Project Management Analysis

Introduction

Project management is such a significant component amid the success of any given project. By definition, project management is deemed as a practice that covers initiation, planning, execution, control and closure of teamwork before attaining the target, as well as meets the specific success criteria. However, the critical challenge amid project management entails achievement of the project goals in the face of the constraints. Primary constraints are not limited to budget, quality, time and even scope. The secondary challenge that would be noted in a project includes optimization and allocation of the significant input which are meant to essentially address the predefined objectives. The knowledge of project management can be applied to Katanga Bay NGL Project. The latter is a small undeveloped port found on the South Coast of one of the African countries. The project is said to be selected for the site review and erection of the new process plant for the Natural Gas Liquids. While the local government was aware of the fact that it could not have a local team of experts, it opted to solicit a team of experts for the plant from the United States. Based on this preamble, the report will share a summary of the Katanga Project, analyze the issues that are emerging from the project, provide solutions the issue with the help of the project management tools such as the Work Breakdown Structure and MS Project or the Gantt Chart among others.

Summary of the Project

Katanga Bay NGL complex is said to have been a construction project that covered a processing plant, roads as well as port improvements which would have accommodated the deep water freight vessels. The project focused on the improvement of roads, social infrastructure and local housing in an area believed to have been mandated by the government. The business case for the project pointed at the intensive analysis in the course of license negotiations as conducted by NPI economists. The plant was speculated to be in the production course for the 250 days of each year as the remaining part of the year is assigned to upgrades, maintenance and repairs at the same time. The operational life linked to Katanga Bay processing plant was approximated at five years before the local government would assume the ownership of the project (Katanga Bay Scenario). The design, planning and commissioning was anticipated to take slightly longer than the speculated 12 month period. Five main contracts were established as Contract KB1: Detailed Design, Contract KB2: Construction and Commissioning, Contract KB3: Port development, Contract KB4: social infrastructure and Contract KB5: Road network. The NPI review after six months showed that all the design work was completed on time, the civil works linked to the NGL plant went well with the NGL plant standing at 45% of the project completed. Issues could be noticed in the main structure of Ethylene Cracker which was heavily delayed but later erected. There are no plans on for commissioning the project with no tasks planned for the same. The dredging activity was also delayed due to lack of the dredging vessel. Apart from the impeded progress, the project could not avoid political and security issues given that this was the first time the team was working in Africa.

Before the Project had started

First, NPI must have had its reasons for investing in the project. This can largely be extracted from the financial information with key focus on the profitability index, the accounting rate return and the payback value or period. The following information was tapped from the business case and project background.

Costs

Site development licence = $10m

Special tax = 25% of annual operating profits

Operations

600 tonnes in a day

Production = 250 days in a year

Expectations = return profit of $740 per tonne

Construction costs = $160m

Contingency = 10%

Total operating cost = $15.5m per year

Marine transportation cost = $2.25m per year

From the figures given, one can easily determine the

Annual Rate of Returns = average annual revenue/initial investment

Initial investment = license + construction costs

= 10 + 160 = $170m

Annual revenues = (740 x 600 x 250) = $111000000 = $111

ARR = 111/170 = 0.65294

= 65.29%

Therefore, the company can recover 65% of its investment in the first one year, which is the amount that is way above the minimum value

In the course of mapping the stakeholders in the project, a work breakdown structure is more convenient in creating such a picture.

The profitability index is equally important.

PI = 1 + NPV/Initial investment

= 1 + 111/170

= 1.65

Because the PI value is greater than 1, NPI can proceed with the project knowing that it will comfortably cover the costs using the profits reaped from the project.

