Proper management key for Ottawa, experts say
Deft management with the right people at helm said to be needed for success
As the Trudeau government prepares to take over the controversial $7.4-billion Trans Mountain pipeline expansion, project management experts say it is critical that government oversight is handled properly.
But the takeover of the project does not necessarily mean the public should be alarmed, according to those experts.
A recent poll by Research Co. suggests a jittery public — threequarters of those surveyed — is uncomfortable that the federal government is using taxpayer money to purchase the pipeline.
David Barrett, an Ontario-based project management consultant and author, said that new ownership, regardless of whether it is public or private, does not have to effect the work that takes place at the project level.
And fundamentally, it does not change the project — they are still building a pipeline from A to Z, said Barrett, who is national program director at the Schulich Executive Education Centre at York University in Toronto.
“We are good at managing projects. We are good at understanding there are massive changes throughout,” said Barrett.
“Your job is to continue on, to embrace those changes, to communicate well, to keep everyone involved. This is a new day and this is how it is going to work.”
The federal government announced last week that it was purchasing the Trans Mountain pipeline and related assets for $4.5 billion from Kinder Morgan Canada. Construction is to resume immediately, with Ottawa footing the bill for summer construction, backed by loan guarantees.
Opponents — including environmentalists and some First Nations and community groups — have vowed to redouble their protests.
Kinder Morgan was back in court last week in an attempt to strengthen an injunction to stop protesters from interfering with work.
Kimberly Speers, an assistant professor of public administration at University of Victoria, said it is critical for the government to have solid oversight and management of the project, including the right people at the helm, as well as good communication and clearly spelled out responsibilities and contractual obligations.
However, Speers noted that project management in the public sector has vastly improved in recent decades and it is possible for the federal government to do a good job.
There may also be positives from Ottawa taking over the project, including that the government may be more focused and sensitive than a private company to take into consideration the views of stakeholders, including of First Nations, said Speers, who teaches courses on public sector management.
The federal government may also put more focus on transparency and the environment, said Speers, who was formerly a consultant for firms such as KPMG and PricewaterhouseCoopers.
Considering the political and legal challenges, the Trudeau government is taking a big risk and that means they certainly have an incentive to deliver a project on time and on budget, said Speers.
“It’s just really having a good project framework and ensuring there’s ongoing monitoring, that there’s a solid foundation,” she said.
The project had been held up by Kinder Morgan after the company said it needed certainty so it could construct the pipeline through B.C. in the face of opposition from Premier John Horgan’s NDP government.
Ultimately, Kinder Morgan decided not to continue construction, citing concern about putting any more capital at risk.
Kinder Morgan CEO Steve Kean said the company had already spent more than $1 billion on the pipeline expansion.
It’s expected the transaction will be finalized by the fall, at which time Ottawa will transfer ownership to a federal Crown corporation. The deal also has a contribution from Alberta in the form of an emergency fund with a ceiling at $2 billion, according to federal government information.
The idea is to eventually find another buyer, but industry analysts have said that will be difficult until all of the regulatory and legal hurdles are cleared.
The federal Liberal government under Prime Minister Justin Trudeau has outlined that any new buyer will be indemnified from politically motivated delays. Horgan’s government has a reference case before the courts seeking to determine B.C.’s ability to restrict bitumen transport that could take a year or more to resolve. Some First Nations have legal challenges on consultation at the Federal Court of Appeal.
It is also not immediately clear what construction will take place this summer or whether it will ramp up substantially.
In response to questions from Postmedia, the National Energy Board said that work can go ahead at the Westridge Marine Terminal, which will undergo an expansion, as well as work at the nearby tunnel portal site and at staging areas, including for pipe storage.
However, no other sections of the project have met conditions to proceed, said the NEB.
Also in response to questions from Postmedia, Trans Mountain said it had no new details on construction and would not be releasing an updated schedule.
It’s just really having a good project framework and ensuring there’s ongoing monitoring, that there’s a solid foundation.