EDPM Report # 2_ Pankaj Shukla

EDPM TRAINING REPORT- 2 13-15 JULY, 2012 NEW DELHI

1 PANKAJ SHUKLA, AIIL MUNDRA

Subject Project Management Report - 2( PMR-2)

as part of EDPM training

Name Pankaj Shukla

Organisation Adani Infra ( India) Limited

Date 28.07. 2012



Strategy without action is day dream.

ACTION WITHOUT STRATEGY IS NIGHTMARE

STRATEGY DEVELOPMENT IS DONE TO address

1. The Organisation Vision & Goal 2. Financial Objectives 3. Sustainability & Growth 4. Stakeholders Aspirations 5. Management of Resources 6. Internal & External Business Environment 7. Learning & Development

. . . & achieve Project success

EDPM TRAINING REPORT 15-17 JUNE,2012 NEW DELHI


1. ADANI Vision

2. Strategy of Adani Power Limited

3. Generic strategy deployed

4. “SWOT” analysis for internal & external environment.

5. Industry level & Firm level critical success factors (CSF)

6. Innovation implemented

7. Promoting a culture of ‘Ownership of Aspirations, Intellectual

Leadership and Speed

Contents



Adani Target / Performance : ( Vision 2020)

From being a new entrant in India’s power sector in 2006, Adani Power Limited has taken rapid strides and

has achieved several path breaking Milestones during its journey of becoming the largest private thermal

Power Producer in the country as well as becoming the largest coal based single location private thermal

Power Plant in the world.

Presently the group is working towards the vision 2020 of ADANI GROUP by Chairman Sh. Gautam Adani.

“ To be the admired leader in integrated infrastructure business

with a deep commitment to nation building. We shall be known

for the scale of our ambition, speed of execution and quality of

operation ’’

1. ADANI VISION:



2. Strategy development & execution at Adani Power Limited:

2.1 : Need for strategy :

Strategies need to be developed and implemented to face the dynamic and challenging internal &

external business environment , anticipate and mitigate the risks, avail the business opportunities,

meet the stakeholders expectation and synergise whole group towards realisation of the

organisation goals.

Being the new entrant into the power sector , an exhaustive and in-depth analysis was carried out

to assess and analyse the following in order to develop and implement effective organization

strategy:

1. Growth , sustainability and earning potential of the power sector on long term

basis.

2. Existing constraints in the sector ( land availability, statutory clearances, coal

availability, transmission lines ,water etc).

3. Local vendors manufacturing capabilities, technology and alternative sourcing

of equipments.

4. Challenges of resources mobilisation, funding, technical know-how

5. Organisation strength & weakness.

6. Immediate capacity setup and future capacity expansion possibility.

7. Project management setup

8. Competition



2.2 Strategy Development & Execution :

With exhaustive brain-storming session, discussions & analysis, the following strategies were

developed and implemented to address each of the above issues as following:

Need Analysis Strategy adopted

1. Growth , sustainability

and earning potential

of the power sector on

long term basis.

India being on the path of rapid

growth & industrialization

where a GDP of around 9% is

required to be matched with

power sector growth in excess

of 11-12%. The present per

capita power consumption is

mere 700 units compared to

China ( 2400 units). Many parts

of the country are still in great

deficit of power. Huge

customer base and with

improved per capita income,

huge potential for growth.

Contribution to the growth of

the nation.

To set up thermal

power plants to tap the

opportunity which is

sustainable, profitable

business.

The thermal power

plants is set up

considering lower

gestation period , lower

investment /MW, lesser

environment issues

compared to nuclear &

hydro and much

improved Plant

Availability and Plant

Load Factor ( PLF)

compared to solar &

wind power plants.

2. Existing constraints in

the sector ( land

availability, statutory

clearances,

The socio-politico-geographical

conditions in the country act as

constraints to the need.

Obtaining the required

clearances for land, coal, water

etc is getting tougher by the

The group took up the setting

up of its thermal power plant at

Mundra, Gujarat, a non

agricultural area , served by our

port for coal import, availability

of abundant water, thinly



coal availability,

transmission lines

,water etc).

day. The issue of R& R for

project impacted people( PIP)

is also a great challenge and

becomes a big liability as per

past experience with other

power developers.

populated , free of forest &

sanctuaries and relatively

unaffected by local socio-

political interference. Adani

power developed its own

transmission lines ( AC & DC)

to reduce dependency on Govt

established transmission lines.

3. Local vendors

manufacturing

capabilities,

technology and

alternative sourcing of

equipments.

Indian Power plant equipment

manufacture ( primarily BHEL)

has very limited manufacturing

capacity( only appx 7000 MW

yearly), and is loaded with

order booking from other

competitors. The existing units

in the country were of

maximum size of 500 MW and

sub-critical.

Adani Power explored the

equipment sourcing externally(

from China having equipment

manufacturing capacity of

100000 MW yearly) to get the

benefit of faster delivery,

improved technology(

supercritical), bigger unit sizes,

cost benefit etc.

