Challenges and Principles in Managing the London Crossrail Project: A Critical Analysis

Question

Task: What are the main challenges faced in managing the London Crossrail Project, and what are the key principles, such as strategic risk management, that can help address these challenges?

Answer

1. Introduction

With changes in climate and advancement of technological pace, many sectors are contemplating the change in infrastructure through mega projects. The mega projects are complex projects in modern society that have improved millions of people, involving private and public stakeholders. Management of mega and complex projects require robust decision-making capabilities but often face performance shortfalls. Selected project of London Crossrail is critiqued with five principles which are strategic risk management, governance, optimum bias, cost & time control and change management.

The London Crossrail Project, UK is one of the largest construction projects in Europe. It is a 100 km rail line project that can pass through 40 stations, starting from Heathrow and Reading in the west to the east in Abbey Wood and Shenfield. The Crossrail Project will move through a 42 km tunnel under Central London. It can provide more reliable and frequent train journeys for the travelers and add an estimated amount of £42 billion in the UK's economy (crossrail.co.uk, 2023). This project is forecasted to carry 200 million passengers per year, which can increase 10% of central London's rail capacity.

2. Identification of issues

Megaprojects suffer from major project challenges due to the vast amount of resources needed and the greater cost of investment required to sum up the project management. The Crossrail project was already delayed for two years as most of the construction work was taking place beneath London, which was difficult to manage. As per the report, the Crossrail Project has used £17.6 billion of funding and light end up costing an additional £3 billion than expected (railtechnologymagazine.com, 2019). The project also faced challenges in terms of developing modern software for a new fleet of trains that was required to switch between different signaling systems around the route. Moreover, the management of the London Crossrail Project decided to break the mega project of the railway line into 36 main work contracts, which further increased their costs and delivery risks. It was due to the breakdown of several contracts of Crossrail Ltd. that led to the increase of contract costs by £2.5 billion in response to design and contract changes. The project neither had enough resources nor detailed delivery plan to manage the mega project. A lot of information was hidden under the ground of London in terms of the threedimensions that existed with the project and the relation with landowners. For instance, the London Crossrail Project also incurred issues with safety testing and signaling systems that led to a cost overrun of more than 4 billion pounds for a total cost of 18.8 billion pounds (Sandle, 2022). The number of organizations and disciplines involved with the Crossrail Project was due to complex relationships among the majority of engineering and design consultants in the UK.

3. Mega and complex principles

3.1 Strategic Risk Management

Identification of strategic risks

3.2 Governance

Transparency & Accountability

It is quite important for the London Crossrail Project to maintain transparency of task status that can allow the project manager as well as the team members to identify and report any project complexities that might affect the progress of the project. This can promote responsibility among the team members due to which they can easily finish off the most large-scale construction project London Crossrail. They need to be accountable enough in the decision-making process of the Crossrail Project in consideration to the required costs, timeline and scope of the project goals (Silvius and Schipper, 2020).

Lack of control mechanism

Lack of control mechanisms can affect the success criteria of the Crossrail Project as they will not be able to keep a track of their costs and schedules in the project activities. This can also trigger team conflict and mismatched team skills, which might affect the project in negative terms. As trust and control are the two most governance mechanisms in megaprojects like the London Crossrail, they need to have those in order to facilitate project success for future reference.

Effective control and monitoring systems

Effective control and monitoring systems in the London Crossrail Project are effective to ensure seamless execution of tasks by improving productivity of team members as well as efficiency in project management. By using a Work Breakdown Structure (WBS), the project partners of Crossrail project can break down the project into several activities that will help to keep the project under control and allow for quick verification (Thomson and El-Haram, 2019). Implementation of Requirements Traceability Matrix (RTM) in the governance mechanism of Crossrail is important to trace the project deliverables and monitor the project's quality.

