Paul Giannelia describes himself, simply, as an infrastructure builder. While this is true, it’s also an understatement.
Since co-founding the SCI Group of Companies over 30 years ago, Giannelia has spent his career overseeing some of the largest and most complex projects ever built on Canadian soil—or water, for that matter. As a project leader or director, he has lent his skills to the Oldman River Dam, the Cambie Street Bridge replacement in Vancouver for Expo 86 and the Calgary Olympic Oval, among others. Further afield, he has worked on major projects like the mountain highway system of Oahu, Hawaii.
But his most famed accomplishment is the $1.3-billion Confederation Bridge linking Prince Edward Island and New Brunswick. In 2000, the project was chosen by Canadian engineers as one of the country’s top-five feats of engineering of the 20th century, and the bridge, completed in 1997, still earns accolades for its design and execution achievements.
More recently, Giannelia has been focused on the challenges of building pipeline infrastructure in Canada. From 2011 to 2014, he served as the director of project execution for Enbridge’s Northern Gateway Pipeline to the west coast. After public opposition stalled that project, Giannelia began advising TransCanada on the execution of its Energy East Pipeline.
Pipelines are not the only segment of the oilpatch facing tough hurdles. The price of a barrel of oil remains below $50, and the forecast for the near future is gloomy. Any energy megaproject in Alberta that braves this unforgiving environment will need to be designed and built with affordability at the top of mind. The days of hiding cost overruns behind $100/bbl oil are done.
In a conversation with Alberta Construction Magazine assistant editor Joseph Caouette, Giannelia offered some of his insights into what it takes to complete a megaproject on time and on budget.
ACM: Where do megaprojects go wrong? What sends them off the rails?
Giannelia: As an industry, we need to get a lot better at doing our initial cost estimates. We sometimes get it very, very wrong from the get-go. We think it’s going to be X billions of dollars, and we make our business decisions on those economics. Then when we start detailed engineering and construction we find out major components are two times or more over budget. We quite often forget that the initial budget wasn’t anywhere close to reality.
The second part where they go wrong is in our execution. We’ve developed project management systems that are geared to measuring the performance of a project and its management team, rather than enhancing the performance of the management team. We’re recording how many hours we worked on a specific item every day and every week, and then we total it all up at the end of the month. It costs what it costs. The cost-collecting, process-driven system does little, if anything, to help us reduce the cost of construction.
ACM: Many of these problems aren’t new. Why has industry been so slow to change?
Giannelia: When you ask how a project went 50 per cent over budget, the common answer is that the productivity just wasn't anywhere close to what we expected. There's a belief that when a welder that's been working most of his career in Edmonton or Calgary gets on a Fort McMurray megaproject, he consciously cuts his number of inches welded per hour in half. It just doesn't happen that way.
But his performance up there is still half of the productivity he has in Edmonton. And why is that? Nine out of 10 times on the large projects it's because he and his support equipment are waiting to get to the work area. They haven't built the scaffold for him yet. Or they don't have the drawings to tell him where to place the weld. Or they don't have the pipe installed yet that he has to weld. That all goes back to poor management/supervision of project execution.
ACM: So these problems are occuring on a higher level. It's not the ground troops. It's the generals.
Giannelia: It is not at all the ground troops. It is the poor performance of the project management team. The frontline supervisor is a foreman, and his job is to get the tradesman everything he needs to do his job. A good foreman does that basically intuitively during the course of the day because he's been trained to do that. He's the guy that's the most competent of all three or four levels of authority before you get to the senior project director. He knows his stuff and he's good at it. But the further you get up from him, the less competency there is.
When people ask how in the heck did we let this happen, the answer is that we have not spent anywhere close to the amount of time necessary to train our project and construction managers. There is no degree or formal apprenticeship in project management or supervision. We don’t have a disciplined three- or four-year school program teaching you how to do that well. We need to ask what kinds of training people have in the field of managing the execution of a project. The construction trades guy gets an apprenticeship of three to four years for all the little things you need to do to become a welder, but there’s no apprenticeship program for our project managers. We need to invest a heck of a lot more in training on the basic ABCs of project execution.
ACM: How do you make up for that lack of experience? A megaproject is not necessarily something you want someone cutting his or her teeth on.
Giannelia: A megaproject has no room for rookies. So what we did when SCI was developing its own projects like the Confederation Bridge in Atlantic Canada was train them from greenhorns to become superstars. We started with a lot of them coming right out of school and showed them how to execute a job like it was their own money they were spending. You drilled that into their heads, and it didn’t take a long time before the results were positive. We did things on the money and on schedule.
We always had a rule that you were never allowed to have a rookie reporting to a rookie. Our definition of a rookie is someone who’s in a position on your project that has never been in that position on any other project in his career. In other words, if we hire someone who’s been a manager for a department of a project, like building the access road to a plant, we would not make him area manager of all the roadworks in the entire plant if his boss was also a rookie doing his job. You couldn’t have both of them because a rookie and a rookie are going to get you into trouble. It’s not that anyone is trying to maliciously undermine anything. It’s just that without disciplined training, they don’t know what they don’t know.
ACM: Are you seeing improvements in Alberta? Is industry finally starting to tackle its problems with executing megaprojects?
Giannelia: I think that industry has been trying to tackle the problem more since 2008, when the last downturn came. That was a bit of a wake-up call. Industry is investing a lot of money at getting better. Are they making the improvements fast enough? I don’t think so. Out of necessity today, it’s got to be done a heck of a lot faster, because the projects are just dying on the vine. Megaprojects are getting shelved because they’re not affordable. So no matter how good we’ve been or how hard we’ve been working at getting better, it hasn’t been good enough, fast enough. It’s that simple.