Engineers India Limited

MEGA PROJECTS-A Project Management Perspective

Niraj Sethi 8th July 2017

National Seminar on Project Management Objectives and ChallengesKolkatta

11 July 2017 2

Table of Contents

1Overview

2Project Implementation Plan- Choices

3

Key challenges to project implementation

Phases of a Project

Key Strategies Schedule

1

Cost Monitoring/ Management

2

3

4

5

6

Conclusion7

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Maha Dhamaka- Bumper Sale It appears MEGA is the Mantra of the day !

Overview

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Overview

Vintage Refineries had Capacities of the order of 0.6 MMTPA against the current trends of MEGA Refineries around 20 MMTPA

Refineries were fuels only refineries compared to todays MEGAintegrated complexes

Time cycles have shrunk from 71 months to 36 months

Todays MEGA Refineries entail High CAPEX investments

Current Indian refining capacity is 232 MMTPA

India is now a refining hub, exporting nearly 80 MMTPA of products.

Fiscal prudence doesn't permit Cost/ Schedule over runs in MEGA Projects

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Overview

Projects are growing in size and complexity-Today it is common to think in terms of projects involving investments of Rs. 40,000 Cr and more.

Integration for value addition characterizes most projects e.g. Refinery-Petrochemicals. The future could see Refining-Petrochemicals-Derivatives and coal gasification integrations.

Increasing complexity and size accompanied by a need to cut implementation time and cost

The net result is a set of major challenges that the Project Owners, Consultants, Contractors and Suppliers have to face jointly and overcome at each stage of a project

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Key challenges to project implementation

Competitive Environment

Enhanced Project Sizes/ Investments

Compressed Project Schedules

Inadequate Experienced manpower

Limited Number of Resourceful & Experienced Construction Companies

Logistic Constraints /difficult landlocked terrains

Inflexible procedures with limited Leeway for maneuvering Vendor/ Contractor failures

Empowerment , Decentralization of Powers/authority for quick action

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EPCMLow Cost / Diffused schedule

LSTKHigh Cost/

Large Overall schedule

OBEEPCM costs/

LSTK Schedules

Project

Project Implementation Plan Choices

Implementation Modes Experienced in the recent past

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Project Implementation Plan EPCM Vs EPC son

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Project Implementation Plan - Remains a choice

Panipat Refinery Expansion of 6 MMTPA implemented on a Hybridmode. A combination of Conventional and LSTK.

Mega Grass Roots Refineries such as GGSRL 9 MMTPA andBina 6 MMTPA Implemented on Conventional Route

Euro IV Project Set the trend of OBE mode of projectImplementation in Preference to LSTK for major schedule gainstowards the Award Cycle of LSTK

Integrated MRPL Expansion chose an Ultimate Hybrid ofConventional, OBE and LSTK

PNCP 0.8 MMTPA Integrated Complex & Paradeep Refinery chosethe other Extreme of Total LSTK mode of Implementation

Facilities on BOO basis have also been installed

Recent Projects indicate no one way preference

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Phases of a Project

A Mega Project has the following broad Phases

TAKE OFFENGINEERINGPROCUREMENTMANUFACTURING/ DELIVERYCONSTRUCTIONMC/ COMMISSIONING

Project Implementation Plan has to ensure an approach for Each Phase

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Take Off / Front end Activities

Process/Front end

Formulation of an Exhaustive Project Design Basis

Early Development of Plot Plan as the mother Document

PFDs/ P&IDs and Dimensioned Equipment Layouts

Process and Engineering Design Basis

Clear Definition of Scope for Deliverables from Licensors

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Take Off/ Front End Activities

Process/Front end Standardization of Piping Material specifications and Instrumentation

Philosophy with Licensors for minimization of variety and hencereduction in Cost Towards spares while maximizing Interchangeability

Mechanical Design of Static equipment including internals with FirmDefinition of hardware

Complete Thermal design of all the Heat Exchangers and Air coolers forFirm Definition of Hardware

API data sheets and Front end Thermal Design /Conceptual Mechanicaldesign of all Furnaces for Firm Definition of Hardware

Primary selection of pumps to finalize the seal arrangement and flushing/utility connectivity

Clear definition of control System including sizing of all Control valvesand safety valves for Clear Definition of hardware

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Take Off/ Front End Activities

Front end Detailing

Development of Load list, SLD, Electrical Substation layouts andElectrical System study for Clear definition of hardware

Clear guidelines to perform Residual Basic Engineering including ISBLutility Distribution P&Ids in Units

Dimensioned Equipment layouts incorporating experience fromEngineering considerations & Owners maintenance practices

Hazop Study on P&Ids and evolution of recommendations to beincorporated in design

Finalization of Interfaces for the contractors

Development of Conceptual UG piping System and Generalarrangements with guidelines for Detailed Engineering

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Take Off/ Front End Activities

Front end Detailing

Safety Audit of the Equipment Layout and Finalization of other safetyRequirements

Development of all Architectural drawings for the Buildings Envisagedincorporating Owners Inputs for Clear definition of requirements

Detailed Equipment Layout Plan and Elevation Sections Drawings

Control System and Specifications Definition for DCS/PLC and Plantsafeguarding system to clearly define the hardware

Overall Layout Drawings for UG Piping System, Cooling water System,Fire water System, Cable layouts for electrical and Instrumentationsystem

Development of Clear Design basis documents for all utility systemsidentifying the Hardware clearly in the documents

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Engineering

Task force working for synergy in engineering etc. regular Interdiscipline reviews.

