EMCM5203 Assignment - International Project Management [PDF]

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SEPTEMBER SEMSTER 2011 LECTURER; MR. KARTHEGESAN BALASUBRAMANIAM

ASSIGNMENT INTERNATIONAL PROJECT MANAGEMENT – EMCM5203 - Report on Project Environment, Performance of Project Manager, Risk Management and The Success Factor of The Enron Dabhol, India, Power Plant Project.

STUDENT; NAME: MOHD. NORIZAM BIN MD. SALLEH MATRIC NO.: CGS 00534317 I/C NO: 670703-01-6045 COURSE: MASTER PROJECT MANAGEMENT Note: Some of the conclusions in this paper might be based on fiction and should not be quoted as true facts and solely meant for academic purposes only.

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

Executive Summary The Dabhol Power Plant (DPP) is a massive thermal power plant on the western cost of Maharashtra state. It was initiated in 1992 and took seven years to commence its energy supply operation. Initially Enron Corp had been invited to explore the possibilities of building a large power plant in Maharashtra by the Government of India (GoI) as a part of its approach to encourage foreign privatisation project in order to boost their local market. In June 1992 a memorandum of understanding was signed and in December 1993 Maharashtra State Electricity Board (MSEB) signed a Power Purchase Agreement (PPA) with Dabhol Power Corporation (DPC). Earlier the total project cost was estimated to reach USD 3.1 billion and would become the largest foreign investment in India at that time. Originally Enron owns 80%, Bechtel Enterprises and General Electric (GE) both owns 10% equities in DPC. Formerly DPP project was planned to build 2,550 MW gas-fired power plants with liquefied natural gas storage facility. Dabhol Power Plant (DPP) was solely built for Maharashtra State Electricity Board (MSEB) and contractually MSEB is accountable to buy 90% of electricity produced by DPC in USD and the tariff is also subject to the escalation of fuel and other operations cost. This one sided contract had put MSEB in a dilemma as they know the users (public and the factories) shall protest due to the high tariff. Worse, MESB is still liable to pay DPC whether or not the electricity taken by the users. The 20 years concession shall put MSEB in the position to pay USD 1.3 billion per year which is approximately USD 25 billion in total to DPC excluding the hiding cost of fuel and operation hikes. When World Bank withdrawn from financing the project as they claimed DPP it is not economically viable, Enron had managed to assemble foreign and Indians banks to finance the project. Other setback faced by the project are especially the protest from the public and the NGOs as a result of improper handling of land acquisition matters, clean water for the people being diverted to DPP project, environmental issues e.g. contamination of toxic and hot water to the estuarine and coastal areas will kill the fish and destroy their habitat, a series of violations against Indian law and human right during handling the protestors, allegations that the project involve fraud, misrepresentation, corruption and bribery but under the Sharad Pawar government everything seem to be under control. The Bharatiya Janata Party/Shiv Sena the opposition party had exploited the sense of anxiety in the people about the Enron deal and used it a part of their election campaign to throw out Enron. The project was criticised for lack of transparency, its projected high costs, and potential environmental impacts. As soon as they came into power after won the state election in 1995, they cancelled the deal, although the construction had been started. The Munde were committee formed and had come out with a very tarnished report alleging corruption, fraud, misrepresentation, corruption and bribery clouding the previous negotiation, its high costs and environmental issues. Enron filled a civil sued of USD 600 million they had spent. Later, in the same year the project were renegotiated and MSEB’s acquire some stakes in DPC. Some pressures applied by the US government through a various means and the project was than recommenced. A more advantageous deal for MSEB was agreed to show the people that the new government was better. Enron equities reduced to 50% remain the same for both Bechtel and GE at 10%, and MESB owns 30%. The project was slightly scaled down to 2184 MW and was planned to ii Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

be completed in two stages at USD 2.9 billion in which second phase is compulsory. First phase suppose can produce 740 MW is schedule to complete in 1999 and the second phase is to produce 1444 MW with an additional construction of an additional of LNG terminal jetty. The first phase of the power plant was completed In May 1999 but mayhem continues to cordon the project. Maharashtra government allies wanted to stop the project because the power produced was much too expensive compared to those produced by other power providers. As anticipated earlier the electricity price from DPC is much higher compared to other operators and the escalation of operation cost and devaluation of Rupee had made it worse. Shortly thereafter MESB default to DPC quickly escalated and in April 2001 the board of DPC authorized the management to terminate the contract. The plant then closed in June 2001. Phase 1 plant was left idle and the second phase which is less than 90% to be completed were abandoned, Enron’s part of DPC was then called for sale. This report was produced to critically focus and analyse on four (4) sectors of scopes which consist of the project environment, performance of project manager/project management team, risk management and the success/failure factor of the DPP project. The critical analysis started with the investigating whether the change of environment management had been properly carried out during the initiation stages and monitored towards the entire project life cycle. It was found out that PESTEL analysis was either not done or not being carried out properly during the initiation stage and throughout the project life cycle. Secondly although Enron is an experienced international company but their project manager and project management team may not be. The finding followed with a shocking finding where all the six Risk Management processes and the impact for each risk were either not identified or was not properly carried out. Lastly the project success factor were not properly monitored and carried out. The conclusive finding showed that even the DPC that projects undertaken by international giant players e.g. Enron, Bechtel and GE, and with the strong backing of the local governments can still go terribly wrong without a proper project management. Four key areas the environment component, project management, risk management and the project success factors were not properly managed. Environmental components were not properly carried. In addition Enron have more weaknesses compared to strength therefore they should improve the way they control and manage the project. Perhaps facilitate their project management team with good project management skills and abilities to use the necessary tools might be able to help Enron to perform better. The project plan was developed without the input of key stakeholders. All the six risk management process from risk management planning, identification, analysis, response planning and monitoring and control were either not carried properly and periodically or not being done. The solving of the problem face was as of ad hock basis or “fire brigade” approach. Their “win-lose”, arrogant attitude, one sided contract and applying pressure approach instead of ”win-win” and collaborative, incentive approach among all the stake holders is no more applicable as colonial era had passed, it will only inviting uneasiness and backfire to the project. No proper monitoring and checking were conducted throughout the project lifecycle and lessons learned were not picked up along the way. Cultural sensitivity and awareness of problems arise throughout the project lifecycle were not anticipated earlier and proactive measures on resources and project team was lacking. Enron are not truthful to themselves, they should understand too profitable contract is good but can iii Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

become meaningless shall the client cannot effort to pay the project. A lot of things were not made transparent and against the host country rules and regulation had invited critics. Recommendations were made for Enron staff should be sent to understand the modern contract approach. New way how to handle contract relation e.g. “win-win” situation, collaboration, incentive, sharing risk, giving encouragement, sharing problem solving, better communication and etc. should be implemented in order to encourage all the parties involved works towards to achieve the project success. Arrogant and applying pressures are no mo applicable. The agreed price in PPA should be made transparent, all financial parameters and breakdown should be defined and cannot be based on estimations figures. MESB, and other government agencies involved should be responsible. If possible should be carried out by competitive bids as transparency is able to clear up any accusation of bribery or misconduct. CBA should be carryout to identify whether the project is economically feasible and MESB are afforded to pay. Shall the project scale require a cut as it is better to do so rather than the client end up with payment default. Perhaps using local fuel e.g. coal and NG might further reduced the cost. PESTEL analysis is to be carried out since the initiation stage and to be monitored and updated throughout the project life cycle. A project stakeholder management framework should be applied in order to categorize and understand their area of concern and enable the project team to take the necessary strategy/action to solve them. Risk management is to be carried, managed and updated according to PMBOK from planning stage and throughout the project life cycle. Critical success factors e.g. cultural sensitivity and awareness of problems arise, proactive measures on resources and project team are also very crucial for the project success should be identified at the onset of the project and should be monitored throughout the project life cycle. Negotiation skills is to be enhanced e.g. by using Negotiation Decision Support system (NDSS) to provide automated, speedy and more accurate decision results. The critical success factors should be identified at the onset of the project and should be monitored throughout the project life cycle. Preventive measures should be place strategically in the project life cycle. The setting up of a Project Management Office (PMO) is strongly recommended. Enron staff involved in projects should be trained in project management and preferably certified. This will allow them to use the proper project management skill and necessary tools. For a large scale project like DPP, setting up of a Project Management Office (PMO) is strongly recommended. A configuration management system should be incorporated into the change control system and a formal change control system should be in place. A change control board should be convened for every project. Enron should adopt an appropriate PMIS, preferably one that is automated. By doing so even people back in HQ can also monitor the project development. The life cycle should consider project management as well. Project management deliverables must be properly defined and documented. Enron should start compiling an archive of lessons learned through the project life cycle for references and references. Whilst there is no assurance that these recommendations will success certainly, it is likely that implementation of some of the suggestion should be able to enhance the success of the project or to reduce the menace of debacle.

