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Infrastructure Projects
Cost Planning Improvement Plan
Awareness Briefing
to
Commercial Directors Forum
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
1
Cost Planning & Estimating Scrutiny
Her Majesty’s Government has recently commissioned three pieces of work looking into Network Rail
June 2015
Dame Colette Bowe (‘… the Bowe Review …’) is
looking at what lessons can be learnt from the
planning of the Control Period 5 programme in
order to improve future rail infrastructure
investment. This will be in the autumn of 2015.
Nicola Shaw, CEO of HS1, (‘… the Shaw Review …’)
is looking to the future: advising the government
on how it should approach the future shape and
financing of Network Rail in the longer term. This
will be in the spring of 2016 in time for the 2016
Budget.
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
Sir Peter Hendy, Chairman of Network Rail (‘…
the Hendy Review …’) is looking at how the
current investment programme can be put
back on a sustainable footing that is
deliverable and affordable. This will be in the
autumn of 2015.
2
Cost Planning & Estimating Scrutiny
Message from Mark Carne – Chief Executive, Network Rail – to Secretary of State
for Transport (Patrick McLaughlin)
July 2015
Network Rail recognises that there were
shortcomings in aspects of the Strategic Business
Plan submission that informed the Final
Determination for CP5 with regard to the
forecasting of funding requirements for the
enhancement and renewals programmes.
A credible Cost Planning Improvement Plan has
been developed by Network Rail,
scrutinised by the ORR and is being deployed.
Network Rail and industry support for this plan
is evident. It will transform Network Rail’s
capability with regard to CP6, addressing the
shortcomings of the preceding Control Period.
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
Network Rail believes that simplistic perceptions
around the ‘… inability to
Estimate …’ misrepresents the complex dynamics
of early forecasting of railway schemes
which is actually a matter of improving consistency
in scope development and control, cross
functional culture and engagement, service
provision and governance and the level of subject
matter resource, data and supporting IT systems.
3
Cost Planning & Estimating Governance
Message from Neil Thompson, IP Commercial & Development Director
3rd September 2015
‘… I want …..
‘… Cost Plans / Estimates produced by
competent individuals / organisations
and approved by
IP Head of Cost Planning …’
‘… to increase our
governance and control in regard to our
responsibilities within early GRIP stages of
development. I want controls in place whereby our IP
Regions still provide a service to their
‘… Cost Plans / Estimates formatted
Route Sponsors / Clients but I want central
correctly in a national consistent
governance and assurance providing certainty that
manner (Rail Method of
what is produced is appropriate for the particular
Measurement compliant) with
stage of a project’s development …’
appropriate risk – similarly for
programmes with key assumptions,
‘… Cost Plans / Estimates and
milestones, critical path identification
Programmes base lined and a
and resources …’
clear change control
process / governance in place …’
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
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Cost Planning Improvement Plan – Workstream
# = STAKEHOLDER ENGAGEMENT
PEOPLE
PRIORITIES:
PROCESS
SYSTEMS & DATA
#
ESTIMATING CAPABILITY
1
6
3
2
5
4
7
1
6
3
2
5
4
7
The levels
1. Basic
2. Room for Improvement
3. House in order
4. Best practice
5. Leading edge
1. Resources:
Establish an HQ service capability with a team of practitioners.
Increase the Regional team capability and service offering
2. Systems and Data:
Develop and deploy an integrated IM strategy to support UCM
and Benchmarking (RCIS), National Rates Database (NRD)
and a single corporate Estimating Tool of Choice (EToC) with
‘Service KPIs’
3. Rail Method of Measurement (RMM):
Establish the RMM across the industry as business as usual
4. GRIP Outputs:
Improve the discipline for GRIP deliverables from stakeholders
5. Early Engagement:
Develop a National Cost Planning Service to support
GRIP Stages 0 to 3
6. Governance:
Provide assurance and hold practitioners, clients and
consultants to account
7. Scope Alignment / Control:
Reconciliation of scope development through change
control of Cost Plans throughout GRIP Stages 0 to 8
8. Whole Life Cost:
Deploying and integrating Whole Life Cost and Life Cycle
Cost into the Cost Planning and Estimating discipline
03 Dec 2015 / 5
The art of Estimating
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
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Questions
03 Dec 2015
Cost Planning Briefing to Commercial Directors Forum
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