Environmental Issues Associated With Infrastructure

Environmental
Issues Associated
with Infrastructure
www.environmental-auditing.org Development
This publication was prepared by the INTOSAI Working Group on Environmental Auditing (WGEA). The WGEA
aims to encourage the use of audit mandates and audit methods in the field of environmental protection and
sustainable development by Supreme Audit Institutions (SAIs). The WGEA has the mandate to
• help SAIs gain a better understanding of environmental auditing issues,

• facilitate exchange of information and experiences among SAIs, and
• publish guidelines and other informative materials.
This publication may be downloaded free of charge from the INTOSAI WGEA website http://www.environmental-
auditing.org. Permission is granted to copy and distribute this publication, giving appropriate credit, provided that
such copies are for academic, personal or professional use and are not sold or used for commercial gain.
ISBN 978-9949-9061-6-1 (PDF)
June 2013
1
FOREWORD &
ACKNOWLEDGEMENTS
This document, Environmental Issues Associated with Infrastructure, has been produced by the INTOSAI
Working Group on Environmental Auditing under its remit to provide guidance materials and conduct research
studies on emerging topics in environmental auditing to help Supreme Audit Institutions design and carry out
environmental audit work.
Around the world governments are involved in building new or replacement infrastructure and maintaining,
modernising or decommissioning existing infrastructure. Infrastructure can significantly impact on its local
environment and community and the wider environment and can involve significant use of raw materials in
its construction. The operation of infrastructure also uses natural resources and can result in environmental
impacts. Governments can reduce the environmental impacts from infrastructure and take the opportunity
afforded by big infrastructure projects to build in measures to improve the environment and contribute to a more
sustainable economy.
Through their audits Supreme Audit Institutions (SAIs) can hold their governments to account for the
environmental impacts from infrastructure and identify ways in which the environmental costs can be minimised
and the benefits maximised. This paper on Environmental Issues Associated with Infrastructure, is a resource
to help audit practitioners identify the types of issues they can address in their audits – whether they are audits
specifically focused on environmental impacts of a particular infrastructure development or a wider audit which
seeks to address the environmental and sustainability issues alongside other issues, such as the efficiency and
effectiveness of the programme. In order to be of use to all INTOSAI members, it is of a general character,
providing:
• information on the environmental and sustainability impacts that can arise from infrastructure projects
and programmes;
• explanation of tools that governments may use to address the environmental impacts; and
• examples of how SAIs have addressed environmental impacts of infrastructure in their audits.
The work to develop this paper was led by the United Kingdom National Audit Office. Many thanks go to the
many individuals who contributed, including the SAIs that acted as members of the Sub-Committee for the
project, providing ideas and comments on emerging drafts, and the SAIs that provided case studies. We would
also like to thank the INTOSAI Working Group on Environmental Auditing and its Steering Committee members
who also provided comments at different stages of the evolution of this paper. Without all these contributions
this paper would not have been possible.
Mihkel Oviir
Auditor General of Estonia
Chair of INTOSAI WGEA
FOREWORD & ACKNOWLEDGEMENTS 2
TABLE OF
CONTENTS
FOREWORD & ACKNOWLEDGEMENTS 2

INTRODUCTION 5
1. ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM
INFRASTRUCTURE DEVELOPMENT 8
1.4 Land 10
1.5. Ecology 11
1.6. Water resources and the water environment 12
1.7. Materials 13
1.8. Energy, Greenhouse Gas emissions and other emissions to air 14
1.9. Human environment 15

2. THE STAGES IN INFRASTRUCTURE DEVELOPMENT 17
2.3. Stage 1: Identify policy need and how to meet need 18
2.7. Stage 2: Draw up project brief 19
2.15. Stage 3: Development of delivery strategy 20
2.19. Stage 4: Draw up the design brief 21
2.23. Stage 5: Construct infrastructure 21
2.26. Stage 6: Operate and maintain infrastructure 22
TABLE OF CONTENTS 3
3. GOVERNANCE APPROACHES FOR MANAGING THE ENVIRONMENTAL
IMPACTS OF INFRASTRUCTURE 23
3.2. Governments’ frameworks for addressing policy impacts 25
3.8. Planning controls 26
3.11. Environmental regulations 27
3.13. Environmental and sustainability assessments 28
3.22. Environmental and sustainability integration in design and procurement 29
3.29. Mechanisms for the ongoing monitoring and evaluation of environmental and sustainability impacts 32
4. HOW SAIs CAN AUDIT THE ENVIRONMENTAL AND SUSTAINABILITY

IMPACTS OF INFRASTRUCTURE 33
4.3. Audits of the national approach to infrastructure planning 34
4.4. Audits of infrastructure projects and programmes 34
4.7. Audits of the operation of processes to address environmental impacts of infrastructure 36
4.9. Audits of infrastructure projects’ contribution to achievement of environmental objectives 37
APPENDIX I: Case studies available to date 38

BIBLIOGRAPHY 55
TABLE OF CONTENTS 4
INTRODUCTION
1. Demands for investment in infrastructure come from the need to maintain, modernise, or replace existing
infrastructure and for additional infrastructure to support new ways of working and living for an increasing
population. Infrastructure is a catalyst for economic growth, it can support economic development particularly in
developing countries, and it can contribute to a transition to a low carbon economy. These demands are leading
to significant infrastructure development in both developing and developed countries, for example in the energy,
transport, health, education and flood relief sectors.
2. The development of infrastructure involves significant investment in assets which last over a long period and
often sits within wider-ranging plans for development. For example in the UK, the 15 year £17 billion Crossrail
project is for a new train line across London, and is part of the wider London Thames Gateway programme, to
regenerate east London.1 New infrastructure development can bring significant environmental, economic and
social benefits, including the opportunity to build in such a way as to meet the challenges posed by climate
change. It can, however, also have significant costs on the environment, both in its construction, use and
decommissioning or disposal. These impacts can be local or across a much wider area and the infrastructure
investment may not always benefit the people who experience the impacts, for example where it increases
water scarcity or interrupts the migration of species.
New infrastructure
can bring
significant
economic benefits
but may have
environmental or
social impacts.
1 London Thames Gateway Delivery Plan http://www.communities.gov.uk/documents/regeneration/pdf/1427560.pdf
INTRODUCTION 5
3. The aim of this research paper is to provide for Supreme Audit Institution auditors an overview of the
common environmental and sustainability impacts associated with infrastructure, along with governance
arrangements that Governments can put in place to manage them, in order to help the auditor design an audit
in this topic area.
4. In some areas the private sector may deliver the infrastructure investment, to meet their own financial
objectives. In other cases governments may incentivise the investment through market regulation; fund private
sector delivery from tax receipts; or fund and manage the infrastructure projects directly itself. This research
paper has identified seven key stages in the development and operation of infrastructure from initial proposals
through to delivery, use, upgrade and decommissioning (Figure 1). Environmental and sustainability impacts
occur at all of these stages, Governments can seek to minimise these environmental and social costs and
maximise the potential benefits associated with infrastructure, whether it is in the private or public sectors, by
setting regulatory requirements and standards. Where governments are directly involved in building projects or
managing infrastructure, they are responsible for the initial policy decisions, project start up and subsequently
for complying with regulations and best practice in the way they manage the infrastructure work.
Figure 1: Generic seven stage model of infrastructure development
Policy
Wider Context
Stage 1: Identify policy need and
how to meet need
Project
Project Start Up
Stage 2: Draw up Project Brief
Stage 3: Development of Delivery
Strategy
Project Delivery
Stage 4: Draw up Design Brief
Stage 5: Construct Infrastructure
Operational Service
Stage 6: Operate and Maintain
Infrastructure
Stage 7: Disposal/
Decommissioning
of Infrastructure
Source: UK National Audit Office
6
5. This paper provides an overview of the relevant issues for auditors to consider in undertaking audits of
government engagement in infrastructure projects. It covers:
• the common environmental and sustainability impacts associated with infrastructure development,
operation, use, upgrade and disposal (Part 1)
Impacts on the environment and sustainability from infrastructure project are wide-ranging and can be either
adverse or positive. The paper presents some of the types of environmental and sustainability impacts that can
be created during the lifecycle of infrastructure.
• a generic model of seven key stages in an infrastructure project’s lifecycle (Part 2)

The paper presents the key steps within the seven stages in the infrastructure project lifecycle through which
Governments and other infrastructure developers can influence the overall environmental and sustainability
impact of the infrastructure.
• governance structures through which environmental and sustainability impacts can be identified,
managed and mitigated (Part 3)
The paper presents a range of tools, structures and processes which Governments can use at different stages
of the infrastructure lifecycle to address environmental and sustainability impacts.
• how Supreme Audit Institutions can audit the environmental and sustainability impacts of
infrastructure (Part 4)
The paper sets out how SAIs can and have addressed environmental and sustainability impacts of infrastructure
in their audits, drawing on case studies, which are presented fully in Appendix 1.
Water treatment works

benefit the community
but can impact on local
ecology and water
resources.
6. To prepare this paper, the project team reviewed infrastructure-related literature, developed and consulted
upon a generic model of infrastructure development and related governance issues, reviewed INTOSAI materials
and collected case study examples from INTOSAI members, and conducted workshop sessions with INTOSAI
members to review and agree the elements which formed the report. A bibliography is provided in Appendix 2.
INTRODUCTION 7
ENVIRONMENTAL
AND SUSTAINABILITY
IMPACTS ARISING
FROM INFRASTRUCTURE
DEVELOPMENT
ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 8

1.1 Governments have wide interest in the social and economic infrastructure of their country. This
includes power stations and energy networks; roads, railways and airports; flood barriers and other flood
protection measures; telecommunications systems; water collection, supply and treatment works; and waste
management. All of these can be large structures individually or collectively and involve significant investment.
They bring substantial benefits over a long period and for developing countries in particular can make an
enormous difference to the productivity of the economy and the health and well-being of the population.
However, they can also have wide-ranging environmental and sustainability impacts, which can be direct or
indirect, short or long-term or cumulative, and reversible or irreversible. Infrastructure projects can involve work
to mitigate significant adverse impacts, if the impacts are identified and considered at the appropriate stage, to
enable the benefits from the infrastructure to be achieved with less detriment. Investment in large infrastructure
projects can also provide an opportunity to enhance the surrounding and wider environment.
1.2 This section presents environmental and sustainability impacts that can be created during the
construction, operation, upgrade and disposal/decommissioning of infrastructure. It does not seek to be an
exhaustive list of every potential impact, and is not specific to any one type of infrastructure. Rather, it provides
a means of highlighting the broad types of impacts, to provide a starting tool for auditors to consider the
consequences of infrastructure development projects and the adequacy of planning assessments and delivery
during the project lifecycle.
1.3 The impacts are presented in the following impact categories:

• Land: Impacts on landscape, soils and land use. (See 1.4)
• Ecology: Impacts on ecology, biodiversity, natural habitats of both flora and fauna. (See 1.5)
• Water resources and the water environment: Impacts on groundwater; surface water such
as lakes, rivers, and streams; oceans and seas; glaciers and ice caps; wetlands and aquifers; rainwater and
wastewater. These impacts also affect the water cycle. (See 1.6)
• Materials: Impacts embedded in the materials used during construction. (See 1.7)
• Energy, Greenhouse Gases and other emissions to air: Impacts arising from energy
use during the construction process including operation and use of machinery; transportation; lighting and
other electricity use. (See 1.8)
• Human environment: Impacts on the local community, local and non-local economy and the built
historic environment e.g. heritage sites. (See 1.9)

LAND
1.4 New infrastructure typically involves land use change and the selection of the site and its proximity
to human settlement will significantly affect its impact. Refurbishment, rebuilding or replacing previous
infrastructure may also change the use of the land on which it sits and its impact. Land use impacts will be
affected by whether the land is:
• of special consideration to the local community and indigenous population;

• on or near an area(s) of architectural significance;
• on land that is part of a nature conservation area, national park or other protected landscape,
a site of particular cultural or scientific interest;
• in a forest (issue around deforestation);
• on a floodplain (resilience to flood risk) ;
• contaminated by hazardous material; or
• agricultural land.
Adverse impacts
• Removal of trees, and in particular disruption of forests, can reduce their sustainability and their ability to act
as a “sink” for carbon dioxide emissions, and hence reduce their impact in global warming. It can all remove
natural barriers to wind and weather which can add to soil erosion and impacts on other ecology.
• The construction and disposal of infrastructure can impact on the condition of the soil structure. For example
the use of vehicles and heavy machinery may cause compaction of soils; land clearance may lead to soil
erosion; and the infrastructure work may cause soil contamination with toxic materials.
• Buildings and hard landscaping reduce the capacity of the land to absorb rainwater and increase run-off,
reducing the land’s ability to store water or act as a flood plain and can impact on river flows and the sediment
cycle.
• Once the infrastructure has been built it will impact on the visual amenity of the land and may act as a barrier
in the use of the land by local communities. For example telecommunications pylons or wind turbines may tower
over communities and may restrict access to the land upon which they are sited.
• The operation of the infrastructure may result in pollution and wastes contaminating land off-site, with
heavy metals and organic pollutants transported from the site by wind or water and toxic materials potentially
accumulating and contaminating land or water courses.
Infrastructure can
impact on visual
amenity of the land.
Positive Impacts
• The development can be used as an opportunity to investigate the archaeology of the site and the removal,
restoration and conservation of items found.
• The land selected may have previously been contaminated and the infrastructure development can offer an
opportunity to regenerate and reuse it.
• Upon upgrade or decommissioning the land may be cleaned up or remediated, to the level required for the
future intended use of the land. For example, for agricultural use land remediation has to be of a very high level
and it may need to be less well remediated for industrial use.

