The project - Construction of 6 Euro IV CPCL Oil storage tankers is critically analyzed from a project management perspective. Systems approach, Work Breakdown Structure, PERT, Costing, Project C&M, Biz (CMS) are discussed in detail.

1. Euro IV Tankages - CPCL Project Presentation
Kamal Nayak B
Lakshman L R
Shanmukha Sreenivas P
Shiriram Prabhu S
21-11-2012

2. Project Overview
This project involves the construction of six oil
storage tankages for CPCL. It was part of the
refinery expansion project in order to produce
Euro IV grade of fuel.
Client: Chennai Petroleum Corporation
Limited (CPCL)
Contractor: NR Patel & Co. (NRP)
Project Management Consultant:
TATA Consulting Engineers Limited (TCE)

3. Project Layout – (Top view)
Naptha
1
Naptha 2
Naptha 3 Naptha 4
Diesel - 1 Diesel 2
Gas Turbine Generator
Input fuel from
the above six
tanks

4. SYSTEMS APPROACH

5. Systems Approach
Primitive Need
The basic need which the system has to meet is the construction of six oil storage
(4 Naphtha, 2 diesels) tankages for CPCL. It was part of the refinery expansion
project in order to produce Euro IV grade of fuel.
Criteria for Evaluation
• Budget overrun
• Time overrun
• Average Safety Index
• Client performance appraisal
• Community and Environmental impact
• Economic and Regional development

6. Desired outputs
Time : 12 Months
Quality : API 650 Standards
Budget: 38.4 crores
Size (Volume): 200000 Litres (all
6 Combined)
Undesired outputs
Project Overrun
1) Cost <10 % of Budget
2) Time < 30 days from
Scheduled Completion
Controllable Inputs
Labour Costs
Land
Quality of Cement, Sand, Steel.
Uncontrollable Inputs
Labour Strikes
Institutional Factors
Socio Political Issues
Environmental Inputs
Rainfall < 2 cm/ day
Temperature < 50 deg
Design Parameters
Size -
Capacity: 200000 litres
Operating Days 365 days
Operating Costs 38.4 crores

7. General Systems model
Land
Labor
Sand
Steel
Cement
Money
Time
Quality
Budget
Size & Capacity
Natural Calamities
Socio Political
Issues
Construction
of 6 storage
tanks
Inputs Outputs

8. Evaluation of alternatives
Prefabricated knock-down
Storage tanks
Reinforced Stainless Steel
tanks

9. Evaluation of alternatives – Contd.
Double walled double deck
storage tanks
Underground Storage
tanks(UST)
Reinforced steel tanks meet all criteria !!!

10. Timeline

11. WBS
• The project has been fragmented in to the following.
o Design and detailed Engineering
o Supply of materials
o Civil works
o Mechanical works

12. SCHEDULING

13. Scheduling
• Scheduling done on MS-Project
• Project duration – 480 days
• PERT – One and three time estimate
• Critical Path
o Apart from structural work – foam and cooling system – everything else
is on the critical path.

14. SCHEDULING
• Project scheduling is the most important tool for determining how the
available and relevant resources should be integrated so that synergy will
be produced.
• The estimated duration for the entire project is 375 days.
• The schedule was prepared by a group of experts comprising of Project
personnel from TCE, NR Patel Contractors and CPCL.
• The ideal time of completion is estimated is based on the priority level of
activities, estimated start and end point of each activity, followed
by their interdependence.

15. PERT
• Before the commencement of the project, a detailed PERT analysis was performed to
analyse the critical paths and the expected time of completion of the different
constituent paths.
• Review meetings were conducted weekly to analyse the progress of the project. A
monthly project review meeting happened where a detailed review was performed on
the status of the project.
• A bi-monthly review meeting attended by the Board members of CPCL, top
management of CPCL, top managers from TCE, the CEO of N R Patel & Co., the PERT
was modified. So every 2 months the PERT was modified with the consent of CPCL
and TCE.
• The PERT present is the modified PERT after eight months of commencement of the
project. This approximately reflects the status of the project mid-way.

16. oCritical path hyperlink
oThree time estimates

17. COSTING

18. Cost break up
• Direct cost
o Labor cost
o Non labor cost
• Indirect cost
o Overheads
o G & A expenses

19. • Rate of return:
Rate of return = X 100
Where, E = 794.63 crores ; C = 38.4 crores ; N = 50 years
Rate of return = 39.2 %
• Payback period:
According to the calculations payback period = 16 years 4 months
• Discounted cash flow and NPV:
The net present value = Rs 1.13 crores.
• Quantity of fuel in the tanks =
200000 litres
• Weighted average price of diesel
and naphtha = Rs 50.5
• Life time of the project post
commissioning = 50 years.

20. Project Cost Accounting System (PCAS)
• Activity-Based Costing (ABC) is used in our study project for PCAS.
• ABC is used to identify, describe, assign costs to, and report on
operational performance.

21. Tenrox project cost and billing software helped in
• Set budgets for project cost and billing; setup notifications when certain milestones
related to Civil, Mechanical work are reached.
• Workflow-driven approval of pre-bills submitted by the contractor and appraisal reports
by CPCL
• CPCL online portal to view project status and pre-bill information for the project in
question.
• Define Purchase Orders (PO) associated with a project to generate pre-bills and track
billable work against each PO.

22. • Indirect Cost = 2.8 crores + 0.12637 crores * Te
( Te in weeks)

23. •HYPERLINK TO SPLIT UP
Of costing

24. CRASHING
• Objectives of Crashing :
• To reduce the scheduled completion time to reap the results of the
project sooner.
• As project continue over time, the team consume indirect costs.
• There may be direct financial penalties for not completing a project
on time.
Normal
time
Crash time Normal cost Crash cost
480 days 470 days 38.4 crores 38.7 crores

25. Biz CMS (Construction Management System) –
Integrated PMS Tool
• Biz CMS is a comprehensive and computerized web based Project Management System tool for the
construction sector.
• This system is designed keeping in mind different functional areas of the industry like
o Scheduling,
o Budgeting,
o Cost control,
o Performance analysis,
o Project Monitoring,
o Control & Management
• CMS is a powerful integrated platform that connects back office, estimation department, purchase
department,project sites and vendors.
• This system synergizes different processes from tendering, estimation, project management, sales and
purchase in addition to inventory management with accounts.

26. Time
Project
Mangement
System
Diary
Scheduling
Budgeting&
cost control
Dash board
Performance
analysis

27. Some of the advantages of using a Computerized
PMS:
• It helps in reducing estimation time and improving accuracy.
• The system carries out complete segregation of materials as per estimation on the basis of category, group
and item. This also indicates preference of the brand given in the tender document which saves lot of
time.
• This software conducts daily update of Project Execution details in addition to Resource Utilization of
both materials and labor. It helps improving project execution process in terms of time and money.
• AUTOMATES
• indent raising
• segregation of material categories
• request for quotation which saves lot of time.

28. LEARNING FROM MG 286 PROJECT MANAGEMENT
• Define the various aspects of the project like nature, industry etc.
• Apply the systems approach to any project and to develop a systems
model.
• To identify clear work definitions in a project and to build an apposite
Work Breakdown Structure
• Schedule projects using single time PERT, three time PERT and CPM
• To do financial analysis and build cost estimates of project.
• Controlling methods used in projects
• MS Project
• Idea about Project Costing and Accounting Software(PCAS) – Tenrox
• Idea about Construction management software – Biz CMS