Challenges facing the delivery of mega projects in Transnet capital projects.

Abstract

This study was undertaken to critically identify and analyse the challenges facing mega-project delivery at Transnet Capital Projects (TCP), a project execution wing of Transnet State-Owned Enterprise (SOE). Transnet is the custodian and operator of eight commercial ports, 20 500 kilometres of railway and 3800 kilometres of pipeline network in South Africa. The Department of Public Enterprises regards Transnet as an integral SOE upon which the country is heavily dependent on for economic growth, job creation and socio-economic transformation. In fulfilling its mandate, Transnet continually reviews its strategies to increase operational efficiencies, produce infrastructure ahead of demand, and reduce the costs of doing business. As a specialist project wing, TCP has delivered several mega-projects for the port, rail and pipelines divisions of Transnet, however evidence indicates that almost 55% of railway projects fail and that the New Multi-Product Pipeline (NMPP) project cost has almost doubled from its original estimate of R11.1 billion to R23.4 Billion. Currently TCP is executing several mega-infrastructure projects arising from Transnet’s R300 Billion Market Demand Strategy (MDS). Future mega-projects are anticipated to follow from Transnet’s 30-year long-term framework plan (LTFP). This study uses PMI’s (2013) ‘10 Knowledge Areas of Project Management’ as a model to critically identify and analyse the challenges facing the delivery of mega-projects in TCP. A simple convenience sample and quantitative data collected from 191 respondents in TCP project management teams provided an extensive data set for analysis. Statistical Package for Social Scientist (SPSS) was applied to analyse 122 constructs and through principal component analysis determine the main contributing challenges. Inferential statistical calculations were processed to determine correlation of 21 hypotheses. The findings indicate that while TCP has world-class project lifecycle processes and selected tools, there are challenges in upfront planning of mega-projects, inefficient scope and cost control, contract management challenges, inadequate personnel experience and skill, an overwhelmingly large number of stakeholders to manage and weak risk management. This study contributes new data on mega-project challenges, recommends new mega-project management practices, processes, and strategies to address these challenges. A new model to refocus mega-project execution for successful outcomes is presented. Transnet, project practitioners, researchers, stakeholders; public and private sector; and the African continent will benefit from the learnings of mega-project delivery at TCP.