- October 26, 2021
An article was recently released entitled ‘Hinkley Nuclear Power Station on Track for 2026 Opening’. With the project 5 years through its original 10-year timeframe, the article was asking three questions, will it be on time, on budget and deliver value for money?
Categorically, the project will not meet its original cost estimates, 5 years in, the estimated cost to complete is £5bn above the original estimate of £18bn which is nearly a 30% increase. When asked if further cost rises were likely, the response was ‘if it takes longer, it will cost more’.
Digging into the obvious statement, if it takes longer it will cost more, leads to questions being raised around the importance of accurate and effective planning. At Hinkley, they are 5 years into the 10-year project and 49% of activities have been completed, which on the surface doesn’t seem too bad right? Especially when the caveat is given that the Pandemic understandably cost the project 6 months. However, having spent time in large scale infrastructure projects and Nuclear in particular, 49% of activities complete needs far more forensic examination. A couple of examples are below:
- There is no time quantification on the activities – have some of the quicker activities been completed?
- Equally, just because the project is 5 years through, does that mean 50% of activities should’ve been completed, should it have been more?
- How much float was baked into the original programme and how much of that has been eaten up? If all of the float has already been used, there is no chance of finishing on time.
It’s likely that the project team are all too aware of the answers to these questions, but our experience shows the management of programme and therefore cost is often a significant area of weakness. The following graphic highlights the vicious cycle that delivery partners can find themselves in:
In summary, effective management of a programme seems such an obvious ingredient for success; however, achieving it can often be far more complex than first thought. We would encourage you to challenge your planning teams to ensure they are an integral part of the delivery team and not kept at arm’s length to simply enter data into P6 and be the bearer of bad news!
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