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“IN AFRICA WE CAN DO IT”
South Africa’s Project Management Experiencesas an South African ‘Export’
Presentation by Sean Flanagan
African Rhythm Project Management Conference
22 April 2002
Paper presented at African Rhythm Project Management Conference 22 – 24 April 2002, Johannesburg, South Africa
Hosted by: Project Management Institute of South Africa (PMISA): www.pmisa.org.za ISBN Number: 0-620-28853-1
On the Proudly South African campaign, President Thabo Mbeki,
“The campaign initiative "should serve not only to inculcate in
every South African a deeper consciousness of who they are and what they
can do to change their lives for the better, but also help in a particular way
to promote our exports. This, of course, would impact positively on
economic growth and job creation."
In particular, Mbeki noted, the campaign offered a "unique opportunity to
our exporters and trade promotion agencies to entrench South Africa's
brand in global markets".
South African Project Management expertise applied outside the country should lead to an increase in the
export of goods and services
PRESENTATION OVERVIEW
Project Management in the perspective of South Africa
• First world expertise in an emerging economy
• Diversity of challenges and yet world class
• South African projects on par with the rest of the world
• Homegrown examples of world class industrial projects
Murray & Roberts Engineering Solutions as World Class Implementers of Projects
• Developing leading Project Management teams
• Why World Class?
Project Management in the context of a case study
• Mozal
PROJECT MANAGEMENT
IN THE PERSPECTIVE OF
SOUTH AFRICA
• First world expertise in an emerging economy• Diversity of challenges faced, yet world class• South African projects on par with the rest of the
world• Home grown examples of world class industrial
projects
FIRST WORLD EXPERTISE IN AN EMERGING ECONOMY
• Misperception of available expertise in South Africa
- We work within an emerging economy, but are capable of delivering first world
projects
- Take first world technology and apply in a third world country
• Joint venturing on projects best leverages international expertise
- International expertise used to augment our knowledge base and skills
- Extensive experience required to select most effective joint ventures
- Challenges to managing the joint venture
• In South Africa obstacles CAN be overcome
- A solution can always be found
- South Africans make a plan - Mozambican flood example
- South Africans proud to share learnings, expertise and experiences
DIVERSE CHALLENGES FACED, YET WORLD CLASS
• Diversity of challenges to working in an emerging economy
- Lower skills level
- Language obstacles
- Labour force issues/ working with unions
- Cultural problems and issues
- Diseases and HIV AIDS affecting the work force
- Environmental issues
- HSEC
• Confirmed world class performance
- Third occasion that International PMI of Year Award won by a South African company
- The joint venture of SNC Lavalin Murray & Roberts Mozal project - won International PMI of Year Award 2001
SOUTH AFRICAN PROJECTS ON PAR WITH THEREST OF THE WORLD
• Leveraging of homegrown expertise:- South Africa has the deepest mines in world
- Low power costs leads to greater beneficiation
- Sasol Gas to Liquids
- Denel technology
- Electronic and IT
• South African companies have listed operations on the London Stock Exchange:- SAB, BHP Billiton, Anglo American and Sasol
- Humble beginnings in South Africa, now global players
- Project opportunities created by them afford ‘tag-on’ for local companies
• Worldwide the value and high level of South African project management expertise being recognised
- Port Hidd, Bahrain
- Lake Kivu, Rwanda
- Pebblebed Modular Reactor
HOMEGROWN EXAMPLES OF WORLD CLASS INDUSTRIAL PROJECTS
• Uranium Enrichment Project• Richards Bay Coal Terminal• Sasol 11 and 111• Kelloggs Factory Revamp• Mossgass• Aluminium Smelters
Past
• Long pipelines• Sasol Gas to Liquid Projects• PBMR
Future
MURRAY & ROBERTS
ENGINEERING SOLUTIONS
AS WORLD CLASS
IMPLEMENTERS OF
PROJECTS
Developing leading Project Management teams
Why World Class?
DEVELOPING LEADING PROJECT MANAGEMENT TEAMS
• Recognised value of joint ventures
• Selecting the right joint venture partner to complement existing skills and expertise using
the right commercial formula
• Once off projects requires Project Management flexibility
- Expertise is developed
• Grabbing a larger share of the future:
- Integrated project management system
- New resource model/ outsourcing alternatives
- Knowledge management
- Value chain management
- Attracting the best people to the job
- Resource location and mobility
- Learning processes required for knowledge based company in an emerging economy
WHY WORLD CLASS?
