PROJECT MANAGEMENT: LESSONS LEARNT IN KLIA PROJECT

PROJECT MANAGEMENT:
LESSONS LEARNT IN KLIA PROJECT
Assoc Prof Sr Dr Wan Maimun Wan Abdullah
University Technology Malaysia
Director, Khalid Ahmad Architects
WMAIMUN/PM
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CONTENT
1. Introduction
2. Study on Project Management
3. KL International Airport Project
4. Lessons Learnt
WMAIMUN/PM
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INTRODUCTION
CONSTRUCTION INDUSTRY
Project overrun on time & cost often happens. (Dlakwa, 1990)
Ineffective, adversarial, fragmented (Latham report 1994)
Chances of successful completion is difficult. (Brown, 1998)
Below average performance (Abdul Rashid, 2002)
Successful completion is not the norm. (Nguyen et al, 2004)
Lack of skill in all areas. (Abdullah, 2004)
Low probability achieving time, cost, quality. (Henrie, 2005)
Delays are prevalent. (Abdul-Rahman et al, 2006)
Ineffective practices, dirty dangerous & difficult (CIMP 2007)
Project failures are a ‘worldwide common phenomena’ and is
acknowledged universally as customary. (Tan, 2004)
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INTRODUCTION
3,500 projects from all over the world reveals on average
cost overrun 40% - 200% (Morris & Hough, 1987).
Budget exceeded >50% are common (Thompson, 1999).
73% government projects were over budget and 70%
delayed. (National Audit United Kingdom, 2001)
58% delayed/not completed. (Othman, 2006)
RM8 billion worth of contract under 9th MP, cost increase
by RM290,000 million (JKR, 2007)
1,428 projects awarded under 9th MP, 111 projects (8%)
categorized as ‘sick project’ or delayed (JKR, 2008)
Main flaws in quality include serious structure defects, soil
erosion, leakage, unsuitable building layout, poor quality
materials, poor workmanship, defects in equipment and
malfunction facilities. (Auditor General, 2007)
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WMAIMUN/PM
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PROJECT MANAGEMENT
‘WHAT TO ACHIEVE’
SUCCESS CRITERIA
‘HOW TO ACHIEVE’
SUCCESS FACTORS
Stakeholders’ Appreciation
Quality
Time
Cost
Human Management
Process
Contract & Technical
Organization
WMAIMUN/PM
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PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
HUMAN
MANAGEMENT
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Meets required
Quality
Completes within
Time
Completes within
Cost
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
HUMAN
MANAGEMENT
PROCESS
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Completes within
Time
Completes within
Cost
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Completes within
Cost
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
ORGANIZATION
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Organizational structure
Financial resources
Policy and strategy
Learning organization
External environment
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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WMAIMUN/PM 13

KL INTERNATIONAL AIRPORT PROJECT
FACILITIES
EARTHWORK
AIRSIDE DEVELOPMENT
Runways, Taxiway, Apron
Air Traffic Services/ Radar
LANDSIDE DEVELOPMENT
Terminal Complex
Core facilities building
Utilities
Others
PRIVATIZED FACILITIES
PACKAGES
E1-E2, EW1 – EW11
RA1 – RA30
AT1 – AT9
PTC1 - PTC5
CA1 – CA9, SA1 – SA7
UT1 – UT9
PR1 – PR20, VIP, Mosque
PV1 - 16, Commercial centre
WMAIMUN/PM 14

KL INTERNATIONAL AIRPORT PROJECT
Over 150 contract packages
Airport site: 100 km2 (25,000 acres)
30,000 workers, > 100 consultants, > 50 countries
from Asia, Africa, Australia, America and Europe
Completed within 6 years compared to
international average of 8 years.
Cost approx. RM10 billion (US$3.5 billion) over
initial estimate of RM20 billion.
Awarded prestigious awards & emerged one of
the top five airports in the world (Wikipedia, 2011)
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
ORGANIZATION
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Organizational structure
Financial resources
Policy and strategy
Learning organization
External environment
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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SUCCESS CRITERIA
OBJECTIVES OF PROJECT
1. Build a thoroughly modern, efficient and
environmentally friendly airport
2. Build it quickly: two milestone to be achieved
15 September 1997
27 June 1998
SUCCESS CRITERIA
• Quality
• Time
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WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
ORGANIZATION
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Organizational structure
Financial resources
Policy and strategy
Learning organization
External environment
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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SUCCESS FACTORS
HUMAN MANAGEMENT
Team and leadership - formation of integrated
project management team to reduce bureaucracy
with core key personnel providing leadership
Communication - establishing a communication
management plan
Stakeholder management - capturing required
project definition & Managing people
WMAIMUN/PM 20

