PROJECT REPORT FOR CONSTRUCTION OF A SHOPPING MALL IN SHILLONG

Project Team Project Manager: Poulomi Pal Chief Finance and Purchase officer: Surbhi Dhupar Chief HR Officer: Tanya Beniwal Chief Marketing and Strategy officer: Shashank S. Tomar Chief Operations and Controller Officer: Piyush Mantri

Contents
Executive Summary ............................................................................................................... 2 Introduction and Study Rationale .......................................................................................... 3 Project Scope ........................................................................................................................ 3 Basic Assumptions in the project ........................................................................................... 4 Technical Specification .......................................................................................................... 4
Technical Knowhow requirement ............................................................................................................. 5

Work Breakdown Structure ................................................................................................... 6 Foreseeable difficulties .......................................................................................................... 7 Milestone .............................................................................................................................. 7 Resource requirement ........................................................................................................... 7
Phase 1 resource requirement ................................................................................................................. 7 Phase 2 resource requirement ................................................................................................................. 8 Phase 3 resource resource planning ......................................................................................................... 9 Assumptions............................................................................................................................................ 10 Total cost of project ................................................................................................................................ 10 Rationale behind the three-phase project cost allocation duration: ..................................................... 10

Project Duration .................................................................................................................. 10 Risk Analysis and Mitigation ................................................................................................ 11

Risks and associated benefits ................................................................................................................. 11 Risks identified with the project ............................................................................................................. 12 Risk Mitigation Strategy .......................................................................................................................... 14

Benefits ............................................................................................................................... 14 Critical Success Factors ........................................................................................................ 15

Modalities of working and monitoring ................................................................................................... 15

Lessons Learnt ..................................................................................................................... 15 Reference ............................................................................................................................ 16

Executive Summary
Shillong, the capital of Meghalaya in India is a fast developing economy and has progressed commercially in an exponential manner over the past years. The population of Shillong is approximately 4 lakhs and the economic condition of the people are improving with every progressing year. Keeping this in mind, the trends, choice sand demand of consumers are also changing. With increased commercialization, the shopping trends of people are also changing. As of now there are approximately three shopping complexes with a number of single brand retails store in Shillong. The demand for such shopping experiences in increasing and hence our organization has accepted the project to construct a shopping complex in Shillong for the client R.P.Estates. The report consists of the detailed planning and analysis of the project undertaken by the organization of constructing a 3-storeyed shopping complex complete with parking facility. It starts with the planning phase which involves finalizing on the blueprint, the marked areas of shops, layout of the different floors and the design of the parking facility. After consultation with the client and the finalization of the blueprint, an approximate cost estimate is done and scheduling is done. The approximate cost of the project comes out to be Rs.22Crore. The construction would be done in a phased manner, starting first with the basement and ending with the construction of the top floor. The layout of the complex has been finalized with the client and each floor will be covering a space of 1000 sq. ft.

Introduction and Study Rationale

The project aims at the construction of a three storied shopping complex with total built up area of 5000sq.ft with 1000sq.ft on each floor and a parking space for 300 vehicles (200 4-wheelers and 100 2wheelers) within a span of one year. The location is Police Bazaar area, a commercial area and heart of the capital of Meghalaya. The project has been chosen due to the growing demand in Shillong which are supported by increasing population, changing demand and tastes of the consumers, modernization and increasing disposable income of buyers and sellers alike. As an organization we are currently responsible for constructing the same within a stipulated time frame with a client-approved layout. The bidding and tendering for the space has already been carried out by the client and our organization is entitled to the task of completing the project and handing it over to the client. The report deals with the detailed planning in terms of time requirement, resource requirement, financial requirement, expected risks and benefits etc. The report also deals with resource allocation as required with an aim to optimize the same. The project involves the planning, development and execution stages of the construction of a 3-storeyed shopping complex. The aim of pre-planning is to have an idea regarding the time duration and the fund requirement. This is necessary for proper resource allocation and funding facilities. The shopping mall has three floors with shops of different pre-decided areas. The work of our organization is limited to constructing the infrastructure except the interior designing of the individual shops. Proper fire management and vigilance system establishment also falls within the scope of the project. The rationale behind choosing this project are as stated below: The project was chosen keeping in mind the duration of the project, feasibility and practicality of completing the same in a stipulated amount of time The project duration, close to around 1 year and 2 months was manageable and the resource requirement and cost allocation could be researched upon given the scope and the limitations that existed while planning for the project The nature of the project is infrastructural which makes it easier to be researched upon as such projects are common and provide a good opportunity for learning in project management