iv Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

Table of Contents Executive Summary ................................................................................................................................................ ii 1.0 Introduction.................................................................................................................................................. 1 2.0 Background .................................................................................................................................................. 5 2.1 Chronology of Events .................................................................................................................................. 8 3.0 Project Environment .................................................................................................................................... 9 3.1 PESTLE Analysis for DPP Project. ........................................................................................................... 11 3.1.1 Political Factors........................................................................................................................................ 11 3.1.2 Economic Factors ..................................................................................................................................... 12 3.1.3 Social Factors ........................................................................................................................................... 13 3.1.4 Technical Factors ..................................................................................................................................... 14 3.1.5 Environmental Factors ............................................................................................................................. 15 3.1.6 Legal Factors ............................................................................................................................................ 16 4.0 Performance of Project Management Team/Project Managers. ................................................................. 18 4.1 DPC Project Management Team (PMT)/Project Managers Weaknesses.................................................... 19 4.2 DPC Project Management Team/Project Managers Strength. .................................................................... 20 5.0 Risk Management ...................................................................................................................................... 25 6.0 The Success/Failure Factor for Dabhol Power Project .............................................................................. 32 7.0 Conclusions ..................................................................................................................................................... 34 8.0 Recommendations ........................................................................................................................................... 37 9.0 References ....................................................................................................................................................... 39

List of Figures Figure 1: Dabhol Power Plant – Location Plan. ...................................................................................................... 2 Figure 2: Ratnagiri Power Plant Formally Known as Dabhol Power Plant – Satellite Image................................. 3 Figure 3: Ratnagiri Power Plant Formally Known as Dabhol Power Plant – Satellite Image (close up). ............... 4 Figure 4: Revised Share Holding Pattern of Dabhol Power Company (1998). ....................................................... 5 Figure 5: The Parties Involved in Dabhol Power Project. ....................................................................................... 6 Figure 6: Enron Headquarters on 1500 Louisiana Street, in Houston (2006). ........................................................ 6 Figure 7: Dabhol Power Plant Was Taken Over by Ratnagiri Gas and .................................................................. 7 Figure 8: Environment and the organisation relation. ........................................................................................... 10 Figure 9: Protestors from various unions attempt to break the police barrier, in south Bombay, 5th July 1995 demanding total cancelling of DPC by Enron. .............................................................................................. 14 Figure 10: An activist of the NAPM a human rights organization, rings a warning bell demanding Enron to quit from DPC, in a protest in Bombay Friday, June 22, 2001 ............................................................................ 16 Figure 11: Stakeholders Power/Interest Matrix for DPC Project ......................................................................... 22 Figure 12: A Sample of Stakeholders Analysis for Dabhol Power Plant Project. ................................................. 24 Figure 13: Project Risk Management Overview - Summary of the PMBOK six Project Risk Management Processes. ...................................................................................................................................................... 25 Figure 14: Matrix shows the six processes and the responsibilities of the project manager and stakeholders. ..... 29 Figure 15: Risk were normally put into Risk Breakdown Structure ..................................................................... 29 Figure 16: Probability/Impact Matrix for Qualitative Risk Assessment (Sample)................................................ 30 Figure 17: Sample Project Risk Register that should be used to Monitor Risk in DPC and should be Analysed/Updated Consistenly. .................................................................................................................... 31 Figure 18: Triple Constraints. ............................................................................................................................... 32

List of Tables Table 1: The Chronology of Dabhol Power Project ............................................................................................... 8 Table 2: The Definition of PESTEL Components. ............................................................................................... 10 Table 3: List of Potential Stakeholder in DPC ...................................................................................................... 22

v Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

1.0 Introduction This report was produced to review and critically analyse the project environment analysis, the project manager performances, the conducted risk management and the success factor of the Dabhol, Power Plant Project in the state Maharashtra, India.

The endeavour qualifies as a project by virtue of meeting all definitions of a project as stated in the Project Management Body of Knowledge Fourth Edition, 2008. The project was a part of a strategic initiative by the government of India to attract foreign private investment into their country in 1992.

Being a privatisation project MSEB shall become the sponsor of the project. World Bank had refused to finance the project as they feel the capacity of the plant is too large for Maharashtra and in addition they feel LNG is too expensive compared to local coal and gas. In other words they feel the project is not economically viable. Due to this four international financiers ANZ Investment Bank, Credit Suisse First Boston, ABN-AMRO and City Bank had come forward including American Export Import Bank and some Indian Banks e.g. State Bank of India, ICICI, Canara Bank, Industrial Finance Corporation of India and Industrial Development Bank of India had participate as local funders.

This report will provide a background of the project as well as a chronological list of events that took place (Fact Sheet February 22, 2002).

The critical analysis will examine thoroughly into the change of environment management, project manager, risk management and project success factor. The investigation will use project management practices and standards to make the analysis. This report shall be assisted with figures, tables and example to exhibit and enhance the information provided.

From the outcome of the study, discussion and analysis, conclusions and recommendations shall be offered at the last part of this report.

1 Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

Figure 1: Dabhol Power Plant – Location Plan.

(Adapted from: IEA)

2 Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

Figure 2: Ratnagiri Power Plant Formally Known as Dabhol Power Plant – Satellite Image Including the Liquid Bulk Terminal Jetty and Gas Storage Areas.

(Adapted from: Google Earth) 3 Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Assignment – EMCM5203 (International Project Management)

Figure 3: Ratnagiri Power Plant Formally Known as Dabhol Power Plant – Satellite Image (close up).

(Adapted from: Google Earth)

4 Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

2.0 Background Dabhol Power Corporation (DPC) was to be a big investment for Enron in India and Dabhol Power Plant (DPP) should become the biggest thermal power plant in the world at that time and the pioneer project to GoI in attracting foreign private investment especially in their energy sector. Although after the negotiation with the SoM new government, Enron DPC share equities reduced to 50%, both BE and GE hold 10%, and the MESB owns 30% but as MESB failed to raise up the necessary capital, have seen Enron equities increased to 65%, MESB owns 15% and both BE and GE remain at 10% (Haljala, Vaisanen, Alam, Utriainen, and Kolster 2002).

Figure 4: Revised Share Holding Pattern of Dabhol Power Company (1998).

DPP project turned into a nightmare of epic magnitude. The project which was expected to be completed in 1995 only operated in May 1999 after facing a lot of hick up. Among other problem faced such as the World Bank withdrawn from giving the financing and label the project as economically not viable, opposed and protest from the public and human right NGOs due to improper handling of land acquisition matters, the fresh water for the people were diverted to DPP, environmental issues e.g. contamination of toxic and hot water to the estuarine and coastal areas will kill the fish and destroy their habitat, a series of violations against Indian law and human right during handling the protestors and not mentioned the project were halted when the new government Bharatiya Janata Party/Shiv Sena won the election. 5 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Figure 5: The Parties Involved in Dabhol Power Project.

(Source: Dabhol Power Project)

Being the biggest shareholders Enron acted as the Project Management Team to the project. In the absence of open tender and the PPA were done in a short period allegations that the project involve fraud, misrepresentation, corruption and bribery had latter had affected the project progress although all these allegations were never proven and have been dismissed by court.

Figure 6: Enron Headquarters on 1500 Louisiana Street, in Houston (2006).

(Source: La caída de ENRON).

6 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Despite the project was managed by experiences international company like Enron, the project rapidly decay into an awkwardness and public embarrassment for all shareholders. This was mainly contributed to poor project management practices, an under-performing project management team, no environmental factors and risk management were carried out and critical mistake in vital decision-making. Further to this, Enron arrogances and bullying approach although in earlier stages looks like they are in control and managed to secure a good deal and one sided contract that win them all with the guarantee and counter guarantee by the SoM and GoI but at the end they lost to sovereign risk where it is not easy to sue a foreign government. That is one of the reason why in modern contract “win-win” approach are chosen compare to the “win-lose” as the losing side might take a revenge of they got the opportunity to do so. Figure 7: Dabhol Power Plant Was Taken Over by Ratnagiri Gas and Power Private Limited in 2005.

