Professional Documents
Culture Documents
Submitted To
Sir Fayyaz-ur-Rehman
Submitted By
-1-|Page
Project Management
Table of Contents
ACKNOWLEDGEMENT ................................................................................................................. - 4 EXECUTIVE SUMMARY................................................................................................................. - 5 Roles, Responsibilities and Authority of Project Manager ...................................................... - 6 INTRODUCTION ............................................................................................................................... 8 BACKGROUND PROBLEM ANALYSIS ................................................................................................ 9 Project Scope: ............................................................................................................................ 9 PROJECT DELIVERABLES ..................................................................................................... 9 Objectives ....................................................................................................................................... 9 ORGANIZATION HIERARCHY CHART .............................................................................................. 10 PROJECT PRIORITY MATRIX ........................................................................................................... 11 MARKET ANAYSIS .......................................................................................................................... 12 Market Demand ......................................................................................................................... 12 Market Supply ........................................................................................................................... 13 Industry Growth ........................................................................................................................ 14 PROJECT PLAN (METHODOLOGY) .................................................................................................. 15 PROJECT SELECTION: .......................................................................................................... 15 PROJECT EXECUTION PLAN: .............................................................................................. 15 WORK BRAEK DOWN STRUCTURE (WBS) ...................................................................... 15 Selection of the Location ........................................................................................................... 15 Selection of the Land ................................................................................................................ 15 Purchasing Of the Land ............................................................................................................. 16 ACQUIRING OF THE LICENSE & NOC ............................................................................... 16 Fulfilling the Required Criteria ................................................................................................. 16 GETTING THE NOCS ............................................................................................................. 16 MATERIAL INPUTS ............................................................................................................... 17 Electricity: ................................................................................................................................. 17 Budgeting .................................................................................................................................. 17 Loan And Equity Ratio.............................................................................................................. 17 Contacting With Different Banks .............................................................................................. 17 Loan from the Bank ................................................................................................................... 17 -2-|Page
Project Management CONSTRUCTION AT SITE ................................................................................................ 18 Hiring the Contractor ............................................................................................................. 18 PURCHASING THE RAW MATERIAL ................................................................................. 18 Start of the construction............................................................................................................. 18 Building ..................................................................................................................................... 18 Stores & Spares ......................................................................................................................... 18 Office Equipment ...................................................................................................................... 18 Hiring of The employees ........................................................................................................... 19 Duties of the Labor .................................................................................................................... 20 Marketing the Fuel station ............................................................................................................ 20 Printing The Brushers ................................................................................................................ 20 Distributing the brushers ........................................................................................................... 20 Activities with duration and predecessors: ................................................................................ 21 Project Monitoring ........................................................................................................................ 22 Follow up the licensing process ................................................................................................ 22 Following the construction and erection phase ......................................................................... 22 Project Valuation ........................................................................................................................... 23 Project profitability analysis ...................................................................................................... 29 Conclusion: .................................................................................................................................... 30 Petroleum Policy 2009 ................................................................................................................. 31 References ..................................................................................................................................... 32
-3-|Page
Project Management
ACKNOWLEDGEMENT
Thanks to almighty Allah for enabling me to fulfill all the requirements for the completion of this report. It would not be a justice in presenting this report without mentioning the people around me who have been inextricably related with the completion of this report. For assisting me in all respect and regards to complete this report my heart felt thanks to my course coordinator Mr. Fayyaz-ur-Rehman, who enriched my knowledge with wealth led ideas to pursue and power of writing this report. It could not have been possible to accomplish this report without her thoughtful guidance and expertise. It is also a great pleasure to record honorable regards to all those who helped me lot in learning and enhancing my knowledge and ability during this report especially to Mr. Tahir Hassan (Manager, Shell, Murree Road Rawalpindi ), helped me a lot for this project report.
