[BBC News] Prices rise for Manx electricity

[ai_Droid]

Now that is funny, "racey" is not a term I would have used to describe some poor saddo trying to defend the indefensible.

 

Not at all, I'm just not knee-jerking 'burn them all!' like a bitter and rabid anti-establishment paranoid tosser.

[P.K.]

Now that is funny, "racey" is not a term I would have used to describe some poor saddo trying to defend the indefensible.

 

Not at all, I'm just not knee-jerking 'burn them all!' like a bitter and rabid anti-establishment paranoid tosser.

The defence rests...

[ai_Droid]

The defence rests...

 

Thank god for that. Can't you start a Manx haters forum and just bugger off for good?

[Gladys]

Phew, it's all getting a bit racey here.

Now that is funny, "racey" is not a term I would have used to describe some poor saddo trying to defend the indefensible.

 

To add to the scalp hunters, I wonder whether the FSC has considered the fitness of those board members at the time to act as directors of IOM companies in future. It may not be a real sanction, but it would certainly send out the right signals.

I'm not sure that Messers Butt, Callister, Rodan et al would like the label "scalp hunter" to describe their work on the Select Committee on the MEA. Of course if various members of the MEA board are hauled before the beak and found guilty of whatever then I don't see them paying any substantial amounts back into the public purse as a consequence. But that's not the point. The fact remains that if you do nothing then nothing changes. The first step to making change is admitting that the current is bollocksed so change is needed. That's not as simple as it sounds. After the Mount Murray fiasco the then CM's first reaction was to drip and moan about how much the enquiry had cost. That's not exactly taking advantage of opportunities shall we say.

 

So is change needed? From the evidence there is no doubt in my mind that capital projects funded by public money need to be kept under tight control by those pulling the purse strings. It's not exactly rocket science.

 

If you read my post, PK you will see that I was not asking for money to be paid back (whatever they could pay would be a drop in the ocean), nor was I calling Butt et al sclap hunters, but rather that if misfeasance is established then the perpetrators should at least be disqualified from acting as a director of any Manx company in the future. It would send a very strong signal to the individuals themselves and any third parties dealing with them (would just take a Google or World Check to reveal their disqualification), and future prospective directors.

 

Can you explain exactly how tighter control of capital projects will stop unauthorised borrowing and, indeed, how you would ensure tighter control, it not being rocket science and all?

[P.K.]

Gladys - I understood perfectly about the disqualification - a good idea which I would hope would be a natural outcome should the individuals concerned be successfully sued by the current (must stop using that word) MEA lot. However I did take your "we will not find any culprit with assailable assets sufficient to eradicate the debt" as being part of the "if you do nothing nothing changes" type of stance. Hopefully not.

 

I very much stand by how hard it is to get folks to admit that change, perhaps radical change, is needed. Poor Ai Droid is a case in point. I post about a "poor saddo trying to defend the indefensible" and the poster immediately recognises it as a reference to them. Well poor saddo if you so readily admit that the cap fits you then you should most definitely wear it. But the fact remains that the record of IOM capital projects is a very very poor one. That's not me being paranoid, rabid, anti-establishment or any of the other rather pathetic knee-jerk comments bandied about (tosser might be fair though as I've been called that before) it's the simple facts of life on publicly funded capital projects on the IOM. To pretend it's otherwise puts you firmly in the "The first step to making change is admitting that the current is bollocksed so change is needed. That's not as simple as it sounds" category.

 

Project management has been picked over time and time again by all sorts of worthies. There are lots of methodologies, tools, training etc etc all readily available. But most importantly you also need individuals of sufficient calibre that they can take control of what is happening and retain that control throughout the life of the project. Put it this way, anyone can put up a team, committee, panel whatever to conduct all sorts of tasks. What's required though is that they can actually do it. So this type of thing is exactly what you are trying to avoid:

THE Department of Trade and Industry was 'led by the nose' by the Manx Electricity Authority's former chief executive Mike Proffitt, a Tynwald select committee heard. DTI chief executive Chris Corlett admitted that he was 'somewhat surprised' to discover that £10 million earmarked for a wind farm project had, in effect, been spent elsewhere.

