Tunneling Industry Outlook 2020


Each year, TBM: Tunnel Business Magazine takes a look at the coming year by polling a sampling of tunneling professionals. How is the year ahead shaping up? What are the emerging trends? The respondents represent a cross section of the industry, and this year includes:

Dawn Dobson-Markman, Dawn Dobson-Markman, Barnard Construction Company Inc.

Dawn Dobson-Markman is Business Development Manager for Barnard. She has 25 years of experience in tunneling and underground mining. During this time, she has worked in various engineering and supervisory capacities on large, complex transportation and water/wastewater projects, most recently in a project management role. Her experience includes projects constructed using tunnel boring machines, drill/blast, roadheader, and NATM techniques. In Business Development, she conducts client outreach regarding future projects, coordinates with joint venture partners, and prepares qualification and proposal packages.

David Field David Field, Mott MacDonald

David Field is Senior Vice President and Regional Tunnel Practice Leader at Mott MacDonald, based in Washington, D.C. He has nearly 30 years of experience and has been active industry participant in events including the Cutting Edge Conference and George A. Fox Conference. He is also a contributing author to the UCA’s “History of Tunneling” book.

Brian Gettinger Brian Gettinger, Freese and Nichols

Brian Gettinger, PE, is Tunneling Services Leader for Freese and Nichols, Inc. He has a wide variety of experience in design, cost estimating, inspection and construction management of tunnels and grouting of shafts and reservoirs for water and wastewater projects. His tunneling experience includes hard and soft rock tunnels excavated by conventional TBM, EPBM and drill-and-blast methods with tunnel liners, including cast-in-place concrete, precast gasketed concrete segments and fiberglass pressure pipe.

Bruce Matheson Bruce Matheson, Terratec

A chartered engineer in the United Kingdom and a Fellow and member of numerous associations and societies, Bruce Matheson has enjoyed over 25 years of experience in underground construction and infrastructure projects (mining, tunneling and shaft sinking) in North America, South America, Asia, Europe, and the Middle East, which has given him an understanding of all aspects of project life cycles, from planning and site investigation through construction and troubleshooting to refurbishment. He has worked for Terratec for the last eight years on projects and with clients all over the world.

What is your take on the North American tunneling market entering 2020? Are you optimistic? Pessimistic? Why?

Dobson – As we enter 2020, I’m optimistic about the North American tunneling market. In addition to the continuation of several significant expansion programs within the transportation and water/wastewater sectors, there are also new programs coming up, with planning and funding in process. Along with these larger programs, there are also numerous standard projects within the public and private sectors that continue to support the market.

Field – As we move into 2020, I am reasonably optimistic regarding the North American tunneling market. Throughout the United States and Canada, significant transportation, highway, water, wastewater, and other emerging sectors are under development or contemplated. These will all provide critical benefit to the communities served by each of these projects.

While multiple major programs are moving forward, certain key transportation programs face protracted or uncertain futures due to a lack of political will to fund much-needed capacity enhancement and state of good repair investment.

Gettinger – Tunneling is an exciting market to be part of, particularly as a younger professional. The industry has a growing need for leadership at all levels: project, corporate and technical management. And we are seeing challenging mega-projects get started all over the county. Excavation technology continues to improve and allow even challenging conditions to be excavated reliably and safely. I’m optimistic that the industry has matured to a point that Owners have confidence in the tunneling equipment, as well as the capability and risk management processes of consultants and contractors, and are increasingly willing to move forward on projects.

Matheson – Optimistic – Terratec has traveled far and wide in 2019 in North America, from Tunnelling Association of Canada meetings in Toronto and Winnipeg to UCA of SME meetings in New York, Chicago and Miami. The feeling is generally optimistic – a lot of the work coming down the pipe is from CSO projects that have been mandated by federal legislation to protect bodies of water due under the Clean Water Act (in the United States) and the Canada Water Act. Whilst not so glamorous as the big mega-projects, they play a vital role from an environmental point of view. Tunneling isn’t just about mega-projects, however. Whether they are big or small, there seem to be a lot of projects about.

There has been a lot of change in the tunneling industry in recent years: new technology, contracting practices, new companies in the market, the impact of the growing manufacturing market in China. What changes do you see as most significant? What are the long-term impacts?

Dobson – The changes in the tunneling industry in recent years are certainly beneficial, just as growth and development in anything tends to be positive progress. New technologies provide advances for the industry to build safer projects with better precision and quality. We’re building larger tunnels and tunnels in challenging locations that previously weren’t considered. We’re seeing record-setting microtunnel drives longer than ever before. These new and emerging technologies will enable us to design and build projects that were not considered in the past.

