ABBREVIATIOnS

SMART Specific, Measurable, Acceptable, Realistic and

Time bound
1. Project management
1.1. Meaning/concept of project
1.2. Features of project
1.3. Project management
1.4. Characteristics
1.5. Benefits/Importance of project management
1.6. Emergence, growth or development of project
management
1.7. Project environment
1.8. Skills required for a project manager
1.9. Role of a project manager
1.10. Responsibilities of a project manager
1.11. Project life cycle
1.12. Phases or steps or stages of project life cycle
1.13. Comparison between project management and
production management
1.14. Comparison between project management and
traditional management
1.15. Project manager and line manager interface
Questions:
2. Project classification
2.1. On the basis of technique
2.2. On the basis of funding sources
2.3. On the basis of size
2.4. On the basis of nature
2.5. On the basis of orientation
3. Project planning and formulation
3.1. Meaning and definition of project planning
3.2. Reasons for making project plan
3.3. Characteristics of project planning

3.4. Levels of planning in project

3.5. Stage/Process of project planning
3.6. Meaning of project proposal
3.7. Contents of project proposal
3.8. Considerations for preparing project proposal
3.9. Procedures for developing project proposal
3.10. Project programme and system
3.11. Project specification
3.12. Total planning process
3.13. Meaning of project formulation
3.14. Methods/techniques of project formulation
3.15. Difference between Critical path method (CPM)
and programme evaluation and review technique
(PERT)
3.16. Position of railway transportation in Nepal
3.17. Problems of railway transport in Nepal
4. Project organization and implementation
4.1. Types of project organization structure
4.2. Linear responsibility chart (LRC)
4.3. Project authority
4.4. Purpose of delegating authority
4.5. Types
4.6. Concept of responsibility and accountability
4.7. Conflict in project environment
4.8. Levels of conflicts
4.9. Conflict management techniques
4.10. Meaning of project team or team building
4.11. Distinction between work group and work team
4.12. Features of project team

Chapter 1 Project management

Meaning/concept of project
The word project is derived from the Latin word
Projectum, from the Latin verb proicere which means to
throw something forward. Actually that means something
that comes in advance before anything else happens by
considering overall factors of surrounding. Project is a
temporary, unique and progressive attempt or endeavor
made to produce some kind of tangible or intangible

result, it is an integrated effort made for achievement of

certain objective within certain time. It includes a series
of interrelated tasks that are planned for execution over a
fixed period of time and within certain requirements and
limitations such as cost, quality, performance and others.
A project is a temporary endeavor undertaken to create
a unique product or service.- Project management
Institute of USA
Project as one, which starts from scratch with a definite
mission, generates activities involving a variety of human
and non human resources all directed towards fulfillment
of the mission and stop once the mission is fulfilled.- S.
Chaudhary
According to Horald Kerzner 2005, A project is any
series of activities and tasks that:
Have a specific objective to be completed within
certain specification
Have defined start and end dates
Have funding limits
Consume resources.
Functionally, project is a one-time short term activity to
be conducted and completed within certain parameters
like cost, time, quality, resources and so on in a dynamic
environment. Project is considered as a cutting edge of
development. Its starting date and ending date are
prefixed. Its development way is unique. Some examples
of project are hydro-electricity project, constitution
building and drafting project, report preparing project,

film making project, irrigation project, constructing

project, etc.
In conclusion a project is any series of activities and tasks
which convert an idea, a design or a plan into concrete
entity that have specific objectives to be completed with
certain specification within pre-determined time period,
budget limits and consumes human and non-human
resources.
For example:
West Seti hydro-electricity project
Total investment Rs1 Kharab 20 Arab
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Total generation: 750 MW

Location: Far-western region
Signed date: February 28, 2012

Starting date to construct: October 2014

To be completion date: July 2019
Nature: Reservoir type
NOTE:
It has clearly defined objectives
It is something that converts an idea, a design or a
plan into some concrete entity.
It is unique, uncertain and accomplishes
impermanent (not permanent) tasks.
It integrates the human and non-human resources as
per requirement.
Project is a one-time set of activities that must be
completed within constraints of time, cost and
quality performance in order to achieve
predetermined objectives.
It is only a one-time activity designed to achieve
specific objectives.
It has definite starting and ending dates.
It lives between these two cut-off points and passes
distinct phases of its life. The time span between
these points is known as project life cycle.
Latin word Projectum (proicere) to throw
something forwards originally meant Something
that comes before anything else happens
Project should be:
Economically viable (cost and benefits, viability, IRR)
Technically feasible
Politically suitable
Socially acceptable

