As both federal and state governments ramp up levels of investment in taxpayer funded rail projects, a critical issue arises as to whether or not we Australians are indeed getting the best value from the projects being undertaken.
Questions surround who is checking the quality of work performed, what the role of assurance personnel should be and whether or not these people should be independent or an integrated part of the project team.
To be sure, little confusion exists when it comes to the actual safety of the project and the role of the Independent Safety Assessor (ISA), who provides an independent assurance link between the project and the Office of National Safety Regulator. Clearly defined through standards and codes of practice, the role of the ISA is well known and understood.
Beyond that, however, a slew of other independent assurance roles being performed by external organisations are popping up with no clear industry-wide definition of what these roles actually do or the scope of role they cover. These roles go by various names, including independent checker, independent auditor, expert review panel design review and many more.
The lack of standardisation surrounding the scope of these roles raises interesting questions as to whether or not either duplication and/or gaps are occurring within these roles. Moreover, broader questions yet surround whether these roles should in fact be independent, or whether it would be better to have them as part of the project team.
Mark Carling, director of Rolling Stock – Infrastructure at SNC-Lavalin, said the ISA role is clearly defined by guidelines and codes of practice and thus well understood. Beyond that, however, he says it is largely the prerogative of each delivery authority to form its own view as to how it wishes to deliver project and risk assurance. As a result, he said, you have a number of titles such as independent verifiers, independent verification testers or independent checkers and no clear industry-wide understanding about what these roles mean or the scope of assurance they perform.
Accordingly, one role described as an independent checking engineer could have a more or less expansive scope compared to a role which is afforded the same description on another project being managed by another delivery authority – as might the methodologies which the delivery agency wants employed vary from on one project to another.
Whilst this is not necessarily a problem, Carling questions whether or not these organisations in fact need to operate at arm’s length. In respect of the ISA role, he said there is a definitive obligation upon the delivery authority to indeed act upon any problems identified. In the case of one of these more vaguely defined roles such as an independent checking engineer, the delivery authority is under no obligation to act on any advice received from them.
In that regard, Carling questions whether or not operating under a model whereby one party performs the work and another simply checks what has been done is indeed the best way. Rather, he suggests that greater value could be derived by having assurance providers instead that are integrated within the project team and provide advice early on and throughout the project.
“That is the real question,” he said. “What is the real value of having independent organisations (providing assurance services)?
“If you have an organisation that you have contracted to deliver a big major project and you have an independent person looking over their shoulder saying ‘well that’s acceptable’ or ‘I don’t think that’s a good idea’, would it be better if you have a more integrated interaction whereby the ‘independent’ verifier is instead an integrated verifier that works with the project in a more collaborative way and with greater level of financial risk tied to the outcome?
“I wonder whether or not there is a more integrated approach that might deliver better outcomes by thinking about how these independent verifiers might actually ultimately better support the outcome by being more integrated.”
Katherine Eastaughffe, a principal consultant and director at transport sector project management and risk management firm Acmena, agrees that there has been a proliferation of independent assurance roles and indeed says there is confusion as to exactly what assurance means. Terms such as such as safety assurance, system assurance and project assurance can mean different things to different people, she says.
Eastaughffe acknowledges that there are occasions whereby public-sector authorities need independent assurance about the quality of work they receive from contractors. Where sufficient expertise is not available in-house, she says third parties have a role to play in this area.
Nevertheless, she says confusion surrounding the terms can have consequences.
First, it can lead to the hiring of parties to perform highly experienced (and premium priced) assurance roles beyond the scope of what is necessary. This can occur, she says, in place of agencies instead taking the time and paying the sufficient amounts to get the right people on the project team to get the job done well at first instance.
Instead, she says, the focus should be the other way around. First, the right amounts must be paid and the necessary due diligence performed to get the most suitable people on the core project team. Only after this, she said, should thoughts turn to paying outside parties to check and confirm that the job is in fact being done.
In addition, she said, the lack of clarity in respect to assurance roles can lead to either duplication in cases in which multiple parties are engaged on roles which overlap or – more problematically – gaps in covering what needs to be checked. On this score, she says it is critical for the delivery agency to be clear about where its areas of risk lie and what it wanted to achieve (including the scope of duties) through the assurance process.
As for the question of independence against integration, Eastaughffe says there are advantages and disadvantages either way. On one hand, engagement of independent assurance personnel who operate at arm’s length can provide more transparent levels of project risk assurances in cases where there are multiple stakeholders – such as a public-sector delivery authority and numerous private rail operators. Conversely, however, a more integrated and expansive assurance role which provides advice throughout the project helps in terms of facilitating delivery the right outcomes at first instance.
Accordingly, she says the best approach will depend upon who and how many stakeholders there are and what you are trying to achieve from an assurance perspective.
Australia is investing big on major rail projects.
Whether or not assurance roles on these projects should be performed at arm’s length or on an integrated process is an interesting question.