What is different about delivering projects in a water crisis?

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Agenda

ƒ Water Management in South East Queensland ƒ The crisis develops! ƒ The solutions and the projects ƒ The lessons for Project Managers so far: ƒ Project Integration, ƒ Scope, ƒ Time, ƒ Cost, ƒ Procurement, ƒ Risk, ƒ Quality, ƒ People Management, 2 ƒ Communications “Whiskey is for drinking, water is for fighting over.”

Mark Twain

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Water Management in SE Queensland

ƒ Greater Brisbane area relies on two catchments ƒ Brisbane also supplies water to Redcliffe, Pine Rivers, Caboolture, Ipswich, Logan and Gold Coast ƒ Most neighboring local authorities have their own sources, either relatively small dams or aquifers ƒ Most have treatment facilities ƒ No significant regional approach for linking water transport networks ƒ Pipe networks are inflexible with limited sharing of facilities 4 Some history

In 2003 ƒ Gold Coast experienced severe drought conditions 2001-2003 and water supply Dams dropped to 28% capacity. ƒ SEQ Water, Gold Coast and other Councils commenced promoting the interconnection of the potable water systems In 2004 ƒ Some Councils and SEQ Water joined forces to tackle this problem. ƒ The solution was to transport additional water from the main water storage for Brisbane. In early 2005 ƒ DNR&M claims capacity in Wivenhoe system is available for allocation In July 2005 ƒ Available water from Wivenhoe gave only two summers of supply ƒ A now full Hinze Dam gave Gold Coast only two summers of water supply. ƒ Gold Coast brings forward the Desalination Plant envisaged in their Drought Security Plan and Gold Coast WaterFutures Plan.

5Around April 2006 ƒ State Government recognised its role in dealing with the problem

Solutions = Projects [Demand & Supply] Supply Projects – Major Infrastructure Interconnectors • Southern Regional Water Pipeline • Eastern pipeline inter-connector • Northern pipeline inter-connector Manufactured water • Western Corridor recycled water scheme • Desalination facility • Brisbane & Caboolture groundwater River interceptions • Cedar Grove Weir • Mount Crosby Weir raising • Raised Hinze Dam wall • Traveston Crossing Dam 6 • Wyaralong Dam www.AQUAprojects.com.au

The South East Queensland Water Crisis

ƒ What is the crisis? Where is the crisis? ƒ Problem identification ƒ Stakeholder impacts ƒ Solution impacts ƒ Examples. ƒ Consumer water restrictions ƒ Political reputations ƒ Loss of income to the water businesses ƒ Industry shutdowns ƒ Resource shortages ƒ People, Finance, Equipment, etc.

8 www.AQUAprojects.com.au Industry response

Not "Lack of planning on your part does not constitute a crisis on my part”

But "Lack of planning on your part does constitute an opportunity on my part”

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Necessity is the mother of invention.

Plato

10 www.AQUAprojects.com.au Desalination Project Scope

ƒ 125Ml per day annual average (133Ml peak daily production) ƒ Twin 3.2 metre outside diameter intake/outfall (2.1km & 2.4km length) ƒ 35km of 1086mm diameter distribution mains ƒ State have legislated completion by Nov 2008 ƒ State decision to upsize the facility caused a 6 month delay in project timing compared with original 55Ml per day timelines

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Project Milestones

ƒ Commenced detailed planning Early 2005 ƒ Decision to go the Market 7 July 2005 ƒ Requests for Proposals 3 September 2005 ƒ Appointment of Alliance Partner 28 November 2005 ƒ Selection of Desalination over IPR 28 November 2005 ƒ Selection of Site 13 February 2006 ƒ Decision to Increase Size to 125Ml 20 April 2006 ƒ Decision for $100m of Early Works 31 July 2006 ƒ Agreement of TOC 30 October 2006 ƒ First water November 2008 ƒ Full production January 2009

