Megaproject Management

Lessons on Risk and Project Management from the Big Dig

Virginia A. Greiman

• Publisher: Wiley
• Year: 2013
• ISBN:
  9781118416341
• Edition: 1
• Topic: Business
• Subtopic: Project Management
• Index: Business

Project management lessons learned on the Big Dig, America's biggest megaproject, by a core member responsible for its daily operations

In Megaproject Management, a central member of the Big Dig team reveals the numerous risks, challenges, and accomplishments of the most complex urban infrastructure project in the history of the United States. Drawing on personal experience and interviews with project engineers, executive oversight commission officials, and core managers, the author, a former deputy counsel and risk manager for the Big Dig, develops new insights as she describes the realities of day-to-day management of the project from a project manager's perspective.

The book incorporates both theory and practice and is therefore highly recommended to policymakers, academics, and project management practitioners. Focusing on lessons learned, this insightful coursebook presents the Big Dig as a massive case study in the management of risk, cost, and schedule, particularly the interrelation of technical, legal, political, and social factors. It provides an analysis of the difficulties in managing megaprojects during each phase and over the life span of the project, while delivering useful lessons on why projects go wrong and what can be done to prevent project failure. It also offers new ideas to enhance project management performance and innovation in our global society.

This unique guide:

• Defines megaproject characteristics and frameworks
• Reviews the Big Dig's history, stakeholders, and governance
• Examines the project's management scope, scheduling, and cost management—including project delays and cost overruns
• Analyzes the Big Dig's risk management and quality management
• Reveals how to build a sustainable project through integration and change introduction

Chapter 1

Introduction to Megaprojects and the Big Dig

The difficult is what takes a little time; the impossible is what takes a little longer.

—Fridtjof Nansen, Nobel Peace Prize Winner, 1922

Introduction

A veritable research and development laboratory of engineering and construction, the Central Artery/Tunnel Project, famously known as the Big Dig, was the largest infrastructure project ever undertaken in the United States and the largest inner-city construction project in the world. Its degree of difficulty was far greater than that of the other megaprojects of the twentieth century, the Panama Canal, the Hoover Dam, and the English Channel Tunnel. Those projects were constructed in “greenfield” sites. There was nothing there. The Big Dig, however, was constructed in the heart of a major, operating city. In addition, the proposed roadways were to be built off of the Colonial shoreline. That meant they would be built not on consolidated soil but on filled land, which possessed undetermined strength characteristics. Due to the proximity of the harbor, the water table throughout this unconsolidated soil was between 5 and 8 feet below the level of the streets. The deepest Big Dig tunnel would have a roadway surface 120 feet below the streets.

The Big Dig turned out to be quite a dichotomy. Challenges that had never before been faced were overcome not only in the design phase but also during construction, and on a daily basis. Technologically, the Big Dig is a resounding success, a marvel of ingenuity, engineering, design, and construction. It did resolve the age-old vehicular gridlock problem in the City of Boston. However, the road to its completion was paved with extraordinary challenges in its execution.

There is now an unparalleled example of what works and what doesn't work on megaprojects. Each chapter in this book offers a view of the Big Dig from the inside out and attempts to provide a perspective heretofore unavailable. The goal of this book is to convey an understanding of the systemic difficulties in managing large-scale projects and the need to develop better solutions for implementation of these projects, including controlling costs, schedule, scope, quality, and risk. The literature is filled with academic analysis and recommended practices, but, despite the complexity of megaprojects, there is scarce examination of the numerous processes and procedures that govern these projects and the knowledge and skills needed for managing large-scale projects around the world.

The objective of this chapter is for readers to learn the benefits of studying megaprojects, as well as to explore typical characteristics of megaprojects and how projects like the Big Dig are conceived and developed. This chapter provides a brief overview of the characteristics of megaprojects generally and the unique characteristics of a megaproject built through an inner-city as well as the impact and benefits of this monumental endeavor for future project managers. While the primary goal of this chapter is to set forth a framework for understanding the importance and goals of megaprojects, it also analyzes what makes megaprojects unique and worthy of future analysis and research.

Why Study Megaprojects?

