Innovative project management practices for large power sector projects.

INNOVATIVE
PROJECT MANAGEMENT PRACTICES
FOR WORKING PROFESSIONALS
by Prof. Sanjeev Bahadur
Program Director
Institute of Advanced Management and Research
Approved by AICTE, Ministry of HRD, Govt. of India.
www.iamrindia.com

Scope of “Project Management”
The topics proposed to be covered in this Project Management
Program are:
Introduction /
Overview/Importance
Project Management
Concepts & Standards
Project Formulation and
Appraisal / Approval Processes
Environment Impact
Assessment (EIA)
Human Resources: Issues,
Challenges and Solutions
Strategic Project Financial
Management
Tips and Techniques for Cost
Estimation in Project
Management
Analyzing Risks in Project
Management
EPC: Engineering,
Procurement, Construction
Procurement Management
and e-procurement
Quality Assurance and
Innovation
Microsoft Project
Demonstration
(CPM/PERT/GANTT Charts)
Productivity, Efficiency and
Time Management
Live Case Study and
discussions
References

Project Delays Cost Rs 1,24,000 Cr
Consequences of Time Delays
 Total projects delays cost Rs 1,24,000 Crores., informs
Sh M.S Gill MoS, Ministry of Statistics & Program
Implementation.
 Out of 567 projects costing more than Rs 150 crores
each, 375 projects reported delays from 1 month to
72 months.
 Causes are Land acquisition, getting Environment
clearances, protest by Local people, incomplete Land
Records, lack of coordination between different
agencies.
 Cost of delay is one third of India Plan Budget 2011-12
 Sectors reviewed are Coal, Steel, Power, Petroleum,
Railways, Road transport/Highways, Telecommunications
 Original cost of these projects was Rs 5,92,535 crores.
(Source :Hindustan Times, 04 April 2011)

Objectives of Project Management
 Definition, Meaning and examples of Projects
 What does Project Management involve?
 What are the qualities of a Project Manager ?
 Reasons for Time and Cost overruns (Govt. of India
agencies studies)
 Solutions for cutting Time/Cost Overruns
 Role of Consultants/Engg. Contractors in Tendering
 Brief overview of the Program (incl. PERT/CPM)
 Research on the Power /Infrastructure Sector
 Focus on NTPC, Tata Power, Reliance Infrastructure
(Ratio Analysis)
 References

Project Definition (ANSI/PMI 99-001-2004)
 Project is a temporary endeavour undertaken to create a
unique product or service or result.
 ISO 10006 defines project as unique process, comprising
of a set of controlled and coordinated activities with start
and finish dates, undertaken to achieve an objective
conforming to specific project requirements including
constraints of resources, cost and time.
 Project refers to a high value, time bound, mission of
creating a product/facility with predetermined
performance objectives in terms of quality specifications,
completion time, resource constraints and budgeted
cost.

Project Management
Project Management is the discipline of planning, organizing,
securing and managing resources to bring about successful
completion of specific project goals and objectives.
A project is a short term undertaking/endeavor, having a
defined beginning and end (usually constrained by date, or by
funding or deliverables), undertaken to meet unique goals and
objectives usually to bring about beneficial change or value
addition.
The temporary nature of projects stands in contrast to regular
operations, which are repetitive, permanent or semi-permanent
functional work to produce products or services. In practice, the
management of these two systems is generally found to be
different, and requires the development of unique technical
skills and the adoption of separate management practices.

Project Management (Meaning)
 To understand project management, one must
understand what a project really is.
 Different types of Projects are cement projects,
power projects, refinery projects, fertilizer projects
etc.
 In each case, the project is for setting up a
manufacturing plant, but as soon as the plant is
operational, the project is deemed to have been
completed.
 A project, is not a physical objective, nor is it the
end-result.

Project Performance Objectives
 SCOPE defines the deliverables
 QUALITY of Product stated in terms of design,
drawings and specifications
 RESOURCES includes manpower, materials and
machinery required to perform the work.
 COMPLETION TIME is the speed with which project
is executed.
 COST is the budgeted expenditure.

Examples of Complex Projects
involving Technology
 Reliance Industries Ltd., Jamnagar
 Tata Chemicals Ltd., Babrala
 NTPC Super Thermal Power Station
 Tata Motors Ltd., Pune
 Delhi Metro Rail Corporation
 India Habitat Centre
 NTPC Solar Power Project.

Reliance Industries Ltd. Refinery, Jamnagar, Gujarat

TATA Chemicals Ltd. – Fertilizer Plant, Babrala,U.P

NTPC Super Thermal Power Station, Singrauli

TATA Motors Ltd. , Pune, Maharashtra

Delhi Metro Rail Corporation (DMRC)

India Habitat Center- Lodhi Road, New Delhi

India Habitat Center, Lodhi Road, New Delhi

NTPC Solar Power Plant – 15 Mw

What does a Project Involve 1
 A Competent/Decisive and Experienced Team with Integrity.
 Identify Right Project Manager/GM (Project) with proven track record of
successful execution of Projects
 Clear Focused Goals (Cost of generation of one Unit should be the Lowest)
 Create clear Mission, Vision, Quality Policy and Organization Chart.
 Benchmark/Research the Project with worlds best 3 similar/better executed
projects (Ratio Analysis).
 Identify how much time and cost went into those projects (eg Reliance Refinery)
Reduce it by 20% on the cost of manpower ,cost of Raw Materials, Cost of
marketing, cost of manufacturing etc
 Estimate the targeted project cost and time required after benchmarking by
appointing proven Consultants such as MECON , EIL,TCE,PDIL etc.
 Get project funding sanction/approval/disbursement. Benchmark Interest rates
with International Rates to reduce cost of capital.
 Responsibility, authority, resources, team, time and processes are required for
successful execution of Project.
 Identify proper project site location considering the right seismic zone,
Road/Highway/Rail/Airport, connectivity, Alternative Fuel/Raw material supplies
(eg Tata Chemicals Babrala), clean water, 24*7 electricity, sewage, internet,
medical facilities, availability of Engineers/Managers/skilled/unskilled
manpower, Tax benefits.

