I just returned from a trip to Canterbury, New Zealand as part of a project between the World Bank and EERI, which I mentioned here. The objective of the project is to research how and whether recovery after the February 2011 earthquake reflects the concept of “build back better.” In interviewing stakeholders, we were focused on the three most impacted sectors: housing, the central business district, and water/wastewater infrastructure. There are many interesting lessons from our trip. One of the most striking ones for me was that of the infrastructure recovery. I think the obstacles, conceptual approaches, and actual solutions reflect a few things I’ve been talking about before. In particular, the infrastructure recovery in Canterbury reflects the need to define infrastructure as the combination of service and capital, as well as seeing recovery as the balance between supply and demand. To illustrate this, I want to describe two contrasting organizations and approaches to infrastructure recovery: SCIRT, which is responsible for Christchurch infrastructure, and Waimakariri District Council (WDC), which is of course responsible for Waimakariri. Both of these cases, I think, provide valuable positive and negative lessons for practitioners and researchers alike in organizing and conducting similar efforts. I’ll focus on SCIRT a bit more because its organization structure and approach will be more unfamiliar to most people reading this.
SCIRT stands for Stronger Christchurch Infrastructure Rebuild Team. SCIRT’s stated goal is “creating resilient infrastructure that gives people security and confidence in the future of Christchurch.” SCIRT was mandated by the New Zealand central government in August, 2011 as a result of the more damaging February, 2011 earthquake. SCIRT will sunset in December 2016, although this will be reviewed one year prior to the sunset. SCIRT took over for IRMO (Infrastructure Rebuild Management Office) that had been set up by the Christchurch City Council (CCC) in response to the September, 2010 earthquake. SCIRT’s scope is broader and more long-term than IRMO, which was focused primarily on emergency restoration within Christchurch. IRMO took the view of repairing or replacing individual damaged components, rather than addressing the service levels of the overall system. In other words, IRMO was focused on capitals, where SCIRT is focused on the combination of capitals and services–the entirety of infrastructure as a concept.
SCIRT is in essence a program of capital reconstruction and service restoration projects defined by an agreed-upon organization structure. SCIRT’s organization model is based on alliance contracting, otherwise known as relationship contracting. This type of procurement and contracting arrangement has been used for other large-scale construction projects, particularly in Australia. Alliances are designed to share risk amongst parties and deal with large, highly complex projects that involve a significant amount of uncertainty. It appears that this is the first time an alliance approach has been used for disaster reconstruction. The SCIRT model focuses on establishing a setting of public-private relationships, rather than a strict partnership. It uses a scheme of risk-reward incentives to create a culture of competitive collaborative between contractors.
The specific organization structure of SCIRT was set up by a small number of individuals that had familiarity with the alliance model. The culture and vibrancy of the SCIRT working environment shows the role of leadership. SCIRT has a well-defined mission statement, values, and ground rules of personnel behaviors. The alliance includes clients (CCC, Canterbury Earthquake Recovery Authority, and New Zealand Transportation Authority), design consultants, and contractors, as well as the core management and services team that is responsible for the overall coordination and management of the organization and reconstruction process. Each client of SCIRT has different cultures, pre-existing protocols, time requirements, and needs. As a result, there is a client-governance group between them to assist in developing a shared understanding of the reconstruction. The designers and other technical staff within SCIRT come from four private consulting companies. Within SCIRT these staff do not identify themselves by their home employer. SCIRT managers evaluate individual staff performance and communicate this to the individual’s home employer in instances where performance is poor.
There are five contractors—called delivery teams—within the SCIRT organization. These contractors were selected because of their size, past performance, and pre-existing familiarity with the clients. The contractors were also involved with IRMO. SCIRT defines each project and sets a fixed project budget for the contractors, avoiding individual bidding or budget negotiation processes. SCIRT does not dictate how contractors deliver projects or how they do subcontracting, just the project design, timeframe, and budget they must meet. About 60% of SCIRT’s work is done by subcontractors. SCIRT offers a project to a particular contractor—contractors do not compete for individual projects—and the chosen contractor is free to take on the project or not. In September 2013, each contract was responsible for about 30 projects each. In many instances, contractors are involved early in the technical design phase of project development. Whether a contractor is offered a project is influenced by a performance score determined based on the delivery of previous projects. Half of this score is based on the cost of delivery, while the other half of the score is based on several key factors including time, safety, and environmental impact. If a contractor manages to complete a project under budget, the surplus is shared amongst all of the clients and all of the other alliance contractors—50% to the clients and 50% to the contractors. The reverse is true if a project goes over budget.