Steve Rodan, chairman of the select committee investigating the MEA loans affair, put it to the witness: 'He (Mr Proffitt] was rather leading you by the nose.'

Mr Corlett nodded his assent.

I think you get the idea....

[ai_Droid]

But the fact remains that the record of IOM capital projects is a very very poor one. That's not me being paranoid, rabid, anti-establishment or any of the other rather pathetic knee-jerk comments bandied about (tosser might be fair though as I've been called that before) it's the simple facts of life on publicly funded capital projects on the IOM.

 

Nope, the fact is you can't resist having a go at any opportunity, which clouds any point you have to make with your spiteful 'you get what you deserve' drivel. It's very clear what you are.

[Tugger]

I agree that those responsible should be pursued. It doesn't matter whether the government recoups any of its overspend now: it just sends a message that such actions have consequences.

 

PK's point is fine, but there's a reason why he comes across as such a wanker when making it - he is one

[Chinahand]

Sigh - should I bother. I think so.

 

The major point I think that people are still missing from this is that the MEA weren't going "Oh my god, we're over budget, how do we hide it from Tynwald - lets illegally and without approval get a loan via MCC."

 

Rather they had already borrowed £30 million via MCC for the cable - This hadn't been approved, or authorized by Treasury or Tynwald or anyone.

 

It was simply disclosed at the end of the year after the fact in the accounts when they were laid before Tynwald. Tynwald passed the accounts fine and dandy - admittedly a certain Peter Karran - (no the other one, P.K.!) asked all his usual ineffective questions, but the accounts were passed and approved. This all occurred in 2001 or even earlier - well before the scandal about the later unauthorized loans.

 

The boards of the MEA and MCC believed they had two routes to finance their capital projects - and things get complicated as there was meant to be a company called the Manx Gas Company to complement the Manx Cable Company with responsibilities to ring fence the Gas projects as these had international liabilities the MEA needed to protect itself from. The reasons why MGC wasn't formed and MCC took on these responsibilities could easily double the time the Select Committee have to sit - anyone know if its come up in their current deliberations - I doubt it!

 

Now in hindsight I am certain the MEA board wished they hadn't thought they had two routes to finance the projects and hadn't used MCC. Its very easy in hindsight to say they should have realized, but legal advice had been taken when the new loans were taken out - and there was the reality that MCC had borrowed money in the past without approval and Tynwald then hadn't batted an eyelid - the new loans in fact re-financed the old MCC loan on better terms which in my mind was one of the main reasons why MCC was used - the convenents were resticting the use of the cable which was commercially damaging.

 

There is no doubt using MCC was quicker than using Treasury and Tynwald and the costs of delay outweighed the additional costs - I can here P.K.'s snort of derision from here, but I do think that is basically indisputable.

 

Both treasury and the DTI had been trotting along to meetings with the MEA over the capital projects and the accounts had been presented each year to Tynwald. No one had batted an eyelid, no one had complained they weren't getting a clear view of the projects.

 

Then the proverbial hit the fan in November 2004 and the rest is history.

 

I think I am more sceptical about the ability of the IOM to run large scale capital projects than Ai droid - but I think things are more complicated than what P.K. rants about.

 

The IOM is small, as a result there will always be lots of redundancy in any capital project that we attempt to install - its simply distorting to compare the costs of projects in the UK put in to support populations in the millions with a project in the Island - the IOM project is always going to seem hugely more expensive - per capita, per KW, per therm, or whatever.

 

We don't have in house expertise, holding that expertise ourselves would be prohibitively expensive, but as a result we are always shafted by the consultants. People do get angry about that, but realistically you aren't going to take on huge projects without expert advice and if you don't have that expertise it costs.

 

Then their is our political and bureacratic oversight and that also stinks - that is something we should be able to improve, but as P.K. notes we do continue to vote in the same lot again and again - last elections there was huge discontent - what happened all returned apart from 2.

 

So - the MEA project was underprepared and underspec'ed before hand, was costly due to lack of scale, and was undertaken with a huge break down in communications between the MEA and government. Those things are all in need of investigation and touch wood will be improved for next time - but this is hugely more than so called illegal loans and the continued emphaisis on this is really missing out more important failings.

