Scope of the Project
The East West Link infrastructure project was initiated by the Victorian State government in the year 2012 to construct a road that was to link the Western Ring Road and Eastern Freeway through Melbourne. The official commencement of the program was expected to start by the year 2014.The project was aimed at facilitating road network between the three cities. Moreover, the project was aimed at reducing traffic congestion that caused delays in the cities. It also had the opportunity to enhance trade for economic development in the region (Victoria 2009).
According to Charvat (2003), the scope of the project was defined to entail the following elements; improved road network to reduce congestion, development of trade, and economic prosperity. The definition reveals that the East West Link Project will enhance connectivity between the three cities and provide alternative routes for traffic in order to reduce traffic jams. It will also provide a valuable opportunity for traders to transport their goods between the cities.
The definition also highlights the fact that project will adhere to the rules and regulations that govern the construction of roads in Victoria. Compliance with the rules will enable the project to attain its objectives without any legal interference. In this regard, project requirements such as construction, design, repair, coordination and management will embrace all legal requirements such as environmental and political laws. The main aim of the project was to improve the efficiency of road transport (Victoria 2009).
At the onset of the project, all political and environmental laws were taken into account by the project committee. Environmental pollution during the road construction was a common problem in Victoria, therefore effective strategies to reduce environmental pollution were initiated (Project Management Body of Knowledge 2011). Such strategies entailed proper identification of environmental aspects that were susceptible to pollution, establishment of mitigation approaches, and urgent intervention measures. The establishment of mitigation strategies was guided by the requirements of Victorian environmental policies, which aim at controlling environmental pollution and conservation of the ecosystem (Victoria 2009).
The other aspect of regulation to be considered at the onset of the project will be political policies and regulations, which govern construction, repair, and maintenance of the roads. The political policies and regulations ensure that road construction projects take place in areas that will be certified for road construction. The policies inhibit road construction in flood prone areas and regions with poor topography. These requirements will be established by surveying the area before the commencement of the project (Larson & Richard 2007).
As part of legal requirements on competitive bidding, contractors for the project will be selected on a free and fair basis. The surveyors will be selected through guidance of procurement regulations on competitive bidding, which requires that bidders for a public project should be selected without any form of bias such as corruption, bribery, nepotism or ethnic affiliation. The potential surveyor for the project is Auspat Land Survey who will be awarded the contract as the main surveyor for the project. The selection of constructors will also be done on a competitive basis. PCL Constructor of the people of Melbourne. The connection between the three cities will also be improved through the construction of a tunnel. The government also expects to improve efficiency at the port of Melbourne through efficient movement of freight.
The most important aspect of the project outline is its design. The project committees together with the constructors have released the initial design to the members of the public. According to the information, the design entails construction of a bridge that will link Hoddle Street and the Eastern free, construction of an interchange that will enhance movement inside the tunnel, a stage at the Port of Melbourne, and an entrance from the Eastern Freeway into the tunnel. The government and the constructors have communicated with the citizens who own buildings that are situated near the project.The government have also laid down the modalities for compensation to the property owners (Land Acquisition and Compensation Brochure 2012).
The project will involve different stakeholders who will have different roles to play. The key stakeholder in the project will be government who will fund the project, assess its performance, and evaluate the achievement of the expected goals (East West Link: infrastructure Project 2012). Other government departments such as the environmental agency will participate in the project to ensure that the construction conforms to the environmental policies. The ministry of construction will work with the environmental agency to ensure to establish effective ways of controlling environmental impacts (Land Acquisition and Compensation Brochure 2012).
The other category of stakeholders that will participate in the project is the community where the project will take place. In addition to providing the required labor during the construction, the community members will work with constructors and the government in identifying environmental elements that are prone to pollution (East West Link: infrastructure Project 2012).
The constructors will confirm and acknowledge the scope of the project. They will also sign legal compliance forms on environmental issues. The deliverables of the project will be determined before the commencement of the project. Both constructors and the surveys will review the deliverables on a timely basis to accommodate any changes in project scope (Project Management Body of Knowledge 2011).
Cost control is one of the vital elements in project management. To ensure sustainability and success of the project, it is important to exercise proper cost management (Miller 2012). The first stage in cost management is to determine the total project cost. For instance, in this case the valuation of the East West Link Project, as revealed by Victoria (2009), will be $ 5 billion. For a period of 10 years, the project will be valued at $ 10 billion. This evaluation will entail continuous construction, repairs, and maintenance. Survey will be estimated at $ 120 million by Auspat, while PLC Constructors will value continuous repairs, construction, and maintenance at $ 8.4 billion.
