PMO

1. Company Confidential – Not For External Distribution
“Managing and delivering the world’s largest and most complex megaprojects through an effective and integrated program management strategy in KSA”
Amer Khan, Country Manager CH2MHILL
Faisaliah Hotel, Riyadh, 15 September 2014
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2. Contains Confidential and Sensitive Data – Copy or Distribution Prohibited
CH2M OLAYAN
CH2MHILL
■Global leader in full-service program management engineering, procurement, construction, and operations for public and private clients
■Headquartered in Denver, Colorado
■Offices in 40+ countries
■26,000 employees
■$7 billion in revenue
■Employee owned
Note: Engineering News Record (ENR) is a McGraw-Hill publication focused on the global engineering and construction industry. Rankings referenced in this brief relate to ENR's independent assessment of CH2M HILL's market position. More details on the basis of rankings and ENR in general can be found at www.enr.com.

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CH2M OLAYAN
CH2M HILL – International Megaproject Experience
Airports
High Speed Rail and Metro
Roads and Bridges
O’Hare International Airport Modernization Program Chicago, IL ROLE – PM US$6.6 billion
Mumbai International Airport Expansion and Renovation Program Mumbai, India ROLE – PM US$2 billion
Haramain High Speed Railway
Kingdom of Saudi Arabia
ROLE – within the PM Consortium US$1.8 billion (phase 1)
High Speed Rail 2 United Kingdom
ROLE – PM US$50 bn
London’s Crossrail High Speed Rail Program
London UK
ROLE – PM US$22 billion
Golden Ears Bridge Vancouver , Canada
ROLE – CM US$800 million

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CH2M OLAYAN
CH2MHILL – International Megaproject Experience
Ports and Waterways
Water and Wastewater
Mega Sports Facilities
Busan Newport Container Terminal
Busan, Korea ROLE – CM US$900 million
Panama Canal Expansion Program
Panama
ROLE – PgM US$5 billion
Abu Dhabi Sewerage Company Strategic Tunnel Enhancement Program
Abu Dhabi, UAE
ROLE – PgM US$1.5 billion
London Tideway CSO Program London, England ROLE – PgM US$4.4 billion
London 2012 Olympics
ROLE – PgM US$11Bn
Qatar 2022 World Cup
ROLE – PgM US$200Bn

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CH2M OLAYAN
CH2MHILL – KSA Megaproject Experience
KAUST & Thuwal
Riyadh PTP
KSA 11 Stadiums
Client - Saudi Aramco
Program Management Services:
•University building, classrooms and laboratories
•Residential units
•Research Park development
•Infrastructure and community facilities in town of Thuwal
•Infrastructure and community facility for National Guard housing
World’s Largest Public Transport Infrastructure Program
Client – Arriyadh Development Authority
The Metro Program
•3 Design and Build contracts total $23bn
•2 Project and Construction management Consultancy contracts – total $820m
The Bus Program
Traffic Management
Traffic Signal Design
Client – Saudi Aramco
Program Management Services
11 new state-of-the-art stadiums in Madinah, Eastern Province, Northern Border Province, Hail, Tabuk, Al-Jouf, Baha, Najran, Jazan, Asir and Qassim.

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CH2M OLAYAN
What is Program Management?
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CH2M OLAYAN
Program Management
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The coordination of resources to plan and deliver related projects to obtain benefits that would not be attainable if managed separately
•Managing interdependencies among projects
•Combining and dealing with escalated issues among the projects
•Tracking the contribution of each individual project to the overall program benefits
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8. CH2M HILL Confidential and Proprietary—Disclosure Prohibited 8
Programs optimize resources to deliver benefits not attainable
using a project-by-project delivery model
Projects
• Coordinate activities for single-purpose
outcome
• Project risk and change management
• Individual management of functions
• Manage project-specific opportunities
and activities
Programs
• Multiple integrated projects delivered
together
• Portfolio or program-wide risk and
change management
• Coordinated management among
functions
• Manage opportunities and activities
among projects to achieve overall
program goals

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CH2M OLAYAN
Tools for Program Management
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CH2M OLAYAN
CH2MHILL Program Management Framework
•We have developed a method of executing programs which is embodied in the CH2M HILL Program Management Framework.
•This is a suite of tools and processes that provide the basic framework for successful delivery of programs.
•Adaption to KSA requirements underway