After a process of damage assessment and budget forecasts, SCIRT and its clients agreed on a $2.5 billion budget for infrastructure reconstruction. This price tag is considered a fixed target for the overall reconstruction budget, which is relatively unusual for similar past processes. Of this estimated damage loss, very little of it was covered by insurance—approximately $200 million. What insurance was available is from the Local Authority Protection Programme (LAPP). LAPP is a fund that is mutually supported by local governments to pay for the replacement of infrastructure damaged by a disaster. Because of the Canterbury earthquake, LAPP funds have been exhausted. As a result, less public infrastructure will be insured in New Zealand than before the earthquakes. Interestingly, SCIRT management observed that higher insurance coverage would have complicated the infrastructure reconstruction process and possibly slowed it down.
Initially, SCIRT took a damage-based approach–a capitals-based approach–for repair or replacement, in which a technical guideline was used to determine if a particular bit of capital (pipe, pump, etc.) should be repaired or replaced. This technical guideline was later revised to incorporate a service-based approach to project definition. (Yes!) As I’ve talked about before, this approach takes a more holistic, systems view. In these case of SCIRT, the goal is to bring back the same overall service levels and reliability as before earthquake, rather than necessarily a one-for-one replacement of damaged capital. This facilitates decisions of whether to reconstruct infrastructure in liquefiable zones or implement a more resilient system layout, and the like. In this way, SCIRT explicitly defines recovery as the achievement of pre-earthquake service and reliability levels. The timeframe is also explicitly defined as December 2016—the date when SCIRT will be disbanded. In other words, SCIRT is aiming for return to the same supply-demand balance as before the earthquake, but not the same capital inventory and layout.
SCIRT has a well-defined process for identifying and prioritizing repair and replacement projects. This process begins with the damaged assessment to understand basic needs. Project priorities are determined using multi-criteria analysis. The primary criteria relate to operations—the condition, serviceability, criticality, and maintenance costs of proposed repair or replacement. Projects are grouped with respect to functional interdependencies–specifically, hydraulic and proximal–to create project groupings. Other lesser-weighted criteria are then considered including interdependence with critical facilities and construction impacts on businesses or the environment. Priorities are recalculated each quarter. SCIRT attempts to define projects with budgets around $10 million. (Yes, a bit odd, but it seems to hasten the process within the constraints/framework of alliance contracting.) In sum, approximately 750 projects will ultimately be defined by SCIRT. Once a project has been defined, it moves to design and ultimately delivery (construction).
SCIRT was careful to define better in terms of improving the seismic resilience–both physical and functional–of horizontal infrastructure–both capital and service. SCIRT is clear that building back better for them does not include other forms of betterment like increased service levels (e.g., wastewater treatment capacity) or use of greener infrastructure technology. SCIRT was not interested in changing Christchurch’s supply-demand equation. They were aiming were more focused on the efficiency of the recovery than the sufficiency of the recovery with respect to future well-being. For SCIRT, improving the resilience of infrastructure includes replacing system components with better materials or technology when feasible , but also includes making decisions regarding system layout and service delivery. SCIRT makes no claim, however, that the best material or technology will always be used for reconstruction. Their definition and implementation of recovery or “building back better” definitely results in lost opportunities. Given political and public pressures that SCIRT operates within, perhaps this an understandable (and typical) opportunity cost.
It is likely that many elements of the SCIRT model could be transferred to other disaster recovery processes, at least conceptually. The formation and arguable success (the jury is out of course) of SCIRT is clearly tied to the strength of leadership behind it, at least from my perspective. The feasibility and effectiveness of a similar organizational structure for future disasters will depend on the particular context and leadership. For example, it is possible that in future disasters there will be political or public fears regarding the potential for financial corruption within a relatively new contracting process, such as alliance contracting.
