HS2 Stakeholder Analysis

What is HS2?

High Speed 2 is the Labour party’s initiative to connect the North and South of the UK with a high speed, low carbon train network. It was officially launched in 2009 by Labour and has faced difficulty after difficulty trying to get the work started.

Phase one of HS2 is to connect London to Birmingham, and this has the green light from the government. Opposition has arisen from the constituencies that have been split, residents that have had their homes demolished and parties, such as UKIP and the Greens have slandered the project, calling for it to be stopped. However, the work to start phase one was green-lighted in parliament in 2017. Phase two, connecting Manchester and Leeds has not had complete permission granted yet and is in jeopardy of being stopped completely.

Stakeholders

Stakeholders will need to be identified, there are many ways to do this, like brainstorming, advice and guidance from similar projects and continual monitoring will help identify stakeholders as well.

Stakeholders:

Internal Stakeholders External Stakeholders
Demand Side Supply Side Private Public
·        Department for Transport (sponsor)

·        British Government

·        Allan Cook, Chairman HS2 Ltd

·        Engineers

·        Contractors

·        Material Suppliers

·        Railway Industry Association

·        Staff

·        Local Residents

·        Local business and landowners

·        Special interest groups

·        Environmentalists

·        Conservationists

·        Archaeologists

·        Other Rail networks

·        Transport businesses

·        Taxpayers

·        Local Councils

·        Regulatory Agencies

·        Newspapers
/media

·        European Rail Freight Association

 

 

Once you know who the stakeholders are you should analyse this further, creating a register with their information to determine how they should be managed.

Mendelow’s Power-Interest grid can help to breakdown the stakeholders into categories to help establish the best ways to communicate with them:

powerinterest

 

Procurement Types 3

Management Contracting

Management contracting can be known as an overlapping procurement system as the design, construction and tendering all overlap. This strategy is suited to more complex projects with accelerated commencement and completion.

The contractor is involved from the start of the design and is responsible for the integrated design and construction phase, the contractor offers the client a consultant service, based on a fee, for coordinating, planning, controlling and managing the design and construction.

Management contracting puts the contractors experience to use from the start, in the concept and design phase through to the construction, they advise the employer on the buildability of the design, plan the construction and discuss cost estimates. Contractor is responsible for tendering parcels of work and negotiating subcontracts with subcontractors (known as works/trade contractors). After client approval, management contractor enters contracts with the works contractors. The contractor manages the project for a lump sum or percentage fee, meanwhile the client has no contractual link with the subcontractors, however this leaves them vulnerable to the contractors’ failures.

Management Contract  normally follows three phases:

  1. Pre-appointment of the MC – After the initial design and feasibility have been arranged, employer invites offers from MCs
  2. Pre-construction period – during this time, the MC will help the design team by offering certain services such as advising on buildability/construction methods, etc.
  3. Construction period – the MC organises and co-ordinates the project, supervises the work and monitors cost.
Advantages
  • time saving potential for overall project duration by using construction packages and overlapping design and construction stages.
  • cost reduction potential by using competition to let work packages and by using value engineering efficiently § Friendly relationship – design and construction
  • late changes more easily accommodated
  • design team are under the clients control throughout the project
  • client has control over selection of trade contractors
  • liked by knowledgeable/experienced clients
Disadvantages
  • no cost certainty prior to commencement of work on site, or in fact until completion
  • needs informed client, able to take an active part in the process
  • design of later packages may affect work already completed on site leading to abortive additional costs
  • individual direct contracts with package trade contractors – no single point responsibility for their performance or quality of their design/workmanship
  • greater administration for the client
  • client takes responsibility for design team performance
  • client carries risk of the effects of non-performance by trade contractors, their financial failure
Construction Management

Like Management Contracting, this strategy is also used on more complex projects, construction management’s primary difference from MC is: Employer places a direct contract with each of the specialist trade contractors. This means that more experienced clients like construction management as they have more responsibility over the trade contractors and the construction manager is only liable for negligence, by failing to perform role with reasonable skill and care (unless greater liability is incorporated in the contract).

