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PROJECT MANAGEMENT INCONSTRUCTION
ASSIGNMENT 2HOLYROOD:
STAKEHOLDER ANALYSIS & RISK MANAGEMENT
DATE: 4TH OCTOBER 2013
LECTURER:PROF. Dr. JOHN TOOKEY
BY:
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ANUSHYA RAMASEGAR
FACULTY OF DESIGN AND CREATIVE TECHNOLOGIES
AUCKLAND UNIVERSITY OF TECHNOLOGYTE WANANGA ARONUI O TAMAKI MAKAU RAU
School of Engineering
Master of Construction Management
Name ANUSHYA RAMASEGAR
ID Number 1380633
Paper Name PROJECT MANAGEMENT IN CONSTRUCTION
Assignment HOLYROOD: STAKEHOLDER ANALYSIS & RISK ASSESSMENT
Number of words (excluding appendices) 4202
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Anushya Ramasegar04/10/2013………………………………………………………….. …………………… SignatureDate
TABLE OF CONTENTS
1.0 INTRODUCTION..............................................4
2.0 PROJECT DEVELOPMENT.......................................5
2.1 COMMENCEMENT OF PROJECT.....................................5
2.2 CONSTRUCTION OF THE PROJECT..................................6
2.3 COMPLETION OF THE PROJECT...................................7
3.0 STAKEHOLDERS..............................................8
3.1 STAKEHOLDER MAP............................................8
3.2 STAKEHOLDER ANALYSIS........................................9
4.0 RISK ASSESSMENT...........................................9
4.1 DESIGN...................................................9
4.2 PROCUREMENT..............................................10
4.3 MANAGEMENT...............................................11
5.0 CONTROVERSIAL ISSUES: COST AND TIME OVERRUNS.............13
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5.1 WAS THE SPB CONDEMNED TO A COST OVERRUN SINCE OUTSET?.........13
6.0 DISCUSSION...............................................14
6.1 LESSONS TO BE LEARNED.....................................14
7.0 CONCLUSION...............................................15
8.0 REFERENCES...............................................16
1.0 INTRODUCTION
The Scottish Parliament Building (SPB) in Edinburgh
stands as one of the most iconic buildings in Britain
today. The building which was constructed with the
Scottish land and people in mind was designed to
represent the cultural and geographical aspects of
Scotland. During the inception stages of the SPB it was
decided that the building would symbolise the country’s
past achievement and signal its future aspirations
(Fraser, 2004) and the Catalan architect, Enric Miralles
who was the lead architect appointed for the project
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captured these elements and infused it into the design of
the building. Drawing inspiration from Scotland’s
seashores, mountain, flower paintings by Charles Rennie
and Henry Raeburn’s painting of the skating minister he
developed a design that he described as (Fraser,
2004):“The building should arise from the sloping base of
Arthur’s Seat and arrive into the city almost surging out
of the rock.”
His efforts paid well as to this date the SPB has
garnered 9 architectural awards including the prestigious
Stirling Prize (“Scotland Parliament”). Initially
budgeted at £50 million, the project was scheduled to
commence construction in June 1999 and was to be
completed in June 2001. Unfortunately, this colossal
endeavour was plagued by budget escalation issues, poor
project management, poor procurement methods, and other
construction issues since the beginning. Eventually, the
construction of the project was completed in March 2004
(“Scotland Parliament”) and with a cost of £431 million.
Members of the Scottish Parliament convened for the first
time on the 7th of September 2004 at Holyrood (Fraser,
2004).
Constructed from mix of steel, oak and granite this
magnificent cultural symbol raised a level of controversy
that was sufficient enough to launch a public inquiry
which lead to the birth of the infamous Fraser Report in
2004.
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This report aims to look at factors that caused the
delays and the excessive escalation of cost. It will also
examine the complexity of the design of the building and
examine the risk factors involved in the completion of
the project.
2.0 PROJECT DEVELOPMENT
The objective of the Holyrood Project was to provide
a home suitable for the Scottish parliament. Conversely,
this project of massive scale encountered political
problems which included the selection of an appropriate
site to the house of parliament. It is important to note
that given to proposed estimate of the project, it can be
clearly seen that a poor feasibility study was done prior
to the design of the building which is clearly a recipe
for a financial disaster.
