The Holyrood Building Project - Research Proposal Example

Background The construction of a seat of parliament, a symbol for Scottish nationality and democracy was one of the principal acts planned after thedevolution from their main United Kingdom administration by the Scotland’s government sitting in Edinburgh. The construction of the new Scottish Parliament House building, dubbed the Holyrood Project was an enormously complex and difficult scheme that was particularly prolonged, often failing to keep within the set time schedule and costing estimates. The Auditor-General of Scotland (2004, Pg.8) observed that, ‘in the recent history of Scotland there has not been a public building project as complex or as difficult to deliver as the Holyrood Project’. Due to its astronomical expense escalation and lethargic implementation schedule, it has dubiously ranked among the world’s worst construction projects. The Holyrood Project negated the acknowledged project management stratagems as advocated by Burke (1999) ‘developing structure in a complex project, where the independent variables of time, cost, resources and human behaviour come together’ (Pg.14). By the end of the project the cost had risen from an initial cost estimate of £40 set in 1998 to over £400 million in 2004, a 900 percent increment or approximately 11 times overrun from initial contract estimates (Burke, 1999). Among the various reasons attributed to the project ‘failure’ were unfounded optimism, unrealistic time period, undervaluation, poor leadership, lack of appropriate skills on the part of management, and uncoordinated teamwork. The upshot of the construction project management was a building that took 20 months more to finish and almost 400 million more in expenditure. The bloated expenses are insufferable when viewed in terms of the average building cost in Edinburgh at £1,544 per square metre while the Scottish parliament building cost £6,686 per square metre (MacDonnell, 2003); (Scottish Parliamentary Corporate Body, 1999); (White & Sidhu, 2005). This ranked among other ‘white elephant’ projects including the Concorde Project that soared from £45 million to £1.01 billion and the London’s Barbican, which rose from a modest £8million to £187million or a 2,237.5 percent escalation. Nonetheless the initial costing figures for the Scottish Parliament at Holyrood have varied ranging from as low as £10 - £40 million to as high as £24.5 to £34 million £109 million due ambiguous records. Nonetheless the White Paper on Scottish Devolution in April 1997. Section 11.6 gave an estimate of £24.5 to £34 million (The Holyrood Inquiry, 2004). Table 1 Holyrood Project Cost Estimates Total spend for 1998-2003, (£) million   Original Later Site acquisition 4 1 Demolition, archaeology 1 1 Construction 50 62 Fees, VAT, Contingencies 28 34 Total Site & Construction Cost 83 98 Fit-out, loose furniture, IT 8 8 Total Cost Estimate 91 106 *Figures are rounded to nearest million and may not sum to totals *External landscaping costs are excluded Source: SPCB letter to MSPs 9 June 1999 The University of Derby defines Project Management as: ‘the application of knowledge, skills, tools and techniques to project activities in order to meet stakeholder’s needs and expectations from a project’. Although in most normal construction projects the cost estimates are identified and known prior to the awarding of the contract, in the Holyrood project the Scotland’s Auditor-General Report (2004: 6) noted that, ‘design development became a process of costing a developing design rather than developing the design within a cost limit’. There was distinct lack of project management direction and leadership during the project management and implementation stages. The Parliament CEO as the project director lacked a clearly defined role in articulating decisions in consideration time, calibre and aptitude, and expenditure. Thus the report asserts, ‘in the Holyrood project there was no single point of leadership and control’ (2004: 7). To make the project widely acceptable the project managers allowed for public submissions after displaying the designs from the five shortlisted candidates namely: Rafael Vinoly; Michael Wilford; Richard Meier with Keppie Design; Enric Miralles y Moya; and Glass Murray & Denton Corker Marshall International. Of the 4,480 respondents from the public, the designs by Vinoly and Miralles were most popular and the later changed name to EMM & RMJM (Scotland) Ltd to incorporate Scottish partners. An evaluation by the Holyrood project consultants, Davis, Langdon and Everest (DLE) quantity surveyors and cost consultants [See Table 2] revealed that none of the shortlisted firms had estimates within the projected budget of £50 million, hence initiating the first real project overrun (White & Sidhu, 2005). Table 2 Estimated Budget Cost Area Metres Squared (Budget Ł50) User Brief - 20,740 metres Competing Firms million) Ft. Squared Glass Murray/Denton Corker Marshall Ł57.89 million 23,620 Richard Meier/Keppie Ł43.00 million Impossible to tabulate EMBT/RMJM Ł62.60 million 27,610 Rafael Vinoly/Reiach & Hall Ł89.60 million 38,700 Michael Wilford & Partners Ł73.40 million 39,885 Source: White & Sidhu, 2005 Pg.8 Enric Miralles and RMJM were eventually awarded the contract at costing of £50 million. However this was raised upwards after an additional 700 metres squared was added to accommodate more staff. The project was given a definite timeline schedule to embark on construction