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Re: Mega-project Management, President’s Notebook,
January 2004 PEGG.
APEGGA President Mike Smyth, P.Eng., makes a compelling
case for the next phase of Alberta oilsands development.
The proper development of the oilsands is crucial to Alberta
and Canada.
And yes, future prosperity depends on the success of such
large scale developments.
On these points I agree with Mr. Smyth fully. I also agree
with him that mega-projects have had a terrible financial
record in the past. Too many mega-projects went south when
it came to cost or schedule overruns.
Mr. Smyth puts the cost and schedule overrun blame on bad
productivity. His solution is better construction management
and perhaps following the advice of some owners to switch
to a lump sum contracting strategy.
But there is more to it than that. Let me list a few main
points that come to mind.
Mainly, mega-projects come with a set of strings attached
as a return for regulatory giveaways, tax relief or royalty
holidays. These strings almost hog-tie the project and
produce disincentive for the contractors to be competitive.
Next in line are ill-defined project scope. Mega-projects
inevitably attract too many last-minute additions, growing
wish lists, and endless research topics, causing unintended
delays.
Lastly, our never-ending zeal to compress project schedules
to be competitive actually causes bad productivity. Haste
really does make waste.
The pendulum swings every eight to 10 years regarding
the contracting strategy. In one cycle, lump-sum turnkey
is de rigueur; in the next, cost reimbursable becomes fashionable.
In the last couple of years, many major U.S. contractors
came out openly against bidding on lump sum projects. They’d
had to take big losses due to cost escalation, mainly caused
by ill-defined scopes and ill-written contracts.
On the other hand, owners routinely conduct detailed audits
of subcontractors to find out cost escalations in a cost
reimbursable project after the fact.
The bottom line is that contracting strategy is not a panacea.
There has to be a happy medium found.
We must also pay attention to what is happening in demographics.
What I call "grey heads" are disappearing from
conference rooms and offices at an alarming rate.
The decimation that took place in the oil industry in the
1980s is showing its effect now, as those few who survived
the ’80s are now retired or retiring, with minimum
numbers of others to take their place. Problems become
more acute with the lack of personnel who understand the
risks and have the proper experience.
There are also legal aspects of a project. They occupy
more prominence
these days and are bound to keep increasing. Engineers
are not always equipped to understand and deal with legal
issues.
Stronger legal basis is not detrimental to progress, but
consistently the legal avenues are being used to shed and
transfer risks by owners. At the least, engineers should
understand that.
The solutions will only come from cooperation among the
stakeholders. They need each other, and their risks and
rewards among must be balanced.
Owners must find the fine balance between project financials,
schedules and local content versus risks. Define projects
up front, plan the work and execute the plan.
Contractors must understand that their future livelihood
depends on producing results and achieving milestones in
their current projects. They must deliver what was promised
and never promise what
they can not deliver.
What APEGGA members can do is become keenly aware of these
aspects. They need to understand that some risks can be
mitigated, others must be shared. And there are some risks
that must be assumed by someone in the end.
Rewards must be proportional to the risks assumed.
Alp Kocaman, P. Eng.
Houston, Tex.
More About Ranks
Re: Photo Mix-Up, Readers’ Forum, Febuary 2004.
Lt.-Col. (Retired) Keith J. Rieder, P.Eng., commented
on the rank of Brig.-Gen. Jerry Silva in the January PEGG
photograph. He said in part that "the gentleman wearing
the four stripes is a colonel, not a general."
Brig.-Gen. Jerry Silva is a retired general who happens
to be the current Colonel Commandant of the Canadian Military
Engineers. This position is an appointment, not a rank.
For official military engineering occurences he wears a
colonel's uniform, not his general's uniform.
Major (Retired) Tame London, P.Eng.
Vancouver, B.C.
Climate Change Science
Actually Is Important
Re: Climate Change is a Risk Factor APEGGA Pros Must Consider,
The PEGG, March 2004.
Joel Nodelman, P.Eng., goes to some length to tell us
that he does not take a position on the controversial issue
of climate change. He suggests that one should move away
from the politics, such as those that undermine the conclusions
of the International Panel on Climate Change or those that
attack those scientists who oppose the IPCC.
He further assures us that he is not a climate expert and
would not presume that engineers and geoscientists can
function in the specialized area of climate science.
However, the essence of Mr. Nodelman’s position,
it appears, is acceptance that greenhouse gas emissions
are associated with climate change and the stakeholders,
government and everyone else must best get on with coping
with the situation.
I’m sure Environment Minister David Anderson and
the IPCC would be delighted with his statement: “Climate
change is one of the most pervasive influences on our society
that we are likely to face in the next century.” The
implication from this and the rest of the article is that
climate change is due to greenhouse gas emissions.
I acknowledge that companies must react to regulations
and possible penalties imposed by governments as best they
can – even if those regulations are misguided and
counterproductive – in order to save their firm and
their shareholders from loss. However, this does not absolve
organizations from becoming knowledgeable on matters affecting
them and making their voice known.
