Project Management 2: New Royal Adelaide Hospital Case Study

This case study examines the New Royal Adelaide Hospital (RAH) project, a significant infrastructure undertaking in South Australia. The project, initiated in 2011 with a budget of $1.7 billion, encountered numerous quality issues, leading to substantial delays and cost overruns, ultimately exceeding $2 billion. The analysis delves into the root causes of these problems, including design flaws, construction defects, mismanagement, and industrial action. It explores the impact of these issues on the project's timeline, budget, and overall success. Furthermore, the case study investigates the roles of various stakeholders, including the government, contractors, and unions, in contributing to these challenges. The study also provides recommendations on how to avoid similar pitfalls in future projects, focusing on improved design, construction procedures, communication, and quality control measures. Finally, the document emphasizes the importance of effective project management, risk assessment, and stakeholder collaboration in delivering successful and cost-effective infrastructure projects.

Running Head: PROJECT MANAGEMENT 1
Project management
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PROJECT MANAGEMENT 2
The New Royal Adelaide Hospital Case Study.
New RAH (Royal Adelaide Hospital) is ranked to be among the largest hospital facilities in
Australia. It offers healthcare services within the Southern region of Australia and provides
extended healthcare services to other people and therefore it is of great importance to all who
seeks of its services.
Executive Summary
In conducting any management project task, there is a great need to highlight a number of
possible issues that are likely going to arise from this project so as to understand the main
objectives and responsibilities of the project being undertaken in that respective scenario. This
will also greatly assist in ensuring that the project undertaken will be able to meet all the needs of
the concerned parties and the targeted individuals. The Quality Management systems of the
project with a continuous improvement activities and proper processes is responsible to manage
the quality of the quantity, identifying quality requirements and the standards that are critical for
the products to be easily delivered. For this case study regarding the New Royal Adelaide
Hospital (RAH), there are a number of quality management issues have been associated with the
delay from the time it started until its completion date. Since the project begun, it has been 18
months behind the schedule of completion and has costed the government of Australia an extra
money of about $640 million. The project accommodates 800 beds and is also has partnered with
the private sectors making it one of the expensive buildings within Australia. Therefore, for this
project, mismanagements and different leadership wrangles encountered in the New RAH project
served as a true and clear reflection of failures which the state government has shown in
controlling financial risks, costs and all the uncertainties in project undertaking and service
delivery to its citizens.

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Introduction
The RAH hospital was established in year 2017 and covers an area of about 10 hectares land
within the Adelaide park. The facility is among the most expensive buildings in Australia with its
cost amounting to approximately 2 billion US dollars (Badi & Diamantidou 2017). It’s also
among the most developed hospitals in terms of technological advanced hospital. For instance,
the Royal Adelaide Hospital houses a fleet of automated equipment that play a key role in
moving o meals and other hospital services within the institution, and electronic medical record.
This project was initiated within the Adelaide Park in the northern region of its location between
the Frome Road and the Adelaide Botanic Gardens where it was later proclaimed to be Royal.
The hospital is placed next to the University of South Australia and the Adelaide University. The
campus founded as a result of this hospital also served as a home to the University of Medical
studies, the Medical School, which was named after the founder (Webster, Hedley, Anderson,
Hawthorne, Radford, Drogemuller & Kelly, 2019).).
This hospital has also been designated with a target of at least 50% reduction in greenhouse gas
emissions all over Australia in comparison to all other hospitals around this nation which offers
equivalent services (Duncanson, Chur‐Hansen & Jesudason, 2019).
Issues that Occurred
When undertaking any management project, highlighting various quality issues that are likely
going to face this project is so critical in understanding the responsibilities and objectives of
undertaking that particular project. This will greatly help in ensuring that the project undertaken