-4-|Page
Project Management
EXECUTIVE SUMMARY
Today the most profitable and for the safe investment the business which is to be considered in Pakistan is the fuel station. This is considered it as most economic viable business and gives good return to the investors. Though the period of investment in the start is longer which consist of about 9 to 11 months But the most important point is the this business has no any kind of risk but only the certain criteria has to fulfilled while running the business that is to keep the health and environment safe and should follow the safety measures and there is no threats from the environment and as well to the environment. The area which we have selected is the most suitable area for the business outside the populated area, the first and for most requirements for fuel stations. During the project various people helped me to go through the whole process of fuel station. Total overall project cost is approximately about the Rs. 39.755. The total cost is
composed of Rs.38.609 Million of capital cost, and Rs.1.146 Million of working capital cost. The entire process flow is suggested to be semiautomatic requiring mainly unskilled workers. Though it seems a huge cost at the start but the return of the project is for
the longer period and the entire project is done with proper planning and guideline and all the criteria try to fulfill before the start of the object like license from the ministry of petroleum and gas. And then the NOCs are followed. Throughout the project it is monitored well and all activities shown in this project is properly sequenced according to the project.
Project Manager
-5-|Page
Project Management
Team Members, their roles and Responsibilities Project Engineering Manager In charge of co-ordination of all engineering disciplines (structural / piping / process / instrumentation / electrical / mechanical / safety / installation) In charge of managing the engineering budget Project Procurement Manager In charge of buying Equipment / Bulk In charge of purchase order and follow-up of the purchase Include Quality Control / Quality Assurance / Inspection services
Link Engineering / Procurement: For each discipline the purpose of the engineering is to deliver to the procurement: o A Specification o A Requisition
-6-|Page
Project Management
Based on these documents, consultation process can begin within procurement Engineering team to advise the appropriate supplier based on technical criteria Project Control Manager In charge of the planning In charge of the progress In charge of the cost control (with respect to the Client and with respect to each discipline leader)
Team roster
Mujeeb A. Khan
0345-5505849
Smak.kashmir@gmail.com
ISB
Nauman Ahmed
0345-5205518
ahmednaumankhan@ymail.com
ISB
Project Director:
-----------------
-7-|Page
Project Management
INTRODUCTION
The proposed project is about petrol and diesel fuelling station, inclusive of car wash and tire shop facility. The Fuelling station will work as a retail outlet for Shell Oil Company in Return the owner will get the profit share on each liter of fuel he sales. Transport is one of the most essential sectors of an economy and direct customer for this project. This sector facilitates the peoples not only in traveling but also in the transportation of goods and services throughout the country. The population of Pakistan is growing with the rate of around 2.0 percent per annum which shows an increase of 3.2 Million people each year. In order to facilitate the growing population not only the number of motor vehicle is increasing (5.287 to 5.366 Million in years 2007, 2008 respectively) which has increased the demand for petroleum products throughout the country. Not only transport sector, but Industrial, agriculture and other sectors of the economy are also growing with a greater pace hence further strengthening the demand for petroleum and lubricant products. According to the GoP statistics the petroleum products and gas consumption accounts for approximately 70 percent of modern energy supply in Pakistan. Electricity (15 percent), LPG and coal account for the balance. The transport sector (the direct customer for this project) is the largest user of petroleum products (59 percent), followed by power (29 percent); industry accounts for about 12 percent, and the balance is used in other sectors including the residential sector.
Fuel STATION
8|Page
Project Management
PROJECT DELIVERABLES
The project deliverables are people are facing while traveling toward the Kotli( A.K) there is no fuel station; they found the Fueling station within the city of Kotli. Objectives Our objectives towards the this business is, To provide the solution of problem for the people traveling towards Kotli To make my investment more safe and profitable To establish my business in the same sector and flourish it
9|Page
Project Management
Owner
Manager
Supervisor
Staff
10 | P a g e
Project Management
Explanation:
CONSTRNT
ENHANCE
ACCEPT
The project we choose is the construction of the Fuel Station. The above matrix shows that performance is on top most priority because top priority is to fill fuel in minimum time at maximum so thats why our performance is high.