The two companies selected for the project had a good financial base and will therefore manage to raise the required funds for the project. For instance, PCL has a large capital base that is mainly supplied by equity and venture capital from foreign investors. On the other hand, Auspat finances its capital from the financial markets (Miller 2012).
From January to July 2014, the project cost management initiatives may suffer from environmental conditions such as heavy rains that may erode some of the parts already constructed. Heavy rains are common in Victoria from the month of January to late August in every year. The event may make the construction company to incur a loss of $ 200 million. Environmental conditions will also force the project constructor to modify the scope of the project to accommodate certain changes. The cost of modification will also be transferred to the surveyor. Uncertainties in the environment greatly influence project cost and cost management. A good cost management initiative must accommodate changes that emanate from the environment and project features (Rakos 2004).
PCL expects to suffer significant losses that will stem from fluctuation in the cost of materials and operation requirements as cement, ballast, sand, machinery. Other cost elements that may affect the company include the cost of fuel, labor, and machinery. Some of the measures that may be proposed by the management to reduce the aforementioned losses include proper forecasting of fuel prices, keeping adequate stock and materials, and employing ‘Just in Time’ mode of operation to reduce inventory cost(Buttrick 2009).
Management of Resources
The resources of a project are the major components that play an important role in the development and success of the project. Effective and efficient management of resources is deemed cardinal to ensure the success of the project (Miller 2012). The interplay between the various resources determines the direction and shape of the project. In East West Link Project, the major resources that will influence its performance and success are finance, plant and machinery, and human resources. During the construction, human and financial resources will be the main sources of problems that will affect the performance of the organization.
Managing human resource will be very hectic for PCL due to rampant strikes, frequent absenteeism, and low levels of labor productivity. Strikes in construction companies are some of the common problems in Victoria. Most construction workers are paid low wages and suffer from poor working conditions. PCL workers have also suffered from similar conditions since most of them are paid low wages and worked under dangerous conditions. However, the issue will be investigated and the human resource manager will be summoned to appear before the project management committee to solve the issue (Project Management Body of Knowledge 2011).
To ensure proper utilization of human resource, it is important for an organization to embrace good practices that are aimed at motivating employees by offering them good pay packages and training, improving the work environment, and encouraging them to participate in the affairs of the organization. These practices enable an organization to improve employee productivity and promote the level of commitment towards the goals of the organization. Proper workforce planning also enables an organization to manage human resource and reduce problems such as absenteeism and strikes (Buttrick 2009).
With regards, to financial resources, PCL Constructors may experience shortages of low supply of funds due to credit regulation initiatives that will be adopted by the central bank of Australia. In September 2014, the Australian government will implement monetary policy aimed at reducing the money supply in the economy to reduce the rate of inflation. The step will greatly affect supply of funds in financial institutions such as commercial banks. The low supply of funds may the expenditure and budget plans of the company thereby reducing the pace of project development.
Coordination of Procurement Activities
One of the tools that determine the flow of operations in project management is procurement. It influences expenditure and financial planning in project management. Effective and efficient management of procurement activities leads to proper allocation and utilization of resources. In project management, procurement initiatives must be in tandem with the project scope. Procurement as a project management tool identifies the materials and other requirements that are needed for the execution of the project. It also provides contract guidelines and performance metrics (Rakos 2004).
Due to continuous flow of funds and materials in procurement activities, it is cardinal to determine the appropriate model for the project to ensure efficient utilization of resources. Assessment of the East West Link Project by Victoria (2009) revealed that the project will be based on 3P model due to its size, time span, and the amount of resources to be involved. The two organizations that will be awarded the contract will also handle their operations according to the requirements of 3P model.
The contractors will handle procurement activities with a lot of caution to minimize expenditure in various materials. PCL will procure most of the materials used in the construction such as ballast, cement, oil, and machines. The organization will also award tenders for the supply of the materials on a competitive basis in order to obtain quality materials at the lowest cost possible. Other tenders may be awarded to various government entities, for instance, Auspat may award the tender for the supply of survey equipment to the ministry of survey and lands. The organizations will fund all the procurement activities from their capital bases.
