Politics v. project truth: We still haven’t learned

Politics v. project truth: We still haven’t learned

Budget and cost overruns continue to plague government-commissioned projects despite repeated calls for “lessons to be learned”. A new book could help with expert views on complex project governance, writes Richard Bayfield.

On 3 June, London’s The Times reported that Doug Thornton, the former Head of Property for HS2, had said he was forced out of his job in December 2015 after telling HS2 that the true cost of buying land for the section between London and the West Midlands would be at least £4.7bn, about £2bn more than expected.

This followed Mr Cummings’ visit to County Durham during the Covid lockdown. As a result, the phrase “doing a Cummings” is the new shorthand for “going out of bounds”.

Standing up for truth

To some extent, the rejection of advice goes with the territory in very senior roles. But any rejection should be based on alternative and respected opinions. Â

I applaud Ruth May and Doug Thornton for taking these very public stances. They both clearly value their personal reputations.

The consequences are huge for taking a public stance: sleepless nights, tainted reputation (until all the facts emerge), and loss of income are the minimum to be expected.

‘Twas ever thus

On HS2, it took until earlier this year for some of the key facts to emerge.

The UK’s National Audit Office published a report in March which concluded that the Department for Transport, HS2 Ltd and “government more widely” underestimated the task at hand, leading to optimistic cost and time estimates.

The first project estimate for Holyrood House was for a simple refurbishment of an existing building and was reported at £10m in the Devolution White Paper of September 1997.

Politics v. project truth

History shows the ongoing tension between being honest and reporting accurately on politically sensitive projects and issues.

Lord Fraser commented: “This unique one-off building could never ever have been built for £50m and I am amazed that for so long the myth has been perpetuated.”

The lessons cited above are essentially about the clash between politics and project governance.

We never studied this

There is no doubt that lessons still need to be learned. They are crucially important for a functioning society.

Combining hundreds of years of collective experience on complex projects, it comprehensively reviews the impact human dynamics play in their success or failure.

The importance of senior leadership, better risk management, communication, relationships and conflict resolution are all comprehensively explored from our hands-on perspectives.

Meanwhile, the challenge for our government as it embarks upon its “build, build, build” programme has been summarised in one sentence by the philosopher, Sir Karl Popper.

“True ignorance is not the absence of knowledge, but the refusal to acquire it.”

Washington launches stinging attack on CCCC

US secretary of state, Mike Pompeo, has launched a verbal assault on China Communications Construction Company (CCCC) and several of its subsidiaries for their work in creating artificial islands in disputed areas of the South China Sea, as well as their role in the Belt and Road Initiative (BRI).

In a press statement released Wednesday, 26 August Pompeo accused CCCC of causing “untold environmental damage” by creating the artificial islands, and said the Chinese government was using CCCC and other state-owned enterprises as “weapons to impose an expansionist agenda” through the BRI.

The official went on: “CCCC, which led on the dredging, is also one of the leading contractors used by Beijing in its global ‘One Belt One Road’ strategy. The company and its subsidiaries have engaged in corruption, predatory financing, environmental destruction and other abuses in countries all around the world. It is frankly a long and diverse and colourful and very unfortunate record in a long list of countries.”

In May, a White House policy paper described the initiative as characterised by “poor quality, corruption, environmental degradation, a lack of public oversight or community involvement, opaque loans, and contracts generating or exacerbating governance and fiscal problems in host nations”.

The paper expressed the suspicion that Beijing planned to use Belt and Road loans to extract political concessions and obtain military access.

CCCC: the BRI’s biggest builder

The sanctions are essentially symbolic, because the groups added to the Department of Commerce’s Entities List imported only $5m of US goods over the past five years.

Projects include immense schemes such as the Beijing-Tianjin-Hebei development plan, work on the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macau Greater Bay area.

Thanks to China’s willingness to finance infrastructure abroad, CCCC has chalked up a portfolio of 700 projects in some 100 countries with a total value of more than $100bn, including landmark schemes such as Kenya’s Mombasa-to-Nairobi rail link.

Future battlegrounds

The US may increase its use of diplomatic pressure to stymie CCCC’s plans to expand. A recent example of this was the Trudeau government’s rejection of CCCC’s bid to buy Canadian contractor Aecon in 2018. This was reportedly made on the urging of the Trump administration, which may have viewed the sale as a threat to the Nafta trade deal.

In the past, CCCC has been criticised for corrupt practices. The World Bank debarred it from bidding for its projects between 2009 and 2017 following its tender for a Philippines’ road scheme, and it has been associated with mistreatment of railway workers in Kenya, corruption in Bangladesh and environmental damage in Sri Lanka.

Does the US stand alone?

The US may have trouble assembling a counter-coalition to oppose CCCC and BRI projects in general.

Washington’s tone is harsher than that of many Western allies. In the case of the European Union, a recent paper by the US-based think-tank the Peterson Institute of International Economics notes that the EU’s attitude to the Belt and Road has yet to coalesce, but that it has “a profoundly distinct perspective from that of the US”, and that although Chinese investment presents challenges, there are also potential benefits.

The Carnegie Endowment for International Peace cites a 2017 report by academics at the University of Bologna that argues that Italy’s political class became convinced of the benefits of seeking Chinese investment after seeing the example of the Greek port of Piraeus. After Chinese shipping company Cosco Pacific bought a controlling interest in the port in 2016, it attracted 13% of Chinese trade to Europe, compared with 2% seven years earlier.

Although the campaign against the adoption of Huawei’s 5G technology has been successful in a number of important markets, including the UK, it has, as The Economist commented back in May, also provided a stimulus to China’s domestic technology industry.

And the wider campaign against Chinese trade has led to Chinese firms seeking alterative suppliers, helping to increase the US’ deficit with China to just over 2% of GDP, while America’s global trade deficit has expanded by 8%.

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