Cost and Budget Management

Cost and Budget Management

The Central Artery/Tunnel (CA/T) project had an enormous problem with cost and value management. As a result, the project which took slightly over 20 years to complete, remains a monumental disaster that reminds tax-payers of the billions of dollars that have been wasted.
If an effective cost and value management strategy was employed from the onset of the project, it would have been completed successfully. One of the major problems the Big Dig project faced was an ever increasing budgetary quotation which soared from 2.5 billion dollars on its inception back in the year 1983 to 14.63 billion dollars in 2003, twenty years later. This resulted from a failure on the part of project management to forecast and plan adequately in terms of finances, personnel and any other resources in case of changes during the project implementation. The project management team ought to have considered the life-cycle of the project against cost so as to arrive at a life-cycle cost effective budget. Further, the project management team should have continually tested for the viability of this budget through employment of cost management to evaluate the functions of materials, the construction equipment involved as well as the processes involved so as to ascertain that the objectives are met at the lowest cost. The contractors should have been made accountable for their actions. This would have gone a long way in ensuring that they offered high quality work at reasonable costs. The audits however reveal contradictory information stating that there was no accountability demanded from the contractors who made mistakes.
Had the project management been keen in monitoring and controlling, which are key aspects of an effective cost and value project, the technical mishaps such as the collapsing of a section of the road would not have occurred in 2006. Through regular monitoring and evaluation, the progress of the project would be closely monitored to ensure that the project’s objectives were being met. Also, this would have enabled any correctional measures to be taken in order to avoid resultant dangers. However, it is clearly evident that this was not done because had it been done, the project management team would have detected the sub-standard concrete that the contractor used along with the poor quality of workmanship. It would have then taken corrective and preventive measures long before any detrimental effects such as death of a commuter were felt.
The principles of value management stipulate that a critical appraisal be done by the project management with a thorough analysis of all the project procedures so as to make decisions which reduce the number of wasteful processes and inefficiency while at the same time improving the benefits enjoyed by the customer. If this process was done, the numerous numbers of wasteful processes such as the repairs to the collapsed road section as a result of using sub-standard materials would have been avoided. This would have also enabled commuters a faster access to the road whose main aim was to ease traffic from the very beginning. The delays caused by the uncountable repairs deny the commuter the value he/she is supposed to be getting from the road due to extended shutdowns. The unfortunate delays caused throughout the project would have been avoided if proper planning, implementation, monitoring and evaluation were done.
In conclusion, cost and value management are key components of project management and should be accorded the importance that they hold. Even after completion of the Big Dig project, the many years delay coupled with the billions of tax payer’s money lost as a result of poor management have over-shadowed its value.

 

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