Project Closure Report: Construction of Royal Adelaide Hospital

This report is a project closure report for the construction of the new Royal Adelaide Hospital. It provides an overview of the project, discussing its performance, financial status, and schedule. The project, a complex undertaking by the Australian government, faced significant challenges, including budget overruns and schedule delays. The report analyzes the issues related to project management, design flaws, and the impact of a Public Private Partnership (PPP) contract. It details the financial mismanagement, schedule performance, and the variances from the original business case. The report also includes lessons learned, emphasizing the importance of proper planning and design in construction projects. The project's scope was achieved, despite scope creep. The report evaluates the project from the perspective of the project manager and team sponsor.

Project Closure Report
[Construction of The new Royal Adelaide
Hospital]

Table of Contents
1 Executive Summary..............................................................................................................................3
2 Project Performance............................................................................................................................4
3 Project Reports....................................................................................................................................8
4 What I Learned.....................................................................................................................................9
5 Bibliography.......................................................................................................................................10
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1 Executi ve Summary
The project closure report aims in discussing a completed project. In this case, the construction of new
Royal Adelaide Hospital is considered. This is one of complex projects undertaken by Australian
government. The Project overview, the performance of the project and the follow on actions associated
with the project is discussed in the report.
1.1 Project Overview
The new Royal Adelaide Hospital was a complex project and it was one of the most expensive buildings in
the world. The new hospital began its construction in February 20100 and was expected to be completed
by April 2016. The new Royal Adelaide hospital is the seventh costliest buildings in the world with a cost of
$2.3bn. This is one of the most complex projects undertaken by Australian government. However, the
project was highly mismanaged representing a failure by state government in controlling the financial cost,
risks and uncertainties in the project. The issues with the schedule and cost of the project resulted in
expense bull with limited accountability and poorly executed project. There were certain issues associated
with risk management and contingency practises of the project. Elimination of these issues was necessary
in order to enhance collaboration among the project team members.
1.2 Project Performance Summary
The complexity of the project largely affected its performance and execution. There were issues with the
project management processes that were followed in this project. The design was flawed and the mistakes
in the construction processes pushed back the original deadline of the project. The design flaws further
disrupted the construction of the building. The mismanagement of the project resulted in increase in
project cost apart from schedule delay. A PPP (Public Private Partnership) contract was considered for this
project that increased the complexity of the project. The state government played an active role in
completion of the project. However, there were certain issues associated with a large scale government
project. In this type of project, greater transparency is needed for ensuring efficient management, which
was not followed in this project. Thus, it can be observed that there were certain issues associated with
1.3 Follow-on Actions
Although the project was unexpectedly delayed, the team was able to complete the project as per
expectations. The contemptible cost of this building in Australia was influenced by CFMEU. However, the
association of CFMEU played a significant role in increasing the labour cost associated with the building.
1.4 Lessons Learned
It has been observed it is important to appropriately plan a project before implementation. For a
construction project, accurate designing plays a significant role. If there were no flaws in the designing
phase, the project might not be delayed by 18 months.
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2 Project Performance
The Construction of The new Royal Adelaide Hospital was one of the most complex projects undertaken by
state government of Australia. There were issues associated with the implementation of this project and
the project management processes that were followed in the project. The project was delayed by 18
months and it over budget. The Construction of The new Royal Adelaide Hospital started in the year 2011,
and could only be completed in 2017 although it the scheduled to be completed in mid of 2016. It was a
complex project that aimed in establishing a new facility of providing 800 beds supported by leading
technology. In this section of this project closure report, the Construction of The new Royal Adelaide
Hospital project will be analysed on basis of the planned financial status, schedule and achievement on
scope against what it could achieve during the implementation phase. It is clear that the project could not
be implemented according to the plan as there were flaws in project design and the initial financial
estimates of the project. However, the project turned out to be one of the Australia’s most advanced
hospital that provides a full range of complex clinical care. The delays in the project were unforeseen and in
response to that, the state issued a number of default notices under the PPP project agreement to
accelerate the project implementation process. Although the project ran out of schedule, the technical
completion of the project could be achieved on 15 March 2017 with certain accepted exclusions and
certain outstanding items. However, hospital could be opened in September 2017. However, still there
were certain outstanding matters still associated with the project including certain outstanding defects,
need for modifications and certain legal proceedings.
2.1 Financial Status
The financial status of the project “Construction of The new Royal Adelaide Hospital” was a complete mess.
One of the significant reasons behind this was the use of public private partnership arrangement for this
project. For understanding the issues related to the financial management of the project, the deviation
from the original budget of the project is needed to be addressed. The initial cost estimate of the project
was 1.8 billion but the project could be implemented in $2.44 billion which was way above the budget.
