ACKNOWLEDGEMENT

I express my sincere gratitude and thanks to IGNOU for giving

me an opportunity to study the Master of Business

Administration (MBA) course.

I would like to thank my Project Guide Mr. V.Anthoniraj

(Co-ordination Engineer, NCC., Saudi Arabia), for his inspiring

guidance, which has shaped the Project.

My thanks goes to NCC’s management and employees for their

constant help they gave me during my project work. Also,

special thanks goes to NCC’s Finance & Administration

Manager, Mr. R.Radhakrishnan for stimulating me throughout

the Course.

Last but not the least, I owe a profound intellectual debt to my

family members and especially my wife, who had patiently

bore my constant impatience to finish the project work in time.


 CERTIFICATE OF ORIGINALITY

I hereby state that the Project Report entitled “Analysis of

Project Management in Construction Industry” prepared by

me (J.Somanathan, Enrolment Number MP 002437390) to the

Indira Gandhi Open University, New Delhi for the award of

MBA degree, is a bonafide Project work.

I hereby declare that the contents of the above cited Project

Report, in full or in parts, have not been submitted to any other

Institute / University for award of any Degree or Diploma.

Project Guide:

V.Anthoniraj J.Somanathan
Co-ordination Engineer Enrol. No. 002437390
National Contracting Co. Ltd., Course : MBA
P.O.Box: 3204
Taif. Saudi Arabia.
 INTRODUCTION

In the recent days thrust is more for setting-up of new electrical projects all over

the world, since there is a steep raise in population & industry potential. As

such, it has become must for every individual in the Project field to have an in

depth knowledge for securing & running the projects without slippages.

Making a note of the above, this Project Work “Analysis of Project

Management” has been prepared with a view of helping the future

entrepreneurs to understand every nook & cranny of the field.

For the purpose of making Project analysis M/s National Contracting Co. Ltd

(NCC), was approached and they were kind enough for providing necessary

assistance & details of their Transmission & Distribution department and its

operations. A brief profile of NCC has been provided in Section-3.

For making precise analysis, information from various sources like Tender /

Contract documents, specifications, progress reports etc., were used. All the

data collected were carefully recorded for analysis and it is framed in Section 4

under respective categories.

Besides the information collected from NCC, other books & internet resources

also referred to make a worth full Project work. These references were given

under Section-5 “Bibliography”.

 OBJECTIVE & METHODOLOGY

GENERAL OBJECTIVES :-

 To have overall knowledge about Electrical Project Management and its

area of major activities.

 To bring out the salient features of the departments in a typical Service

Oriented Organization, which undertakes construction of Electrical

projects on Turnkey basis.

 To understand the basic functions of Top, middle and bottom

management in a construction industry.

 To educate future entrepreneurs for utilizing the correct Management

planning tool (CPM, PERT, Bar chart etc.,) at correct situations.

 To analyze the basic problems in construction management and prepare

suitable suggestions for trouble free project completion.

 To state the impact of indirect costs during execution and develop a list

of recommendations for effective cost control.

 To identify major Pitfalls in Project Management.

METHODOLOGY : -

The analysis carried out on a typical Construction oriented organization to

understand the problems of Project Management and arriving solutions for

pitfalls. Information and data has been collected from various sources through

structured interview & various Contract documents.

 SAMPLING & INSTRUMENTS USED

SAMPLING :-

The following samples were considered for Analysis :-

o Customer (Utilities and industrial)

o International and Local Suppliers

o Tendering Engineers & Project Managers

o Project Co-ordinating Engineers

o Design Engineers & Draughts men

o Finance & Accounts personnel

o Construction Managers / Site Engineers

o Site Supervisors (Erection, concreting & Stringing)

o Stores in-charge

o Workers (Skilled, Semiskilled & Helpers)

INSTRUMENTS USED :-

This study made with the following instruments, which had systematically

measured the Project Management in a construction company.

 Tender & Contract documents

 BOM, Engineering specifications & Vendor Data

 CPM / PERT/ Bar chart of project

 Estimated & actual cost statements

 Statement of accounts / Cash Flow

 OPERATIONS OF ALIREZA GROUP

The Alireza Group is a major international business group inspired by Saudi

family traditions and lead by family principals. Its trading roots reach back

several generations and its horizons have always been international.

The Group is actively involved in developing regions of the world with focus

on Construction, trading, support, manufacturing, investment and financial

services.

Integrity in relationships with major international companies, often as joint

venture partners, has made the Group an important trading and business

partner wherever it operates.

The Group’s philosophy is founded on commitment to continuing growth and

development in an ever-changing global market. The objective is to provide

quality of the highest order throughout, in worldwide businesses. Loyalty,

Trust, Professionalism and international expertise, reinforced by the ability and

determination to foster long term relationships, are the hallmarks of the Group.

Alireza Group Companies quality procedures and commitment to services of

globally acceptable quality are backed by ISO 9000 certification. Most of the

Group companies have already obtained ISO certificates.

The Group employs around 4,000 persons in Saudi Arabia and Gulf and is

actively engaged in :
 Erection and Commissioning of Power Generation plants with

auxiliaries – individual packages or turnkey installations.

 Installation of Power transmission and Distribution Systems with

associated substations.

 Operation and maintenance of Water & Sewerage treatment systems

and Desalination plants.

 High technology support and training in Instrumentation,

Telecommunications, Dispatch and Control systems, Data processing

and Radar systems.

 Health care services / Hospital Management

 Civil Engineering & Civil construction services

 Pre-Engineering System Housing, Camps etc.

 Pipe Construction – Onshore & Offshore

 Transportation and Container services

 Cargo handling and Freight forwarding.

 Maintenance of Power plant & mechanical installations

 Petrochemical plant construction

 Offshore Marine services and Port Management

 Rigging and Crane Hire

 Motels, Camps, Housing and Catering

 LIST OF ALIREZA GROUP COMPANIES

USA

Rezayat American Inc.