Hold management system to be in place.

Majority of front (Drawings/ Material/ Physical) shall be made availableto the civil and structural contractors at the time of mobilization.

Majority of front (Drawings/ Material/ Physical) shall be made availableto the Composite contractor at the time of mobilization.

Piping & Civil/ Structures to be opening batsmen!.

Minimize Mid Course Changes

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Engineering

Exhaustive 3D model review to avoid surprises/ re-engineering andprocurement of additional material.

MTOs and AFC drawing extraction from Model

IBR (System Isometrics) & Utility System Isometrics to be extractedfrom The Model

Vendors encouraged to be accountable for drawings, fabrication etc.

Building contract shall include all associated infrastructures such asAC system, Lighting, Fire alarm system etc.

Monthly meeting shall be organized with the contractors/ vendors forLong Lead and critical items/ Package.

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Procurement

ORDERING/ MANUFACTURING/ DELIVERY

Fast track ordering on competitive basis

Zero deviation bid and exhaustive discussion before submission ofbids may be adopted.

Pre Tender/ Pre Bid meetings

Static , Rotating Equipment may be bulked (Bottom line purchase) foravailing advantages of economies of scale

Accuracies of First piping Bulk MTO are critical to Project success

Umbrella contracts for supply of standard equipment Motors/Transformers/ Switchgear etc.

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Description Columns Vessels Heat Exch

Air Coolers

Compressor Pumps Misc

Unit Nos Nos Nos Nos Nos Nos Nos

CDU/VDU 6 28 47 10 - 47 25

MS Block 17 68 59 11 11 42 27

DHDT 6 24 16 6 2 12 13

DCU 9 23 19 9 1 34 20

VGO HDT 7 34 26 7 3 25 13

PFCC 10 30 45 6 3 49 31

PP 3 31 5 1 5 24 38

U&O 0 17+

64 Tanks

0 0 1 70 9

TOTAL 58 255 217 50 26 303 176

Major Equipment- Typical Refinery

Procurement

Bulk Procurement is the Key

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Resort to bulking to minimize vendors Bulk material

Procurement

210 km

5 Lakhs

2.2 Lakhs

1.1 Lakhs

(Excl. P/L)

Chart1

168000508752226618114468

39800393733471563

1869403348397

220000513092230313116428

PIPES

FITTINGS

FLANGES

VALVES

Sheet1

PIPESFITTINGSFLANGESVALVESHV CABMV CAB

REFINERY1680005087522266181144683130003900000

COT39800393733471563

PIPE LINE1869403348397

OEVRALL220000513092230313116428

To resize chart data range, drag lower right corner of range.

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UG Piping material procurement to be prioritized to ensure majormaterial availability prior to the contractor mobilization

Minimize site work- Major fabrication in shop.

ODCs sourcing through PORT based vendors

Across the table review of drawings/ documents.

Composite mechanical contract comprising of Mechanical, piping,electrical, Insulation, painting

3D Modeling Review done at 3 stages

3D Modeling accorded priority and Target Major Engineeringcompletion 9 Months prior to MC

Procurement

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Construction

Field engineering cell along with associated 3D model software.

Peak manpower deployed on large Projects: 20,000/ Over 50 Millionman-hours

Tenders for Machinery to facilitate construction

Piling Contractors encouraged to use Hydraulic rigs vis--visConventional.

Designs tweaked to suit site conditions- Water Table, Hard Rock etc.

Fabrication Yards

Provision of Extensive Storage Warehouses/ yards

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Prioritize UG works and pavement to facilitate uninterruptedconstruction works

Modular Construction

Pre-fabricated Manholes, Trenches

Tenders to augment failing contractors

Awards for Safe working

Constructability studies including Rigging studies for ODC andmega lifts

Contractors encouraged to establish fabrication facility (AutoWelding) at site. Provides Large Inch-Dia daily progress.

Construction

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Engineering design to be Construction Friendly

Monsoon Combat Plan & Designs to be in place for uninterrupted site works

Credentials of perennially non performing vendors to be reviewed

Equipment Tracking (GPS) and Logistic Expertise/ Monitoring system to be improved

Possibility of Swing Contracts for supplementing failing construction agencies to be explored (e.g. Hiring Cranes and Manpower Resources)

Construction

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Review if Major ODCs could be fabricated at site If space is available.

