www concept ntnu no Current reality in Norwegian

www. concept. ntnu. no Current reality in Norwegian public investment projects Ole Jonny Klakegg Research Director Concept Research Programme

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) • Do we define and design major public investment projects well? Ring 3 Ulven-Sinsen Double track Asker-Sandvika Leopard 2 tanks New Opera-house Oslo

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 representa tion Number of projects Share of projects Result of analysis: fundamental logic in defining project objectives. N = 51 projects. Source: O J Klakegg, Ph. D dissertation 2010

Well Designed? No! They are not up to best practice Best practice reference: Logical Framework Approach. The number of projects meeting the best practice criteria. Total of 51 projects evaluated. Source: O J Klakegg, Ph. D 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 QA 2. 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 Project 4 OK E 6 Riksgrens. – Warning. Svingensk. E 6 Klemetsrud – Assurtjern Stop Rv 653 Eiksundsambandet 5 E 18 Høvik – Frydenhaug 6 Ringvei Nord, Tønsberg 7 E 10 Lofast 8 E 18 Kopstad – Gulli 9 Rv 2 Kløfta – Nybakk 10 E 6 Åsgård – Halmstad 11 E 6 Svingenskogen – Åsgård 12 E 18 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 E 6 Skjerdingstad – Jaktøyen Nybygg Svalbard forskningsp. 18 19 ISL-prosjektet (nybygg FD) 20 ICT Tollområde Svinesund 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 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