What does a Project Involve 2
 Dealing/Negotiation with Suppliers/contracts, Contractors, Architects, Facility
providers, District officials Local Politicians, Press, Insurance, Consultants,
Service Providers , CA’s, Cost Accountants, IT specialists, bankers,
Environmentalists, Accountants, Taxation specialists, Energy Economists,
Security , Maintenance Specialists,Horticulturists etc
 Defining the scope of various tenders, deadlines of execution, terms/conditions,
penalty for late execution, inspection, testing and commissioning criteria.
 Use of Computers/Telecom, PERT/CPM , CAD/CAM tools , SAP,DBMS,MIS for
Monitoring and Control.
 Use correct tools, equipment, Govt. approvals, people and management
processes to execute the project both in targeted time and cost.
 Maintain quality of project execution.
 Maintain high levels of Productivity, Efficiency and Transparent Monitoring.
 Identify Critical Success Factors and Causes for Delays.
 Success of the Project depends on proven technology, Control of Proven sources
for delays and Factor all of them in your estimated time and cost of your project.
Target your project finishing time to be less by 30%
 E procurement can reduce purchasing costs and time.
 List all activities, people responsible and classify them into A/B/C in order of
importance/cost
 Plan an Incentive scheme for actual achievers who achieve targeted or better
the Time/cost parameters planned and desired,

Project Clearance Cycle (Process)

NTPC Organization Chart (Top Mgmt.)

Why Projects Succeed and Fail
 Projects succeed because of people, process
and structure.
 Projects fail because of inexperienced people,
poor processes and structure.
 Introduce your project team to the criteria for
project success and failure, and make sure
they know the difference!

Project Appraisal
 Project appraisal is a generic term that refers
to the process of assessing, in a structured
way, the case for proceeding with a project or
proposal. Project appraisal is the effort of
calculating a project's viability. It often involves
comparing various options, using
economic appraisal or some other
decision analysis technique

Project Formulation
Points to be considered:
 The type and level of industrial activity.
 To match financial resources available with
required amount.
 Prepare a sensible project report.

Broad Heads of Project Report
 General Information
 Project Description
 Market potential
 Capital Costs and Sources of Finance
 Assessment of Working Capital
 Other Financial Aspects
 Economic and Social Variables

India Infrastructure Projects
 In the last decade or so, development of India Infrastructure
Projects have been propelled specially in transport sector with
adequate intervention of Central and State Governments
aided by a host of private investments from within and outside
the country.
 From independence, India Infrastructure Projects bear
testimony of the inability of policymakers to transform ambitious
plans into action. The issues responsible for this were:
 Counter guarantees
 State level issues
 Delay in financial closure
 Ability and willingness of the end customers to pay
 Need to develop independent regulators who can monitor and
guide development of the sector
Source : India Business Directory

Cost Overrun
 A cost overrun, known as a cost increase or budget
overrun, is an unexpected cost incurred in excess of a
budgeted amount due to an under-estimation of the actual
cost during budgeting. Cost overrun should be distinguished
from cost escalation, which is used to express an
anticipated growth in a budgeted cost due to factors such as
inflation.
 Cost overrun is common in infrastructure, building, and
technology projects. A comprehensive study of cost overrun
published in the Journal of the American Planning
Association in 2002 found that 9 out of ten construction
projects had underestimated costs. Overruns of 50 to one
hundred percent were common.

Time/Cost overrun
Table 1: Sector-wise comparison of project implementation data
Source : NCAER, Govt. of India

Summary of NCAER Findings
 Infrastructure projects are hugely complex, due to
multiplicity of direct stake holders; intense market
and non-market interface; development in a setting
where there are shortages of critical inputs; and weak
governance.
 There has been an enormous increase in the scale of
operations. While many things can be outsourced, the
basic initiating, regulatory, supervisory and
governance functions are within the government, so
capacity becomes a constraint.
 The evolving nature of policy is unavoidable but leads
to uncertainty and may slowdown the process of
investment.

Summary of NCAER Findings (Cont.)
 Opening up the sectors for private investment and
operation can speed up the process of execution once the
policy framework is in place. However, the need for
government intervention at different stages would require
equal capacity for decisions within the government.
 There is a need for prioritizing building up capacity. For
example, building regulatory capacity for individual
sectors and across states is not easy.
 The experience in project execution has varied across
sectors and across states as well as between private and
public sector project. Some high profile projects have met
the target levels of performance metrics while the others
have not.
 The Chinese experience highlights the need for strong
accountability mechanisms.

