FINAL ONLINE SUMMATIVE ASSESSMENT
PROGRAMME Bachelor of Commerce in Project Management
MODULE Project Cost and Procurement Management
YEAR Two (2)
INTAKE January 2024 Semester 2
DATE 13 November 2024
TOTAL MARKS 100
, SECTION A [40 MARKS]
Read the case study below and answer ALL the questions in this section.
COST COMPLEXITIES ON MEGA INFRASTRUCTURE PROJECTS
Many governments recognise the importance of undertaking large-scale and high-impact infrastructure projects as a
significant lever to develop their people and allow for expanded access to services. The World Bank estimated that in
2023 Sub-Saharan African countries needed to spend a minimum of 7.1% of their Gross Domestic Product (GDP) on
average on Sustainable Development Goals (SDG) related to infrastructure per year but were only spending 3.5% on
average annually. A November 2023 report titled ‘Africa must tackle huge infrastructure gap to unlock opportunities for
transformation’ by the African Development Bank noted that lack of adequate infrastructure was one of the primary
impediments to the realisation of the benefits of the Africa Continental Free Trade Area.
The nexus between infrastructure development and human development is undeniable. At the core of human evolution
lies great scientific leaps in the scale and ingenuity of infrastructure deployed by various civilisations over time.
The infrastructure differential is the most obvious and notable differentiator between developed and developing
nations. Several developing nations lag significantly in terms of the quality and scale of infrastructure such as roads,
railways, schools, hospitals, shipping ports, airports, dams, bridges, canals, housing, telecommunications, and many
others. This deficit in infrastructure acts as a critical barrier to the ability of citizens, in particular, the youth to reach
their full economic potential. If there is one thing most Africans could agree on - we urgently need more infrastructure.
Why if the case for infrastructure development is obvious, are so many large scale infrastructure projects including
projects in other sectors such as mining or agriculture experiencing rising tensions caused by environmental and
socio-economic related causes? This is not a phenomenon limited only to Africa. According to the United Nations
Principles for Responsible Investing (PRI) article ‘Building the conversation around social issues
in infrastructure investing’, the US$3.8 billion Dakota Access Pipeline in the US, Melbourne’s proposed US$8.8 billion
East-West Road link, and the Mexico City international airport are just three of many high-profile infrastructure
projects with large capital spends that have encountered strong resistance from civil society, politicians, and
regulators. There are significant costs suffered by investors as a direct result of rising tensions due to failure to
manage project host communities and other key stakeholder concerns. In the case of the Dakota Access Pipeline, the
investors are estimated to have lost US$ 7.5 billion due to delays to construction and cost overruns with many
attributable to protest actions and legal challenges to the project. Some key deficiencies by project sponsors,
developers, or governments in the design and commissioning of projects that may lead to rising tensions are:
· Lack of real and meaningful proactive consultation with host communities and ensuring that there is a robust
mechanism in place to capture the feedback from communities and communicate back the remedial actions to be
considered in the design and execution phases of the project. It is of limited value to consult with host
communities as an afterthought when the project has moved to the construction phase and changes in the
approved project schedules would impact the critical path and cause significant cost overruns.
· Failure to identify all the project stakeholder’s risks leaving out of your consultation and engagement processes
stakeholders who may have a significant impact on the project. In some cases, this error has resulted in projects
being cancelled due to opposition from groups who previously had not been identified as strong or influential. It is
critical to develop a stakeholder management strategy that identifies stakeholders, defines the risk and reward
relationships to the project, defines mechanisms for engagement, and develops risk mitigation plans for each
stakeholder group. A well-developed stakeholder management plan defines who the stakeholders are, their
PROGRAMME Bachelor of Commerce in Project Management
MODULE Project Cost and Procurement Management
YEAR Two (2)
INTAKE January 2024 Semester 2
DATE 13 November 2024
TOTAL MARKS 100
, SECTION A [40 MARKS]
Read the case study below and answer ALL the questions in this section.
COST COMPLEXITIES ON MEGA INFRASTRUCTURE PROJECTS
Many governments recognise the importance of undertaking large-scale and high-impact infrastructure projects as a
significant lever to develop their people and allow for expanded access to services. The World Bank estimated that in
2023 Sub-Saharan African countries needed to spend a minimum of 7.1% of their Gross Domestic Product (GDP) on
average on Sustainable Development Goals (SDG) related to infrastructure per year but were only spending 3.5% on
average annually. A November 2023 report titled ‘Africa must tackle huge infrastructure gap to unlock opportunities for
transformation’ by the African Development Bank noted that lack of adequate infrastructure was one of the primary
impediments to the realisation of the benefits of the Africa Continental Free Trade Area.
The nexus between infrastructure development and human development is undeniable. At the core of human evolution
lies great scientific leaps in the scale and ingenuity of infrastructure deployed by various civilisations over time.
The infrastructure differential is the most obvious and notable differentiator between developed and developing
nations. Several developing nations lag significantly in terms of the quality and scale of infrastructure such as roads,
railways, schools, hospitals, shipping ports, airports, dams, bridges, canals, housing, telecommunications, and many
others. This deficit in infrastructure acts as a critical barrier to the ability of citizens, in particular, the youth to reach
their full economic potential. If there is one thing most Africans could agree on - we urgently need more infrastructure.
Why if the case for infrastructure development is obvious, are so many large scale infrastructure projects including
projects in other sectors such as mining or agriculture experiencing rising tensions caused by environmental and
socio-economic related causes? This is not a phenomenon limited only to Africa. According to the United Nations
Principles for Responsible Investing (PRI) article ‘Building the conversation around social issues
in infrastructure investing’, the US$3.8 billion Dakota Access Pipeline in the US, Melbourne’s proposed US$8.8 billion
East-West Road link, and the Mexico City international airport are just three of many high-profile infrastructure
projects with large capital spends that have encountered strong resistance from civil society, politicians, and
regulators. There are significant costs suffered by investors as a direct result of rising tensions due to failure to
manage project host communities and other key stakeholder concerns. In the case of the Dakota Access Pipeline, the
investors are estimated to have lost US$ 7.5 billion due to delays to construction and cost overruns with many
attributable to protest actions and legal challenges to the project. Some key deficiencies by project sponsors,
developers, or governments in the design and commissioning of projects that may lead to rising tensions are:
· Lack of real and meaningful proactive consultation with host communities and ensuring that there is a robust
mechanism in place to capture the feedback from communities and communicate back the remedial actions to be
considered in the design and execution phases of the project. It is of limited value to consult with host
communities as an afterthought when the project has moved to the construction phase and changes in the
approved project schedules would impact the critical path and cause significant cost overruns.
· Failure to identify all the project stakeholder’s risks leaving out of your consultation and engagement processes
stakeholders who may have a significant impact on the project. In some cases, this error has resulted in projects
being cancelled due to opposition from groups who previously had not been identified as strong or influential. It is
critical to develop a stakeholder management strategy that identifies stakeholders, defines the risk and reward
relationships to the project, defines mechanisms for engagement, and develops risk mitigation plans for each
stakeholder group. A well-developed stakeholder management plan defines who the stakeholders are, their