In light of the magnitude and technological complexity of these projects—to say nothing of their intriguing historical and political stories—it is surprising that more has not been written about the phenomenon of megaprojects.

—Haynes 2002

Megaprojects exhibit many interesting and unique characteristics, and many reasons have been advanced for studying megaprojects including understanding how projects create value (Esty 2004) and the concepts and strategies for success (Merrow 2011). There are additional compelling reasons to study megaprojects; a few of the most important are highlighted as follows.

1. Delivery of Lessons from Practice

We cannot undo the past, but we are bound to pass it in review in order to draw from it such lessons as may be applicable to the future…

—Sir Winston Churchill

One of the primary reasons for project management research is the development of a body of lessons learned that can be applied to future projects across industries and continents. The greatest teacher is experience, as evidenced in this popular quote from Will Rogers: “Good judgment comes from experience and a lot of that comes from bad judgment.” The many lessons from the Big Dig and other megaprojects must be shared so that all projects can benefit from this experience, both the good and the bad.

In the National Academies' 2003 report Completing the “Big Dig”: Managing the Final Stages of Boston's Central Artery/Tunnel Project (Board 2003), the committee that reviewed the project management practices employed on the Boston Central Artery/Tunnel (the Big Dig) Project recommended that other megaprojects “could benefit from the lessons learned from the Big Dig—the causes of the many problems…as well as the solutions developed by the management team, design engineers, and construction contractors. Participants in these new projects will need to learn how to develop realistic expectations and manage efforts to achieve them.”

During the past decade, megaprojects have had an enormous impact on the global economy and the advancement of transition and developing countries. Research on megaprojects tends to focus on their failures, in terms of cost overruns, delays, and endemic stakeholder conflicts. However, there are also great benefits that are associated with project development and implementation processes that are rarely discussed. This book attempts to focus on both the lessons that are learned when things go wrong, but also the lessons to be gleaned from success, so that they may be systemically pursued.

2. Advancement of Knowledge and Innovation

Institutional learning is proposed as a process through which adaptations can be made to accommodate shortcomings in the prevailing institutional environment (Hall et al., 2001); (Greiman and Rwabizambuga 2009). The nature of megaprojects brings together significant tacit knowledge that is embedded within particular groups in the project (Bresnen 2003). In project-based activities, the flows of personnel, material, and information as social processes are important in the diffusion and transfer of technology and knowledge. Social processes play a great role in the transfer of knowledge and learning. Large projects demonstrate the relationship between knowledge, technology, and organization. This interrelationship emphasizes the importance of structuring the project right from the outset to maximize the flow of knowledge in and out of the project to the benefit of the broader organizational goals.

Advancement of knowledge and innovation at the Big Dig was at the heart of its mission. As noted by the U.S. Federal Highway Administration (FHWA), “[w]hile some aspects of the Central Artery/Tunnel Project (CA/T) in Boston,…have been controversial, this monumental undertaking has been responsible for improving the state-of-the-practice in transportation design and construction” (FHWA 2001). This knowledge includes innovations in managerial, operational, and technological tools and processes. Throughout this book many of these innovations and advancements are highlighted and are used to emphasize the importance of studying megaprojects to gain insights into methodologies and tools for improved practices in future projects. Sharing knowledge is not just a domestic goal but a worldwide strategy led by multinational development banks and country- and region-based knowledge-sharing alliances.

3. Projects as an Engine for Economic Development

Large-scale infrastructure has long been an essential factor in economic development. The U.S. Department of Transportation (USDOT), has recognized that “in rebuilding our roads, bridges, transit systems, and airports, we can spur the creation and growth of small businesses, America's economic engine” (USDOT 2011). In 2010, The U.S. Department of the Treasury issued An Economic Analysis of Infrastructure Investments, which described the merits of direct private investment in infrastructure as follows:

Many studies have found evidence of large private sector productivity gains from public infrastructure investments, in many cases with higher returns than private capital investment. Research has shown that well designed infrastructure investments can raise economic growth, productivity, and land values, while also providing significant positive spillovers to areas such as economic development, energy efficiency, public health and manufacturing.

