Project Delivery Performance Problems
We provided comment in March on measuring project delivery against three criteria: time, cost and performance (i.e. adherence to specification / user requirements).
The Guardian identifies the current problems that Network Rail are experiencing (link at the end) and classifies these performance issues in the time and cost category. It should be noted, in a positive way, that there is no mention of shortfalls in the performance of the delivered outputs of the projects.
Furthermore, as safety is a fundamental element to performance the performance of Network Rail in providing the safest rail network in Europe should be recognised.
Perhaps most worryingly are the major projects, such as the electrification of the Great Western line, which are witnessing massive increases in costs.
The Great Western has risen in cost by 50% and it is believed that other large projects are facing the likelihood of large increases.
The development of High Speed 2 (HS2) has widely differing cost estimates; the Department of Transport identifies a £43bn cost however the Institute of Economic Affairs suggests a cost of £80bn. This trait for underestimating costs is clear to see and it would be imprudent to ignore this trend when financing such infrastructure.
Putting to one side the issue of cost estimation perhaps the most interesting development will be whether Network Rail adopt a portfolio approach, addressing both their change initiatives and the existing network operations to ensure that their strategic objectives are met.
Undertaking a full and comprehensive Balance of Investment (BoI) will permit an informed approach to the management of the portfolio.
Read the full Guardian article.
The Guardian identifies the current problems that Network Rail are experiencing (link at the end) and classifies these performance issues in the time and cost category. It should be noted, in a positive way, that there is no mention of shortfalls in the performance of the delivered outputs of the projects.
Furthermore, as safety is a fundamental element to performance the performance of Network Rail in providing the safest rail network in Europe should be recognised.
Time - Milestones (30 missed out of a possible 84)
Cost - Increase debt of 16% in a single year (an increase of £5bn to £37.8bn)
Perhaps most worryingly are the major projects, such as the electrification of the Great Western line, which are witnessing massive increases in costs.
The Great Western has risen in cost by 50% and it is believed that other large projects are facing the likelihood of large increases.
The development of High Speed 2 (HS2) has widely differing cost estimates; the Department of Transport identifies a £43bn cost however the Institute of Economic Affairs suggests a cost of £80bn. This trait for underestimating costs is clear to see and it would be imprudent to ignore this trend when financing such infrastructure.
Putting to one side the issue of cost estimation perhaps the most interesting development will be whether Network Rail adopt a portfolio approach, addressing both their change initiatives and the existing network operations to ensure that their strategic objectives are met.
Undertaking a full and comprehensive Balance of Investment (BoI) will permit an informed approach to the management of the portfolio.
Read the full Guardian article.
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