Project Overview
The Edinburgh Tram project was conceived in 2001 as a proposal for constructing three transport routes in Edinburgh. The project was later approved in 2006 after undergoing a successful bureaucratic protocol in parliament. The project is basically a railway line that traverses from York Place to Edinburg Airfield. The Scottish government approved the commencement of the project in 2007 with an estimated completion timeline of 3 years between 2008 and 2011 (Lowe, 2010). However, the project experienced numerous controversies characterized by massive delays and alterations in the estimated project costs. Political interests and propaganda were also at center stage as political parties in the country took advantage of the project’s challenges to achieve mileage in their power ambitions. Contractual disputes between infrastructural contractors and project managers largely affected the project’s completion as suspensions often occurred until when the disputes were resolved (Lowe, 2010). This report presents a critical evaluation of the Edinburgh Trams project’s success and flaws in its practical implementation of activities, financial, scheduling, management, resource, scheduling, and expectations.
Objectives of the Project
The Edinburgh Tram project was intended to provide an affordable and ecosystem-friendly transport option for city residents and also decongest traffic in the city. The three-phase line would significantly reduce traffic congestion and minimize environmental damage emanating from heavy motor vehicles. The project was also meant to support the region’s local economy by easing accessibility to various points within the city. The project was also initiated to address various issues of safety and security of the city’s transport system. This is because the city roads were highly congested and the city was densely populated, hence, leading to insecurity. The Edinburgh city residents would realize maximum social benefits from the project initiations (Lowe, 2010). The government and other transport stakeholders would also set standards and increase revenue collection from the upgraded infrastructure in the city. Various stakeholders were assigned roles in achieving project deliverables. Consequently, their involvement in the project resulted in different impacts at distinct stages of the initiative. The Scottish government was the main stakeholder in the project and it was tasked with funding, supervision, and monitoring the project (Lowe, 2010). Other stakeholders of the project included politicians, contractors, courts, and the Scottish community.
Project Strategy, Costs, Timeline, and Expectations
The estimated cost of the project was roughly £375 million. The Scottish government projected the higher side of the project to be £500million but was cautious for the cost not to exceed £545 million as this would exceed the expected project benefits. The budget for the project, however, underwent several revisions quoting the final cost of the project at £776million approximately. The project was expected to generate a 231% benefit in comparison to the cost of the project. The Edinburgh Trams project would also include 3800 residential units, creating 930 job vacancies (Flyvbjerg, 2018). Out of the 930 vacancies, 530 jobs would be realized in phase 1 of the project which sought to improve the quality of air, improve accessibility to crucial sections of the city and reduce noise levels within the metropolitan region.
The estimated timeline for the project was 3 years. This time was to run from 2008 to 2011 when the new system was expected to have begun its operations by February 2011. However, several delays were encountered in the project implementation phase which prompted several revisions and later rescheduled the launch date to May 2014.
Organization Structure
The Organization of Edinburg Tram project describes the deliverables, planning, and responsibilities necessary for the accomplishment of the project. The organizational board plan for Edinburg is comprised of stakeholders, board members, deliverables, and processes of the project (BBC News, 2007). The processes illustrate the responsibilities expected of the stakeholders in accomplishing the process. The processes involved in this project pertain to the human resource team, risk management team, cost management team, procurement team, scope, integration management team, communication process, and quality management team (BBC News, 2007). The project’s key stakeholders were organized as follows:
- The City of Edinburg Council (CEC): This comprised of the project initiators and owners.
- Transport Initiative Edinburgh (TIE): They were the managers of the project which was a private company under CEC.
- Tram Operator: Initially assigned to Transdev but was later transferred to Edinburg Trams Limited. Their role was to operate and maintain the tramway using both ground and aerial view
- Infrastructural Contractor: This responsibility was achieved by BBS which comprised of 3 companies namely Construcciones y Auxiliar de Ferrocarriles, Siemens, and Bilfinger Berger. Their role was to construct the tramway and the tram depot. They were tasked with procurement and installation of the ticketing machine, installation of overhead power lines, and construction of passenger shelter.