(Treasury 2010)

Moreover, the Congressional Budget Office has determined that additional investment in infrastructure is among the most effective policy options for raising output and employment (CBO 2010). These positive benefits are a major reason why the lessons from megaprojects are so important in identifying greater opportunities for building efficiencies into our transportation and infrastructure systems and building national communities that can enhance global competitiveness.

4. Global Expansion and Improvement of Societal Benefits

Development projects have had a long history of improving societal benefits including environmental sustainability, quality of life, infrastructure development, and economic viability; however, there is a long way to go, considering that more than half the world—over 3 billion people—live on less than $2.50 a day (Chen and Martin 2008). In some countries, projects are the only way to deliver sustainable development; thus, understanding how they can be used to greater effect is a key to solving major global problems including poverty alleviation, food security, global health, and the general welfare of local citizens. Figure 1.1 shows the poverty levels in the developing world in 1990 versus 2008. According to the World Bank, the focus on poverty alleviation has reduced by almost half, the percentage of people living on less than a $1.25 a day (WB 2012; 2011).

Figure 1.1 Poverty Picture in the Developing World 1990–2008

Source: World Bank: Poverty and Equity Data Portal.

As of 2011, an estimated 880 million people in the world live without safe water, 1.4 billion lack electricity, 2.5 billion lack sanitation, and more than 1 billion lack access to telephone services. Total demand for infrastructure investment and maintenance from developing countries is estimated at more than $900 billion a year, with the greatest needs in Africa and Asia (WB 2011). Increasingly, the Bank Group is linking developing countries so they can share knowledge gained from their experiences. As a group, the bank continues to focus on infrastructure—its largest investment sector—as well as efforts to connect investment to private-sector financing, which includes supporting public-private partnerships. Figure 1.2 shows 53 percent of the lending by sector in Africa dedicated to infrastructure development in Agriculture and Forestry, Energy and Mining, Industry and Trade, Transportation and Water, Sanitation, and Food Protection.

Figure 1.2 World Bank Lending by Sector (Africa) FY 2011

Source: World Bank: Annual Report 2011: The Year in Review: Africa.

The importance of infrastructure development is further emphasized by the World Bank's partnership with the Government of Singapore, in launching the first Infrastructure Finance Center of Excellence to provide customized services to governments in developed and developing countries as they develop mechanisms to finance infrastructure, including with more private capital.

5. Fulfilling the Growing Need for Major Investment in Transportation and Energy

Our global society now connects us in ways that we could never have imagined. Seven billion humans now have the opportunity to interact with each other and share knowledge and experience, and our technology enables us to pursue innovative pathways and incredible challenges. Major investments in capital-intensive projects are needed for projects around the globe to build pipelines for the supply of natural gas, to build alternative energy resources such as wind farms, to relieve urban traffic congestion, and to rebuild and modernize bridges, tunnels, and highways as they reach the end of their original design life. The growth in infrastructure investment funds is expected to continue both domestically and globally with billions available in equity to invest in projects that can produce a reliable revenue stream through tolls, tunnels, and cloud-based computer services. The World Bank reports that financing for infrastructure remains its core business, accounting for 46 percent of total assistance in 2011 (WB 2011).

6. Improving Transparency and Oversight

Another important reason to study megaprojects is to learn from the politics of large-scale investment to make sure that, through transparency and public scrutiny, better oversight of these projects is secured.

Megaprojects generate a tremendous amount of scrutiny and public concern. In 2009, the U.S. Department of Transportation (USDOT) Office of Inspector General (OIG) reported 278 indictments and 235 c...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Author's Perspectives
• Acknowledgments
• Introduction to This Book
• Chapter 1: Introduction to Megaprojects and the Big Dig
• Chapter 2: History and Financing of the Big Dig
• Chapter 3: Stakeholders
• Chapter 4: Governance
• Chapter 5: Megaproject Scope Management
• Chapter 6: Schedule
• Chapter 7: Cost History
• Chapter 8: Cost Management
• Chapter 9: Megaprojects and Megarisk
• Chapter 10: Quality Management
• Chapter 11: Building a Sustainable Project through Integration and Change
• Chapter 12: Leadership
• Appendix
• Glossary
• Abbreviations and Acronyms
• Index