Project Risk Management at Delaney Tires Storage; the Combination between PMI Approach and PT Inco Project Management Procedures

Habibie, Ir., IP, Agung Setyawan, IrPT Inco Central Engineering DP.08, Sorowako, South Sulawesi 92984, Indonesia Andi Erwin Syarif, Ir, IP., MTPT Inco Government Relation, DP.23, Sorowako, South Sulawesi 92984, Indonesia

ABSTRACT:PT Inco Indonesia was established in July 25, 1968. Presently, PT Inco is in their way of the second contract of work with Indonesian Government up to 2025. The total area contract of work is 218,528.99 Ha, have been divided into three provinces, Central Sulawesi Province is 36,635.36 Ha, South Sulawesi Province is 118,387.45 Ha and South East Sulawesi province is 63,506.18 Ha.

Our company vision is strive to provide a safe, healthy and stimulating work environment that maximizes opportunities to enhance PT Inco’s success as a high quality nickel producer. We take pride in promoting environmental responsibility and advancing safety in a whole company operation area. PT Inco is committed to ensuring that it will operate in a clean, healthy and safe work environment; will take necessary steps and invest approximately to meet its environmental obligation.

PT Inco has been investing capital expenditures to support Nickel Mining production in achieving 200 million pounds production target at 2010 by constructing new Tires Shop and Tires Storage Facilities. These 2 facilities will be the world largest facilities in the world of Mining Industry. Tires Shop ownership is Mining Department and the new Tires Storage will be owned and operated by Warehousing and Logistic Department.

Central Engineering section as the part of Support and Engineering Services Department at PT Inco has been doing development of these facilities for more than 2 years. Especially for Tires Storage facilities, Project Manager, the author of this abstract has been working for implementation of Project Risk Management throughout Project Life Cycle starting from Risk Management Planning, Risk Identification, Qualitative and Quantitative Risk Analysis, Risk response Planning and Risk Monitoring and Control. Currently, we are 95% in construction phase and will close out the project by early of July 2008.

From this session, it is an opportunity to combine and compare Project Risk Management process between PMI approach and PT Inco Project Management Procedures, also presenting the complexity of project compared with the competency level of Project Manager who is the author of this abstract. The key performance of this project will be quality, quantity, time frame, resources usage, costs and safety performance during project life cycle.

The lessons learned of this project will be conducted during project life cycle and ensured by the end of project phase this is recorded and presented to all project Managers and Management of PT Inco to ensure the same old mistakes won’t be repeated in the current and future projects.Key words: tires storage, risk management planning, risk identification, qualitative and quantitative risk analysis, risk response planning, risk monitoring and controlling, safety, and lessons learned.

1

1. PT Inco Profile; One of the World’s Premier Nickel Producers

1.1. General Overview

PT Inco for more than three decades, since the signing of its Contract of Work with the Indonesian Government in 1968, the Company has provided skilled jobs, shown concern for the needs of the communities in which it operates, benefited shareholders and contributed positively to the Indonesian economy.

PT Inco produces nickel in matte, an intermediate product, from lateritic ores at its integrated mining and processing facilities near Sorowako on the island of Sulawesi. Its entire production is sold in US Dollars under long-term contracts for refining in Japan. PT Inco’s competitive strengths include abundant ore reserves, a skilled, well-trained workforce, low-cost hydroelectric power, modern production facilities and an assured market for its product.

The Company is owned 60,80 percent owned by CVRD Inco, 20,1 percent owned by Sumitomo Metal Mining Co. Ltd, 17,9 percent owned by publics and The others are owned by consortium of 4 Japanese Company.

Through the strength of our people and resources, we strive to be a safe, reliable, and profitable growth-oriented primary nickel producer.

1.2. Vision

PT Inco intends to remain a leader among multinational businesses based in Indonesia by consistently producing high returns on investment while adhering to strong corporate values.

We will realize our vision by enabling employees to reach their full career potential and achieve outstanding results for our Company.