Features/Characteristics of a project
A project is any series of activities and tasks which
convert an idea, a design or a plan into concrete entity
that have specific objectives to be completed with certain
specification within pre-determined time period, budget
limits and consumes human and non-human resources.
Project has several characteristics among them some are
mentioned below:
1)Specific goal/Objectives
Every project has its own goals or objectives. Projects
have specific objectives to be completed within the
certain provision. It focuses on end outcomes. Its output
is measurable. Once the project objectives have been
accomplished or achieved the project ceases to exist. The
projects goal must be SMART i.e. Specific, Measurable,
Acceptable, Realistic and Time bound
2)Temporary nature
The project is temporary in nature; it has fixed starting
and ending date. A single project does not continue
endlessly.
3)Life-span/cycle starting and end
Every project has limited life span with pre-fixed starting
and ending date. The life span consists of the stage of
initiation, planning and design, implementation,
monitoring and control and termination. The life span of

project can be short or long depending upon the nature,

scope, objectives and size of the project.
4)Constraints time, cost, quality
Time, cost and budget are the major constraints of the
project. It has time schedule for activities and completion
date as deadline, own budget to control cost and clearly
laid down quality specification.
5)Teamwork project manager as leader
The project is based on the team work. Each and every
member of the project joins hand to hand together to
accomplish project objectives; they are integrated and
have complementary skills with mutually trust and
openness in the team function.
The project manager stood as a leader of the team.
6)Unique or special entity
A project is unique and no two projects are similar, even
though inputs, processing, and the results of two projects
are identical. The nature of an organisation, and available
infrastructures, location of the project, the people
associated with a project make project unique.
7)Contracting and sub contracting
Most of the project is contracted and sub-contracted. A
high percentage of the projects works are done through

contractors and sub-contractor according to the size of

the project.
8)Dynamic environment
Project operates in dynamic environment. Environment
consists of forces that influence the projects ability to
achieve its objective. In order to achieve the goals,
project must continuously adopt to its environment.
Failure to adapt to the environment is a major cause due
to which project fails.
9)Risk and uncertainty
The project involves uncertainty in their activities and
results. This brings risk to the project. Every project has
risk and uncertainty associated with it. The degree of risk
and uncertainty also vary during the life cycle of a
project. An ill-defined project has a high degree of risk
and uncertainty in comparison of a well-defined project.
The risk is perceived to be variability of actual returns
from the estimated returns and uncertainty about future
leads to variations in returns.
10) Beneficiaries
The project has certain group or group of beneficiaries.
They are ultimate users of the project outputs. The
project manager must address the needs of
beneficiaries/clients. Owners, clients, members, the
public at large may be beneficiaries of the projects.

Beside the above mention features there are:

11) Flexibility- adapt to change
12) Resource Integration- consumes and coordinates
resources Planning and control
13) Unity in diversity

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Project management
Project management is a carefully planned and organised
effort to accomplish successful project. Project is a
temporary unique and progressive attempt or endeavour
to produce a specific result.
Project management includes developing a project plan,
which includes defining and conforming the project goals
and objectives, identifying task and how goals will be
achieved. It also includes managing the implementation
of the project plan, along with operating regular to ensure

that there is accurate and objective information on

performance related to the plan and the mechanism to
implement recovery action when necessary. Project
usually follows major features or stages, including
feasibility, defining, project planning, implementation,
evaluation and support / maintenance.
Project management is the application of knowledge,
skills, tools and techniques to project activities in order to
meet or exceed stakeholders needs and expectation
from a project.

