PROJECT MANAGEMENT IN

CONSTRUCTION

ASSIGNMENT 2
HOLYROOD:
STAKEHOLDER ANALYSIS &
RISK MANAGEMENT

DATE:
4TH
OCTOBER 2013

LECTURER:
PROF. Dr. JOHN TOOKEY

BY:
ANUSHYA RAMASEGAR

Anushya.R 1
 FACULTY OF DESIGN AND CREATIVE TECHNOLOGIES

AUCKLAND UNIVERSITY OF TECHNOLOGY

TE WANANGA ARONUI O TAMAKI MAKAU RAU

School of Engineering

Master of Construction Management

Name ANUSHYA RAMASEGAR

ID Number 1380633

Paper Name PROJECT MANAGEMENT IN CONSTRUCTION

Assignment HOLYROOD: STAKEHOLDER ANALYSIS & RISK ASSESSMENT

Number of words (excluding appendices)

 Please read and tick the boxes below before handing in your assignment
 If you are uncertain about any of these matters then please discuss them with your lecturer. Assignments will not
be accepted if this section not completed.

Where I have used someone else’s words or images, we have clearly indicated this by putting them inside
speech marks (if appropriate) and adding an in-text reference 
Where I have used other people’s ideas or writing, we have clearly indicated this by putting them into our own
words and adding and adding the reference at the end of the sentence/paragraph. 
Other than the above, this assignment
IS NOT copied from another student or previous assignment 
IS NOT directly copied from books, journals or other materials

IS NOT cut and pasted from the internet

HAS NOT been handed in by one of us or anyone else in any other course

HAS NOT been done by someone else (e.g. friends, relative, professional)

I agree to this assignment being used (or copied) for academic purposes which shall include amongst other
things, external moderation, promotional work, sharing with fellow colleagues and others works of good
quality (and if I have any concerns, I will keep the lecturer informed)

ANUSHYA RAMASEGAR 04/10/2013

………………………………………………………….. ……………………
Signature Date

Anushya.R 2
 TABLE OF CONTENTS
1.0 INTRODUCTION............................................................................................................ 5

2.0 PROJECT DEVELOPMENT......................................................................................... 6

2.1 COMMENCEMENT OF PROJECT ........................................................................................ 6

2.2 CONSTRUCTION OF THE PROJECT .................................................................................... 7
2.3 COMPLETION OF THE PROJECT ........................................................................................ 7

3.0 STAKEHOLDERS .......................................................................................................... 8

3.1 STAKEHOLDER MAP ........................................................................................................ 8

3.2 STAKEHOLDER ANALYSIS ............................................................................................... 9

4.0 RISK ASSESSMENT ...................................................................................................... 9

4.1 DESIGN ........................................................................................................................... 9

4.2 PROCUREMENT ............................................................................................................. 10
4.3 MANAGEMENT .............................................................................................................. 11

5.0 CONTROVERSIAL ISSUES: COST AND TIME OVERRUNS ............................. 13

5.1 WAS THE SPB CONDEMNED TO A COST OVERRUN SINCE OUTSET? ............................. 13

6.0 DISCUSSION ................................................................................................................. 14

6.1 LESSONS TO BE LEARNED ............................................................................................. 14

7.0 CONCLUSION .............................................................................................................. 15

9.0 REFERENCES ............................................................................................................... 16

Anushya.R 3
1.0 Introduction
2.0 Project development (1999 – 2004)
2.1 Commencement of Project
2.2 Construction of Project
2.3 Completion of Project
3.0 Stakeholders
3.1 Stakeholder Map
3.2 Analysis of Stakeholder Map
4.0 Risk Assessment
4.1 Design
4.2 Construction Management
5.0 Controversial Issues : Cost and Time Overrun
5.1 Was the SPB Condemned to a Cost Overrun Since Outset?
5.2 Why was Time an Important Factor in the Completion of the SPB?
6.0 Discussion
6.1 Principle Issues in the SPB Construction
6.2 Lessons Learned
7.0 Conclusion
8.0 References

Anushya.R 4
1.0 INTRODUCTION

The Scottish Parliament Building (SPB) in Edinburgh stands as one of the

most iconic buildings in Britain today. The building which was constructed with the
Scottish land and people in mind was designed to represent the cultural and
geographical aspects of Scotland. During the inception stages of the SPB it was
decided that the building would symbolise the country’s past achievement and signal
its future aspirations (Fraser, 2004) and Enric Miralles the lead architect appointed for
the project captured these elements and infused it into the design of the building.
Drawing inspiration from Scotland’s seashores, mountain, flower paintings by
Charles Rennie and Henry Raeburn’s painting of the skating minister he developed a
design that he described as (Fraser 2004):

“The building should arise from the sloping base of Arthur’s Seat and arrive
into the city almost surging out of the rock.”

