Interface Management in Mega Oil Refinery Projects

Dr. Mohammad Mehdi Mortaheb, Assistant Professor, Department of Civil Engineering, Project Management Specialization, Sharif University of Technology Mehrshad Rahimi, Department of Civil Engineering, Project Management Specialization, Sharif University of Technology Shahab Zardynezhad, Department of Civil Engineering, Project Management Specialization, Sharif University of Technology/University of Calgary IRAN Keywords: NIOEC, Interface Management, Portfolio, Oil Refineries, Mega Projects.

1-Abstract
Aiming at a higher gasoline production level and in order to enhance gasoline selfsufficiency in the country, and export the environmental friendly by-products with higher addedvalue instead of raw crude oil, NIOEC1 decided to de-bottleneck and revamp the existing refineries and construct several new oil refineries; in platform of several mega oil refinery projects. Most of the mega oil refineries programs are managing in the form of multi-projects environment with different Contractors which create several challenges which are fundamentally different from a single project. Recent mega oil-refineries projects in Iran have all experienced significant delay during execution phase which negatively impact the relation between time, cost, scope, quality, and resources. There are many reasons for these overruns, but based on some investigations and lessonslearned; one of the most important factors is poor interface management and coordination between different project parties during execution phase. The objective of this paper is to create a comprehensive road map dealing with interface management subjects at the beginning of the project life cycle (i.e.: Front-End Loading), in order to properly identify and mitigate the potential causes, and prevent any scope creep in the next project phases.
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National Iranian Oil Engineering and Construction Company 1

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In this paper, the top ten most causes of interface problems and their respective impacts on execution of the mega oil-refineries projects will be identified by using a quantitative research method.

The result of the research is the generation of a dynamic interface management plan to be used and implemented by Owners in order to effectively manage the common problems and issues related to interface management of mega oil-refineries projects of Iran. The generated interface management plan is a generic tool that can be easily customized in order to be used for any other mega oil, gas, and petrochemical projects.

2-Introduction
A megaproject (sometimes also called "major program") is an extremely large-scale investment project. Megaprojects are typically defined as costing more than US$1 billion and attracting a lot of public attention because of substantial impacts on communities, environment, and budgets {1}. Construction and management work of a mega project is normally divided into several packages and each package comprises of several projects that are running parallel to each other. Each project is designed and constructed by a number of local and international companies and involves many vendors and suppliers from different countries. Sometimes mega construction projects are called as programs. Management of programs is not only complex but also somehow difficult. Mega oil refineries projects of Iran require an estimated Capital Expenditure (i.e.: CAPEX) more than 2-3 billion Euros. Limitations such as Embargo, Contractor s financial status, experiences, resources (e.g.: manpower, construction equipment, etc.), work load, and Owner s and Contractor s risk strategies have caused mega oil refineries programs to be divided into smaller projects and being undertaken in a multi-project environment. Turner and Speiser [1] contend that by far the greatest proportion of project activity takes place within portfolios, or programs. Payne [2] estimates that up to 90% by value of all projects are carried out in a multi-project context of some sort. Oil refineries projects involve many parties; for example Owner, Licensors, Basic Designer, Detail Designer, Construction Contractors, Sub-Contractors, Vendors that create different interface problems such as ineffective communications, poor cooperation, hidden agenda, and lack of trust. All those problems cause delays, difficulty in resolving claims, cost overruns, litigations, and sometimes compromise project quality. All interface problems should be communicated and solved carefully and urgently by mutual cooperation, correct communication, and proper coordination between different project parties. Interface management failures have occurred for years, but came to a harsh light with the Three Mile Island nuclear incident in 1979 when it was found that people in key positions made assumptions without checking with one another, which ultimately led to the disaster. Investigations into other disasters have highlighted interface management failure as the root cause in the Piper Alpha, Exxon Valdez, and Phillips Pasadena accidents [3]. Some studies discussed the interface problems between project parties, including Designers and Contractors [4], [5], Contractors and Sub-Contractors [6], [7], Owners and maintenance Contractors [8], as well as common interface problems among various construction parties [9]. Unfortunately, the importance of interface issues and the need of interface management and coordination of the mega oil projects have not received proper attention in Iran from both Owner and Basic Designer at the front-end loading of the project cycle and at the early phase of the construction by Construction Contractors/Sub-Contractors.

