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Construction projects are chaotic, dynamic and complex,. Therefore, construction projects are associated with risk over all stages. Many problems can arise during the project lifecycle causing the project to be over cost or/and behind schedule.
Recently, governments want to build high-tech buildings. The astonishing architectural appearance and the high performance during the operation phase are the main requirements. These projects are usually large scale requiring securing large amounts of fund. Both design and construction required high level of skills, competency and expertise of the project team. Therefore, high risk can be involved in execution such projects causing extensive consequences if it is not considered early.
This report will be devoted to firstly introduce one of these governmental projects, namely Scottish parliament in Holoyrood. Secondly, to investigate and give a thorough analysis about the main problems held and played a main role in causing the project failure. Then, to vastly explain the project management attitude related to these problems. Finally, a conclusion will be reached to give tentative recommendations and lessons can be learnt from this case study.
After the success of referendum in 1997, the Secretary of State swiftly moves to find out a site for the Scotland's Parliament.
Between the first four possible sites Haymarket; St Andrew's House; Regent Road; Leith; and the Holyrood site; on 9 January 1998, Donald Dewar announced: ''I am delighted to be able to announce today that after a careful and thorough examination of options, Scotland's Parliament will occupy this prestigious setting in the historical heart of Edinburgh close to the Palace of Holyrood.'' [Fraser, 2003]
After around 300 years of absence the Scottish parliament, the Government's requirements for a new Scottish Parliament building were high in terms of quality, durability and flexibility. These requirements were stated in the White Paper on devolution "The building the Scottish Parliament occupies must be of such a quality, durability and civic importance as to reflect the Parliament's status and operational needs; it must be secure but also accessible to all including people with special needs. It will be an important symbol for Scotland. It must be flexible enough to accommodate changes over time in operational requirements. Quality and value for money are also key considerations" [White, 2005]
The first stage of the project was the feasibility study which indicated that the initial cost of the new building would be around £40 million. In this big iconic project, client was pushed by a strong desire to achieve the best design, international competitions are announced to acquire as possible talents as required, Spanish architecture was appointed. He became, eventually, a part of a joint venture with RMJM (Scotland) Ltd. This joint venture suffered from serious difficulties. Both companies were from different cultural backgrounds. In addition, there was a geographic barrier and it was difficult to solve problems from separate location.
In March 1998 a timeline for the Holyrood Project was set, with a start date of construction on site of July 1999 and a completion date of autumn 2001 [Fraser, 2003]. The design of this project was complex and the construction process took a long time to be executed.
In addition, this project involved the participation of multiple parties and complex combination of stakeholders. The following figure shows the main organisations involved in this project.
Figure 1 (Source: Black, 2004)
Scottish parliament at Holyrood comprises 11 units; it includes more than three times the original area compared with the competition. During the six years since it start, the project was presided over by five different clients [Hadden, 2009]. However, Scottish Parliament building is formally ranked as one of the worst construction projects in the world for late delivery and cost overruns [MacDonnell, 2003]. The project cost is more than 1000 percent increase on the original estimate of £40million and it was delivered 3.5 years late.
Given the design complexity and the aesthetics associated, the building was state of art, but as a result of the massive increases in costs and the significant delay, it was a big failure according to the project management point of view.
Reasons for Project Failure
Scotland's controversial parliament building at Holyrood is now considered one of the worst construction projects for late delivery and cost overruns. The following sections introduce the main reasons for these problems causing project failure.
Reasons for Late delivery
Although there was a clear emphasis that the time is a priority, the project did not achieve the 1998 target for completion by the end of 2001 and it was delivered 3.5 years late. Many critical factors plaid its role in this extensive delay.
A construction management was used as a procurement route to deliver this project as it is the most conventional procurement vehicle to accomplish the project as quickly as possible. Construction management has been employed as the most suitable procurement vehicle, but unfortunately, it was one of the key reasons which contributed in the late delivery of the project as the challenges and risks related were not completely appreciated by the project management team.
Furthermore, a great negotiation with the contractors about the design development took place simultaneously as the construction process was progressing. In addition, the joint venture was two parties, each in different country, working in two different methods. The consequence was a lot of abortive work and lack of decisions.