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will be able to meet all the needs of the concerned parties and the targeted individuals. The
Quality Management systems of the project with a continuous improvement activities and proper
processes is responsible to manage the quality of the quantity, identifying quality requirements
and the standards that are critical for the products to be easily delivered. Quality project
management documents how the project is undertaken to demonstrate its compliance, the quality
performance assurance, quality of the systems, the quality of the audits processes and all the
activities linked to quality control. Lastly the quality project management monitors the activities
the outcome from quality control and records all the results of executing different quality
activities. Sometimes, these various processes and activities may interact and overlap. Basically,
there might be issues in the project quality management system of the project thus affecting
some operations of the project (Hosseini, Maghrebi, Akbarnezhad, Martek, & Arashpour 2018).
When it comes to the New Royal Adelaide Hospital (RAH), various quality management issues
have been associated with the delay from the time it started. Since its beginning, it has been 18
months behind the schedule of completion and has costed the government of Australia an extra
money of about $640 million. The project accommodates 800 beds and is also has partnered with
the private sectors making it one of the expensive buildings within Australia (Karran, Yau,
Hillier & Moseley, 2018).
The extra cost has been accrued due to change of the project scopes caused by the following.
First, the ignorance the safety within the institution, the high technical demand and the poor legal
action that has been undertaken by the South Australian government. Secondly, the illegal
industrial actions and incompetence behaviors shown towards the project has compromised the
quality project management.

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In this way, therefore it is clear that the New Royal Adelaide Hospital stands as an outstanding
example and a good indication to why a number of desperate and major reforms are so much
needed in ensuring a variety of major governmental projects are undertaken appropriately and on
time (Andriamamonjy, Saelens, & Klein, 2018).
Causes of the problems
Establishment of the new RAH hospital started back in the year 2011 following a government
initiative to establish a healthcare facility that could properly serve the locals and all the residents
of the state in their health needs. The project was estimated to be complete by 2016 April due to
failure by the South Australia government in financing the project. This kind of financial
constrain delayed the completion date making it to additionally fail to meet two of its completion
dates that were set aside. The two additional dates that were set for the completion of the project
were on May 2016 and June 2017, though both dates were not met as it was expected. After
these two delays, the South Australia Health announced new dates of completion for this project
after several delays and misunderstandings between the management of the project and the
government who were the major financers of this project (Schultz, Shoobridge, Harvey, Carte &
Kitson 2019).
Mismanagement in undertaking the project as well as corrupt officials is believed to be the major
sources of the problems in this hospital project (Crowson, Harvey & Stout 2019). Additionally,
government failed to put efforts in ensuring all the financial records of money utilization in this
project was properly followed.
Globally, the New RAH hospital stands to be the seventh most expensive building having been
constructed. This costed a total of $2.3 billion as compared to the estimated $1.7 billion which

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was estimated for the project. When comparing the final cost of the project, the initial
approximation of $1.7 billion place the overrun cost of the New RAH hospital at a 35 percent of
the initial cost in real terms (Walker, 2018).
At the beginning, the completion delay was caused by every flaw in its design, and any mistake
caused in the progress of the project. Such errors caused the construction of the hospital to
double to $417 million from $244.7 Million. This high cost was due to unforeseen remediation
cost as well as the contamination claim that costed approximately $69 million. Secondly, the site
modification and defects within building specifications caused $34.3 million. Thirdly, the
transition team setup of the on 2017 delivered a long delay move of the equipment from the
current New RAH hospital facility $180,000 every day. Thirdly the low quality in planning for
the emergency sections meant to handle cases concerning very serious and severe sicknesses was
faced to lack dozens and dozens of beds despite the higher number of patients. In addition to this,
the outpatient facilities were in a position that they could not easily meet all the expected
demands within the estimation of about 40,000 appointments per year (Schultz, Shoobridge,
Harvey, Carte & Kitson 2019).
In the previous years, there a number of issues linked to rollout of the electronic patient record
where over $422 million was used in establishing the digital systems. Initially the ward floors
were completely incapable for storage of medical record facilities used in the hospital forcing
hospital workers to temporarily keep the records in section meant for car parking thus posing a
great risk of destruction to these medical records. After establishing the modern way of storing
data, most of the records were could be housed off-site (Inglis, Caughey & Shakib, 2019).
Failure in meeting the deadline of the project by April of the year 2016 forced the state
government to issue the contractor with a fault notice for failure in delivery of the project within

