Almost every government, city and utility says it wants more infrastructure. Far fewer ask the harder question: why does the same unit of infrastructure investment produce a durable, productive asset in one place and a late, costly and poorly maintained one in another? The evidence gives an answer that is uncomfortable for anyone who measures ambition by the size of the budget. The return on infrastructure is decided mainly by the system around the spending: how projects are chosen, how the pipeline is sequenced, who is accountable for delivery, and whether assets are looked after once they open.
The International Monetary Fund has put a number on that gap. Through its infrastructure governance work, the IMF estimates that countries lose over one-third of the potential benefits of infrastructure investment to inefficiencies (an earlier IMF cross-country measure put the average loss at around 30%), and that strong infrastructure governance can remove more than half of those losses (IMF, Infrastructure Governance portal, accessed 2026). Few engineering advances promise as much.
What follows applies that finding across transport, water and power networks, digital connectivity and cities: how to build a credible pipeline, divide capital between maintenance and new build, organise delivery, and judge assets over their working lives.
In brief
- Infrastructure value is lost mainly through governance, not engineering. The IMF estimates that countries lose over a third of the potential benefits of infrastructure investment to inefficiency, and that better governance can recover more than half of it.
- A credible pipeline is funded, prioritised, sequenced and regularly updated. A list of announcements is not a pipeline, and the supply chain prices the difference.
- Maintaining existing assets is often the best-returning project available. Analysis of OECD countries for the World Bank’s Lifelines (2019) found that each extra dollar spent on road maintenance saves about US$1.50 of new investment.
- Delivery bodies need clear authority and capabilities that change as a project moves from construction to operation. Recent UK mega-projects show the cost when they do not.
- Infrastructure should be judged over the asset’s life, yet an OECD survey found that only 8 of 33 member countries keep registers covering all government fixed assets (OECD, 2026).
Why governance, not ambition, sets the return
Infrastructure is among the longest-lived capital an economy owns. The UK’s 10 Year Infrastructure Strategy notes that 85% of the country’s existing rail assets and 88% of its existing water mains could still be in place in 2055 (HM Treasury and NISTA, 2025). A decision taken this year about where a line runs or how a treatment works is sized will shape service, cost and resilience for generations. Mistakes compound for just as long.
That longevity is why international institutions have converged on governance as the decisive variable. The OECD’s Recommendation on the Governance of Infrastructure, adopted in July 2020, sets out ten pillars covering how governments plan, prioritise, fund, budget, deliver, operate and monitor infrastructure, from a long-term strategic vision linked to multi-year budgets through to asset performance across the life cycle and critical infrastructure resilience.
The IMF’s Public Investment Management Assessment framework examines 15 institutions across planning, allocation and implementation. Its questions are pointed: whether major projects are reviewed centrally before they enter the budget, whether the government keeps a pipeline of appraised projects, and whether completing ongoing projects takes priority over starting new ones. Reviewing its early assessments, the IMF found the weakest institutional design in the allocation and implementation stages, notably project appraisal, selection and management, and the monitoring of assets (IMF, Public Investment Management Assessment: Review and Update, 2018). The pattern suggests that many countries are better at announcing infrastructure than at choosing, building and looking after it.
Money alone does not close that gap. The US Infrastructure Investment and Jobs Act, law since November 2021, provides US$550 billion of new federal investment over fiscal years 2022 to 2026 in roads, bridges, transit, water, resilience and broadband (US Federal Highway Administration, accessed 2026). Yet the American Society of Civil Engineers’ 2025 Report Card for America’s Infrastructure still grades US infrastructure at C overall and, while noting that the Act has funded more than 60,000 projects, estimates a US$3.6 trillion investment gap over the next ten years. Our reading is that large funding programmes buy capacity and time; they do not by themselves create the institutions that turn capacity into lasting service. For the scale of the wider pipeline these choices sit within, see our analysis of the next decade of global projects.
What makes an infrastructure pipeline credible
Many published pipelines are lists of aspirations: projects without confirmed funding, sequence or delivery route. The supply chain reads them accordingly and holds back investment in the skills, plant and factories that would make delivery cheaper.
A credible infrastructure pipeline has four properties. It is funded, with projects tied to multi-year budgets or identified finance. It is prioritised against assessed need rather than political visibility. It is sequenced so that the market can absorb it without bidding up prices. And it is maintained: updated on a fixed rhythm, with projects that drop out shown as clearly as those added.