12 Reflections on the ‘crisis’ journey

1. Recognise that a problem or crisis exists 2. Accept ownership of the problem or crisis 3. Identify the real cause and effect elements 4. Plan to deal with the crisis 5. Implement the plan 6. Communicate the facts

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Lessons Learnt – so far

ƒ Asked 6 current ‘client side’ program and project managers working on SEQ Water projects for their key learnings to date. ƒ Despite their heavy workloads most responded. They really want to get their message out now. ƒ Summarised their points into the PMBOK framework

14 Lessons Learnt - Project Integration

ƒ Find out where you and your program/project fit in the crisis? ƒ What other programs/projects impinge on my success? ƒ Who and how are the programs/projects being integrated? ƒ Look for insight into the real priorities by identifying the details of the crisis: ƒ External to project ƒ Client e.g. who is the client? Will that change? ƒ Regulators e.g. competing requirements ƒ Customers e.g. announced service levels cannot be provided ƒ Community expectations e.g. raised too high ƒ Competitors e.g. spreading rumours and ‘white anting’ ƒ Internal to the project ƒ Time e.g. resource availability ƒ Cost e.g. announced budgets ƒ Performance e.g. announced milestones ƒ Resources e.g. water pipe, skilled water retaining structures trades people 15 www.AQUAprojects.com.au

SRWP Pipelines

16 Lessons Learnt - Project Scope

ƒ Many of the projects had to start before the usual level of information was available. ƒ Scope clarification [both technical and infrastructure supply chain] must be pursued with rigour and signed off. ƒ Share the scope clarifications process with as wide a group of stakeholders as possible. It flushes ‘nay sayers’ out early and should provide more people to give you early warning of changes. ƒ Because the solutions will change be open to scope changes. ƒ Keep testing the performance criteria and measures of success because they will surely change. ƒ When client or asset owner changes the scope will almost certainly change.

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Scoping The Project

The Infrastructure Supply Chain:

n n t & o io t n i r e t t p & e t s e t c n e e t r c s v a p y je c n u i r e d it o io m g n u r o e c n il it n p i e c t m d p n Pr n o o s o s n I A ib fi C l e m r n m O s e u P o a a e v D c o H e D e o C C F D D &

ƒ The project package may comprise one or many of the elements

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Lessons Learnt - Time

ƒ People are prepared to make decisions on the available information, rather than undertake further studies. There is a ‘bias for action’. ƒ Provide a robust report as the basis for any decisions – The auditor will not care that it was a crisis at the time. ƒ Because the water crisis affects nearly everyone, any delays or perceived late performance are a very public ‘black mark’. ƒ Control the quality of costs and time information and pro-actively manage its release ƒ Unrealistic timetables have been set around some projects. This can drive sub-optimal procurement strategies, so ‘push back’ with balanced facts. ƒ “The primary objectives for project delivery are time, cost, and quality/performance. Pick any two” 20 www.aquaprojects.com.au Balance tanks

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Lessons Learnt - Cost

ƒ It will cost more – Significant responses to a crisis create the demand which can easily outstrip supply. ƒ Higher costs for materials, resources and services as the crisis becomes widespread as demand increases ƒ Push back ‘must we do this task or project now? Can it be done another time? ƒ Is an alternative solution that does not use these costly inputs? ƒ Cost ‘blow-outs’ will be very public whether real or not. ƒ Control costs and time information and pro-actively manage their release ƒ Develop an agreed Value For Money criteria and assessment process early, otherwise as clients become desperate they will throw money at you that you cannot use effectively.