We will strive to provide a safe, healthy and stimulating work environment that maximizes opportunities to enhance PT Inco’s success as a high quality nickel producer.

We take pride in promoting environmental responsibility and advancing community development.

1.3. Mission

We will meet our commitment to:

Investors through sustainable and consistent long-term earnings growth.

Employees by ensuring safe, healthy and rewarding work.

Customers by meeting our obligations with respect to the quality and timely delivery of our products.

Indonesia through responsible corporate citizenship, fulfilling our Contract of Work commitments and community and environmental responsibilities.

PT Inco is committed to ensuring that it will operate in a clean, healthy and safe work environment; will take necessary steps and invest approximately to meet its environmental obligation

2. PT Inco’s Commitment in Environmental around Contract of Work

2.1. Environmental Management in Mining Land Operation

2

The commitment is spelled out in the Company policy relating to environment, health and safety stating that PT Inco is committed to sustainable development concept, taking into account the equitable balance between economic growth and sound handling of human health and environmental protection

Figure 1 - Nursery Activities for Mining Rehabilitation

The policy necessitates PT Inco not only to meet, but whenever possible, to surpass environmental national standard established by existing regulation.

PT Inco is committed to ensuring that it will operate in a healthy environment, by conducting continual improvement on the living environment performance, in the form of Post Mining Areas Rehabilitation, Sediment Control, Liquid Waste Control as well as Dust Emission Control.

Figure 2 - Plantation of Work in Post Mining Land

Since the post mining area reclamation was started on 1980, PT Inco has conducted continual improvement on their performance with sustainable development

principle. When the post mining area reclamation was started, they focused on erosion control. Since then many efforts has been done to improve the performance.

In 2003, PT Inco created standardization of post mining area reclamation which has been certified by Directorate General of Mining to meet the demand for an optimum result entirely. It consists of best practice of post mining area reclamation activities. Since then, the activities became an un-separated part of mining plan until execution level.

Up to the end of 2005 PT Inco Tbk has re-vegetated 2.844 hectares of post mining areas. PT Inco Tbk has cooperated with PSl-UNHAS and The Biotechnological Forest Laboratorium IPB in doing repeated surveys and studying the reproduction of many local endemic plants to support the local endemic revegetation program.

PT. Inco always tries to integrate the post mining area reclamation program with the community development program so people can take advantages from the company. The company invited Mr. Zukri Saad (consultant, former Executive Director of WALHI), to evaluate the reclamation program and to give recommendation over reclamation program which is integrated with community and local government development program.

Figure 3 - Areas Rehabilitation Status at the End of 2004 PT International Nickel Indonesia

Performance Monitoring Post Mining Areas

3

Re-vegetation Status Q4 - 2004

Figure 4 – ADITAMA Reward Gold Achievement from Energy and Mineral Resources Department, Republic of Indonesia, year of 2007.

2.2. Environmental Management in Processing Plant Area

In the year of 2006, PT Inco also Achieve the Gold of Aditama Reward from Energy and Mineral Resources Department, Republic of Indonesia due to the successful in controlling the erosion and managing the sedimentation in during Mining exploration, operation and post mining operation.

PT Inco also had been doing the installation of new high technology called Off Gas Cleaning System throughout all the Processing Plant System starting from Furnace System since year of 2004. The objective of this project is to reduce the

amount of gas emission produced by the process plant operation.

The other program is Hydrocarbon Management which is ensuring that all the hydrocarbon use must comply with environmental regulation by Indonesian Law. The scopes of the program covered in Environmental Management Standard – EMS 01 produced by PT Inco with the purposes are:

a. To ensure all Hydrocarbon facilities at PT Inco recorded in a Central PTI Hydrocarbon Management Register that will be accessible and kept up to date.

b. To ensure all Hydrocarbon facilities are subject to a formal environmental risk assessment and that appropriate control are implemented.

