Derby City Council

A52 ‘mess’; Cabinet report implies widespread incompetence leading to cost overruns and slippages

A report to be presented to the Cabinet next week on the A52 cost overrun and delays, makes enlightening reading.

It is only an interim report, despite the expectation that, after 3 months since the first announcement of this “issue” that there would have been definitive statements on the total expected cost, and the completion date. That is still several months away – that speaks volumes about the depth and extent of the problems encountered.

What went wrong?

In early May 2018, no one knew of any significant problems with the A52 improvements project. Following the announcement in late May 2018 that there was a major issue,  no one could make any reliable forecast on cost and delivery timescales. It is clear that the very basics of competent project management were not in place.

Any project of this nature should have, in broad terms:

  • a detailed design for the purposes of cost estimating, securing funding and construction execution.
  • a detailed plan which breaks down each task/activity, their sequencing and dependencies, which also profiles the cost estimate over time
  • a risk register
  • a Governance Board structure operating regularly at a number of levels that monitors progress on the ground against the plan, tracks cost build up against deliverables, and the management of risks.

This is standard project management practice which ensures that problems can be identified promptly, actions taken to mitigate the consequences, and so delays and additional costs minimised.

The Cabinet paper reports that Corporate and Operational Project Boards have now been set up.

The report also states that deviations have been identified between the original schematic designs, and what has actually been constructed on site. It has been necessary to do “a full level survey of the site to establish an up to date and accurate base line for the updating of the detailed design,..and…working up cost estimates for different elements with the contractor”. This has then to be integrated with the state of the existing construction. It seems that build was being carried out against out of date information.

Opportunities are being taken, in this update, to design in cost reductions wherever possible.

Cost overrun

The overall layout of the project remains basically unchanged. The latest estimate is £33m- however that can’t be known, conclusively, until the full design/cost process has been completed.

Comment

The original budget for the project was claimed to be £15m. However, we only know this to be the funding available. The final report may comment on this, but it would be reasonable to speculate that the cost of the project was never £15m ( most likely ~ £30m+) and that, in reality, someone decided to proceed with the scheme, either in the full knowledge that the funding would not cover the costs, or on the basis of cost estimates that were performed with wreckless inaccuracy.

The design and project management was not given to an experienced and professional construction management company  like Galliford Try who is the main contractor for this project. It was managed inside Derby City Council. It may have been a cheaper option than asking the experts to take control…perhaps therein lies the problem?

This is another, major, example of the criticisms levelled by the auditors at the Council about “informed decision making”.  Papers presented to the Cabinet at the time were clear that the project objectives could be delivered for £15m, and were 100% funded. The process and persons involved in arriving at that statement need to be scrutinised very carefully.

It would have been reasonable for most of the Cabinet members to have assumed that the Senior Officers had ensured that their recommendations were backed up by full detailed analysis.

We will have to wait until the final report to find out who knew what at the time, and where the collective incompetence was centred, and why it never occurred to the Acting Chief Executive, or the Cabinet Member, Cllr Afzal,  that this project required some level of regular challenging scrutiny from their offices. If they had, this mess would have been uncovered much earlier.

 

 

Categories: Derby City Council

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