Page 115 - DMGT521_PROJECT_MANAGEMENT

Project Management

Notes design calculations). It should also present a rough layout of various facilities and list out
all the major equipments needed, with key specifications and available source(s) of supply.
Moreover, it should consider, and evaluate, alternative equipments as well and give
reasoned recommendations about them. The importance of thoroughness of planning at
this stage of the feasibility study can hardly be overemphasized. Many delays, cost overruns,
and even failures of projects can be avoided provided the design and physical formulation
of the project are based on a sufficiently deep analysis and have the support of the owner
at the highest level. Otherwise, the project is likely to encounter midstream changes, with
untoward consequences. There is a general impression that “minor” midstream changes
would not pose much of a problem. This is not so. A project is a multi-task entity with
complex linkages and interrelationships between its various constituents, and even “small”
changes, which may result in certain made-to-order procured equipments being rendered
unsuitable and thus throw the project schedule and costs haywire. The aim of all the efforts
at this stage is to design a viable operating entity which not only works, but works
harmoniously (and with minimum costs) in relation to the stipulated inputs and local
environment. Apparent as well as latent and relatively infrequent factors having a bearing
on the effectiveness of the project must therefore be identified and considered. Neglect of
climatic and geographical aspects (e.g. monsoons, floods, snowstorms, dust-storms, heat/
cold-waves, earthquakes, typhoons, etc.) at this stage can prove quite costly later on. It is
equally important to ascertain and give due consideration to local industrial and safety
standards.
6. Construction Process: This needs to be tackled in. the feasibility study in terms of its five
aspects, First, the methodology to be followed - viz., capital intensive or otherwise and its
feasibility under prevailing conditions. Second, whether the construction or installation
is to be done in-house, or on a turnkey basis, or by farming out a number of contracts for
different work packages, and their feasibility. A recommendation may also be made
whether any special agency(ies) should be engaged as a part of backup or contingency
arrangements for critical activity(ies). Third, the determination of such construction
equipments, materials and other essential inputs (like cement, sand, steel, stores etc.) as
are to be arranged by the owner, along with their alternatives, availability, source of
supply (local/foreign), lead-times, and infrastructural requirements (like uninterrupted
supply of power, clean water, gas, steam, etc). Fourthly, the recommended sequence and
time schedule of different activities in the form of a bar chart/PERT network. Lastly,
assessment of the financial implications of this phase based on the latest available unit
costs and with provision for inflation and contingencies.

7. Inputs: These relate to the operation phase of the project, but need to be identified at this
stage of the feasibility study to examine the technical feasibility of the proposed system(s).
For this, classification of the inputs into following categories will be found useful:
(a) raw materials,
(b) processed materials,
(c) components and subassemblies,

(d) spares and wear and tear parts,
(e) water and steam,
(f) gas, fuels and electricity.
Next, their qualitative and quantitative requirements (including buffer stocks, where
applicable), availability, feasibility alternatives and reliable sources of supply should be
carefully ascertained and record. The problems involved in their storage and handling
should be also assessed.

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