His efforts paid well as to this date the SPB has garnered 9 architectural
awards including the prestigious Stirling Prize (2005). Initially budgeted at £50
million, the project was scheduled to commence construction in June 1999 and was to
be completed in June 2001. Unfortunately, this colossal endeavour was plagued by
budget escalation issues, poor project management, poor procurement methods, and
other construction issues since the beginning. Eventually, the construction of the
project was completed in March 2004 (Scotland Parliament) and with a cost of £431
million. Members of the Scottish Parliament convened for the first time on the 7th of
September 2004 at Holyrood (Fraser, 2004).

Constructed from mix of steel, oak and granite this magnificent cultural
symbol raised a level of controversy that was sufficient enough to launch a public
inquiry which lead to the birth of the infamous Fraser Report in 2004.

This report aims to look at factors that caused the delays and the excessive
escalation of cost. It will also examine the complexity of the design of the building
and examine the risk factors involved in the completion of the project.

Anushya.R 5
2.0 PROJECT DEVELOPMENT

The objective of the Holyrood Project was to provide a home suitable for the
Scottish parliament. Conversely, this project of massive scale encountered political
problems which included the selection of an appropriate site to the house of
parliament. It is important to note that given to proposed estimate of the project, it can
be clearly seen that a poor feasibility study was done prior to the design of the
building which is clearly a recipe for a financial disaster.

Even though the completed building was built in high standards and excellent
quality, the project experienced a 20 month slippage (Auditor General, 2004) and was
almost 50% larger than when first designed. The design team was lead by Enric
Miralles until his death in July 2000 (Auditor General, 2004).

The Holyrood Project was not handed over to the Scottish Parliamentary
Corporate Body until the 1st of June 1999. The project was an extremely challenging
one in terms of design and management.

2.1 Commencement of Project

From the beginning the project it can be seen that the project lack a sense of
appreciation of plan. This can clearly be seen with the budget, the procurement
method and the selection criteria of the designer. The unrealistic budget set up for this
elaborate project was not addressed until it was too late. The selection criteria adopted
for the procurement method and the handing of the PQQ’s lacked a systematic
approach. It is believed that the project was handed over to the SPCB by the former
Scottish Office (Fraser, 2004). The conclusions arrived by Lord Fraser are as follows
(Fraser 2004):

 The Brief was not up to date (no changes were reflected since
November 1998)

 The Brief did not anticipate the requirement of the Parliament resulting
in additional building added on later increasing the cost of the project

 Insufficient funds were allocated to the project from the beginning the
reason being that:

Anushya.R 6
  Exclusion of budget for risks
 Fully to fully comprehend the complexity of the design
 Considerations we not given to blast and security.

A seemingly high profile project like this without a contingency for risk
clearly states poor foresight and decision making ability by the project team.
Moreover, the process in which the designer was chosen and subsequently appointed
was done in a highly unprofessional manner.

Also, a project of this significance requires a project sponsor of sound calibre.

Due to the demanding nature of the project, the project sponsor is required to
understand the needs of the project and be able to convey the client’s requirements
clearly and decisively to the construction manager, project manager and design team.
However it is clear that Mrs. Doig lacked these skills and to a large extent proceeded
to make poor management decisions. This is clearly seen in the method of
procurement adopted for the project.

The overall impression given during the onset of the project is that the project
scope was not clearly defined, risk assessment was not given enough thought or
consideration, the complexity of the design was underestimated and lack of reflection
was given to the requirements of the building.

2.2 Construction of the Project

It was after the commencement of the project where crucial changes and discoveries
were made. Paul D. Gardiner (2005) described it as the phase where new information
from other phases can lead to change, and a good project manager should know that
some changes are inevitable; therefore there is a need to maintain control over these
changes to the project plan. Unfortunately, that was not the case with the Holyrood
project. There were since detailed design variations and late supply of information
during the construction process until 2000 (Fraser, 2004).

2.3 Completion of the Project

The Scottish Parliamentary building was completed successfully amidst the

controversy that surrounded the project. The last tower crane left the construction site
in March 2004 and in August 2004 the Scottish Parliament met for the first time in
Holyrood (“Scotland Parliament”).

