Execution Challenges during Project Life Cycle
E Pramod, Senior General Manager -Construction, Aker Powergas Pvt Ltd

In the first part published in the March issue of CEW, E Pramod, Senior General Manager -Construction, Aker Powergas Pvt Ltd, explained how project execution, especially the projects, where continuous modification of technology in terms of processes and equipment take place, is challenging and threw light on some of the execution challenges normally faced during the project life cycle. In this concluding part, the author focuses on the Residual Process Work and Detailed Process Engineering, and some of the critical elements for successful construction work.

We read about Modes of Project Execution, Focus Areas and Competence Base Lines in Project Management, etc in first the part. In this part we will learn some other significant elements necessary for successful construction or project delivery.

Residual Process Work and Detailed Process Engineering
Though the licensor is expected to provide a process package in order to proceed with the detailed design, this will mostly depend upon the scope of work as agreed between the licensor and the owner. Of late, in order to decrease capital expenditure, the owners are transferring the bulk of the residual process work to the detailed engineering company. This includes the check for inconsistency, heat & mass balance within some of the packages, thermal design of equipment, finalisation of utility consumption figures of the whole plant, thermal radiation dispersion studies, sizing of the flare gas header lines & cooling water supply and return lines and early HAZOP study.

Therefore, it is imperative that the project task force should include experienced process engineers who can pre-empt such issues and resolve them proactively. This would involve constant interaction with the licensor and the PMC. The project team should always give a high priority to these important activities right from the initial stage of the project.

The problem can be even more acute when owners buy off-the-shelf packages (used for other projects, where even capacities could slightly differ) from licensors. In such cases, substantial work needs to be done during the detailed process design. This would call for cross checking of the PFDs and heat & mass balance data as well.

The accuracy and timelines of the process engineering work are critical success factors for any project. Unlike the other engineering disciplines, the process group will have to ramp up their strength to the maximum soon after the commencement of detailed engineering. Most of the critical activities like consistency check of the licensor’s package, work on PFD, Heat & Mass balance, P&ID, line list, line sizing and process data sheets start at approximately the same time. They also need to prioritise and provide the required inputs for the requisitioning of the long lead items.

This early process work should be executed with a very high focus on both accuracy and timelines, as both of these factors have an extremely critical influence on the subsequent activities. It is prudent for the project team to have a dedicated project engineer to closely monitor and review this process work for the first few months. This will also help the project team capture, control and manage the likely changes that arise during this phase of the project.

One of the most critical elements for successful construction work is the availability of equipment and bulk materials at site as planned. In order to ensure a positive cash flow, project cost controllers often attempt to follow the “just in time” principle. However, a prudent project execution team will always build in sufficient buffer time to ensure that the equipment and other bulk materials reach the site punctually.

Over the last decade, the cost of construction has skyrocketed. Moreover, qualified and experienced construction resources are always difficult to come by. Hence the project team will always try to avoid leaving construction contractors idle. Therefore, the engineering team will always be under pressure to complete their requisitioning work.

These calculated risks taken by the procurement team can prove to be very costly at a later stage on EPC projects, where the PMC’s approvals on requisitions are a must. However, the irony is that the EPC contractor rarely has the luxury of waiting for final approval of the requisition before the purchase order is placed on the supplier for the long lead items. Delay in ordering can expose the project to potential high idling charges from the construction contractor, while critical comments or errors in the requisition may lead to a price escalation claim from the equipment supplier.

On one refinery EPC job, the EPC contractor and the equipment supplier had missed out one of the hidden requirements for the waste heat boiler. This omission came to light only 6 months after the purchase order was placed. In its absence, the supplier had considered the boiler as conventional smoke tube type in place of water wall design. On another occasion, the EPC contractor and the supplier had wrongly interpreted the atmospheric pressure at site, which led to modification of the inlet vanes of the stator of the imported blower which was almost ready for shop testing. In both cases, the schedule and the cost were badly impacted.

