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Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the project sponsors for it to be successfully.
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Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the project sponsors for it to be successfully.

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Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the …

Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the project sponsors for it to be successfully.

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  • 1. MIDLAND STATE UNIVERSITY FACULTY OF COMMERCE DEPARTMENT OF BUSINESS MANAGEMENT NAME: CHIBARINYA KUDZAI REG NUMBER: R112742Q M.O.E: CONVENTIONAL LEVEL: 4.1 MODULE: PROJECT MANAGEMENT (BM404) Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the project sponsors for it to be successfully. “The Lord will perfect that which concerns me” Psalms 138 vs 8
  • 2. Business operating environment of a project can be called project environment. This refers to the impact of the operating factors to the project. Project environment needs to be analyzed, understood and addressed if project is to be implemented successfully. Project environment provides managers and investors with a structured approach to analyzing and handling possible external constraints. There must be continued interaction between the project and its environment, and the project itself affects the environment just as it in turn is affected by it, so that there is a two way relationship between them. The political and economic situation in Zimbabwe for the last decade has severely affected all sectors of the economy, including infrastructure. In this regard, the AfDB has identified the rehabilitation of key power sector assets as the fastest and least-costly option for restoring the country‟s capacity to increase electricity supply to meet part of the current demand and enhance system stability. The African Development Bank (AfDB) launched the physical implementation of the sub-transmission component of the Emergency Power Infrastructure Rehabilitation Project (EPIR) in Harare on April 24, 2013. The Emergency Power Infrastructure Rehabilitation Project (EPIR) is to improve the provision of adequate and reliable power supply in an environmentally sound manner through the rehabilitation of the Ash Plant at Hwange Power Station and the sub-transmission and distribution facilities in the country. Once complete, the rehabilitation of the sub-transmission and the distribution networks will improve system reliability and allow the restoration of supply services to about 22,000 customers in various neighborhoods across the country that presently have no access to electricity services. ANALYSIS OF THE PROJECT ENVIROMENT OF EMERGENCY POWER INFRASTRUCTURE REHABILATION PROJECT (EPIR) PHYSICAL AND TECHNOLOGY ENVIROMENT This refers to the natural setting of the project, its geology, soils, landscape, climate, water resources and ecological systems. The Emergency Power Infrastructure Rehabilitation Project target areas are Kwekwe, Gweru, Bulawayo, Masvingo, Mutare, Harare and Hwange with
  • 3. a combined target population of 4.13 million people. Hwange is selected because is the site of Hwange Colliery to undertake rehabilitation of the Ash Plant at Hwange Power Station. The nature of the project is such that it will yield more environment and social benefits than negative impacts. Most impacts are expected to be site specific and temporary such as dust and noise and will mainly occur during construction. There are two main impacts, one being the management of transformer oil decanted from old transformers which contain polychlorinated biphenyls. The weather is also a major risk since most of the project‟s activities are undertaken on the physical environment. Bad weather conditions such as raining can result in delays of the project activities. Basically, our technology environment in our country always constrains many projects since we are still backward in terms of sophisticated machines but AfDB brought better machines for this project to be successful stated on the Herald Newspaper news. POLITICAL ENVIROMENT The political environment presents the most salient risk to our outlook for the Zimbabwean economy. Concerns on the credibility of the electoral process on 31 July 2013 are likely to affect donor participation in the country‟s economic recovery process. Some development partners have expressed preconditions for meaningful re-engagement with Zimbabwe, and these include concrete evidence of credible and tangible progress on political and democratic reforms. Based on the foregoing, the donors‟ role and engagement with the new government on the country‟s development process is rather uncertain. The expectations on the AfDB leadership, as a trusted partner, in the Emergency Power Infrastructure Rehabilitation Project (EPIR) remain high despite the challenges. Going forward much will depend on the willingness of all parties to dialogue and commitment by the government to pursue prudent, consistent, credible and inclusive policies and political reforms.
  • 4. ECONOMIC ENVIROMENT The economy continues to experience structural challenges emanating from the limited sources and high cost of capital; uncertainties arising from policy inconsistencies, especially with respect to economic empowerment and indigenization regulations; dilapidated infrastructure and obsolete technologies. The economic environment in Zimbabwe for this project is unpredictable since our country‟s politics plays a crucial role in economic growth. Undercapitalization of resources compounded by debt ridden financial position of our country affect also the project. Basically, during GNU era our country‟s economic indicators were growing at a favorable rate .Our real GDP growth rate increased from 9% in 2011 to 14% in 2013.Since Emergency Power Infrastructure Rehabilitation Project (EPIR) is partly affected by our government economic policies such as indigenization and empowerment regulations, economic environment remain favorable for AfDB to carry on its projects. The downside risks on the political front include the integration of the opposition and the