The Victorian Desalination Project: Overview

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The Victorian Desalination Project: Overview
Source: (Mitchell et al. 2008).

Introduction

The Victorian desalination project shown above came into being on 19 July 2007 when the Victorian government announced the intention for constructing a desalination plant with a 150-Gigalitre capacity. The main objective of executing this project was to augment water supplies within Melbourne and Geelong coupled with the surrounding areas. This has to be done to achieve the intended goals and objectives, which are finite in nature. In this extent, the Victorian desalination project is a temporary endeavour. Consequently, the project has all the qualities defined by PMBOK. PMBOK “is a collection of processes and knowledge areas generally accepted as best practice within the project management discipline” (Haughey 2012). The body provides various project management fundamentals irrespective of the type of project under consideration. PMBOK defines a projects as a “temporarily endeavour undertaken to create a unique product, service, or result” (IEEE 2008). In the context of this paper, the desalination plant is the unique product. By taking Victorian desalination project, as precisely meeting the definition of a project, as offered by PMBOK, the aim of this paper is to analyse it right from its inception to date based on the projects’ management knowledge areas defined by PMBOK. These knowledge areas are procurement management, scope management, cost management, risk management, integration management, time management, and communication management.

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Procurement management

Project procurement constitutes an integral part of the process of project management in which various services or products are bought through a myriad of external sources outside the employees’ base. These products and or services are used to complete the stipulated tasks making up the project (Duncan 1996). Under the stipulations of PMBOK, PPM also entails “a variety of tasks including the planning process where it is decided on what to acquire and how it will be done” (Duncan1996). For mega projects such as Victorian desalination project, approval of the procurement strategies vital for adoption is necessary. For this purpose, in the procurement process of the products and services used in the project, the government has been acquiring common wealth and state’s approvals for the acceptable bidding process, bidding evaluation, and awarding of tenders as guidelines on how to acquire the necessary products and services for use in the project. What to acquire is the subject of performance requirements of the project.

In the procurement management process, project management relations binding both the buyer and the service or product provider through a contract is vital in setting the project in motion. For Victorian desalination project, this noble task was realised through the state’s effort to enhance execution of tender process in a competitive way while arriving at the decision on who is to deliver the desalination project within the provisions of contractual terms. With regard to the Capital Projects Division (2009), “the tender process was implemented in accordance with Partnerships Victoria policy and principles seeking to ensure that the State received the best value for money outcome.” This was an effort to set the frameworks for the governance in the process of procurement, which constituted of a number of elements. These were expression of interest for supply of products and services and submission of initial proposal in response to a request for the same by the government in march 2009 followed by submission of the amended proposal upon scrutiny of community feedback and consultations in April 2004. On July 2009, AquaSure consortium was announced as the company to execute the project.

Scope management

Scope management encompasses all the processes and procedures that are required in ensuring that a project takes into incorporation the required set of task to complete successfully within the stipulated time constraints. It constitutes scope initiation, scope planning, scope definition, scope verification, and change control of the scope (Tolbert 2008). For the Victorian desalination project, the project was initiated following the government’s announcement of the decision to construct the Australian largest desalination plant on 19 July 2007. Scope planning was realised through government’s announcement that the capacity of the desalination plant would be a 150-billion liter expandable to 200 billion liters (Kjorstad 2010). Every activity and element of the projects would be executed to meet this capacity. Hence, scope planning helps in guiding the process of allocating time and monetary values to the project.

Scope definition refers to the subdivision of all major deliverables of the project into small deliverables, which are manageable. Government Initiatives (2012) give a list of these deliverables by informing that the desalination plant will be “surrounded by a 225ha revegetated coastal park for public use, have long tunnels for intake and outlet to protect the coast and beach – 200-billion liter capacity, have 84-kilometre two-way water transfer pipeline – 200-billion liter capacity.” They also give “seven pipeline connection points for water delivery to Melbourne and some towns in South Gipps land and Western Port” (Government Initiatives 2012). As part of scope definition of the Victorian desalination project, the plant has an underground supply of power, which is 87 kilometers long with a capacity of 200 billion liters. Another crucial aspect of scope management is scope verification. This aspect entails “formalising acceptances of the project scope” (Tolbert 2008). This is accomplished through consultation upon conducting an assessment on the impacts of the project.