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In this paper, the top ten most important causes of interface problems ( and their respective impacts on the projects) between parties, including Designers and Contractors, Contractors and SubContractors, Owners/PMC and Designers/Contractors, as well as common interface problems among various construction parties of the mega oil-refineries projects will be identified by using a quantitative research method (This will be done by interviewing and distributing survey questionnaires and interviews of about 70 senior and middle managers selected amongst Contractors, Consulting Engineers, PMC, and Owner sides as the researchers statistical society. Finally, this study will develop a dynamic interface management plan based on analysis of responses for using project participants and implementation which has been requested by Owner to improve and manage effectively the common problems and subjects related to interface management of mega oil-refineries projects of Iran. This study addresses application of an effective interface management plan in terms of an applicable project job specification for improvement and management of different interface issues among design and construction disciplines (i.e.: mechanical, instrumentation, civil, electrical, etc) of oil refineries mega projects. The generated interface management plan is generic since it can be easily customized in order to use in any other mega oil, gas, and petrochemical projects.

3. Problem Statement

National Iranian Oil Engineering and Construction Company (NIOEC) plans to construct some new oil refineries and upgrade most of the existing oil refineries, in terms of a portfolio of construction mega projects, aiming at a higher production level of gasoline and other clean and environmental friendly products, gasoline self-sufficiency, and exporting more valuable by-products instead of raw crude oil. However, recent mega oil-refineries construction projects in Iran which are executing in a multi-project environment with multiple and many Contractors working in a single program have all experienced poor interface management which led to schedule overruns and negatively impacted the balance between time, cost, scope, quality, and resources of the projects. Construction of mega oil refineries programs within a multi-project environment are distinguished by extraordinary involvement and entanglement of many Contractors and due to Owner s policies in some cases, some projects are selected as lump sum and fast track nature. The multi-project environment causes diversities between the projects in terms of contract type or pricing arrangement which made many difficulties for project parties, especially for the Owner. Considering the above, an effective and dynamic interface management technique is essential to find, identify, communicate, record, monitor, solve, and manage all interface issues between different project parties. France [10] states that interface management is useful shorthand to describe how companies work with each other in the design, manufacture, and construction of the project. Chen [11] presents a multiperspective approach that systematically explores comprehensive cause factors for various interface issues. According to some investigations done by writers in different ongoing mega oil refineries projects, there are much unclear interface information between different project parties, which created many problems for the project; since each Contractor usually executes his own work and do not pay attention or share necessary information with others. Since, there is no suitable and effective tool to help the Owner to manage interface problems between different Contractors, therefore the primary objective of this study is to identify the main top ten

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causes of the interface problems and develops a dynamic interface management plan for using project participants, accordingly.

4- Research Goal and Objectives

In mega oil refineries projects which are under execution by NIOEC; definition, identification, communication, recording, monitoring, controlling, and managing the different interface events and problems is critical; shortening the construction phase of the project; even for a single day and preventing delaying in start up and production of the oil refinery will save significant amounts to needed for importing gasoline and gas oil to respond the local demand. The main purpose for conducting this study is to develop a dynamic interface management plan for using project participants and implementation which has been requested by the Owner to improve and effectively manage the common problems and issues related to interface management of mega oilrefineries projects of Iran. The main objectives of this research include (1) identification, evaluation, and assessment of the interface management problems of the different ongoing oil refineries mega projects; (2) classification of the main interface problems and the top ten causes of the interface management problems; (3) determine the respective effects on project completion,(4) provision of applicable recommendations to the project parties, and (5) developing a dynamic interface management plan for using project participants and implementation which has been requested by the Owner to improve and effectively manage the common problems and issuess related to interface management of mega oil-refineries projects of Iran.

5-Research Methodology
For this research, the undertaken methodology is composed of the following steps: Step-1: An intensive literature review and background research related to the interface management of the mega projects has been done. Step-2: Investigation and examination of the interview results of three empirical questionnaires were developed and then they were distributed between seventy managers and professionals amongst the Contractors, Consultant Engineers, PMC, and the Owner of an oil refinery mega program which had been divided into ten smaller projects and were undertaken in a multi-project environment mainly because of required estimated Capital Expenditure (i.e.: CAPEX) , more than 3.4 billion Euros, and due to some limitations such as Embargo, Contractor s financial abilities, experiences, resources (e.g.: manpower, construction equipment, etc.), work load, and Owner s and Contractor s risk strategies. The questionnaires examine the respondents opinion and attitude by using simple and open questions. In order to verify the completeness of the questionnaires to represent of the causes of the interface management and their effects on the mega oil refinery projects, a small survey was conducted by a face to face interview with five senior managers and experts who had worked in the biggest gas refinery project located in Assaluyeh port, south of Iran during 2004 to 2008.

