Project Planning, Value Engineering

and Risk Management

PROPOSAL FOR THE NEW TOWN

PLANT CONSTRUCTION
ASSIGNMENT-7BU504-100601249
Table of Content

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1.0 Executive Summary

Why is it Being Proposed - Read the background and understand the project –
summarize the ethos and rational of the project in 600 words approx.

The fundamental objective of the project is to resuscitate the dead economy of a people by
injecting a lifeline that will not only bring about the old glory but also improve it to meet the new
generation innovation and technology. The manufacturing and distribution park will close the
gaps of loss of jobs, money, support for local facilities, social stability etc., created by the
collapse of the former plant and restore the town economically and socially by opening the
windows of new investment and employment opportunities.

Beginning from the project inception to commissioning, opportunities such as provision of social
and physical infrastructure, skills, education, tourism, etc., would be trickling in and will grow
when the new plant becomes operational.

Nguyen, Ogunlana, & Lan (2004) opined that because the construction industry intermingles
with nearly all areas of human ventures qualifies it as one of the most important industries in
any economy. However, despite projected indicators are used to predict results, risk
identification and management are done to avert catastrophes and scheduling is employed to
ensure that the desired facilities are available as at when due, nonetheless projects still end up
with delays, budget overshoots and adjusted specifications (Nguyen, Ogunlana, & Lan, 2004).
This is so because the dynamics, ambiguity, and inherent complexity of most construction
project create challenges for even the best of managers (Nguyen, Ogunlana, & Lan, 2004).
Hence, it is in the light of this we would be examining prospect and approach to implementing
the new Town manufacturing and distribution park project.

Due to the size and complexity of the project, which inevitably elevate construction risk levels,
turnkey contract model is strongly proposed for the New Town Plant construction. This strategy
will not only assist the client to meet the project objectives but will also effectively transfer the
construction major technical risks to the contractor at a cost (Smith, Merna, & Jobling, 2006).

The programme of work shall comprise 6 main areas (substructure, frame, envelope, roofing,
services & finishings and external works) with 30 sub-components of works. The proposed
duration for the construction completion shall be for 30 months (starting from June 2022 and
fishing by November 2024) (Hore, Kehoe, McMullan, & Penton, 1997).

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The construction team is made up of three distinct parties, the owner, consultant team and
contractor team, working together to satisfy the interest of the client (owner) (Gahlot & Dhir,
1992). Architect, Quantity Surveyor, Structural Engineer, Service Engineers and Specialists
(Professionals in the construction industry) constitute both the consultant and contractor teams.
In addition, the contractor team would have clerk of works, suppliers, subcontractors, plant
hirers, factory inspectors and building control officers.

2.0 Building a Project Team

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Explain the structure and key components/skills of a project team capable of delivering
this project in 900 words approx.

The structure adopted for this project is the one that suits a turn-key project. The primary
purpose for this choice is to transfer all/most of the technical risk to the contractor. A fixed price
lump sum turnkey contract allows the contractor to cover all aspects of engineering,
procurement, and construction for the whole project (including health, safety, and environment
studies) (Smith, Merna & Jobling, 2006). With these responsibilities also comes the associated
risk burden on the contractor. The role of the client is to provide detailed specifications of what
s/he requires and awards a single contract for the entire facility. The detailed specifications
would be given by the client’s consultant team.

Therefore, three distinct parties constitute the construction team namely: the owner, consultant
team and contractor team, working together to satisfy the interest of the client (owner) (Gahlot &
Dhir, 1992). We have construction professionals (architect, quantity surveyor, structural
engineer, service engineers and specialists) being members of both the consultant and
contractor teams. In addition, the contractor team would have clerk of works, suppliers,
subcontractors, plant hirers, factory inspectors and building control officers.

Owner/client

Consultants Contractor

Architect Engineers/Specialists

Fig. 1: The Construction Team

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 Contractor

Architect,
Engineers &
Specialists

Subcontractor Subcontractor Subcontractor

Fig. 2: The Contractor Team

2.1 Owner/Client

The owners in this case are National Government and Regional organizations. They have the
final say (decision makers) over the project. They take decision on the type of contract, and
management and funding of the project. If need be, they approve changes to the scope and
delivery timeline. The owners constitute the construction team to serve their interests through
the services of both the contractor and the consultants. They control the project resources.
Finally, the owners take possession of the project and arrange for its maintenance at completion
(Gahlot & Dhir, 1992).

2.2 Consultants

Professionals in the construction industry constitute the consultants team. They include
architect, quantity surveyor, structural engineer, service engineers and specialists (geotechnics
expert, safety and maintenance planners etc.) (Gahlot & Dhir, 1992). The specific role of this
professional includes:

1. Architect: The architect is usually the lead consultants except in civil engineering
projects (bridges, dams, highway etc.). They are the first point of call when a client
decides to build. The client’s idea of what s/he wants is shared with the architect who in-
turn design to suits the client\s functional and aesthetic needs. The architect also assists
the engineers in the design proper (for safety and economy).

