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Decoding Failures: How to Better Manage Infrastructure Risk

Billion-dollar transportation “megaprojects” are notoriously prone to cost overruns and delays. With huge federal dollars spurring on such projects, Aurigo’s CEO argues now is the time to achieve better management.

aerial view of construction worker in construction site
Less than one-tenth (8.5 percent) of U.S. construction projects are completed on time and on budget. It’s a staggering statistic that sets the construction industry apart from other sectors. Productivity in construction follows a similar trajectory of stagnation compared with other industries in the past 20 years, experiencing just 1 percent annual productivity growth in that time.

Increasingly, governments, state agencies and construction companies are looking for answers on how they can minimize risks, increase productivity, simplify complexity and deliver on schedule.


For example, the Infrastructure Investment and Jobs Act (IIJA) aims to inject a $1.2 trillion investment in construction, create jobs and stimulate growth. It is a radically ambitious overhaul of the country’s infrastructure that will see projects delivered faster, with greater transparency and more cost-effectively.

In particular, megaprojects — those complex, large-scale projects costing upwards of $1 billion — are ripe for disruption. Prominent examples abound of projects that were wildly over budget and behind schedule. For example, D.C.’s Silver Line projects, whose second phase experienced at least a $250 million cost overrun and a four-year time delay. Or, New York Metropolitan Transportation Authority’s East Side Access project which extended the previous service by two miles, cost $11.6 billion (nearly three times the original estimate) and took 16 years to build.

Change is coming, however. The sheer scale of IIJA regulation requires the whole construction ecosystem — capital owners, construction companies, services providers and so on — to rapidly transition to digital processes that can handle city, state and even federal-level projects.


Dig a little deeper beyond the headline numbers and we find a multitude of reasons behind megaproject delays and spiraling costs, such as design flaws, lawsuits, compromised compliance practices, right of way (ROW) objections and more. Individual projects may incur eye-watering expenses, but the percentage of infrastructure spending has shrunk as a proportion of the economy as a whole, effectively creating a widening talent and experience gap in the industry, which makes keeping up with the best practices of large-scale modern transportation projects more challenging.

Closing this gap is paramount. Most of the difficulties that beset transportation projects can be boiled down to a lack of foresight or a misallocation of resources. Both categories are firmly in the “sweet spot” for digitization to have a major impact. Manual processes and incomplete data lead to poor predictions, whether to do with time, costs, resourcing, risk, compliance, safety, maintenance or anticipating future demands. Currently, data gathering and information sharing across the stakeholder ecosystem is far from standardized or seamless, unlike the equivalent experience in other industries.

Evolving construction’s heavy reliance on paper and spreadsheets to modern cloud-based, AI-driven systems will enable digitization to impact every area of the industry. Furthermore, to participate in IIJA-driven critical infrastructure projects, capital construction companies will need to be able to demonstrate digital capabilities such as accurate reporting, analytics and forecasting, so that projects can be managed and delivered in a way that is proactive, transparent and measurable.


With their many moving parts, large infrastructure projects can easily fall prey to optimism bias, the tendency to underplay the likelihood of delays, complications and other bumps in the road involved in project selection, funding, public feedback and program approval. By contrast, digital tools such as AI and ML-powered analytics enable a scientific approach that leverages historical data to create models that predict these factors, as well as many more. Even unpredictable events outside the project’s control can be analyzed via “what if” modeling that takes into account occurrences such as unusual weather conditions, natural disasters, material price increases or supply chain delays. The outcomes are tracked as part of a holistic risk overview.

This kind of accurate time, budget and resource planning is the first step in creating realistic estimates and avoiding costly overruns.


The importance of clear, streamlined engagement in megaprojects cannot be overstated. A considerable degree of complexity is inevitable in prominent megaprojects which involve many disciplines coming together, interconnected dependencies and timelines, and political as well as public attention. However, communication complexity is not inevitable and we have the tools to simplify it. Digital technologies have an important role to play in streamlining construction communication complexity between stakeholders, for example with centralized systems that prioritize transparency. Yet, according to one far-reaching study, more than 70 percent of capital project handlers admitted their company did not have integrated systems or processes for project reporting and lacked visibility and control of the work.


Historically, there has been insufficient attention paid to the maintenance of transportation infrastructure projects. Bridges in the U.S. are a prime example. Almost 40 percent of them are more than 50 years old and 9 percent-plus are considered “structurally deficient” due to a lack of proactive management.

Considerations such as how and when to repair as well as the availability of components have been patchy, despite ongoing maintenance being a valuable tool to extend the life of existing capital investments. Modern methods leverage drones capable of high-resolution imagery, combined with powerful AI and ML models to predict maintenance requirements and address them in a way that typically causes little or no disruption to users before they become critical issues.


ROW considerations now play a central role in shaping transportation and urban development, and can account for up to 13 percent of a project’s budget. ROW management is by its nature multifaceted and complex, so a systematic approach that prioritizes transparency and clear communication is critical to a megaproject’s long-term goals. Failure in this regard can stall a project early and drive up costs, as occurred when the Honolulu rail transit line build was delayed because of concerns about the project impacting native Hawaiian burial grounds.

ROW management, with its complexities, multiple stakeholder groups and interdependent processes is a key area to benefit from digitization. Advanced digital tools can streamline and speed up the process, provide transparency to all stakeholders and reduce errors. By integrating with financial management systems and offering capabilities for capital planning, project management and federal reimbursements, these digital solutions take a holistic view of the planning and development process, enabling a more seamless experience for ROW issues and beyond.


The construction industry is at a pivotal point. Slowing productivity, stagnating growth, project delays and costly overruns have become major challenges that threaten to erode public confidence. The construction sector now finds itself on the brink of a major digital disruption. Embracing technologies such as cloud processing, AI, ML and unmanned aerial vehicles (drones) will enable projects to become more streamlined and efficient. By decoding the failures of megaprojects of the past, digitization of the construction ecosystem represents a vital opportunity to overcome challenges such as ROW management, spiraling budgets and project delays.

Balaji Sreenivasan is founder and CEO of Aurigo Software.