Government Investments

The Herald reports:

The Government has released detailed reports on the progress of its major investments for the first time, showing which projects are on track and which are at risk of blowing their budget.

The two reports published by the Treasury today are part of a drive to increase transparency in Government procurement and detect any potential cost overruns or delays at an early stage.

One of the reports provided a snapshot of $6.4 billion in Government spending over the next year on 409 projects, including ICT, new schools, defence and construction. These projects had a whole-of-life cost of $74 billion.

The report showed construction projects were the riskiest investments for the Government, while defence investments carried the least risk.

It assessed each project according to a five-level scale from green to red. Of the 409 investments, 237 were given a “green” status (on track), 39 were given an “amber” status (requiring attention) and five were given a “red” status (major problems). The remainder had not yet been assessed.

The projects which were classed as “red” made up 0.1 per cent of the $74 billion investment programme.

This is not sexy stuff, not is important. It is applying greater commercial disciplines to $74 billion of capital spending. Too often large projects only get attention when it it too late. This approach may help prevent another INCIS or Novopay.