All of these, combined with the emphasis on the time as priority and in the same time on the quality, made the process of design development and information production much more difficult to be controlled and made the detailed designs providing always late.
Additionally, the huge number of design changes and the production of detailed design variations overall the construction stage could be considered one of the major causes of 40 months delay. The Corporate Body of the project estimates that there have been some 10,000 change orders issued over the course of the project, and the cost of these changes was very huge [Black, 2004].
Moreover, the design of some packages was provided by sub- contractors to mitigate the pressure on the design team. However, these design elements needed to be approved by the basic design team, the reason which caused additional delay for the project activities.
Lastly, the project sponsors and the project team required the project to be delivered as early as possible, so they put unachievable programme for a very complex and complicated project, thus, it was very challenging to deliver such complex -design project in two years and according to the programme required. For this reason, it was not surprised that the architect and sub- contractors, as well, found it difficult to accomplish a lot of essential elements of the work on time.
Reasons for Unexpected Final Cost
Fraser in his inquiry stated "... The £195 million target the Parliament set in 2000 actually totalled £209 million. Project costs have since more than doubled to £431 million". [Fraser, 2003]
This puts the Scottish Parliament building in the top level of projects which largely ran over budget, ahead of the British Library the Channel Tunnel, and the Humber Bridge- although all these project cost greatly more than expected. [MacDonnell, 2003]
When cost overrun occurs in a construction project, two explanations can be usually introduced. Either the initial estimation is totally wrong or unrealistic, or the project has failed to be managed in order to meet the budget allocated. Although the cause may be a combination of these two causes, the first explanation had plaid its role in Holrood projects.
The initial budget was set in the Scotland's Parliament project was not realistic. David, Langdon and Everest, the quantity surveyor and cost consultant for the project reported cost commentary on the design entries [White, 2005]. The winner's -a joint venture of EMBT (Enric Millers's company) and RMJM- estimated cost was around £62 M. despite this the budget remained of a £50M.
It is essential to mention that despite the publicized insistence on the £50M, which grabbed the attention to the cost as a priority objective; this was not the real situation. In fact, cost took a backseat comparing it to quality and time. The real insistence was on the quality.
Additionally, increased requirement for space, such as the necessity to include an additional entrance, representing about 47% of the total area of the building, seems to be extraordinary. The gross area of the project was increased from about 20,000 to approximately 31000m2 as a result of changing in the design specification and which was a main reason for escalation in project cost.
Significant cost has been incurred as a result of design changes and disruption, which caused insufficient design information being made available to trade Contractors. Numerous number of design variations occurred. According to the Scotland on Sunday, there was an average of three times design change per each hour of a working day [Koleoso, 2004]. The security issue that had risen to the top lately in the project, influenced by the 11 Sep events, was not well considered in the beginning.
In addition, using the construction management as procurement route caused high degree of uncertainty to be identified within many of the project contracts. The author can argue that if work had been entirely designed before the work started, a lot of unnecessary and unacceptable costs could have been avoided.
Moreover, as the consultants were appointed on a basis of percentage fees of the approved construction project cost, the higher project costs were, the more each consultant was paid. In addition, non- identified fee cap made the consultants have no incentive to control the project cost. Both these factors caused additional cost to the related project.
Finally, delay, disruption and prolongation made the project duration much longer, and as more time means more money, the cost increase should not be surprising.
Project management attitude
From the author point of view, the main problem for the project failure was that the complexity of the design had not been fully appreciated in the early stage of the project. For this reason, the author can argue that the project management did not play its required role in regard to design stage of the project, or in other words the management in this stage was not effective enough.
Moreover, the project management team regarding this complex project did not play its required role to help on producing and releasing design information according to the time agreed in construction manager's programme. The following diagram illustrates a minute of the project life after approving the stage D. The huge delay is evident and can be largely attributed to the long time required for the scheme and detailed design to be issued and then the information related to be produced.