Wonthaggi Desalination Plant

Wonthaggi Desalination Plant
Source: (Mitchell et al. 2008).

Lastly, scope change control involves carrying out a control of the project’s scope. Since the feasibility of the scope of the Victorian desalination was confirmed by the assessment studies and other forms consultations, this element was arguably insignificant for setting the project in motion to the next phase.

Cost management

Under PMBOK, cost management houses all the necessary tasks that are required to facilitate the completion of projects within the set budgetary constraints. It has four essential elements. These are “resource planning cost estimation, cost budgeting, and costs control” (Tolbert 2008). For Victorian desalination project, the necessary resources include the personnel to handle the project, material, and equipments. In the awarding of the tender to AquaSure, this factor was critical in that the company was awarded the tender since it had proven its state of art technology and equipment. The figure below shows construction of the plant in progress.

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 construction of the plant in progress
Source: (Tolbert 2008).

According to Millar and Schneiders (2011), the company also had “high energy efficiency membranes, producing high quality desalinated water matching Melbourne’s world-class water, with a solution that provided certainty to the delivery of water by end of 2011.” In its proposal, the company also offered to provide low cost, and highly dependable underground sources of power that were possible to construct within the preset periods. Once planning is accomplished, it becomes necessary to estimate various costs. This aspect entails “developing an approximation (estimate) of the costs of the resources needed to complete project activities” (Tolbert 2008). The Victorian desalination project was estimated to cost the government a capital cost of $3.1 billion. Before the commencement of any projects, cost budgeting is done. It involves “allocating the overall cost estimate to individual work activities” (Tolbert 2008). For the Victorian project, this was precisely done. The desalination plant was budgeted to take 47 percent of the total cost of the project. Marine structures took 18 percent while power supply took 7 percent. The transfer pipeline took 28 percent of the total capital cost (Mitchell et al. 2008).However, resulting from the financial crisis in 2009, additional costs have risen up often prompting borrowing.

Communication management

In any project, a project a manager consumes about 90 percent of his or her time in communication. Essentially, project management communication is a “subset of project management that includes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information” (Tolbert 2008). In the process of execution of any project, it is critical that all stakeholders, including the communities, investors, and even the government are updated on the progress of the projects coupled with its shortcomings. For this purpose, the communication personnel and stakeholders’ relation personnel for the Victorian desalination project has been managing consultations with various stakeholders through communication management from the time the project kicked off in 2007. Communication management is central in enhancing a to-and-fro flow of information between the government agencies constantly monitoring the project and the available interest groups such as communities and councils. The feedback obtained is used in the derivation of strategies to improve and or indentify the necessary areas that need further attention in terms of being communicated to enhance dissemination and disposition of the information.

Integration management

Project integration management aims at ensuring that various elements of a project are coordinated. This element closely reflects the elements of an integrated project management advocated for by PMBOK. In the plan development, according to the Australian Publishing Resource Service (2012), it was categorically stated that the Victorian desalination project encompassed “financing, construction and operation of the reverse osmosis desalination process plant, associated marine tunnels and structures, 84km water transfer pipeline and an 87km high-voltage AC underground power line to supply power to the plant.” These activities have been pursued to completion since the inception of the project until to date. As part of the integration management, following the economic crunch on 2009, there have been a myriad of change controls especially on the issue of financing of the project. These changes included procurement of various alternatives for funding to cater for the increased costs of resources for the project and guaranteeing of debt funding by the state coupled with the state’s decision to share equally refinancing risks with AquaSure.