Even though the completed building was built in high
standards and excellent quality, the project experienced
a 20 month slippage (Auditor General, 2004) and was
almost 50% larger than when first designed. The design
team was lead by Enric Miralles until his death in July
2000 (Auditor General, 2004).
The Holyrood Project was not handed over to the
Scottish Parliamentary Corporate Body until the 1st of
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June 1999. The project was an extremely challenging one
in terms of design and management.
2.1 Commencement of Project
From the beginning the project it can be seen that
the project lack a sense of appreciation of plan. This
can clearly be seen with the budget, the procurement
method and the selection criteria of the designer. The
unrealistic budget set up for this elaborate project was
not addressed until it was too late. The selection
criteria adopted for the procurement method and the
handing of the Pre-Qualification Questionnaires (PQQ)
lacked a systematic approach. It is believed that the
project was handed over to the Scottish Parliamentary
Corporate Body (SPCB) by the former Scottish Office
(Fraser, 2004). The conclusions arrived by Lord Fraser
are as follows (Fraser 2004):
The Brief was not up to date (no changes were
reflected since November 1998)
The Brief did not anticipate the requirement of
the Parliament resulting in additional building
added on later, hence increasing the cost of
the project
Insufficient funds were allocated to the
project from the beginning the reason being
that:
Exclusion of budget for risks
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Unable to fully comprehend the complexityof the design
Considerations we not given to blast andsecurity.
A seemingly high profile project like this without a
contingency for risk clearly states poor foresight and
decision making ability by the project team. Moreover,
the process in which the designer was chosen and
subsequently appointed was done in a highly
unprofessional manner.
Also, a project of this significance requires a
project sponsor of sound calibre. Due to the demanding
nature of the project, the project sponsor is required to
understand the needs of the project and be able to convey
the client’s requirements clearly and decisively to the
construction manager, project manager and design team.
However it is clear that Mrs. Doig the Project Sponsor,
lacked these skills and to a large extent proceeded to
make poor management decisions. This is clearly seen in
the method of procurement adopted for the project.
The overall impression given during the onset of the
project is that the project scope was not clearly
defined, risk assessment was not given enough thought or
consideration, the complexity of the design was
underestimated and lack of reflection was given to the
requirements of the building.
2.2 Construction of the Project
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It was after the commencement of the project where
crucial changes and discoveries were made. Paul D.
Gardiner (2005) described it as the phase where new
information from other phases can lead to change, and a
good project manager should know that some changes are
inevitable; therefore there is a need to maintain control
over these changes to the project plan. Unfortunately,
that was not the case with the Holyrood project. There
were since detailed design variations and late supply of
information during the construction process until 2000
(Fraser, 2004).
The design variations that kept arising for the
debating chamber was one of the reasons why there were
delays in construction and additional costs. In the
Holyrood Inquiry, there were many references to the
“complexity of the design” highlighting that as a factor
causing both cost and time overruns (Isobel and Iqwinder,
2005).
Then in August 1999, there was a request by the
architect, Enric Miralles to increase the area of the
project by 4000 sqm (Fraser, 2004). Strangely, the report
by the Auditor General in 2000 stated that there were no
appropriate explanations given by the architect as to why
this increase of area was necessary (Isobel and Iqwinder,
2005).
It can be seen that it was during the construction
stage; the most crucial stage of this project that there
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was a significant increase of cost overruns and time
delays. Even with the establishment of the Holyrood
Progress Group in 2000, the project was only completed in
2004.
2.3 Completion of the Project
The Scottish Parliamentary building was completed
successfully amidst the controversy that surrounded the
project. The last tower crane left the construction site
in March 2004 and in August 2004 the Scottish Parliament
met for the first time in Holyrood (“Scotland
Parliament”).
However, at the time the Holyrood Inquiry was opened
in June 2003, the project stood at £373.9 million and
construction was forecasted to be completed in November
2003 (Isobel and Iqwinder, 2005). By September 2003, a
progress report by the presiding officer of the SPCB
stated that figures have risen to £401.2 million and
subsequently again in February 2004 to £430.6 million
(Isobel and Iqwinder, 2005).
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3.0 STAKEHOLDERS
Bearing in mind that this is a public sector
project, the stakeholders involved in this project are
numerous; ranging from the project owner to the public.
However, separating the stakeholders and categorising
them will be beneficial terms of analysing project
management issues and problems involved in the line of
communication.