Time and cost overruns in infra
projects declining: Govt
 In a move that could encourage many big investments in
the sector, the government has stated that time and
cost overruns in the infrastructure projects has improved
significantly in 2010 compared to 1991.
 The overall cost overrun in projects (worth Rs 150 crore
or more) has come down from 61.6 per cent in March
1991 to astonishing 21.10 per cent in September 2010,
a review by Ministry of Statistics and Programme
Implementation said.
 This became possible due to tightening of procedures
and monitoring and feedback to the ministries and
departments implementing the projects, it said.
Source : Indian Express

Project Roles and Responsibilities
There are many groups of people involved in both the project
and project management lifecycles.
 The Project Team is the group responsible for planning and
executing the project. It consists of a Project Manager and a
variable number of Project Team members, who are brought to
deliver their tasks according to the project schedule.
 Project Manager/GM (Projects) is the person responsible for
ensuring that the Project Team completes the project. The
Project Manager/GM (Projects) develops the Project Plan with the
team and manages the team’s performance of project tasks. It is
the responsibility of the GM/Project Manager to secure
acceptance and approval of deliverables from the Project Owners
and Stakeholders. The Project Manager is responsible for
communication, including status reporting, risk management,
escalation of issues that cannot be resolved within the team,
ensuring the project is delivered in budget, on schedule and
within scope.

Role of a GM-Projects /
Project Manager
 Leadership Role
 Monitoring Role
 Resource allocation Role
 Negotiation Role
 Liaisoning Role
 Disturbance handling Role
 Legal Representative Role
 Entrepreneurial Activity
 Communication dissemination Role
 Decision making Role

Essential Soft Skills for Project
Managers
12 essential skills required for good Project Managers are:
 Effective Communication and Consultation
 Conflict and Crisis Management
 Flexibility, Adaptability and Creativity
 Selfless Leadership
 Efficient Teamwork
 Good Negotiation /Techno- commercial skills
 Organizational Effectiveness
 Problem Solving and Prompt Decision Making
 Professionalism and Ethics
 Trustworthiness
 Self-control
 Learning and Development

Critical Success Factors (1 of 2 )
 Based on Review of 187 Centre Funded Projects-
Planning Commission states causes of delays to be
avoided for Success of the Projects, are:
 Poor Project Formulation
 Changes in Design or Scope Midway
 Inability of Project Mgmt to take Quick decisions
 Mgmt Problems such as Personnel, Labour -
Contractor disputes, Mismatch of Eqpt. Specifications
 Poor Monitoring (Ideal - Weekly monitoring)
 According to Sh N Vittal, former CVC, Corruption
increases project costs

Critical Success Factors (2 of 2 )
 Inadequate/Untimely Release of Funds unforseen
factors/ Natural Calamities.
 Some cost overruns due to Inflation
 Due to Contracts incompleteness, some Delays/cost
overruns are inevitable
 Percentage cost overruns also escalate with length of
Implementation
 Bigger projects lead to much higher Cost overruns
 Defective Planning leads to Time/Cost Overruns
 Southern States have marginally shorter delays/ lesser
Cost escalation.
 Changes in Duty structure/Exchange Rates during
project execution.
Delhi School of Economics (DSE)

Contracts and Projects Risk
Management
 One of the critical outcomes of contract and project management is
to ensure that risks to owners and contractor are identified and
controlled in a proactive way so that both parties are satisfied with
the project outcome. While world class project and contract
management cannot, of itself, make risk “go away”, it can, and
should, identify the risks and opportunities, determine who is
responsible for managing each individual risk, and for the
consequences should the risk occur.
 Knowledge to move contracts and project management from the
tactical/reactive to the more important proactive/strategic focus.
 Critical understanding of the risk minimization process.
 How to examine both the threats and opportunities facing contracts
and projects from both a top-down and bottom-up perspective.
 Skills in allocating contract and procurement risk.
 Ability to identify the warning signs of cost overruns, schedule
delays, and poor quality, as early as possible in the project to
minimize or mitigate the likely impact.

10 Golden Rules of
Project Risk Management
 Rule 1: Make Risk Management Part of Your Project
 Rule 2: Identify Risks Early in Your Project
 Rule 3: Communicate About Risks
 Rule 4: Consider Both Threats and Opportunities
 Rule 5: Clarify Ownership Issues
 Rule 6: Prioritize Risks
 Rule 7: Analyze Risks
 Rule 8: Plan and Implement Risk Responses
 Rule 9: Register Project Risks
 Rule 10: Track Risks and Associated Tasks
By Bart Jutte

Cutting Time/Cost Overruns (1 of 2)
 Wherever possible, Fixed price rather than unit price EPC
contracts be used.
 Suitable changes in Standard Organization Structure
required to minimize established causes of delays.
 Contract Management during Construction phase is
important
 Both contracts and weekly progress monitoring may be
done transparently thru webserver with Passwords.
 Increased Competition can bring down Project costs by
5-7%
 Standard capacities and Proven technologies can reduce
Project Costs by 5-10%. Arbitration instead of Litigation
can reduce Time delays
 E-Procurement can cut costs by 5-10% (eg. SAIL CMO)

Cutting Time/Cost Overruns ( 2 of 2)
 Penalties for delayed delivery/commissioning/poor Quality
of workmanship should be incorporated in the Rs 100 cr
plus B2B Contracts with suppliers.
 Organizational failures are statistical cause of delays/cost
overruns
 Change in ownership cannot mitigate problems
 Last 10% should be released after integrated plant/ Project
shows production.
 Payment thru L/C on measurable Milestones basis/ against
security/BG can reduce Project Costs and reduce time
delays.
 An Incentive scheme to be given to project team/members
for timely installation/commissioning can also cut delays.
 Good administration of Infra facilities improves execution
of project.