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CH2M OLAYAN
CH2MHILL Framework provides a common system to describe program activities
Program Management Framework
Delivery Phases
Pursuit Phases
Development
Phase
Initiation Phase
1
Closeout
Phase
Execution
Phase
Assurance Functions
Management Functions
Planning
Phase
2
3
4
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CH2M OLAYAN
CH2MHILL Framework Components
Component Description Benefits
Initiation Guide
Program Platform
Program
Portal
Maturity Model
Get started right
Understanding and continuity of work expectations
Transparent and meaningful reporting
Staying focused
Our Guide that includes differentiating concepts with detailed checklists, outlines, tools, agendas, and guidelines, to assist us all in the timely and efficient startup of a high functioning team.
Our Platform contains our standards, processes, guidance and tools, accessible to all participants, that establishes operating protocols that will be used throughout program execution.
The Portal is our proprietary web-based information portal for visualizing and accessing critical program data.
This assessment tool is used to evaluate our program leadership team’s progress, periodically evaluating the developmental status and operational effectiveness.

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CH2M OLAYAN
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The Standard Platform can be Easily Customized for any Megaproject

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CH2M OLAYAN
An effective and integrated program management strategy for KSA

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CH2M OLAYAN
Recap from September 2013 Megaprojects Conference The Bare Facts
•In KSA, there are at least 80 mega projects with a value of $1bn or more
•Their combined value is $365bn to the year 2030
•This represents 75% of the total value of Middle East projects

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Recap from September 2013 Mega Projects Conference 6 Key Action Areas with 20 Recommendations
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1.Quantification of the megaproject market to 2030
2.Upgrading the methodologies used in procuring megaprojects
3.Improvement of the megaproject delivery process in Saudi Arabia
4.Adoption of world-class sustainability principles in operations and maintenance
5.Expansion of partnerships in megaproject
6.Redefinition of public policy to take into account the demands of megaprojects

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CH2M OLAYAN
1.Quantification the Saudi Arabian Megaprojects Market Recommendations
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1.Include the delivery of megaprojects as a strategic topic for the 10th five- year development plan (2015-19)
2.Establish a Saudi megaproject Management Information center
3.Consider an alternative approach to managing the flow of investment into megaprojects that will provide a higher degree of stability
4.Establish a building materials information center
5.Introduce measures that will help reduce the potential for unpredictable and unsustainable building material price increases
6.Quantify the volume and quality of labor required to deliver megaprojects.
7.Improve the management of foreign labor working in construction sector
8.Increase the number of Saudis working in the projects sector
•Visas, quotas, nitaqat
•Training, shortage of engineers
•Labour mobility

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CH2M OLAYAN
2.Procurement models for Saudi Arabian megaprojects Recommendations
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9.Identify optimal procurement models and documentation; to capture relevant information about both and to facilitate the dissemination in the megaprojects supply chain.
10.Carry out a review of existing public procurement models to establish best practice for all government procurement departments
•Role of Ministry of Finance, executing Ministry / Authority
11.Identify centers of excellence in megaproject procurement where the transfer of knowledge to Saudi Arabian future megaprojects can be implemented

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CH2M OLAYAN
3.Megaproject delivery in Saudi Arabia Recommendations
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12.Prepare a comprehensive study of the supply chain from planning to project completion and how it needs to change to meet the megaproject challenge
•Favourable trading nations,
•tarrifs, duties,
•Sponsorship system
•Culture of delivery/close out as well initiation

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CH2M OLAYAN
4.Megaproject sustainability and operations and maintenance - Recommendations
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13.Investigate viability of early design and engineering into future megaprojects. Promote value engineering across projects and teach in university courses
14.Mandate full-life economic studies for future megaprojects and accessible to relevant stakeholders. Provide incentives to encourage project delivery and operations and maintenance companies to invest in labour-saving technologies.
15.Regulate high standards of energy and water efficiency and ‘green building’ for all future megaprojects. Establish construction waste gathering, sorting and disposal centers close to megaprojects. Local stakeholders to be encouraged to engage with sustainability and environment initiatives developed in association with megaprojects.