One of the most significant reasons behind the budget upsurge was the significant delay that the project
faced. The project was delayed by 18 months that had a huge impact on the labour and material cost of the
project resulting in price upsurge. It is one of the most complex projects and therefore certain difficulties
were faced during the implementation of this construction project. Since the project followed a public
private partnership, the issues with the budget and the progress of the project was handled by state and
Project Co. They progressively worked together to finalise the works that were needed for implementation
of the project within the set budget. However, since there were issue with the initial design of the project,
the cost of the project increased while maintaining the initial need of the project. The delay in delivering
the project further affected the financial condition of the project. The additional cost of transition,
modifications and remediation resulted in increase in the budget of the project. Apart from this, there has
been a significant increase in project budget mainly because of delays in settlement deed and contingency
funding. However, the recent financial report associated with the construction project of new Royal
Adelaide Hospital indicates that the total forecast expenditure associated with the project could be
completed within revised project budget that is allocated for the project work. Another significant reason
behind the increase in the budget of the project is that some costs were directly related to delivery of the
new Royal Adelaide Hospital, which was not considered in the initial budget of the project.
These were certain major issues associated with the financial management of the construction of new
Royal Adelaide Hospital. Thus it can be said that a detailed planning was essential for implementing the
project within the set budget.
2.2 Schedule Performance
The Construction of The new Royal Adelaide Hospital project has been subjected to a number of delays. As
a result of the delay, the project could not be completed in the scheduled time and therefore the state
issued Project CO (the private partner of the project) a major default notice under the project Agreement.
Followed by that, the state further issued certain default notices under Project agreement to complete the
project as soon as possible. The schedule that the project should have followed is represented in the
following table.
WBS Task Name Duration Start Finish
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0 Construction of The new Royal
Adelaide Hospital 1455 days Mon 14-02-11 Fri 09-09-16
1 Project Starts 0 days Mon 14-02-11 Mon 14-02-11
2 Project Planning 105 days Mon 14-02-11 Fri 08-07-11
2.1 Requirements Gathering 30 days Mon 14-02-11 Fri 25-03-11
2.2 Understanding the specifications
of the Project 60 days Mon 14-02-11 Fri 06-05-11
2.3 Development of Project Plan 45 days Mon 09-05-11 Fri 08-07-11
2.4 M1: Approval of Project Plan 0 days Fri 08-07-11 Fri 08-07-11
3 Project Initiation 200 days Mon 11-07-11 Fri 13-04-12
3.1 Surveying the Land 4 months Mon 11-07-11 Fri 28-10-11
3.2 Understanding the technical needs 45 days Mon 31-10-11 Fri 30-12-11
3.3 Management of Human Resources 30 days Mon 02-01-12 Fri 10-02-12
3.4 Planning the Project Schedule 30 days Mon 13-02-12 Fri 23-03-12
3.5 Budget Estimation 45 days Mon 13-02-12 Fri 13-04-12
3.6 M2: Successful Project Initiation 0 days Fri 13-04-12 Fri 13-04-12
4 Implementation/Start of
Construction 830 days Mon 16-04-12 Fri 19-06-15
4.1 Preparation of Design 40 wks Mon 16-04-12 Fri 18-01-13
4.2 Approval of Design 30 wks Mon 21-01-13 Fri 16-08-13
4.3 Start of construction 12 months Mon 19-08-13 Fri 18-07-14
4.4 Working on internal design of the
Hospital 10 months Mon 21-07-14 Fri 24-04-15
4.5 Documentation 2 months Mon 27-04-15 Fri 19-06-15
4.6 M3: Completion of Hospital
Construction 0 days Fri 19-06-15 Fri 19-06-15
5 Project Evaluation and Release 320 days Mon 22-06-15 Fri 09-09-16
5.1 Identification of the outstanding
issues 100 days Mon 22-06-15 Fri 06-11-15
5.2 Detailed quality Testing 90 days Mon 09-11-15 Fri 11-03-16
5.3 Documentation of the Findings 45 days Mon 14-03-16 Fri 13-05-16
5.4 Working of issues of the Project 80 days Mon 14-03-16 Fri 01-07-16
5.5 Hospital Opening 30 days Mon 04-07-16 Fri 12-08-16
5.6 Documentation 20 days Mon 15-08-16 Fri 09-09-16
6 Project Ends 0 days Fri 09-09-16 Fri 09-09-16
The schedule Gantt chart of the project is represented in the following picture-
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Figure 1: Representing the Gantt chart of the Project
(Source: Generated by Author using MS project)
The work activities marked in red in the Gantt chart above depict the critical path of the project
However, there were certain issues with the schedule and implementation approach of the project. There
were certain problems associated with the designing of the project that lead to significant delay of the
project. Had project followed the original schedule, the project would not have suffered a budget overrun.
