Australia’s cancelled Commonwealth Games: three principles for successfully delivering major programmes
In the current economic climate, the successful delivery of complex major programmes can seem ever more challenging. Above the traditional difficulties that come with managing multi-year (or multi-decade) programmes across numerous locations, suppliers and contractors, organisations must also navigate high inflation, labour shortages, contractor insolvencies and general economic stagnation.
Last year, Australia's Victoria State Government made the difficult decision to pull out of hosting the 2026 Commonwealth Games. This followed assessments that an original AU$2bn budget could have spiralled to AU$7bn. One of the biggest factors in this cost escalation was the focus on delivering the games beyond Melbourne. Rather than drawing on the city’s established sporting infrastructure, the objective was to boost investment in regional areas in need of development.
This type of trade off, which introduced challenges for delivery in areas without established supply chains, is familiar to many who have worked on major programmes across Australia and the globe. The games are just one example of a major project looking to deliver economic and social value beyond an established market – such as regeneration projects in communities in need of investment, or infrastructure programmes in isolated or challenging areas.
It is important to draw conclusions for other similarly complex programmes going forward – and for future investment within Victoria itself.
The government has still pledged to spend the originally promised AU$2bn of investment in the regional cities and towns that would have stood to benefit from the Commonwealth Games.
Delivering this programme of investment will need to tackle many of the same challenges which threatened the Commonwealth Games programme of works. It is therefore worth addressing three core principles of major programme delivery to identify what is needed for success.
1. Balancing ambition with deliverability
Having a clear vision from the outset is crucial for setting up a comprehensive programme plan, including identifying the goals, the measures of success and the risks and variables – attaining a realistic understanding of any constraints that the project may face.
For complex programmes, capturing the agreed scope within a centralised scope book is essential. This is used as a baseline to clearly define requirements around how the various scope items will be funded and by whom, as well as providing an understanding of the programme’s purposes and what success will look like. This ensures that the team is working towards the same shared vision. Ultimately, careful consideration needs to be given to both funding and capacity to strike the right balance between ambition and deliverability.
In today’s complex delivery environment, it is essential that a simple scope and clear vision is achievable within constrained budgets and a challenging economic climate.
Our Q3 Australia and New Zealand market intelligence report published in December points to difficult conditions in Australia’s market as a whole. Levels of insolvency and liquidation are rising largely due to the impacts of high inflation. At the same time, tendering conditions appear to be challenging due to the volume of work currently in the market across most states.
Historically, we have found that tendering for major projects in regional areas generally attracts lower response rates. One reason for this is that the greater level of due diligence required for a major project, with its scale and ambition, may be too extensive to appeal to small suppliers – or the capability for a specific specialist skill may simply not exist in that location.
There needs to be full awareness of the risks and potential challenges if organisations choose to adopt a potentially more costly and complex approach to tendering outside established markets.
2. The importance of engaging the supply chain early
After the vision is established, and proper consideration is given to these risk factors, the owner’s team will need to decide whether or not to proceed with the programme. If it gets the green light, it is then essential to set it up for success.
Building the ‘right’ contracting model is important for establishing strong relationships across the supply chain. This must foster a shared sense of risk and responsibility. In the case of the regional Australian market, ensuring the contracting model appeals to suppliers is crucial. This can be helped by early contractor involvement, an appropriate model for risk sharing and collaboration with potential suppliers to understand their pressures and competition for their capacity.
Market demand is currently fierce in Australia, with major projects like the Sydney Metro drawing on capacity and resources from across the nation. Adding to this, high levels of liquidation are reducing the pool of suppliers.
A collaborative and holistic approach can help establish clear timescales and pipelines of activity that both the supply chain and the client can plan around.
Developing strong partnerships with suppliers and committing to robust engagement with local stakeholders is key – especially for programmes of such scale and duration.
Early engagement and consistent, open communication will help stakeholders fully understand the potential impacts and benefits of projects and will highlight possible barriers and risks sooner rather than later. This will help organisations to deliver programmes with wide-ranging benefits for the local communities, in turn encouraging local support and sponsorship.
3. Bringing the vision to life
Once the programme has been set up, teams then need to build on the existing foundations for success. It’s important to establish rigorous controls to keep the project on track to reach the vision that has been set out.
Teams should put in place appropriate programme controls and reporting from the earliest stages, in order to understand cost, time, risk and position, relative to the scope and established baseline project parameters.
Managing major programmes to the agreed baseline enables clear identification of variations that can then be escalated for review and approval.
This would include delivery to milestone dates, tracking cost forecasts and agreed scope items. Major programmes are time critical and have immovable deadlines. Without this reality check, a vision can quickly fail.
However, programmes also need to be able to change and develop within a controlled framework. Market conditions are constantly evolving, making it important for organisations to adapt within the plan to overcome unforeseen challenges. This is vital for building and keeping confidence within the team that the programme is on track and within approved funding limits.
Regular governance meetings, where progress is reviewed against the baseline, can build both confidence and clarity across the programme – as can the proper use of data. Accurate project data in real time is essential to drive informed decisions and enable project teams to react to unplanned changes and risks to mitigate any negative impact.
Strengthening delivery of future programmes
While no major programme is identical, and each may face nuances that influence delivery, the success of any project relies on these three core principles – a clear and realistic vision, laying strong programme foundations, and implementing robust project controls.
Programmes such as the Victoria Commonwealth Games, and the planned regional investment still to come, can help us reflect and strengthen the delivery of future programmes, particularly those taking place outside of established markets.
We know infrastructure and major projects have the capacity to bring enormous social and economic value to regions where they are delivered – we must learn from the past to ensure the transformative projects of the future can be achieved successfully.