q4e-2011 ntpc abstract - powerhr forum 02, 2012 · abstract india started its ... 2 case study is...
TRANSCRIPT
Abstract
India started its journey of excellence after adopting the path of
economic liberalization and globalization. Currently, we are in a
phase of transformation from D eveloping to D eveloped . Our
GDP has been growing gradually since last few years. Day by day,
more and more inflow of foreign investment is being observed. But,
India has still a vast potential of such investment and waiting for some
more development of its minimum infrastructural facilities like roads,
power, airport etc. Government has been investing a lot of money
through various projects to develop these facilities. For this, our
leaders have been stressing much upon effectively managing the
projects being under taken every year.
The prebudget economic survey published in Feb 2011 says that over
52% of ongoing Infrastructure projects are running behind schedule.
A survey of DPI (Department of Program Implementation) says that
As on October 2010, out of 559 Projects, 14 are ahead of schedule,
117 are on schedule and 293 are delayed . Unless and until, these
projects are completed in time, within estimated cost & with desired
quality, our country cannot pick the path of progress at par with other
competitors like our neighboring country, China, whose GDP has
been roaring up and is far ahead of us.
This paper discusses the problems faced during projectimplementation. Case studies of various sectors have beenanalyzed. Scope of study has been defined with specific
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attention on power plants. The success and failure stories ofsome of the ongoing and past NTPC projects have beenanalyzed to define a Roadmap for strengthening ProjectManagement capabilities.Based on the above learning, some recommendations with
road map have been made for strengthening Project
Management capabilities.
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Introduction
To provide a Roadmap for Strengthening Project Management
Capabilities , we have done Primary & Secondary survey. With these
survey work, data analysis & our extensive brainstorming we have
proposed a path/improvement in certain processes to strengthen the
Project Management capabilities.
In our Secondary survey we have shown three types of case studies.
The 1 one is a case study of a failed project of Tata's Singur, 2 case
study is of successful project of DMRC and 3 one is case study of a
delayed project of NTPC Kahalgaon stage#2 & success stories of
NTPC Projects. Further we have done SWOT analysis of NTPC &
done a Primary Research work for understanding requirements of
better Project Management. Based upon the case studies we have
tried to gather learnings.From the learning's we devised the
recommendations. Based upon that our team PIONEER suggest a
road map with some suggestions which will help in
.
st nd
rd
Strengthening
Project Management Capabilities
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Problems with Mismanaged Projects
FIG-1
CHART-1
A Mismanaged Projects provide i) ii)
& iii) . These provide huge gap in
Demand & Supply & finally slows down the GDP of our country.
During last 5 years , 495 projects have been delayed leading to a cost
over run of Rs 55175 Cr The delay in project execution in general
slows down our GDP as evident from the following curve.
Cost Overrun Quality
Deterioration Time Overrun
.
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Project Management
Project
Project Life Cycle
Definition: - A project is a one-shot, time-limited, goal-directed,major undertaking, requiring the commitment of varied skills andresources."A project is a temporary endeavor undertaken to create a uniqueproduct or service.
· Performed by people· Constrained by limited resources· Planned, executed & controlled
The project life cycle consists of four phases as shown in the aboveFigure.
There are four phases within the project life cycle1. Project Initiation2. Project Planning3. Project Execution4. Project closure
FIG-2
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Project Management
Project Management of NTPC Limited
The discipline of planning, organizing, securing, and managingresources to achieve specific goals. It is also application of knowledge,skills, tools, and techniques to project objectives to meet stakeholderneeds and expectations
NTPC Limited practices Current Project Execution Approach likeintegrated project management and Control system (IPMCS) whichis the coordinated efforts of Contracts, Engineering, andConstruction.
IPMCS serves as a basic management tool for Project Planning,
Scheduling, Monitoring and Control, based on PERT
NETWORKS at various levels using computer aided tools/softwares.
TABLE-I
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Details of the Research WorkAnd
Analysis
Scope of Study Defined
The word P roject is itself a very vast term as discussed above, which
covers a wide range of areas. Starting from arranging everything for
making own tea for the first time to building the Great Wall of China
are all achieved through executing some projects. It may be industry
or infrastructure building roads and bridges or implementing some
new ideas for the development of society all fall under the definition
and implementation of the word P roject .
In our country, presently, infrastructural development, especially
power sector is perhaps facing the biggest challenge at the moment
because of acute shortage and other developments are linked to this
segment. So, our study has been focused basically on strengthening
project management of power sectors.
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Methodology Adopted:
01. Case Study of a failed Project02. Study of a successful Project03. Venturing into NTPC Projects04. Best Approach Model for Power Projects05. SWOT Analysis of NTPC Limited & Questionnaire06. Recommendations with Road Map for
Implementation07. Conclusions
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Case Study-ITATA Nano
Case Study I: Singur- A Failed Project
FIG-3 FIG-4
Failure of TATA'S Singur Project & Nandigram's Chemical Factory
The proposed Chemical hub at Nandigram & TATA's proposedNANO factory at Singur could not be released. Land Acquisition inboth the cases proved failure & ultimately the two projects wereabandoned.
Ø Acquisition of farm/fertile land is disastrous
Ø Increasing expectations of PAPs is to be fulfilled in
newer, attractive & fruitful ways
Ø Increasing tendency to politicize the land acquisition
problem & needs ways to tackle them
Ø Needs to change the British-time land acquisition law
by the Centre
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Takeoffs
CASE STUDY- II: SUCCESS OF DMRC
The Delhi Metro Rail Corporation (DMRC), which operates anetwork spanning over 100 km linking Delhi with Noida, Gurgaonand Faridabad in the National Capital Region, has receivedinternational benchmarks in service and technology.
The entire Phase I of the project was completed in November 2006,on budget and almost three years ahead of schedule, making Delhimetro one of the fastest metro constructions achieved worldwide.Similarly Phae II of the project got also completed in almost sametime frame.
Project details and progress:
Key Factors of success:
? Able Leadership of metro man Mr. E. Sreedharan
Ø Latest technology like NATM incorporated for tunnelingØ Better contract system incorporating both local competitive
bidding a well as International competitive biddingØ Funding from different sourcesØ Indigenization of coaches
TABLE-2
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Phase No. oflines
Length(km)
Elevatedlength (km)
Undergroundsection (km)
At gradelength (km)
No. ofstations
Phase IPhase IIPhase IIIPhase IV
315118
65.10128.06112.17108.50
47.4394.13NANA
4.504.10NANA
13.1729.83NANA
5981NANA
Total 413.83
Takeoffs
Venturing into NTPC Projects
Kahalgaon Stage-II:
Delayed Project of NTPC Limited:
TABLE-3
The cause of choosing NTPC Projects are:-
NTPC Limited has the
ü Largest Market Share in Power Sector
ü Largest Capacity in Generationü Largest Business in Power Sectorü Largest Diversified in Power Related Areas
TheThe detailed
actual progress has been shown below:
1. Poor Infrastructure Facility2. Non-Sequential Supply of Materials3. Poor Materials Management System for BHEL Materials4. Two units were awarded to same Sub- Agency by BHEL for
Boiler as well as TG works
kahalgaon project (3X500 MW) got delayed by 33 monthsas per contract and 29 months as per approval.
Major contributors of the delay are:
.
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Elevatedlength (km)
Schedule(As PerContract)
SynchronizationCOD
SynchronizationCOD
SynchronizationCOD
Schedule(As per Inv.approval)
Nov'06Jun'07*May'07Dec'07*Mar'07Oct'07*
UnitNo.
Actual Delay in Months(w.r.t. Invapproval)
Delay inMonths(w.r.t.contractSchedule)
July'06Dec'06Dec'06May'07Dec'06Jun'07
Mar'07Aug'08Mar'08Dec'08June'09Mar'10
41410122729
82015192733
U#5
U#6
U#7
5. Delay in Front Handing over by Civil Agency (MainlyHSCL)
6. Poor work progress by Offloaded Agencies.7. Abnormal increase in Structural Qty causing delay in
fabrication & Erection work.
The Gerua Bridge in between Kahalgaon and Bhagalpur wascollapsed in Nov'2000. The alternate route from Bhagalpur is viaGodda ( Bhagalpur- Godda- Kahalgaon-Distance 120KM) throughwhich Kahalgaon project received the required materials by roadtransport. Due to this, all the materials coming through road transporttravelled additional 90 KMs, consuming considerable amount oftime.
:
" The Materials yards were not properly earmarked andStacking of materials were not done in systematic way.
" A lot of time was consumed in searching of materials andmany materials got damaged and missed, in due course oftime.
Poor Infrastructural Facility:
Poor Material Management by BHELFIG-5 FIG-6
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" Materials were cannibalized from Unit-6 to Unit-5 & fromUnit-7 to Unit-6. But adequate measures were not
The following observations/mistakes were learnt:
" Back to back sub-contracting by the HSCL for Civil &structural work.
" Engaging a single sub agency by M/s HSCL for entire civilwork of SG civil & Main Plant Civil works was the basicmistake at the beginning of the project activity.
" There was huge dumping of Mill rejects for movement ofHeavy duty crane. This caused delay in front handing over forpaving work for civil agency.
:
The requirement of structural steel increased at site unreasonably.What has been envisaged by Engineering, was not sufficient to meetthe target and heavy quantity of additional steel was procured causingunusual delay.
To add further fuel to the journey of delay, offloading of structuralwork to the local agencies was made. These agencies were neitherhaving sufficient project experience, nor were financially healthy.
After a lot of hurdles, finally the last units got commercialized w.e.f
Mar'2010.
taken intime for replenishment of Materials.
Failure of Main Civil Agency HSCL executing the Structural
work:
Unrealistic Engineering
They were also not equipped with their constructionequipments. Hence they also failed to keep time schedule.
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Some of the Successful Projects:Simhadri-Stage-I:The stage-I of Simhadri project was brought in 39 months creating anew benchmark in the Indian History of erection and commissioningof 500MW unit of a green field project.
1. Packaging Concept :
a. Reduction in Contract Packages to 12 (presently 29 in
stage-II).
B. Main plant turnkey contract to BHEL incl. civil works
executed by M/s Simplex.
C. Less interface issues & improved coordination due to less no.
of agencies
2. Timely availability of Land & Site Leveling Works.
3. Timely availability of supplies.
4. Matching manpower from NTPC & BHEL
5. Resourceful contracting agencies.
6. Dedicated 33kv/11kv Construction Power supply has been
established by 2nd month after Main Plant Contract award
date.
7. Approach road from National Highway to project site
strengthened.
8. Stand by arrangement for power supply has been arranged
by agencies by providing
Some of the key success factors were:
9. BHEL engaged 5 separate agencies for site leveling tomeet the completion target.
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10. Strong state government support with regard to IR issuesand wage issues.
The main plant was awarded on 22.08.01. The unit was synchronizedin 36 months 9 days creating another benchmark in the history of500MW erection and commissioning.
The major reason of success was less no of package due to EPCapproach
VSTPP-Stage-III:
Ramagundum Stage-III:
TABLE-4
TABLE-5
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CompletionTargetsUnit No
Schedule Actual
First Unit 24.02.2007 01.12.2006
Second Unit 24.08.2007 15.07.2007
Major Activity Date of Mile Stone
Achieved
No of Days
Main Plant Award 22.08.2001 -
1st Synchronization 31.08.2004 36 months 9 days
Date of Commercialization 25.03.2005 43 months 3 days
Key Findings for Success Factors
Some major success factors for the above projects of NTPCare as follows:-
1. Less Number of Packages
2. Timely availability of Land & Site leveling, Supplies
3. Advance planning of Construction equipments
4. Very Less man day loss during construction period
5. Time Availability of NTPC Inputs like Steel, Cement
6. Introduction of Web Based Monitoring
7. Visits of Top Management to Manufacturer's sites
8. Adoption of GPS System for Critical Material Tracking
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Best Practices Model for Power Projects
Now best approach adopted by different thermal projects are:v Itaipu: Benefit Sharing Approach on Land Acquisition (Itaipu
Dam located on the border between Brazil and Paraguay)v Simhadri & Vindhyachal: Lesser Packages & Better
engineering on LOA(Letter of Awards).v NTPC Mouda: Round the Clock Working & Tight
Monitoring; Quality Machines on site levelling.v NTPC Ramagundam: Faster mobilization of materialv Hissar: On-site Drawing Approvalv NTPC Vindhyachal: Quick Payments on Civil Works.v Hissar: Use of Prefabricated Material, TEPCO: 5S
Methodology on Civil Works.v Rosa Of Reliance Power: Concurrent Execution & Standard
Practices of Commissioning
FIG-7
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SWOT Analysis of NTPC Limited
Strength
Weakness
Opportunity
Threat
v Maharatna Statusv Excellent Monitoring & Reporting Systemv Skilled Man Powerv Approach to GOIv Sound Financial Strength
v Lack of Long Term Supply Agreement with the powerequipment manufacturer
v Multi layered structure delaying decision makingv Lack of experience from Captive Coal Mines
v Increasing Market Demandv New Techniques & Machinery for Constructionv Introduction of Web Basedv Real Time Monitoring
v Land Acquisitionv Private playersv Tariff Based Biddingv Attritionv Stringent Environment Norms
We have done a atNTPC Kahalgaon with population of 228 Nos. Of Employees forunderstanding requirements of better Project Management.
