Project Management Governance system at CLP Power's generation business group
The first event of APMHK in 2015 was held at Royal Hong Kong Yacht Club, Kellett Island, Causeway Bay on 20th January. The interesting event entitled “Project Management Governance System at CLP Power’s generation business group” was presented by Mr. Jim Pippin, Director – Operation and Construction at CLP Holding Limited. It was well attended by over 50 members and guests.
CLP Power Hong Kong Limited (formerly known as China Light & Power Company Limited) is an electricity generation, transmission, and distribution company in Hong Kong. The company was founded in 1901. Jim is responsible for support and oversight of the development and execution of projects across CLP’s regions including China, India, Australia and southeast Asia as well as the functional management of CLP’s Project Management Governance System (“System”). He is well placed to share his experience of adopting this formal System to review and manage project development and execution.
In a 5-year cycle, there are about 1,500 to 2,000 projects in CLP, of which 822 are ongoing and 2014 projects. At any one time, each project manager handles 5 to 10 ongoing projects. Since 2012, the System has been developed to ensure sustainable, effective and efficient delivery of the capital projects. At the presentation, Jim considered the role of project management and governance in the formulation and implementation of the business strategy.
To enable the System to develop and strengthen its project management capabilities, projects are categorised and set up with various defined decision points and review points throughout the project life cycle. Jim stated three essential phases of “Decision”, “Execution” and “Delivery” for each project. He then applied a number of Decision Points (DPs) and Review Points (RPs) to each phase.
In the Decision phase, the essential DPs are listing, budgeting, and funding and award. A project cannot go forward without going through these DPs and supported by the necessary submission documents. These include the Project Request, Project Proforma to justify the project, and the Project Execution Plan to define the scope of works and to put in cost and risk assessments. In the Execution phase, RPs is set up for design freeze, construction and start-up. CLP needs firm budget and is determined to ensure site safety and good control methods for significant projects, in particular. CLP values contractors’ lives. At this phase, a Safety Implementation Plan is submitted. In the Delivery phase, the DRs are operation, technical close and financial close. CLP puts more formality on the substantial completion of projects and the post implementation review. After the Technical Close there will be sharing of the lessons learned, which can be treated as a format for communication and training tool.
Jim further introduced four classes of Health Check, a self-recording process – warning, attention, healthy and closed, broken down by project categories. The warning signifies that there is a problem. Fortunately, only 1% of the 800 projects are with problems against 85% problem fee in CLP. For each category of projects, there are committees and standing members to ensure project governance. The requirement for governance increases as the project complexity increases, and as CLP is increasingly undertaking projects of growing complexity.
Jim emphasised that the System was a journey, just a beginning, but not a new concept. CLP needs a new system to ensure projects are delivered through a sound system of internal control to create value and safeguard the investment of the shareholders. And the governance is the mechanism for ensuring those internal controls. CLP is unique. It provides project management as a viable career path for prospective project managers. Unfortunately, the main problem is the clear lack of young project managers. The huge challenge is the heavy workload and the difficulty to find the right level and right number of project managers and engineers from locally or overseas into projects.