- Utility diversion contractor: This contract was particularly awarded to Alfred McAlpine Infrastructure Services in 2006 where the company successfully accomplished its work in November 2006. This team was majorly concerned with the construction of a park and a ride at Langston.
- Team Contractor: Besides being a member of the BBS consortium, Constructions y Auxiliar de Ferrocarriles was issued the contract to develop and hand over the trams for testing in due time. It was also awarded the mandate to oversee Systems Design Service (SDS) which was necessary for electronic systems in the transport line.
The implementation of the project was initially spearheaded by TIE, a subsidiary of the city council which was registered to prevent the council from suffering liabilities emanating from project implementation. TIE managed the project in overall structure and was assigned the role of contracting suppliers to facilitate sections of the contract. This was evident in 2009 when the operation of the trams was snatched from the initially awarded company, Transdev, and given to Edinburgh Trams Limited (Lowe, 2010). The contractual framework of the project comprised the System Design Services (SDS), Vehicle maintenance and supply (TRAMCO), Joint Revenue Committee (JRC), IFRASCO-provided infrastructure and maintenance, and Multi Utilities Diversion Framework Agreement (MUDFA). Contractual disputes that emerged between TIE and BBS resulted in implementation delays for the Edinburgh Trams project (Flyvbjerg, 2018). The project also experienced funding challenges and this situation compelled the council to cut short the tram’s length. Generally, the degree of success for the project’s implementation was very low as compared to the budgetary estimations, timelines, and collaboration levels between key stakeholders.
Schedule
The project was subdivided into 4 sections and each section was contracted to a specific supplier. The stages included: (Picken, 2020).
- The project design phase: This phase of the Edinburgh Tram project consisted of drawings of infrastructures required, acquisition of land, and compliance with all the existing traffic regulations.
- Utility diversions work: This phase particularly involved the construction of a park and a ride at Langston. The face also included other enabling works for the project.
- Infrastructure construction (Infrasco): This phase was going to be the heart of the project. The epicenter of the Edinburg project was the construction of the tramline tram depot. The phase of the project will also be inclusive of all the procurement procedures. The installation of ticketing machines and the building of a passenger shelter overhead power line were crucial elements of the project. The trains would be electrically powered, hence, having the power line in place would imply a significant milestone for the project.
- Construction of 27 trams (Tramco): This phase was crucial and would need to be completed and allow time for testing of the project before it is launched.
The project timelines and milestones are illustrated in the figure below:
Fig 1: Timelines and illustrations for the Edinburg Trams project
Report for the Edinburgh Tram Inquiry (Flyvbjerg & Budzier, 2018).
Resources
5.1 Financial Resources
Having been recommended as a solution to decongesting traffic in Edinburg, several resources were injected in ensuring that the project is successfully achieved. Financial resources were crucial to the project implementation as £375 million were first budgeted for but proved insufficient. The figure was later increased to £776 million to ensure that the work does not stall. The CEC awarded contracts to numerous companies to enable the completion of the project and ensure it meets its intended targets (Brocklehurst, 2020). The continuous supply of financial resources was meant for a swift workmanship during the project.
5.2 Technical Resources
The technical resources used for the project included Multi Utilities Diversion Framework, vehicle supply, maintenance equipment, and infrastructure. The stakeholders of the project were involved in managing specific aspects of the project. For instance, Brinkerhoff was tasked with handling the System Device Service while McAlpine was involved in handling the Multi Utilities Diversion Framework contract for the Edinburg Trams project. (CAF), a Spanish organization was involved in managing infrastructure and maintenance for Edinburg Trams. Best bidders with distinguished professionalism were selected for the project to ensure a smooth running of the project from start to end (BBC News, 2019). The project is, however, claimed to have dragged due to inadequate staffing. The stipulated 930 employees might have not met the ultimate needs of the project.