4. Challenges of

resources availability

& mobilisation,

funding

The existing coal mining

capacity in the country was

limited . Several environment

& socio-political factors were

proving big constraint for future

mining development,

overloaded railway network

which is used for coal transport

across the country, poor quality

of coal ( very high ash content),

limitation of local banks &

funding agencies to finance the

power projects, inadequate

skilled manpower

Adani Power acquired mines in

Indonesia & Australia and

developed mining infrastructure

there, developed own port and

railway lines, purchased own

fleet of ships for coal transport

from overseas mines,

established mining division.

Adani Power collaborated with

various national & international

banks / financial institutions/

investors and thru equity

market arranged the funding for

the project.

5. Organisation strength &

weakness.

Being new entrant into the

sector, we need to built up on

our strengths and to explore

/devise measures to improve

upon our weaknesses. This will

help us develop & implement

our strategy on long term basis.

Visionary Leadership, team of

highly experienced

professionals, integrated

business model from mining to

transmission, diversified

business model with exclusive

mining, trading, logistics,

Engineering & project

management entities to



complement our power

business. Adani Power

established offices in China,

Singapore, Indonesia, Australia

and several other places to

stream-line, co-ordinate &

expedite the project

deliverables. Established

modern training centre with

latest state of the art technology

with simulators for upgrading

the operational skills of

existing employees / new

joinees.

6. Immediate capacity

setup and future

capacity expansion

potential.

To identify the opportunities(

present / future) and determine

the scalability required .

Adani Power ventured into the

power business by setting up 2

units of 330 MW each capacity

at Mundra( Phase-I).

Subsequently, 2 additional units

of 330MW each and 5

additional units of 660 MW

each capacity were set up there

to avail the opportunities in the

expanding power business in

the country.

7. Project management

setup

With changing times, the

modern project have become

very large and complex. The

measurable bench marks of a

project with respect to time,

cost, quality, safety &

productivity have attained

newer heights. Hence, well

developed & extensive project

management practices are to be

implemented from the inception

of a project.

Adani Power established

dedicated project planning,

monitoring & controlling group

at Corporate as well at site

level. This has resulted in

effective monitoring,

management & control of

project deliverables like

materials, drawings, resources.

It has helped in streamlining the

co-ordination with external

statutory bodies for approvals/

clearances as well EPC

contractors, consultants,

vendors & suppliers.

8. Competition

The emerging opportunities

Outsourced the



lead to emerging competition.

Being the new entrants and the

scale of goals we set up for

ourselves( 20,000MW by

2020), we need to implement

innovative ways, be agile and

decisive. We have the target to

achieve the generation capacity

in only few years compared to

our long existing competitors.

equipment from China

to gain on time ,cost,

proven technology

Extensive

mechanization with

additional mobilization

of equipment.

Deployment of

experienced team from

the Power sector

Deployment of

established contractors

/vendors with market

proven credentials and

having big resource

pool.

Setting up own

inspection & expediting

team at China.

Acquisition of mines,

ships, development of

port, transmission lines.

Our integrated business

model provides us

tremendous competitive

leverage over our

competitors.



3. Generic Strategy Deployed by Adani Power Group : Adani Group has focussed on integration of power business to cover the entire value chain from

Mines to Transmission.

3.1 Low cost provider strategy: We are selling most part of power in bulk to State Electricity Boards under long term Power

Purchase Agreements ( PPA) which were won against a competitive bidding . The surplus power

would be sold through our Power Trading Division on merchant basis to customers mainly State.

Electricity Authorities and bulk consumers. Power sold on merchant basis would depend on

demand and supply gaps and opportunities.

3.2 Broad differentiation strategy: Seeking to differentiate the company’s product offering from rivals’ in ways that will appeal to a

broad spectrum of buyers. We have established the facility to transmit power at high voltages from

220 KV to 400 KV AC and +/- 500 KV HVDC at frequency matching to grid frequency so essentially

power as a product from all bulk power. The HVDC power transmission has lesser transmission

loss compared to AC transmission and the threat of unauthorized power pilferage during

transmission is also controlled.

4. ‘SWOT’ analysis for internal and external environment: An analysis of internal and external environment for Adani Power business using SWOT analysis is

undertaken as below.

4.1 Strengths: Visionary Leadership

Visionary leadership of the Chairman Sh. Gautam Adani with Right world view, Right Knowledge

and Right conduct having full trust in core team enabled it to acquire the position among top

business groups in India within a short span.



Execution Competence:

Successful execution and commissioning of 4620 MW thermal power plant at Mundra

Gujarat. It is the largest coal based thermal Power Plant in the country and completed in

record time.

Setting up 1000 km of +/-500KV HVDC transmission lines from Mundra, Gujarat to

Mahendragarh , Harayana. It is the first venture of its kind in the private sector in the

country.

Successful commissioning of 40MW Solar Power Plant at Nalia, Gujarat in record time.

