Design, Engineering & Consultancy

INTRODUCTION
The industrial and economic liberalizations and development of human resource to combat liberalization for sustaining Indian trade and commerce from foreign competition for survival, have opened the flood gate of industrial development requiring effective design engineering and consultancy services from concept to commissioning of a project. The Indian organizations providing design, engineering and consultancy services have to take greater responsibility to provide effective services to fulfill the project demand of controlling cost, timely implementation of project and assuring the quality of project for targeted parameters.
Cost and time over runs have become almost a regular feature in Indian projects. The implemented project quality, in many cases, does not produce market tenable products in desired quantity and quality. Thus the profitability of the project contemplated in the conceptual stage cannot be derived and project failure often arises. The extend and nature of failure of the project depend upon the size of the project and entrepreneurs are forced to combat the situation undertaking balancing facilities, modification of the units with additional expenditure. Capacity derating has become a normal feature in Indian projects wasting valuable capital investments and reducing profit margin.
TYPE OF PROJECTS
A project is a customer’s job for creating a productive wealth or fixed asset capable of producing goods or generating services in a specified time and cost. It is carried out in a planned way to satisfy customer, his stated and implied needs with totality of features using certain specific resources.
Projects can be of single technology or multi-technology. Size of projects can be small, medium and large. In the multi-technology projects, a number of technologies are used to process the input raw material into the finished products. The project produces a number of saleable products or semis and byproducts. Integrated steel plant is a multi-technology project. In a single technology, one technology is used to process the input material to one finished or semi finished product. Normally some of the chemical plant and some speciality plants are of single technology type.
Obviously multi-technology projects are large projects and single technology projects are small projects with some exceptions.
Technology can be defined as the sum of knowledge which allows things to be done. Technology means the knowledge of how something is made and it is the science of industrial art. It is a combination of knowledge and technique. Technique is the skill needed to carry out some specific task. Thus it is mastering to get the desired quantity and quality of product. Knowledge is of two types embodied and disembodied (Fig. 1). Embodied knowledge is characterized by equipment, raw material, built in the environment and operating procedure (drawings and manuals). The disembodied knowledge is tacit which is learnt by keen association, minute observation on actually doing in every step and application. It is the tacit knowledge hampers the performance of any product in actual application, product specification and plant performance. Thus the important aspect of assimilation of knowledge is tacit understanding. Failure of many projects is attributable either on non-availability of tacit knowledge or transfer of tacit knowledge. Technology know how supplier leave a gap in technology transfer through nondivulgence of this tacit knowledge fully.
PROJECT CONSULTANT
To meet the economic and social need of the country a project is conceived and implemented for creating wealth, producing goods or generating services. The execution of project is carried out in a planned way to meet the project objective with the use of a number of resources – man, material, money and time. The cost, time and quality of project are managed by the project participants – The client, the consultant and the contractors. Thus success of a project depends upon the integration of multidisciplinary functions. Each of the participants together with the government should give their best through planning, organizing, execution and control towards project success.
To avoid cost and time over run every entrepreneur hands over the work of a project to a consultant to steer for the success from concept to commissioning keeping the financial management in his own hand. The complexity and vast one time operation are thus left to one able hand for guidance, control and monitoring. The role of consultant in any project is immense and success of the project depends upon the correct performance of the project consultant.
The functions of the project consultant are :

Project identification (product, services)
Selection of technology nad knowhow
Project profitability
Design and engineering
Selection of vendor
Effective time,cost and quality control
Management of site activities
Documentation control
Establishment of project performance
Post commissioning and back upsupport services

The consultant provides the services in various stages of the project. The principle stages of the projects are :

Conceptual
Evalution and arrangement of finance
Pollution control clearence
Design and engineering
Construction, erection, Start up and commissioning
Commercial production and stabilisation