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5-1-Questionnaire Design
The main goal of this research is to investigate, identify, elaborate, communicate record, categorize, and prioritize causes of interface problems and developing an effective tool for better interface management and coordination of the oil refineries mega projects. To achieve this goal, three different questionnaires were used for gathering the research data . In the first questionnaire, the industry professionals were asked the following simple questions: 1) What are the main interface problems and respective causes of the Iranian oil refineries mega projects? Please list based on their importance. 2) What are their impacts (effects) on project completion? 3) What do you suggest to manage interface problems of the Iranian oil refineries mega projects listed in question one, in an effective manner? The second questionnaire included the list of recognized causes of interface problems of the mega oil refinery projects. These causes were categorized into seven different groups based on factors of interface problems of the mega oil refinery projects: factors related to (1) Owner, (2) Project, (3) Contractor, (4) Consultant, (5) Engineering, (6) Procurement, and (7) External Issues. The purpose of the second questionnaire was to determine frequency of occurrence, severity of the each cause on project delay, and importance of the identified causes on project interface problems. For each cause/factor, three questions were asked as follow: 1. What is the Frequency of Occurrence for this cause? 2. What is the Severity of this cause on project delay? 3. What is the Importance of this cause on project interface problem? All of them were categorized on a four-point scale. Frequency of occurrence is categorized as follow: always, often, sometimes, and rarely (on 4 to 1 point scale). Similarly, degree of severity and importance were categorized as follows: extreme, great, moderate, and little (on 4 to 1 point scale).

6-Literature Review 6-1- Mega Projects, Communication, and Delays

Communication refers to the information exchange between entities and according to PMBOK1(1) Guide (Project Management Institute (PMI), 2004). Communication Management is the timely and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of project information. A research [12] shows the major causes of delay in construction projects. The factors related to communication and coordination is considered as critical causes of delay and totally are about 13% of all the causes. Based on another research [13], inadequate communication is considered to be the third most critical reason of low productivity and consequently extensive delays and idle time. Dawood, Akinsola,
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Project Management Body of Knowledge

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and Hobbs [14] noted, Two-thirds of the construction problems were caused by inadequate coordination and inefficient means of communication of project information and data. It is clear that integration of the design and construction processes alone cannot improve productivity and performance without an improved communication and efficient means of exchanging information .

6-2-Definition of the Interfaces

There are many definitions for interfaces, for example Lin [15], Pe [16], and Wu [17] believe that interfaces exist within the occasion, processes, systems, elements, and equipments, while Wang [18], Ye [19], and Ku [20] define the interface as a dimension between two firms or organizations that can mutually influence each other. With regard to the oil refinery projects, interfaces would be appeared between different Contractors, Owner and Contractors, Engineering team and Contractors, Contractors and SubContractors, Contractors and Manufacturers, and within different disciplines such as electrical, mechanical, civil, instrumentation, process, etc. The use of the interface concept in the context of project management followed the development of the system approach, which defined organizations as systems of mutually dependent variables [21]. Thus, projects are made of sub-projects whose interfaces are necessary to determine if integration can be achieved (2).

6-3- Classification of the Interfaces

Interfaces arise from division of the work into parts executed by different people or organizations (3). Interfaces can be "internal", if the work conducted is done with one organization, or "external", if different organizations collaborate [22]. Other researchers [21]; (3); [22] explained that interfaces can be classified as follow: Time interfaces that are triggers conditioning the transition from a certain kind of activity to another, Geographical interfaces that separate on-site and off-site work, Technical interfaces that set the limits of a system's sub-components, Organizational interfaces that keep human groups or persons apart. Morris (2) proposed two main interface types: static interfaces and dynamic interfaces. Stuckenbtuck (3) proposed three main interfaces: personal interfaces, organizational interfaces, and system interfaces. Pavitt and Gibb [23] proposed three main interface types: physical interfaces, contractual interfaces, and organizational interfaces. Physical interfaces are the actual physical connections between two or more building elements or components. Contractual interfaces are the groupings of work elements into distinct work packages to suit the availability of the design information. Organizational interfaces are the interactions between various participants in a construction project.

