PPMP 20010: Analyzing Cost & Time Overrun in Sydney Opera House

This report provides a critical analysis of the Sydney Opera House project failure, focusing on the significant cost and time overruns experienced during its construction. It examines the range of control systems used for cost, schedule, scope, and quality, and analyzes the reasons behind the overruns, including poor planning, financial problems, delays in land acquisition, unexpected ground conditions, material shortages, inexperienced contractors, and underestimation of construction costs. The report further assesses the responsibility of the project execution team for the incurred overruns and explores the relationship between the identified problems. Finally, it analyzes project management actions that could have been taken to better control the project and stakeholders, offering recommendations for future project success. The aim is to provide insights into the factors contributing to project failure and to identify strategies for improving project outcomes in similar large-scale construction endeavors.

Running head: PROJECT MANAGEMENT
Analyzing cost and time overrun in Sydney Opera House Failed Project
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Table of Contents
1. Introduction..................................................................................................................................2
2. Range of used control system for cost, schedule, scope and quality...........................................2
3. Analysis of reasons explain the cost and time overrun encountered during the project..............5
4. Analysis of the extent to which the project execution team could be held responsible of the
incurred time andcost overruns........................................................................................................7
5. Analysis of the relationship between the problems...................................................................10
6. Analysis of the project management actions that could have been taken to better control the
project and stakeholders in order to increase the chance for successful delivery..........................12
7. Conclusion.................................................................................................................................13
8. Recommendations for project success.......................................................................................14
References......................................................................................................................................16

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1. Introduction
Sydney Australia’s iconic opera house is a study in the failure project of Australia. The
original plan of the project is in four year timetable and it has a budget of AU$7 million budget.
At the end the project took AU$102 million with 14 years to be completed. The construction of
this project is not managed properly, therefore it is considered as one of the failed project. The
project is failed as it was not followed the processes signify the project management along with
accounting processes. The main focus behind this project is to design future National Opera
House which can showcase creative as well as technical abilities of Australia (Sydney Opera
House Failed Project 2017). This project is mainly failed due to cost and time overrun.
This project report analyzes the ranges used to control system for cost, schedule, scope
and quality. It also analyzes the cost and time overrun which are identified during the project,
extents to which the team of project execution can be responsible for issues related to cost and
time overrun. All the project related factors of cost and time overrun issues are related with each
other. The actions related to project management are analysed for better control of the project
plan so that the project can get success. The project stakeholders are responsible for delivering
the project on time to the project manager.
2. Range of used control system for cost, schedule, scope and quality
The project controls are termed as gathering of project data, administration of data and
analytical actions used to compute in addition to control time as well as cost outcomes for the
project work. Through proper communication of information it can assist to effective decision

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making related to the construction work. In the Sydney Opera House Project, cost control system
is required to identify and lessen the business expenses for increasing profits and starting with
the budget processes (Sydney Opera House Failed Project 2017). The project owner compares
the project’s actual budget with the budgeted expectations. The actual project cost is higher than
planned budget, therefore the management takes proper steps to control entire project cost
(Kerznerand Kerzner 2017). Cost control is a key significant factor to maintain and grow the
project profitability. Outsourcing is needed to control the project cost as the project can find
cheaper way to perform the project tasks.The construction company can calculate net pay as well
as tax withholdings for the workers that can save time plus expenses of workplace employer.
The first step to establish this construction project work is estimation of how long the
project activities will take from time it starts and finishes. The total duration of this project
activity is time for project work done plus it is associated with waiting time (Flemingand
Koppelman 2016). The activity duration estimation is based on quality of the project resources
expected to use on the project activities. Over the project lifecycle, it is involved with activities
which can source delay and hastening tends to reject one another. The schedule project control
leads to measure the project progress and compare to plan progress on timely and daily basis.
The schedule control processes is involved to gather data on performance of project and compare
with planned schedule performance (Harrisonand Lock 2017). A daily reporting period is
established to compare progress with estimated project progress. Reporting of construction work
is done on weekly and monthly basis based on project complexity and duration of work.
The project work requires managing scope so that the project can able to meet with its
project goals. As the construction of Opera House is not able to meet with its time and scope,
therefore scope is required to control. Scope control is required monitoring and controlling entire

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process group so that the work is controlled on time (Nicholasand Steyn 2017). For the
construction project, the scope is that surface is prepared for building, foundations require lying
and control system requires expanding before building work is started. The project becomes
complicated as it requires various things to be considered. The contractor is required to map
building site such that the suppliers and builders can know the part of project (Kerzner 2018). It
can map with corresponds with the project scope. It is responsibility of general contractor to
determine jobs require performing. A detailed plan is created with information so that the
contractor can control project scope (Binder 2016). As the project leader and contractor will get
formal approval from the stakeholders, and then well defined project tasks and requirements are
used to work as per project goals. Possible project changes are forecasted based on project
requirements as it can change the project scope and cause delay in time to complete the project
work.
The control system for quality is required to maintain a better quality of the construction
materials. The professionals of project controls are not concerned in direct management of
project work and management of quality (Verzuh 2015). Quality inspections are the works which
are undertaken by the project team members to finish entire project scope. There are
consequences to get quality materials and administer contractors for monitoring the project
outcomes.Mainly, the quality control system is required to focus on meeting with project’s
requirements (Loveet al. 2015). Quality assurance is focused to provide confidences that quality
needs are to be fulfilled. In the construction project of Opera House, the control system
evaluates, inspects and tests the product to detect if it can fulfill client’s needs, if the project is
free of defects and conform to the project specifications. Quality control system identifies the
defects after the product is formed. The project manager provides quality assurance for this

