Construction mega-projects, such as the High-Speed Two (HS2) railway, often face the challenge of staying within budget. HS2's Chair and interim Chief Executive, Sir Jon Thompson, recently gave insight into some of the key reasons behind the project's budget overruns.
In case you missed it, here are each of the given reasons for the budgeting problems for HS2 and how email management can prevent each one from happening in the Architecture, Engineering, and Construction (AEC) industries.
1. Poor cost estimates
Projects like HS2 often start with optimistic cost estimates that may not align with the practical challenges encountered during construction, leading to budget discrepancies.
Email management supports accurate record-keeping of initial estimates and subsequent adjustments. This transparency aids in refining cost estimations for future projects based on real-world experiences.
2. Evolution of project scope
Changes in project scope during the construction phase can significantly impact budgets. Design alterations or additional requirements may not have been adequately accounted for initially. Thompson stated that "between 2010 and 2019 when the current budget was set, the scope of HS2 was changed significantly by a whole series of ministers,” and that "much more of it was put through tunnels which costs a lot more than putting it through cuttings, for example, so there have been a whole series of scope changes.”
Thorough email management can help here in maintaining accurate documentation and tracking of project scope changes. A clear audit trail assists in managing modifications efficiently, ensuring that budget adjustments are well-documented and justified.
3. Poor delivery by HS2
HS2 Ltd openly admits to falling short of its delivery promises, particularly in the execution of main works civil contracts. Despite an invitation for further inquiries on the matter, time constraints limited the discussion. Last year, significant changes were made to the responsibilities of two key joint ventures overseeing the central section's main works, with no indication of wrongdoing by either contractor.
To prevent project overruns, efficient communication is crucial. Ideagen Mail Manager offers a proactive solution by centralizing project-related emails and documents. This ensures streamlined communication, robust document management, and clear audit trails, aligning with effective project management principles. It enhances accountability, reduces miscommunication risks, and provides a comprehensive collaborative space for project teams
4. Inflation
Inflation has surged construction costs by 27% in the past three years, driven by increased steel, concrete, and rebar prices. HS2's £57 billion estimate for phase one completion, based on 2019 prices, is expected to rise by £8-£10 billion in 2023/24.
In the face of cost fluctuations, investing in an email management solution can be a surprisingly useful asset to create transparent budget accountability. As inflation impacts project costs, mitigating financial challenges is something good email management can facilitate, reducing stress on the team and projects themselves.
5. Uncertain ground conditions
HS2's chair identifies unforeseen ground conditions as a significant factor contributing to cost escalations. Unearthed issues, such as challenging soil compositions, can disrupt project timelines and increase expenses.
Efficient communication facilitated by email management allows real-time collaboration and sharing of geotechnical reports. Teams can promptly address ground condition uncertainties, reducing the likelihood of surprise expenses.
6. Planning delays
Lengthy and intricate procurement processes can contribute to project delays and increased costs, especially in projects with numerous suppliers. In addition to this, they often involve numerous stakeholders, each with their own interests and demands. Balancing these complexities can lead to delays and additional costs.
Having a centralized communication system ensures that stakeholders are kept informed and engaged. Transparent and traceable email trails help manage expectations, minimizing potential disputes and delays. It can also help to streamline procurement communication; by keeping all relevant documentation in one accessible location, you will have a smoother procurement process, reducing the risk of unnecessary delays and associated costs.
How Ideagen Mail Manager can prevent budgeting issues
HS2's budgetary challenges don’t need to be something to fear; Ideagen Mail Manager can help businesses navigate through not just these issues, but other common problems experienced in the AEC industry. Whether mitigating the impact of inflation or streamlining procurement communication, Ideagen Mail Manager can improve your project timelines and team productivity.
Request a demo now to empower your projects with seamless collaboration, efficient document management and proactive budget control.