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6-4- Interfaces Management

Based on the definition and classification of the interfaces, there are many interfaces between project parties of any kind of construction projects. Thus, the concept of interface management becomes important. Interface management is the systematic control of communication supporting a process operation [22]. Interface management has been proven to address project complexity and allows for a dynamic and well-coordinated construction project system [11]. The critical relationship between interface management and project success is developed so constantly in literature (2), (3), Lock, (4), Patrick, (5), Delmon, (6), [23]. Ku [20] proposed five different perspectives in order to analyze interface management, namely, "contract interface", "technology interface", "monitor interface", "execution integration interface", and "the interacting behavior in the interface". Based on a review of the literature and a pilot study of interviews among various construction parties, Yu-Cheng Lin [24] proposed interface management procedure includes interface finding, interface identifying, interface communicating, interface recording, and interface closing. Each phase is briefly outlined in the following table:
Table-1: Proposed Interface Management Procedure [24] Description Interface finding is the checking for new or existing interface events related Interface Finding to projects. Interface identifying ensures that the identified interfaces are consistent with Interface Identifying all relational participants. Interface communicating is the process of requesting, responding to and Interface Communicating tracing processes among relational participants. Interface recording is all information recording processes related to the Interface Recording identified interface event. Interface closing is the final closing action when the interface event is Interface Closing reconfirmed without further identification or tracing. Phase

Chua [25] proposed to use the work breakdown structure (WBS) concept to improve work interface management. Interface management is an information-intensive task in which available and useful information is extremely useful to related participants [24]. Interface management is defined as "the management of common boundaries between people, systems, equipment, or concepts" [26]. In the civil engineering field, Wideman[27] provides two similar definitions for interface management: (1) " The management of communication, coordination, and responsibility across a common boundary between two organizations, phases, or physical entities which are independent"; and (2) "managing the problems that often occur among people, departments, and disciplines rather than within the project team itself." This paper uses the definition of interface management within oil refineries mega projects as: The management boarders and boundaries between different project players, including designers and Contractors, Contractors and sub-Contractors, Owners and Licensors, Owners and designers, Owners and Contractors as well as common interface problems among various construction parties to enhance management of the resources, costs, schedules, safety, risks, contracts, and systems in order to created a dynamic, organized, and active environment during project execution of oil refineries mega projects.

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7- Research Findings and Analysis of Responses 7-1- Respondents Characteristics

A face to face interviewing of the five senior managers and professionals (who worked in biggest gas refinery project located in Assaluyeh port south of Iran during project execution during 2004 to 2008) has been taken. Totally seventy questionnaires were distributed between Contractors, Consultant Engineers, PMC, and Owner of an oil refinery mega program which is divided into ten smaller projects and were undertaken in a multi-project environment. The characteristics of the respondents are summarized in the following table:
Table-2: Characteristics of the Respondents Owner Contractors Consultants/PMC Distributed Questionnaires 15 40 15 Grade 1,2 1,2 Experience (Company)-Years Over 50 Between 15-30 Between 10-20 Participated Consultants-Years 10-35 10-30 10-30 Past Experience in Mega Projects Yes Somehow Somehow Organization Public-Private Joint Project Private Private Note: Simple random sampling was used to select each company representative from a list.

7-2- Interface Problems

With reference to the gathered information by questionnaire No.1 and interview with industrial professionals, the interface problems on project based on different viewpoints of Owners, Contractors, and Consultants/PMC were identified, as follow: Unclear Tie-In Points (Coordinates/ Locations) Missed Tie-In Points (Coordinates/ Locations) Poor Communication between Project Parties Unclear or Un-defined(or poor defined) Responsibilities/Scope of each parties at Tie-In Points in: Engineering Procurement (Material Supply) Construction Test Inspection Lack of Management/Coordination Procedure Unclear or no definition for internal and external interfaces Undefined external supplier

7-3- Causes of Interface Problems

With reference to the gathered information by questionnaire No.1 and interview with industrial professionals, causes of interface problems based on different viewpoints of Owners, Contractors, and Consultants/PMC were collected, clarified, analyzed, tabulated, grouped, and categorized into the seven groups as shown in Table-3. Then, in the next stage for each cause/factor three questions were asked as follow by using another questionnaire (Questionnaire No.2): 1. What is the frequency of occurrence for this cause? 2. What is the severity of this cause on project delay? 3. What is the importance of this cause on the project interface problem?

