SECTION 3

GUIDELINES FOR PROJECT MONITORING AND PERFORMANCE EVALUATION (PIME) OF THE SUB TRANSMISSION AND DISTRIBUTION PROJECT(ST&DP) 3.1 Improvement in Sub-Transmission and Distribution (STDS) has been identified as a key element in the reduction of losses and to improve the quality and reliability of electrical supply to the consumers. implementation, monitoring and performance evaluation Project is a very

important activity in any organisation. Through effective Project Implementation, Monitoring & Evaluation (PIME) organisation ensure that their resources are optimally employed for achievment of their objectives. Any deficiency or slackness in project implementation can lead to time and cost overruns and also in slippages/deficiencies in the quality of project work. They may ultimately result in loss of further opportunities and a decrease in project profitability. The situation may get further aggravated due to accumulation of interest and cost escalation as a result of inflationary factors. The credibility of organisation is at stake due to delay in implementation. 3.2 To guard against such dangers it is necessary for every Organisation to evolve or develop proper manual or computer based monitoring systems for its project. The monitoring system should take into account the characteristics of the project and skill of the people .Monitoring system should provide mechanism for comparison of actual progress with planned or scheduled progress at various stages in terms of time, cost, output and quality. Any deviation should be properly analysed to find the

reasons for deviations based on which management should take remedial actions as and when necessary. 3.3 In a project proposal the following should clearly defined so as to ensure timely completion of the project within the budgeted cost, achievement of desired performance : Job scope Time schedule Expenditure and Capitalisation schedule Expected performance improvements (Deliverables) Cost-benefit analysis 3.4 Monitoring of Project implementation and Performance Evaluation The monitoring of the execution of the project takes place at two levels i.e. at site level and at corporate office. Site level monitoring is done by Engineer-in-Charge of the project generally called General Manager(GM). At corporate office it is done by Project Implementation, Monitoring and Evaluation (PIME) cell. If needed , it is required to be monitored by a statutory body like CEA. A nodal officer is to be appointed in each responsibility centre to be headed by C.E(construction)/S.E(construction). The nodal officer shall interact with the site engineers as well as PIME cell of the corporate office .This nodal officer shall be responsible for monitoring the physical progress of the each activity and report the deviations to PIME cell. PIME cell will in-turn call the project review meetings and take appropriate action in consultation with Technical Director or equivalent officer . Thus a relationship is to be created to improve work culture delegating more power to responsibility centre in regard to procurement etc.

Project Implementation, Monitoring & Evaluation Cell A project Implementation and monitoring cell shall be formed at the Corporate office of the utility for project formulation, implementation and monitoring. This will monitor all kind of projects as indicated elsewhere.The objective of the cell shall be to ensure Project completion as specified in the project report. The details in the project report form the basis for monitoring and evaluation. Project Manager ST&DP The cell shall be headed by Project Manager-ST&DP who shall report to the Technical Director (Distribution). The designated officer shall participate in the formulation of the project report and interface with the funding and other agencies till the project approval so that he is fully familiar with the scope of the project and the commitments made. As Project Manager he shall be responsible for proper utilisation of funds, clearances from various agencies and timely completion of project and to achieve the deliverables. He shall be supported by suitable staff for the following functions : a) Design and Data Cell b) Contracts and Management Cell c) Project Monitoring & Evaluation Cell Design and Data Cell : The cell shall be responsible for consolidation of all the data necessary for project formulation and its subsequent maintenance and up-dation. Suitable methodology to up-date the data based on site modification shall be devised. The cell shall also be responsible for the design of systems for upgradation. This will ensure uniformity of approach in design and forward

and backward integration of the improvements that may take place during implementation. Contracts Management Cell Based on the size and complexity of the job, type of contract will be decided by this cell.Contracts management cell shall be responsible for handling all type of contracts and ensure that order is placed as scheduled. Project Monitoring & Evaluation Cell The cell shall monitor all type of contracts . It shall identify and forewarn regarding likely deviations in time, cost, quality and output so that effective measures could be initiated to avoid time and cost over-runs. On implementation the benefits achieved shall be compared with the projected parameters and deviations analysed. The feedback shall be used for improvements in the future projects. 3.5 TASK OF MONITORING AGENCY Major Tasks of monitoring agency can be grouped as follows : Making arrangement for allocation of Funds and their distribution among the construction schedules. Ensure timely forest clearance. Ensure timely land availability Ensuring timely start of work Monitoring critical activities. Monitoring of adoption of safety standards Monitoring of adherence to labour /factory act/ laws Monitoring of adherence to quality practice of construction, standard and specifications.