Time management

Project time management seeks to ensure that all activities constituting the entire project are completed timely within the stipulated time constraints. It has five essential aspects, “activity definition, activity sequencing, activity duration estimation, schedule development and schedule control” (IEEE 2008). The Victorian desalination project, initiated by the procurement process, led to the short listing of two main products and services providers by 2008. By March 2009, the shortlisted bidders submitted their bids. Towards the end of 2009, evaluation of bids was conducted followed by awarding of the contract. In the case of sequencing of the project’s activities, various parts of the projects- desalination plant, marine structures, power supply, and transfer pipeline, were allocated differing times. However, the period for operation of the project was set as to be December 2011. This was upon the completion of the project between September 2010 and June 2011. Unfortunately, this preset target was not achieved due to a number of factors such as bad weather and impacts of economic crunch experienced in 2009 coupled with technical difficulties in the construction process. Nevertheless, any project remains a temporary endeavour constrained by time. Therefore, there were needs to review the anticipated completion dates. This prompted the extension of the completion date by one year. However, even today, the project has not yet been fully completed.

Risks management

Project risk management encompasses all the measures adopted to identify, respond, and analyse various risks likely to be encountered in projects. In this sense, it focuses on “maximising the probability and consequences of positive events besides minimising the probability and consequences of adverse events to project objectives” (Mitchell 2008). This is done in a number of steps including planning of risks, identification of risks, qualitative risks analysis, quantitative analysis of risks, response planning for risks, and risk monitoring and control (Duncan1996). From the context of risk management, the Victorian desalination projects experienced mitigation of various risks, which are assumed by either the state or the contracted company to deliver the project, AquaSure. Some of these risks are site risks, scope risks, designing, constructing and commissioning risks, operational risks, industrial relations, law alterations risks, asset risks, and finance and sponsor risks among others.

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For the case of site risks, claims by natives, risks associated with key approvals, and land acquisition are assumed and mitigated by the state. On the other hand, within the same realm, site conditions and environmental contamination are assumed by AquaSure. Assuming scope risks was and has been principally the responsibility of the state. The project has also been facing several risks related to delays of completion dates coupled with hiked construction costs accruing from majeure events and state’s risk items among them court decisions meant to prevent proceedings of the project and law alterations. These risks are mitigated by both the state and AquaSure. Apart from these risks, there are other risks associated with design and construction such as waters system connections (assumed by the state) and infrastructure for power supply risks (assumed by the AquaSure).

Phases of Project Management

Victorian desalination project was subject to undergoing various phases that characterise projects. According to IEEE (2008), the phases include conception and initiating, plan preparations, execution, monitoring and controlling of both processes and resources, and finally, project closing.

Project conception and Initiation

Before the project was initiated, it was critically evaluated for its feasibility. The conception of the idea of coming up with such a mega project was inspired by the needs to provide means of availing water that was reliable in all weather situations. Additionally, the government of Australia would also benefit immensely from the project since it provided a means of increasing revenues. Amid the benefits that made the government authenticate the project, several drawbacks were encountered including the fear amongst the communities that they would lose their land. Concerns were also high about the impacts of the project on aquatic ecosystem (Mitchell, et al. 2008).

Nevertheless, amicable and strategic decisions were made at this phase to resolve the challenges. A task force mandated to evaluate whether the project was implementable confirmed that the project was indeed viable since the necessary resources could be availed by the government of Australia and other stakeholders. The pressing need for clean sources of water supplies within Greelog and the neighboring towns compelled the government to make this project a priority in comparison to other government projects. After the project was proved viable within the financial constraints, the scope and location of the project were determined. Cost of the project was then approximated, as well as the time required for completing it. The necessary human resources and equipments were also determined by the project implementation committee. The stakeholder’s conflicts were resolved. For instance, concerns were raised that the project would pose problems to the community accruing from the effects of the discharges into the environment. However, upon the resolution of this and other conflicts of interest among the stakeholders, the project charter was approved. Consequently, the project was now ready to proceed into the planning phase.