More states and agencies are embracing alternative contracting practices that include early contractor involvement and allow for more innovation. These Clients still need to determine what contracting method is best suited for each particular project and also, for projects within a program. As has been discussed in recent years, there is no “one size fits all” and the idea to use a certain contracting method simply to shift as much risk as possible to the other party is also inappropriate but something we continue to see. Within the industry and with our clients, as we continue to share and discuss best practices and lessons learned from the use of particular contracts, the benefits of using a variety of contracting practices will continue to push growth in the tunneling industry.

Field – Recent years have seen significant advances in tunneling equipment and materials. For example, TBM and microtunneling equipment with enhanced data acquisitions, cutter/tool wear monitoring and replacement capabilities. All forms of tunnel lining — precast segmental, cast-in-place, and shotcrete — have benefited from advances in steel and synthetic fiber.

Digital delivery is an ongoing trend. Some owners have fully embraced it, and some have yet to do so. We are in a transition period that is very similar to that seen for the transition from traditional drawings to CAD.

Artificial intelligence and machine learning applications will be one of the most significant changes in the industry and should be prominent in any discussion. The tunnel engineering community must innovate, remain flexible, and integrate these new skills into our core businesses. The integration of next-generation information technology into the engineering workflow while maintaining adequate engineering oversight will be our most significant challenge.

Gettinger – I’m keenly interested in the emerging use of computer-controlled large-diameter tunnel boring machines. TBM operation, particularly through difficult ground, has relied completely on the skill of the TBM operator and often been more of an art than a science. With limited numbers of operators and more and more projects, finding qualified operators is a challenge. Even with a skilled operator, modern TBMs are equipped with so many sensors that the real-time data management can be overwhelming, and operators tend to operate on “feel.” Considering the potential financial consequences of excavation challenges, project outcomes could be dramatically improved by being able to use an auto-pilot-like feature allowing the equipment to respond instantaneously to changes in ground conditions. Better outcomes will lead to even greater use of tunnels as an infrastructure solution.

Matheson – Has there really been a lot of change? I don’t think so. So there are some larger companies coming into the North American market from overseas and bringing with them their foreign practices, but even these behemoths have had to accept that the North American market is different and the tunneling contractors here are good at what they do. One of the biggest changes I have seen is the fact that clients/owners are beginning to realize bigger is not always better; the bigger the projects the fewer the players willing or able to bid and that is bad for everyone. As far as technology and production, the market likes tried and tested solutions.

What new trends are you seeing or do you expect to see in the near term? Long term?

Field – Some immediately apparent and important trends include the continued increase in the use of design-build (DB), contracts manager general contractor (CMGC), and public-private partnership (P3) contract delivery, as more states and agencies are being afforded the regulatory approvals for this delivery method.

While P3 and DB are valid contract delivery methods, appropriate risk allocation within the contractual framework is needed such that the parties best equipped to manage the risk retain that responsibility.

With continued population growth, aging infrastructure, and a changing global climate, there is an increasing focus on not just maintaining infrastructure in a “state of good repair” but “future proofing” it by making it resilient and sustainable.

Gettinger – In Texas, the urban centers long known for sprawl are now densifying, especially with the prospect of enormous population growth over the next 40 years. These changes are going to strain existing infrastructure, requiring construction of new, larger water, wastewater, stormwater and transportation infrastructure. Solutions that were once only economically feasible in East- and West-Coast urban centers will soon be needed in Texas’s major cities. Tunneling presents an opportunity to install resilient infrastructure that avoids conflicts with other systems and limits impacts on the community and the environment.

Matheson – We are seeing more interest in tried and tested solutions from other countries to solve problems in North America, such as tight-radius tunnels.

There is no shortage of mega-projects that have been discussed for quite some time, including the Hudson River Tunnel, the Bay Delta Tunnel in California, and others. What is it about the tunneling market that allows projects to spend years in the planning process? How does this impact the market? Is there anything that we can do to help projects get expedited?

Dobson – Especially with mega-projects that take significant time to plan, design, receive regulatory approvals, and fund, changes in local, state and federal agencies (i.e., politics) have significant impacts on the progress of these programs. The industry has seen major projects delayed due to new agency officials who primarily want to go back to the drawing board in hopes of finding cheaper solutions, all the while the cost of doing business is increasing. Tunneling alternatives are still viewed as too expensive but, as the population of urban areas continues to grow in North America and across the world, underground is becoming the most viable option in many cases.

The impacts of these mega-projects on the market and their delays are considerable. As delays continue there is potential for mega-projects to overlap and concerns regarding whether the industry can support all these mega-projects such as providing qualified labor and the massive quantity of material resources needed along with capacities of sureties and bonding.

As an industry there are a number of things we can do to possibly help expedite projects: more accurate cost estimates during the planning and approval phase; early engineer and contractor involvement to assist with determination of viable alternatives; and better general public education through positive media communication are a few examples.