Therefore, engineers and geoscientists should become informed
on the science of climate change. As one who was involved
in assessing risks of oil or gas ventures and the decision
to drill costly wells, it was incumbent on me to bring
as much science as practical to bear on that decision.
This applies to engineers and geoscientists: much of the
science on climate change is not, to use the hackneyed
expression, rocket science.
There is, however, a major difficulty for all citizens to gain a balanced,
unbiased understanding of the science of climate change. This is touched on
by Mr. Nodelman in his description of the contesting views on the merits of
the work by IPCC.
Environment Canada has spent millions presenting the part of the IPCC that
focused on CO2 as a cause of climate change. Yet there are many qualified climate
scientists telling us that there are other causes.
The truth is that, although climate change has been (and is) recognized as
a certainty, the cause of that change remains scientifically unproven.
The issue of climate change and its possible economic consequences is huge
for all Canadians. One writer did the math and determined that even if every
plane, train and automobile in Canada were parked forever, we would still miss
our Kyoto target.
There has been some mention that the federal government would place an emission
cap on carbon of $15 per tonne. Who pays if those emission costs exceed that
cap? Then we find that Husky will receive a federal grant of $7.8 million for
an ethanol plant.
The list goes on and on.
These examples and the fact that the federal government is budgeting in terms
of multi-billions of dollars over the next three years should concentrate our
minds and have us ask , “How valid is the focus solely on emissions of
CO2 as cause of climate change?”
We must remove the question of the cause of climate change from the political
arena until such time as a proper hearing on the subject has been held. This
has never been done in Canada. In order to support the policy-making process
of government and for the public at large to have confidence in that process,
it is essential that only highly qualified, climate scientists be requested
to testify before an independent, non-governmental, judicial-type panel.
This is an opportunity for the professionals and their organizations that are
regarded by the public and politicians as having integrity to add their voice
to this request.
Some may consider that it is too late, that decisions have already been made.
However, we have many years ahead on the proposed Kyoto timetable.
Moreover, it is never too late to become as knowledgeable as we possibly can
be on a question of this magnitude – the effects of which could have
an impact on all Canadians for a long time.
David Barss, P.Geol.
Calgary
Use M.I.T. Category
Re: Inclusivity
I felt that your coverage was too defensive on the APEGGA
management position of the new categories. Inclusivity
can be accomplished readily with an existing APEGGA process
- it is called the Member-In-Training category.
Simply review each candidate and assess for M.I.T. on the
basis of requiring one to four years of Canadian experience
for full acceptance.
Registered, Provisional etc. all lead to confusion as to
who is or is not permitted to practice engineering in Alberta.
The new categories in themselves also seem to discriminate
and identify immigrant candidates, perhaps forever.
I would not vote for these new categories.
T.P. O'Neill, P.Eng.
Sherwood Park
Defeating Professionalism
I’m not amused with Council’s inclusivity
proposal. As ill-informed as I may be, one interpretation
of the proposal is that it defeats the purpose of professionalism
and everything that comes with it. Instead of being inclusive,
it only alienates current members whom only learned the
grand scheme of things from the APRIL ISSUE of The PEGG.
If APEGGA includes two more categories in the membership,
with the likelihood that its people will be cheaper to
hire than the professional members, then engineers and
geoscientists, already under-valued by themselves and society
as market-driven commodities, will likely be worth less
than ever.
Eventually, the bottom line wins and work that is being
done by professional members will be displaced to the provisional
and registered members. Existing professional members,
meanwhile, will likely be on the streets, looking for work.
My comments are only hypothetical. But please educate
me if you must. Is there no mechanism in place to stop
this madness?
Let’s say we apply Boolean logic to the general public,
and they will interpret provisional and, especially, registered
members as follows: He or she is a member of APEGGA. Then
he or she is a licensed professional. Then he or she can
do the work.
Or can he or she? Is he or she a real engineer, geologist
or geophysicist or what?
Help me. Apparently, I’m confused.
Nattalia Lea, P.Eng.
Calgary
Grassroots Input Needed
I should hope that the Pandora’s box named “Inclusivity” has
not yet been opened too far. This concept has not been
given true and meticulous thought by the grassroots of
APEGGA. Those in the inner circle of the Association, with
their agendas and perspectives, may have convinced themselves
of one direction on the issue and be pushing hard for acceptance.
Many rank-and-file professionals, however, are not prepared
to accept this, at least not yet – and some not at
all.
I urge caution, as a minimum, since this is a significant
step in the Association’s history and for the professions
as a whole.
The possibility exists that the Alberta Advantage could
also be tarnished by a perception of lax standards and
mediocrity. One untimely catastrophe is all it would take
to scare investment from Alberta. Individually, we could
see a number of significant personal repercussions that
have not been considered at this time. Foreign assignments,
registration in other jurisdictions and who knows what
else – more thought is needed.
