Saturday, September 12, 2015

BIG projects

Everyone seems to agree that megaprojects should be avoided.  They are over time and over budget.  On these grounds, we shouldn't undertake them.

This isn’t new.  When I was involved in international construction, my bible was a 1988 study by the Rand Corporation of the problems associated with large civilian infrastructure projects.  Fifty-two projects of a value of over $500 million (1984$) were studied.  Only four came in on budget, and the average cost growth was 88%. In contrast, 18 projects were completed on time and the average time growth was 17%. 

The causes of the  overruns were identified.  Using new technology played a role; lack of familiarity with the construction techniques was another; institutional problems to do with environmental controls, labour practices and procurement restraints also loomed large. It was recommended that much more work went into the head-end design of the project to ensure that these factors were addressed as far as possible.

Does this sound familiar?  It should.  Medupi and Kusile are some of the largest coal-fired power stations in the world.  They are using supercritical technologies that are novel in South Africa. Eskom used to have the construction skills; they were lost over a decade ago when Government decided Eskom should no longer build power stations.  The stations have had desulphurization imposed on them for the most doubtful of environmental reasons.  They have been beset by union problems, which have even involved the destruction of construction equipment. They have had to maximize local procurement, and the acquisition of the major component, the boilers, was the subject of Government involvement.  The project starts were rushed when it was finally realized that we were about to run out of power. All the factors that are known to lead to cost and time growth were present.

So when people complain about the lack of information about our nuclear programme, perhaps they need to recognize that time spent in planning properly is time well spent, and when you are planning, there is very little information available to discuss.  

But above all, our nuclear planners need to read the update on the Rand report - Industrial Megaprojects: Concepts, Strategies,and Practices for Success by Edward Merrow, available via Amazon.