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Subject Code INF70005 Subject Title Subject Title bject Title Strategic Project Management
Lecturer’s Name Dr Bill Young
Title or Topic Addressed Edinburgh Tram Network
Due Date 21 March 2017 Date Received 20 March 2017
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Marker’s Signature Date Grade/Mark INF70005
STRATEGIC PROJECT MANAGEMENT
Assignment value 30 %
EDINBURGH TRAM NETWORK
SummaryThe project is about Edinburgh tram network which is an alternative for increasing traffic problems in Edinburgh, Scotland. The document contains detailed plans, expectations and executions from the Tram network, what are the strategies ETN had gone through, what was the impact of those strategies on the outcome and how much that effected the proposed budget. The criteria which has made the project exceed the proposed budget which leads the project failure and a discussion about the standard criteria. The document also contains suggestions and recommendations that can be useful for other organizations in future.Contents
TOC o “1-3” h z u STUDENT(S) DETAILS PAGEREF _Toc477711234 h 1Summary PAGEREF _Toc477711235 h 3Edenburgh Tram Network PAGEREF _Toc477711236 h 5Introduction PAGEREF _Toc477711237 h 5Background PAGEREF _Toc477711238 h 5Criteria PAGEREF _Toc477711239 h 7Standard Criteria PAGEREF _Toc477711240 h 7Critical Identification and Justification PAGEREF _Toc477711241 h 8Conclusion PAGEREF _Toc477711242 h 9Recommendations PAGEREF _Toc477711243 h 9References PAGEREF _Toc477711244 h 10
EDINBRUGH TRAM NETWORK
IntroductionEdinburgh Trams is a tramway in Edinburgh, Scotland, operated by transport For Edinburgh. It is a Kilometre line between York palace in new town and Edinburgh Airport, with 16 stops. The main aim of the ETN project is to provide efficient, comfortable, modern and integrated service for the Edinburgh local people which enhances the city economy and environment. The project has been expected to be environment friendly by providing a platform for society to use public transport but due to its delays in opening, over budget in each stage of execution the project has been considered as failure
BackgroundHistory suggests that Edinburgh is city of trams origin. Trams are operated in Edinburgh 1871 to 1956. The first tram system was horse-drawn, while cable-haulage appeared in the city in 1898. Electric trams replaced cable-haulage trams in the year 1923.Electrification of the cable trams began partly in mitigation of the effects of the unpopular merger of the Edinburgh and Leith burghs in 1920. In 1952 a programme commences to replace entire tramway fleet with motor buses. In 1956 trams are replaced by buses the last tram ran on November 16, 1956.
After 1956 Tram services were completely stopped and bus services were introduced in Edinburgh. Expanding population and increase in vehicle ownership, city transport began to expand there were serious traffic problems since the 1980s. Car ownership in Edinburgh was amongst the lowest in the United Kingdom and bus usage was significantly high. However over last 2 decades, car ownership has steadily increased towards the national average leading to increased traffic congestion. Trams have been considered as the only solution to Edinburgh’s increasing traffic problems. Edinburgh virtually lost all its suburban rail system in the 1960s.
As city began to expand approximately 160,000 vehicles enter city everyday which causes serious pollution effects to environment. frequent road repairs and increased traffic congestion were the main concerns for the transport department. A full metro system was always going to be ruled out on the grounds of cost so trams emerged as the only viable solution. A consensus emerged on the City of Edinburgh Council (CEC) in favour of a tram network supported by all the parties represented. Labour were the majority party, but the scheme was also supported by the Conservatives and Liberal Democrats. The CEC allocated the management of the project to their ‘arms-length’ company Transport Initiatives Edinburgh (TIE)
By starting the Tram network project, the Edinburgh people was not only expecting that it provides solution for traffic problems, city employment and economy growth with a structure in it.
The Decisions which are made by the team for the cause of failure
The Edinburgh trams project ranks as fourth largest public capital project in Scotland. During the period since the City of Edinburgh Council (CEC) gave its approval to the project’s final business case in December 2007, there has been significant media attention given to it with concerns raised about cost over-runs and delivery delays.
A parliament bill was proposed by Scottish national party transport spokesman Kenny McCaskill in support of a tramway between 2000 and 2002. The Scottish executive announced the approval of funding in 2002.
