INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

ABOUT THE COURSE - PROJECT

FORMULATION & IMPLEMENTATION
3 credits course with 3 lectures per week
Weightage: CWS – 20
MTE – 30
ETE – 50
Course Details:
 Project objectives and formulation,
 preparation of pre-feasibility and detailed project reports,
 Project implementation methods and management, project management
agencies, problems of project implementation.
 Project planning, background of network charts, network elements, drawing
the network, PERT and CPM comparison and application, monitoring and
control, management concepts, use of application software in project
management,
 Cost estimates, economic and financial analysis, internal rate of return, cost
benefit analysis, 2
Course Details: Contd…
 Institutional development and implementation strategies
 Tendering procedures, tender documents of central and different state
governments, standard tender documents from international bodies
like world bank, ADB and other funding agencies, on-line tendering
procedure, procurement,
 Financial management, resource mobilization and sustainability of
the project,
 Public hearing process,
REFERENCES

 Projects – Planning, Analysis, Financing, Implementation and

Review- Prasanna Chandra
 Construction Management and Planning- B. Sengupta & H. Guha
 Bidding and Estimating Procedure for Construction - GL
Mansfield
 Construction Engineering and Management- S. Seetharaman
EXECUTION OF ANY PROJECT HAS
MAJORLY TWO PROCESSES

 Formulation of project (Planning)

 Execution of project (Implementation)
FORMULATION OF PROJECT

 Reconnaissance Survey/ Investigations

o Collection of data
o Measurement
o Analysis of data
 Reconnaissance report
o Conceptual plan
o Status report
 Pre-Feasibility Report (PFR)– To establish technical feasibility
 Detailed Survey and Investigations (DSI ) should be to the extent
depending upon stage of study.
FORMULATION OF PROJECT

 Feasibility Study – Detailed Project Report / Feasibility Report

(DPR/FR) -To establish technical feasibility as well financial
viability, Based on DPR – investment decision is taken.
 Arrangement of finances – Loan, Equity, Grant- Financial
institution carry out their own Techno-economic Appraisal
EXECUTION STAGE – IMPLEMENTATION

 The execution of a simple construction project does not require a

specialist contract but a complex project requires specialist
contractor / agency.

PRE- CONSTRUCTION STAGE

 Review of plan / feasibility

 Statutory clearances / obligations
 Land Acquisition
 Detailed Engineering Designs
 Tendering & award of work
CONSTRUCTION STAGE

 Construction of works
 Procurement/ installation of equipment
 Testing and commissioning
 May be only a few construction companies are available for
turnkey project
 Global tenders should be invited for more complex and bigger
projects
 This involves flow of foreign currency
 Conversion rates
 Govt. rules

Money should be available as the work progress.

IMPORTANCE OF CONSTRUCTION INDUSTRY

 Construction industry is very important

o Utilization of materials – Steel, cement, bricks, stones, sand,
Coarse aggregates, wood etc.
o Utilization of plants (Machinery) for Construction
o Utilization of plants (Machinery) for installation in project
o Utilization of manpower
o Provides employment to various categories of persons
Labourers
Technicians
Engineer / Managers
Scientists
Office / account
THE KEY ROLE FOR SUCCESSFUL COMPLETION OF
PROJECT IS BY OWNER, CONSULTANT AND CONTRACTOR

 The Owner
o Owner may be a person, a group of persons acting as a corporate
body, a govt. department, a company, a corporation, a joint venture
or any authority possessing adequate powers.
o After acceptance of detailed project report/ cost of the project
owner undertakes the work of the project
o Owner has responsibility for flow of money i.e., financial
management.
o Money should be available when needed. Whatever may be the
source
o Payment of Advances and dues
o Taxation dues – relevant taxes should be paid
THE KEY ROLE FOR SUCCESSFUL COMPLETION OF
PROJECT IS BY OWNER, CONSULTANT AND CONTRACTOR

o Insurance
o Source are equity (self), Borrowings / debt , Public participation in
terms of equity / debt, Grant in aid
o Time management
o Monitoring of the project to complete within time.
o Designs/ approval of designs, procurement, quality controls
o Supervision
o work as per specifications / quality
o Works as per designs (safety)
o Statutory clearances
o The owner may have advisors / consultants for financial
management and other activities where they do not have
manpower.
THE KEY ROLE FOR SUCCESSFUL COMPLETION OF
PROJECT IS BY OWNER, CONSULTANT AND CONTRACTOR

