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PMI India
Project Management
Conference 2010



Exposure draft period approaches for The Practice Standard for Estimating

With the fast depletion of oil, natural gas assumes high importance as a clean and environment-friendly fuel for the future. India has a huge demand potential for natural gas. To connect natural gas sources to demand centers, the country needs a gas grid pipeline. There are, however, a number of challenges in managing such major pipeline projects.

Managing schedule:
It is ideal to undertake around 20 percent of the activities in the pre-project stage by the time one gets approval for complete project execution. A best effort schedule (time crash of 80 percent) may be followed.

Permissions: Pre-project activities such as statutory clearances, environmental clearances, survey and Right of Use (RoU) acquisition, and railway/highway crossing permissions are of paramount importance.
Route survey: Correct survey data forms the critical input for further design and engineering of the pipeline system. The route survey provides the population density for class location identification, based on which the line pipe thickness is determined. Any over-estimation of thickness will cost the company dearly.
RoU: Acquiring hassle-free RoU from land owners to carry out construction is one of the biggest challenges. The local community should be taken into confidence. For this, the company can initiate community corporate social responsibility-related activities.

Land procurement: For laying pipeline facilities, there is a need for land for permanent installations. This normally takes 2-3 years due to long-drawn government procedures. Time-bound projects of national importance can get caught in this uncertain schedule of land acquisition through government procedures. The other option for land acquisition is through private negotiation by a committee.

Tendering and award of contracts:
This involves issuing e-tenders, conducting reverse auction system, managing a file management system to track the movement of files, pre-tender meeting, preparing cost estimates, and preparing tender documents.

Line pipe: Pipeline construction accounts for almost 40 percent of the project cost. Companies can avoid risks associated with it by encouraging indigenous sourcing, carrying out capacity assessment of vendors and thereby splitting of the orders to meet delivery schedule, liasoning  with international raw material suppliers for steel coil/plate, daily monitoring, monitoring the logistics of line pipe and making them available at dumpsites.

Timely procurement of material:
For a mammoth pipeline project, an expediting group is useful. The group would call review/constraint meetings with the vendors and sort out problems if any.

Construction management:
A dedicated revenue team that conducts close monitoring, dispute resolution, and faster compensation distribution to land owners is the key to successful RoU opening.

Monitoring by top management is important: Top management monitoring is essential. For example, in the case of a pipeline project with a stiff target, the management decided that the director and executive director concerned would visit the site every fortnight to review the project and resolve issues. This model yielded excellent results.

Project monitoring:
Project monitoring comprises an internal and external review mechanism. Internal review involves a four-tier approach, chairman and managing director level (quarterly), director level (monthly), general manager projects level (fortnightly); and project manager level (weekly). Consultants, major contractors, and major vendors must be present during the CMD and director review. External reviews are generally conducted by the ministry concerned, and the respective state governments.

Motivation techniques:
Pipeline construction involves long periods of working in rough terrain, and staying in temporary camps. The company should evolve incentive policies to keep employee morale high.

Best practices:
Managing large projects requires systems and procedures so that there is consistency. All your actions are closely watched from different quarters. Any organization that intends to work in a transparent manner has to follow some best practices, like a bill watch system to track the movement and timely payment of bills, e-payments to ensure secure and faster payment, maintaining proper documentation to face any questions under the Right To Information (RTI) Act, etc. The management of projects in the public sector is a little more tedious than in the private sector. Projects can be completed within the scope only if the management has a strong will to do so.
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