3.6

TASK OF CONTROLLING AGENCY If a Manager could depend upon the flawless execution of plans by a

perfectly balanced Organisation there would be no need for control because results would invariably be as expected .However, since plans and operations rarely remain on course, therefore a control is needed to obtain results. The most common process consist of three steps. Setting standards of performance Measuring performance against these standards. Correcting deviations from standards and plans. One of the controlling action in the construction of ST&DP is to divide the complete construction activity into number of milestones based on the realistic / compelling needs. These milestones can be timely reviewed, compressed and expanded as the need arises and the correcting deviation from the set milestones can be taken in the form of deployment of additional funds, extra manpower, material etc.,The monitoring and evaluation activities for construction of Sub Transmission and Distribution Project are: Determination of whether project objectives are being met as the ST&DP progresses Maintenance of control over the schedules by changing work loads and emphasis as required by delays in critical activities. Evaluation of expenditure of funds in terms of both work accomplished and time.The revision of budget as required to reflect changes in work definition .

 Evaluation of work force, adequate utilization as the work progresses and make adjustments as required. Evaluate time , cost, work performance in terms of schedules, budgets and technical plans to identify inter-action plans . 3.7 Stages of Project Monitoring PIME cell is the nodal department in the organization to discharge the role of the Project Monitoring by involving at following stages of Project implementation. TARGET SETTING(Physical/financial) SCHEDULING MONITORING PROGRESS REPORTING 3.8 TARGET SETTING Works required to be accomplished by PIME cell are enumerated below :(a) Preparation of Implementation Schedule (b) Finalisation of Activity Flow Network(AFN) (c) Setting Annual Construction Targets for the project. (d) Allocation of Annual Construction Budget targets Preparation of Implementation Schedule Implementation schedule to be given in project report is prepared by PIME Cell based on the past experience for completion of similar projects, as well as keeping in view specific requirement of projects, if any, availability of working seasons, terrain involved, local working conditions

etc. This schedule indicates the time frame for major activities viz. GOI/Board approval for the project, funding tie up/loan effectiveness, forest clearance, major pre-award and post-award activities of various packages of the project etc. The completion target indicated in the implementation schedule is meant for providing over-all time frame to GOI and/or External Agencies. Besides various milestones to be achieved for critical activities of the project are also indicated. Finalisation of Activity Flow Network (AFN) As soon as techno-economic clearance is sanctioned for implementation of the project, an activity flow network is prepared encompassing all major activities right from investment approval, fund tie-up, forest clearance, land acquisition, tendering, award and work execution upto commissioning. AFN is exhaustive elaboration of the implementation schedule generally keeping a float of 3 to 6 months in completion time vis--vis, time of completion as per implementation schedule attached with Project Report, so as to take care of any unforeseen delays/slippages during the execution of the project. Over all completion period in the aforesaid Flow Network is determined, keeping in view considerations like completion of upstream and down stream network etc. Draft network may be discussed with concerned construction engineers/engineering department for their comments/suggestions and modified suitably.It is then put up for the approval of CEO/CMD of the project. Approved activity flow Network is then circulated to concerned site for adoption. Setting Annual Construction Targets Site Engineer in Charge is required to submit targets for construction during the forthcoming year, considering over-all

implementation time frame, cumulative physical progress till last year and anticipated completion of the balance works. These targets are reviewed and frozen after discussions with concerned higher authorities as necessary. The requirement of construction power and alternative project arrangements are to be planned beforehand. Approach road, if not available may be responsibility of the authorities. Residential, communication facilities, schools, drinking water or other social obligations are to be ensured by the project authorities. Statutory Notifications to be complied. At the end of the year, the actual achievements for the various construction activities of project are furnished to PIME Cell by Site Engineers.PIME Cell furnish the consolidated report to CEO/CMD . Allocation of Annual Construction Budget Targets :Annual Budget Estimates (B.E.) for the forthcoming year and Revised Estimates (R.E) for the current year are prepared Equipment wise/Package wise by the site office of the project and forwarded to corporate office. BE and RE of construction project is reviewed vis--vis achievements and physical targets as per AFN. Meeting must be organized at Corporate Centre between Heads of Construction Group and Heads of Engg./Contract/Financing with CEO to review feasible annual allocation. Annual, physical and Financial targets are then set for the project. 3.9 SCHEDULING
PRE-AWARD SCHEDULING (LEVEL-I NETWORK)