3.1 Stakeholder Map
Figure 1: Stakeholder Map
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Interest of Stakeholders
P o w e r / I n f l u e
GROUP A
MINIMAL EFFORT
GROUP B
KEEP INFORMED
GROUP C
KEEP SATISFIED
GROUP D
KEY PLAYERS
3.2 Stakeholder Analysis
List of Stakeholders According to Group:
Table 1: Stakeholder Analysis Table
No. Group Stakeholders
1A
(low interest / lowpower)
Legal Team NGO’s
2B
(high interest / lowpower)
Suppliers Members of Parliament
(MSP) Media City Council (Edinburgh) Secretary of State
(Scotland) General Public
3C
(low interest / highpower)
Insurance Company Audit Advisor to the
Scottish Parliament Project Financial
Controller Private Finance Unit,
Scottish Office
4D
(high interest / highpower)
Project Owner (SPCB) Architect Consultant
(EMBT/RMJM) Project Sponsor (Barbara
Doig) Project Managers Construction Manager
(Bovis) Quantity Surveyor (DLE) Design Team (Ove Arup &
Partners)
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4.0 RISK ASSESSMENT
One of the major blunders recognised in the Holyrood
Project was the lack of attention to the risk factors involved
in the project. The 3 prominent risk factors that will be
discussed in this report is design, procurement and
construction management.
4.1 Design
The Parliament Building comprises of several
buildings representing different aspects of Scotland and
spanning over an area of 31,000 sqm (312, 000 sqft)
(Fraser, 2004). The entire building comprises of 9
separate building including accommodations for the MSP’s,
a media tower, garden lobby and the debating chamber.
There was no doubt that when Enric Miralles designed the
building, he took used poetic approach and incorporated
many of the Scottish cultural and geographical symbolisms
to illustrate the connection between the Scottish land
and the Scottish people. Needless to say, his efforts
paid off well and today the SPB is an important icon of
Scotland.
However, the design of the building has been
identified to be one of the causes of delay of the
Holyrood Project. According to Auditor General, Robert
Black’s report, the main cause of the 20 month delay
since September 2000 was the production of detailed
design variations and late supply of information during
the construction process. He also mentioned that thereAnushya.R 13
were difficulties associated with the construction due to
the complexity of the design and density of the
development (Auditor General, 2004).
By September 2000, the building was 50% larger than
it was originally designed to be (Max Wideman, 2010).
Subsequently, this had an effect on the construction
timeline and the budget of the project. In June 1999,
there was a call to look into the design of the debating
chamber again (Max Wideman, 2010). As a result, the
architects and members of the design team were required
to put in significant amount of additional time and
effort into the design of the debating chamber. In fact,
to help discover an effectual solution for the project
visits to Holland and Belgium were arranged to examine
the arrangements of the Flemish and Dutch parliament
buildings (Max Wideman, 2010). This single issue deterred
progression of the project as the architects and design
team took three months to resolve this single issue (Max
Wideman, 2010).
It was concluded by the Auditor General (2004) in
his report that one of the main reasons construction
costs ballooned and the project deadline extended was due
extensive design developments.
4.2 Procurement
Although the building was delivered successfully to
the SPCB, the project was deemed as a construction
debacle because cost and time objectives were not met.
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Originally the project was set to start in 1998 and
finish in 2001. However the final completion was only in
2004. This delay occurred even though time was said to be
a priority by the project team in the beginning (Fraser,
2004). One of the most discussed aspects of the project
was the procurement system.
The Holyrood Project employed a construction
management procurement system over other procurement
systems such as Public Finance Initiative or Public
Private Partnership (PFI/PPP) (Fraser, 2004). This was
questionable since the latter method is usually adopted
for public sector projects and large scaled ones. To
avoid any delays in the completion of the SPB the
ministers decided that the PFI/PPP method shall not be
pursued (Fraser, 2004). Even though it was a political
judgement exercised by the late Donald Dewar (Secretary
of State of Scotland) and project team with unrestricted
constraints it was necessarily in the best interest of
the project.
Although the procurement method has its advantages
however, it was disadvantageous to this project due to
several reasons (Fraser, 2004):
Greater client risk
The complexity of administering many differenttrade packages (approximately 60 in the case ofHolyrood)
The requirement for client to be informed anddecisive
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The essential need for a good project team andproject brief
The relative difficulty of managing delays anddisruptions in the project
Absence of any overall contractual programme ofcontract sum
In addition to that, there was no detailed
consideration of procurement options prior to the
selection of the construction management method. In
summary, the procurement method adopted was not given the
due consideration it needed. The findings in the Auditor
General’s (2004) report stated that construction
management is an unusual method of procuring construction
projects in the public sector and it has never been used
in a major public building project in Scotland. This
clearly shows the lack of expertise in the project team
especially in a crucial decision such as this.