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project when the product can meet with quality and compliance needs (Adam, Josephsonand
Lindahl 2015). Quality assures for successful completion of the project work focused on time
and cost.
3. Analysis of reasons for cost and time overrun encountered throughout the
project
The construction work of Sydney Australia’s Opera House Project is one of the key
significant sector of the construction industry in Australia, faces significant overrun of cost as
well as time. Both of those overrun cause delay in the entire project work. The purpose of this
section is to study how cost as well as time overrun in the construction projects is based on
forecasted cost, predicted time plus nature of the project (Miranda Sarmentoand Renneboog
2017). Following are the reasons behind cost and time overrun during the project such as:
Poor planning: Improper planning is considered as detrimental effects on the time and
cost presentation of the construction project of Opera House. There is no resource scheduling in
the project which leads to delay in entire project development stages. Improper planning of entire
project work is lead to cost overrun and delay in project with longer duration and high project
budget (Rahman, Ismailand Jaber 2018).The project is launched with no such finalized plans;
however the project client changed floor planning from two theaters to four after staring of
construction work. Each of different management team members have distinguished project
goals and taken different decisions from others.
Financial problems: The construction project is not receiving proper budget as per
planned, therefore it faces cost overrun. Proper budget is not allocated to each project activities
based on the project requirements (Ali 2018). There are no management as well as accounting

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expectations which lead to wastage of the materials costs and project cost. There is undefined
project budget due to which the management team begins escalation. The cost is escalated
because of change orders and wrong survey of construction site.
Delay in land acquisition: In this construction project, land acquisition is to be
completed before the project is being tendered. This project work is awarded with partial land
acquisition by the project owners (Larsen et al. 2015). Delay in the acquisition of land as well as
improper project planning considered to be an impact on cost and time of the work. Delay in land
acquisition is driven based on some factors. One factor is that delays are resistance by local
community (Deshmukh and Menkudle 2018). The compensation is offered based on value of the
agricultural lands where the post construction is done based on project land values.
Unexpected ground conditions: The ground conditions are reviewed by the trial pits as
well as sampling onsite. The definite site conditions for amount of the project are not determined
until there is achievement of excavation. Unexpected sub surface conditions are required
redesign of the project at some extents. There is also change in ground conditions which can lead
to problems of moving machinery along with suppliers in the site, underlying excavations along
with laying foundations (Adam, Josephson and Lindahl 2017). There is also an increase in cost
and add time required for the construction work.
Shortage of the construction materials: Due to high development of the buildings work,
there is shortage of the construction materials. The local market is not capable to provide demand
of the building materials; therefore it is required to import the construction materials beginning
of abroad (Sha'aret al. 2017). When it is not anticipated in real estimation of cost, delay in the

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project is occurred and prices of those elements are increased which lead to both cost and time
overrun for the project work.
Inexperienced contractors: The contracted are being selected based on price, experience
to undertake type of the construction project as well as track record to produce quality work by
means of budget as well as on time. The contractors have lack of responsibilities as well as
leadership to provide permission of buildings, secure the property and manage personnel on the
site. Inexperienced contractors cannot be able to provide site surveying, disposing and recycling
of the construction work (Azizand Abdel-Hakam 2016). It leads to delay and additional cost is
raised as the project owner should re-tender remaining task to be conducted by the service
provider.
Underestimation of construction cost: Before the project work gets approved by the
contractor, the larger projects are underestimated due to lack of financing approvals. The projects
are consisted of initial cost estimation errors which can lead to increase of fund for project
completion (Amoateyet al. 2015). There is an increase in construction cost to become visible
after the construction work commencements but the issue is raised through contract price
estimation tender phase.
4. Analysis of extent to which the project execution team responsible of the
incurred time and cost overruns
The cost and time overrun of project is held due to poor planning in design and execution
phase. Therefore, the project execution team is responsible for those incurred overruns. In the
construction project of Australia, times as well as cost are lifelines of the project, where the
project manager can control time furthermore cost to make sure that the project is complete on

