Infrastructure has been a buzzword on financial markets ever since US President Donald Trump promised to “rebuild America” with massive spending projects. But a global report released today said billions of dollars are wasted on infrastructure projects because of bad planning, bureaucracy and the failure to retain good staff. The US-based Project Management Institute (PMI) found Australia fared worse than the global average, with $108 million wasted for every billion dollars spent on infrastructure. Globally, the PMI study said organisations on average wasted $97 million for every billion dollars invested, according to the responses of 187 project managers. However, the outcome showed that for the first time in five years more projects are being completed more efficiently, with waste down by 20 per cent. PMI chief executive Mark Langley told The World Today that a failure to retain good project staff was a key contributor to waste.
“Champion organisations do this very well. One of the key things that they do, that Australia lags in, is defined career paths for project and program managers,” Mr Langley said. “They’ve identified a role in an organisation just like accountancy, law and engineering. In Australia, they do that substantially less than the global average.” Mr Langley, who is in Australia to launch the report, said a lack of attention to staff retaining good staff contributes to a “brain drain”.
“There’s an opportunity for Australian organisations to start to invest in careers of project managers in both the public and private sector,” Mr Langley said. Australia compared poorly to other competing nations where waste on projects has been reduced, according to the research. India has the lowest waste of $73 million for every billion dollars, followed by China and the Middle East with $82 million wasted per billion. PMI said Europe has the worst waste management, with $131 million lost for every billion dollars invested.
Mark Langley says the rally in infrastructure spending after Donald Trump’s presidential victory has been “quite positive”. But Mr Langley conceded there is a risk of disappointment if Mr Trump fails to deliver on the big spending plans. “I think there’s always a danger on that. But building out infrastructure is absolutely essential to economic growth,” he said.
Full report click here.