(Source: Ratnagiri Gas and Power Private Limited Website)

Despite the entire problems faced the project itself considered a success story as at the end Phase I were commissioned and the Phase II only one month more to complete but due to default payment by MESB the project were finally stopped in 2001. However the project management is at failure as shall the project been carried out following a proper project management skill and standard most of the problems may not be aroused or the project not even commenced in the first place. 7 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

2.1 Chronology of Events Table 1: The Chronology of Dabhol Power Project Date

Description

1991-1992

India opens its power sector to private foreign investors.

Feb. 1992

Enron begins investigating opportunities in the Indian power sector.

May 1992

Enron executives pitch their ideas to the Indian power secretary, who is in the United States to encourage foreign participation in the Indian power sector.

June 1992

Enron, Bechtel and General Electric signed a memorandum of understanding with the Maharashtra State Electricity Board (MSEB) to build the Dabhol project. The operating entity is the Dabhol Power Company, a joint venture. Enron is the majority owner while General Electric and Bechtel each own 10% shares.

June 1992Dec. 1993

The parties negotiate the terms of the deal. Enron obtains the necessary approvals for the project from the Indian government.

Dec. 1993

Dabhol Power Company and MSEB sign the power purchase agreement. Govt. of Maharashtra signs guarantee Govt. of India signs guarantee. Split into two phases

1994early 1995

Indian political parties opposing the ruling Congress party campaign on an anti-Enron platform. Enron seeks and obtains $635 million in financing, insurance, and loan guarantees from Bank of America, ABN Amro, a group of Indian banks, the U.S. Export-Import Bank, and the Overseas Private Investment Corporation (OPIC).

Jan. 1995

Commerce Secretary Brown visits India, accompanied by Ken Lay, and oversees signing of loan agreements by the Dabhol Power Company with the U.S. Export-Import Bank and OPIC.

Spring 1995

Rulling party Sharad pawar defeat and the the opposition alliance Bharatiya Janata PartyShiv sena wins the election in Maharashtra in March, and in May the new government appoints a committee of state ministers (the Munde Committee) to review the Dabhol project.

Aug. 1995

The Munde Committee issues a sharply critical report that recommends scrapping the Dabhol project. The state government acts on this advice.

Aug.-Dec. 1995

Enron enters arbitration and seeks $300 million in compensation. The state government files suit in September to void the agreement, alleging fraud and misrepresentation. U.S. officials, including Energy Secretary Hazel O’Leary, warn India that its action will discourage foreign investment. Rebecca Mark, Chairman of Enron International, meets with Bal Thackeray, the top power in one of the ruling parties. Afterwards, negotiations resume between Enron and the state.

Nov. 1995

Jan. 1996

The state announces it will accept a revised agreement.

Feb. 1996

The state and the Dabhol Power Company finalize the terms of the revised agreement.

1996-1997

Legal challenges to the project by Indian groups continue, but are eventually dismissed.

1997

Enron obtains approval from the Indian government to expand the Dabhol liquified natural gas terminal to allow it to process 5 million metric tons annually.

8 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management) May 1999

Dabhol Phase I (740 megawatts) begins generating power & Phase 2 financing of $1.87 billion secured

2000

Rebecca Mark leaves Enron. Maharashtra Govt. official announces contract should be renegotiated due to high power cost

Jan. 2001

The state of Maharashtra stops paying for Dabhol as of its $22 million bill December 2000. The state subsequently seeks to cancel the power purchase agreement.

April 2001

Enron begins arbitration proceedings.

April 2001

Secretary of State Colin Powell raises Enron’s problems regarding Dabhol in a discussion with India’s foreign minister.

May-June 2001

The Dabhol Power Company ceases operation of the Phase I portion of the plant and halts construction on the 90% completed Phase II portion (1,444 megawatts).

May 2001

The Bush Administration releases the White House Energy Plan, which contains a provision that benefits Enron’s India operations.

June 2001

Vice President Cheney raises Dabhol in a meeting with Sonia Gandhi, the president of India’s opposition Congress Party. The National Security Council leads a “Dabhol working group” with Administration officials, including Treasury, State, the Export-Import Bank, and OPIC officials. Christina B. Rocca, Assistant Secretary of State, meets with Indian officials on Dabhol.

July 2001 July 2001 Oct. 2001

Alan Larson, Undersecretary of State for Economic, Business and Agricultural Affairs, raises Dabhol with the Indian foreign minister and the Indian national security advisor.

Nov. 2001

Talking points are prepared for President Bush to discuss Dabhol in a meeting with Indian Prime Minister Vajpayee on November 9. However, the topic is vetoed the day before the meeting on November 8, which is the same day that Enron discloses a stunning $586 million in previously unreported losses.

(Adapted from: Fact Sheet, February 22, 2002).

3.0 Project Environment In a big scale project like Dabhol Power Plant any changes on one or more environment components either it is internal e.g. management process and organisation resources or external e.g. change of government, protester and fuel hikes might jeopardise the project shall they have not been identified early and were address properly. They are a many type of method that can be used to identify the environment factors such as PESTEL Analysis, SWOT, Porter’s Model, BCG Growth Matrix and others but in this report PESTEL Analysis shall be used.

9 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

The PESTLE Analysis is a tool that is used to identify and analyze the key drivers of change in the strategic or business environment. The abbreviation stands for Political, Economic, Social, Technological, Legal, and Environmental factors. The tool allows the assessing of the current environment and potential changes. The idea is, if the project is better placed than its competitors, it would be able to respond to changes more effectively. (Orfano and Mc Donough, Jan 2, 2011). In Figure 8 illustrate the effect and connection of all the environment factors to the organisation. Figure 8: Environment and the organisation relation.

(Source; Certo & Certo, 2009).

Table 2: The Definition of PESTEL Components. Political

e.g. trade regulations and tariffs, social welfare policies.

Economic

e.g. business cycles, interest rates, money supply, inflation, unemployment, disposable income, availability and cost of energy, the internationalisation of business. Taken together these economic factors determine how easy—or not—it is to be profitable, because they affect demand.

Social

Sociocultural influences include demand and taste issues, and how tastes and preferences change over time. Specific influences include:
demographics (for example, an ageing population in Europe);
people in the vicinity, land aquisition issues, water etc.
social mobility—will people move in order to work, or stay where they are even if unemployed and relying on state support? (To some extent this is now a political issue, with an enlarged Europe enabling a freer movement of labour across the community);
lifestyle changes (for example, the desire to retire earlier, and general changes in people's views about work/life balance);
concern for the environment, including waste disposal, recycling and energy consumption. 10

Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)





government spending on research, the quality of academic research and the ‘brain drain’; the focus on technology, and support for invention and innovation; the pace of technological change and the creation of technology-enabled industries.

Environmental






global warming and climate change; animal welfare; waste, such as unnecessary packaging.

Legal





legislation about trade practices and competition; environmental-protection legislation, such as new laws on recycling and wastedisposal industries; employment law, such as that regarding employment protection and discrimination.

Technological







(Adapted from: Paul, Debra & Yeates 2010)

3.1 PESTLE Analysis for DPP Project. The following are environment component using PESTEL analysis gathered from problem faced in this project;

3.1.1 Political Factors Initially it was seemed fairly clear cut, DPC had an MOU, backed by a number of clearances, which was legally binding with the Indian government had regularised several investment rules to allow major foreign investor to invest in India. India who was suffering from power shortage had given DPC a guarantee from the SoM and second guarantee from the Government of India. Enron was the first foreign company to receive a government guarantee in India where this is to comfort foreign investors, partly because of the poor financial condition of state-run companies in infrastructure sectors, such as the state electricity boards. The defeat of ruling party Sharad Pawar government to the opposition the Bharatiya Janata Party/Shiv Sena in 1995 was not anticipated. This was caused the project to be halted at least ten (10) months before the renegotiation materialised and the project could recommenced. The earlier thought was with the government has a stake in DPC (15-30% equities), GoI and SoM should have done everything to keep the project going but unfortunately for DPC, but this was not happen when their personal interest had come in between. Enron should maintain their status quo to all political parties in order to ensure whoever ruling the country will give no harm to the project. After all DPC project should be the national interest as despite it will settle the energy crisis it shall also prosper the country economy by creating job and business opportunities. 11 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

When MSEB default its payment to DPC in Jan 2001 and Enron tried to invoke the guarantees to recover the dues form GoI and SMG and to pursue arbitration in London court the government hindered and MSEB revoke the power contract in May 2001, Enron halted the second phase of the project, issued a notice to terminate the Dabhol contract and named the price it wanted for its equity in the company. While Indian and foreign lenders would have been willing to help DPC the governments on the other hand are reluctant.