EUROPE

Rezayat Europe Ltd.,

Lorne Stewart PLC

Initial Catering Services Ltd.,

FAR EAST / SOUTH ASIA

Rezayat Exports International Ltd., (REZEX)

Arabian Gulf Investments (Far East) Ltd.,

Rezayat Engineering Services Pvt. Ltd., India

SAUDI ARABIA

Rezayat Saudi

Rezayat Automotive

Rezayat Brown & Root Saudi Co. Ltd.,

Rezayat Catering & Support Services

Rezayat Commercial

Rezayat Construction and Maintenance

Rezayat Deborah Saudi Arabian Company Ltd.,

Rezayat Inspection Services

Rezayat Insurance Consultants

Rezayat Loss Adjusting

Rezayat Medical Services

Rezayat Pipeline Services

Rezayat Protech Company Ltd.,

Rezayat Ship Agency

Rezayat Sparrow Arabian Crane Hire Company Ltd.,

Al Bilad Catalyst Company Ltd.,

Crescent Transportation Company Ltd.,

Nadrico Saudi Company Ltd.,

National Contracting Company Ltd., (NCC)

National Pipe Company Ltd., (NPC)

Saudi Arabian Engineering Company Ltd., (SAECO)

Saudi Arabian Fabricated Metals Industry Company Ltd., (SAFAMI)

Taisei Saudi Arabia Company Ltd.,

MIDDLE EAST

Rezayat, Kuwait

Rezayat Commercial, Kuwait

Rezayat Projects, Dubai

Abu Dhabi Petroleum Ports Oerating Company, Abu Dhabi

Alireza Brown & Root Maintenance Company Ltd., Kuwait

Lamnalco Group, Sharjah

National Contracting Company Ltd., (NCC), Kuwait

 NATIONAL CONTRACTING CO. LTD

National Contracting Co. Ltd., (NCC), a wholly owned member of the Alireza

Group, is a professionally managed Organization. The four decade old

company specializes in turnkey construction activities in the Power sector and

has extensive international associations to fulfill a wide range of activities.

Based in Saudi Arabia, the Company is well represented in the Middle East and

is ideally positioned to expand operations to other parts of the World.

PROFILE OF ACTIVITIES :

 Design, Engineering, Procurement and construction of Turnkey Power

Generation plants. The capabilities cover Gas turbine, Steam turbine

and Diesel Power plants.

 Design, Engineering & Installation of Over head Transmission Lines

upto 500 kV, designed to international standards using Lattice

structures, monopoles and wooden poles.

 Design, Engineering & construction of Medium / Low voltage

Distribution lines in mountain areas, employing steel, concrete and

wooden poles. The scope includes erection of transformers, Air break

switches and consumer service connections.

 Design, Engineering, Installation, Testing & Commissioning of High

Voltage substations for Utilities, Industries etc., in either conventional

Outdoor or Indoor GIS versions.

 Electro-Mechanical construction of Petrochemical plants, Fertilizer

plants, Metallurgical plants, Oil & Gas installations, Cement plants,

Water De-salination plants & other Industrial plants.

 Fiber optic installations mainly associated with Power lines, using

various leading International makes of OPGW.

 PROJECT MANAGEMENT – OVERVIEW

Project management is the art of directing and coordinating human and

material resources throughout the life of a project by using modern

management techniques to achieve predetermined objectives of scope, cost,

time, quality and participation satisfaction.

The basic ingredients for a project management framework may be represented

schematically in the figure given below.

A working knowledge of general management and familiarity with the special

knowledge domain related to the project are indispensable. Supporting

disciplines such as computer science and decision science may also play an

important role. In fact, modern management practices and various special

knowledge domains have absorbed various techniques or tools which were

once identified only with the supporting disciplines.

Specifically, project management in construction encompasses a set of objectives

which may be accomplished by implementing a series of operations subject to

resource constraints. There are potential conflicts between the stated objectives

with regard to scope, cost, time and quality, and the constraints imposed on

human, material and financial resources. These conflicts should be resolved at

the onset of a project by making the necessary tradeoffs or creating new

alternatives.

Project management for construction generally include the following :

 Specification of project objectives and plans including delineation of

scope, budgeting, scheduling, setting performance requirements, and

selecting project participants.

 Maximization of efficient resource utilization through procurement of

labor, materials and equipment according to the prescribed schedule

and plan.

 Implementation of various operations through proper coordination and

control of planning, design, estimating, Contracting and construction in

the entire process.

 Development of effective communications and mechanisms for

resolving conflicts among the various participants.

 Generally, project management is distinguished from the general

management of corporations by the mission-oriented nature of a

project.
 STEPS OF PROJECT MANAGEMENT IN
CONSTRUCTION INDUSTRY

Pre-Qualification

Purchase of Tender Documents

Preparation of Estimate

Submission of Bid

Securing the Order

Design in Engineering

Ordering of Materials

Delivery of Materials at Site

Installation of Items

Testing and Commissioning

Handing over of the Project

The above steps are mostly applicable for Electrical projects, which involves

construction of Power stations, Overhead lines and Sub-stations.

 TENDERING & MARKETING

A tender is an offer to perform an act which the party offering, is bound to

perform to the party to whom the offer is made. Marketing refers to, appraising

the client about the strengths of the company for doing a particular project.

All the Construction companies who wishes to enter in the Projects field, have

created their own department for “Tendering & Marketing”. Usually, that

department posses competitive personnel having vast experience and knows

about the techniques for winning a project. Marketing of a project involves,

persuading & canvassing the customer for using the services of the organization

by giving construction Contract.

The Major functions of Tending & Marketing department are listed below :

1. First stage in tendering is to get Pre-qualified with various Clients. For this

purpose a complete credentials of the company to be prepared by the

department for submission to Client. Based on the past experience and

capability, the Client qualifies the Company for bidding in construction

projects.

2. After getting Pre-qualified, the Client starts sending letter to the Contractor,

inviting him to participate in tenders. If the Contractor wishes to bid for the

project he arranges for purchasing the documents (at some cost decided by

the Client). If the Contractor is not interested in participation, he send

regret letter to the Client, duly mentioning the reason for non-participation.
3. Immediately after receipt of the tender documents, a careful study is being

made to understand the Project Scope of Work and technical specifications.

If any discrepancies found in the documents, it is brought to the notice of

the Client for clarification.

4. Pre-bid site visit made to study the environmental & terrain conditions of

the proposed project site. Based on the observations, a detailed report

prepared and submitted to the Estimation Engineer. (A sample copy of

Majerah Distribution project’s pre-tender site visit Check list attached at

the end of this sub-section). In the site visit report all the positive and

negative aspects of the site conditions mentioned clearly, so that it helps the

Estimating Engineer for preparing a comprehensive bid.

5. Preliminary BOQ arrived based on the Clients Price Schedule. As per the

assessed quantity, enquires sent to the Supplier for getting competitive

offer. Along with the enquiries, a complete set of technical data schedules

were also attached for necessary filling-up by the supplier. This technical

schedule helps to find out whether the supplier’s offer meets the Clients

requirement.

6. A close follow-up being done for getting the Suppliers Quotations in time.

For this purpose repeated phone calls & faxes are required. It may be noted

that each supplier has their own priority and without follow-up they may

not respond.