by July 1999 with a completion date set for autumn 2001. According to the Lord Fraser Holyrood Inquiry, the project managers did this without considering the allowance for the planning and design phase stages. The project managers were also guilty of ignoring the independent Project Team’s valuation consultants who had advocated an injection of an additional £27 million risk exposure figure to the budget. The now much maligned Permanent Secretary; Sir Muir Russell argued that it could not have been ‘regarded as a sound estimate of the likely cost of the project’ (Mackay, 2004, p. 9). One of the most glaringly omissions by the Scottish Parliament project managers as noted by the Lord Fraser Holyrood Inquiry was the lack of a clear procurement strategy hence opening the route for possible cost escalations. Within months of the project handover (August 1998), a feasibility study by DLE alleged that the Mirales Concept proposed by the EMBT/RMJM group was not feasible within the stated budget hence risk exposure was calculated at 80 – 100 percent possibility. In 2000, the Auditor General’s report highlighted a number of shortcomings to the ongoing project including ‘shortfalls in the procurement strategy, on project cost reporting, and in accounting for risk.’ (AuditorGeneral Report, 2000, Pg.6). Although the Holyrood Inquiry by Lord Fraser downplayed allegations of official corruption, some issues were too apparent to discount including the awarding of the contract to the highest bidder Bovis Lend Lease, in contravention to the set UK and EU regulations denying the most viable contractor McAlpine when the former was allowed to scale down their figure by £500,000. A former employee of Bovis was later to be appointed a Permanent Secretary of Trade (UNICORN, 2006). Further expenditure appreciation started accumulating thereafter the project commissioning in 1998 when there was the redesigning of the debating chamber in 2000, extension of the foyer roof, and use of Kemnay granite. A critical stage in the project phase as noted by the Lord Fraser Holyrood Inquiry was when the Scottish Parliament underlined the need of not ‘compromising quality and security considerations’ even at the risk of escalating the cost further. The Inquiry concluded that ‘whenever there was a conflict between quality and cost, quality was preferred’ (The Holyrood Inquiry, 2004, p. 240). The Building User Brief of 1998 deliberation on security were to gain more prominence in the wake of the US September 11 2001 terrorist attacks. However the Holyrood Inquiry rejected the assertion that security was the single most significant factor in cost overruns. Lord Fraser remarked that, ‘I have to reject…the assertion that resolution of the bomb blast issue was the biggest single factor affecting both programme and cost over the last five years’ (The Holyrood Inquiry, 2004, Pg. 23). The project management strategies employed have also been variously criticised particularly the construction management method that was propagated by the project manager Bill Armstrong and project sponsor Barbara Doig. This was upheld despite the stratagem been cynically adopted thus later found inadequate, mostly gripped by limitations on matters of procurement when it was later reviewed. This strategy voided the more intricate but secure route of comprehensive project management that could have scrutinised the divergent details in the project phases hence saving unnecessary expense and time (Mackay, 2004) [See Figure: 1]. Nevertheless Henderson (2006) has argued that many projects fail due to an ‘explosion of requirements’ or expectations that beset the project once it commences as more prerequisites. This generates huge gaps between the expectations and actuality in a phenomenon he calls the Requirements Drift (Pg.12). Figure 1 Source: University of Derby Lecture Notes The Holyrood Project seem to have endured a rollercoaster ride of alternating implementation estimates with increasingly injections of new subprojects that spiralled the price upwards and completion date forward typical of the alternative project lifecycle [See Figure: 2]. The project was therefore plagued by several ‘requirement drifts’ characteristic of public funded projects that are guided or managed by political appointees. Figure: 2 Source: University of Derby – Lecture Notes The main reasons indicated as causing the delay and upsurge in cost in the project are: Unrealistic Time Schedule The project was allocated unrealistic time schedule that did not consider the complexity and iconic status of the proposed building. The fact that the country had recently gained some sort of independence made the project sponsors led by Ms.Barbara Doig put undue pressure and deadlines on the contractors. The haste resulted in many price overruns as several issues crept up as the project progressed. There were therefore minimal feasibility studies undertaken to complement the project as little time was taken to asses the initial cost estimates and time schedule in the rush. Lack of Experience and Dedication The directors of the Holyrood Project including the project manager Bill Armstrong and Ms. Doig lacked the management capacity nor did they have the enthusiasm necessary for such a huge project. A new civil servant manger, Sarah Davidson also proved to be incompetent in terms of project management. The insistence by Armstrong to use construction management strategy was instrumental in the failure to adhere to the set