Enron may also escape the political risks shall they managed to get financing from multilateral financing agency e.g. World Bank, the Inter-American Development Bank as these bank normally have a absolute gauging of the environment and political situation and adapting to the circumstances. Knowing India politic is not stable Enron/DPC should take bigger coverage for political risk.

3.1.2 Economic Factors Enron failed to accept the facts that Maharashtra and India is not ready and even effort to have the project. To mitigate the commercial risk DPC had signed a 20 years Power Purchase Agreement (PPA) with MSEB where 90% of the power produced shall be bought by MSEB and payments are fixed in USD thus not influenced by the currency risk. The PPA guaranteed by the SoM and counter-guarantees by the GoI made the project seem economically very sound. When the World Bank withdrawn from financing the project as in their eyes it is economically not viable Enron securing financing from foreign and Indian banks but this exercise delayed their progress.

At the time of signing the tariff rate was calculated to be around 2.4/ kWh produced assuming at 90% load. During 1999-2000 the tariff rate of Rs 4.12/unit compared to the tariff offered by other power operators at Rs 1.41/unit (e.g. National Thermal Corporation) was too much different. Reason of the different was because of the high exchange rate, increased of operation cost and the consumption from DPC was only 7% of its capacity. With the use of LNG for Phase 2 plant it was anticipated the tariff shall increase further. The reason for choosing LNG was because Enron during that time had eying a project to bring LNG through pipeline to India. As imported LNG is expensive it does not give any good to MESB. (Haljala, Vaisanen, Alam, Utriainen, and Kolster 2002). 12 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

The first defaults to the PPA occurred when MSEB announced in 8th January 2001 that it did not have money to pay the bills due from October and November purchases worth USD61 Million. DPC invoked the SoM and GoI guarantees to recover the outstanding monthly bills and left the GoI an arbitration notice and invoked political Force Majeure a month later.

The PPA itself was very thoroughly designed and was supposed to give the DPC decent commercial risk cover. It however failed to take into account the possibility of the tariff hike to exceed the solvency of the buyer, which was not able to transfer the cost escalation to its customers or even the public opinion effects of the high prices. Guarantees offered by parties having rather limited resources did not correct the situation as planned but initiated rather harsh countermeasures.

MSEB non liquidity risk could have dealt by DPC shall they negotiating the PPA to include clauses giving DPC right to sell all excess electricity to other customers. Being an experiences international power provider Enron should be able to advice GoI, SoM and MSEB. A position in the MSEB should be demanded in order for them to assess their financial status.

Questions was been asked whether or not Enron was fully aware of the financial credibility of GoI in the international market and whether they had considered alternative sources of financing before the World Bank rejected to finance the project.

The high electric tariff problem could have been solved if the governments and MSEB would have allowed Power Company e.g. Power Trading Corporation to buy power from Dabhol, so that it could have reduced its dependence on MSEB and perhaps the use of local fuel e.g. coal and natural gas might be able to reduce the operation cost as the government can protect their interest.

3.1.3 Social Factors Local people opposed the project as the land acquisition exercise were not carried out properly and they believe the project did not bring them any good except taking away their home/land by force, reduced their water supply utilization and disturb their privacy. It was understand that there is no proper compensation was paid to those people whom their land 13 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

had been acquired. Numerous NGOs were formed to convene the protest. There were some allegation that Enron used local gangster to assault opposition activists and even the police to raid the villagers and protesters. In 1999 ‘Human Rights Watch’ reported violation of human rights.

Figure 9: Protestors from various unions attempt to break the police barrier, in south Bombay, 5th July 1995 demanding total cancelling of DPC by Enron.

(Source: AP Associated Press).

These human rights violations became a severe problem and although Enron denied any wrongdoing, the harmony of the locals and DPC was gone and the pressure from the activists and environmental groups could not be made good. Thus, the project faced terrible publicity, tremendous pressure to change its practices and rigorous actions, which finally delayed the project completion.

If possible compensation should be paid accordingly to people affected and suffered because of the project construction, necessary information is given and their complaints be entertained.

3.1.4 Technical Factors Technology risks were considered small as Bechtel one of DPC associate had enormous experiences in power and LNG projects and therefore it was expected the project shall not suffer any major technological difficulties. 14 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

When DPC sued MSEB for the default payment, MSEB in May 2001 made a counter claim by accusing DPC had breached the PPA as DPC failed to supply its base load capacity in three hours from request on 28th January, 13th February, and 29th March 2011. MSEB established that Enron failed to deliver to technical specifications and had requested Rs 4 billion as penalty and should pay off its outstanding bills from the end of the year 2000. DPC admitted that it could not ramp-up from full stop/idle to base load in three hours but the legal notice should be considered more as a counter measure to DPC’s invocations of guarantees and arbitration early of the same year.

Allowance to sell excess capacity to other customers will never let the plant to idle even during MSEB’s off-peaks this will solve the ramp up problems.

3.1.5 Environmental Factors This factor mainly because the concerned from the local and fishermen within the vicinity. They were afraid the hot sea water dispersed from the DPP cooling system which also contained toxic effluents may adversely affect the flora and fauna, reduce fish and pollute the fresh water. About 2,000 families of fishermen expected to get affected. These concerns were raised in 1993, during the two-month notification period but unfortunately DPC falsely claimed to the government no objections were received.

The diversion of water supply to the project site also a great concerned to them and the green peace organizations too. In 1996-1997 the problem of water diversion became severe as the local water supplies were diverted to the project (8,338 litres per minute) at the expense of the villagers. The people only get 40,000 litres of water per day, compared to 300,000 litres per day before the project started. As alternative villagers turned to rivers to take water but as the untreated sewage dumped into the river, the water was no more potable. DPC proposed site were occupied by 90,000 people but the government begin acquiring their land without consulting the public and the information on environmental impact and land acquisition was not disclose and severely neglected. Finally, the local organized into groups to protest the project and most of these organizations were made up of social activists. The local opposition to the project began in 1992 and intensified in 1996/1997. They claimed the power plant threatened the local environment and against the governmental environmental standards. 15 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Protesters rushed into the streets requesting for changes in the plant’s design and more broadly to oppose the Indian government’s economic liberalization policies.

Figure 10: An activist of the NAPM a human rights organization, rings a warning bell demanding Enron to quit from DPC, in a protest in Bombay Friday, June 22, 2001

(Source: AP Associated Press).

Same like social factors ff possible compensation should be paid accordingly to people affected and suffered because of the project construction, necessary information is given and their complaints be entertained. Proper explanation about the project benefit to the people and the country, how it meeting of EIA requirements and how other countries who having thermal power plant but not affecting the environment should help. In addition the disruption of water to the people should be solved.

3.1.6 Legal Factors Among other factors are DPC get accuse of bribery by the public and the new government. The project contract was questionable right from it start as it was considered to be too generous to DPC or a one-sided contract by the public opposition of the project, opposition parties and as well as the World Bank. DPC suspiciously accused of corruption in the setting up of the project and how it secure official clearance for the project. They feel in such a large project like DPC, tenders process should be exercised but this project had been agreed in some secret negotiations. It was found some shortages in the PPA had left MSEB’s financial liabilities unclear where the breakdown of project costs considerations and many financial 16 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

parameters were not defined and all the figures in PPA were based on estimations. Due to this DPC have been accused of frauds and misleading however in the contrary on 19 Aug 1994, the High Court ruled that none of these accusations were justified. The US Government also carried out an investigation about the questionable USD 20 million education expenses used by DPC. However, the results also showed that there was no bribery involved in the amount.

The Memorandum of Understanding (MOU) signed on 20th June 1992 for a plant “with a minimum capacity of 2000 MW”, includes several conflicts with Indian law. These conflicts impose legal risks on the power project that could have been avoided by taking the local law properly in account. There were also many conflicts between the PPA and the Indian Electricity Supply Act (ESA) law e.g. the application of English Law by Indian parties is claimed to be illegal according to Indian law. There were also many conflicts between the PPA and the Indian Electricity Supply Act (ESA) law e.g. the application of English Law by Indian parties is claimed to be illegal according to Indian law. According to the MOU, Enron has to be paid 90% of the energy produced regardless of what are the MESB needs. On the other hand, the Indian law states that a power company can enter into a contract only to sell the electricity that it actually generates and not its generating capacity.

Payment in USD is also a deviation from the Indian norms; the Indian law states the price that the public pays for electricity must follow least-cost approach. In August 1993, Central Electricity Authority (CEA) study showed the reasonable capital costs for the Enron plant to be Rs 19.1 million per MW. Enron’s estimate was Rs. 44.9 million per MW is in line with World Bank’s statement, that the project is not part of the least cost sequence (Haljala, Vaisanen, Alam, Utriainen, and Kolster 2002).

