Project Management Institute

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2011 PMI PROJECT OF THE YEAR FINALISTS

BY KEVIN ALLEN

Aluminum. Water. Electricity. We’ve come to depend on each of these in some way or another in our daily lives—and they were the focus of the three finalists for the 2011 PMI Project of the Year.

Each initiative survived a historically brutal global economy and stringent deadlines to meet the triple constraints. One project took advantage of cloud technology to manage a large, dispersed team. Another was forced to accommodate equipment that had sat in storage for three decades.

Together, these megaprojects demonstrate the power of project management.

Here’s an overview of the finalists for the 2011 PMI Project of the year. Look for in-depth case studies on each of these projects in the coming months.

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AND THE WINNER IS...? The 2011 PMI Project of the Year will be presented at PMI Global Congress 2011—North America, scheduled for 22-25 October in Dallas/Fort Worth, Texas, USA. Visit PMI.org to learn more.

OAK GROVE STEAM ELECTRIC STATION

PROJECT: Restart a power plant megaproject that has seen 30 years of delays—using equipment from the 1970s
BUDGET: US$1.92 billion
LOCATION: Franklin, Texas, USA
KEY PROJECT PLAYERS: Luminant, Fluor
HIGHLIGHT: After numerous delays and with outdated equipment, the rebaselined project comes in on time and on budget—while setting a low-emissions record.

THE POWER OF PERSISTENCE

The Oak Grove Steam Electric Station is a project nearly four decades in the making.

In the mid-1970s, construction was approved on two lignite coal-fired power plants in Robertson County, Texas, USA. Then the country’s economic climate shifted, the demand for new power generation was reduced, and the projects were stalled—the first of many delays.

Equipment that had been delivered sat in storage until power generator Luminant decided to resurrect the projects in the early 2000s, responding to an increasing electricity demand. The company decided to combine the two projects and move forward on the dual-unit Oak Grove Steam Electric Station on a site in Franklin, where some infrastructure work had been started.

The project plan included construction of two supercritical boilers, which operate at extremely high pressure, as well as two steam turbine generators and two 420-foot (128-meter) chimneys.

Fluor, the project management consulting giant, was tapped to provide engineering, procurement, construction, commissioning and maintenance services in April 2006, and construction began in June the following year.

When the project was restarted, the team found itself forced to work with equipment that was 30 years old.

“We began with an assessment analysis of the equipment they had purchased and had kept in storage to see what was still proper, viable and usable—what might be missing over the years and what needed replacing,” says Greenville, South Carolina, USA-based Clinton Smith, PMP, vice president at Fluor. “It was a very extensive effort in bringing that in-storage, aged equipment to a condition that we would stand behind for a very large power plant.”

Looking to avoid further delays, Mr. Smith’s team followed a rigorous schedule. He credits an aggressive procurement group with helping to keep the project on schedule by using global sourcing to overcome labor shortages and limits on raw materials.

“We scoured the Earth for the best price and best delivery of the parts and pieces we were really needing,” he says.

Despite its numerous challenges, the US$1.92 billion project was completed on time and on budget, per the rebaselined plan, in June 2010.

Oak Grove delivers 1,700 megawatts of electricity to local residents, operating with the capacity to power an average of nearly 850,000 homes. And it does so with the lowest emissions rates of any lignite-fired power plant in the United States and 70 percent lower emissions than the national coal plant average.

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EMAL SMELTER COMPLEX

PROJECT: Build the world’s largest single-site greenfield aluminum smelter
BUDGET: US$6 billion
LOCATION: Al Taweelah, Abu Dhabi, United Arab Emirates
KEY PROJECT PLAYERS: Dubal and Mubadala
HIGHLIGHT: One of the largest industrial projects in the region, the initiative involved groundbreaking technology, and was delivered under budget and ahead of schedule.

FUSING TOGETHER

To communicate effectively with stakeholders around the globe, the project team working on the largest single-site greenfield aluminum smelter turned to an emerging technology.

