Project Phasing And The Bottom Line

All projects that are implemented, have been given corporate go-ahead on the basis of a set of clearly defined targets. These are typically a production goal at a capital cost, operating cost and production schedule, that will yield an acceptable return on investment by the companies internal criteria. The challenge for the implementation team is two-fold, firstly to properly define the project criteria prior to board approval and secondly to deliver an operating facility that meets these objectives, in particular the ROI. The paper addresses the issues a project team and the company management must address for a successful project. Key questions that will be explored are: ? What is the status of key technologies? Are they well proven in commercial practice, completely novel or in between? ? Is the project schedule driven by market constraints or cash flow constraints? ? Are the risks of fast tracking worth the potential rewards? ? For a retrofit project, are all the technical and production interfaces and issues known at the time of approval to proceed? ? How much should be invested in technological development and engineering and at which phase? ? For an owner-operator, how much responsibility is it wise or appropriate to push down to vendors? The answers to these questions for a specific project will define how you go about a project, the resources required, the contracting strategies, the phasing and the appropriate level of investment in the definition and procurement phases, prior to starting major capital commitments and construction.