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the stipulated timeframe. Secondly, the builders started demanding to know the factors behind
the delays of the completion date. The legal conflicts encountered between the constructors of
the facility and the government triggered a mixed reaction leading to delays in the completion
dates. These defects transpired within the hospital’s constructers costed the government more
than the amount that was estimated and allocated for this project. Later, the two parties involved
reached a legal action which then facilitated the completion of these facility (Guo & Feng 2019).
In accordance to the office of the Chief Economist of Australia, it is clear that a total of 8.1
percent of all the Australia’s GDP stems in order to meet for the building and construction
industry serving as a source of employment to majority of residents within and outside the
locality of the construction site. This is to say that; the industry is creating employment
opportunities for the youth and other residents of Australia (Inglis, Caughey & Shakib, 2019).
The contemptible costs of putting up any building in Australia, an example being the
construction of the facility such as this hospital has attracted influences from several lobby
groups such as the CFMEU body. This is an example of a lobby group that has served a very
crucial task in ensuring all the cost for construction of this hospital are met and therefore, greatly
decreasing the productivity of the entire construction activity (Walker, 2018).
The lobby group (CFMEU), with the use of anticompetitive practices that were involving the
complicity, pattern bargaining and price fixing has greatly positively influenced the efforts of
lobby groups in ensuring the government projects are put into records and proper follow up
channels are used to ensure efficient service delivery. Therefore, this body became so
instrumental in the construction of the New RAH hospital since it helped in ensuring that all the
workers involved in the project gets payments within the stipulated time and a good pay for that
matter. This is to say that, if it was not for CFMEU, then the project would be further delayed

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sue to delayed payments of the workers and other critical people in this project (Phan, Dalfsen, &
Nguyen, 2019).
Notwithstanding the fact that the entire construction process of this hospital delayed thus causing
extra cost and extra channeling of resources from the government, there were several threats
from CFMEU organization aimed at disrupting the construction process. This made the Federal
Court of law to fine CFMEU a total of $57,500 as a result of threatening to sway the head
contractor and aiming at disrupting government development project. This was done since the
employees undertaking the project were not allowed to take any industrial action aimed at
reducing and ensuring the project was complete on time and appropriately (Bryant, Costello,
Schoeman, Sathananthan, Knight, Lau & Andrews, 2018). This action was taken by the court to
ensure the facility reaches its completion on time despite several delays that were encountered
from time to time. It meant that, if employees could boycott the project and go on an industrial
action, then this could ultimately delay this work again for several days or several months or
even for more than a year since with no employees and skilled workers ultimately the project
could paralyze or collapse (Orchard, Neubeck, Freedman, Li, Webster, Zwar & Lowres, 2019).
As a result of this, two of the senior officials managing CFMEU who were so much involved in
paralyzing the activities of this project were alleged to have stated that, in case of any legal
action imposed to them, it will be a cause of complete paralyzing the project (Morton, Lioufas,
Dansie, Palmer, Jose, Raj & Boudville, 2019).
The higher commissioner in charge of building and constructions expressed his disappointment
on the conduct of action portrayed by CFMEU and its officials imposing a fine of $1.1 billion
against the organization and all its involved officials for paralyzing construction work and being
engaged in unlawful action which hindered government work. He additionally expressed his

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feelings towards to officials by stating that, the conduct expressed by these officials is
completely unethical and unacceptable and not at all will the government tolerate such activities
when it comes to undertaking projects that are of great benefit to the public. This was a big blow
to the officials in charge of the CFMEU in the construction site which demotivated them and this
affected their great contribution towards the project and in such facilitating the delays of the
completion date for this hospital (Mignone, Hosseini, Chileshe & Arashpour, 2016).
The implementation of EBAs body as a successor of CFMEU initiated extremely higher labor
costs in this project and its proper delivery. The work disputes between the institutions managing
the project and the government representatives or the commissioners and the unlawful practices
by the minority in this project have made the New Royal Adelaide Hospital project to not only
face a substantial benefits downfall over the recent time but also it is the public, and in particular
the taxpayers of Australia who are losing their money. This is because, the construction of this
New RAH hospital was facilitated using taxpayer’s money and therefore it means that, any loses
encountered in the hospital as a result of management quarrels or misunderstanding between the
top officials is a big blow and great lose to the public whose money was spent to put this project
into place (Malik, Gallagher, Linz, Elliott, Emami, Kadhim, & Sanders, 2019).
Solutions to these problems
Government needs to ensure that all the tender projects are given to potential clients who can
deliver excellent work within the stipulated time. This will help in reducing the extra cost that
government incurs through offering tenders to people who can’t deliver as expected of them.
Also, proper and thorough checks on all the government projects is needed in ensuring proper
utilization of government resources and finances. Lastly, all individuals who are given tender but

