There is no magic solution to delivering major capital projects “successfully,” but there are common sense recognized guidelines based on proven management principles.
These principles can ensure the decision to proceed with a major capital project is made on a sound business basis, and that the major capital project itself has more than a reasonable chance of being delivered on time and within budget and of satisfying the organization’s functional requirements.
At the highest, most abstract level, there are in reality only two “best practices” for carrying out a major capital project:
- Selecting the right project for development; and
- managing that project from conception through to implementation in a sound business-like manner.
The question of whether the right project has been selected is one that should not be lightly overlooked. Indeed, the selection of the right project is a critical concern because few municipal capital facilities are able to operate on a self-sustaining basis.
It is essential to incorporate into the major capital project approval process some form of rigorous reality checking system. However, relatively few municipalities seem to have any formalized set of standards that would provide even the most general guide as to the kind of capital improvements that should be undertaken.
Such standards are necessary if the intent is to link major capital procurement to a coherent and consistent strategic plan. The District of Columbia in the United States has done so, but as with many guides of this kind, the language used tends to offer only limited direction:
- To build facilities that support the district stakeholders’ objectives.
- To support the physical development objectives incorporated in approved plans, especially the comprehensive plan.
- To assure the availability of public improvements. To provide site opportunities to accommodate and attract private development consistent with approved development objectives.
- To improve financial planning by comparing needs with resources, estimating future bond issues plus debt service and other current revenue needs, thus identifying future operating budget and tax implications.
- To establish priorities among projects so that limited resources are used to the best advantage.
- To identify, as accurately as possible, the impacts of public facility decisions on future operating budgets in terms of energy use, maintenance costs and staffing requirements among others.
- To provide a concise, central source of information on all planned rehabilitation of public facilities for citizens, agencies and other stakeholders in the district.
- To provide a basis for effective public participation in decisions related to public facilities and other physical improvements.
Still, it is better to have something than nothing. Capital planning requires choosing between wastewater treatment, the management of stormwater and the sourcing and supply of clean drinking water.
An overall capital plan should give clear indication as to where priorities lie among three similar yet distinct types of initiatives. No municipality can afford to build everything. One of the critical responsibilities of an elected council is to decide where priorities lie.
Confirmation of the net benefit that will result from a major capital project is critical at a time of tight municipal budgeting.
However, a further reason for a proper balance of cost and benefit, demonstrating a reasonable likelihood that perceived gains will result, is also necessary in view of the extent to which political concerns influence decision-making at municipal and other levels of government.
Ever sensitive to the shifting focus of public concerns, many politicians have lately begun trying to put forward a wide range of initiatives that are supposedly supportive of sustainable development.
The result is often controversial – not only as to whether environmental concerns are being balanced against other equal public concerns, but even whether the proper environmental calculation has been made.
Complaints by business and developers in relation to ill-considered decision-making in the interests of protecting the environment are perhaps to be expected.