3. Support and Engineering Services Department of PT Inco; Place for Managing the Capital Projects

3.1. General Overview

Support and Engineering Services (SES) provides support to the entire PTI organization in the form of Capital Project Management, Engineering services, Construction Services, Fabrication, Maintenance System support and Shutdown Planning. There are approximately 500 PTI employees in the department, while approximately another 500 people are managed through contractors.

3.2. Vision

Excellence in selection, installation and maintenance of Assets required by PTI to meet is vision. A team of highly skilled, energized professionals delivering this Support Safely, reliably and predictably.

3.3. Mission

4

Provide Asset Management Support to the entire PTI organization in the form of Capital Project Management, Engineering services, Construction Services, Fabrication, Maintenance System support and Shutdown Planning.

Figure 5 – Inco Capital Project Development Process

3.4. Goals and Objective

a. Capital Projects delivered safely, on time, on budget and meeting the owner’s expectations.

b. Safe, cost effective, timely and high quality delivery of construction projects.

c. Installation of the Asset Management Framework.

d. Support for the operating departments to maintain PTI’s assets to fulfill the stakeholders’ sustainability expectations. e. Effective and efficient maintenance

shutdowns every time. f. Effective People meeting personal

and organizational goals.

4. Delaney Tires Storage Project

4.1. The Background and Key Objectives

Anticipating the tires crisis for few years period, SCM needs to maintain the tires stock level until we get the long-term tires supply contract. The desirable storage must be able store more than 1,800 pieces of big, medium and light tires. The new tires storage will be able to support 200 Mlbs production rate in year of 2011. The final desirable objective is to increase the tires life usage since the new area will provide shelters and pavements to protect the tires from direct sunrise, rain, and any spillage on that location.

Some critical items were considered in the design to meet the desirable Tires Storage facilities (Q&A): The storage can store larger quantity of

tires requires larger area of storages to meet adequate storage and handling procedures. The storage and handling procedures have met the tires manufacturer's recommendation.

Tires and rubber products are subject to ageing. The new storage will ensure this kind of product to be stored properly.

Tires products must be protected from direct sunrise and extreme temperature.

5

Therefore we designed covered shelter for this purpose.

The location should be considered free from wet, oily and greasily, humidity that can reduce the tires quality. We provided storage with proper pavements inside the shelters and impermeable base entire access road.

Tires storage may become breeding grounds for insects, rodents and other animals. Mosquitoes in particular are capable of transmitting diseases to humans. We ensure the storage area has proper drainage and free from ponding.

The tires asset is US $ 20,000,000. The storage requires fire prevention system.

4.2. Scope of Works and Status

4.2.1. Scope of WorksThe original scopes are to construct the proper Tires Storage Facilities in accordance with standard storage and handling design requirements. Land clearing, excavation, haulage and

backfilling work for more than 50,000 M3

Civil/Structural: to provide tires storage shelter complete with tires backrest and proper pavement, drainage, fencing 800 meters long.

Mechanical: to provide fire protection system in accordance of NFPA requirements. The system will include the fire storage tank, diesel engine pump, piping, separated fire block walls and other related facilities.

Electrical: to provide grounding system around the storage area

4.2.2. StatusSafety:Total man-hours = more than 90,000 hours CV Mahalona = 90,000 hours

(Delaney Tires Storage)

PT Lintech = 3,000 hours (Installation of 420 kL of Water Tanks at Delaney)DI = NILMA = NILRI = NIL

Schedule: Project Initiation : June 2006 Project Planning : July 2006 Project Execution : October 2006

Design phase : October 2006Tendering/contract: January 2007Construction : February 2007Commissioning : July 2008

Project Monitoring and Controlling : during project life cycles

Project Closeout : September 2008

The project has been handed over to operation (CCC) by middle of July 2008 and Closed out Memo by middle of August 2008.

Budget:Amended CAR was approved for $1,270,000Expenditure + commitment to date: around $1,330,000

4.3. Project Risk Management at Delaney Tires Storage Project

Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective, such as time, cost, scope, or quality. A risk may have one or more causes and, if it occurs, one or more impacts.