Project Scope
The project scope is defined in the following manner: A completed 3-storey shopping mall with basement parking lot for vehicles complete with all utilities and amenities like electricity , plumbing, vigilance system, communication system, fire protection system and aesthetic designing Provide high skill training to the maintenance staff of the client for precautionary and preventive maintenance of the building and the facilities Handover of the shopping mall with a high scale event launch with sufficient public promotion

The project scope is decided by an agreement between the client and the organization and has limited chances to be changed during any stage.

Basic Assumptions in the project

The following assumptions have been considered: The acquisition for land and requisite payment has been done by client. Hence work related to land acquisition and consequent registration have not been considered It has been assumed that there would be no future expansion of the building and the technical specifications have been formulated based on that assumption Also no scope for future expansion for the parking space is possible It has been assumed that there would be no scarcity of resources and would be available as required Also, all resources required have been purchased at the start of the project and the prices of similar resources are same

Technical Specification
Technical Specifications Type of building Shop specifications No. of shops each type Parking space Civil specifications Average standard shopping center 1000 sq.ft on the first and the second each storey to be sold/rented to a retail outlet, 200 sq.ft , 400sq.ft, 750 sq.ft and 800sq.ft area shop space Ground floor and first floor : 4 x 200 sq.ft, 1x 400 sq.ft, 1x 800 sq.ft Third floor : 4x750 sq.ft Capacity for parking 200 4-wheelers and 100 2-wheelers Water-Cement Ratio Mix proportioning shall be carried out according to the ACI standard designation ACI-613 or Design of concrete mixes The water: cement: sand mixture to be used should be 1:4:2 which is the standard combination used in infrastructure building The walls should have a thickness of 6 within the shopping mall to withstand the force and stress Two 11kV feeders to be obtained from State electricity supply, Back-up electricity to be provided by 4x1000kVA diesel generators Centralized cooling system through centrifugal pumps Procurement of any material before being utilized in construction (i.e bulk purchase) would be sanctioned by inspectors from the organization and client side The total area for construction as sanctioned by client is 3000 sq.ft of which the shopping complex is spread over a 1000 sq.ft over the land. The rest of the area should have a walkway of 4 feet width all around the perimeter as well as the around the shopping complex. The parking space should have a clearance space of 10 ft on each side as well as at the entrance and the exit, the space should be approximately 20 ft The walls of the shopping complex are specified to be 6 thick and that of the boundary wall is expected to be 4 thick

Electrical specifications

Inspection Layout

Constructional Specifications

The organization is required to construct walls on each floor depending upon the above mentioned shop area specification

Technical Knowhow requirement

The technical know-how requirement would need a skilled workforce. The organization has the policy of employing skilled workforce from internal the organization. Hence the skilled workforce requirement would be Project Manager-1 Chief Strategy and Marketing Officer Chief Finance and Purchase Officer Chief Operations Manager Chief HR Manager Electrical Engineers -2 Civil engineers -3 Mechanical Engineer 3 Architectures 2

Work Breakdown Structure

Site Selection & Land Acquisition Soil Testing Site Selection Land Agreement Village Headman's Approval Municipal Corporation's Permits for Utilities Sale of permises on Rent PR (launch event) Advertising & Media Create Finalize

Legal Approvals

Sales & Marketing

Administration/Management

Planning & Architecture

Systematic Design & Floor Plan Administer the Construction Hiring Contractors Budgeting Accounting Loan Arrangement & Financing Remuneration Training Staffing Compensation&Performance Review Tender Document Preperation Invitation of Tenders Tender Opening & Evaluation Awarding Tenders Procurement of Raw Materials

Finance & Accounting

Recruitment & Employment

Tendering & Procurement

Purchase Order Invoicing

Ground Level Surfacing Excavation Pouring Concrete Cure & Strip Forms

CONSTRUCTION OF THE SHOPPING MALL

External Works

Excavations & Foundation

Drains & Ducts Columns Joist Beams Laying Masonry Installing Roof Drains Roofing Laying of Tiles Exteriors Interiors False Ceiling

