After the folks at Pavco completed the gold plated Vancouver Convention Center and kept the budget overruns down to a few hundred million dollars, they rewarded senior executives with bonuses and “incentive pay.”
That is unlikely to change this year despite the 2010 fiscal year seeing losses before government contributions rise from$16.9 million to $61.1 million. These folks always do a fine job. And so might you, if you got to write your own targets.
For example, instead of only reporting actual usage, they report the percentage that a facility was used compared to a target number. So, if you target ten days use and sell five days, that’s 50% utilization.
Sean Holman adds interesting information to the mix with his Public Eye article titled Maple Story. It discusses the compensation for the Convention Center General Manager position:
When Barbara Maple left that job in April 2008, she was making $130,500 per year. By comparison, her successor Ken Cretney – the former general manager of the Marriott Pinnacle Downtown Hotel – is making $205,400 a year, as well as having received a $100,000 incentive payment in fiscal 2009/10. That pushed the total value of his compensation package up to $335,347.
The following was first published July 9, 2010:
Premier-in-waiting Gordon Campbell – and many voters – wanted an anchor chain hung around the NDP’s collective neck in 2001. Campbell would have ensured that three tarnished aluminum ferry icons were made fast to the links. With delays, cost overruns and break-in difficulties, the high speed catamarans were political hot potatoes drawing negative attention to the NDP government.
Glen Clark’s government intended the catamarans to serve needs of BC Ferry Services and stimulate the marine construction trade in BC. Instead, they became symbols of misdirected and incompetent public enterprise. Feeling the heat and already suffering at the polls, Clark’s successor Ujjal Dosanjh removed the vessels from the fleet and offered them for sale. That played into the hands of a cynical political movement willing to burn hundreds of millions to snap shut the trap into which their opposition had stepped. Gordon Campbell and his handlers were people prepared to poison the community well for political advantage.
Indeed, the ferry construction project was a disaster owned largely by the NDP government of Glen Clark. Ujjal Dosanjh’s cabinet offered the ships for sale, a decision based on expert advice. They expected to realize more benefit from a sale than the next favored option, which involved modifications to reduce speed and improve fuel efficiency so the ships could be assigned to Langdale runs and supplemental service on the Nanaimo route. Consultants predicted that a sale would take two years.
However, the new Liberal government didn’t want to sell the vessels on the international market or to modify them and put them into service. This was one disaster from which they didn’t want citizens making a recovery. Leaving the ships idly displayed on the Vancouver waterfront as sharp reminders served a political purpose worth more than any alternatives. For that, Liberals needed cooperation of the Washington Marine Group who controlled berthing facilities in North Vancouver, a place with great visibility, especially compared to BC Ferries’ own Deas Docks in Richmond.
Instead of allowing the sale process to run the recommended course, the Liberals sold the aluminum catamarans to Washington Marine, completing the sale little more than a year after the Wright report that counseled patience. WMG, owned by Montana based multi-billionaire Dennis Washington, paid under $20 million, less than the ships’ scrap value. Naturally, the Washington family are large contributors to the BC Liberals. WMG sold the ships to the giant Abu Dhabi Mar Group for service in the Persian Gulf between the United Arab Emirates and Quatar.
Had he been advising Premier Clark, Sir Humphrey Appleby would have said the original fast ferry plan was courageous. Every ex post facto expert review concluded that while its execution was inept, the initial program itself was ill conceived. This is from the report by Fred R. Wright, FCA:
Construction of the fast ferries started before the scope, schedule and budget for the ships was firmly established. Indeed, these critical elements of ship construction were not managed in a disciplined way throughout the project. It seems self evident, at least in hindsight, that first-rate project management techniques that mitigate risk are essential on any project of this magnitude.
Additionally, the principles of project management are most needed, and most valuable, at the genesis of a project. A clear recognition of how scope, budget and schedule interrelate, together with appropriately precise estimates of these three elements, are essential to sorting out potentially successful projects from superficially attractive ideas that have little potential for practical success.
Proven project management practices [should] be used on all significant capital projects.
Perhaps readers are wondering where we are going with this old story. I think it is important because it demonstrates how little politicians remember from days in the wilderness, once they enter plush lounges of power and sit in swivel chairs behind the desks.
I’ve written here before about my former admiration for Finance Minister Colin Hansen. When he was Liberal opposition critic of the ferry services, he spoke about the need for transparency, accountability, consultation and systematic risk analysis. He talked extensively about the NDP failure to complete a comprehensive Business Plan before beginning ferry construction.
The 2001 Wright Report reminded the Liberals about these almost universal principles, including those shown above. So what happened when the Convention Centre budget spiraled out of control, growing massively from under $500 million to almost $1 billion, a growth even greater than the entire fast ferry program cost.
It turns out that the convention centre got built, like the ferries, without any comprehensive examination of underlying business assumptions. My own analysis may sound familiar:
- Critical elements of construction were not managed in a disciplined way throughout the project. It seems self evident, at least in hindsight, that first-rate project management techniques that mitigate risk and are essential on any project of this magnitude were not employed.
- Additionally, the principles of project management most needed, and most valuable, at the genesis of a project were disregarded. A clear recognition of how scope, budget and schedule interrelate, together with appropriately precise estimates of these three elements, are essential to sorting out potentially successful projects from superficially attractive ideas that have little potential for practical success.
- Proven project management practices should have been used on this and other significant capital projects.
That explains the almost $500 million cost overrun and also the failure to evaluate the changing market for North American convention facilities. Without doubt, the Vancouver Convention Centre is gorgeous. It is bigger and better but largely empty.
Here is the centre’s bumf:
With our expansion complete, we’ve tripled our size to cover 1.1 million square feet (or four city blocks) for a combined total of 466,500 square feet of pre-function, meeting, exhibition, and ballroom space. The Vancouver Convention Centre now offers the ability to hold multiple simultaneous events, each with their own separate access and function spaces.
Built over land and water, with floor-to-ceiling glass throughout that treats guests to phenomenal harbour and mountain views, our new West Building is a masterpiece of design, inspiration and sustainability. Our commitment to green technology can be found in every corner: the “living roof,” seawater heating and cooling, on-site water treatment and even fish habitat built into the foundation.
All well and good. Sounds great but where are the customers? Here is a calendar showing the convention centre’s availability. Days in red show the times that no events are scheduled and announced. Rather than hosting simultaneous events, they appear to be occupying the most costly empty space in Canada. Listings are from the Events Schedule published by the Convention Centre July 9, 2010.