Anushya.R 7
3.0 STAKEHOLDERS

Bearing in mind that this is a public sector project, the stakeholders involved
in this project are numerous ranging from the project owner to the public. However,
separating the stakeholders and categorising them will be beneficial terms of
analysing project management issues and problems involved in the line of
communication.

3.1 Stakeholder Map

Interest of Stakeholders
Power / Influence of Stakeholders

GROUP A GROUP B
MINIMAL EFFORT KEEP INFORMED

GROUP C GROUP D
KEEP SATISFIED KEY PLAYERS

Figure 1: Stakeholder Map

Anushya.R 8
 3.2 Stakeholder Analysis

List of Stakeholders According to Group:

Table 1: Stakeholder Analysis Table
No. Group Stakeholders

 Legal Team
A
1  Public
(low interest / low power)
 NGO’s

 Suppliers
 Members of Parliament (MSP)
B
2  Media
(high interest / low power)
 City Council (Edinburgh)
 Secretary of State (Scotland)

 Insurance Company
C  Audit Advisor to the Scottish Parliament
3
(low interest / high power)  Project Financial Controller
 Private Finance Unit, Scottish Office

 Project Owner (SPCB)

 Architect Consultant (EMBT/RMJM)
 Project Sponsort (Barbara Doig)
D
4  Project Managers
(high interest / high power)
 Construction Manager (Bovis)
 Quantity Surveyor (DLE)
 Design Team (Ove Arup & Partners)

4.0 RISK ASSESSMENT

One of the major blunders recognised in the Holyrood Project was the lack of
attention to the risk factors involved in the project. The 3 prominent risk factors that will be
discussed in this report is design, procurement and construction management.

4.1 Design

The Parliament Building comprises of several buildings representing different

aspects of Scotland and spanning over an area of 31,000 sqm (312, 000 sqft) (Fraser,
2004). The entire building comprises of 9 separate building including
accommodations for the MSP’s, a media tower, garden lobby and the debating

Anushya.R 9
 chamber. There was no doubt that when Enric Miralles designed the building, he took
used poetic approach and incorporated many of the Scottish cultural and geographical
symbolisms to illustrate the connection between the Scottish land and the Scottish
people. Needless to say, his efforts paid off well and today the SPB is an important
icon of Scotland.

However, the design of the building has been identified to be one of the causes
of delay of the Holyrood Project. According to Auditor General, Robert Black’s
report, the main cause of the 20 month delay since September 2000 was the
production of detailed design variations and late supply of information during the
construction process. He also mentioned that there were difficulties associated with
the construction due to the complexity of the design and density of the development
(Auditor General, 2004).

By September 2000, the building was 50% larger than it was originally
designed to be (Max Wideman, 2010). Subsequently, this had an effect on the
construction timeline and the budget of the project. In June 1999, there was a call to
look into the design of the debating chamber again (Max Wideman, 2010). As a
result, the architects and members of the design team were required to put in
significant amount of additional time and effort into the design of the debating
chamber. In fact, to help discover an effectual solution for the project visits to
Holland and Belgium were arranged to examine the arrangements of the Flemish and
Dutch parliament buildings (Max Wideman, 2010). This single issue deterred
progression of the project as the architects and design team took three months to
resolve this single issue (Max Wideman, 2010).

It was concluded by the Auditor General (2004) in his report that one of the
main reasons construction costs ballooned and the project deadline was extended was
caused by the design development.

4.2 Procurement

Although the building was delivered successfully to the SPCB, the project was
deemed as a construction debacle because cost and time objectives were not met.
Originally the project was set to start in 1998 and finish in 2001. However the final
completion was only in 2004. This delay occurred even though time was said to be a

Anushya.R 10
 priority by the project team in the beginning (Fraser, 2004). One of the most discussed
aspects of the project was the procurement system.

The Holyrood Project employed a construction management procurement

system over other procurement systems such as Public Finance Initiative or Public
Private Partnership (PFI/PPP) (Fraser, 2004). This was questionable since the latter
method is usually adopted for public sector projects and large scaled ones. To avoid
any delays in the completion of the SPB the ministers decided that the PFI/PPP
method shall not be pursued (Fraser, 2004). Even though it was a political judgement
exercised by the Donald Dewar and project team with unrestricted constraints it was
necessarily in the best interest of the project.

