Technology can save airports time and money on construction projects
Airports can take more control of construction projects through the use of technology to reduce delays and capital expenditure. While this requires the investment of extra time and effort in the early stages of planning a project it can pay off handsomely in the long run, potentially reducing the total cost of an airport building project by as much as 10%.
This was the advice given to GAD World delegates in Dublin by McKinsey associate principal Frederic Remond during a presentation on how to improve capital productivity and reduce capital expenditure on airport projects.
Around $900 billion worth of capex is expected to be spent on airport construction projects around the world in the coming years, but more than 80% of those projects will be delivered later than planned.
“The rule is that you will overrun,” said Remond, adding that there are “three dimensions that can be dangerous for airports” when it comes to planning and executing projects.
The first is that airports tend to have limited experience in managing large capital projects. Secondly, they operate in a complex environment.
“Airports need to manage their main airlines, affiliate airlines, other airlines and goods going through – all while building,” said Remond. Finally, airports have “many invested stakeholders” to manage and deal with.
“There are four things that bother our clients the most,” said Remond, listing last-minute spec changes, problems with site logistics – ranging from difficulties accessing the site to the miscalculation of crane heights – organisational changes, and airline customer issues.
“The main airline often thinks they’re the King of the Kingdom,” he said, giving an example of an airline that refused to provide access to its offices during a construction project. Throw in the proliferation of negative headlines in the press, because “airports are very visible”, and it becomes clear why delivering projects on time is unusual.
However, the risk of overrunning and spending more than you need to can be reduced through the smart use of technology. For instance, the use of the digital twin concept, which involves creating a digital representation of a project against which progress can be monitored through the use of data, can reduce delays by identifying problems early on.
“The digital twin allows you to compare the real thing that is being built to a 3D model, enabling you to detect everything that you want to detect as you go along,” said Remond. For example, a drone could be used to “take a picture of the site and calculate how much earth has been moved and how much concrete has been poured”.
Frederic Remond, associate principal, McKinsey
“This is super impressive and very useful but you need to have a good 3D model in the beginning,” Remond explained.
By adopting a digital 4D building information modelling (BIM) solution, Remond said that Abu Dhabi Airport had saved “millions of dollars and months in schedule” on a major construction project.
The earlier on in the project planning process the groundwork can be laid on any strategy to reduce delays through the use technology, the better the end result. “The beginning is everything. When you do it once you get to the procurement stage it will cost you four to 10 times more,” said Remond. “Get help from the beginning on how to do the best contracts because the contracts will make it or break it.”
He also advised airports to build the customer experience into construction projects early on because they are a people-focused business. “You should be thinking about the customer experience when you do the design. If you don’t, you will not get to the right functioning of the airport,” said Remond.
Airports can learn from other sectors about how to carry out construction projects more efficiently. Citing an example in Japan where a mudslide destroyed a road but a new road circumventing the destruction was built within 24 hours, Remond warned airlines that they are susceptible to similar events as a result of climate change, making the ability to respond rapidly more urgent.
“Thirty per cent of airports could be flooded often, due to climate change. You will get hit, that’s a given – the question is when,” he said.
The use of Project Production Management (PPM) software can also help to keep airport construction projects on track by taking into account both inventory and variability.
“PPM closes the gap in project management. You plan all the different steps with minimum, maximum and average times and you put it all into a computer, so you’re tracking how the flow of the project is actually moving,” said Remond. This enables airports to counter any variations as they occur.
“When this was applied to an airport the result was a 10% cost reduction on the whole project, but it requires lots of setting up at the beginning,” Remond noted.