Published here July 2018


Musings Index

The Political Dangers of Large Projects
and why don't we do something about it?

I live in Canada. For those who may not know, Canada is quite a big country in terms of territory that lies along the northern border of the USA and goes up close to the North Pole. Its population is about one tenth of the USA. It is divided into a series of "provinces" arrayed along that northern border. Canada's major natural resources asset is oil. That oil is the property of one of the provinces, Alberta, somewhere in the middle of the border array.

So, here's the challenge. To monetize the Alberta asset, it is necessary to get the oil out of the so-called tar sands and pipe it to tide water on the coast for shipping overseas, or alternatively across the US border to the south. The first hurdle, getting the oil out of the tar sands, has been reasonably solved, so far as resource extraction goes. But building a pipeline, or rather twinning an older smaller line to the west coast, some 900 miles across the Rocky Mountains is a serious engineering challenge roughly estimated at around $12 billion. Yes, that's twelve followed by nine zeros.

But property owners along the way, especially on the coast, and through some Indian-owned lands, are vehemently opposed to the pipeline, ostensibly on the grounds of protecting the environment. I say "ostensibly" because the impact is not so much the temporary damage to the land arising from the laying of the pipe, but rather the danger of extensive damage to the west coast's pristine water line arising from potential oil spills. That's on the one hand, and on the other, the pollution added to the atmosphere arising from burning the fuel wherever it ends up. I should add that this position is strongly supported by the provincial government on the west coast.

So the project is held up.

It is not as if these risks have not been considered — rather the project has been studied from many impact perspectives, especially environmental, over the past eight years or more, at a cost of millions of dollars. The existing pipeline is the property of a private company, or at least it was until recently. In an effort to try to solve the deadlock, the Canadian government has decided to buy the whole project, including the existing pipeline facilities for around USD $3.5 billion. The standard practice in these circumstances is to create a "crown corporation", which is effectively a government-owned company, set up from scratch to run the whole works. This strategy has been adopted many times before, some more successfully than others.

Of course, the money for this exercise comes from the government, which means the long-suffering taxpayers. In short, I am now part owner of a very large project. Over which, I might add, I have absolutely no control.

But here's the kicker.

On almost the same day as the Federal Government made its pipeline purchase announcement, the Federal Government's Auditor-General (AG) released his report on another big government project, a public service pay system. This IT (information technology) system, named "Phoenix", was conceived in 2009 and designed to pay some 300,000 employees. It was expected to save about USD $5 million annually in reduced manual input costs. In the event over the past couple of years, however, more than half of those employees have reported being affected, such as some being overpaid, some being underpaid, and others not paid at all, in some cases for months.

According to the AG speaking in Ottawa, the failed federal public service pay system was "the result of a government culture that stands in the way of helping people. The problem-plagued Phoenix pay system was mismanaged from the very beginning and is just one of the incomprehensible failures of the government over the last decade." The AG went on to say: "The building and implementation of Phoenix was an incomprehensible failure of project management and oversight."[1] (Emphasis added.)

He added later that the government has reached a critical moment where it needs to reflect on how to change the way it does business. In the detail, the AG's report provides many specific opportunities for Lessons Learned, especially in terms of oversight and governance.

So, I am now not only part owner of a very large project over which I have absolutely no control, but one that is to be built, apparently, by an incompetent cadre of project managers in a highly toxic environment of public opposition. Of course, the only real tool that any government has is to somehow buy off the opposition (which some of them no doubt inevitable want) using more tax-payers money.

Hey ho, project management "cost and schedule"? When will our official and esteemed project management associations and their respective aficionados get a grip on project management politics to correct serious situations like this?

1. National Post Newspaper, Wednesday May 30, 2018, page A10.
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