The guarantees from the country host governments were insufficient to eliminate the political risk. After all GoI and SoM are both neither nor a solvent customer. It is better to make MSEBs commercially independent, because being a profit-seeking body shall promoting competition and inviting competitive bids only for the price of power and letting private plant operators to sell power directly to customers. This is more transparent an able to clear up any accusation of bribery or misconduct. 17 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Based on the environmental components that faced by DPC one after another it is concluded that no thorough environmental analyses have been carried for the project during the initial stage and throughout the project lifecycle. Shall the environment component being look into e.g. using PESTEL analysis for sure these entire environmental components can be detected, managed, solved or avoided before they affect the projects. It was believed that DPC project was approved without proper study on its economic viability, environmental and social impact assessment. As the result of Enron and the SoM had repeatedly ignored public complaints and failing to meet human rights standards.

Enron should send their project management team to attend project management courses as a through usage of PESTEL tools for a large and international project like DPC is a compulsory. This tools shall allow them not only to anticipate environment component, use them in their project risk management plan but they can also visual the farsighted of the project.

4.0 Performance of Project Management Team/Project Managers. For a big scale project like Dabhol Power Plant (DPP) where the total project value is amounted to USD 2.9 billion, assumption was made that the project was managed by Enron themselves (the biggest foreign entity in DPC) as the project management team, lead by a project director who is in charge on several project managers that oversee each individual job package e.g. authorities/public matters, earth works infrastructure and enabling works, building structures and stack, fuel storage reservoir and liquid bulk terminal jetty, M & E works including turbine and auxiliaries.

Project management is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements. Project management is accomplished through the appropriate application and integration of the 42 logically grouped project management process comprising the 5 Process groups which are initiating, planning, executing, monitoring and controlling, and closing. Managing a project typically includes i) Identifying requirements. ii) Addressing the various needs, concerns and expectation of the stakeholders 18 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

as the project is planned and carried out. iii) Balancing the competing project constraints including but not limited to scope, quality, schedule, budget, resources and risk. (PMBOK 4th Edition 2008).

Project Manager is responsible for coordinating and integrating activities across multiple, functional lines. The integration activities perform by the project manager includes integrating the activities necessary to develop a project plan, integrating the activities necessary to execute the plan integrating the activities necessary to make changes to the plan. (Kerzner 2009).

In order words the project management team (the project director and his project managers) should be in control of the project requirements, the stakeholder needs, to balance the project constraints and to achieve the project goals to complete the project ahead or before schedule, within budget and at acceptable quality, safety and sustainability. Based from the information gathered and collected from various papers and case studies related to Dabhol Power Plant (DPP) project, this chapter shall identify the weakness and the strength of DPC project management team/project managers.

4.1 DPC Project Management Team (PMT)/Project Managers Weaknesses. Among the weakness are as follows; i)

It was found out that the risk management for the project was not properly identified since the initiation stage and not being monitored and controlled properly throughout the project life cycle. As the result of this the project had been halted a few times due to the opposed faced from the people, Human Right Watch and even the new government of SoM.

ii) Enron was not fully aware of the financial credibility of GoI in the international market. Although it is good to secure a higher tariff but it is meaningless shall the client are not effort to pay. iii) Not truthful to themselves as the project were labelled by WB as not economically viable.

19 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

iv) They had not considered alternative sources of financing before the WB rejected to finance the project partly contributed for project delay. v) Phases 1 was completed nearly four (4) years behind schedule whereas phase 2 also was delayed and finally stopped due to default on payment by MESB. Make it worst extension of time were not properly compiled and applied to MESB.

In the other

hand the construction it was believed the cost for both phases had increased from USD 2.9 billon to more than USD 4.0 billon. vi) The project management team had failed to anticipate or managed all the problems with respect to external environment factors that mostly are manageable shall they were identified and monitored since the initiation/planning stage via a good risk management plan/process. Or else they should be sensitive enough to the potential problems and can be monitored and managed throughout the project life cycle. vii) Although the problem faced especially which involved the environmental issues were settled, but they were done as of fire “fighting concept” and some of them actually can be avoided in the first place shall the risk management were conducted and monitored. viii) Arrogant attitude, not transparent and always apply pressure on others are no more applicable to current market as most people preferred to “win-win” approach, collaboration, incentive, shared risk and etc. (Turner 2009) ix) Stakeholders analysis were not carried out or else their issues and concerned should be monitored and managed.

4.2 DPC Project Management Team/Project Managers Strength. Among the strength are as follows; i)

Although Phase I was delayed but it has been completed despite all the hassle faced. Despite having a lot of problems the project success had proofed that their project manager/PMT are capable to manage and supervise the construction teams.

ii) Enron are good in negotiation or perhaps in giving necessary pressure to secure a “win-lose” contract in India. Despite being in foreign country they secured 20 years concessionaire contract in USD, free from fuel and operation hikes it is seem to be in their favour at a minimum risk.

20 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

iii) Enron also managed to solve some political issues very quickly. For example they managed to resume the halted project from the new government in less than eight (8) month period.

As conclusion, Enron have more weaknesses compared to strength. They should improve the way they control and manage the project. Perhaps with good project management skills and abilities to use the necessary tools might be able Enron to perform better. For example Project Integration Management skill will help the PMT/PM to integrate the project better. Project integration management includes the processes and activities needed to identify, define, combine, unify and coordinate the various processes and project management activities within the project management process groups. It involves making choices, tradeoffs among competing demands and managing interdependencies (PMBOK 4th Edition 2008).

The project cancelation is mainly because a few main factors namely very high cost, political pressures and allegations of irregularities. Shall Enron truthful to themselves the project can be scale down further to minimise the cost. Using local fuel e.g. coal and NG might further reduced the cost. They should understand a good contract is meaningless shall the client cannot effort to pay. Arrogant attitude and applying pressure to a foreign country is no more applicable as colonial era had passed, it will only inviting backfire to the project. A lot of things should be made transparent and following the rules and regulation of the home country to avoid critics.

For recommendation, Cost Benefit Analysis (CBA) should be carried out in order to identify and measure various cost/benefits and whether the project is economically viable and whether the project should be carried out in the first place. Stakeholder analysis of a tool for identifying stakeholders and their concerns should be carried out in order to identify, approach and solve the problem that may arise. Table 3 (below) shows the potential stakeholders for DPP Project.

21 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Table 3: List of Potential Stakeholder in DPC

No

Stakeholder

Description

Environment

1

Government of India (GoI)

Government

External

2 3

State of Maharashtra (SoM) Fire Department

Government Regulatory Body

External External

4 5

Utility department Maharashtra State Electricity Board (MSEB)

Regulatory Body Client / Share Holder

External External

6

Bechtel

Share Holder

External

7

GE

Share Holder

External

8

Enron

Project Manager / Share Holder

Internal

9

Affected Department

Functional Managers

Internal

10

Team

Project Team / Interest Group

Internal

11

Project Board

Steering Committee

Internal

12

Subcontractors

Contractor

External

13

Suppliers

Vendors

External

14

Public & Community

General Public

External

15

Non Government Organizations

Pressure Groups

External

16

Users

End Users

External

. (Adapted from: PMBOK 4th Edition 2008).

Figure 11: Stakeholders Power/Interest Matrix for DPC Project

(Adapted from: PMBOK 4th Edition 2008). 22 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

The stakeholder analysis (above) is to identify their power, interest and influence in the project environment. In Enron case, it is likely to have high power and high interest while the public & community have low power, low interest. But due the explanation, land acquisition and other EIA matters were not done carefully they have become low power but high interest. With this analysis Enron shall be able to manage and tackled the stakeholders concerned.

Sample for stakeholders analysis, their concerned, influence of issues and strategies to resolve them are shows in Figure 12 (next page).

23 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Figure 12: A Sample of Stakeholders Analysis for Dabhol Power Plant Project. Stakeholder Group organisation/ individual Government of India (GoI) State of Maharashtra (SoM)

Area of concern i) High Tariff/Payment iv) Complaint from users ii) High Tariff/Payment i) Complaint from users iii)High Tariff/Payment iv) Complaint from users

Area of Interest/issues High

Influence on issue Project Halted

- Maintain a good repo.

High

Project Halted

- Maintain a good repo.

High

Maharashtra State Electricity Board (MSEB) i) Complaints ii) Picket.

High

i) Complaints ii) Picket.