Project Risk Management comprised of 5 phases that is classified to Planning Phase Group.

6

Figure 6: Project Risk Management Overview

4.3.1. Risk Management Planning Risk Management Planning is the process of deciding how to approach and conduct risk management activities for a project.

Inputs Tools and Techniques

Outputs

1. Enterprise environmental factors

2. Organizational process assets

3. Project scope statement

4. Project management plan

Planning meetings and analysis

Risk management plan

Figure 7: Risk management Planning: Inputs, Tools and Techniques, and Outputs

4.3.1.1. Risk Management Planning: Inputs

1. Enterprise Environmental Factorsa. The existing organization is

categorized as composite organization. The staffs who worked for Project Manager of this project were also working for other projects that were led by other Project Managers.

b. Other environmental factor to consider, many projects were running and also required special attentions to get it finished otherwise the number of resources such as manpower, materials, budget, equipment and tools were not sufficient.

2. Organizational Process AssetsThe existence of Project Manager’s department is only supporting department since PT Inco core business is focusing in on going operation to producing Nickel Matte product (Process Plant and Mining Department).

3. Project Scope StatementDescribed in 4.1 and 4.2

4. Project Management PlanProject management plan questioned and answered about: Kinds of project management

process selected by project team? The project scope management will be conducted by Central Engineering team after having intensive meeting with project sponsor regarding product descriptions, background and project objectives. After having scope and WBS defined, the Project Manager moved to design and drawing phase to accommodate all the scope requirements as per project objectives. Tendering and contracting out to contractor were the next phase and project close out will be the last phase as per PT Inco project management procedures.

How’s the technique of communication among stakeholders? Communication is maintained via intensive meeting (daily, weekly and monthly), communication can be continued via email, extension phone or via written (site query, if it occurs

7

between Project Manager and Contractors).

The model of project organization structure? It is defined in figure 7.

List of materials equipments to be purchased and who are going to supply? Project Manager listed all materials and equipments for purchase and addressed it to SCM – Procurement Departments.

Figure 8 - Failure to Communicate Scope

Figure 9 - Simple Project Organization Chart of Delaney Tires Storage Project

What are the Environmental, Health and Safety Impact? Project Manager established HSE Evaluation/Hazard and Operability to ensure project phases and end of products to comply with PTI EHS policy and Major Hazard Standard (EHS).

4.3.1.2. Risk Management Planning: Tools and Technique

1. Planning Meetings and AnalysisProject Manager and team hold planning meetings to develop risk management plan. Attendees at these meetings may include selected project team members and stakeholders, anyone in the organization with responsibility to manage risk planning and execution activities, and others, as needed.

4.3.1.3. Risk Management Planning: Outputs

1. Risk Management PlanThe risk management plan will discuss about:a. Methodology of doing the project

starting from scope development phase, budget submission, design and drawing phase, construction phase, commissioning, hand over to operation until project close out.

b. Roles and responsibilities. Every team members have their own type of activity, assign people and his/her roles, and clarifies their responsibilities.

c. Budgeting. Assigned resources and accurate estimate as per project scope, schedule and risk during project life cycles should be factored.

d. Timing. Defined when risk management process will be performed throughout project life cycles, and established risk management activities to be included in project schedule.

8

Project ManagerIr. Habibie, IP

Project EngineerAgung Setyawan, Ir

Sponsor: Ichsan AzisManager of Warehousing

Owner: J. RusdadiGM of Warehousing and Logistics

Construction ManagerYusri Yusuf

Contractor: PT. MahalonaPT. Lintech Duta Pratama

Design Engineer:Agung Setyawan (Civil)Oesman Reza (Mechanical), Dahlan (Electrical)

e. Risk categories. Risk breakdown structure was provided to ensure a comprehensive process of systematically identifying risk to a consistent level of details.

f. Definitions of risk probability and impact. PT Inco has risk ranking matrix to be used for analyzing the rate of risk in every activities throughout project life cycle.

