The Devilish Details an Analysis of Problem Projects and their Contributing Challenges

Abstract

This paper, an update to the 2003 paper titled “Knowledge, Technology and Profit” (Twigge-Molecey, 2003) analyzes 45 “problem projects” from the mining and metals industry over the last eleven years representing $133 billion in CAPEX. The projects have been designated as “problem projects” as they did not meet their owner’s initial expectations for project performance as defined in the paper. This paper explores some of the challenges that were present, through interviews with the knowledgeable individuals that were familiar with the projects and investigations using publically available information. The aim of the exercise was to identify the key challenges faced by the projects, and the contributing factors that led to the project failures so that the lessons can be applied to future projects.

The project challenges have been categorized into four themes, technical, organizational, environmental & social and missing “homework” prior to board approval. Of noteworthy interest is that environmental permitting aspects have risen to become a significant and notable contributor to problem projects in 11 years from 2003 to 2014. It is further observed that many projects have been challenged by increasing size and complexity and with execution in more remote locations since the previous paper.

It is a reality that every project will face challenges. Some projects are simply more challenging than others, and success or failure of the project is often determined by whether the project team is fully prepared to respond to the challenges. This in turn is largely dependent on whether the project “homework” was adequately completed and considered for all aspects of the project.