Project Quality Issues in New Royal Adelaide Hospital

This case study analyzes the project quality issues encountered during the construction of the New Royal Adelaide Hospital (nRAH). The analysis, based on reports from the Auditor-General of South Australia and supporting literature, identifies key challenges impacting project quality. These challenges include the impact of State Government reforms and adverse environmental conditions, ineffective risk management, and financial management issues such as inadequate cost reporting and budget overruns. The study examines the impact of poorly defined project requirements, and the importance of project manager skills, cost control, and external factors. The document draws upon multiple reports and academic sources to provide a comprehensive overview of the challenges faced by the nRAH project and their implications for project quality management. The analysis highlights the need for effective risk management, financial controls, and clear project requirements to ensure project success.

Running head: MANAGING PROJECT QUALITY 1
Managing Project Quality
Student’s Name
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Managing Project Quality
McMahon, P. (2015). New Royal Adelaide Hospital Report: November 2015. Report of the
Auditor-General, Government of South Australia,70-73.
This report by McMahon (2015) presents the challenges which need to be addressed to
ensure the New Royal Adelaide Hospital project is successfully delivered. The report is relevant
to the study because the challenges facing the project are vital project-quality issues. Firstly, the
release of health reform initiatives by the State Government presents a fundamental challenge to
the project. Such reforms include focusing on evidence-based care and State’s health services
working differently and in partnerships (McMahon, 2015). Such reforms interfere with the initial
plan of the project, thus imposing enormous challenges.
Adverse environmental conditions affect project quality. Most importantly, adverse
environmental conditions call for rescheduling of the project programs and operations. For
instance, the date of Technical Completion and Commercial Acceptance is shifted by 76 days to
prevent opening the new hospital in the winter season (McMahon, 2015). McMahon’s idea has
been supported by Sunindijo (2015) who argues that external environmental factors cause the
project budget to be revised over time, thus requiring regular communication to accommodate
the expectations of all the affected stockholders. In conclusion, it is clear that State Government
reforms and adverse environmental conditions present significant challenges on project quality.
Rodrigues, S. (2018). Report 11 of 2018: New Royal Hospital operating term arrangements.
Report of Auditor-General, Government of South Australia, 34-37.
Report 11 of 2018 by Rodrigues (2018) presents different aspects of the operating term,
including risk management within the contract. This report is vital for the research since it

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presents different operational risks that affect project quality. For instance, the risk detailing
register was not present at the beginning of the operating term. Secondly, the register is not
optimally utilized in the management of contract risks (Rodrigues, 2018). Also, there is a lack of
regular reporting to the PPP Management Committee on shared risks and contract risks. Forth,
delays exist in finalizing reporting of shared risks to the government entities (Rodrigues, 2018).
The ideas presented by Rodrigues have been supported by Patanakul, Kwak, Zwikael, & Liu
(2016) who argue that the problems that face project management in governmental projects
circumnavigate project risk management. Thus, ineffective project risk management is a
fundamental issue to project quality.
Hunter, W. (2018). New Royal Adelaide Hospital: March 2018. Report of Auditor-General,
Government of South Australia, 33-53.
Hunter (2018) provides project financial status and management among other aspects of
the New Royal Adelaide Hospital project. This report is vital to the research because it identifies
fundamental financial management issues impacting project quality. Most importantly,
ineffective financial management is a great challenge to project quality. Financial managers fail
to report all the costs incurred to deliver a project. For instance, there was a lack of approval and
locked down ICT baseline for day 1 for the New Royal Adelaide Hospital project case (Hunter,
2018). Also, there were incidences of operation approval without the approval of funding
(Hunter, 2018). Changes which occur to the approved project budget also present fundamental
issues. For instance, the approved budget for the New Royal Adelaide Project shifted from
$1.677 billion to $2.094 billion (Hunter, 2018). As a result, delay in project funding for 345 days
was experienced (Hunter, 2018). Hunter’s ideas have been supported by Love & Ahiaga-Dagbui
(2018) who argue that systemic distortion or misstatement of fact in the budgeting process is a