Primary Research work (Encl: Annexure-1)
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RECOMMENDATION WITH ROADMAP FORIMPLEMENTATION
Time Management
Faster Land acquisition
v Time Managementv Cost Managementv Quality Managementv Contract Managementv Human Resources Managementv Communications Managementv Risk Managementv Integration Management
v Faster Land acquisitionv Adopting Latest Techniquesv Use of Modular/ Prefabricated Structuresv Use of Pneumatic Structuresv Erection Simulatorv Strict Compliance of Safety
a. Appropriate site selection, Preferably barren land ortakeover of BIFR industries.
b. Dedicated team deployed like NUSCO(NTPC utilitiesservices company ltd.)
c. Help from NGO for rehabilitation work.d. Profit sharing to PAPse. Socio-economic rehabilitation of PAPsf. Stress on expansion of existing projects
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Adopting Latest Techniques
FIG-8
CHART-2
Since Civil & Mechanical Works play a major role during executionof a project we have to concentrate adopting more techniques in civilin civil & mechanical work.
a. Pile Breaker
b. Telescopic Cranes
c. Automated canopy Tower construction in place ofmultiple manual crane
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Use of Modular/ Prefabricated Structures
Use of Pneumatic StructuresFIG-9
FIG-10
a. Use of Bolted structure in place of welded structure
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Construction Simulator
FIG-11
In NTPC we have mandatory 15 days workshop at NTPC Korba
s imula tor. I t i s i r re spec t ive whether one i s f rom
operation,maintenance,C&I,contract,F&S everyone have to attend
it.
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Similarly our team suggest to have a simulator of erection activities
in our company. The advantages will be:
v
v
v
v
Statistics suggest that 98% of the accidents can prevented by
taking suitable precaution.
v Fuel Cost Reduction
v Capital Cost Reduction
v Revisiting Engineering
v Cheap Funding
Initial brief up of erection process
Early visualization of site & its activities the Virtualway
Better risk & Cost Analysis Approach
Pool of Engineers Specialized for Site
Strict Compliance of Safety
Cost Management
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Sr. No. Description of Accident % Occurrence Remarks
1 Unsafe Act of Persons 88%
2 Unsafe Mechanical / Physical
Condition
10%
3 Natural Calamities 2%
98% of the
Accidents can be
prevented if suitable
precaution can be
taken
TABLE-6
Fuel Cost Reduction
CHART-3
Cost Sheet Analysis under Cost+Tariff Mode:A cost sheet of a typical coal based thermal power plant under thepresent Cost+ tariff regime has been analysed in detail and the breakof various factors involved in calculation of the total tariff is shownbelow (shown in next page).
The ratio of cost of fuel (energy charge or variable charge) with
capacity charge(Fixed cost) is approx. 70:30.
a. Consultancies to Foreign Leading Agencies (Eg. PeabodyEnergy Corporation , USA, Centennial Coal, Australia , RioTinto, British-Australian Company and PT Arutmin ,Indonesia ) for harnessing their best practices.
b. Foreign mines Exposurec. Efficient and Economical Coal Production from captive
minesd. Efficiency Improvement through High Mechanization
Cost of coal can be reduced by :
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FIG-12 FIG-13
Statistics show 20 to 30% of the cost saving can be done by upgrading
to higher size mobile Mining Equipment. (Source: Bob King &
Associates).
a. Crushed Coal Transportation
In case of Sasan UMPP, Reliance ordered the BTG Pkg to a Chinesecompany instead of BHEL. Due to this their capital cost reducedfrom 5.69 Cr/MW to 4.63 Cr/MW.
a. Reducing System Redundancy
e.g. Single TDBFP system
b. Bunker Size Reduction
- Significant Cost saving in CHP system
c. Optimization of Civil & Mech. Structure
d. Compact Plant Layout
Capital Cost Reduction
Revisiting Engineering
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e. Compact Layout of Township
In order to arrange Loan at Minimal Interest rate
We can go for
a. Infrastructure Bond at interest@ of 6 ~7%Loan from ADB/IMF/World Bank at interest@ of 3~5%
- Multi- Storied buildings with- Lift and Parking Facility
Cheap Funding
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Quality Management
Contract Management
a. Strict Compliance of quality during execution
b. Redundancy Vs Reliability
c. Project Completion in Totality
d. Equipment with Reliable Performance
- For this we need exploring Economic but Qualitative
Equipment through long term technology alliance. For
Immediate measure, we may opt for Chinese equipments.
But in long run we need ICB for bulk tendering with provision
of manufacturing unit in India
a. Fast & flexible dispute resolution system
b. Rate Contract with agencies for large Equipment
c. Award of BOP package as per schedule
d. Expediting finalization of sub vendor by the principle vendor
e. Agencies unable to execute ongoing projects in time may
be barred from bidding of next project
f. E tendering, reverse auction, video conferencing
.
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Human Resources Management
Communication Management
HR plays an important role in strengthening project managementcapabilities. Employees of an organization are the key assets. InNTPC, 25144 beautiful minds are working. These minds areregularly trained through initiatives taken by HR department.They can be further strengthen by :
a. Certification and training courses of the employee.b. Sharing best practices by managing strong knowledge
base.c. PMKQ (Project management knowledge quotient ) is being
used to measure and analyze strengths and weaknesses ofproject management.
d. Motivation factor like should beencouraged more.
like Q4E,PC,QC,NOCETshould be strengthen more.
f. Today our man/mw ratio is near to 0.8 and our target is0.6.So in this challenging environment a balance in work lifeis required. It can be done by adding more recreationactivities.
g. Stress should be given in more and more.
h. In project there is always a shortage of skilled manpowerlike technicians, welder, fitter. NTPC has adopted 18 ITI'sand is setting new 8 ITI's to fill the gap in manpower. Itshould be focused more.
Today in the era of IT yuga, communication plays an important rolein project management. Our team Pioneer suggests that IT shouldbe set up in parallel with the set up of the project. Benefits of ITmanagement are as follows :
“Star of the month”
e. Knowledge sharing platform
cross functionalteam work
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a of project and materials based on GPS.b among intra projects can be done.c. Status of can be
monitored.d. Application of at project is helpful in funding
and other various purposes.
and are two different words but areused in very much conjunction. In project risks may be in terms offund, man power,strikes,accident etc. Risk management is an art ofmanaging all these various risks associated with the project.
We suggest that themore and more so as to avoid any risk regarding fund
allocation or rather say fund release.
It is the summation of each and every aspects so as to achieve thegoal.In NTPC for every different cross section likeHR,finance,quality,contract we have a dedicated team deployedheaded by a project manager/HOD.These project managers are
well educated and well trained and they know their role. But atthe top we need one person who can guide all these cross
functional sections and can mould them in a
. Real time tracking
. Video conferencingpending drawings, approval plans
SAP and ESS
“Risk” “project execution”
preventive vigilance practices should bestrengthen
leadership
still
direction. For theperson to sit at the top qualities are importantbecause these leaders have some vision in their mind. Toachieve that vision they made some strategy and by virtue ofcommunication skill they align and motivate people toachieve the goal/vision.
Risk Management
Integration Management
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Our CMD Sri A.R.Choudhary,prior coming to NTPC he was inNBCC.That time NBCC was a sick company.He not only made aturnaround of NBCC from a sick company to profit making companybut also upgraded it into “Miniratna “status.
Power plant plays a key role in industrialization and hence for thegrowth of the nation. Today India is a power deficit country .So tobridge the gap between demand and supply of power, more andmore power plants are required. But coming of a power plantproject within the constraint of time, cost and quality is always achallenging job.
Recent Initiatives of NTPC are
IT based real time monitoring through Project MonitoringCentre, web based milestone monitoring for new &ongoing projects accessible to Ministry of Power andMinistry of Statistics & Program Implementation.Live visuals through high resolution remote controlledcameras.Single point centre for quick transfer of critical informationto management.Regular review mechanism in place through videoconferencing available at PMC.
PMC (Project Management Contract)
Conclusion
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Adoption of new concepts liketo enable start of Engineering activities before the
award of main plant award.
Creation of Pre Investment Monitoring cell, integratedwith PMC, with clear timelines.Regular monitoring of new projects proposals tillinvestment approval.Land acquisition cell created at Corporate Centre tosupport the activities at site.Strict timelines for ordering BOP (Balance of Plant)Packages.
We are already in the path of excellence only a few fine-tuning isrequired like:.
Formation of NUSCO, a dedicated team for LandacquisitionErection SimulatorCanopy concept to avoid Man-Day lossesUse of Advance technologies particularly in civil areaOptimization of Engineering for Cost ReductionLess number of PackagesFast & Flexible Decision making for Contractual DisputesGPS enabled tracking for ensuring critical EquipmentApplication of Latest Project Management Tools likeCritical
LNTP (Limited Notice toProceed)
Chain Project Management (CCPM), Event ChainMethodology, Agile Project Management etc.
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Annexure 1
Annexure 2
Annexure 3
Team members of Pioneer:
REFERENCES:
Management Concepts & Practices, by S.K.Prasad,Prentice Hall India.
S. Choudhury Project Management, Tata McGraw Hill
Integrated Project Management by Bruce T Barkley, Sr
P K De. Operations Management XLRI Jamshedpur,Jamshedpur, India.
Search Group, Incorporated
Project Management Institute
Centre for Technology in Government
Has done B.E. in Electrical Engineering from Jadavpur Universityin 2002. Has served Triune Projects Pvt. Ltd., a design Enggcompany for one year. Joined NTPC as an ET in the year 2003 .Worked in the Electrical Erection Department at NTPC Kahalgaonupto April 2011 & has exposure of execution of Kahalgaon's 3X500MW Power Plant. Presently working at Electrical MaintainenceDept. of NTPC Kahalgaon. He has participated in NOCET-2011 inERHQ-1 from team “Random-X” and bagged first prize.Mob: - 9431600517
Intranet of NTPC Limited
Chintan Baithak by CMD, NTPC
E-mail:- [email protected]
Asesh Singha Roy
www.search.org
www.pmi.org
www.ctg.albany.edu
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Abhishek Kumar
Tarun Kumar:
Has done B-Tech in Electrical Engg from N.I.T. Jaipur in 2005.Hasserved IBM for one year as programmer .Joined NTPC as an ET inthe year 2006.Presently working as Senior engineer in operationdepartment at NTPC Kahalgaon.He is also the facilitator ofNavsahkti QC of operation department who has bagged“ award in NCQC-2011 meet at Hyderabad.He hasparticipated in PC-2010 in ERHQ-1 and bagged runner upaward.Currently in PC- 2011 project level meet has bagged firstprize from “Inner Eye “ professional circle.Mob: - 9431600267
E-mail:- [email protected]
Has done B.Sc in Electrical Engg from B.I.T. Sindri in 2006.Workedas Asst. Manager in DTL(Delhi Transco Limited) for one year.Joined NTPC as an ET in the year 2007.Presently working asEngineer in operation department at NTPC Kahalgaon.Mob: - 9431600308
E-mail:[email protected]
Excellent”
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“Strengthening Project Management Capabilities”
Abstract
Operations keep the lights on, strategy provides a light at the end of
the tunnel, but project management is the train engine that moves
the organization forward.
Joy Gumz
The power sector in India is witnessing sweeping changes in its
operating environment in terms of economic, regulatory, statutory
and operating mechanisms. It has become imperative for the utility
companies to manage this transition from rigid monopolies
operating in a tightly regulated environment to a market driven and
commercially competitive organization. Today organizations
manage projects within increasingly complex environments driven
by regulatory changes and organizational restructuring. New
product development, post-deal integration, outsourcing and policy
implementation, in addition to traditional, but vital, system
development and implementation, are amongst the current key
project initiatives organizations must manage. In fact, it's difficult to
imagine an organization that is not engaged in some type of project
activity.