Built in the Khalifa Port Industrial Zone in Al Taweelah, Abu Dhabi, United Arab Emirates, the US$6 billion first phase of the Emal Smelter Complex marks one of the largest industrial projects in the country. At the peak of its construction, 18,000 workers were on-site, according to project director Jerzy Orzechowski.

Emal (Emirates Aluminum) served as the project owner, a joint venture between Mubadala, an investment arm of the Abu Dhabi government, and Dubal (Dubai Aluminium). The engineering, procurement and construction management team was a partnership between SNC-Lavalin in Canada and the Australian company WorleyParsons.

With stakeholders located around the globe, the project team used cloud computing and virtual private networks to ensure that all key players had access to the information they needed. More than 1,400 registered users were able to access project documentation from eight geographical locations.

The global economic crisis occurred at the height of construction, and Mr. Orzechowski’s team was charged with keeping the project on track.

“That created a tremendous shortage of resources up front and pricing constraints,” he says. “To keep the project on schedule and on budget, we had to step in with a number of contractors to rectify problems and keep the bigger ship afloat while continuing the work.”

Mr. Orzechowski divided the project into seven parts, each under the guidance of an area manager: infrastructure, the power plant, port and material handling, energy, reduction systems, carbon and casthouse (where molten aluminum is cast into ingots and other products).

The divide-and-conquer approach meant “the problems are not as global—they’re more identifiable,” Mr. Orzechowski says. “That allowed management like myself to move into the areas and quickly find solutions, rather than looking directly all the time, because you manage by exceptions with projects of this size.”

Due to the tremendous market pricing pressures on the commodity and resource costs, two value-improvement programs were performed during the project execution phase to optimize the scope and budget.

The smelting facility was completed December 2010 under budget, and the first hot metal was achieved 20 months after groundbreaking—four months ahead of schedule.

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PRAIRIE WATERS PROJECT

PROJECT: Deliver a water-supply public works project in response to a drought.
BUDGET: US$754 million
LOCATION: Aurora, Colorado, USA
HIGHLIGHT: The project was delivered on time and US$100 million under budget.

WATER OF LIFE

With the city of Aurora, Colorado, USA facing a major water shortage after a two-year drought, time was of the essence for the Prairie Waters Project.

The city’s water department partnered with engineering and program management service provider CH2M Hill to deliver one of the largest water-related public works projects in the state. The project plan called for a pipeline, three pumping stations and a treatment plant that will meet the city’s water needs through 2030.

“It was a very large project for us to undertake,” says Larry Catalano, manager of capital projects for the City of Aurora, Colorado. “We hadn’t done anything of this magnitude ever. Plus, with the critical nature of the drought situation that we were in, we didn’t know how long it was going to continue. So it was of paramount importance to bring it on line when we said we would.”

The project spanned six local governments’ jurisdictions. Obtaining permission to construct in these areas required 18 months of complex negotiations and more than 400 permits.

Mr. Catalano worked to minimize permits whenever possible, but designed the project to meet all requirements. In one instance, the U.S. Army Corps of Engineers told the project team that to avoid a permit it had to tunnel a creek crossing that Mr. Catalano thought was “fairly dry and innocuous.”

He convinced representatives for the Corps of Engineers to inspect the site. They eventually determined that the creek could be crossed using the open cut excavation method, which doesn’t involve digging a trench—saving the project time and money.

“We questioned everything to try to keep costs down but also comply with all permit requirements,” Mr. Catalano says.

One of the project’s goals was to minimize impact on the environment. Mr. Catalano’s team worked with the Colorado Division of Wildlife and the Division of Migratory Bird Management and many other jurisdictions as required to secure necessary permits. Team members also held a training exercise for each of the contractors to help them recognize what to do when they encountered environmental issues.

The megaproject closed ahead of schedule and a whopping US$100 million under budget.

“Where we were really able to achieve our savings was through aggressive project management, attention to detail, partnering and continuous value engineering,” Mr. Catalano says. “Our construction managers, project managers and the contractor worked together to look for ways that did not affect the integrity or the design of the project to find ways to save money.” PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK SEPTEMBER 2011 WWW.PMI.ORG

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