disastrous dilligence!!8 Sep 2018 13:25
I can understand why everyone is so annoyed about this latest announcement of projected cost increases , after all i'm guessing everyone thought of SXX as one of the steadier shares in thier portfolio? I know i foolishly thought so, looking back i don't know how i fell into that trap! Getting basic planning items like tunnel sizes wrong ( don't know how that happened could be machinery sizes weren't properly examined etc) is just **** poor planning. But in addition...
Look at the scope of work they are embarking on ..... Mine preparation and its tunnelling and dewatering requirements , Also the long interconnect export tunnel . Port facilities to construct and equip , possibly dredging to go with that.
All these items in anybodies scope are high risk tasks which cost can only be guessed at or derived by consultants input, geotechnical .... These guys can be right on the button with soil types, but often they are not.
The ramifications of encountering unexpected soils when tunnelling - or dredging for port construction can send cost spiralling, due to the machinery delays/advance rates being slowed dramatically. we see this in subsea remote vehicle trenching all the time, Lump summing work like that on the back of a geo tech report is risky to say the least.
In this instance its happening on a land construction project, where cost estimates and cost planning are narrowed down and supposed to be far more de risked.
I'd say its far from that and will keep myself focused that this is still a high risk exercise until main infrastructure is well advanced. If we keep that in mind there won't be so much gnashing and disappointment when they hit the next hurdle that they haven't envisaged for, which i think there will be few!!
I am always a realist and cynic, but having written hundreds of daily reports on why progress through unexpected soils is slower than envisaged , i just see it coming!
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