Planning Execution and Control of Projects - Case Study Example

LАNNING ЕХЕСUTIОN АND СОNTRОL ОF РRОJЕСTS By Student’s name Code+ course name Professor’s name University name City, State Date Mzansi Tunnel Shuttle project Introduction Investments have been on the rise in the recent years. Investment involves risks taking that investors have to go through but after completing it successfully one get great profits. However, unlike other profit-making practices that just benefit one party, investments benefits more than one individual especially those intended to provide services to the public (Gray, and Larson, 2011). For example, construction of roads, railways and public structure benefits the public who are using it and also the investor. Below is a case study of Mzansi Tunnel Shuttle project, which is an investment and involves several parties from when it starts until its completion. Project Description Mzansi Tunnel Shuttle involves the construction of a railway running all the way from Dar es Salaam (Tanzania) to Durban (South Africa). The project is being funded by the joint American and Canadian venture (AUM) and six Emeriti Banks, led by the Abu Dhabi, who are known as Sandline ventures. They have selected a constancy firm that will help them in all the processes that are required when undertaking the project. This consultancy firm is known as Anglo Synergy Solutions (ASyS), which has been performing very well in the recent years. Its primary task was to research and propose a project that the firms should invest in. ASyS proposed the Mzansi Tunnel Shuttle, which was an excellent choice for the investing firms. The two companies are willing to invest in the building of the rail as long as they will get returns soon and repay funds that they had been lend. The UAM wishes to contribute US $ 83 billion while Sandline venture is willing to contribute US $ 120 billion. Totalling to US $ 203 billion. They have approached two construction companies who are the Arabtec and the NKA-D. NKA-D is a joint venture of Nzuzo khumalo associates of South Africa and Dangote constructions a Nigerian company. It also gives consulting services. The construction companies have given the routes to be used by the train as following: (A map of the railway) The map above shows all the countries and stations that the train is expected to pass through. It can be summarised in two major routes each having equal number of stations. It is clearly shown in the table below: Route A Route B Station Country Station Country Dar es Salaam Tanzania Dar es Salaam Tanzania Lilongwe Malawi Lusaka Zambia Blantyre Malawi Bulawayo Zimbabwe Harare Zimbabwe Gaborone Botswana Pretoria South Africa Pretoria South Africa Durban South Africa Durban South Africa (Table showing countries and routes to be used) Although the routes seem to be similar, they are not the same. The main difference is that they pass through different countries covering different distances. Route A is shorter than route B, therefore, making route A to be more suitable to the investors. Below is the scope of work for the Mzansi Tunnel Shuttle: Scope of Work Problem Statement Long distance traveling has been a great challenge especially in African countries. This is because the transport available is either very expensive and reliable or affordable and unreliable. For example, taking a plane from Tanzania to South Africa is very expensive but you will get to your destination in time. Alternatively one can use the road that is a bit cheap while using the public means but it may take you some months to get to South Africa. The second challenge is when transporting bulky goods. Sometimes, when using the airways, the luggage weight is limited. This makes it challenging to use it when travelling with heavy luggage. It makes it quite challenging to export and import perishable goods between the two countries. Therefore, this project is meant to solve these challenges. Goal The primary goal for Mzansi Tunnel Shuttle is to come up with a reliable, cheap and affordable means of transport that runs from Tanzania to South Africa. The railway will be used to connect the six countries it is passing through hence making it easier for the countries to do business. Africa is known for the great diversity of its wild animals. Hence, the transport makes it very favourable for tourists to travel from one region to the other along the areas the train passes. Objectives Task: The project will be implementing the Japan’s Shinkansen tilting train that is expected to be travelling at a speed of 200 km/h. It will be passing through six countries and will be stopping in each country since there is a station. Deliverable Africa has always been criticized for the use of outdated technology in transport and bad roads. With the implementation of this project, it will ensure that the six countries it will be passing through will be connected. The project will also introduce the latest train technology there is in the world. The train is known as a safety means of transport since it has never been involved in any accident in Japan. The transport is also expected to carry bulky goods from one country to the other. Administration There have been several meetings between the investors and the construction company. In the first meeting, they discussed the best route to be used. AUM and Sandline venture preferred to use the Harare route since it was shorter than the Bulawayo route. However, NKA-D after analysing both routes found out that Harari route needed some special construction to enhance its safety. It is because the wagon design sensors couldn’t meet safety guidelines of centripetal force. It would be solved by widening the tracks by 10 cm for the route. Timeline The project was set to start as soon as all the resources and arrangement were complete. It means that there was no set date for the project to start. However, the investors had stated that it should be complete by 2019. The construction companies were not okay with the decision and are pleading for more time. Stakeholders in the project There are several stakeholders in the project. The actions of each stakeholder determine the success or failure of the project (Forsberg, Mooz, and Cotterman, 2000). They include; Anglo Synergy Solutions (ASyS), AUM, Sandline ventures, funding banks, Arabtec, NKA-D and Hitachi System Company. 