The Victorian Desalination Project

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Introduction

The Victorian government announced that it intended to construct a desalination plant with a capacity of 150-gigalitres of water. The announcement paved the way to the Victorian desalination project on 19 July 2007 (Norimitsu 2010, p.12). Appendix a shows an aerial view of the Victorian desalination project. The major objective of the plant was to enhance the augmentation of water supplies within Geelong and Melbourne areas and their surroundings. The project was to be implemented in a manner that would make sure that its aims, goals, and objectives of its creation would be precisely achieved within time and resources constraints. This requirement implied that the Victorian desalination project was a transitory undertaking. Arguably, the Victorian desalination project had to meet the criteria set by PMBOK for any endeavour based on the definition of a project. PMBOK involves “a collection of processes and knowledge areas that are generally accepted as the best practices within the project management discipline” (Haughey 2012, Para. 4).

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PMBOK avails the fundamental information on project management with the type of project under consideration notwithstanding. According to the PMBOK, a project is a “temporary venture undertaken to create a unique product, service, or result” (IEEE 2008, p.34). For the purposes of discussions of this paper, the Victorian desalination project is the unique product referred in here by PMBOK. This paper considers the Victorian project as fitting the definition of the project as this body offers it. By doing this, the main aim of the paper is to analyse it right from its setting up to its current state. This effort is done based on the project management body of knowledge areas as guided by the PMBOK. These knowledge areas are scope management, cost management, time management, risk management, integration management, procurement management, and communication management.

Scope Management

Scope management involves the activities and procedures that are undertaken to ensure that a project takes into account the required set of errands that are vital in ensuring that a project is completed within the usual constraints of time and resources. Scope management encompasses components such as scope launching, planning, verification, definition, and change and control (Tolbert 2008, p.57). In the case of the Victorian desalination project, the declaration of the intention to construct the Australian chief desalination plant on 19 July 2007 marked the scope initiation phase. The definition of the capacity of the project (150-billion litre expandable to 200 billion litres) (Kjorstad 2010, p.7) marked the beginning of the scope planning phase. The essence of the scope planning is that all the activities that would be undertaken would be geared towards the achievement of this stipulated capacity. Therefore, scope planning facilitated the process of allocation of time and financial resources to the project.

The term scope definition is used to refer to subdivision of all major deliverables of the project into small deliverables. A record of these deliverables is availed by the Government Initiatives. The plant also has “seven pipeline connection points for water delivery to Melbourne and some towns in South Gipps land and Western Port” (Government Initiatives 2012, Para.6). Additionally, the plant has a subversive power supply, which spans a distance of 87 km. The plant was also expected to have a maximum output capacity of 200 billion litres of water annually. Scope verification is yet another critical aspect of scope management. It refers to “formalising acceptances of the project scope” (Tolbert 2008, p.57). With regard to Victorian desalination plant, scope verification was realised via carrying out assessments followed by appropriate consultations on the likely impacts of the desalination plant. Scope change and control entails conducting a control of the scope of a project. The assessment studies for the Victorian plant helped to determine whether the project was feasible. Hence, scope change and control was not an impediment in setting the project in the next phase of its execution.

Cost Management

From the context of PMBOK, cost management engulfs all vital tasks that are paramount in facilitating the end of projects precisely within budgetary constraints. It comprises resource planning, cost budgeting, cost estimation, and cost control. In case of the Victorian project, resources that required planning include the materials for construction, human resource, and equipments. On conducting resource planning, the tender was awarded to AquaSure since the company proved that it had the required human resource capacity, technology, and equipments that are vital for the executing the project. This argument is supported by Millar and Schneiders (2011) who reckon that AquaSure had “high energy efficiency membranes that produced high quality desalinated water that matched Melbourne’s world-class water with a solution that provided certainty to the delivery of water by the end of 2011” (Para.3). The proposal by the company revealed that it was ready to offer highly dependable underground water source. The project was estimated that it would cost the government approximately 3.1 billion dollars. Before the Victorian desalination project commenced, cost budgeting was done by “allocating the overall cost estimates to individual work activities” (Tolbert 2008, p.58). 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, p.15). However, ensuing from the financial crisis in 2009, additional costs have risen up often prompting borrowing of more financial resources.

