€50 million write-off of failed Irish Rail IT project

[patfert1]

Irish Rail wanted to end contract last year for delayed IT project company

TDs to hear from State-owned rail company about €50m write-down on system to manage movement of trains

www.irishtimes.com

Irish Rail chief executive Mary Considine is expected to tell the committee on Wednesday that six years after a contract was signed and two years after the original date for its commissioning, Indra “still does not have a developed product that is fit for deployment on the network”.

‘National scandal’: Committee seeks urgent meetings on €50m write-off of Irish Rail IT project

‘€50 million has now been written off by Irish Rail on this project and there just simply has to be accountability.’

www.thejournal.ie

Under the initial proposals, the system was targeted to be commissioned in 2024, with a target cost of €19.5 million.
As of the most recent update provided to the Public Accounts Committee, over €31.5 million had been spent on the IT system, with not even the first phase completed.

I've been reading articles about this for a while.
In a career in IT I've observed or been involved in projects that went off the rails (sorry for the pun) but to hear Irish Rail already paid so much for a system in which the first phase hasn't even been delivered is shocking. This suggests really poor contract management and poor vendor control. The vendor here is the Spanish Indra group with whom I am not familiar.

I'm curious if anyone on this forum has any deeper insight into what happened here.

 

[patfert1]

Another article

Botched Irish rail project could see bill rise to €255m

A botched Irish Rail IT project that was labelled ‘unrealistic’, three years before it was written off last month to the value of €50million.

extra.ie

The State is now locked into a contract with a Spanish tech firm, Indra, that has yet to complete the first phase of the contract, which represents just 3% of the project.

Members of the Irish Rail executive team said this ‘vital’ project could cost the taxpayer another €205million, or more, and delay rail infrastructure expansion programmes.

 

[galway]

I'm curious if anyone on this forum has any deeper insight into what happened here

I think it is a bit like Trumps wall we no longer hear about, We well build a wall and Mexico will pay for it,
I hear the problem may be linked to outsiders getting in the way trying to link the system from the start into a broader National transport network,

 

[mathepac]

You mean whoever bought all the electric double-decker buses that can't be charged and are now costing €7M in storage?

How come no-one ever gets fired?

 

[galway]

You mean whoever bought all the electric double-decker buses that can't be charged and are now costing €7M in storage

now you are on the scent,

 

[Purple]

You mean whoever bought all the electric double-decker buses that can't be charged and are now costing €7M in storage?

How come no-one ever gets fired?

They don't get big bonuses when things go right.
They get paid a fraction of what someone in a similar role in the private sector would get paid.
They can't get fired.

Hardly a recipe for dynamic and ambitious people. Those who are good get poached by the private sector. The culture is risk averse and the people are generally well meaning and hard working but just not good enough to do what is being asked of them.

 

[mathepac]

They don't get big bonuses when things go right

Are you suggesting that they should get paid extra for doing what they're paid to do?

 

[Purple]

Are you suggesting that they should get paid extra for doing what they're paid to do?

I'm suggesting that we need to look at the calibre of people who run our Departments and State Bodies. If there is no incentive for doing an excellent job and no penalty for doing a bad job then the job will attract mediocrity and those who turn out to be excellent will be poached by the private sector.

We have Government Departments with multi-billion Euro budgets which employ tens of thousands of people and we have State Bodies of close to that size, and we expect to attract and retain people of a sufficient intellect, drive and ambition to run them while offering them the same income as a GP or half decent Solicitor.

 

[mathepac]

If there is no incentive for doing an excellent job

But there is; they get to stay in the job plus keep the generous pensions and they move to the next increment on the performance scale, which contributes to making them eligible for promotion to the next grade or level. I say performance scale rather than the "time-served" scale common to these jobs.

I'm more accustomed to the private sector rating system (McKinsey originally?) at 6/12-monthly reviews of the previously agreed work targets and personal/professional development plans:

AER - Always Exceeds Expectations
OER - Often Exceeds Expectations
AMR - Always Meets Expectations
OMR - Often Meets Expectations
FMR - Fails to Meet Expectations

AER & OER ratings may lead to extra rewards (bonuses, share options, bigger car (!) etc.) and promotion opportunities or indeed expanded responsibilities, AMR will maintain the status quo and means you keep your job, others lead to investigations for the underlying reasons, possibly more frequent reviews and reporting, improvement plans, or may lead to demotion, transition plans or cessation.

AMR or lower is pretty much the minimum just to stay working in the same or similar role, I suggest we do this for all public servants. For the record, I was never lower than an OER

 

[patfert1]

The IT article I mentioned in the original post includes a reference to a consultant called WSP, a UK infrastructure consultancy I believe.

...external consultants WSP advised that Indra had the capability to potentially deliver the project if recommendations it had set out in an audit were implemented.

I think a major fault in state organizations is the use of such consultants. It allows management to offload decision making and avoid responsibility when things go wrong. In my private sector experience, managers were hired to be responsible for decisions and execution, not to pay external consultants to do it for them.

private sector rating system (McKinsey originally?

I'm curious now where that originated. 25 years ago I brought it to the company where I then worked, having experienced it many years earlier at a previous employer. They thought it was my idea

 

[mathepac]

I hope you got an AER that year for your initiative! Yes my understanding is that a management consultancy firm developed the original model and McKinsey keeps coming up in connection with it. I believe it was one of the first to encompass both intrinsic and extrinsic rewards systems in personal planning and performance reviews, tied to the broader organisation's business objectives.

 

[PMU]

I think a major fault in state organizations is the use of such consultants. It allows management to offload decision making and avoid responsibility when things go wrong. In my private sector experience, managers were hired to be responsible for decisions and execution, not to pay external consultants to do it for them.

Under public procurement rules the professional and technical capacity of of tenderers to meet the provisions of the contract must be evaluated by the contracting authority. For a project of the type in question I would suggest that your average public servant would not necessarily have adequate experience in this and for large scale projects. This is not a criticism, just a fact of life. The use of external advisors such as WSP, which is a Canadian engineering and professional services firm that has 85,000 employees, on this aspect of the evaluation reduces significantly the risk flawed selection of a tenderer. We must remember that in all cases it is the contracting authority and not the consultant that makes the decision.

However, there appears to be a tendency in the failure of large scale projects in the Irish public sector to blame the contractor, even is situations where they have successfully implemented equivalent projects in the private sector and abroad. There is a large list of international contractors that successfully deliver projects elsewhere but have come a cropper with the Irish public service, e.g. Cork Events Centre; National Broadband plan; Electronic Health records/Individual Health Identifier; Pulse Replacement, etc. etc. etc.). So perhaps the problem lies elsewhere and not with the contractor.

 

[Purple]

There is a large list of international contractors that successfully deliver projects elsewhere but have come a cropper with the Irish public service, e.g. Cork Events Centre; National Broadband plan; Electronic Health records/Individual Health Identifier; Pulse Replacement, etc. etc. etc.). So perhaps the problem lies elsewhere and not with the contractor.

Don't forget the National Children's Hospital.

 

[patfert1]

So perhaps the problem lies elsewhere and not with the contractor.

In many years of personal experience with IT projects including successful, not-so-successful and complete failure, the responsibility for the success or failure usually lay to some degree with both parties. When there was a failure it was almost always contributed to in some way by both sides. For example, there might have been a dysfunctional client, but the vendor could have managed it much better, such as costing and staffing it with appropriate people to manage the dysfunction, etc. A lot of IT projects are undercosted to win the contract.