Definitions and assumptions

In order to give a full description of the Governance issues, it is important that a clear definition of Governance be established first. Governance, in this article will refer to the process of developing, communicating, implementing, monitoring and assuring the policies, procedures, organisational structures and practices associated to the Perth Arena Project. (As outlined in the unit notes)
Governance issues

A key activity to be carried out after projects monitoring, is the process of controlling. This particular project lacked an implementation of control processes. The project seemed to constantly change in scope in an uncontrolled fashion. This would inherently lead to cost and schedule changes, which were also not controlled, thus the project went over budget and delayed completion.

It was a requirement that the project management implement the Strategic Asset Management (SAM) framework. However either the key processes were skipped or were jus rushed through. The framework should have been a standardised way of carrying out the project in a professional sequence; however management decided to use unprofessional processes that did not yield project success.

In order for project owners to make accurate decisions regarding project issues, there is a need for comprehensive project performance reporting. In this particular project, the minister rarely received written documentation that clearly outlined the current performance of the project. Most performance reviews were simply done via informal interviews between project managers/directors and the minister of the Department of Housing and Works (DHW). All project issues were not even fully reported to the minister. An example would be the case of the contracting issues which arose and were not fully conveyed to the minister, most likely because of unethical project contracting practices on the part of the project directors.

The organisational structure of this project was developed in such a way that it created confusion and overlapping of roles and responsibilities. At one point during the project, responsibility for project works was in the hands of the Office of Strategic Projects (OSP) which is an office in the Department of Treasury and Finance (DTF). However project progress was still being reported to the minister of DHW. Initially the project structure had someone occupying two or more positions at different hierarchy levels. This was a way of reducing accountability of certain roles because it meant that the Project Director would report to himself as the Director of Construction.

The decision making processes during the Perth Arena project were appalling. Some of the decisions that were made were never justified even though they created havoc. Tenders were being awarded way before the planning phase of the project was completed. Contract negotiations were even carried out without thorough analysis of the impact it would have on the project. Tenders were also unfairly awarded because of previous relations between BGC (contractor) and members of the project team. This therefore meant that the project was being carried out under an unethical environment
Solutions to governance issues

It seemed as if the biggest issue during this project was centred on the hierarchy and the reporting structures. It would be necessary for the Perth Arena project to adopt a fully project based organisational structure. This will ensure commitment and 100% (approximately) availability of project resources. This framework is to be implemented carefully ensuring that no one person is allocated two or more responsibilities.

It would be vital for all project leaders to be enrolled in Project Management courses as a form of training which enhances their abilities to effectively manage successful projects. Such courses can be undertaken at the Curtin University, which is also situated in Perth and offers evening lectures, thus not disrupting the ongoing Perth Arena project.

A Project Steering Group (PSG) and a Project Controlling Group (PCG) will need to be appropriately setup with the relevant project owners and representatives from relevant stakeholder groups. These groups should essentially pave a way for better monitoring and controlling of project processes and practices.

Minister (Department of Housing and Works)

This particular minister is a relevant stakeholder because the Perth Arena project is funded from his department’s annual budget.
Interest

The minister has very high interests in this project, making it a top priority to his ministerial responsibilities. Not only is the project funded from his ministry’s budget, but the project is a very large project requiring financial resources ranging in the hundreds of millions. This project is of great concern because it leaves a legacy as the minister who was responsible for Perth’s urban development. The minister should therefore have high interests because he is required to make major decisions pertaining to the project.
Power

The minister possesses very high levels of power within the project. His positional power arises from the fact that he is the parliament’s representative as minister in charge of DHW, thus making him the highest person hierarchically. His ministerial powers and the backing he has from other politicians provide him with the political power necessary to drive the project. His personal power s however limited because of his inability to recognise when he is being lied to by his project directors. The minister is also unable to identify problems at an early stage of the project, to prevent further negative impacts on the projects.
Attitude and involvement

The minister has a very positive attitude towards the project. This is because he has realised the benefits of the project, and approves of it. There are also some personal indirect benefits linked to this project, and thus the minister would make sure that he is directly involved in the project.
Management strategies

It would be advisable as the project director, to maintain regular (at least weekly) project review meetings with the minister. These meetings need to be face-to-face so that all issues are directly discussed thoroughly. The minister should also receive summarised documentation that shows project progress, issues and successes.

Auditor General

The Auditor General hails from the Western Australia Auditors Board.
Interest

Since the project is government funded, and the Auditor General is responsible for performance auditing of public sectors, then the Auditor has medium-to-high levels of interest in this particular project. His level of interest may also be backed up by the need to prove to taxpayers how their funds are being utilised by government.
Power

The auditor has low-to-medium levels of power. This is because he does not have a direct position in the Perth Arena project structures. The auditor however has the backing of parliament members as they strive for transparency across all public sectors. The auditor does not have any relationships or friendly interactions with the project team because he is a third party member, and is thus external to this project.
Attitude and involvement

The auditor has a neutral attitude towards this project. This is because his objectives are to fairly analyse the situation of the project. The auditor is therefore not directly involved in the project process; he however makes recommendations to the issues he identifies.
Management strategies

It is of utmost importance that prior to the commencement of the project, the project director identifies with auditors how he will be assessed with respect to project performance. This can be done by informal consultations.

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Posted on May 23, 2016Author TutorCategories Question, Questions

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