future role of development partners such as donors in the providing funds to carry on this project. However, because of the country‟s loan arrears situation, donors may continue to be engaged although to a limited extent. Also, if the macroeconomic and political stability attained during the GNU era is maintained, investor and donor confidence may remain. SOCIAL ENVIROMENT Basically, in our country human social indicators remain below international baselines. The weak growth of the country‟s economy, characterized by declining employment for more than a decade, resulted in poverty levels that remained high. While individual poverty prevalence for Zimbabwe dropped from 75.6% in 2010 to 70.9% in 2012 and slightly increased to 72.3 % in 2013 these levels are critical. The drop was partly attributed to remittances from the diasporas gifts and transfer incomes. While all the human social indicators are below acceptable international baselines, this increases cases of theft and vandalism of infrastructure. Emergency Power Infrastructure Rehabilitation Project (EPIR) is greatly affected by our poor social environment, many cases of theft and vandalism is reported even if the project is the answer to
  • 5. our country poor social environment. Because of the country‟s social situation, donors may continue to be engaged although to a limited extent. Also, if the macroeconomic and political stability attained during the GNU era is maintained, investor confidence may remain. PROSPECTS OF SUCCESS OF EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT According to Newsday Newspaper the African Development Bank on 25 January 2014 approved phase two of Zimbabwe‟s Emergency Power Infrastructure Rehabilitation Project worth close to US$20 million. Its objective is to improve the availability and reliability of electricity supply through the rehabilitation of electricity generation, transmission and distribution facilities. The Phase II of the project is designed to enhance benefits gained under Phase one interventions and to address issues that are not covered in Phase one. When complete, Phase II will enable full utilization of national produced capacity through restoration of transformer capacity. Utilized installed capacity will rise from 1 237MW in 2013 to 1 960MW by 2016 with due attention to environmental safety and protection. The financing comes in through the Zimbabwe Multi-Donor Trust Fund administered by the AfDB. This clearly indicates that EPIR project phase one was completed successful due to better physical, economic and political environment in our country. Also the prospects of success of EPIR project phase one was on the following opportunities which all our business operating environments holds. The country‟s loan arrears situation, allows donors to continue to be engaged with our projects although to a limited extent. Also, if the macroeconomic and political stability attained during the GNU era is maintained, investor confidence may remain. Donors regard ZimFund as the best modality for development finance in infrastructure given Zimbabwe‟s arrears situation. The AfDB policy dialogue, technical assistance, capacity building and knowledge work are relevant for deepened engagement and consensus to this project even if our technological environment constrains the activities. Despite all the prospects of success of the project, uncertainty with regard to normalization of relations with the international community and implications of this on the country‟s debt and arrears situation. Following some concerns over the credibility of the electoral process, the future of Zimbabwe‟s re-engagement with the international community remains somewhat
  • 6. uncertain. More so, the non-resolution of arrears will continue imposing significant limits on the amount of support available from development partners and constrain Zimbabwe‟s access to international capital markets and private investment which also limits the capacity of borrowing of AfDB in financing the project concern our country. RECOMMENDATIONS TO AfDB FOR SUCCESS OF EPIR PROJECT PHASE (11) Since the financing comes in through the Zimbabwe Multi-Donor Trust Fund administered by the AfDB. AfDB should closely monitor and administered all the finance since our current government is characterized by corruption and mismanagement of funds Additional resources for Zimbabwe will be necessary for the Bank to sustain its engagement. These resources include capital equipments and funds from donors. To deliver on the mandate entrusted to the Bank, the AfDB‟s engagement in Zimbabwe over the next two years will be to consolidate the assistance and progress already made and to avoid policy reversals. Policy reversal is the failure to continue with ongoing reforms. To curb the risks of political instability in the aftermath of the election. The AfDB should enhance international and regional efforts to maintain dialogue between the different parties. AfDB should continue injection of investment capital by government of Zimbabwe into ZESA and the Zimbabwean Power Sector and application of cost recovery tariff regime to mitigate the revenue risks leading to failure to properly operate, and maintain the rehabilitated facilities. The AfDB should also enactment and enforcement of legislation that criminalizes acts of vandalism and reduction in power outages ensuring that the system is live most of the time. Engagement of independent procurement agent to reduce delays and red tape in our government management
  • 7. Reference Aaker. D, (2007) „Project Management‟, 8th edition, California, John Wiley and sons inc. Brace, I. (2004), „Business Project Management‟, Kogan Page Ltd, London Zimbabwe receives $12 million for EPIRP II from AfDB,News Day Newspaper,26January 2014,Nyaradzo Phiri Emergency Power Infrastructure Rehabilitation Project Phase II (EPIRP II)News Day Newspaper,25January 2014,Victoria Mtomba Zimbabwe - Country Risk, Herald Newspaper, 12 February 2014 ,Siphose Ncube http://www.businessmonitor.com/news-and-views http://www.afdb.org/topics-and-Zimbabwe http://www.afdb.org/ufms/zimbabwe epri.pdf http://www.afdb.org/zimbabwe economic outlook.html

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