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fundamental issue on project quality. Therefore, inappropriate financial management is a
significant project quality issue.
Patanakul, P., Kwak, Y. H., Zwikael, O., & Liu, M. (2016). What impacts the performance of
large-scale government projects?. International Journal of Project Management, 34(3), 452-466.
Patanakul, Kwak, Zwikael & Liu (2016), presents different factors which impact the
performance of government project in Australia, United States of America, and the UK. The
research is significant to the topic of study because it presents ineffective risk management as a
fundament problem in project quality. According to Patanakul, Kwak, Zwikael & Liu (2016),
government projects are not well managed even if the respective teams follow all the principles
of management. The underlying challenge circumnavigates poor risk management. This idea is
displayed by Rodrigues (2018), who presents poor risk management strategies as a challenge to
the New Royal Adelaide Hospital project. Therefore, poor project management is a fundamental
issue in project quality.
Patanakul, P. (2014). Managing large-scale IS/IT projects in the public sector: Problems and
causes leading to poor performance. The Journal of High Technology Management Research, 25(1), 21-
35.
Patanakul (2014), brings forth various challenges leading to poor performance among
large scale IT projects. The journal is relevant to the topic because it discusses the issues
affecting project quality. Most importantly, the journal addresses significant issues which are
identical to the ones in the New Royal Adelaide Hospital project. Patanakul (2014) argues for
poorly defined initial requirements as a threat to project quality. A similar concept has been
displayed by Hunter (2018), who presents incidences of operation approval without the approval
of funding as a significant challenge to the New Royal Adelaide Hospital. Similarly, Love &

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Ahiaga-Dagbui (2018) presents 'misstatement of facts' during the budgeting process as a
significant challenge to project development. Therefore, the lack of clear project requirement
during the initial stages misleads the entire project, hence affecting the project quality.
Sunindijo, R. Y. (2015). Project manager skills for improving project performance. International
Journal of Business Performance Management, 16(1), 67-83.
Sunindijo, (2015) presents the skills necessary for project managers to promote quality
performance. The journal is revenant to the topic because it displays the fundamental challenges
available to the project managers. Cost performance is affected by cost control mechanisms,
external environmental factors, quality of estimates, project management, type of contract,
completeness of the design documents, and geographical locations. Sunindijo’s idea has been
supported in different pieces of literature. For instance, the aspect of project management has
been illustrated by Rodrigues (2018), who reveals ineffective risk management as a threat to
project quality in the New Royal Adelaide Hospital case. Similarly, the aspect of environmental
influence has been illustrated by McMahon (2015) who reveals the extension of the completion
of the New Royal Adelaide Hospital project by 76 days to prevent the hospital from opening in
the winter season. Therefore, factors such as cost control mechanisms, external environmental
factors, quality of estimates, project management, type of contract, completeness of the design
documents and geographical locations have a great influence to the project quality.

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References
Hunter, W. (2018). New Royal Adelaide Hospital: March 2018. Report of Auditor-General,
Government of South Australia, 33-53.
Love, P. E., & Ahiaga-Dagbui, D. D. (2018). Debunking fake news in a post-truth era: The
plausible untruths of cost underestimation in transport infrastructure
projects. Transportation Research Part A: Policy and Practice, 113, 357-368.
McMahon, P. (2015). New Royal Adelaide Hospital Report: November 2015. Report of the
Auditor-General, Government of South Australia,70-73.
Patanakul, P. (2014). Managing large-scale IS/IT projects in the public sector: Problems and
causes leading to poor performance. The Journal of High Technology Management
Research, 25(1), 21-35.
Patanakul, P., Kwak, Y. H., Zwikael, O., & Liu, M. (2016). What impacts the performance of
large-scale government projects?. International Journal of Project Management, 34(3),
452-466.
Rodrigues, S. (2018). Report 11 of 2018: New Royal Hospital operating term arrangements.
Report of Auditor-General, Government of South Australia, 34-37.
Sunindijo, R. Y. (2015). Project manager skills for improving project performance. International
Journal of Business Performance Management, 16(1), 67-83.