4.3 Management
The Holyrood project did not consist of one Project
Leader but rather a team of Project Leader(s) which led to the
classic case of ‘too many cooks spoil the broth’. Based on
literature, there are many reasons as to why a project fails.
Amongst these reasons are lack of senior management and
ministerial ownership and leadership (Cicmil, 2005). In this
project this is clearly demonstrated by the project sponsor
Barbara Doig. Mrs. Doig was clearly not equipped to handle a
project of this scale as she lack the experience, expertise
and assertive qualities required for the role (Fraser, 2004).
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Her lack of skills was apparent when there was no in depth
research done on the method of procurement adopted for the
project (Fraser, 2004).
The project manager had no single point of authoritative
command which made it difficult to assert his authority of
influence to control the direction of the project. This was
one of the reasons the first project manager Bill Armstrong
resigned from his position. He had indicated that he was not
receiving the support necessary to enable him to carry out his
job as Project Manager and that his advice was not being
listened to (Fraser, 2004). Although he was an excellent
project manager as demonstrated by his track record, he was
powerless in this project and was unable to perform his duties
to the best of his abilities.
Also there was no clear direction as to where the
project was heading as this caused the delays and budget
overruns (Auditor General, 2004). In this case, the client,
SPCB, did not use normal budgetary control procedures in their
decision making process (Auditor General, 2004). Also, in June
2001 when the Parliament approved a motion that was construed
as removing the budget constraint of £195 million the Project
Team did not set a cost ceiling that would allow the project
to be properly managed in terms of time and cost (Auditor
General, 2004). Due to this fact, the focus turned to high
deliverable quality with no regards to cost and time
implications.
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Another flaw in the project management was the lack of
communication with the stakeholders. A high level of project
of this scale will attract significant amount of interest by
the media, public and other important stakeholders. It is the
responsibility of the client to keep the stakeholders informed
of its progression be it good news or bad news. The lack of
communication with the stakeholders shows that the project
sponsor had little knowledge of the project and the
construction industry. Moreover, throughout the project, cost
reporting and financial control was managed poorly in this
project (Auditor General, 2004) causing the overall cost of
the project to rise significantly.
In summary, the project did not have a clear direction
from the outset and lacked leadership. This in turn led to
lack of control over the project, poor flow of communication
and incompetent management by the project team.
5.0 CONTROVERSIAL ISSUES: COST AND TIME OVERRUNS
The two biggest factors that lead to the Holyrood Project
being one of the most discussed construction disasters are
cost and time. Following this statement:
“In spite of the political and cultural imperative of the successful completionof the SPB to the Scottish people, from a project management perspective thedesign, procurement and development of the SPN was certain to be subject toimmense cost and time overruns”
This statement is true to a certain extent. Given that
the project is of a massive scale there are some certainty inAnushya.R 18
cost overruns due to design variations and contingencies. This
in turn may or may not lead to cost overruns depending on how
well or how detailed the project has been budgeted in the
first place. Also, given that the procurement method that was
adopted was construction management there is added risk of
cost and time overrun.
5.1 Was the SPB Condemned to a Cost Overrun Since
Outset?
Looking at the method of procurement and the lack of
decisiveness from the client one can foresee that the project
was doomed to a cost overrun from the beginning. It did not
that help that the initial programme schedule was not
realistic enough to accommodate the futuristic design of Enric
Miralles. Changes in design cause a revision in cost and
construction and implicate the programme schedule as well.
During the detailed design period, £80 million was added to
the construction cost (Auditor General, 2004). This is
calculated to be approximately 19% of the overall construction
costs. Poor planning, decision making and lack of foresight by
the client and construction managers led to this outcome.
The programme schedule provided by Bovis should have been
deemed unrealistic and unachievable by the Project Sponsor and
the Project Team. The lack of experience by the latter caused
the late delivery of the project. Lack of project management
skills by the Project Managers and Project Sponsor also lead
to the rise of cost overruns.
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5.2 Was Time an Important Factor in the Completion of
the SPB?