Steel Erection

Main Structure

Masoning Work

Building Finishes

Furnishings & Fixtures

Doors, Windows & Partitions Elevators Railings Cabling & Wiring Heating & cooling Systems Toilets Plumbing Electronic Security Systems Installation Security Personnel Intercom Telephone Lines Wifi Fire Exit Fire fighting equipment Other Hazard Mitigation Municipality Connection

Electricals Sanitation

Works

Security

Communication System

Emergency

Water Supply

Foreseeable difficulties
With any project there are associated difficulties and some of the fore-seeable difficulties associated with this project are: Delay in supplies from suppliers due to reasons like landslides, road blockages or non-availability of the required resources Since the human resource requirement for labour work is supplied by contractors, hence factors like labour unrest within labour union etc may be a problem which might adversely affect the scheduling of the project In case the quality of the raw material fails inspection, and replacement takes longer than anticipated which eats into the buffer time allocated in the project, the scheduling may be hampered thus affecting the progress and cost requirement

Milestone
Milestones 1st October 2013 28th October 2013 1st November 2013 28th March 2014 30th June 2014 16th October 2014 15th September 2014 5th December 2014 11th October 2014 Design and architecture approved by client Permits for construction from Government and Darbar approved Foundations poured marking the start of the construction Bricklaying, and completion of first storey and the basement(parking lot) Completion of second storey Completion of final storey Electrical , mechanical and plumbing inspection passed Final aesthetic designing and fitting of fixtures competed and sanctioned by client Final handover to client with a public event

Resource requirement
The resource requirement for the project is as follows:

Phase 1 resource requirement

Finalizing blueprint and getting permits from responsible authorities Resource requirement: Resource Human Resource Purpose Five people for working on the project design and handling interaction with the client Cost per Total cost in unit/resource project Internal to the For the internal 180000 organization 5 workforce the External consultant salary per month is -1 Rs.30000 per person. External consultant charges Rs.5000 per design sanctioned Procurement

Human Resource

Miscellaneous Cost

For clerical jobs Internal resource -2 Average salary 140000 like applying for would be Rs.5000 permits and p.m receiving them Stationary Cost To be obtained 200000 along with other from suppliers amenities and -utilities

Phase 1 total budget = Rs.520000 Contingency margin = 15% Total phase 1 Budget = Rs.598000

Phase 2 resource requirement

The construction phase external and internal This phase consists of calculating the cost required for acquiring material (raw material and finished goods). Resource Steel Frames & Rods Cement Sand Bricks Plaster Paint Sanitary fixtures Purpose Construction Construction Construction Construction Construction Internal and external Internal to building Internal and external to building Construction Cost per unit/resource From supplier Rs. 44200 per unit available From supplier 50 kg sacks @ RS.275 per sack From supplier RS.43 per cubic feet of river sand From supplier Rs.19000 for 3000 bricks Contract given to Rs.50 per sq.m of vendor wall area Contract given to Rate Rs.25 per vendor sq.ft From supplier Variable depending upon component Contract given -Procurement Total cost in project 44200000 1443750 3037090 6607390 420168 3000000 1500000

Plumbing and sewage facility PVC Pipes

12000000

From supplier

Variable

200000

Electrical System

(Excluding Lighting, including HVAC) Generators (Diesel Operated) Manpower Requirement

Internal

Contract given

--

58000000

Back Up Power system Labour work, plumbing, electrical fixing and carpentry

From supplier1000kVA x 4 Daily workforce for masonry : 25 Workforce for plumbing : 15 Workforce for electrical System: 7 Workforce for painting : 12

Tiles and mosaic Interior to the From supplier flooring building

$95000 per generator Masonry @ Rs.300 per person per day Plumbing @ Rs.450 per person per day Electrical @ Rs.450 per person per day Painting @ Rs.250 per person per day Flooring and other internal civil works @ Rs.350 per person per day Kajaria tiles @ Rs.95 for 1x1sq.ft tiles