High

Public & Community

Non Government Organizations High Users

i) High Tariff

Government agencies

i) Relevant Approval

High

- Project Halted - No payment - LAD - NCR

Strategies

- Negotiation for lower prices. - Request to sell surplus energy to others. - To sit as MESB Director to understand their capacity to pay.

- Project Delay - Tarnish image.

- Carry out dialogs and explain to public on EIA matters. - To settle land acquisition, fresh water supply human right and etc. - Project Delay - Carry out dialogs and explain to public on EIA - Tarnish image. matters. - To settle land acquisition, fresh water supply human right and etc. -No customer to MESB - Negotiation with MESB for lower prices. -No payment to DPC -Approval matters might at stake.

- Maintain a good repo.

(Adapted: PMBOK 4th Edition 2008) 24 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

5.0 Risk Management According to PMBOK, Project Risk Management includes the process of conducting risk management planning, identification, analysis, response planning and monitoring and control on the project. The objectives of Project Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project. (PMBOK 4th Edition 2008).

Figure 13: Project Risk Management Overview - Summary of the PMBOK six Project Risk Management Processes.

(Source: PMBOK 4th Edition 2008).

25 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

For a big scale project such as Dabhol Power Plant, managing risk is very vital in order to ensure the project can smoothly carry out to achieve its objectives. Risk management shall start with Plan Risk Management where the team should carefully and clearly planning how to enhance the possibility of success of the five other risk management processes. It should be completed early during project planning, since it is crucial to successfully performing the other risk management processes during the planning stage and throughout the project life cycle.

Risk identification involves identifying potential project risks. Risk Identification produces a deliverable — the project Risk Register – where risks are identified that may affect the project’s ability to achieve its objectives. Risk Identification documents which risks might affect the project and documents their characteristics. The Risk Register is subsequently amended with the results from qualitative risk analysis and risk response planning, and is reviewed and updated throughout the project (Caltrans May 2, 2007).

Risk identification is an iterative process as new risks may submerge when the project progresses through its life cycle and some formerly identified risk may withdraw. All the risks identified will normally been categorized under it sources e.g. environmental, design, right of way, engineering service risk, construction, project management, external, natural disaster and etc. This process also called the risk breakdown structure, suitably tailored to the project. The identified risks than put into a risk register they can easily be monitored by the project manager/management and the risk owner. All the risk shall be labelled and be ranked based their weightiness and whether they are threats, opportunities, triggers, residual risk, secondary risk or risk interaction. The Risk Identification process than shall be used in Qualitative Risk Analysis process.

Risk Analysis – Qualitative assesses the priority of identified risks using their probability of occurring, the corresponding impact on project objectives if the risks do occur, as well as other factors such as the time frame and risk tolerance of the project constraints of cost, schedule, scope, and quality (Caltrans May 2, 2007).

26 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Risk Analysis - Quantitative is a way of numerically estimating the probability that a project will meet its cost and time objectives. Quantitative analysis is based on a simultaneous evaluation of the impact of all identified and quantified risks. The result is a probability distribution of the project’s cost and completion date based on the identified risks in the project. Quantitative risk analysis involves statistical techniques, primarily Monte Carlo simulations that are most widely and easily used with specialized software (Caltrans May 2, 2007).

A specialized Monte Carlo simulation software program iterates the project schedule or cost estimate, drawing duration or cost values for each iteration at random from the probability distribution derived from the 3-point estimates and probability distribution types selected for each element. The 3-point estimates determining the optimistic, the most likely and the pessimistic values for the activity or cost element. The programme are able to answer the question e.g. how likely is the current plan to come in on schedule or on budget, how much contingency reserve of time or money is required and to determine which activities item cost elements contribute the highest probabilities in schedule or cost of overrun?

Risk Response Planning is the process of developing options, and determining actions to enhance opportunities and reduce threats to the project’s objectives. It focuses on the highrisk items evaluated in the qualitative and/or quantitative risk analysis. In Risk Response Planning parties are identified and assigned to take responsibility for each risk response. This process ensures that each risk requiring a response has an owner monitoring the responses, although a different party may be responsible for implementing the risk handling action itself. The project manager identify which strategy is best for each risk, and then design specific action(s) to implement that strategy (Caltrans May 2, 2007).

Indentify all the risks and analyse the negative risks/threats that can be handled by eliminate, transfer or mitigate them. In the other hand for positive risks/opportunities they can be approached by exploit, share, enhance and acceptance of the risks. Active acceptance strategy can be carried out by establishing a contingency reserve, including amounts of time, money, or resources to handle the threat or opportunity or to design some responses for the use if

27 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

certain events occur (contingency plan). In the contrary passive acceptance may leave the project team to deal with the threats or opportunities as they occur.

Risk Monitoring and Control monitors the execution of planned strategies on the identified risks and evaluates their effectiveness. Risk monitoring and control continues for the life of the project. The list of project risks changes as the project matures, new risks develop, or anticipated risks disappear. (Caltrans May 2, 2007).

Risk meetings should be regularly held during project execution where all or a part of the Risk Register is reviewed to see how effective they were handle and new risks are discussed and assigned to their owners. The process of identification, analysis, and response planning of new risk shall be periodically reviews. Risk ratings and prioritization may change during the project lifecycle. If an unanticipated risk emerges, or a risk’s impact is greater than expected, the planned response may not be adequate, the project manager and the project team must perform additional response planning to control the risk such as choose for alternative response strategies, implementing a contingency plan, taking corrective actions and replanning the project. The risk owner reports periodically to the project manager and the risk team leader on the status of the risk and the effectiveness of the response plan.

Although

Enron is known to be very good in conducting project risk management, but in their

involvement in Dabhol Power Plant project it’s concluded no thorough risk studies were carried out or else they should be managed to identify them earlier, avoid or manage to reduce many of the issues that they had faced. Failure to carry out a substantial risk management and addressed some vital risks properly had contribute to the project failure. Shall the project risks were identified, delegated to the risk owners and been monitored and controlled throughout the project life cycle the project should be running smoothly as everyone knows their job function and responsibilities.

The risk management for Enron should be started with plan risk management by identify who should be responsible to each one of risk management process. Figure 13 shows the responsibility of some stake holder in risk management 6 process.

28 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Figure 14: Matrix shows the six processes and the responsibilities of the project manager and stakeholders.

(Source: Caltrans May 2, 2007).

Risk breakdown structure where all the indentified risk been categorized under it sources, will be conducted before they were put into a risk register. This is to avoid any risk been left out.

Figure 15: Risk were normally put into Risk Breakdown Structure

(Source: Caltrans May 2, 2007). 29 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

The identified risks should be put into a risk register where they can easily be monitored by the project manager/management and the risk owner. All the risk shall be labelled and be ranked based their weightiness e.g. whether they are threats, opportunities, triggers, residual risk, secondary risk or risk interaction. The same risk register shall later be updated periodically during throughout the risk management other process. All the risks should be analysed qualitative and quantitative to identify the seriousness of each identified risk, their probability, impact and to know how likely is the current plan can be met? How much contingency reserve of time or money is required? Using sensitivity analysis, which activities contribute the most to the possibility of overrunning schedule or cost targets? Quantitative risk analysis should be used in DPC either on project schedule, its cost estimate or on its other risks. An extensive quantitative risk analysis shall be able to assist the project manager/management to manage the risks in large, complex and high technologies projects.

The following are sample on how risk probability/impact been tabulated after the qualitative risk analysis been conducted.

Figure 16: Probability/Impact Matrix for Qualitative Risk Assessment (Sample)

(Source: Caltrans May 2, 2007).

Table 16, shows a sample of Risk Register for Dabhol Power Plant project that have been updated throughout the project lifecycle during the risk response planning and Risk Monitoring and Control processes. All the other risk management process can be revisited during the monitoring and control process periodically as the impact of some risks might change and new risks might be submerged. Monitoring all the potential risk register shall be an advantage to the project team as they can plan ahead and not to put the project at jeopardise

state. 30

Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Figure 17: Sample Project Risk Register that should be used to Monitor Risk in DPC and should be Analysed/Updated Consistenly.

ID

Risk Risk/ Rating Opportu nity

Risk Category

Date Found

Risk Root Cause Primary Probability Impact (P) (I) Description Objective

Risk Owner

Risk Risk Strategy Owner Trigger contact

Responses Action

Status/ Date Review

Negotiation with new government

Active

R18

1

R

Environ/ Politic

Cancellation Change of Economic/ of project Government Time

PM1

Accept

R12

2

R

Environ/ Social/

Poor Rebuilt Stoppage due to protest treatment to Reputation the local

PM1

Accept

Negotiation Active with relevant parties

R1

3

R

Environ/ Economic

Insufficient World Bank Economic/ funding refuse to give funding

PM1

Accept

Look for alternative Funding

R4

4

R

Clean water

Affect the project

Insufficient Const./ water in Basic req. Maharashtra

PM2

Accept

Built dedicated pipeline

Active

R23

5

R

Design/ Requirement

could not ramp-up to base load in 3hr fr idle

Less power required by MESB

Spec.