3.3 Optimum bias

The concept of optimism bias is considered as the tendency of the general individuals to expect better results compared to average outcomes according to their actions. It has been highlighted by Monzaniet al. (2021), project managers can face multiple issues, such as underestimation related to cost and complication of time of different planned activities and over estimations related to the benefits of the project due to the influence of optimum bias. There are multiple factors associated with optimum bias such as the tendency of a project manager to be over optimistic while calculating the major benefits associated with the project and it also leads the individual to downplay the associated costs. According to my personal analysis from the London crossrail project, I have understood that the crossrail limited team has introduced a quantitative risk based approach to analyse the overall risks as well as potential of the specific projects. It is important to understand that risk management is a crucial element associated with the overall success of a project (Kress and Aue, 2019). Estimation is recognised as one of the most crucial elements to manage and complete a project within the provided budget as well as time period. Introducing a cost model based structure within the crossrail project can be effective to mitigate the major issues associated with the project. There are some innovative approaches such as managing the cost associated with uncertainty and engaging the sponsors completely within the process and to introduce proper technical decisions can be effective to reduce the major risks within the particular project.

According to my personal analysis, it is important to establish proper transparency between the project sponsors and project team. As stated by Suh and Ryerson (2019), transparency is crucial to introduce effective strategies based on the criticality of the current situation and project sponsors should maintain proper transparency with the project managers. In this specific case yeah, the committee has provided proper findings during 2019 through a report. The report indicated that the project team had suffered from the concept of optimism bias and the project managers have provided missed guided information regarding the risks to the mayor (London.gov.uk, 2022). The project team members have not communicated quickly with the mayor regarding the major issues related to project delays. It is the responsibility of the project manager to complete a project within the provided deadline as it is related to the overall sustainability of the project. The project was a government initiative and it is important to complete the project and through the appropriate utilisation of financial resources. However the concept of optimism bias has increased the tendency of the project team members to overlook the major risks and expect comparatively high quality outcomes. The specialist engineers have the potential to provide appropriate information regarding the outcomes and required time. However, lack of specialist engineers and lack of effective project management techniques have led the project towards failure. System integration as well as construction focused activities have faced major issues due to the poor project management approaches and lack of specialist engineers has increased the challenge towards strategic implementation.

3.4 Cost and time control practises

Overall success of a project is dependent on multiple factors such as appropriate management related to cost and time control practices. As per the opinion of Ulusoyet al. (2021), cost control practice is crucial to handle a complex as well as massive project within a provided budget. Based on the overall estimation of the crossrail project, it can be understood that it was a £14.8bn project at the initial stage and it needs proper and management related to cost to ensure value for money facility. The project managers have introduced an initial control baseline to fulfil the overall requirements of the sponsors and achieve the positive signal of the sponsors and to start the project. The baseline of the project was supported by a specially designed work breakdown structure and the work breakdown structure was crucial to include multiple variances within the cost performance for managing each task appropriately.

The cost management function within this particular project has been designed to provide project level cost, estimating as well as planning forecasting budgeting and managing reporting and control all the related costs within the project. It was also crucial to minimise the anticipated final cost and it is crucial to drive the best value for money outcomes. I think the project managers have selected this approach to ensure the anticipated final crossrail direct cost within the specific funding envelope.

Figure 1: Work and cost control structure

(Source: Based on London.gov.uk, 2022)

The cost of management is an integral part associated with the overall success of the project. For instance, the estimation indicates that the spending rate of the project is nearly £24,000,000 per week (Learninglegacy.crossrail.co.uk, 2019). Crossrail Ltd has introduced an extremely robust approach related to cost management. The work breakdown structure has been fired with the cost breakdown structure in this project and it is used as an important management tool for the project managers to make a proper control over cost. The cost management as well as forecasting procedure is a single procedure to provide timely as well as accurate cost related information to act proactively within the whole project. For instance, the project has been delayed already for two years and it indicates that the project manager has failed to establish proper transparency between the actual project growth and estimation. On the other hand, it is important to understand that the massive construction related projects are different from other types of projects. Construction projects generally take a comparatively higher time as well as financial resources than other simple projects. The London crossrail project can be set as an example of success compared to the other construction related or infrastructure related projects. According to my personal analysis, I have understood the alignment between work breakdown, structure and cost breakdown. Structure has helped the project managers to provide equal importance to each task and ensure the best quality outputs. On the other hand, lack of collaboration between the project sponsors and the project team has hampered the time management related characteristics.