Project Coordination
It is very important at all levels viz. Engineering,
Procurement, Construction, and start-up period some other
important aspects of project management are as follows

Broad Costing of 3X660 MW- TPP

Cost Estimates for 3X660 MW – Thermal Power Plant

TCE/EIL/PDIL/MECON as Consultants
Competent services in diverse roles
 The services provided by TCE for thermal power projects are wide
ranging.
 TCE meets the diverse requirements of different participating
agencies- the Utility, the Independent Power Producer (IPP), the
EPC contractor
 and the lending institutions.
 TCE's comprehensive range of services for power projects include :
 Site selection Techno-economic feasibility studies Financial
 analysis Power system studies Site surveys Site specific
 studies Environmental impact assessment IPP bid solicitation and
 selection EPC bid solicitation and selection Pre-tender support to
 EPC bidders Owner’s Engineer services to utilities and IPPs O & M
 contractor bid solicitation and selection Concept-to-commissioning
 A-E services to utilities and IPPs Post-award detailed engineering
 services to EPC contractors Technical due diligence

Thermal Power Station (TPS)
A Thermal Power Station is a power plant in which the
prime mover is steam driven. Water is heated, turns
into steam and spins a steam turbine which drives an
electrical generator. After it passes through the turbine,
the steam is condensed in a condenser and recycled to
where it was heated; this is known as a Rankine cycle.
The greatest variation in the design of thermal power
stations is due to the different fuel sources. Some
prefer to use the term energy center because such
facilities convert forms of heat energy into electrical
energy. Some thermal power plants also deliver heat
energy for industrial purposes, for district heating, or
for desalination of water as well as delivering electrical
power. A large proportion of CO2 is produced by the
worlds fossil fired thermal power plants; efforts to
reduce these outputs are various and widespread.
Source : Wikipedia

L&T Power Project Development
L&T develops grid-linked independent Power Plant and Cogeneration and
Captive Power Plants on Build-Own Operate (BOO), Build-Own-Operate-
Transfer (BOOT), Build-Lease-Operate (BLO). build-Lease-Operate (BLO).
Build -Own-Operate-Maintain (BOOM) basis.
Activities:
 Identification of new opportunities for grid-connected & captive power
plants.
 Evaluation of risks and strategies for mitigation of these risks.
 Ensuring various clearances.
 Evaluation of various financing structures.
 Arranging the requisite financial package for investment.
 Establishing partnering relationship with existing power plants to set up
joint ventures with equity participation - with or without reconstruction.
Projects Executed:
 116 naphtha -fire combined cycle cogeneration power plant, on BOO basis,
to generate 116 MW of power and 480 TPH of process steam, for Haldia
Petrochemicals Limited, Haldia.
 90 MW naphtha/natural-gas-fired cogeneration power plant, on BLO basis,
to deliver 90 MW of power and 240 TPH of process steam, for Indian
Petrochemicals Corporation Limited, Gandhar.

Power production statistics
Source- CEA Jan 2011

CEA Website Data
800
700
600
500
400
300
200
100
0
20
02-
03
20
03-
04
20
04-
05
20
05-
06
20
06-
07
20
07-
08
20
08-
09
35
30
25
20
15
10
5
0
20
02-
03
20
03-
04
20
04-
05
20
05-
06
20
06-
07
20
07-
08
20
08-
09
Compare Indian T&D Losses of 25% with Korea’s 4%.

Coal Consumption & Cost of Power
400
350
300
250
200
150
100
50
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Special CAD/CAM Tools
for Power Sector
Geo-facilities Management System
for Electric Industry
 Based on Intergraph’s G/Technology™, G/Electric is a
multidimensional solution that provides powerful tools to
support the facilities/asset management needs of electric
transmission and distribution companies.
 It was created specifically for the electric industry and
incorporates input from clients and industry partners,
combined with Intergraph’s extensive project
implementation experience.
 G/Electric fits into the comprehensive information
technology (IT) environment we call Geospatial Resource
Management (GRM).

Special CAD/CAM Tools
for Infrastructure
Water Infrastructure Management
 Water infrastructure management (WIM) is an
Intergraph software solution that supports all the details
of a municipal or private water and wastewater
distribution system.
 With it, you can plan, conduct engineering analysis,
design work orders, and manage mapping, asset, and
maintenance records. The fundamental feature of WIM is
a geospatial network asset database of the distribution
assets of the system, such as water mains and sewers,
storage reservoirs, pumps, pipelines, valves, and
meters.

Save 5-10 % Using E-procurement !
 E-procurement (electronic procurement, sometimes also
known as supplier exchange) is the business-to-business or
business-to-consumer or Business-to-government purchase
and sale of supplies, Work and services through the Internet as
well as other information and networking systems, such as
Electronic Data Interchange and Enterprise Resource Planning.
 E-procurement Web sites allow qualified and registered users
to look for buyers or sellers of goods and services. Depending
on the approach, buyers or sellers may specify costs or invite
bids. Transactions can be initiated and completed. Ongoing
purchases may qualify customers for volume discounts or
special offers. E-procurement software may make it possible to
automate some buying and selling. Companies participating
expect to be able to control parts inventories more effectively,
reduce purchasing agent overhead, and improve Supply Chain
Management.

HR-Issues, Challenges, Solutions
 To visualize skilled/unskilled manpower planning after
benchmarking with similar/better executed projects
 To prepare organization chart
 Identify the key project staff with their job descriptions and
experience requirements
 To organize Recruitment and selection of talented staff with
proven track record.
 To prepare detailed HR policies/promotion guidelines
 To comply with Ministry of Labour guidelines
 To create Performance Appraisal system on Objective criteria
 To create comprehensive database of current staff
 To use SAP as tool for organization wide working
 To plan for Safety/quality monitoring/Disaster Management/Energy
Audit
 To improve productivity, efficiency of the system as a whole thru
Incentives/rewards/punishment of delibrate violation of HR policies
 To keep manpower costs competitive.

