Challenges in managing transport projects

There is increasing pressure by governments and the community for well planned and delivered transport projects that meet the agreed time, cost and quality requirements.

Infrastructure Australia in their 2013 National Infrastructure Plan [1]
outlined a number of major challenges facing transport, and in particular the need to improve project management.

A survey by Caravel [2] found that on average 48% of projects filed to meet the baseline time, cost and quality objectives. A major reason why projects failed to meet their time, cost and quality requirements is poor project management.

Pottinger [3] showed that the cost of recent Australian road and rail projects were towards the upper end of similar projects in developed countries around the world.

The delivery of major transport projects is very challenging – there are long planning horizons, complex interfaces, multiple stakeholders and the potential for major scope changes. If there is poor project management then overruns and delays or poor quality can occur, resulting in higher costs.

The Victorian Treasury and Finance department established a high value – high risk assurance framework, covering five phases of projects, linked to decision gateways. Evans and Peck [4] reviewed a number of projects against this framework and made the following observations.

1. Conceptualise: establish clear need, define likely benefits, explore strategic interventions. Typical challenges: failure to involve stakeholders and users in defining scope; insufficient options considered; and lack of appreciation of complexity and ability to deliver project.

2. Prove: explore project options, estimate costs, validate value for money and viability. Typical challenges: insufficient time and effort spent on options and business case; design process overcomplicated and costly; and optimistic delivery timeframes.

3. Procure: specify requirements, engage market, award contract. Typical challenges: proceeding to market before business case completed; lack of innovation to identify best contracting method; and probity issues in planning and procurement process.

4. Implement: deliver solution. Typical challenges: lack of transparency on costs; requirements task-driven rather than outcome-driven; and lack of change management and benefits realisation planning.

5. Realise: measure success of investment. Typical challenges: difficult to use, dysfunctional and overly complex outcomes, not operating as intended; and value for money not demonstrated.

There is a shortage of adequate project management skills and competencies to ensure best practices in project delivery.


Notes:
[1] Infrastructure Australia, 2013. National Infrastructure Plan
[2] Caravel, 2013. A review of project governance effectiveness in Australia, a report to Infrastructure Australia.
[3] Pottinger, 2013. Building Australia – new models for financing infrastructure
[4] Evans and Peck, 2012. Advice to Inquiry into Effective Decision-Making for the Successful Delivery of Significant Infrastructure Projects

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