E&C Launch Presentation by Raj Kalady, PMI India
- 1. Message from Raj Kalady Country Head : PMI India
- 2. Dear Practitioners, Greetings to all! It gives me great pleasure that the PMI Chennai Chapter has come forward to promote an Engineering & Construction forum as a part of their out reach activities . This Forum could not have arrived at a better time. The 12th five year plan intends to double the infrastructure spending to USD 1 trillion through 2012-17 with 50 percent of the funding to be met by private sector. With Project delays and cost overruns, afflicting this industry, this forum will serve as a platform to discuss industry challenges with respect to Project Management, share best practices and more importantly serve as a catalyst to promote industry academia linkage. I wish the forum all success and hope that this movement will help the industry to improve their Project Management capabilities and thereby meet their business objectives. Thank you!
- 3. 3© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 60 256 0 50 100 150 200 250 300 FY07 FY17 USDbillion The investment in infrastructure sector is expected to be more than 10 percent of GDP by 2017 Note: All figures in USD Billions Source: Planning Commission 5% of GDP +15% pa CAGR Investments in Infrastructure 0 200 400 600 800 1000 1200 Xth Xith XIIth USDbillion Electricity Roads and bridges Railways Irrigation Water supply Ports Airports Telecom Others Planned Infrastructure Investments (USD Billion) 1,025 514 227 10.7% of GDP 1,18,537 MW to be added in 12th plan 1 billion tonnes of new capacity to be added in 12th plan 1,000 Km of new expressway to be constructed in 12th plan 5.19 lakh crore to be spent on railways in 12th plan
- 4. 4© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Although the sector is considered to be key driver of economic growth, time and cost overruns threaten to limit the sector’s potential… 58% 53% 41% 33% 30% 28% 46% Roads & highways Power Coal Civil Aviation Shipping & ports Railways Overall Time overrun Overall project costs (planned versus anticipated) have risen by 18 percent across various sectors Railways — INR8600 billion rise in budget Power — INR160 billion increase in budget Petroleum — INR110 billion increase in budget Steel — INR60 billion increase in budget Urban dev — INR50 billion increase in budget Atomic energy — INR60 billion increase in budget 141% 119% 63% 15% 12% 11% 18% Railways Water resources Petrochemical Atomic energy Urban… Civil Aviation Overall Cost overrun Sector wise percentage of projects with time and cost overruns
- 5. 5© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. .. resulted due to multiple reasons across the project lifecycle Conceptualization/ Pre-Planning Planning and Design Execution and Monitoring Closure/Handover Reasons for Delay across the Project Lifecycle Source: KPMG Analysis Post-Construction Phase Delay in regulatory approvals Unavailability/delayed availability of funds Delay Land/site handover Lack of strong R&R policies Ineffective procurement planning Design/scope change Weak/ineffective project planning & monitoring Contractual disputes Delay in decision making Pre-commissioning teething troubles Contractual disputes Unavailability/delayed availability of funds Lack of strong R&R policies Delay in regulatory approvals Delay in decision making Coordination issues Lack of Skilled Manpower Lack of Skilled Manpower Lack of Skilled Manpower Lack of Skilled Manpower Pre-Construction Phase
- 6. How important is the Project Management Skill? Quality of Project Managers has the highest influence of all the factors! Source: PMI-KPMG Study on drivers for success in Infra Projects
- 7. PMI FICCI Report 2010 – PM in India Insights in 6 key sectors IT-ITES and Automobile sector have a high level of adoption and performance. Infrastructure sector is the highest contributor to Gross Domestic Production (GDP) among the six sectors studied; however, project management practices are yet to realize benefits in this sector. Defence is an investment sector from a national perspective, resulting in capital expenditure of about 3% of the GDP.
- 8. Planning Commission acknowledged the need of Project Management in its Approach Paper to the 12th Five year plan “Implementation in many areas, particularly in infrastructure development, involving large projects, is held up for a variety of reasons. Coordination needed across different agencies to facilitate 12 Approach to the Twelfth Five Year Plan progress in project implementation is often lacking and can lead to long delays and cost over-runs. ‘Project management’ capabilities must be improved for the country to get better returns from public investment in infrastructure and also in the social sectors’. Project management, with a view to deliver on time and within cost, is a learnable capability that can be institutionalised, as demonstrated by the development experiences of Japan, Korea, Singapore and China. A nation- wide drive to improve project management must be an integral part of the Twelfth Five Year Plan. Further in the 12th Plan PM is the key in the India Backbone implementation Network
- 9. Thank you!
Editor's Notes
- #9: As a Policy Influencer/ Changer