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fails to deliver should pay for it through using their own resources to meet the expected work,
therefore, government should at all cost avoid channeling additional resources to projects under
management of careless individuals who use public money for their own gain.
Recommendations
Mismanagements and different leadership wrangles encountered in the New RAH project served
as a true and clear reflection of failures which the state government has shown in controlling
financial risks, costs and all the uncertainties in project undertaking and service delivery to its
citizens. It also shows that the government and more so the department of construction and
development needs to style up and improve the way things are done by ensuring that proper
channels and proper procurements steps are followed when awarding different project
development tenders in order to ensure the public does not incur a great blow and great loss
regarding their finances (Le, Chaabane & Dao, 2019). Also, the public needs to be much more
responsible with different development projects that government puts in place and ensure that the
stipulated deadline for completion of different projects is reached failure to which they should
question respective authorities concerned and seek appropriate answers on when these projects
are going to reach completion stage.
Additionally, the major issuers that were presented during the progress of construction of this
hospital facility emphasizes the ineptitude by the government of southern Australia to design a fit
which is meant to serve the purpose of a hospital in order to cater well for the needs of patients
sufficiently. Therefore, there is a great need in ensuring positive and proper relations between
employees and employers are enhanced in all the government projects to the public. The result of
all this fault by the government resulted to an expensive bill which has limited uncountability for
a poorly executed project. This needs to be fixed in future dates in order to avoid such instances

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and ensure the public gets services worth their tax (Hosseini, Banihashemi, Chileshe, Namzadi,
Udeaja, Rameezdeen & McCuen, 2016).
Conclusion
There are a variety of issues which the government of Australia needs to fix in regard to order
issuing and project delivery. This is because, such related issues and project delivery factors
affected the construction of RAH hospital, which later led to the extension of its deadline and
extension of completion date.
In doing so, the government needs to ensure there is clear oversight of the projects undertaken
and day to day audit of its progress. This will ensure lazy clients who win the tender are
considered and proper follow up made to retrieve the tender and issue it to more serious
individuals who can deliver appropriate work on time.
Ensuring there is transparency on how the government issues tender, transparency in project
undertaking process and utilization of public resources while undertaking this kind of a project is
another factor that will improve the public trust for the government and all its work. This will
help in keeping the public at limelight of the projects undertaken by the government and ensure
the deadlines are met as stipulated.
Government should enhance good and proper collaborative efforts among its various
departments in order to achieve the best outcomes within all its projects.
In addition to this, penalizing all the bureaucrats involved in contract with the government and
fail to deliver through acting in an unethical manner and unacceptable way can help in reducing
government faults through the entire project delivery task. Also, institutional penalties to all
leaders who award tender to nonperforming individuals or their friends should be put in place

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since public leaders and individuals who work in public offices needs to acts in accordance to the
rule of law and all guidelines set aside to ensure the common citizen benefits out of the tax paid
and all the government projects.
Unlawful influences from the outside sources like trade unions and other lobby groups should be
handled appropriately and such kind of influencers taken into record since they cause delays in
delivering government work. Despite the fact that, they are also beneficial since they out
government into record while undertaking projects, still there are some negative influences
which affects the task undertaken thus causing delays. Therefore, any negative influence from
such lobby groups should be put in place and proper penalties applied.
When government takes the above measures and puts them in place, there will be lower building
costs, prevent significant delays in project delivery and keep projects within scope.
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