PM2

Accept

Propose to sell electricity to others therefore turbine will not idle

Active

R35

4

R

R/W

Stoppage

Improper land acquisitions

Const./ Time

PM3

Accept

Acquire lands through proper channel

Active

Active

(Adapted: Caltrans May 2, 2007).

31 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

It is concluded that the risk management was not carried out properly and the risk management framework were not in place since the project were faced one after another problem to be settled throughout its life cycle. Shall the six risk management process from risk management planning, identification, analysis, response planning and monitoring and control on the project being carried properly and periodically it shall be able to increase the probability and impact of positive events and to decrease the probability and impact of negative events in the project. In addition it shall help the team to foresee the farsighted sight of the project.

It is recommended for DPC to carry out the risk management for their Dabhol Power Plant project. Shall they do not have the expert to do so they can either hire a risk analyser to assist the project manager/project director or else they should send some their project team member to undergo risk management courses. DPC can also transfer some of the risk by buying Contractor all risks insurances of increase their coverage of the political risk insurances with OPIC.

6.0 The Success/Failure Factor for Dabhol Power Project If you ask project manager to define the criteria for project success, the response would be, in most cases, “on time, on budget, and within scope or performance specifications”. These criteria are often referred to as the triple constraint, shown in Figure below. It is generally depicted as a triangle with cost, schedule, and scope representing each side. (Saladis and Kerzner 2009). Figure 18: Triple Constraints.

(Source: Saladis, F. P., and Kerzner, H. ,2009). 32 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

It is possible to achieve a project successful even when management has failed and vice versa. There are many examples of project which were relatively successful despite not being completed on time, or over budget e.g. the Thames Barrier, the Fulmar North Sea oil project or Concorde. (Munns and Bjeirmi 1996).

The application of project management and its tools may enhance the probability of success but other contributors should also be determining as they are different between one project to another.

There are seven tools that appear in both the list of “most often used tools” and “tools with the greatest potential to contribute to improved project performance” are as follows: •

Lessons learned / Post mortems

•

Requirements analysis

•

Scope statement

•

Work breakdown structure

•

Project management software for monitoring of schedule

•

Project management software for task scheduling

•

Project management software for resource scheduling (Besner 2006)

In the case of the DPP project, all of the above are critical success factors. Although Enron depended on past experiences to manage the project, they seems did not have extensive records to call upon both because they were not properly documented and archived over the years, all the project are far apart, and the experiences staff had left. This indicates that previous projects were either not closed out well or the documentation are went missing. These entire seven tools should be made available and carried out during the planning stage. The schedule monitoring falls under the monitor and control process and should be carried out through the project life cycle and project management life cycle.

For large and international projects like DPP project, the Project Management Team/Project Manager should cover all these seven (7) Critical success as follows; •

“Win-win” situation for all parties and never practiced “win-lose” approach.

•

Collaborative effort – among all the stakeholders. 33

Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

•

Measurement, measurement and more measurement – Measure the situation before the project starts, ongoing and the results.

•

Gather lessons learned as you go - As experienced people may have left.

•

Cultural sensitivity and awareness throughout the project – It is hard to know and aware for all the cultural factors and their impact and therefore being sensitive surely help.

•

Proactive resource allocation – Proactive on the allocated human resources that might create problems.

•

Project organisation and manager and team member selection – How to structure the project and people, how to divide and deal with issues. (Lientz & Rea 2003)

It was concluded arrogant, applying pressure to home country government and “win-lose” approach taken by Enron are no more applicable and become backfire. In spirit, ”win-win” and collaborative approach among all the stake holders are more applicable and will manage to keep all parties in harmony and works toward to achieve the project goal. Works should be monitored and check throughout the project lifecycle and lessons learned should be picked at the same time to assist the project along the way. Cultural sensitivity and awareness of problems arose throughout the project lifecycle, proactive measures on resources and project team are also very crucial for the project success.

Again, the application of a formal project management framework is recommended.

7.0 Conclusions Large and international project are always complex from normal contract. Despite its large scale, they are not easy to control, consist of different cultures, different time zone, different currencies, involve variety of regulations and rules, political upheaval and uncertainty and the visibility of the project to the outside world.

34 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

They also stated among other reasons for international project to failed are the project being treated as normal standard project, excessive management attention, lack of activity to the local culture, failure to stay course, failure to take into account self-interest, overdependence upon technology and lack of measurement. (Lientz & Rea 2003).

Being one of India's first and largest foreign investment projects, DPP project was anticipated as a major step in improving the country's insufficient electricity in the early 1990s. Project financiers were excited about the opportunity of investing in India in hopes of attaining large returns. Unfortunately, the project has been twisted by crises and has resulted in multibilliondollar losses to investors and project lenders because of a poorly conducted negotiation process that allowed Indian national and state officials to take a series of opportunistic actions.

The DPC project is very good examples even a projects undertaken by international giant players e.g. Enron, Bachtel and GE, and with the strong backing of the local governments can still go terribly wrong. Project faced trouble since very beginning when World Bank withdrawn from giving financing. They labelled DPC as economically not viable as they feel the electrical tariff was very high compared to others provided by locals’ present power providers. Although lastly Enron managed to secure the financing but it had caused delay to the project.

They managed to influence the GoI and SoM for MESB to agree to one sided and a huge and expensive project that they themselves are actually cannot effort. The arrogant and “win-lose” approach, the pressure applied to the host governments and not transparent in handling the contracts matters and the people affected by the project had put the project in major critics and backfire. It was believed that these attitudes were actually the main factor for MESB to invoke the payment that had caused the project to shout down and also contributed to Enron collapse. There is a reason to believe this argument as Dabhol Plant are now running well after taken over by Ratnagiri Gas and Power Private Limited in 2005 and they even have intention to increase Dabhol Power Plant capacity for another 2,000-3,000MW (Bhaskar 2009).

35 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Four key areas the environment component, project management, risk management and the project success factors were not properly handle.

Environmental components should be carried for the project during the initial stage and throughout the project lifecycle. Project management tools e.g. PESTEL, SWOT, Porter’s Model, BCG Growth Matrix can be used to detect, manage, solve or avoid all these components before they affect the projects.

Enron have more weaknesses compared to strength therefore they should improve the way they control and manage the project. Perhaps facilitate their project management team with good project management skills and abilities to use the necessary tools might be able to help Enron to perform better. The project plan was developed without the input of key stakeholders.

All the six risk management process from risk management planning, identification, analysis, response planning and monitoring and control on the project are not being carried properly and periodically therefore it is not able to increase the probability and impact of positive events and to decrease the probability and impact of negative events in the project. In addition the project team are lacking with the farsighted sight knowledge of the project.

Enron practicing ”win-lose”, apply pressure, bullying and arrogant approach among all the stake holders and which had develop uneasiness, disappointments, dissatisfaction, critics and etc. which had jeopardised in achieving the project goal. Works not monitored and check throughout the project lifecycle and lessons learned were never picked along the way. Cultural sensitivity, awareness of problems arises and proactive measures on resources and project team that might assist the project success were never a priority.

Enron are not truthful to themselves, They should understand too profitable contract is meaningless shall the client cannot effort to pay. For the sake of the project, further scale down to minimise the cost should be look into. A lot of things were not transparent and not following the rules and regulation of the home country to avoid critics.

36 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Finally, the critical analysis revealed that Enron lacked the required project management skills in running the project.

8.0 Recommendations The report shall exposed the shortcomings from the critical analysis and investigation carried out whether the change of environment management, project management, risk management and project success had been properly analysed and carried out during the initiation stages and monitored towards the entire project life cycle. To effect such changes will take time and commitment from the entire organisation. The following are some recommendations that should be considered:

1.

Enron staff should be sent to understand the modern contract approach. New way how to handle contract relation e.g. “win-win” situation, collaboration, incentive, sharing risk, giving encouragement, sharing problem solving, better communication and etc. should be implemented in order to encourage all the parties involved works towards to achieve the project success. Arrogant and applying pressures are no more applicable.

2.