How can APEGGA possibly accept “immigrants to Alberta
who graduated from a university that is not on the list
of universities deemed to be equivalent to a Canadian university,” as
the Association has said. I have worked internationally
and seen that some universities offer PhDs to individuals
that I would not want to paint a bridge for me, far less
design it. If a university is not on the list, it is not
on the list for a reason.
“People who have a science degree or something similar
and apply that knowledge in a profession that looks much
like engineering” should start their own association.
Ours is an association for engineers, geologists and geophysicists.
Don’t call an apple an orange.
If what someone does crosses the line between “looking” much
like engineering to “being” engineering, then
APEGGA must step in and stop the practice.
APEGGA concluded that “it is better to have people
who are practicing our professions licensed and subject
to our high standards than to have them practicing with
no licence at all.” That sounds like either a cop-out
or empire-building.
APEGGA says that the public will not necessarily know
the difference between a professional and a registered
EGG. This is a strong argument against inclusivity.
If APEGGA exists to protect the public, then is APEGGA
going to be liable when its apparently indistinguishable
designations subject the public to varying standards of
qualification? Would Albertans like a veterinarian to be
allowed to do surgery on humans?
I do not think that all of the membership has been offered
adequate information to assess the potential effects such
a change may have. Since these effects may be significant,
APEGGA must seek conclusive agreement from at least 75
per cent (if not more) of the members before an irreversible
move is made.
A few hundred, at most, members able to attend a meeting
in Edmonton, who possibly have been lobbied by one group
with a particular viewpoint, should not get to speak for
the entire membership – or the public for that matter.
I concur with Horace R. Gopeesingh, P.Eng., (Current Requirements
Should Be Maintained, Member Says, Readers’ Forum,
March 2004) and am inclined to review the value of my APEGGA
membership. Many other members may choose title changes
to avoid the domain of APEGGA’s inner circle and
their perceived fiefdom.
I would hope that the Alberta Government, Legislative
Assembly and Cabinet do some independent due diligence
on inclusivity and not let the “fox redesign the
hen house” – and then whitewash it.
Richard D. A. Pike, P.Eng.
Calgary
What About
Our Right to Practice?
On occasion over the last 20 years, I have asked APEGGA
about what it does for its members. I have never received
the courtesy of an answer, except once about protecting
the public, which of course did not answer my question.
I know what you do not do. You do not stand up for your
members’ rights to practice and you do not stand
against those who do our work when they have no business
doing it.
Now I see that you are working for the rights of others,
through inclusivity, instead of insisting that real engineers,
geologists or geophysicists do the work. I have witnessed
mathematicians and chemists working as reservoir engineers;
there are biologists doing the work that environmental
engineers should be doing.
Who really speaks for us? It is not APEGGA.
I sense a lack of fire in the belly for the professions
by the very people who claim to be working for us. APEGGA
is doing us all a disservice by considering the inclusivity
of people who are not educationally qualified EGGs. These
people should go back to school and earn their degrees,
just as we did.
I do not mind giving foreign professionals a chance at
becoming members; I do not like seeing a fellow engineer
(or medical doctor) driving a taxi cab. But I do not support
the stance to allow others who are not qualified into the
fold. Enough is enough.
You seem to merely brush over the concern about lowering
standards. Of course the standards are lowered. These people
are not engineers, geologists or geophysicists. End of
story.
You talk about protecting the public. APEGGA likes to
throw that one out every time Council wants to push something
forward. I think you fall down on that job since you do
not insist that licensed and recognized engineers, geologists
or geophysicists do the work in the first place.
Qualified people are the ones who should be doing the work;
that is the way to protect the public.
I disagree with inclusivity of non-engineers, non-geologists,
and non-geophysicists. Your current members add value to
society. Are we, however, getting value for being members
of APEGGA?
Joanny Liu, P.Eng.
Calgary
Don’t Fear Change
Having come from Vancouver, B.C., I've seen the changes
made there on issues such as these over the two decades
I lived there. APEGGA now seems to be surpassing APEGBC,
and finds itself at the forefront of change. I personally
view this as a positive route for APEGGA to take.
This is strange in a business community that refuses to
change its outlook. I've been here for four years now and
employers just won't grant me any meaningful employment.
I am a liberal thinker in a sea of very, very conservative
engineers here in Alberta. They are still basing their
hiring on whether or not they "like" you at an
interview. It's still a popularity contest. They view employee
engineers solely as "labour costs" and certainly
won't help pay anything towards having these employees
upgrade their skills at night school (or weekend training
courses).
I'm sure these professional engineers don't care for inclusivity,
because they will view getting others within APEGGA as
the first step on a slippery slope to allowing anyone with
a one-year diploma (certified technician) to be eventually
thinking they can practice alongside engineering grads,
with or without experience.
As the world famous psychologist Dr. Wayne Dyer, has said
on PBS TV stations on occasion, "Those who are afraid
of change are the first and most vocal people to object
to change.”
Raymond A. Keith, P. Eng.
Edmonton
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