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Current reality in Norwegian
public investment projects
Ole Jonny Klakegg
Research Director
Concept Research Programme
Concept
www.concept.ntnu.no
What do we need to invest in?
Value
[Million NOK]
Source:
State of the Nation
2010 (RIF –
Association of
consulting engineers)
Municipal buildings
Health buildings
Railway
Airports
State roads
Municipal roads
Water supply
Waste water
Waste disposal
Energy production
Energy distribution
SUM:
Current
state
Current
development
Securing
the future
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)
Ring 3 Ulven-Sinsen
Double track Asker-Sandvika
Leopard 2 tanks
New Opera-house Oslo
• Do we define and design major
public investment projects well?
Well Defined?
No! There is a lack of fundamental logic
Category
A
B
C
D
E
F
Characteri
sation
Well
defined
No
purpose
No effect
No
content
Parallel
effects
Top heavy
15
7
3
2
21
2
29,4%
13,7%
5,9%
3,9%
41,2%
3,9%
Symbolic
represent
ation
Number of
projects
Share of
projects
Result of analysis: fundamental logic in defining project objectives.
N = 51 projects.
Source: O J Klakegg, PhD dissertation 2010
Well Designed?
No! They are not up to best practice
50
45
40
38
35
30
25
21
20
20
15
10
6
5
2
0
Achievable
operational goals
Resources
available
One realistic
strategic objective
All uncertainties
included
One realistic
tactical goal
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 agencies
with projects in this sample.
Source: Concept Research Programme 2010
Actual cost compared to approved
expected cost
Average: -4%
Results placed on the timeline according to finishing date of the project.
The execution perspective
Category
Assessment (of the project as a whole)
No. of
projects
Very
All objectives achieved. Appears as specially positive and/or
successful 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
As expected, some objectives are achieved, others not. Partly
successful well executed, but weak on certain points. Moderate problems
with limited consequence.
5
Less
Most of the immediate objectives are only partly achieved.
successful Management was passive. Major conflicts during execution or
after.
0
Not
A lot of things has gone wrong, at the start and during
successful execution. The objectives are achieved only to a limited
degree.
0
Result of detailed assessment
No
4
OK
E6 Riksgrens. – Svingensk.
Warning
E6 Klemetsrud – Assurtjern
Stop
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
1
2
3
Roads
Railw
Building 17
ICT
Project
E6 Skjerdingstad – Jaktøyen
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
Governance
Agency plan.
cost. estim.
Goal
achievement
Management
organizing
Projectcontrol
Contract
management
Uncertainty
management
Analyses and Reality
Analysis
Reality
Organization
Market
Technical issues
Scope management
Contract strategy and…
Project control
Given by nature
Leadership and…
Users
Currency
Framework conditions
Stakeholders
Technical/System…
Transfer to operations
SME and Environment
Organization
Market
Technical issues
Scope management
Contract strategy and…
Project control
Given by nature
Leadership and…
Users
Currency
Framework conditions
Stakeholders
Technical/System…
Transfer to operations
SME and Environment
0
20
40
60
0
20
40
60
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