Benefits of High Speed Rail project exaggerated, secret report reveals

Having been involved in commercial leadership roles on a number of billion pound plus infrastructure projects, I’d say it is nearly impossible to properly estimate and budget them. However good your pricing philosophy and risk management it will rarely be right.

The other issue is the psychology of public sector finance approvals. If the true cost of H2S was exposed at the start, it simply wouldn’t be approved either by the Treasury or politically in the court of public opinion. Equally, it’s pretty much impossible to estimate the benefits with much else but a scientific wild arrsed guess.

I wonder how much of these blown out budgets are deliberate in order to manage the approvals processes.
Your second paragraph, nail, head, hit!
 
the biggest debacle has been in management and oversight, especially when Boris Johnson was Mayor,
Shurely knot!

He's a fine man: a charismatic and wise leader destined for greatness and a unique place in the history of this sceptred isle.

He is possibly the only man capable of becoming this nation's saviour.

How very dare you say such things about him?!

For shame, I say.
 

Riga

War Hero
Your second paragraph, nail, head, hit!
Nope, Treasury apply a 60% penalty on the figures and only agree to proceed if they can still deliver on a the current Cost:Benefit analysis.

HS2 has had bad management, Simples.
Crossrail 1 had, courtesy of Boris, bad oversight. Simples.

F for applying intellect
Show again in the morning. ;)
 
Nope, Treasury apply a 60% penalty on the figures and only agree to proceed if they can still deliver on a the current Cost:Benefit analysis.

HS2 has had bad management, Simples.
Crossrail 1 had, courtesy of Boris, bad oversight. Simples.

F for applying intellect
Show again in the morning. ;)
I stand by what I said. Complex projects are deliberately under bid in order to get HMT approval. Re-show 2200 hrs tonight. :rmp:
 
Nope, Treasury apply a 60% penalty on the figures and only agree to proceed if they can still deliver on a the current Cost:Benefit analysis.

HS2 has had bad management, Simples.
Crossrail 1 had, courtesy of Boris, bad oversight. Simples.

F for applying intellect
Show again in the morning. ;)
No, Treasury does not apply an arbitrary 60% penalty loading. They use sophisticated, probabalised risk management tools and use the P60 risk curve to determine the most likely cost. In very rough terms that means assuming that 60% of the identified risks will mature at 60% of the identified severity in terms of cost and time.

Even so, the costs are still an estimate as is the risk analysis. So to are the benefit models that Treasury use; they are just models.

In any event, Treasury just set the rules and fund. Ministers are the approvers. My hypothesis remains; politicians deliberately under represent costs to get stuff done. Maybe they use the P0 risk curve, knowing that it has no chance of materialising. And then drip feed the truer picture.

Project managers, on the other hand, are likely to over represent the costs; use the P100 risk curve so that they don’t overshoot.
 
No, Treasury does not apply an arbitrary 60% penalty loading. They use sophisticated, probabalised risk management tools and use the P60 risk curve to determine the most likely cost. In very rough terms that means assuming that 60% of the identified risks will mature at 60% of the identified severity in terms of cost and time.

Even so, the costs are still an estimate as is the risk analysis. So to are the benefit models that Treasury use; they are just models.

In any event, Treasury just set the rules and fund. Ministers are the approvers. My hypothesis remains; politicians deliberately under represent costs to get stuff done. Maybe they use the P0 risk curve, knowing that it has no chance of materialising. And then drip feed the truer picture.

Project managers, on the other hand, are likely to over represent the costs; use the P100 risk curve so that they don’t overshoot.
If I have it right, you mean that politicians understand the P60 curve well enough to game the process, which means they would game it irrespective of whether P70, or P100 were being applied.

Or am I missing something?
 
If I have it right, you mean that politicians understand the P60 curve well enough to game the process, which means they would game it irrespective of whether P70, or P100 were being applied.

Or am I missing something?
No, I think they use the base estimate without much, if any, understanding of what sits between that and the worst case.

The whole approvals process thing is a game and that applies in any environment, public sector or not.
 

Riga

War Hero
I stand by what I said. Complex projects are deliberately under bid in order to get HMT approval. Re-show 2200 hrs tonight. :rmp:
Someone nicked my phone. End Ex on photos of forts, I'm sorry.

There is a Treasury Bias of +60% on all projects - it is so high that many projects get knee-capped. Please do better in the lower form.
 

Riga

War Hero
No, Treasury does not apply an arbitrary 60% penalty loading. They use sophisticated, probabalised risk management tools and use the P60 risk curve to determine the most likely cost. In very rough terms that means assuming that 60% of the identified risks will mature at 60% of the identified severity in terms of cost and time.

Even so, the costs are still an estimate as is the risk analysis. So to are the benefit models that Treasury use; they are just models.

In any event, Treasury just set the rules and fund. Ministers are the approvers. My hypothesis remains; politicians deliberately under represent costs to get stuff done. Maybe they use the P0 risk curve, knowing that it has no chance of materialising. And then drip feed the truer picture.

Project managers, on the other hand, are likely to over represent the costs; use the P100 risk curve so that they don’t overshoot.
That's one for Roger_Ford of Modern Railways to delve into ;) Care to give your initials and post nominals for the question? Or just write direct and print his reply.
 
Someone nicked my phone. End Ex on photos of forts, I'm sorry.

There is a Treasury Bias of +60% on all projects - it is so high that many projects get knee-capped. Please do better in the lower form.
Funnily enough, I checked with an old uni mate who was in the Treasury until 2018. He said that your blanket assumption above is quite simply not correct.
 
If I have it right, you mean that politicians understand the P60 curve well enough to game the process, which means they would game it irrespective of whether P70, or P100 were being applied.

Or am I missing something?
@Stonker , send key settings, over
 

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