The infrastructure recovery process within the Waimakariri district provides a contrasting case relative to SCIRT and the Christchurch district. Waimakariri was significantly impacted by the September, 2010 earthquake, with roughly 13,000 households losing access to water and sewer services. In the immediate aftermath of the earthquake, the WDC was primarily concerned with getting service back to homes, even if it meant using temporary means such as above-ground water pipes or portals or even, um, ignoring laws (doing work on private property…though with informal consent of property owners). During the initial emergency phase of reconstruction, priorities were often determined in the field by WDC engineers in consultation with private contractors. The access to necessary contractors, equipment, and materials for emergency restoration and long-term reconstruction was not cited as a problem by WDC.
The focus on temporary service restoration created less urgency in decision-making for WDC regarding repairs and replacement approaches and priorities. With respect to my discussion of theory, they were more concerned with sufficiency than efficiency. To me, this contrasts with IRMO and SCIRT. In a few instances, urgency resulted in not using the best possible pipe material (HDPE) because of longer required installation time. WDC took an intentional approach to the repair and replacement process. In general, HDPE pipe was/is used in high liquefaction hazard zones and polyvinyl chloride (PVC) pipe was/is used in moderate liquefaction zones. Decisions of what capital to repair or replace now considered factors of hazard, vulnerability, and critically. Prior to the earthquake only age and condition were considered by WDC.
For the WDC, building back better has a broader meaning than for SCIRT. Similar to SCIRT, WDC’s definition is founded on the combination of capitals and services, rather than just capital. WDC had multiple strategies with respect to seismic resilience. (WDC was much more explicit about this in my conversations with each organization.) When feasible, pipe material was improved. Capital assets were removed or abandoned from some liquefaction-prone areas. WDC reduced the time and cost of future repairs and replacement by co-locating assets and shallower placement of wastewater pipes. Pressurized wastewater systems were installed or was considered in some areas with the highest liquefaction hazard. Lastly, improved redundancy was created using new system layout. WDC speculates that the process of optimizing system resilience increased reconstruction time and cost by 20-30%.
The decision of whether to use a pressurized sewer system in some areas provides a good example of the tradeoffs of building back better. A pressurized system can provide more service resilience than a gravity system in the event of differential settlement due to future liquefaction or lateral spreading. Pressurized systems have higher capital costs than traditional gravity systems. The choice of a pressurized system also can lead to controversy with homeowners. This is because pumps must be installed on homeowner’s property, which requires space, resident costs for electricity, and the onus for monitoring and maintenance goes to the homeowner. As a result, the WDC’s goal was to use this approach to building back better as little as possible. It is also possible that the choice of a more resilient pressurized system is not technically feasible because of incompatibilities with existing, undamaged (gravity) system components, which would have to be removed and replaced to accommodate the pressurized system.
Unlike SCIRT, WDC went beyond the goal of restoring the same level of service delivered prior to the earthquake. They wanted to change the supply-demand equation–change their community’s definition of sufficiency. Where needed, possible, and feasible, the increased level of service (e.g., wastewater capacity) was determined based on pre-existing growth management plans developed by the WDC prior to the earthquake. Having growth and asset management plans in place prior to the earthquake is cited by WDC as greatly aiding their recovery process. The existence and strength of WDC’s growth management plans was influenced by the fact that the district is the third fast growing district in New Zealand. Population within the district is continuing to grow as a result of the impacts in Christchurch from the February, 2011 earthquake. (This population growth, combined with increased property taxes, is expected to pay for infrastructure reconstruction costs over the next 25 years.) By the way, WDC is well known within New Zealand and abroad as being a leader in planning. I was also rather surprised and impressed that multiple folks at WDC cited theory as underlying their choices. This is not something I’ve come across much with similar folks in the US (sorry, but its true).
Yeah, right, like I’m going to pick a winner. I was impressed with both organizations and their representatives during each conversation (and site tour). For practitioners, they both provide models for the rest of the world for approaching recovery and building back better. For scholars, they also provide great examples of theory in action, er, praxis. By documenting both approaches, we will have explicit choices for future development of plans, organizational structures, recovery processes, and theory. We all win.