VANYA YSABEL M

VANYA YSABEL M. MANEJA
Student No. 480232441
Master of Project Management

PMGT-6871
Project Planning and Governance
Assignment 2
Project Analysis of the Sydney Desalination Plant
& The Lane Cove Tunnel

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21 April 2018

Table of Contents

Executive Summary ——————————————————————– 3

The Lane Cove Tunnel —————————————————————– 3
Introduction ——————————————————————– 3
Project Management Methodology Utilised ——————————- 3
Project Life Cycle Used ——————————————————- 4
Project Governance Structure Followed ————————————- 4
Original Reasoning behind the Project ————————————— 4
Original Perceived Outcomes of the Project ——————————— 4
Anticipated Benefits to be achieved upon the Success of the Project —- 4
Project: Success or Failure upon Completion ——————————– 5
Project: Success or Failure at Current Status ——————————— 6

Sydney Desalination Plant —————————————————————- 6
Introduction ———————————————————————– 6
Project Management Methodology Utilised ———————————- 6
Project Life Cycle Used ——————————————————— 7
Project Governance Structure Followed ————————————— 7
Original Reasoning behind the Project —————————————– 8
Original Perceived Outcomes of the Project ———————————– 8
Anticipated Benefits to be achieved upon the Success of the Project —— 8
Project: Success or Failure upon Completion ——————————— 8
Project: Success or Failure at Current Status ———————————- 9

Conclusion ————————————————————————- 9
References ———————————————————————————— 11
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Executive Summary
The similarities and differences of two (2) landmark projects in Australia: The Lane Cove Tunnel and the Sydney Desalination Plant were analysed based on various Project Management elements, such as Project Methodology, Project Life Cycle, Project Governance Structure, the Original Reasoning behind each Project and its perceived Outcomes to evaluate whether the projects are to be considered as Success or Failure. It has been identified that in terms of the Project Methodology, Project Life Cycle and Project Governance Structure used, the projects have lots of similarities but the end-result of the projects were different. Factors that contributed to this are the mode of execution of the projects’ phases, the collaboration between entities, the motivation for the project’s completion and the assumption of risks and mitigating measures applied. It is realised that even if projects have similar characteristics, this will not guarantee that their results will be the same. In the end, it is identified that the Sydney Desalination Plant Project is a success while the Lane Cove Tunnel is a failure.

THE LANE COVE TUNNEL
The Lane Cove Tunnel is a 3.6 km tunnel that provides linkage between the M2 Motorway and the Gore Hill Freeway (GHD PTY Ltd., 2011). The project has an estimated actual cost of $1,100,000 and is expected to service 90,000-100,000 vehicle trips a day (Phillips, 2007). The project is part of the 1998 New South Wales Government Proposal, “Action for Transport 2010” (GHD PTY Ltd., 2011). It is a product of Public-Private Partnership (PPP), the initial contract was signed in December 2003, construction commenced in June 2004 and was opened to public use in March 2007 (GHD PTY Ltd., 2011). The project was awarded to the Lane Cove Tunnel Consortium (now “Connector Motorways”) because it was the company with the highest traffic forecast, the one who can give an upfront payment and does not require government contribution (GHD PTY Ltd., 2011). It is to be financed, constructed, owned and operated by the winning bidder until 2037 when it should be passed into public ownership (Parliament of New South Wales, 2006).