Figure 10: Risk Breakdown Structure

4.3.2. Risk Identification Risk identification determines which risks might affect the project and documents their characteristics.

From Risk Breakdown Structure (RBS) we can identify the risk in each category as follows:

1. Technicala. Requirements

The requirement can be defined as per scope of work as described in 4.2.1. Special requirement was to provide complete fire protection system comprised of 420 kL of water tank, fire pump and hydrant were the requirement to ensure the

new facilities covered by insurances.

b. TechnologyThe new Delaney Tires Storage will have complete fire protection system as per NFPA requirements. Project Manager and Mechanical Engineer will need to specify the specification of diesel engine fire pump since the mechanical and instrument part should follow the latest technology so we can obtain the engine and pump spare parts easily.

c. Complexity and interfaces Project Manager worked

together to specify the requirements of each scope of works consist civil/structural, mechanical and electrical discipline. Also required to establish the sequence of construction to ensure the work can be done properly to meet quality and schedule.

Excavation, haulage, backfilling and compaction work more than 50,000 M3 was a huge major earth work and required special attention since land sliding has been happening few decades at PT Inco area. Required to establish proper planning of execution and geotechnical investigation before then to identify the characteristic of soils.

d. Performance and reliabilityRequired to ensure the performance and reliability of all related equipments and materials which were purchased comprehensively to ensure the new storage facilities will achieve 25 years design life.

e. QualityQuality assurance and quality control should be established during procurement and

9

construction phase. The specification of steel structure, concrete specifications, piping, fire pump were reviewed closely.

2. Externala. Subcontractors and Suppliers

The construction contracts were divided in two contracts: PT Mahalona (Local

Contractor) worked for Earth works, civil/structural, mechanical piping and grounding installation. The erection of structural work with 200 tons total erection and 50,000 M3 earth work were really big challenge for local contractor since this was categorized a high risk work. Project Manager took a risk to get this work done utilizing local contractor rather than experienced national contractor

PT Lintech Duta Pratama worked for 420 kL of water tank fabrication and installation. The contractor is specialist in doing tank so there’s no significant challenge for this kind of work.

b. RegulatoryPT Inco was committed to improve safety regulation throughout all operation activities in contract of work area. Major Hazard Standard (MHS) and General EHS Standard was developed and socialized for implementation for all design, construction and operation activities. Here are listed the MHS and General EHS as mandatory to follow during project life cycle MHS 03 Road Condition MHS 05 Electrical MHS 06 Working at Height MHS 07 Confined Spaces MHS 08 Lifting and

Supporting Loads MHS 10 Slope Stability

MHS 12 Boilers and Pressure Vessels

MHS 15 Rotating and Moving Equipments

EHS 01 Hydrocarbon Management

c. MarketNot applicable

d. CustomerThe customer or Project Sponsor of this project was Warehousing section and owned by PT Inco Warehousing and Logistics Department. The new storage facility has met the objectives of business case and has been operated for PT Inco long term objectives in term of tires stock management and tires quality maintenance.

e. WeatherWeather was also a significant risk which was taken in to account. During earth work and construction, the contractor had factored the weather since it was rainy season on that time. Especially for earth work (compaction work), it was difficult to get optimum compaction if the water content of soil was very high. Also the risk of having the equipments did excavations while the area was very slippery and unstable.

3. Organizationala. Project dependencies

Project Manager must factor the sustainability of PTI business operation as the number one priority. In addition, there were also so many operating and capital projects were running and need equal attentions to finish to meeting cost, schedule and safety. In this situation, Project Manager looked at bigger picture and integrated thinking to be more tolerant to other projects if those were required to finish based on

10

the urgency and importance of the project related to PTI business need.

c. ResourcesPT Inco is a composite project organization model. Project Managers are having multiple projects and also other resources such as Engineers, Designer, Procurement Analyst have different projects. Project Managers must be agile to adapt with all project team members if they want to succeed their projects. Equipments and materials were also major factors since they were also used by other projects.

d. FundingThe source of funds for this project was coming from Capital Appropriation Request (CAR) approved by PT Inco Management. Project Manager. Project Manager did second CAR Amendment due to location moved from Palapa Area to Delaney area which was the new area was green field (re-vegetated area) and out of utilities services. The extensive scopes of works and rate of settlements (geotechnical matter) in this new area were very significant to revised budget addition.

e. Prioritization Described in organizational, project dependencies.