Factors that effected cost and time overrun:
The political dispute was far from over despite the project being finalized and started initial funding. The SNP councillors did not see themselves a bound to support the project even though they were part of the administration sponsoring it. Similarly, the SNP Government ministers at Holyrood lost few opportunities to take forward the progress of project even though they were the main funders. This continued after the Scottish Government cancelled the Edinburgh Airport Rail Link in favour of making the trams the means of linking the City Centre and the main line rail network to the airport.
There were four distinct contracts let for the project:
1. System Design Services (SDS)
2. The Multi Utilities Diversion Framework Agreement (MUDFA)
The MUDFA contract was awarded to Alfred McAlpine (AMIS) in October 2006. The contract commenced on July 2007 after some preparatory ad investigation work and was due to be completed by November 2008. The work was delayed by prevarication by first minister Alex Salmond in 2007 before funds were allocated. The decision of the Scottish government to fund a new station at Gogar as a partial replacement for the Edinburgh Airport Rail Link Project was another problem. This decision required a redesign of the tram track layout near to the depot at Gogar and the construction of a few tram stop simplify the interchange.
3. The Tram Infrastructure and Maintenance Contract (INFRACO)
The INFRACO contract undertaken by BBS a consortium of Bilfinger-Berger carrying out the civil engineering works and Siemens company is responsible for the electrical side in May 2008. The contract finally signed in May 2008 with a start on site expected by September 2008 and completion was estimated by January 2011. It was planned that passenger carrying operations would start in 2011. The first dispute elevated in March 2009 when BBS refused to start on the track laying on princes’ street. There were suggestions in the press that BBS were demanding an extra £80 million was agreed before they would commence track laying. The works were completed by the November 2009 deadline. The Disputes continued into 2010.
4. Vehicle Supply and Maintenance Contract (TRAMCO)
The TRAMCO contract was won by the Spanish firm CAF in November 2007.Tramcar construction Works completed smoothly. The first two cars built underwent trails at siemens test track in Wildenrath, Germany. One of them has delivered earlier and is on display in princes’ street. The remaining 26 trams was delivered over the period.
Political influence over the regional parties in nation and disputes between the project contractors and consultants defaced the project and the project come to halt on several occasions. In early 2005 the Scottish parliament sloped the project when new estimated costs disclosed an increase of 30% to the original estimated £375m that was allocated for the project. Although the project did get going again, those early cost increases were a alarming sign of even worse to happen in long run.
CriteriaStandard CriteriaCriteria means standards and principles how the project to be deal and taking this into consideration one can agree whether a project can be a success or failure project. we can measure the success or failure of the project at delivery stage as well as end of completion stage and after completion stage of project. Any project that undertaken by an organization can be a success, a failure or it can be both success and failure that depends on the outcome of the project. Over the period of 50 years the main factors that influence the criteria are cost, time, and quantity. These success factors have been considered as ‘The Iron Triangle’, over the last 50 years have become inseparably linked with measuring the success of project management. “Time and costs are at best, only guesses, calculated at a time when least is known about the project where Quality is a phenomenon, it is an emergent property of people’s different attitudes and beliefs, which often change over the development life-cycle of a project” Atkinson, R 1999.
The cost, time are the external points which can be known by internal team and can analyse the status of the project. There will be few type of errors which can be recognised only by project management team in each stage of project. Errors made in early planning can be known directly and some cannot be known at initial stage which can be known after the completion and during the testing phase. After the completion of initial testing phase the team can identify whether the project heading in the proposed budget and given stipulated time. If project includes development life cycles these will be secondary factors and the primary factors will be the quality of the system and the performance which tell the outcome is favourable to the user or not. After the completion of project, the success is measured solely by the revenue generated by the completed project or performance of the system with user satisfaction.
Currently, the organizations have been adopting six sigma success criteria and critical success factors associated to it which is précised and more detailed structure which should be followed by organizations in developing their projects. The six sigma CSF’s will give great impact on the project success as the critical factors of success in every organisation depends on knowledgeable by the training to individual or team and including all the qualities which needs to be qualified for a person to be in a team for projects where different projects demands different needs and technologies.Critical Identification and JustificationThe criteria that implies the present project case is the iron triangle and the critical factors are cost, time and quality. These are the critical factors which needs to be understanding to get an overview of ETN failures. The major failures happened to ETN project due to lack of proper planning in early stage, lack of communication within the organisation and with project contractors, underestimating the final budget of the project. The city transport council handling the project should be alert in initial stage of the project. Trams network is well established in United Kingdom CEC should have taken advantage and make the design and cost techniques on early stage of project with cost and time efficient.