 

Our type of Politician is too often fighting its last campaign and not looking to the future - the bureaucratic oversight of the MEA during this time was clearly abysmal, but if the end result of all this is increased bureaucracy then there is a real risk of the wheels continuing to fall off.

 

How to improve our capital projects know-how is a real challenge, and should be exercising our government and polititians, but the image they give is being more concerned about 100 yards of dog crap covered path on Langness or whatever. Problem!

[Lee54]

The Police should take a close look at the Company that built the new Power Station. The Company that was set up to finish the job was PGT Ltd, that is where all the money has been spent. They should also take a close look at the directors of this company and the cosy relationship they had with some of the contractors they engaged on the Project. Some of the contractors that were employed on the project were only set up for this job and once it was finished they took off to the far ends of the world wealthy men never to be seen again. The FCU should interview all of the subcontractors that were employed on the project, that's when the dirt will hit the fan.

I would like to see someone with the balls to call a independent FCU from the mainland to go through the books of those engaged at the plant,

[P.K.]

Sigh - should I bother. I think so.

Well Mr Chinahand, I was wondering if or when you would pop up on this. When the kiddies are slinging their toys out it's sometimes not worth the bother. Personal insults don't faze me in the slightest (they tell me everything I need to know about the person posting them) but I know it bothers some folk. I'm a bit short of time however:

The boards of the MEA and MCC believed they had two routes to finance their capital projects - and things get complicated as there was meant to be a company called the Manx Gas Company to complement the Manx Cable Company with responsibilities to ring fence the Gas projects as these had international liabilities the MEA needed to protect itself from. The reasons why MGC wasn't formed and MCC took on these responsibilities could easily double the time the Select Committee have to sit - anyone know if its come up in their current deliberations - I doubt it!

 

Now in hindsight I am certain the MEA board wished they hadn't thought they had two routes to finance the projects and hadn't used MCC. Its very easy in hindsight to say they should have realized, but legal advice had been taken when the new loans were taken out - and there was the reality that MCC had borrowed money in the past without approval and Tynwald then hadn't batted an eyelid - the new loans in fact re-financed the old MCC loan on better terms which in my mind was one of the main reasons why MCC was used - the convenents were resticting the use of the cable which was commercially damaging.

 

There is no doubt using MCC was quicker than using Treasury and Tynwald and the costs of delay outweighed the additional costs - I can here P.K.'s snort of derision from here, but I do think that is basically indisputable.

I'm a project manager. Golden Rule #1 - never never never base decisions on anecdotal evidence. They "believed" they had two routes to finance? There is "no doubt" MCC was quicker than Tynwald - almost certainly true but to a critical degree I wonder? It's subjective so not something you should be running a project on. The Select Committee is taking a long time - the "reasons" MGC wasn't formed etc etc could easily double their time? And so on. It gives me the impression they were completely out of control.

I think I am more sceptical about the ability of the IOM to run large scale capital projects than Ai droid - but I think things are more complicated than what P.K. rants about.

 

The IOM is small, as a result there will always be lots of redundancy in any capital project that we attempt to install - its simply distorting to compare the costs of projects in the UK put in to support populations in the millions with a project in the Island - the IOM project is always going to seem hugely more expensive - per capita, per KW, per therm, or whatever.

 

We don't have in house expertise, holding that expertise ourselves would be prohibitively expensive, but as a result we are always shafted by the consultants. People do get angry about that, but realistically you aren't going to take on huge projects without expert advice and if you don't have that expertise it costs.

In theory you shouldn't be shafted by consultants. In practice you get good service out of those who are outlooking their next job (and subsequent cheque) from you and bad service from those who will happily create a pile of poo because they know they are going to walk away and it's never going to bite them in the arse.

Then their is our political and bureacratic oversight and that also stinks - that is something we should be able to improve, but as P.K. notes we do continue to vote in the same lot again and again - last elections there was huge discontent - what happened all returned apart from 2.

 

So - the MEA project was underprepared and underspec'ed before hand, was costly due to lack of scale, and was undertaken with a huge break down in communications between the MEA and government. Those things are all in need of investigation and touch wood will be improved for next time - but this is hugely more than so called illegal loans and the continued emphaisis on this is really missing out more important failings.

