How to boost the chances of delivering a project on time and on budget
From start to finish, any connections project to higher voltage networks involves a complex set of actions and elements. Getting anything wrong could bring quality, cost and timing issues – or worse, halt the project in its tracks.
Our New Connections Construction Consultant, David Burbidge, who has a huge amount of experience delivering connections projects both as a supplier and as a client, explains why getting it wrong can be costly, and introduces a series of articles that will cover in more detail the actions and elements to get right.
Prepare well – or pay the price
Any good connections project will have had a connection application submitted for the most appropriate scheme for the site, and the connection offer will have been through due diligence. This will determine if the connection is going to be technically and financially feasible.
Once the connection and budget for the build is deemed cost-effective, there needs to be scrutiny of the next steps. It’s crucial to get the beginning right. There is a high risk of time and cost overruns, and/or quality issues if sufficient time hasn’t been allocated at the start of the project by a suitably experienced person.
For example, choosing the wrong supplier, equipment or materials has huge potential to hurt a project financially – not only during, but also after the works have completed. If there are latent defects/quality issues that come to light post-completion, then the developer is potentially looking at direct and consequential losses.
Direct losses will result from having to retrospectively put the work right, and when generation is involved, there will be associated consequential losses.
For example, if it comes to light two or three years after completion that jointing work on a new 132KV circuit for a new solar farm is substandard and is causing faults on the circuit, it could potentially stop all generation. Depending on the size of the generator, this could be £100,000+ per day in lost generation alone while the quality issues are put right.
Most construction contracts only provide warranties for around a 24-month period, and in general no competent supplier will accept consequential losses in a contract as any losses could far exceed the value of the initial contract.
If the developer doesn’t choose the right supplier to start with, they will have problems all the way through, and the time and money they will have to put in to keep the project on track will increase exponentially.
Whilst there will be some suppliers that claim they can do high and extra-high voltage work, that knowledge is in short supply in the UK. The competency level increases and becomes more critical as voltages increase. It’s not just a quality issue – safety is absolutely paramount. And so, the supplier selection process must include validating suppliers who have access to competent people to carry out the works required.
Compare apples with apples
It’s very important that prior to going out to tender, the developer gets clarity on exactly what they need in terms of equipment specification and performance etc.
They must make sure they are measuring each supplier on the same basis and on the same assumptions. The tighter the prescription, the easier it is to compare suppliers and contracts.
For example, a developer would have got budgetary costs for a sub-station and often the DNO will quote for the work. But they could potentially get it at a lower price if they go through an ICP. In such cases, the developer needs to be clear on what they are asking for and what the supplier is proposing to give them. They could specify ‘a substation that will supply this X load’ – or they could go out to market with a detailed specification of component parts e.g. switch gear, transformers, layout, earthing requirements fencing and building specification etc.
However, even with the tightest of specifications, there will always be variations in the returns, but the more preparation put in at the beginning, the more consistency and less surprises there will be as the project progresses.
If there isn’t clarity between developer and supplier on what exactly is being delivered at the beginning, this could lead to delays arguing points, and additional costs as the project progresses. With any large-scale project it is fair to say that some assumptions will be wrong. Variations will occur, but getting as much clarity as possible, as early as possible, helps everyone. No-one (developer or supplier) wants a surprise.
But, it is important that the contract between the developer and supplier is fair and balanced. If the balance of risk tips more on the supplier, then they will price their work higher.
There also needs to be agreed processes in place for monitoring progress and approving variations once work starts.
Getting the specification, supplier and contract right first makes the process run more smoothly. There will be fewer problems if the preparation is done right at the beginning – putting things right retrospectively will always costs more money.
We will look at these aspects in more detail in further articles – and introduce other important elements to consider when delivering a connections project.