Field – Long linear projects such as the tunnels mentioned have a considerable environmental footprint, often impacting multiple cities and counties, and sometime crossing states. The planning and environmental processes on megaprojects are known to be extremely complex and often subject to legal challenges and pushback from impacted stakeholders.

This combined with the lack of political will and funding for projects that can span multiple administrations, whether that be local, state or federal, often results in a megaproject taking many years, sometimes decades, to get to market. The tunneling industry needs to become a stronger advocate and influence on the decision makers. This comes with a responsibility to identify, quantify and mitigate those risks and drivers that impact any megaproject.

Successful projects start with strong support from political sponsors. In collaboration with project stakeholders through sound engineering, construction using the right technology and materials the industry can meet the project goals.

Gettinger – The expenditure of billions of dollars must be done prudently, so it is important that we don’t put the proverbial cart before the horse. However, once we’ve concluded that a project is the right solution, it does not benefit anyone for projects to linger for decades. As a tunnel consultant, it is critical for me to understand and help my clients navigate the two biggest schedule challenges – permitting and funding. Projects are destined to struggle if they advance without clear, well-thought-out strategies to address these two things. We should measure project success not only on how well construction went, but how long it took us to take a project from concept to completion.

In Houston, we are exploring tunneling as a regional solution to mitigate flood damages from major storm events. Time is of the essence for delivery of a mitigating solution. Every hurricane season that passes without a constructed project exposes people and property to risk. We don’t have decades to wait. Solutions are needed faster.

Matheson – I think it’s not a North American problem that it takes time for mega-projects to come online – it’s a global problem. Mega-projects need mega cash, and securing that takes mega effort and time, the key surely would be (globally) to disassociate mega-projects from political agendas, but that’s tricky.

In many construction markets, contractors report that a lack of available workers limits their ability to grow. Are you seeing this in the tunneling market? How, if any, is the tunneling market different from other construction disciplines?

Dobson – Similar to other construction markets, there is certainly a lack of available experienced workers in the tunneling industry. This is not to say that the lack of workers limits growth because the industry will find solutions. Recent surveys indicate that many firms increase base pay rates, provide incentives and bonuses to attract qualified workers yet, this does not address the issue of bringing new workers into the industry. There is extra effort necessary at all levels to invest in training and developing new workers. Many experienced craft that have been in tunneling and mining for most of their careers are nearing retirement and younger generations are less likely to consider the underground sector as it is unfamiliar to the general population. When the public sees pictures of underground projects in the news, most view it as dark, dirty, and dangerous. The fact is underground construction and mining in North America is just as safe as any other construction market; safety statistics support this and we can do better as an industry in promoting the positive aspects of underground construction – the uniqueness of building underground spaces, the comradery, the generally better pay scale, to name a few.

Field – Lack of skilled personnel in the tunneling industry impacts more than the contracting community. These trends are equally apparent in the consulting community. This lack of personnel will continue to limit growth and impact the industry’s ability to deliver tunnel projects.

This has a greater impact on a specialist engineering sector such as tunneling. Looking at the experience base in the industry, most tunneling experts have more general engineer qualifications relating to areas such as civil, structural and geotechnical disciplines. These form the building blocks to a successful career path in tunneling. This is no different today, and the emphasis is on individual firms to mentor and train graduates to become experienced specialist tunnel engineers.

Gettinger – This is certainly a challenge in tunneling. My purview is the consulting side, and the number of well-qualified engineers to plan, develop and design tunnel projects is limited. The result is that Owners are often given tunneling advice and provided project deliverables by consultants with limited tunneling experience that are based on poor or incomplete assumptions. These poorly planned and executed work products complicate future project delivery, often leading to unnecessary delays and cost overruns. The resulting poor outcomes from utilizing inexperienced tunnel professionals limit the Owner’s interest in using tunneling in the future, which isn’t good for the industry or the Owner.

Owners often struggle to clearly distinguish professional and firm qualifications on tunnel projects, particularly when the Owner is new to tunneling. Well-written language in a proposal and a good-looking PowerPoint slide deck in an interview can often mask the level of actual competency. We should consider ways to demonstrate technical competency and excellence more clearly than a Professional Engineer designation. Certification programs like the Design-Build Institute of America’s (DBIA) Accredited Professional program could add value in the tunnel industry.

Matheson – It’s a free market economy, and the market dictates that if there is a shortage, then wages and conditions go up and as a result younger people are drawn into the industry. It’s always been that way.

What opportunities do you see for the North American market? New technology (high-speed rail/maglev/hyperloop)? New/emerging markets (flood control/water transmission)? Other?

