Current reality in Norwegian public investment projects

Ole Jonny KlakeggResearch Director

Concept Research Programme

Concept

Conceptwww.concept.ntnu.no

What do we need to invest in?

Source:State of the Nation 2010 (RIF – Association of consulting engineers)

Municipal buildingsHealth buildings

RailwayAirports

State roadsMunicipal roads

Water supplyWaste water

Waste disposalEnergy productionEnergy distribution

SUM:

Current develop-ment

Securing the future

Current state

Value

[Million NOK]

Research into Current Status

• 88 Projects subject to external quality assurance in Norway (2001-2007). Sample includes: + 29 Road and railway projects+ 12 Building projects+ 10 Defence projects= 51 Projects in total (58% of population)

• Do we define and design major public investment projects well?

Ring 3 Ulven-Sinsen

Double track Asker-Sandvika

Leopard 2 tanks

New Opera-house Oslo

Well Defined?

Category A B C D E FCharacterisation

Well defined

No purpose

No effectNo

contentParallel effects

Top heavy

Symbolic representation

Number of projects 15 7 3 2 21 2

Share of projects 29,4% 13,7% 5,9% 3,9% 41,2% 3,9%

No! There is a lack of fundamental logic

Result of analysis: fundamental logic in defining project objectives. N = 51 projects.

Source: O J Klakegg, PhD dissertation 2010

Well Designed?

38

21 20

6

2

0

5

10

15

20

25

30

35

40

45

50

Achievableoperational goals

Resourcesavailable

One realisticstrategic objective

All uncertaintiesincluded

One realistictactical goal

No! They are not up to best practice

Best practice reference: Logical Framework Approach. The number of projects meeting the best practice criteria. Total of 51 projects evaluated.

Source: O J Klakegg, PhD dissertation 2010

Governance of Projects

• The Norwegian State needs to invest in physical infrastructure

• We have financial ability

• But we struggle to find economically viable projects (few people to share the cost)

• And we struggle to define and design the projects well

How do our projects perform?Objectives achieved No. of Projects Share of Projects

Within cost frame 22 95%

Not significantly beyond approved expected cost 21 91%

Without significant delay 21 91%

Quality as expected 22 95%

Result of 23 major Norwegian public investment projects finished after going through QA2. They reach objectives and deliver within approved frames.

We see a high degree of professionalism in project management in all agencieswith projects in this sample.

Source: Concept Research Programme 2010

Actual cost compared to approved expected cost

Results placed on the timeline according to finishing date of the project.

Average: -4%

The execution perspectiveCategory Assessment (of the project as a whole) No. of

projects

Very successful

All objectives achieved. Appears as specially positive and/or has established new best practice 6

Successful All immediate objectives achieved. Well executed, active management, good handling of communication and conflicts. No significant problems.

12

Average successful

As expected, some objectives are achieved, others not. Partly well executed, but weak on certain points. Moderate problems with limited consequence.

5

Less successful

Most of the immediate objectives are only partly achieved. Management was passive. Major conflicts during execution or after.

0

Not successful

A lot of things has gone wrong, at the start and during execution. The objectives are achieved only to a limited degree.

0

Result of detailed assessmentNo Project Governance Agency plan.

cost. estim.Goal

achievementManagement

organizingProject-control

Contract management

Uncertainty management

1 E6 Skjerdingstad – Jaktøyen

2 E6 Riksgrens. – Svingensk.

3 E6 Klemetsrud – Assurtjern

4 Rv 653 Eiksundsambandet

5 E18 Høvik – Frydenhaug

6 Ringvei Nord, Tønsberg

7 E10 Lofast

8 E18 Kopstad – Gulli

9 Rv 2 Kløfta – Nybakk

10 E6 Åsgård – Halmstad

11 E6 Svingenskogen – Åsgård

12 E18 Momarken – Sekkelsten

13 Dobbeltspor Sandvika-Asker

14 GSM-R samband for jernbanen

15 Nytt operahus

16 Høgskolen i Østfold

17 Nybygg Svalbard forskningsp.

18 Tollområde Svinesund

19 ISL-prosjektet (nybygg FD)

20 FIS Basis

21 GOLF, leveranseprosjekt 1

22 LOS ØP (økonomiprosjektet)

23 NAV-IKT

Roads

Railw

Building

ICT

OKWarning

Stop

Analyses and Reality

Some issues dominate in analyses (based on 75 project analyses). Observations in real life show that reality is more complex (based on 23 finished projects).

Concept Symposium 2010

Highlights of the Symposium

Decision makers, doers and advisors:

Joining forces to enhance utility of investments

• 32 international presenters• 100 participants• By invitation from the

Norwegian Ministry of Finance

Want an invitation? Look at: www.concept.ntnu.no