The Metro Line Auditor's Report

The Metro line fiasco has turned into an ominously dark cloud over our otherwise bright and hopeful city.

The City Auditor’s report, if you haven’t read it yet, details terrible management of a major project that is supposed to be a major piece of our LRT future.

One thing that’s important to keep in mind when looking at this report is the role Thales, the signalling contractor, has to play in all this. There is plenty of blame to go around in terms of the City’s role in this project, but Thales has missed major milestones throughout this project. They’ve contributed to this project delay in a big way, and there are many issues to be resolved with them as we seek to bring the line to completion. I say this not to detract from the City’s role - we’ve got a lot of work to do.

A lot has been said about why things played out the way they did, about who is responsible, and what the City should do to fix the problems and make sure the same mistakes are never repeated. The Auditor’s report provides three critical recommendations. When coupled with improvements already made since our new Transportation General Manager came aboard in 2013, I think the dark cloud can begin to dissipate.

Council’s Benchmarks

But I don’t think this cloud will ever be completely gone unless three things occur. These are things the City Manager, under City Council’s clear direction must fiercely seek to accomplish:

1.) The opening of the Metro line to the full service we expected when we signed the contracts as soon as possible.

2.) The complete implementation of the Auditor’s recommendations and new practices of transparent reporting for all partners,  from Project Managers, to Project Owners, to General Managers, to the City Manager, and to Council on all major infrastructure projects (i.e LRT, Bridges, Arenas, Recreation Centres, etc).

3.) Meaningful accountability for those staff who were here when these misjudgments related to lack of communication were made. The onus must be on the City Manager to convince Council that those staff add more value to Edmonton’s future than they have subtracted from it by being responsible in whatever way they were for this mess. If he can’t convince us of that, then the people responsible who are still with the city today, shouldn’t be tomorrow.

The Auditor’s Report

As for the Auditor’s report, it identified a number of ‘lessons learned’ that will be critical for the Transportation department to apply to upcoming projects and the remainder of the work on the Metro Line project. Quoted from the City Auditor’s report on the Metro Line, the lessons are as follows:

• Project management roles and responsibilities need to be clearly defined and understood.

• Realistic project completion dates need to be established and if necessary revised in a timely manner.

• Senior Management should be provided with formal written status reports that identify major issues.

• Council should be notified on a timely basis of any event or issue that has the potential to generate negative publicity.

• Contract management practices need to be reviewed to ensure the City receives best value.

Conclusions and Recommendations

The Auditor’s report also identified a number of conclusions and recommendations for the City to consider:

Conclusions:

1.) The report found that procurement practices for the Communications Based Train Control (CBTC) system designed to control the signals for the train contract complied with the City’s procurement directive and associated procedures.

2.) Project management practices for the Metro Line project were not effective in 3 of the 13 project management knowledge areas. 

3.) Time/Schedule – Neither the CBTC contractor nor the civil construction contractor met the originally-scheduled full-service opening date of April 2014. As of the date of the Auditor’s report, a commissioning letter stating that the CBTC system is ready for first stage of revenue service on the Metro Line has not been received.

4.) Human Resource – Overall Metro Line project roles and responsibilities were not clearly defined and understood by the entire Metro Line project team resulting in ineffective leadership.

5.) Communications – Failure to define roles and responsibilities also resulted in poor communication within the Metro Line project team and to senior management and Council

6.) Based on the review, there are opportunities to improve due diligence for contract management.

Recommendations:

1.) The report recommends that the General Manager of Transportation Services ensure that for all major projects consistent principles and methodologies of adhere to quality assurance principles for contract management, meaning that every contract we sign should be well thought out and airtight in terms of expectations and repercussions. Action Taken: Transportation is completing a gap analysis of all capital projects by December 2015, and expect to have completed filling any gaps by next year.

2.) The report recommends that the General Manager of Transportation Services ensure that project roles, responsibilities, lines of communication, management of working relationships, and decision authority levels are clearly defined, assigned, and communicated for all major projects. Action Taken: The Transportation department has committed to enhancing project rigor, to include communications in their risk management plan, and to ensure that all projects will be evaluated by risk principles.

3.) The auditor’s report recommends that the General Manager of Transportation Services in conjunction with Financial Services and Utilities’ and the Corporate Centre for Project Management staff develop a standard reporting methodology, so that there is never any question about how should be reporting what and when. Action Taken: Transportation has committed to completing a scan of best practices for project reporting, and will continue to work with Financial Services and Utilities and the Corporate Centre for Project Management on developing the methodology.

I'm hopeful the day comes that we can move on from this debacle. Administration has accepted responsibility and is committing to implementation of all of the Auditor’s recommendations. 70% of the relevant leadership in the Transportation Department has turned over since the darkest days of this colossal mismanagement. Some left of their own accord, some retired, and yes, some made unwilling exits.

When asked at Audit Committee today, the General Manager of Transportation assured us that he has full confidence that the individuals currently on his team are fully on board with the changes to the department, and that they will be able to avoid these pitfalls in the future, particularly when it comes to the Valley Line.

Additional Steps

In addition to improvements to be made as result of the lessons learned, in early 2013, the City put in place the:

All of these changes should help prevent the problems that the City has encountered with the Metro line project delivery.

Additionally, Council, earlier this year, approved an Enterprise Risk Management Framework which allows us to understand a range of organizational risks associated with policy changes. In the case of the Metro Line, the Risk Management Framework  would have involved an investigation of the policy that led to the track placement, which compelled the project managers to pursue a complex signalling system, and the splitting of the contracts for the signalling system, which as I mentioned in one of my previous blogs, was one of the principal faults in the projects.

Earning Back Some Trust

It will take time to get the trust of the public back when it comes to our ability to manage these large projects. But earning back your trust will be based on our actions and performance from this day forward. I believe the actions we have taken are very important steps in ensuring that our staff on future projects do not make the same mistakes and that Council has the ability to see the investments we make with your tax dollars deliver the projects the city asked for.

If there is a silver lining in this stormy Metro Line cloud, it’s that the processes and procedures for the Transportation department have undergone a serious overhaul, one that by all accounts was sorely needed. Only time will tell if these changes are enough to restore the public’s confidence in the City’s ability to manage large capital projects. But for certain we as a council must pay very close attention to ensuring the recommendations from the Auditor are taken very seriously and implemented expeditiously.