Against the backdrop of increasing user demand, constrained financing, and an aging asset base, it is imperative for governments to make the most of their existing infrastructure assets–specifically, to increase their productivity and longevity. This slideshow recommends ways of doing just that. For more information, please check out the full report from The World Economic Forum with BCG, "Strategic Infrastructure: Steps to Operate and Maintain Infrastructure Efficiently and Effectively" (http://on.bcg.com/1lnDqv7).

1. Overview of 2014 WEF and BCG report:
Strategic Infrastructure
Panama, 30 March 2014

2. 1
Copyright©2014byTheBostonConsultingGroup,Inc.Allrightsreserved.
Overview of the report "Strategic Infrastructure: Steps to
operate and maintain infrastructure efficiently and effectively"
Context and objectives of this report
— Infrastructure is essential for sustained economic growth, competitiveness and social progress. While building new
infrastructure assets ranks high on the global agenda, governments in both developed and developing countries often
neglect their existing infrastructure assets.
— Against the backdrop of increasing user demand, constrained financing and an ageing asset base, it is imperative for
governments to make the most of their existing assets – specifically, to increase their productivity and longevity.
— This report recommends ways of doing just that. It provides a structured and comprehensive framework for implementing
operations and maintenance (O&M) best practices, as well as many real-life examples. In addition, it covers the enabling
factors for O&M such as funding, capabilities and governance.
— Using the guidance provided in this report, governments and operators can systematically consider all possible optimization
levers and so reap the full potential of their infrastructure assets.
Audience of the report
— This report is designed primarily for senior government leaders and for the officials responsible for managing infrastructure
assets on the strategic and operational level.
— Other stakeholders would also benefit from the report – the private sector, multilateral development banks, the donor
community and civil society – as it enables them to have a more productive engagement with governments.
— Finally, private infrastructure operators as well will value the report, as many of the best practices listed in it can be applied
equally to privately operated infrastructure assets.
Scope of the report
— The report is intended to serve as a “roadmap” for directing governments and other stakeholders to the critical success
factors in infrastructure O&M. It does so by providing a comprehensive framework, actionable lessons learned and more
than 200 real-life examples and case studies.
— The framework and recommendations can be applied broadly in developed and developing economies, and across many
sectors of economic and social infrastructure.
— The O&M best practices are collected from infrastructure assets that are delivered under public or private modes, or under
public-private partnerships (PPP), and can likewise be applied to all kinds of delivery modes.
— The report is not a compendium of the whole infrastructure life cycle: it excludes initial design and construction, and takes
those decisions as a given; and, its focus is exclusively on O&M and end-of-life-cycle decisions of existing assets.
Source: World Economic Forum; BCG

3. 2
Copyright©2014byTheBostonConsultingGroup,Inc.Allrightsreserved.
The infrastructure gap can be narrowed via three levers:
Optimization of existing assets often neglected
The global infrastructure gap Three levers to close the gap
Report focus
Asset demand:
rising needs
Build new
assets
Existing asset supply:
Ageing asset base
Optimize
existing
assets
Reduce
demand
New asset supply:
limited funding
1
2
3
Gap
Time
Infrastructure asset demand/supply
Gap
~1.0
Supply
(based on
construction
activity)3
Demand
(based on OECD
estimate)2
~2.7
~3.7
in %
GDP4 ~5.4% ~4.0% ~1.4%
in US$ trillion, annual (average 2010-2030)1
1. Including economic and social infrastructure 2. Infrastructure to 2030 (Volume 2): Mapping Policy for Electricity, Water and Transport, June 2007. Paris: Organisation for Economic Cooperation and
Development (OECD) 3. IHS Global Insight Construction Database, March 2012 4. Using $70T as global GDP, non-PPP adjusted (2011)
Source: World Economic Forum; BCG