Project management is the science of organizing the

components of a project.
Project management is the task of getting the project
activities done on time, within budget & according to
specification by project team in dynamic environment.
An art or science for the unique application of managerial
principles to project in a dynamic environment is called
project management.
An act of getting temporary act completed within the
limitation of cost, resources and quality standard is called
project management.
Project management is the planning, organizing,
directing and controlling of company resources to
complete specific goals and objectives. - Harold Kerzner

Project management is the art of directing and

coordinating human and non-human resources
throughout the life of project by using modern
management techniques to achieve predetermined
objectives of scope, cost, time, quality, participant
satisfaction.- PMI of USA

The planning, organizing, directing and controlling

company resources to achieve relatively short term,
preset objectives
The discipline of project management provides the tools
and techniques that enable the project team to organize
the work to meet the objective.
Project management is the process of identification,
planning, implementation, appraisal and control of project
activities and resources in achieving project specific
objectives within limited time, cost and quality
performance with effective and efficient utilization of
available resources.
Projects and production *both them involve some kinds of
conversion from raw materials into finished goods
*Frequency we generally undertake each activity *Project
supposed to be one time (only once) activity whether
production is repetitive activity First time, only onceproject

Characteristics
1. Objective oriented
2. Team work
3. Planning, implementation and controlling
4. Change oriented
5. Uniqueness
6. Constraints of time, cost and quality
7. Functional co-ordination
8. Management of project
9. Matrix organization
Benefits/Importance of project management
1)Resources utilization
2)Team development
3)Customer satisfaction
Whenever you get a project done on time and under
budget, the client walk away happy in a happy client is
one you will see again.
4)Change management
Change is a natural phenomenon with every project
throughout its life-cycle, project very during its life span
in term of technology, equipment, material, machinery
people, work ethics and organisation culture. Some
changes in these variables may not have any major
impact, but some others may change the very nature of a
project. Therefore, the interrelationship and management
of change between these variable is required for
successful completion of a project.
5)Matrix model

6)Social prosperity
7)Time management
8)Quality work
Because of better efficiency and better strategies, we can
achieve said goals with specific time and cost parameter.
9)Overall development
10)
Emergence, growth or development of project
management
Project management has a long history since human
civilization. It is not the substitution of traditional
management but it is new and modified version of
traditional management. Its origin is anciently rooted in
antiquity. It was the demand of time rather than desire,
due to limited resources, time, cost and quality
standards. The growth and development of project
management are roughly studied by classifying in
following two eras.
A. Ancient/ Traditional era
Project management is started since time immemorial.
The pyramid and Babel tower of Egypt are known as the
oldest construction project of the world. The Great Wall
of China (220-206 B C), Taj mahal (1632-1653 A D),
the churches of Europe, the temples of Nepal and India,
the Suez-canal the Panama Canal are some introductory
examples of ancient era project. At that time, the rules of

managing those construction projects were not matched

with the rules of modern project management.
Some examples of ancient era are
Pyramid of Egypt
Great Wall of China
Taj Mahal
Palaces, Temples, Stupas, Gumba of Kathmandu
valley, etc.
B. Modern era
The invention of electric bulbs by Thomas Elba Edison
(1711 AD), scientific management propounded by F W
Taylor (1856-1915 A D), Principles of administrative
management propounded by Henry Fayol (1841-1925 A
D), Bureaucracy theory propounded by Max Weber (18641925 A D), etc. have given the background for the
development of modern era.
Some examples of ancient era are
Atomic bombs, missiles and aerospace project
Putrajaya town planning project, Malaysia
Hydro-electricity project in Nepal, etc.
Modern era emergence and growth of project
management can be studied under the following two
periods.
a. Informal period of modern era
Informal period of modern era in project management
begin from the invention of electric bulb by Thomas Elba

Edison (1711 AD) to the period before Second World War.

At that period, the concept of project management was
used in Army or defense sector of European and
American country. To introduce or develop atomic bombs,
missiles and other types of weapon, this concept was
used in aerospace sector too. US defense department
firstly applied and popularized project management
informally.
b. Formal period of modern era
The formal period of modern era begin after the
completion of Second World War. The quest for military,
supremacy and arms race between USSR and USA during
the 1950s, 1960s, 1970s, 1980s gave the impetus to
rapid development of the concept of project
management. The major events in the emergence and
growth of concept of project management can be listed
as follows
1950s-1960s
Project experts Paul O Gaddis (1959 A D) published a
first article about project management titled The
project manager in Harvard Business Review (HBR)
and that article was considered as one of the
milestone in the field of project management.
In 1950, development of Programmes Evaluation and
Review Techniques (PERT), Critical Path Method (CPM)
In 1960, matrix organizational structure was
developed and tested by NASA in the USA.

