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COST & TIME OVERRUN IN MEGA PROJECTS (REASONS & SUGGESTIONS)

COST & TIME OVERRUN IN MEGA PROJECTS (REASONS & SUGGESTIONS). P.K. JAIN V. K. VERMA CE/CON/ER GM/ADMIN/DFCCIL. “ Railway project execution ‘pathetic’, says House panel”

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COST & TIME OVERRUN IN MEGA PROJECTS (REASONS & SUGGESTIONS)

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  1. COST & TIME OVERRUN IN MEGA PROJECTS(REASONS & SUGGESTIONS) P.K. JAIN V. K. VERMA CE/CON/ER GM/ADMIN/DFCCIL

  2. “Railway project execution ‘pathetic’, says House panel” • Railway Ministry – Starting large number of projects without adequate funds or a definite date of completion • Of all infrastructure ministries, Railways has the highest number of projects facing time and cost overruns.

  3. Inter Ministry R EASONS • inadequate funds, • land acquisition, • rehabilitation & resettlement, • forest clearances, • delay in shifting utilities, • removal of encroachments, • law & order problems, • lack of proper co-ordination by states, • change in the scope of the project

  4. SUGGESTIONS • Realistic Cost and Time estimates during project appraisal • More emphasis on pre-project activities • Better contract management

  5. SUGGESTIONS • Project Organisation. • Project Monitoring. • Decision making process. • Contract Management.

  6. SUGGESTIONS Project Organisation • Continuity of decision makers • Experts – Finance & Human resources • IT for efficiency and effectiveness • Expert teams – Technical Groups • Consultancy to supplement organization

  7. SUGGESTIONS Consultancy to supplement organization • QCBS (quality cum cost based system) or Fix cost best Quality • Registration of firms & Engineers • Responsibility of the persons • In house core competence

  8. SUGGESTIONS Project Monitoring • Critical path Method” instead of Expenditure based system • Monitoring must be backed with action oriented solutions • Emphasis on the life cycle cost / benefit and whole project instead of cost of each activity separately

  9. SUGGESTIONS Decision making process. • Clear and well defined project Requirement • On-line process • Dependence on divisions minimum being (primarily operation oriented) • More freedom to the contractor by EPC contracts

  10. SUGGESTIONS Contract Management • Pre contract activity - progress in land acquisition, planning and data collection • Combined Larger value EPC contracts including Civil / electrical and S & T works • FIDIC conditions of tendering • Parallel and post checking in place of pre checking of documents • Identification and sharing of risks • Better dispute resolution

  11. SUGGESTIONS Contract Management • Pre contract activity - progress in land acquisition, planning and data collection • Combined Larger value EPC contracts including Civil / electrical and S & T works • FIDIC conditions of tendering • Parallel and post checking in place of pre checking of documents • Identification and sharing of risks • Better dispute resolution

  12. Thank You

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