Speed of Project Execution: To maintain leadership in market it is very important to implement the project at rapid pace from

conceptualization to commissioning. Adani Power has set up a benchmark for other players by

achieving completion of Mundra TPP as under:

Unit 1 (330 MW): 34 Months.

Unit 5 (660 MW): 36 Months.

Integrated Power Business:

Adani Power undertook the process of Power business integration by developing the supply chain

from mines development to power transmission. It was undertaken to meet the long term business

goals and also to be prepared with the rapidly changing power business environment in the country

and abroad. It is the only corporate which has covered all aspects of Power Generation like Coal

(Mines in Indonesia & Australia), owning port for handling coal cargo (Mundra, Dahej in India &

Abbot port in Australia), own infrastructure company who can execute Power Project on EPC basis

(Adani Infra (India) Limited), own Operation & Maintenance Group, developing HVDC & high

voltage transmission lines connecting its generation facilities with national grid.

Brand Name:

Adani Power is the largest power generation company (in private Sector) with capacity of 4620 MW

( thermal ) and 40 MW ( Solar) .



Experienced and Cohesive Team of Professionals:

Highly experienced team of professions from various disciplines of Engineering, Procurement,

Inspection, Execution, Project Management & Techno-commercial.

The Indian team is ably supported by our overseas team of international professionals in the field of

overseas mining, procurement, ports & infrastructure development in countries like Indonesia,

Australia, Singapore etc.

4. 2 Challenges:

Coal Supply : The limitation & constraints in mining sector in the country is causing big anxiety for assured coal supply to existing and upcoming power plants.

Increased pricing of imported coal due to imposition of additional duties/ taxes in the sourcing country like Indonesia( Adani’s principal coal importing source)

Land ,water , mines allotment for present & future projects.

Statutory clearance for upcoming projects.

Inadequate long term PPAs

Inadequate transmission lines for power evacuation

4. 3 Opportunities:

Adani’s integrated power business model It provided leverage in the present market environment

Scale of Operation :

By setting the largest thermal power plant and solar power plant in the country , Adani is better prepared to provide power to different segments compared to its competitors.

HVDC transmission Line:

By setting up 1000 km of HVDC line, Adani is in position to access and supply the power



deficient areas of Haryana, Westerns U.P. Delhi, Rajasthan and Punjab.

Power Trading :

Opportunity to sell power in open market thro’ our power trading division and gain better rates on power sold.

4.4 Threats:

Availability of fuel:

Though India has huge reserves of coal available, yet the mining capacity limitation, socio- political issues coupled with bureaucratic system is proving bottleneck to provide assured coal supply for existing as well as upcoming power projects.

Development of Mining Infrastructure and coal transportation have not kept pace with establishment of power generating stations.

Alternate sourcing of coal by import is becoming non-viable due to increased prices unless

tariffs are revised.

Environmental Clearance:

Due to global awareness on global warming, GOI has revised the guideline for environment & forest clearances for new projects. More stringent guidelines and bureaucratic approach results in delayed clearances.

Land availability:

Land requirement for setting up Power Projects is substantial and this calls for acquisition of land in big way involving relocation of local habitants. Land acquisition and relocation of local habitants are getting converted in to political issues and impacting project implementation.

5. Industry level ‘CSF’ for Adani Power Limited:

Ability to cover complete supply chain from producing / sourcing the raw material mainly coal

today to trading of final product i.e. power

Ability to implement projects faster as compared to other players.



Ability to get fuel security (coal in adequate quantities and at affordable prices) as compared to other players in power

Ability to access the market /customers in wide geographical locations as compared to

other power developers.

5.1 Firm level ‘CSF’ for Adani Power Limited:

Developing expertise for handling EPC business by acquiring desired knowledge & skill.

Timely addressing to the concerns of the stakeholders.

Project Financing.

Competent, Motivated and Cohesive Team of Professionals.

Strong Risk Management competency.

6. Innovation implemented by Adani Power Limited:

Introduction of Supercritical technology

Introduction of HVDC in the private sector

Procurement Strategy

Valve Hall Building in Steel Structure

Finalization of Design Basis Reports, Specifications and Tenders while awaiting clearances/

approvals.

Standardization of Technical Specification for infrastructure facilities:

7. Promoting a culture of “Ownership of Aspirations, Intellectual Leadership and Speed:

The desire and effort to excel, open to new ideas & learning, coherence in thought-process & strategy, dedication and integrity demonstrated by top leadership have set examples for others to follow.



Systems are in place to encourage decision making at all levels, removal of bottlenecks and

hurdles within shortest possible time. It is a driver for speed of project implementation.

Thrust on training and development of every individual. Identified Individuals Development Plans incorporating formal training and On Job learning.

Well defined roles, job descriptions, reporting relationships, jointly agreed and signed key

result area increase commitment of employees.

Fair and Transparent reward and recognition scheme is in place.

A unique and generous Incentive policy has been formulated and implemented for all

employees. The incentives are linked to achievement of the project milestones.

+ =

Pankaj Shukla Adani Infra ( India) Limited Mundra

EDPM Report # 2_ Pankaj Shukla

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