Transportation megaprojects: comparing project management and oversight approaches: three recent, well-known initiatives--Boston's Big Dig, Denver's International Airport, and Colorado's T-REX--vary in methods and success.
In this article, we investigate megaprojects and project management structures. We examine Boston's Central Artery/Third Harbor Tunnel (CA/T) project (the "Big Dig"), the Denver International Airport (DIA) project, and Colorado's Transportation Expansion (T-REX) project and consider some of the factors that may contribute to megaproject success. Constructing megaprojects requires megacollaboration. The complexity and size of these projects also require public entities to hire private firms to perform much of the design and construction work, thus creating public-private partnerships. Among other things, this article looks at the implications for publicly funded megaprojects, whether greater public oversight necessarily means less efficiency and whether one structure is "best."
Boston, Massachusetts, hosted the Big Dig, as it was colloquially dubbed during design and construction. This transportation megaproject garnered much local press and presents a unique model for consideration. Although the Big Dig is often considered one unified project, it was actually three separate projects rolled into one by political expediency. During its life cycle, the project was managed through two distinct project management structures.
Engineers and planners replaced a six-lane elevated highway, running through the center of Boston, with an eight- to ten-lane underground expressway beneath the existing road in an effort to address monumental traffic congestion and air quality problems. In addition to this challenge, the megaprcject included building a modern bridge spanning the Charles River and linking downtown Boston to Logan Airport by way of a new roadway beneath South Boston and across the Boston Harbor by way of an immersed tube tunnel (Figure 1). The project received funding from federal and state monies (about 60/40) and was substantially completed in late 2007 for nearly $15 billion.
Informed observers, however, question the definition of "substantially completed"--especially in light of media reports of a two thousand-item list of things yet to be done on the project. Moreover, a collapse of ceiling tiles in one tunnel in 2006, which led to the death of a motorist, raised questions as to whether the Big Dig was completed safely. Nevertheless, the final cost is a far cry from that projected in the mid-1980s when project managers estimated the cost at $2.6 billion and looked for completion toward the end of 1998. A decade later, the total project cost was pegged at about $22 billion, including the interest that will be paid over the next several decades on the bonds issued to fund the project. The Massachusetts legislature has recently considered bailout strategies for rescuing the Massachusetts Turnpike Authority from the crushing interest payment burden it now faces.
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Stakeholders in this project included members of the business community, neighborhood organizations (North End, Chinatown, etc.), highway users, environmentalists, design and construction firms, property owners along the Big Dig corridor, and others. Of the myriad stakeholders, several showed an outstanding level of engagement and leadership on the project. The power players in this project included the joint venture of Bechtel/Parsons Brinckerhoff (B/PB), the Federal Highway Administration (FHWA), the Massachusetts General Court (the Legislature), the Massachusetts Highway Department (MassHighway) and the Massachusetts Turnpike Authority (MassPike).
Over the life of the Big Dig, project leaders crafted two project management structures: a "mirrored" model and a "merged" model. Under the mirrored model (Figure 2), the public owner, MassHighway, contracted with B/PB to manage and oversee design and construction. With this model, MassHighway maintained a small staff mirroring the staff of B/PB. Ideally, the state staff represented the interests of the state and B/PB provided the resources to manage design and construction on the public owner's behalf.
After a series of cost-driven political shakeups, the project management structure was adjusted and a merged model developed. With this model (Figure 3), under the leadership of MassPike, the public and private organizations were merged into one entity. Project leaders described the new structure as more efficient, and knowledgeable commentators concluded it was less accountable.
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Denver International Airport
The DIA project (Figure 4) shared some features with the Big Dig but also had its own unique characteristics. In brief, both megaprojects generated much controversy, went well over budget, and evidenced serious problems with quality and engineering issues. The DIA project began as a response to city and state reports suggesting that expanded air traffic necessitated a larger airport. The reports indicated that the old airport, Stapleton, was a poor choice for expansion. Eventually, community leaders decided that building a larger airport further from the city was the best option. Annexing and purchasing land from private owners in Adams County, east of the original airport, became the plan. This $4.2 billion operation, originally estimated at $1.7 million, was completed in February 1995, sixteen months behind schedule.
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The DIA project was one of the largest airport construction projects in the nation, and the expenses bore out that reality. Financing came from the federal government (through the Federal Aviation Administration), other federal monies, landing fees, and rental fees. In total, the federal government was scheduled to finance nearly half the cost of the project. The other half was expected to come from the landing fees and other rental payments. With the escalation of costs, in the end, the city, federal sources, and landing fees made up the bulk of the financing. In some ways, the outcome of this project parallels the outcome of the Big Dig.