Project planning

In the planning phase, one of the critical activities entails planning for the available resources. These resources include both financial and time frames available for the project. At this phase, the project managers also define the procedures for realization of the preset objectives (IEEE 2008). For the case of Victorian desalination project, it was critical that the project manager came up with a precise definition of all constraints and requirements coupled with the assumptions related to the project at hand. Other activities included defining the roles of the managers and supervisors and determining the number of employees appropriate for the completion of the project within the set time coupled with the skills that were required in these employees’ pool. The project was then broken down into work structures, which were allocated to the employees depending on their expertise. During the process off execution of a project, changes occur (Duncan 1996). Consequently, it is essential that a plan for change management be made at this phase. The Victorian desalination project manager responded to this concern appropriately before the project could move to its execution phase.

Project execution

In this phase, the Victorian desalination project was implemented in accordance with the plans that had been approved. In the process, the project management made sure that a common ground was established between employees and the project anticipations. Additionally, the procurement arm initiated its process for acquiring materials for the project. This required cute management of the acquired material resources to ensure that they were of the appropriate quantity and quality. This was vital for the project to deliver the set objectives precisely.

Project monitoring and control

Projects require monitoring and control to ensure that they always remain on track and that they do not slide off the required path. For the Victorian desalination project, the project was measured to ensure that it complied with the anticipated performance thresholds. The main aim was to ensure that all the deliverables of the project profiled the quality standards that are set for desalination plants. The extents to which Victorian desalination project risks are mitigated are also determined via control and project monitoring strategies.

Closing of the project

The Victorian desalination project is not yet completed. Hence, it is not yet closed. However, it is expected that, when such a time comes, the project manager will release a document detailing the resources that have been consumed in the project. The manager will also seek legal and administrative acceptance of the project as having delivered its goals and objectives. Before declaring its closure, other thing such as the extents to which the stakeholders will be satisfied by the project in relation to their raised concerns, which had established conflicts of interest at the planning phase, is necessary. Should they be satisfied and also the project be accepted when evaluated in relation to the design and performance requirements, the project will be declared complete and closed thereof.

Conclusion

Projects are critical endeavours that are often constrained by resources and time. One way of looking at a project is from the context of being a composition of many tasks that, while brought together, amount to a whole. These specific activities require valid and different resources and times for their completion. They must also be clearly planned to avoid unnecessary delays. For this reason, this paper has focused on the analysis of the Victorian desalination project from the dimensions of integration project management, communication project management, costs project management, project time management, project risks management, project scope management, and project procurement management. The phases of the project have also been given some plausible attention.

References

Australian Publishing Resource Service, 2012, Major Projects and Water Reform, Web.

Capital Projects Division, 2009, Partnerships Victoria project summary: Victorian desalination project, Department Of Treasury And Finance, London.

Duncan, W 1996, A Guide To The Project Management Body Of Knowledge, Project Management Institute, Newtown Square.

Government Initiatives, 2012, Desalination project, Web.

Haughey, D 2012, The project management body of knowledge (PMBOK), Web.

IEEE 2008, A Guide To The Project Management Body Of Knowledge, Project Management Institute, New York.

Kjorstad, J 2010, ‘Featured Global Projects,’ Infrastructure Journal, vol. 1 no. 2, pp 1-80.

Millar, R & Schneiders, B 2011, The price of a drink, Web.

Mitchell, K, Wimbush, N, Harty, C, Lampe, G, & Sharpley, G 2008, Environment Effects Statement: Victorian Desalination Project Report of the Inquiry to the minister for planning, Australian Institute of Publication, Australia.

Tolbert, L 2008, ‘Nine knowledge areas’, Journal of community academy, vol. 2 no. 2, pp. 56-59.

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