1. Anglo Synergy Solutions (ASyS) It is a consulting company that is highly reputable for customer satisfaction. It is the company that was consulted when choosing the project and suggested Mzansi Tunnel Shuttle project. The company acts as the link between the investing companies and the constructions companies. It advises both parties on the most viable solution that they can take. ASyS is a major stakeholder in the project and can determine the success or failure of the project. It needs to maintain coordination among all the parties involved. In the case study, NKA-D Construction Company complains about the time given by the AUM and Sandline. NKA-D claims that time allocated for construction is short and should be added. They further explain that the time set was politically driven but not based on the ground work. The building company also states that the route, the investing company chose, needed more time and funds. ASyS is expected to consult with the investing companies and convince them to change the time set and the structure of the construction to ensure the safety of the users. If ASyS do not mediate the two parties, the construction company may not continue with the construction, which would lead to the project failing. I would recommend that any changes made should be documented to avoid later inconveniences. 2. AUM and Sandline Ventures. The two companies are supposed to fund the project and make important decisions. The companies were consulted on the routes that they wanted the rail to be constructed. They were to provide all the necessary details such as the stations to be included in the plan. However, the investing companies are mostly driven by the profits and may get to extreme measures in the mission to minimize cost and maximize profits. For example, when selecting the route to use, they would have preferred to use the Bulawayo route since it’s the safest route. However, they chose the Harari route that is shorter and would save some cash without considering the risks associated with it. For the project to be successful, the two investing firms should not give profits a priority since it may cost lives, and the life of the system built. On the other hand, the companies set their completion date without consulting the construction companies. It may cause conflict between the two parties since the investing companies claimed that they would apply stringent liquidated damages (LDs) for any delays. The constructions companies may provide poor quality work due to the limited time that may force them to hurriedly complete the work to hit the deadline. 3. Banks Banks, in this case, are providing finances to the investing firms. These banks determine the interests the cash should be paid with, the grace period and the time limit for repaying the money. These banks include; Sberbank, individual country banks and industrial and commercial bank of china. The rules and decision these banks make have a direct effect on the success or failure of the project. For example, if the banks increase the interest rates, the investing companies will be forced to reduce construction time and finances that may make the project to be almost impossible. Such decisions can lead to failure of the project. An example of a decision that can contribute to the success of the project is if the banks increased the grace period or even the number of years of payment. Such decisions will allow the banks to increase the construction time that may result in better quality work. 4. The construction company The construction companies implement the plan that is presented to them concerning the project. They are the heart of the project and dictates the quality of the project. The two construction companies in this project are the Arabtec and NKA-D. The construction company conducts ground check up and indicates if the project is applicable. This includes the way the ground is structured, compatibility of the technology with the structure and the distribution of funds in the project. The construction company in this project came up with two routes, which was a great strategy to enable the investors to choose the one they think it is the best. They also played their part well by analysing the dangers associated with each route and the remedies. For the project to be successful, the construction companies should consider all the challenges related to the work. After that, they should present them to the investors and request for more time and finances to ensure they are successful. I would recommend all the terms of operation between any parties and the construction companies to be documented. The changes agreed should also be updated in the documents to avoid future conflicts. 5. Hitachi Systems Hitachi systems will be the supplier of the construction materials and the train. The company also provide the safety guidance to be followed when constructing the tracks. To ensure all the safety precautions are taken, the company should make a follow up of the project and ensure that all measures that are required are followed. It can be done by sending one of their workers to the construction site to ensure that it is in the best condition. The main risks in the project There are various risks that will arise when working on the project. These risks are taken so that to ensure that the project is completed successfully. A risk may either favour the one taking the risk or be against the risk-taker (Bartels, 2004). The following are some of the risks that have been taken by the parties in the case study. First it's the time risk. The investors have given the project fixed time to be completed. The time of completion determines the profits to be made by the investors. The investors are taking a risk by trusting that the construction companies will carry out the project within the specified time. Time is a big risk to both the investor and the construction companies. If the construction companies take more time to prepare, they might be forced by the investors to compensate for the time lost. With proper consultations, the time factor can be altered to favour every party involved. The technical risk is also a risk the parties in the project are taking. The route chosen is shorter but has the safety risks that must be taken care of. The construction company has not received feedback from the investors on whether they should change the route. Hence, the company will have to take the risk of