Procurement Management

Procurement is an integral component of project management. The main tasks involved are buying of a myriad of material and services from external sources, which are outside the employees’ pool. The materials and services are deployed to complete the various stipulated tasks that constitute the project (Duncan 2001, p. 53). From the recommendations of PM BOK, project procurement also entails the “a variety of tasks including the planning process where it is decided on what to acquire and how it will be done” (Duncan 2001, p.67). In any project, approval of procurement strategies that would be deployed to obtain service and material for the project is essential. In the case of the project under study, the government acquired both States’ and Common Wealth approval of the acceptability of various bidding processes, awarding of tenders, and bidding evaluation. Guidelines were also sought on the process of acquiring the relevant materials and services. What was to be acquired was dictated by the anticipated performance of the project.

In the due course of the procurement process, relations that bound the products and services provided and the buyer are established in the endeavour to set the project in motion. In the case of the Victorian project, this essential aspect was accomplished through the effort of the State to enhance the execution of the tendering process in a manner that was competitive while arriving at the decision on who was to deliver the desalination project within the provisions of contractual terms (Heibuch 2009, Para.2). Indeed, with regard to Capital Projects Division (2009), “the tender process was implemented in accordance with the Partnership Victoria policy and principles seeking to ensure that the State received the best value for money outcome” (p.19). Arguably, this attempt entangled an attempt to lay down the frameworks that would guide the process of procurement. This process constituted elements such as the expression of interest for the supply of products and services and submission of the initial proposals. The submission of the amended proposal upon its scrutiny and incorporation of communities, feedback and consultations were scheduled for April 2004. Lastly, On July 2009, AquaSure consortium was declared as the most appropriate company to execute the project.

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Time Management

Project time management ensures that the activities that make up a project are completed with the predetermined time constraints. It is made up of five main components. These are “activity definition, activity sequencing, activity duration estimation, schedule development, and schedule control” (IEEE 2008, p.32). Short-listing of two main service providers and product providers was done by 2008. By March 2009, bidders who were shortlisted submitted their bids. Evaluation of bids was conducted by the end of 2009. In the same time, awarding of the contract was done. In the case of sequencing of the project’s activities, various parts of the project- desalination plant, marine structures, power supply, and transfer pipeline were allocated various times. The operation of the project was scheduled for December 2011. This date was set following the scheduling of the completion of the project between September 2010 and June 2011. However, the operation date of the project was never realised. Indeed, as at November 2012, the project was not in operation.

Integration Management

Integration management is the aspect of project management that ensures that all elements of a project are coordinated. The Australian Publishing Resource Service (2012) argues that Australasian desalination project encompassed “financing, construction, and operation of the reverse osmosis desalination process plant, associated marine tunnels, and structures, and 84km water transfer pipeline and a 87km high-voltage AC underground power line to supply power to the plant” (Para. 5). The activities have been pursued since inception to the current stage of the project. As an integration endeavour, several change controls particularly on issues related to financing have been made. Some of the changes entail consideration of alternative sources of funding to cater for the hiked costs of project resources coupled with making a guarantee of debt funding. A decision has also been by the States to share the risk of financing the project.

Risk Management

Project risk management is the identification, responding, and analysing of risks that would be encountered in a project (Alexander & Sheedy 2005, p.125: Kallman 2011, p.122). The main objective is to “maximise the probability and consequences of positive events besides minimising the probability and consequences of adverse events to project objectives” (Mitchell 2008, p.71). In the case of this project, the government, the states and the contracted company agreed to assume various risks. The definition of risks gives rise to a number of them such as site risks, scope risks, designing, constructing and commissioning risks, operational risks, industrial relations, law alterations risks, asset risks, and finance and sponsor risks amongst others. The state was to assume site risks, risks of key approval, natives’ claims, and land Acquisition risks. AquaSure assumed environmental contamination and site condition risks. Scope risks were the province of the State. On the other hand, the state and AquaSure assumed the risks of delays of completion dates equally coupled with the hiked construction costs accruing from significant events and state’s risky items among them being court decisions that prevent proceedings of the project and law alterations. Lastly, AquaSure took care of the risks of design and construction of various water systems and power supply systems.

Communication Management

A project manager spends an immense amount of time in communication. Communication management 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, p.58). Within the brackets of this project, communication management has been deployed to make sure that communities, inventors, stakeholders, and the government are informed on the successes and shortcomings of the project as postulated by PMBOK.

Phases of the Victorian Desalination Project

Victorian desalination project underwent various phases in its development. They included initiation preparation of plans, execution (appendix b), controlling and monitoring of resources and process, and lastly project closing.

