OPG’s Darlington Refurbishment: A Model for Effective, Independent Oversight
Category: Industry News
On April 1, I’ll be sharing the stage with Carla Carmichael of Ontario Power Generation (OPG) and Milton Caplan of MZ Consulting to talk about OPG’s Darlington refurbishment project at the 5th annual Managing Risk in Construction Contracts & Projects conference in Toronto.
The Darlington refurbishment is one of the two largest industrial projects in Canada, along with the similar Bruce Power Major Component Replacement Project. The first phase of the Darlington project is poised to finish this year and meet OPG’s public commitments for cost and schedule.
As we noted in a paper we published last year, even capital projects that are ultimately considered successful are far too often plagued by cost overruns in the billions and years-long schedule delays. So, what’s different about OPG’s approach to the Darlington refurbishment project?
The success thus far is thanks in no small part to OPG’s commitments to transparency, investment in upfront planning and applying lessons the company had learned from previous projects to establish well-developed cost and scheduling estimates.
During execution, OPG has followed its plan and where the inevitable “known unknowns” materialized, OPG and its prime contractors have been able to follow its processes and mitigate those risks within its budget.
OPG’s oversight model deployed expertise – including from Modus – that helped keep key stakeholders informed, provided independent perspectives on managing risks, and helped the project stay on track to meet its critical goals.
A report from the Office of the Auditor General of Ontario credited the utility for its vigilance on this project, noting that a “clear accountability structure is in place.”
“Project timelines and costs are being managed, monitored and publicly reported on a regular basis and corrective actions are being taken when issues arise,” the report said.
Much about these findings reflects the importance of independent oversight on a project that is projected to cost more than $12 billion. An effective oversight team can test and verify the accuracy of information produced throughout the project, provide appropriate context for that information, and provide an accountability structure that helps identify and mitigate problems in a timely manner.
At the conference in April, we’ll share more about how OPG structured its oversight activities to provide unfettered information to its stakeholders and enabled prudent decision-making.