Gantt Chart
 A Gantt chart is a type of bar chart that
illustrates a project schedule. Gantt charts
illustrate the start and finish dates of the
terminal elements and summary elements of a
project. Terminal elements and summary
elements comprise the work breakdown
structure of the project. Some Gantt charts
also show the dependency (i.e., precedence
network) relationships between activities

PERT and CPM
PERT= Project Evaluation Review Technique
CPM = Critical Path Method
 A PERT chart is a project management tool used to
schedule, organize, and coordinate tasks within a
project. PERT is a methodology developed by the U.S.
Navy in the 1950s to manage the Polaris submarine
missile program.
 A similar methodology, the CPM was developed for
project management in the private sector at about the
same time.

Why PERT/CPM?
 Prediction of deliverables
 Planning resource requirements
 Controlling resource allocation
 Internal program review
 External program review
 Performance evaluation
 Uniform wide acceptance

Critical Path Method (CPM)
 The critical path method (CPM) is an algorithm for
scheduling a set of project activities. It is an important
tool for effective project management.
PERT chart for a project with
five milestones (10 through 50)
and six activities (A through F).
The project has two critical paths:
activities B and C, or A, D, and F
– giving a minimum project time
of 7 months with fast tracking.
Activity E is sub-critical,
and has a float of 2 months.

Determine Critical Path
 All Tasks with zero Total Float are Critical.
 Any delay in these Tasks will delay Project Completion.
 Darken these Tasks to finish CPM Diagram.
 If a task seems too complex or involved to easily
determine primary properties . . .
Break the task up into simpler tasks . . .
Or create a CPM sub-project.

The CPM Diagram
 “Tasks” are Arrows
 “Critical Tasks” are
Thick Arrows
 “Events” are Circles
 “Dummy Tasks” are
Dashed Arrows
(depict precedence relation for
next activity)

Innovation
 Innovation is creativity plus productivity
 Business Innovation is Creativity plus
Commercialization
 Innovation is Idea selection, Development
and commercialization
 Requires Competencies and knowledge of a
team
 Different competencies,
structure,processes,
 resources and time scales are required

Innovative Organizations(Traits)
 Drive to stay ahead
 Acceptance of risks.
 Growth Orientation
 Commitment to Technology
 Vigilance
 Diverse range of skills
 Adaptability
 Enthusiasm for knowledge
 Receptivity

Energy Audit -Innovation
(Reliance Energy Limited)
 Thermal power consist of various sub cycles / systems
like air & flue gas cycle, main steam, feed water &
condensate cycle , fuel & ash cycle, Equipment cooling
water (ECW), auxiliary cooling water (ACW) system,
Compressed air system, Electrical auxiliary power &
lighting system, HVAC system etc.. There is
tremendous scope of energy saving potential in each
system/cycle which is given below.
 Thermal power plant is designated sector as per EC
Act 2001. Most thermal power plant uses 30-40% of
energy value of primary fuels.
 The remaining 60-70% is lost during generation, is in
the form of heat.
 Transmission and distribution also add to major loss.

Energy Audit –Innovation (1 of 4)
1. Air & flue gas cycle:-
a. Optimizing excess air ratio: - It reduces FD fan & ID fan loading.
b. Replacement of oversize FD and PA fan: - Many thermal power plants
have oversize fan causing huge difference between design & operating point
leads to lower efficiency. Hence fan efficiency can be improved by replacing
correct size of fan. If replacement is not possible, Use of HT VFD for PA & ID
fan can be the solution.
c. Attending the air & flue gas leakages: - Leakages in air & flue gas path
increases fan loading. Use of Thermo vision monitoring can be adopted to
identify leakages in flue gas path. Air preheater performance is one crucial
factor in leakage contribution. If APH leakage exceeds design value then it
requires corrective action.
2. Steam, Feed water and condensate cycle:-
a. BFP scoop operation in three element mode instead of DP mode: - In
three element mode throttling losses across FRS valve reduces leads to
reduction in BFP power.
b. Optimization of level set point in LP & HP heater: - Heater drip level
affects TTD & DCA of heater which finally affect feed water O/L temp. Hence
it requires setting of drip level set point correctly.
c. Charging of APRDS from CRH line instead of MS line: -APRDS charging
from cold reheat (CRH) is always more beneficial than from MS line
charging.
Contd .. 2 of 4

2. Steam, Feed water and condensate cycle (contd.):-
d. Isolation of steam line which is not in use: - It is not advisable to keep
steam line unnecessary charge if steam is not utilized since there energy loss
occurred due to radiation. For example deareator extraction can be charged
from turbine Extraction/CRH or from APRDS. In normal running APRDS
Extraction is not used so same can be kept isolated.
e. Replacement of BFP cartridge: - BFP draws more current If Cartridge is
wore out, causing short circuit of feed water Flow inside the pump. It affects
pump performance. Hence cartridge replacement is necessary.
f. Attending passing recirculation valve of BFP: - BFP Power consumption
Increases due to passing of R/C valve. It requires corrective action.
g. Installation of HT VFD for CEP: - CEP capacity is underutilized and also
there is pressure loss occurs across Deareator level control valve. There is
large scope of energy saving which can be accomplished by use of HT VFD for
CEP or impeller trimming.
3. Fuel & ash Cycle:-
a. Optimized ball loading in Ball tube mill: - Excessive ball loading increases
mill power. Hence ball loading is to be Optimized depending upon coal
fineness report.
b. Use of Wash Coal or Blending with A- grade coal: - F-grade coal has
high ash content. Overall performance can be improved by using Wash coal or
blending of F-grade coal with A- grade coal instead of only using F- grade
coal.
c. Avoiding idle running of conveyors & crusher in CHP
Contd .. 3 of 4