7. Detailed Cost estimate prepared based on the supplier offers and past

experience. As far as possible all the costs including direct and indirect costs

should be considered while estimating. Cost estimate includes, supply cost,

 transportation, customs duty, taxes, labor, overheads etc., (A sample

estimation sheet for Majerah Distribution Project has been enclosed at

the end of this sub-section). The cost estimation should be done with more

care, since the mistake made during estimate will affect the profit margin of

the project. During bid preparations, the competitors strengths are kept in

mind.

8. It is necessary for each tender that the Contractor has to submit ‘Technical

documents” along with commercial offer. The technical documents include

dimensional drawings, data schedules, copy of type test reports, deviations

etc., Most of the technical data are supplied by the suppliers.

9. Bid documents compilation as per Clients requirement and submission to

Clients office before dead line. Usually 5 % (on the total bid value) Bid bond

submitted along with each tender. “Bid Bond” is the Guarantee given by

the Contractor’s Bank, stating that - if the Contractor default from their

commitment, the Bank shall pay compensation to Client.

10. Attending the Bid opening & noting the outcome of results. The bid values

of all the participants are being noted and conveyed to the top Management

for further course of action. If possible, information about the competitors

approach to quoting of project may be collected.

11. If the company found to be the lowest bidder, then there has to be close

follow-up with the Client for securing the Order. After securing the order,

all the documents transferred to Contracts department for execution of the

Project.
12. Besides the above functions, the Tendering department has the

responsibility of keeping updated records about the Company’s credentials,

which is required for future bidding.

ESTIMATING FACTORS

There are three basic types of factors affecting the work which must be taken

into account in the estimate. They are site, Contract and personnel factors, a list

of which follows:

1) Site factors

a) Type of project

i) Typical or nonstandard

ii) Commercial, industrial, or government

iii) Distance to work areas

iv) Congested or clear

b) Project location

i) In town or out of town

ii) Accessibility

iii) Availability of house, water & electricity

c) Material handling and storage facilities

i) Availability of loading ramps and hoisting facilities

ii) Types of storage facilities

iii) Availability of storage yard

d) Security

i) Danger of flooding
 ii) Fire hazards

iii) Safe storage

iv) Availability of Police station

2) Contract Factors

a) Quality of design

i) Completeness of drawings and specifications

ii) Coordination of layout and interfacing

iii) Reputation and experience of professional

b) Quality of general Contractor or construction manager

i) Management reputation

ii) Availability of experienced staff

iii) Experience in this type of work

iv) Busy or not with other projects

c) Type of schedule

i) Normal, or will the work be dragged out?

ii) Accelerated, requiring overtime or shift work

iii) Subject to delays, disputes, interruptions

d) Beneficial use and occupancy

i) Right of Client to make use of facilities before Contract is

completed

ii) Use of electrical system for temporary lightning and power

3) Personnel factors

a) Availability of skilled personnel

b) Ability to work with optimum crew size

 c) Past experience in this type of project

d) Typical or atypical work

e) Weather conditions

f) Congestion conditions

g) Availability of adequate hoisting facilities for crews and materials

h) Morale and psychological problems

It may be noted that, accurate estimate can be ruined by sloppy material

pricing. Mistakes happen if it is not correctly ascertained whether the material is

priced per hundred or per thousand, whether the tax is included or not, or

whether the pricing catalog is out of date.

Proper identification of the material helps to get accurate prices from the

suppliers. Hidden cost and all job expenses are to be added in the estimate.

These cover items such as sub-contract work, cartage and delivery, cutting and

patching, painting, temporary wiring, field office and storage, insurance,

inspection, drawings and drafting expense, traveling expense, contingency,

guarantee etc.,. An ever-increasing hidden cost is financing. Slow cash flow and

holdback are very expensive to finance and put great stress on the operation.

After arriving the Prime cost of the estimate, overheads and profit are added to

arrive the total cost. Adequate explanation to be given to the field people and to

the professionals about the basic principles, procedures & assumptions of the

estimating system and the way in which it is prepared. This ongoing dialogue,

combined with the regular feedback of job experience will help to double-check
and fine-tune the labor units and job factors that form the basis of estimation

system.

ESTIMATING TECHNIQUES

Assuming that the estimate has been prepared with care and accuracy, the

individual items very often have a tendency to complement or compensate for

each other. Some may be a little high, others a little low. They tend to average

out.

It’s much like a choir : If we single out any given singer, he or she may not be

particularly good, but as a whole the choir may be very good. This must be

understood, particularly by the professionals who review or check an estimate.

They must understand that it is the result as a whole, and not any individual

items, that must add up to a value covering the actual labor and material that

will be consumed when the work is eventually done.

A Contractor will be successful on only a fraction of the jobs on which he or she

bids. Estimators are therefore confronted with the need to develop techniques

that will speed up the estimating process without decreasing the accuracy to

unacceptable levels.

TYPES OF CONSTRUCTION CONTRACTS

While construction Contracts serve as a means of pricing construction, they also

structure the allocation of risk to the various parties involved. The Client has

the sole power to decide what type of Contract should be used for a specific
Project to be constructed and to set forth the terms in a Contractual agreement.

It is important to understand the risks of the Contractors associated with

different types of construction Contracts.

Lump Sum Contract :

In a lump sum Contract, the Client has essentially assigned all the risk to the

Contractor, who in turn can be expected to ask for a higher markup in order to

take care of unforeseen contingencies. Beside the fixed lump sum price, other

commitments are often made by the Contractor in the form of submittals such

as a specific schedule, the management reporting system or a quality control

program. If the actual cost of the project is underestimated, the underestimated

cost will reduce the Contractor's profit by that amount. An overestimate has an

opposite effect, but may reduce the chance of being a low bidder for the project.

Unit Price Contract :

In a Unit Price Contract, the risk of inaccurate estimation of uncertain quantities

for some key tasks has been removed from the Contractor. However, some

Contractors may submit an "Unbalanced Bid" when it discovers large

discrepancies between its estimates and the Client’s estimates of these

quantities. Depending on the confidence of the Contractor on its own estimates

and its propensity on risk, a Contractor can slightly raise the unit prices on the

underestimated tasks while lowering the Unit Prices on other tasks. If the

Contractor is correct in its assessment, it can increase its profit substantially

since the payment is made on the actual quantities of tasks; and if the reverse is
true, it can lose on this basis. Furthermore, the Client may disqualify a

Contractor if the Bid appears to be heavily unbalanced.

Cost Plus Fixed Percentage Contract :

For certain types of construction involving new technology or extremely

pressing needs, the Client is sometimes forced to assume all risks of cost

overruns. The Contractor will receive the actual direct job cost plus a fixed

percentage, and have little incentive to reduce job cost. Furthermore, if there are

pressing needs to complete the project, overtime payments to workers are

common and will further increase the job cost. Unless there are compelling

reasons, such as the urgency in the construction of military installations, the

Client should not use this type of Contract.