Risk Management Elements
The project was marred with several risks such as budgetary uncertainties and the city’s utility infrastructure. Budgetary risks were prevented by the early awarding of the contracts for designing the project. The move enabled the conception of the project in its early stages and ensure accuracy on cost-estimation issues. The city’s utility infrastructure was perceived as a potential risk of working within the stipulated deadline. This risk would emerge as a result of the need to relocate certain city utilities to ensure that they are not interrupted during the construction phase of the Edinburgh Trams project (Lowe, 2010). To avoid the issue, utility diversion was adopted as a separate contract to ensure that the project is implemented in time. Another expected risk in the project was the tendency of suppliers to deliver materials unevenly, especially where a supplier is dealing with numerous services in the project. This risk was reduced by separating the critical elements which included financial, technical, professional and equipment of the project which saw infrastructure constructions and trams developments being separated.
The separation of contracts was not the only approach to reducing the risks associated with coordination and project weaknesses. This was complemented by handing over the entire infrastructure contract to the BBS consortium. The objective of this measure was to coordinate complex aspects of the project and minimize risks resulting from poor coordination between distinct organizations (Picken, 2020). Fluctuation in costs was also something expected during the project’s implementation phase. The cost fluctuations are highly risky as they might not only hike the project’s costs but also makes the costs to be extremely higher than the benefits. This issue was of great concern considering that the project was approved under a specified budgetary allocation, hence, exceeding the budget would stall the project. The budget exceeded its initial approximation because of delays extending up to 3 years, hence, the value of project deliverables went up due to inflation. TIE worked on minimizing this type of risk by setting the contract costs fixed (Picken, 2020). The assurance of commitment to this measure was evident by a compensation mechanism in case the project failed to be implemented. In reference to this agreement, £3.2 million was supposed to be paid if phase 1b of the project could not materialize.
The possibility of conflicts between suppliers and TIE was also expected to pose potential impacts that would paralyze the project. TIE made an initiative to minimize this type of risk by offering mechanisms of mediation where conflicts, as pertains to contracts, would arise. Contract disagreements would first enter a mediation table before legal action could be taken. This was preferred as an easy way of saving time for the completion of the project because legal disputes take a long process to resolve. When a contract matter is taken to court, the judicial process orders an immediate halt of the process until the matter is heard and determined. Disagreements in the project would therefore be addressed first after which legal processes can take the course to incase an arbitrary approach fails (Lowe, 2010). Consequently, project implementation under alternative dispute resolutions was guaranteed to continue without any interruptions.
As Zwikael et al. (2007) report, in high-risk projects better project planning improved success on four measures: schedule overrun, cost overrun, technical performance, and customer satisfaction. Schedule overrun is typically caused by financial problems unachievable contract timelines stated by clients and a poor definition of project scope. Cost overrun is an expected change in the project budget where mostly the total cost goes up. Technical knowhow is a hitch at the implementation stage of a project. All these factors have a negative impact on project implementation, hence, the reason behind the stalling of Edinburg’s project. Project stakeholders are supposed to strike a good balance between overrun factors to attain the project targets in the required timeframe.
6.1 Theoretical perspectives
The implementation strategy found in Edinburg’s Trams project and the forces involved in applying the negotiation strategy to help comprehend an important project management theory. The events interfering with Edinburg’s project management connect to the game theory applied in the strategic decision-making approach. The game theory manifestation is evident in the confrontations between BBS and TIE which are the two major stakeholders involved in the project. The negotiations witnessed by the two entities are similar to Game Theory’s ‘Chicken’ game (Kapliński & Tamošaitiene, 2010). This is because the two stakeholders engage in effortless negotiations and their success would depend on how their opponents negotiate. The disagreements began right away from the start of the project in 2008 to 2010. One significant feature of the game theory and as presented in Edinburgh’s project is the inability to offer an absolute solution or strategic and stable solution to the problem (Kapliński & Tamošaitiene, 2010). A stakeholder must combine several approaches to sustain the opponent’s curiosity. The aspect of the game theory in the project prolonged its completion. They resolved this controversy by constituting a project management panel in 2009 and restructuring deadlines until the agreement was reached.