 

Our type of Politician is too often fighting its last campaign and not looking to the future - the bureaucratic oversight of the MEA during this time was clearly abysmal, but if the end result of all this is increased bureaucracy then there is a real risk of the wheels continuing to fall off.

 

How to improve our capital projects know-how is a real challenge, and should be exercising our government and polititians, but the image they give is being more concerned about 100 yards of dog crap covered path on Langness or whatever. Problem!

I agree with most of this. Unfortunately, because of the undemocratic make-up of Tynwald, the un-elected members end up with the unpopular portfolios! Should they distribute the largesse they are unaccountable to the electorate so there are no checks and balances. If left to the elected members they have one eye on the next election so they take the "crowd pleaser" option every time. The breakdown in comms between the MEA and Tynwald I believe to be a deliberate action on the part of MEA. The SC should winkle that one out and I could be wrong - time will tell. The issue around the management of capital projects, as I have posted time and time again, is woefully inadequate. How anyone can defend that pile of brown and smelly is beyond all rationale. But what do you do, hire one lot to run the project and then another lot to watch over them?

 

As a start there needs to be clear R&R's with all the usual SWOT's, CPA's, checkpoints, spend analysis, PR's blah-di-blah-di-blah etc etc etc i.e. there needs to be competent project managers in Tynwald, preferably before too much is spent on the next cock-up.

[Burt]

The Police should take a close look at the Company that built the new Power Station. The Company that was set up to finish the job was PGT Ltd, that is where all the money has been spent. They should also take a close look at the directors of this company and the cosy relationship they had with some of the contractors they engaged on the Project. Some of the contractors that were employed on the project were only set up for this job and once it was finished they took off to the far ends of the world wealthy men never to be seen again. The FCU should interview all of the subcontractors that were employed on the project, that's when the dirt will hit the fan.

I would like to see someone with the balls to call a independent FCU from the mainland to go through the books of those engaged at the plant,

Dear oh dear, do I hear the sound of legal teams gathering?

[Sebrof]

Sigh - should I bother. I think so.

 

The major point I think that people are still missing from this is that the MEA weren't going "Oh my god, we're over budget, how do we hide it from Tynwald - lets illegally and without approval get a loan via MCC."

 

Rather they had already borrowed £30 million via MCC for the cable - This hadn't been approved, or authorized by Treasury or Tynwald or anyone.

 

It was simply disclosed at the end of the year after the fact in the accounts when they were laid before Tynwald. Tynwald passed the accounts fine and dandy - admittedly a certain Peter Karran - (no the other one, P.K.!) asked all his usual ineffective questions, but the accounts were passed and approved. This all occurred in 2001 or even earlier - well before the scandal about the later unauthorized loans.

 

The boards of the MEA and MCC believed they had two routes to finance their capital projects - and things get complicated as there was meant to be a company called the Manx Gas Company to complement the Manx Cable Company with responsibilities to ring fence the Gas projects as these had international liabilities the MEA needed to protect itself from. The reasons why MGC wasn't formed and MCC took on these responsibilities could easily double the time the Select Committee have to sit - anyone know if its come up in their current deliberations - I doubt it!

 

Now in hindsight I am certain the MEA board wished they hadn't thought they had two routes to finance the projects and hadn't used MCC. Its very easy in hindsight to say they should have realized, but legal advice had been taken when the new loans were taken out - and there was the reality that MCC had borrowed money in the past without approval and Tynwald then hadn't batted an eyelid - the new loans in fact re-financed the old MCC loan on better terms which in my mind was one of the main reasons why MCC was used - the convenents were resticting the use of the cable which was commercially damaging.

 

There is no doubt using MCC was quicker than using Treasury and Tynwald and the costs of delay outweighed the additional costs - I can here P.K.'s snort of derision from here, but I do think that is basically indisputable.

 

Both treasury and the DTI had been trotting along to meetings with the MEA over the capital projects and the accounts had been presented each year to Tynwald. No one had batted an eyelid, no one had complained they weren't getting a clear view of the projects.

 

Then the proverbial hit the fan in November 2004 and the rest is history.

 

I think I am more sceptical about the ability of the IOM to run large scale capital projects than Ai droid - but I think things are more complicated than what P.K. rants about.

