RC121 NovDec 2025 - Magazine - Page 34
MAJOR PROJECTS
PILLAR 2: GOVERNANCE AND OVERSIGHT
PILLAR 3: ORGANIZATION AND PERFORMANCE
PILLAR 4: COMMERCIAL AND FINANCIAL
The second pillar revolves around effective
governance and oversight. Every project needs
a robust governance framework, with structure
and rules for delivery and oversight. This starts by
ensuring alignment across stakeholders, the public,
and contractors.
In a too-familiar story, a large transit project
slated for five years turned into a far longer project
due to lack of alignment. Project owners weren’t
on the same page as stakeholders, and the
corporations involved didn’t prioritize the same
business objectives. As a result, functions within
those organizations worked against each other and
toward different outcomes. Misalignment created
public and contractor frustration, as outcomes and
contracts changed, costs escalated, and schedules
deteriorated.
Alongside alignment, effective governance is
based on accountability, authority, and disclosure.
There needs to be a structure and rules in place for
decisions, escalation and reporting, clear project
KPIs, and a means to ensure compliance.
This pillar—organization and performance—focuses broadly on resources,
leadership and project culture. Are
mechanisms in place that set the right
tone, empower the right teams, and
support effective and efficient project
delivery?
Megaprojects have budgets equivalent
to large corporations. They need depth
and breadth of experience, but they
also employ temporary teams. Managing
conflict, accepting change, and
establishing the right working cadence
are vital to project success. A relentless
focus on the clock is essential, making
consensus-based decisions unworkable.
Project owners need to remember
these projects aren’t business as
usual. They need purpose-built delivery
organizations and the capacity
and capability to deliver under the
requirements of a project environment.
The commercial and financial pillar
ensures financial structures are in
place to support the project. Successful
projects rely on strategic contracting
and procurement relationships with a
clear understanding of the risk allocation
between parties. Changing market
conditions play a role and different
contracting models require different levels
of owner oversight. A mismatch between
owner controls and contracting model
can lead to poor performance. There’s
a common misconception that project
performance can be outsourced. We’ve
seen this up close in oil and gas processing
projects that fell behind planned costs
and schedule performance with an
engineering, procurement and construction
management (EPCM) contractors. It took
restructuring an experienced owner team
and owner controls capability to drive
EPCM performance and turn things around.
34—RENEW CANADA – NOVEMBER/DECEMBER 2025
RENEWCANADA.NET