Dobson – Indications are that North American agencies and clients are seeing the benefits and need for transportation solutions such as high-speed rail, maglev, and hyperloop, some of which likely involve tunnel sections. In order for these solutions to be of overall value though, they need to actually connect major travel corridors. In other emerging markets such as flood control and water transmission, again along with growth comes the need to find more space and in many cases this means going underground and advances in technologies are enabling this underground expansion.

Field – With a continually expanding population, aging infrastructure, changing climates and limited resources, there will be an increasing need for new technologies to meet societal and business expectations in North America.

Existing transportation and water transmission infrastructure will not be replaced overnight, and continued investment is required to maintain and prolong service life. We must focus on getting planned projects from drawing board to execution. Looking at the “Report Card” on Infrastructure, the demand for upgrade/state-of-good-repair will likely exceed the industry’s existing capacity for the next decade without considering the needs for new programs with new technologies.

New technologies typically require substantial investment and research on proof of concept before they can be applied in the industry. There are two main areas of new technology: enhancing or streamlining existing process, and new unique applications. Much of the prior focus of new technology has been in refining existing equipment, processes, and materials. Looking forward, the industry must shift its focus to alternate technologies and new materials.

Gettinger – I’m excited about the opportunity in Southeast Texas and across the Gulf Coast to use tunnels to make our growing urban centers more resilient. In Houston, tunnels present a unique opportunity to mitigate flooding with large gravity-flow inverted siphons conveying stormwater as well as consolidating wastewater treatment facilities to centralized, hardened locations. Advances in excavation technology will allow tunnels to be constructed through high groundwater in clayey and sandy gulf soils, an application that would not have been possible just a few decades ago.

Our initial work on the stormwater tunnel concept has proven the feasibility of tunnels of all sizes in Houston – putting tunneling into the “toolbox” for consideration as a solution for all types of infrastructure in the future.

Matheson – As previously mentioned, tight-radius tunnels are a reality in other countries and that sort of technology can result in new ways of solving old problems. There are other “new” ideas that are also quite exciting.

What is your view on the international market? What areas are most active? What areas are up-and-coming? What is the potential for North American companies in overseas markets?

Dobson – With the potential in the North American market, which international companies have anticipated and are pursuing, I believe most North American companies are less focused on overseas markets. Similar to what is being experienced here in the U.S. and Canada, population growth is a key factor in consideration of transit and environmental solutions; for example, the rail projects in India and the wastewater tunnel in Mexico City are both significant programs to address the needs of population growth. There also have been and continue to be projects in developing countries where little to no experienced tunneling contractors exist but, with the positive market in North America, I don’t envision that North American contractors will consider those markets in the foreseeable future as long as there is a stable market here.

Field – The international market generally mirrors the North American market; however, the financial and political cycles are on a different wavelength. The behavior of the construction market inevitably lags the financial markets. The international market for tunneling is strong with multiple tunneling projects in most major capital cities and population centers.

With respect to the overseas market for North American companies, our technology and tunneling professionals are an international commodity. The types of tunneling and ground conditions are not tied to international boundaries.

The constraints for North American companies result from questions like these: How translatable is your staff base? What is your local presence? Can you be cost-competitive in the local market?

To have a global outlook, you must have a global capability!

Gettinger – I believe the international market has a lot of lessons to share with North America’s growing urban centers. Malaysia, Singapore and Hong Kong are pushing the boundaries and imagination of urban planners, using tunnels to maximize the use of limited real estate. European leaders continue to use tunneling in progressive ways, particularly for transportation. We sometimes forget in the U.S. that cities like London, Paris and Madrid have been around for many centuries longer than anything in the Americas. As our urban centers densify and continue to grow, it would be wise for us to take lessons from elsewhere and apply them for our betterment.

Matheson – There is a lot of work overseas especially in Asia, but it’s an aggressive and competitive market and since there is a lot of work at home as well, I’m not sure why North American contractors would want to go overseas.

Concluding thoughts?

Dobson – The North American tunneling market continues to look optimistic. The industry should embrace the advancement of new technologies and have the brevity to adopt new solutions that are best suited for each project. Most importantly, we need to better market the positive aspects of underground construction – to owners, to the public, and to a new generation of workers in order to expand, maintain, and rehabilitate our much-needed infrastructure.

Field – Significant advances have been made in recent years, with more complex projects being undertaken in more challenging conditions. Combined with a significant number of active tunneling projects and many more in the development pipeline, the North American tunneling outlook is buoyant and looks to remain so.

Gettinger – I enjoy reading about the engineering marvels of our forefathers, projects like the Panama Canal, Brooklyn Bridge and Hoover Dam. I fully expect that in the 21st Century and beyond, the projects that next frontier of great engineering achievement will be underground, building the resilient cities of the future.

Matheson – It’s going to be a busy year!

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