Adelaide Desalination Plant in Lonsdale - Reason for Project Fail - Case Study Example

Case Study University Affiliation Name Executive summary This project analysis reveals the phases, events, and challenges that have faced Adelaide’s desalination plant project in South Australia. The desalination plant was aimed at reducing the over dependence of Adelaide on the Murray River and rainfall based water sources. The project also aimed at reducing pressure on the Murray River to meet water supplies. The project followed inadequate water supply and resulting water restrictions for the metropolitan. The project aimed at serving over 50% of the water needs in the Adelaide metropolitan in South Australia. The construction of the Adelaide desalination plant has faced various challenges that have resulted to missed deadlines and extension of timeframes. Other issues have been raised in regard to the project that requires to be addressed by project managers. Lessons for project managers are evident. Brief introduction to the project The project Adelaide Desalination plant in Londsale, South Australia was commenced in March 2009 and was to be completed in 2012. The desalination plant project was meant to remove impurities and dissolved salts from the Port Stanvac water source through the process of reverse osmosis; where high pressure forces salty water through a membrane that acts like a strainer to remove impurities and salts. The project is located at coastal Port Stanvac. The indicative cost for building 100 gigaliters seawater and the associated works is $1.83 billion and conducted in two phases, with the first phase for 50gigaliters per year and the second phase topping to reach 100gigaliter per year. When completed, the project was meant to serve over 50% of clean water needs in Adelaide. Water will be distributed by a new pipeline from the desalination plant to storage tanks situated at happy valley before entering the current water supply network. The project was funded by South Australia government. The project was envisioned following the realization that the amount of clean water available was inadequate. The desalination project was thus meant to compensate for the dwindling rain water in South Australia. The project idea was mooted following the obvious pressure on river Murray and concerns over the sustainability of dependence on rain water to meet clean water needs for the South Australia populations. The shortage in rainfall further made the need for alternative water source that is not dependent on rainfall to be identified. Overreliance on Murray River and rainfall sources to meet water supplies for Adelaide had resulted to inadequate water supply contributing to water restrictions for the metropolitan. The objectives of the project is to build a 100gigaliter per year desalination plant to provide the south Australia population with additional water to aid providing reliable drinking water supplies for the future needs of South Australia. The project aims to ensure that adequate drinking water is available even during the drought seasons. Another objective of the project was to significantly reduce the over reliance on River Murray and other rainfall based water sources (Implementation Plan, 2008). The scope of the project includes the plant construction realising a capacity of an additional 100gigalitres per year to the existing water sources thereby serving over 50% of water needs for Adelaide. A transfer pipeline system from Port Stanvac to Happy valley water treatment supply is also to be constructed where it will combine with water from the Happy valley water treatment plant. A project stakeholder analysis There are a number of stakeholders for the project. The Southern Australia government through SA Water are major stakeholders as the financier and water distributors in the project. The taxpayers who funded the project through the government are also interested in the outcome of the project. The community living within the project zone are stakeholders as the project may impact on their lives in various ways. Other stakeholders that may be interested in the outcome of the project are the local populations who are supposed to be served by the project when completed, and environmentalists due to possible impact of the project on environment. The companies that are working on the project Adelaide Aqua, which is a consortium of four companies contracted to design, build and operate and maintain the plant for a period of twenty years, a joint venture between McConnell Dowell Constructors Pty Ltd and Built Environs Pty Ltd supposed to construct the pipeline and ETSA electricity supposed to supply power to the plant also form part of the stakeholders as they stand to be impacted by the success or failure of the project. The company’s employees including architects, engineers, among others are also stakeholders. A brief description of how the project was managed The first step involved identification of a location for the plant. Port Stanvic was identified as an ideal location due to its relatively deep sea water, access to water supply network, marine dispersion, construction cost and suitable land. The project aimed at avoiding environmental and other risks and this was attained through marine monitoring that started in 2008 and includes salinity monitoring and marine monitoring of habitats, water quality, and discharge testing to continue after the completion of the project in order to avoid and minimise potential adverse effects to the marine. A pilot study was conducted successfully at Port Stanvac at a cost of $10 million from January 2008 to August 2008. The plant construction began in March 2009 and was initially supposed to have its first water by December, 2010 and later changed to March 2011 before it was again pushed forward by three months to August 2011. Initially, the project targeted to produce 50 