Abstract
Large infrastructural projects in the Netherlands tend to have a bad reputation, since cost overruns and delays are recurring topics in the media. Several investigations by the “Netherlands Court of Audit” and Parliament-initiated committees have fuelled this perception. This lack of trust significantly increases the challenge for project managers of projects with public exposure in the Netherlands. This paper addresses the question of whether government projects can be managed successfully and provides a theoretical basis for the interactive workshop held on behalf of Thinktank Project NL. The first step is to look at the cultural dimension, assessing the differences in culture between government and business organizations. The second step comprises the application dimension, analyzing some distinctive features between public and private projects. These two building blocks are input to the group discussion on questions such as “Can public projects in the Netherlands be managed successfully?”, “What specific project management skills are necessary to successfully manage public projects in the Netherlands so that they do achieve their objectives?”, and “Are public projects really different from commercial/private projects?” The concluding answer to the title question appears to be that public projects are a possible though challenging mission. Government projects have their own characteristics, specifically with regard to internal regulations and additional focus on stakeholder management that need close attention.
Introduction
The North-South metro line currently under construction in Amsterdam is a striking example of a troubled public project that makes headlines in the Dutch media (Damen, 2009) and has even reached the worldwide project management community (Struggle to Stay on Track, 2009). When the city council approved the project in 2002, it was planned to be completed in 2011 for a budget of €1.4 billion. The current projection is an 85% likelihood for late 2017 and a budget of €2.3 billion (Financial prognosis, 2009). Recent contributors include a repeated subsidence near the Vijzelgracht station being constructed and a revised risk analysis for the process of boring that has not started yet. The responsible alderman has resigned, and the Amsterdam community is losing trust in the project, as shown by a survey (Don’t Stop the Metro, 2009) where 20% of the respondents want to stop the project, 28% want to wait for the investigation to be completed, 12% have no opinion, and 40% want to continue with the construction. A committee chaired by former minister Veerman will investigate if and how to complete the metro line (North-South Line, 2009).
Other large infrastructure projects in the Netherlands that have made headlines in the media are the HSL-South, the High Speed Line (HSL) to Belgium and France; the Betuweroute, a cargo railroad line form Rotterdam to Germany; and Maasvlakte 2, an extension of the Rotterdam harbor facilities on land recovered from the North Sea-. The news is usually bad. Projects incur significant overruns on cost and time, and scope increases are common. The effect is a growing lack of trust in the ability to execute such projects that not only on the part of the general public but also on that of stakeholders such as government, members of parliament, and project organizations. The negative connotation requires adjustment. Public projects are an essential part of the current and future development of the Netherlands. Decision makers as well as the general public should not become more hesitant to embark on large public projects. To turn the tide, we need to build the public project execution strength in the Netherlands. Project Thinktank is an initiative of the PMI Netherlands Chapter and aims at (re)building trust in public projects in the Netherlands and support initiatives that make public projects a “mission possible.”
When considering the causes for project failures, a good source are the published reports of the many investigations into troubled projects. The Netherlands Court of Audit investigated the decision-making process of the Betuweroute (Algemene Rekenkamer, 2000), its project control and finance (Algemene Rekenkamer, 2001), the provision of information on large projects (Algemene Rekenkamer, 2002), and the risk reserves of both the Betuweroute and HSL-South (Algemene Rekenkamer, 2003). The latest report led to the establishment of the parliamentary commission Duivesteijn that investigated large infrastructure projects (Duivesteijn Committee, 2004). A committee of inquiry investigated the museum parking garage in Rotterdam (Report of Committee of Inquiry Museum Parking Garage, 2007). The Amsterdam Ombudsman investigated the North-South line for the repeated occurrence of subsidence at the location Vijzelgracht (2008) and (North-South Line Vijzelgracht Part 1, 2009).
Differences in Culture Between Government and Business Organizations
In order to analyze and discuss the underlying causes for the success or failure of public projects in a workshop audience of mixed government/commercial background, it is important to take the culture of the government/public environment into consideration and compare it with the culture of business organizations. To establish a conceptual understanding of the two worlds, a model is used that is described by Smit and van Thiel (Smit & Thiel, 2002). Generally speaking they characterize government by its martial ethos, with emphasis on general interest and terms such as justifiable and careful. Business is characterized through its commercial ethos and keywords as profit, dominance, and market mechanism.
Smit and van Thiel explain the differences in culture between government and business organizations using a value comparison table (Exhibit 1).
Exhibit 1: Differences in values between government and business.
The workshop puts each of the above terms on a separate slide and asks the audience to which of the two categories it belongs. The answers put forward in the workshop held with 80 project managers in the Netherlands on 23 June 2008 (Denktank Project NL, 2008) were in line with the table, with the exception of anticipation (more business), responsibility, and secrecy (both equally applicable to government and business), and vocation (neither). The workshop discussion can be summarized as:
- Also in business organizations, up to 80% of projects exceed budget, schedule, or scope.
- Potentially up to 90% of projects start with misinformation such as wrong prognoses, capacity forecasts, or running cost. The cause is usually attributed to the sales organization.