TEAM & LEADERSHIP
WMAIMUN/PM 21

COMMUNICATION
KLIA Formal Communication Strategy
(Source: Tan Sri Jamilus Hussein)
WMAIMUN/PM 22

STAKEHOLDER MANAGEMENT
SETTING PROJECT PARAMETERS:
1. Industrious system of meetings, questionnaires
and confirmations with clients.
2. Liaising with other stakeholders including local
authorities, end-users, consultants etc
3. “Must have”, ‘Essential” “Important to have” &
“Nice to have”
4. Project Definition and Engineering Design
Proposal – agreed project requirements signedoff
by client
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STAKEHOLDER MANAGEMENT
PROJECT DEFINITION: Sacrosanct items
• Airspace management – airside, landside
• Fixed building form for MTB, CP & SB
• Fixed Architectural and aesthetic features such
as roof, columns, glass panel
• Clear routes and access – check-in routes,
control area, main lounge
• Specified walking distance and transfer time
• Retail & catering facilities
• Concept of “Airport in the forest” and “Forest in
the Airport”
WMAIMUN/PM 24

STAKEHOLDER MANAGEMENT
Leadership – managing people
Government servants – well-disciplined and trained
to observe procedures and systems
Private sector consultants and contractors – focus
on getting the job done quickly and willing to take
risks, mopping up mistakes as they go along
Migrant workers, from different parts of the world
and different socio-economic backgrounds.
WMAIMUN/PM 25

WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
ORGANIZATION
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Organizational structure
Financial resources
Policy and strategy
Learning organization
External environment
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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SUCCESS FACTORS
PROCESS
Planning - Masterplan
Schedule - Master Implementation program
Monitoring and control - Approval committees
Quality Management Plan – KLIA Quality Plan,
Consultants Quality Plan & Contractors’ Quality
Plan
WMAIMUN/PM 27

PLANNING
Planning took almost 2 years
Airport concept, project scope, terminal operations,
computer integration, work packages, phases,
migration plan, and everything captured were
addressed and strategized.
KLIA Masterplan was the ultimate handguide with a
key ingredient in airport planning of creating simple
passenger flows from the landside to airside,
without foregoing the primary project objective of a
thoroughly modern, efficient and environmentally
friendly airport.
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SCHEDULE
MASTER IMPLEMENTATION PROGRAM
PROJECT SCHEDULE
PROGRAM OF WORK
29
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1
MONITORING AND CONTROL
The Four Managerial Levels of KLIAB
Overall Project Level
KLIA Bhd Management
- BoD, M&C Committees
- MD, CD, SCGM
- GM
Ext. new
Conc.
Partiesdevpmt
users
2
Overall Construction Level
3
Area
level
Area
level
Area
level
Area
level
Area
level
Area
level
Area
level
Daily
Area Coordination meetings
for monitoring & control.
4
Package Level
Daily Package Level meetings
With Contractors,
Consultants, etc.
(Source: Tan Sri Jamilus Hussein)
WMAIMUN/PM 30

MONITORING AND CONTROL
DESIGN APPROVAL PROCESS
DRAWINGS SUBMITTED BY
CONTRACTOR
21 DAYS
APPROVED
NO
RESPONSE
APPROVED WITH
CORRECTIONS
REJECTED
CORRECTIONS
MADE
CORRECTIONS
NOT MADE
FINAL DESIGN
RESUBMIT
WMAIMUN/PM 31

QUALITY MANAGEMENT
KLIA QUALITY MANAGEMENT MANUAL
PACKAGE
CONTRACTOR
Prepare
Internal Audit
Prepare
CONSULTANT
- review
- monitor
- audit
Internal
Audit
Submit
Audit
Prepare
Internal
Audit
Contractors
Quality Plan
KLIA Bhd
- review
- monitor
- audit
Submit
Audit
Consultant’s
Quality Plan
(Source: Tan Sri Jamilus Hussein)
WMAIMUN/PM 32

