According to Globenewsire.com, the global railroad construction market grew from $202.70 billion in 2022 to $222.17 billion in 2023 and is expected to grow by another 22% to reach $272.09 billion by 2027. In short, the demand for new railroad infrastructure is booming.

The increased demand for rail stems from a convergence of global factors. First and foremost, there’s a growing concern for sustainable transportation options amidst the global push to combat climate change. Rail is one of the most energy-efficient transportation modes for passengers and freight. The rail sector currently carries 8% of the world’s passengers and 7% of the world’s freight, yet it only represents 2% of the world’s energy demand.

Additionally, burgeoning urban populations are straining existing transportation networks. High-speed rail presents an attractive solution, offering faster and more reliable intercity travel, alleviating growing traffic congestion, and enhancing connectivity. Moreover, technological advancements make high-speed rail systems more feasible and cost-effective, encouraging governments and private investors to pursue these projects to boost economic development and competitiveness regionally and globally.

Here’s a look at some of the world’s most significant rail mega projects (in U.S. Dollars)

1. Dankal Tele Aviv Light Rail Israel: $13 billion
2. Suburban Rail Loop East. Melbourne, Australia $22.3 billion
3. Tel Aviv Metro. Israel, $40 billion
4. Grand Paris Express, France $48 billion
5. Chuo Shinkansen, Japan $64.4 billion
6. High Speed 2, UK, $122 billion
7. California High-Speed Rail, $128 billion

Challenges Facing Rail Construction

Rail construction requires a substantial financial investment, careful planning, coordination, and the ability to anticipate and overcome unexpected challenges over the project’s life cycle. Some of the challenges that rail projects face include:

• Budget Overrun: Rail projects are capital intensive, requiring upfront investment in materials, labor, equipment, and land acquisition. Exceeding the budget can place a substantial financial strain on the project’s owner. This strain can transform a project with a favorable return on investment into a negative ROI, as the initial economic analysis forecasted a more modest cost projection.
• Stakeholder Management: Rail projects involve multiple stakeholders, from federal, state, and local government agencies to local communities, businesses, and councils. The project team’s challenge is to effectively communicate with and engage with all stakeholders to ensure the team addresses concerns and gains support.
• Workforce Management: Finding, retaining, and profitably deploying skilled labor, including construction workers, engineers, and other professionals, especially when facing historically low unemployment and rising wages, is becoming increasingly difficult.
• Weather: Weather conditions can significantly affect construction schedules, mainly where a substantial portion of the work occurs in an open-air environment. This inability to plan for uncertainty can lead to delays and increased costs.

Driving Innovative Solutions to Combat the Complexities of Rail Construction

Australia, where growing patronage of the passenger rail network in Melbourne and other cities due to growing population and increased housing construction, is facing these challenges on a massive scale. In Melbourne, a large-scale construction project led by a series of alliances comprised of developers, contractors and architects is underway to replace passenger railway level crossings with safer bridges and underpasses and supply the city with new stations, track duplications, and car parking garages.

Ross Sterland, Director and Co-Founder of ORBIZ, a leading consulting firm that specializes in project management services for both the private and public sectors, notes, “Australia is seeing a significant population growth from international migration across major cities where the transport infrastructure systems are already under significant pressure. State governments are working hard to address this and enable the safe movement of higher volumes of people around urban areas. This has led to massive investment in rail infrastructure development nationwide, including these level crossing removal projects.”

To meet the demand for current and future rail infrastructure projects, Australian developers must adopt and employ more efficient construction practices, such as digitizing Lean Construction and the Last Planner System® – a construction planning and control system designed to enhance project reliability and collaboration among stakeholders through short-term planning and commitment management.

“While labor costs put significant pressure on the construction industry in Australia, another challenge is how these projects are managed,” said Sterland. “By not adopting Lean practices, productivity in the Australian construction industry has fallen behind other industries and other countries. Right now, adoption is slow, partially due to traditional thinking of having always delivered projects a certain way. New methods like Lean are deemed too challenging to implement. A cultural shift needs to happen.”

Headquartered in Melbourne, Australia, and with offices worldwide, ORBIZ assists leading organizations in achieving their operational excellence goals. The company’s Lean management and continuous improvement strategies are employed in industries including mining, construction, rail, aviation, oil and gas, healthcare, facilities management, and all sub-sectors of the manufacturing industry.

The team at ORBIZ are experts at applying the principles of The Last Planner System® to infrastructure, transportation, buildings, and industrial facility projects, enabling their clients to harness best practices, reduce risk, and control performance outcomes.

Sterland said, “Utilizing a rigorous system like the Last Planner System® and digitizing it via a construction planning software platform will drive the change in the culture and how projects are managed and reported.”

