energy sector © siemens ag 2008 energy sector contractors experiences in project implementation and...

Energy Sector© Siemens AG 2008

Energy Sector

Contractor‘s Experiences inProject Implementationand Ideas for Improvement

Siemens Electrical & Electronic Services - K.S.C.C.

Energy SectorSEES Kuwait - 26th May 2010Slide 2 © Siemens AG 2010

Overview

History of Siemens Substation Business in Kuwait

Introduction

Project Implementation (PM@Siemens)

Analysis of Obstacles

Ideas for Improvement

Discussion



1968

1970

1980

1990

2000

2010

Delivery of first 132/33/11 kV substation

First High Voltage GIS of Siemens outside Europe for MEW

From 1970 - 1980 Commissioning of 12 Primary Substations




More than 100 turnkey substation projects were executed for MEW which represents more than 30% of the network


Overview


Introduction




Discussion


Introduction

Energy transmission is key integral part of the infrastructural development in Kuwait. In order to cater to the growing needs of electrical energy numerous primary substations were planned and executed in the last decade. Efficient project execution of these substation projects to meet the required deadlines has been the main interest of the substation contractors and MEW - the owner and the end user of the substations.

During implementation of substations Siemens Project Management encountered obstacles which had mainly negative impact on the execution time and - as a result - on the cash flow in the project.

Ideas for improvement in specific areas of the project shall support the owner as well as the contractor to reduce these obstacles in the future.


Overview


Introduction




Discussion


Project Implemetation (PM@Siemens)

PM@Siemens - Siemens Core Learning Programs

Professional project management is a vital success factor for Siemens. Almost half of our revenues derive from project business, and more than 15,000 project managers work for our customers worldwide every day. Our goal is to continually improve our project-related processes. We have to sustainably increase our results and to minimize project risks. Our values – excellent, innovative and responsible – are our guiding principles in doing so. The PM@Siemens Learning Programs are long-term training programs which are geared to the PM@Siemens job profiles and which ensure the comprehensive and unified training of project managers throughout the Siemens Group.


PM @ Siemens – Certification Levels


PM @ Siemens – General Process Overview


Overview


Introduction




Discussion


Analysis of ObstaclesExecution of Substations

The successful execution of Primary Substations is related to the achievement of the following Milestones:

Site Handover with Building License

Civil Completion

Manufacturing & Shipment Completion

Erection Completion

Commissioning and Testing (TOAC)

FCC

Late achievement of one or more Milestones results in a delay of completion



The main impact on delays during execution derives from:

- late Design and Building Licenses

- late Energizing

- late FCC-Clearances.

These delays are affecting the customer as well as the contractor.

• The late submittal of licenses is mainly affecting the contractor

• The late energizing is mainly harmful for the owner.


Overview


Introduction




Discussion


Ideas for ImprovementAreas for Improvement

Analysis of the Project Implementation Process leads to the following areas for Improvement:

Planning

Communication

Process and Organization

Contract

Invoicing


Ideas for ImprovementPlanning

Handling Municipality related issues (such as building license, site handing over)

Handling issues with other Ministry authorities such as MOC, MPW in relocating existing underground services.

Co-ordination within MEW to energize substation within contract period.

No change in site location.


Ideas for ImprovementCommunication

Internal communication within MEW departments.

Introduce electronic form of communication for correspondences.

Implement regular Progress Meeting and Minutes of Meeting with MEW Management.

Open day for contractors to address contract issues.


Ideas for ImprovementProcess and Organization

Demarcation of authorities with clear responsibilities for MEW concerned representatives.

Define the Process for Change in scope of contract with necessary templates and authorities. Introduce proper Variation Order Workflow.

Define scope of FCC general checks with necessary templates and authorities for contractors and MEW for resource management.

Soil investigations shall be carried out by the owner before tender opening.


Ideas for ImprovementContract

Provision of Transport and Communication to the concerned MEW employee by MEW.

Liability should be limited to the total contract value.

Price Variation for raw material like copper, steel, concrete should be considered

Contract award for Cable- and OHL Works should be done in parallel to the award of the substation tender.

Proper definition of warrenty obligations:The release of 5 percent FCC rate shall be done according to the contractual defined time period of 12 resp. 15 months. Extended warranties for products and erection companies shall be settled with a bond.


Ideas for ImprovementContract

Contractually the site handing over can last up to 6 months. In case more than one substation is contracted, this time period shall be reduced to enable the contractor to stagger the civil works and following activities.

As the completion of telemetry and Cable resp. OHL works are separately contracted, the completion cannot be influenced by the substation contractor. Therefore the TOAC should be released after commissioning and testing of the substation equipment.


Ideas for ImprovementInvoicing

Spare Parts Payment should be done according to the payment terms for the main delivery.

Revision in Payment terms to 20% (advance payment), 65% (progress), 10%(TOAC), 5%(FCC).

The contractual due time for payments (45 days) is rarely achieved. Either the payment process could be reorganized or interests for delayed payment should be contractually agreed.

Monthly Progress Payment for erection shall be considered.



Thank You!

energy sector © siemens ag 2008 energy sector contractors experiences in project implementation and...

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