3.5 Change management

Change management is a crucial element associated with the overall success of a specific project. As per the view of Binciet al. (2020), change management is related to changing the existing culture or working process of a project. It is also related to introducing technological adaptation and more advanced approaches to perform a task. According to the basic characteristics of the London crossrail project, it can be understood that the time delay of project completion has overshadowed the overall success of this particular project. This project is recognised as the biggest infrastructure related project in Europe and yet the costs related to this particular project has increased by at least £600 million. The government authority and other project sponsors have mentioned that they have no idea how much more money is required to complete the project and it indicates that the project can be recognised as a major failure. A quantitative risk based approach has been introduced at the initial stage of this project to analyse the potential outcomes and manage the project. However, it was not sufficient to ensure over and integrity of the project and the project managers have not communicated to responsible individuals such as the mayor at the initial stage and while the risks were in the developing stage.

Change management related initiatives such as appropriate implementation of change management models like Lewin’s change management model have not been implemented. As per the view of MunckafRosenschöld (2019), baseline control is not sufficient in the recent time period while managing huge and complex construction projects. Crossrail Ltd was responsible for managing the whole project and the control change was dependent on the baseline of cost, scope and schedule within the program level. The absence of a systematic approach within the management level, was a major reason associated with the failure of the project. The project managers have introduced a quantitative risk analysis and it was not sufficient according to the changing nature of the project. The team members have faced issues to adopt the changing patterns of work due to the poor change management initiatives. As stated by Martinsuoet al. (2022), sustainable as well as effective communication is crucial between the management team and team members to ensure sustainability in a project. Lack of communication between the higher authority and 30 members was a major reason for this particular issue.

4. Recommendation

Recommendation 1: Maintaining open communication chain within teams

It is critically important in the management of mega and complex project methods to maintain open communication within the team members. One of the most vital things in the upfront planning phase of mega projects is communication in response to cost, schedule and earned value management. By conducting frequent team meetings, both internal and external stakeholders understand their specific roles and responsibilities. These can further help to develop smooth connections among the team members and achieve value in terms of Crossrail project's success (Denicolet al. 2020). Developing the organizational chart by drawing out the key players and third-party resources, the Crossrail Project can get a clear view on the communication chain and indicate the hierarchical reporting relationships to manage project time, scope and costs.

Recommendation 2: Share the financials with stakeholders

Sharing financials with the required personnel on a weekly basis is crucial to keep the customers ahead in handling mega projects. Moreover, the project team members should be accountable and show accountability in maintaining the costs of each project activities while constructing a railway line of 118 km. The Crossrail Project should not hide their budget status from the project client, which can further pose the risk of cost overrun by assuming the worst of mega project management (Qiuet al. 2019).

Recommendation 3: Developing project-specific policies and procedures

The success of mega projects mostly depends on the collaboration and procedural structure of the extended project team. This can allow the Crossrail Project to maintain transparency in a wide scale and meet the specific needs as well as circumstances of the shareholders in the mega project. As the project includes 42 km of new railway tunnels in addition with 30 upgraded stations and 10 new stations, it is quite important to avoid uncertainties in the project that might be restricted through definite policies and procedures as needed (He et al. 2021).

5. Conclusion

The London crossrail project is categorised as the largest infrastructure project within Europe. But the project is facing multiple issues. There are major issues related to optimum bias, change management initiatives, poor cost and time control practices and all these elements have made a major adverse impact on the overall sustainability of the project. For instance, the project is already delayed by two years and the cost of this project has increased at least £600 million during the recent time period. Appropriate recommending strategies have been provided in the study to complete this project in a more advanced way.

Critical reflection

During the course of this research I understood that in order to achieve success in mega projects and add value to the project, the management team needs to maintain a robust set of policies and procedures that can withhold clear roles and responsibilities of team members with approved channels. I observed various practices such as government compliancea and cost optimisation are required for any mega project to proceed without generating falling prey to shortcomings. The project partners of mega projects like the London Crossrail Project need to share the financials as a part of the status report in the form of a dashboard. On the other hand, I think the systematic nature of the initial strategies related to cost and time control have not been applied appropriately within the whole project.

6. Reference list

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