tefr & dpr - pm - module - iii
TRANSCRIPT
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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