The UK offers a live test. Its 10 Year Infrastructure Strategy, published in June 2025, committed at least £725 billion of government funding to infrastructure over the decade and was blunt about the diagnosis: investment had been too erratic and too low, making delivery slow and costly. It cited the School Rebuilding Programme, where stop-start capital funding had lowered market confidence and deterred investment in skills and technology. The strategy is to be updated every two years under the oversight of the National Infrastructure and Service Transformation Authority (NISTA), which combined the strategic role of the former National Infrastructure Commission with the assurance role of the Infrastructure and Projects Authority.
The accompanying Infrastructure Pipeline launched in July 2025 with around 780 projects and £530 billion of planned investment. Its first update, in March 2026, listed 734 projects worth £718 billion over the coming decade and added something most pipelines lack: an estimate that delivery will require an average construction and infrastructure workforce of between 629,000 and 706,000 a year over the next five years (NISTA, 2026). Whether it proves credible will depend on how faithfully it is funded and revised, but its design reflects the right idea: a pipeline is a signal to the supply chain, not a press release.
| Dimension | A list of announcements | A credible infrastructure pipeline |
|---|---|---|
| Funding | Headline totals, often unallocated | Projects tied to multi-year budgets or identified finance |
| Selection | Visibility and timing | Appraised need, value for money and whole-life cost |
| Sequencing | Everything starts at once | Paced to market capacity, skills and consenting |
| Coverage | Public projects only | Public, regulated and private projects in one view |
| Transparency | Updated when convenient | Fixed update cycle, with changes and removals shown |
| Market response | Suppliers wait and see | Suppliers invest in capacity, skills and productivity |
Maintain, renew or build: the capital allocation question
The most consequential choice in infrastructure investment is rarely which new project to build. It is how to divide scarce capital between looking after what exists and adding to it. Openings are visible and maintenance is not, so political incentives favour new build, and maintenance is often the first line cut when budgets tighten.
The evidence points the other way. Analysis of OECD countries prepared for the World Bank’s Lifelines report (2019) found that every additional dollar spent on road maintenance saves around US$1.50 in new investment, and the report cites research estimating that without good maintenance, infrastructure capital costs could rise by 50% in transport and by more than 60% in water. The IMF’s 2018 review made the same point in fiscal terms: appraisal assumes returns over an asset’s whole life, so a lack of routine maintenance undermines the returns that justified the investment. It added a specific institution on maintenance to its framework as a result.
Yet the information needed to allocate capital between old and new is often missing. An OECD survey of 33 member countries, reported in 2026, found that only 36% factor life-cycle costs into project appraisal and selection in all cases, only 24% have legal requirements for asset management plans, and only 24% keep registers covering all government fixed assets, while 30% have no centralised register at all (OECD, Management of assets throughout their life cycle, 2026). A government that does not know the condition of what it owns cannot rationally decide whether to repair, renew or replace it.
The UK offers one example of correcting the bias. Its strategy introduced, for the first time, long-term maintenance budgets for the health, education and justice estates, rising from £9 billion in 2025–26 to at least £10 billion a year by 2034–35, as the National Audit Office had recommended. It is a small share of the envelope, but it changes the default: maintenance becomes a planned programme rather than a residual.
Resilience belongs in the same calculation. Lifelines estimated that building resilience into power, water and transport assets in low- and middle-income countries would add only around 3% to overall investment needs while producing, in its median scenario, a net benefit of US$4.2 trillion over the lifetime of new infrastructure, roughly US$4 of benefit for every US$1 invested. The UK strategy gives a national example: emergency measures to cope with an extreme drought, one with a 0.2% annual probability, would have cost twice as much as proactive investment in new water resource infrastructure.
The cheapest capacity in most infrastructure systems is the capacity that already exists and has not yet been lost to neglect.
From this evidence we draw a capital allocation sequence for infrastructure owners. It is our framework, not an official standard:
- Know what you own. Register assets, their condition and their criticality before debating new projects.
- Protect the maintenance base. Fund routine and major maintenance through multi-year settlements that cannot be raided in a difficult year.
- Get more from existing assets. Operational improvements, monitoring and targeted upgrades often release capacity faster and more cheaply than new build.
- Renew on whole-life cost. Replace assets when life-cycle analysis says so, not when failure forces the decision.