ECOLOGY
1.5 Infrastructure can significantly impact on the ecology and biodiversity on the chosen site and in
surrounding areas. In addition to site based impacts, infrastructure can affect ecology through its impact on
water courses (for example from dams) or the air (for example from wind turbines). Many impacts will be local to
the site of the infrastructure but in some cases there may be impacts across a much wider area.
Adverse impacts
• Change in land-use as a result of infrastructure development will destroy existing habitats and affect the
species that lived there.
• Degradation of the surrounding environment during construction, operation or decommissioning through
noise, vibration and light pollution or waste (e.g. dust created during construction) may also disturb habitats and
wildlife and can affect plant and fruit growth. For example, a power station may increase water temperature as
a result of discharge of cooling water this in turn may alter growth, metabolism, feeding habits, reproduction or
migration of aquatic species.
• The use of land for infrastructure projects may hinder the movement of animals through habitat destruction or
fragmentation. This can impact on species population dynamics e.g. distribution and abundance; and for rare
species in extreme cases can result in species extinction. For example in Europe increased road infrastructure
has been linked with the threat of extinction of hedgehogs2.
• A construction project can introduce new predators, pests or other invasive species from other areas. For
example non-native pests can be brought in by vehicles or workers and upset the ecological balance on site or
in the surrounding area.
• Infrastructure development can also have offsite impacts on the ecology in surrounding areas. For example,
displacement of populations of species from the site may increase pressure on surrounding areas, thereby
reducing these sites’ capacity to support the wildlife present. These areas may also, as a result, suffer a
reduction in ecological quality so that the sites are no longer able to support the migration, dispersal or genetic
exchange of wild species. Offsite impacts are especially important in cases where infrastructure development is
taking place in close proximity to nature preservation areas.
• Infrastructure development can reduce the ability of the natural environment, its habitats and species to
adapt to climate change.
Construction work
can disturb habitats
and wildlife.
Positive impacts
• Infrastructure development and disposal can present opportunities on the site to extend, improve or create
new habitats for existing wildlife and plants. For example, the development can incorporate within its design
the space needed for existing habitats, important species, buffer areas and landscape features – ensuring that
the site retains its capacity to support the diversity, abundance, migration, dispersal and genetic exchange of
wildlife. Another positive impact may be that some species are well adapted to built environments and thrive
there. Some infrastructure that people rarely visit, such as power stations, may provide undisturbed land for
animals and plants in their grounds.
• Features lost through development on site can be compensated for through:
- providing habitat connectivity, to enable wildlife migration to continue;
- re-creation, as nearby as possible, of features and landforms capable of maintaining the same
ecological functions and with the same capacity to support the habitats and species lost or displaced and
moving of affected species to the new site where possible;
- restoration and enhancement of surrounding features unaffected by development or creation of new or
additional buffer areas to reduce impacts.
2 Ecological effects of roads, Andreas Seiler (2001)

WATER RESOURCES
AND THE WATER ENVIRONMENT
1.6 Infrastructure can have impact on water resources (including water quality); flood risk; consumption of
water during construction and operation; and water embodied in the materials used to build and maintain the
infrastructure.
Adverse impacts
• Infrastructure construction and its use may add to increased demand for water and so add to pressure on
water supplies in the local area. This may be of particular concern due to growing pressure on the quantity and
quality of water supplies as a result of climate change. Pressures from water demand where there is scarcity
can also impact communities away from the site of the infrastructure and this can be beyond national borders.
• Infrastructure construction, operation or decommissioning can lead to contamination/pollution of on-site

groundwater and surface water altering its acidity, pH balance and salinity and impacting on aquatic plants, fish
and animals. Contamination or pollution can arise through:
- Leaks and spills from tanks, pipes, vehicles (e.g. sewage from a water treatment facility);
- Accidents or spillage during storage or transport of raw materials, manufactured products and waste
materials;
- Storage of waste arising from the construction/operation of the infrastructure on or adjacent to the site;
- Leaching of pollutants from the materials used to build or maintain the infrastructure;
- Discharge of poor quality water after use in technological processes during infrastructure construction,
operation or decommissioning;
- Fly ash contaminating groundwater, for example from combustion of solid fuel such as wood, peat, coal
in power stations.
• The operation of water management infrastructure over time can lead to wear and tear of the network of
pipes and valves and result in water leaks. Burst pipes can disrupt water supply and lead to flooding of areas
and properties and also waste a valuable natural resource. Leaking discharge pipes can spill untreated waste
water.
• An infrastructure site may be vulnerable to flooding or change the flood risk to those downstream or adjacent
to it.
Construction can contaminate

groundwater or surface water.
Positive impacts
• There are opportunities with refurbishment, modernisation or construction of new infrastructure to minimise
the consumption of water through the collection and utilisation of rainwater during construction and operation;
the installation of water efficient equipment; and the re-use of grey water on site.
• The infrastructure itself can be part of the transformation to a lower carbon economy, The transportation of
water for example is carbon intensive and new water infrastructure may be more energy efficient and reduce the
carbon intensity of the economy.
3 IEA Energy Technology Perspectives 2008: Scenarios and strategies to 2050

MATERIALS
1.7 Enormous amounts of materials and energy can be used in the construction and operation of an
infrastructure project. Construction of infrastructure uses a significant volume of materials derived from natural
resources, such as timber, concrete and steel. And rare natural resources are used in the manufacture of
equipment. The sourcing, processing, manufacture, distribution, use and disposal of construction materials can
have significant local and global environmental impacts.
Adverse impacts
• Many materials used in construction or the operation of infrastructure, such as coal or nuclear power
stations, can be from unsustainable sources or damage the environment and create pollution during their
extraction, for example stone or sand quarried or timber harvested unsustainably. For power stations, for
example, coal mining can release methane, a potent greenhouse gas,
• Many materials are produced in an energy intensive process, in particular cement production for concrete
releases about five per cent of global CO2 emissions and steel accounts for 4 to 5 per cent3. As a result, large
amounts of natural materials and energy can be embedded in the final infrastructure project.
• Some materials used to construct infrastructure are treated with chemicals which can result in toxic
emissions such as polycyclic aromatic hydrocarbons, which represent air pollution and health hazards, for
example in the pre-treatment of timber or treating railroad ties with creosote;
• The construction and disposal of infrastructure can create a large and complex waste stream, covering a
wide array of materials some of which can be hazardous, such as polychlorinated biphenyl (PCB), asbestos or
lead dust.
Materials used
in construction
can be from
unsustainable
sources.
Positive impacts
• Upgrade decisions can take account of the embedded materials and result in extending the life of existing
assets rather than replacing them with new infrastructure or incorporating existing steel frames in new
infrastructure.
• Designs for upgraded or new infrastructure can minimise the use of materials with higher environmental
impact and use instead sustainable products, such as sustainably sourced wood instead of concrete.
• There are opportunities during construction to source materials that are re-used or recycled reducing waste
from other sites that would otherwise need disposal.
• Refurbishment and/or rebuilding allows the removal of potentially harmful materials such as asbestos, and
their replacement with safer, better-performing materials.
3 IEA Energy Technology Perspectives 2008: Scenarios and strategies to 2050

ENERGY, GREENHOUSE GAS EMISSIONS AND
OTHER EMISSIONS TO AIR
1.8 Energy is consumed and greenhouse gases are emitted during the transport to site of the construction
material and the workers; the operation of heavy construction machinery; the operation and maintenance of the
infrastructure; treatment of wastewater; and the operation of heavy machinery and the transport of waste mate-
rial during the demolition of infrastructure.
Adverse impacts
• Transportation of staff and raw materials to and from infrastructure development sites results in emissions
to air of carbon dioxide, carbon monoxide, nitrous oxides (NOx), sulphur oxides (SOx), dust, polyaromatic
hydrocarbons (PAHs) and particulate matter (PM). These emissions contribute to climate change and have
impacts on air quality which can result in both health and environmental impacts. Using materials from local
resources and supplies can lower the transportation impacts. In some cases greenhouse gas emissions could
be reduced through use of lower carbon means of transport, such as transportation by water.
• Energy used in construction and operation of infrastructure is often not from renewable sources and
consumption of fossil fuels contributes to greenhouse gas emissions and other polluting emissions to air.
• Energy infrastructure, such as heating and electricity energy systems, can be inefficient with a lot of energy
being lost along the way as it moves from the source to the end-user. Maintenance and refurbishment of energy
infrastructure may be used to reduce this adverse impact, such as resulting in the improvement in combined
heat and power systems.
Infrastructure can be part of

the transformation to a low
carbon economy.
Positive impacts
• The infrastructure itself can be part of the transformation to a lower carbon economy, for example if it is new
energy infrastructure or rail transport to take freight off roads.
• Infrastructure design may incorporate energy-saving or energy generating features and can make them more
efficient than the infrastructure services they replace.
• The design can include technology to reduce emissions and carbon capture and storage.
• Transportation arrangements for infrastructure development or operation can be used by other users to
reduce third party energy use. For example bus services can be established for workers on site and also operate
as public services.

HUMAN ENVIRONMENT
1.9 New infrastructure projects can affect the physical, cultural, social and economic factors in an area. The
nature and scale of the impacts on the human environment will be substantially determined by the location of
the infrastructure. Maintenance or modernisation of existing infrastructure to extend its operational life can main-
tain its social or economic benefits.
Adverse impacts
• Displacement of local populations, including indigenous populations, during construction may threaten the
sustainability of community structures and cultures. Such displacement can happen in the immediate surrounds
or across a wider area, for example if a dam reduces water flow and disrupts community life downstream.
• New infrastructure can involve the demolition of existing commercial properties to make way for it, which can
mean the loss of jobs in the local economy.
• Construction may impact on archaeological and other heritage sites with architectural or historical
importance.
• Once built, infrastructure can have negative impacts on the local community. For example, in addition to
impacts on ecology and the water environment, a road generates traffic which can be a nuisance and hazard for
the local community. New infrastructure development may also lead to reduced access to previously used green
infrastructure.
• There can be health effects (real or potential, in the event of an incident) from infrastructure on the local
community. For example this might include electromagnetic radiation from telecommunication pylons; sewage
contamination from wastewater plants; radioactive leakage from nuclear plants.
• Decommissioning and disposal of infrastructure can be a burden on the economy if the funds for disposal
have not been budgeted for adequately and if responsibility for disposal has not been appropriately assigned.
Decommissioning of infrastructure may also impact on jobs and the local economy.
Infrastructure projects can benefit but also disadvantage communities.

• Construction, operation and disposal poses health and safety considerations for the workers. For disposal of
infrastructure, specific issues of relevance are:
- structural stability of buildings;
- stability of earth slopes/retaining walls, hazards from voids;
- hazardous materials either on site or remaining in buildings;
- hazardous materials contained within the fabric of buildings;
- redundant services ducts or pipes containing hazardous materials.
Positive impacts
• The infrastructure itself should deliver the benefits it is designed to achieve for the local community, such
as new waste management infrastructure improving sanitation, health and the environment; flood defences
protecting local communities and their livelihoods; and transport and telecommunications increasing the quality
of life for people in remote areas as they become better connected to jobs, shops and other facilities.
• The developer of the infrastructure may pay tax or provide other support to the local community.
• Construction can strengthen the local economy through using local companies and local employees at all
stages of the infrastructure lifecycle.
• New infrastructure may bring additional people, employment and tourism into the economy and the
opportunity to invest in local services to support the increasing community, such as education, health care
facilities and housing.
• The presence of infrastructure such as a railway or a power station may affect property prices (may be a
positive or adverse effect)

2
THE STAGES IN
INFRASTRUCTURE
DEVELOPMENT
THE STAGES IN INFRASTRUCTURE DEVELOPMENT 17

2.1 Sustainability and environmental implications, as discussed in Part 1, should be considered throughout
the lifecycle of an infrastructure project, to minimise the adverse impacts and maximise take-up of the
opportunities for benefit. This section will develop further the generic infrastructure model presented in the
introduction (Figure 1) to highlight the need for a continuous, iterative assessment of environmental impacts; to
provide a tool for thinking practically about how to consider the impact on the environment at each stage; and
how to integrate this into the decision-making process.
2.2 The model (Figure 2) is not based on any specific type of infrastructure project; rather it presents a generic
model of the typical infrastructure development (and use) which could be applied in a variety of contexts. The
model has been drawn together from a range of sources and simplified to produce a high-level representation
of an infrastructure project’s lifecycle. It should be noted that this approach is rarely linear and that there may
be some reiteration of steps and overlapping of stages. Stages may start earlier and a significant setback in the
operational phase could even mean going back to the beginning of the cycle.
STAGE 1: IDENTIFY POLICY NEED

AND HOW TO MEET NEED
Identifying the need.
2.3 The first step in an infrastructure development project is to identify clearly the policy or business need. This
is achieved through:
clarifying the current situation, level of service and demand met with existing infrastructure; assessing any future
impacts on the level of services which can be provided with existing infrastructure; and assessing likely future
demand, taking into account long-term changes in demand prompted by changes in society or the climate.
Policy needs for infrastructure development can arise where there is a lack of capacity of a public service to meet
current or future community needs; a low service level; or a risk of service level falling. Identifying policy need
encourages full consideration of the range of options that are available to meet the need.
Setting out the options.

2.4 Once a need for change in a public infrastructure service has been established, then the various options
available to fulfil the need must be identified. The list of options identified and considered should include the “do
nothing option”; the scope for improving output from existing infrastructure; the potential to reduce existing or
future demand; and infrastructure upgrade; as well as new infrastructure solutions. This is important because all
infrastructure solutions will involve environmental or sustainability costs and impacts and so these must be com-
pared to the costs and benefits of other potential solutions.
Options appraisal.
2.5 Option appraisal is a technique for setting objectives, creating and reviewing options for meeting the objec-
tives and analysing their relative costs and benefits. It assists in making decisions on whether to proceed with a
project and in identifying the best option for delivering it. During this stage there should be an evaluation of the
risks, as well as the costs and benefits of each option, including environmental and social costs. It should quan-
tify costs and benefits where possible based on detailed environmental assessment, so that decisions on options
available are taken based on robust information. Long-term issues such as climate change should be addressed
in this analysis. Emissions associated with the use of the infrastructure will need to be in line with future emissions
reduction requirements and the infrastructure will need to be resilient to future climate change and not inhibit
adaptation in other sectors. A robust cost benefit analysis, considering the whole life of the project, is vital at this
stage of the project.
High level business case.

2.6 This sets out the high level rationale, that is the policy or business need, for the infrastructure and justifies
the business option selected, based on the options appraisal undertaken.

