This document discusses core problems with project management in the public sector in Pakistan. It provides examples of cost overruns, delays, and unsatisfactory outcomes on public projects. Reasons for failures include wrong project selection and scope, poor planning and execution, and biases in project roles. It advocates for applying established project management standards and processes like the Project Management Body of Knowledge to improve outcomes. These include integrated programming, accurate cost estimating, using tools like earned value analysis for monitoring, and incentivizing roles to prioritize schedule and cost control. Adopting project management practices could significantly reduce inflationary costs on projects and provide returns on investments in project management capabilities.

1. Project Management Core Problems Khalid Ahmad Khan, PE, PMP President – PMI Lahore Chapter 22 December 2009

2. About PMI Introduction

3. Founded in 1969 by working project managers 420,000 members and credential holders 250 chapters in over 70 countries 450 members in Lahore Goal: Organizations everywhere will embrace, value and utilize project management and then attribute their successes to it. Project Management Institute

4. A Guide to the Project Management Body of Knowledge The purpose of the Guide is “to identify and describe that subset of the PMBOK® which is generally recognized as good practice” PMBOK Guide®

5. Standards ensure a basic project management framework is applied consistently worldwide Project Management Institute

6. PM Core Problems

7. Public Sector Performance Challenges

9. Long delays

10. Poor quality

11. Unsatisfied usersPlanning Commission

12. Public Sector Project Performance – Nov 2007 World Bank – Pakistan Infrastructure Implementation Capacity Assessment Nov 07

13. Public Sector Project Performance – Nov 2007 Programming  Wrongly selected Planning  Poorly executed World Bank – Pakistan Infrastructure Implementation Capacity Assessment Nov 07

14. Programming failure

15. Programming Challenge

16. Programming Challenge

17. Programming Failure Wrong Project Design, Location, Basis  0-100% loss Project Delay - Loss of benefits Electricityproduction from Ghazi Brotha Rs. 145 million/day – Rs 52 billon/year Total delay in project – 4+ Years Project Delay - Inflation Impact of inflation on RBOD Rs. 6.1 million/day – Rs. 2.3 billion/year Total delay in project – Uncertain (current 5+ Years) Costof failure

18. RBOD Project – Nov 05 Project Approved May 2001 Original Budget Rs. 13.95 billion Target Completion June 2005 (48 months) Progress Rs. 2.7 billion (20%)

19. RBOD Revision 2005 Overall Rs. 16.8 billion Rs. 13.95 billion Rs. 30.74 billion Original PC-1 May 2001 Revised PC-1 Dec 2005 Inflation Rs. 9 billion 53.6 % Discounting to May 2001 Scope Rs. 7.8 billion 46.4% Revised PC-1 May 2001 Value Progress Rs. 2.7 billion (8.7%) Rs. 21.74 billion

20. Analysis/Lessons Reasons for failure

21. PM and Programming Project Management Processes Input Build Output Utilize Outcomes Identify Select Input Transform Outcome Model

22. Major Causes for Project FailureSecretaries workshop - 2003

23. Major Gaps in Delivery of Projects – Nov 2007 World Bank – Pakistan Infrastructure Implementation Capacity Assessment Nov 22-07

24. Project Identified PC-2 Feasibility PC-1 Project Approval Technical Sanction [4%] Tendering [Premium] Award Execution Measurement of Work Public Sector DevelopmentEstimation at PC-1 Stage Payments [10%]

25. Bias in Project Roles Percent based consulting fee Client Engineer Role of Client Sponsor Role of Engineer Design Control Quality Supervise contractor Project Planning Contractor

26. Limitations of Financial Monitoring Physical Progress vs. Financial Progress 100.00 Budget 70.00 Utilized Budget Utilized 50.00 Physical-1 Physical-1 Physical-2 Physical-3 Physical-2 70.00 Physical-3 80.00 - 20.00 40.00 60.00 80.00 100.00 120.00 Assumes all money spent is used with 100% efficiency Works fine only if the project is on-track Ignores Scope & Time

27. Project Splitting/Organization Traditional Functional

28. Solutions Improving outputs/outcomes

30. Primavera

31. PM Soft Skills

32. Leadership

33. Incentives for government officials

34. 100% subsidy on training course + exam fees

35. Bonus of USD 2,000 for passing certificationSkill Enhancement

36. Integrated Programming/PM

37. Design: LFA and PMI Standards

38. Project Management Standard – PMI PMBoK 4th Ed Initiating Planning Controlling Executing Closing

39. Earned Value Project Management

41. cost, schedule, and technical

42. Early and accurate identification of trends and problems

43. Basis for course correction

45. Benefits Results of good project management

47. Cost: Rs 4,527.6 Million

49. ROI of Project Management Construction Inflation Long term (4 yr) trend: 9.1% per annum Based on RBOD-II analysis Short term (1 yr) trend: 13.3% per annum Based on Market Rates data from Finance Taunsa Project Budget: Rs. 4.26 billion 3 Yr Inflation Impact: Rs. 883 million 2 Yr Inflation Impact: Rs. 555 million Saving: Rs 328 million (8.0% of Budget Cost) PM Cost: PMO I&P: Rs 50 million (1% of Budget Cost) PMU P&D: Rs. 5 million (0.1% of Budget Cost)

50. PM Implementations Lessons

51. Conclusion

52. Q&A Thank You