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CH2M OLAYAN
5.Partnerships in Saudi Arabian megaprojects Recommendations
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16.Conduct a review of the existing rules and laws to adapt them to the special needs of megaprojects. This should encompass dispute resolution systems.
•Contract forms – FIDIC
•Arbitration
•Client/Service provider relationship
•Accountability v Authority
•Client capacity building
17.Conduct a review of the foreign investment regulations which are implemented by SAGIA and the Ministry of Commerce & Industry to encourage FDI in projects sector

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CH2M OLAYAN
6.Policy and Saudi Arabian megaprojects Recommendations
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18.Consider devising a comprehensive strategy for the megaprojects sector to 2030 and invite all stakeholders to contribute to its preparation. Incorporate as an important component of the 10th five- year development plan for 2015-19.
19.The Government should consider appointing a senior official to be responsible for devising the Saudi Arabian megaprojects strategy to 2030.
•high level committee
20.The Government should consider hosting an annual Saudi Arabian Megaproject Management Forum in Saudi Arabia to be attended by representatives of relevant local, regional and international stakeholders

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CH2M OLAYAN
The Critical Importance of the Owner’s Role

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CH2M OLAYAN
1.The Owner owns and maintains the vision.
2.Defines the requirements and objectives in order to achieve the vision.
3.Is the overall design authority
4.Provides the land.
5.Provides the funding, approves and makes payments.
6.Facilitates the engagement with key stakeholders.
7.Ensures that Program-level risks are managed.
8.The Owner is the procurement authority – it awards and manages the contracts.
9.Is responsible for managing the definition of the institutional arrangements.
10.Provides assurance to the Higher Authorities
11.Is the de-facto Program Manager.
12.Provides Program leadership
The critical importance of the Owner‘s Role
17-Sep-14
Slide 24

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CH2M OLAYAN
Program Management Role
17-Sep-14
Slide 25
1.Strategic planning
2.Development of the Program structure, organisation and governance
3.Development of an Integrated Program Master Schedule
4.Progress monitoring, reporting and governance
5.HSE leadership
6.Program integration

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CH2M OLAYAN
Recommendations for the Owner

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1. It will save time and money if you have a fully developed strategic approach from the outset with defined needs
–What do you really need? E.g. a public transport system
–Auditable programme level budgets and forecasts
–Advisors / Consultants
•Commercial
•Technical
•Financial
•Legal
–Your Governance Strategy
–Any existing departmental governance will not be designed nor fit for purpose to manage and deliver a Mega program
–So what will work?
•It will be drawn from best practice
•It will be unique to you and your program

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CH2M OLAYAN
2. You may (will) need programmatic exceptions from Saudi procurement regulations at some point
•KSA government tenders and procurement law never envisaged mega program procurement. This is quite consistent with other countries experience
•The onus is on the Program leadership team to understand and lobby for exceptions required
•This need to be done proactively so that the Owner is controlling negotiations with bidders rather than responding
•International bidders will test the Owner. They will be concerned and will obtain independent legal advice

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CH2M OLAYAN
3. You cannot resource the Owner’s role on a part time basis
•The programme is a multi billion dollar business and with it comes a risk profile that can cause serious direct and collateral damage
•Effective delegation of decision making responsibility and capability is essential for both you and your integrated team
•You are storing up future problems if you attempt to delegate to team members who have other jobs
•Remember > Time has a schedule cost and this equates to more money for contractors if you are not responsive

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CH2M OLAYAN
4. Consider and stress test your consultant strategy in advance in order to be proactive
•Define what you need for entire programme life cycle
•Be strategic in allocating mandates
•One consultant cannot deliver everything the programme needs
•Worldwide it is a limited pool of consultants who can deliver
–They will get conflicted out early if you are not careful
•Much better to have Consultants help design a programme with you than to have them rescue it

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5. Be realistic and prudent when making risk transfer decisions
•Unlike smaller design build projects you will not be able to transfer all risks to contractors
•Trying to do so will result in:
–Higher contingency pricing, making value for money unachievable
–Protracted negotiations in procurement and delays to the process
–Impacts on our wider contracting strategy and disconnects in the overall risk profile
–A lack of international contractor interest

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6. There will be an international overlay and it will impact on the parameters of your decision making process
•Corporately
•Through the supply chain
•Materials
•Other
–Often sits uncomfortably with requirement to be governed by Saudi law

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CH2M OLAYAN
Some Conclusions
1.Mega transport and infrastructure project delivery is already underway
2.Government and industry need to act on recommendations now
3.No problem is unmanageable and/ or unsolvable
4.Decision making has a real cost consequence and this only ramps up as the procurement and program goes live
5.Program governance is critical
6.Assign priorities and action owners
7.Continuously monitor and evaluate
8.Instill delivery culture (complete, not just start)
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34. Company Confidential – Not For External Distribution
Thank you
Amer Khan, Country Manager CH2MHILL
amer.khan@ch2m.com
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