A PFI project being hailed as a model partnership, expected to deliver what it was planned to, and all for less than expected may not be something you often see reported in the media, but the Thames Tideway Tunnel (TTT) project seems to be bucking a trend or two.
It is estimated that every year 39 million tonnes of sewage overflow end up in London’s watery artery, the River Thames – a very unpleasant thought indeed. Nobody could possibly have considered our capital’s great waterway to be pristine, but acknowledgement of just how polluted it is creates a massive shift in perspective. The Thames offers vital social and economic benefits to London; therefore, the dirtier it gets, the greater the negative impact this could have on health, tourism, and many other areas. A spokesperson for Thames Water expressed the concern, saying “It is fundamentally environmentally wrong to use London’s iconic river as an open sewer and discharge tens of millions of tonnes of sewage into it every year.”
In 2004 the government gave the green light to the TTT project: 15 miles of sewer tunnels under the Thames to replace the 100-year-old Victorian system that has served us so well for so long. The aim, to reduce that 39m tonnes of raw sewage overflow to, at most, 2-3 tonnes. Financed mainly by the private sector and managed by DEFRA in collaboration with several private sector partners, the project’s mantra was that they were “Creating a River Thames fit for our future”
How it could easily have gone wrong
The media are drawn to projects that involve public money, and the larger the project the more likely it is to attract criticism. Sometimes this can be predicted and avoided, while in other cases it can be the beginning of the end for a project – see Care.data. There are some projects that weather the storm, and TTT was one of these.
A headline from The Guardian in 2014, ten years into the project, stated: “Planned London super sewer branded waste of time and taxpayer money”.
This was sure to cause controversy. When it emerged that the man at the centre of this claim was none other than Professor Chris Binnie, who chaired an assessment team that supported the super sewer at its inception, it was recognised that tough questions would need to be answered.
“Super sewer” was quite an apt term as the project was to cost a sizeable £4.1bn (though what is rarely also discussed is that this was to cover the entire construction, operation and maintenance budget for the project over its 120 year economic life). But the benefits cited in support of the project were equally impressive, at between £7.4bn and £12.7bn (the range taking into account various population and income growth scenarios throughout the tunnel’s life). The benefits were also limited to those that could be reasonably confidently quantified, including those associated with “reducing adverse impacts of Dissolved Oxygen on fish, better health outcomes for river users (e.g. rowers) and reduced sewage litter and odour”, according to DEFRA’s Costs and Benefits of the Thames Tideway Tunnel 2015 update.
With this level of public investment in the project there was always the potential for controversy.
Binnie reportedly claimed that “The tunnel will do what it says it will do. But it is almost certainly a stupendous waste of money for very limited benefit.” The article went on to claim that Thames Water’s 15m customers would all now have to put up with at least an £80 permanent hike in their annual water bills.
His “value for money” claim was based on his belief that “Since the tunnel was chosen, in the intervening 10 years, technology has moved on … and techniques such as sustainable drainage systems, real-time control of sewer flows, floating booms to retain floating litter, sewer separation and the like have been developed and are now widely used elsewhere.”
Thames Water responded by saying that “Years of study have shown that all the suggested alternatives to the Thames Tideway Tunnel would be ineffective, more expensive, more disruptive, take longer, or all four.”
What went well with Thames Tideway Tunnel, and how these lessons can be applied to any major project
We often write about lessons learned from projects that have experienced challenges, so it’s a welcome change of pace to report on what has been done to help lead major projects through choppy waters to successful conclusions. TTT is not there yet, for there is a long way to go before we can call this project a true success; but it certainly seems to be performing strongly as a more recent headline from The Guardian in 2015 attests: “London super sewer to cost less than expected, says Ofwat”.
So what has caused this turnaround in fortune?