Figure 2: Generic Model of Infrastructure Development
Policy
• • Identify the policy need or desired policy outcome.
Wider Context • • Set out the options available to solve the problem
Stage 1: Identify policy need and • (including do nothing’ and non-infrastructure options).
how to meet need • • Options appraisal to identify the best option for meeting
• the policy need.
• • Prepeare the high level business case.
Project
• • Prepare a feasibility study
Project Start Up • • Prepare a business case
Stage 2: Draw up Project Brief • • Address options for choice of delivery model
Stage 3: Development of Delivery
Strategy • • Prepare a permanent strategy
• • Prepare output based specification
• • Prepare contract strategy
• • Prepare outline design brief

• • Prepare detailed design brief
Project Delivery
Stage 4: Draw up Design Brief • • Procurement
Stage 5: Construction • • Build infrastructure
• • Test infrastructure
• • Monitor construction against performance criteria
• • and indicators
Operational Service
Stage 6: Operate and Maintain • • Monitor performance & benefits realisation
Infrastructure • • Contract management
Stage 7: Disposal / • • Maintenance
Decommissioning • • Decommission plan and strategy
of Infrastructure • (including finantse model)
STAGE 2: DRAW UP PROJECT BRIEF

The project brief.
2.7 To progress beyond the initial concept and develop a more detailed project definition, the Project
Brief provides the formal basis for assessing whether the proposal is viable and achievable. This defines the
infrastructure’s objectives in outline and is a statement of the user requirements and other relevant technical,
administrative and financial information. It must contain sufficient detail for an informed decision to go ahead or
abandon the project. It is likely to include:
• Background to the infrastructure need

• Preferred option
• Main stakeholders, especially service users
• Benefits expected and how they will be measured
• Impacts of the development and how they will be avoided or mitigated
• Estimate of overall effort required and who will do it
• Outline of activities required
• Key milestones, including critical stages

Feasibility study.
2.8 This examines the issues that will make the project feasible or unfeasible. It considers various aspects of
the infrastructure project in enough detail to inform a final decision of whether to proceed or not. It indicates
whether the infrastructure is practicable in engineering terms,
confirms its possible costs and decides on the methods that should be adopted for design and construction.
The following may be addressed in a feasibility study:
• Budget and scope of the project: Will the proposed project work at the desired budget?
• Site analysis: Is the site chosen suitable?
• What is the best strategy for developing the project on a given site?
• What other cost, planning, and design constraints might the project run into?
A feasibility study culminates with the preparation of a report which documents its findings and makes
recommendations for proceeding with the next stage of infrastructure development. It is important at this
stage to identify key environmental and sustainability impacts, in the short and long term, and how these will be
addressed, and how they have already informed the scope, site chosen, strategy or design constraints.
The business case:

2.9 provides justification for undertaking a project, in terms of evaluating the benefit, cost and risk of
alternative options and rationale for the preferred solution. This can involve putting values on the environmental
costs and benefits identified at the feasibility stage.
Choise of delivery model:

2.10 This involves determining the best way to deliver the policy object identified at the beginning. The
potential options available to Governments include: direct delivery by central Government department;
delegation of delivery to other public sector bodies, such as particular agencies or local authorities; outsourcing
to the private sector through partnering with external contractor or Public Private Partnership; and using
regulatory levers to require or incentivise private investment in the desired project.
2.11 In reality the choice of delivery model may be restricted for the provision of some infrastructure. For
example the funding available from public funds may be limited, leading to decisions to make users pay. For
infrastructure funded by users and provided within the market place a public private partnership may not
be appropriate if the market is regulated. In an unregulated market the use of subsidies and other financial
incentives can be a key part of the delivery model.
2.12 The choice of delivery model has lasting implications for the mechanisms available to Government to
influence the design, construction and operation phases. It also affects the project’s value for money. For
example, if the government considers infrastructure should be user funded it may have limited levers to
influence the specification for the infrastructure, or the government may decide to run the procurement for the
infrastructure itself so that it retains control of the design and operational stages and the ability to manage the
key risks including those to the environment. Alternatively, the government may consider it can achieve its
objectives through regulation of the building and operation of the infrastructure.
2.13 The choice of delivery model may also introduce different risks and uncertainties. Those providing finance
for a project, bank or bond financers or corporate business borrowers, may operate to their own objectives and
drivers and apply different sustainability standards or seek to avoid risks.
2.14 The assessment of the delivery model should therefore include consideration of the environmental and
sustainability impacts that will be created and then the levers the government wants to address them through
the alternative delivery options, and this could influence the delivery model decisions taken. The choice of
delivery model is then incorporated back into the feasibility study and business case.

STAGE 3: DEVELOPMENT OF DELIVERY
STRATEGY
2.15 Refinement and expansion of the delivery strategy includes the preparation of procurement and contract
strategies and the development of key infrastructure specifications. Certain aspects of this stage are likely
to have been decided in high level terms by the choice of delivery model, as they are inherent to the delivery
model. But at this stage the detailed delivery strategy will be developed further.
Procurement strategy.
2.16 The procurement strategy identifies the best way of achieving the objectives of the project and value
for money, taking account of the risks and constraints, leading to decisions about the funding mechanism
and asset ownership for the project. The aim of a procurement strategy is to achieve the optimum balance
of risk, control and funding for a particular project. Consideration of risks and their ownership should include
environmental and social risks. For example in procuring the building of a power station with carbon capture
and storage (CCS) it will need to be clear who would be responsible in the event of a leakage from the carbon
storage, the operator or government.
Output-based specifications.
2.17 The development of output-based specifications sets out the functional requirements of a project.
Output-functional specifications help to:
• focus the procurer on what functions the facility needs to perform

• allow the provider the greatest opportunity to innovate and find ways of enhancing the function of the facility
while reducing its whole-life costs, including environmental and sustainability costs.
Contract strategy.
2.18 The contract strategy determines the level of integration of design, construction and ongoing
maintenance for a given project, and should support the main project objectives in terms of risk allocation,
delivery, incentivisation and so on.
STAGE 4: DRAW UP THE DESIGN BRIEF

2.19 If the delivery strategy involves setting of an output based specification this stage will be the
responsibility of the contractor.
The design brief.

2.20 This is a technical document which describes the functional and operational requirements of the
infrastructure to be constructed. It defines all design requirements for the infrastructure and is the foundation on
which the final design will be developed. It may include the following:
• Schematic drawings of the proposed infrastructure

• General specifications of the infrastructure and the performance criteria once complete
• Site information
• Any technical details which may affect the infrastructure development
The outline design brief.

2.21 At the early stage the design requirements can be precise on the environmental or social requirements
or be specified in outcome terms to enable the development of innovative designs.
Detailed or final design drawings.

2.22 Detailed or final design drawings: The detailed design is used for construction. It contains all the
information necessary to build a particular type of infrastructure. This information can also be used to support
the application for the various permits required before construction can begin. The detailed design shows what
the finished work will look like, how materials and components will be integrated together and the dimensions
and layout of the infrastructure.

STAGE 5: CONSTRUCTION
2.23 Construction involves the building or assembly of infrastructure and is the stage of the project in which
environmental impacts are realised and mitigation measures implemented. Environmental outcomes can be
affected by several factors at this stage. Poor construction or changes made to specifications or decisions
can impact upon project and environmental outcomes. Similarly good project and contract management is
important in ensuring that objectives are met.
2.24 If the construction is being carried out under contract, its delivery must be monitored against the design
brief and contract. Its construction must be tested to ensure technology is installed correctly to deliver against
operating performance criteria.
2.25 The commissioning and testing stage at the end of construction is a key stage for assessing delivery and
operation of environmental features in the design, environmental controls and residual impacts. Those taking
on the operation of the infrastructure need to understand how to operate it to achieve its design performance.
This stage is particularly important if the infrastructure is one of a series, so lessons can be learned and built into
design specifications for subsequent projects.
STAGE 6: OPERATE AND MAINTAIN

INFRASTRUCTURE
2.26 Operation and use is the longest stage in the lifecycle of infrastructure and for some types of
infrastructure this stage can have greater total environmental and sustainability impacts than the construction
phase, so needs to be addressed in initial plans and business cases.The long-term operating and maintenance
regime for infrastructure and its affordability can significantly affect its sustainability and environmental
performance. If operation and maintenance costs and the funds required are not considered adequately from
the outset of developing the infrastructure, the sustainability of the infrastructure and its environmental impacts
can become more acute. Any changes to the infrastructure over this time period can enhance or impair
environmental outcomes and therefore managing such changes is also critical.
STAGE 7: DISPOSAL/ DECOMMISSIONING OF

INFRASTRUCTURE
2.27 Infrastructure may have a long lifetime but is not permanent. The design life of infrastructure varies. But
in developed countries much of the existing economic infrastructure, such as power stations or communications
or transport networks which has been in place for over 50 years, is likely to be coming to the end of its design
life and will need to be decommissioned and/or disposed of. This is particularly the case where the costs of
maintaining the infrastructure are very high and the demand for the outputs has changed and so the economic
case for maintaining them are very weak.
2.28 The decommissioning/disposal process can result in very long term environmental impacts as well as
offering immense opportunities for ecological restoration, land reclamation or decontamination and the re-use
of materials. The adverse impacts of infrastructure disposal, like construction, can be reduced by considering
disposal at the design stage. For example the materials decommissioned and needing disposal can be reduced
by designing into the infrastructure elements that can be re-used or recycled, for example re-use of a steel
framework, or modification or alteration of the operations of the infrastructure system. It is also important at the
planning stage to provide for the cost of decommissioning to ensure that there is funding available to complete it
and realise the opportunities available from reclaiming the site.

3
GOVERNANCE
APPROACHES
FOR MANAGING
THE ENVIRONMENTAL
IMPACTS OF
INFRASTRUCTURE
GOVERNANCE APPROACHES FOR MANAGING THE ENVIRONMENTAL IMPACTS OFINFRASTRUCTURE 23

3.1 This section examines a range of tools, structures and processes which when incorporated into
the infrastructure lifecycle can help governments address environmental and sustainability considerations
throughout a project. These tools and processes for addressing environmental and sustainability impacts may
be embedded within wider project governance arrangements or be set out as additional requirements and
complement standard processes. They are generic and apply to the governance of infrastructure projects of
different types, from the building of roads to the building of dams or electricity network infrastructure. They can
be used, to minimise or mitigate adverse environmental and sustainability impacts, or maximise take-up of the
potential positive impacts, which occur across the lifecycle of infrastructure projects. For illustrative purposes
Figure 3 maps the governance approaches discussed in this section to the model of infrastructure development
established in Figure 2. But the timing of the use of the tools or processes is not fixed, and there may be value
from their use at successive stages of the lifecycle of an infrastructure project.
Figure 3: Governance approaches for incorporating environmental and sustainability consideration,

across the infrastructure development cycle
Wider Context • • Regulatory framework

Stage 1: Identify policy need and • • Taxation
how to meet need • • Policy Impact Assessesments
Project Start Up
Stage 2: Draw up Project Brief • • Planning controls
Stage 3: Development of Delivery • • Regulatory regimes
Strategy • • Environmental Impact Assessments
• • Design specifications
Project Delivery
• • Contrast Management
Stage 4: Draw up Design Brief
• • Procurement standards
Stage 5: Construct Infrastructure
• • Lyfe-Cycle Costing
Operational Service
Stage 6: Operate and Maintain
Infrastructure • • Environmental Management Systems
Stage 7: Disposal /
Decommissioning
of Infrastructure

GOVERNMENTS’ FRAMEWORKS FOR
ADDRESSING POLICY IMPACTS
3.2 There are a wide range of international agreements, national and local governance structures which seek
to control, incentivise or monitor the environmental and sustainability framework within which infrastructure
projects are pursued. As governance structures, they do not operate at an individual project level, but are
included here for completeness as they form key parameters in which a project must operate and inform
project decision-making.
3.3 Governments have committed themselves to many international environmental and sustainability
agreements and conventions which impact on the way they may address infrastructure projects. Key examples
include the World Heritage Convention and Convention on Biological Diversity (Figure 4).
Figure 4: Key international conventions that shape governments’ frameworks for considering
infrastructure developments
TREATY DESCRIPTION
Ramsar Convention on Wetlands, 1971, Iran Provides an international framework for the
conservation and use of wetlands and their
resources; emphasizes wildfowl habitat.
AConvention Concerning the Protection of the Sets up an international committee to protect

World Cultural and Natural Heritage, historical and natural sites, requires an inventory
1972, Paris of endangered world heritage sites. Recognizes
that nature and culture are complementary.
Convention on Long-Range Transboundary Air Combats acidification on a broad regional basis

Pollution, 1979, Geneva and brings together research and policy. Has
been extended by eight new protocols
Convention on the Protection of the Ozone Encourages research and cooperation; and sets
Layer, 1985, Vienna a precedent for early response to environmental
problems
Convention on the Control of Transboundary Encourages disposal of hazardous wastes

Movements of Hazardous Wastes and their within country of origin; and provides for waste
Disposal, 1989 Basel reduction and disposal
United Nations Framework Convention on Recognizes that global warming is a problem

Climate Change, 1992, New York and sets an objective of stabilizing greenhouse
gas emissions, requires regular inventories of
and such emissions, and places heaviest burden on
industrialized countries.
Kyoto Protocol to the United Nations Sets targets on greenhouse gas emissions.
Framework on Climate Change, 1997, Kyoto
Convention on Biological Diversity, 1992, Rio Regulates the conservation and sustainable
de Janeiro use of biological diversity, the equitable sharing
of genetic resource benefits, and appropriate
transfer of relevant technologies.
Protocol on Pollutant Release and Transfer The “Kiev Protocol” was the first legally binding
Registers to the Aarhus Convention, Kiev, 2003 international instrument on pollutant release and
transfer registers. These registers are inventories
of pollution from industrial sites and other sources
such as agriculture and transport.