Typical Past project advantage in Site Fabricated ODCs

Provide Major cranes for Erection and handling of prefabricated RCC /Steel structures and Erection of ODCs.

Major Site fabricated equipment Duration in months

COLUMNS Dia (M) Height (M) Weight (MT) Fabrication time(Ahead of sch.)

CDU 7 67.85 642 3 months

VDU 12 60.3 810 3 months

Coke Chambers 9.1 34 340 2 months delay

Reactor 13.8 62 415 1 months

Regenerator 15.3 25 514 1 months

Construction

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Work breakdown for Civil work for units and offsite

With Volumes involved- RMC, Batching Plants, Free Issue of Cement & Steel are areas for deliberation

Construction

Chart1

17100

19200

9200

9000

12500

25200

25200

48500

170000

RCC

Sheet1

RCCST STEELSeries 3

CDU/VDU1710054002

MS BLOCK1920037002

DHDT920020003

DCU900021005

VGO HDT125002150

PFCC252006700

PP252002900

OFFSITE485005800

OVERALL17000030750

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Work breakdown for structural work

With Volumes involved- Free Issue of Steel , Pre fabricated Steel delivered from external shops, Modularization are areas for

deliberation

Construction

Chart1

5400

3700

2000

2100

2150

7200

2900

5800

31250

ST STEEL

Sheet1

ST STEELSeries 3

CDU/VDU54002

MS BLOCK37002

DHDT20003

DCU21005

VGO HDT2150

PFCC7200

PP2900

OFFSITE5800

OVERALL31250

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MC/ Commissioning

System checks to start 06 months prior to Mechanical Completion for system wise monitoring/ completion/ handover

Extensive Formatting to Checklist and identify the remedial measures

Timely Availability of Utilities (Say N2/ CW/ Steam) to aid schedule

Lining up of specialized agency to facilitate pre-commissioning / commissioning

Adequate spares for last minute use

Vendors on standby/ call for Commissioning assistance

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Key Strategies - Schedule

Target schedule shall be at least 2-3 months before the contractualschedule.

Integrated Project Master Schedule, integrating all the workpackages level detailed schedules from Major Contractors, Vendors

Critical Path & Near Critical path analysis at regular intervals usingPrimavera software

Multi-tiered Project review system Daily / Weekly meetings with Key Contractors Monthly progress review meetings by Senior Management

War Room approach for Project Monitoring & Control Extensive reporting systems with regular Management reviewsand meetings

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Key Strategies - Schedule

Long Lead and Critical Activities to be always in focus

Bonus and incentive scheme to encourage vendors/ contractors toimprove delivery.

Long lead items shall be floated with preliminary data which shall beupdated through amendments before award.

Across the Table Drawing approvals to expedite Manufacture anddelivery

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Cost Monitoring / Management

Ensure clear / succinct inputs for costing

Consolidate all previous project data through database system

Cost Status Reports to be monitored closely for analysis, feedback and corrective action

Value based engineering for optimization, standardization and effective solutions

Close vigil on SOR quantities to restrict variation and exercise schedule control

Monitor variations in rates of Inputs, FE, Taxes/ Duties etc.

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VENDORS CONTRACTORS

PROJECT MANAGEMENT

OWNER MANAGEMENT

CONFIGURATION & DESIGN BASIS

PROCESS DESIGN

DETAIL ENGG.

BID PACKAGE &

CONTRACTOR SELECTION

FRONT END ENGG

EQUIPMENT DELIVERIES

CONSTRUCTION

COMMISSIONING & HANDING OVER

EXTERNAL LINKAGES INCLUDING STATUORY

Project Management

Managing all players and Meeting All Challenges !

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Conclusion Large projects increasing in Complexity Resources are an

imperative

All Phases are critical i.e. Pre-Project/ Engg. / Proc. / Const.

Increased standardization, coupled with Proper planning and appropriate Project controls can help to mitigate the challenges

Good Project definition is the key to meeting time and cost

Success depends on use of Key Past Learnings and preparedness for eventualities

Collaborative approach will work(Vendors & Contractors- Partners in progress)

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Thanks for your patience

Slide Number 1Slide Number 2OverviewOverviewOverviewKey challenges to project implementationSlide Number 7Project Implementation Plan EPCM Vs EPC sonProject Implementation Plan - Remains a choicePhases of a Project Take Off / Front end ActivitiesTake Off/ Front End ActivitiesTake Off/ Front End ActivitiesTake Off/ Front End ActivitiesEngineeringEngineeringProcurement Procurement Slide Number 19Slide Number 20 Construction Construction Construction Construction Construction Construction MC/ CommissioningKey Strategies - ScheduleKey Strategies - ScheduleCost Monitoring / Management Slide Number 31ConclusionSlide Number 33