a Aves Transport NSW | for NSW Fall Qverations Centre (ROC, Transport Finance and Investment Division Evaluatian & Assurance Health Chess review Report v & Dateradtiy 2018 ‘SENSITIVE: NSW GOVERNMENT IPA Application 195-0017 - Pago 41 Executive Summary ‘The Evaluation & Assurance Branch within TINSW Finance & Investment Division has conducted a Health Check Assurance Review of the Rail Operations Centre (ROC) as requested by the Finance and Investment Committee in May 2018 as a result of adcitional funding request. ‘The purpose of this Health Check Review Is to provide a ‘point in time’ insight into the performance of the project in relation to time, cost and risk management. The Review is also to provide assurance that project delivery is being managed effectively and whether the planned project outcomes remain aligned to the achievement of targeted benefits. Key observations Be * The ROG ie now being etfectvely managed and has sang sponsorship and governance from within Syéney Trains : + Sydney Trains have @ strong commitment to delve the projg@SPNnin the approved budget + Acive risk management has been evidenced in the ROC paar df for timely resolution of issues * Complex build and interrelationship of technolog fully assessed unti operation of the ROC + Likely delay of benefits due to project exteXGN and.use of the facility as result of acceptance of new roles and “buy in" to ngytyocesses and functionality * There are schedule risks for all wefQstreams’ across the ROC ~ infrastructure, technology, process, people and the BeBendency on Network Operations Reform (NOR) . The key diiver of the risk Is bulgfag energisation. Energisation is the catalyst for the commencement of testing and gofissioning, training, population of ROC by staf. Delay of project completion will hag pacts on the benefits realisation timing ‘+ KPIs have not yet bee@fully developed to support the purpose of the ROC. This is le’and processes is not able to be required to assess and will inform staff training ‘Limited continges milion) to deal with emerging risks and the likelihood of project dufation ext ; The purpose of theQROC is to Stipport new business functions to increase the ability of Sydney Trains to react efficiently on Day of Operations by enabling, identifying and managing incidents during degraded modesto. improve network recovery. This will translate into fewer delays and better information and willitipfove our service to customers. Benefits was originally included in the TOR however has been withdrawn from this review as the benefits will not be able to be articulated until the building is operational, transformation processes (including structures and recruitment are finalised) and operating and any technology has been tested and commissioned to understand the workings of the building. Notwithstanding ‘observations have been included which will impact any future benefits analysis and a recommendation regarding Benefits is included. ‘SENSITIVE: NSW GOVERNMENT FRAIL OPERATIONS CENTRE EVALUATION & ASSURANCE HEALTH CHECK REVIEW REPORT IPA Application 196-0017 - Page 462 Project Context Background The ROC aims to provide a world standard Network Control capability to manage Day of Operations activities (including signalling/ train control, customer information, security, network asset monitoring and incident response). The ROC aims to improve key aspects of the ‘day of ‘operations’ by delivering a solution combining technology, people and process, and infrastructure and will co-looate key functions co-ordinating activities during the Day of Operations. The ‘operation is supported by new business applications functionality to inorease the ability of ‘Sydney Trains: ‘+ Allow the capture of changes to the Daily Working Timetable on Day of Operations by enabling Train Controllers to calculate and publish effects of decision made + Identity and manage worktlow during incident and improve network recovery + Rapidly transmit customer information. through multiple change5 both internal and external customers, and Vv * View the network on a schematic rail network diagram fonitor performance in real time including infrastructure alerts such as power faiiutesOTR, security incident, etc. In November 2018 Rallcorp submited the ROC as a NexkPNRGy Proposal o Treasury es par of the 2014-15 TAM process. A preliminary and final bus ‘case was subsequently developed in October 2014 to support the proposed investment. \C was approved by the Transport FIC in June 2015 for a capital investment of $276.2 aus covering an infrastructure, technology and people and process component. NSW Treasug@aPbvided $112.2 milion via a borrowing facility (5.5% over 25yr loan term). The debt servicg repayment is to be funded from operational savings as a result of the ROC = the ROC design, announcement othe ROC site location, and endorsement of the concept design. The project commenced ry in 2015 with a target completion date of 2017. The ROC has the objective to modernise aging rail operation technology via introduction of a new rail operation system. The tecnnahdy selected for the system had not been tested in Australia. In July 2016, mg ‘additional funds of $17.25M to add construction and fit out of one In December 2015, the Minister of Tr vs rt & Infrastructure approved the preferred concept for extra floor tosthie, 1g:to acconimodate Sydney Trains need to move out of Pitt Street offices, which was(eated as a’ separate project to support Activity Based Working, In June 2017, Syd Train, (HaliCorp) announced a scope reset to the project to deliver the rogram within the cuffent approved budget of $2762M. The project steering committee endorsed the preferred ‘approach to mitigate forecast increases to project costs of between $40 million -$50million, An addendum was prepared by Sydney Trains to outline the impacts of the reset, noting the main paints as below; ‘+ De-scope of Customer Information Management System (CIMS) '* Reduction of Economic and Financial Benefits from $ 436 million to $194.4 (NPV@7%) with a resulting BCR of 1.7 against the original Business Case of 2.2 * Significant issues experienced include industrial relations dispute, technology development not meeting requirements, changes to ROC building scope/design and budgel overspend. In April 2018, a request of additional funding of $20 millon was submitted by Sydney Trains, which was approved by FIC. ‘SENSITIVE: NSW GOVERNMENT [RAL OPERATIONS CENTRE EVALUATION & ASSURANCE HEALTH CHECK REVIEW REPORT IPA Appicaton 195-0017 - Page 48