24700000 2203000

2250000

*The above table does not consider the cost required to be given for electrical supply form the state electricity supplier from 2 11kV feeders as mentioned in the specifications before. This cost is approximately Rs.10000000. Total Budget in Phase 2 = Rs. 162361397 Taking into consideration 15% contingency, the total budget becomes = Rs. 186715607

Phase 3 resource resource planning

The completion phase includes the final touches required for the completion of the building including, internal decorations like standardized lighting and fixtures and glass fixtures. The final phase also takes into consideration the promotional and marketing expenses. Resource Purpose Procurement From supplier -Procured from supplier but fixed by contractor 2000000 -Cost per unit/resource Total cost in project 700000

Electrical lighting Standardized fixtures lighting in the shopping complex Glass fixtures to Both internal and provide the external to the aesthetic look shopping complex

Vigilance System

Fire-fighting system installation Promotional expenses

Installation of close circuit cameras and monitoring room As directed by government to get certified for safe operation On behalf of the client

Procured supplier

from Close circuit 1070000 cameras at Rs. 20000 per unit

Procured supplier

from Fire extinguishers 100000 @ Rs.2000 per unit and other equipment In-house strategy -80000

Assumptions
The salary of permanently hired employees has not been considered in the budget calculation as the organization has separate salary account to handle the same and this cost is taken care of in the overall company expenses and is not specific to the project alone.

Total cost of project

The total project cost comes out to be approximately Rs. 166831397 i.e the cost incurred by our organization in completing the project is as mentioned above. Considering contingency cost of 15%, the cost of the project stands to be Rs. 191856107 i.e approximately Rs. 200000000. (Rs.20Crore) Profit margin as charged by the organization = 15% Hence price quoted to client = Rs. 220634523

Rationale behind the three-phase project cost allocation duration:

The financing required for the project is broken up into three parts because of the fact that entire financing is not required at once as the preferred means of financing is through revolving credit system and phase wise financing is less costlier as the interest to be paid on the loan is lower in the mentioned case.

Project Duration
The project duration is exactly 1 year and 39 days starting from 25th September 2013 and ending on 3rd December 2014. The project duration has been designed keeping in mind expected problems in work.
Table 1Project Scheduling

Task Name Start Finalize blueprint Village Head Permit Municipal Corp. Permits Utility Permits Ground Level Surfacing Excavation & Foundation

Duration 5 days 5 days 7 days 13 days 10 days 16 days

Start date 25th September 2013 25th September 2013 2nd October 2013 2nd October 2013 11th October 2013 29th October 2013 9st November 2013

End Date 1st October 2013 8th October 2013 10th October 2013 28th October 2013 8th November 2013 28th November 2013

Drains & Ducts Bricklaying Steel Erections Basement (Parking Lot) First storey Second storey Third storey Plumbing Electrical Sheathing Vigilance system Fixtures Final Inspection Handover Inauguration

10 days 15 days 15 days 35 days 20 days 75 days 90 days 18 days 20days 5 days 5 days 10 days 3 days 1 day

29thth November 2013 12th December 2013 2nd January 2014 22nd January 2014 5th March 2014 28th March 2014 30th June 2014 16th October 2014 7th November 2014 7th November 2014 24th November 2014 24th November 2014 6th December 2014 9th December 2014

11th December 2013 31st December 2013 21st January 2014 4th March 2014 28th March 2014 30th June 2014 16th October 2014 7th November 2014 3rd December 2014 24th November 2014 28th September 2014 5th December 2014 9th December 2014 10th December 2014 11th December 2014

Risk Analysis and Mitigation

Risks and associated benefits
Table 2 Risks and associated mitigation measures

Type of Risk Financial Risk

Political Risk

Enter into written contracts with the Labour Union after having elaborate discussions with the Contractors/Representatives regarding work time duration, leaves, compensation etc. Risks The two major risks identified under this Enter into strictly defined contracts associated head are: Non-availability of resources and with the suppliers with supply risk of non-compliance from suppliers end chain Operational Project delays, especially in the critical Keep sufficient, though not much Risk path due to malfunctioning of buffers in project scheduling to accommodate such delays Inflation risk As money will buy less in future than today Pre decided contracts with suppliers due to inflation the power of money keeps would mitigate this risk thus insulating eroding the project in terms of price mitigation Business Risk It is the possibility that the investments Phase wise project financing to be cash flows will not be sufficient to justify applied with sufficient time lead the investment, represents the degree of

