Comments by "Tony Wilson" (@tonywilson4713) on "Why do so many infrastructure projects have cost blowouts? | 7.30" video.
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ENGINEER HERE: There isn't one of these projects that doesn't have some merit and some real payback to us the general population of Australia. The real problem is HOW these projects are planned from the start and that includes the contracts that are rarely negotiated in good faith by either or both the government or the contractors.
So for everyone interested here's 4 basic project items and for anyone who has ever done a project and wondered what went wrong simply ask which of these wasn't done well enough. Sorry if some of this is longish but I hope it will explain a number of things and how to NOT have projects go wrong.
1) SPECIFICATION:
This is the basic what, why and how.
What are we going to build - a bridge, a road, a building, a sports stadium or even a submarine.
Why are we building this bridge, road, building, sports stadium or submarine.
The what and why don't need much detail. Its can be as simple as, We need this bridge to go over that river because the old bridge needs replacing.
BUT the HOW must be detailed and most importantly it must explain what STANDARDS must be met. Most people and especially lawyers don't realise that most engineering standards are NOT required by law or regulation. There's actually very few standards that are required to be met by law and yes this stuns most people. So its incredibly important that every standard that a project needs is absolutely listed and described for its applicable use IN THE CONTRACT(s).
The single biggest issue with lawyers and engineering projects is NOT what they put in the contracts but what they leave out. See the comment at the bottom.
2) RESOUCES:
In all engineering projects there are 3 main resources - labour, machinery and money.
Labour from top to bottom needs to not only be available but also the required skills needed need to be available. This is an area where non-engineering human resource people are utterly hopeless. For all their claims (and I have experience with this issue) they CANNOT tell the difference between an mechanic and mechanical engineer, electrician and an electrical engineer or any other engineering skill set.
Machinery is another monster bug for engineers. Its no use planning to rent a 50ton crane when you need to lift a 100ton object AND YES THAT HAPPENS. You have to have people who know their subject plan what they need and when they need it. If you suddenly have to rent things like cranes, digging machines, scaffold,... etc. the people supplying those services can charge whatever they like because they know that holding up a billion dollar project is worse than paying ridiculous money to rent something.
Money is the worst thing engineers have to deal with because there's always some clown waving an economics degree like a caveman swinging a club screaming "What's the business case for that?" or "Who's going to pay for that?" In 99.9% of cases the reason why its costing more than planned is because the economics clown interfered back at the planning stage.
3) TECHNICAL VIABLITY: This is something that most engineers hate because it involves Donald Rumsfeld's 3 knowns. There's known knowns, known unknowns and unknown unknowns. Planning is about having as many known knowns as practical and the best way to have that is CLEAR SPECIFICATIONS. Think about the Apollo program. It had the very simple 2 PART specification. 1 - get a man to the moon and 2 - get him back SAFELY. That was why they could go there 9 times and land 6 times and not lose anyone in the process. The times they lost people were in training accidents where they were less clear about what they were doing and people were rushed and NOT checking properly.
4) COMPLETION DATE which is also called CLOSE OUT: This is possibly the worst thing done in all projects and again goes back to the specifications. If a job is NOT clearly specified then its gets very murky to what it means to be finished. Despite what people might think an unclear completion is music to a contractor because its easy to make a lot of money late in a project. Most of the major items are already in place so its mostly labour or variations and both are more money on top of profit. As we can all see from some of the enquiries into the Big 4 consultancies getting repeat work is what they want more than anything. In an engineering the equivalent to that are the contract variations at the end of a project. The way to avoid that is by (right up front) detailing in the specification: "This is what we want and this is what we mean by being finished."
Go check any project you know of and you'll quickly see the problems that happen when one of these things is not done.
And a perfect example of bad planning is Snowy 2.0. Yes as an engineer I can emphatically state that it is a project with merit and eventually we the Australian people will benefit from it. HOWEVER when you plan on building a power station you also need to connect it to the power grid. That was NOT done in the initial plans and that's where the biggest cost blowouts are. Plus the contractors KNOW they have us by the short and curlies because what's the point of building Snowy 2.0 if you don't connect it to the grid. It has to be connected so they have us. Its a perfect example of the problem of what's left out of the contract.
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