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Project Initiation and Conception

Before the initialisation of the project, critical evaluation of its feasibility was done. The idea conception was fuelled by the need to come up with a means of supplying reliable water that was safe for consumption at all seasons. The government of Australia would also benefit from the project due to the increased revenues. Although the government found the ideas necessary, there was some fear amongst the communities that they would lose their land based on where it was to be located (see appendix c). The project also had negative impacts on the aquatic ecosystem (Mitchell, et al. 2008, p.14). To resolve the challenges, a task force was created to determine whether the project was implementable. The task force recommended that the project could be implemented since the necessary resources could be sourced from the government and other stakeholders. The pressing need for clean sources of water supplies within Greelog and the neighbouring towns compelled the government to make this project a priority in comparison to other government projects.

Project Planning

One of the most crucial elements of the planning phase was the consideration of the available resources. These resources include timeframes and financial resources (Dessler 2004, p.351). The project managers also defined the procedure that would be deployed to realise the objectives of the project. In this regard, the Victorian desalination project’s constraints and other requirements were defined. The roles of the project managers were also spelt out. The numbers of supervisors, their professional qualifications, and the number of the employees that were necessary for execution of the project were also determined. The next step of project planning involved the breaking down the project into work structures, which were then allotted to the employees depending on their professional expertise. In the execution process of a project, change always takes place (Duncan 2001, p.89). Therefore, the project managers developed a plan management strategy before proceeding to the execution phase.

Project Execution

The Victorian project was implemented based on the plans that had been approved in the planning phase. In the process, the project management made sure that a common ground was established between employees and the project anticipations. Procurement department initiated the process of acquiring services and materials. The process of procurement required a good management of the acquired material resources to ensure that they were of the right quantity and quality. This scrutiny was essential to ensure that the project delivered its set objectives as predetermined in the idea of conception and planning stage.

Project Monitoring and Control

Monitoring and control of the Victorian desalination project was vital to ensure that the project remained on track and never slipped from the set path. Monitoring was also vital in ensuring that the project complied precisely with the performance thresholds anticipated and developed in the planning phase. The main aim of controlling and monitoring the project was to ensure that all deliverables of the project profiled the quality standards that were set for desalination plants. Additionally, through the project control and monitoring strategies, the extents and thresholds to which the desalination project risks were mitigated were determined.

Closing of the Victorian Desalination Project

The completion of this desalination project has not been declared officially yet. Nevertheless, it is anticipated that, when the official completion time will be determined, the project manager will garner and release the necessary documents that will detail all resources that have been consumed by the project. The managers will also seek administrative and legal acceptance of the project after having evidenced that the project delivered the objectives and the goals that led to its creation. Before the declaration is made that the project has been completed successfully, information on the extents to which all stakeholders will be satisfied by the project by considering their claims, which truncated into conflicts of interest in the planning will have to be provided. In case the perceptions of the stakeholders on the project are satisfying and consistent with the performance and design requirements of the project, the project manager will be in a position to declare the Victorian desalination project complete and hence closed.

Conclusion

Projects are short-term endeavours that are often constrained by financial resources and time. The financial constraints limit the size of the projects while time constraints limit the time that is available for the execution, evaluation, controlling, and monitoring of the project before it is brought to a halt when the goals and objectives are delivered. In the paper, a project was looked from the angle of being composed of several tasks, which while combined comprise 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, the PMBOK prescribes some pertinent aspect that successful projects should have and or follow. These aspects are integration project management, communication project management, cost project management, project time management, project risks management, project scope management, and project procurement management. The main aim of the paper has been to analyse the Victorian desalination project based on these aspects. Effort has also been made to shed some light on the phases that the Victorian desalination project has undergone since its inception to its much-awaited official closing.

References

Alexander, C & Sheedy, E 2005, The Professional Risk Managers’ Handbook: A Comprehensive Guide to Current Theory and Best Practices. PRMIA Publications, New Jersey.

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.

Dessler, G. 2004, ‘Project management principles and practices’, Journal of Project Management, vol.3 no.2, pp. 345-357.

Duncan, W 2001, 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.

Heibuch, J 2009, New Australian Desalination Plant. Web.

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

Kallman, J 2011, ‘Risk management process’, Journal of risk management, vol. 2 no. 3, pp. 121-125.

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.

Norimitsu, O 2010, ‘Asia pacific: Arid Australia Sips Seas Water, but at Cost’, New York Times, pp. 12-13.

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

Appendix

  1. Aerial view of the Victorian desalination project

    Source: (Mitchell et al. 2008)
    Source: (Mitchell et al. 2008)
  2. Construction in progress

    Source: (Tolbert 2008)
    Source: (Tolbert 2008)
  3. The project’s strategic location

    Source: (Mitchell et al. 2008)
    Source: (Mitchell et al. 2008)

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