The ability to successfully execute these projects is what drives the
realization of intended benefits and the achievement of business
strategies. Organizations that execute projects successfully
employ effective project management practices as a tool to drive
change and achieve business objectives.
For NHPC, projects are the building blocks that provide the
foundation for its future viability.Given the strategic impact that
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projects have on a business, NHPC must follow effective project
management strengthening processes that measures progress
and risks and ensure the right projects can be delivered in
alignment with its vision and mission.
This paper adopts a “dynamic capabilities” perspective, drawing on
organizational learning theory to explain the path-dependent
nature of Project Management capability development and how
PM capabilities work with the resource base to enhance
competitive advantage.
The paper infers that NHPC has achieved an average score on
project management capability benchmark and it concludes with a
recommendation of Project Management Strengthening Model
(PMS) that incorporates an integrated project management
process at different levels with the formulation of System
Integration Management Office (SIMO).
Trying to manage a project without project management is like
trying to play a football game without a game plan.
K. Tate (Past Board Member, PMI)
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1. Introduction
Many businesses recognize project management as a core
competence and seek to deliver benefits to the business through
effective management of projects. But how can an organization
know whether its project management processes are adequate?
Can a business compare itself with best practice or its competitors?
Is there an accepted benchmark for organizational project
management capability? The work of Ibbs, Kwak, and Reginato
over the last decade focused on recognizing the benefits of
investment in project management competency through
measures of maturity in an organization's practice of project
management. Higher maturity scores are hypothesized to correlate
with higher levels of predicted project performance. The theory
was that investment in strengthening project management
capabilities increases an organization's project management
maturity standing and this improvement results in enhanced
project performance that should translate into cost saving and
other benefits.
NHPC Ltd is a project-oriented company engaged in operation,
maintenance and construction of hydro power plants. Studies
reveal that most of the power projects especially Hydro projects
consistently come in late and over budget. Some of the causes of
delay have been enclosed at Annex1.With the objective to take
NHPC to new heights of performance, is it required that
(A) NHPC should find ways to rethink, or transform, the way it
manages its projects? ;
1,2,3,4
OR
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(B) It should invest in strengthening its project management
capabilities?
To choose the appropriate option NHPC should assess its project
management maturity, while managing its activities.
The (ProMMM) has been
developed on established concepts from existing models such as
the Capability Maturity Model (CMM) from Carnegie-Mellon
Software Engineering Institute (Paulk et al. 1993, 1995) and the
EFQM Excellence Model from the European Foundation for Quality
Management (EFQM, 1999). It also draws on a previously
published model developed to assess organizational risk
management capability (the see Hillson
1997).
The model describes four levels, of increasing project
management capabilities with each ProMMM level (Naive, Novice,
Normalized and Natural) further defined in terms of four attributes,
namely culture, process, experience and application (as explained
in Annex-2). It presents a generic benchmarking framework
applicable to project-based organizations in any type of industry
and does not presume any prior level of project management
capability. The various levels have been summarized in figure1.
The team has adopted this tool to assess NHPC's current project
management capability against agreed criteria .
1.1. The Project Management Maturity Model Structure
Project Management Maturity Model
Risk Maturity Model -
5, 6
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Figure 1: Pro MMM Levels
1.2. ProMMM attributes
culture (how we think),
attribute (how
we do things),
The four attributes, namely culture, process, experience and
application are briefly discussed hereunder:
One crucial area is organizational
covering the mindset, ethos and belief structure of the
organization, which drive instinctive assumptions and
reactions.
A second element required for effective project
management is embodied in the process
covering methods, tools and techniques
available to support project management.
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Fully project-based culturepractice approach to PM in all aspects of
the business.Improved business processes by active Project-basedinformation
With a best-
Level4
Natu
ral
PM is implemented across all aspects of the business.Generic project management processes areformalized and widespreadBenefits are understood at all levels of theorganization although not fully achieved in all cases.
No structured approach to project management.Management processes are repetitive and reactive.Little or no attempt to learn from the past or to preparefor future threats or uncertainties.
Experiment with project management,No structured generic processes in place.Aware of the potential benefits of a structuredapproach to managing projects, theNot effective implementation of PM processes
Level3
No
rmalized
Level2
No
vic
e
Level1
Naiv
e
Pro
ject
A third essential contributor to project management is
, both individual
and corporate, expressing the extent to which the principles
and practice of project management are understood.
Lastly, project management must be put into practice, and
the effectiveness of will be
a key measure of project management maturity.
NHPC has employed project management tools and
process for managing projects.
of the paper are to:
Use ProMMM to benchmark NHPC's project
management capabilities.
Study the primary reasons behind the failure or delay of
projects.
Support the introduction of effective in-house project
management approa
Assessment of NHPC's project management capability against the
ProMMM framework was undertaken using two complementary
approaches: a perception-based questionnaire, and structured
interviews with key staff (data validation).
experience (what we know and can do)
application (actually doing it)
The objectives
ch(i.eAction Plan)
2. Hypothesis:
3. Research Objectives
4. Research Methodology
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4.1. Primary Data
4.1.1. Research Design
4.1.2. StatisticalAnalysis
Key Findings -Interpretation of ProMMM Questionnaire
results
For each attribute, a series of questions in the ProMMM
Questionnaire was used to explore respondents' perception of the
degree of effectiveness of Project Management in managing
projects effectively. The questionnaire is detailed inAnnex 3.
The survey was conducted (via e-mail) on 70 executives (E4-E6),
for three consecutive weeks. A cover letter was sent to all survey
participants discussing the survey objectives, the questionnaire
topic areas and a strong request for their participation. A follow-up
reminder email was sent during week two of the survey in an effort
to maximize response rates. A final e-mail was sent to thank survey
respondents for their participation.
Answers to each question are scored 14, indicating the
corresponding ProMMM level. The questionnaire responses were
entered into a Master table using MS excel statistical tool and
attribute scores were calculated & analyzed. The mean score is
calculated for the set of questions for each attribute, with standard
deviations showing the degree of agreement between
respondents. Overall ProMMM level is calculated as the average of
all four attributes. Results are presented as a radar plot of the four
attributes, as well as numerical values of attribute scores and
overall ProMMM level, as shown in Figure 2A.
On the assessment of NHPC's attribute score at ProMMM level,
exposes its areas of particular strength and weakness which are
detailed as under:
4.1.3.
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NHPC on ProMMM Level is rated at 2.4, representing an
“ I m p r o v i n g N o v i c e ” p r o j e c t m a n a g e m e n t
organization. Attribute scores were: Culture 3.2,
Process 2.5, Experience 1.76,Application 2.1.
Very high scores on culture indicated the
of NHPC towards the proactive
approach to project management. This validated our
hypothesis.
Higher scores for culture, process combined with a lower
score for application and experience [high C/P (1.28) with
low E/A (0.83) also] indicated that the principles and
framework for effective project management are in place,
but there was a lack of application of appropriate project
management tools, techniques and methodologies- good
theory but poor practice.
positive mindset
and belief structure
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A low score on experience indicated that companyexecutives view the role of project manager as an add-on to anemployee's job description without appropriate training orcompensation further supporting the “
phenomenon.
A snapshot of the process gap identification of
NHPC project management is given in Figure 2B.
A questionnaire-based approach is limited in scope, since it can
only address those issues listed in the questions. Finally, there is
room for significant differences in interpretation of the meaning of
questions between respondents, especially where unfamiliar
concepts are used. Interviews were used to supplement, enhance
or reinforce the results obtained from the ProMMM Questionnaire.
Interviews (were carried out with six (6) senior officers in grade E6-
E7).
accidental projectmanager”
4.1.1. Data Validation
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Conclusions from the structured interviews broadly confirmed the
findings of the questionnaire analysis. Key issues arising from the
study included confirmation of the presence of awareness about
the benefits of project management. Processes were found to be
formally established, but were not perceived as effective. The roles
and expectations for Project Managers required clear definition,
and it was also important to strengthen and support project
management capabilities.
Secondary data has been taken from books, journals, article, web
sites etc. to study the causes of failures of projects and philosophy
adopted in other organizations to strengthen the project
management capabilities, as elaborated in our literature review.
Study of NHPC projects and other hydro projects of power
sector reveal that projects continue to fail at an alarming
rate. The top three reasons for project failures - bad
estimates/missed deadlines, scope changes and
insufficient resources - are internal project factors. It is
notable that these three categories alone comprise 50% of
the reasons for project failure. In project management, a
project is considered “failure” when results don't match
initial objectives. Usually an approach of “post-mortem” is
applied to analyse the causes of failure which leads to
benefit of everyone except, of course, the project. Project
Managers are starting to apply the
method to prevent project failures.
4.2. Secondary Data
4.2.1. Literature Review
4.2.1.1. Understanding Project Failure
1. Postmorterm v/s Premortem
Performing a Project
Premortem
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During a typical premortem the team predicts the probable
reasons of failure of the project and looks for ways to
strengthen the plan. The exercise also sensitizes the team
to pick up early signs of trouble once the project gets under
way.
Hierarchical organizational structure may undermine the
authority of Project Managers and so they have to rely on
the official process for communicating their needs across
the organization. Ideally, PMs should be able to control the
company's resources needed to accomplish their projects,
and directly supervise their teams. Unfortunately, in the real
world PMs have little or no authority. This cross-
organizational communication can result in delaying project
tasks, which can ultimately bring the project to failure.
Studies have shown that most organizations have
numerous projects underway with no formal project
management process in place to effectively manage
successful outcomes, thus creating “Accidental Project
Managers”.
“We strategize beautifully, we implement pathetically,” say
U.S. automobile executives.
“42 % of IT projects were abandoned before completion and
roughly 50 % of all technology projects failed to meet chief
executives' expectations,” says the Wall Street Journal.
2. The Organizational Challenge
3. Lack of Training The “Accidental Project
Manager” Phenomenon
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4. Lack of Clear Vision and Objectives
5. HYDRO Projects in difficult terrain :
When the project is in critical phase, at times the
supervisors and project managers jump to a quick solution,
while not understanding the true needs of the organization,
thus decreasing the chances of selecting the best solution.
Solution jumping can take place in the department where
the problem/opportunity is identified. But the problem and
its solution may have impact over the activities of other
programmes running under the same project and in turn
may affect the deadline of the project.
Human resources required by the contractor to execute the
work is not adequately managed and little or no resource
planning is done depending on the geographic location of
the project. Manpower and time management for projects
situated in Leh and Laddakh (at altitude 3300M) and
Himachal Pradesh (at altitude 1200M) cannot be same.
According to the Project Management Institute (1996: 93)
“the three important processes are organisational planning,
staff acquisition and team development”, however many
contractors ignore these important aspects and prefer to
chase their short-term goals of maximising profit as
opposed to the long term goals of industry development.
Robbins-Gioia Inc found that “90 % of project managers
often underestimate project size and complexity. Nearly
half (44 %) have cost overruns of 10% to 40%, and only
16% consistently meet scheduled due dates.”
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Figure 3: Effective Project Management in the Indian
Public Sector
4.1.1.1. The Delhi Metro Project:
Strategic level - Portfolio Project Management
The DMRC is an organisation where culture is based on
punctuality, honesty and strict adherence to deadlines. According
to studies, DMRC has performed exceptionally well in all project
management areas as shown in Fig 3 above.
For NHPC, projects are the building blocks that provide the
foundation for its future viability.
Projects emanate from the strategic plan, therefore to
increase project success, at the strategic level a process
must be established to select and monitor projects and
ensure projects and resources are in alignment with the
5. Recommendations:
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strategic plan. This process is portfolio project
management.
At the developmental level the focus is on project
throughput, repeatable processes and mentoring to
strengthen the NHPC's and individual's project
management capability and stake holder management.
This function would be achieved by the SIMO as defined in
figure 5Aand 5B.
At the tactical level it is all about individual project
management leadership and execution and how the project
team interacts with the complexities of the project, copes
with the changes that inevitably occur and deals with the
unexpected problems inherent in all change initiatives.
For success to occur, synergy is required from all project
participants at all levels. To drive success, executives must move
away from ad-hoc setting of priorities and allocation of resources
and move towards a strategy that:
Intelligently compares initiatives across a set of
strategic imperatives and dimensions;
Prioritizes initiatives across NHPC on an informed basis;
Effectively allocates resources to drive successful
execution;
Provides information to better understand the ongoing
costs and progress of the efforts;
Developmental level-Setting up of System Integration
Management Office (SIMO)
Tactical level Project Management Leadership
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Gains better visibility into the value (financial and
strategic) that investments deliver to the company.
