Infrastructure major projects must learn from the oil & gas sector

Public infrastructure projects are in the news again. They are high profile because they invariably overrun, overspend, and descend into a mutual blame game.

The UK Government, for example, has good cause to be worried. Amyas Morse, head of the National Audit Office, said in January 2016:

I acknowledge that a number of positive steps have been taken but I am concerned that a third of projects monitored by the Authority are red or amber-red and the overall picture of project performance progress is opaque. More effort is needed to improve the success rate of project delivery.

This is the same old story, and it doesn’t seem to be getting better.

In the EU it’s much the same. The EU Commission is on record as stating that there is an “inherent sluggishness” about preparing, planning, authorizing and evaluating large infrastructure projects, and that this impedes their implementation.

As well as this, satisfying multiple stakeholders means that controlling the total project cycle is a major challenge. Every stage is a painstaking juggling act, from identifying the need for a project, through selection, planning, public enquiries, design and construction.

The causes of this inefficiency, and resulting escalation of costs, are well known. Many studies have shown the problems are always the same:  the ‘expansion’ of the size of the project during planning, the length of the implementation phase, the shifting emphasis in public-private partnerships, and presumptions made about the accounting.

Of course there are calls for corrective measures, usually some waffle about the ‘transparency’ buzz-word. But is transparency alone enough?

Let me inject a more tangible piece of advice for all involved in a large infrastructure project: take practical action, and adopt a contractual risk management solution.

8over8’s ProCon platform has a track record of success in the oil and gas industries. It enhances project outcomes through the use of Early Warning Indicators (EWIs) that alert project owners about likely challenges and problems that need management attention before they fester into claims, schedule delays and cost overruns.

This means that ProCon can deliver cost savings for complex infrastructure projects, just as it already does for a very challenging oil and gas sector.

It even provides that elusive transparency.

The National Audit Office will be impressed!

What’s next?

Discover how you can cut project overrun and boost profit – download ‘Capex project overruns: Tackling the lasting negative effects of risk’

About the author
Ian Taylor | Chairman, Living PlanIT
Ian Taylor was a Member of the UK Parliament for 23 years and chaired the all Party Parliamentary and Scientific Committee. Ian is currently responsible for the governance of the PlanIT Valley project.
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