Managing Complex Investment Procedures

Question

1. What is the annual cement consumption per person in developed countries?

2. What techniques were used in the research method?

3. What causes delays in project completion?

4. What is the primary cause for project delays in EIA?

Accepted Answer

In developed countries, the average annual cement consumption per person is approximately 250 kilograms. This data is based on the assumption that cement is an essential ingredient in construction and physical groundworks, and it cannot be substituted with other materials. The prediction of cement consumption is calculated based on the number of people residing in a certain area. For example, in 2010, Indonesia had 245 million people, which would require about 61.25 million tons of cement annually. This prediction led to the construction of numerous cement projects in Indonesia from 2010 to 2018 to support the massive infrastructure strategy. The study aims to explore project bottlenecks and improve management in cement projects, providing valuable insights for investors and the Indonesian government.

Accepted Answer

The research method involved three stages: a questionnaire survey, issue discussions, and an evaluation workshop. The techniques were advised by Walker & Harland (2008) and included the analytical hierarchy process (AHP) and exploratory analysis. AHP is a part of the multi-criteria decision-making (MCDM) technique to resolve uncertain issues, while exploratory analysis considers various alternative perspectives on different stages. The methods aimed to increase reliability by using various techniques, including descriptive analysis and qualitative techniques with descriptive statistical tools. The process started with case studies and 31 cement projects from 2010 to 2018, followed by exploratory analysis and AHP in the second phase, and argumentation, standings, and reasons in the third phase to justify the variation in project completion time. The methods are principally mixed interdisciplinary studies that involve discussion, coordination, and management innovations.

Accepted Answer

Based on the results, delays in project completion are primarily caused by the preparation and operational stages. The table shows that each project title includes the stage of preparation, phase of accomplishing engineering, procurement, construction (EPC), testing operations in the commissioning stage, and schedule of closure projects. The substance of EPC projects is standard for every project practitioner, and they must perform all matters of the projects to the end. However, in Indonesia, the preparation stage is generally not included in the EPC scope, but it takes approximately 37.5% of the total length of the whole schedule. This stage has seized the schedule for at least 18 months and remained uncertain until the end of the project. Experts can stand based on their professional experience, while others may deliver different considerations. The results concluded that preparation and operational projects were the sources of delays, and these issues became a focus of discussion in meetings through an analytical hierarchy process.

Accepted Answer

The primary cause for project delays in Environmental Impact Analysis (EIA) is the delay in obtaining approval for the EIA. The EIA document is a crucial instrument of environmental assessment that must be compiled by certified entities with the exclusive right to conduct EIA processes. The Minister of Environment Decree No. 5 of 2012 outlines the types of business plans and activities that require EIA. The EIA consists of terms of reference, environmental management plan (EMP), and environmental monitoring plan (EMoP). Every project owner must perform an EIA before construction projects, although the scale and scope of projects may be optional for EIA. The government of Indonesia has implemented EIA management, with large projects requiring EIA and limited projects requiring environmental permits. Indonesia Law No. 32 of 2009 mandates the presentation of EME, EMoE, EMP, EMoP, EIA, and SCEM documents for environmental permits. The average time to complete these documents ranges from 12 to 24 months, and some projects did not complete the EIA, leading to construction halts.

Accepted Answer

The Terms of Reference (TOR) in Environmental Impact Analysis (EIA) is obtained from the project owner and cannot be done by the project team. It is essential to coordinate with licensed environmental consultants or special project teams representing the owner or counterpart to compile a preliminary environmental impact analysis. The TOR includes all aspects that have been applied recently and potential future impacts during the construction project. It serves as a guideline for the EIA process and helps in identifying the specific region and level of impact for public announcements and community involvement.

Accepted Answer

Factors influencing construction project size include the complexity of operation, PESTEL impacts, funding amount, construction duration, and other considerations. For cement corporations, projects can be classified as small, medium, or large based on these factors. The study covers 14 cement corporations that executed 31 construction projects from 2010 to 2018, with project durations ranging from three to four years. Each project goes through preparation, execution, and closure stages, with the preparation stage being the most critical. Building a solid team and having a future vision are crucial for project success.

Accepted Answer

Project management in Indonesia's construction projects operates through a structured framework that involves internal and external operations. Internally, the project team covers and manages divisions such as preparation, engineering, procurement, construction, and commissioning. Supporting divisions include accounting and finance, security and health, human resources and general affairs, and project control and risk. External operations involve communication and coordination with suppliers, consultants, and counterparts. The flow of accounting and finance is identified within the project team, but for significant funding, coordination with the project owner is mandatory. Figure 6 illustrates the flow mechanism of project operations, including invoicing and payment settlement for main equipment suppliers and smaller transactions handled by the accounting and finance division. The project owner plays a crucial role in managing funding and coordinating with the project team for various financial aspects.

Accepted Answer

To effectively handle the preparation stage in project management, it is necessary to assign a specialized and competent team. This team should be responsible for managing the uncontrollable and uncertain aspects of the stage. Additionally, the involvement of environmental, economic, and legal experts is crucial to ensure compliance with procedures and regulations. During the preparation stage, deliverable documents should include feasibility studies and environmental impact analysis (EIA) to prevent negative impacts on the environment. Strong professional communication is essential to address environmental issues and avoid damaging the company's reputation. Despite the relatively small portion of costs allocated outside (5.56%), the team must pay the highest attention to the outside, as any failure during the environmental assessment can have significant consequences on the overall project.

Managing Complex Investment Procedures

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Most frequently asked questions

1. What is the annual cement consumption per person in developed countries?

2. What techniques were used in the research method?

3. What causes delays in project completion?

4. What is the primary cause for project delays in EIA?

5. What is the purpose of the TOR in EIA?

6. What factors influence construction project size?

7. How does project management in Indonesia's construction projects operate?

8. How can project management effectively handle the preparation stage?

Citations

Enhancing supply chain resilience in offsite construction through the procurement strategy: a systematic literature review

References

Supply chains in the construction industry

Improving construction management practice with the Last Planner System: a case study

Emerging procurement technology: data analytics and cognitive analytics

Analysis of delays in Tanzanian construction industry

E‐procurement in the United Nations: influences, issues and impact

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