4. Project Managementa. Estimating

The level of estimate was very important to project successful. Project Manager did estimate three times due to change of proposed storage location caused additional scope of works increased significantly. There were more than 200% increased cost from original budget.

b. PlanningPlanning process comprised of project scoping phase, sequence of

activities, estimating, procurement plan, Hazard and operability (HAZOP) and risk ranking review. Risk of each design and construction activities can be identified using Hazard and Operability (HAZOP) form as a technique to identify and rank the risk during planning process.

Figure 11 : Hazop Deviation Matrix

c. ControllingProject monitoring and controlling is defined as phase to monitor and control all activities in each project phase to ensure everything is meeting planning process. Change of project location (from Palapa area to Delaney area) as requested by PTI Management decision was recorded to integrated change control, scope verification due to additional works, schedule adjustment and cost impact were documented properly in this process group. Poor project documentation will lead Project

11

Manager into big problem since the company also has been auditing the improper procedures or lack of implementation project delivery system around PT Inco.

d. Communication Described in 4.3.1.1 Risk Management Planning: Inputs

4.3.3. Qualitative Risk AnalysisQualitative risk analysis includes methods for prioritizing the identified risk for further action.

Risk ranking matrix will show the risk score in every design or construction parameters. If the level of consequence is 3 or 4 and frequency is 3 or 4 then this parameter should be prioritized for further action or recommendation.

4.3.4. Quantitative Risk AnalysisQuantitative risk analyzes the effect of those risk events and assigns a numerical rating to those risks. It also presents a quantitative approach to making decisions in the presence of uncertainty.

The Project Manager didn’t use this process in the project since all risks are certain and could be predicted.

4.3.5. Risk Response PlanningRisk response planning is the process of developing options, and determining actions to enhance opportunities and reduce threats to the project’s objectives. Risk response planning addresses the risk by their priority, inserting resources and activities into the budget, schedule, and project management plan, as needed.

Figure 12: Risk Ranking Matrix

Implementation of risk response planning during planning process group of the project as follows:

1. Avoid. Risk avoidance involves changing the project management plan to eliminate the threat posed by an adverse risk, to isolate the project objectives from the risk impact, or to relax the objective that is in jeopardy, such as extending the schedules or reducing scope.

12

Project M

anagement

Organization

External

Technical

Improved

com

munication

betw

een

all stakeholders

of

the

project

to

ensure

comm

unication

and

information

are

maintainable.

Asked O

wner and Project Sponsor to take

decision on moving from

Palapa Area to

Delaney A

rea which w

as the area out of utilities services and green area. T

he Project Manager

didn’t take responsibility on changing the location.

Asked

Mining

operation

(internal

PT

I organization ) to do haulage process for sub base and base of access road and storage base

1. Selected contractor that is qualified in erection w

ork and earth work. 2. A

sked Geotechnical

Engineer to assess existing land for storage

location due to the location was disposal area

Risk A

voidance

Released

construction w

ork

to

contractor since

PT Inco

didn’t have

adequate

resources to

do the

Asked

independent

consultants to review the

design of fire protection system

for

insurance

Risk T

ransfer

Let internal organization

(procurement

section)

to

provide

procurement

of

equipments and m

aterials since contractor didn’t have adequate resources such

as purchasing team

, port, shipment, etc

Performed

in-house scope

development

and engineering to ensure all requirements

are completely defined.

Risk M

itigation

To

establish contingency

in the budget estim

ate to allow

additional

scope

during construction phase.