The three broad categories of project stakeholders were local citizens and city officials (Denver, Colorado), the private construction companies (Greiner Engineering, Inc., and Morrison-Knudsen Company), and the airlines (United and Continental).
The project management structure for this project was simple. The city hired the joint venture of Greiner/ Morrison-Knudsen to serve as consultants for this project on the design and build portions. In addition, the city-managed Program Management Team (PMT)--staffed by Greiner/Morrison-Knudsen and city employees--acted as the overall manager. This team reported to the associate director of aviation and was an extension of the city.
This structure, in essence a merged format (Figure 5), allowed the project some degree of flexibility while maintaining a direct line of authority to the city of Denver. The main reported problems with this project included an automated baggage system (which never worked and was replaced by a manual system), cracks in the runways (needing repair prior to use), and serious cost overruns.
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Critics may have named this project "Frederico's Folly" after Frederico Pena (former Denver mayor and eventual Secretary of the U.S. Department of Transpor tation), one of its early champions, but the airport was ranked third in on-time performance of flights in the first twelve months of operation.
According to material available on the Metro Denver Web site, T-REX was a j oint multimodal and intermodal transportation infrastructure project where the Colorado Department of Transportation (CDOT) in partnership with the Regional Transportation District (RTD) added ten miles of light rail (Figure 6); repaired, replaced, and added highway lanes; replaced bridges; upgraded drainage; and completed a host of associated transportation upgrades. This megaproject was unique for a number of reasons, including
* boasting both light rail and highway upgrades (multimodal),
* using creative financing mechanisms to fund the enterprise, and
* employing a flexible project management structure, saving time and money.
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Beginning as a response to the greater Denver and Southeast Corridor's growing transportation needs, T-REX grew from the shared interests of the mass transit and highway communities. Increasing traffic congestion, mass transit needs, highway engineering issues, and other concerns drove this $1.67 billion project, which was designed to transform the way Denver commuted to work. By November 2006, it did just that.
Financing, which aimed to add no new taxes, came from federal, state, and local sources. The plan called for a 60 percent contribution from federal sources and 40 percent from state and local sources. Grant anticipation revenue vehicle (GARVEE) bonds, a unique feature of the funding arrangement, leveraged the value of bonds not yet granted to fund the present needs of the project. In this way, the project was able to secure greater funding in a timely manner.
Because of the multimodal nature of this project, the major stakeholders included a wide variety of companies and interested parties. They included CDOT, RTD, Southeast Corridor Constructors (SECC), City of Denver, FHWA, Federal Transit Administration (FTA), and other state and local agencies.
The project management structure for this project was unique in two significant ways:
* The major stakeholders agreed to work as a unified group, the Southeast Corridor Project Team. This partnership was articulated through a number of agreements clearly identifying location of authority and responsibility. This team worked collaboratively to ensure the project was completed on time, under budget, and in a safe manner.
* The project used a "design-build" method of project management instead of a "design-bid-build" structure (Figure 7). This "design-build" method allowed for a single contractor (SECC) to build the entire project at a predetermined price with oversight from the CDOT and RTD. This unique structure allowed for greater collaboration, increased cost efficiency, enhanced innovation, greater creativity, and a shorter project completion time. In fact, according to data published by project proponents, the actual project was completed under budget and twenty-two months ahead of schedule.
Each one of these projects had unique characteristics, which complicates efforts to compare and contrast the project management structures and project success. Nevertheless, some criteria can be used to evaluate them. We look at each project from the perspective of four performance indicators: efficiency, effectiveness, capacity, and responsiveness.
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Over time, Big Dig project officials developed two distinct management structures. Initially, they developed the mirrored approach, in which the partners, B/ PB and the state staff (the MassHighway CA/T unit), operated as distinct units. The state staff mirrored the staffing found in the private organization. The project management organization consisted of two separate, hierarchical entities; each was structured along the same functional lines in a mirrored arrangement.
After the 1997 shift--enabled by the passage of the Metropolitan Highway System bill--MassHighway turned management of the project over to MassPike. Public officials combined the two separate organizations into one "salt-and-pepper" body, which included public and private employees. This merging of functions-and private-and public-sector employees obscured lines of accountability, although some argue that the new structure enjoyed the advantage of greater administrative efficiency.
The DIA project structure was somewhat similar to the two Big Dig project management structures. It included hiring the joint venture of Greiner/Morrison Knudsen to serve as consultants for both the design and build portions of the project. This is similar to the Big Dig project, but a city-managed team, the PMT, was crafted to act as the overall management structure in the DIA. Similar to the Big Dig, the DIA had a merged staffing structure (PMT was staffed by both Greiner/Morrison-Knudsen and city employees), but the team reported to the associate director of aviation and thus was a clear extension of the city with distinct reporting to the public entity. This structure, which was a merged format, allowed flexibility without sacrificing accountability.