3.4 Governments address their international commitments and national priorities through supporting the
adoption, incentivisation and enforcement of general and specific laws using regulatory regimes (including the
planning regime), and administrative practices such as the requirement to undertake policy impact assessments.
At a national and local level, these legal and administrative policy structures will influence decisions on
infrastructure projects by setting the wider context and requirements over their construction, operation and
disposal.
Environmental taxes
3.5 or other forms of financial incentives and disincentives, such as subsidies (direct and indirect) and
minimum price setting for inputs, can also be used as a tool to increase the cost of a more environmentally
destructive activity to encourage use of less damaging options. Environmental taxes can be used for example
to favour recycling and discourage investment in and use of landfill. Taxes or minimum prices can raise the cost
of products to discourage their use, for example taxes raising the price of mined aggregates compared to use of
other products or minimum carbon pricing. Development tax receipts can be reserved for spending to address
the impacts of the development. Tax relief can also be used to encourage infrastructure to be built on previously
used sites to support regeneration. The tax administration regime should include processes to ensure that
the objectives of environmental taxes have been met: for example that waste has been properly diverted from
landfill.
3.6 Governments can undertake and require other regional and local government entities to undertake
policy impact assessments to make policymakers compare various options for achieving an objective by
assessing its likely costs and benefits. Impact Assessments can include the economic impacts; social impacts;
environmental impacts and sustainability impacts arising from a proposed policy, and should take
account of the other policy structures and commitments in operation. They can involve public consultation to
identify the range of likely social, economic and environmental impacts from the infrastructure development.
3.7 Consideration of the impacts of infrastructure development on the environment at an early stage of the
policy process will ensure that sufficient time is available to assess where wider environmental impacts are
significant and quantify and monetise where appropriate . This work4 can feed into a cost-benefit analysis to
integrate the environmental and sustainability considerations into the overall policy or project assessment and
can identify potential policy impacts that can be mitigated. Appraisal can help identify any significant impacts
that may fall disproportionately on future generations5 and evaluate the benefit of the infrastructure proposal
against the ‘do nothing’ option and non-infrastructure options.
PLANNING CONTROLS
3.8 The regulation of land-use change through planning laws (including land-use planning, zoning and
transport system planning) enables governments to establish general principles for development and controls
requiring individual applications and approvals for what is built and where and for major redevelopments. This
can allow a government to make decisions on whether a proposed development should go ahead or not and
the form it should take 6. A country’s planning regime can require explicit consideration of how the needs of
the community are to be met in a sustainable manner before a planning approval is granted. This can allow the
planning decision to weigh up long term needs, benefits to future generations and costs to the environment
against short term social and economic benefits to enable development impacts and requirements to be
considered over their whole lifecycle7.
3.9 A planning regime can require that the environment in a proposed development area is not negatively
affected by any proposed development, for example by setting conditions which must be met if planning
approval is to be granted and conditions which apply following the approval to build. Planning conditions can
be used to ensure that any development that takes place minimises its impact on the environment, is positive
for the community and takes into account the needs of future generations. It can apply to the construction and
operation of infrastructure. A list of examples of conditions for planning approval are included in Figure 5.
3.10 A planning system can also require complementary actions or payments to fund them. For example
to obtain planning approval an infrastructure developer may be expected to provide or fund local community
facilities, or green space development.
4
http://www.defra.gov.uk/corporate/about/how/policy-guidance/env-impact-guide/
5
http://www.defra.gov.uk/corporate/about/how/policy-guidance/sd-impact/
6
http://www.planningportal.gov.uk/planning/planningsystem
7
http://www.rtpi.org.uk/item/298/23/5/3

Figure 5: Examples of conditions to be met as part of a planning approval process
• Re-use of sites in areas that need regeneration • Ensures buildings are energy efficient and use
to make them attractive places to live renewable energy
• Is built where shops, services and employment • Ensures that groundwater is not over-exploited,
can be provided locally, reducing the need to for example by capturing and using rainwater and
travel and boosting the local economy recycling mains water
• Avoids building over, or being close enough • Provides adequate space for wildlife to flourish,
to cause damage to, certain sites - for example, by, for example, planting trees, creating more
areas of local landscape importance, conservation green corridors to link habitat, creating ponds and
areas or sites of special interest to indigenous leaving areas wild and uncultivated.
populations
Source: National Audit Office (2008) Planning for Homes: Speeding up planning applications for
major housing developments in England, London.
ENVIRONMENTAL REGULATIONS
3.11 Environmental regulations can be used to impact directly on infrastructure development activity, its
operation or decommissioning. Environmental regulation can involve the use of permits, licences, consents,
notifications, registrations or exemptions of activities that may cause pollution or otherwise damage the
environment. The impact of environmental regulation on infrastructure projects will vary according to the type of
infrastructure and its use and operation:
• environmental permits may be required for the construction or operation of a regulated infrastructure facility,
such as a water tre atment plant or waste handling plant.
• trade effluent consents and agreements may be required for operations or activities that discharge trade
effluent into the public foul sewer
• water abstraction and impoundment licences may be required for infrastructure building or operations that
take water from surface waters or groundwater, or obstruct them in any way
• waste carrier, broker and dealer registration may be required for the transport of waste
• operations that produce or move hazardous waste generally require hazardous waste registrations
• CO2 allowances may be needed for proposed power stations or industrial infrastructure under carbon
trading regimes.
3.12 As with planning consents, the permissions may be granted only where developers have met certain
conditions and these conditions can continue to apply to the permissions. Examples of such conditions are
given in Figure 6.8
Figure 6: Examples of conditions attached to environmental regulatory permissions
• Proof that the developer has the means ensuring that it continues to operate effectively;
available to provide the required standards of • Identification of potential accidents, and putting
environmental protection; in place any necessary measures to minimise the
• Equipment must be designed and installed to chances of them happening and to minimise the
a suitable standard ; effects of any accidents that do occur;
• Use of a maintenance schedule for all • Staff must be trained in pollution prevention
equipment whose failure may lead to pollution, and procedures for handling pollution incidents.
Source: National Audit Office (2008) Planning for Homes: Speeding up planning applications for major
housing developments in England, London.
8 http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1080480220&r.l1=1079068363&r.l2=1086048470&r.l3=1080480296&r.s=sc&type=RESOURCES

ENVIRONMENTAL AND SUSTAINABILITY
ASSESSMENTS
3.13 A large variety of specific assessment tools exist which can either focus specifically on, or look to
integrate consideration of environmental, social and economic impacts into the decision-making process at
a project level. These assessments provide an opportunity to understand and, where possible, quantify the
impacts of different design and delivery options to allow informed assessments of projects. Governments can
require the preparation of environmental impacts assessments as part of their planning regime.
An Environmental Assessment
3.14 is a process which ensures that the likely effects of a specific new development on the environment
are fully understood and taken into account before the development is allowed to go ahead.9 This enables
environmental factors to be given due weight, along with economic or social factors, when planning applications
are being considered. There are variations in the form of individual assessments (which may form a regulatory
requirement) with some looking strategically across multiple projects to assess cumulative impacts coherently
at a regional level and others focussing on a single project in isolation. Reference to technical standards such
as the Best Available Technique (BAT) or Best Practicable Environmental Option (BPEO) can help to identify and
assess the environmental impacts of a plan and identify opportunities to increase positive impacts. Conducting
an environmental assessment is an iterative process which should be carried out alongside the development of
the plan or programme.
3.15 The environmental assessment process may require a substantial and full consultation by the developer
with bodies which have an interest in the likely environmental effects of the development proposal as well as
the local community and indigenous population and other interested stakeholders. Consultation may identify
adverse effects not otherwise identified and consider alternative approaches to mitigating impacts.
3.16 Whilst the various requirements for an environmental assessment differ from country to country, as
determined by their legislation, they usually require collection of information to help planning authorities to make
the appropriate decisions, including:
• Characteristics of projects, in particular: the size of the project; the accumulation effect with other projects;
the use of natural resources; the production of waste; pollution and nuisances; and the risk of accidents.
• An outline of the main alternatives studied by the developer and an indication of the main reasons for the final
choice, taking into account the environmental effects.
• A description of the aspects of the environment likely to be significantly affected by the proposed project,
including, in particular, population, fauna, flora, soil, water, air, climatic factors, material assets, including the
architectural and archaeological heritage, landscape and the inter-relationship between the above factors over
the period of development and the lifetime of the infrastructure.
• A description of the likely significant effects of the proposed project on the environment resulting from: the
existence of the project;
the use of natural resources; the emission of pollutants, the creation of nuisances and the elimination of waste.
• A description of the measures that will be used to prevent, reduce and where possible offset any significant
adverse effects on the environment. 10
A social or sustainability impact assessment

3.17 is an additional tool may be used to widen the scope of an environmental assessment to incorporate
concepts of community, health and wellbeing, culture and the human environment. The broad format follows
that of the environmental impact assessment and seeks to ensure affected parties are identified and engaged
in the decision-making process and that the long-term sustainability considerations underpin the assessment
process.11 In some countries a broad impact assessment covering environmental, social and sustainability
impacts is the prime assessment and there is no separate environmental assessment.
3.18 Key to the environmental and sustainability assessment is the consideration of costs and benefits across
the whole life cycle of the project. From an infrastructure perspective, a Life-Cycle Assessment can include
consideration of construction materials, air emissions, water effluents, climate change impacts, solid waste, and
the consumption/depletion of energy and other resources and be used to help to ensure that a government’s
choices are environmentally sound, whether in the design, manufacture or use of a product or system. The
assessment involves12:
9 http://www.communities.gov.uk/documents/planningandbuilding/pdf/157989.pdf
10 http://www.sea-info.net/content/main.asp?pid=230
11 http://www.socialimpactassessment.com/documents/0303%20Vanclay%20IAPA%20V21N1%20SIA%20International%20Principles_1.pdf
12 Royal Society of Chemistry, Environment, Health and Safety Committee Note on: Life Cycle Assessment, February 2010. http://www.rsc.org/images/LCA_20100215_tcm18-97943.pdf

• Compiling an inventory of the flows of energy and materials to and from the environment at each stage of
development;
• Calculating and evaluating the relevant impacts, including the impacts embedded in materials used in
construction and operation of the infrastructure;
• Interpreting the results to help make informed decisions; and assessing whether results are in line with
project goals, identifying significant impacts and recommending methods for reducing the impacts, potentially
increasing efficiency and productivity.
3.19 A life-cycle assessment approach allows governments to make informed choices over the long term
and avoid short term decisions that lead to environmental degradation. It also encourages governments to avoid
shifting problems from one life cycle stage to another, from one geographic region to another and from one
environmental medium (air, water or soil) to another 13.
3.20 Techniques exist to convert these identified impacts and remediation costs into monetary terms, so
that they can be brought into a Cost-Benefit Analysis. This can be done in outline at the policy development
stage and then updated and strengthened after full consideration of environmental and sustainability costs in
the project start-up phase. At this stage the cost-benefit analysis can gauge which design/procurement option
represents the best value for money, taking into account both financial and environmental impacts, for the user
and for society as a whole. Techniques for monetising non-financial impacts are difficult to apply and in some
cases controversial and research is still developing the techniques. The three main approaches which can be
applied to environmental and social impacts are:
• Preference based approaches: these involve obtaining from representative samples of people the financial
value they place on environmental and social goods (their “willingness to pay” for them) or how much they
consider they would need to be compensated to accept negative impacts (their “willingness to accept” them);
• Damage costs: this involves identifying and valuing the costs which might arise from a failure to mitigate
environmental or social impacts; and
• Abatement costs: this involves identifying the costs of avoiding impacts partially or completely.
3.21 These techniques for monetising non-financial impacts are usually developed for the purpose of the
individual case, through a bespoke study. The values they arrive at are unlikely to be transferable to another
appraisal.14
ENVIRONMENTAL AND SUSTAINABILITY

INTEGRATION IN DESIGN AND PROCUREMENT
3.22 A key opportunity to incorporate environmental and sustainability considerations is in the design,
procurement and construction processes. Decisions taken at this stage can minimise any adverse impacts
identified in the earlier assessments as well as seeking to enhance potentially positive impacts.
3.23 The design phase gives the project sponsor opportunity to influence the environmental and
sustainability performance of an infrastructure development. The design phase is key in identifying construction
materials and methods that help achieve sustainability targets, in identifying Best Available Technique applicable
to the infrastructure, and in designing in features to improve the infrastructure’s operational
performance15. The design can incorporate features which will encourage occupants to reduce the impact
of their behaviour – that is to “nudge” them into better practices. Considerations for the design process may
include:
• Enhancing biodiversity, for example through incorporating new and existing flora and fauna, creating habitat
and generally enhancing the local environment through good design of structures;
• Incorporating energy saving features;
• Using, where possible, materials with low environmental impact e.g. materials that: 1) have low embodied
energy; 2) can be sourced locally; 3) maximise the use of recycled products; and 4) have a long life and low
maintenance requirements.
• Minimising waste both during construction, operation, maintenance and demolition. Consideration should be
given to building into the design provisions for the segregation, storage and recycling of waste material during
the operation stage;
• Incorporating water saving features both for consumption and discharge of wastewater; and incorporating
grey water recycling and rainwater harvesting;
13 US Environment Protection Agency, Lifecycle Assessment: Principles and Practice, May 2006 http://www.epa.gov/nrmrl/lcaccess/pdfs/600r06060.pdf
14 National Audit Office Appraisal and sustainable development http://www.nao.org.uk/publications/1213/appraisal_and_sustainable_dev.aspx
15 Office of Government Commerce, Achieving Excellence in Construction, 2007

