Getting value for money on major projects

Ailie MacAdam

Crossrail has been described as a “textbook example of how to get things right”. Ailie MacAdam assess lessons learned across individual projects that can help industry to deliver better value for money. 

Another milestone in the project was recently reached as Network Rail passed the halfway point on its £2.3bn investment programme to get the existing rail network across outer London ready for Crossrail.  A major programme in its own right, this work includes more than 30 miles of new track, station rebuilds, modernisation of signalling, and electrification of key sections to the west of London. 

While there is still much to be done, given that many projects of this magnitude can experience a ‘mid-life crisis’, to reach this milestone successfully is extremely positive.  

"Start projects with the end in mind.  The importance of spending quality time up front to define the required outputs of the project or programme cannot be overestimated."

While the Great Western Route Modernisation programme is facing up to some significant challenges, this latest successful milestone on Crossrail comes on the heels of the Reading Station redevelopment - a success story for the rail industry, and one which sets a positive example of how to achieve value for money for the taxpayer. 

As the new National Infrastructure Commission settles down to business, it is timely to assess lessons learned from individual projects to understand how Government and industry can deliver better value for money on large scale infrastructure projects.  My own personal experience leading delivery teams has left me with a strong belief that projects with a collaborative ethos have the greatest chance of success.  A few other lessons I have learned along the way include:

Start projects with the end in mind.  The importance of spending quality time up front to define the required outputs of the project or programme cannot be overestimated.  This may sound obvious, but all too often we see this step missed in the enthusiasm to secure the supply chain and show some physical progress. 

This upfront investment in time should be used to nail the scope, specifications, assumptions and execution strategy, which allows an associated cost and schedule to be developed.  This allows for controlled delivery.  It does not mean that things cannot change, but changes will occur in a controlled way against a baseline, with an understanding of the cost and schedule impact. 

Successful project delivery models are those with a clear delineation of responsibilities.  Having an appropriate balance between autonomy and governance, with the freedom to take difficult and timely decisions, is also crucial to success, as is the commitment of all parties to deliver as a team. 

"Looking to the future, leadership of a successful delivery organization will look very different tomorrow than it does today."

The benefits of a collaborative approach can be seen at Crossrail where the Department for Transport, Transport for London, Network Rail, Crossrail Ltd, future operators, the delivery partner and the supply chain are all working well together to deliver the programme with a common vision of success.  While Crossrail still has some way to go, the programme is proceeding well and on course to deliver value for money to the taxpayer.

Another important factor in maximising effective delivery structures lies in ensuring there is a broad market of potential capable and interested contractors.  Procurement and delivery structures should match the capability of suppliers in the marketplace.  This is particularly important for the largest projects where there may be very few creditworthy suppliers who can guarantee delivery. 

To address this challenge, in some cases, consortia comprised of multiple parties are formed to share the risk.  A more innovative solution would seem to be to enable the private sector to manage the implementation of such projects and to procure delivery of capital works from a broader cross section of suppliers, generally via a number of smaller valued contracts.  This can lead to a greater and more efficient level of competition and ultimately better value for money.

"Our industry is made up of a committed, skilled and increasingly diverse workforce quietly getting on with their jobs"

In setting up the National Infrastructure Commission, the Government has signalled its intent to take a longer-term view of infrastructure investment needs while also learning the lessons from past projects.   This is to be welcomed.  Our industry is made up of a committed, skilled and increasingly diverse workforce quietly getting on with their jobs to maintain or upgrade our country’s infrastructure.  We owe it to our fellow colleagues to show that we can collectively learn from their achievements to deliver successfully the infrastructure projects of the future.

Looking to the future, leadership of a successful delivery organization will look very different tomorrow than it does today.  It will be necessary, for example, to manage and leverage technology advances, more complex interfaces and engaged stakeholders, social and online media, communications advances, and diversity of teams.  It is up to our industry to “look around the corner” and prepare our leadership to be ready.

Ailie MacAdam is Regional Manager for Infrastructure, Europe & Africa, at Bechtel.

Comments

'Cannot be underestimated"??
@ Stephen Quite, engineers aren't always particularly good at communicating with those outside industry and industry speak, which often includes the normalisation of jargon, idioms and other turns of phrase, frequently misconstructed, that others would find mildly immature and amusing. This is one reason why, I think, engineering has trouble attracting people into the industry; despite obvious talent we, look relatively unprofessional and sound to the wider world similarly so.