Aggressively competitive bids for projects creates a risk of budget-busting delays. But 3D modelling tech could change this, offering high-level data at the outset
Unlike the taxi industry, or the retail sector, where autonomous cars and self-service checkouts will eventually put millions out of a job, the construction sector is always likely to depend on manpower.
Whether it’s building a new housing estate or constructing a multi-billion-pound, cross-country rail link, the supply chain that gets the materials to the site, and the process of putting them together, involves thousands of manual workers. It employs a huge variety of experts from brick makers to brick layers, railway engineers to train engine drivers, and architects to archaeologists.
But while the construction sector is behind some of the most technologically advanced projects in human history, from nuclear power stations to subway systems, the industry itself has been slow to advance.
The reason? Margins in the construction sector are low, which stymies investment, according to Swiss Re Corporate Solutions’ Cedric Wong.
Overpromising creates delays
He says there is a “vicious circle” in the construction sector that can mean it gets a bad rap.
“There are five or six contractors who have got a big workforce bidding for these big projects,” Wong explains.
“Sometimes the moral hazard is to cut corners, to get the lowest price to win the project, just to keep your workforce in business.”
That can mean costs are underquoted and projects take years longer than initial estimates. For governments in a position to spend billions of pounds in taxpayer money on once-in-a-generation infrastructure projects, that potential for costly delays can prove a significant deterrent to building new bridges, railways and ports.
Sometimes the moral hazard is to cut corners, to get the lowest price to win the project, just to keep your workforce in business
Even though the fiscal stimulus those projects generate can go down well with voters, no government wants a delayed infrastructure project to be on the minds of people at the ballot box. And conflicted contractors make that a very real possibility.
But that is changing, and it could be good for business, says Wong.
So what’s the secret? Building information modelling – or Bim for short – and better access to that information.
Seeing the big picture
Bim is an advanced form of 3D modelling that incorporates ground-level and subterranean high-definition survey data from new scanning tools that can be mounted on everything from boats to drones.
In a world where hundreds of contractors and subcontractors are making precise and carefully coordinated assumptions about a tightly timed project from a single survey, long before breaking ground, this can make all the difference. It minimises the chance of last-minute surprises when the builders arrive on site and the single data set means all the contractors are up to date with the latest changes to the schematics, which drastically reduces the chance of delays.
We look at the overarching risk management and the contractual structure of risk-sharing between the client and the contractor
Wong says there is a clear cost benefit to introducing the new tech, but he does note that in some cases the money simply isn’t yet there to put it in place and train people up.
“When you introduce anything, there’s a learning curve, and that learning curve costs money. And that money isn’t there.”
Will governments invest?
Maybe. As more people move to cities and economies seek to generate more power from renewable sources, as well as replacing aging infrastructure, government spending on construction is actually forecast to increase.
But, as Wong says, a lot of the time, “by the end of the project, it’s gone two or three years over time and doubled in budget”.
“And that shakes the confidence of the government to release more projects because trying to put the right figure and the right timeline on the project is quite difficult.”
Increasingly, governments are demanding their builders employ the Bim tech.
Of course, Wong and his team still assess a project the old-fashioned way, too.
“We still look for the basics: who’s building it? Where are they building it? What are they building?”
“We look at the overarching risk management and the contractual structure of risk-sharing between the client and the contractor,” he says, just to make sure that the client isn’t pushing all the risk onto its contractors.