Governance of major infrastructure projects is falling below acceptable standards, Crossrail chairman Terry Morgan has warned.
Morgan said that the standard set by Crossrail, which he said by being delivered on time and within budget has given politicians the “confidence to continue the infrastructure story”, is not being emulated by other major projects in the pipeline.
He said that Crossrail’s success stemmed from the strong governance structures that were put in place at the outset and that these then ensured that key deadlines were consistently hit.
“I have issues with what is happening on some other key projects,” he said, speaking at New Civil Engineer sister title Ground Engineering’s Infrastructure Summit this week.
“On big projects, if you miss one deadline, the concertina effect that has is hard to overstate,” he said. “So we worked very hard not to miss a single date on Crossrail.
“If you say you are going to award a contract on a certain date, you do it,” he said.
Morgan mentioned no project in particular, but High Speed 2 is fast gaining notoriety for the way client HS2 Ltd repeatedly misses deadlines for contract awards, shortlisting announcements and release of tender documents.
Morgan’s warning comes swiftly on the back of a new initiative from the Infrastructure Client Group (ICG) aimed at improving infrastructure delivery in five key areas, with governance and capable ownership two of the five.
ICG’s Project 13 programme is being run by the ICE and is set out in the report “From Transactions to Enterprises” which essentially outlines how project delivery needs to move from being output-focused to outcome-focused, largely through building longer-term relationships with suppliers who are hired based on the value they add not on the lowest price they can offer.
“Governance of procurement and delivery is often based on obtaining the lowest price through a competitive tender and then delivering the construction on time, within budget and to quality,” says the report. “The flaw in this approach is that it assumes that lowest price represents best value and that completion on time, within budget and to quality defines the desired outcome.”
The report cites the high speed rail link between the Channel Tunnel and London’s St Pancras Station as an example of a major project that was delivered within the original budget and schedule but has failed to achieve the revenues forecast from international passengers and property development.
Governance is one of five action areas that will be developed by working groups, whose programmes are currently being developed and will be announced next month. The focus will however be on developing systems of governance and procurement practices that are focused on maximising value to customers and stakeholders rather than on minimising initial capital costs.
Other working groups will target improvements in delivery by re-evaluating organisational structures and looking at the value of alliancing; examining supply chain integration and redefining the role of the traditional main contractor as project integrator; improving project ownership by developing what is termed the “capable owner”; and examining the role of digital transformation.