Nov 15, 2016 - 2 years ago
By Supply Post
BC Hydro released an independent review of the Site C project's risk and cost management processes by Ernst & Young LLP and BTY Consultancy Group Inc. The report stated: “Overall, our review finds that the project is well defined and that the processes for managing risks and costs are largely representative of leading practices. Execution of the major work packages are clearly scoped and supported by both a robust set of project management practices and tools, as well as by a team with deep experience on delivering major projects for BC Hydro.”
Ernst & Young and BTY Group were engaged to assess the Site C project's practices for cost and schedule forecasting, including risk management and mitigation, to ensure the appropriate processes are in place to build the project on time and on budget.
The review focused on four key areas:
1. Review of contracts (over $50 million) awarded to date.
2. Review of risk management plans, processes and risk registers.
3. Review of cost management plans and processes, with an assessment of overall cost controls.
4. Review of key cost drivers and indicators compared to the estimate baseline.
During the months of July and August 2016, Ernst & Young and BTY reviewed over 100 project documents, interviewed senior project personnel and conducted a site visit.
Key excerpts from report
The Ernst & Young/BTY report stated that:
• "Given Site C's early stage in its lifecycle, our review did not find any evidence to suggest that major project milestones and financial targets will not be met. Overall, the Site C project is both clearly defined and well-planned."
• "BC Hydro employs an industry leading approach to project management via the Project & Portfolio Management system, with practices scaled to both the complexity and size of Site C."
• "While project execution risks do exist, those risks are well-understood and managed by the project team."
• "A robust process was followed in order to establish the project budget, and extensive due diligence was conducted."
• "Site C benefits from best-in-class software that BC Hydro has implemented and integrated over the past five years, including SAP, P6 (Primavera), HeavyBid, Unifier, and others."
• "Finally, we were strongly encouraged by the level to which Site C has leveraged the depth of knowledge within the broader BC Hydro organization around key areas such as project, contract, and interface management."
The Ernst & Young/BTY report also provided a list of recommendations for BC Hydro to consider going forward. BC Hydro has reviewed and considered the recommendations in the report and has developed an action plan to address them.