3. Fuel & ash Cycle:- (contd.)
d. Use of Dry ash Evacuation instead of WET deashing System: - Dry
deashing system consumes less power & also minimizes waste reduction.
e. Optimize mill maintenance:-Mill corrective/preventive maintenance is to
be optimized depending parameter like- running hrs, mill fineness, bottom
ash unburnt particle, degree of reject pipe chocking etc.
4. Electrical & lighting system:-
a. Optimizing Voltage level of distribution transformer: - It is found
that Operating voltage level is on higher side than required causing more
losses. It is required to reduce the voltage level by tap changing.
b. Use of Auto star/delta/star converter for under loaded motor
Lighting: - Use of electronic chock instead of conventional use copper
Chock, Use of CFL, Replacement of mercury vapor lamp by metal Halide
lamp. Use of timer for area lighting is the methods can be used. Lighting
has tremendous potential of saving.
5. ECW & ACW system:-
a. Isolating ECW supply of standby auxiliaries: - Many times standby
coolers are kept charged from ECW side. Also Standby equipment’s
auxiliaries like Lube oil system kept running for reliability. We can isolate
Standby cooler from ECW system & switching of standby auxiliaries, doing
trade off between return & reliability.
b. Application of special coating on CW pump impeller: - It improves
pump impeller profile condition, increasing pump performance.
Contd .. 4 of 4

5. ECW & ACW system:-
c. Improving condenser performance by condenser tube cleaning &
use of highly efficient debris filter: - Tube cleaning by bullet shot
method increases condenser performance, condenser tube cleaning is
necessary which is to be carried out in overhaul. Also highly advanced
debris filter contribute condenser performance.
6. Compressed air system:-
a. Optimizing discharge air pressure by tuning loading/ unloading
cycle: - It helpful to reduce sp. Power consumption.
b. Use of heat of compression air dryer instead of electrically heated
air dryer: - Heat of compression air dryer use heat generated in
compression cycle, thus reduces sp. Power consumption.
c. Use of screw compressor instead reciprocating compressor: - Sp.
Power consumption of screw compressor is less than reciprocating air
compressor leads to reduce aux. power consumption.
7. HVAC system
a. Cooling tower performance improvement
b. Installing absorption refrigeration system instead of vapor
compression system
c. Use of wind turbo ventilators instead of conventional motor driven
exhauster

CONTROL & DIAGNOSTIC FEATURES
OF 500 MW TURBO GENERATORS (BHEL)
With the increase in the power rating of generating sets,
the issue of availability has become very important. The
outage of even one large capacity machine from the grid
causes a significant shortfall in power generation. High
availability and reliability are therefore fundamental
requirements of power generating units. To achieve this,
the health of machines needs to be monitored
continuously. Over and above this, we also require
techniques for forecasting imminent problems.
Diagnostic tools are therefore gaining increasing
importance by the day. This paper gives details of the
control and diagnostic tools used in 500 MW generators
manufactured by BHEL.
(Refer BHEL Journal)

Government Clearances Required (1/4)
 Advance action / clearance for feasibility report
 Investment approval
 Funds
 Domestic funds / loans / bonds / debentures / equity
 Raising money in the foreign market
 Foreign direct investment
 Foreign collaboration
 Engaging foreign consultants
 Global tenders
 Foreign assistance

 Location
 Pollution Control
 Environment
 Forest
 Telecommunication
 Port angle
 Mining lease
 Mines safety
 Commissioning boiler
 Steam and condensate
piping
 Fire protection system
 Labour laws
 Inspection certification
of electrical system
 Statutory clearance for
power projects
 Techno-economic clearance
for power projects/captive
power plants
 Chimney/tall buildings near
airport
 Defense angle / proximity to
defense installations
 Railway siding construction /
operation
 Safety against explosion
 Fire protection system
 Equipment lay-out under
Factory Act / approval before
commissioning

 Tenders specifications
 Tender Approval
 Shipment arrangements
 Letter of Intent
 Industrial license
 Coal linkage
 Oil / Gas linkage
 Power linkage
 Water
 Appointing foreign technicians / engineers

 Building plans/no objection
 Land acquisition
 Right of way clearance
 Formation of company
 Appointment of Managing Director/ Director(s)
 Sales tax/VAT/GST (when applicable) registration
 Discounts in insurance rates
 Registration under Excise Act
 Approval under Service /Sales Act.
 Registration under Shop & Establishment Act
 Movement of over-dimensional equipment on roads
 Movement of over-dimensional equipment on barges etc.
 Income tax registration / income tax clearance regarding
foreign technicians

INDIAN STANDARDS ON
EARTHQUAKE ENGINEERING
 Bureau of Indian standards, the National Standard Body of
India, is a Statutory Organization under the Bureau of
Indian Standards Act 1986. One of the activity is
formulation of Indian Standards on different subjects of
Engineering through various Division Councils.
 The Civil Engineering Division Council is responsible for
standardization in the field of Civil Engineering including
Structural Engineering, Building materials and
components, Planning Design, Construction and
Maintenance of Civil Engineering Structures, Construction
Practices, Safety in Building etc.
 These standards are evolved based on consensus principle
through a net work of technical committee comprising
representatives from Research and Development
Organizations, Consumers, Industry, Testing Labs and
Govt. Organizations etc.

