Highlighting a crucial condition to make infrastructure more reliable and resilient
September 3rd, 2021
An unexpected topic at the July G20 Finance Track ministerial meeting
Though it went almost unnoticed by the media, something remarkable occurred at the July G20 Finance Ministers and Central Bank Governors meeting in Venice: the endorsement of a “G20 Policy Agenda on Infrastructure Maintenance”. Indeed, maintenance itself tends to be invisible when it is working well, only to become newsworthy when failure or disasters strike. Actually, the Italian G20 Presidency showed boldness and leadership when it proposed that infrastructure maintenance be included among its priorities for 2021. The endorsed “G20 Policy Agenda on Infrastructure Maintenance” embraces the idea that there is much more to maintenance than just “the wide range of activities aimed at keeping the infrastructure/asset in a serviceable condition”. In a nutshell, the G20 calls for a shift in perspective: it invites to look at spending on infrastructure maintenance not just as the cost of keeping assets in good order, but rather as an investment yielding significant benefits both in the short and long-term.
Infrastructure maintenance can boost prosperity
The World Bank Group’s report “Well Maintained: Economic Benefits from more Reliable and Resilient Infrastructure” effectively documents how good and timely maintenance boosts prosperity, enabling growth and well-being of people, firms and economic systems as a whole. Estimating (just) the direct costs imposed to firms, in low- and middle-income countries, sales losses due to power outages amounts to USD 82 billion a year; disruptions to the water supply infrastructure cost USD 6 billion annually; and reduced utilization rates of transportation due to disrupted infrastructure cause a loss of USD 107 billion a year. These estimates exclude indirect coping costs, the loss of competitiveness and capacity to attract investments. While disentangling the multiple causes of systems’ disruption (natural hazards, obsolescence, poor management, etc.) remains a challenge, investing in higher resiliency of infrastructure is a cost-effective and robust policy choice. One of the analyses estimated that for each dollar spent for making exposed infrastructure more resilient, there is a greater than 1 gain (and this benefit-to-costs ratio is even higher in a scenario affected by climate change).
Well-maintained infrastructure will be more resilient to shocks
The OECD’s report “Building Resilience – New Strategies for Strengthening Infrastructure Resilience and Maintenance” illustrates that infrastructure systems are increasingly exposed to a combination of old and new challenges. Increasingly frequent extreme weather events are a serious concern (storms, floods, earthquakes, and other natural hazards are responsible for 10 percent to 70 percent of all disruptions, depending on the country and sector), but so are past maintenance negligence, the lack of risk preparedness, and/or the inadequacy of decades-old structures to withstand present usage. Besides, different demand patterns and increasingly complex supply chains are making infrastructure systems more interdependent (e.g. widespread digitalization, and de-carbonization efforts are increasing the reliance of the economy on telecommunication and electricity networks).
Many promising initiatives are underway
Along with the above-mentioned Policy Agenda and accompanying reports, G20 members and observer countries collected examples of how they have achieved either project level benefits (e.g. cost efficiency, asset’s life extension) or positive impacts on the environment and the economic system as a whole. Below are just a few of the 45 initiatives presented in the “Annex of Infrastructure Maintenance Case Studies”:
Genoa and Italy’s path towards prioritizing maintenance
Turning to Italy, the progressive obsolescence of the country’s existing infrastructure assets, combined with the challenges of its unique morphological complexity and exposure to various natural hazards, have prompted the launch of several policy interventions aimed at improving the safety and quality of the national infrastructural stock. In 2018, the tragic collapse of the Morandi bridge in Genoa was definitely a wake-up call. Yet, the reconstruction of the (now) San Giorgio bridge represents an inspiring best practice. Not only was it rebuilt in record time (also thanks to the supportive engagement of the city), but it is a prominent example of state-of-the-art technology applied to increase the resilience, sustainability and cost-efficiency of operation and maintenance.
For this reason, Italy’s G20 Presidency is pleased that Genoa will host the upcoming G20 High-Level Conference on Local Infrastructure Investment (https://www.iai.it/en/eventi/g20-high-level-conference-local-infrastructure-investment) on September 27 (prior to the sixth G20 Infrastructure Working Group meeting). The conference – which will be opened by the Italian Finance Minister, Daniele Franco – will be an opportunity to hear from international representatives from local authorities (mayors and state governors) and other organizations supporting sub-national infrastructure investments. A novelty for the G20 as well as an important acknowledgement of the crucial role local entities play in planning, funding, operating and maintaining quality infrastructure.
What is next? Ensuring maintenance becomes a priority and is systematically addressed
Under the Italian G20 Presidency, the Infrastructure Working Group carried out a substantive effort to explain why and document how prioritizing infrastructure maintenance (and allocating adequate resources for it) can yield significant benefits in the short and long-term. Below are three fundamental messages that are worth highlighting:
1. Embracing a long-term vision. “Life-cycle costing”, “risk preparedness”, “preventive maintenance”, and many other keywords surfacing from the maintenance debate ultimately have one thing in common: a long-term vision. Most of the cases mentioned above reveal a forward-looking approach to infrastructure design and management aimed at preserving the planet’s natural resources and meeting future generations’ needs.
2. Envisioning a possible “re-branding” of maintenance. No one contends that prioritizing infrastructure resilience makes good political sense and spending on maintenance makes good business sense, yet action is still inadequate. Perhaps a “re-branding” of maintenance is needed to increase widespread awareness of its significance. Granting the deserved priority to caring for existing assets hinges on the availability of better and systematically collected data on infrastructure (e.g. assets’ location, status, risks, performance, impacts).
3. Fostering coordination with local entities. In a workshop earlier this year, the Mayor of Freetown put it very clearly: “Cities are very often the recipients of issues, but they don’t necessarily have the mandate to address the root causes of problems” (e.g. the pressure on infrastructure systems of rapid urbanization is just the symptom of wider phenomenon of rural-urban migration). Of course, the optimal level at which infrastructure services are planned, regulated and delivered depends on many factors, but efforts should be made to reconcile the tension between an oversight that has to be strategically centralized, versus an attention to needs/opportunities/constraints that benefits from being localized.
There is a long road ahead to bring infrastructure maintenance up to adequate levels (in developed and emerging countries alike), but, hopefully, the work presented above has provided some robust reasons and inspiring examples to give infrastructure maintenance the prominence it deserves.