ROLE OF CONSULTANT IN PROJECT STAGES
Conceptual stage
In the conceptual stage the consultant identifies the product to be produced through market survey, analysis of demand, assessment of growth rate, analysis of technical and financial strength and weakness of the entrepreneur and finally selects the product mix. Depending upon the financial strength and availability of the fund, the phases of the project is also chosen.
The consultant prepares a brief project profile together with the capital investment for the consideration of the entrepreneur. Once the project profile is lucrative on the consideration that the products have marketable edge over other operators in the same area to sustain competition, have appreciable growth rate in dramatic and foreign markets, have established consumer segment and that the new original product have clear potential demand, the consultant prepares a techno-economic feasibility report (TEFR) to clearly understand the project parameters together with clear market potential. In many cases the project profile can be a preinvestment feasibility report to address the factors in greater details. The pre-investment feasibility report addresses almost all the areas included in TEFR described later, but very briefly and broadly.
Bases on the demand pattern of the product, projects can be classified as :

Export oriented unit(EOU)
Import substitution unit
Production of a new product for domestic market
Products for local designated consumers
Diversification
Expansion of existing capacity and product quality improvement
Special purpose project
Research and development projects
Welfare projects
Modernisation and modification

Whatever may be the type of project, in TEFR the following points are normally addressed very precisely :

Establishmet of correct demand, growth rate and selection of product mix
Selection of technology and knowhow
Possibility of backward and forward integration
Site location, layout and transportation of raw material and finished products
Availability of raw materials with possibility of tie up or memorandum of understanding with supplier for long terms assurance of supply of raw materials
Composition of plant and equipment
Requirement of manpower and training
Assessment of project time with implementation schedule
Techno-economic evaluation which includes :

Project cost estimate
Operating cost for mvalue addition
Raw material cost and finished product cost
Cash flow statement
Debt-Equity ratio
Pay back period and break even point
Internal rate of return
Project profitability statement

The cost estimate and the profitability are the estimated value. The actual values may be different after execution of project due to various variable factors. The influence of variation of capital (project) cost, cash inflows, project life and cost of capital (interest rate) (on net present value are checked) through sensitivity analysis to know clearly the risk involved in selection of the project.
In some cases the social cost benefit is worked out to establish the project viability when a project cannot be implemented through normal economic consideration. Such projects are undertaken by Government.
EVALUATION AND ARRANGEMENT OF FINANCE STAGE
The consultant provides the technical assistance to the extrepreneur to obtain the financial assistance from development banks and financial institute. All queries of the bank is explained with back up data through review and rework when required. The quality participation is decided to arrange fund from open market. Normally the extrepreneur takes the lead and the consultant are registered with the developmental; banks. The TEFR prepared by the consultants becomes the most important document when addressed properly as per the guideline set by the different banks.
ENVIRONMENT POLLUTION CONTROL CLEARENCE
A project can be only implemented if clearence from State Government and Central Government is received on Environmental/Pollution Control. Many projects have already been identified as highly pollutant projects for the types of products they produce (viz. zinc, lead, copper, aluminium and steel producing industries, paper, pesticides, leather, textile, refineries, plastics, rubber, cement, paints, dye, fertilisers etc). Project particulars are submitted to State/Central Government's Ministry of Environment and Forest to ascertain that all possible measures have been taken in the project commitments to treat the pollutant sufficiently to bring down into the prescribed levels before release for safety of life and environment. Once this is guranteed and ensured, the project is cleared for execution. For this the consultant prepares EIA (Environment Impact Assessment) and EMP (Environment Management Plan) reports addressing the environment imbalance which might be caused by the pollutants (emitted gas, waste discharge water, noise) released from project wastes discharge/refuses and recommended the treatment facilities which must be included in the project equipment composition to arrest the limit of contamination. Once the EIA and EMP reports satisfy the stipulated condition and regulation, the trade off occurs.
Design and Engineering stage
Consultant plays a major role in this stage. The activities of the consultant can be dicided into two heads. These are

Basic and project engineering
Detailed engineering

In this basic and project engineering stage, the consultant gives a final shape to the project for details engineering to commence. The following work is undertaken by the consultant in the basic and project engineering phase:

Site survey and soil investigation to finally select the site parameters for design input data (final checking and arrangement, if required)
Clearly define the project as to composition of equipment, capacity (production programme) and quality and elemination of parallel flow
Selection of process and material flows, heat balance, process control, system design etc. (process design)
Overall layout based on soil data and survey report, shop location, road and railway network, location of raw material receipts and despatch of finished products.
Finalisation of energy optimisation and conservation proposals
Services and utility (gas, steam, water, compressed air network)
Waste product disposals for pullution control
Electical power distribution network
Shaping of mode of execution of the project, numbers of packages for floating tender enquiries and identification of prospective contractors and vendors to whom tenders will be floated.