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time and within cost (Ahiaga-Dagbui et al. 2017). Project execution is a phase where the plan is
designed prior to project phases. The project execution team can deliver project excepted results
such as project deliverables and outputs. Following are reasons to which the project execution
team is accountable for acquired time along with cost overrun such as:
1. The project execution team is not included documentation of potential processes and
collaborated to get the project goals (Lock 2016).
2. Training is not provided to the project team members; therefore it is not established
project changes and causes project time and cost overrun.
3. The team is not provided framework of the project activities,not identified required
resources and not negotiated with the high level authorities (Burtonshaw-Gunn 2017).
4. The project team cannot provide detailed planning moreover implementation. They are
not using critical project management to control project implementation for timely
completion of project activities.
5. The project execution team cannot conduct the meeting to start the phase of project
execution and control (Zhou, Gohand Li 2015). They are not reviewed documentation in
addition to current project status.
6. The team is not utilized the risk management plan and developed and applied resolution
strategies towards unexpected abilities.
7. The project execution team is not acknowledged the project outputs; delivered and
accepted the products and services for the project plan (Wuet al. 2017).
A project execution team is responsible to execute entire construction project so that the
project can compete within scheduled budget and time. Sydney Opera House Project is a large
complex project because of communicational issues, uncertainties of time and lack of

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coordination on the firm resources (de Carvalho, Patahand de Souza Bido 2015). The project
inhibits productivity as well as innovation in the business organization when the project
execution team can cooperate with other team members. They have higher level of autonomy to
make decisions for maximization of construction project success in terms of cost and time. The
key components of the project execution are ability to work effectively in the project team. The
execution team precedes the project plan and its project phases are distinguished for the project
plan (Walker 2015). As the project execution team is not provided all required project
requirements and not updated the project plan to the project team members, therefore it is
difficult to understand what exact requirements of the project plan are. The project manager is
not reviewed the project draft unless they can comprehend the main factors of cost moreover
time overrun in the project (Cannonand Hillebrandt 2016). In a construction project of building,
time, scope, cost and quality are main factors which are required to control for completion of
project activities for project success and goal achievement.
Zheng et al. (2016) stated that it is key purpose of project execution team is absolute the
project work definite in project plan and assemble with project objectives. Through the project
execution phase, the team is not focused on the key processes such as management of people,
followed project processes and communicated information to key project stakeholders and
execution team members. Amirsayafi, Jin and Senaratne(2018) discussed that there are six gaps
which would incur cost in addition to time overrun in the project execution phase such as
absence of project understanding, misalignment by means of strategic goal and poor
management of project changes. The execution team has lack of effective leadership to motivate
the team members to work as per scheduled time and estimated cost for project success.

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The project execution team cannot support the project manager to perform work of project to
achieve the project objectives. The team is not provided resources as well as support to the
project which can accountable to enable success of project work (Buvik and Rolfsen 2015). The
project manager is not authorized to start entire project work. When the project work is tagged as
closed, then hours and expenses are not approved. The project work is archived, and thenproject
documentation is being closed with projected final project outcomes. The project executives are
not defined the project strategies and lead the project with meaningful contribution of project
work (Fadun and Saka 2018). Therefore, the construction project of Sydney’s Opera House was
failed based on cost and time overrun.
5. Analysis of the relationship between the problems
Nasaruddin and Rahman (2016) analyzed that management of the resources in framework
of the construction sector is a complex task. The factors which are identified for cost overrun and
time overrun are poor planning, financial problems, and use of acquisition of land, unexpected
ground conditions, shortage of the construction materials, inexperienced contractors and
underestimation of construction cost. Those all identified problems are linked with each other as
those all provides an impact on projected cost and time and therefore the project is not completed
on scheduled time. When all those factors are mitigated, then the project is delivered as per
client’s requirements in addition to expectations. The construction industry is consisted of
greater impact on economy of the countries. It is a sector which can provide ingredients for
development of the economy. Nicholas and Steyn (2017) stated that due to poor cost along with
time management, the industry is faced huge amount of overrun of the project cost. Poor

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management of project cost as well as overrun is a problem and issue when it comes to cost of
project in developed along with emerging countries.
In the construction project, there is an increase in project complexity and environment in
which they are being constructed as greater demand on the construction manager to deliver the
project work on schedule in planned budget along with higher quality of project materials (Love
et al. 2015). A large infrastructure project of Sydney Opera House is delayed because of various
project issues. Infrastructure project is playing a huge role in economical development of
Australia. There is successful execution of the construction project which can keep in estimated
cost and scheduled for delivery. The problem is that in the traditional construction contracts, the
contract is being awarded with lower bidder to develop the construction strategy.
Aziz and Abdel-Hakam (2016) stated that cost overrun is where the clients can spend
high amount of money for the project completion as compared to its estimated. Then the project
work goes over the estimated budget. Buvik and Rolfsen (2015) discussed that schedule overrun
is when the project gets delayed beyond the expected project time to complete the work. Due to
lot of difficulties in the project work, more time is needed to complete the project work that it is
initially planned. Most of the project work in Australia is being affected by the time overruns.
Those can vary due to number of risks in the project work. Delay in acquisition of the land along
with site handover is main reasons for the overrun of project cost in the pre-execution phases.
Therefore, it is driven based on various factors. It is one of the main factors for delay in
resistance by means of local community (Amoatey et al. 2015). Insufficient management of the
scope of project and change in the project is prevalent to the infrastructure sector and there is
also availability of the resources for the infrastructure sector. However, due to lack of resources
assigned for the project work, the project is not completed within scheduled project time. In most