• Taking into account the local climate to ensure that the infrastructure is robust to cope with future climate
change and does not impede adaptation to climate change in other sectors, for example by affecting bio-
diversity;
• Enhancing the historic or local environment through using local materials and traditions. Where appropriate,
the design should focus on achieving a style, scale, proportion and quality in keeping with the surrounding area;
• Assessing the possible impact on the health and safety of the facility’s occupants or those involved in
construction when specifying materials or installing equipment;
• Consulting on the design with the local community and other relevant stakeholders; and
• Ensuring that the long term effect of climate change is considered and mechanisms are put in place and
included in initial designs to address the potential impacts, for example of flooding or higher summer time
temperatures. This applies to the infrastructure itself and the surrounding areas, natural environment and local
communities.
3.24 In infrastructure projects procurement principles can apply to the project as a whole or to the purchase
of goods or services within the project. Governments can use the procurement process to drive the efficiency of
suppliers and their supply chains and to influence the delivery of the infrastructure and ensure that environmental
and sustainability considerations are built into the construction and operation of the infrastructure (Figure 7). The
most effective way to pursue environmental objectives through procurement is to consider them at the earliest
stage of the procurement process; at the business case and when defining needs and specifications.
Figure 7: Addressing environmental and sustainability issues during the procurement process
• Business case. This is the stage at which • Selection. At this stage, the procurer should
there is most scope for considering environ- ask tenderers for relevant evidence of technical
mental and sustainability impacts. A key step capability to deliver the environmental specifications.
is considering the need to procure. Through • Award. All public contracts should be awarded
effective demand management the need to on the basis of value for money on a whole-
procure may be avoided. Alternatively, the need life cost basis, not lowest up-front price. They
can be defined in such a way as to minimise should be evaluated from the point of view of the
resources consumed. procurer; wider costs or benefits to society should
• Specification. Considerations should be have already been considered and built in to the
included where they are relevant to the subject specification.
matter of the contract. They include what the • Contract and supplier management.
product consists of (e.g. cleaning services using Contract conditions should be used to ensure
products with low chemical content), how it suppliers provide appropriate information on their
performs its function (e.g. energy efficient light performance against environmental/sustainability
bulbs), and its suitability for responsible disposal requirements. Outside of formal conditions, there
(e.g. easily recyclable parts). Certain production are often opportunities to work with suppliers and
processes can also be specified (e.g. electricity their own supply chain on a voluntary basis to raise
from renewable sources, timber from sustainably- awareness of environmental and sustainability
managed forests). objectives.
Source: NAO ‘Addressing the environmental impacts of Government procurement’, 2009 16
3.25 The key stage in which environmental and sustainability issues are considered is when the project brief
is developed into an output based specification in which the environmental and sustainability objectives are
defined. Where appropriate, performance or functional specifications should be used and apply over the lifetime
of the infrastructure and cover construction, operation and disposal.17 Sustainability considerations should
be used in the tender pre-qualification, evaluation and award process, in order to select the most suitable
contractor. To be useful as criteria for selection of bidders and for monitoring the performance of the selected
bidder, the tender criteria need to be well-defined and measurable. The evaluation methodology should test the
compliance of the bids against the criteria and requirements set out in the specifications. Examples of ways in
which environmental and sustainability considerations can be included in the infrastructure specifications are
included in Figure 8.
16 http://www.nao.org.uk/publications/0809/addressing_sustainable_procure.aspx
17 Office of Government Commerce, Achieving Excellence in Construction, 2007

Figure 8: Examples of environmental infrastructure specifications in procurement contracts
• Setting out biodiversity standards that need to • Setting out requirements that the materials
be met and how performance will be measured. used will contribute to the sustainability and
This may include a requirement for a Biodiversity environmental performance of the infrastructure.
Management Plan. E.g. re-use of materials; avoidance of
• Setting targets for energy consumption during environmentally damaging materials or those that
construction and in operation as well as how they are harmful to humans, flora and fauna.
will be monitored. • Setting out requirements on health and safety
• Setting targets for water consumption both of the workers; targets for employment of local
during construction and when the infrastructure is people; targets on equality and diversity (e.g.
in operation. ethnic minorities; women; indigenous groups);
• Setting targets for re-use and recycling and • Setting out provisions for consultation of
waste minimisation and reduction during the the local community to identify their needs,
construction and operation of the infrastructure. views and opinions on design, construction
This could also include a requirement that and operating issues; and to address noise and
contractors provide a Waste Management Plan. nuisance.
Source: NAO
3.26 As with the impact assessments, it is important to make decisions about procurement by considering all
the impacts of products and services throughout their lifecycle. Life Cycle Assessment (LCA) and Whole-Life
Costing18 provide tools to quantify and assess the consequences of products or services at all stages of an
infrastructure project.19
3.27 Contract management is the phase of the procurement cycle in which a supplier delivers the required
goods or services in accordance with a procuring authority’s specification. 20 Public bodies responsible for
projects funded by public-private partnership or with considerable outsourcing can set out in the contract the
rights and responsibilities of the infrastructure developer and set in place mechanisms to monitor and hold them
to account. The contract enables the contractor to monitor and report performance against the environmental
criteria in the tender specification.21 It is vital to establish effective contract management processes and
resources in good time to drive excellent supplier performance throughout the contract. Furthermore, the
contract should be drawn up in such a way so that it is responsive to change. There could be changes to policy
requirements; funding availability or there may be changes in technology which can make a step change in
performance possible and the public body sponsor will want to be able to take a share in the benefits arising.
3.28 Governments can set out guidance on voluntary best practice in sustainability and environmental
considerations and there may also be professional best practice standards which can be used as criteria in
infrastructure design and tender specifications. Governments may elect to make official standards which form
mandatory specifications to ensure that sustainable outcomes are achieved22. There are many examples of
international and national best practice standards, such as the EU Greening Public Procurement Standards
(Figure 9), for sustainable forestry products (the Forest Stewardship Council certification), for building standards
(in the UK, BREEAM assessments of the sustainability of building specifications), and health and safety
standards for working environments.
18 Chartered Institute for Public Finance and Accounting http://www.cipfa.org/Policy-and-Guidance/Publications/W/Whole-Life-Costing

19 A product’s life cycle is generally broken down into stages.: 1) Product design ; 2) Raw material extraction and processing; 3) Manufacturing of the product; 4) Packaging and
distribution to the consumer; 5) Product use and maintenance; 6) End-of-life disposal
20 http://www.ogc.gov.uk/policy_and_standards_framework_contract_management_.asp
21 Thomas E. Glavinich, Contractor’s Guide to Green Building Construction: Management, Project Delivery, Documentation, and Risk Reduction, 2008
22 http://sd.defra.gov.uk/advice/public/buying/

Figure 9: EU Greening Public Procurement Standards
The EU Commission has a set of Greening updated. The GPP approach is to propose two
Public Procurement (GPP) standards which types of criteria for each sector covered:
have been designed to help government buyers • The core criteria are those suitable for use
in member states procure sustainably. The by any contracting authority across the Member
Commission has developed 19 common GPP States and
criteria. The priority sectors for implementing address the key environmental impacts.
GPP were selected through a multi-criteria They are designed to be used with minimum
analysis including: scope for environmental additional verification effort or cost increases.
improvement; public expenditure; potential • The comprehensive criteria are for those
impact on suppliers; potential for setting an who wish to purchase the best environmental
example to private or corporate consumers; products available on the market. These may
political sensitivity; existence of relevant and require additional verification effort or a slight
easy-to-use criteria; market availability and increase in cost compared to other products
economic efficiency. The criteria are regularly with the same functionality.
Source: European Commission http://ec.europa.eu/environment/gpp/what_en.htm
MECHANISMS FOR THE ONGOING MONITORING

AND EVALUATION OF ENVIRONMENTAL AND
SUSTAINABILITY IMPACTS
3.29 The assessment and monitoring of the impacts of an infrastructure project during its operation,
maintenance and disposal should be an ongoing, iterative process to accommodate variations in its function,
new standards or best practice, improved knowledge, changing impacts, such as those associated with climate
change, and the infrastructure’s contribution to changing policy objectives. The structures to ensure effective
accountability against planned environmental and sustainability outcomes should be designed and embedded
during the project start up stage to ensure appropriate monitoring of compliance and re-assessment of
performance throughout the project lifecycle.
3.30 An infrastructure operator may commit to using an environmental management system (EMS) to
routinely monitor its environmental performance and improve and control it. The International Organisation for
Standardisation has developed an internationally accepted standard for implementing an effective EMS, known
as ISO 1400123. To obtain ISO recognition for its EMS an organisation must:
• Formulate an environmental policy, which formally outlines its commitments to environmental management;
• Identify its significant environmental impacts – for example energy consumption, emissions to air, water
pollution, waste, water consumption, resource consumption;
• Set measurable objectives to reduce its environmental impacts, with quantified targets in all significant
impact areas;
• Review and report internally its environmental performance and carry out internal auditing where appropriate.
3.31 Infrastructure will inevitably deteriorate during the course of its lifecycle and changes in other factors,
such as climate change, may impact on the infrastructure and its surroundings and its ability to fulfill its purpose.
This will present decisions about when and whether to maintain, refurbish or dispose of it. The infrastructure
owner or operator needs to monitor and assess routinely the performance of the infrastructure. The key
structures and tools for this continual monitoring process should be identified and implemented during the
design phase and be used to review options as the infrastructure ages.
3.32 During the use of infrastructure Government or other public environmental agencies will monitor
continuing compliance with their regulatory requirements, including environmental permit conditions, and any
evidence of emissions. In the event of environmental impacts increasing significantly regulators will need to
consider enforcement action and whether they have powers to enforce closure and decommissioning.
23 http://www.iso14000-iso14001-environmental-management.com/iso14001.htm

4
HOW SAIs CAN AUDIT
THE ENVIRONMENTAL
AND SUSTAINABILITY
IMPACTS OF
INFRASTRUCTURE
HOW SAIs CAN AUDIT THE ENVIRONMENTAL AND SUSTAINABILITY IMPACTS OF INFRASTRUCTURE 33
4.1 Supreme audit institutions (SAIs) have differing mandates, which may include particular responsibilities
to undertake and report compliance audits, of a public sector entity’s compliance with the authority it has
been given by the legislature; performance audits, of the economy, efficiency and effectiveness of programs,
projects and activities; and environmental audits. The generic model of an infrastructure project’s lifecycle
presented in Part 2 together with the associated governance structures outlined in Part 3 demonstrate the wide
array of potential areas for audit focus at both project and policy level. Such audits could be solely focused
on the environmental and sustainability impacts of infrastructure or they could be of infrastructure investment,
addressing its environmental and sustainability impacts alongside other issues associated with the efficiency or
effectiveness of the project or programme.
4.2 The purpose of this section is to explore the approaches SAIs can take to examining how public bodies
have responded to the environmental and sustainability challenges posed by the planning, construction,
maintenance and decommissioning of infrastructure projects. It is informed by a number of case studies
received from SAIs, for which detailed descriptions have been provided in Appendix 1. In particular this part
explores audits of the environmental impacts of infrastructure through audits of:
• National infrastructure planning
• Infrastructure projects, programmes and portfolios at different stages of their lifecycle
• Operation of governance approaches to address environmental impacts
• Achievement of investment objectives
consider enforcement action and whether they have powers to enforce closure and decommissioning.
AUDITS OF THE NATIONAL APPROACH TO

INFRASTRUCTURE PLANNING
4.3 SAIs may consider it beneficial to review their government’s approach to prioritisation of national
infrastructure investment. Governments may recognise that they can achieve a more rational approach to
decisions on infrastructure investment by comparing the economic benefits and other impacts of major
proposals and prioritising them. This may be considered more effective than decisions being taken within
individual government ministries and allow the selection of priority developments which maximise economic
growth or other national objectives, such as competitiveness. Audits may address the effectiveness of this
prioritisation process, examining the evidence of the need for the investment and the identification and
monetisation of the costs and benefits. Audits may address processes for mobilising resources from public
expenditure and private sources and any barriers likely to affect delivery and government action to tackle them.
For example:
• The Australian National Audit Office reviewed the work of Infrastructure Australia in undertaking the first
National Infrastructure Audit and developing the first Infrastructure Priority List. The audit concluded that the
published Prioritisation Methodology was sound, and combined monetised cost-benefit analysis of projects with
analysis of an initiative’s non-monetised effects, to determine the wider economic, environmental and social
merits of an initiative. However the audit found that the Final Priority List included pipeline projects which were
not justified according to their benefit cost ratio. (Appendix 1 Australia).
AUDITS OF INFRASTRUCTURE PROJECTS AND