The agreed price in PPA should be made transparent, all financial parameters and breakdown should be defined and cannot be based on estimations figures. MESB, and other government agencies involved should be responsible. If possible should be carried out by competitive bids as transparency is able to clear up any accusation of bribery or misconduct.

3.

Enron is to carryout CBA and to identify whether the project is economically feasible and MESB are afforded to pay. Shall the project scale require a cut as it is better to do so rather than the client end up with payment default. Perhaps using local fuel e.g. coal and NG might further reduced the cost.

4.

To apply PESTEL analysis since the initiation stage and to be monitored and updated throughout the project life cycle.

5.

A project stakeholder management framework should be applied in order to categorize and understand their area of concern and enable the project team to take the necessary strategy/action to solve them. 37

Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

6.

Risk management is to be carried, managed and updated according to PMBOK from planning stage and throughout the project life cycle. Preventive measures should be place strategically in the project life cycle.

7.

Critical success factors e.g. cultural sensitivity and awareness of problems arise, proactive measures on resources and project team are also very crucial for the project success should be identified at the onset of the project and should be monitored throughout the project life cycle.

8.

To enhance negotiation skills by using Negotiation Decision Support system (NDSS) to provide automated, speedy and more accurate decision results.

9.

The critical success factors should be identified at the onset of the project and should be monitored throughout the project life cycle.

10. The setting up of a Project Management Office (PMO) is strongly recommended. 11. Enron staff involved in projects should be trained in project management and preferably certified. This will allow them to use the proper project management skill and necessary tools. 12. For a large scale project like DPP, setting up of a Project Management Office (PMO) is strongly recommended. 13. A configuration management system should be incorporated into the change control system and a formal change control system should be in place. A change control board should be convened for every project. 14. Enron should adopt an appropriate PMIS, preferably one that is automated. By doing so even people back in HQ can also monitor the project development. 15. The life cycle should consider project management as well. Project management deliverables must be properly defined and documented. 16. Enron should start compiling an archive of lessons learned through the project life cycle for references and references.

Adopting all or part of these recommendations might not give any assurance to achieve the desired success but by doing so it is probably can be greatly reduced the percentage of failure.

38 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

9.0 References 1)

Arundhati Roy (February 24, 2002). Enron in India: The Dabhol Power Project and Enron's Global Reach “Power to the People”. Revolutionary Worker #1140. Retrieved 8th October 2011, from http://rwor.org/a/v23/1140-1147/1140/enron-india.htm.

2)

Balasubramaniam, K. (Semester September 2011), EMCM5203, Lecturer Notes, Open University Malaysia.

3)

Bhaskar U. (Oct 11, 2009). New power project being considered next to Dabhol plant. Live Mint, The Wall Street Journal. Retrieved 1st November 2011, from http://www.livemint.com/2009/10/11223511/New-power-project-being-consid.html.

4)

Barkely T. Bruce (2004), Project Risk management, McGraw-Hill: New York.

5)

Belanger, T. C. and Highsmith, J. (2007) Another Look at Life Cycles, in Field Guide to Project Management, (2nd ed). D. I. Cleland, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172346.ch7

6)

Bjeirmi, B. and Munns A.K. (1996). "The role of project management in achieving project success." International Journal of Project Management 14(2): 81-87.

7)

Brandon, D. M. (2007), Project Performance Measurement, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch34

8)

Bryce, Robert. (2003). Pipe dreams: greed, ego, and the death of enron. [Books24x7 version]

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Reference (continued) 17) Dabhol Power Project, Retrieved 8th October 2011, from http://www.scribd.com/doc/13451579/Dabholpower-project. 18) Davis, A. M., Hickey, A. M. and Zweig, A. S. (2007), Requirements Management in a Project Management Context, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch17 19) DPC is now Ratnagiri Gas and Power Private Ltd, July 07, 2005 17:51 IST, Rediff.com, Retrieved 22th October 2011, from http://www.rediff.com/money/2005/jul/07dpc.htm. 20) Fact Sheet (February 22, 2002), Background on Enron’s Dabhol Power Project, Minority Staff Committee on Government Reform, U.S. House of Representatives. Retrieved 8th October 2011, from http://www.scribd.com/doc/36436051/Dabhol-Fact-Sheet. 21) Frame, J. D. (2007), Lessons Learned: Project Evaluation, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch47 22) Gale, A. (2007), Competencies: Organizational and Personal, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch43 23) Gardiner, P. D. (2005). Project management : a strategic planning approach. Houndmills, Basingstoke, Hampshire ; New York, Palgrave Macmillan. 24) Gareis, R. (2007), Management of the Project-Oriented Company, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch6 25) Haljala, M., Vaisanen, S., Alam, J., Utriainen, J, and Kolster, N. (2002), D a b h o l C a s e S t u d y, Tu22.439 Project finance (Assignment). Retrieved 8th October 2011, from http://www.scribd.com/doc/61428763/Case-Dabhol. 26) Hansen, K., O’Sullivan, R.C., and Anderson, W.G., (2005), The Dabhol Power Project Settlement-What Happened? and How?, Infra Structure Journal 12, Retrieved 8th October 2011, from http://www.scribd.com/doc/47364965/Dabhol-InfrastructureJournal12-2005. 27) Harpum, P. (2007), Design Management, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch18 28) Harpum, P. (2007), Project Control, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch1 29) Human rights watch, Retrieved 13th October 2011, from http://www.hrw.org/reports/1999/enron/index.htm 30) Ive, G. (2007), Private Finance Initiative and the Management of Projects, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch16 31) Jaafari, A. (2007), Modeling of Large Projects, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch13 32) Jugdev, K. M., Ralf (2005). "A Retrospective Look at Our Evolving Understanding of Project Succes." Project Management Journal 36(4): 19-31. 40 Date: Semester September 2011

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Reference (continued) 33) Kerzner, H. (2009). Project management: a systems approach to planning, scheduling, and controlling (10th ed.). Hoboken, N.J.: John Wiley & Sons. 34) La caída de ENRON, Retrieved 8th October 2011, from http://www.slideshare.net/guiramirez/la-cada-deenron. 35) Larson, E. (2007), Project Management Structures, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch3 36) Leach, L. P. (2007), Critical Chain Project Management, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch33 37) Lewis, James P.. (2007). The project manager's desk reference, third edition. [Books24x7 version] Available from http://common.books24x7.com/toc.aspx?bookid=3408. 38) Lientz B. P. & Rea K. P. (2003). International project management. Amsterdam ; Boston: Academic Press. 39) Magenau, J. M. and Pinto, J. K. (2007), Power, Influence and Negotiation in Project Management, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch41 40) Martin, M. G. (2007) Building the Foundation for Project Success—The Statement of Work, in Field Guide to Project Management, (2nd ed). D. I. Cleland, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172346.ch14. 41) Merritt, G. M. and Smith, P. G. (2007), Techniques for Managing Project Risk, in Field Guide to Project Management, (2nd ed) D. I. Cleland, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172346.ch13 42) Morris, P. W. G. (2007), Project Management in the Construction Industry, in The Wiley Guide to Managing Projects (eds P. W. G. Morris and J. K. Pinto), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172391.ch54 43) Orfano, F., and Mc Donough,, M. (Jan 2, 2011), Components of a PESTLE Analysis, Brighthub, Retrieved 12th October 2011, from http://www.brighthub.com/office/project-management/articles/51754.aspx. 44) Paul, Debra & Yeates, Donald & (eds), James Cadle. (2010). Business analysis, second edition. [Books24x7 version] Available from http://common.books24x7.com/toc.aspx?bookid=41313. 45) Pickett, K.H. Spencer. (2005). Auditing the risk management process. [Books24x7 version] Available from http://common.books24x7.com/toc.aspx?bookid=14012. 46) Pinto (ed), Jeffrey K.. (1998). The project management institute project management handbook. [Books24x7 version] Available from http://common.books24x7.com/toc.aspx?bookid=14259. 47) Pinto, J. K. (2007), The Elements of Project Success, in Field Guide to Project Management, (2ed ed). D. I. Cleland, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470172346.ch2 48) Power purchase agreement scans, Retrieved 13th October 2011, from http://altindia.net/enronPPA/. 49) Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK guide) (4th ed.). Newtown Square, Pa.: Project Management Institute, Inc.

41 Date: Semester September 2011

Name: Mohd. Norizam Bin Md. Salleh Matriculation No.: CGS 00534317 Intake: September 2010 Assignment – EMCA5103 (International Project Management)

Reference (continued) 50) Ratnagiri Gas and Power Private http://www.rgppl.com/index.php.

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42 Date: Semester September 2011