• Vision:
- World Class Implementers of Projects
• Core proposition:
- Seeking Solutions for Emerging Economies
- Applying other people’s technology
• Offering:
- Demonstrated capability
- Accountability for our performance
- Flexible and focused client service
- A passion for what we do
PROJECT MANAGEMENT
IN THE CONTEXT OF A CASE
STUDY
Mozal
MOZAL: PROJECT OVERVIEW
Mozal Aluminium Smelter Project
•
MOZAL: LOCATION
In putting the success of Mozal into perspective it is important to remember that…
“This was a grassroots fast track project in Mozambique, a country that has had a very poor infrastructure and a largely unskilled labour force following two
decades of war.”
Adam Smith - Wealth of Nations3 requisites for business to flourish
Absence of war
Low taxes
Reasonable application of justice
For a smelter add:
Low price of power
Proximity of deep water port
Reliable Alumina supply
WHY MAPUTO?
OWNER MOZAL S.A.R.L.
BHP Billiton - 47%
Mozambican
government - 4% IDC
- 24%Mitsubishi
- 25%
PROJECT HISTORY
Snc-Lavalin Murray & Roberts Engineering Solutions Joint Venture:• SNC-Lavalin: Canadian engineering/ construction firm
• Murray & Roberts Engineering Solutions: a Murray & Roberts Group company
Successful EPCM contractor for Hillside Aluminium Smelter, Richards Bay:• 500 000 tpa
• 1st metal: June 1995
• Stable operation above nameplate capacity
BHP Billiton integral to the success of the project team
EPCM SERVICESPROVIDED
• Project Management
• Engineering
• Procurement
• Project Controls and Administration
• Construction Management
• Pre-Commissioning
• Owner assistance during commissioning
COMMUNICATIONS STRUCTURE
Key:
AP - Aluminium PechineyMPT – BHP Billiton Project TeamMOT - Mozal Operating TeamSLMR - SNC Lavalin Murray & Roberts Engineering Solutions (EPCM team)
SuppliersContractors
TurnkeysAP
SLMR MPTEPCM
Consultants MOT
GovernmentRegulatory
agencies
Working level communication Establish protocol
KEY SUCCESS FACTORS/ ENABLERS
Agreement with Eskom on power price
Support from Mozambique government:• Industrial Free Zone (IFZ) - 1995
• Project approval (IPA) - December, 1997
Low cost production
Key performance achievements
Schedule:• 1st metal achieved six months ahead of schedule
Budget:• Final capital cost of US$ 100 million under budget
Safety:• Final LTIFR of 1.7
Industrial Relations:• <0.5% of manhours lost to industrial action
Empowerment:• 5,500 Mozambicans trained in construction trades
• 70% of labour force local
MAJOR SUPPLY POINTS
MOZAMBIQUE
MA
LAW
I
NAM IBIA
BOTSWANA
ZIMBABWE
Lusaka
RSA
BEIRA
Durban
Windhoek
Harare
Gabarone
JohannesburgMAPUTO
ZAMBIA
Note: TRAC corridor road was under construction during smelter construction
Swaziland for
abnormal loads
Ressano Garcia (main entry point
for surface shipment)
Marine shipments
Air shipments
Marine shipments
Air shipments
LOGISTICS SHIPMENT POINTS
MAJOR QUANTITIES
• 24 000 tons of structural steel
• 16km of drainage culverts
• 235 000m³ of concrete
• 8.2km of fencing
• 38km of piping
• 800km of cabling
• 18km of cable trays
• Over a construction area equivalent to 340
soccer fields
MAJOR CHALLENGES
• Country factors
• Infrastructure
• Government liaison issues
• Labour issues
• Safety
• Health care
• Climate
CONSTRUCTION CHALLENGES
• Infrastructure
• Border and customs facilities
• Geotechnical
• Labour requirements- 9 000 total at peak (6 000 direct)- Limited use of expatriate labour- Training and development of immature local labour force - Untested local labour structures- Development of empowerment contractors
• Safety performance recognition and safety management programme• PLA signatories• Industrial relations (PLA success factor)• Malaria - 6 500 cases in clinic• HIV AIDS/STDs
PROGRESS - A BIRD’S EYE VIEW
April 1998 Aug 1998
May 1999 Sept 1999 July 2000
IN SUMMARY
Summary and conclusion
Questions and answers
Thanks to the PMISA
African Project Management isworld class
We have reserved a place on the global stage