Risk Identification Project financing required for the project might not be obtained in time that would delay the start of the project. This would directly affect the cost and schedule implications of the project . The labour force might go on strikes in case of requirement of overtime leading to project shutdown and subsequent delay. Specially important in case the critical path is affected

Risk Mitigation The usual creditor list is analyzed and approached for project financing based on past history with the creditor, credibility of the creditor

Liquidity Risk

Project Development Risk

business risks in the project As real estate is generally considered as illiquid asset, not easily convertible to cash without discounting the price. Liquidity risk is high 1. Procuring Licenses and permits- Conflicts of interests with local authorities, official formalities mainly based on good relations with municipal council 2. Construction costs- Inadequate planning of project, lack of procedures, inadequate or unrealistic estimates of costs and deadlines, insufficient communication structure with internal personnel and contractors 3. ContractsContracts are awarded mainly on basis of price without taking into consideration the quality or experience of the contractor

This can be mitigated is all the registration related to real estates are handled by the client as agreed upon in the contract with the client N/A

Risks identified with the project

Sl. No 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 Risks identified Delay in approval from regulatory bodies Unstable government policies Change in regulations Political instability Lawless ness, strikes, lockouts Hike in material prices Unavailability of skilled labourers Change in project scope Insufficient technology Delay in completion of construction Request for increase in project budget Strains in contractual relationships Financial delays Change in credit policy Unexpected obstacle on site Slow communication between team members

Scenario analysis is the easiest and most commonly used technique for analysing the risks. The significance of each risk is assessed in terms of: Probability of the event Impact of the event Risk number = P x I P Probability of occurrence I Impact factor of risk Possibility of occurrence Very high chance High chance Greater Chance Possible Likely Unlikely Probability Type and level of risk Impact (P) 0.90 Maximum impact of scope, time and cost 0.75 High impact on scope, medium impact on time and lesser impact on 0.60 cost 0.45 High impact on time, medium impact on scope and lesser impact 0.30 on cost 0.15 High impact on cost, medium impact on time and lesser impact on scope Impact Factor (I) 0.9 0.6

0.3

0.1

Sl. No 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17

Risk Delay in approval from regulatory bodies Unstable government policies Change in regulations Political instability Lawless ness, strikes, lockouts Hike in material prices Unavailability of skilled labour Change in project scope Insufficient technology Delay in completion of construction Request for increase in project budget Strains in contractual relationships Financial delays Change in credit policy Unexpected obstacle on site Slow communication between team members

Risk Probability Impact Number 7.00% 0.9 6.30% 8% 0.6 4.80% 6.00% 0.9 5.40% 5.90% 0.6 3.54% 10.00% 0.3 3.00% 10% 0.3 3.00% 9.50% 0.3 2.85% 3.00% 0.3 0.90% 2% 0.6 1.20% 3.90% 0.6 2.34% 7.80% 0.3 2.34% 4.00% 0.6 2.40% 6.80% 0.3 2.04% 3.00% 0.9 2.70% 2.10% 0.9 1.89% 4% 0.9 3.60%

Risk Mitigation Strategy

Now that risk assessment has been done, a decision has to be made concerning which response is appropriate for the specific event. Responses to risk can be classified as: Mitigating Avoiding Sharing Transferring Retaining

For each of the 17 risks identified and assessed, a risk response strategy is assigned and eventually implemented. Risk Delay in approval from regulatory bodies Change in regulations Unstable government policies Slow communication between team members Political instability Lawless ness, strikes, lockouts Hike in material prices Unavailability of skilled labour Change in credit policy Strains in contractual relationships Delay in completion of construction Request for increase in project budget Financial delays Unexpected obstacle on site Insufficient technology Change in project scope Risk Risk Number Response 6.30% Share 5.40% Retain 4.80% Share 3.60% 3.54% 3.00% 3.00% 2.85% 2.70% 2.40% 2.34% 2.34% 2.04% 1.89% 1.20% 0.90% Avoid Retain Share Transfer Avoid Share Avoid Avoid Mitigate Mitigate Mitigate Avoid Avoid

Benefits
The project would help the organization in expanding the portfolio of services Also it would lead to winning of further projects of similar nature in Shillong

Facilitating services- Facilitating services are services which are absolutely essential to operation. In a shopping complex, housekeeping and front desk are essential smooth functioning of the shopping mall. The operational staff should be active and well prepared to handle any emergency situation that may occur. It is also important in the sense that since the complex would be open to a large number of audience, hence an agile and active management staff needs to be kept for ready service.

