Tefr & Dpr - Pm - Module - III

8/2/2019 Tefr & Dpr - Pm - Module - III

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PROJECT OPERATIONS

AND

MANAGEMENT

A Conceptual Framework

byProf. Tapash Kumar Ganguli

* * *


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Introduction to Basic Project Management

Understanding of TEFRs & DPRs with Reasoning

Technical Session on


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What are the Stages & Phases of a Project ?

Any project has to pass through certainstages and phases. UNIDO, Geneva has

divided project cycles into the followingphases and stages


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Nominal Group Technique : It is a structured techniqueadministered by the co-ordinator.

It consists of the five steps :

1. Silent Idea Generation

2. Round Robin Presentation

3. Idea Classification

4. Voting and Ranking

5. Discussion of Results

The ideas generated in the process are ranked and the best ischosen.


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Market Analysis

Market and Demand Analysis

Situational Analysis

Collection of Primary and SecondaryInformation through Market Survey

Market Description

Demand Forecasting and Uncertainties


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Economical Analysis (PEST) :

Study of the inputs and outputs of variousindustries

Import Substitution

Reports of studies conducted by Institutions

Revival of sick industries

Local Political scenario

Global Competitive Environment


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Technical Analysis :

Technology Selection, Input requirements and Utilities, Product Mix,

Plant Capacity, Functional Layout, Location of the Project, LogisticalRequirements, Vendor Support, Machinery and Equipment,

Consideration of Alternatives.

The Technical Feasibility generally include thefollowing items :

Who should select the technology and how ?

What will the technology do ? What will it not do ?

What will it require ( inputs ) ?


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What will it cost ?

How certain are the above ?

Does it facilitate easy expansion ?

What was the experience of the previous users, ifany ?

Promoters often depend on consultants forselecting the appropriate technology.

Technological decisions are generally irreversiblethey call for a big outlay of investment theydirectly affect the competitiveness


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This includes the understanding of :

The cost of the project

The means of finance

Estimation of working capital

Profitability estimations

Balance sheet projections

Projection of sources and uses of funds

Financial Analysis :

Means of Financing the Project (Term Loan / Deferred Credit etc.),

Sources of Finance , Risk Analysis of the Project Investment,Sensitivity Analysis, Scenario Analysis - Social Cost Benefit Analysis.


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The Financial Institutions expect certain conditions to befulfilled to qualify for Financial Assistance.

The requirements broadly cover the following aspects :

Debt equity ratio

Promoters contribution

Security margin

Debt service capacity

Repayment schedule

Conversion


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The role of Financial Institutions, in fulfillingGovernment objectives, embraces :

Survey of potential for agriculture and industrialgrowth.

Maximizing export earning by identifying productswith good export potential.

Maximizing industrial / agriculture production ofboth capital and consumer goods.

Identifying projects with employment generationpotential.

Maximizing self employment opportunities.

Promotion of industrial health.


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4. Particulars of the Project

Product mix and capacity

Location and Site

Plant and Machinery

Raw Materials

Utilities5. Technical arrangements

6. Production process

7. Environmental aspects

8. Schedule of implementation

9. Cost of the Project

10. Means of Finance


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11. Profitability Estimates

Assumptions

Projected Balance Sheet

Projected Cash Flow Statement

12. Appraisal based on profitability Estimates.

13. Economic considerations

14. Appendices Estimates of costs of production

Calculation of depreciation

Calculation of working capital and margin money for

working capital.

Repayment / interest schedule of term loan and bankfinance

Calculation of tax Coverage ratios

NPV, IRR etc. Sensitivity analysis


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Before the Financial Institutions make any commitment abouttheir funds, they have to necessarily satisfy themselves about thefeasibility of the Project be assisted.

The process generally involves the following sequence :

Application

The appraisal process

Single institution

Loan syndication

Project Evaluation :Technical,Commercial andFinancial

Management evaluation

Assessment and distributionof risks

Time frame for completionand expected returns

Consent from the appropriateauthority

Documentation anddisbursements


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Once the project has been identified and screened and theapproval has received after all the appraisal process the

next stage is :

II. Investment Phase or On-going Project Phase :

Project Formulation Phase i.e. forming a project group toexecute the project. This group shall be responsible for basic anddetailed engineering, recruitment of staff members, appointingthe contractor, consultants etc. tendering, bidding and

contracting , procurement, quality, safety, health hazards etc. allrelated issues to resolve. A formal order is place the order withan appropriate contractor.


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This is for implementation, assess and take further actionsto stabilize the project with :

Short Term Views

Long Term Views

This follows by project planning and scheduling.

Construction Phase

Installation and Commissioning

Start-up

III. Operation and Maintenance Phase :


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THEHARVARD

LAW

Under the most rigorous controlled conditions of pressure, temperature,

volume, humidity and other variables

the organism will do as it damn well pleases

Thank You

Tefr & Dpr - Pm - Module - III

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