EDPM Report # 3_ Pankaj Shukla

EDPM TRAINING REPORT 17-19 AUGUST ,2012 NEW DELHI

1 PANKAJ SHUKLA, AIIL MUNDRA

Subject Advanced Project Risk Management

( PMR-3)

Name Pankaj Shukla

Organisation Adani Infra ( India) Limited

Date 12.09. 2012

EDPM TRAINING REPORT- 3 17-19 AUGUST , 2012 NEW DELHI


“RISK LEADS TO OPPORTUNITIES & VICE-VERSA. HENCE, THEY MUST BE IDENTIFIED, ANALYSED &

Taken care of SIMULTANEOUSLY AND NOT IN ISOLATION. “

Risk & Opportunity Management is undertaken to achieve :

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

. . . & MAKE THE Project successFUL



1. ADANI Vision

2. Adani (Mundra) Power Project Life Cycle

3. Adani Project Risk Management Processes Mapping

with respect to IEDPM Module -3 study

4. Conclusion

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:



Being the new entrant into the power sector , several exhaustive and in-depth brain storming

sessions were required to be carried out to identify various risks ( internal & external ) and also to

know the business opportunities ( long term & short term) prior to venturing into Thermal Power

Business.

2. Project Life Cycle : ( Risks Vs Opportunities).

Risk Management procedures were implemented in all the phases of the project , few in

formal way and others informally.

a. Conceptual Phase of the Mundra Power Project:

The following initial thought process was undertaken in the early days that led to Adani

Group venturing into Thermal Power Business. It was based on various exhaustive

discussions, consultations & brainstorming sessions with various stakeholders, technology

providers & the Promotor. The primary issues discussed were the project feasibility , risks

involved ( external & internal ) and the opportunities available in the power sector.

The major discussed issues along with respective risks and opportunities were:

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

Government guidelines & PPA prospects in the sector.

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

availability, transmission lines ,water etc).

Socio-geographic & political condition in the country.

Local vendors manufacturing capabilities, technology and alternative sourcing of

equipments.

Challenges of resources mobilisation, funding, technical know-how

Organisation strength & weakness.

Immediate capacity setup and future capacity expansion possibility.

Project management setup

Competition

The risks & opportunities were discussed amongst top management teams. Project Charter & Risk Register were implemented in an informal way at this stage.



b. Planning Phase :

After obtaining the consensus of the stakeholders and supported by the study that

available opportunity far outweighs the risks involved, the Project obtained go ahead.

This phase led to the detailing and establishing procedures & guidelines for technology

selection, vendor selection, project engineering, procurement, contract management,

monitoring & control and MIS reporting for schedule, budget/ cost, resources, quality

and HSE.

This helped to manage the risks involved during planning stage with respect to

Engineering, Schedule, Costing, Quality , Safety etc.

c. Implementation Phase:

The power project was started with 2 units of 330 MW each capacity.

The units were based on proven technology, the units were of mid-size,

The site was free of forest, mining area & wildlife sanctuary zone.

The land was mostly unpopulated

Sea water source was nearby.

Well established sea port & infrastructure of the Group available.

Well established vendors and contractors were deputed on the project.

Experienced team of professionals deployed.

. This helped to manage the risks involved during implementation stage with respect to

Engineering, Schedule, Costing, Quality , Safety etc.

d. Closure Phase:

Lessons learnt are being documents for future project.

Well developed Training Centre / Simulators are used to upgrade the

operational skills of the O & M team.



3: Project Risk Management Processes (w.r.t IEDPM Module-3 ) mapping in context with Adani Power Group

Being the new entrant into the power sector , several exhaustive and in-depth brain storming

sessions were carried out to identify various risks ( internal & external ) and also to avail the

business opportunities ( long term & short term) to venture into Thermal Power Business..

Risk Management

Process

Tools required as per

IEDPM

Tools / procedures implemented in

Adani Power

1. Project Risk

Identification

.Expert review

Brainstorming

Analogy Method

Check list

Questionnaire

SWOT Analysis

.Expert review

Brainstorming

Analogy Method

Check list

Questionnaire

SWOT Analysis.

2. Risk

Categorisation

External

Unpredictable

Predictable ( but

uncertain)

.

Management contingency plan

is established.

Project contingency plan is

established.



Internal

Financial

Technical

Legal

Schedule

Budget / cash flow is prepared.

Liquidity is managed.