Cost Plus Fixed Fee Contract :

Under this type of Contract, the Contractor will receive the actual direct job cost

plus a fixed fee, and will have some incentive to complete the job quickly since

its fee is fixed regardless of the duration of the project. However, the Client still

assumes the risks of direct job cost overrun while the Contractor may risk the

erosion of its profits if the project is dragged on beyond the expected time.

Cost Plus Variable Percentage Contract :

For this type of Contract, the Contractor agrees to a penalty if the actual cost

exceeds the estimated job cost, or a reward if the actual cost is below the

estimated job cost. In return for taking the risk on its own estimate, the
Contractor is allowed a variable percentage of the direct job-cost for its fee.

Furthermore, the project duration is usually specified and the Contractor must

abide by the deadline for completion. This type of Contract allocates

considerable risk for cost overruns to the Client, but also provides incentives to

Contractors to reduce costs as much as possible.

Target Estimate Contract :

This is another form of Contract which specifies a penalty or reward to a

Contractor, depending on whether the actual cost is greater than or less than the

Contractor's estimated direct job cost. Usually, the percentages of savings or

overrun to be shared by the Client and the Contractor are predetermined and

the project duration is specified in the Contract. Bonuses or penalties may be

stipulated for different project completion dates.

Guaranteed Maximum Cost Contract :

When the project scope is well defined, a Client may choose to ask the

Contractor to take all the risks, both in terms of actual project cost and project

time. Any work change orders from the Client must be extremely minor if at all,

since performance specifications are provided to the Client at the outset of

construction. The Client and the Contractor agree to a project cost guaranteed

by the Contractor as maximum. There may be or may not be additional

provisions to share any savings if any in the Contract. This type of Contract is

particularly suitable for turnkey operation.

DO’S & DONT’S DURING TENDERING :

 Do include in-direct (Hidden) costs in the estimate

 Do have full knowledge about the Scope of work, before bid estimate.

 Do have time limit for getting the offer from the suppliers

 Do consult the experts for estimating the erection cost for the project.

 Do not underestimate the Competitors.

 Do not have approximate cost estimation, this may led to adverse effect

during project execution.

 Do not keep the cost working till the dead line for Bid submission, this

may lead to wrong estimate.

 Do not submit the Bid (Tender) without Bid Bond, since most of the

Clients reject the Bids without Bid Bond.

 DESIGN, ENGINEERING &
PROJECT PLANNING

Design & Engineering is a process of creating the description of a new facility,

usually represented by detailed drawings / plans and specifications. Project

planning is a process of identifying activities and resources required to make

the design a physical reality. Hence, construction is the implementation of a

design envisioned by Designers and Engineers.

DESIGN METHODOLOGY

The conceptual design process may be formal or informal, it can be characterized by a

series of actions: formulation, analysis, search, decision, specification, and modification.

However, at the early stage in the development of a new project, these actions are highly

interactive as illustrated in Figure.

CONCEPTUAL DESIGN PROCESS

The series of actions taken in the conceptual design process may be described as

follows:

 Formulation refers to the definition or description of a design problem

in broad terms through the synthesis of ideas describing alternative

facilities.

 Analysis refines the problem definition or description by separating

important from peripheral information and by pulling together the

essential detail. Interpretation and prediction are usually required as

part of the analysis.

 Search involves gathering a set of potential solutions for performing the

specified functions and satisfying the user requirements.

 Decision means that each of the potential solutions is evaluated and

compared to the alternatives until the best solution is obtained.

 Specification is to describe the chosen solution in a form which contains

enough detail for implementation.

 Modification refers to the change in the solution or re-design if the

solution is found to be wanting or if new information is discovered in

the process of design.

As the project moves from conceptual planning to detailed design, the design

process becomes more formal. In general, the actions of formulation, analysis,

search, decision, specification and modification still hold, but they represent

specific steps with less random interactions in detailed design. The design

methodology thus formalized can be applied to a variety of design problems.

The basic approach to design relies on decomposition and integration. Since

design problems are large and complex, they have to be decomposed to yield

sub-problems that are small enough to solve. There are numerous alternative

ways to decompose design problems, such as decomposition by functions of the

facility, by spatial locations of its parts, or by links of various functions or parts.

Solutions to sub-problems must be integrated into an overall solution. The

integration often creates conceptual conflicts which must be identified and

corrected. A hierarchical structure with an appropriate number of levels may be

used for the decomposition of a design problem to sub-problems.

The following are the brief functions of Overhead line Design & Engineering

Department of NCC :

1) Collecting the Survey details from the Site.

2) Preparation of preliminary construction drawings.

3) Site inspection with the Client for finalizing the survey.

4) Review of Engineering Specifications.

5) Preparation of detailed construction drawings.

6) Checking the supplier equipment drawings for compatibility.

7) Obtaining approval from Clients.

8) Arriving the Bill of Quantities (BOQ) for Material ordering.

9) Sending copies of drawings to site for reference & records.

10) Preparation of As-Built drawings

11) Helping the Construction department for project planning.

PROJECT PLANNING :

Project / Construction planning is a fundamental and challenging activity in the

Management and execution of construction projects. It involves the choice of

technology, the definition of work tasks, the estimation of the required

resources and durations for individual tasks, and the identification of any

interactions among the different work tasks. A good construction plan is the

basis for developing the budget and the schedule for work. Developing the

construction plan is a critical task in the management of construction, even if

the plan is not written or otherwise formally recorded. In addition to these

technical aspects of construction planning, it may also be necessary to make

organizational decisions about the relationships between project participants

and even which organizations to include in a project. For example, the extent to

which sub-contractors will be used on a project is often determined during

construction planning.

Like a detective, a planner begins with a result (i.e. a facility design) and must

synthesize the steps required to yield this result. Essential aspects of

construction planning include the generation of required activities, analysis of

the implications of these activities, and choice among the various alternative

means of performing activities. In contrast to a detective discovering a single

train of events, however, construction planners also face the normative problem

of choosing the best among numerous alternative plans. A planner must

imagine the final facility as described in the plans and specifications.

In developing a construction plan, it is common to adopt a primary emphasis on

either cost control or on schedule control as illustrated in Figure.

EMPHASIS ON CONSTRUCTION PLANNING

Some projects are primarily divided into expense categories with associated

costs. In these cases, construction planning is cost or expense oriented. Within

the categories of expenditure, a distinction is made between costs incurred

directly in the performance of an activity and indirectly for the accomplishment

of the project. Normally, scheduling of work activities over time is critical and is

emphasized in the planning process. In this case, the planner insures that the

proper precedence’s among activities are maintained and that efficient

scheduling of the available resources prevails. Traditional scheduling

procedures emphasize the maintenance of task precedence’s (resulting in

critical path scheduling procedures) or efficient use of resources over time

(resulting in job shop scheduling procedures). Finally, most complex projects

require consideration of both cost and scheduling over time, so that planning,

monitoring and record keeping must consider both dimensions. In these cases,

the integration of schedule and budget information is a major concern.

