he assam gas cracker project conceived as part of the assam accord signed in 1985 is yet to see the light of the day. it has been plagued by a host of problems starting from location to economic viability. originally planned at tengakhat, it was later shifted to a place called lepetkata. the project is now being implemented by gail (a government of india enterprise) as the lead promoter (70% share) with another public enterprise oil (20% share) and the government of assam as minor partners. gail had to be brought in after india’s largest private sector enterprise reliance industries backed out of the project saying that it was economically unviable. the land acquisition for the project (as of mid 2008) is yet to be completed and there is still a lot of uncertainty regarding the availability of raw materials for production. in the meantime, the project cost has spiraled many times over to inr 50 billion, which is likely to go up further. • (a) discuss the importance of project management in the light of the above situation. • (b) as a project manager employed with gail, what would be your line of action to see to it that the project is not delayed any further? • (c) why do projects suffer from time and cost overruns? c
Answers
Explanation:
The Assam Gas Cracker Project conceived as part of the Assam
Accord signed in 1985 is yet to see the light of the day. It has
been plagued by a host of problems starting from location to
economic viability. Originally planned at Tengakhat, it was later
shifted to a place called Lepetkata. The project is now being
implemented by GAIL (a Government of India enterprise) as the
lead promoter (70% share) with another public enterprise OIL
(20% share) and the Government of Assam as minor partners.
GAIL had to be brought in after India’s largest private sector
enterprise Reliance Industries backed out of the project saying
that it was economically unviable. The land acquisition for the
project (as of mid 2008) is yet to be completed and there is still a
lot of uncertainty regarding the availability of raw materials for
production. In the meantime, the project cost has spiralled many
times over to INR 50 billion, which is likely to go up further.
a) Importance of project management in the light of the above situation:
The case of the Assam Gas Cracker Project highlights the importance of project management in ensuring the success of a project. Effective project management is necessary to ensure that the project is completed on time, within budget, and with the desired quality. The project manager needs to coordinate with various stakeholders and manage the project resources effectively to ensure the project's success.
In the case of the Assam Gas Cracker Project, poor project management has led to significant delays and cost overruns. The project had to be shifted to a new location, land acquisition is incomplete, and there is uncertainty regarding the availability of raw materials for production. These issues could have been avoided or managed better with effective project management.
b) Line of action as a project manager employed with GAIL:
As a project manager employed with GAIL, the following would be my line of action to ensure that the project is not delayed any further:
Identify the critical path: The project manager should identify the critical path and focus on completing the critical tasks on time. This will help to ensure that the project is completed on time.
Resource allocation: The project manager should ensure that the project resources are allocated effectively. This includes ensuring that the right people are assigned to the right tasks and that resources are not over or underutilized.
Communication: The project manager should ensure that there is effective communication between all stakeholders. This includes regular progress updates and identifying and addressing any issues as they arise.
Risk management: The project manager should identify potential risks and develop a plan to mitigate or manage them. This will help to minimize delays and cost overruns.
Quality control: The project manager should ensure that the project meets the desired quality standards. This includes regular quality checks and addressing any issues that arise.
c) Reasons for time and cost overruns in projects:
Projects suffer from time and cost overruns due to various reasons, including:
Poor planning: Inadequate planning can lead to delays and cost overruns. The project manager needs to ensure that the project plan is comprehensive and includes all necessary tasks, resources, and timelines.
Changes in scope: Changes in the project's scope can lead to delays and cost overruns. The project manager needs to ensure that any changes in scope are properly evaluated and managed.
Resource constraints: Limited resources can lead to delays and cost overruns. The project manager needs to ensure that resources are allocated effectively and that any resource constraints are managed properly.
Unforeseen circumstances: Unforeseen circumstances such as weather events, natural disasters, and other external factors can lead to delays and cost overruns. The project manager needs to develop a contingency plan to manage such situations.
Inadequate risk management: Inadequate risk management can lead to delays and cost overruns. The project manager needs to identify potential risks and develop a plan to mitigate or manage them.
#SPJ3