Figure 2 (Source: Black, 2004)
The construction manager substantially revised his timetable and he predicted completion of the appointment of designers by July 1998, Stage D design by October 1998, and a site start on 1 April 1999 [Fraser, 2003] but none of these took place on time. Although, the project management team tried to control the situation by updating and reviewing the project programme many times. But in each time the construction manager put optimistic programme seeking to meet the client's desire to achieve the earliest possible completion date rather than reflecting the real project situation.
Furthermore, as the delay became obvious, the project management did not check each new revision of the programme and they depended on the commitment of design team to deliver the required information on time. All of that with continuous pressure from the client body to complete the project by the earliest possible date.
The auditor general stated that the average delay in 20 of the largest contracts was 37 weeks and there were about 1,800 change orders [Black, 2004]. Given this, it is evident that the project management role was absent in regard to address underlying reasons for the high number of design changes and consequently the extensive delay. With each programme revision, all stakeholders approved that the new plan were achievable.
Although project management team did well in some aspects of its consultants' work, the repeated slippage raises a question about the performance of the management team and their experience. The Auditor General for Scotland stated in his report that "The project owner is not a construction professional and neither is the current project director. The senior project manager is a construction professional but is less senior in the hierarchy and he is not a single authoritative point of command. The project director has acted as the senior project administrator co-ordinating the interests of the various parties. She did what she was qualified to do" [Maccallm, 2003].
Given the aforementioned, it is quite clear that the problem was not only the inefficiency of the project team; but it was also in the team itself.
In relation to project communication lines aspect, it is quite clear that the project management was not, as it should be, the central point for communications routes between the design team and client.
A lot of information on key decisions had been imparted to the design team without the involvement of the project manager and there was a general ignore by EMBT/RMJM Ltd for instructions issued by the Project Manager.
On the other hand, the project failure and success is basically subjected to the cost performance of the project. When the actual cost is more than the budgeted one, on many occasion we term that as a project management failure.
It is of utmost importance to keep control on the processes costs once the phase of budgeting and cost planning is completed.
In this project, it is rather evident that in spite of the ministers insisting on the fixed budget for the project, no approved budget limit had been addressed. If budget limit had been put and budget looked likely to be over run, then the project management could have taken an action to decrease the costs or to obtain further funding. In fact, the absence of the basis upon which the decisions of action to be taken was quite clear. As a result, the invoices of contractors were not checked against an agreed budget. They were checked against the total estimated costs for the package reported by the cost consultant [Black, 2004]. This was disastrous to the project as the forecasts became self-fulfilling as no effective action has been taken to include costs within an agreed budget.
It is worth mention that some of the escalation in costs is due to the extended construction period which means additional costs because of prolongation, delay, and disruption. This fact raises the question of the proposed role to be played by the project management team.
In fact, project management was not well placed to resist extra time-related costs from contractors, and the author can argue that the client or the project body was unsuccessful in choosing the project management team.
What could have been done to avoid this result?
Although there is no doubt the building satisfied the requirements for a high quality and it was a landmark in Edinburgh reflecting the aspirations of Scottish, the goal could have been achieved more efficiently if the project had been better managed.To get the job done better, many actions could have been taken, including;
A through presentation should have be done to introduce different procurement routes available, their advantages and disadvantages, risk associated and the potential success if each of which has been applied to the related project. The Treasury Guidance recommended a defined procedure for the appraisal of contract strategies and it highlighted that if any particular procurement method was unable to satisfy project objectives, it should be excluded from later considerations. For instance, If price certainty is priority, management contracting and construction management procurement routes would be inappropriate (OGC, 1992). The Project Manager is the main responsible to show the client how different procurement routes can satisfy the main Project's objectives.
Regarding this project, adopting the traditional procurement route was available and was able to give the client full control on the project and could provide a certainty and protection from the huge cost risk even if it does not provide a fast track for the construction process.
However, it is really not understood how the client publicized a fixed budget of £50 M, and in the same time adopt a procurement method known for its higher degree of cost uncertainty. The benefits in regard to shorten the project duration must have been compared with the risk of cost overrun involved.
