Euro IV Tankages - CPCL Project Presentation

Kamal Nayak B

Lakshman L R

Shanmukha Sreenivas P

Shiriram Prabhu S

21-11-2012

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)

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

SYSTEMS APPROACH

Systems Approach

Primitive NeedThe 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

Desired outputsTime : 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 InputsLabour CostsLandQuality of Cement, Sand, Steel.

Uncontrollable InputsLabour StrikesInstitutional FactorsSocio Political Issues

Environmental InputsRainfall < 2 cm/ day

Temperature < 50 deg

Design ParametersSize -Capacity: 200000 litresOperating Days 365 days

Operating Costs 38.4 crores

General Systems model

LandLaborSandSteel

CementMoney

TimeQualityBudget

Size & Capacity

Natural CalamitiesSocio Political

Issues

Construction of 6 storage

tanks

Inputs Outputs

Evaluation of alternativesPrefabricated knock-down Storage tanks

Reinforced Stainless Steel tanks

Evaluation of alternatives – Contd. Double walled double deck storage tanks

Underground Storage tanks(UST)

Reinforced steel tanks meet all criteria !!!

Timeline

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

SCHEDULING

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.

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.

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.

oCritical path hyperlink

oThree time estimates

COSTING

Cost break up

• Direct cost

o Labor cost

o Non labor cost

• Indirect cost

o Overheads

o G & A expenses

• 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.

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.

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.

• Indirect Cost = 2.8 crores + 0.12637 crores * Te

( Te in weeks)

•HYPERLINK TO SPLIT UP

Of costing

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.

Normaltime

Crash time Normal cost Crash cost

480 days 470 days 38.4 crores 38.7 crores

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.

Project Mangement

System

Time

Diary

Scheduling

Budgeting& cost control

Performance analysis

Dash board

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.

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