 In 1962, Keith Davis introduced and implemented

one project called Man Hatton project. The
development of atomic bomb was the outcome of
Manhattan Project.
In this period, project management invested and
developed intercontinental ballistic missiles in USA
In 1962, National Aeronautics Space Administration
(NASA) implemented Programmes Evaluation and
Review Techniques (PERT) with the emphasis of Work
Break-down Structure (WBS) and cost control system
In 1963, United air force adopted the project life
cycle in defense sector
In 1967, International Project Management
Association (IPMA) was established.
In 1969, project management concept began to
apply in environmental issues and IT sector
1970s-1980s
Project management begins to apply in various
sectors like construction, manufacturing,
automobiles, social awareness,
and so on.
National Aeronautics Space Administration (NASA)
and the department of defense in USA accepted the
concept of project management.
Project management occupied a central place for the
application of information technology in each and
every sector.
Henry Gantt, called the father of planning and control
techniques, used the Gantt chart and Gantt formula
as a project management tools.
1990s-2000s

 Windows networks, internet and E-mail were

launched
Development of websites, B2B, mobile and cellular
communication has facilitated the virtual teams for
the successful implementation of project
management.
Total Quality Management (TQM), ISO 9000, Quality
management system gained a global acceptance in
project management
Many multinational companies began to use the
project concept in emerging area like cost
management, time management, stress and conflict
management and so on.
Nowadays project management has become the
major tools of overall development in any country
with the parameter of time, cost, resources and
quality standard.
In the context of Nepal, project management
unknowingly started from the construction of the
temple, palaces, Gumba and so on. But up to now,
one thousands micro and major (macro) projects are
completed with the little-bit development of
hydropower projects. It can be the foundation for the
social and economical prosperity of Nepal.
Project environment
Project management is an open system to be operated in
a dynamic environment. Project management is
influenced by internal and external environmental forces.
These factors are called environmental forces of projects.
They provide and pass SWOT (Strength, Weakness,

Opportunities, and Threats). The change in environment

brings increase or decrease uncertainty, competition,
complexity etc. in all types of resource and goal. The
project management team has to change the policies and
strategies based on the changes in environment.
Project operates in dynamic environment. Environment
consists of forces that influence the projects ability to
achieve its objective. In order to achieve the goals,
project must continuously adopt to its environment.
Failure to adapt to the environment is a major cause due
to which project fails.
Project environment can be classified into.
A. Internal environment Controllable environment
of the project
It is located within the project. It is controllable by the
project. It provides strength and weakness to the project.
The forces in the internal environment consists of
Within control
Strength and weakness
Affect the project most
i.

Project objectives

Objective is the desired outcomes or in the result of the

project. Project must be focused on objective.
SMART
Aspiration with the goal

Desired goals of the project to satisfy its customer

ii.

Project constraints

A project operates within the constraints of cost, time and

quality Performance. They determine the scope and
boundaries of the project.
WHERE IS Effect?
Limit the activities
iii.

Project resources

Human
Non-human
Project has a human and nonhuman resources, the
human resources include specialized experts and
managerial personnel. Research availability sets a limit
on project activities

iv.

Project structure

A project is a temporary organization structure is overall

framework for different roles, functions and authority. It
includes individual groups unique and relationship
between them. It provides a hierarchy for effective flow of
instruction and feedback within the project organisation
Resources
Generally, matrix structure

Right men in right posts with proper rights and duties

(authority and responsibility)
Always communication
Part of functional organization/ pure project organization/
Matrix organization
B. External environment
Those factors that are beyond or little control of the
project management are called external factors. It
provides threats and opportunities (OT) to a project.
Project manager should adopt external environment as
per the need of project. External environment is made up
of the stakeholders (immediate factors) and remote
factors (general environment).
1. Immediate or task or stakeholders environment
The task environment of a project is made of
stakeholders. They are either involved in the project or
other interest are affected by the project they affect the
project activity project cannot control the tax
environment, but can directly influence it.
Consist of the different elements or factors which directly
or indirectly influence the project activities
The elements of project task environment are

a)