gigaliters per year but this was revised to 100 gigaliters in June 2009 and additional funding of $228 million provided by the federal government with the cost expected to shift from $1.1billion to $1.84billion (Roxas, 2010). The pump station and pipeline to transfer water to the existing water supply at happy valley was completed and revegetation of the pipeline corridor also completed but after undue delays. Power supply was expected to come from renewable sources at estimated cost of $75million annually but the estimates had increased to $130 million per year as at the end of 2010. Power from renewable sources may not be possible due to resistance of turbine wind farm construction among residents at the proposed site. (Martin, 2010) pointed out that the project was accused of cover ups in delays, chronic delays in schedule, and safety breaches leading to a call for an inquiry. The project is yet to be completed and while the SA Water has made assurances that the plant will not incur additional costs despite being late, there are risks that water cost would be higher. The plant constructed is supposed to be complete by December 2012. Strategies for meeting the project targets include use of procurement strategy, risk analysis, communication and stakeholder plan. A critical analysis of the project outcome The project has failed to meet its deadlines for completion of various stages. For instance, an initial deadline to have the first water was set at December 2010, changed to March 2011 before delivery on July, 2011, which was a delay of eight months. This has led to negotiations for new delivery dates with possible consequences for financial penalties of up to $10million for the project (Sarah, 2011).While the whole project is yet to be completed, the risk of additional costs for the project thus still remains a real threat to the success of the project. The failure to meet scheduled timeframes is an indication of poor planning. Failure to adequately plan for contingencies has resulted to the inadequate explanations for missing schedule; that the death of one of the employees was the reason for the project to fall back by four months besides indicating lack of preparedness against risks in project management. Poor risk management is also a challenge as the project aimed at meeting deadlines thereby sacrificing safety standards (Sarah, 2010). The projects commitment to source 100 percent of its energy need from renewable sources is threatened by resistance from communities surrounding the proposed energy producing wind turbine. This shows improper consultation of stakeholders. This risks making the project less viable as the costs of producing water may be extremely high. This may further exacerbate the ability of the SA Water to apply the national water Initiative (NWI) pricing, which are some of the responsibilities for the state according to the implementation plan (Implementation plan, 2008). In conclusion, the project has failed to meet deadlines for the first milestone of 50gigalitrs per year and there are high chances that it may not meet the second phase expected to be complete by December 2012. The project is unlikely to achieve its objectives especially in the short term since it is not yet to be completed and on the long term due to the cost factors if issues that are arising in the course of project implementation are not addressed. Additional costs are likely to be incurred due to the unnecessary delays brining out issues of poor planning and implementation of the project to the fore and providing lessons for project managers. References Roxas, S. (2010). Adelaide’s desalination plant costs remain the same despite another delay. Available: http://au.ibtimes.com/articles/93639/20101220/adelaide-s-desalination-plant- cost-remains-the-same-despite-another-delay.htm. Last accessed 1st October 2011. SAWater. (2011). Desalination: Project Information. Available: http://www.sawater.com.au/SAWater/WhatsNew/MajorProjects/ADP_ProjectInfo.htm. Last accessed 1st October 2011. Sarah, M. (2010). Desalination plant delays, cover-ups prompt call for inquiry. Available: http://www.adelaidenow.com.au/news/south-australia/desalination-plant-delays-cover- ups-prompt-call-for-inquiry/comments-e6frea83-1225940901270. Last accessed 1st October, 2011. Sarah, M. (2011). More delays hit Adelaides desalination plant. Available: http://www.adelaidenow.com.au/news/south-australia/more-delays-hit-adelaides- desalination-plant/story-e6frea83-1226021894494 Last accessed 1st October, 2011. National Partnership agreement on water for the future. (2011) Implementation Plan for Adelaide desalination project (50GL/year plant). Available: http://www.federalfinancialrelations.gov.au/content/national_partnership_agreements/en vironment/water_for_the_future/Adelaide_desalination/SA_50GL.pdf. Last accessed 1st October, 2011. Appendix Factsheet Involved in the project: Financiers/ Client: SA water Pipeline construction: McConnell Dowell Constructors Pty Ltd and Built Environs Pty Ltd Plant design, construction, maintenance: Adelaide Aqua Ltd (Consortium of AbiGroup, McConnell Dowell & Acciona Agua, Trility) Type of contract: Construct, Operate and maintenance Technology: Reverse osmosis seawater desalination Cost: 1.83$billion Web-site of the project www.sawater.com.au Project Timeline Payment number Milestone Dates Expected Actual Delivery Date Amount 1 Award of construction, design operation and maintenance of plant October 2009 October, 2009 $25,000,000 2 Completion of bulk earthworks and excavations February 2010 March, 2011 $35,000,000 3 Power supply and transfer pipeline infrastructure, first water December 2010 July, 2011 $30,000,000 4 Completion of bulk earthwork for 100gigalitere plant, 50 giga litre at operating capacity May, 2011 Not yet complete as at October 2011 $10,000,000 5 Other milestones to completion 31, Dec, 2012 - $228,000,000 Read More