Based upon the approved

AFN for project, Level-1 Network is

finalised by CEO package-wise. Level-l Network covers various activities associated with that package viz. Floating of NIT, opening of Bids,

placement of award and various site activities like survey, mobilisation by contractor at site, engineering ,supply of eqpt./material,other activities and testing & commissioning, etc. Level-I Network for various packages is drawn keeping over-all time period allocated in the approved AFN. Interfacing between various packages is ensured by CEO so that there is no slippage/mismatch between the activities of these packages so as to ensure overall completion of the project as per AFN. The L-1 Network, becomes part of bid document and later on this becomes part of contract.
POST-AWARD SCHEDULING (LEVEL-2 NETWORK)

major

This covers various activities associated at post award stage for each package commencing from award to the completion of the works i.e. engineering, release of construction drawings, procurement of raw material, type testing, manufacturing, inspection, supply mobilisation at site, major construction activities, testing and commissioning etc. Once the package is awarded, the Supplier/Contractor is required to submit L-2 Network/Bar Chart indicating detailed programme for completion of the project within the time frame elucidated in the L-1 Network. CEO reviews L-2 network and checks interdependencies between various activities within as well as with other related packages so that equipments/services required from an activity/work becomes available as per defined milestone in L-1 network as well as ensuring timely completion of the package/project. Views of concerned departments in Corporate Centre viz., engineering, contracts and QA&I are also taken into consideration so that the schedules for various activities are finalised to minimize the chances of slippages. In this process, efforts are made to compress the completion

time of the particular package to the extent practically feasible so as to partly/fully cover up delay (if any), taken place in award etc. Based on review ,supplier/contractor is advised to modify L-2 network and resubmit for approval. Updated L-2 network is then put up for approval of competent authority. An approved copy of L-2 Network is then furnished to supplier/contractor, various concerned Deptt. at CC ensuring implementation of package accordingly. 3.10 MONITORING OF CONSTRUCTION ACTIVITIES The monitoring for construction is done at two stages : 1. Pre-award : Once the AFN is approved, the status of various statutory Clearance activities such as, Environment clearance, Investment approval etc are reviewed from time-to-time and wherever major slippages are observed/anticipated matter is put up to top management by way of Exception Report for their intervention. If required, matter is taken up at Ministry level during various project review meetings. Status of Target/Milestone dates for activities like fund tie-up, package listing, Approved cost estimate/QR, Notice Inviting Tenders (NIT), Opening of Bid Documents (OBD), Letter of Award (LOA) etc. as brought out in the AFN are reviewed during periodic Monthly Pre-award Review Meetings. These meetings must be taken by ED (PIME Cell), wherein representatives of Engg./Contracts/PIME Cell/Finance/Corporate Planning participate. Minutes of such meetings are circulated to the head of concerned Deptts. and management so that corrective action are taken and target set for timely Award (LOA), are achieved.

2.

Post Award Once the Network is finalised, supplier/contractor is required to

implement the same for supply and work execution. The progress is monitored regularly during Project Review Meetings (PRMs) held at predefined interval and the same are presided over by Head of the Construction Circle.In this meeting representatives from site/departments of Corporate Centre viz. Engg, Contract Services and PIME Cell must participate. PIME Cell representative act as co-ordinator of PRM. During these PRMs, progress of various activities relating to engineering, supply and site activities are reviewed. Besides PRM also review budget utilisation, status of contract closing, O&M issues etc. Targets are fixed to recoup the slippages (if any). Record Notes of PRM broadly covering the issues discussed are circulated by PIME Cell for further follow up and monitoring. Major bottlenecks, critical issues/slippages etc. as surfaced during PRM, are put up to top management in the form of Exception Report for their timely intervention. Based on the progress /feedback received from PRM, in case of considerable slippages in supplies/works, meetings with concerned supplier/contractor for expediting are organised at Corporate Centre at the level of ED(PIME Cell)/GM(Proj.)/CMD .During these meetings an action plan for making good the delays, completion programme and resolution of holdup/bottlenecks (if any) are deliberated and actions proposed/initiated for timely completion of package project and revised targets are set for further monitoring. PIME Cell acts as co-ordinator for these meetings and issue Record Note of discussion to all concerned for further needful action.