The team has proposed a Project Management Strengthening
Model (PMS) as shown in figure 4 that would incorporate an
integrated project management process at strategic,
developmental and tactical level. The plan would describe the
ownership and accountability of each level to ensure that projects
are completed much more quickly, so that benefits to the
organization are realized much sooner
5.1. Action Plan
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5.2. Approach for implementation
System Integration Management Office (SIMO)
Dynamic capability
The should be
established for maintaining and supporting best practices for the
project manager and providing the organization consistency in
project performance. It shall have a dynamic capability (as per
figure 5A) consisting of people, structures and processes that are
continually monitored and adjusted to meet the changing
requirements of the dynamic environment. Its organizational
structure includes portfolio review board and other roles for Project
Management which promotes holistic portfolio level vision,
responsibility and accountability for Project Management. All
projects are reviewed as a portfolio at one or more of the gates. The
main resource allocation of gates is the most likely to be reviewed
as a portfolio.
The SIMO shall develop project management expertise as a core
Figure 5A: @SIMO
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competency to execute projects more efficiently, centralizes
management and coordination of projects and resources,
formalizes project proposal and prioritization process, eliminating
wasted money/effort on cancelled projects, formalizes and
standardizes project management methods and tools, reduces
/mitigates risk of cost and schedule overruns. Typical functions
performed by SIMO are shown below:
NHPC, in addition to maintaining its position as dominant player in
the hydropower sector, also has to play a leadership role in
translating the nation's vision of huge hydropower capacity addition
in the next 10 to 15 years into reality. Being the leading hydropower
generator NHPC also plays a major role in defining industry
standards and laying benchmarks for the competition to follow.
With the objective of meeting these ambitious targets and taking
the organization to new heights of performance, it has become
essential to strengthen its Project Management capabilities to play
Figure 5B: Project management functions typically
performed by a SIMO
6. Conclusion
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Manage projectcycle times
Training &mentoringDevelopsfutureleaders
Performs projectaudits fordelivery threatavoidance
Providesdashboardinformation togovernanceboard
Tools,techniques,templates &metrics
Maintains masterproject portfolioprioritization ofportfolio &resourcemanagement
Clarifies roleof PMin organization
Facilitatesgovernanceboard& Stakeholdermanagement
Focused onstrategicGoals / rightproject mix
EstablishrepeatablePM process
an enabling role. NHPC can achieve success by establishing an
integrated project management process in order to execute
strategic initiatives and strengthen the organizations (and
individual's) project management capability. The research to
evaluate the existing Project Management capabilities of NHPC
indicates average scorecard, which is clear indicator that Project
Management is not a core competency.
At one level the people agree that management of NHPC is
successful in creating culture and processes for project
management and the principles and framework for effective project
management are in place.
On another plane it critically analyses the lack of application of
appropriate project management tools, techniques and
methodologies. The team envisages and recommends a wider role
of SIMO department to focus on strengthening the Project
Management capabilities.As rightly said…
“
.” [11]
Tom Peters
1. Ibbs, W. C., and Kwak, Y. H. 'Assessing project
management maturity', Project Management Journal, 31(1)
(2000) 32-43.
2. Ibbs, W.C., & Kwak, Y. H. 'The benefits of project
management: Financial and organizational
New town Squa re , PA : PMI
EducationalFoundation. (1997).
3. Ibbs, W. C., & Reginato, J. 'Can good project management
Successful organizations are a 'projectized' organization, that is
they run the business by project management
rewards
toco rpo ra t i ons ,
References:
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actually cost less?' Proceedings of the 33rd Annual
Project Management Institute 2002 Seminars and
Symposium, San Antonio, TX, [CDROM]. Newtown
Square, PA: Project Management Institute, (2002).
4. Kwak, Y. H., & Ibbs, W. C. 'Calculating project
management's return on investment', Project Management
Journal. 31(2) (2000) 38-47.
5. Hillson, D.A. (2001) 'Benchmarking Organisational Project
Management Capability', in Proceedings of the 32nd
Annual Project Management Institute Seminars &
Symposium (PMI 2001), Nashville, USA, 710 November,
Newtown Square, PA, Project
6. Hillson, D. A. and Timerick, S. (2001) 'Project Management
Benchmarking in Theory and Practice', in Proceedings of
the Effective Project Management 2001 Conference,
London, 3031 October, High Wycombe, UK,Association for
Project Management.
7. Clarkson, B. and Luca, J. (2003) 'The Transitions of a
Novice Project Manager', in Proceedings of the 2003 World
Conference on Educational Multimedia Hypermedia &
Telecommunications (ED-MEDIA 2003), Honolulu, Hawaii,
2328 June.
8. Detroit Downer, 1991.
9. Why do Projects Fail? Wall Street Journal,April 30, 1998.
10. Robbins-Gioia Inc, 2002.http://www.robbinsgioia.com
11. Peters, T. Thriving on Chaos. Knopf, 1987.
12. Power: How People Make Decisions (MIT Press, 1998) and
The Power of Intuition (Doubleday, 2004).
13. Project Management Institute [PMI]. 'Organizational
Project Management Maturity', knowledge foundation.
Newton Square, Pennsylvania USA: PMI, (2008).
14. Levin, G. and Skulmoski, G. 'The project management
Management Institute.
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maturity', ESI Horizons, 2(3) (2000) 17.
15. Janet Lowe, Jack Welch Speaks: Wisdom from the World's
Greatest Business Leader (New York: Wiley, 1998), p. 98.
Annex-I
Table 1: Illustration of Reasons for Hydro ElectricProjects Slipping from 11th Plan
(Source: CEA web site :2011)
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Delay in revised forest clearance. Slow
progress of HRT due to poor geology. ( bad
estimation/ missed deadline) Slide in
Power Ho)use area in Feb 07( bad
estimation
Slow progress of HRT due to poor geology (
bad estimation)
Work suspended due to environmental
concerns. (missed deadline) Delay in
forest clearance for approach road to Helgu
Adit. (missed deadline)
Frequent stoppage of work by locals in Ar.
Pradesh side.
Civil works of HRT due to delay in
procurement/deployment of Tunnel Boring
Machine by Civil Contractor. (insufficient
resources) Poor rock strata encountered in
power house. ( bad estimation)
NHPC, HP. 800
MW
Parbati
St.-II
Rampur
Loharinagpala
Tapovan
Vishnugad
Subansiri
Lower
SJVNL 412 MW
NTPC, Uttranchal
600 MW
NTPC, Uttranchal
4x130= 520 MW
NHPC, Ar.Pr
2000 MW
Project CausesProjectDescription
:
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Initial delay due to MOE&F clearance,
clearance obtained on 17.05.2007 (missed
deadline) Delay in award of Civil & E&M
package. Civil package of HRT was
awarded in June, 2007 and E&M package
awarded in Feb., 09. (missed deadline)
Adverse geology resulting in slow progress
in HRT. ( bad estimation) Flash flood on
28.10.2008 caused major damage to some
of the works.
H.P. 110 MWSawara
Kuddu
NEEPCO, Ar.Pr.
600 MW
Kameng
Project CausesProjectDescription
Annex-2 ProMMM levels
The ProMMM framework defines each of the four maturity
levels against the four attributes, summarized below
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Unaware of the need form a n a g e m e n t o fprojects.No structuredapproach to projects.Repetitive and reactivem a n a g e m e n tprocesses.Little or noattempt to learn from pastor to prepare for future.
Experimenting with projectmanagement, through as m a l l n u m b e r o findiv iduals.No gener icstructured approach inplace.Aware of potential benefitsof managing projects, but
implementation,not gaining full benefits.ineffective
Management of projects builtinto routine businessprocesses.Formalised generic projectmanagement processesimplemented on most or allprojects.Benefits understood at alllevels of the organization,although not alwaysconsistently achieved.
Project-aware culture, withproactive approach toproject management in allaspects of the business.Active use of projectinformation to improvebusiness processes andgain competitive advantage
Level 1: Naive Level 4: NaturalLevel 2: Novice Level 3: Normalized
No awareness of thebenefits of projectmanagement.Resistant/reluctant tochange. Tendency tocontinue with existingprocesses.
Project processes may beviewed as additionaloverhead with variablebenefits.Project management onlyused on selected projects.
Accepted policy for projectmanagement. Benefitsrecognized and expected.Prepared to commitresources in order to reapgains.
Top-down commitment toproject management, withleadership by example.Proactive projectmanagement encouragedand rewarded.
No formal processesNo generic formalprocesses, although somespecific formal methods maybe in use. Processeffectiveness dependsheavily on the skills of thein- house project team andavailability of externalsupport.
Generic processes applied tomost or all projects.Formal processes,incorporated into qualitysystem.Active allocationandmanagement of projectbudgets at all levels. Limitedneed for external support.
Project-based businessprocesses.'Total Project Management'permeating entire business.Regular refreshing andupdating ofprocesses.Routine projectmetrics with constantfeedback for improvement.
No understanding of projectprinciples or language.
Limited to individuals whomay have had little or noformal training.
In-house core of expertise,formally trained in basic skills.Development of specificprocesses and tools.
All staff project-aware andusing basic skills.Learning from experienceas part of theprocess.Regular externaltraining to enhance skills.
No structured application.No dedicated resources.No project tools.
Inconsistent application.Variable availability of staff.
Ad hoc collection of tools
and methods.
Routine and consistentapplication to all projects.Committed resources.Integrated set of tools andmethods.
Second-nature, applied toall activities.Project-based reporting anddecision-making.
State-of-the-art tools and
methods.Applic
ation
Experience
Pro
cess
Culture
Sum
mary
de
finitio
n
Annex-3 Questionnaire
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PartlyStatementsObservation iscompletelycorrect/agreed
MinimaObservation iscompletelyincorrec/disagreed
Applic
ation
Culture
Marks corresponding to attribute 4 3 12
Do you think that project management is critical for NHPC businesssuccess?
Do you think that project management processes are tolerated butsometimes seen as unnecessary add-on?
but sometimes seen as unnecessary add-on?
Do you think that project management processes are regularlyrefreshed and updated?
Does the staff of NHPC understand the underlying principles ofproject management?
Does any formal training is being provided project managementprocesses?
Does any formal training is being provided project managementprocesses?
Attribute
Does NHPC have formal project management processes in place?
Do you think “Post Mortem” analysis (analysis after completion ofprojects) done in NHPC ensures implementation of projectmanagement processes?
How frequently do you use project management process -Primavera to review the work progress of ongoing project activitiesand project schedule?
Are project management processes stable and mature?
How frequently do you use project management process -issuetracking system placed in your system?
How frequently do you use project management process- ERPsystem placed in your system from project management point ofview?
Are there procedures in place to effectively manageinterdependencies with other projects / systems?
Has the approach and development strategy of the project beendefined, documented and accepted by the appropriatestakeholders?
Do you think “Pre Mortem” analysis (analysis before start ofprojects) done in NHPC for implementation of project managementprocesses?
Experience
About the authors:
Shubhra Shah, Dy Manager (Electronics)
She has received her B Tech (E&C) from Engineering
College, Kota in 1998.Since then she is working with NHPC
Ltd and presently she is Dy. Manager (E&C) in NHPC. She
is having over 12 years of experience in Design of control &
automation, protection, switchgear systems for Hydro
Power Stations. She is IPMA Level D certified professional.
She has presented several technical papers in various
conferences in India and abroad.
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PartlyStatementsObservation iscompletelycorrect/agreed
MinimaObservation iscompletelyincorrec/disagreed
Attribute
Do you think the detailed project plan identifies individualresponsibilities for the next 46 weeks?
Do you think project management processes need tobe routinely applied to all projects/ activities?
Do you think staff of NHPC is familiar in applying thepractical skills and techniques of project management?
Have all unresolved risks been documented?
Have all unimplemented risk strategies been escalated to anissues log?
Has adequate time for orientation & training of project staff beenprovided for in relation to technical nature of the Application andthe experience levels of project personnel?
Do you think NHPC has a whole hearted top-downcommitment for proactive and systematic managementof projects?
Do you think the scope of application of projectmanagement processes is clearly defined?
Do you think project management processes is appliedonly onto occasional projects (especiallymega/difficult/strategic)?
