No one to blame for Grand’s cost overrun, report finds
by Ian Elliot
Monday, June 05, 2006 - 07:00
Local News - There is no way to recover the money the city has spent on the Grand Theatre renovations, a consultant’s report going to city council has concluded.
KPMG was hired by the city to find out why the Grand Theatre’s original $6.5-million renovation budget swelled to an expected cost of $14.5 million.
Officials have blamed the spiralling costs on the discovery of unexpected decay in the theatre’s structure and tenders for reconstruction that were higher than anticipated.
The only way the city could cut its costs would be to shut the project down, and that was an option neither the city nor the consultants seriously considered.
“At this stage of the project, there appears to be little room to effect significant cost reductions without a fundamental change in the project objective, such as abandoning the redevelopment,” the report finds.
The report urges the city to change how it budgets, plans and oversees major projects in the future.
The Grand renovation was “unique” because it involved renovations to a historic building, the report concludes. The report, which will go to council as an information matter tomorrow, lays no blame for the spiralling costs.
“The cost overruns are generally attributed to factors beyond the control of the project management,” it concludes. “ However, it appears unlikely that the project could have been managed to its original budget.”
With the city on the verge of beginning one of the largest construction projects a downtown arena it has ever undertaken, the consultants issued a series of recommendations calling for more oversight of costs and better communication between departments to identify and control costs before they become unmanageable.
The consultants called for a more rigorous due diligence process while a project is being planned. This is so the project, and its associated costs, would be better understood and estimated.
It says city staff should ensure a plan is in place if the project is delayed or problems arise.
It also says major projects need to be staggered so they don’t compete with each other and split available money and staff attention.
And the report calls for the city to improve communication between departments and from middle-level managers to commissioners by forming a project management committee.
It would review and
approve any changes to the project, as well as issuing regular update.
ID- 59888