Major Projects Victoria’s (MPV) reports to the Victorian Minister for Major Projects and is located within the Department of Business and Innovation. It’s stated role (according to the MPV web site) is to “provide expert project delivery services and advice to Victorian Government departments and other agencies engaged in the delivery of complex, technically challenging, and invariably unique projects of state significance.”
In his Oct 2012 report to the Victorian Parliament, the Victorian Auditor General – Des Pearson – concludes that:
MPV is not able to demonstrate that it operates, and manages infrastructure projects effectively, efficiently or economically.
Key findings in the report include the following:
- Poor oversight by DBI and the lack of effective internal controls have contributed to poor governance standards and a lack of organisational integrity and accountability
- MPV’s governance and operational shortcomings are pervasive and should be addressed as a priority.
- MPV has reported to Parliament that it has achieved 100 per cent performance over a 14-year period. This raises questions about whether Parliament and the community have been reliably informed, and highlights fundamental shortcomings of MPV’s and DBI’s governance.
- MPV is not complying with relevant legislation.
- There are also major deficiencies with the way MPV manages internal contracts, with missing contracts, and variations without adequate reason or assessment of performance.
- MPV adopts employment practices that do not represent value-for-money and lack transparency and integrity.
- While MPV has established a generally sound project management framework, there remain gaps that have not been addressed for four years.
- MPV sees itself as a leader in project management across the Victorian public sector. However, it does not have any process to systematically and routinely learn from projects and, therefore, continually improve.
- Its poor oversight mechanisms mean that it cannot demonstrate a sound understanding of how it is performing across all of its projects.
Of special interest is the report’s findings in the areas of Project Management and Reporting Performance:
- MPV does not have effective project oversight mechanisms in place that enable it to quality assure project management practices and learn from projects. It also cannot demonstrate that it has a sound understanding of the status of its projects.
- On average, the main construction contract for projects are over the expected cost by around 18 per cent and over the planned end date by around 37 per cent. This differs significantly from MPV’s reported 100 per cent performance in delivering projects against ‘agreed plans’.
- MPV’s project data is unreliable.
- Performance indicators developed by MPV and the Department of Business and Innovation are neither relevant nor appropriate, and are incapable of fairly representing actual performance. MPV does not properly assess its performance against its indicators.
- The veracity of reported performance data and the information that the Department of Business and Innovation has provided to Parliament is not assured.
As the Victorian Government estimates the total value of current projects at around $35.6 billion, with expenditure of around $7.6 billion in 2013–14 alone, it is disappointing and concerning to learn that Victorians do not receive the value-for-money from their public funded investments. Moreover, the lack of credible performance indicators (the likes of which are outlined in any basic project management text-book) is puzzling.