Owners sometimes decide to proceed on a series of successive industrial capital expenditure projects that form a full and consistent programme but get approved progressively. This can reflect particular financing constraints or a general approach to allow more flexibility and adaptation to the market circumstances. When individual projects get approved, the consistency with the overall programme must also be checked and maintained. In our new White Paper 2022-07 ‘How to Manage Long Term Industrial Capex Programmes That Get Approved Piecemeal’, we investigate practices needed to ensure sufficient control is maintained by the owner.
In certain circumstances, capital investment programmes can be split and approved piecemeal. This is actually quite a common practice in certain cases. Examples include upgrades to a number of existing facilities along a full industrial value chain (such as for mining and chemical value chains that may involve several sites across the world), or a number of upgrades within a single industrial compound. This can also apply to greenfield projects, for example, development of a mine first without a processing plant, and later or separate development of the processing facilities, or the progressive development of an oil field through successive Capex projects. This will also apply if the financing schemes of the various projects in the programme are different.
Proceeding with such an approach will allow progressive investment and possible adaptation of individual projects scopes to the current condition of the economy and other external factors that may warrant flexibility and adaptation.
Irrespective of the successive approval of several projects within an overall programme, it is still essential to maintain a view on the overall consistency of the scopes including standardisation and interfaces between projects. Therefore, a sufficient minimum programme management oversight must still be implemented.
Read our new White Paper 2022-07 ‘How to Manage Long Term Industrial Capex Programmes That Get Approved Piecemeal’ for more insights about the risks and good practices for capital programmes that get approved progressively.
When individual projects within a programme get approved piecemeal over time, it is still essential to preserve the overall value and strategic intent to maintain a programme vision. This only requires a limited effort and team, however, the voice of the programme must be formalized and heard as part of all those projects’ governance and key decision gates to make sure the organisation actually reaps the expected benefits of the full programme.
If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2022-07_Managing_Long_Term_Programmes_v1.pdf
