March 2014
DELIVERING MAJOR PROJECTS
A NEW FORMULA FOR SUCCESS
Pioneers in development and sustainability
March 2014
1 Understanding mega project success & failures
2 Introduction – About ACCIONA
3 4 Conclusion References
March 2014
A GLOBAL FRONT-RUNNER IN RENEWABLE ENERGY, WATER AND INFRASTRUCTURE
March 2014
ACCIONA, BY THE NUMBERS
Present in more than 30 countries, on all 5 continents
+75 years of history
59% family-held + 41% free float2
worth of CAPEX
At 31 December 2012 1 - Contribution calculated prior to consolidation adjustments. 2 - Following amortization of treasury stock ( 6 June 2012)
+30,000 employees
€854 m
46%
11%
14%
€7.02bn REVENUES
20121
€1.43bn EBITDA 20122
29%
78%
March 2014
Offices and projects in more than 30 countries
ACCIONA AROUND THE WORLD
Asia & Oceania
• Australia • India • South Korea
Middle East & Africa
• UAE • Morocco • South Africa • Saudi Arabia • Algeria
Latin America
• Brazil • Chile • Colombia • Peru • Panama
North America
• Canada • USA • Mexico
• Venezuela • Dominican Rep. • Costa Rica • Ecuador • Argentina
• Hungary • Croatia • Belgium • Romania • Holland • France • Austria
Europe
• Spain • Poland • Italy • Portugal • Sweden • United
Kingdom • Greece • Germany
• Catar • Gabon • Cape Verde
March 2014
March 2014 INNOVATION
ACCIONA always has its sights set firmly on TECHNOLOGICAL LEADERSHIP in all its activities.
The Company invested €500M in R&D and Innovation in the period
2010-2015.
More than 150 PROJECTS are currently in progress in our R&D
and Innovation centers manned by 345 professionals.
WE TOP THE INVESTMENT TABLE in R&D and Innovation,
in Europe’s construction sector and utilities in percentage of revenues and EBITDA..
March 2014 October 2013 VALUE CHAIN
A “big picture” vision of the project
Alignment of interests
Optimum risk allocation
*Operation and Maintenance
R&D
FINANCING
March 2014 BUILDING A BETTER WORLD
€6.77BN BACKLOG 52% international, 79% public works.
EXTENSIVE EXPERIENCE IN BOTH THE PRIVATE AND PUBLIC SECTORS Transport, public works, hospitals, airports, maritime works, electrical facilities.
A FRONT-RUNNER IN INFRASTRUCTURE DEVELOPMENT AND MANAGEMENT Design and engineering, financing, procurement, construction and Operation & Maintenance.
March 2014
FLAGSHIP MEGA PROJECTS C I V I L W O R K S
Legacy Way Tunnel Brisbane, Australia Construction of two twin tunnels 4.3km long each. Holds world records for daily, weekly and monthly perforation rates.
Ting Kau Bridge Hong Kong, China The 14th longest cable-stay bridge in the world, with a total span of 1,558 feet. 120.000m3 of reinforced concrete was used to build it.
Alqueva Dam Portugal Europe’s biggest reservoir with a volume of 4,150 Hm3 and a surface of 250 km2. Obtained the 9th Puente de Alcántara International Award.
El Ferrol Seaport Spain Construction of Phases I and II of the seaport of El Ferrol, located in A Coruña on Spain’s northwestern coast.
ACCIONA SOLAR HQ Spain Spain’s very first zero-emissions building. Requires 52% less energy than a conventional building.
Fort St. John Hospital Canada A 55-bed hospital featuring a 123-bed care center for seniors. Built to "LEED Gold“ sustainability standards.
A-30 Expressway Canada Construction of a 42km section, and a 35-year concession. Named “North America PPP Deal of the Year” by Project Finance magazine.
Infanta Sofía Hospital Spain Design and construction and running of the non-healthcare areas for a 30-year period. Services more than 300,000 inhabitants.
C O N S T R U C T I O N
C O N C E S S I O N S
Mundaring Water Treatment Plant Design, construction, operation and maintenance of the water treatment plant which will provide water to around 33,000 rural and town services.