1. ICF/Management Capacity
An Intelligent Client Function (ICF) team is the steadfast band of talented individuals formed at the outset of your project as its eyes and ears, as its frontline defence against numerous relationship issues and problems with your contractor, and as the skilled and adequately resourced advisory team reporting to management or the board. We have been advocating the development of such teams for years, and though we cannot say for certain, it seems, from a statement made by John Bourne, TTT’s project director at DEFRA, that they may have had one. “It’s been a team effort since the project started, from the first ministerial agreement in 2007 to the completion of the financial arrangements in August 2015 which allowed construction work to begin. The project successfully brought together a wide range of expertise: financial, legal, technical, insurance and regulatory. This partnership approach has helped create the conditions for success, managed the risk and reduced the cost to the taxpayer.”
The benefits of an excellent ICF team can so easily go unrealised if management are unwilling to invest in them or to listen to what they have to say. But several members of the TTT management team had been through the government’s Major Projects Leadership Academy (MPLA) – a training facility aimed at project leaders across the government to build on their expertise – which seems to have had a positive impact.
2. Outcome clarity
The TTT project had a clear set of goals – primarily to reduce sewage pollution running off into the Thames from 39m tonnes to 2-3 tonnes a year – and a very good reason for pursuing them: as well as the health, economic and social benefits already mentioned, there was the threat of European Commission fines estimated to be in the region of £100m a year.
Such clarity, alongside calculations on costs and benefits as supplied by DEFRA, provides much of the information required to extrapolate KPIs, benchmarks and milestones to mark the way to a successful conclusion of the project.
The clearer your outcome specification, and the deeper the analysis you conduct into your reasons for embarking on a project (as well as the ways in which its successful conclusion with benefit relevant stakeholders over and above the cost of conducting such a project), the lower your risk of failure will be.
3. Applied learning
When we look at what we can learn from the lessons of the past there are two clear avenues – the lessons we can learn from other projects, and the lessons we can learn from the project we are working on throughout its lifecycle.
The former seems to have been adequately addressed with the gov.uk website stating that “According to members of the project team, the opportunity to learn from other projects for the benefit of TTT was key to the project’s success. The team drew on lessons from Crossrail and HS2, and also benefited from senior people moving onto the project at appropriate stages.”
The latter was referring to the necessary malleability of project plans and schedules to adapt to the reality of the environment that they find themselves in, something we go into more detail about below.
4. Willingness to adapt
All major projects should be afforded the opportunity to adapt to their circumstances. Contracts and schedules are not fixed in stone, and if better ways of working are established some time into a project then they should be given the airing they deserve to determine whether they will, in fact, add value. We always recommend a “review and adapt” meeting between all relevant parties at least once every six months to do just this.
The Major Projects Authority (MPA), or as it’s now known (as of 1 January 2016), the Infrastructure and Projects Authority (IPA), is responsible for helping government departments to “improve the way we manage and deliver projects”. In its Annual Report on Major Projects 2015-16 it reported that their regular assurance reviews on the TTT project “provided specialist input into how to overcome the challenges as the project developed”.
Public opinion is a powerful force, and, as we have seen many times before, communication that lacks the impact required to sway public opinion in favour of a major public sector project can be its downfall. Throughout its lifecycle major outsourced projects will be susceptible to such issues, and it is only through preparedness, proof of concept and stakeholder confidence that such threats can be averted.
In the case of the TTT project, it seems that aside from an early media hiccup, so far things have been going well. It should be noted, however, that despite DEFRAs commendable efforts to offer concrete outcome benefits, there are likely to be some who will note their intangible nature, leaving them open to potential dispute. That being said, the main parties involved seem to believe in the process and have respect for the way things have been run. Gavin Tait, director of Amber Infrastructure, one of the project’s investors, is reported to have said: “The contribution of the DEFRA team, supported by an excellent IUK team, extended far beyond the practical necessities of forming an appropriate government support package. The active and pragmatic approach adopted by them to potential investors in TTT was key to the success of getting this project financed. The private/public engagement on this project sets a benchmark for the development of all future major UK infrastructure projects.”
Labelling TTT a benchmark for future UK projects is praise indeed; but under such difficult circumstances it certainly seems, at this stage, that we’d agree with that statement.