Monitoring and Control Processes and Procedures
The monitoring of a project involves measures put in place to facilitate a project’s completion in time. The monitoring process is, hence, a strategic tool for project management. Notably, the operational process oversees the process or project implementation. The Edinburgh project made use of 3 operational strategies in monitoring the project’s schedule. The monitoring tools include individual work plans, operational plans, project work plans and data collection (Lowe, 2010). The overall monitoring and reporting document assesses the management of a project, funds the project, and supports the implementation process. Hence, the process provides an opportunity for the identification of project deliverables, events, and potential risks. The challenges experienced by the Edinburgh Trams project unearthed the weaknesses of its monitoring team (Lowe, 2010). Due to a lack of proper monitoring at the implementation and operations stage the project was terminated without any other specific reason. The project process had a significant influence on the monitoring and evaluation process. This is because it ensured that the implementation process accurate and within the timelines. Consequently, the sum approved for the completion of the project lost value through inflation making the community believe that the project would not reap its intended benefits.
7.1 Control processes
Meredith et al (2017) stipulates that fundamental purposes of a control process involves results regulation through alteration of various activities concerned with organizational assets. This include physical asset control where receipt, storage, maintenance and inventory are addressed. The next phase is the human resource control where the aspect focuses on the growth and development of workers on the particular project. Appraisal is common in this type of resource to facilitate quality and speedy execution of work (Meredith et al., 2017). Lastly, financial resource control is another critical factor in project regulation. Project must conform to the financial processes of the organization in charge of the project.
Summary and Assessment of the Project
Edinburg project was affected by numerous flaws connected to costs, political influence, and delays in completion which not only dragged the process but also hurt taxpayers. As indicated earlier, the project was initially commissioned by private companies Transport Initiatives Edinburgh (TIE) which was later replaced by consultants Turner & Townsend. The companies were supposed to oversee various phases of the project and ensure its proper implementation. The initial plan to ensure certainty in budgetary allocation was not achieved as the project was delayed for another three years and the budget went up by more than twice the initial cost. Due to several flaws in budgeting and timelines, the scope of the project was revised several times. Despite that the project was eventually completed, it became very difficult to estimate the benefits of the project to the government and the community.
Instead of taking the whole role of supervising the entire project, the owners of the project would have devised a better approach to make the main suppliers fully responsible for the project. This measure would have assisted in ensuring that initial cost estimations for the project were final and there is no justifiable reasons for demanding a cost increase for the project. The pre-evaluation process would have gauged the competence of the main suppliers and subcontractors responsible for handling various aspects of the project. The government, in particular, ought to hold contractors accountable for their failures instead of giving them a chance to adjust project budgeting and schedule. The government should understand that the success of a project is better achieved if politics are barred from interfering in the project implementation. This approach will reduce delays and disputes involved in a serious government project.
9.0 Reflection and Recommendations for Millennium Dome Project
9.1 About the Project and its Forecast/Budget
The Millennium Dome was built to serve as the focal point for the country’s Millennium festivities, debuting on New Year’s Eve and lasting through the year 2000. The project received special treatment because it was created under a Conservative administration and expanded to its full potential by New Labour. The National Lottery, visitors, and commercial sponsors were all expected to contribute to the project’s funding. In 1996, it became clear that private finance would be unable to accept the significant risk of constructing, running, and maintaining the Dome project. The state took control of the initiative, but their financing and hiring capacities were insufficient, citing lack of responsibility, budgetary balance, and conflict of interest as causes. The total cost of construction for the Dome was originally estimated to be over £300 million (Kamal, 2020). The construction and facilities expenditures had escalated to nearly £600 million by the time the Dome was formally opened.
Table showing: Millennium Budget and Project Timeline (Anderson, 2017)
9.2 Comparison of what the Project achieved and what it intended to Achieve
The Millennium Dome Project was designed for celebration purposes to welcome the 2000 millennium. The plan was to create a London-based facility for various events and exhibitions. The Millennium Dome, also identified as The O2, is a gigantic building project in Greenwich, London, England. It was constructed to accommodate an exhibition honoring the start of the 20th century and the 3rd millennium CE (Gillett & Tennent, 2020). The core design is the earth’s largest dome, approximately double the dimensions of the previous record-holder, the Georgia Dome. Its construction area ranges along the River Thames at the northern extremity of the Greenwich Peninsula, bypassing the prime meridian (0° longitude). The goal of the project was to construct a multi-purpose semi-enclosed dome that could be used for exhibitions, sports, concerts, and other public occasions within the provided time frame and funding. It was also meant to reclaim the Greenwich Peninsula, which had devolved into a land full of garbage pand toxic waste (Whannel, 2021). The idea was to erect the dome on this garbage ground, the badlands would be converted into useful state assets that might be utilized for commercial objectives or rented and marketed to private parties.