In the detailed engineering phase the consultant uses the data generated in the basic and project engineering phase as input data and undertakes the following work :

Preparation of shop layouts and general arrangement drawings
Preparation of design drawings for steel structural work for the building
Preparation of detailed civil engineering and architectural drawing for the building and civil engineering drawing for equipment foundation and auxiliary service facilities.
Approval of structural fabrication drawing
Finalisation of input data, design, calculation and drawing and equipment parameters for preparation of technical specification in the contracting and procurement stage.
Preparation of as build drgs
Checking of operating and maintenance manuals submitted by each vendor
Checking of completeness in supply of drgs, design calculations and other documents as listed in the contract arrangement

Contracting and Procurement stage
The task of the consultant includes the following:

Preparation of technical specification for civil work (foundation and steel structural works)
Preparation of technical specification of various technical units, electrical devices, environment management proposals, utility and services network and equipment(including compressed air station, pump houses , raw water reservoirs and treatment plant, gas facilities and distribution), material handling equipment (including shop EOT cranes, conveyers, handling attatchment etc.), chemical system, auxiliary system, instrumentation, refractories etc.
Preparation of documents elaborating commercial clauses and other terms and conditions of contract (General Conditions of Contract and invitation to tender)
Techno-commercial evaluation of tenders, initial recommendation, evaluation of prices and final recommendation.
Preparation of draft letter of order/indent (LOO/LOI) and draft contract document for signing of contract agreement between purchaser and venders/contractors
Approval of vendors/contractor drawings
Approval of quality assurance plan and inspection of the plant and equipment
Compilation of test reports unitwise and shopwise

Now-a-days in order to overcome the time and cost over run, many customers in large projects implementation both in single or multi-technology type are using turnkey concept to provide and ensure a single point responsibility and accountability. In this style of project implementation, the entire project composition is broken down to a number units or technologywise package. The scope under each package is decided and technical specification together with commercial terms and conditions is prepared to give full responsibility to the vendor/contractor. The package includes civil and structural execution work together with detailed design engineering in addition to design engineering, manufacture, supply, erection and commissioning of plant and equipment of a particular technology shop or facility. In this type of execution work, the vendors/contractors are termed as EPC (Engineering, procurement and Construction) contractors. The consultant, in such execution style only approaved the layout equipment parameters and equipment general arrangement drawings, design drawing of the contractors to ascertain technology audit and project quality. The consultant also undertakes inspection of the plantand equipment manufactured in contractor's / sub-contractor's works.
The nature of job in each EPC requires that the main technology supplier ties up with specialised electrical, civil and erection contractors to form either a consortium or the electricals, the civil and erection constructors become subcontractors to main technology contractors who becomes the principal contractor in that EPC system. The one point responsibility and accountability is working very satisfactorily in large projects reducing projects time over run appreciably. But the project cost is rising considering by the mark-up on subcontractors price by the principal contracto. The customer, however, is relieved of conflict management and worriness to some extent and getting assurance on timely start of the commercial production to ensure project profitability.
The design, engineering and contracting procurement stages overlap to a great extent. Design and engineering continue almost upto end of the procurement stage. The consultant uses the design data and other engineering information (feed back data) supplied by various vendors and contractors for further engineering. These are mostly related to civil, structural, services and utility (gas, steam, water, compressed air) and electricalareas of project. Further the shop layout, shop composition, equipment disposition and configurations are given a final shape eliminating any interference for construction at site.
Construction and commissioning phase
Construction and commissioning phase is the last phase of the project execution. The consultant provides the following services in this phase and the services are purely supervisory nature:

