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| Port and Rail CAPEX improvement
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Context / Scope of project
A large Port and Rail infrastructure project had seen projected capital expenditure swell 25% from the initial Pre-Feasibility Study to the Bankable Feasibility Study (BFS). This had led the owners to require a ROCX1 review to quickly identify if the project was still viable and to set in motion reductions to bring the NPV back into an acceptable range. The owners wanted to focus not just on capex savings, but also on NPV and cater for substantial future growth in tonnage.
Client achieved:
- Reduction of capex to near original PFS figure – savings of over 20%
- A total of more than $600 million dollars worth of ideas were reviewed and documented, identifying key risk areas and opportunities for future savings
- Understanding of optimal operating tonnage – right sizing, and step capex requirements for future expansion to triple current capacity
- Shifting focus onto NPV – shift from pure capex reduction to balancing of capex, opex and risk tradeoffs
- Establishment of a sustainable continuous improvement process.
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What we did:
- Developed Value Driver Trees for the project to identify drivers of value and what areas to focus efforts on
- Worked intensively with the Area Managers to run structured Idea Generation sessions, drill down based on Value Driver Trees into specific areas reviewing budget line items to Level 3/4, complete documentation and risk assessment and prepare for weekly Decision Group reviews
- Put in place a standard gated idea management approach to assess all ideas – ensure prioritisation, valuation and verification to a sufficient level of completion for presentment to Decision Group
- Provided tracking tools to automate idea pipeline management, generation of standard Results Action Reviews (RAR) packs, and enable visibility of ideas from generation to locked-in phase (into BFS)
- Defined RAR meetings from GM down to Area Managers which drove:
- Focused consolidation of new and existing ideas into one repository enabling all ideas to be managed to resolution
- Provided systematic approach for ideas to be aired by all Area Managers
- Ensured sufficient pipeline velocity to meet with aggressive timelines for the BFS
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