 The Consultant
o Consultant may be one or many depending upon nature of the
specialization or he may engage specialists.
o To give technical advice to the owner
o To design the works/ design checking
o Cost estimates
o Provide necessary research work
o Testing work
o Quality checks
THE KEY ROLE FOR SUCCESSFUL COMPLETION OF
PROJECT IS BY OWNER, CONSULTANT AND CONTRACTOR

o Supervision / supervision of supervisors

o Checking of material
o Testing at workshop for equipment / at site
o Performance testing
o Clearance, financial management
WHY CONSULTANT IS REQUIRED

 Shortage of specialized technical manpower with owner

 More freedom to exercise his knowledge and expertise
 He can employ any expert more freely

APPOINTMENT OF CONSULTANT

 By mutual understanding, MOU, by tendering

o Payment may be lump sum for total work for specific scope of
work and duration
o Periodically Payment depending upon involvement
o Retainer ship
o Only for expert advice as and when required
CONTRACTOR
 Contractor may be a person, a group of persons acting as a corporate
body, a govt. department, a company, a corporation, a joint venture or
any authority possessing adequate powers.

APPOINTMENT OF CONTRACTOR

 Contractor offer for a particular job for particular amount with certain
terms and conditions as required by tender document.
 In case his offer is accepted he sign a contract agreement with owner.
CONTRACTOR DOES THE WORK

 As per drawings and tender specifications

 Any deviations to be approved by owner
 To do under instructions from owner
 Some time design is also done by contractor then it is to be checked
and approved by the owner.
While preparing tender documents, conditions, quantities and
specifications should be clearly mentioned so that least deviation and
problem or conflict is there.

QUALIFYING CRITERIA FOR CONTRACTOR

 For complex projects the qualification of the contractor should be
ensured before selection of the contractor. The contractor may be an
agency engaged for civil construction work or supply and erection of
equipment. The following criteria should be taken care.
FOR CONSTRUCTION ACTIVITIES
 Annual turnover of last 5 years and single maximum in one year to
know financial soundness.
 Staffing (size of company) / organization chart of the company
 Balance sheets of company for last 3 – 5 years
 Last 3 years tax returns
 List of T&P / machinery, equipment with make & models, year no. of
hours run.
 Status of current projects.
 List of completed projects with completion certificates (or may be
asked from the clients)
FOR MANUFACTURING ITEMS – SUPPLY AND ERECTION
 Supply details of last 5 years
 Running/ operation of machines supplied
 Certificate from client from successful running
 Licenses for manufacturing
 Annual turnover of last 5 years and single maximum in one year to
know financial soundness.
 Turn over
 Balance sheet, annual income tax return for 3-5 years
PLANNING FOR CONSTRUCTION

 REGULATORY REQUIREMENT – An important aspect

o Owner/ Construction manager is required to have a knowledge of

rules and regulations applicable to the project activities
o Prepare action plan to overcome
o Otherwise it may lead to
 Inviting intervention from regulatory authorities
 Causing delay, time and cost overrun, financial and other
losses.
PLANNING FOR CONSTRUCTION

 Regulations – (A) General Laws / Regulations Effecting

Construction
o Project Specific Laws / Regulations
o General Laws / Regulations Effecting Construction –
 Labour and welfare laws – Terms of appointment,
 Proper working conditions
 Social Security
 Financial and Taxes
 Commercial and Contracts
 Safety
LABOUR AND WELFARE LAWS

 TERMS OF APPOINTMENT
o Wages, tenure of appointment, leave, working hours (not more
than 8), allowances such as overtime, travel and bonus etc.
shelter and fuels, child labour, bonded labour.
 PROPER WORKING CONDITIONS
o Cleanliness, disposal wastes, water supply, sanitation,
temperature (during very high or very low temperatures work
should be stopped).
 SOCIAL SECURITY
o Employees State Insurance (ESI) and Employees Provident
Fund (EMP), Medical and Education Facilities, Retirement
Benefits, Disability/ Death Compensation.
FINANCIAL AND TAXES

 All financial transition- sources and receipt of money, expenditure

on different heads should be properly recorded.
 All taxes such as income tax, service tax, entry tax, local area
development, excise duty, custom duty and any other tax levied by
central / state government or local bodies be taken care.

COMMERCIAL AND CONTRACTS

 For all the material supply, procurement and other project works all
the commercial terms and contract documents should be maintained
and made available to regulatory authorities.

SAFETY
 Safety measures for fire and other natural calamities such as flood,
earthquake etc.
 Safety and security for storage and use of explosives.
PROJECT SPECIFIC LAWS / REGULATIONS
 UTILITY RULES
o Compliance of rules for the raw material procurement and
utilization of the product.