Champions for Change: Bringing Digitized Lean to Rail Construction

With a leadership position in the rail industry across construction, rolling stock manufacturing, and asset management, ORBIZ is bolstering the delivery of rail infrastructure megaprojects in Australia and North Africa with its Integrated Project Delivery (IPD) methodology. Through its partnership with Touchplan®, ORBIZ provides a web-based, accessible-anywhere construction collaboration platform that enables effective implementation of The Last Planner System.

Touchplan combines the Last Planner principles of collaborative pull planning with weekly work planning, enabling teams to efficiently keep projects on schedule while planned finish milestone dates, path length, and lookaheads are all fully integrated. All stakeholders have the resources to continuously report on plans to maintain a live schedule.  When a project hits an obstacle like unexpected weather delays, real-time updates and detailed variance reasons aid in replanning.

ORBIZ, in partnership with Touchplan, supercharges the Last Planner process by offering clients a complete package to address the need for more collaboration between trades, subcontractors, and the project team regarding the day-to-day planning of the project.

“Through a comprehensive suite of data and analytics features, Touchplan provides actionable insights to deliver rail projects faster,” said Sterland. “The platform combines the benefits of pull planning with best-in-class digital collaboration tools, enabling construction teams to collaborate when they cannot get together physically. The Touchplan interface is the easiest to use, allowing all team members to get up to speed quickly, maximizing the benefit of collaborative planning.”

Early Successes – Delivering Efficiency to Level Crossing Removals

The Grattan Institute reported in November 2020 that large rail and road construction projects, like removing level crossings, have an overrun frequency rate of 32% and an average cost increase of 19%.

To prevent replicating these schedule and budget slippages on their projects, the leadership team responsible for delivering the level-crossing removal projects across Melbourne identified the implementation of the Last Planner System® as an opportunity to drive continuous improvement and innovation through their program.

Through its partnership with Touchplan, ORBIZ developed an end-to-end project management system that:

• Develops a change management plan by assessing existing planning systems, processes, and infrastructure to identify change requirements.
• Trains key personnel in Last Planner System® principles and all aspects of Touchplan®.
• Establishes new IT infrastructure and management practices.
• Coaches the project team through the implementation to establish effective use of all software functionality.

The result was enhanced collaboration across the rail project’s planning and construction and increased accountability of frontline planning, which improved the reliability of promised work. Plan Percent Complete (the measure of how well the planning on a job is working) performance was greater than 80% compared to the industry average of 50%.

“Level crossing removal projects have to be planned to the “nth” degree, even before the project is awarded,” said Phil Hendy from the McConnell Dowell, one of the organizations delivering level crossing removal projects in Melbourne. “We have thousands of commuters whose journeys are disrupted through road detours or needing to take replacement buses in-lieu of the train. Touchplan has allowed us to be better prepared and our teams to clearly understand what will happen, which consistently keeps disruptions and delays during the construction to a minimum.”

Expanding to New Markets

ORBIZ has expanded its rail infrastructure work to include large-scale transportation projects in other international markets.

The Cairo Monorail Project involves the construction of two separate monorail lines, creating public transport connections from New Administrative City and 6th October City to the Greater Cairo area.

The project includes a 57 km monorail line with 22 stations connecting the New Administrative City with East Cairo and a 42 km monorail line with 13 stations connecting 6th October City with Giza. Each monorail line also incorporates a depot facility for servicing and maintaining the monorail trains and associated equipment.

Sterland added, “Digitizing the Last Planner System on the Cairo Monorail project provides tremendous visibility into the project and its performance. This project stretches over 100 kilometers of Cairo. You can’t easily drive to over 80 project sites covering the construction of rail sections, stations, and maintenance depots. Providing the site offices with a rigorous digital planning system for managing their part of the project, managers can send their progress back to the site office, allowing everyone to see what is happening in real-time. The Last Planner System and digital platforms are driving a cultural change in construction. Managers will no longer accept that a team will just call in and report once a week. Instead, you have transparent visibility of robust data outlining what is going well and where challenges exist.”

Conclusion

The global railroad construction market is experiencing unprecedented growth, driven by rapid urbanization and the urgent need for sustainable transportation solutions. However, this growth also brings significant challenges, including budget overruns, stakeholder management issues, workforce shortages, and weather-related delays.

To address these challenges and drive innovation in railroad construction, firms like ORBIZ are leading the charge by digitizing Lean construction. By adopting these methodologies, projects can improve efficiency, collaboration, and overall project reliability.

As the railroad construction industry continues to evolve, it’s clear that embracing digitization and innovative production management approaches will be essential for meeting the demands of the future. With ORBIZ and its partnership with Touchplan at the forefront of this transformation, the future of railroad construction looks promising, paving the way for more efficient, sustainable, and reliable transportation infrastructure worldwide.

If you are an owner, general contractor, or trade contractor working on rail construction projects and looking to enhance efficiency and reduce delays, ORBIZ and Touchplan can help. Click here to learn more. (link to Touchplan and ORBIZ page: https://orbiz.io/the-orbiz-way/construction-planning/)