schedule and costing. The project leaders ignored the advice of the main consulting firm Davis, Langdon and Everest (DLE) who wanted the estimate reviewed upwards to accommodate risk exposures. They also refused to consider engaging more experts as well as calling for more diligent procurement measures. The engagement of the contractor Bovis Lend Lease has therefore been blamed on the inexperience of the project leaders (AuditorGeneral Report, 2000). Lack of Technical Competence on Project Management The project managers selection and appraising of the best design team was also found wanting in matters of project management during the inquiry by the Auditor General and the Lord Fraser Holyrood Project enquiries. Similarly, the selection of the procurement firm was dogged in controversy when the highest bidder was selected contrary to the Scottish, UK, and EU guidelines (The Holyrood Inquiry, 2004). Poor leadership and Guidance The Holyrood Project was led by some ineffectual project managers who were crucially constrained by their incapacity to deal with the many emerging complex and rather intricate technical details. The building architect from Spain was also involved in many other global projects and resided outside the country. Other professional consultants involved had minimal contribution to the project due to undue political interference and incompetence of the sponsors. This is exemplified by the project overall leader, Sir Muir Russell appointing an inept civil servant Ms. Doig as the project sponsor and endorsing the hiring of the contractor against set guidelines (White & Sidhu, 2005). Inadequate Forecasting and Estimations The project was mired by inadequate costing and time schedule inconsistencies that led to price escalations. This was due to additional extension to the original construction plans and trimmings and fittings that kept on appreciating. There was a lack of adequate reappraisal in the project lifecycle to constantly check against undue overruns. The initial plans also ignored additional estimates including consultant and legal fees, taxes among others (Mackay, 2004). Lack of Coordinated Team Work The Holyrood Project construction and management team lacked proper leadership that could have enhanced teamwork and coordination in their work. The disparate additions and reworking occasioned by poor planning procedures as well as costly accumulation of overheads made the project grossly overrun. The project failure in keeping with the initial estimates has therefore being mainly blamed on poor coordination and lack of teamwork among all the stakeholders of the project (Haughey, 2001). Analysis of the Holyrood Project Failure as per OGC Best Practice Hypothesis Lack of clear links between the project and the organisations key strategic priorities, including agreed measures of success. The Holyrood Project was a discordant scheme that was plagued by poor linkage from the initial schedules and objectives. Lack of leadership from the project sponsors. The project managers and civil servants did not exhibit real leadership in taking control of the scheme as exemplified by the huge overruns and extended time schedule. Lack of efficient utilisation and linkage with stakeholders. The project managers ignored the advice of the technical consultants while also disregarding the appraisal reports by the Auditor General. Lack of competence and experience in project and risk management. The appointed project managers were novices in large projects development as was cruelly exposed by the failure to professionally run the project. Minimal consideration to developing strategies in project management and operations as well as making them manageable. The Holyrood Project was too complex to be managed wholesomely hence need to incorporate modern method and chopping the various stages into manageable phases. Compromising Quality over Costs. Although the project sponsors were considerate of maintaining quality throughout the implementation stages, the constant renegotiations and changes interfered with the anticipated time schedule. Lack of comprehension of and linkages with the contractors by the project leaders. In the Holyrood Project this led to inordinate delays in the supply and cost appreciation as negotiations were delayed. Lack of efficient project team incorporation linking customers, the contractors and the providers. This was reflected in the general lack of coordination and teamwork from all the stakeholders. Recommendations Project contracts should be managed by competent professionals by employing construction management strategies the risk is contained by the client rather than being at the mercy of the contractor. Proper evaluation during the project life-cycle must be emphasised by clear guidelines of when to continue or halt certain stages and awarding of new contracts. The Scottish Auditor-General report noted that, ‘scrutinise the business need for a project at key stages in its life-cycle, before key contracts are awarded, to provide assurance that it can progress successfully to the next stage’ (2004: 8). In such iconic projects of high magnitude, the contractor should be given a distinctive reward scheme that not only rewards timely schedules but also recompense for keeping or enhancing quality and keeping within set expenditure budgets. The project director should be delinked from the project sponsor to avoid duplication of roles especially in public projects of iconic status where