Project Management Institute

Taking a toll

Project management could have saved German taxpayers billions

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PHOTOS COURTESY OF TOLL COLLECT

CASE ANALYSIS:

Project management could have saved German taxpayers billions.

In the heart of Europe, Germany serves as a major hub for international commercial trucks. Because heavy truck traffic was straining the country's transportation infrastructure, the German government wanted to develop a distance-based toll system for trucks of 12 tons or more.

After an open competitive bidding session, Toll Collect GmbH, a Berlin, Germany-based joint-venture of Deutsche Telekom and DaimlerChrysler, was commissioned to build a system capable of calculating distance-based tolls without booths along the motorways. Switzerland and Austria opted for comparatively cheap, simple systems based on microwaves, but the highly innovative German system relied on a Global Positioning System (GPS) and mobile telecommunications to track vehicles.

The lack of sufficient project management, however, could have sealed the fate of a revolutionary development in modern transportation, according to Oliver F. Lehmann, PMP, vice president of professional development for PMI's Troubled Projects Specific Interest Group. A project management professional would have:

Project Breakdown

Kickoff Date: September 2002

Proposed Deadline: 31 August 2003

Revised Deadline: 2 November 2003

Cancelled: February 2004

Objectives: A new electronic truck toll-collection system was intended to ensure accurate charges and convenient fee collection across all German motorways for trucks 12 tons or more.

ROI: The environmentally friendly system was meant to allay road maintenance costs and provide additional funding for infrastructure.

Project Pitfalls: Technical glitches pushed back the project completion date twice. The German Transport Ministry says the delay cost €156 million (US$194 million) per month in lost revenue.

1. SCRUTINIZED THE SCHEDULE.

Ironically, Germany's Federal Office for Goods Transport (BAG) started the program with clear objectives regarding the quality of the system, including a working schedule and procurement rules. But time was of the essence; the German government urgently needed the euros. Toll Collect accepted customer requirements that were impossible to meet.

2. CONDUCTED A PILOT TEST.

The problem was integration, according to Toll Collect officials. About 20,000 of the onboard units used to track vehicle movements were recalled due to software glitches. Sometimes the units incorrectly registered miles traveled, calculated incorrect tolls or shut down without reason. Grundig, a Nurnberg, Germany-based hardware manufacturer, claimed that the units were fully operational before installing the software.

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As a result, the planned August 2003 system launch never happened, nor was the new 2 November 2003 deadline met. According to a new project plan, a simplified system wouldn't have been fully operational until at least 2005. As a consequence, the German government calculated a shortfall of more than €1.3 billion (US$1.6 billion), while other major government-funded projects dependent on Toll Collect revenue such as the high-speed maglev train Transrapid in Munich might be postponed or cancelled. In February, the government finally pulled the plug on the Toll Collect system.

3. STRESSED INTENSE RISK MANAGEMENT.

Standard risk management could have identified the risks inherent in an innovative program that has numerous interfaces, requires technical know-how, and engages both private and public stakeholders. With growing complexity, systems become more susceptible to failure. Integrating very different technologies and developing a solution that is reliable enough to serve a vast number of clients in a relatively narrow traffic hot spot would require specific contingencies in time and money.

4. COMMUNICATED CLEARLY WITH STAKEHOLDERS.

Bit by bit, information trickled from the involved parties to the public. Most information started as rumors and was confirmed days or weeks later, including the news that the project was in trouble, which was reported in the press last summer. Meanwhile, suppliers and buyers struggled to secure their legal positions and communicate openly to finish the system development.

If you know of a troubled project in which a project manager could have (or did) save the day, share your lessons learned. Contact us at rfoti@imaginepub.com.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

MARCH 2004 | PM NETWORK

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