Risk workshops should have been conducted earlier and continued overall project stages. An effective action plan to manage and monitor the risk should have been established. All potential risks associated with the project and their potential impact on costs and deadlines should have been identified. Then, based on the results from an effective risks analysis an action to manage these risks should have been taken. Han et al (2006) stated that if the risky factors in a construction project are underestimated, tremendous loss in the construction projects will be certain. Therefore, it is important and necessary for construction project team to improve their awareness of risks and underpin the risk management process (Han et al, 2006). Indeed, the "tight" time which was given to the Scottish Parliament prevented the risk management activity to take its place effectively and although all project stakeholders recognised that risks were very probable to occur, there was no allowance for all other risks instead of inflation.
The design stage should have taken more time in order to avoid the high number of design variations and the delay in supply of information during the construction process. The concept of buffers could have been very affective even with the construction management procurement strategy by delaying the start point of construction until a full detailed image of the project and its cost and program obtained. Buffers aim to generate an accurate construction strategy that protects against uncertainties and decrease the possible impact of construction changes. The usage of buffers in construction schedule is to complete activities without wasting time (Rogalska and Hejducki, 2007).
A great financial management plan should have been prepared, special department for cost control should have been established and professionals in budgeting should have been assigned for this complex and huge project. The prepared plan should contain reliable estimate of the cost rather just indicator of the cost. This plan should take account of risk and uncertainty to provide a sound basis for managing all stages in the project. During carrying out of a project, a cost control system becomes indispensable techniques to managers in the engineering project. These tools give project managers a signal of the progress and problems related to the project, especially, these problem causing the project to be late and over budget. The project cost control systems is critical as it provides a clear indication of the existence and the level of such problems (Hendrickson, 1998).
Real appreciation of the design complexity and the unavoidable costs was needed, if that had been done, a lot of difficulties could have been avoided. The continuous increasing in construction projects complexity makes a suitable planning and project processes control are of the main issues in the construction scheduling management" (Shu-Hui and Ping , 2006).
A critical change is one of the main reasons for consecutive delays in construction project programme. These changes usually require re-estimation of work statement, additional equipments, workers, materials, and overtime. For that reason, managing changes efficiently is vital to the overall success of any construction project (Hao et al, 2008). Therefore, as a reaction to the enormous number of changes in this project, the project management team should have been well qualified and ready to adopt a suitable and affective change management policy.
The best projects owner gives enough time to getting the right project team. It evaluates the quality of the individuals and their experience. The client and the project team working together can decrease waste, improve quality and deliver a project far more effectively (OGC, 2007). In regard to the Scottish Parliament project team, more professional members and experts should have been employed, especially, project sponsor and project body representatives. Barbara Doig failed to play her role as effective project sponsor.
Project briefing is critical for overall success of a project, so it is of utmost importance that the team can translate the client's requirements into a design specifying technical attributes, functional performance criteria and quality standards; as well as completion of the project on time and at the budgeted cost (Yahya , 2007). However, in regard to the proposal project the project brief should have been more realistic. The target of very complex building with very high quality desired more than £40 M and two years.
Conclusions, Lessons and Recommendations
The Scottish Parliament was a key challenge in its complexity, its scale, and its ever-changing requirements. The high quality and complex geometrical shape for this project, both in the overall building outlines and in individual elements give it a high potential of success for merely being an icon in their nature, but in the same time a high potential of failure regarding the cost and time escalation.
After all of aforementioned facts and arguments, the author bound to conclude the main learned lessons and to recommend that:
The Brief should expect the requirements of the project and it should be up to date, and reflect the any changes can be made.
High appreciation and significant importance should be given to the design stage in the project lifecycle.
Enough time has to be available for planning before the project starts. The buffers could help in this point.
The procurement strategy must be carefully chosen, with appreciation and full understanding of the risks laid and the advantages and disadvantages of each one in order to take the optimum decision.
The construction management vehicle is unsuitable for most public sector construction projects because of the huge risks and uncertainty of cost and duration, and on the other hand because the public sector may fail to protect itself from the over cost and delay.
The leadership and full control of project is crucial; therefore, a single point of leadership and control should be available.
Project management is a science, an art, and in the same time it is an experience.