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 2. Structural Engineer: The structural engineer designs the structural elements of the
proposed property for stability and cost effectiveness. They also produce the working
drawings based on the architect’s plans.
3. Mechanical Engineer: The mechanical engineer is responsible for the designs and
preparation of the working drawings associated with mechanical services such as air
conditioning, ventilating and heating systems, lifts etc., in the construction project.
4. Electrical Engineer: The electrical engineer designs and prepare the working drawings
for the electric power distribution systems of the construction project.
5. Quantity Surveyor: The quantity surveyors are also known as cost engineers. They
prepare bill of quantity and manage cost of the construction project. To achieve this, they
implement the following:
i. Prepare the priced and unpriced bill of quantities and tender documents;
before the invitation of contractors to bid for the construction project;
ii. Check work done and issue payment certificate during construction;
iii. Assess variation due to unforeseen circumstances for approval;
iv. Prepare cash-flow statement for the construction project;
v. Prepare final account for the completed construction project.
6. Specialists: They perform special functions relating to health and safety, soil
investigation, equipment use etc. They are usually consulted for advice on specific
problems on site relating to their expertise.

2.3 Contractor

This is the person or company who gets the work done. The contractor employs the services of
construction professionals to execute the project. Hence, similar roles played by the consultant
team, and even more is expected from the contractor’s team. Some members of the contractor
team handle designs (architects and engineers), tendering (quantity surveyors), scheduling
(construction managers) etc., and occasionally visit the site to check what is being done against
given specifications. Other team members are stationed at the construction site to carry out the
construction e.g., surveying (surveyors), construction (engineers and builders), billing (quantity
surveyor) etc.

In this project, because of its size and complexity, it is expected that the contractor and her
basic team may not have all the requisite skills and know-how to complete it. Therefore,
specialist and other professionals like health and safety, soil investigators, clerk of works,
factory inspectors, building control officers, etc., would be brought in by the contractor. In the

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same vein, some specialist work would require the services of suppliers, subcontractors, plant
hirers etc.

Meanwhile, being the major executor of the project, it is the responsibility of the contractor to
plan for labour, machinery, materials, power etc., to complete the work within agreed period and
budget.

Good understanding of the different roles expected of the construction team (owner,
consultants, and contractor) and proper synergy would achieve speed, economy, efficiency, and
quality in the execution of the New Town Plant construction project.

3.1 Planning the Project

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Produce a simple Gantt chart using excel to show how the tasks are sequenced see
notes provided

Split the Gantt chart into 6 main areas of work with a sub heading for each.

The chart should show the duration of each task and how it is linked

Note – it is expected that the Gantt chart will have 30 phases

PROJECT SCHEDULE

To be completed within two and half years (639 days) from the date of signing of contract. This
project will use 5 days working week calendar. The project start date is Wednesday 20th April
2022 and completion shall be Monday 30th September 2024.

MILESTONES

S/n Task Duration Start Date Finish Date

1 Preliminaries 110 days 20/04/2022 30/09/2022
2 Substructure 50 days 21/09/2022 29/11/2022
3 Frame 160 days 30/11/2022 11/07/2023
4 Envelope and Roofing 130 days 12/07/2023 09/01/2024
5 Building Finishes and Services 205 days 15/11/2023 27/08/2024
6 (a) External Works and Inspection 25 days 21/08/2024 24/09/2024
(b) Final Completion Documentation 4 days 25/09/2024 30/09/2024

Risk Assessment

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Produce a project risk schedule, on the template to be provided, with what you consider
to be the top 10 project delivery risks, their risk level (low, medium of high), an
approximate delay to the project and depending on the area of the work they fall into the
cost, based on the figures provided for delays.

For each risk explain briefly why you consider this is a top ten risk.

RISK ASSESMENT

Some of the areas of risks considered include:

a) Legislations relating to land titles;

b) Political Environment in the United Kingdom;
c) Economic factor relating to unstable market conditions;
d) Natural occurrence;
e) Contract related issues;
f) Science and technology;
g) Organization capacity;
h) Resources relating to delivery of materials; and
i) Human factors

Initial Risk

For each risk explain briefly why you consider this is a top ten risk.

1. Receive notice to proceed and sign contract - Unrealistic Deadline Risk

This is a contract related risk associated with over desperation on the part of the contractors to
have an edge over competitors to win the contract bid. Therefore, a deliberate act to shrink the
project delivery timeline to an unrealistic deadline could put the entire project at risk. Although,
this risk is rated medium on the probability of occurrence scale, its impact is however very high
if it does occur.

2. Obtain Building Permits - Permits and Agreement Risk

Since the land area had been abandoned for a while, there is the high possibility of the right of
way issues arising due to development in the area. Such illegal/legal occupants might be
unwilling to let go their properties for a right of way. The impact of this risk is very high to the
overall success of the project, but the probability of occurrence is low.

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 3. Long Lead Procurement Initial Cost Estimates - Price Rises/financing Conditions Risk

Project financing is a serious business. Unforeseen circumstances leading to delay in project

financing could impact major procurement schedule that could in-turn be caught in the web of
unstable market condition with a possible price rises to the initial projections. This risk has both
high probability of occurrence and impact.

