Factors Complicating Sochi Construction Plan

Dmitry Artemiev
Head of Construction Project Management Group
Ernst & Young

Organizing an Olympic event is always a complex exercise, but Russia has added some factors that make the process for Sochi 2014 even more challenging. These include (1) seeking green certification for major venues, (2) using a Public-Private Partnership (PPP) approach for financing and management, and (3) setting very short deadlines.

Although the decision by the government to seek green certification for the leading 10 venues and facilities is an honorable endeavor, it creates formidable difficulties. The Breeam green building certification system, one of the leading systems globally, has been selected as best suited to these venues and facilities, and project teams are currently working to incorporate the requirements for certification in the project designs under the guidance and supervision of Olympstroi. While successful green certification may be one of the most remarkable achievements of Sochi 2014, the requirements are strict, and the process adds significant complexity to the design and construction of the venues and facilities.

The realization of PPP projects requires complex coordination between Russian organizations, financial institutions, Olympic organizations, construction and management companies, foreign investors and credit organizations. During the preparation and realization of such projects, numerous changes are possible, including changes in the legal, financial and business structure, in addition to the inevitable physical construction adjustments.

The already short and challenging deadlines for the venues and supporting facilities are exacerbated by the additional requirements involved in meeting green certification goals and realizing successful PPP joint projects. The urgency will affect the strategic approach to the procurement of Olympic construction. Traditional design-bid-build contracts are likely to be replaced by fast-track design-build contracts, possibly along with other creative project-delivery approaches in order to speed up the construction process. For example, in a similar effort for the Salt Lake City Winter Olympic Games of 2002, the well-known I-15 highway bisecting the Salt Lake Valley, one of the major infrastructure projects for the games, was given Special Experimental Project status in order to circumvent restrictions that prevented federal funds from being used for design-build projects. This allowed the $1.6 billion reconstruction project to be completed on time before the games.

To successfully deal with these challenges, the planning and control of Olympic program management will have to be adjusted and upgraded. The systems for collecting and processing data must feed the Management Board and project managers with concise, accurate and easy-to-understand status reports enabling them to make informed decisions to ensure that cost, time, resources and quality are managed efficiently. The application of modern principles of organization to Olympic program management and the preparation of quality management reporting will be absolutely necessary for providing management leadership in construction and will be essential for program success. Experts agree that, in evaluating massive construction programs, it is the quality of management reporting that is the best indicator of whether things are properly controlled.

Specialized information systems and hubs, which can incorporate various instruments for program reporting, are available along with standard systems, which provide users with necessary project details from lower information levels.

Turning to London’s experience with Olympic construction, there are “C-level” milestones that need to be reported to the International Olympic Committee. Those involve major pieces of the entire project. Then there are “internal” high-level milestones that are reported up to the U.K. government. These are broken down into sub-programs, projects and work streams, which lay out what individual workers will be doing on any given day.

Russia faces the complex and dynamic environment of Olympic construction as well as new additional requirements of green construction and PPP projects, all of which can lead to confusion, a lack of accountability and discipline, and delays in completing projects. The Sochi Olympic construction program must take into consideration all of these new challenges as well as pioneering and creative solutions that will have a positive impact.