Project Management Methodology Utilised
Upon analysing the Lane Cove Tunnel Project, it is identified that it follows the Waterfall approach and the Methodology that was utilised in managing this project is Prince2. We analyse this by evaluating the components of the project and the key principles of Prince2.
• Projects must have business justification – The project has undergone feasibility study and the need to build the tunnel was established. Expected benefits were emphasised in reports, giving stronger justification to the project’s importance.
• Teams should learn from every stage – The teams learned from their experience in this project. Though there were discrepancies in design and construction which resulted to plan changes, it is definite that all members of the team have learned from the mistakes committed.
• Roles and responsibilities are clearly defined – Roles and responsibilities of each team are defined through the establishment of teams based on their knowledge and expertise.
• Work is planned in stages – Work packages with schedule were set to ensure the project’s delivery in the set time frame.
• Project Boards “manage by exceptions” – The project was participated by Ministers and Key agencies, and since this is not the only project that they have, they manage by exceptions, only when the need arises.
• Teams keep a constant focus on quality – Because of the collapse of some parts of the tunnel, it is unsure if the team really focused on the quality of the deliverables. The team probably did what they are expected to do, but it is assumed that the materials used are not of very good quality and that there are some discrepancies in the design.
• The approach is tailored for each project – The approach of having all important factors such as scope, timeframe and cost before the start of the project is tailored to fit a construction project like this.

Project Life Cycle Used
Based on the characteristics of the processes used in the Lane Cove Tunnel, it is identified that the Project Life Cycle is predictive, wherein the project scope, time and cost are already determined in the start of the project. The Project Scope is to deliver a 3.6 km tunnel that connects the M2 Motorway and the Gore Hill Freeway, expected delivery time, May 2007 and with the estimated budget cost of $550M.

Project Governance Structure Followed
The major entities in the Lane Cove Tunnel Project include the NSW Government/RTA; the constructor, Thesis and John Holland; the Equity holders and the debt holders (GHD PTY Ltd., 2011). The project was participated by Ministers and Key Government Agencies (Parliament of New South Wales, 2006).

Original Reasoning behind the Project
The Lane Cove Tunnel Project was conceptualised as a solution to the worsening traffic situation in Epping Road and in effect, also improve the traffic situation in Sydney (GHD PTY Ltd., 2011). Population in Sydney has dramatically increased over the years, thus adding more vehicles in the road, which can no longer be accommodated by the existing infrastructure for a free-flowing traffic. (Parliament of New South Wales, 2006).

Original Perceived Outcomes of the Project
In a nutshell, the main perceived outcome of the project is to build a tunnel that will help minimise traffic in the city, through partnering with a private entity which will be responsible in financing, building, operating and maintaining the infrastructure at least cost to the government. As agreed upon by the NSW Government and Lane Cove Tunnel Consortium, there will be a 33-year concession period, after which, the ownership will be returned to the NSW Government, which can help generate more income for the government. (GHD PTY Ltd., 2011)

Anticipated Benefits to be achieved upon the Success of the Project
Upon the completion of the project, the following are expected to be achieved, as stated in the Roads and Traffic Authority’s (RTA) Environmental Impact Statement (Parliament of New South Wales, 2006):
• Improve road travel efficiency from east to west through reducing traffic congestion and decreasing the amount of travel time
• Through the reduction of traffic volume in the surface area, it is expected that there will be less air pollution and minimised traffic noise
• Ensure safety and easier access for pedestrians and cyclists along Epping Road
• Enhance public road transport through the provision of bus lanes on Epping Road and transit lanes on the Gore Hill Freeway
• To achieve the above-mentioned outcomes at least cost to the government

Project: Success or Failure upon Completion
The Lane Cove Tunnel is considered a Success with few imperfections upon its completion. It is based on the value of Estimated Cost vs. Actual Cost, Expected Time of Completion vs. Time the Project was delivered and the satisfaction of the anticipated benefits.
Estimated Cost vs. Actual Cost
Estimated Cost Actual Cost
$550 million $1,100 million Over budget, but no financial cost to the NSW Government

Expected Time of Completion vs. Time the Project was delivered
Expected Time of Completion Time the Project was delivered
May 2007 March 2007 Delivered ahead of schedule

Satisfaction of the Anticipated Benefits
Anticipated Benefits
1. Improve road travel efficiency
2. Lessen air pollution and minimise traffic noise
3. Safe and easier access for pedestrians and cyclists
4. Enhance public road transport
5. Achieve outcomes at least cost to the government

Even if the project was completed over budget, the anticipated benefits were achieved at least cost to the government. Though for the main contractor, the Lane Cove Tunnel Consortium, it could be considered as a failure upon completion because it is over their anticipated budget.