PROGRAMMES
4.4 SAIs may consider it appropriate to audit an individual infrastructure project because of the scale of
investment involved and the benefits it is expected to bring or its impact on the economy or community. Audits
may address the quality of decision taking on investment projects and very early stage review can assess the
case for the investment before a final decision to proceed and to establish the likely impacts and consider the
sufficiency of the benefits realization and impact mitigation arrangements.
For example:
• The US Government Accountability Office (GAO) carried out a study of funding options for establishing
a clean water trust fund to support the increased investment needed for modernization and increasing the
capacity of waste water treatment systems. The study focused on obtaining stakeholders’ views on the issues
that would need to be addressed in designing and establishing a clean water trust fund and looked at potential
options that could generate about $10 billion in revenue to support a clean water trust fund. (Appendix 1 US (1))
• OAG Thailand audited the Bangkok Super Skywalk Project prior to construction of the second stage
to review the sufficiency of the information available to support the Bangkok Metropolitan Administration’s
(BMA) decision to proceed with the project. The audit found that the BMA did not have a feasibility report
for the project and had not undertaken an environmental impact assessment to clarify the benefits and the
environmental impacts from construction. The BMA’s consultation on the project had not covered all aspects
of costs and benefits. The audit also found that the consultation was difficult and costly to respond to for the
public, limiting its representativeness. Following the audit it was acknowledged that the evidence base for the
project was not sufficient and that the project was not sustainable. Consequently,the BMA cancelled the second
stage of the project (Appendix 1 Thailand)
4.5 Audits may address projects at a later stage to provide accountability for the expenditure involved and
the environmental impacts or benefits realized by the project; to identify lessons learned for the operation of
the infrastructure or for the development of other infrastructure projects. The audit may address projects as a
whole or particularly focus on how the projects have addressed their environmental impacts. Alternatively it may
address a number of such projects. For example:
• The Estonia National Audit Office audited the state’s management of district heating, within a wider study of
the sustainability of the district heating supply. The audit found that heat losses from district heating networks
were substantially higher than they should have been and hence the systems were not fully delivering the
environmental advantages they should be achieving. The manner in which district heating prices were set by
the Estonian Competition Authority had not been successful in ensuring sustainability and the good condition
of the systems. The cost of renovation of the systems was not known and there was no development plan, nor
was there any clarity over whether state financial support could be given to areas where investment is needed to
address the poor condition of the heating systems. (Appendix 1, Estonia (1))
• The EU Court of Auditors undertook an audit of EU Structural Measures spending on water supply
infrastructure projects and included a look at the management procedures in place as well as a review of the
financial cost/benefit analyses carried out and the completed projects. The audit found that whilst structural
spending has contributed to improving the supply of water for domestic use, better results could have been
achieved at a lower cost by improving the forecasting of future demand and by delivering better planning to
ensure that the complementary infrastructure required for the entry into operation of the projects is available on
time. (Appendix 1 ECA)
• The Brazilian Court of Audit (TCU) reviewed its audits of infrastructure from 2004 to 2009. The review
identified the main types of non-compliance with environmental regulations that the audits had found. More
than half of the environmental findings were from failure to obtain an environmental permit. One third of the
environmental findings were in audits related to highways schemes and one third related to urban infrastructure,
buildings and dams. The review concluded that the inclusion of environmental checks in the audits of
infrastructure had contributed to improvements in environmental management. (Appendix 1, Brazil (1))
4.6 Audits may be one-off or part of a series addressing the infrastructure development over an extended
period. For example:
• The UK National Audit Office has undertaken a series of studies on the Preparations for the London 2012
Olympics from the initial bid through to readiness for the Games in 2012. The audits have examined the project
at multiple stages of the infrastructure lifecycle as the project has progressed. The reports have addressed
plans to deliver the project’s commitment to achieving long term, sustainable regeneration alongside wider
consideration of cost and progress against plans. Later in the project the audit included a focus on
the sustainable use for the sites and the legacy from the games. The series of studies has allowed audit
recommendations to feed into the start-up and construction phases of the project and has enabled close
monitoring of progress against the original plans and objectives. (Appendix 1 United Kingdom (1))
• The Estonia National Audit Office reviewed national road maintenance in 2006 and followed this up with a
further review in 2012. The study assessed whether road performance had improved, including its compliance
with environmental requirements. It found that costs had increased more than the relevant price index and there
was still evidence of poor maintenance, particularly in the winter. (Appendix 1 Estonia (2))
AUDITS OF THE OPERATION OF PROCESSES
TO ADDRESS ENVIRONMENTAL IMPACTS
OF INFRASTRUCTURE
4.7 SAIs may undertake audits of compliance with and effectiveness of laws and regulations and other
governance frameworks such as those outlined in Part 3. Audits can address compliance and enforcement
of laws and regulations for individual infrastructure projects or for a wider sample of projects, to identify where
there is scope for improvement in the administration of the regulations. For example:
• The Brazilian Court of Audit examined the performance of the federal environment agency (IBAMA) in
carrying out Environmental Impact Assessments. It found IBAMA’s monitoring was focussed only on whether
conditions and mitigation measures defined in the environmental license were in place. It did not verify the
effectiveness of those actions and whether the goals of the environmental licensing were being achieved. The
audit recommended that IBAMA should establish a systematic monitoring system to ensure compliance with
the conditions and mitigation measures of the license throughout the infrastructure’s lifecycle. The study also
covered performance considerations by investigating the relative importance given to environmental and social
impacts, recommending improvements in environmental impact assessment methodology, procedures and
technical criteria. This combination highlights the importance of both the initial implementation of governance
structures, such as a regulatory regime, and the continuing monitoring of the implementation of conditions and
mitigation measures throughout the subsequent lifecycle stages. (Appendix 1 Brazil (2))
• The Brazilian Court of Audit subsequently carried out a study of two major infrastructure projects which
were issued environmental permits to evaluate whether they had been compliant in mitigating the environmental
impacts in accordance with the conditions of their licenses. (Appendix 1 Brazil (3))
• The US Government Accountability Office carried out a study of the time taken to complete highway
projects. This examined the many factors contributing to the length of time taken to complete highways
investment projects and the effectiveness of provisions to expedite it, including streamlining of some elements
of the environmental review process. The study found that although environmental reviews were a significant
contributor to the time taken to complete projects, States’ Departments for Transport did not wish to seek to
speed up the process by taking responsibility for environmental review decisions from the Federal Highway
Administration, which they considered had the staff and expertise to take informed decisions on environmental
impacts. (Appendix 1 United States (2))
4.8 Audits can also address organisations’ compliance with good practice governance tools in their
infrastructure projects in order to identify whether reliance on such voluntary approaches can be effective and
identify any barriers to their effectiveness. For example:
• the US Government Accountability Office (GAO) carried out a survey across major airports to identify trends
in their consideration of environmental impacts in planning decisions, following environmentally sustainable
standards and implementing Environmental Management Systems. The audit found that almost all airports were
taking some action to address their environmental impacts and the larger airports were taking a wider range
of actions. Airports were moving towards more holistic consideration of their environmental impacts, including
using Environmental Management Systems. (Appendix 1 United States (3))
• the UK National Audit Office undertook a study of central government organisations’ compliance with
administratively required governance structures and standards for procurement and contract management to
ensure sustainable construction and refurbishment of the government estate. The study found that standards
were not being met and central government organisations were not carrying out environmental assessments.
The study recommended that accountability should be clarified, with more outcome based performance targets
and better reporting and more use of Whole-Life Costing. (Appendix 1 United Kingdom (2))
AUDITS OF INFRASTRUCTURE PROJECTS’
CONTRIBUTION TO ACHIEVEMENT
OF ENVIRONMENTAL OBJECTIVES
4.9 SAIs can undertake audits of performance in meeting environmental objectives, which address
infrastructure projects’ achievements alongside the results from other policy tools to deliver the intended
outcome. For example:
• The New Zealand Audit Office audited a sample of Local Authorities to examine whether they were effectively
managing supplies of drinking water to meet the likely future demand. This examined and compared the use
of a range of governance tools employed in forecasting demand for drinking water, developing management
and risk strategies, as well as the governance arrangements for the delivery of water. The study reported that
some Local Authorities were using unsatisfactory methods for demand forecasting and so there was uncertainty
over their infrastructure needs. The Local Authorities considered they faced a challenge in meeting forecast
demand, including the ability to fund necessary infrastructure upgrades. The report concluded that none of the
local authorities had a fully integrated approach to dealing with sustainable development and supplying drinking
water. (Appendix 1 New Zealand)
• The Estonia National Audit Office audited the development of waste water treatment in rural areas with the
support of the Cohesion Fund. The audit covered 63 local authorities and evaluated the preparation, instigation
and financial stability of the waste water treatment systems developed. The key finding was that the state
would not achieve its commitment to improve waste water treatment systems to achieve sound drinking water
and waste water quality by 2010. The audit found some Local Authorities were not involved in the necessary
water supply and sewerage projects and some did not have the development plans needed to inform such
projects. Poor financial analysis and planning against tight time pressures to submit plans contributed to delays
in launching the projects. (Appendix 1 Estonia (3))
APPENDIX I
Case studies
available to date
APPENDIX I. Case studies available to date 38

AUSTRALIA
Conduct by Infrastructure Australia of the First National Infrastructure
Audit and Development of the Infrastructure Priority List
July 2010; 2010/2011 report number 2; Australian National Audit Office, available in English at
http://www.anao.gov.au/~/media/Uploads/Documents/2010%2011_audit_report_02.pdf
Infrastructure Australia was established to work with the States and Territories to identify and
achieve the most effective outcomes for nationally significant infrastructure. Its objectives are to increase
the economic standard of living for Australians; environmental sustainability and reduced greenhouse
gas emissions; and better social outcomes, quality of life and reduced social disadvantage in cities and
regions.
The audit objectives

To assess the effectiveness of Infrastructure Australia’s conduct of the first National Infrastructure Audit and
development of the Infrastructure Priority List.
The scope of the audit

Infrastructure Australia’s methodology and process for reviewing infrastructure submissions; the conduct
of the Infrastructure Australia’s first National Infrastructure Audit; the formulation of Interim and Final
Infrastructure Priority Lists; and the provision of advice and recommendations to the Government.
Conclusions of the audit

• The published National Infrastructure Audit framework was sound.
• Infrastructure Australia’s methodology provided a robust framework for the development of the Interim
and Final Infrastructure Priority Lists.
• The reason for shortlisting the particular projects which appeared on the Interim Priority List were not
fully documented
• Information gathered on the projects in the Interim Priority List was insufficient to significantly improve
the information available to inform the development of the Final Priority List
• The Final Priority List contained both ‘priority’ projects and ‘pipeline’ projects. The priority projects
met the criteria set out in the published Prioritisation Methodology but the pipeline projects did not
demonstrably satisfy the tests, including the “primary driver” the benefit cost ratio.
The SAI’s key recommendations

• Infrastructure Australia should promote greater transparency over the development of future
Infrastructure Priority Lists by maintaining records that clearly outline when decisions are taken to include
projects on the List, and the reasons for their inclusion.
• future prioritisation processes should include information in the published guidance on the different
criteria that will be applied to discriminate between priority projects that are ready to proceed and those
that exhibit potential but require further development before being considered for possible funding.
• when reporting the results of future infrastructure project prioritisation processes, Infrastructure
Australia should provide clear advice on: the relative priority of projects recommended for funding
consideration having regard to the results of its appraisal of their economic merits and other factors; the
level and form of Commonwealth funding it recommends for priority projects that are ready to proceed;
and any other projects it would support being considered for planning and/or design work funding.
Responses of the government to the audit

• Infrastructure Australia welcomed the involvement of the Australian National Audit Office and supported
the thrust of the recommendations made by it in this report.

BRAZIL (1)
Evaluation of environmental monitoring carried out by the Brazilian Court
of Audit in the federal infrastructure works.
May, 2010; Brazilian Court of Audit, Judgment N° 968/2010 –
Plenary; available in Portuguese at www.tcu.gov.br

• Each year, an audit report is sent to the National Congress regarding the execution of the infrastructure
works covered by the Federal Budget. This annual audit report is based on information from audits of
public works conducted by the Brazilian Court of Audit. These individual audits verify the compliance with
the conditions defined in environmental permits, among other aspects.
• Thus, this study consolidated and analysed the environmental findings in audits of public works from
2004 to 2009 in order to evaluate compliance with environmental licensing.

The scope of this study is to present the environmental situation of federal public enterprises verified in
audits of public works under the responsibility of the Court of Audit. The infrastructure works of greater
importance audited by the Court of Audit are usually those that cause significant environmental impact
on national or regional levels. The federal environment agency, the Brazilian Institute of Environment and
Renewable Natural Resources – IBAMA, is responsible for issuing the environmental licenses.
The environmental and sustainability issues within scope of the audit

• Is there a tendency for greater attention to environmental requirements in federal infrastructure works?
• What are the most frequent irregularities in the works audited by the Court of Audit?
• Do any federal government agency or entity stand out in the number of environmental findings?

• The environmental findings were mainly related to the lack of licensing or improper licensing. More
than half of the audits (54.1%) found no environmental permit in place. Approximately one third of these
environmental findings came from deployment, duplication, restoration and maintenance of highways and
another third from works of urban infrastructure, buildings and dams.
• The National Department of Works Against Droughts was responsible for 22 environmental findings in
51 of its works inspected by the Brazilian Court of Audit between 2004 and 2009.
• The National Department of Transport Infrastructure accounted for 45% of the audits between
2004 and 2009 and was responsible for 43% of the environmental findings. Irregularities related to
the environment were identified in about 15% of its inspected works. Between 2005 and 2008 the
National Department of Infrastructure was the federal entity that received the most fines ($ 8.6 million),
infraction notices, embargoes and other sanctions applied by IBAMA for failure to fulfil standards of
environmental licensing. It was concluded that it would be opportune to carry out further work to assess
the Department’s environmental management of public works.
• It was concluded that the audits of infrastructure works and their consideration of environmental
aspects played an important role in achieving improvement in environmental management.

BRAZIL (2)
Audit of the Process of Environmental Impact Assessment of Public
Works in Brazil.
July 2009; Brazilian Court of Audit, Judgment N° 2.212/2009 –Plenary; available in Portuguese at
www.tcu.gov.br

• Provide an analysis of the process of the federal environmental impact assessment of public works

Environmental impact assessments of large infrastructure projects, under the responsibility of the Brazilian
Institute of Environment and Renewable Natural Resources (IBAMA) between 2004 and 2009.

• Whether IBAMA’s Department of Environmental Licensing performs a continuous assessment of
environmental impacts for each project
• Whether the Environmental Impact Assessments carried out by IBAMA use criteria and indicators that
characterise the actual and potential benefits from the process
• Whether the steps involved in the Assessment of Environmental Impacts are standardised in order to
improve its analysis

• IBAMA’s procedures for Assessment of Environmental Impacts were very focused on the examination
of formal requirements, with less attention to the environmental and social effects of a given project or the
effectiveness of the proposed mitigation measures.
• once the project was licensed, IBAMA’s action was limited in verifying whether mitigation measures
were implemented as expected and if those measures achieved their goals of environmental protection.
• a lack of formal methodologies, indicators and criteria hindered significantly the generation of good-
quality federal EIAs.
The SAI recommended:

• Develop standards and specific rules for the procedures, technical criteria and methodologies adopted
in the federal Environmental Impact Assessment process
• Establish systematic monitoring of the effective implementation of mitigation measures as prerequisite

for issuing operational licenses;
• Study the feasibility of creating a consolidated report with the ex post evaluation of mitigated and
unmitigated impacts, good practices observed and environmental benefits of the process of EIA, based
on the environmental performance of the developments authorized by IBAMA.

BRAZIL (3)
Evaluation of the process of Environmental Impact Assessment in Federal
Government´s infrastructure works - Case Study.
Not published

To evaluate if the post-decision monitoring process for federal government infrastructure works ensures
environmental impacts are properly mitigated and / or compensated for during installation and operation;
and to evaluate the efficiency and effectiveness of the mitigation measures.

Evaluation of whether mitigation measures were effective in mitigating impacts, in accordance with
conditions defined in the environmental licence, for two large infrastructure projects.

• Were the measures implemented by developers effective in mitigating the environmental impacts in
accordance with the conditions of the environmental licenses issued by (IBAMA: The brazilian Institute of
Environment and Renewable Natural Resources)?
• Did the developers’ environmental management observe the principles for monitoring and good
international practices after the license was issued?