- Build new where the gap is structural. Reserve new build for demand, connectivity or resilience needs the existing network cannot meet.
Delivery bodies and the discipline of execution
Once the portfolio is chosen, value depends on execution, and execution depends on who holds authority. The OECD observes that in many member countries the institutions that develop and deliver infrastructure are not the ones that operate and maintain it (OECD, 2026), which creates obvious risks at handover.
A study by the UK government’s Office for Value for Money, summarised in the strategy, found that mega-projects are not typically set up for success: early cost estimates are unreliable, incentives push projects into delivery before they are ready, and convoluted decision-making and assurance blur accountability. The prescribed response applies to any capital programme: staged, incremental funding as design matures and risk falls; cost and schedule estimates that start as broad ranges; and a fixed capital envelope once construction begins. The front-end discipline this demands is examined in why capital projects fail before construction begins, and the logic of staged funding in connecting capital to a brighter tomorrow.
High Speed Two shows the price of getting it wrong. In June 2026 the National Audit Office reported that the Department for Transport and HS2 Ltd now expect the London–Birmingham programme to cost between £87.7 billion and £102.7 billion (mixed price base), with costs having doubled since 2020 because of cost underestimation, inefficient delivery and scope changes; £46.8 billion (nominal, including work on the cancelled Phase 2) had been spent by the end of March 2026. A further reset runs from January 2025 to an expected finish in spring 2027, and the NAO cautioned against putting the new plans into action until everything is in place to deliver them (NAO, High Speed Two reset, 2026).
Crossrail, now the Elizabeth line, offers a subtler lesson. The NAO found that by keeping a leadership team and governance boards staffed predominantly by civil engineers throughout the programme, Crossrail Ltd failed to identify early enough the need to plan for operational and systems integration, which led to cost increases and delays (NAO, Governance and decision-making on mega-projects, 2025). A railway or a water network is a working system, not just a structure; the delivery body’s skills and governance must evolve as a project moves from civil works to integration, testing and operation.
Central oversight helps when it concentrates on the decisions that matter. NISTA’s Major Projects Annual Report 2025–26, published in July 2026, explains that from April 2026 the Government Major Projects Portfolio, which had held 189 projects, was refocused on around 80 of the most complex and strategically significant, with other major projects managed through departmental portfolios. It is also embedding an early-warning system that uses portfolio data to flag projects at risk of moving to a red rating. Fewer, deeper interventions, and data used before problems harden into crises, are sound project controls practice, the discipline at the centre of the Forum’s project controls and delivery programme.
Judging infrastructure over the life of the asset
Most infrastructure is still judged at approval and at opening, and neither moment says whether the investment was worthwhile. The OECD’s ninth pillar asks governments to optimise life-cycle costs and asset quality, monitor performance against predefined service targets, regularly review asset values and depreciation, and ensure that audit and ex post value-for-money evaluation are carried out when infrastructure contracts end and used in later decisions. The IMF framework likewise asks whether governments review completed projects and adjust their procedures.
For leaders, that implies a different scorecard: service availability, asset condition against plan, whole-life cost per unit of service, delivery of promised benefits, performance under stress, and connectivity, such as whether a transport link widened the labour market it was built to serve. The UK strategy’s “digital first” principle makes a related point: failing to consider digital needs from the earliest stages of planning, it notes, results in costly retrofits and lost benefits.
Cities make the point most sharply, because their systems depend on one another. The OECD recommends investment strategies tailored to the places they serve and co-ordinated across levels of government. The UK is extending integrated funding settlements so that mayors representing nearly 40% of people in England will control a single flexible budget for growth and public services, which in our reading is an attempt to let places plan transport, housing and utilities together rather than project by project.
What infrastructure leaders should do now
- Finance ministries and public owners: publish a funded, sequenced pipeline and revise it on a fixed cycle; ring-fence maintenance; require whole-life costing in every major appraisal; build asset registers before new strategies.
- Regulated utilities and network operators: make the trade-off between maintenance, renewal and expansion explicit to regulators and boards, and design delivery organisations whose capabilities shift towards integration and operation.
- Investors and lenders: price governance as well as demand. Pipeline credibility, staged approvals and asset management maturity are leading indicators of delivery risk.
- Contractors and suppliers: use credible pipelines to commit to skills and productivity, and press clients for early integration planning and honest ranges rather than point estimates.
