UK Infrastructure costs

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macliam
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Re: UK Infrastructure costs

Post by macliam » Fri Feb 14, 2020 12:57 pm

pabenny wrote:
Thu Feb 13, 2020 12:04 pm
I suspect the problem lies in the budget setting rather than the management of spend. I also don't think the UK is notably worse than other countries.

Cost estimates are managed down to be politically acceptable rather than being reliable projections. So the budget-setters take the most favourable assumptions where ever possible, omit elements of known spend, by making no contingencies for unforeseen/unforeseeable complications, or even just not allowing for cost inflation.

It's fairly straightforward to estimate the cost of building a house because it's been done lots of times before. But we've built only a couple of completely new rail lines in most people's lifetimes and so there is limited experience to go dawn on.

And you've got political interference - the line must avoid that habitat rather than go through it. Ker-ching, the cost goes up by £500m. Delayed by a year while there's a review. Ker-Ching. Another £1bn for inflation.
Whilst I accept some of your points, the issue here is not inflation, nor is it "unknowns" - the Elizabeth tower increase is put down to "the discovery of bomb damage and asbestos" and I would suggest that not anticipating the presence of a "go-to" material for construction and repairs in the past, or bomb damage in a building that was bombed, is just shoddy preparation. Once you have overlooked significant factors, any plans are worthless - and it is very costly to amend them whilst the project is underway.

Imagine a builder increasing the cost of a house because he found stones in the ground or he'd not included the cost of digging foundations.....
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pabenny
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Re: UK Infrastructure costs

Post by pabenny » Fri Feb 14, 2020 2:29 pm

Agree completely that it is foolish to assume away predictable but uncertain things - like asbestos in the Elizabeth Tower. But I also believe that this is largely for political reasons rather than out of ineptness.
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macliam
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Re: UK Infrastructure costs

Post by macliam » Fri Feb 14, 2020 4:13 pm

This is not a "no fault" situation and there are remedies for this - the specification must be clear and inclusive and bidders should be subject to penalties if they are found to have omitted costs to reduce the initial offering without these exclusions being declared. If one bidder has omitted items that unsuccessful bidders have included, the customer must understand why this has been done and accept the consequences. That way, either the person accepting the bid or the bidder is at fault.....
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pabenny
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Re: UK Infrastructure costs

Post by pabenny » Fri Feb 14, 2020 5:26 pm

Perhaps the specifiers provide assumptions? Or instruct bidders to break down their bid in such a way that the headline price made public can omit certain items.
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planteria
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Re: UK Infrastructure costs

Post by planteria » Sat Feb 15, 2020 8:33 am

pabenny wrote:
Fri Feb 14, 2020 10:36 am
As the linked article says, that bonus is the result of growth in the share price of Ocado over 5 years. It looks like he has increased the value of the company by more than £6 billion - and Mr Steiner has received a bonus of about 1% of that.
that's right. Ocado is one of the companies that we considered closely, but didn't invest in. we've done well regardless, but i'd have been happy to be on board. and if i was, fwiw i wouldn't be moaning about Steiner's bonus.

https://www.hl.co.uk/shares/shares-sear ... rdinary-2p
you can play around with the timeframes here, and it looks good regardless.
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Re: UK Infrastructure costs

Post by AAAlphaThunder » Wed Feb 19, 2020 9:34 am

planteria wrote:
Sat Feb 15, 2020 8:33 am
pabenny wrote:
Fri Feb 14, 2020 10:36 am
As the linked article says, that bonus is the result of growth in the share price of Ocado over 5 years. It looks like he has increased the value of the company by more than £6 billion - and Mr Steiner has received a bonus of about 1% of that.
that's right. Ocado is one of the companies that we considered closely, but didn't invest in. we've done well regardless, but i'd have been happy to be on board. and if i was, fwiw i wouldn't be moaning about Steiner's bonus.

https://www.hl.co.uk/shares/shares-sear ... rdinary-2p
you can play around with the timeframes here, and it looks good regardless.
Ocado have done very well for themselves.
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