Customers or clients or Beneficiaries

Customers needs, opinions and abilities

It satisfies the needs of the customer. The customer
specifies the term of reference; the customer greatly
influences the project. The project should be focused on
customer needs.
Should be focused on clients need and requirements
b)

Competitors

Competition in cost, price, quality and services

Competition from individual or an organization may
create the problems
Competition increases performance quality
c) Contractors
Contracting and sub-contracting
A project involves highly labour of contracting and subcontracting the greater the complexity, the greater the
level of contracting, the constructors influence project
progress
Competition in cost, skills and efficiency
Tender
Selection
d)

Consultants

Hire experts or consultants

Ideas, suggestions

Influences
The project activity requires professional expertise. So
consultants are hired for various activities consultants
influence the project activities directly through the
professional services.
Experts for advice to perform project activities
e)

Suppliers

Materials, labourers, time and qualities

Projects depend on supplier for procurement of
equipment, materials, service and labour, they affect
efficiency, quality and settled of project through the
delivery timing, and projects must build a good
relationship with suppliers
f) Financier
Lend money to project- owners/shareholders/donors
Fund provider
Donor and owner
Grants or credit or soft cost
The financiers of the project can be owners, shareholders,
institution or foreign donors. They greatly affect fund
mobilization for the project.
g)

Labour unions

Has to maintain the mutual and cordial relationship with

the labour union

Unionization is increasing in project. Labour relation need

to be effectively managed by project. Industrial disputes
leading to strikes or lockout can adversely affect project
progress.
h)

Government

The policies, attitude and facilitation by government

support or give constraints to the projects. Projects will
comply with government regulation and directions. This
should be environment friendly
Government makes project related rules, regulations
policies and directives
2. Remote factors/general environment (PEST)
Uncontrollable environment
Creates opportunities and threats to project
It is located outside of project. It cannot be controlled.
The project can indirectly influence it. The factors of
external environment are
a)
Political-legal environment
Politics of local, national and international
government and the regulatory agencies of the
government affect project activities. Uncertain
political climate is bad for project's health
Political system
Political parties, power blocks and election procedures
Ideologies/ Political Philosophies

Democratic and socialism [Democratic socialism (DS) and

totalitarian socialism (TS)]
(democratic-totalitarian-mixed)
Power
Stability
Rules and regulation
Organs of state/ Political Institutions
Legislature (parliament), Executive (government),
Judiciary (court)
b)
Economic environment
Economic growth rate, income distribution, economic
health, inflation, fiscal policies, and foreign aid are
important economic forces in the project
environment which affect project activates
Economic classes
Economic policies
(Monetary-fiscal-industrial)
Trade cycle
GDP
Economic growth rate
Economic system
Per capita income
c) Socio-cultural environment
Project should be sensitive to socio cultural change. The
forces can be demographics, life style, social values,
tradition, belief, religion, attitude, art culture etc. Such
forces affect the project team and the stake holders of
the project
Socio-structure

 Caste/creeds
Class
(Rank within a society determined by its members)
Languages
Group
Attitudes
Regions
Beliefs
customs
d)
Technological environment
The level of technology, pace of technological change and
changes in wok method greatly affect projects.
Computerization, robotization, automation and
information technology have had profound impact on
projects
Ideas, process, tools and methods to convert inputs
into outputs (labor based-capital based)
I.

Level of technology
Simple to complex
Labour intensive and capital intensive
Labour intensive: use of more labour
capital intensive: use of more machines, Nano,
automation, robotics, computerization

II.

Pace of technology change

Technology is dynamic force

Fast and slow

III.

Transfer of technology
Developed to developing or underdeveloped
countries
Foreign direct investment (FDI)
Multinational companies

Globalization (Global companies- contracts, technical

collaboration, joint ventures are modalities)
Projects (turn key projects based on global bidding
service a source of technology transfer)
Trade (Sales of equipment or machines)
Training and publications (opportunities to learn)
IV.

Research and development

Superior quality
Affordable

The project ideas should be economically viable,

technically, feasible, politically stable and social
acceptable.
Project manager
Project manager is responsible to each and every
department, but line manager is responsible to single
department
Skills required for a project manager
1. Conceptual skills
It refers to the ability to form concept, such skills includes
thinking creativity, formulating abstractions, analyzing
complex situation solving problems etc.

i.
ii.