From the outset the client was very clear regarding the
timeline of the project; the project needed to be completed to
the highest quality within the schedule. However, the question
then arises: Was the programme schedule for the construction a
realistic one? The answer is a sound ‘no’. The initial
programme schedule indicated the project was to be completed
by June 2001. However the final completion of construction was
not until March 2004.
Although Bovis complied with the client’s requirements
and came up with a programme schedule that fulfilled the
client’s deadline, both parties should have realised and come
to terms that from the onset that the demanding schedule could
not have been met. This lack of knowledge clearly shows that
the client or project team lacked significant experience in
the area of construction. Bovis on the other hand instead of
pleasing the client should have taken the responsibility of
highlighting the unachievable completion dates and the
consequences of pursuing the initial programme schedule
(Anderson, 2004).
It was evident that even though time was an important
factor in the construction of the SPB, the Project Team lacked
the necessary skills and experience to ensure the project was
delivered on time. The Project Sponsor and Minister involved
especially lacked the necessary leadership skills to take
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charge and make important decisions to ensure the well being
of the project.
6.0 DISCUSSION
The Holyrood project has been an extensive topic of
construction discussion amongst scholars. There are many
aspects of the project outcome that can be discussed and
debated upon. Generally, it can be concurred that the Holyrood
Project lacked teamwork, good communication flow, proper
project management and control. This naturally led to a budget
overrun and time delays.
6.1 Lessons to be Learned
In depth research and a detailed analysis should be done
before choosing a procurement method. Procurement methods
need to be chosen based on project requirements. In this
case construction management was not a suitable method of
procurement. The Project Team should have opted for the
Public Private Partnership method instead.
Project risks should be identified, carefully analysed
and weighed. If necessary, provision for counter measure
must be allocated to avoid cost overruns and construction
delay.
Project briefs must be prepared in detail during the
inception stages of a project. Cost analysis and timeline
must be thoroughly discussed before architects,
construction managers and design teams are appointed.
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Budget allocation must be done clearly along with a set
of key performance indicators that shall be used
throughout the duration of the project.
A clear cut hierarchy of the Project Team must be
appointed along with a proper communication line
flowchart. All personnel involved in the project
including contractors, designers, architects and project
managers must adhere to the flowchart.
For large scale public sector projects such as the
Holyrood Project, appointment of key personnel in the
Project Team such as Project Sponsor and Project Manager
should be exercised with much deliberation and care. In
the case of the Holyrood Project, lack of experience and
expertise amongst the key personnel involved in the
project proved to be one of the downfalls of the project.
Both client and construction manager should be realistic
about the programme schedule before the commencement of
the project. In this respect, the experience of the
Project Sponsor and Construction Manager is crucial to
the final outcome of the project
7.0 CONCLUSION
Today, nine years after its construction, the Scottish
Parliament Building stands as one of the most iconic buildings
of Britain. However, this iconic building also stands as one
of constructions’ greatest lessons. Public sector projects
should be handled with extra attention and thoroughness owing
to the fact that high profile projects are bound to be under
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media and public scrutiny. Having said that, if the Project
Team had exercised due meticulousness throughout the project,
the failure to deliver the project on time and on budget would
not have been so severe.
8.0 REFERENCES
Lord Fraser, Sept 2004, The Holyrood Inquiry, Scotland: ScottishParliamentary Corporate Body.
Scotland Parliament, Milestone dates in the building of the Scottish Parliament (n.d.).Retrieved Sept 25, 2013 from:http://www.scottish.parliament.uk/visitandlearn/16333.aspx
Max Wideman, 2010, Risks in Political Projects: The New Scottish ParliamentBuilding. Retrieved from: http://www.maxwideman.com/papers/political_projects/political_projects.pdf
Andersen E.S, Grude K.V, Haug T, Goal directed project management:effective techniques and strategies Kogan Page 3rd edition (2004)
Gardiner P.D, 2005, Project Management: A strategic planning approachPalgrave Macmillian
Cicmil S.K, 1997 Critical Factors of effective project management the TQMmagazine Volume 9 Number 6 Pg. 390-396
Auditor General, Robert Black, June 2004, Key findings from management of the Holyrood building project. Retrieved from website: www.audit-scotland.gov.uk
Isobel White and Iqwinder Sidhu, January 2005, Building the Scottish Parliament, the Holyrood project
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