political interference will greatly impede an impartial project director. The contractor must be given a clear guideline on timelines, costing and quality that must be strictly adhered to with appropriate penalties and rewards for either violation or distinction. Hence performance indicators for the project must be set to steer the project successfully. Large projects of high magnitude must be guided by a significant adequate timeframe that makes allowance for proper planning to enable the complex hurdles are sufficiently addressed while the project implementation stage must be set within a realistic time schedule. Summary The Holyrood Project has been criticised for employing civil servants as the project managers in a complex iconic facility construction (Mackay, 2004). Their propensity to succumb to political pressure was an unwelcome development that resulted in oversimplification of establishing real cost estimates hence making the project seem overly over bloated. The slow pace of the project which has been blamed on lack of sufficient professional specialists maybe somewhat misleading considering the Mythical Man-Month hypothesis propagated by Brookes (1979) indicates that person-months are not a conditional to mathematical laws. Tasks requiring a certain period may not necessarily be hastened by the addition of more personnel thus the Holyrood Project could not have been accelerated by the addition of more experts as ‘adding more people to a late project makes it later’ (Henderson, 2006, p. 6). Henderson (2006) argues that complex projects are intricately interlinked hence extricating them will be a problematical since they are tightly-coupled ‘changes to one component induce change in others’ (Pg.6). The completion of large complex projects may require more induction of funding to offset the many interrelated technical subterranean issues cropping up as the project progresses. Henderson however argues that when a contractor renegotiates the project contract, that it is the first sign of failure. Conclusion The failure of the Holyrood Project in the construction of the Scottish Parliament is not so much a matter of technical project construction implementation but rather mainly an issue of cost overruns that spilled out of control from the approximated value of £10 - £40 million to the final figure of £414.4 - £431 million. Similarly from the projected time period (conclude by mid-2001) was overshot by over 20 months as various delays and amendments were initiated despite constant funding and backing that disregarded costing. This 900 percent escalation is therefore a far assessment of a project managers and sponsors failing to keep within their budgets and timeline. Although large public projects are beset by cost overruns, the Holyrood Project abysmal escalation reeks of incompetence and haste that could have been avoided with more diligent employment of profession acumen. Engaging private sector managers immune from political pressure and following down strict contractual guidelines can save authorities public funds and improve on often delayed time schedules. The project management lifecycle requires constant feedback and appraisals that evaluate the progress of the project against the set contract obligations and guidelines of the project sponsor. References AuditorGeneral Report (2000) The Holyrood Project. Retrieved December 5, 2009, from Scottish Parliament Online: Axelrod R and M D Cohen (1999) Harnessing Complexity - Organisational Implications of a Scientific Frontier. Free Press, New York, NY BBC. (2000)a. Holyrood: The Great Debate. Retrieved December 5, 2009, from BBC Online: BBC. (2000)b. MSPs back Holyrood project. Retrieved December 5, 2009, from BBC Online: Body S P (1999) Scottish Parliament: Research Briefings: RN 99-11 The Holyrood building project. Edinburgh: Scottish Parliamentary Corporate Body: Research Note 99/11. Haughey D (2001) Eight Key Factors to Ensuring project Success. Retrieved December 5, 2009 from Projectsmart.com Henderson P (2006) Why Large IT Projects Fail. University of Southampton, SO17 1BJ, UK: School of Electronics and Computer Science. Holyrood Inquiry (2004) The Holyrood Inquiry. A Report by The Rt Hon Lord Fraser of Carmyllie QC Retrieved Online December 5, 2009 from Macdonell H (2003) Holyroods World-class Price Overrun The Scotsman Pg.1-2. Mackay T (2004) The Holyrood Project Scottish Parliament Edinburgh National Library of Scotland (2000) Parliament and the people conned over Donalds Dome says McLetchie. Retrieved December 5, 2009, from National Library of Scotland Online: Scottish Parliamentary Corporate Body (1999) Scottish Parliament: Research Briefings: RN 99-11 The Holyrood building project. Edinburgh: Scottish Parliamentary Corporate Body: Research Note 99/11. The Holyrood Inquiry (2004) The Scottish Parliament Construction: The Holyrood Project. Retrieved December 5, 2009, from Scottish Parliament Online: http://www.holyroodinquiry.org/holyrood-history.htm The Information Centre (1999) THE HOLYROOD BUILDING PROJECT. Edinburgh: The Scottish Parliament; Research Note 99/11. UNICORN (2006) Scottish Parliament Building. Retrieved December 5, 2009, from Against Corruption Organisation Online: http://www.againstcorruption.org/ University of Derby (2009) Project Management. University of Derby; Derby White Isobel and Iqwinder Sidhu (2005) Building the Scottish Parliament, The Holyrood Project. Glasgow: Parliament and Constitution Centre: SN/PC3357. Read More