INFRASTRUCTURE ECONOMY ACCELERATING MAJOR PROJECTS. Report of seminar 181 held on 8th October 2013 Church House, London SUMMARY

Transcription

1 INFRASTRUCTURE ECONOMY ACCELERATING MAJOR PROJECTS Report of seminar 181 held on 8th October 2013 Church House, London SUMMARY

2 SEMINAR PROGRAMME 12:00 Registration 12:30 Chairman's introduction Alan Couzens, Head of Infrastructure Performance & Reporting 12:45 Investing in risk Paul Spence, Director of Strategy and Corporate Affairs 13:10 Discussion 13:30 Accelerating major projects Martin Arter, Director of Programme & Technical Services 13:55 Discussion 14:15 Coffee 14:45 The accelerated delivery pilot delivering a legacy through acceleration 15:10 Delivery through an integrated alliance 15:35 First panel discussion 15:55 Second panel discussion Andy Watson, Divisional Director, Major Projects North Dale Evans, Director 16:15 Chairman's closing remarks Alan Couzens, Head of Infrastructure Performance & Reporting 16:30 Close Infrastructure UK EDF Energy Network Rail Ltd Highways Alliance Infrastructure UK 2

3 KEY CONCLUSIONS PURPOSE In response to the Government s challenge, to learn some lessons and messages from recent examples of successful accelerated deliveries, and to hear how some clients are investing to achieve earliest completion dates. KEY MESSAGES Two key issues for success are the intertwining of risk and rigorous project management at all stages. Resist changes in design and avoid making mistakes in construction. Avoid quick fixes, keep optimism firmly in check, go slow to go quick, adopt pragmatic risk reduction, and employ strong project management at all stages. Accelerate design, not construction. Getting the beginning right is vital. Peer reviews are valuable. KEY LESSONS Do not allow projects to become over-scientific on details and miss the big picture oversight on risks. Lower levels build their own risks around their accountability as people focus on worst cases, thus leading to a negative culture. You cannot accelerate beyond the natural pace of projects. Politicians, civil servants, designers and contractors need to work together. Collaborative planning and appropriate levels of reports have saved months on projects. One size does not fit all challenge client habits. Pre-assembled supply chains, ready to step in with a shared desire to succeed, have proved their worth months of known forward visibility of work has encouraged innovation from the supply chain. These are the views of Malcolm Noyce, Executive Director, MPA 3

4 INTRODUCTION The 2013 Budget placed emphasis on the important role that economic infrastructure can play in providing an early boost to the growth of the UK economy. This message was reinforced in the investment announced in the Government s June 2013 Spending Review and the publication Investing In Britain s Future. This half day seminar looked at how to overcome some of the challenges that this investment brings with it for instance, finding ways in which major projects already in the pipeline can be delivered more quickly, whilst recognising that they traditionally need sophisticated and longish lead times. The event was chaired by Alan Couzens, Head of Infrastructure Performance and Reporting at Infrastructure UK, which is a division of HM Treasury. He noted the importance of government and industry working together to accelerate and improve project delivery. INVESTING IN RISK The first presentation, given by the Director of Strategy and Corporate Affairs at EDF Energy, considered how EDF s plans for nuclear new build (NNB) in the UK highlighted the importance of rigorous project management, and its relationship with in-depth risk analysis. Drawing on EDF Energy s experience in building its NNB project team, the session looked at the pitfalls of approaching risk management in an unhelpful level of detail. It was explained how an overly scientific approach can lead to a large, unmanageable list of risks, with the added danger of losing sight of the overall picture. These factors are not helpful in building a project team, since it is easy to imagine the project as being out of control and doomed to failure. Instead of concentrating on all the potential risks, the key is to focus on elements within the project that can be controlled. For example, the three main risks in EDF s NNB project to build two reactors at Hinkley Point in Somerset are: changing the design, lack of a clear schedule and making mistakes during building. By focusing on these risks, which can all be influenced before the project starts, it is possible to maximise the chances of success. The presentation concluded with a list of ten commandments for successful project delivery produced for the NNB project team, and displayed on the office walls of each new build site. 4