Advantages
  • time saving potential for overall project duration by using construction packages and overlapping design and construction stages.
  • Cost reduction potential by using competition to let work packages and by using value engineering efficiently
  • Friendly relationship – design and construction
  • Continuous coordination between the design and construction processes
  • late changes more easily accommodated
  • design team are under the clients control throughout the project
  • design team are managed by the CM
  • client has control over selection of trade contractors
  • liked by experienced clients
Disadvantages
  • no cost certainty prior to commencement of work on site, or in fact until completion
  • needs informed client, able to take an active role in the admin. of the process
  • design of later packages may affect work already completed on site leading to additional costs
  • individual direct contracts with package trade contractors – no single point responsibility for their performance or quality of their design/workmanship
  • greater administration for the client
  • client takes responsibility for design team performance
  • client carries risk of the effects of nonperformance by trade contractors, their financial failure No guarantee by the construction manager for total cost, time or quality of works. The owner has high risk.

 

In Other News

IMG_1422

Unfortunately, the lady that was due to be moving into the house at the end of the month has pulled her offer out and so the house is back on the market. 😦 sad times!

The Beginning of Semester 2

(Projects in a commercial environment)

Introduction to Procurement

Returning to University in the 3rd week of January after a good Christmas holiday, we kick-started the day with an introduction to procurement. Firstly learning that: The Chartered Institute of Procurement & Supply defines procurement as: “Procurement and supply management involves buying the goods and services that enable an organisation to operate in a profitable and ethical manner.” Basically, procurement involves a lot more thought than simply purchasing something, taking more care to consider things such as price, quality, time, location and reputation.

Procurement can be like a process; it requires contracts and relationships between parties and becomes more complicated and thorough depending on the risks involved with the project.

A procurement route is all about deciding on allocation of risks in respect of: Time, Cost and Quality. And has responsibilities of Design, Construction, Management, Operation, Funding

The main characteristic of a traditional procurement route is the “separation of the responsibility for the design of the project from that for its construction.”

The History of Procurement Routes:

The traditional method would consist of competitively priced, staged lump sum payments. This method became popular in the mid-1850s. The lack of co-ordination between trades such as design and build became an obstacle and lead to the decrease in popularity for the traditional method after the 2nd World War. Involving a contractor in the early stages of the project proved to be good.

Another reason that the traditional route began to fail was in 1973 – oil crisis caused major rise in fuel prices and interest rates which meant that people were prioritising quick completion to reduce cost. This led to building work commencing before some plans are complete.

red and yellow tower crane on top of building under construction

Photo by Pedro Sandrini on Pexels.com

The Process:

Preparation – creating a business case and appointing a Project Manager.

Design – Appointing the design team and beginning the design process, it is important to take time and communicate with the design and build teams as rushed plans leads to errors and conflict.

Under the traditional procurement route, design is normally completed:

  • Before competitive tenders are invited.
  • Before the main construction contract is let. But:
  • Contractor may have some design liability, where identified and contractually stipulated.

Preparing and Obtaining Tenders – finalise documentation (BOQ – bill of quantities), specifications, drawings, etc. The design must be fully prepared before the BOQ is created for pricing accuracy and fairness.

Construction Phase – assuming there are no changes, construction cost can be identified with reasonable accuracy.

To ensure good communication throughout the process, the PM should oversee the teams.

 

Advantages of traditional procurement route:

  • Has stood the test of time
  • Understood by many clients, contractors etc.
  • Client able to select the most appropriate design team
  • Client able to have direct influence, thus facilitating a high level of performance and bespoke quality in the design
  • Client can monitor and control all phases of the project
  • High degree of certainty based on the cost and specified performance before a commitment to build

High risk of disruptions and variations, especially in cost if the design is not fully prepared before the tender is obtained or the BOQ is inaccurate.