In contrast, the T-REX project management appears to have been the most innovative model, yet it still included distinct lines of authority and responsibility. First, the major stakeholders (CDOT RTD, FHWA, and FTA) worked as a team. One project and one team--the Southeast Corridor Project Team--had shared goals and vision and worked collaboratively. Authority and responsibility were carefully identified in project agreements. In addition, the project used a design-build method of project management instead of a design-bid-build structure. The team hired one contractor, SECC, to build the entire project at a predetermined price, but oversight from CDOT and RTD was not delegated to the hired contractor. This unique structure allowed for collaboration, increased cost efficiency, enhanced innovation, greater creativity, and seemingly better oversight.
Table 1 shows how the projects compare using our criteria of efficiency, effectiveness, capacity, and responsiveness. Although all three projects are effective and responsive, only T-REX rates a good or excellent in efficiency, and only the Big Dig garners a good or excellent in capacity.
Megaprojects are unique social creations, involving many individuals in a structure of interrelationships. They are massive, require complex financing schemes, and are publicly owned, yet they need expertise and horsepower from the private realm for completion. In all of this, there is a certain social contract animated by the relationships inherent in megaprojects. The greatest relationship is engendered between the private and public organization. Each of these entities is driven by its own set of values and agendas.
The public manager has to identify these values and ensure the project, as a public effort, is organized and completed in a way that manifests public values. Different project management structures address efficiency, effectiveness, capacity, and responsiveness (and the oversight of these values) differently. At a minimum, trust must be fostered if a project is to succeed. In addition, the project that scored best in our analysis is the one with a collaborative model of project management, crafted in a way that clearly defines authority and responsibility.
All of these projects and their varied project management structures are cautionary tales. When public officials are willing to cede responsibility for managing public projects to private ventures, projects have more problems (cost overruns, schedule expansion, etc). As the Obama administration increases aid to private companies, oversight will be increasingly important. Whether government rows, steers, mandates, regulates, initiates, or collaborates, state and federal agencies must be able to deal with megaprojects like the Big Dig, DIA, and T-REX professionally and competently. Reliance on private-sector expertise is likely to continue, and government officials are well served to build on the lessons learned from previous projects.
Altshuler, Alan, and David Luberoff. Mega-Projects: The Changing Politics of Urban Public Investment (Washington, DC: Brookings Institution Press, 2003).
Haynes, Wendy. "Boston's Big Dig Project: A Cautionary Tale." Bridgewater Review, Vol. 26, No. 1, June 2008.
Johnston, Van R. "DIA: 'Double-edged' International Airport." Paper presented at the national conference of the American Society for Public Administration, Seattle, Washington, May 1998.
Johnston, Van R., Wendy Haynes, and Claire-Lauren Schulz. "The T-REX Megaproject: Denver's Showcase for Innovation and Collaboration." The Public Manager, Vol. 35, No. 2 (Summer), 2006, pp. 3-8.
Rasmussen, Eric. "Denver Airport's Soft Landing." Civil Engineering, Vol. 67, No. 7, July 1997, pp. 36-39.
Wendy Haynes, PhD, serves as a tenured, full-time faculty member and MPA program coordinator in the Political Science Department at Bridgewater State College in Massachusetts. She has many years of experience as a leader, analyst, and consultant at all levels of government, including thirteen years in the Massachusetts Inspector General's Office monitoring the Big Dig. She's also a former president and an active member of the American Society for Public Administration. Dr. Haynes can be reached at email@example.com. Andrew Whipple is working as a research assistant at Bridgewater State College in the MPA program. He also has many years of experience as a manager with the American Red Cross Blood Services and other nonprofits. Andrew can be reached at firstname.lastname@example.org. The authors appreciate the advice and counsel they received on this comparative analysis from Dr. Van R. Johnston, Denver university.
Table 1. Project Evaluation Matrix T-REX (Collaborative, Project Big Dig-- Big Dig-- single performance MassHighway MassPike DIA design-build criteria (Mirrored) (Merged) (Merged contractor) Efficiency-- (c) (c) (c) (a) on budget Efficiency-- on time (c) (c) (c) (a) Effectiveness (a) (a) (a) (a) Capacity (c) (a) (b) (b) Responsiveness (a) (a) (a) (a) Note: (a) = good or excellent; (b) = fair to poor; (c) = poor.
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|Author:||Haynes, Wendy; Whipple, Andrew|
|Publication:||The Public Manager|
|Date:||Jun 22, 2009|
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