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Table-3: List of Identified Sources of Interface Problems based on Industrial Professionals Opinion and Idea No 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Cause/Source of Interface Problem Change Order Issued by Owner Owner Late Design Approval Poor Owner s Communication and Coordination with Other Parties Poor and Slow Owner s Decision Making Process Work Suspension by Owner Incomplete and Unclear Scope Definition Lack of Key Deliverables such as Internal and External Interface List, and Interface Management Plan in FEED Package Joint-Ownership Structure (Governmental-Private Structure) Delay in Owner Material Supply Owner Late in Progress Payment to Contractor Owner Late Decision for Breaking the Program into the Smaller Projects Owner Late Decision for Hiring Qualified Project Management Consultant Selected Contract Type (EPC, EP Only, Construction Only) Lack of Effective Liquated Damage Type of Selected Tendering Policy(Lowest Price Bidder) Poorly Written Contract Lack of Project Sponsor s Supervision Delay in Project Completion Cultural Differences (Self-Interest Perspective, Bias, etc.) between Parties Discrepancies or Mistakes in Engineering Deliverables (Basic or Detail) Late Issuance of Engineering Key Deliverables Insufficient and Unclear Detail in Engineering Deliverables(Basic or Detail) Lack of Experience in Engineering Team Low Quality of the Prepared FEED Package by Basic Designer Complexity in Design due to Nature of the Mega Projects Contractors Poor Planning and Scheduling Poor Contractor s Communication and Coordination with Other Parties Low Accuracy in Project Cost Estimation Contractor Late Mobilization during any Project Phase Delay due to Sub-Contractors Work Performance Lack of Experience in Contractor s/ Sub-Contractors Technical Team Contractor s/ Sub-Contractors Key Manpower Turnover Contractor s/Sub-Contractors Unfamiliarity and Lack of Previous Experience with Oil Refineries Mega Projects Contractor s/Sub-Contractors Unfamiliarity and Lack of Previous Experience with Owner s Needs Contractor s Unfamiliarity and Lack of Previous Experience with Local Law and Regulations Re-Work due to Construction Mistakes by Contractors/Sub-Contractors Consultant Late Mobilization during any Project Phase Lack of Experience in Consultant s Technical Team Consultant s Key Manpower Turnover Consultant Unfamiliarity and Lack of Previous Experience with Oil Refineries Mega Projects Consultant Unfamiliarity and Lack of Previous Experience with Owner s Needs Consultant Unfamiliarity and Lack of Previous Experience with Local Law and Regulations Poor Consultant s Communication and Coordination with Other Parties Delay in Evaluating and/or Approving Change Order Requested by Owner Delay in Approving Key Engineering Deliverables Poor and Slow Consultant s Decision Making Process Category Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Project Project Project Project Project Project Project Engineering Engineering Engineering Engineering Engineering Engineering Contractors Contractors Contractors Contractors Contractors Contractors Contractors Contractors Contractors Contractors Contractors Consultant Consultant Consultant Consultant Consultant Consultant Consultant Consultant Consultant Consultant

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Table-2 (Continued): List of Identified Sources of Interface Problems based on Industrial Professionals Opinion and Idea No Cause/Source of Interface Problem Category 47 Joint-Venture Structure of the Consultant due to Size of Program Consultant 48 Conflict between Consultant and Design Team Consultant 49 Material Shortage due to Worldwide Work Load Procurement 50 Delay in Material Procurement Procurement 51 Delay in Procurement due to Material Variety and Selection Procurement 52 Lack of an Effective Information System for Material Tracing Procurement 53 Bureaucracy and Complicated Material Procurement Process Procurement 54 Changes in Type, Specification, Quantity of the Material Procurement 55 Delay and Late Shipment of the Material Procurement 56 Damage of the Procured Material Procurement 57 Unclear Responsibility of Scope of Supply for Material Procurement 58 Shortage and Unqualified of Labor/Workforce External 59 Impacts of Sub-Surface Condition (i.e.: Soil, Water level, etc.) External 60 Accident during Construction External 61 Change of Governmental Regulations and Laws External 62 Weather Conditions at Construction Site External 63 Delay in Obtaining Permit External 64 Price Escalation of Material and Labor External 65 Embargo/ US Sanction External

7-3-1-Frequency of Interfaces Problems Causes:

The top ten frequent sources of interface problems according to Owner s, Consultant s, and Contractor s opinion are gathered. From Owner point of view, the most frequent causes of interface problems were mainly related to the Contractors and Sub-Contractors. Owners believed that lack of experience in Contractor s/ Sub-Contractors technical team, Contractors poor planning and scheduling, Contractor s/Sub-Contractors unfamiliarity and lack of previous experience in oil refineries mega projects are the three highest frequents of interface problems causes. However, Contractors/SubContractors indicated that the most frequent causes of interface problems related to the Owner s poor management during Front-End Loading Phase which are Owner late decision for dividing the program into the smaller projects, and lack of key deliverables such as Internal and External interface list, and Interface Management Plan within FEED Package. Also, Contractors believed that Owner late design approval was the third highest frequents of interface problems causes. It was found that Owner s Project Management Consultant had the same idea as Contractors regarding the first two highest frequents of interface problems causes. However, Consultant believed that awarding the project to the lowest bidder s financial proposal was the third highest frequent of interface problems causes. It is worth mentioning that most of the Owner s representatives believed that Owner s late decision for dividing the program into the smaller projects at the end of Front-End Loading Phase, and lack of key deliverables such as Internal and External interface list, and Interface Management Plan within FEED package have significant role on creation of the project interface events.