 SPECIFICATIONS AND CODES

o Use of relevant IS codes is mandatory.
o In the absence of IS codes, international standards may be used
o Use of guidelines / manuals / practices

 ENVIRONMENTAL AND POLLUTION

o Measures for environmental impact and ecological balance,

pollution of air and water.
o Care for water and air quality standards
CONSTRUCTION AND BUILDING RULES

 Applicable building by laws, for construction along the road – clear

distance from centre of the road.
 In advance countries, regulations for environmental pollution and
occupational safety are very stringent and many of the large projects
like the construction of a power plant is primarily dependent upon
the clearance from these considerations.
 Even in India, river valley projects have been abandoned due to
environmental considerations.
 There are a number of government departments and public agencies
to implement and monitor the regulations. Each of the department
has framed rules like the maintenance of account books by the
construction manager.
 In addition, monthly or quarterly returns filled in prescribed forms
are required to be submitted in the respective departments.
PROJECT FORMULATION
 Project Formulation is concerned with the collection, compilation
and analysis of technical and economic data for locating possible
opportunities for investment and Development or opportunities for
Development.
PROJECT FORMULATION INCLUDES
 The systematic identification and priority of problems and
opportunities to be addressed through development projects
 The identification of a hierarchy of project goals and objectives
 The planning of solutions in terms of inputs, activities, outputs,
effects and impacts
 Planning for utilization of human, financial and material resources
to achieve the objectives of the project,
 Making detailed arrangements for the technical and operational
aspects of project implementation such as the costing, financing and
scheduling of project activities.
 Alternative solutions
 The assessment of project outcomes.
PROBLEMS THAT ARISE FROM POOR PROJECT DESIGN
INCLUDE

 The development of project objectives that are not consistent with

the needs and values of intended beneficiaries
 Failure to identify stakeholders and involvement of stakeholders in
project design and formulation, implementation and evaluation in a
way that empowers them to act and build ownership of project
results
 The development of project objectives that are not measurable and
therefore cannot be used to evaluate project performance and
achievements or to communicate project results
 Projects activities that do not deliver the desired outcome
economically and do not have the desired impact
 Project activities have unintended, negative side-effects.
 Project objective can be defined as a specific measurable project
goal. The objective can be small as installation of a lock in the door
and as large as the construction of a multistory building complex.
o Identify the problem and formulation of the objective
o Collection and analysis of the data / information
o Analysis the construction
o Analysis for the Alternatives
o Selection of optimum plan
STAGES FOR PROJECT DEVELOPMENT
 Reconnaissance survey
 PFR
 Detailed Survey & Investigations
 DPR/FR
 Review of DPR
 Arrangement of finances
 Tendering and award of work
 Detailed Engg. Design
 Execution
o Procurement
o Construction
o Erection of Equipment
o Testing and Commissioning
PRE-FEASIBILITY REPORT (PFR)
 Reconnaissance survey and investigations – Collection of data-
Primary, Secondary and Metadata,
 Project Area
 Location and Accessibility
 Project objectives
 Conceptual plan, Layout of project, Basic components of works,
technical specifications / parameters
 Broad Cost estimations
 Benefits from the project- Tangible / Non- Tangible
 Economic and financial aspects
 Techno-economic viability
 Govt. policy / bye laws
 Technical feasibility
 Decision for detailed investigation
DETAILED SURVEY AND INVESTIGATIONS- ELABORATE
 Topographical
 Hydrological- Discharge measurements, water Quality
 Geological- faults, landslides, avalanches, overburden , sediment
deposits, type of rocks
 Meteorological- Temperature, rainfall, wind, solar radiations,
humidity
 Socio- economic
 Load survey/ Requirement related to the project
 Environmental- EIA, EMP
 Construction Material
 Muck Disposal site
 Geo- technical/ Sub surface exploration
DETAILED PROJECT REPORT (DPR)/ FEASIBILITY REPORT
(FR)
 Introduction
o Project Area
o Location and Access, topography, climatic conditions
o Project objectives
o Project History
o Govt. policy / bye laws,
o Project sponsors
 Basic data
o DSI and other data
 Analysis of DSI
o Technical details
o Broad specifications
o Sizing of components
o Basic design drawings
BENEFITS FROM THE PROJECT

 Project schedule / construction planning

o Time scheduling
 Costing
o Costing of project components than abstract of cost
o Schedule of rates, analysis of rates, market price, budgetary
price of equipment
 Financial analysis
o Economic and Financial aspects
 Environmental aspects- EIA AND EMP
 Conclusions
 Recommendation