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Sunday April 21, 2024

Delayed projects

By Mian Salimuddin
June 17, 2020

Infrastructure projects the world over are notorious for their cost and schedule overruns, despite heavy padding of these items at the planning stage.

The construction industry is itself seriously embarrassed and has been undertaking extensive research to identify the root causes of this problem, and suggest remedial measures. Pakistan’s last two mega projects, the Islamabad Airport and the Neelum-Jhelum (NJ) project, are typical examples of this malice of cost and schedule overruns.

A Construction Industry Institute (CII), spread in fifteen US universities and with 141 leading engineering-contractor firms as its members, has undertaken comprehensive research to bring about measurable improvements in capital projects in terms of cost, schedule, quality and safety.

Some of its earlier findings were that only 25 percent of large construction projects finished on time and within budget. Further, about 65 percent of 300 global mega projects with budgets of one billion dollars or more, failed to meet the objectives established at the final investment stage. The Neelum-Jhelum Project, producing electricity at Rs15 per unit, is neither meeting the objective of cheap hydropower nor cost and time. The Islamabad Airport failed in terms of cost, schedule and ability to use dual runways for simultaneous landings and takeoffs.

But the most revealing and startling finding is that poor project design and shoddy execution are a consequence of failure to strictly comply with a set of activities very early in the project cycle. These set of activities are collectively termed by various names: pre-project planning, front-end planning, front-end loading, conceptual engineering etc.

These activities are to be carried out prior to the point of project sanction to proceed, allocation of full budget and contract notification with a major contractor. It is the period prior to commencing the detailed engineering, procurement, construction and startup or commissioning phases of the project.

Pre-project activities are divided into three sections and have a total of 70 elements. To ensure measurability, each of these elements has a score depending on its state of completeness. Cumulatively, the score of all the 70 elements is called the Project Definition Readiness Index (PDRI).

The goal of the PDRI is to determine how well the project scope of work has been defined and how well equipped and prepared the project is to commence with detailed design and construction.

According to the CII, there is a statistically significant correlation between the completeness of the PDRI and design and constructability. In other words, the quality of the PDRI determines the quality of design and project outcome. Any shortcuts or shortfalls in the pre-project planning will, therefore, be reflected in inadequate design and execution, leading to cost and schedule overruns.

If we position project management as an execution-only discipline, we will be cut-off from the really important parts of the project – those where value can be created, the pre-project planning.

The Diamer-Basha Dam with a cost outlay of Rs442 billion and eight-year completion time is of strategic importance in which delay might not be an option. But if this project is to follow through the well-defined government processes, which Neelum-Jhelum and other public-sector projects have to adhere to, then the results are a foregone conclusion.

On the contrary, it is not only possible to complete a project in less than eight years but with less than Rs400 billion also.

Unbelievable, but doable. For this to happen, we must develop and consistently apply a well-defined pre-project planning process. Religiously and thoroughly complete the 70 elements of the PDRI, before moving to design. Any shortfall at this stage will negatively affect the project objectives, cost, schedule, safety & quality, and meet the fate of previous mega projects in the country.

The writer is a freelance contributor. Email: miansalimuddin@gmail.com