Environmental Impact Assessment
 An environmental impact assessment is an
assessment of the possible positive or negative impact
that a proposed project may have on the
environment, together consisting of the natural, social
and economic aspects.
 The purpose of the assessment is to ensure that
decision makers consider the ensuing environmental
impacts while deciding whether to proceed with a
project. The International Association for Impact
Assessment (IAIA) defines an environmental impact
assessment as "the process of identifying, predicting,
evaluating and mitigating the biophysical, social, and
other relevant effects of development proposals prior
to major decisions being taken and commitments
made."

NTPC Ratio Analysis (Last 5 Years) 1 of 2
Mar ‘ 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
PER SHARE RATIOS
Adjusted E P S (Rs.) 9.82 8.72 8.93 8.02 6.01
Adjusted Cash EPS (Rs.) 13.04 11.59 11.53 10.55 8.5
Reported EPS (Rs.) 10.59 9.95 8.99 8.33 7.06
Reported Cash EPS (Rs.) 13.8 12.82 11.59 10.85 9.54
Dividend Per Share 3.8 3.6 3.5 3.2 2.8
Operating Profit Per Share (Rs.) 15.09 12.79 13.98 12.32 9
Book Value (Excl Rev Res) Per Share (Rs.) 77.28 71.55 65.81 58.94 54.53
Book Value (Incl Rev Res) Per Share (Rs.) 77.28 71.55 65.81 58.94 54.53
Net Operating Income Per Share (Rs.) 56.25 50.91 44.98 39.58 31.71
Free Reserves Per Share (Rs.) 62.75 56.25 52.34 47.38 43.24
PROFITABILITY RATIOS
Operating Margin (%) 26.81 25.11 31.07 31.13 28.4
Gross Profit Margin (%) 21.1 19.48 25.31 24.77 20.56
Net Profit Margin (%) 17.72 18.11 18.51 19.39 20.2
Adjusted Cash Margin (%) 21.83 21.1 23.74 24.58 24.31
Adjusted Return On Net Worth (%) 12.7 12.18 13.57 13.61 11.02
Reported Return On Net Worth (%) 13.69 13.9 13.66 14.12 12.94
Return On long Term Funds (%) 12.45 12.27 15.15 14.69 12.26

NTPC Ratio Analysis (Last 5 Years) 2 of 2

Tata Power Ratio Analysis (Last 5 Years) 1/2
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
PER SHARE RATIOS
Adjusted E P S (Rs.) 37.62 21.71 21.36 24.19 22.22
Reported EPS (Rs.) 39.93 41.65 39.42 35.21 30.85
Dividend Per Share 12 11.5 10.5 9.5 8.5
Operating Profit Per Share (Rs.) 78.37 50.79 41.67 35.46 42.48

Tata Power Ratio Analysis (Last 5 Years) 2/2
LEVERAGE RATIOS
Long Term Debt / Equity 0.55 0.52 0.34 0.6 0.49
Total Debt/Equity 0.56 0.6 0.38 0.61 0.5
Owners fund as % of total Source 63.84 62.22 72.15 61.97 66.34
Fixed Assets Turnover Ratio 0.7 0.8 0.91 0.78 0.76
LIQUIDITY RATIOS
Current Ratio 2.45 2.1 2.04 2.25 2.22
Current Ratio (Inc. ST Loans) 2.39 1.64 1.78 2.22 2.18
Quick Ratio 2.17 1.77 1.75 2 1.85
Inventory Turnover Ratio 18.98 15.49 18.7 6,072.41 498.76
PAYOUT RATIOS
Dividend payout Ratio (Net Profit) 34.08 31.2 30.84 31.6 31.41
Dividend payout Ratio (Cash Profit) 22.65 22.9 23.02 22.05 21.34
Earning Retention Ratio 63.82 40.16 43.09 54.01 56.37
Cash Earnings Retention Ratio 76.44 64.68 65.02 71.79 73.65
COVERAGE RATIOS
Adjusted Cash Flow Time Total Debt 4.35 6.44 4.02 4.71 3.84
Financial Charges Coverage Ratio 5.02 4.15 6.23 5.55 6.63
Fin. Charges Cov.Ratio (Post Tax) 4.39 4.86 7.78 6.34 6.89
COMPONENT RATIOS
Material Cost Component(% earnings) 61.28 73.86 72.76 70.1 70.43
Selling Cost Component 0.74 0.67 0.59 5.19 1.19
Exports as percent of Total Sales 0.78 4.47 0.31 2.12 1.82
Import Comp. in Raw Mat. Consumed 0 0 0 0 0
Long term assets / Total Assets 0.68 0.7 0.69 0.64 0.68
Bonus Component In Equity Capital (%) 0.47 0.51 0.51 0.57 0.57

Reliance Power Ratio Analysis (Last 5 Years) 1/2
PER SHARE RATIOS
Adjusted E P S (Rs.) 0.45 0.79 0.33 0.01 -25.57
Adjusted Cash EPS (Rs.) 0.45 0.79 0.33 0.01 -25.57
Reported EPS (Rs.) 1.14 1.04 0.41 0.01 -25.57
Reported Cash EPS (Rs.) 1.14 1.04 0.41 0.01 -25.57
Dividend Per Share 0 0 0 0 0
Operating Profit Per Share (Rs.) -0.4 -0.3 -0.11 0.06 -22.27
Book Value (Excl Rev Res) Per Share (Rs.) 58.69 57.55 59.92 10 -19.22
Book Value (Incl Rev Res) Per Share (Rs.) 58.69 57.55 59.92 10 -19.22
Net Operating Income Per Share (Rs.) 0 0 0 0.11 0
Free Reserves Per Share (Rs.) 48.69 47.55 49.92 0 -29.22
Operating Margin (%) 0 0 77.44 60.98 0
Gross Profit Margin (%) 0 0 77.44 60.98 0
Net Profit Margin (%) 122.09 90.9 83.9 7.19 0
Adjusted Cash Margin (%) 48.92 69.75 66.89 7.68 0