5 ACCELERATING MAJOR PROJECTS The second presentation, from Network Rail s Director of Programme and Technical Services, started by highlighting some of the principal reasons why accelerated projects can fail. Techniques that can be used for accelerating projects include starting early, doing the work faster, finishing early, innovating, and creating a new co-located team. However, techniques such as these can also cause failure and delay for example, starting early on construction before the design is mature is likely to be counterproductive, as is working quickly without appropriate attention to effective planning. The presentation then went on to suggest ways in which projects can be accelerated successfully. Five core recommendations were made, as outlined in the key messages above, and various points were discussed in detail. For example, go slow to go quick involves strong, resilient leadership, getting the planning right, and aligning the objectives of the key stakeholders. As part of risk reduction, keep customer involvement high and agree what is to be accelerated it is sometimes possible to concentrate on certain parts of a project, if the customer is very clear about what they want. The session concluded with a summary of Network Rail s Reading station redevelopment project. Network Rail set themselves three challenges at the outset of the project: to collaborate, take 18 months off the programme, and generate 50 million of savings. The key factors which are contributing towards meeting these challenges successfully include, amongst others, an effective leadership framework, an achievable plan, extensive collaboration with an extended range of stakeholders, and performance management all of which are factors that chime with the five core recommendations for successful acceleration. To date, the collaboration standard BS11000 has been achieved for a number of projects and programmes, 12 months have been taken off the delivery timeline, and some significant financial savings have been made. THE ACCELERATED DELIVERY PILOT: DELIVERING A LEGACY THROUGH ACCELERATION At the CBI Conference in 2012 the Prime Minister challenged the construction industry to speed up the time it takes to get roads built, to unlock critical economic growth. In response to this challenge the Highways Agency is accelerating the delivery of four key strategic projects in a pilot scheme involving over 600 million. The presentation, from a Divisional Director at the Highways Agency, outlined the experience of establishing and delivering the pilot scheme to date. It started by looking at the working methods inherent in the highways sector, and changes that the Highways Agency is trying to introduce for example, creating a new and faster natural pace for projects, and adopting a smarter approach to production thinking and standardisation. continued 5

6 delivering continued To implement the pilot, the Highways Agency established collaborative teams, including an accelerated delivery team involving the client, contractor, consultant and programme management organisations, and a Cross-Departmental Working Group. Represented on the group are the Highways Agency and various government departments, including the Department of the Environment, Infrastructure UK and the Cabinet Office. Fourteen acceleration strategies were identified for example, taking a risk-based approach to assessment and appraisal; streamlining the planning and consent process; simplifying the governance; improving workflow during design and construction. In essence, the aim is to create the right environment, and then speed up both the development appraisal phase of project delivery and the approval process all of which should enable faster construction and faster project delivery. There was clear agreement at the outset that safety, maintainability, operability and quality standards could not be compromised for the sake of delivering projects more quickly. The session continued with an overview of some of the achievements to date for instance through working across government departments there has been some success with streamlining the Development Consent Order process. It concluded with some personal observations on the challenges of delivering what is in effect a bottom-up change programme in the way the whole of the highways sector works. DELIVERY THROUGH INTEGRATED TEAMS Alliance is a collaborative organisation set up in 2005 to deliver the major part of Anglian Water s capital programme. Since then, a 200 million per year programme has been delivered successfully, and over the next two years the evolution of the Alliance will be established for the period The final presentation of the afternoon was given by Alliance director responsible for the programme s day-to-day management. It explored how the development of an integrated delivery model has enabled the organisation to deal with the challenges of meeting the programme s efficiency, carbon and output targets. The Alliance model is based on collaboration and incentivised arrangements. At its centre is the formation of highly integrated supply chain teams that are brought together to deliver visible programmes of work. Framework partners are integrated into teams from the outset of these programmes, working within a single streamlined delivery process. It was noted that early involvement and early development of teams is essential, to maximise partner and supplier input. The partners are all individually contracted to Anglian Water, but they work under a collective horizontal agreement, based on the organisation best suited for each task. Selection criteria include cost, capability and culture; it was noted that the cultural aspect is a significant factor, and any partner organisation must fit with the collective aims. continued 6

7 teams continued Anglian Water effectively sets the programme, and the Alliance determines which member of the team is best placed to deliver it. Over time, teams become more and more integrated, based on not just the best team member for the task, but the best person for the task. Some of the benefits of the Alliance s integrated approach were illustrated with examples of projects that have been delivered using pre-assembled supply chains. The aim is to get to the point where all Alliance programmes can be delivered in an integrated way. Further work is currently being carried out on the structure and function of the teams, and on how to create the optimum environment for them to perform well. CONCLUSION Picking up on various points that had been made during the afternoon s proceedings, the Chairman said that the investment, visibility and certainty of the forward pipeline are essential in creating an environment where clients can work more effectively with the supply chain to accelerate and improve delivery. However, accelerated delivery must be tailored to fit the risk and complexity of the project and the delivery environment. It also needs to reflect the existing capability of the organisation, how far the organisation is prepared to go in terms of cultural change, and the relationship it wants with its supply chain. 7

8 PARTICIPATING Alliance AECOM Balfour Beatty plc Bechtel Ltd Cabinet Office Carillion plc Chiltern Railways CJ Associates Copper Consultancy Costain Ltd Defence Infrastructure Organisation EC Harris LLP EDF Energy Freshfields Bruckhaus Deringer Highways Agency Infrastructure UK Jacobs Group KPMG LLP Major Projects Association Manchester Business School Mott MacDonald National Grid Network Rail Ltd PA Consulting Group Parsons Brinckerhoff Rhead Group Risk Solutions School of Construction and Project Management, UCL The Nichols Group Transport for London Turner & Townsend University of Cambridge University of Leeds Viridor 8