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7-3-2-Severity of Interfaces Problems Causes:

The top ten sever sources of interface problems according to Owner s, Consultant s, and Contractor s opinion are found. Owner believed that the most sever causes of interface problems were related to the Contractors. Owners believed that key manpower turnover, and lack of Contractor s previous experiences were the two main sever sources. Owner reminded that Owner s late decision for dividing the program into the smaller projects at the end of Front-End Loading Phase , and lack of key deliverables such as Internal and External interface list, and Interface Management Plan within FEED package were sever sources on creation of the project interface issues. However, again both Contractors/Sub-Contractors and Consultants underlined that the most two sever causes of project interface problems were Owner s late decision for dividing the program into the smaller projects, lack of key deliverables such as Internal and External interface list, and Interface Management Plan within FEED package. They indicated that poor and slow Owner s decision making process was another sever sources of project interface problems.

7-3-3-Importance of Interfaces Problems Causes:

The top ten important causes of interface problems according to Owner s, Consultant s, and Contractor s opinion are identified. There were some causes that were common between different parties and some causes were common between two parties. It is worth to mention that lack of key deliverables such as Internal and External interface list, and Interface Management Plan within FEED Package were common causes between all parties as key sources on creation of the project interface issues.

7-4-The Top Ten Interfaces Problems Causes:

The top ten causes of project interface problems based on all industry professionals opinions and ideas which were collected, clarified, analyzed, tabulated, grouped, categorized, and prioritized in terms of the number of times quoted by respondents as follow: Owner s Late Decision for Dividing the Program into the Smaller Projects Lack of Key Deliverables such as Internal and External Interface List, and Interface Management Plan within FEED Package Owner s Late Decision for Hiring Qualified Project Management Consultant Change Order Issued by Owner Incomplete and Unclear Scope Definition Poor and Slow Owner s Decision Making Process Owner s Late in Progress Payment to Contractor Poor Contractor s Communication and Coordination with Other Parties Contractors Poor Planning and Scheduling Consultant s Delay in Approving Key Engineering Deliverables As it is clearly mentioned, lack of an Interface Management Plan , and Internal and External Interface List as a key deliverable of the Front-End-Loading Phase were introduced as the main cause of interface problems of the studied oil refinery mega project.

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Industry professionals made many valuable recommendations for better management of the interface problems of the oil refinery mega projects which were used for developing the Interface Management Plan and were reflected in the recommendation part of this article, as well.

7-5-Impacts of Interface Problems Causes:

With reference to the gathered information by questionnaire No.1 and interview with industrial professionals, the impact of the causes of interface problems on project based on different viewpoints of Owners, Contractors, and Consultants/PMC were collected, clarified, analyzed, and prioritized, as follow: 1. 2. 3. 4. 5. 6. 7. Time overrun in terms of delay, Cost overrun, Quality impacts, Disputes between different project parties, Arbitration, Suspension of the Work or Contract Termination (rarely), Litigation (rarely).

However, the empirical relationship between causes and effects of the interface problems needs to be investigated in future studies to confirm the result of the gathered information by questionnaire.

8- Similar Research Findings for Interface Issues

Chen [11] investigated causes of interface issues from six interrelated perspective including people/participants, methods/processes, resources, documentation, project management, and environment, which were shown in the form of C&E diagram invented by Kaoru Ishikawa in 1968 . It is a graphical tool that helps to identify, sort, and display potential or real root causes (factors) of a specific effect, problem, or condition.

9-Recommendation 9-1-General Recommendations

According to the results of the research, interviews, and distributing questionnaires to many professionals who have extensive experiences in project management of the oil, gas and petrochemical industries in Iran and based on the lessons-learned from a comprehensive study of several articles in similar projects as mentioned in the literature review, the following items can be recommended to all parties in order to improve the performance of the interface management of the oil refineries mega projects: 1) As it has been shown in Figure-1, the interface management process including interface finding, identification, communicating, recording, and closing shall be done during Front-End loading phase of each project. The key deliverable at the end of this phase will be an Interface Management Plan , and Internal and External interface list. (Figure-2) 2) A detail Interface Management Plan (Procedure) for Oil Refinery was prepared by writers based on results of this research. Writers provided an effective Interface Management Plan for oil refinery in terms of an applicable project job specification for improvement and management of different interface issues among design and construction disciplines (i.e.: mechanical,

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3)

4)

5)