Adelaide Desalination Plant (Port Stanvac) Reverse Osmosis Seawater Desalination plant with max capacity of 100 gigalitres per year provides 50% of Adelaide's drinking water.
March 2014
March 2014
UNDERSTANDING MEGA PROJECT FAILURES – WHAT ARE THE CONTRIBUTING FACTORS
KEY ELEMENTS IN MEGA PROJECT SUCCESS
March 2014
Caravel Group’s recent report produced for Infrastructure Australia on Project
Governance Effectiveness in Australia found that on average 48% of projects
failed to meet their baseline time, cost and quality objectives, based on a survey
of Industry and Government Senior Executives.
The government capital expenditure is in the order of $60 billion per annum and
private expenditure is in the order of $155 billion bringing the total to $215 billion
If we assume that the best case project success rate of 52% having a
corresponding failure rate of 48% with an average cost overrun of 40% (a
conservative estimate), then the potential wastage of capital is in the order of $30
billion
KPMG Global construction survey 2013 quotes “…56% respondents say that
mega project management is a major contributor to growth,” while “77% report
underperforming projects due to delays, poor estimating processes, and failed risk
management processes.”
March 2014
UNDERSTANDING MEGA PROJECT SUCCESS & FAILURES
March 2014
A survey of Industry and Government Senior Executives in Australia found that on
average 48% OF PROJECTS FAILED to meet their baseline time, cost and
quality objectives, and despite the efforts of industry and government, estimated
improvement over the last 20 years was estimated at 10%. Furthermore, the
BLAME for failure is falling on the Project Team, whilst the ACTUAL CAUSE of
failure lies with the Governance Team.
Source: A Review of Project Governance Effectiveness in Australia, 2.1 Project Success Rates, an Inconvenient
Truth by Caravel Group for Australian Government, Infrastructure Australia. March 2013
UNDERSTANDING MEGA PROJECT SUCCESS & FAILURES
March 2014
KPMG’s 2010 report on ‘Success and Failure in Urban Transport Infrastructure
Projects’ describes a successful project as being able to maintain its policy delivery
in the long-term, and uses sustainably project development methods that could be
transferred to other projects.
March 2014
UNDERSTANDING MEGA PROJECT SUCCESS & FAILURES
Other definitions incorporate the view success or failure of an infrastructure project
as being the community’s user-ship of the asset, the fees generated as returns to the
investor, and the productivity gains for increased efficiency returns to the local and
greater community.
March 2014
Lynda Bourne of the Project Management Institute discusses the EFFECTIVENESS
of a PROJECT SPONSOR significantly contributes probability of the project’s
success, stating that the role with respect to the project should:
March 2014
ENGINEERING
CONSTRUCTION
Gain commitment for the project by being a key advocate for the project
Ensure the projects optimisation by arranging sufficient resources at delivery
Build durability by ensuring the people and process are in place to maintain it
once the project completes its hand over
Support the project manager
Facilitate problem solving
Create alignment between all stakeholders
UNDERSTANDING MEGA PROJECT SUCCESS & FAILURES
March 2014
Commercial
Mission of Project
Client
Community and People
Value Marketing
DEFINING SUCCESS – ACCIONA
March 2014
STRATEGY Local Requirement, Client, Procurement Model, Partners, Planning Resources, Right Governance Team, Functionality, Value for Money
Commercial
Mission of the Project
ANSWERING TO SHAREHOLDERS Commercial Frame, Risk Allocation, Cash Flow, Profitability, Time and Cost
MARKETING Project Importance, Iconic, Awards
DEFINING SUCCESS – ACCIONA
March 2014 DEFINING SUCCESS – ACCIONA
Client
DELIVERY Meeting and Exceeding Expectations Problem solving approach, Win-Win strategy
MARKETING Future Work, Client References
March 2014
POST CONSTRUCTION Functionality of Infrastructure
Demonstrate Value for money
DEFINING SUCCESS – ACCIONA
Community and People
Value Marketing
DURING CONSTRUCTION Construction team work Environment, Culture and Safety
Active positive engagement with community
March 2014 DELIVERING SUCCESS – LEGACY WAY
Commercial
Mission of the Project
Transcity Joint Venture is the consortium responsible for the design, construction and 10 year operation of Brisbane’s newest road tunnel Legacy Way. The $1.5 billion project, consists of twin two-lane tunnels, approximately 4.6km in length. Construction began in early 2011 and the tunnel is set for completion in early 2015.