Well established Contract

Management team in place.

Internal /External Audit

undertaken by reputed

auditors.

Experienced technical team

deployed at the project.

Well established in-house

Engg team

Well established training

centre available

Extensive training to staff.

Well established technical

libraries at project sites and

HO.

Regular learning sessions are

arranged.

Highly experienced team to

mange contractual managers

and to reduce contractual

ambiguity.

Well established Legal team

to manage Licensing and

Lawsuits if any.

Well established Project

Management Team to develop

WBS & schedules

Regular monitoring & control

of the project progress &

constraints.

Regular updation for accuracy.



3. Risk Analysis

.Qualitative

Expert judgment

Decision Tree

Probability

Assessment

Impact Assessment

Quantitative

Beta Distribution

Monte-Carlo

Simulation

Financial

Measurement

Regular brainstorming session

& discussion is held at top

management group.

Lesson learnt files / cases are

studied.

Analogy from past project

experience is studied.

Discussion with external

experts from the industry is

invited and implemented.

Decision tree concept to

analyse the risk is done.

Cause-effect study is done at

various level.

Informal study / discussion is

done regularly to assess the

probability of various risks

and the effects thereof.

Probability assessment

coupled with impact

assessment for risks is

undertaken by project team

members.

Past experience and general

trend is used for risk analysis.

Various financial indicators

such as cash flow, profit

margin, IRR, NPV, Life Cycle

Cost and RoA etc are

regularly monitored and

estimated.



4. Risk

Prioritization

List of identified &

analysed risk list

Prioritisation

structure

Prepared and circulated to

HODs for review &

finalization

Structure developed based on

probability

Undertaken based on impact

Undertaken based on past

experience and lessons learnt

Formal discussion at Senior

Management Level and cross-

functional project teams

undertaken.

Regular review of the risk

priorities discussed.

Formal risk register not

implemented.

5. Risk response

plan

Risk response plan

to be in integrated

with overall Project

Plan and milestones

Identified Risk List

Inputs from risk

analysis.

Inputs from risk

categorization.

Inputs from risk

prioritization

Implemented in non formal

way


way

Incorporated

Incorporated

Incorporated



Risk Register

Responsibility

Matrix

Strategy for risk

management.


way.

Established with emergency

response plan

Based on risk criticality ,

probability & impact criteria,

case to case basis strategy for

various risk developed.

Avoidance

Transfer

Mitigate

Acceptance

6. Risk Response

implementatio

n

Risk List

Risk probability-

impact analysis

Responsibility

Matrix

Risk Monitoring

Regular consultation and

review / updation of the

identified risk list done.

Exhaustive brainstorming

across various project groups

done. The Cause- Effect study

for various risk done.

Non formal documentation

Staff responsibility matrix

established in informal way

amongst the stakeholders.

Regular interaction with

various stakeholders

undertaken. The outcome were

non formally documented.



Risk control

Review of Risk

response Plan

Risk register

Lessons Learnt

Risk response is implemented

on case to case basis by

Avoidance

Transfer

Mitigate

Accept

Risk response results are

reviewed with respect to cost,

time, quality and safety. As

required, the response plan is

revised/ modified for better

and more effective

implementation

Though, no formal risk register

is established, yet the risk

management processes

including response plan and

cause-effect analysis are

discussed with stakeholders

and team members. The

implementation plan and the

results are shared with

stakeholders and team

members.

Regular reviews of the risk

response plans, their

implementation and the degree

of success achieved led to

several valuable learning

opportunities.

These acquired lessons led to

to improved risk management

plan

These led to more effective

risk management strategies.



These led to greater awareness

and knowledge sharing

amongst the stakeholders.

This led to developing &

implementing certain risk

monitoring and control

mechanisms uniformly across

the organization.

4: CONCLUSION

1. Risks are part & parcel of any venture.

2. Risk Management Plan should be implemented at the inception of

the project.

3. Regular risk monitoring & control should be undertaken.

4. Expert Opinion should be sought in devising & implementing the

risk management plan.

5. All the stakeholders of the project should be appraised of the

impending risks as well as available opportunities.

6. Risk identification & control should be done timely before the risk

becomes a crisis.

Pankaj Shukla

Adani Infra ( India) Limited

Mundra ,Gujarat

EDPM Report # 3_ Pankaj Shukla

Documents

Transcript of EDPM Report # 3_ Pankaj Shukla