Experience
Pro
cess
P.C. Sharma, Dy Manager (Electrical)
He has received his B Tech (E) from NIT, Kurukshetra,
in 1997.Since then he is working with NHPC Ltd and
presently he is Dy. Manager (E) in NHPC. He is having
over 12 years of experience in, Operation and
maintenance, Design of GIS, protection, switchgear
systems for Hydro Power Stations. He is a certified
project management professional by IPMA. He is
certified Energy Auditor from Bureau of Energy
Efficiency. He has presented several technical papers
in various conferences.
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1. Executive summary:
Vision without action is day dream and action without vision is
nightmare.
Our paper concentrates on investigating a relationship between theapplication of good project management practices and successfulproject delivery.
This paper aims at understanding the social, technical, commercial,HR & political issues and the emerging trends and challenges relatedto . Long term strategies fordeveloping and sustaining the capabilities/skills for
have been formulated. On the basis of research,a model has been prepared to meet the target of
.
Paper entails the initiatives taken in the area of project managementby NTPC and its contemporaries in expediting project execution. Onbasis of primary and secondary research, SWOT analysis of NTPC inproject management context was performed to
On basis of the gap analysis key suggestions forhave been proposed.
strengthening project managementstrengthening
project managementstrengthened project
management
know
Where we are in the domain of project management?
What are the gaps?
What strategic steps can be taken to fill the gaps to achieve the targetof strengthening project management?
strengtheningproject management capabilities
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The key mantra is
and it constitutes a synergy between the three work centersviz. engineering, contracts &
, “strength are to be leveraged and strategiesfor overcoming the weakness are to be developed.”
A model is structured to enable us to refine our project managementabilities
construction working in sync & greatly supported by strong boundarymanagement, effective communication with stake holders,meticulous monitoring, and dedicated project team spearheaded by astrong leader.
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2. Introduction:
We are moving from an age of scientific discovery to an age of scientificmastery
Organizations within the limits ofresources and changes must expand & grow fast to give returns to thesociety.
Every complex project comes with its own problems and challengesand good project management practices help overcome them.
, and the generation now alive is the most important one in allof history. We are at front row seat as all of the
While population increases and boundaries expand, the resources aregetting scarce day by day. Changing climatic conditions demand us tobe more protective to our environment while business at the sametime is the spine of existence.
Projects are new beginnings in many ways. Whether it is the launch ofa new car or development of new software, it needs planning, design,execution and monitoring before the final product is delivered.
A paradigm shift is observed in the power sector and major emphasisis on delivering power project faster and cheaper. Projectmanagement is the science and art of sequencing and stringing al
changes implemented willreshape the future.
l the
project activities together into coherent whole to ensure that thefinal delivery meets the desired specifications.
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3. Definitions:
Project:
Project Management:
Capability:
“ ”
A project is a temporary andone-time endeavor undertaken tocreate a unique product or service. Thisproperty of being a temporary and aone-time undertaking contrast withprocesses, or operations, which arepermanent or semi-permanent ongoingfunctional work to create the sameproduct or service over and over again.The management of these two systemsis often very different and requiresvarying technical skills and philosophy,hence requiring the development ofproject management.
Texas)
The application of knowledge, skills, tools,and techniques to project objectives to meet stakeholder needs andexpectations.
Texas.)
The quality of being capable; ability. The capacity to be
used, treated, or developed for a specific purpose.
(Source: Oxford Dictionary)
According to
(Source: Lawrence P. Webster-
(Source: Lawrence P. Webster-
LOU GERSTNER
Execution is the critical part of successful strategy.
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4. Relevance of the topic (NTPC Context):
Existing energy deficit in India
The power sector today is challenged to bridge supply-demand gap inkeeping with national requirements. Delivery of electricity at costeffective means and development of capacity for future growth tomeet national requirements require adoption of benchmarks andproject management best practices.
NTPC being the leading power producer in India has Herculeantask” ahead in view of
Huge demand - supply gap inthe country requiring speedy execution of the projects to match theGDP growth rate of > 8%.
NTPC has an ambitious capacity addition programme for XI th &XII th plan.NTPC has embarked upon gigantic capacity addition plan to become50,000 MW by 2012 & 75000 MW plus company by 2017.
“
(i)
(ii) To achieve Govt. of India's mission of “power for all by2012”.
:
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In 30 years we have achieved in 30 years
Now,
We have huge asking rate
4500 MW per year up to 2012
5000 MW per year from 2012 to 2017.
Since its inception NTPC has always given importance to project
completion in the most competitive manner and on challenging time
schedules. Looking at the history of project execution in NTPC (Ref
Chart-I & Chart-II), it can be seen that NTPC has been
successful in reducing its project completion time continually from
80's to the present date.
It is in good position to earn the incentive as per CERC Norm (Tariff
2009-14) for the projects commissioned on or after 1st April, 2009 -an
additional return of 0.5% shall be allowed if such projects are
completed within the timeline
NTPC has received International Project Management Award 2005
for Simhadri and in 2008 for Vindhyachal III, for excellence in
project execution
35,354 MW ~ 1000 MW
per year.
~
~
.
History of project execution in NTPC:
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Chart-I
Chart-II
5. Project Management:
Project Management is application of
to project objectives to meet stakeholder needs and
expectations.
knowledge, skills, tools, and
techniques
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T re n d s o f Re d u c tio n in P ro je c t tim e c y c le
0
10
20
30
40
50
60
70
80's 90's curre nt
Dura
tion
inm
onth
s
5 0 0 MW
2 1 0 /2 5 0 /3 0 0 M
W
Description
210/250/300 MW Units
500/600 MW Units
80’s 90’s Current
48-60 M 36-48 M
60 M 48-60 M
30-42 M
39-45 M
Project management is like juggling three balls simultaneously as it
involves a fine balance between delivering on time, within budget
while ensuring quality. Effective Project Management implies the
management of Time, management of cost and management of
Performance/ quality.
With respect to project management there are two types of projects
This requires handling of one project at a
time.
This requires handling of Multi project
at a time.
1) Simple Project:
2) Complex project:
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(Source: IPMA competence baseline version 3.0)
NTPC's present installed capacity is 35,354MW &
as many projects of NTPC are under
different stages as under:
? Planning Stage -14796 MW
? Tendering Stage-18356MW
? Construction Stage-13588 MW
(Source: NTPC Web based milestone monitoring system)
has a complex
multi project management
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Chart-III
(Source: NTPC Annual report)
I
and product, and builds aproduct or service with integrity. It looks downstream in theproject process to product performance and customersatisfaction.
n a there are two types ofintegration involved & both are essential success factors. They are
looks and into the business,program, project, and product/service components. This kind ofintegration targets the program, project,
multi project program environment
Vertical integration
vertical and horizontal integration.
inside up and down
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The Organization chart (Chart-III) of NTPC
Horizontal integration looks outside and around
organizational assets that support theproject
to the external, the
environmental and the. It focuses on outside forces that create risk and opportunity,
market forces that will shape the product or service.
Vertical integration is related to horizontal integration
management of Time, management of cost and
management of Performance/ quality
Construction of Delhi Metro Rail is considered to be one of the
most successful ventures.
in the
sense that a project that reflects outside factors and environmental
scanning information is more apt to succeed in its performance
because these factors can make or break a project.
(Source: Integrated Project management: Bruce T. Barkley, Sr.)
Examples of large and complex projects delivered on all three
parameters i.e.
are few and far between.
In general, the problem of time and cost over runs remain a
common pain area in both public and private sector projects in
India.
Case study:
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The Delhi Metro Project: Effective Project Management
in the Indian Public Sector
The Delhi Metro project gave Delhi aworld-class mass rapid transit system.More importantly, it stood out frommost other public sector projects inIndia in that it was completed onschedule and within the budgeted cost.
The case describes the organizationand planning of the project andhighlights the steps taken by theDMRC to ensure the successfulcompletion of the project. It alsoexplains how the DMRC managed thevarious stakeholders like the centraland state governments, the contractors,and the citizens of Delhi, to ensure thatthe project was implemented smoothly.
Following are the key learning's from theadopted by DMRC to ensure the successful and timely completion ofthe project
» to be taken up before a largeinfrastructure project can be started. (Project initiation and Planning)
» Appreciate the significance of the role of a inproject execution.(Project execution)-Trained and experiencedproject manger was appointed.
implementation strategy
:
Understand the preliminary activities
project manager
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» Understand the importance of the in successfulproject management.(Project execution)-Building a sense ofownership.
» Recognize the importance of in aproject.( Project initiation , Planning & execution)-Alignment ofstakeholder's vision, creating transparency and a shared focus onresults.
»projects in developing countries, and how these can be
overcome.(Risk management)
? Little defined project management process
? Project teams rely on own experience
right work culture
managing the various stakeholders
Appreciate the difficulties involved in the execution of largeinfrastructure
an overall stage of maturity
(Source: The Delhi Metro Project Effective Project Management in the IndianPublic Sector - Project Management Case Studies - Case Study.mht)
Organization's Project management has .
Following are the 4 stages of Project
1. Informal Project Management
management MaturityStages
:
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Teams, processes and systems are not integrated
? Core process is defined
? Key roles and responsibilities are clear
? Cross functional processes defined and integrated
? Performance measures for project output and objectives
? Cross functional processes integrated from projects' start
? Intelligent Key Performance Indicators available for all
projects
? Organization has strategy and clear plan to improve PM
process and demonstrate improvement in PM function
The implementation of a number of Projects simultaneously at
various sites requires a proper system of planning,
2. Structured Project Management:
3. Integrated Project Management:
4. High Performance Project Teams/ PM Oriented Culture
(Source:
:
Project management informed solutions, PMIS
NTPC believes in system approach.
monitoring and
6) Project management in NTPC context
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control so that the projects are completed within the estimated time
and cost with desired quality.
As already discussed in maturity model, NTPC has developed an
elaborate Project Management system called
as a system approach
from concept to commissioning resulting in quick progression of
project.
The IPMCS integrates all major control centers namely:
-
The IPMCS integrates all the three control centers. The integrated
system has provided the necessary criteria for providing dynamic
project planning, scheduling, review, monitoring and control. In
addition to the above three Control Centers, the other functions are
service functions, e.g. These disciplines
assist project implementation through effective, timely and integrated
assistance to project implementation. The projects are reviewed and
exceptions are flagged for the corrective measures and direction by
the top management.
(Source: 6th Analyst & investor meet,NTPC-2010)
Integrated Project
Management & Control Systems (IPMCS),
Engineering Management
- Contracts Management
- Construction Management.
Finance, Human Resource.
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7. key activitiesProject life cycle in NTPC
The project life cycle from concept to commissioning can be broadly
classified into three distinct life cycle phases which are mutually
exclusive as well as comprehensively interdependent. Following are
the broad stages: (Fig-I)
1) Project conceptualization
2) Project planning and development
3) Project execution.
Source: White paper on implementation, challenges and opportunities, Energy
Summit Nagpur,Jan2010 & Corporate planning energy scan 1 Quarter 2010.st
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The project management framework shown above can contribute to
a structured manner of addressing the typical challenges throughout
the project life-cycle and aid in
managing the power projects faster. The challenges of the project
management can be addressed under following key activities:
Project conceptualization
Project planning and development
Project execution
1. Project delivery: To what extent do NTPC deliver projectcommitments?
2. Challenges& constraints: What are the gaps that hampers inmeeting project commitments?
Above three activities are the key thrust areas for
strengthening project management capability.
8.1 Research Intent:The study focuses on following:
8. Research Methodology
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3. Project management trends and practices: To what extent dowe adopt best practices?
4. Project management capability: How to strengthen Projectmanagement capability?
The process of deriving a strategy forwas carried out in two stages.
This comprises? Study which included an examination of the present status
of power sector in India.
? The strategies that have been adopted by the othercompetitors.
? Contemporary research articles and papers published invarious journals.
Survey-I was conducted for the collection of primary data, usingquestionnaires from the senior and middle level executives in thecompany.
192 executives.Via e-mail & hard copiesclose ended with 1 open ended question.
: Micro soft excel, graphs & charts.
strengthening projectmanagement
i) Secondary research;
(ii). Primary research:
Sample size:Response:Questions:Tools used for analysis
(Reference: White paper onimplementation, challenges & opportunities, Energy summit-Nagpur, Jan2010, Corporate planning energy scan 1st Quarter2010, BODH-III Survey.)
(Survey no.-I, Refer Annexure-I),
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Strenghts
Opportubities
SWOT Analysis
Threats
Weaknesses
On the basis of primary and secondary research SWOT analysis inNTPC Project management context has been performed. Strength,weakness, opportunities & threats in the area of project managementcapabilities are found:
NTPC has
• Excellent track record of performance in project execution.
• Highly skilled and experienced human resources, exposed
to state-of-the-art technologies in project execution.
