TRANSMISSION SECTOR AND PROJECT MANAGEMENT OF TRANSMISSION LINESAt Kalpataru Power Transmission Ltd.

Presented By:Manthan R. ChauhanEnrollment number(127690592020)Mob: +91 9428640036

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CONTENT ▪ Indian power sector

▪ Company profile

▪ Tendering

▪ Marketing strategy

▪ Contract (Case study)

▪ Bar chart & cash flow

▪ Analysis & interpretation

INDIAN POWER SECTOR5th largest electricity generation capacity in the world

COMPANY PROFILE

WHAT IS KPTL

▪ leading multidimensional EPC (engineering procurement construction) Contracting company

▪DIVERSIFIED PORTFOLIO IN :▪ Power Transmission & Distribution,

▪ Cross Country Pipeline, Oil & Gas field

▪ Civil Infrastructure Projects,

▪ Power Generation (biomass) as well as

▪ Railway projects

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PROJECT BASED COMPANY !▪ Important to understand “tendering “ .

▪ And also difference between project based & product based company.

B2B B2C

Size of B2B vs. B2C Markets:

SMALL LARGE

Purchasing & sales process:

COMPLEX INFLUENSIVE AND SIMPLE

Cost of sale:In thousand dollars. In dollars, except, for cars and homes.

Purchase decision:

Depend on budgets range in cost from a dollar to a few thousand dollars. Except, for cars and homes

The value of brand:

personal relationships and consultative selling.

through advertising and now social media.

Life time customer value:

much higher due to the higher cost of sales and the like hood of repeat or add-on sales to the same customer.

lower than B2B because of the lower cost of an individual sale and repeat sales are generally fewer.

TENDERING ▪ “process of making an offer”

▪ Tendering is the process of making an offer, bid or proposal, or expressing interest in response to an invitation or request for tender.

▪ selects an offer or tender that meets their needs and provides the best value for money.

TENDERING PROCESS INCLUDES :

Contract Servicing - Internal &

External.

Business Development.

Identification of Tenders.

Procurement of Tender

Document.

Review of Tender

Documents.

Preparation of Tender.

Submission of Tender

Pre- Award Discussion.

Award of Contract/ Signing

of Contract.

Tendering flow chart pg: 28

CONSIDERABLE NOTIFICATIONS OF TENDER

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MARKETING STRATEGY

Low cost leadership

Performance appraisal from the companies

Submission of performance and

advance bank guarantee

Finalise bar chart

Initiating project as per the bar chart

and its monitoring

Report to purchaser for any issue or force majeure

Reply to owner if any query or complaint

CONTRACT EXECUTION PROCESS

CONTRACT UNDER STUDY▪ NAME OF CONTRACT:

400 KV Babhaleshwar Kudus DCQ Line (Quad Bundled Conductor) LILO on both ckts of 400 KV Padghe Tarapur DC line (Twin Conductor)

▪ OWNER:

Maharastra State Electricity Transmission Company Ltd. (MSETCL)

▪ CONTRACTER:

KALPATARU Power Transmission Limited (KPTL)

Contract

Supply contract Erection contract

SUPPLY PART: ▪ Contract price: ₹ 376, 00, 41,988

▪ Completion period : 18 months

▪ Taxes and duties: inclusive of all taxes

▪ Payment procedure : through financing agency, after providing all the bills

TERMS OF PAYMENT: 1. 10% of cost of supply interest free advances in two stages for mobilization purpose on submission of bank guarantee.a) 5% advance after establishment of site office.b) 5% advance will be after completion of 25 % detailed survey

2. 60% of cost of material shall be payable after adjusting 10% advance(50%) within 45 days .

3. 30% of cost of material due in 45 days of successful erection at site

4. Balance 10% after 60 days from date of successful commissioning & submission of all final bill.

No payment for access supply.

FEATURES: (1/3)

Price variation:1. Price adjustment formula for supply of towers given by the owner.2. Price adjustment formula given by owner for supply of AAA conductor3. Advance payment will not be calculated for price variation.4. No price variation will be provided for the period that exceeds the project completion time.