11 | P a g e
Project Management
MARKET ANAYSIS
The market for petroleum products is highly concentrated. The PSO has got the major market share of around 65% and the remaining portion of market is shared by other oil marketing companies (OMCs) like Shell, Caltex, Attock Refineries, Total Parco and Admore. The market shares are listed in the table below: .Target Customers Sectors Transportation Power Industrial Govt. Agriculture Domestic % Consumption 55 29 12 2 1 1
Market Demand
The petroleum products account for approximately 40 percent of modern energy consumption in Pakistan. Consumption of petroleum products grew sharply during the 1980s at about 7 percent per annum, but slowed to about 2.5 percent during late 1990s and has gained a momentum in 2004-05 to about 9.31%.
12 | P a g e
Project Management
Table 3: CURRENT/PROJECTED DEMAND OF PETROLEUM PRODUCTS (In million tones) 2003-2004 Demand of Petroleum Products Demand of Petroleum Products 14.3 5 2004-05 15.5 2010-11 17.0 2017-18 19.0
10.3
12.0
11.3
11.8
1.3 Surplus Naphtha / Motor gasoline available for exports 5.3 Deficit of HSD and FO
1.5
0.8
0.8
5.0
8.0
8.0
Source: Ministry of Petroleum & Natural Resources The demand is expected to increase around 17 million tones per annum by the year 201011.Thereafter, it is expected to further increase to around 19 million tones by the year 2017-18. The production of refined products by the local refineries during the year 2003-04 was 10.27 million tons. The deficit products import were 5 million tons in 2003-04 while it will remain around 5-6million tons per annum up to year 2010-11. Thereafter, it is expected to increase to a level of around 8.0 million tons per annum by the year 2017-18.
Market Supply
Keeping in view such a rapidly growing market demand for petroleum products over the past few years one can not deny the need of fuel fuelling stations. According to the statistics only 18% of the oil demand is satisfied from the local sources, rest is imported in the form of either crude oil or finished products from Middle East exporters (Saudi Arab playing the lead role). Different OMCs are expanding their retail outlets network to satisfy the demand and capture a maximum market share.
13 | P a g e
Project Management
Industry Growth
There has been a tremendous growth in the transportation sector as well as the oil fuelling station or retail outlets over the past years. According to the table , in 1998 there were 4.303 Million registered vehicles, which rose up to 5.366Million during the year 2007 that shows a growth of around 1.1 Million vehicles. There are around 5500 or more petrol pumps (fuelling stations) operating throughout the country. Due to the growing demand of petroleum products new oil marketing companies are commencing their operations. The table given below represents the steadily growing trend of transportation sector over the last decade.
YEAR
Motor Cabs
Buses
Trucks
Motor cycles
Rickshaws
Others
Total In Millions 4.303 4.559 4.701 4.784 4.947 5.077 5.132 5.209 5.287 5.366
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
1.085 1.162 1.182 1.198 1.205 1.272 1.285 1.307 1.344 1.344
0.083 0.083 0.083 0.090 0.090 0.090 0.091 0.092 0.095 0.095
0.125 0.150 0.154 0.161 0.162 0.162 0.162 0.165 0.170 0.170
0.132 0.1.45 0.1.48 0.1.55 0.1.64 0.1.75 0.1.78 0.1.81 0.1.84 0.1.87
2.068 2.175 2.260 2.283 2.382 2.422 2.444 2.481 2.556 2.556
0.081 0.095 0.099 0.010 0.119 0.120 0.122 0.124 0.128 0.128
0.729 0.746 0.772 0.786 0.822 0.833 0.846 0.858 0.871 0.884
14 | P a g e
Project Management
PROJECT SELECTION:
We have already discuss the project selection tools and why we choose this business/project and We have discussed the risk analysis, geographical analysis, and social analysis in the background of the project problem analysis
15 | P a g e
Project Management
These all NOCs are required before to set up the project and the total time required to cover up all these NOCs is about to 2 to 3 months. The cost attached to this process involve is about Rs. 300,000. Now different agents are also involved in this process and people hire their services to
16 | P a g e
Project Management
get all these NCOs which minimize their costs in such a way that they can save the time on fulfilling all the requirements and visiting the different offices. The cost involved in it is about to Rs. 500,000. Which covers all the expenses and the business man can get all these NOCs and documents (license) without any trouble.