4. 3
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There is a massive opportunity ... ... and it is realistic to achieve
Source: Asset Management Survey 2011 (European Federation of National Maintenance Society); CIA World Fact Book 2012; World Economic Forum; BCG
Significant value can be unlocked through proper infra O&M
The O&M opportunity
Low maturity of infra asset management
Huge global infrastructure stock
Many examples of optimized O&M
— within infra: e.g. Singapore airport,
non-revenue water reduction in Manila
— from other sectors, e.g. Oil & Gas
Recent wave of innovations
— e.g. dynamic traffic management
— e.g. e-tolling
— e.g. smart meters and grid
O&M solutions are low-cost
— Low capex and quick payback
— High benefit-cost ratios
~ 1.2 B
fixed line
> 33 M km
roads
> 43 k airports
~ 1.1 M km
railways >20,000 TWh p.a.
produced
> 600,000 km
waterways
Process
Industries
3.1
Manu
facturing
3.0
Infra
structure
2.7 1 = lowest
maturity
5 = best-
practice

5. 4
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Scarce financial
resources
Little information
and skills
Unclear incentives
and accountabilities
No life-cycle view in design
& build; no integrated budget
Lack of coordination across
functions and agencies
Few systems/tool support, e.g.
AM systems, TQM
Lack of skilled staff, as
engineers prefer build-projects
No comprehensive O&M
plans and strategies
Lack of independent, pro-
fessional public agencies
Public budgets biased to new
assets, for political motives
Insufficient public funding for
infrastructure overall
Annual budgets not suited to
stable, multi-year O&M needs
Low cost recovery via user
fees and user-charge evasion
Inadequate
governance
Weak
capabilities
Insufficient
funding
Little data on asset use and
condition, O&M spend
Limited benchmarking and
evidence on O&M impact
Corruption, bureaucracy,
lack of accountability
Little private-sector
participation & competition
Little use of ancillary revenues
and land value capture
Low O&M performance due to three root causes
The O&M challenges
Notes: AM = Asset Management; TQM = Total Quality Management
Source: World Economic Forum; BCG

6. 5
Copyright©2014byTheBostonConsultingGroup,Inc.Allrightsreserved.
O&M excellence needs a comprehensive approach
O&M best-practice framework
1.1
1.2
1.31.4
1.5
1.6
Maximize asset
utilization
Enhance
quality
for users
Reduce
O&M costs
Reinvest with
a life cycle view
Extend
asset
life
Mitigate
externalities
2.1
2.2
2.3
Ensure
funding
Build
capabilities
Reform
governance
Enablers
Source: World Economic Forum; BCG

7. 6
Copyright©2014byTheBostonConsultingGroup,Inc.Allrightsreserved.
Operators need to benchmark
O&M best-practice checklist
Increase
utility
Increase
lifetime
value
Decrease
total cost
1.1. Maximize
asset utilization
1.2. Enhance
quality for users
1.3. Reduce
O&M costs
1.4. Mitigate
externalities
1.5. Extend
asset life
1.6. Reinvest with
a life cycle view
Apply demand
management
Optimize availability/
reduce downtime
Enhance peak capacity
and effective throughput
Enhance the end-to-end
user experience
Use smart technologies to
refine user performance
Adopt a customer-centric
operating model
Rightsize management
and support functions
Optimize procurement
costs and outsourcing
Implement lean and
automated processes
Cooperate with
relevant stakeholders
Embed sustainability/HSE
into routine operations
Arrange comprehensive
sustainability/HSE plans
Enhance disaster
resilience
Control excessive asset
consumption and stress
Invest in preventive and
predictive maintenance
Select contracting mode
for best value for money
Prepare for efficient
project delivery
Prioritize project options
with whole life cycle CBA
Capture ancillary
business opportunities
Apply inclusive
user charges
Dedicate user taxes
via maintenance funds
Conduct training and
develop talent
Apply data, benchmarks
and tools
Introduce asset
management planning
Consider private-sector
participation & competition
Foster cooperation
between agencies
Corporatize and profes-
sionalize public agencies
Enable O&M
best practice
2.1. Ensure
funding
2.2. Build
capabilities
2.3. Reform
governance
Note: HSE = Health Safety Environment; CBA = Cost-Benefit Analysis; Source: World Economic Forum; BCG