According to Gillett and Tennent (2020), the dome was built to provide individuals with a tremendous source of entertainment as well as to construct a historic edifice that people will appreciate. The construction cost $976 million (£700 million), with most of the funds attained from taxpayers. The structure, which incorporated a surreal theme garden with displays influenced by lifestyle, culture, and spirituality, opened in 2000 to celebrate the new millennium (Whannel, 2021). The O2, a beautiful structure on the Greenwich Peninsula, presently accommodates a variety of live events with remarkable success. The O2’s 20,000-seat capacity is used for everything from boxing to darts, The X Factor to Classic FM. After the Manchester Arena, this is the UK’s second-largest stadium. Although the Millennium Experience ceased operations in the year 2000, the building in which it was situated has subsequently been adapted to a variety of uses, thanks in part to Richard Rogers’ unusually adaptable design. The project managed to convert the garbage lands into the current dome (Radujković et al., 2021). Thus, this goal was achieved. Nevertheless, there is little doubt that the Millennium Dome project is a success. Opening on time was a huge accomplishment, as the Dome drew a considerable number of paying guests.
9.3 Significant Deviation from the Original Project Plan
During John Major’s reign as Prime Minister, the dome was planned to be smaller. It was designed to be a structure like a planet fair to celebrate the millennium. During Tony Blair’s reign in the office, he appreciated the vision and opinion and extended the structure’s size and budget. From January 1 through December 31, 2000, the exhibition was opened to the populace. The scheme and exhibition were incredibly political, drawing just half of the 12 million customers anticipated by the sponsors, and were thus labeled a disappointment by the media. All of the exhibit’s initial components were traded or disassembled. Unpredicted low and slow sponsorship had a negative influence on the project. The organization’s financial assistance was reduced from £195 million to revised £122 million between May 1997 and January 2000. The project team had difficulties meeting the schedule for transforming endorsement deals into real contracts, liquid money, and financing for procedures, given that several organizations were hesitant to offer the huge amounts of cash needed during 1998, and they demanded the project to show economic and commercial return for their monetary commitment to the project as a guarantee. Even worse, during the end of 2000, the organization’s budget had been lowered to £115 million.
The use of national lottery profits to supplement the funds needed to complete the project has become a lightning rod in the ever-widening public discussion about project costs. A further £175 million was spent by the labor government to keep the project alive. The 12 million visitor goal was an approximated, and it was not founded on a firm understanding of the project’s content. Although the corporation regarded the income contingency designed to balance the budget with roughly 11 million people, the Millennium Commissioners selected a strategy with a visitor target of 12 million in May 1997 (Radujković et al., 2021). However, no strategy was developed to oversee the Dome’s content, ticket rates, or if the visitors will have appropriate parking and pick-up alternatives. The corporation understood that the Dome will face extreme competition from other similar projects, and that it would have to ensure a positive reputation and attain public attention to achieve the target number of visitors.
9.4 Attributes of Good/Bad Project Management Practices
Good Management Project Practices
Several problems affected the project, including fiscal uncertainty and the city’s utility infrastructure. The early awarding of contracts for the design of the project helped to avoid budgetary problems. The change allowed the project to be conceived at an early stage and ensured cost-estimation accuracy (Whannel, 2021). The city’s utility infrastructure was seen as a potential stumbling block to meeting the deadline. This risk would arise as a result of the necessity to transfer certain city utilities so that they are not disrupted during the Millennium Dome project’s building phase (Kamal, 2020). Utility diversion should be accepted as a separate contract to avoid the problem and ensure that the project was completed on schedule. This risk should be mitigated by segregating the project’s main aspects, which comprise financial, technical, professional, and equipment, as well as infrastructure and tram advancements.