The lack of a post-decision monitoring process does not allow the identification of what measures can be
adopted to ensure that the objectives of EIA are achieved with the least environmental impact and lowest
cost.
IBAMA has a low capacity for organizational learning, because of its rotation of technicians in its
Environmental Board Authorization team and a lack of internal mechanisms for capturing the knowledge
gained in the monitoring phase.
There is no evaluation of effectiveness of the environmental programs implemented during the

construction phase. Thus, there is no feedback that will allow future mitigation measures and future EIAs
to incorporate what may have been successful or unsuccessful in the construction of transportation
infrastructure works.
IBAMA’s analysis of monitoring reports should include an assessment of the effectiveness of mitigation
measures and of the environmental programs as well as the verification of compliance with the conditions
of the environmental license. To achieve this, lBAMA should request from the developer a consolidated
report on the implementation of environmental programs, in order to highlight experiences, good practices
that could be replicated and programs whose results fell short of what was expected.
IBAMA should also determine that mitigation measures have clearly defined goals and targets, with
measurable indicators that can be used to evaluate the effectiveness of each environmental program.

ESTONIA (1)
The state’s actions in ensuring the sustainability of heating supply
Full report available in English: www.riigikontroll.ee

Sixty percent of Estonia’s population uses district heating: heat, which is generated in boiler plants or power stations
and distributed to consumers via heat networks. The objective of the audit was to assess whether the state has
organised the activities in the heating supply sector (first and foremost district heating) to ensure secure, reliable,
effective heating supply meeting environmental requirements and the needs of consumers.

• the activities of the Ministry of the Economic Affairs and Communications in regulating district heating, identifying
the need for investments and support and organising price formation and monitoring;
• the activities of the Estonian Competition Authority in approving the price of district heating and organising
monitoring;
• the activities of the Environmental Investment Centre of the Ministry of Finance in assessing applications for
support measures and adopting financing decisions.

• The management of investment in the system and associated efficiency of the production and distribution of heat.
• The regulation of the price of heat with the aim of ensuring a sustainable supply of heat for customers in the future,
including the assessment of the need for investment.

The Ministry of Economic Affairs and Communications has paid insufficient attention to the sustainability of the
nation’s heating supplies:
• The state and many local authorities lack a broad understanding of their heating supply situation (i.e. length and
condition of heat networks), and in particular of district heating. A national heating supply development plan has not
been drafted.
• Many consumers are forced to use district heating even where it is more expensive and less efficient than other
alternatives (such as local boiler plants, heating pumps etc.).
Conclusions relating to environmental and sustainability findings

• The price setting process has not ensured a sustainable supply of heat for consumers in the future. Therefore it is
not always guaranteed that the companies are investing in a way that will make production and distribution of district
heating more efficient.
• It is not known how much money must be invested to renovate the district heating systems and whether district
heating companies are willing and able to make such investment by themselves.
• In the process of assessment of applications for support very little attention was paid to the sustainability of district
heating regions and projects. This might have led to support for projects which are unable to sustain themselves in
future.

The audit was published in 2007. The ministries and authorities admitted most of the problems related with heating
supply in Estonia. Estonian Competition Authority agreed with the audit recommendations, but did not admit most
of the problems related with the price regulation. However, the Authority has started to fix up their price regulation
processes.

ESTONIA (2)
Road maintenance and supervision of road maintenance
February 2012
Summary report available in English: www.riigikontroll.ee

There are 16,500 kilometres of state roads in Estonia. Every year 4 to 6.5 per cent of state roads are
renovated or repaired. In addition to road construction and renovation, the roads, bridges and supporting
infrastructure have to be maintained constantly to keep them in good condition to ensure traffic safety
and enable the roads to be used in the wintertime. The state spends about 45 million euros a year on the
maintenance of national roads.

The Ministry of Economic Affairs and the Communications and Road Administration’s oversight of
contracts for maintenance of the roads and whether the roads have been maintained economically and in
accordance with the requirements, to ensure their safety and maintain their sustainability in the long-term.
Bridges and overpasses are expensive infrastructure and their maintenance is important for extending
their lifetime.

• Road maintenance has to be performed in accordance with environmental requirements. The
maintenance of roads involves the use of chlorides for melting ice and pesticides for weed control. There
are no legal limits on the use of chlorides; but pesticide use is regulated within water regulations.

The Roads Administration has not improved the organisation of the maintenance of the roads since
the previous audit and the increase in the cost of roads maintenance from 2006-2009 was 8 per cent
higher than the relevant price index. Costs have increased because of an increase in the volume of repair
works ordered from road maintenance companies and limited competition to keep costs down. But
some maintenance works have not been completed and therefore there is a risk that some bridges and
overpasses are not in good condition.
The goal of road maintenance is not unambiguously clear, the government has not set technology
requirements for maintenance works and contracts with road maintenance companies do not establish
what maintenance works should comprise.
The most serious maintenance problems appear in the winter. Main roads are maintained but many side APPENDIX
roads are not cleared of snow. Many maintenance problems are also evident in the summer, with the
maintenance of many bridges not carried out and gravel roads allowed to become full of holes or uneven.
Road maintenance companies have also not generally addressed responsibilities for limiting their pesticide
use.
The Road Administration’s supervision of maintenance contracts is inadequate. Roads are not inspected
often enough or closely enough.

The Minister of Economic Affairs and Communications has concluded that the government should review
the principles for the organisation of road maintenance, in cooperation with the Roads Administration.

ESTONIA (3)
Development of waste water treatment in rural areas with the support of
the Cohesion Fund’s projects
Published in 2010 - summary available in English: www.riigikontroll.ee

The National Audit Office examined the work of state agencies and local authorities in launching the first
water management projects financed through the Cohesion Fund during the 2004-2006 programme
period of the European Union.

The audit covered 63 local authorities and 7 regions of water companies. Three projects (the Western
islands, the Matsalu ecological reserve and the Emajõgi and Võhandu Rivers) were audited in terms of
the success of their preparation and instigation and financial sustainability of their water management
systems.
Financial sustainability of water infrastructure development projects was considered a crucial success
factor. The amortisation time for pipelines is 30 years after what they need to be recovered. So the water
price has to cover management costs and ensure funds for future renovation works.

• Too little funding was planned for the improvement of water management systems.
• There were problems with the involvement of local authorities in instigating projects. The Ministry of the
Environment currently had no power to oblige local authorities to instigate projects, where they had no
interest to do so. Some local authorities were poorly prepared for their involvement in projects, lacking,
amongst other things, a public water supply and sewerage system development plan.
• There were shortcomings projects’ financial analysis and their technological solutions. Poor funding
applications and confusion in assessing environmental impact led to delays in launching projects.
• Delays in projects caused a sharp rise in building costs leading to projects needing to seek additional
state financing. During the project duration, the cost of building tenders for the environmental sector had
gone up by an average of 1.8 times.
• The organisation of waste water treatment in rural areas, with support from the EU Cohesion Fund,
would not guarantee the sustainability of the sector, as not all costs had been taken into consideration in
determining the price of water and sewerage services.
APPENDIX

• Although the Minister of the Environment considered it important to compensate for the rise in the
prices of water management caused by increasing construction prices, the Minister found it difficult to
develop common principles for subsidy, because the capacity of the local authorities was very different.
• The Minister of the Environment confirmed that a legislative amendment had been initiated to resolve
the problems associated with the establishment of water prices.
• The role of approving the price of water supply and sewerage services was transferred from local
authorities to the Estonian Competition Authority in 2010.
• In 2010 the Environmental Information Centre used environmental monitoring data to conclude that the
efficiency of wastewater treatment in Estonia had improved. Wastewater to be treated passed biological
or more stringent treatment systems and the latter had brought about decrease in the pollution load for
organic matter as well as for phosphorus and nitrogen.

UNITED STATES (1)
Clean Water Infrastructure: A Variety of Issues Need to Be Considered
When Designing a Clean Water Trust Fund (GAO-09-657)
May, 2009 Report available in English at: www.gao.gov/new.itema/d09657

GAO was asked to (1) obtain stakeholders’ views on the issues that would need to be addressed in
designing and establishing a clean water trust fund and (2) identify and describe potential options that
could generate about $10 billion in revenue to support a clean water trust fund.

To identify issues that need to be addressed in designing and establishing a clean water trust fund and
funding options for such a fund, GAO reviewed past legislative proposals and industry position papers and
interviewed more than 50 different stakeholders with knowledge of a variety of wastewater infrastructure
issues, including individuals and groups from the wastewater industry, industry associations, and federal,
state, and local governments. GAO also administered a questionnaire to 28 national organizations
representing the wastewater and drinking water industries, state and local governments, engineers, and
environmental groups to obtain their views on the issues that need to be addressed in designing and
establishing a trust fund as well as their views on the potential funding options that could be used for this
fund. GAO received 22 responses, for a response rate of 79 percent. To estimate the revenue that the
options identified could potentially generate, GAO used the most recent government data available to
estimate the value of products or activities that could be subject to a federal tax and applied a range of
tax rates to these values based on current or past taxation policies. In addition, GAO interviewed federal
and state officials to identify the challenges likely to be associated with implementing the funding options
identified.

GAO did not make any recommendations. While this report identified a number of funding options,
GAO did not endorse any option and did not have a position on whether or not a trust fund should be
established.

The audit did not make any recommendations for federal action as a result of this work. A draft of the
report was provided to the U.S. Environmental Protection Agency and the Internal Revenue Service for
review and comment. Neither agency provided written comments. The Environmental Protection Agency
provided technical comments, which were incorporated as appropriate.

UNITED STATES (2)
Highway Projects: Some Federal and State practices to expedite
completion show promise (GAO-12-593)
June 2012 Report available in English at: http://www.gao.gov/assets/600/591420

This report addressed the following objectives:
• To review the process associated with completing highway projects and Federal provisions to help
expedite the process

The audit addressed:
• the process for planning, designing and constructing federally funded highway projects and factors
affecting their time to completion;
• State departments’ views on the benefits and challenges of initiatives to expedite highway projects;
• practices implemented by State departments of transport and the Federal Highway Administration to
expedite highways projects.
Environmental and sustainability issues within scope of the audit:

The audit described the requirements for projects with a significant environmental impact to prepare an
environmental impact statement and for projects with less significant impacts to prepare an environmental
assessment.

The study found that it took on average 83 months to prepare and sign off an Environmental Impact
Statement in 2009 and 69 months in 2010.
At preliminary design stage there are over 40 environmental laws which must be addressed as well
as applicable state laws and for more complex projects the completion of preliminary designs and
environmental reviews contribute to the time taken to complete the project.
States’ Departments for Transport did not wish to seek to speed up the process by taking responsibility
for environmental review decisions from the Federal Highway Administration, which they considered had
the staff and expertise to take informed decisions on environmental impacts. But the GAO concluded the
provisions for this delegation should be retained to give state Departments for Transport the opportunity
to choose to take it up in future.

The audit did not make any recommendations for federal action as a result of this work. However, a draft
of this report was provided to the U.S. Department of Transportation (DOT) for review and comment.

UNITED STATES (3)
Aviation and the Environment: Systematically Addressing Environmental
Impacts and Community Concerns Can Help Airports Reduce Project
Delays (GAO-10-50)
September 2010 Report available in English at: http://www.gao.gov/new.items/d1050

This report addressed:
• actions taken by airports to reduce the environmental impacts of their operations and development;
• the extent to which airports believe that environmental issues have or will delay capital projects or
operational changes; and
• the strategies airports can adopt to mitigate delays in implementing capital projects and operational
changes and address environmental issues.

A Web-based survey of officials from the 150 busiest U.S. airports. Interviews with officials from 10
airports that had been identified as needing additional capacity, having community involvement in
environmental issues,being in areas which were not achieving pollution targets.
Interviews with officials from the federal, state, and local agencies responsible for oversight of airport
operations and environmental issues, as well as representatives from a range of special interest
groups. Literature review to determine leading practices in stakeholder and community involvement in
environmental issues, including previous audit reports and reports by other relevant governmental bodies.
Environmental and sustainability issues within scope of the audit

The survey of airport officials included questions about the actions they take to reduce or control noise
problems, water pollution, airport emissions and other environmental problems, and about the factors
that help or hinder their airports in doing so. The survey also contained questions about the environmental
impacts associated with the development and operations of airports and the actions airports are taking to
balance these concerns.

Almost all of the airports surveyed took some actions to address environmental impacts in four key
areas: reducing noise levels, controlling water pollution, reducing emissions, and using environmentally
sustainable practices. Airports were moving toward a more holistic approach to environmental
management.
Less than half of the surveyed airports believe that addressing environmental issues somewhat or greatly
delayed a development project (35 percent) or operational change (42 percent) at their airport over the
last 5 years, even though the vast majority had undertaken a capital development project or operational
change during this time period.
A number of airports have adopted strategies to systematically address environmental impacts and
community concerns, and are integrating environmental considerations into their planning process.
Some airports are also working with the federal government to streamline the federal environmental
review process. If airports could align their Environmental Management System (EMS) with the federal
environmental review process they could improve the quality of their environmental analyses and decision
making. Effective community outreach can help airports better anticipate and deal with community
opposition

The audit did not make any recommendations for federal action as a result of this work. However, a draft
of this report was provided to the U.S. Department of Transportation (DOT) and the U.S. Environmental
Protection Agency for review and comment.

UNITED KINGDOM (1)
• Preparations for the London 2012 Olympic and Paralympic Games - Risk assessment and
management, February 2007
• Preparations for the London 2012 Olympic and Paralympic Games: Progress Report, June 2008,
February 2010 and February 2011
Reports available in English at www.nao.org.uk

To audit the government’s preparations for hosting the London 2012 Olympic and Paralympic Games.

It considers the progress that has been made since July 2005 when the International Olympic Committee
chose London as the host city for 2012.