WHAT WHAT
SUCCESS CRITERIA
Stakeholders’
appreciation
Meets required
Quality
Completes within
Time
Completes within
Cost
HUMAN
MANAGEMENT
PROCESS
CONTRACT
AND
TECHNICAL
ORGANIZATION
HOW
SUCCESS FACTORS
Team and leadership
Project manager
Communication
Stakeholder management
Planning
Scheduling
Monitoring and control
Quality management
Risk management
Contracting
Contractor
Technical
Innovation
Organizational structure
Financial resources
Policy and strategy
Learning organization
External environment
PROJECT SUCCESS FRAMEWORK (W.M ABDULLAH, 2010)
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SUCCESS FACTORS
CONTRACT & TECHNICAL
Three manageable geographical areas namely
PTC, Core facilities and Privatised facilities.
Procurement Strategy:
• Tendering method - Pre-qualification
• Procurement system - a combination of fast track
Design-and-build, fast track Conventional contracts,
and Privatisation.
Contracting - Bespoked forms of contract
WMAIMUN/PM 34

PROCUREMENT STRATEGY
FACILITIES
Passenger Terminal Complex (MTB, SB,
TTS, TAMS, PLB, Radars)
Core Facilities - Runways, Buildings,
Control Towers, including EW & Roads
SSF, aircraft fuelling, cargo aircraft
maintenance, car rental, hotels, petrol
stations, cogeneration plant, car-park
facilities
PACKAGE
PTC & AT
CORE
FACILITIES
PRIVATIZED
WMAIMUN/PM 35

PROCUREMENT STRATEGY
TENDER
Pre-qualification
Sets of pre-q exercise for different
packages
Various PTCs, CA, RA, UT, AT, etc
International tender
2-envelope system
WMAIMUN/PM 36

PROCUREMENT STRATEGY
PACKAGES PROCUREMENT CONDITION OF
CONTRACT
PTC & UT
Design and Build
KLIA D&B contract
CORE FACILITIES
PRIVATIZED
Fast Track
Traditional Contract
Privatization
KLIA BQ contract
Privatization
contract
WMAIMUN/PM 37

PROCUREMENT STRATEGY
FAST TRACK IMPLEMENTATION REGIME
TIME
Tender Design
Detailed Design
Procurement
Detailed Design
Completed
Construction
Drawings
Completed
Construction Drawings
Construction
Completed
Construction
(Source: Tan Sri Jamilus Hussein)
Overlap between
Design & Construction
WMAIMUN/PM 38

CONTRACT
BESPOKED FORM OF CONTRACT
Variation works procedure
Related/ interfacing works – key events and
priority events
Acceleration works
Claims procedure
Indemnity and warranty
Government policy
Deeming clauses
Operations and Maintenance contract
WMAIMUN/PM 39

CONTRACT
VARIATION PROCEDURE
ER issues Variation order &
request estimate from Contractor
Contractor fails
to give estimates
Contractor gives
estimates
ER disagrees estimates/
Inadequate justification
ER agrees
with estimate
ER estimate cost & time
VO issued & work proceed
ER’s estimate binding
until reviewed under
Dispute resolution
VO instructed.
Contractor limited to
cost & time of estimate.
Works proceed
WMAIMUN/PM 40

CONTRACT
KLIA Interfacing Visualized
Contract
Packages
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Interfacing
Contractual
Interfacing
WMAIMUN/PM 41
(Source: Tan Sri Jamilus Hussein)

ACCELERATION
CONTRACT
Employer’s right to order acceleration in lieu of
EOT
Cooperation from Contractor – acceleration
proposals
Contractor’s right to be paid for accelerated
works
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CONTRACT
LIQUIDATED DAMAGES
LAD for Whole of the Works
LAD for priority events
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CONTRACT
INDEMNITY & WARRANTY
Parent company guarantee
Extensive copyright and intellectual property
Direct Warranties from Suppliers, SC & designers
Gurantee period: 5 – 30 years
Project insurance effected by Employer
WMAIMUN/PM 44

CONTRACT
GOVERNMENT POLICY
Environmental policy
Health and Safety
Fixed Forex
Payment in Yen and RM
FOB
Local carrier and freight forwarder
Local participation
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CONTRACT
TRAINING
Training manuals
Training during construction and O&M periods
OPERATIONS & MAINTENANCE
O&M Manuals prior to completion
Separate O&M contract
O&M services
Immediate repairs upon breakdown
Spare parts
WMAIMUN/PM 46

SUCCESS CRITERIA
CONCLUSION
Need to be clear from the start. For KLIA project,
the success criteria are “Time”, and “Quality”
SUCCESS FACTORS
Human management – Team and leadership,
communication and stakeholder management
Process – Planning, Schedule, Monitoring &
control, Quality Management System
Contract & technical – Procurement strategy &
Contracting
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