Concept
Foresight

iii.

Judgmental capacity

iv.

Intuition
2. Technical skills

He should able to understand technology involved in

project
Evaluate technical concepts and solution
Communicate in technical terms with project team
i.
ii.

Technical knowledge
Performance

iii.

Problems

iv.

Solution

v.

Terms

3. Human relation skills

They are ability to get along with people and get the jobs
done through people
Build strong relationship among departments and
stakeholders
4. Managerial skills
(Planning, Controlling, HRM, Decision making, Leadership,
Organizing, Coordinating, Budget allocation)

5. Team building skills

They are ability to integrate people from many disciplines
and department into an effective team.
6. Resource allocation skills
7. Other skills
i.

Determined

ii.

Courage

iii.

Patience

iv.

Charismatic

Among the above mention skills there are:

8. Communication skills
9. Conflict Management Skills
10.
Planning skills

Role of a project manager

A project manager is the person who has the overall
responsibility for the success and failure of projects.
Below is responsibilities list for a project manager.
Role means organized behaviour of a person in relation to
a particular position
1)Leadership roles
(Directing-influencing- motivating)
a. Power

b. Inspiring Styles
c. Motivating
2)Interpersonal roles
a. Listener
b. Collector
c. Motivating
3)Decisional roles
a. Rational decision on right time
b. Disturbance handler
c. Conflict management
d. Resource allocation
4)Balancing roles
(Customer-functional departments-stakeholders)
a. Department
b. Stakeholders
c. Teams
Among the above mention roles there are:
5).Informational role (gathering-analysis-selectionstorage dissemination-spoke person)
6)Analytical role (positive and negative parts of projectSWOT analysis)

Responsibilities of a project manager

Responsibilities are the obligations to perform duties and
carried out tasks using authority.
1)Project definition
Defining the project to all project participants and
stakeholders
For whom the project is?
What are the objectives and constraints?
Budget
2)Project team selection
Selection from various disciplines, areas,
Training and development
Leading
Motivation
3)Shareholders management
To manage the stakeholders in the project by fulfilling
needs and desires
4)Financial management
Determine the fixed and working capital
Determine the project cash flow
Preparation of accounting and its report
Analyze the project profitability

5)Change and conflict management

Continuous interface with the stakeholders as well as the
upper management >Take accountability
Provide clear picture and effective report and information
to settle the dispute/conflicts
6)Resource allocation
7)Project completion and handover
Project life cycle
Project is temporary work having certain beginning and
ending points of time period. It passes through different
phases from conception to completion. Those phases are
collectively called project life cycle.
Life cycle of project becomes different according to
nature of the project. Even the life cycle of similar nature
project may be different based on time, place and
environment. Generally, when the phase ends next phase
starts in a project. In some projects other phase starts
even before completion of any earlier phase. There are
four phase of project life-cycle
Phases or steps or stages of project life cycle
A. Conceptual phase: About 2%
The idea may first come to mind when one is
seriously trying to overcome from certain problems.

 Analyze the positive and negative impact of the

project in the society
It is the first phase of project life-cycle, during
conceptual phase, the project needs and purposes
are identified. Conceptual decisions are taken on
what is the problem, how to solve it, how much it
cost, how long it needs, what type of machinery or
tools are needed, from where to collect financial
resources, what are the special objectives of the
project etc, this phase indicates the success or failure
of project, so the project operators should be careful
in this phase.
The important tasks in this phase are defined and
explained the project, need and purpose.
State the problem to be solved by the project.
Identify the project solution.
Lists the benefits to be gained upon successful
project completion
Develop the project concept.
Perform feasibility analyses to prove the project is
technically feasible and economically viable.
Identify how the project relates to other dependent
project running in parallel.
Set security to the project.
Defined options to proposed solution
The phase tries to discover the following facts
i.

Need identification

ii.

Ideas germination

Project ideas germinates (begin to grow)

iii.

Pre-feasibility study

Examines the facts found from the feasibility analysis

helps to identify availability the human and non human
resources
iv.