Reliance Power Ratio Analysis (Last 5 Years) 2/2
Adjusted Return On Net Worth (%) 0.77 1.38 0.55 0.08 0
Reported Return On Net Worth (%) 1.94 1.8 0.69 0.08 0
Return On long Term Funds (%) 0.89 1.45 0.64 0.68 0
LEVERAGE RATIOS
Long Term Debt / Equity 0 0 0 0 0
Total Debt/Equity 0 0 0 0 0
Owners fund as % of total Source 100 100 100 100 0
Fixed Assets Turnover Ratio 0 0 0 0.03 0
LIQUIDITY RATIOS
Current Ratio 189.31 167.36 12.6 9.16 1.72
Quick Ratio 189.31 167.36 12.6 9.16 1.72
PAYOUT RATIOS
Earning Retention Ratio 100 100 100 100 0
Cash Earnings Retention Ratio 100 100 100 100 0
COVERAGE RATIOS
Financial Charges Coverage Ratio 74.91 113.42 15.27 1.67 0
Fin. Charges Cov.Ratio (Post Tax) 162.62 142.03 17.54 1.2 0
COMPONENT RATIOS
Selling Cost Component 0 0 1.31 0.57 0
Bonus Component In Equity Capital (%) 5.7 5.7 0 0 0

Reliance Infra. Ratio Analysis (Last 5 Years) 1/2
PER SHARE RATIOS
Adjusted E P S (Rs.) 40 31.11 24.69 25.37 31.04
Reported EPS (Rs.) 47.03 50.39 45.86 35.07 30.63
Dividend Per Share 7.1 7 6.3 5.3 5
Operating Profit Per Share (Rs.) 35.74 19.22 22.73 21.75 35.99

Reliance Infra. Ratio Analysis (Last 5 Years) 2/2
LEVERAGE RATIOS
Long Term Debt / Equity 0.1 0.14 0.06 0.16 0.41
Total Debt/Equity 0.29 0.69 0.48 0.67 0.6
Owners fund as % of total Source 77.37 58.96 67.19 59.59 62.23
Fixed Assets Turnover Ratio 1.33 1.4 0.99 0.97 0.72
LIQUIDITY RATIOS
Current Ratio 1.73 1.55 2.47 3.93 4.25
Quick Ratio 1.66 1.45 2.37 3.82 4.07
Inventory Turnover Ratio 59.45 55.96 40.26 32.87 19.6
PAYOUT RATIOS
Dividend payout Ratio (Net Profit) 15.94 16.19 15.93 17.68 18.37
Dividend payout Ratio (Cash Profit) 12.47 13.33 13.21 13.6 11.18
Earning Retention Ratio 81.25 73.77 70.41 75.57 81.88
Cash Earnings Retention Ratio 85.87 80.55 78.59 82.72 88.91
COVERAGE RATIOS
Adjusted Cash Flow Time Total Debt 3.17 7.73 6.21 7.14 3.96
Financial Charges Coverage Ratio 6.28 4.25 4.13 4.76 6.88
Fin. Charges Cov.Ratio (Post Tax) 6.04 5.19 5.23 5.16 6.57
COMPONENT RATIOS
Material Cost Component(% earnings) 34.17 44.32 39.5 26.96 27.67
Selling Cost Component 1.82 1.79 2.36 2.32 0.21
Exports as percent of Total Sales 0.43 0.96 0.01 0 0
Bonus Component In Equity Capital (%) 3.3 3.57 3.43 3.53 3.8

References
 Planning Commission, Govt. of
India
 Ministry of Statistics and
Programme Implementation
 Ministry of Power ,Govt. of India
 NCAER , Govt. of India
 Central Electricity Authority, Govt.
of India
 Delhi School of Economics, Delhi
University
 National Thermal Power
Corporation (PSU)
 Mckensie Report
 Tata Consulting Engineers/Tata
Power
 EIL/PDIL/Mecon/MN Dastur
 Reliance Industries Ltd
 India Habitat Center
 Tata Chemicals Ltd
 Delhi Metro Rail Corporation
Total Project Management P K Joy,
McMillan publishers
Project Management by Rory Burke,
Wiley
Project Management by Jack R
Meredith/Samuel J Mantel ,Wiley
Energy Audit: Reliance Energy Ltd
BHEL Innovations
Ministry of Environment & Forest,
Government of India
Innovation Management Dr R Lalitha,
Himalaya Publishing
Larsen and Toubro (L&T)
Ministry of Labour ,Govt. of India
Dion Global Solutions Limited,
Insight (Research Data Base)
TERI, New Delhi
Wikipedia
Hindustan Times / Indian Express
Vijayant Consultants, Ahemadabad

Acknowledgement
 The Author / Presenter thankfully acknowledges the
contribution of the following IAMR Staff members in
the creation of this Power Point Presentation on
‘Innovative Project Management Practices for
working professionals’.
1. Mr. Rajendra Yadav
2. Mr. Avadesh Mishra
3. Mr. Mayur Sharma
 Mr. Rakesh Bhatia, with his rich experience of 25
years in execution & marketing of EPC Projects, has
been a great help in validating and correlating the
inputs & streamlining the flow.

Thank you all the participants for patient
listening, your valuable contribution by making
the session interactive and value added .
It was a great experience sharing platform to
cut time & cost overruns in major projects in the
power, infrastructure, construction sectors.

Innovative project management practices for large power sector projects.

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