A third-party review of the TTC’s capital program has found that two thirds of the major infrastructure projects it has undertaken in recent years have gone over budget.
The KPMG review, which will be tabled at a meeting of the TTC’s board today, looked at nine capital projects launched over the last 15 years and found that six of them exceeded their initial budgets to the tune of a combined $2.9 billion.
Of the cost overruns, the report found that $1.6 billion of them occurred after the project began while $1.3 billion occurred while the project was still in the conception stages.
The most common driver of cost overruns was changes in the scopes of the projects, the review found. As well, KPMG found that many projects had “immature scope definition at the time the budget was allocated.”
“In several cases elements have been added, such as increased utility work or a greater emphasis on architecture, well into the project lifecycle,” the report said. “In general, these kinds of issues stem from a lack of definition of the complete scope at the estimation and budget stage, inadequate allocation for the further development of scope, and the commercial implications of scope changes later in the project.”
The KPMG review looked at a number of costly infrastructure projects that are either nearing completion or have already been completed.
Included in the list of projects that was examined was the Toronto York Spadina Subway Extension, for which the budget went from $1.5 billion to $3.2 billion, and the Leslie Barns streetcar storage yard, which was about $162 million over budget and opened two years later than it was scheduled to.
Overall, the KPMG review found that the TTC is operating at a “low standardized level of maturity” when it comes to capital project delivery with minimal “corporate level standardization of project management processes and tools.” KPMG’s benchmark for public sector organizations is a “high-standardized level of maturity.”
In order to improve its management of complex projects, KPMG has made 41 recommendations to the TTC. The recommendations mostly pertain to the TTC’s processes and procedures.
Some of the more notable recommendations include a call for a more “formalized and detailed risk assessment” strategy and a “management reserve to address post-approval scope changes in project budgets.”
Speaking with CP24 about the report on Wednesday, Mayor John Tory said it is further proof that major changes are needed in the way that the city and the TTC approaches major public transit projects.
“This can’t continue. We can’t have people’s money treated in a way where the budget goes from X to 1.5 X in a matter of weeks or months,” he said. “It involves proper estimation, it involves a greater role for the private sector in actually doing these projects and it involves much greater discipline on the part of the people in charge of these projects either at the TTC or city hall.”