Project: Success or Failure at Current Status
The success or failure of the Lane Cove Tunnel Project is based on the person or entity that we are going to analyse the project with. If we analyse the project the project from the point of view of the primary contractor, it is a failure. The contractor was the one who financed, designed and constructed the tunnel, they suffered a huge amount of losses blamed to the inaccurate and high forecasting of the traffic in the tunnel. The anticipated number of trips per day is way above the actual number of current trips, which means less income for the toll road. However, to increase the number of trips in the tunnel, the government has made road closures which are said to benefit not the government, but the private contractor. This decision can be considered as Pareto inefficient (Phillips, 2007), because there are groups of people disadvantaged by this action. For the government, it is still a success because a tunnel was built at no cost to them, though there were lots of criticisms about the project.

SYDNEY DESALINATION PLANT
The concept of building a desalination plant in Sydney was first introduced in November 2005 by the NSW Department of Planning. The construction of the plant was not immediately initialised upon conceptualisation but the NSW Government made sure to be fully ready to construct such plant at short notice once Sydney’s water storage level drops to 30 percent. (Preferred Project Report for Sydney’s Desalination Project, 2006)
A combination of partners was formed to deliver a big-scale project like this. When the project was approved in 2007, the construction commenced and was finished after 29 months. The plant in Kurnell started its production in January 2010 and is able to supply an equivalent of 15% of Sydney’s drinking water. (Sydney Desalination Plant, 2011)
Since its operation, the project gained both local and international recognitions such as Best Desalination Plant of the Year (2010) and Project of the Year Award. (Holland & Water, 2011)

Project Management Methodology Utilised
Based on the characteristics shown in the Sydney Desalination Plant Project, it follows the Waterfall approach and the Methodology that was utilised in managing this project is Prince2. We analyse this through evaluating the key components of the project and the principles of Prince2.
• Projects must have business justification – The need to construct a high-standard desalination plant was established and key benefits upon completion of the project are well-identified.
• Teams should learn from every stage – As one of the achievements of the Sydney Desalination Project, it was not just about the project delivery and completion, but also the acquired knowledge among all the participants of the project. Since desalination is not a familiar concept in Australia, all teams learned from international experts and applied these learnings in the different courses of the project. There have been records proving that participants in the Sydney Desalination Plant project are given more and better opportunities after the project because of the excellent knowledge and experience that they have gained from it. (Holland & Water, 2011)
• Roles and responsibilities are clearly defined – Through the leadership of the Project Steering Committee, teams were formed in accordance with their knowledge and expertise. Each team is clearly informed of their responsibilities and in this project, all teams are directed towards one goal. (Holland & Water, 2011)
• Work is planned in stages – Considering the complexity of this project and the time constraint, a concrete work plan was established, with specific timeframe to ensure the delivery of each stage on schedule. Scheduled and unscheduled inspections were executed by the Commissioning Team to ensure that all teams are working on their assigned tasks. (Holland & Water, 2011)
• Project Boards “manage by exceptions” – The Project Steering Committee played a key role in the success of this project. They served as the oversight for the project and made sure that if any important issue arises, they will act upon it and will make sure that the project will proceed as planned.
• Teams keep a constant focus on quality – Even before the project started, the JV has already invested on measures on ensuring the quality of the deliverables for this project. New technologies were also applied in the design and construction stage of the project to make sure that it adheres to the international standards of a desalination plant. Quality is one of the major considerations that JV prioritised, along with delivering a desalination plant that is “fit for purpose”. (Holland & Water, 2011)
• The approach is tailored for each project – The Sydney Desalination Plant is a big project involving a big number of workers. Different approaches were used to cater the different needs of each team. The JV even considered putting all teams together in one location to ensure effective communication and collaboration within teams. (Holland & Water, 2011)

Project Life Cycle Used
The characteristics of the processes used in the Sydney Desalination Plant demonstrate that the Project Life Cycle is predictive, wherein the project scope, time and cost are already determined at the start of the project. The Project Scope is to deliver a desalination plant that can maintain 250ML/D and can be expanded to 500ML/D when needed, expected delivery time of summer of 2009-2010 with the budget of $1.896B.

