Question 5 [20] Read the case study below in detail and then answer the questions. Discuss the following in detail and give examples from the case study, about the importance of estimating project costs. 5.1 The effect of underestimating initial cost. 5.2 How a clear scope and WBS can affect the time, cost, and quality of a project. 5.3 The effect when scope creep is not managed. 5.4 The effect of external factors on the project cost and time. (You will need to do some additional research to answer this question. Remember to reference all sources used) The Sydney Opera House Construction: A Case of Project Management Failure The Sydney Opera House is an iconic structure, recognised as a symbol of Australia around the world. The architect, Jm Utzon, won the architecture competition in 1957. Construction commenced in 1959. The construction period was originally scheduled for four years with an PROUECT MANAGEMENT V allocated budget of AUS $7 million. The project took 14 years to completed at a cost of AUS\$102 milion. The Sydney Opera House could probably be one of the most disastrous construction projects in history, not only from the financial point of view but also for the whole management plan. Initially, at the beginning of any project, goals and objectives have to be clearly defined by the client to provide a guideline for what the project must complete. There are three main factors: time, cost, and quality. In the case of the Sydney Opera House, the last one was the most important, as it was an almost unrestricted goal of the project and the reason why it was launched. No indications of time or cost limits were provided for the design competition. Thus, the architects were allowed total freedom in their designs. After Utzon was selected, he presented his "Red Book" in March 1958, which consisted of the Sydney National Opera House report. It comprised some indications such as plans, sections, reports by consultants, etc. The funds came aimost entirely from a dedicated lottery, so the project would not be a financial burden for the government. The goal was to complete the construction at the end of 1962 and have the grand opening at the start of 1963. The project should have lasted four years. The main stakeholder was the architect, but Utzon was much more concerned with the design aspect rather than time and costs objectives, which proved challenging. During the project, Utzon joined forces with Ove Arup, who oversaw the structure and the engineering. With some other subcontractors, the team oversaw mechanics, electrics, heating and ventilating. lighting and acoustics. There was no real project manager, but rather collaboration between Utzon and Arup. The other main stakeholder was the client, the state of New South Wales. This included the Australian government, who launched the competition for the project, and the Labour Premier, Joe Cahill. A part-time executive committee was created to provide project supervision; these members had no real technical skills. The government eventualy became an obstacle to the project team by inhibiting changes during the progress of the operations and thus contributed to cost overrun and delays. Finally, the public was an indirect stakeholder because they were concerned with the project's success. There appeared to be problems from the start of the project, which was divided into three stages: Stage 1 was the podium, Stage 2 was the outer shells, and Stage 3 was the interiors and windows. Utzon remonstrated that he had not completed the designs for the structure. The government maintained that the construction must be started. In addition, the client changed the requirements of the design after the construction was started. moving from two theatres to four. Hence, plans and designs had to be modified during construction. The initial project's budget estimate was based on unfinished design drawings and site surveys which later led to disagreements. The contractors for the first stage successfully claimed additional costs of AUSS1,2 milion in 1962 owing to design changes. When Stage 1 was completed in 1963, it had cost an estimated AUS55.2 million and it was already 47 weeks over schedule for the whole project. Stage 2 was the most contentious stage of the entire construction. As costs increased, a new government stepped in and monitored all payments being requested by the Opera House. By the end of Stage 1. Utzon submitted an updated estimate of the project's total cost as AUS\$12,5 milion. As more payments were being delivered and no visible progress was seen, the govemment began withholding payments to Utzon. Stage 2 slowed down and in 1966, Uizon felt he had to resign from the project as his creative freedom was being restricted and he therefore could not bring his perfect idea to completion. The project was then taken over by three Australian engineers, and Stage 2 was completed in 1967 at a total cost of AUSS13,2 milion. When Utzon walked out of the project, he did not leave any designs or sketches to work with as he was convinced that he would be called back to the project once the new team failed. This was not so, and given the lack of designs to work with, new ones had to be created based on the current structure of the Opera House. In the process, many unexpected problems were discovered. Obviously, this resulted in a huge increase in the estimate of the total cost of the project, which ended up as AUS\$85 million. Queen Elizabeth II inaugurated the Sydney Opera House in 1973. This was 17 years later, after redesigns, underestimates and cost overruns. By 1975, the building had paid for itself, thanks to the lottery system that was created to assist its funding. Utzon was never to return to Australia, never to see the result of his work, which was recognised as an incredible achievement of architecture. In 2003 the architect was honoured with the Pritzker Prize for architecture, the most renowned architectural prize in the world. Source: https://www.eoi.es/blogs/cristinagarcia-ochoa/2012/01/14/the-sidney-opera-houseconstruction-a-case-of-project-management-failure/