4. Long Lead Procurement - Policy Changes/Breach of Existing Agreements Risk

This project is government related. Hence it is subject to major policy change risk/breach of
existing agreements especially if there is an election that changes the government or major
supplies is coming from another country like Ukraine where situation of war had put many
projects in a precarious state. This risk has both high probability of occurrence and impact.

5. Excavate Foundation - Subterranean Water Risk

Ground condition sometimes exhibit certain phenomenon (natural occurrence) that raise the risk
exposure of project delivery. For example, subterranean water risk impact on project is high but
the probability of occurrence is low due to availability of sound soil investigation.

6. Erect Steel structures - Late Delivery of Materials Risk

If procurement of steel is delayed as envisaged in 3 and 4, the erection of steel activity cannot
be implemented being a major resource for the activity. This is a very high risk in both
probability of occurrence and impact.

7. Form and Pour Concrete - Bad Organization of Works Risk

This is a long period activity (22 weeks) involving many workmanships, hence requires sound
organization of the works. Poor organization of work is a very high risk in both probability of
occurrence and impact.

8. Masonry Work - Errors and Omissions Risk

A good brick setting requires skilled and meticulous masons. However, errors and omissions
are sometimes inevitable human factor that can occur. The probability of occurrence and impact
are both mild because such mistakes could easily be corrected if detected on time.

9. Set Elevator and Equipment - Poorly Chosen Technology Solutions Risk

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This is a mechanical piece of equipment that not only requires up to date technology but also
the right choice to serve a specific purpose (e.g., elevator for 840kg weight cannot serve 1680
kg weight). The probability of occurrence and impact are both mild for this risk.

10. Set HVAC, Equipment, Trim, Test and Balance System- Imprecision Risk

As in 9 above, this is also a mechanical piece of equipment that requires both up to date
technology and the right choice to serve a specific purpose. In addition, it requires accuracy and
precision in setting. The probability of occurrence and impact are both mild for this risk.

Risk Mitigation

On the risk chart produced in task 4, using the template provided, complete the risk
mitigation measures proposed to reduce the risk. Show the level of the risk after it has
been mitigated

For each risk explained above, the following mitigation is proposed:

1. Receive notice to proceed and sign contract - Unrealistic Deadline Risk

Client consulting team doing due diligence to prevent it. Fines for project completion delays
stipulated in the contract. The contractor employing more resources for the completion of the
project.

2. Obtain Building Permits - Permits and Agreement Risk

Dialogue with asset owners would be explored. Possible expropriation of assets would also be
considered.

3. Long Lead Procurement Initial Cost Estimates - Price Rises/financing Conditions Risk

Bank loan and possible shares investment (investors buy-in) would be considered.

4. Long Lead Procurement - Policy Changes/Breach of Existing Agreements Risk

The contract would be rescission barred except for a vitiating factor that puts either party in a
jeopardy. Multiple material suppliers would be engaged for the project.

5. Excavate Foundation - Subterranean Water Risk

Force majeure clause contained in the contract would protect the contractor. A geotechnical
survey (soil investigation) would be conducted.

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 6. Erect Steel structures - Late Delivery of Materials Risk

Proper forecasting would be carried out. Also, as stated in 4 above, multiple materials suppliers
would be engaged.

7. Form and Pour Concrete - Bad Organization of Works Risk

Fixed working hours and schedule set to complete the activity in time and to perform flawless
work. Also, quality control officers and site engineers will ensure inspection of line and level,
form work, reinforcement, cleanliness, vibrators, and tools etc., are carried out during the activity
implementation.

8. Masonry Work - Errors and Omissions Risk

Highly skilled masons would be engaged. Quality control officers and site engineers regularly
monitor progress of work and report feedback to management.

9. Set Elevator and Equipment - Poorly Chosen Technology Solutions Risk

Proper consultation to guide against design deficiency and unproven engineering techniques.
Engaging the services of a sub-contractor with proven track record in the industry.

10. Set HVAC, Equipment, Trim, Test and Balance System- Imprecision Risk

Same as in 9 above, proper consultation to guide against design deficiency and unproven
engineering techniques. Employing sub-contractor with a good track record in the industry.

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Reference

Gahlot, P. S. & DHIR, B. M. (1992). Construction Planning and Management. New Delhi, Willey
Eastern Ltd.

Hore, A. V., Kehoe, J. G., McMullan, R., & Penton M. R. (1997). Construction 1: Management
Finance Measurement. London, Macmillan Press Ltd. DOI 10.1007/978-1-349-13932-3

Nguyen, Long & Ogunlana, Stephen & Lan, Do. (2004). A study on project success factors in
large construction projects in Vietnam. Engineering, Construction and Architectural
Management. 11. 404-413. 10.1108/09699980410570166.

Smith N. J., Merna T., & Jobling P. (2006). Managing Risk in Construction Projects. 2nd Edition
Blackwell Publishing.

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