22 www.aquaprojects.com.au Western Corridor Recycling pipelines

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Lessons Learnt - Quality

ƒ Squeezing time without sacrificing quality. ƒ Make sure the Quality system is integrated, is set up early, and is fit for purpose. ƒ Time becomes No.1, everything else such as environmental, safety, community engagement is a lower priority. ƒ If they are not managed well they will affect time anyway. ƒ Resources become stretched so poorer quality project outcomes are inevitable. ƒ Proactively manage and resource the Quality system, it is your only defence. ƒ If a particular process cannot be kept in control, redesign or change the process

24 www.aquaprojects.com.au Lessons Learnt - Quality

ƒ Design consultants resources are stretched and put inexperienced professional staff on the project with little supervision. Constructability, HAZOP studies and peer reviews are limited/non-existent. ƒ Make sure the Quality system includes the design process ƒ Construction staff are lacking or inexperienced in specialist skills areas. ƒ Ensure the skills needed are identified early and tested before appointment. Skills training programs may need to be implemented

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Bundamba Pump Station

26 www.AQUAprojects.com.au Lessons Learnt - Procurement

ƒ Client has to take more cognisance of the contractors needs in order to attract and retain good quality resources. ƒ Procurement strategy and subcontract packaging needs to consider broader issues such as ƒ continuity of work, ƒ larger packages, ƒ repackaging the work to suit available suppliers / providers

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Pump station

28 Lessons Learnt Risk

ƒ Greater push back on risk allocation by proponents since they know the client is in a difficult position ƒ Make sure the client is aware of the current market pressures and they understand the implications of the risk profile they adopt. ƒ the risk profile that the market is accustomed to becomes distorted by the higher external risks. ƒ Test with client if they are willing to take on some of the external risks and the implications ƒ Client Contingency Line in project budget may be higher than the ‘non-crisis’ averages ƒ A change of client or owner risk now needs to be valued

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30 Lessons Learnt – People Management

ƒ People ƒ Skills shortages – in particular in water retaining construction works (water retaining tanks, pump stations, pipelines, etc). This has resulted in a large number of contractors and subcontractors using personnel and trades staff who have largely building related experience with no/limited experience in the required construction techniques in ’long life’ water retaining assets. ƒ Ensure skilled supervisors from the clients organization and or contractors organization who can train the necessary staff

31 www.aquaprojects.com.au Lessons Learnt – People Management

ƒ Governance ƒ Interim governance arrangements often required to get the work started ƒ Plan for novation of contracts ƒ Select people in the interim arrangements who have a ‘bias for action’ ƒ Avoid new governance arrangements allocating blame for any problem on the interim arrangements ƒ Encourage/facilitate engagement of experienced mature people for the new governance arrangements ƒ Ensure Novation Agreements bind the future parties to past lawful decisions

33 www.aquaprojects.com.au Lessons Learnt – People Management

ƒ Stakeholders ƒ Although these are generally good news projects for the public the management of perceptions is critical. There are a lot of people out there who consider themselves experts. They will always knock the projects and the performance. E.g. Client initiated Scope Changes will become Cost ‘blow-outs’ and will be very public whether real or not. ƒ Proactively manage the communication with all stakeholders ƒ listen & communicate, listen & communicate, listen & communicate, listen & communicate, listen & communicate, ƒ the public is more likely to accept options that would not be acceptable in times of ‘plenty’. ƒ But do not take them for granted

35 www.aquaprojects.com.au Lessons Learnt - Communications

ƒ Although these are generally good news projects for the public the management of perceptions is critical. ƒ Plan strategically, tactically and operationally and manage all communications proactively

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Conclusion & Challenges

ƒ The current crisis produces excellent opportunities for ƒ Learning ƒ Presentation may provide a checklist for Project Managers entering this environment ƒ Numerous concurrent projects and programs in a similar environment. Lessons are more easily transferred. ƒ Opportunity and need for innovation in Project Management ƒ Client and stakeholders expect results ƒ Project Management can raise its profile as a key profession ƒ Are we up to it? ƒ Project Managers to share their experiences and learnings ƒ Let us see more presentations and technical sessions to build up the Body of Knowledge. 38 www.AQUAprojects.com.au Six Phases of a Major Project:

1. Enthusiasm

2. Disenchantment

3. Panic

4. Search for the guilty

5. Punishment of the innocent

6. Decoration of non-participants.

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