Due to the delay in completion of the construction works, the budget of the project has increased
unexpectedly by $346.8 million mainly because of the schedule issues in the project.
2.3 Achievement of Scope
The project’s scope could be achieved with the completion of the project. However, there were certain
instances of scope creep in the project which could not be controlled. A detailed scope management plan
could have eliminated the issues arising from the variances with the initial requirements of the project.
2.4 Variances from Original Business Case
The variances or drift from the original business case could be seen in form of schedule budget of the
project. The project was delayed by 18 months from the original schedule of the project and there was an
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increase in the budget of $346.8 million. There were a number of reasons behind this variance from the
original business case of the project that were discussed in the previous sections of this report.
2.5 Lessons Learned
It has been observed that the project could have performed better with a better project management.
There were issues with the schedule estimates of the project that resulted in unexpected delays in the
project. Thus a more planned approach was necessary for appropriate project implementation and
construction of new Royal Adelaide Hospital.
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3 Project Reports
This section of the project closure report will evaluate the performance of this construction project on
perspective of project manager and tram sponsor.
3.1 Project Manager
The project manager of the project new Royal Adelaide Hospital was in lead of managing the project
progress according to the project plan. It was project manager’s duty to ensure that project performs
according to the plan. However, there were certain issues in project management that resulted in
unsatisfactory project performance. The project manager should have ensured accurate project
implementation and control, which could have eliminated the outstanding issues in the project.
3.1.1 Project Summary
The project plan was formulated in 2011 and the construction of the hospital started soon after that.
Initially the project was implemented according to the plan. However, the issues in the initial project design
largely affected the schedule of the project. Furthermore, the government failed to finalise this project on
the scheduled time thus the project missed two additional set of the completion date. Even it was delayed;
the project was completed according to the initial specifications. The new Royal Adelaide Hospital is one of
the expensive construction projects in the world and the project was completed according to the plan.
3.1.2 Events that affected Project Performance
There were certain issues that affected the performance of the project. The major issue was the faulty
construction design that resulted in the project delay. Apart from that, the improper project management
had a large impact on the project execution. A lack of proper project management methodology further
resulted in improper project execution. Furthermore, there were issues with the set budget of the project
that largely affected the project performance. The project budget was revised for a number of times that
affected the performance of the project. Therefore, it can be said that a more planned approach of project
implementation could eliminated the issues associated with project performance.
3.1.3 Team Performance
The construction of new Royal Adelaide Hospital followed a Public Private Partnership procurement
method. Therefore, the project team was huge. Issues with team collaboration affected the team
performance. The state had to issue a number of notices to project team for ensuring normal operation of
the team. Thus, it can be said that there was lack of collaborative team, which was another reason behind
the project delays.
3.2 Project Sponsor
The project sponsors for construction of Royal Adelaide Hospital were interested in completion of the
project within the set schedule. The project sponsors were not much happy with the execution of the
project mainly because of the huge delay in delivering the project. The project faced scope creep and
therefore there has been a change in the actual project scope. However, the construction project turned
out to be 7th costliest projects in the world. The project sponsor of this project was mainly concerned with
the quality of this project, which the project team could achieve.
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4 What I Learned
This coursework have helped me in understanding the knowledge and concept of project management. I
have understood the methods of project selection and appropriate project management models that can
help in accurate project implementation. One of the most important of project management is the
appropriate scope management and identification of project’s scope. A project might experience scope
creep if the scope of the project is not correctly identified. I have understood the importance of project
scope management and will implement that knowledge in my professional career as well. One of the
important project management aspects is project time management. It is essential to correctly estimate the
schedule of the project so that it can be followed during project implementation. I have understood the
concept and importance of cost management in project. Appropriate cost estimate helps in
implementation of the project within a planned budget. Clients or customer of every project expects a
product of standard quality. Thus management of project quality is another important characteristic of
project management. In every project, it is essential to identify and mitigate the risks associated with a
project. Accurate risk identification helps in better management of a project. I have gained a substantial
knowledge about the project delivery systems and need for choosing appropriate project procurement
method. Human resources are an important aspect of project and appropriate management of the same is
necessary. For project success, accurate communication among the team members is essential and
therefore, the communication management is another important part of project management. In order to
keep the project stakeholders engaged, it is necessary to follow the stakeholder engagement process in an
accurate way. This coursework has helped me in gaining a detailed knowledge of project management.
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