Construction planning is not an activity which is restricted to the period after

the award of a contract for construction. It is an essential activity during the

facility design. Also, if problems arise during construction, re-planning is

required.

The development of a project plan is very much analogous to the development

of a good facility design. The planner must weigh the costs and reliability of

different options while at the same time insuring technical feasibility. Project

planning is more difficult in some ways since the building process is dynamic as

the site and the physical facility change over time as construction proceeds. On

the other hand, construction operations tend to be fairly standard from one

project to another, whereas structural or foundation details might differ

considerably from one facility to another.

Forming a good construction plan is an exceptionally challenging problem.

There are numerous possible plans available for any given project. While past

experience is a good guide to Project planning, each project is likely to have

special problems or opportunities that may require considerable ingenuity and

creativity to overcome or exploit. Unfortunately, it is quite difficult to provide

direct guidance concerning general procedures or strategies to form good plans

in all circumstances. There are some recommendations or issues that can be

addressed to describe the characteristics of good plans, but this does not

necessarily tell a planner how to discover a good plan. However, as in the

design process, strategies of decomposition in which planning is divided into

sub-problems and hierarchical planning in which general activities are

repeatably subdivided into more specific tasks can be readily adopted in many

cases.

Programme Evaluation review technique (PERT)

PERT describes the basic network technique which includes planning,

monitoring and control of projects. PERT finds applications in planning and

control of complex set of tasks, functions and relationships. It is very important

technique in the field of project management. PERT is commonly employed for

conducting the initial review of a project. PERT is very useful for planning the

time and resources. It represents an important step in the development of

managerial science. It points out potentially troublesome areas (which may

disrupt Programme objectives) against which a timely action can be taken to

prevent their occurrences. PERT helps in decision making.

Because of the uncertainty of activity timings, PERT acquired the shape of a

probabilistic model. It uses linear programming and probability concepts for

planning and controlling activities. Probability concept helps in estimating

activity timings: and the maximization of the predefined objectives is achieved

through the Linear programming feature of PERT.

The Critical Path Method (CPM)

The most widely used scheduling technique is the critical path method (CPM)

for scheduling, often referred to as critical path scheduling. This method

calculates the minimum completion time for a project along with the possible

start and finish times for the project activities. Indeed, many texts and managers

regard critical path scheduling as the only usable and practical scheduling

procedure. Computer programs and algorithms for critical path scheduling are

widely available and can efficiently handle projects with thousands of activities.

The critical path itself represents the set or sequence of predecessor/successor

activities which will take the longest time to complete. The duration of the

critical path is the sum of the activities' durations along the path. Thus, the

critical path can be defined as the longest possible path through the "network"

of project activities. The duration of the critical path represents the minimum

time required to complete a project. Any delays along the critical path would

imply that additional time would be required to complete the project.

There may be more than one critical path among all the project activities, so

completion of the entire project could be delayed by delaying activities along

any one of the critical paths. For example, a project consisting of two activities

performed in parallel that each require three days would have each activity

critical for a completion in three days. Critical Path Monitoring (CPM) is the

most preferred tool for most of the Project Managers for Planning in

construction industry.
Bar Chart

It is the simplest method for Project planning. It has very simple structure and

easy to understand by all individual. But the draw back in this method is we

cannot find out the critical path or the exact durations of each sub-activity.

Do’s and Dont’s during Design, Engineering and Project Planning :

 Do have clear idea about clients requirement, before start of design.

 Do have precision during drawing preparation.

 Do maintain records for submission and approval of drawings.

 Do have correct software for design and engineering.

 Do monitor the progress of the project at every stage.

 Do update and revise the planning chart frequently.

 Do not change the design engineer often.

 Do not accept non standard drawings from the suppliers .

 Do not delay submission of drawings since it will affect project

completion time.

 Do not introduce complicated project planning method.

 VENDOR ANALYSIS AND
PROCUREMENT OF MATERIALS

Vendor analysis is a formal process of evaluating potential suppliers based on

selected criteria that might include not just price, but product quality and

selection, delivery, ordering, inventory and product availability, service

reliability, as well as the value of the potential long-term relationship.

Next stage to Design & Engineering is the activity is Ordering of Materials. The

main target of Purchase department is to make sure that Correct quality /

quantity of materials reach at site at correct time. Before order placement of

materials, it is the duty of the Purchase department to see that the vendor is

selected correctly.

In general the Vendors may be selected based on the following :

 Whether the Vendor’s name is in Clients Approved Vendor list.

 Whether the Vendor’s offer meets all the technical requirements of Client

specification.

 Whether the Vendor has adequate experience (Supply record) in the

relevant field.

 Whether the Vendor can meet the demand for supply.

 Whether the Vendor is sound in Financial Terms.

 Whether the Vendor has infrastructure for equipment testing facilities.

 Whether the Vendor’s company is ISO 9000 certified.

  Whether the Vendor has sufficient Engineers for deputing them to

Clients office for discussion.

 Whether the Vendor can meet the delivery schedule for supply of

materials.

 Whether the Vendor has transportation facility.

 Whether the Vendor offers better Credit payment terms.

 Whether the Vendor gives long term Warranty for the equipments /

materials.

 Whether the Vendor posses better service facility.

(A sample Vendor Analysis form for Majerah Distribution project is attached

at the end of this sub-section). In every organization ”Vendor Analysis”

activity must be given due importance before finalizing the order with specific

supplier.

PROCUREMENT OF MATERIALS :

After Vendor Analysis, the activity is to Procure the Materials from the selected

Vendor. The process of Procurement of materials involves :

1) Negotiation of Final prices with Suppliers / Manufacturers.

2) Placement of Letter of Intent (LOI)

3) Placement of Formal Purchase Order.

4) Obtaining Order acknowledgement from Supplier.

5) Request for Performance bank Guarantee from supplier.

6) Opening of Letter of Credit (L/C).

 7) Follow-up with suppliers for materials.

8) Arranging of Testing & inspection at manufacturers factory.

9) Obtaining Despatch clearance from Client for shipping the materials to

site.

10) Arranging transit insurance.

11) Despatching the materials to project site.

One of the main activity in the above is the placement of “Purchase Order”.

Because this involves careful study of all the aspects i.e supplier capability,

conformity to specifications, price terms, delivery terms etc., (A sample copy of

Purchase order is enclosed at the end of this sub-section).

