Valuation of RailNet Denmark
Peak Consulting Group has participated in the project board for the project “Valuation of RailNet Denmark’s infrastructure”, one of the most strategically important projects carried out within the overarching programme “On Track”. The project ran from the summer of 2007 to the summer of 2008.
Most likely, RailNet Denmark is the largest infrastructural proprietor in Denmark. The state-owned organisation under the Danish Ministry of Transport has in recent years undergone significant changes in management style and reporting structures, increasingly moving towards corporate structures.
For several years, RailNet Denmarks management structures have received criticism from the National Audit Office of Denmark, and the organisation has been subject to increased supervision and performance audit by the Ministry of Transport. Valuation of the infrastructure is part of a series of initiatives to professionalise management. Hence, the success of the project was of great importance to ensure that the project would contribute to lifting the increased supervision.
Peak assisted in valuating assets
The primary objective of the project was to enable RailNet Denmark to present annual reports containing an auditable balance sheet for the organisation’s infrastructural assets. Furthermore, RailNet Denmark wanted the method of accounting for the value of infrastructural assets to be based upon IFRS (International Financial Reporting Standards) requirements and specific agreements with the Danish Agency for Governmental Management.
Further project objectives were to ensure:
- Valuation of RailNet Denmarks registered infrastructural assets with effect from 01.01.2008
- RailNet Denmarks continued overview of the assets of the organisation
- Documentation of developments in the railway system – and any eventual backlogs
- A basis for eventual loan financing for projects, and
- Compliance with governmental accounting regulations (possibly supplemented by agreement with the Danish Agency for Governmental Management), assuring that the National Audit Office of Denmark will not find ground for any qualifications
Scope of governance and management
Project management and governance was divided between RailNet Denmark and Peak Consulting Group. RailNet Denmark’s project manager was responsible for financial principles and methods, with Peak’s project manager was in charge of the project management activities. Furthermore, Peak’s project manager focused on creating an auditable data basis as well as on providing sparring on business aspects of linking the business systems with SAP.
In terms of project members, the project very extensive, involving all nine business areas and several departments. Approximately 100 employeess and consultants from SAP and KPMG were involved.
The project has been a fixed items on RailNet Denmarks Board and Management meetings as the projects output has had key impact on the organisation’s financial management.
Peak Consulting Group’s project manager contributed to reaching project goals
Peak ensured that:
- The project at all times sustained a consistent reporting structure providing information to employees as well as management, board of directors, and the Ministry of Transport
- Continuous progress in project teams across all business areas was made
- RailNet Denmark achieved an auditable data basis for the preliminary statement of account
- It is created action plans for the areas which could not be included in the opening balance
- Action plans have been made for areas that could not be included in the preliminary statement of account
- Documentation for all decisions made and infrastructural aspects was in place
The successful project has ensured that RailNet Denmark has an auditable balancesheet and know the value of their assets.
Peaks Project Manager demonstrated the ability to hold a big overview on things and ensured that all area managers kept focus and delivered.
Søren Stahlfest Møller, CFO