 

The IOM is small, as a result there will always be lots of redundancy in any capital project that we attempt to install - its simply distorting to compare the costs of projects in the UK put in to support populations in the millions with a project in the Island - the IOM project is always going to seem hugely more expensive - per capita, per KW, per therm, or whatever.

 

We don't have in house expertise, holding that expertise ourselves would be prohibitively expensive, but as a result we are always shafted by the consultants. People do get angry about that, but realistically you aren't going to take on huge projects without expert advice and if you don't have that expertise it costs.

 

Then their is our political and bureacratic oversight and that also stinks - that is something we should be able to improve, but as P.K. notes we do continue to vote in the same lot again and again - last elections there was huge discontent - what happened all returned apart from 2.

 

So - the MEA project was underprepared and underspec'ed before hand, was costly due to lack of scale, and was undertaken with a huge break down in communications between the MEA and government. Those things are all in need of investigation and touch wood will be improved for next time - but this is hugely more than so called illegal loans and the continued emphaisis on this is really missing out more important failings.

 

Our type of Politician is too often fighting its last campaign and not looking to the future - the bureaucratic oversight of the MEA during this time was clearly abysmal, but if the end result of all this is increased bureaucracy then there is a real risk of the wheels continuing to fall off.

 

How to improve our capital projects know-how is a real challenge, and should be exercising our government and polititians, but the image they give is being more concerned about 100 yards of dog crap covered path on Langness or whatever. Problem!

 

Another good post. Thank you.

 

S

[bluemonday]

Out of interest, do you think the Australians ( as mentioned at http://www.manxradio.com/readNEwsItem.aspx?id=24988 ) know about all this MEA loan ruckus?

[ai_Droid]

I think I am more sceptical about the ability of the IOM to run large scale capital projects than Ai droid - but I think things are more complicated than what P.K. rants about.

 

Wha....

 

So - the MEA project was underprepared and underspec'ed before hand, was costly due to lack of scale

 

That's exactly what I was saying! By the time the loans scandal that everyones concentrating on hit, the thing was half done. That money would have had to have come in either way to get it finished. It's the approval in the first place that was the issue, which is what I said from the start!

[Skeddan]

I think I am more sceptical about the ability of the IOM to run large scale capital projects than Ai droid

 

We don't have in house expertise, holding that expertise ourselves would be prohibitively expensive, but as a result we are always shafted by the consultants. People do get angry about that, but realistically you aren't going to take on huge projects without expert advice and if you don't have that expertise it costs.

In theory you shouldn't be shafted by consultants. In practice you get good service out of those who are outlooking their next job (and subsequent cheque) from you and bad service from those who will happily create a pile of poo because they know they are going to walk away and it's never going to bite them in the arse.

 

There are some very good consulting firms.

 

Managing large(ish) scale capital projects is complex and does take skill and experience.

 

These aren't 'huge projects' - feature films are regularly made with bigger budgets. They're minor compared to Kansai airport, rolling out a 3G network, managing the Olympics, eBorders, or building a nuclear power station.

 

1st rate Programme and Project management is key. Consultants doing this should only be doing this (not also selling the system, doing the systems integration, etc.). 1st rate PM firms work at skills transfer - which is needed. However, 1st rate firms are expensive, but they save a lot compared to projects that go over-budget, under-deliver, are late, or fail totally.

 

What is more expensive are executives and managers in public authorities, often of very middling ability, who are eager to be able to put being in charge of some big project on their CV and so boost their career.

 

The inception and very early stages of a project (business case, planning how to go about the project etc.) are the most critical and makes the greatest difference to the success of the project. Involving PMs late is like employing a captain for a badly engineered ship - they may handle it expertly, but it doesn't compensate for inherent flaws.

 

Design of robust governance arrangements for the project is one of the 'early stages'. Ensuring the project has a sound business case (and abandoning it if it doesn't) is another part of the inception stage.

 

PM Consultants also do reviews to identify reasons for failures in past projects. At a guess I'd say the failures are mainly due to what happened or didn't before the geen-light was given. IMO it would be sensible to have such a review and to look to establish a framework for handling such projects in future. I'd think £120,000 spent on that would be a good investment.