• High credit rating that is indicative of the confidence
lenders.
• Streamlined and transparent tendering system
global power equipment manufacturers.
• Strong project monitoring and control.
I) Strengths
attracting
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• Project management training and capability development&certification courses
NTPC has
• Multi layered structure delaying decision making.
• Knowledge management: Inadequate awareness of
knowledge management system (IPON, ESS KM) that
could assist in improving effectiveness.
• While multiple parameters are considered during planning
phase, limited adoption of best practices.
• Lack of number of trained project managers.
• Absence of flawless assessment of project risk
• Stringent QR hindering competition.
• Risk of de-motivation and job dilution monotonous job
profile erodes capability to change.
• Structured approach to project team formation: Absence of
Distinctive Identification of project team/owner prior to
commencement of project.
• Difficulty to involve multiple and diverse stakeholders:
Lack of Effective communication with various stakeholders
during execution to meet project objectives.
NTPC has
• Huge Demand - Supply gap in the country requiring
speedy execution of the projects to match the GDP growth
rate of > 8%.
II) Weakness-
III) Opportunities
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• Emphasis on employing certified project mangers.
• Development of new business like equipment
manufacturing.
• Attractive risk and reward system for project team.
• NTPC has entered into new technologies to expand its
capacity.
• Provision of incentives to involved agencies for achieving
milestones.
• Adoption of modern construction technologies & T&P's in
project execution.
• Collaboration with educational institute as a more effective
strategy to develop project management capability.
NTPC has
• Limited experience of operating in a truly liberalized
environment with competition- Securing ultra mega
projects (Tariff based bidding).
• Social costs of capacity growth Thrust on strong execution
of Resettlement and Rehabilitation plans.
• Uncertainty concerning fuel availability-coal ,gas
• Manpower shortage-likely to continue to push up project
risks.
• Limited experience in new power generating technologies.
(Nuclear, renewable etc)
• Delay in resolving contractual disputes.
IV) Threats
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Case-Study:
Simhadri Project is a testimony of active application and best practices
of knowledge, skills, tools, and techniques to project objectives. It is a
world class bench mark in project execution.
formulate the key strategies for Strengthening project management
capabilities
To
, case study of NTPC-Simhadri has been studied and potential
issues which were responsible for the successful implementation of a complex
project like Simhadri Thermal Power Project [2x500 MW]
of National Thermal Power Corporation were found out.
NTPC Simhadri A Success story (A case study at IIM 's):
NTPC has made the most of integrated project management system
[IPMS] for implementation of Simhadri project. The project was
reviewed not only against physical progress but cost, material
requirement and manpower resource requirement.
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Key learning's of the Implementation strategy adopted at
NTPC Simhadri Project:
Project Organization
Team work and role of leadership
c. Engineering Strategy
a.
NTPC set up an exclusive Task Force as the single point contact /
responsibility centre for co-ordination among all the core engineering
functional disciplines at the Corporate Centre. The active role of the
Regional Head Quarter-Hyderabad helped in the faster
implementation of the Project.
b.
The minutes of the Project Review Meetings were widely circulated
within the organization which ensured effective communication
among various departments. NTPC introduced attractive financial
incentive/ bonus scheme for the employees linked to achievement of
various physical targets of the Project. Such incentive scheme proved
to have salutary effect in building team spirit and commitment
towards the Project.
NTPC developed a very detailed specification documents. Even the
Contractors of NTPC acknowledged that such exhaustive
specification document helped them to undertake detailed
engineering in advance and place their orders on their sub-vendors
without any problem. It saved substantial time for the Contractors.
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d. Procurement Strategy
e. Close Monitoring
f. Critical material follow -up
The trend was towards having minimum number of packages. In
pursuance of this trend, NTPC in case of Simhadri Project made a
composite package which included additional scope in the main plant
package apart from the conventional scope of Steam Generator and
Turbine Generator .
Project was closely monitored at various levels. At Project site
activities were monitored on daily/ weekly basis with the
representative of the contractor/subcontractor. Every month under
Project General Manger, a project review meeting was regularly held
which was attended by the representatives of site, region and CC. At
Regional Head Quarter, ED of the concerned region monitored the
project at least once in Quarter at site. Director Project also reviewed
the progress of the Project at site. Apart from this ministry of
programme implementation also monitored power projects through
a flash report generated by NTPC every month.
NTPC in case of Simhadri Project set up a special cell at Regional
head Quarter in Hyderabad to monitor, co-ordinate and follow up on
day to day basis all dispatches from works of the vendor/ supplier.
Such methodology ensured that Project could focus on actual
erection/ construction work at site.
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g. Application of IT
h. NTPC Manpower Deployment
i. Funding Strategy
The Project was fully geared to extensively use IT in the following
areas:
(1) Finance and Accounts.
(2) Material Control [Dispatch and Receipt at site - Dispatch Units
(DU) wise/ Unit wise/ System wise].
(3) Monitoring of pending material list.
(4) Issue of receipt certificates
(5) Verifying and release of payment to the contractor .
(6) Engineering drawings and documentations control at site.
(7) Monitoring and reporting of progress at site using MS Project
Scheduler.
Average manpower deployed in other projects of NTPC is in average
0.9 per MW. Whereas the actual manpower deployed in case of
Simhadri Project was always less than 0.6/MW. - Effective usage of
the manpower.
NTPC's strong financial balance sheet helped NTPC to overcome the
financial crisis which normally cripples other power .NTPC could
mobilize funds from domestic market and internal generation.
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j. Social Impacts
As part of its on going rehabilitation and resettlement policy, NTPC
spent a sum of Rs. 5 crores to undertake village-wise community
development works covering development of roads, drinking water,
education and health facilities to comprehensively respond to the
needs of the affected community.:
(Source: Case Study of Simhadri Thermal Power Project, CMG,
Knowledge Management System)
An analysis of the strengths and weaknesses of NTPC's overall project
management function highlights the areas of potential improvement
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Areas ofimprovement
Based on SWOT analysis of NTPC and key learning's fromimplementation strategies adopted at NTPC-Simhadri, followingTable has been formulated that indicates the potential area ofimprovement for strengthening project management capability:
Table-1
Based on potential areas of improvement following key strategieshave been formulated for strengthening project managementcapabilities:
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Assessment of
project risk.
External factor
Capability tomanage projectcomplexities
Innovation/R&D/ Adoption ofnewtechnology
Adoption ofbestpractices
Emphasis onadoption ofbest practices/ benchmark
Involvement ofmultiplestakeholder
Communication
Synchronizationof project planand execution
Day to daymonitoring-ITenabledmonitoring
Policies ®ulations
Strategicprocurementmanagement
Resourceoptimization
Vendor/Partnermanagement
Resourcemobilization
Environment Expectationmanagement
Skilldevelopment
9. Recommendations:
Keys to strengthening project managementcapabilities:
Adoption of
Best practicesshould be recorded at the closure of project and should be aContinuous activity .
.
9.1 Best practices:
If best practices achieved in a project can be made as a continuous
activity, the project management capability for the future project can be
enhanced
Driving excellence and achieving best practices in terms of costmanagement, time management, change management andquality management during project execution has to be madefocus area in Project management practices.
Thrust on adoption of best practices infield of engineering, construction, contracts and riskmanagement.
Following best practices in field of engineering, contracts and
construction shall enable NTPC to strengthen its project
management capability:
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9.1.1 Best practices in Engineering:
Engineering has transformed itself
" Standardization to prevent repetition of similar work for each
new package and hence saving time:
" Standardization of layouts
" Standardization of equipment / packages.
" Standard technical specification.
" Broadening the specification increases the pool of
possible contractors.
" Providing owner inputs timely to the agencies.
" Release of drawings in time.
" Updating DREAMS tools( in-house developed
Engineering Collaboration system): by direct uploading of
drawings to ERP C folder which gives direct accessibility of
approved drawings to site.
from the era of ammonia
prints to e- drawings.”
Following Practice will help in strengthening our engineering
capability:
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" Increased Vendor quality audits will lead to reduced
inspection time.
" Ensure well developed Infrastructure before Main PlantAward.:These are time consuming activities with lengthy procedureseven though not requiring much finance. eg.. ConstructionPower, Construction Water, Construction Equipment,Approach Roads, Sheds Both Storage and Office, TownshipFacilities etc.
· To enable timely evacuation of power-As a strategic step, separate agreements, for supply ofconstruction power (Project specific transmission system) toset up before the commissioning of the plant
· Possibilities of clubbing of buildings may be exploredsuch as ii) ARCW PH Compressor House, DG set Buildingiii) CW & Fire water PH to reduce construction time &Cost.
·A right-sizing of land requirement benchmarks could inturn expedite project execution schedules in the long run,especially for larger projects, CEA Study.
9.1.2 Best practices in Construction/ Infrastructuredevelopment:
Optimize size of land requirement:
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CEA study shows land requirement for thermal power plantscan be brought down by 10-40 %
Around 1,600 acres of land would be required for setting up a5x800 MW imported coal-based thermal power project, suchas the Mundra UMPP, for which around 3,500 acres havebeen earmarked.
The land requirement of Indian thermal stations fired bydomestic coal has generally been on the higher side, ascompared to international benchmarks.
1) Emphasizing on modern tower type structure for townshiphence saving land.2) MW to land ratio to be kept as high as possible.
9.1.3. Best practices in Contracts & materials:
· more
vigorously· shall enable to
increase competition /participation.· will enable faster
decision making.· Avoiding overloading of one Agency beyond the production
capacity /· Efforts are needed to for taking up
.
Suggestion::
Expediting dispatch of critical material
Review of Qualifying Requirement
Review of DOP (Delegation of power)
develop more vendorsavoid over burdening.
civil construction.
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· Augment Manufacturing Capability -
· Avoid Non-sequential excessive stacking of materials at
erection site occupied the front of civil agency for
foundation work.
through
· Utilization of 3D Plant Modeling System for designing· Exploring possibility of welded structures for critical
structures & Bolted for Non-critical structures whereversuitable- discussions to be carried with main boiler
Exploring the applicability of preassembling of boilercomponents.
· Nuclear project: NTPC inks JV Agreement with NPCIL toset up nuclear power project & Technical capabilitydevelopment.
Adoption of in construction
eg. Pile Breaker being adopted for speedy construction.
Main Plant and BOP
Equipment
9.1 Enhancement of capability to manage project
complexities
Engineering:
Construction:
Innovation, R&D/Adoption of new concepts
technologies in engineering , construction and contracts/procurement:
9.2.1 R&D/Adoption of new concepts technologies in engineering &
construction
suppliers.
modern technologies & T&P's
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· Modularization Construction:
_ Use of prefabricated structures & modules
_ Integrating various components such as equipment,
piping, structures etc in one module to facilitate the
construction work.
_ Pre-assembling of boiler components, Turbine parts etc.
·
GPS system has been implemented in some of the projects formaterial tracking on road. But, much time is spent in tacking ofmaterials at site. For this, RFID (Radio Frequency Identification)technology can be used in tracking of material locations at site.
Once, the materials are required at site, RFID tags can be fixed tothem. These tags interact with the interrogator, which in turn pass onthe server for storage of material locations and faster retrieval at anypoint of time.
·NTPC has made changes in its bidding process for sourcingequipment that will cut down the overall project cycle andprevent delays in completion of projects.
RFID for Faster Tracking of material at Site:
9.2.2 Strategic procurement:
LNTP(Limited notice to proceed):
Contracts & materials:
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The changes are expected to compress the overall equipmentaward time by 6 months. Changes will help NTPC in fasterimplementation capacity in the 12th Plan.
Orders for the main and BOP could be placed simultaneouslywithin a space of just 3 months from the time bids are invited.The new system called limited notice to proceed (LNTP) willbe implemented in the bid document for sourcing equipmentneeded for 12 th Plan,
LNTP will award main equipment supply deal to winningbidders only after they provide design inputs specific to theneed of a power plant
At present, NTPC does not insist that L1 bidders ofequipment to provide design inputs for a project beforeproceeding with the erection of main plant equipment (boiler,turbine, generators).
Normally the L1 bidder does not share the designs withNTPC until the award process is fully completed. Thisprevents NTPC from ordering BOP or smaller
equipment and machinery need for power projects and thedelay extends the completion schedule of projects.(Source:6 analyst and investor meet NTPC)th
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·The government is planning to bring changes in theinternational bidding procedure for big infrastructureprojects to put them on the fast track and help in utilizingresources better. Proposal has been made by an officialcommittee that companies can be pre-qualified for biddingwithout reference to any specific project. Only theempanelled companies will be eligible to participate inbidding for projects on the block.