Though everyone is aware of the golden rules and the hidden perils, there are no straightforward and ready-made solutions available while finalising the order for critical long lead items. The gift of a good project execution resource lies in bringing the right talent, experience and the lessons learnt from earlier projects to the table during the requisitioning and ordering phase of the critical equipment. With these, the potential troubles of the construction phase may - to a large degree be prevented.
Project Controls
One expects no debate while discussing the importance of the project control functions. While a Level-3 schedule is available from the owner or the PMC, the project control function will generally involve Establishing the work breakdown structure (WBS), Planning, scheduling and progress control, Finalising the progress measurement norms, Progress measurement, Cost control and estimating, Scope and change control, Procedure for baseline correction, Quantity control (material & equipment), Forecasting, status, trend analysis of cost, schedule and quantities, Uncertainty management and Reporting.

Even though the project controls cover the above listed functions, they are often not fully utilised. In most cases, both the owner and the project execution team are satisfied with monitoring the project through a baseline schedule and various reporting which in turn form a part of the management report. The sole project control engineer is normally busy with scheduling and progress measurement work, as well as the generation of the look-ahead schedules and weekly/monthly reports.

The very fact that most projects employ only one planning engineer at the engineering and project office and one more at the construction site, irrespective of the size of the project, is proof of the under-utilisation of this function. To make project controls a critical success factor, all the functions need to be leveraged by the execution team. Another grey area, especially for EPC projects, is the treatment of the baseline schedule as sacrosanct. It is very important to adhere to this schedule throughout the duration of the project. However, if some of the critical path activities get delayed due to reasons beyond the control of the contractor, it is always prudent to have a catch up or mitigation plan with a realistic schedule.

Sadly, the popular approach is generally to crash the project schedule by requesting the contractor to deploy more resources even when the delay is obviously unavoidable. On such occasions, the project execution team should try to influence the stakeholders to revise the baseline schedule. Here again, the general feeling is that by clinging on to the original baseline schedule, they will be successful in minimising the absolute delay period at the end of the project.

However, in reality, the grip on project control loosens as the schedule remains unmet month after month, leading to a chaotic situation and larger delays than if the baseline schedule had been revised.

Construction has always been the toughest phase of project execution. It is the phase during which the correctness, accuracy and efficiency of the engineering and procurement teams are put to the test. On the other side, the construction team is always under pressure to minimise the delays which have occurred during engineering and procurement phase. They also have to deal with the quality issues which surface in the drawings issued for construction and in the equipment delivered to site for erection. One of the major advantages of the 3D engineering software like PDS and PDMS, which are being widely used by engineering companies, is to minimise the errors in the drawings issued for construction. In spite of this, the construction team still encounters numerous quality issues in these drawings which they have to work around. However, the use of these software tools has brought down the occurrences of such cases drastically.

For the last 10 years, the biggest challenge faced by the construction industry in India is shortage of manpower resources, an odd problem in a country with a population of one billion. One of the main reasons for this is that India has seen a tremendous growth in the service industry, and a large pool of engineering talent has moved towards the IT and IT enabled service sector. The construction labour force has also shrunk in size due to increased development at a state level, as well as a number of national work guarantee schemes. Hence in the present scenario, it is a herculean task for the construction companies to mobilise and retain the required labour force on projects.

This human resource problem to some extent has been mitigated through technological advances in the construction industry, but India still has a long way to go in this respect. However, it is important to change the mind-set that construction resources are easily available in India. Various factors have also made conditions difficult for the contractors to set up their own office, fabrication yards and labour camps at sites. We need to give more focus and attention to minimising the work at site from the design stage itself. The aim should be to maximise the fabrication under controlled conditions (in fabrication shops and yards) and use more prefabricated structures and modular buildings at site.

This article covers the challenges of project execution and the reasons why it continues to produce high levels of interest among project execution teams. However, we have touched upon only a few key facets, to bring out the unique complexity that one may face from project to project. Though one may have a good project execution strategy and learning from past projects, there is no ready-made single solution available for the issues one encounters on each project. Lastly, the success of the project execution also depends on the ability of the project execution team in motivating all the stakeholders towards the achievement of the final goal.