Requirement of project

Requirement of the project/try to find out the group of

beneficiaries
Objective and output of the project
B. Definition phase: About 2%
Will develop the idea generated during the conception
phase and produces the documents describing the project
in sufficient details
Analyses the budget, implementation schedule, policy,
economic and social aspects of the project
i.

Project definition

ii.

Constraints and objectives

iii.

Site identification by Map

iv.

Technology selection

v.
vi.
vii.

Rough blue-print preparation

Plant size and capacity
Reasons for selection

C.Planning and organization phase: About 8%

This phase is mainly a testing a final standardization
effort so that operation can begin. Almost all
documentation must be completed and cleared in this
phase.
i.
ii.
iii.

Estimate logically in advance

Planning for all resources and time period
Detail feasibility study and analysis

(Impact of environmental factor)

iv.
v.

Operational plan and work schedules

Budgeting

Scheduling and budget

vi.
vii.
viii.

Approval and licensing/licensing work and

government clearance
Site preparation and investigation
Process and procedures

ix.

Pre-tender of contracts

x.

Organization structure
D.Implementation Phase
In this phase, the improved project plan is
converted into reality to achieve the project
objective. The implementation phase is the most
important phase takes more than 89% of the time

of project. It is important to maintain control and

communication. Progress is continuously
monitored and appropriate adjustments are made
and recorded a variation from the original plan.
It includes the fun task.
Start executing the project plan.

Monitored and controlled changes made to the key

parameters such as scope, time, cost, quality, risk

Management stakeholders expectations and

communication.

Report performance through starters, reports and

meeting

manage various requests

confirm the planned results are produced

Actual execution stage (longest stage) about 85% of the

project work is done
i.
ii.

Negotiation and contracting

Provision and operation of machinery and
equipment

iii.

Drawing and construction

iv.

Divide sectors into sub-sectors

v.

Observation, inspection, control and evaluation

mechanism are carried out

vi.

Test operation and production

E. Termination/Clean-up or closure phase

All the objectives of the project are achieved in this

phase. Necessary documents, files, reports, including all
the properties of the project are handed over to the
concerned body customer. Satisfaction is given priority.
Bank accounts of the project are closed and final audit is
done. Employees and workers are given good bye and the
project is closed
Last stage about 3%
Basically clean-up task
Remaining work, if any, has to be completed
Project accounts are closed
Materials reconciliation are carried out
Outstanding payment should be made
Dues should be collected
Planning of the staffs and workers for new project
Designee engineer will leave the project
i.
ii.

Completion of project work

Evaluation of performance with standard

iii.

Closing financial statement

iv.

Auditing

v.

Evaluation of satisfaction of customers and

stakeholders

vi.
vii.

Lay off personnel/manpower

Handover of project and remaining resources to
concerned authority or organization

Comparison between project management and

production management
Project management and production management are
interrelated disciplines to each other. Production starts
when project ends. Each and every project is conducted
for producing and generating goods and services. Both
production management and project management are
the branches of traditional management (i.e. scientific
management theory)
Basis

Project Management

Product Management

1)Definit Project Management is Management of the

planning, organizing,
product is known as
ion

directing, controlling
and managing
resources to achieve
specific goals within
predetermined time
period.
2)Organi separate and
zation temporary

product management.

3)Struct
ure

Generally Matrix
model- separate
temporary
organization
4)Life
Fixed (start and end)/
span/T Certain beginning and
ending time
ime
period

Simple functional
model

5)Life
cycle

Pre determined life

cycle

6)Existe
nce

From prefeasibility
study or begins from
logical ideas

7)Appro
ach

Project management
approach- project
manager involved in
all phases of product

8)Emplo
yees

Managed by
multidisciplinary
project team under

Can be prolonged
through differentiation,
positioning and
improvements
Begins after project
ends/Exist only after
production of productR&D of product
Use PM approach for
new product
development- not
involve of project
manager in all stages
General permanent
staff/Managed by
specialist in marketing

long run and

permanent

Has not fixed /

continuous process

project managertotal
responsibility and
accountabilitytemporary
9)Flexibi
lity

Flexibility and
operational autonomy
to manage risk and
adaption to
environmental
changes
10) Appl Applicable in various
ication types of activities/
multi-sectors
11) Acti One time unique
vities / activities and
Nature temporary act

under the leadership of

functional managerresponsible for results
towards marketing
manager and CEOpermanent
Rigidity in rules and
standing operating
procedures- problems
of environmental
adaptation
Only to product
management
Ongoing operational
and regular activities

