A Critical Review of “BRT Project Audit Report” by OGMC

What is expected, when Project Level Risks mentioned by the Sponsor itself get ignored?

What kind of final results will be achieved when Detail Engineering Design (DED) of the project is not given appropriate time?

What happens, when everything is cut down and set unrealistic targets to meet only political goals?

What happens, when made Financial Irregularities and technically unplanned procurement?

What happens, when contracts are awarded without fulfilling the Performance Assessment Criteria?

What happens when Governance is implemented only in words but not on ground?

Couple of months back, I came across an audit report of a large-scale public sector project. This important landmark project had suffered numerous revisions to project completion dates as it has unfortunately never been able to successfully meet any of the previous timelines. Above that the completed work had several issues which were very precisely and clearly highlighted in the audit report. This audit report was prepared by an independent third-party consultant just to review the issues in this project.

As per the audit report, there was one main reason identified that contributed to all other major issues in the project. The same reason was identified as risk by the sponsor. This issue/risk was “Possibility of Intervention of High-Level Government personnel to exert a Government-level pressure to Fast Track the project in order to achieve some political goals”. The Sponsor had well identified this risk in a timely manner but it seems to be ignored by the project team as they didn’t had any contingency and risk management plan against this risk. This risk affected both the technical and management aspects of the project.

Technical Issues:

One of the major flaws in the technical aspect of the project was the issue in Detail Engineering Design (DED) of the project. The main reason for all the issues was that not appropriate time was given for this specific project activity. This caused the DED to be based on Preliminary Design rather than allowing the team enough time to look into the details for better technical solutions.

The original estimated effort for DED preparation was one year but it was cut down to half and does not allow the DED consultants to complete their work.

The poor design led to a lot of issues in the project. The quality was not upto the International standards simply because it was the very first thing cut down to target early completion of the project.

The design was termed to have high risks of casualties and accidents in the audit report. The quality in terms of aesthetic sense was also poor with regards to locations and usability of different structures.

Project Management Issues:

The project manager was termed as “Highly Disappointing” and “Below Par” in the audit report. No standard processes or procedures were adopted and everything was termed to be executed in an haphazard manner. The Project Management team was never able to calculate appropriate and reasonable project timeline and the project completion date.

As mentioned earlier, there was a cut-down in time allocation for defining complete scope therefore the approved PC-1 and project plan totally lacked the Project Vision as it was never possible to make effective estimates with such assumptions. The timelines for different milestones were not clear which negatively affected all the areas of the project.

Unclear milestone completion dates led to premature Procurement of Human Resources and Materials causing wastage of resources. The Human Resources was not used effectively most of the time due to non availability of pre-requisites related to their expertise.

The wastage of occurred to the materials in form of wear and tear and losing warranty period for its maintenance etc. Also technically the material and equipment started getting obsolete as their new advance and upgraded versions were introduced in the market. Procuring more than required resources was termed as “Total Wastage without any potential income or usage”.

The mismanagement in Project Planning directly affected the Project Finances. The Project Cost had to be revised every time there was a change in the timeline. The poor Project Execution led to many financial activities which were termed as “Financial Irregularities” by the auditor in its report. Since many resources were procured at times when they were not able to be fully or partially utilized therefore their salaries and other expenses were termed as irregularity. The material acquired also remained unused for a long period suffering wear and tear.

There was also some expected “Recoverable Cost” from the dismantled material or re-processing of a few elements. That aspect was totally missing in the project and was termed as “Loss” by the auditor. There was also some income expected in the form of Interest from the Saving Account where all project funds were maintained.

The contract was awarded without fulfilling the Performance Assessment Criteria. Similarly the implementation of Penalty, Liquidated Damages and Performance Guarantee etc. were missing as per contract. These aspects are very important and mandatory clauses of any such large scale landmark project.

Another major missing element was absence of Quality Control and Monitoring framework. The Project Management team not only failed to set up different check-points or implementation of any International Standards during the project. The quality of completed work was termed as “Poor” in the audit report. The Quality Controls were termed as “Fully Missing” from the project execution.

Similarly the key reporting contents were also fully missing along with any focus on Financial and Risk management areas. The contract system was also not in place.

Why did all this happened?

It is surprising to see so many low performances or key elements missing in an important project of such magnitude and importance. There were two main parties; The Sponsor and the Project Team. I believe the missing link between them was the presence of an Independent Consultant to perform the most important role of “Project Governance”.

This governance was required to ensure building the right level of expectations for both parties and implementation based on ground realities as well as following best industry standards. The Consultant could have timely highlighted the risk and shortcomings to all the relevant stakeholders in a timely manner without getting influenced by either side. This would have allowed timely implementation of Corrective Measures. The Consultant can therefore implement the key element “Transparency” from start to the end of the project.

The issues which were highlighted by the auditor, at later stages of the project, could have been identified and rectified at a much earlier stage and restricting the damages.

References:

Important Note:

This Critical Analysis Report, by OGMC, is purely based on the information from the reference links. OGMC Team is not responsible for any errors in these resources. This article is only intended to analyze a public project against the Project Management Framework, Benchmarks and Standards. This report is not aimed to defame, politicize or criticize any person or stakeholder. This article is purely regarding educational purposes only.