PM-OP-TE-0015
Local requirements, Partners and Governance
Constructors Joint Venture
Acciona 40%
Ghella 30%
BMD 30% RCR O’Donnell Griffin
Design Alliance Participants
March 2014 DELIVERING SUCCESS – LEGACY WAY
Commercial
Mission of the Project
Completed tunnelling FOUR MONTHS AHEAD OF SCHEDULE
Achieved a WORLD RECORD excavating 48m in one day, 239.9m in one week, and 818.89m in one month (30 day)
March 2014
Date: 4/06/2013
42+000.00
42+500.00
43+000.00
43+500.00
44+000.00
44+500.00
45+000.00
45+500.00
46+000.00
46+500.00
47+000.00
3/09/2012
17/09/2012
1/10/2012
15/10/2012
29/10/2012
12/11/2012
26/11/2012
10/12/2012
24/12/2012
7/01/2013
21/01/2013
4/02/2013
18/02/2013
4/03/2013
18/03/2013
1/04/2013
15/04/2013
29/04/2013
13/05/2013
27/05/2013
10/06/2013
24/06/2013
8/07/2013
22/07/2013
5/08/2013
19/08/2013
Chai
nage
TBM 1 & 2 Tunnel Programs
Predicted production
TBM1
Actual production
TBM1
Predicted production
TBM2
Actual production
TBM2
Date
March 2014
Understanding of the contract requirements
DELIVERING SUCCESS – LEGACY WAY
Client
Understanding client drivers
Committed to working together and problem solving
March 2014
WINNER of the prestigious LORD MAYORS 2012 AWARD FOR "BUSINESS INNOVATION” for Legacy Way
WINNER of the MAJOR TUNNELLING PROJECT OF THE YEAR award for Legacy Way at the 2013 International Tunnelling Awards
DELIVERING SUCCESS – LEGACY WAY
Client
"ACCIONA's drive to constantly find new and better ways to operate is evident in its design and construction of the Legacy Way road tunnel.” Brisbane Lord Mayor Graham Quirk
March 2014 DELIVERING SUCCESS – LEGACY WAY
Community and People
Value Marketing
Dedicated Community and Stakeholder Relations team works closely with local RESIDENTS, BUSINESSES and COMMUNITY GROUPS to ensure projects progress is effectively communicated via a range of channels including:
Face-to-face meetings Door knocking Flyers Website information
Public displays 24/7 hotline Visitors’ Centre Community Liaison Groups
March 2014
1. MISSION OF THE PROJECT
Functionality
Best Procurement Model
Commercial Frame
Risk Allocation
2. UNDERSTANDING THE PROJECT SPONSOR ROLE
CONCLUSION
Right people and processes in place
Identify an alignment of stakeholders
Clear long term rules and drivers
Problem solving approach on a “win-win” basis, support of the Project Manager
March 2014
3. GOVERNANCE TEAM
Skills and Capabilities Understanding of Risk and Responsibilities Looking for Innovation Ability to foresee and plan for resources required Support of the delivery team, performance measures of governance team
Gain internal commitment during delivery Gain external commitment with long term view
4. VALUE MARKETING
CONCLUSION
March 2014
REFERENCES
• Project Governance Effectiveness, report by Caravel Group—March
2013 http://www.infrastructureaustralia.gov.au
• Lynda Bourne, DPM, PMP, Project Management Institute, April 5,
2012
http://blogs.pmi.org/blog/voices_on_project_management/2012/04/wh
at-does-a-project-sponsor-re.html
• Success and Failure in Urban Transport Infrastructure Projects,
report by KPMG United Kingdom, 2010
http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/
Documents/Urban-transport-infrastructure-projects-O-201003.pdf
• KPMG Global construction survey 2013
KPMG International Cooperative (“KPMG International”)
March 2014
March 2014
Fernando Fajardo Managing Director, ACCIONA Infrastructure & Agua
(Australia & South East Asia)
Project Director, Transcity Joint Venture, Legacy Way Project