To

utilize local labour to

prevent

social

conflicts around PT

I contract of work

Risk A

cceptance

Figure 13: Risk response Strategy versus Risk Breakdown Structure

2. Transfer. Risk transference requires shifting the negative impact of a threat, along with ownership of the response, to a third party.

3. Mitigate. Risk mitigation implies a reduction in the probability and/or impact of an adverse risk event to an acceptable threshold.

4. Acceptance. A strategy that is adopted because it is seldom to eliminate all risks from a project. This strategy indicates that the project team has decided not to change the project management plan to deal with risk.

4.3.6. Risk Monitoring and ControllingRisk Monitoring and Control is the process of identifying, analyze and planning for newly arising risks, keeping track of identified risks and those on the watchlist, reanalyzing existing risks, monitoring trigger conditions for contingency plans, monitoring residual risks, and reviewing the execution of risk responses while evaluating their effectiveness.

Project Manager did some tools and technique to ensure the project risks could be resolved during project execution consisted of:

1. Weekly Progress MeetingProject Manager and team conducted weekly project meeting to discuss the progress of the project including discussion about risks, particularly threats, how to deal with it and better solution so the risks didn’t impact the deliverables of the project (schedule delay, cost, or poor quality of works).

2. Risk AuditsProject Manager and team established and maintained Safety Layer Audit (SLA) Program during construction phase to ensure the project complied with Major Hazard Standard (MHS) which are the

13

highest commitment of PT Inco in safety policy and procedures. This audit was conducted once a week by Project Manager and Team.

4.4. Final Product of Delaney Tires Storage

The final products of this project are: 2. New storage area 2.5 Ha

comprised of access road, storage compartments, fencing around storage. The total volume of excavation and backfilling work for this area were around 50,000 M3.

3. Storage compartments made from structural steel and paving block pavement which are able to store more than 1,800 each of big and medium tires for heavy and medium equipments. The maximum size of tires diameter 2600 mm outside diameter. The total weight of structural steel works are around 200 tons. Every storage compartments to be grounded by loop system.

4. Fire protection system consisted of: Fire piping (above ground used 50

meters long carbon steel pipe and underground used 300 meters long ductile iron pipe with mechanical joint connection).

420,000 liters of cylinder water tank made from mild steel plate (8 meters diameter and 8.5 meters high).

Fire pumps which are able to give 1850 g-pm during an hour of duration.

Fire hydrant (4 units). Each unit consisted of 2 wye valve hydrant (given pressure: 500 g-pm/each for primary hydrant and 250 g-pm/each for secondary hydrants).

Portable Fire Extinguisher are available in every 2 bays of storage compartments.

Fire separated walls installed in every 3 bays of compartments (installed fire block walls for every 120 each of tires).

Figure 14: Delaney Tires Storage Layout and Cross Section

14

4.5. Lessons Learned Obtained from Project Life Cycles

Project Manager is not experienced in this case, to ensure risks are identified and resolved, He involved Technical Experts, Senior Project Manager and Engineering Manager during project life cycles as places for advices and suggestions.

The changes of scope of work and change of location had increased the costs significantly. In this case, PTI Management should be having proper planning on where they were going to put these facilities to meet company business need. Project Manager and Team were victims of improper planning.

Required to determine or identify the risks since early beginning to ensure the risks can be controlled and monitored that can impact schedule, quality, scope addition and cost. Project Manager has utilized PMBOK Third Edition as guidance for proper Project Risk Management combined with PT Inco Project Management Procedures.

Reference:

1Project Management Body of Knowledge, 3rd Edition. Project Management Institute, Four Campus Boulevard, Newton Square, USA, 2004

2Capital Project Owner’s and Sponsor’s Handbook. PT International Nickel Indonesia, 2005

3Engineering Procedures Manual. PT International Nickel Indonesia, 2006

4PT Inco website: http://www.pt-inco.co.id/new/profil.php, 2006.

15