Disadvantages of traditional procurement route:

  • Design-bid-build sequence takes long period of time
  • Designers design, don’t manage
  • Contractor unable to contribute to the design.
  • No benefit from contractor’s experience while designing the project (buildability)
  • The traditional standard forms are adversarial in nature, mentality of “that’s not my job”
  • Accelerating the process by producing tender documents from an incomplete design, or inaccurate BOQ, can result in less cost and time certainty. Leads to: Variations Time and cost overrun Expensive disputes
  • Client bears the risk of design and cost (quantities)
  • Client can think bid is a lump sum (therefore final cost) but is still vulnerable to claims
  • Strategy based upon price competition, which can result in adversarial relationships developing

~

In other, unrelated news – I sold my house! You can see completed pictures in the gallery on my website…

IMG_1391

 

Golden Gate Bridge Example

Simplified Business Case for the Golden Gate Bridge

This weekly upload is going to be a study blog, written to help me revise my course, Project Management BSc. Hopefully, it will also create a good overview for anyone else looking to study the same thing.

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In response to my last post, I wanted to share a rough draft of a simple business case. Using my University’s description of a business case, I have tried to come up with something similar, referring to the Golden Gate Bridge. I haven’t addressed all the key elements of a business case here, because I either struggled to find any research on that specific part or I wasn’t confident enough with my answer. If anyone does have any good feedback, that would be helpful. However, this is just my take on a quick task, nothing serious, perhaps as my course matures, I will be able to return to it and extend it a bit further.

Strategic Case: A solution is needed to connect the almost 2-mile gap between Marin County to San Francisco as there was no way round at the time.

Options Appraisal:

  Option Cost
1. Do nothing Minimum
2. Build a Bridge (recommended) Maximum
3. Invest in Boats Average

Expected Benefits and Disbenefits:

Option Benefits Disbenefits
Do nothing Saves cost, saves resources No direct link between Marin County and San Francisco Bay
Build a Bridge Direct link between Marin County and San Francisco Bay, opens up employment (on construction and between the 2 areas), more roads leading to less congestion. High cost, high risk construction, disapproval from business owners and civic leaders, ruin the view of the bay, obstruct ships, requires maintenance
Invest in Boats Increased access across the bay, increased revenue and employment for the shipping business Requires maintenance, will not allow car access between the 2 areas

Financial Case:
Engineers estimate of $25-30 million to construct.

$35 million in bank bonds granted

Bank of America President Amadeo Giannini, who provided a crucial boost by agreeing to buy $6 million in bonds in 1932. https://www.history.com/topics/landmarks/golden-gate-bridge

pexels-photo-2068975.jpeg

Photo by Alexander Mils on Pexels.com

Risks of Building the Bridge:

  1. Hazardous working conditions – impacts the workers and their family’s health and wellbeing
  2. There was risk of insufficient funding after the Great Depression – may cause the bridge to remain uncompleted, or could lead to a delay in the project
  3. Earthquake – after the 1906 San Francisco earthquake there would be worries of insufficient measures to avoid bridge collapse, which would incur additional costs and endanger lives.

Time Scale:
Drawings for the bridge were submitted in 1921 and were passed in 1933. Building work was completed in 1937.

Benefits realised after one year “June 30, 1938: During the first full fiscal year, the Golden Gate Bridge serves 3,892,063 motor vehicles, carries more than 8,000,000 passengers, and in excess of 400,000 pedestrians walked the sidewalks (GGBHD Annual Report FY37/38).”

According to http://goldengatebridge.org/research/GGBTraffToll.php, the toll for the bridge was 50 cents each way in 1937, so according to above study, in the first year the bridge would have roughly earned $1,946,031.50 in it’s first year.

img_0110

If you have any tips on how to improve this, please let me know!

OTHER SOURCES

http://goldengatebridge.org/research/dates.php

http://goldengatebridge.org/research/GGBTraffToll.php

https://www.history.com/topics/landmarks/golden-gate-bridge