Cost: The project has been started with an overview of £545 million and the project has completed with an overall budget of £776 million. The tram eventually took its first passenger in 2014, at a cost of approximately £1 billion including loan interest. At a cost of approximately £1 billion for completion of project, the final cost was a massive £71.4m/km. As a point of reference, the average per km cost for tramlines completed in 17 other cities in the northern hemisphere for the period 2010-2014 was about £22.7m/km. A 314% cost increase validate an outcome of a success of a project, certainly no.
Time: According to initial plan the tramline is scheduled to complete as early as possible within three years of starting period which would had completed by 2011. Due various political conflicts, communication gap between organisation and contractors, budget issues, and environmental problems it has extended further 3 years and finally completed in 2014. The project has exceeded 3 years to proposed deadline.
Quality: Despite spending huge budget on the tramline project, the outcome of project was measured by customer’s satisfaction. Reports in the press suggests that customers are happy to use the tramline to overcome the traffic congestion which implies the quality of the project to some extent.
But the cause of all these is the Lack of Planning, no proper knowledge, no proper design for the entire project and lack of risk management skills.
The ETN project was a failure with £1 billion budget and 3 years over the proposed deadline. The major reasons for failure of this project are political disputes over various parties in countries, Lack of awareness on construction projects to the organisation, are underestimating the complexity of the project, Lack of contractor oversight, Lack of quality controls. Failed to establish appropriate controls and management processes to ensure the project was properly organised.
ConclusionEven though the outcome of the project has given customer satisfaction, Edinburgh Tram network project is considering to be a failure project by investigating the critical factors such as cost, time and quality. The city transport council and project management team should have been taken measured risks in each stage while dealing such a big project. This project exposes risks from the early stages and calculated measures has not imposed in each stage which leads to cost and over run.
Poor communication within organisation, budget rise in each stage of the project, no proper plan and design about the system leads to failure of the project.
The project management group should have applied six sigma principles to share knowledge within the team which is critical strategy for any organisation to complete any project successfully. The transport council will be run in profits in long run and the project ultimately contribute to the economic growth of the city Edinburgh
RecommendationsExperience of this project case study, one can understand how to achieve success of a typical project by applying industry standard principles. The Organisations must follow six sigma principles to achieve success in any project. The project team should be knowledgeable and aware on what they are working to achieve better results. Analysing risks in early stage development was a solution for time and cost overruns which ultimately leads to project success. Team management should invest lot of effort in the early stages to identify risks in each stage and better alternatives to overcome those risks.
ReferencesAtkinson, R 1999, Project Management: Cost, time and Quality, two best guesses and a phenomenon, it’s time to accept other success criteria, International Journal of Project Management, Vol.17, no.6, pp.337-342. <https://notendur.hi.is/vio1/Project_management_Cost_time_and_quality.pdf>.
Calleam Consulting Ltd- Why Technology Projects Fail, 2015, Tram Trouble
< http://calleam.com/WTPF/?p=7677>. Accessed 20 March 2018.
Cleland, Dl and Ireland, LR 2004, Project Manager’s portable handbook, 2nd edition, McGraw-Hill, New York. Coronado, RB and Antony, J 2002, ‘Critical success factors for the successful implementation of six sigma projects in organisation’, The TQM Magazine, vol. 14 no. 2, pp.92-99.< http://cdn.intechopen.com/pdfs/11583/InTech-A_comprehensive_framework_for_six_sigma_critical _ success_factors_with_an_experience_on_a_developing_country.pdf>.
John G Lowe. 2018. 2010. ONLINE Available at: http://www.arcom.ac.uk/-docs/proceedings/ar2010-1289-1298_Lowe.pdf. Accessed 20 March 2018.
Steven brocklehurst. 2014. Going of the rails: the Edinburgh tram saga. ONLINE Available at: <http://www.bbc.com/news/uk-scotland-edinburgh-east-fife-27159614>. Accessed 19 March 2018.
Audit Scotland. 2011. Edinburgh trams interim report. ONLINE Available at: <http://www.audit-scotland.gov.uk/docs/central/2010/nr_110202_trams.pdf>. Accessed 18 March 2018.
Danie van der Westhuizen. 2015. Defining and measuring project success. ONLINE Available at: <https://eprints.usq.edu.au/346/1/DependentVariableArticleV8.pdf>. Accessed 19 March 2018.