- Boards and CFOs of companies that rely on public networks: treat transport, water, power and digital infrastructure as a risk in site selection and in their own capital project schedules.
Infrastructure touches every area
Infrastructure investment touches every area of the project economy. Portfolio leadership decides what enters the pipeline and what leaves it. Funding and governance decide whether capital arrives in stages tied to delivery confidence. Delivery and risk depend on controls that surface problems early, technology on how much capacity can be released from existing assets, and results and value on someone still owning the outcome years after opening. Energy networks face these pressures most acutely, which is why we examine them separately in powering projects for a more resilient world.
Decide, Fund, Deliver, Prove for infrastructure
The project economy sequence of Decide, Fund, Deliver and Prove maps closely onto the points where infrastructure value is won or lost. Decide is appraisal, selection and a credible pipeline. Fund is multi-year budgets, staged approvals and protected maintenance. Deliver is delivery bodies with clear authority and evolving capabilities. Prove is life-cycle performance and ex post evaluation that feeds the next decision. On the evidence above, the weakest link is often the last: many systems do not reliably measure whether an asset delivered the service it promised, so the next round of decisions starts without that evidence. At Project Economy Forum Dubai on 27–28 January 2027, the second day follows a single project from first decision to final proof, reflecting the same logic: the chain only holds if it is managed as a whole.
Conclusion: the infrastructure behind the infrastructure
If the IMF is right that stronger governance can recover more than half of the value lost to inefficient public investment, then the best-returning infrastructure asset many countries could build is not a bridge, a line or a treatment works. It is the institutional machinery that decides what to build, funds it in the right order, looks after it and learns from it: the appraisal capability, the published pipeline, the asset register, the delivery body that knows how to hand over a working system. Like physical assets, it depreciates when neglected. Leaders who invest in it deliberately will get more out of every pound, dollar or dirham that follows.
Frequently asked questions
What is infrastructure investment?
Infrastructure investment is capital spent on the long-lived networks and facilities that economies depend on, including transport, water, energy, digital connectivity and public buildings. Its return depends less on the size of the budget than on how projects are selected, delivered, maintained and measured.
What makes a national infrastructure pipeline credible?
A credible pipeline is funded, prioritised against assessed need, sequenced to what the market can deliver and updated on a fixed cycle, with removals shown as clearly as additions. That credibility persuades suppliers to invest in the skills and capacity that bring costs down.
Should governments prioritise maintenance or new infrastructure?
Where assets are sound and demand is served, maintenance usually offers the higher return: World Bank analysis found each extra dollar of road maintenance in OECD countries saves about US$1.50 of new investment. New build is justified where there is a structural gap in capacity, connectivity or resilience that existing networks cannot close.
Sources
- American Society of Civil Engineers, 2025 Report Card for America’s Infrastructure (2025). ASCE Infrastructure Report Card
- HM Treasury and National Infrastructure and Service Transformation Authority, UK Infrastructure: A 10 Year Strategy (2025). GOV.UK
- International Monetary Fund, Infrastructure Governance, online portal on the Public Investment Management Assessment (accessed 2026). IMF Infrastructure Governance
- International Monetary Fund, Public Investment Management Assessment: Review and Update (2018). IMF
- National Audit Office, Governance and decision-making on mega-projects (2025). NAO
- National Audit Office, High Speed Two reset (2026). NAO
- National Infrastructure and Service Transformation Authority, Infrastructure Pipeline kicks off new era of infrastructure delivery (2025). GOV.UK
- National Infrastructure and Service Transformation Authority, Infrastructure Pipeline update signals future workforce needs (2026). GOV.UK
- National Infrastructure and Service Transformation Authority, NISTA Major Projects Annual Report 2025–26 (2026). GOV.UK
- OECD, Recommendation of the Council on the Governance of Infrastructure, OECD/LEGAL/0460 (2020). OECD Legal Instruments
- OECD, Management of assets throughout their life cycle: Evidence from the Infrastructure Governance Indicators, OECD Working Papers on Public Governance No. 89 (2026). OECD
- US Federal Highway Administration, Infrastructure Investment and Jobs Act (IIJA) under the Federal Highway Administration Office of Operations (accessed 2026). FHWA
- World Bank, Lifelines: The Resilient Infrastructure Opportunity, by Hallegatte, Rentschler and Rozenberg (2019). World Bank