Effective management of procurement activities requires an organization to prepare proper documentation that outlines all the procurement processes right from the order stage to delivery phase (Project Management Body of Knowledge 2011). Documentation also enables an organization to identify the various risk factors that are present in each stage of procurement process. Risk management in procurement also requires an organization to evaluate and monitor the activities involved in each stage. For instance, during delivery the most common risks that may interfere with the procurement process include failure of the transport tool or delays on the side of the supplier.
Risk is an inherent characteristic of every operation where resources and time are utilized. Projects have various categories of risks that emanate from the operation and the existence of the project. The project will have different types of risks that will be identified by PCL. These risks may include financial risks, changes in scope of the project, changes in policies and regulations, asset devaluation, operational risks, and environmental risks. However, there major risks that will greatly affect the project, for instance, changes in policies and regulations, environmental risks and changes in scope of the project may reduce the efficiency of the project. The three categories of risks will also affect other elements of the project such as financial resources and operations (Wideman & Max 2008).
With regards to environmental risks, the government and the management of PCL will establish proper risk mitigation strategies to control air pollution from heavy dust and smoke. The strategies will also control the pollution due to disposal of waste chemical. Heavy dust, smoke, and noise are expected during the construction. To solve the problem of the environmental pollution, PCL will come with a set of recommendations that will be used in solving the problem.
The organization will assess risk factors that stem from operations by conducting a cost benefit analysis for each activity and processes. This approach will enable the organization to evaluate the financial expenditure in each activity and compare the outcome with the benefits (Wideman & Max 2008). However, it will be difficult to assess risks that emanate from changes in policies and regulations.
The element of communication plays a cardinal role in coordination of project activities and process. Communication is an aspect of project management that determines its success. Effective management of communication is paramount for the success of the project. Elements such as regular meetings, proper organization of communication channels, and use of appropriate communication media are necessary to ensure effective communication (Project Management Body of Knowledge 2011). In East West Link Project, there will be regular communication between the two companies and the government through meetings and consultations. Moreover, the two organizations will use the most appropriate tools of communication such as video conferencing, mobile phones for urgent situations, and internet communication through mails.
The project committee will collaborate with the two companies in identifying various communication needs of the project stakeholders. In this regard, strategies will be established to handle complains, suggestions, and enquiries. The committee will hold regular meetings with the management of the two companies to get information on the progress of the project. Issues on environmental pollution and project operations will be given more attention by the government and the project coordinators in order to reduce the impact of environmental pollution (East West Link: infrastructure Project 2012).
Project Time Span and Management
Project time span is an important element that is used to determine project expenditure, project plan, goals, and objectives (Rakos, 2004). The time span outlines the progress of the project based on stages. PCL anticipates that project would assume full operation by the year 2015. The company aims to construct between 4-5 Kilometers of the road by the year 2016.The constructor gave a timeline for particular design aspects of the project, for instance, the construction of a new bridge will take between 6 to 12 months, the construction of the entrance to the port will take about 6 months, and tunnel construction will take about two years.
The expectations of the company and the government tend to conflict since both parties tend to use a different time lime. According to the government, the organization should complete major sections of the project by December 2015. The difference emanates from various factors that may affect the performance of the project, for instance the issue of low supply of funds may reduce the pace of the company’s operations in the year 2015. Through regular consultation the government and the company are expected to eliminate the disparity in expectations and the company may also change its operational strategies to enhance the achievement of the project objectives. The adopted changes are expected to increase labor productivity and enhance the efficiency of operations (Project Management Body of Knowledge 2011).
Due to the problem of traffic congestion that caused delays, the East West Link Project was initiated with charter that aimed at ensuring efficiency in road transport between Melbourne and the Eastern Freeway. The government of Victorian State established the project to expand trade activities between the cities and enhance economic development. The contractors of the project will develop proper documentation that is expected to embrace all the anticipated plans that may be integrated into the project (Wideman & Max 2008).
Based on the project information, I strongly believe that the project will be a valuable initiative that would enable the government of Victorian State to enhance road connectivity between the cities and eliminate jams.
The project will be accurately structured with the relevant stakeholders and highly qualified contractors. Effective resource management will enable the project contractors to ensure proper utilization of resources. The project is also expected to adopt good procurement management strategies and cost control measures for success. The project may suffer from delays that will emanate from low supply of funds and labor related issues.
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