MATERIAL INPUTS
Electricity:
One of the main input required for the Fuel station is electricity to run the machinery and the sponsor for the electricity is WAPDA and the Rs. 0.35 million is required for obtaining the electricity connection and there is no security deposits are required for the electricity connection.
Budgeting
Budgeting involve the all terms of financing and this portion tells us about the how our project will be budgeted and with what ratio.
17 | P a g e
Project Management
CONSTRUCTION AT SITE
Construction at site will be started after contacting Shell Oil Company and the main construction includes the building.
Office Equipment
Some office equipment is also required for the proposed project. Provision of Rs.100,000 has been made for acquiring the required office equipment.
18 | P a g e
Project Management
19 | P a g e
Project Management
20 | P a g e
Project Management
21 | P a g e
Project Management
Project Monitoring
22 | P a g e
Project Management
Project Valuation
Description Land Building & Infrastructure Furniture & Fixtures Office Equipment Pre-operating costs Company Joining Fee and Security Total Capital Cost Working Capital Raw Material Inventory Cash Total Working Capital
39,756,760
23 | P a g e
Project Management
Operating Expenses
Designation Manager Accountant Cashier Dispenser Watchmen Sweeper Total No. of Employees for two shifts 1 1 1 6 2 1 13 Salary per month 12000 8000 6000 4500 5000 2500 65,500 Anually (Rs.) 144,000 96,000 72,000 324,000 120,000 30,000 786,000
Office Equipment
Description Computer Printer Telephone Fax machine(withPhone line) Total Qty Total 1 1 2 1 Cost/Unit 12,000 7500 1000 12000 Amount (PKR) 12,000 7500 2000 12000 33,500
24 | P a g e
Project Management
Project Financing Description Equity Financing Debt Financing Total Percentage 60% 40% 100% Amount in Rs 23,852,131 15,903,129 39,755,260
25 | P a g e
Project Management
Project Returns
Description Equity Project
IRR
68%
56%
MIRR
43%
34%
3.05
3.22
232,816,329
306,244,247
26 | P a g e
Project Management
Depreciation on Assets Accounting Profit Depreciation on the assets has been charged at the following rates for the calculation of accounting profits, Depreciation Rates Building Equipment Office equipments Furniture &fixtures Tax Adjustments Land Building Equipment Office equipments Furniture &fixtures 0% 5% 10% 10% 10% 5% 10% 20% 10%
27 | P a g e
Project Management
Working Capital
Working capital is calculated on the basis of following assumptions:
Accounts Receivables
Mostly, the sale of Fuel is on cash basis. However, some Fuel stations do offer a credit facility to reputable companies on agreed terms and conditions. Therefore, receivables are estimated at 6% of the total sales amount.
Advances to Employees
Advances to employees are calculated on the basis of 30 days of both payroll and staff benefits.
Accounts Payable
Cost of electricity for 20 days has been considered in calculating accounts payable.
Sales Tax
The sales tax levied by Government of Pakistan is charged to the customers at the rate of 15% on the sale of gas. These funds are deposited after every 14 days in favor of Government of Pakistan.
28 | P a g e
Project Management
29 | P a g e
Project Management
Conclusion:
This whole study tells us about the project or business that it is feasible or not. As we have already discussed that this business has enormous advantages and it is a safe investment for a batter return. The place which we have chosen is not a saturated and batter to opt for the business.
This project though has a very large investment at the start but the return is safe and this project or business is evergreen through out the year. One of the main advantages of this business is that it has not at all the credit customers and it gives the batter and safe return of the investment as we have already discusses it. The risk in this business is so minimum though the costly item of the business is land but in Pakistan the property values has an increasing trends. When we talk about the geographical analysis the area which we have chosen is the best to suit business and there is no threat to my business as well. My business is totally safe toward the environment and there are no hazards from the business operations.
30 | P a g e
Project Management
31 | P a g e
Project Management
References
Mr.Tahir Hassan Manager Shell , Murree Road Rawalpindi
Pakistan Statistical Year Book 2007, Federal Bureau of Statistics Energy Book, Hydrocarbon Development Institute of Pakistan
www.ogra.org.pk
www.skilfull.com
32 | P a g e