Australia's construction and infrastructure industry is reporting budget blow-outs, long delays and disputes caused by scoping problems in major infrastructure projects.
Research by Blake Dawson reports on deficiencies in the scoping - or the setting up - of numerous major projects over the past three years. This feedback has been provided by those on the ground who have been responsible for some of the country's largest infrastructure projects. Industry players are recognising that different approaches are required to address the frequent and serious problems that arise if a project is not adequately scoped from the outset.
Cost over-runs of $200 million or more were found in a quarter of the country's mega-projects worth over $1 billion which were surveyed. Smaller scale projects, including community infrastructure, were also impacted. One in five had blow-outs of more than 20 per cent of the project value, averaging $7 million. According to the report Scope for Improvement 2008, feedback from the industry indicates that the problems are getting worse.
More than half of the survey respondents said their projects were not adequately scoped, with the problems usually discovered after contract signing and far too late in the process. In many cases this led to months of delays and disputes. The research also found that projects often failed to adequately consult end-users, with almost 90 per cent of respondents saying infrastructure was adversely affected by this. The continued severe skills shortage also led to errors in scoping documents, resulting in either incorrect or insufficient information being available on project sites.
The Blake Dawson report is supported by the Australian Constructors Association and Infrastructure Partnerships Australia and is a timely reminder for the private sector and government as they roll out billions of dollars for infrastructure projects in an uncertain financial market.
A positive conclusion from the research is that there are clear steps that can be taken to improve scoping practices.