KONKAN RAILWAY

- A case in project management

GROUP 11

NITIN RANKA PGP/20/092

RAJAT LUTHRA PGP/20/102

ARAVIND P PGP/20/201

VIVEK BABU B PGP/20/308

ANSHUL GOSWAMI PGP/20/315

Introduction

• 740 Km railway line connecting Bombay(Roha) to Mangalore

(Thokur)

• Project consisted of 1998 bridges (179 major and 1819

minor)

• 92 tunnels totaling 83km to bore

• Contracts for the project were awarded to some of the most

reputed construction firms in India, including Larsen &
Toubro, Gammon India and AFCONS

• The authorised share capital was raised in 1996-97

from Rs 600 crore to Rs 800 crore, with the
government of India taking a 51 %, while the rest
went to Maharashtra (22%), Karnataka (15%),
Kerala (6%) and Goa (6%)
Some other features of the project
• The entire project length of 760 Km. was divided in
seven sectors, each approximately 100 Km. long,
headed by a Chief Engineer.

• The sectors were Mahad, Ratnagiri (north), Ratnagiri

(south), Kudal, Panaji, Karwar and Udupi.

• At the peak of the construction period, there were no

more than 2,400 personnel, starting from the CMD to
the lowest rung.

• The establishment of computer Wide Area Networks

(WANs) and Local Area Networks (LANs) augmented
their efforts through fax and voice communication
which lead to quick decision making

• 42,000 landowners dealt with to acquire 4,850

hectares of land

• Four state governments were to be dealt with

Main Stakeholders

Important stakeholders Name of shareholder Shareholding

• Central Govt. percentage
Planning commission Ministry of Railways 411,29,74,000 51%
Finance ministry
Railway ministry
• State Govt. Govt of Maharashtra 177,42,24,000 22%
Maharashtra
Goa Government of Karnataka 120,96,98,000 15%
Karnataka
Kerala
Government of Goa 48,38,79,000 6%
• Landowners, Contractors, Investors,
Engineers Government of Kerala 48,38,79,000 6%
• Chief secretary & Transport secretary Total 806,46,61,000 100%
of Bangalore & Kerala
Project Cost, Scope and Time
• Estimated time of completion
was 5 years, ultimately took 7
years
• Foundation stone for the project
was laid at Roha by Sharad
Pawar in 1990
• In 1993, the southernmost
section of 47 km in Karnataka
and the northernmost section of
47 km in Maharashtra were
inaugurated.
• The problematic Mumbai-
Mangalore tunnel finally
completed in 1998
• Formal inauguration of the entire
stretch of 740 km on January 26,
1998
• A capital of Rs.800 crores was pooled together by the
railways and the states of Kerala, Karnataka and Goa and
Maharashtra
• GOI taking a 51 % share, while the rest went to Maharashtra
(22 %), Karnataka (15 %), Kerala (6 %) and Goa (6 %)
• The 741-kilometre line connects
Maharashtra, Goa and Karnataka
States was divided in seven sectors,
each approximately 100 Km long
• Over 2,000 bridges and 92 tunnels were
built
• 42,000 landowners to dealt with to
acquire 4,850 hectares of land
• Interacted with 4 state governments
• Life-styles and environment to be least
disturbed
Project Cost, Scope and Time
Konkan Railway

Legal and Civil Electric Track and

Buildings Trains
finance Engineering Power signaling

Legal and Power Permanent

Earthmoving Bridges Locomotives
contracts generation way

Land Power Passenger

Drainage Workshops Signaling
surveying distribution Coaches

Land Safety Maintenance

Tunneling Offices
purchase equipment trains

Finance Stations Indicators

RISK MANAGEMENT PLANNING

The risk management plan tells

• How you’re going to handle risk in your project?
• How you’ll assess risk?
• Who is responsible for doing it?
• How often you’ll do risk planning?

There are four • Avoid

• Mitigate
basic ways to • Transfer
handle a risk • Accept
Risk Management Strategy - Identification
•Government raise fund by issuing bonds and it depends a lot of the economic stability of
Budget for the project country. Government acquired money by issuing tax free bond and external commercial
borrowing

Difficulty in acquiring • Due to involvement of large number of sate and land is a state subject. Landowner were given
land compensation and rental charges for 1 year till their rehabilitation is completed

Difficulty in making 760 •Railway line was divided into 7 zones and constructed started at each zone at same time. Thus
km line cost and time both were reduced

•Contractor’s risk is very high. Carefully scrutinizing the contractor's profile. Only those were
Risk of contractors selected ho had adequate cash flow

•In a cross state construction project, this risk is very high in one incident construction was
Political interference stopped for 9 months due to differences with government of Goa

Difficult geological •Project required different kinds of survey, clearance and geological inspection. Accident took
condition place while excavating tunnel in mountains, This delayed the project

•Most difficult is the assessment of impact on environment especially in such an environmentally

Environmental impact fragile area.
Risk Breakdown Structure

Organizational
Technical Risk External Risk Project Risk
Risk

Government
Safety
approvals
Safety Safety
Land acquisition Design Changes

Budgeting issues Budget Contractor Help

Contractor
constraint
risks Political instability - extension Equipment Supply
Janta Dal collapse
Environmental
Skilled & Fuel Supply
Construction impact
experience
Quality Economic growth Workforce Skilled Workforce
Risk Severity Matrix

The Konkan railway project, also known as the KCRL, involved many risk
factors and they are classified into the following heads and these factors are
graphed on the impact vs likelihood based on our estimation

 Risk 1 – Political Risk

 Risk 2 – Land Acquisition related risk
 Risk 3 – Environmental related regulatory risks Risk 5 Risk 4 Risk 8

Likelihood
 Risk 4 – Workforce related risks
Risk 6 Risk 1 Risk 7
 Risk 5 – Equipment supply related risks (raw material
risks) Risk 2 Risk 3
 Risk 6 – Weather conditions related risks
 Risk 7 – Risk involving the contractor
 Risk 8 – Release of finance and budgeting
Impact
Risk Response/Monitoring and Control
 In a country like India, where the length regulations and the political complexity is a reality.
This case was no different.
 For mitigating such risks, a well experienced project management team should be
appointed with extensive and dynamic experience to handle such situations and the one
which is experienced to work in a complex market such as India.
 A solid team support should also be emphasized upon. Thus, a proper team support
structure should be developed instead of having a stand-alone project structure.
 A proper inter and intra communication channel should be developed for a better
coordination and monitoring of the project.
 Apart from it, given the complexity involved in the project, the frequency of the project
monitoring should be increased so that in case of fluctuations in the project parameter,
some remedial actions can be taken or contingency plan should be adopted to address
the problem.
 For the problem of uncertainty in the supply of tools and equipment, a domestic backup
supplier for the imported material should be appointed as the case when there is no
backup supplier would lead to total shutting up of the project.
Risk monitoring and control
1. Risk Reviews: This is performed by the internal risk team for monitoring the addition,
deletion or changes to prioritization due to impact or probability changes.
2. Risk Audits: This is generally performed by external agencies having expertise in some
technology and also providing and thus an impartial view about the status of the project.

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