BIG GOVERNMENT PROJECTS IN TROUBLE
By Richard Harman (author)
A Treasury report released yesterday shows a host of problems occurring with a series of big Government projects.
The problems appear to fall into three main areas --- big computer projects; the Christchurch rebuild and Defence procurement.
There are three major computer projects involving Customs, Statistics and Police which Treasury says are of concern.
The $30 million budget overshoot on Customs Joint Border management System has been known about for some time but there are still worries whether its intelligence analysis component will be able to go live as planned next year.
A $327 million Statistics project to replace existing data systems with modern ones is having its scope revised and will need to go back to Cabinet for new approval.
But a relative modest $48.9 million Police project to develop a Human Resources Management Information system would appear to be in big trouble.
Treasury says emerging system change requests and the need for more resources have put pressure on the development schedule and budget.
“A short review by PwC has found there are risks to the go live date of 1 April 2016 and current payroll defects are greater than anticipated,” the report says.
“Costs have risen by $10m (29%) and the project is unlikely to be delivered within its total appropriated costs of $56.2m.”
There are big problems with the Christchurch rebuild, particularly the stadium and convention centre which Treasury says have issues of unanticipated costs, typically driven by land remediation, delays, and scope changes.
“Issues with timeframes are also common,” the report says.
“A number of project milestones have been missed or are under review, with other projects identifying risks around timeframes.
“These issues suggest the programme continues to be overly optimistic about what is achievable within its (and its partners) capacity and capability.
“It is highly likely that additional funding will be needed to finish the programme.
This means increasing funding would require significant compromise of other investment initiatives.”
Another Government programme to purchase land in the red zone has also taken longer than expected.
That Defence should be having problems with its procurement is almost inevitable but the Government has moved this year to strengthen its procurement capabilities and that appears to be paying off with Treasury only having problems with whether the so-far undecided aircraft to replace the current C130 (Hercules) transport aircraft will meet their delivery deadlines.
But the good news for the Government is that some of the very big projects like the IRD’s $1.3 billion Business Transformation project is on time and budget.