Regarding procurement of metals like Aluminium, Copper etc., special

emphasis on international prices (London Metal Exchange - LME) to be

considered during negotiations with suppliers. The LME prices / data is

available in the internet. (A sample data of LME price for Aluminium is

attached at the end of this sub-section).

Every Purchase department personnel should know the art of negotiations. It

helps in increasing the Profit of the project. The Barometer of the Purchasing

person is determined by the discounts obtained from the suppliers.

Do’s and Dont’s during Procurement of Materials :

 Do get at least three Quotations from various suppliers before finalizing

the order.
 Do split the order to different suppliers, so that the Project schedule

does not affect.

 Do negotiate with suppliers for site delivery of materials, this will help

to reduce your transportation problem.

 Do have clear policies for “Procurement of Materials”

 Do not give bulk order to one supplier.

 Do not let the supplier demand the price increase before completing the

supply of materials.

 Do not encourage accepting the materials without complying the

factory testing procedures

 CONSTRUCTION MANAGEMENT

Construction management refers to a Project Management team consisting of a

professional Project Manager and other participants who will carry out the tasks

of project planning, design and construction in an integrated manner.

Contractual relationships among members of the team are intended to minimize

adversarial relationships and contribute to greater response within the

Management group.

The Project Manager, in the broadest sense of the term, is the most important

person for the success or failure of a project. The Project Manager is responsible

for planning, organizing and controlling the project. In turn, the Project

Manager receives authority from the management of the organization to

mobilize the necessary resources to complete a project.

The following are the Major functions of Project Manager :

 Planning the work, based on the Clients requirement and Project

completion schedule. The planning includes manpower, materials,

construction machineries, tools etc.,

 Control the un-necessary costs to maximize the profit of the Project.

Particularly cutting the miscellaneous costs i.e conveyance, stationary,

telephone charges etc., Every Project Manager must have knowledge of

hidden / indirect costs of the Project. At every stage of the project cost

control measures to be adopted.

  Must build the team, so that they feel a responsibility to each and not

just to the organization in order that they deliver the project to the

defined requirements.

 Must be proficient at managing people but must never be seen as

manipulative or deceitful. He should have leading capacity and

motivating nature.

 Should establish Personnel requirement, so that all the colleagues

deliver the output accordingly.

 Must establish quantity and type of supervision to be followed in a

particular project. This can be achieved through knowledge of the

operation, the target work-hours, and a coordinated work plan.

 Should learn the techniques of all the Project operations by experience.

This will help him in executing hassle free projects in future.

 Should know about the importance of 5 M’s i.e Money, Materials,

Manpower, Methods & Measurement.

In a organization, the members of the functional departments may be

accustomed to a single reporting line in a hierarchical structure, but the Project

Manager coordinates the activities of the team members drawn from functional

departments. The functional structure within the organization is responsible for

priorities, coordination, administration and final decisions pertaining to project

implementation.

Thus, there are potential conflicts between functional divisions and project

teams. The Project Manager must be given the responsibility and authority to
resolve various conflicts such that the established project policy and quality

standards will not be jeopardized.

In general, the Project Manager's authority must be clearly documented as well

as defined, particularly in a organization where the functional division

managers often retain certain authority over the personnel temporarily assigned

to a project.

CONSTRUCTION PLANNING :

The first and foremost activity in Construction Management is planning the

Execution, Manpower & Material requirement. The execution planning of a

project can be done through CPM or PERT or Bar chart. The selection of

particular method depends on the volume & nature of the project. (A sample

“Planning Bar chart “of Majerah Distribution project is attached at the end of

this sub-section).

Next to Execution planning, Manpower planning is the most important stage in

the Project. This requires careful judgement of manpower requirement during

various stages of project. Wrong manipulation shall result in delay in

completion of project. (A sample Organization chart is enclosed at the end of

this sub-section).

Good project management in construction must vigorously pursue the efficient

utilization of labor, material and equipment. Improvement of labor productivity

should be a major and continual concern of those who are responsible for cost

control of constructed facilities. Material handling, which includes

procurement, inventory, shop fabrication and field servicing, requires special

attention for cost reduction. The use of new equipment and innovative methods

has made possible wholesale changes in construction technologies in recent

decades.

Productivity at the Job Site

Contractors are often concerned with the labor activity at job sites. For this

purpose, it is convenient to express labor productivity as functional units per

labor hour for each type of construction task. However, even for such specific

purposes, different levels of measure may be used. Lower-level measures are

more useful for monitoring individual activities, while higher-level measures

may be more convenient for developing industry-wide standards of

performance.

While each contractor is free to use its own system to measure labor

productivity at a site, it is a good practice to set up a system which can be used

to track productivity trends over time and in varied locations. Considerable

efforts are required to collect information regionally or nationally over a

number of years to produce such results.

Factors Affecting Job-Site Productivity

Job-site productivity is influenced by many factors which can be characterized

either as labor characteristics, project work conditions or as non-productive

activities.
The labor characteristics include:

 age and experience of workforce

 leadership and motivation of workforce

The project work conditions include among other factors:

 Job size and complexity.

 Job site accessibility.

 Labor availability.

 Equipment utilization.

 Contractual agreements.

 Local climate.

 Local cultural characteristics, particularly in foreign operations.

The non-productive activities associated with a project may or may not be paid

by the owner, but they nevertheless take up potential labor resources which can

otherwise be directed to the project. The non-productive activities include

among other factors:

 Indirect labor required to maintain the progress of the project

 Rework for correcting unsatisfactory work

 Temporary work stoppage due to inclement weather or material

shortage

 Absentee time, including late start and early quits

 Non-working holidays
Each category of factors affects the productive labor available to a project as

well as the on-site labor effectiveness.

MATERIAL MANAGEMENT & INVENTORY CONTROL :

Materials management is an important element in project planning and control.

Materials represent a major expense in construction, so minimizing

procurement or purchase costs presents important opportunities for reducing

costs. Poor materials management can also result in large and avoidable costs

during construction. First, if materials are purchased early, capital may be tied

up and interest charges incurred on the excess inventory of materials. Even

worse, materials may deteriorate during storage or be stolen unless special care

is taken. Delays and extra expenses may be incurred if materials required for

particular activities are not available. Accordingly, insuring a timely flow of

material is an important concern of project managers.

The availability of materials may greatly influence the schedule in projects with

a fast track or very tight time schedule: sufficient time for obtaining the

necessary materials must be allowed.

Once goods are purchased, they represent an inventory used during the

construction process. The general objective of inventory control is to minimize

the total cost of keeping the inventory while making tradeoffs among the major

categories of costs: (1) purchase costs, (2) order cost, (3) holding costs, and (4)

unavailable cost. These cost categories are interrelated since reducing cost in
one category may increase cost in others. The costs in all categories generally

are subject to considerable uncertainty.