Project Governance Structure Followed
The Sydney Desalination Plant Project was led by the Joint Venture Steering Committee involving John Holland’s Executive General Manager and General Manager for Water, Veola Water Australia’s Chief Executive Officer and Executive Vice President for Major Projects Group and a Dispute Resolution Board with its Chairman and members. (Holland & Water, 2011) The Project Team was divided based on their work packages and led by a designated team leader.
All of which are well-experienced in their own fields, well-informed about their specific tasks and responsibilities and are open to collaboration with all members of the team, ensuring efficient delivery of all tasks required of them.
Original Reasoning behind the Project
Various factors contributed to the conceptualisation of the construction of the Sydney Desalination Plant. Climate change has affected almost all countries in the world, and Australia as a first world country is not spared from this. New South Wales (NSW) has experienced drought in recent years and there have been periods of water shortage throughout the city. There has also been a dramatic increase in the living population in Sydney and it is anticipated that this will continue in the coming years, meaning more demand for potable water. The project’s main objective is to secure Sydney’s water supply especially in times of drought. (Knights, Macgill, & Passey)

Original Perceived Outcome of the Project
The Sydney Desalination Plant was constructed to maintain water capacity of 250 ML/day and could be expanded to 500 ML/day if needed in case of drought and water shortage.

Anticipated Benefits to be achieved upon the Success of the Project
Upon completion, the following benefits are expected to be achieved:
1. A reliable desalination plant that will supply desalinated water to the metropolitan
2. Fewer water restrictions for water conservation because of secured water supply
3. Less investment for costly water sources, ie: water tanks

Project: Success or Failure upon Completion
The Sydney Desalination Plant is considered a Success upon its completion. It is best to show proof to this on the same gauge that we did for the first case, the Lane Cove Tunnel, to better compare the two projects.
Estimated Cost vs. Actual Cost
Estimated Cost Actual Cost
$1.896 $1.1 billion Completed under budget

Expected Time of Completion vs. Time the Project was delivered
Expected Time of Completion Time the Project was delivered
Summer of 2009-2010 January 28, 2010 Delivered as scheduled

Satisfaction of the Anticipated Benefits
Anticipated Benefits
Reliable water supply
Less water restrictions
Less investment for costly water sources

One of the most important consideration in a project is the satisfaction of the client. The Sydney Water has expressed their excellent satisfaction in the project outcome considering that it was delivered on time and under budget and has achieved the main purpose of the project, which is to construct a high-standard desalination plant that will be utilised for securing the water supply of the city. (Holland & Water, 2011)

Project: Success or Failure at Current Status
This project is considered a success at its current status even if it is not operational at the moment. Aside from the fact that it has achieved its perceived outcomes, and that the project itself has received various recognitions, it also aided in the acquisition of significant knowledge and experience for the people who worked for the project.
Because of the existence of a high-standard desalination plant through the effective leadership and management of JV and Sydney Water, Sydney’s water supply is secured not only for the present but more importantly, for the future. Though the project was challenged with time constraints, it did not hinder the JV to deliver what the client expected them to, and even exceeded the client’s expectations. The Sydney Desalination Plant is now a model project for desalination plants due to its best practices.
The plant was privatised by the O’Farrell Government in 2011 and it is believed that the government was able to gain some profit out of its privatisation. (Sydney Desalination Plant Privatisation, 2013)
Currently, the plant is in Water Security Mode, meaning it is well-maintained and is ready to operate when the dam water levels fall below 60%, still achieving the project’s goal of securing Sydney’s water supply. (Sydney Desalination Plant, n.d.) Though there are controversies revolving around the plant, not currently operational, the project’s goal is to secure Sydney’s water if drought comes, and what is important is this goal will still be achieved once the need arises.