Although the construction method has its advantages however, it was

disadvantageous to this project due to several reasons (Fraser, 2004):

 Greater client risk

 The complexity of administering many different trade packages
(approximately 60 in the case of Holyrood)
 The requirement for client to be informed and decisive
 The essential need for a good project team and project brief
 The relative difficulty of managing delays and disruptions in the
project
 Absence of any overall contractual programme of contract sum

In addition to that, there was no detailed consideration of procurement options

prior to the selection of the construction management method. In summary, the
procurement method adopted was not given the due consideration it needed. The
findings in the Auditor General’s (2004) report stated that construction management
is an unusual method of procuring construction projects in the public sector and it has
never been used in a major public building project in Scotland. This clearly shows the
lack of expertise in the project team especially in a crucial decision such as this.

4.3 Management

The Holyrood project did not consist of one Project Leader but rather a team
of Project Leader which lead to the classic case of ‘too many cooks spoil the broth’. Based on
literature, there are many reasons as to why a project fails. Amongst these reasons are lack of

Anushya.R 11
senior management and ministerial ownership and leadership (Cicmil, 2005). In this project
this is clearly demonstrated by the project sponsor Barbara Doig. Mrs. Doig was clearly not
equipped to handle a project of this scale as she lack the experience, expertise and assertive
qualities required for the role (Fraser, 2004). Her lack of skills was apparent when there was
no in depth research done on the method of procurement adopted for the project (Fraser,
2004).

The project manager had no single point of authoritative command which made it
difficult to assert his authority of influence to control the direction of the project. This was
one the reasons the first project manager Bill Armstrong resigned from his position. He knew
the direction the project was heading and had no authority to stop that from happening
(Fraser, 2004). Although he was an excellent project manager as demonstrated by his track
record, he was powerless in this project and was unable to perform his duties to the best of
his abilities (Fraser, 2004).

Also there was no clear direction as to where the project was heading as this caused
the delays and budget overruns (Auditor General, 2004). In this case, the client, SPCB, did
not use normal budgetary control procedures in their decision making process (Auditor
General, 2004). Also, in June 2001 when the Parliament approved a motion that was
construed as removing the budget constraint of £195 million the Project Team did not set a
cost ceiling that would allow the project to be properly managed in terms of time and cost
(Auditor General, 2004). Due to this fact, the focus turned to high deliverable quality with no
regards to cost and time implications.

Another flaw in the project management was the lack of communication with the
stakeholders. A high level of project of this scale will attract significant amount of interest by
the media, public and other important stakeholders. It is the responsibility of the client to
keep the stakeholders informed of its progression be it good news or bad news. The lack of
communication with the stakeholders shows that the project sponsor had little knowledge of
the project and the construction industry. Moreover, throughout the project, cost reporting
and financial control was managed poorly in this project (Auditor General, 2004) causing the
overall cost of the project to rise significantly.

In summary, the project did not have a clear direction from the outset and lacked
leadership. This in turn led to lack of control over the project, poor flow of communication
and incompetent management by the project team.

Anushya.R 12
5.0 CONTROVERSIAL ISSUES: COST AND TIME OVERRUNS

The two biggest factors that lead to the Holyrood Project being one of the most
discussed construction disasters are cost and time. Following this statement:

“In spite of the political and cultural imperative of the successful completion of the
SPB to the Scottish people, from a project management perspective the design, procurement
and development of the SPN was certain to be subject to immense cost and time overruns”

This statement is true to a certain extent. Given that the project is of a massive scale
there are some certainty in cost overruns due to design variations and contingencies. This in
turn may or may not lead to cost overruns depending on how well or how detailed the project
has been budgeted in the first place. Also, given that the procurement method that was
adopted was construction management there is added risk of cost and time overrun.

5.1 Was the SPB Condemned to a Cost Overrun Since Outset?

Looking at the method of procurement and the lack of decisiveness from the client
one can foresee that the project was doomed to a cost overrun from the beginning. It did not
that help that the initial programme schedule was not realistic enough to accommodate the
futuristic design of Enric Miralles. Changes in design cause a revision in cost and
construction and implicate the programme schedule as well. During the detailed design
period, £80 million was added to the construction cost (Auditor General, 2004). This is
calculated to be approximately 19% of the overall construction costs. Poor planning, decision
making and lack of foresight by the client and construction managers led to this outcome.

The programme schedule provided by Bovis should have been deemed unrealistic and
unachievable by the Project Sponsor and the Project Team. The lack of experience by the
latter caused the late delivery of the project. Lack of project management skills by the Project
Managers and Project Sponsor also lead to the rise of cost overruns.

5.2 Was Time an Important Factor in the Completion of the SPB?

From the outset the client was very clear regarding the timeline of the project; the
project needed to be completed to the highest quality within the schedule. However, the
question then arises: Was the programme schedule for the construction a realistic one? The
answer is a sound ‘no’. The initial programme schedule indicated the project was to be

Anushya.R 13
completed by June 2001. However the final completion of construction was not until March
2004.