3.

Monitoring for Budget Utilisation One of the important parameter which indicates the progress of the

project both in physical and financial terms is budget utilisation. Detailed expenditure reports for all the packages of various projects are obtained from site office on regular basis and achievements vis--vis monthly targets reviewed. Summary of achievements/shortfall in supplies/works is put up to Management for information and intervention as necessary. Meeting for management review of budget utilisation is organised from time-to-time, to prevent shortfalls and initiating timely corrective action, so as to ensure full utilisation of annual Budget allocations. 4. Monitoring of Contract Closing Following are pre-requisites for closing of contract. Completion of all supplies/work Material reconciliation Time extension & Liquidity Damages(LD) Necessary contract amendments. Status of closing of various contracts is reviewed during PRM of the region and PIME Cell assist in obtaining timely clearance from concerned Deptt. of CC for closing of the contracts. If required, Review Meetings at Management level are also organised by PIME Cell, in this regard. 3.11 PROGRESS REPORTING Progress Reporting activity of PIME Cell is accomplished in two parts. a) External Reporting b) Internal Reporting

EXTERNAL REPORTING

Based on progress received, monthly report must be prepared and sent to external monitoring agency, funding agency, indicating physical progress of ongoing projects and anticipated completion thereof. This report must also cover the snags/bottlenecks (if any). Physical milestones likely to be achieved during the ensuing Financial Year are submitted to funding agency, external monitoring agency, at the commencement of financial year in respect of all on-going projects and monthly report sent on the same. Based on the progress achieved and loan disbursement status from Corporate finance, a monthly report indicating physical and financial progress as well as project wise loan disbursement/claims must be sent to funding agency, in respect of all externally aided projects. In respect of all on-going projects, a Quarterly Progress Report indicating the projects physical/financial status, time/cost over run must be sent to funding agencies like World Bank, Asian Development Bank, OECF, etc. in respect of on-going projects funded by them. A brief write up of the projects alongwith the achievements and constraints (if any) is also to be provided to other monitoring agencies. Quarterly progress review must be taken by Ministry of Power at the level of CEA for status of on-going projects, utilisation of budget etc. Detailed progress of on-going projects in J&K must be sent separately on monthly basis to MOP and CEA.
INTERNAL REPORTING

Based on the discussions during regional PRMs, record notes and exception report are generated for internal circulation and management information.

Status of critical issues during project execution, Budget utilisation, are put up to Management periodically depending upon the urgency/criticality. As per criticality of issues relating to execution of project and budget, management review meetings are required to be arranged with Supplier/Contractors/Regional heads from time to time and decision taken during such meetings must be circulated by PIME Cell for information & actions by all concerned. PIME Cell must prepare the progress of critical items of on-going project and submit the same to company Secretary. from time to time for information of the Board of Directors. 3.12 Format for monitoring the Physical and Financial progress of a Sub Transmission and Distribution Project are enclosed in Annexure-PEVM0, Annexure-PEVM1 and Annexure-PEVM3. 3.13 TIME SCHEDULE OF IMPLEMENTATION OF ST&DP A list of activites for the feeders and sub-station is given in Annex. PEVM4 & Annex. PEVM5. A bar chart can be drawn as per implementation schedule given in the project report, mutual agreement with the supplier and activites thus monitored.

Annexure-PEVM0 Format of the Progress Report for Project Monitoring Progress Report for the month ending 1. Project Name 2. Location 3. Project Status with regard to design, engineering & procurement: 3.1 Specifications 3.1.1. Basic Specifications
Category Total Scheduled for the year Q1 Q2 Q3 Q4 Total No. completed during period Under review. Cumulative progress For the year

Civil Mechanical Electrical Instrumentation Control.

4. Procurement 4.1 Order Placement Category Total No. of enquiries Total No of orders issued

Scheduled Issued Civil Mechanical Electrical Instrumentation Control

Scheduled

Issued

5..Drawing & Design released for construction Category Total drawings Total No. Issued to Total No issued during period Cumulative No. Issued

to be released date Civil Mechanical Electrical Instrumentation Control 6.0 Site work/Erection of equipment/Commissioning

Details of schedule v/s actual of progress at site work, erection & commissioning of equipment. 7.0 Hold ups/Items requiring prompt attention 8.0 Financial Data Schedule Actual 8.1 Total Amount 8.2 Amount Committed 8.3 Amount of orders placed 8.4 Amount paid