Conclusion
From the analysis of both projects, similarities and differences that contributed to the success or failure of the projects are identified.
• The Nature of the Project – Both projects are partnerships between the government and private entities but the Lane Cove Tunnel is privately-financed and the Sydney Desalination Plant’s budget is from the government. Both projects have anticipated benefits but the LCT was built also to recover the contractor’s investment and eventually gain profit from it. The Sydney Desalination Plant is mainly focused on the service that it may provide to the people.
• The contractor’s motivating factor in the project – Every contractor’s motivating factor is to gain profit from every project, but for the LCT, the contractor got more interested in the project because of the high forecast of traffic in the toll road, which in turn will speed up the return of investment and will give more profit to them. On the other hand, for the Sydney Desalination Plant, the contractor focused on the delivery of a high-quality project for the satisfaction of the client.
• The governance style used in the project – Though both projects are predictive, with set objectives, time frame and cost, the governing style of the Project Steering Committee of the Sydney Desalination Plant Project proved to be more effective. Harmonious relationships with teams and stakeholders were established and maintained which resulted to less disputes in construction and turnover.
• Assumption of risks – The Lane Cove Tunnel Project eventually experienced more problems during the design, construction, delivery and maintenance of the project because all risks were not assumed in the early stage of the project. While in the Sydney Desalination Plant, identifying of possible risks was given utmost importance even before the project has started. They even set up a Disputes Resolution Board to resolve conflicts in case anticipated and unanticipated risks arise.
• Consideration of all factors – Both projects have undergone public consultations and completed the necessary requirements as part of project initiation, social, safety, quality and even environmental factors were considered but the seriousness in avoiding negative impacts towards all factors was more characterized in the process and actions done in the Sydney Desalination Plant.
• Government involvement in the project – Because of the difference in nature, the government (Sydney Water) was more involved in the whole life cycle of the project, which in turn contributed to its success. It is also noted that the John Holland is a common denominator for both projects, but it did not mean that both projects will have the same result. It all boils down to the collaboration of all entities in the project.
• The Project Methodology used – Even if the same project methodology was used in both projects, the execution of the phases was different which probably played a big factor in the project’s success or failure.

References

(n.d.). Retrieved from Sydney Desalination Plant: http://www.sydneydesal.com.au/
A Guide to the Project Management Body of Knowledge (PMBOK Guide) (Fifth ed.). (2013). Project Management Institute Inc.
Bell, K., Budd, P., Emery, S., Farnfield, S., Pereira, K., & Scott, C. (n.d.). A Feasibility Study for the Construction of Next Generation Desalination Plant in New South Wales, Australia.
Black, J. (2014). Traffic risk in the Australian toll road sector. Public Infrastructure Bulletin, 1(9).
GHD PTY Ltd. (2011). Revised Final Report: An Investigation of over-optimistic Patronage Forecasts for selected recent toll road projects.
Hewitt, P., Burkitt, S., & Baskaran, B. (2008, March 1). Design and Construction of Retaining Structures for Lane Cove Tunnel. Australian Geomechanics, 43(1).
Holland, J., & Water, V. (2011). Sydney Desalination Plant.
Kanowski, S. (2011, June 11). Case studies of recent Australian toll road projects. Canberra: GHD.
Knights, D., Macgill, I., & Passey, R. (n.d.). The sustainability of Desalination Plants in Australia: is renewable energy the answer?
Parliament of New South Wales. (2006). Third Report – Lane Cove Tunnel.
Phillips, G. (2007, December 3-5). Analysis of Sydney Public-Private Partnership Road Tunnels.
(2006). Preferred Project Report for Sydney’s Desalination Project. GHD Fichtner.
Smith, S. (2005, October). Desalination, Wastewater and the Sydney Metropolitan Water Plan. New South Wales, Australia.
Sydney Desalination Plant. (2011). Schneider Electric.
Sydney Desalination Plant Privatisation. (2013). Allens; Linklaters.