The scope of the stakeholders can be shown below

Figure 1: The Katana WBS structure

The project manager needs to ask the most appropriate questions before communicating the clear goals or targets. It is evident that there were scope changes in the project, which could be handled in time (Kerzner 2017). Scope changes, which is also referred to as scope creep, happen when the project scope is extended beyond the original objectives of the project. Supervisors and clients may end up asking for changes, which demands the project manager to evaluate the request, communicate the effects and the deadlines to the stakeholders. The development of WBS aids the understanding of the entire Katanga project scope. The hierarchical description of the project needs to be completed with the help of deliverables. The commissioning task was left undefined, some of the tasks such as erection of the cracker were delayed and even the MEC team kept struggling with the ground work. Work scheduling must have been a problem in the course of running the project from an active starting point. Work or project scheduling largely provides a list of deliverables, activities and milestones in a project.

Gantt chart

The schedule would inform on the planned start, the duration, the finish date, the resources needed and the team that would be engaged. A detailed project schedule, which is more convenient for the Katanga project, covers the project activities, the sequence of activities, estimation of the resources and estimation of the timelines (Tritschler et al. 2017).

The HR Budget

Beane lived in Africa (Single Status) Project manager

Cost = Remuneration + Business expenses + Expat Expenses + Flights

= 10000 + 1500 + 2500 + 2000 = 16000

All chose single status

Weinberg – Contract manager (assistant manager)

Cost = Remuneration + Business expenses + Expat Expenses + Flights

= 4000 + 500 + 2500 + 2000 = 9000

Devries – Deputy Project manager

Cost = Remuneration + Business expenses + Expat Expenses + Flights

= 7000 + 1000 + 2500 + 2000 = 12500

Miller – Commissioning manager (Assistant manager)

Cost = 4000 + 500 +2500 +2000 = 9000

Larger – Planning manager

= 7000 + 1000 + 2500 + 2000 = 12500

Mabote and Okavango – Project coordinators

= 2(2500 + 500 + 2500 + 2000) = 15000

Muller – QA manager

= 7000 + 1000 + 2500 + 2000 = 12500

Patten – commissioning manager

= 7000 + 1000 + 2500 + 2000 = 12500

Barbara welsh (Accompanied status) – Finance manage (Assistant manager)

Cost =4000 + 500 + 2500 + 2000 = 9000

Total = 16000 + 9000 + 12500 + 9000 + 12500 + 15000 + 12500 + 12500 + 9000

= $95500

For one year, the HR should plan for

= 95500 x 12

= $ 1146000

Histogram

Resource Table

Week by week resource histogram showing commissioning engineers required each week during the commissioning stage only –maximum number required during the stage

Conclusion

In conclusion, report has shared the essence of project management and the meaningful use of its principles. The significant elements of project management would be applied on Katanga project, which is believed to be handled by the NPI team from Nevada. While the progress looks good, the report has cited issues and challenges aligned to time, quality, scope and budget as noted amid the difficult times faced by the project managers. It could be established that the team never understood the scope and they might have set the inappropriate or unrealistic goals, which would have only worked in Nevada and not in Africa. The project schedule could not give a clear picture of the progress of the project and subsequent interferences hampered the progress of the project. However, project management provides such tools like WBS, WBS Gantt chart and activity based estimations for the purposes of appropriately allocation resources and time to tasks.

Dig deeper into Professionalism and Procurement Responsibilities with our selection of articles.

Dig deeper into Professionalism and Procurement Responsibilities with our selection of articles.

References

Project Management Institute (2013). A guide to the project management body of knowledge : PMBOK guide. Newtown Square, Pennsylvania: Project Management Institute.

Page, K. (2014). Paul Hopkin: Fundamentals of Risk Management. [online] Kogan Page. Available at:

Lewis, C.S., Chatfield, C.S. and Johnson, T.D. (2019). Microsoft Project 2019 step by step. Elk Grove Village, Illinois: Published With The Authorization Of Microsoft Corporation By Pearson Education, Inc.

Chakrabortty, R.K., Sarker, R.A. and Essam, D.L., 2017. Resource constrained project scheduling with uncertain activity durations. Computers & Industrial Engineering, 112, pp.537-550.

Meredith, J. R., Mantel Jr, S. J., & Shafer, S. M. (2017). Project management: a managerial approach. John Wiley & Sons.