constructing using the Harari route that will now cost more and need 18 months more. It is hence a significant risk to take which will have an effect on both the construction company and the investors. Investment is a big risk to take. It is not always that after one invests, he or she will get returns. Sometimes one suffers losses and may lose the investment. In this case study, the investors have been lend money by different banks. They are hoping that after the project is successful, they will repay the loan, interest earned and still get profits. The investor have entrusted their investments to the hands of the construction companies who are expected to do their work in time to ensure that the investment benefits the investor. Lending money is a big risk. There is no assurance that the borrower will return the cash and also the interest earned. Some people when they borrow money disappear and never repays the loan. The banks and financial institutions have lent the investing companies finances to invest. If the investment does not go as planned, it might result in them failing to repay the money. They cash payment is also spread within an extensive period, in case the bank loses documents, the debtor might not continue with the payment. Also, in case the company gets bankrupt, and it is resolved, the banks cash might be lost. There is also the risk of the interest payment overwhelming profits. The project has fixed funds and time. If one of them is altered with or not used as planned, it might lead to losses. The investing companies have done their calculations and have decided that the project need to be completed by 2019. In case of anything and the time exceeds that, it might lead to more interest payment accumulation than the profits. The investors are the most affected by this factor. The quality of the construction can determine the durability of the structure. The investors wanted to run the rail for the next 75 years to be able to repay their loan interest and get some profits. However, there is no assurance that the construction will last for those 75 years. It is hence a risk they are taking that the construction will be of best quality to ensure that it lasts until they repay the interests, and they get their profits. Lists of risks and issues in the project 1. The completion of the project is a priority. 2. The quality of the structure constructed is also an issue. 3. The quality of the building materials influences the quality of the structure built. 4. The pressure exerted on the construction companies affects the quality of work. 5. Hitachi systems have their safety guidelines that should be followed. 6. The investors’ decision is an issue that influence the project’s output. 7. ASyS influences as it unites all the parties in the project. 8. There is the political influence that have effect to the investors. 9. The expected profits is also an issue to be considered. 10. The funds available for the project is an issue that will affect the success of the project. 11. The Bank policies affect the funds available and the investors’ decisions. 12. The government policies and regulations affect the bank’s policies and the currency 13. Appreciation and depreciation of a currency that has an effect on the funds available. 14. Economic factors influence the currency. 15. Inflation affects economic factors. 16. The fixed time limit affects the quality of the decision made. Causal Map showing risks and issues in the project Discuss how the causal map might be of value to the project. It is crucial for all stakeholders to draw a causal map of the project before it commences. It is because the causal map has several benefits that contribute to the well-being of the project as it starts until it is complete (Gardiner, 2005). One of the advantages is that it shows a chain of command in the project. When the causal map is drawn well, one should easily be able to locate his or her place in the project. For example, the bank cannot approach the construction companies when they have got any issues with the finances. The banks have to talk to the investors who are supposed to account for the use of money or payment of the money used in the construction. The causal maps also help one understand the cause and effect of the action in the project. One can check the map to understand why certain decisions were made. For example, the setting of time by the investors could be due to the pressure they are experiencing from the banks and also from the politics. If the banks extended the time for repaying the loan, the investors could also increase the construction time. This means that the pressure imposed by the banks is directly proportional to the pressure imposed on the construction companies by the investors (Lee, Ford, and Joglekar, 2007). It is also easy to interpret and understand causal maps. Just by one look one can tell how the whole process started and how it will end. One is also able to know the major shareholders and their purpose in the project. It is also very easy to note where there is a problem in the project and resolve it using the people who are affected. Conclusion It is evident that there are various risks and issues affecting the project. It is, however, important for all stakeholders to unite and agree on the best ways to solve the issues. Changes are inevitable in the project and before they are implemented, they need to be documented to avoid conflicts in the future. Some of these issues can be controlled while others can't. The stakeholders should control those they can, to ensure the project is completed successfully. Bibliography Bartels, N. (2004). Advanced planning's on-going operation. Manufacturing Systems, vol. 22 (12), pp. 32-34 Forsberg, K., Mooz, H. and Cotterman, H. (2000). Visualising project management: a model for business and technical success [online]. New York: Wiley. Available at: https://ezproxy.buid.ac.ae/login?url=https://www.dawsonera.com:443/abstract/9780471746744 Gardiner, P. D. (2005). Project management: a strategic planning approach. New York: Palgrave Macmillan. Gray, C. F. and Larson E. W. (2011). Project management: the managerial process. 5th ed. New York: McGraw Hill. Lee, Z, Ford, D.N. and Joglekar, N. (2007). Resource allocation policy design for reduced project duration: a systems modelling approach. Systems Research and Behavioral Science, vol. 24 (6), pp. 551-566. Read More