Supporting services- The supporting services are not essential to providing the core benefit, but plays an important role in marketing of operation. These services can be additional training for soft skills and communication to the management staff. Also training regarding the operation and maintenance services of various aspects is equally important to be provided to the management staff.

Critical Success Factors

Critical Success Factors for starting a new shopping mall Operational strategic direction and Market understanding Branding & Marketing, Operating management and staff- skills, training, experience Operational and construction standards- education, implementation and consistency of standards National and local governments regulations- taxes, duties, policies, legislation, town plan and building regulations Site location Accessibility for consumers, staff and suppliers Feasibility- Financial, market, physical, macro environment Design efficiency- meeting budget, operational efficiency and guest satisfaction Development strategic and project objectives Development team- team leader, executive management, key operational staff, consultants and advisors Contractor- costs, time, quality, experience, resources, capability, attitude

In simpler words- Key Success factors can be

keep your facilities in good condition make sure your prices are competitive be part of a group buying, promotion and marketing scheme with travel agents, airlines and car hire businesses hire skilled staff grow a loyal customer base have a good reputation

Modalities of working and monitoring

The working modality is direct in nature with weekly checks of quality and inspection

Lessons Learnt
The project planning has given us some important learnings as this is our first major project on such a large scale. We have identified difficulties faced and their subsequent resolution. We need to document

this so that in future there is no recurrence of the similar problems and if we need permanent answers to some questions which might have been mitigated on a temporary basis. The formulation of the project plan was challenging owing to the uncertainties involved in the project. We are using sophisticated technology of this magnitude for the first time and it is a challenge to understand their operations and plan accordingly for their use or installation. Suitable training is required for the same. The next challenge is to deal with the bureaucratic ways of functioning of the government. We have to depend on client for land acquisition and also issues of compensation for inhabitants and land-owners. EIA and clearance from the concerned authorities poses to be another important factor that needs to be taken into account. The complex nature of smooth land acquisition in one of the busiest places in Shillong is in itself a problem. Also, there might be resistance from local shop owners who do not view such commercialization in a good light for their income prospects. The learnings from this project would be to keep provisions for unforeseen circumstances and risks for projects in the future as we realized their importance in this project. Technology awareness is equally important and we need to conduct training and development exercises to keep our knowledge updated. We also have to be careful about project scope and liabilities of the project. These need to be incorporated in the contract and also provision for dispute resolution mechanism should be included which must include arbitration clauses like jurisdiction of courts and probable arbitrators. Coordinating with various stakeholders is always important and so is customer relationship management

Reference
1. Barrie, Donald S. and Boyd C. Paulson, Jr., Professional Construction Management, McGraw-Hill Book Company, 2nd Ed., 1984. 2. Halpin, Daniel W. and Ronald W. Woodhead, Construction Management, John Wiley and Sons, 1980. 3. Hodgetts, R.M., Management: Theory, Process and Practice, W.B. Saunders Co., Philadelphia, PA, 1979. 4. Kerzner, H. Project Management: A Systems Approach to Planning, Scheduling and Controlling. 2nd. Ed., Van Nostrand Reinhold, New York, 1984. 5. Levitt, R.E., R.D. Logcher and N.H. Quaddumi, "Impact of Owner-Engineer Risk Sharing on Design Conservatism," ASCE Journal of Professional Issues in Engineering, Vol. 110, 1984, pp. 157-167. 6. Moolin, F.P., Jr., and F.A. McCoy: "Managing the Alaska Pipeline Project," Civil Engineering, November 1981, pp. 51-54. 7. Murray, L., E. Gallardo, S. Aggarwal and R. Waywitka, "Marketing Construction Management Services," ASCE Journal of Construction Division, Vol. 107, 1981, pp. 665-677. 8. Project Management Institute, A Guide to the Project Management Body of Knowledge, Newtown Square, Pennsylvania, 2000.