 86% of major transport infrastructure projects encounter cost overruns or delays.
Source: Infrastructure Australia, 2024.
Peter Driml is an Executive Director at RP Infrastructure. A qualified civil engineer with over 35 years’ experience in the construction industry, Peter has worked on major multidisciplinary infrastructure projects ranging in value up to $10B.