Roles of Store keeper :

1) Ensures that the stores are clean & tidy and thus materials are

properly identified.

2) Ensures that shipments are thoroughly checked before accepting

them into the stores.

3) Enforce discipline around the storage area and do not allow loitering

or casual entry.

4) Follow the company procedures for receiving and returning of

materials and tools and keep the records up to date.

5) If any shortage of materials are noticed this should be informed to the

project office immediately.

CONSTRUCTION EQUIPMENTS :

The selection of the appropriate type and size of construction equipment often

affects the required amount of time and effort and thus the job-site productivity

of a project. It is therefore important for site managers and construction

planners to be familiar with the characteristics of the major types of equipment

most commonly used in construction.

Excavation and Loading

One family of construction machines used for excavation is broadly classified as a

crane-shovel as indicated by the variety of machines in Figure.

Typical Machines in the Crane-Shovel Family

Also some sample color photos of construction equipments are attached at the

end of this sub-section.

CONSTRUCTION PROCESS :

At varying levels of detail, a project manager must insure that these inputs are

effectively coordinated to achieve an efficient construction process. This

coordination involves both strategic decisions and tactical management in the

field. For example, strategic decisions about appropriate technologies or site

layout are often made during the process of construction planning. During the

course of construction, foremen and site managers will make decisions about

work to be undertaken at particular times of the day based upon the availability

of the necessary resources of labor, materials and equipment. Without

coordination among these necessary inputs, the construction process will be

inefficient or stop altogether.

PROGRESS REPORT :

The progress achieved at site should be reported by the Project Manager to the

office daily. He should mentioned clearly the achievements & requirements in

the daily progress report.

Every month, Monthly progress report submitted to the Client duly furnishing

the following documents :

 Basic details of the Contract

 Brief Description of Scope of work

 Contract Bill of Quantity

 Project Organisation Chart

 Overall Time schedule

  Overall ‘S’ curve

 Manpower / Equipment Schedule

 Material Status

 Execution Status

 Manpower evaluation report

 Vehicle / Equipment evaluation report

 Cash flow / Invoice Projection

 Invoices / Payment received

 Photographs of execution activity

The above mentioned subjects are mostly related to Transmission / Distribution

line projects and it may vary depending on the nature of the project. A sample

‘S’ curve of Majerah Distribution project is attached at the end of this

sub-section)

Illustration of Planned versus Actual Progress over Time on a Project

HANDING OVER OF THE PROJECT :

Though this activity comes in the last stage of the project, it has to be done with

lot of importance. Handing over involves testing, inspection, commissioning &

final certification by customer about timely completion of project with good

quality. In most of the projects, the customer pays the final amount to the

contractor after final handing over.

Do’s and Dont’s during Project Construction :

 Do have proper manpower and materials planning.

 Do follow the systems & procedures created by the company

 Do adopt innovative methods to speed up the erection of materials.

 Do have cost control.

 Do follow the safety procedures at every stage of the construction

activity.

 Do educate the trainee Engineers for getting acquainted with the

construction activity.

 Don’t use improper tools for construction.

 Don’t use inferior quality of materials.

 Don’t keep long break periods to workers.

 Don’t adopt Breakdown type of equipment maintenance

 TOTAL QUALITY MANAGEMENT / SAFETY

Quality control and safety represent increasingly important concerns for Project

Managers. Defects or failures in constructed facilities can result in very large

costs. Even with minor defects, re-construction may be required and facility

operations impaired. Increased costs and delays are the result. In the worst case,

failures may cause personal injuries or fatalities.

Accidents during the construction process can similarly result in personal

injuries and large costs. Indirect costs of insurance, inspection and regulation

are increasing rapidly due to these increased direct costs. Good Project

Managers try to ensure that the job is done right the first time and that no major

accidents occur on the project.

As with cost control, the most important decisions regarding the quality of a

completed facility are made during the design and planning stages rather than

during construction. It is during these preliminary stages that component

configurations, material specifications and functional performance are decided.

Quality control during construction consists largely of insuring conformance to

these original designs and planning decisions.

With the attention to conformance as the measure of quality during the

construction process, the specification of quality requirements in the design and

contract documentation becomes extremely important. Quality requirements

should be clear and verifiable, so that all parties in the project can understand

the requirements for conformance.

Safety during the construction project is also influenced in large part by

decisions made during the planning and design process. Some designs or

construction plans are inherently difficult and dangerous to implement,

whereas other, comparable plans may considerably reduce the possibility of

accidents.

Organizing for Quality and Safety

A variety of different organizations are possible for quality and safety control

during construction. One common model is to have a group responsible for

quality assurance and another group primarily responsible for safety within an

organization. In large organizations, departments dedicated to quality

assurance and to safety might assign specific individuals to assume

responsibility for these functions on particular projects. For smaller projects, the

project manager or an assistant might assume these and other responsibilities.

In either case, insuring safe and quality construction is a concern of the project

manager in overall charge of the project in addition to the concerns of

personnel, cost, time and other management issues.

Inspectors and quality assurance personnel will be involved in a project to

represent a variety of different organizations. Each of the parties directly

concerned with the project may have their own quality and safety inspectors,

including the owner, the engineer/architect, and the various constructor firms.
These inspectors may be contractors from specialized quality assurance

organizations. In addition to on-site inspections, samples of materials will

commonly be tested by specialized laboratories to insure compliance. Inspectors

to insure compliance with regulatory requirements will also be involved. It is

advisable to have Quality and safety manual for each organization. This will

improve the performance of the output by the workmen.

Do’s & Dont’s in Quality control & Safety:

 Do have clearly stated Quality Policy.

 Do educate all the employees about the Quality and safety procedures

to be followed.

 Do have Quality control measures at every stage of the project.

 Do provide required safety equipments to all the workers.

 Do give due importance to Quality and safety during execution of the

project.

 Do not employ unqualified labor.

 Do not allow employees to proceed with the work without safety

equipments.

 Do not attempt to overlook the Quality and safety policy of the

Organisation.
 COST CONTROL AND CASH FLOW

During the execution of a project, procedures for cost control and record

keeping become indispensable tools in the construction process. These tools

serve the dual purpose of recording the financial transactions that occur as well

as indication of the progress and problems associated with a project.

Four main divisions of cost:

a. Material cost, including all applicable taxes

b. Labor cost, including labor burden

c. Direct job expense

d. General overhead

Of these four items the more controversial and least understood is direct job

expense. Most people confuse direct job expense with general overhead. But

these are two separate areas of cost. General overhead pertains to items of

expense that cannot be identified with any particular project. On the other hand

direct job expenses are generated by a particular project and are as much a

direct cost as the material and labor that go into it.