It is anticipated that the move would lead to competitivetariffs as the company will be able to utilize their resources inimplementation of projects rather than competing for them.The proposal aimed to speed up execution of projects. If theproposal is brought into force, time spent on bidding can bereduced. Projects are proposed to be classified as small,medium and large, and a separate list of pre-qualifiedcompanies will be planned. The process of pre-qualificationwill be virtually identical for all projects and for each projectthe cumbersome job will not be repeated involving multipleauditors and lawyers.
This can be a good proposal for quick bidding of projects.However, the empanelment lists will be opened at least twicea year to accommodate fresh bidders and review existingones.
Blanket Prequalification:
(Source: Prospering Indian power sector Blog)
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· by separate internationalcompetitive bids for the boiler and the steam turbinegenerator i.e. one bulk package for all the boilers and anotherbulk package for all the STG (steam turbine generator) inplace of a common BTG (Boiler turbine generator) bulkpackage as there are limited manufacturers who manufactureboth boiler and STG.
NTPC has adopted the bulk tendering route for procurementof main plant equipment, the first of its kind in the country.
· A system of
may be adopted to provide correct signal
for timely completion of the project.
Enhancing participation
Bulk Tendering
&
·
This will give option of diverting the material from oneto another project if needed
of nine units of 800 Mw capacity in thesecond phase. The proposal for this has been given to the(Union) ministry of power.
NTPC has floated tenders for 11 units of 660 Mw supercritical
units through the bulk tendering. This is for nine units of NTPC
and two of Damodar Valley Corporation.
Bulk Tendering
Penalty's (LDs) for delay incentive
for early execution
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· NTPC need to empower & evaluate
vendors to find the right match to suit our need. Efforts are
needed to develop more vendors for taking up
&
Vendor Development:
civil
construction Augmentation Manufacturing Capability.
After preliminary evaluation on Financial/technical/past
performance, we shall keep disqualified vendors for future reference
and qualified vendors shall be reviewed in Joint management review
for analyzing performance. NTPC needs to develop high quality
vendors and also re-align the vendor assessment to meet the
accelerated execution requirements.
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9.3. Involvement of multiple and diverse stakeholders:
Overcoming the challenge to create a shared vision of the project is
necessary for project success. Ownership of project at senior
leadership level defines success for a project. This shall ensure that
there is a common understanding of projects and organization
objectives among all stakeholders and everyone shall work towards a
common goal.
Stakeholder identification is required in the project's earlystages to measure their expectations and assess their impacton the overall project life-cycle. The impact can be on thedesign or construction which can adversely affect the projectschedule and budget.
Proactive management of stakeholders or land owners -caneliminate the mismatch of stakeholders' expectations.
•
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Stakeholder Identification and Communication
•
•
he model is still seen as a success. Its
strength lies in its annuity payment concept. Apart from
offering lump sum compensation, it provides a 33-year
annuity, annual hike, plots, jobs and even a 20% incentive
for a no-litigation agreement. There is also a statutory
amount of interest and 30% solatium. While other state
policies allow a district-level calculation of land value,
which is often disputed, Haryana, for practical purposes,
has been divided into five zones for computing the
minimum floor rate (MFR), which the acquirer has to
pay.
Removal of mismatch of expectations of Project AffectedPersons (PAP)-Adequate Communication & involvementthrough-out the project cycle to make the planning forbalance work realistic & achievable.
Ensuring R&R and clearance planning placement before theproject plan is finalized. Exploring new ideas like
1. Computation of proportionate acquisition of land byinvolvement of local bodies like "Gram Panchayat" toavoid complete land loss to PAP and to minimizetheir discontentment.Eg. LikeThe model which involves not only the one-timepayment for land but also long-term annuity forfarmers, besides providing jobs, is referred to as theHaryana model. T
Haryana model.
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Highlights:
The compensation is not only based on the current market
price rather it takes into account the value added price after
the project is implemented.
From government, annuity per acre per annum for
government projects, increasing every year for 33 years
Also provides for residential / industrial plot, government
job to displaced family.
Stamp duty exemption for farmers.
•
(Source: http://www businesseconomics.. In/?p=1994)
2. Large Shopping complex creation to maximize creation
of lively hood for Project affected people (PAP).
3. Electricity supply to village households located in radius
of say 5 km for minimum 6-8 hours daily.4. Skill development of PAP's like welding, fitting through
training.
5. Sharing incentives with PAPs for helping andencouraging faster project execution.
Land acquisition cell created at corporate centre to supportthe activities at Site.
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•
•
•
Collaboration with NGO's & local bodies to create
Regular meeting/interactions with state & central Govt. to
ensure support in handling critical/ political issues.
Sectoral support for resolving policy issues.
Lack of
Effective risk sensing and risk management causes project
failure. Assessing risk is the key to any project's success.
Ability to successfully address and mitigate risk provides
advantages in project execution.
With a dream of becoming the largest & best powerproducer in the world, the tariff based regime has proved
Enterprise Footprint -
Enhancement of assessment of project risk:
9.4.1 NTPC revisiting bidding strategy for UMPP's by
looking to enhance its Technical and operational
capability: Tariff based bidding
Genuine not just generous.
9.4
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Boundary management:
to be a bane for NTPC till date. While NTPC wasnowhere in the run for Sasan UMPP, it stood L2 forTilaiya UMPP with quoted tariff at 239 p/kWh incomparison to the winner Reliance Power at 177 p/kWh.
If this trend of aggressive bidding persists in future casesalso, our dreams of achieving 75000 MW by 2017 and128000 MW by 2032 may come to a halt The competitionshall be stiff for this upcoming UMPP owing to itslucrative business position. However, the learning fromthe recent bids particularly for Sasan & KrishnapattanamUMPP can attract more feasible rate quote for tariffagainst the aggressive one. The detailed analysis andscanning the present market scenario along with thecompetitors strengths and strategies can give an insightfor the areas for improvement .NTPC is already havingforte of Project Management & execution, reliable &economic power generation where others are still have torun a long way.
However, being a continuous learning organization andfor realizing vision of becoming world's largest powerproducer, it has to continuously improve upon itsstrategies and adopt best practices so that best strategy canbe formulated to quote a best & most sustainable tariff rateor the opportunities available ahead.
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9.4.2 Ensuring Plant equipment supply: China has three state-owned equipment manufacturing companies and they all aredoing well. If we want faster capacity addition, we cannot bedependant on BHEL alone. Having its own manufacturingcompany, NTPC can reduce the time of project execution byat least 9 to 10 months.
BHEL currently is the monopoly player in power equipmentsupplies. The JV company with BHEL, called NTPC BHELPower Projects Ltd, is incorporated, the manufacturing isexpected to commence from 2013-14. A MOU has beensigned between NTPC, BHEL and rigorous monitoring ofprogress of various milestones will be done
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9.4.3 Ensuring Fuel availability & Transport infrastructure:
(i)NTPC is ensuring flawless supply of fuel coal by adopting
(ii)Transport Infrastructure:
" Railway infrastructure needs augmentation for meeting
coal transportation requirements to the site.
· Inadequate handling capacities at ports & constraints in
unloading large ships
· Augmentation of connectivity between port and rail
links
· Widening and strengthening of roads required for
movement of large/heavy equipment.
Fuel policy tweak may help NTPC beat linkage clause in
projects:
Fuels for future thermal power project for 12th plan, both coal
and gas will be allocated under a new score card system where the
following measures:
(Iii)
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Measures adopted Resulting issues Drivers for success
Purchase &development of coalmines( India &abroad)
Risks of operating indifferent geographies.eg. political risks/logistics operations
• Risk managementthrough effectivecontracting,
• Control oversupplyinfrastructure
use of higher efficiency units and progress on land acquisition has
the highest weight. Projects with a higher score will get priority in
fuel allocation from domestic sources which aim to eliminate the
subjectivity surrounding the current fuel allocation policy.
Prioritization will be based on points to be allocated as detailed
below:
* Only the IPP projects located within 150 km from the nearest
port will be required to meet at least 30% of their coal
requirements through import. This is not applicable to SPSU s
and CPSU s as Government is already fixing target for import of
coal for them.
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** For weightage for progress of land acquisition, the developer
shall submit a Certificate from the District Collector
or the State Revenue Authority or the authorized agency of the
State Government such as Industrial Development Corporation.
(Source:http://articles.economictimes.indiatimes.com/2010-08-
2/news/27606580_1_gas-allocation-policy-gas-linkage-power-
projects)
9.4.4 Finance Management:
"Maharatna" status
9.4.5 Safety risk assessment:
The NTPC Limited, will pave way for
enhanced delegated powers for its Board of Directors.
Board of Directors of NTPC shall now be, empowered to make
equity investment to establish financial joint ventures and wholly-
owned subsidiaries and undertake mergers & acquisitions, in
India or abroad, subject to a ceiling of 15% of the net worth,
limited to Rs.5000 crore in one project as against earlier limit of
Rs.1000 crore.
Exploring the idea that all safety appliances to be provided by
the contractor shall be identified and quantified in the bid
documents .They should be made payable items rather than
imposing penalties for not providing them.
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9.5. Synchronization of project plan and execution
9.5.1)Empasis on IT enabled monitoring: (Schedule
Management)
(I)Meticulous Project Review and Internal Monitoring
With a view to inculcate network centric approach and to identifyand assess critical issues at an early stage, to facilitate fasterresolution of the problems, meticulous review and projectmonitoring is very important.NTPC over the years has adopted the latest available techniquesof project monitoring techniques from manual flowchart/ Ganttcharts to web based tools like primavera/SAP-ERP-PS module.This is supplemented by regular reviews through videoconferencing and periodic package wise review with majorsuppliers for expediting critical supplies/ on critical hold-up,monitoring and expediting progress etc.
At present NTPC has setup a state of art web enabled project
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monitoring centre at corporate centre for fissues/ developments in project implementation and investorservices.
The centre provides all the information related to projects liketimelines, quantitative progress, issues, trends, real-time videosand facilitates deliberations and faster resolution of criticalbottlenecks.
ast track facilitating of
Important features:Web-based Milestone Monitoring System (WebMiles) providesreal time status of various projects of NTPC in a graphicalmanner. The system is hosted at http://www.ntpcpmc.com andaccess to the system has been extended to CEA, Ministry ofStatistics and Program Implementation (MoSPI) and Ministry ofPower (MoP), so that they can get the project status without anymanual intervention.
Project Review and Internal Monitoring System (PRIMS):Project Review and Internal Monitoring System (PRIMS) forreview of project activities by top management. Large video wallwith conferencing facilities.
Enterprise-wide Issue Tracker System is a web basedcollaborative system and automates the enterprise wide issueresolution. The system is integrated with faster communicationchannels like email and SMS in the background to keep the teammembers informed of the developments.
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SMS-based Information Delivery System is under trial to provideproject related information to the team members on demand justthrough a SMS.
Webmiles and PRIMS are linked to bank end projectmanagement systems - like SAP-PS and Primavera to capture theproject schedules. A software has been developed in-house tofetch the milestone dates from the networks in batch mode daily.
In addition PRIMS is linked toEnterprise-wide Issue Tracking System to capture subjectiveissues and Progress Reporting Module to capture scheduled andactual progress of activities.
Future Plans: GPS based material tracking in envisaged to trackthe critical supplies starting from material inspection atmanufacturers' works to delivery at project site.
Following MIS Reports have been made available in ERPEnterprise Portal through development of integration interfaces:- Status of internal and external Milestones of a project.- Status of pending Engineering & QA Documents (Drawings,
Quality Plans)- Status of pending Supply/ site Activities- Project-wise summary and detailed reports of drawings,Quality Plans & Other Engineering Documents, fetched fromD REAMS ( in-house developed Engineering Collaborationsystem)
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(II)
ERP as a tool for change management and businessprocess improvement
Emphasis on IT enabled monitoring
Company to enable integrated information flow, streamlinedbusiness processes standardization and integration, adoption ofglobal best practices, quick and informed decision making basedon real time information for overall productivity enhancement,an Enterprise Resource Planning (ERP) system has beenimplemented at all NTPC locations and in its subsidiaries.Besides implementation of usual functionalities like EmployeeSelf Service (ESS), Finance, HR, Materials, Maintenance andProjects, new generation products like e-procurement,Knowledge Management (KM), Document Management, andWorkflow have also been implemented.