Although Bovis complied with the client’s requirements and came up with a
programme schedule that fulfilled the client’s deadline, both parties should have realised and
come to terms that from the onset that the demanding schedule could not have been met. This
lack of knowledge clearly shows that the client or project team lacked significant experience
in the area of construction. Bovis on the other hand instead of pleasing the client should have
taken the responsibility of highlighting the unachievable completion dates and the
consequences of pursuing the initial programme schedule.

It was evident that even though time was an important factor in the construction of the
SPB, the Project Team lacked the necessary skills and experience to ensure the project was
delivered on time. The Project Sponsor and Minister involved especially lacked the necessary
leadership skills to take charge and make important decisions to ensure the well being of the
project.

6.0 DISCUSSION

The Holyrood project has been an extensive topic of construction discussion amongst
scholars. There are many aspects of the project outcome that can be discussed and debated
upon. Generally, it can be concurred that the Holyrood Project lacked teamwork, good
communication flow, proper project management and control. This naturally lead to a budget
overrun and time delays.

6.1 Lessons to be Learned

 In depth research and a detailed analysis should be done before choosing a

procurement method. Procurement methods need to be chosen based on project
requirements. In this case construction management was not a suitable method of
procurement. The Project Team should have opted for the Public Private Partnership
method instead.

 Project risks should be identified, carefully analysed and weighed. If necessary,

provision for counter measure must be allocated to avoid cost overruns and
construction delay.

Anushya.R 14
  Project briefs must be prepared in detail during the inception stages of a project. Cost
analysis and timeline must be thoroughly discussed before architects, construction
managers and design teams are appointed.

 Budget allocation must be done clearly along with a set of key performance indicators
that shall be used throughout the duration of the project.

 A clear cut hierarchy of the Project Team must be appointed along with a proper
communication line flowchart. All personnel involved in the project including
contractors, designers, architects and project managers must adhere to the flowchart.

 For large scale public sector projects such as the Holyrood Project, appointment of
key personnel in the Project Team such as Project Sponsor and Project Manager
should be exercised with much deliberation and care. In the case of the Holyrood
Project, lack of experience and expertise amongst the key personnel involved in the
project proved to be one of the downfalls of the project.

 Both client and construction manager should be realistic about the programme
schedule before the commencement of the project. In this respect, the experience of
the Project Sponsor and Construction Manager is crucial to the final outcome of the
project

7.0 CONCLUSION

Today, nine years after its construction, the Scottish Parliament Building stands as
one of the most iconic buildings of Britain. However, this iconic building also stands as one
of constructions’ greatest lessons. Public sectors projects should be handled with extra
attention and thoroughness owing to the fact that high profile projects are bound to be under
media and public scrutiny. Having said that, if the Project Team had exercised due
meticulousness throughout the project, the failure to deliver the project on time and on budget
would not have been so severe.

Anushya.R 15
9.0 REFERENCES

Primary Reference:
Lord Fraser, Sept 2004, The Holyrood Inquiry, Scotland: Scottish Parliamentary Corporate Body.
Scotland Parliament, Milestone dates in the building of the Scottish Parliament (n.d.). Retrieved Sept 25, 2013
from: http://www.scottish.parliament.uk/visitandlearn/16333.aspx
Max Wideman, 2010, Risks in Political Projects: The New Scottish Parliament Building. Retrieved
from:http://www.maxwideman.com/papers/political_projects/political_projects.pdf

Andersen E.S, Grude K.V, Haug T, Goal directed project management: effective techniques and strategies
Kogan Page 3rd edition (2004)

Gardiner P.D, Project Management: A strategic planning approach Palgrave Macmillian (2005)

Cicmil S.K , Critical Factors of effective project management the TQM magazine Volume 9 Number 6
1997,390-396

Kerzner H. Project Management, a systems approach to planning scheduling and controlling (John Wiley and
sons Inc) (2006) page 66

Leech D.J, Turner B.,Project Management for profit, Ellis Horwood publishing (1990)

Lockyer K.and Gordon J, Project management and project Network Techniques

(6th Edition Pitman Publishing), (1996) Page 3

Lock D, Project Management Gower publishing limited, Pg 6, 12-14

Maylor H, Project Management (Pitman Publishing ) (1996) Page 25

Nickson D Siddons S, Project management disasters: And how to survive them, Kogan Page Limited, (2006)
Page 25-74

Anushya.R 16