6)

instrumentation, civil, electrical, etc) of oil refineries mega projects. The generated interface coordination plan is a dynamic procedure since it can be easily customized in order to use to any other mega oil, gas, and petrochemical project. Owner should give special attention to the following issues: Decision for dividing the program into the smaller projects should be done by the end of Front-End Loading phase with full assistance and supervision of the basic engineering designer, Key deliverables such as Internal and External interface list, and Interface Management Plan to be prepared by basic engineering designer as key documents of FEED Package for each program, On time design approval and progress payment to Contractor, minimizing major change orders to the contract requirements and work suspension which interfere the work, and trying to completely and clearly define the scope of work and supply of each parties especially at the tie-in points, adequate quality of the FEED package by basic designer, proper expedition for issuance of engineering key deliverables, and inserting sufficient and clear detail into the engineering deliverables. Owner should use proper tools for evaluation and selection of the Contractors and not just relying on the Contractor s lowest financial proposals, also past experiences, technical expertise, sufficient resources(e.g.: manpower) and financial backup should be considered as key parameters for evaluation and selection of the Contractors. And finally, Owner should be able to make decisions immediately to solve any problem related to the interface events that arise during the project execution. Contractors should consider the following factors: Clear understanding and familiarity of Owner s needs and local law and regulations, SubContractors evaluation and selection, early planning, scheduling, and monitoring for the interface issues with other parties, Upgrading and curing communication and coordination with other project parties, reducing key manpower turnover, searching and applying lessons- learned of others, and expediting mobilization process. Consultant should look upon the following points: Reducing conflict with design team and other Contractors, create mechanism to solve project interface problems and disputes, expediting reviewing and approving the key engineering deliverables, and try to be flexible with considering time, cost, and quality together, expediting the design activities related to the interface issues, Plan for weekly, bi-weekly, and monthly coordination meeting regarding project interface issues, Clear understanding and familiarity of Owner s needs and local law and regulations, Generate a suitable computerized spreadsheet data base for interface issues of different Contractors, and monitor and update the data base, accordingly, also consultant must monitor the execution work closely and do necessary supervision and inspection at appropriate time, Do the risk study regarding interface risks especially those related to external issues and strategic ones and give the advice on proper time to Owner. Engineering party should concentrate to the following items: Minimizing discrepancies or mistakes in engineering deliverables, on time issuance of the key engineering deliverables, expediting the design activities related to the interface issues, Reducing conflict with other project parties, and to consider maximum constructability in design by using 3D computerized modeling software.

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7) Adding a position called Interface Manager with enough lead engineers for each discipline for the project organization chart of each project party is highly recommended to be considered for each program of the portfolio. Interface Manager should be reported directly to the project manager.

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9-2-Recommendation for Future Studies

The followings can be recommended for future studies: Evaluation of the effectiveness of the generated Interface Management Plan (Procedure) for Oil Refinery , by implementing it in some real oil refinery mega projects. Similar study can be conducted in other oil refineries mega projects to find more problems, impacts, causes and/or re-confirm the research findings of this study. More detail study can be done to evaluate the effect of a specific cause of interface problems on a specific project. By increasing the number of interlocutors, a more detail analysis can be conducted by calculating Frequency Index , Severity Index , and Importance Index by the formula given in the Sadi A.Assaf s and Sadiq Al-Hejji s article [29]. The cause factors can also be analyzed based on research needs either by factor analysis and multiple regression which were performed by Rong-Yau Huang [30] or C&E diagram methods which were performed by Qian Chen [31].

10-Conclusion
In this research, interface problems, the main causes and their impacts (effects) on project completion of the Iranian ongoing oil refineries mega projects were investigated. Totally, 70 questionnaires distributed between Contractors, Consulting Engineers, PMC, and the Owner of an oil refinery mega project which was divided into ten smaller projects and was undertaken in a multi-project environment. Based on the gathered information, the interface problems were identified, and 65 causes of those interface problems were collected, clarified, analyzed, tabulated, grouped, and categorized into the seven main groups as (1) Owner, (2) Project, (3) Engineering, (4) Contractor, (5) Consultant, (6) Procurement, and (7) External Issues. The top ten most interface problem causes were identified as: (1) Owner late decision for dividing the program into the smaller projects, (2) lack of key deliverables such as Internal and External interface list, and Interface Management Plan (Procedure) within FEED package, (3) Owner late decision for hiring qualified project management consultant, (4) change order issued by Owner, (5) incomplete and unclear scope definition, (6) poor and slow Owner s decision making process, (7) Owner late in progress payment to contractor, (8) poor Contractor s communication and coordination with other parties, (9) Contractors poor planning and scheduling, and (10) Consultant s delay in reviewing and approving key engineering deliverables. Also, the main effects of interface problems were identified as: (1) time overrun in terms of delay, (2) cost overrun, (3) quality impacts, (4) disputes, (5) arbitration, (6) litigation (rarely), and (7) termination (rarely). In the next stage of the research for each cause/factor, three questions were asked by using another questionnaire to determine frequency of occurrence, severity on project delay, and importance of each cause. However, the empirical relationship between causes and effects of the interface problems need to be investigated in future studies to confirm the result of gathered information by questionnaire. Finally, applicable, proven, effective, possible, and logical suggestions considering indigenous culture and situations to reduce and solve common interface problems associated with oil refinery mega projects more provided in terms of general recommendations for four main project parties as (1) the Owner, (2) Contractors, (3) Consultants, and (4) Engineering Companies and in addition due to Owner s request. An effective and applicable Interface Management Plan (Procedure) was prepared for Oil Refinery Mega Projects in terms of an applicable project job specification for helping the practitioners