Construction planning
Site preparation including leveling, marketing, identifying etc.
Designer supervision of civil and structural work
Check on adherence to safety rules and regulation
Supervision of erection and commissioning for maintaining quality standards and codes by vendors/contractors.
Quality controls and maintenance of quality records
Measurements and certification of contractors bills
Participation in preliminary acceptance tests to check completeness of the installation, preparation of defect list and supervision of liquidation of defects
Supervision of start up, trial run, no load tests of individual equipment items and integrated trial run as a whole
Supervision of commissioning activities and overseeing load tests
Maintenance of quality records
Formulation and overseeing of acceptance test to check on rated capacity, integrated operation, consumption of energy etc., preparation of defect list and supervision of liquidation of defects. Maintanence of quality records
Overseeing of performance gurantee test to check on performance data guranteed by the vendors
Supervision of final acceptance test, identification of shortfalls, listing of defect and liquidation of defects

Post commissioning and back up services
After completion of final acceptance test, the project goes into commercial production. Many cases the commercial productions starts soon after acceptance test. Project stipulation though specifies submission of all drawing and manuals before start of preliminary acceptance test, in many cases such normal practice disappears. Many vendors supply document late. Whatever be the condition, the consultant provides the following services as back up to complete the project in all respect:

Ensures supply of all manuals (operation and maintenance)
Ensures supply of lists of fast wear parts, insurance spares and spares for 2 years' operation and maintanence
Lubrication charts with correct specification
Compilation of all inspection and site test reports
Ensures supply of all drgs. as stipulated in contract - shop layout, equipment general arrangement and sections drawing for fast wear part, components, insurance spares and all kinds of replacable parts
Ensures supply of all as-built drawing by vendor / contractors
Preparation and checking of all as-built drawing to ensure incorporation of all site changes and modifications
Project completion report highlighting changes, performance figures and plant parameters

Project Management
Many entrepreneurs hand over the total implementation work of project to the consultant. In this case the entire project management is carried out by the consultant. The consultant is responsible for the following aspects of the project :

Project time
Project cost
Project quality

For management of these parameters of the project, the consultant undertakes:

Identification of channel of communication, responsibility and accountability
Project network planning involving project scheduling, sequencing of activities, preparation of PART and CPM charts and preparation of charts for various levels of control as under :

L1	:	The total project
L2	:	Major segments of the project
L3	:	Tasks in every segment
L4	:	Activities in every task
L5	:	Elements in every activity

Such charts are prepared by vendors and consultant approves these charts in relation to the overall project schedule to integrate the activities of all vendors.
For controlling and planning of total work monthly or for a specific period, various charts are considered :

'S' curves	:	for cumulative values
'Bell' curves	:	for periodical percentage progress values at certain interval of time

Based on these curves the project schedule is formulated for a specific time and is managed through L1 to L5 charts at various levels of organisation :

Engineering follow up
Monitoring of contracting services (placement of order on vendors)
Vendor follow ups and expediting for input data management for engineering
Vendor follow ups and expediting services for manufacture and supply of equipment to site
Site activity jmanagement through scheduling, monitoring review and rescheduling
Review and management of vendor/contractor performance and follow up of contractors
Progress review, reporting of shortfall, recommendation for expeditious completion, redeployment, remobilisation of sources crashing etc.
Financial forecasting, budgeting and control of cost
Quality assurance plan, technical audits, maintenance of quality
Manpower planning and management of training of operating personnel

The task of project management shows that the work has to be carried out by a group of competent personnel having right attitude, commitment towards project objectives, adequate leadership quality, self mativation, transparency and integrity, team building capability, sufficient technical capability and neutral management philosophy.
Conclusion
The project cost totally depends upon the consultant. The correct design and engineering together with optimum selection of composition of equipment in a project restrict the capital outlay. Proper scheduling, planning and monitoring in every stage of project implementation restrict time and cost over ruens. Listing of critical items and close monitoring,
follow up of critical vendors and weak contractors yeild better results. More stress on input data management ensure timely supply of design data for early completion of design and engineering. Many project failures could be very easily assigned to conflict on design and engineering activities and approval there after. A strong project team together with correct role play and functioning of consultants brings in project success by reducing cost and time over runs.