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A large-scale “multi-purpose arena” was planned in Oslo for concerts, sports events etc (it is now the Oslo Spektrum). The winner of the architectural design contest put the cost of the project at £ 28 million. Three years later Oslo City Council had found financing options for the £ 28 million. Meanwhile, several sports and other stakeholders had signed up to the project and further adjustments were made to the already technologically complicated project in order to meet their needs.
Before the definitive decision on instigation of the project, a budget quality analysis using the Successive Principle showed that costs had now risen from the £ 28 up to £ 68 million; alongside this the principle identified the definitive optimisation prospects. The council and project group resolved to accept the project provided that it could be rationalised to under £ 48 million. The project was streamlined to an expected cost of £ 42 million (+/- approx. £ 5 million). The £ 42 million was allocated as the working budget with £ 6 million as contingency reserves.
The centre was built using the Successive Principle as the budget tracking tool and was, moreover, completed ahead of the due date. The official construction accounts kept to the working budget, albeit by the narrowest of margins, so the contingency fund remained intact.
Ref.: www.byggai.se/mats/cm2/SuccessivePrinciple.ppt (look for page 11 and following pages in the Dias show)
About Dr. Steen Lichtenberg