Portfolio assurance of a £12bn investment programme at Transport for London
- OverviewRead more
In April 2005 Transport for London (TfL) embarked on a mammoth £12 billion Investment Programme (IP) for the capital's transport system over the forward five-years, including enablement for 2012 Olympic transportation. The organisation recognised that delivery of the IP would require new structures and processes at senior levels to ensure that the TfL Commissioner and the TfL Board had adequate visibility of progress and assurance over risk mitigation. Working directly to the TfL Commissioner, we led a joint working team that included cross business representation to design the Oversight Group function and cultivate a “challenge and support” culture. Our support proved crucial to pilot a programme which procured technical assurance for critical projects from independent engineering firms, and ultimately to handover to the newly recruited permanent Oversight team. Our involvement ensured benefits of the Oversight function were achieved through avoided costs of circa £90m at net present value.
- Our client's challengeRead more
Transport for London (TfL) is the integrated body responsible for the capital's transport system. As of April 2005, TfL embarked on a huge
Investment Programme (IP) equating to a c. £12 billion investment (£3.5 billion enabling 2012 Olympic transportation), over the forward five-years. The organisation recognised that delivery of the IP would require new structures and processes at senior level to ensure the chief executive and the TfL Board had adequate visibility.
A key component of the new organisation was the need for an Oversight Group to provide the TfL Commissioner with independent assurance as to the progress of the IP and the mitigation of identified risks.
- Our responseRead more
Working collectively with the TfL Commissioner, we led a joint working team that included cross business representation. After a period of analysis and benchmarking, the team designed new structures and processes to provide the necessary assurance. The resultant Oversight function, along with the cultivated “challenge and support” culture, provides the Commissioner and the TfL Board with assurance as to IP progress (independent of the line management structures).A key element of the TfL Oversight's assurance capability is the Independent Engineer construct, which involves:
- Designing the structures and processes for running the Independent Engineer programme and piloted early Independent Engineer reviews
- Procured independent engineering firms to provide the additional technical assurance on critical projects and programmes, ensuring that the selected firms adopted a thorough PPM-based approach
- Augmented new framework and programme of reviews and handed over to the newly recruited permanent Oversight team
- The value to our clientRead more
The benefits of the independent assurance provided by the Oversight function is estimated conservatively as a net present value of c. £90m in avoided costs (improved programme delivery, retention of TfL's credit rating etc). This was recently attested to when the second year £200m bond (early 2006) was issued at 12 basis points below the first issue – a reflection of the market's confidence in TfL and its management structures.
Direct 'second opinion' benefits of the reviews are also expected - in one early review alone, these were estimated at c. £2-3m worth of 'value engineering' savings.
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