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(The Owner, Contractors, Engineering Parties, and Consultants) to improve and manage different interface issues among design and construction disciplines (i.e.: mechanical, instrumentation, civil, electrical, etc) of oil refineries mega projects effectively and immensely. The generated interface management plan is a generic and applied procedure, since it can be easily customized in order to use to any other mega oil, gas, and petrochemical project. This research can help and facilitate academicians to conduct similar research and studies anywhere around the world to identify causes and effects of interface problems in construction of the mega projects, as well.

11- References:
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[12]. Sweis G., Sweis R., Abu HammadA. , Shaboul A. Delays in Construction Projects: The Case of Jordan, International Journal of Project Management, 2007,pp. 26, 665674. [13]. Hewage K.N., Ruwanpura J.Y. Carpentry Worker IssuesandEfficiencies Related to Construction Productivity in Albertas Commercial Construction Projects. Canadian Journal of Civil Engineering, 33, 2006,pp. 10751089. [14]. Dawood N., AkinsolaA. , Hobbs B. Development of Automated Communication of System for Managing Site Information Using Internet Technology. Automation in Construction . 2002, pp. 11, 557 572. [15]. Lin, X. L. The Practical Investigationof Interfaces in MRTS. s.l. : reports of technological transfer of MRTS systems, 1997. [16]. Pe, W. Z. Integration Management of Interface in MRTS Construction Project, SemiAnnual journal of MRTS Technology, 2000, pp. No. 23, pp. 223236. [17]. Wu, Y. Basic Requirement and Construction Interface of Escalator Equipment in MRTS Systems. Semi Annual Journal of MRTS Technology, 2001, pp. No. 24, pp. 245264. [18]. Wang, M. D.et al.The Applicationof Management Systemwithin Involved Parties in the Construction Site. Construction Management Association of the Republic of China,1996 . [19]. Ye, H. A. Improvement for Interface Management of Construction. First Construction Management Academic Conference. 1999, pp. pp. 281289. [20]. Ku, W. H. A Study of Establishing Lessons Learned Database for Contractor. s.l. : National Taiwan University, 2000. [21]. Wren, D. A. Interfaceand Interorganizational Coordination., Acad. Manage J, 1967,pp. 10(1), 69 81. [22]. Healy, P. Interfaces." Project Management: Getting the Job done on Timeandin Budget. Butterworth Heinemann, 1997,pp. 267278. [23]. Pavitt, T.C and Gibb, A. G.F. Interfce Management within Construction: in Particular, Building Faade. J. Constr. Eng Manage., ASCE, 2003, pp. Vol. 129, No. 1. [24]. YuCheng, Lin. Developing Construction Network Based Interface Management System. J. Constr. Engrg. And Mgmt., ASCE, 2009,pp. 477486. [25].Chua, David K. H., Myriam, Godinot. Use of a WBS Matrix to Improve Interface Management in Projects. J. Constr. Eng. Management, 2006,pp. 132(1),6779.

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12- Acknowledgements
We are heartily thankful to our Professor, Dr. George F. Jergeas, professor of project management in the Schulich School of Engineering at the University of Calgary, for his guidance, encouragement, and motivation during two main courses enabled us to develop this paper. The authors also very grateful to all people who support us for this research project provided by all interviewees, NIORDC, NIOEC,POGC, Ghods Niroo, Rahab Consultant Co., NDEC, NPC, NIORDC, and MAPNA companies who are famous governmental and private Iranian companies. Finally, the authors are also very grateful to their family, for their keen, committed, and warm encouragement during the preparation of this article.

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