It considers the risks, challenges and progress in relation to planning for a lasting legacy, the prospect
of which formed a key element of the Olympic bid. The legacy is viewed in terms of the venues that will
remain after 2012, the regeneration of the local area, and also the wider benefits of the Games.
Key environmental and sustainability conclusions of the audit

February 2007: Work is ongoing to finalise proposals for the legacy use and ownership of the venues,
and to develop plans for delivering and measuring the wider benefits of the Games.
The SAI recommended action should be taken to manage risk, including:
• developing robust business plans for the Olympic venues with a clear focus on whole-life costs;
• agreeing who will be responsible for each facility during the transition phase after the Games;
• identifying, and where possible quantifying, the key legacy benefits that it is realistic to expect from the
Games, so that it will be clear whether they have been achieved.
June 2008: The Olympic Delivery Authority has established a dedicated team to implement its
sustainability strategy and has established quantified and measurable targets. A requirement has been
placed on every contractor to plan for how it will minimize environmental impacts and a system developed
for monitoring and managing suppliers’ performance against targets for sustainable development.
The SAI recommended the Government Olympic Executive’s evaluation framework for assessing the
impact of the Games should include baselines for measuring whether the expected legacy benefits are
achieved.
February 2010: During 2009 the Olympic Park Legacy Company was formed to take responsibility for
delivering a positive legacy from the Olympic Park.
The SAI recommended the Legacy Company should set out a clear plan for mitigating the costs of
maintaining assets after the Games. Securing long term legacy usage should remain the priority.
February 2011: The Government Olympic Executive is accountable for the success of the legacy, but a
range of delivery bodies outside the direct control of the Executive are accountable for individual projects.
The SAI recommended the Government Olympic Executive’s evaluation framework should set out how
the effects of the Games will be separated out from business as usual activities.

The Olympic Executive has, as recommended by the Committee of Public Accounts in July 2008, set in
train work to evaluate the legacy. A consortium of consultants and academics will examine the costs and
benefits of the 18 programmes that comprise the legacy portfolio, with an interim report due in 2012.

UNITED KINGDOM (2)
Building for the future: Sustainable construction and refurbishment on the government estate
April 2007 Report available in English at www.nao.org.uk

To audit government performance in meeting targets to make their new buildings and major
refurbishments more sustainable.

• the extent to which departments and agencies are meeting the standards set for sustainable
construction and refurbishment on the government estate;
• how departments and agencies evaluate value for money when designing and specifying sustainable
buildings; and
• whether buildings on the government estate which were designed to be sustainable have delivered the
expected benefits.
We appointed engineering and management consultants to assist us in this work.

The government has set sustainability standards for the construction and refurbishment of buildings on
the government estate, but these are not being met. Departments are failing to carry out environmental
assessments and achieve the target ratings.
Various barriers are hindering progress towards more sustainable buildings. These include, in particular:
• the fragmentation of policy responsibility among government bodies for improving sustainable
construction and the absence of a coherent approach to monitoring progress and ensuring compliance;
• the lack of sufficient knowledge and expertise in sustainable procurement among those departmental
staff responsible for them;
• the widespread perception of a conflict between sustainability and value for money – partly because
project teams are failing to assess the long-term costs and benefits of more sustainable approaches; and
• the failure to specify expected benefits and undertake rigorous reviews to evaluate performance against
them and the consequent lack of robust data to inform business appraisals for new projects.
The SAI’s key recommendations

• The government should establish a clear understanding on the division of policy responsibilities for
sustainable construction in the public sector, in such a way as to ensure clear accountability for this area
of policy.
• The government should specify their requirements for environmental performance in terms of outcome
base performance targets – including carbon emissions and energy and water
• The government needs to better monitor and report on progress to help understand and hold
departments to account for environmental performance. Completed projects should be evaluated to
assess whether they delivered the specified level of performance.
• The government needs to take full account of the government’s environmental targets - and the wider
social and economic impacts which sustainable buildings can bring - when assessing value for money,
with clearer guidance on the use of whole life costing.

The government established the Centre of Expertise in Sustainable Procurement (CESP) in 2008 to
provide leadership focusing on environmental sustainability across government.

NEW ZEALAND
Local authorities: planning to meet the forecast demand for drinking
water
February 2010 Report available in English at: www.oag.govt.nz

Many parts of New Zealand are experiencing increasing demand for water, which puts pressure on water sources and
the capacity of the infrastructure (that is, the pipes and water treatment plants). Local authorities are responsible for
the supply of drinking water and ensuring there is adequate infrastructure and strategies in place to meet the needs of
their communities.
The audit examined whether a representative sample of eight local authorities were effectively managing their supplies
of drinking water to meet the likely future demand for it.

The audit looked at the forecasts the local authorities used to identify the likely future demand for drinking water,
and the strategies they were using to make sure they could meet that demand. We appointed engineering and
management consultants to assist us in this work.

Only two of the eight local authorities reviewed were managing their drinking water supplies effectively and all eight
local authorities had identified challenges to meeting the forecast demand for drinking water.
Six of the local authorities used a demand forecasting method that would be considered the minimum in terms of
industry standards. Their ability to prepare reliable forecasts for drinking water demand was limited by the quality of
their information, particularly water use data. Few of the eight local authorities explicitly addressed uncertainty in their
forecasts. There were few examples of forecast verification or peer review.

While most of the local authorities were clearly taking sustainable development into account, the actions they had
chosen were partial rather than comprehensive. None of the local authorities had a fully integrated approach to dealing
with sustainable development and supplying drinking water.
All eight local authorities had assessed what they needed to do to meet the country’s drinking water standards. Their
assessments informed the changes they were making and their increased capital expenditure for supplying drinking
water. Five of the smaller local authorities need to upgrade their infrastructure, especially those that had previously
received poor water quality grades.
The SAI recommended local authorities should

• use accurate and up-to-date information to prepare water demand forecasts to reduce the risk of under- or over-
investing in water supply infrastructure;
• improve the efficiency of supplies by minimising water that is unaccounted for, to reduce the demand on existing
water sources and the risk of over-investing in water supply infrastructure;
• participate in an independent benchmarking programme to measure efficiency in drinking water supply;
• prepare comprehensive demand management plans that integrate supply and demand strategies;
• carry out rigorous evaluations of the costs and benefits of supply and demand strategy options, to choose the most
cost-effective and sustainable options.
Responses to the audit

The SAI provided individual, detailed reports to each of the local authorities audited. Several began making
improvements as a result of those reports.
The report was well received by the wider local government sector and has been used by local authorities to improve
their water supply management and future planning. The SAI will conduct a follow up in 2011/12.

RUSSIAN FEDERATION
Audit of the efficiency of the federal property and budget funds allocated in 2008 - 2009 to territorial administrations and
subordinated establishments of Federal Agency on supervision in the nature management sphere in the Far Eastern Federal
District for protection of the environment and nature management during preparation for the Asian Pacific Economic
Cooperation forum

Audit of the public funds usage allocated for carrying out Nature protection actions during the preparation
for the APEC forum.

Efficiency of the public funds usage directed on carrying out the nature protection actions within the
preparation framework for APEC forum.

Audit materials are directed to the Federal Assembly of the Russian Federation. Representations of the
Accounts Chamber of the Russian Federation are directed to the Ministry of natural resources and ecology
of the Russian Federation and Federal Agency of supervision in the nature management sphere.

A special interdepartmental commission on the assessment of the observance of the nature protection
legislation of the Russian Federation at building of objects of APEC 2012 summit is now functioning.
Constant control over the public funds usage is carried out by the territorial bodies and subordinated
establishments.

THAILAND
Bangkok Super Skywalk Projects: Preventive Environmental Audit
Year 2011

OAG Thailand selected the Bangkok Super Skywalk Projects to review the cost effectiveness of
the project which was expected to cost Bt 10 billion (USD 334 million); and to consider its future
environmental impact.

OAG reviewed BMA Super Skywalk Projects management plan in order to assess the feasibility of the
project and environmental impact from the first day of declaration project to 10 August 2011.

Under sustainable development, OAG concerns about environmental degradation from public
construction especially mega projects. Therefore, preventive environmental audit of OAG focuses on
sufficient information for decision making before initiating project.

There was insufficient and imperfect information for decision making on the project investment
There was inadequate consultation to obtain public opinion on the project
Conclusions relating to environmental and sustainability findings

Under preventive environmental audit, the auditors focus on the sufficiency of information for decision
making for initiating a project. As audit criteria, indispensible documents for mega project should be
comprised of Feasibility study, Environmental Impact Assessment (EIA report), and Stakeholders’
participation. Likewise, these documents could reflect the transparency of project before initiation.
The SAI found that BMA did not have a feasibility report and Environmental Impact Assessment. BMA
could not clarify the groups that would benefit from or be disadvantaged by this project. In addition, BMA
did not study the environmental impact from construction. Meanwhile, BMA conducted the opinion survey
in order to support the project; therefore the survey did not cover all aspects of the project that might
affect the environment and surrounding areas, and the cost and worthiness of the project. Furthermore,
several channels to receive public opinion were too complicated and costly to respondents. Hence, there
was a low response rate from people living in Bangkok.

BMA decided to cancel the second phase of the Super Skywalk project.

EUROPEAN COURT OF AUDITORS
Is EU structural measures spending on the supply of water for domestic
consumption used to the best effect?
Special Report No 9/2010
http://eca.europa.eu/portal/pls/portal/docs/1/7902724.PDF

The main objective of the audit was to assess whether EU spending on water supply is used to best
effect.

• the most appropriate solutions were adopted to meet the needs of the areas concerned;
• the co-financed projects were successful in improving the water supply;
• the objectives have been achieved at the lowest cost to the EU budget.
The audit assessed directly the performance of the investments both in terms of outputs and results. The
audit was based on a direct review of 29 projects — 11 approved by the Commission and 18 approved
by the managing authorities in the Member States.

The Court found that, whilst structural measures spending has contributed to improving the supply of
water for domestic use, better results could have been achieved at a lower cost. In particular:
• forecasts of future water needs did not take into account downward trends in water demand nor all
resources already available;
• measurable improvements have been achieved in terms of increased available volume of water,
better water quality, and higher network yield and service continuity; however, some projects were not
operational because of missing complementary infrastructure and monitoring of achievements was of
variable quality;
• all projects have experienced cost increases and delays when measured by the two main efficiency
parameters (capacity utilisation rate and non- invoiced water) and insufficient consideration was paid by
the Commission and the Member States’ managing the ability of the projects to generate revenues.
The European Court of Audit recommended to the Commission and Member States they should:
To identify better solutions: (a) Improve their ex-ante analysis and forecasts of future needs by taking
into account recent and accurate data and their inventory and review of all available water; (b) Pay greater
attention to the alternative to the supply side solution.
To achieve the programme aims: (a) Ensure from the planning stage, that the complementary
infrastructure required for projects to enter into operation will be available on time; (b)Set up better
monitoring tools to assess project achievements.
To control costs: (a) pay more attention, during the planning phase, to factors which often cause delays,
(b) Improve the quality of the ex ante analysis of the projects and take their results into account when
determining the size of new infrastructures; (c) Systematically analyse the pros and cons of building
infrastructure in stages, to make better use of the capacity built and develop it according to the evolution
of needs.
Responses of the EU Commission to the audit

The Commission welcomed the Court’s conclusion that structural measures spending has contributed to
improving supply of water for domestic use. The Commission agreed that there is scope for improvement,
though noting that it is difficult to achieve a perfect match between ex-ante demand and savings
forecasts and actual outcome.
The Commission considered that managing authorities have an important role in ensuring projects meet
these performance standards. The Jaspers facility was set up for the programming period 2007-2013 to
strengthen capacity in the new Member States.

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BIBLIOGRAPHY 56
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Environmental

• help SAIs gain a better understanding of environmental auditing issues,

ISBN 978-9949-9061-6-1 (PDF)

FOREWORD & ACKNOWLEDGEMENTS 2

4. HOW SAIs CAN AUDIT THE ENVIRONMENTAL AND SUSTAINABILITY

APPENDIX I: Case studies available to date 38

1 London Thames Gateway Delivery Plan http://www.communities.gov.uk/documents/regeneration/pdf/1427560.pdf

Figure 1: Generic seven stage model of infrastructure development

Source: UK National Audit Office

• a generic model of seven key stages in an infrastructure project’s lifecycle (Part 2)

Water treatment works

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 8

1.3 The impacts are presented in the following impact categories:

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 9

• of special consideration to the local community and indigenous population;

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 10

2 Ecological effects of roads, Andreas Seiler (2001)

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 11

• Infrastructure construction, operation or decommissioning can lead to contamination/pollution of on-site

Construction can contaminate

3 IEA Energy Technology Perspectives 2008: Scenarios and strategies to 2050

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 12

3 IEA Energy Technology Perspectives 2008: Scenarios and strategies to 2050

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 13

Infrastructure can be part of

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 14

Infrastructure projects can benefit but also disadvantage communities.

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 15

ENVIRONMENTAL AND SUSTAINABILITY IMPACTS ARISING FROM INFRASTRUCTURE DEVELOPMENT 16

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 17

STAGE 1: IDENTIFY POLICY NEED

Setting out the options.

High level business case.

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 18

• • Prepare outline design brief

Source: UK National Audit Office

STAGE 2: DRAW UP PROJECT BRIEF

• Background to the infrastructure need

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 19

The business case:

Choise of delivery model:

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 20

• focus the procurer on what functions the facility needs to perform

STAGE 4: DRAW UP THE DESIGN BRIEF

The design brief.

• Schematic drawings of the proposed infrastructure

The outline design brief.

Detailed or final design drawings.

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 21

STAGE 6: OPERATE AND MAINTAIN

STAGE 7: DISPOSAL/ DECOMMISSIONING OF

THE STAGES IN INFRASTRUCTURE DEVELOPMENT 22

GOVERNANCE APPROACHES FOR MANAGING THE ENVIRONMENTAL IMPACTS OFINFRASTRUCTURE 23

Figure 3: Governance approaches for incorporating environmental and sustainability consideration,

Wider Context • • Regulatory framework

Source: UK National Audit Office

GOVERNANCE APPROACHES FOR MANAGING THE ENVIRONMENTAL IMPACTS OFINFRASTRUCTURE 24

AConvention Concerning the Protection of the Sets up an international committee to protect

Convention on Long-Range Transboundary Air Combats acidification on a broad regional basis