Bad Management Practices
The events obstructing Millennium project management are linked to the strategic decision-making approach’s use of game theory. The disputes between the project’s two key stakeholders are a perfect example of game theory in action. This is because the two parties participate in painless discussions, and their success is contingent on how their opponent’s bargain is (Whannel, 2021). From the beginning of the project, there were conflicts. One of the most notable features of game theory, as given in the Millennium Dome project, is its inability to provide an absolute or strategic and durable solution to the problem (Radujković et al., 2021). To keep the opponent’s curiosity alive, a stakeholder should employ a variety of strategies. The project’s completion was delayed due to the use of game theory.
9.5. Administrative Performance/Planning
The Prime Minister hoped that the project would be concluded before the 2000 Millennium festivals. The objective of the endeavor was to display this achievement and remind individuals of the state’s approval of artistic endeavors. The state considered the project a monumental accomplishment that will entice the citizens, who will be entertained by a diversity of shows and presentations prepared for the festival. The collaborative venture group was offered the assignment of completing the project following the specifications. The designer was Richard Rogers, and the civil engineer was Buro Happold (Radujković et al., 2021). The company, the designers and structural engineers bore complete responsibility and ownership for the project’s invention and fulfillment. The stakeholders should have been well-versed in the task and competent in managing it. The Millennium Experience received a lot of bad press, owing to the exhibition’s rising expenses and low visitor numbers – it drew only six million visitors over the course of the year, which was little over 10% of the British population at the time and half of what was planned. The Millennium Dome suffered as a result of its affiliation, and was frequently chastised for being over-budget (Radujković et al., 2021). The architectural project was, in fact, considerably under budget and quite inexpensive for a structure of this size, at £43 million. But Rogers remarked that the amount quoted generally included the contents.
9.6 Organizational Structure
The Millennium Dome is an incredible undertaking. It was conceived as a Millennium Exhibition on par with the Great Exhibition of 1851 and the Festival of Britain of 1951 in terms of grandeur and accomplishment. The project received special treatment because it was created under a Conservative administration and expanded to its potential by New Labour. The National Lottery, visitors, and commercial sponsors were all planned as funding sources (Radujković et al., 2021). In 1996, it was clear that private finance will be unable to accept the significant risk of constructing, running, and preserving the project. Consequently, the state took charge of the project, however, their funding and appointing capacities are still scarce, citing lack of answerability, monetary balance, and dispute in interest as reasons. While the project is in progress, project managers are responsible for evaluating the project’s process and outcomes, or in other words, evaluation, and the project team must decide whether improvements are required to adapt to future developments (Whannel, 2021). Launching on time was a huge accomplishment, as the Dome drew a considerable number of paying guests. Many different parties are involved in the formal responsibilities and answerability for the project, including the new Millennium experience firm, the stakeholder, the Commission, and the Department of Culture, Media, and Sport.
9.7 Team composition/processes and procedures
For the British, it would be a noteworthy definitive asset of the Millennium Dome. The worth of the government investment in the Dome cannot be measured in terms of a balance sheet; the overall value of the Dome would be estimated by how the government utilizes it in the future and they can prevent another financial catastrophe and meet the need for adequate data-backed projections. The management of the Dome project, both at the state level and on the ground, is thought to be problematic (Whannel, 2021). The central concern is that it seems that both project’s stakeholders supposed that Britain, due to its strong economy and improved global standing, would gladly contribute to and fund the Millennium Dome project as a matter of state pride. The decision to plan for 12 million people signified that the Dome would need to draw more than four times the number of visitors than UK ‘pay-to-visit’ attraction, Alton Towers. (national audit). The primary partners in the project team do not know how they will react if visitor revenue falls drastically below the anticipated levels (Whannel, 2021). The possibility of the Commission’s financial life being extended was identified in 1997, but the project team struggled to determine its funding requirements, and the Commission was unable to secure enough contributions ahead of time.
10. Conclusion
As the next decade approaches, it’s possible that the Millennium Dome and its replacement, the O2, will have cemented the Greenwich area as a key London entertainment hub. The public funds spent on the Dome are difficult to rationalize in a balance sheet examination. The project’s final worth will be determined by how well the government manages future megaprojects, as well as if the repeating lessons of accountability and the necessity for thorough data-backed estimates are learned.
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