Liquidation damages:Liquidation damages at a rate of ½% of total contract price per week of delay-maximum rate 10%

Right of Design: Right of design is with the owner.

Performance guarantee in lieu of deposit: The performance guarantee shall be 10% of total contract price.

Guarantee/Warranty period: The guarantee /warranty period shall be two years from the date of commissioning of the line.

Insurance: The contractor at his own cost shall arrange, secure and maintain comprehensive insurance as may be necessary to protect his and owners interest against risks.

Force Majeure: Force Majeure conditions, which substantially affect the performance of contract, are specified in the owner’s tender specification.

FEATURES: (2/3)

Monthly Progress report: is to submitted on last day of each calendar month with the following details

1. Engineering drawing & type testing2. Procurement of RM & bought out item3. Manufacturing4. Dispatch

Jurisdiction of contract:The court of Mumbai shall have exclusive jurisdiction in all matters arising in connection with thiscontract agreement including arbitration proceeding.

FEATURES: (3/3)

Contract price: ₹ 81,32,41,457

Completion period: 18 month

Taxes and duties: inclusive of all taxes

Payment procedure : through financing agency, after providing all the bills

Terms of payment :

90% of charge will be paid within 45 days from date of completion.

10% of erection charges shall be paid within 60days after successful commissioning of line & submission of final bill.

ERECTION:

Liquidation damages: Liquidation damages at a rate of ½% of total contract price per week of delay maximum rate 10% .

Right of Design: Right of design is with the owner.

Performance guarantee in lieu of deposit: The performance guarantee shall be 10% of total contract price.

Guarantee/Warranty period: The guarantee /warranty period shall be two years from the date of commissioning of the line.

Insurance: The contractor at his own cost shall arrange, secure and maintain comprehensive insurance as may be necessary to protect his and owners interest against risks.

FEATURES: (1/2)

Force Majeure: Force Majeure conditions, which substantially affect the performance of contract, are specified in the owners tender specification.

Monthly Progress report:1. Detail survey2. Stub setting3. Tower erection4. Stringing

Jurisdiction of contract:The court of Mumbai shall have exclusive jurisdiction in all matters arising in connection with thiscontract agreement including arbitration proceeding.

FEATURES: (2/2)

PLANNING OR DESIGN-BAR CHART

Ref: pg 45

CASH FLOW

Ref: pg 47

ANALYSIS & INTERPRETATION

SWOT ANALYSISStrength

Economy of Scale in

Production Project

Management & skilled employee

WeaknessLimited

developmental

experience in

DBFOT/BOOT projects.

Entry Barriers:

•Requirement of good capital. •Past Execution experience for getting the projects.

•5 to 6 integrated players dominate 70% of the Market

Substitution:

•Wind power and solar or biomass power plants.

•underground transmission systems.

•Adoption of pole structure in place of space structure.

Internal Rivalry:•Around 18 to 20 players are present in the industry

•projects beyond 765 KV categories the competition is less severe.

•Margin hovers around 4% to 6 % in the industry.

Bargaining Power of Buyers:

•Power Grid and SEBs(State electrical Board) are the major buyers of the transmission projects.

• These buyers cannot backward integrate and therefore the order flow consistency will remain with key players.

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•Management of costs of Subcontractors and outsourcing service providers and employees will remain a challenge for the industry

•The threat of forward integration by the subcontractors

Bargaining Power of Suppliers:

BCG MATRIX

Market Share

4P ANALYSISPRODUCTtower material as a product and erection as a service

PRICElow cost leadership and best quality in price strategy

PLACE Company provides the product at the project site arranging the transportation PROMOTION Advertisement is not useful. However the company therefore gives its advertisements in technical magazines or sponsors technical events/fairs. The CRM of the company plays an important role in resolving day to day techno-commercial issues and completion of the project. So it is also a way to promote the company with repo building techniques.

RIGHT OF WAY

SUGGESITIONS

AMBIGUOUS PAYMENT TERM

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CONCLUSION

“Operations keep the lights on, strategy provides a light at the end of the tunnel,

but project management is the train engine that moves the organization forward”.

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