Heavy spending in this year's state budget has put NSW in the middle of one of the biggest infrastructure booms in Australia's history. Government agencies will be responsible for delivering more than $30 billion of critical infrastructure projects over the next five years, with big ticket investments in health, education, transport and water infrastructure on the agenda.
Queensland has also splashed out through its State Infrastructure Fund, breathing life into signature projects like Cross River Rail and a number of projects in central, north and far north Queensland.
Graham Cox, former owner and Executive Director of international project management firm TBH, recently joined McCullough Robertson to head up its project advisory team. Graham's deep sector expertise will complement the firm's legal practice to provide government agencies, financiers, owners and contractors with an end-to-end service to help plan and deliver successful projects.
Having managed more than $3 billion of government capital works and social infrastructure projects, Graham knows what works and what doesn't. His core message to those responsible for delivering critical government infrastructure projects is that public expectations have changed. "These days government is no longer judged by what it delivers with public funds but increasingly, how it delivers and potential lengthy delays and costly disputes," he says.
Procurement of advisors, consultants and industry experts should be well planned and delivery authorities should ensure they canvas and engage with more than just the cheapest or most commonly used consultants. Significant time delays on projects can be overcome by engaging with experts to help plan the activities and timeframes required and build a detailed master schedule.
Graham follows this advice with what he believes will be the critical success factors for planning and delivering public sector projects in the coming years.
Build a winning team
In any building and construction boom, capability and capacity are
critical. The tendering process sets the scene for the project so
make sure you are agile with procurement processes and have the
autonomy to reach out to as wider market as possible during EOI and
RFT phases. It is crucial that the tender and selection process
results in a team which has the financial capacity and technical
capability to deliver a value for money and innovative project.
A winning team is also an integrated team. The more effectively a team is integrated, particularly at the front end of a project, the greater the opportunities to gain maximum benefit from project team collaboration and cooperation and the better it can perform.
Get the right advice, early
While Graham is cognisant of government procurement processes and
budget pressures, he insists that agencies and project directors
engage industry experts as soon as possible. Getting expert advice
may seem expensive, but the cost of getting it wrong on a $100
million project, let alone a $500 million project, is what keeps
Ministers and DGs awake at night.
"Government agencies go to great lengths to establish expert panels of appropriately skilled advisors and consultants. These panels could be used more frequently and to greater effect to engage with industry experts who can provide rapid and precise expertise where required. This 'best of breed' approach will assist in setting the project up to transition into the delivery phase and beyond," says Graham.
Incentivise and reward performance
As Donald Rumsfeld once said... "Your performance depends on
your people. Select the best, train them and back them. If errors
occur, give sharper guidance. If errors persist or if the fit feels
wrong, help them move on. The country cannot afford amateur hour in
the White House".
The tendering process offers the opportunity to be flexible and create incentives and the opportunity to reward and encourage innovative and fast tracked delivery. It is important that project owners engage consultants, advisors and contractors using a performance management approach.
Delivery authorities should embrace the use of incentivised contracts where appropriate. Advice should be taken from industry experts who can draft suitable KPIs, milestone payments, incentive structuring and equitable risk allocation for each contract, based on experience and past projects. While it may be obvious, it's important to state that what might work well for one project might not work at all for another project.
Plan beyond the boom
It must be acknowledged that government employees are put under
immense pressure to deliver at times of peak demand and heightened
political sensitivity. Government agencies and delivery authorities
must appreciate that building booms do not last and that detailed
resource planning, not just for the project itself but for when
projects reach completion and beyond, will ensure agencies are not
left with large teams and larger overheads to wind up.
By using the private sector where appropriate, government agencies and delivery authorities can leverage efficient and innovative solutions for projects and avoid the legacy of ongoing overheads.
Delivering urban initiatives for the benefit of the community is complex. With a swag of botched infrastructure projects fresh in the minds of tax payers, community expectations have never been so high. Quality assets and cost efficiency are no longer the sole criteria on which project outcomes are measured. A robust mix of transparency, process thoroughness and accountability are now just as important to the communities we serve.