- The exit option is considered an important attribute of business organizations and can hardly be used by government.
- Secrecy is considered part of the problem. In business organizations, this allows problems to be kept in-house and not be brought out. Part of the audience states that to a certain extent the same is true of government, in spite of its law-endorsed public nature.
- Keep in mind that the main purpose of using the cultural differences table is to create a conceptual understanding. From a sociological perspective, it is less applicable to describe the complexities of both worlds.
- Traffic forecasts in the Netherlands of 1927 and 1958 have been shown to be very accurate. Issues are caused by market rules and regulations. Trends are seldom used.
- Are projects in business worse than in government? Problems in business are more successfully kept from the media. It is important to further exploit and emphasize differences and commonalities between both. Keep in mind that the application area could have a serious influence, such as that between IT and public infrastructure.
- Mutual insight between government and business representatives into each others’ value system helps to create an understanding of the differences in culture and the effects on projects.
Distinctive Features Between Public and Private Projects
Another perspective is to look at specific features of projects in the public domain as compared with those of projects in the business domain. The Government Extension to the PMBOK® Guide)—Third edition (Project Management Institute, 2006) is a very helpful source of knowledge. Characteristics that are different for government projects are:
- Project funding from public funds
- Project benefits go to the public
- Project execution is often prescribed by laws
- Project team serves as stewards of the public interest
- Project budget cycle is 1 year
- Often there are many stakeholders
The differences are summarized in Exhibit 2.
Exhibit 2: Summary of differences between private and public projects.
Group Discussion
Some example propositions that were used in the June 2008 workshop were:
- Project management methodology is too rigid for government projects
- Scope management is impossible in government projects
- Project management is the problem and not the solution
Below some relevant remarks made during the discussion are summarized:
“Project management methodology is too rigid for government projects.”
- In the early stages of projects there may be a multifactor network with many parties, relationships, and interests. Solidifying a project in this context requires specific skills (de Bruin & ten Heuvelhof, 2007). According to some, these process-related components are not as present in the methodology, and according to others, are present but not well applied.
- Is the tool kit properly filled? The methodology has many components that are relevant for projects. Long-duration projects should prepare for many (re-)adjustments. A portfolio management structure could be very helpful.
- Control is not as mature in government projects. Measurements are in place but few results are actionable.
- A public servant is sworn in to serve the public interest and expects people outside the government to do the same. Practice proves otherwise.
- Do not overemphasize the value of the methodology. Instead focus on the competencies of the project manager.
- A government representative is surprised to find that project managers tend to accept wrong assumptions at the start. There is room for a stronger support of the profession. Doctors do not operate without the proper tools, but project managers apparently often do.
- Keep in mind the difference between project success and political success. The definition of success in government is to ensure that the political person in charge such as a Minister does not “lose his scalp.”
“Scope management is impossible in government projects.”
- Why is that? The tools, such as change requests, allow for proper scope management. This is confirmed for a very large chunk of maintenance projects of public infrastructure at the Ministry of Public Works. Execution shows only a 3% overrun in the past 22 years.
- Obstruction by political opponents is seen as an important contributor to scope instability. Better stakeholder management would help.
- Errors in putting up work to public tender are seen as a potential cause for scope creep, especially when risks are not properly dealt with. In the tender/risk area public infrastructure projects are generally well managed and more mature than government IT projects.
- A great deal of progress has been made in managing specifications and quality. This leads to a more easily directed execution.
- Such direction is especially difficult in IT projects when interactive development is an accepted practice. For example, the Dutch Tax Authority does have a data model but does not employ an information model. Building systems turn out to be more problematic in that environment.
“Project management is the problem and not the solution.”
- Professional project management is a requirement to ensure that the results meet the expectations.
- Tools and methodologies give one something to go on. Problems in the government arena may be solved less creatively due to a certain lack of understanding of the problem itself.
- Public-private partnership such as in the Waard Alliance (Betuweroute, 2003) shows a methodology that has worked.
- When working on a government project, the regulations for public tenders are required study material.
- Knowledge of the government application domain is a must, and development of competencies aimed at the political arena is a big plus.
Conclusion
In the opinion of Thinktank Project NL, the answer to the question, “Public projects in the Netherlands, mission (im)possible” is positive. More successful public projects are a possible though challenging mission. An important step to take is to create a mutual understanding between government and business representatives of each others’ background, cultures, and specific challenges. Insight into the implications for projects helps in adapting the project manager’s curriculum for the government environment.
Keep in mind that the project manager is only one of the stakeholders involved. Future steps need to address stakeholders such as government, members of parliament, contractors, media, and the general public.
Thinktank Project NL
Thinktank Project NL is a club of enthusiastic project management professionals that aims to increase the success rate of public projects in the Netherlands by creating a broad insight into the value of the project management profession. They use public available reports as input for their analysis and are in a permanent dialogue with public, politics, government, and business representatives to share the Thinktank’s vision for successful projects and for the approach that is needed to get there. The Thinktank was founded in 2006 as part of PMI Netherlands Chapter. Their motto is “Building trust in projects.” More information can be found at www.denktankproject.nl.