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Crossrail: lessons in governance
The document discusses the importance of governance in project management, particularly for infrastructure projects like Crossrail. It highlights how effective governance mitigates project failure by ensuring alignment with corporate objectives, accountability, and timely decision-making. It outlines roles, responsibilities, and necessary communication systems between sponsors and execution teams to foster good governance.
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Crossrail: lessons in governance
- 1. Martin Buck FICEFRICS Transition and Strategy Director Crossrail Governance 1
- 2. What is governance? Whygovernance matters Considerations Who are the parties? Establishing good governance Crossrail example Contents 12/18/2014 2
- 3. Corporate governance canbe defined as: “The function of governance is to ensure that an organisation or partnership fulfils its overall purpose, achieves its intended outcomes for citizens and service users, and operates in an effective, efficient and ethical manner.” The Independent Commission on Good Governance in Public Services Governance - what do we mean? 3
- 4. Governance - whatdo we mean? Governance of project management can be defined as: “The governance of project management concerns those areas of corporate governance that are specifically related to project activities. Effective governance of project management ensures that an organisation’s project portfolio is aligned to the organisation’s objectives, is delivered efficiently, and is sustainable. Governance of project management also supports the means by which the corporate board and other major project stakeholders are provided with timely, relevant and reliable information.“ Directing Change, Association for Project Management, 2011 12/18/2014 4
- 5. For Infrastructure projects,good governance is about a balance between the natural desire of sponsor(s) to retain control, and the need of the delivery team to have sufficient freedom to allow it to manage the risk to meet the project objectives. Project Initiation Routemap – Governance Module 12/18/2014 5 Governance - what do we mean?
- 6. Why governance matters Effectiveproject governance is critical to project success. 5 of the 8 common causes of project failure attributable to weak governance; 7 of the 10 common causes attributable to good governance; 3 out of 5 elements fundamental to successful project delivery relate to good governance; effective governance as one of six key responsibilities for client organisation; Weak governance main contributor to project failure. Project Initiation Routemap – Governance Module 12/18/2014 6
- 7. Factors to consider Accountability Authority Alignment Disclosure Butalso scale and lifecycle 12/18/2014 7
- 8. Programme or Project Sponsor Parties- typical structure 12/18/2014 8 Promoters Developers Financiers Sub-projects Partners Supply chain Accountability Authority Alignment Disclosure
- 9. Sponsors – commissioningbody Policy/business case owners Expertise Constraints Resources Land and other enabling interests Funding The parties 12/18/2014 9
- 10. Project - executingbody Programme and project management Procurement and supply chain Safe delivery Programme controls Personnel Risk management Reporting The parties 12/18/2014 10
- 11. Factors – scale& lifecycle Complexity of the project Maturity of both parties Complexity of commissioning body Development curve of execution body 12/18/2014 11
- 12. a clear statementof the objectives and parameters for delivery between the sponsor(s) and the execution team including arrangements for remedy in the event of difficulty; the project being sufficiently autonomous with a single controlling mind; a clear system of delegation and determined process for timely decisions that fall outside the limits of delegation; a determined process for controlling change; Establishing good governance 12/18/2014 12
- 13. a determined processfor reporting and other communications between the sponsor(s) and execution team; a collaborative culture and working relationship between sponsor(s) and execution team; board members have sufficient understanding of the project context to make reasonable timely decisions (or seek advice to help them); and a defined system for assurance at all levels. Establishing good governance (cont) 12/18/2014 13 Project Initiation Routemap – Governance Module
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- 15. January 1989 EastWest Crossrail Chelsea-Hackney line Jubilee line extension
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- 17. National/strategic champion Local champion Stakeholdersupport Population Business Groups – London First Companies – Canary Wharf/Berkeley Group/John Lewis Industry Network Rail/TfL London Underground Project/construction/equipment suppliers Losers as well as winners Political commitment
- 18. Parties Department for transport Transportfor London Network Rail Canary Wharf Group British Airports Authority Corporation of London London First
- 19. Funding (£14.8bn) Other Funding (£2.45bn) Network Rail Others DfT (£5.20bn) TfL (£7.15bn) GLA BRS& Direct Contribution Community Infrastructure Levy TfL Direct Contribution Developers Contribution Land and Property BAA plc City of London Direct Contribution (4.7bn)
- 20. Catastrophic failure Cost escalation Change Operatorand systems interface Principal risks
- 21. Integrated Team Governance andstakeholders TfLDfT Project Partners Crossrail Ltd Sponsors’ Agreement Project Development Agreement (PDA) Shareholder Agreement Design Consultants London Underground NR (on-network works) Docklands Light Railway Canary Wharf Group Berkeley Homes Contractors CTOC Rolling Stock / Depot Industry Partner Agreements Delivery Contracts ‘Crossrail Project’ Executive Team Operator RfL P Rep Operating Contracts Framework Contracts JST
- 22. Sponsors DfT TfL Project - CrossrailLtd Independent Board Chairman 4 independent directors – 1 serving official CoL 2 DfT/TfL nominees Parties & Roles 12/18/2014 22 Act together through a joint sponsor team
- 23. Parties & Roles NetworkRail No sponsor role Delivery agreement with Crossrail Canary Wharf group No sponsor role Delivery Agreement for Canary Wharf station BAA No role Corporation of London No formal role London First No formal role 12/18/2014 23
- 24. Sponsor Board Rotating Chair TfL MDFinance TfL Head of Programmes DfT Head of Rail Investment DfT DG Rail Head of Joint Sponsor Team P Rep
- 25. Crossrail Ltd Board Non-exec Chair TfL nominee DfT nominee Non-execNon-execNon-exec CRL Finance Director Executive Directors CRL Programme Director CRL CEO
- 26. Project Development Agreement Quasiprivate sector arms length DA CRL obligation to deliver Programme, milestones, funding Change Reporting and assurance Review Points, Intervention Points Joint Sponsor Team Relevant Events No relief
- 27. Review point 1– July 2008 Parliament grants powers - Crossrail Bill passed Review point 2 - 2008 Sign core project documents Review point 3 – Sept 2009 Interim assurance point – programme and cost Review point 4 – April 2011 Final withdrawal point for either sponsor, full operational powers to CRL inc award of contracts 4 Review Points Delegation increased as stages of development demonstrated
- 28. Summary Complex multi-stakeholder environment Cleardefinition of sponsor and deliverer Obligations formally agreed Funding certainty Autonomous SPV style delivery organisation Authority and delegations aligned with development
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