There are major benefits of ERP implementation for theCompany:· Real-time tracking of key project activities and milestones
helps identify and eliminate potential bottlenecks
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Lower procurement lead times
Improved vendor collaboration enabled by streamlined
workflows and standard processes
Centralized Commercial Billing Functions and Real-time
visibility into cash inflows from the customers.
Reduction in books closure cycle time and seamless
reconciliation for improved accounting efficiency
Greater employee satisfaction as they are able to manage/
track transactions in the self-service facility.
Project management operates in a
management environment of chaos and complexity .There is
lack of experienced project managers in India.
·
·
·
·
·
9.5.2 Resource mobilization:
Human Resource:
.At present, project managers have good domain engineering
knowledge and experience, but many of them lack formal
training and certification in project management. There is a
general consensus that shortage of talent in the construction
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sector is a long term problem Shortage of skilled
engineers and managers, skilled technicians like welders, riggers
etc. (Ref Chart no. III)
Training will produce a large pool of lower and middle level
managers urgently required for project execution. NTPC is ensuring
skill development via training/certification to Engineers, Projects
Managers and other manpower.· CIPM certification programme for Project team
through IPMA.
(Source: CII-CEA-White-Paper-on-Strategy-for-11th-Plan-Beyond01)
NTPC is facing
Chart no. III
· NTPC has adopted 18 ITI's and build 8 new ITI's formeeting the skill gap. New courses like HP Wielding,Electrician, and Fitter etc. have been started in 12 it isfrom this year.
· Sponsored around 750 youths from villages invicinity of NTPC Units for ITI training.
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Certification /Training will enable
? Saving in terms of time and cost overruns.? Wider sharing of best practices.? Enhancement of hard and soft skills? Managing risk more efficiently.
Training increases capability of projects managers to take
practical and profitable decisions
Project Management Knowledge Quotient (PMKQ) in
conjunction with Project Management Knowledge Scan (PMKS)
software is a tool to help companies extensively measure and
analyze employees' knowledge and understanding of latest PM
related skills.
knowledge domain of understanding project managementconcepts before we undertake strategic steps to fill up theidentified knowledge gaps.
• This helps company to know where we are in the
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• The measurements of knowledge in the vital discipline ofproject management. It provide the gap analysis tounderstand the strengths and weaknesses at regions /projects/functions /individuals level.
In NTPC, a total number of 1188 employees were asked to takePMKQ assessment test covering 48 questions. Employeesselected covered 4 Regions, 20 Projects and 46 Functional Areasand spanned across 10 Grades from E1 to E8.
of results showed that CIPM holders did much better.On average, inoverall assessment.
.
AnalysisCIPM holders have done almost 100% better
This confirms the International findings that certificationenhances the overall Knowledge of employees increasing theirchances of managing projects well(Source: PM News_37;IPMA)
Sample size:
Response:
Questions:
ools used for analysis
192 executives
Via e-mail & hard copies
close ended with 1 open ended question.
: Micro soft excel, graphs & charts.T
Research-II
Purpose:
Primary research :( SURVEY-II)
Delivering excellent project management services.
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Secondary Research-II: Following is the findings of BODH-
III ( conducted through
IMRB, International, Mumbai, in January 2009, in
NTPC project execution context which were found low on
ratings: (BODH-IV is under process)
NTPC Organizational Climate Survey)
* NTPC commitment index quite high as compared to other
organizations. Comparing across segments within NTPC,
commitment level is low for executives. Comparing regions, we
see HYDRO scoring low. At a department level- Engineering,
followed by Project Construction, R & D and Operations have
given lower rating on commitment
**% favorable response
This model shall
enable to overcome resource shortages and skill set deficiency.
On basis of primary and secondary research a model has been
created for strengthening resource capability.
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Lower rating on commitment
Low Welfare And Work Life Balance
Scope For Advancement
Cooperation And Teamwork
Participative Management
3.7 index (Average)*
42%**
43%**
43%**
51%**
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e -COMIT
C
O
M
I
T
ompetence
penness
otivation
nvolvement
eam WorkEnhancing
e -COMIT
Competence Training &Certificationprogramme.
Greater focus/ thrust to be given onof the
training programme &certification.
Presentation at the end of trainingmodule in department for betterreview of training.
Assessment of training by use of newtools-PMKQ for CIPM holders
review and applicability
Enhancing Elements Key SuggestionsCurrent System
Existing KMS
(IPON,ESS)
Dissemination of knowledge to rootlevel through
of existing KMS.Appreciation letter/reward foraccepted ideas in IPONProject experience handbookDocumentation of lessons learntfrom a project by managing strongknowledge base /
cultivate awareness/utilization
sharing bestpractices.
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Openness Performanceappraisal
HR-communicationmeet
•
•
All round feedback mechanism-Concept/
approach.
Should seek to stay in touch withchanging employee aspirations.( p e r s o n a l l y a s w e l l a sprofessionally)
Open to all- 360 deg.
Enhancing Elements Key SuggestionsCurrent System
Motivation•
•
Incentives forproject team
Mutual Trust
•
•
•
Substantial Lucrativeincentives/additional locationalbenefits to project team.Enhancement of compensationfor working in shift/night.Articulating praise-Concept like“Executive of the month “inprojects.
• Nurturing failures as culturalchange.
Involvement • Targets & goal •
•
•
Goals should be mutual andinteractive for the individual.Encouragement and inculcatingbelongingness/ ownership to thework.Effective utilization of theempowerment of the projecthead & team.
• Developing Family supportsystem for dedicatedmanpower.
10. ROAD Map for Implementation
”Strength is to be leveraged & strategies for overcoming the
weakness are to be developed.”
Following key suggestions when applied together will go a longway to achieve the goal of strengthened project managementcapabilities
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Team Work • Project owner/Team
•
•
•
•
Project leader to turn individualto team player-foster team spirit& harmony
Encourage employees to rewardone another -Ask employees tonominate one another for awardsand recognit ion based onteamwork and excellence.
A l l o w t e a m m e m b e r s t oparticipate in goal-setting.
Encourage department managersto pitch in with all tasks i.e. likely toassist fellow team membersthemselves.
• Centralized task force for projectexecution-developing experts.( da t a bank c rea t i on a reawise/discipline wise)
Enhancing Elements Key SuggestionsCurrent System
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1. Adoption of best practices/risk management
Best practices should be recorded at theclosure of project and should be acontinuous activity.Thrust on adoption of best practices infield of engineering, construction,contracts and risk management.
KEY Practices Action Plan
2 Enhancement of capability tomanage project complexities
. Innovation, R&D/Adoption of newconcepts technologies in engineering& construction and strategicprocurement.
3. Involve Multiple stakeholders This ensures that there is a commonunderstanding of projects andorganization objectives among allstakeholders and every one may worktowards a common goal.• Proactive stakeholder
management.• Removal of mismatch with PAP.• Exploring new ideas• “Enterprise Footprint”-
Boundary management:
A model is structured to enable us to
categorized under
? Project Management Process
? Project Management Systems and Information
? Organization, environment and culture
The purpose of the capability maturity model is:
? to enable internal or external project management
benchmarking.
? to provide a tool for periodically measurement and
quantifying improvement NTPC project management
function
refine our project
management abilities
Objectives and Benefits
for
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4. Enhancement of assessment ofproject risk
• NTPC revisiting bidding strategyfor UMPP's
• Ensuring sequential supply ofmaterial.
• Ensuring fuel and transportlinkage
• Safety risk assessment
KEY Practices Action Plan
5. Synchronization of projectplan and execution
• Meticulous monitoring -Application of IT- MovingTowards Excellence With
• HR- Delivering Fast Projectservices
SAP
After analyzing gaps in the field of project execution for NTPC andwith aforesaid key strategies/action plans to fill those gaps, a modelfor strengthened project management capability has been preparedwhich comprises all the three centers working in synchronism witheffective communication throughout the process chain as well aswith stakeholders & strongly supported by meticulous monitoringsystem , boundary management, dedicated & committed team andleaders leading from front all striving towards the common goal ofstrengthening project management capability.
NTPC being the biggest power utility in
India has the moral responsibility to achieve mission of 'power for
all' by 2012 by Govt of India.
11.Conclusion
It is evident that the deficit in power availability in India is a
significant impediment to the smooth development of the
economy. In this context, bridging the gap in demand and supply
has become critical.
There is a need to review and
enhance project execution capabilities to help ensure targets are
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met. This strongly necessitates employing a comprehensive
project management structure to address the major challenges in
project execution and to deliver them as per the planned
schedule. There is need to assess all the key project aspects. As
discussed initially, the overall intent of this paper is to highlight
the opportunities and challenges in project execution and the
drivers that are required to address these challenges.
At present, NTPC is illuminating every third bulb of the country
and to achieve GOI target to illuminate bulb of every household
in the country expertise and excellence in project execution is the
only gateway.
“India's tomorrow will be decided by the choice WE MAKE
TODAY”
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12.Reference
1. NTPC News, July 2010
2. White paper on implementation, challenges &
opportunities, Energy
summit-Nagpur,Jan2010.
3. BODH-III Survey
4. IPMA competence baseline version 3.0
5. PM News-Nov 2009
6. Prospering Indian power sector Blog.
7. CMG ppt, KM ESS.
8 .NTPC Intranet
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13.ANNERXURE
Survey-I
Strengthening Project Management Capability
i. Levels
ii. Department
iv. Age
v. Gender
vi. Work Experience
Rating Scale:
1 Strongly Disagree 2 Disagree 3 Neither Agree Nor Disagree 4 Agree
5 Strongly Agree
1. NTPC has excellent track record of performance in project
execution.
2. NTPC has highly skilled and experienced human resources,
exposed to state-of-the-art technologies in project execution.
3. NTPC has high credit rating that is indicative of the
confidence lenders.
4. In NTPC we have streamlined and transparent tendering
system attracting global power equipment manufacturers.
5. NTPC strives for maintaining best safety & environmental
standards during project execution.
6. In NTPC decision making is fast.
7. I am aware of knowledge management system in NTPC &using
it to fullest. (IPON, ESS knowledge manageme
8. Stringent QR is hindering competition / participation.
nt).
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9. NTPC has Limited number of vendors/agencies for BOP.
10. Monotonous job profile gives rise to de-motivation and job
dilution.
11. In NTPC there is distinctive Identification of project
team/owner prior to commencement of project
12. In NTPC there is Effective communication with various
stakeholder during project execution.
13 NTPC should foray into equipment manufacturing to ensure
in time supply of equipment.
14. NTPC should adopt Incentive/Penalty for involved
agencies/contractors for fast/delay supply of material
/equipment for execution.
15. NTPC should adopt modern construction technologies &
T&P's in project execution.
16. Manpower shortage-likely to continue to push up project costs
and risks.
17. Project head is empowered enough to resolve contractual
disputes.
18. What is the relative importance given to the following
parameters for the success of the projects:
i) Project is with in the budget
ii) Project has delivered targeted benefits
iii) Project on time
iv) Project quality standards are high
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Result of survey-I
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Survey-II
Strengthening project management capability
i. Levelsii. Departmentiv. Agev. Gendervi. Work Experience
Rating Scale:
-
-Openness
1 Strongly Disagree 2 Disagree 3 Neither Agree Nor Disagree 4 Agree5 Strongly Agree
Enhancing Competence
Enhancing
1) In NTPC we document the lessons learnt from aproject and apply them to future projects.
2) In NTPC there is thrust on review and applicability oftraining programme /certification.
3) There is dissemination of knowledge to the root level byefficient usage of present Knowledge managementsystem.
4) In our organization all around feedback i.e. from top tobottom & vice versa can be effective in achievingopenness.
5) HR strives to create a culture of openness andtransparency.
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Enhancing Motivation
Enhancing
Enhancing
-
-Involvement
Team work
6) In NTPC project team is happy with locationaladvantage and incentive schemes.advantage andincentive schemes.
7) Compensation for working in shifts are adequate inNTPC
8) Your new ideas/good work is appreciated by seniors.
9) There is a clear assignment of roles and responsibilitiesto enable better control and fast execution of assignedjobs.
10) I have a sense of pride to be associated with a projectexecution team in NTPC.
11) Information is communicated in a timely way atNTPC & flows freely at all the levels (Management &Employees).
12) In my job I have full freedom to take initiative and todo anything extra on my own.
13) I perform best to of my abilities, when in a team, rather
than individually.
14) I am part of decision making for setting goals for the team.
15) My senior plays the role of mentor for my personal as
well as professional development in the company
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Result of survey-II-
Enhancing -Openness
Enhancing -Motivation
Enhancing Competence
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Enhancing -Involvement
Enhancing Team work
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