Direct Job Expense:

These expenses are generated in two ways as detailed below:

1. As expenses incurred in the management of labor

2. As expenses incurred in the management of materials

General Overhead:

It exists independently of any particular project. It consists of items of general

expense that your company must expend in order to operate as a business. All

the jobs that your company has in progress at any given time must collectively

generate sufficient contribution to cover the cost of this general overhead.

A contractor must maintain an estimating and often an engineering staff. This

machinery work done by this staff on jobs tendered but lost must be covered.

There are many times that you must tender ten jobs to get one. There are

expenses involved in the operation of your office and your central warehouse,

including the cost of salaries of their respective personnel. Add to these the

expenses for rent, light, telephone, stationary, advertising, financing, legal fees

and vehicles and trucks and you arrive at a cost of general overhead which can

average 15% of the direct cost.

General overhead items are grouped under the general headings of

administrative salaries, office salaries, staff salaries, operating expense, fees and

financing all of which must be covered as part of operating your business. It is

important that these expenses are to be accounted in tender pricing.

A sample PIE Chart showing the percentage of cost in a typical electrical

construction project is attached at the end of the sub-section. It may be noted

from the chart that the miscellaneous expenses is accounting for 3% which can

be reduced by effective cost control. In general the construction Engineers

should have the knowledge of impact on project costs due to the damages as

summarized below:

 A decrease in productivity, so that it took more worker hours to do a

given amount of work.

 Increased labor rates for a portion of work.

 Inefficient use of supervisory personnel and an increase in the cost of

supervision due to the extended duration of the job.

 Added cost for estimating, engineering, material handling, and other

direct job expenses.

 Increased expenses because of tools and construction equipment were

tied up for a long period than had been estimated.

 Additional expense due to extended warranty and bonding.

 Additional financing costs because of late payments due to late

approvals and delay in the release of holdback.

 Added cost to cover the shortfall in overhead recovery due to the

extended duration of the job

 Higher material costs in some cases due to the changes and delays

For cost control on a project, the construction plan and the associated cash flow

estimates can provide the baseline reference for subsequent project monitoring

and control. For schedules, progress on individual activities and the

achievement of milestone completions can be compared with the project

schedule to monitor the progress of activities. Contract and job specifications

provide the criteria by which to assess and assure the required quality of

construction.

For control and monitoring purposes, the original detailed cost estimate is

typically converted to a project budget, and the project budget is used

subsequently as a guide for management. Specific items in the detailed cost

estimate become job cost elements. Expenses incurred during the course of a

project are recorded in specific job cost accounts to be compared with the

original cost estimates in each category.

Proportion Completion versus Expenditure for an Activity

CASH FLOW:

Cash flow helps to know about the financial position and profitability of the

project. It has basic elements of In flow, Out flow and Net flow. Cash flow

should be updated every month by the Project Manager to monitor the

invoicing status.

In flow: In flow is the anticipated “Monthly invoicing” of the project. This

involves Supply and erection of materials.

Out flow: There are two categories of Out flow:

1) Supply portion which includes

i. Material cost

ii. Port Clearance

iii. Transport

iv. Insurance

v. Financing

vi. Contingency

vii. Overheads

2) Erection Portion which includes

i. Salaries & Wages

ii. Travel & Conveyance

iii. Administration expenses

iv. Communication

v. Running & maintenance of vehicles

 vi. Contingency

vii. Overheads

Net flow: Net flow is the difference of In flow and Out flow, which gives the

profit margin of the project.

NET FLOW = IN FLOW – OUT FLOW

In an Electrical construction project, most of the initial stages have the negative

cash flow and the last stage will have positive cash flow, i.e. at the end of the

project only the contractor can realize the profit what he expected.

It is the duty of the every project manager to make the invoices without delay to

have smooth cash flow, or else the company has to face severe financial crisis.
 PITFALLS OF TYPICAL PROJECT

Pitfalls in any project may be major or minor in nature. Minor pitfalls like delay

in approval from customer, sickness of workers, vehicle breakdown etc., may be

ignored since it wont have much effect on the Project completion.

But, major pitfalls make severe impact on the Project execution. Some of them

are listed below:

Project handling capacity: Contractors, who tends to take mega projects

without knowing their own capacity of handling it, run out of project due to

lack of resources. It is important for every contractor to analyse (during tender

stage), whether he can handle the Project.

Client’s credibility: Client credibility is one of the main points to be considered

while bidding. If the customer is poor in effecting payment, then the contractor

will suffer through out the execution and sometimes he has to finance the

project for longer period.

Supplier’s credibility: Suppliers are to be selected with great care. If suppliers

are not up to the mark, then this may lead to delay in supply of materials, in-

turn affect the project completion time.

Quality working personnel: If the working personnel are not competitive

enough in delivering the requirements of the Client, then the reputation of the

Organisation will erode. So, at every stage of execution, competitive personnel’s

are deployed for the work.

Machineries: Selection of construction machineries play important role in

erection activities. Wrong selection equipment will lead to loss of manpower

and time.

Accidents: Some times Accidents become major pit fall for the project. It is so

important that every employee should be made aware about the safety during

work.

Natural calamity: In some cases, Natural calamity like strom, earthquake,

floods also makes the project delayed. These factors has to be recorded as and

when occurs and it has to be brought to the notice of the client for claiming

extension of project completion time.

Labor unrest: In most of the underdeveloped countries, Labor unrest is

becoming major pitfall. This has to be handled carefully with political approach.

War: Sometimes war between rival countries affect the project completion. Due

to war most of the transport facilities become unreliable and the required

materials for construction may not reach the site in time. Also the labor force

looses their interest in job and concentrate on the developments of war.

It is the duty of every Project Manger to have through knowledge about all the

pitfalls stated above and the methods to handle it.

 LIMITATIONS & DIRECTIONS FOR
FUTURE RESEARCH
LIMITATIONS:

The major problem in the analysis of Project Management is, we cannot

bring-out and summarise all the aspects and pitfalls, because the systems and

activities varies from project to project and company to company.

Another problem is, most of the companies do not divulge the information

related to their area of operations, as such collecting the complete data becomes

cumbersome for an individual.

DIRECTION FOR FUTURE RESEARCH:

 Application of computers in all operational areas.

 Development of systems for effective communications.

 Exploring the possibilities for reducing the delays and disruptions in

project execution.

 Forming of manual for execution of typical project

 Training of personnel to make them aware about the problems and

solutions of Project management

 Preparation of Project management Journal

 Conducting of Seminars to educate the future entrepreneurs