Procuring  Complex  Tunnelling  Projects  – Considerations  for  Owners  and  Contractors

Steve  TennantDirector  Plus  3  Consultants

www.plus3.com.my

What  Am  I  going  to  Cover?

1. Updates  in  Project  Management  Theory2. Practicalities3. Business  Cases  and  Honesty  /  Optimism4. Unmanageability  and  Uncertainty

Project  ManagementTechnical

Traditional  Project  ManagementSchedule Cost

Project  ManagementTechnical

Complex  Project  ManagementSchedule Cost

Context Financing

Rethinking  Project  Management

1. Accounting  for  external  factors  instead  of  treating  them  as  risks

2. Changing  management  from  a  linear  process  to  an  interactive  process

3. Emphasizing  project  completion  in  terms  of  creating  value,  instead  of  focusing  on  end  product

4. Thinking  of  the  project  on  a  broad  spectrum  with  multiple  purposes  and  no  preset definition  in  lieu  of  a  defined  start  and  end  point  with  guidelines

5. Focusing  on  the  training  of  managers  to  rely  on  experience  and  intuition  instead  of  merely  following  detailed  proceduresRef.    Rethinking  Project  Management   (Winter  and  Smith  2006).

Rethinking  Project  Management  – Some  

References• http://goo.gl/0VSFhg

International   Centre   for  Complex  Project  Management• http://goo.gl/eS90qE

Rethinking  Project  Management   -­‐ Final  Report• http://goo.gl/jxY57E

Transportation   Research  Board  of  the  National  Academies• http://goo.gl/hhX3Ws

New  Paradigms  for  Complex  Projects• http://goo.gl/0eGcyo

Management   and  control  of  Cost  and  Risk  for  Tunneling and  Infrastructure  Projects

• http://goo.gl/wsAoOU• Manageability  of  Complex  Construction  Engineering   Projects:  Dealing  with  

Uncertainty

Enough  of  Theories,  what  about  Practicalities?

The  Project  Owner  whether  Government  or  Private  Sector,  needs:• Credibility– Enabling  Legislation  /  Concession– Financial– Technical– Project  Management  capability– Acceptable  Commercial  reputation

Enough  of  Theories,  what  about  Practicalities?

The  Project  whether  Government  or  Private  Sector,  needs:• A  Business  Case

– Business   Drivers  or  Need– Scope  of  Project– Financial  Metrics– Assumptions– Cash  Flow  Statement   (NPV)– Costs– Benefits   (Social  /  Financial)– Risk– Strategic  Options

– Opportunity  Costs– Review  &  Approval  Points

– Adaptable– Business  Orientated– Comprehensive– Understandable– Measurable– Transparent– Accountabilities

Honesty  in  Preparing  Business  Cases?

• The  possibility  of  Bias?– Political  Ambitions  (Civil  Service  /  Politicians)• International  Prestige• Domestic  Prestige• Personal  Benefit

– Commercial  Ambitions  (Private  Sector  /  Consultants)• International  Prestige• Domestic  Prestige• Personal  Benefit

So  we  have  a  Project  Owner  and  a  Business  Case

1. Getting  this  far  will  have  been  a  Project  in  its  own  right!2. Unmanageability  and  uncertainty!

1. Why  increasing  knowledge  does  not  exclude  unmanageability2. Natural  optimism  results   in  failure   to  include  sufficient  buffers  

for  uncertainty3. The  Uncertainty  Gap

So  we  have  a  Project  Owner  and  a  Business  Case

Source:  South  China  Morning  Post

Project  Complexity

Project  ComplexityUnpredictability

So  we  have  a  Project  Owner  and  a  Business  Case

1. Getting  this  far  will  have  been  a  Project  in  its  own  right!2. Unmanageability  and  uncertainty!

1. Why  increasing  knowledge  does  not  exclude  unmanageability2. Natural  optimism  results   in  failure   to  include  sufficient  buffers  

for  uncertainty3. The  Uncertainty  Gap