12) Resp Collective

onsibil responsibility
ity

Responsibility of chief
executive is more

13) Lead Dual boss (line

manager and project
ers
manager)
14) Deci Quick
sion
makin
g

Single boss (CEO)

Delay

Comparison between project management and

traditional management
Traditional management is based on scientific and
administrative principles propounded by F.W. Taylor and
Henry Fayol, etc. the principles of all branches of
management are based on traditional management. It
has emerged to overcome the limitations of traditional
management. It focuses more on innovative than on
maintenance for achieving specific goals within fixed
period and perimeters.
Following are the differences between project
management and traditional management
Basis

Project
Management

1)Functi
ons

planning, organizing,
implementing,
controlling,
managing resources,
changing task of
innovative nature
2)Organi separate and
zation temporary
/Natur
e
3)Struct
ure
4)Life

Matrix modelseparate temporary

organization

Traditional
Management
Planning, organizing,
staffing, directing,
controlling, consistent
task of maintenance
nature
long run and
permanent

Pyramid modelintegral part of ongoing

marketing activities of
the organization
Fixed (start and end)- Has not fixed- on going
time bound system
system

span/d
uratio
n
5)Linestaff
relatio
nship

Work flow both

vertically and
horizontally.
Integration
management,
unclear line of
authority
6)Author Divided among
functional manager ity
delega decentralization
tion

Clearly defined
authority, line authority
makes decision, staff
authorities suggests
and advise.

7)Emplo
yees

Managed by specialist
in marketing under the
leadership of functional
manager-responsible
for results towards
marketing manager
and CEO-permanent
Rigidity in rules and
standing operating
procedures- problems
of environmental
adaptation- does not
respond in changing
needs of the
environment
Risk aversion

8)Flexibi
lity

Managed by
multidisciplinary
project team under
project manager
total responsibility
and accountabilitytemporary
Flexibility and
operational
autonomy to manage
risk and adaption to
environmental
changes

9)Risk

Risk oriented team

10) Cha

Change oriented

Centralized authority

Resistance to change
(status-quo)

nge
Manag
ement
11) Cons Time, cost and
traints quality performance

Without considering
important

12) Lead Dual bosses

ership

Single boss

13) Deci
sion
makin
g

Not participative

Participative

14) Resp Collective or team

onsibil
ity

Mostly chief

Project manager and line manager interface

Project management conducts horizontal, vertical and
diagonal relationship between managers and
subordinates. In this model double bosses are appointed
in a project i.e. project manager and line manager. The
head of functional department is line manager the head
of functional department is project manager. Rights and
duties and powers are allocated to both managers. Line
manager does work in more than one project at a time;
however project manager performs the activities of only
project at a time.

Line manager provides various resources like man,

materials, machine, money, method and information.
Project manager is concerned with the answer of what,
when, how, and why but line manager is concerned with
where, who and how well of project. So, the working
relationship between two managers is called interface
between them. It is generally done through open
communication, clean-out policy, rules and regulation,
negotiation and so on.

Project manager is fully responsible for project while line

manager is responsible only for the functional
department along with human resources

The main area or points of the project manager and line

manager interface are presented as below.
1. Resource allocation
2. Reporting
3. Work package
4. Co-ordination
5. Problem solving
6. Negotiation
7. Open-communication
Questions:
1)Describe about all environmental factors by considering
specific or particular project.
2)Enumerate the events occurred in the evolution of
project management.

3)What is project manager? Explain his/her skills and

roles in brief. (2+7+6)
4)What is meant by project? Explain the characteristics of
project. (TU 2058)
5)What is project life cycle? Explain it with suitable
examples. (TU 2063)
6)Describe about emergence and growth of project
management.
7)How does project environment affect project
management concept? Discuss in the context of Nepal.
Set (A)
Short Questions
1. What is meant by project and project management?
Explain the characteristics of the project.
2. Differentiate between project management and
product management.
3. What are the skill requirements for a project manager
to work in the project?
Comprehensive Questions
1. Why is it necessary to review project environment?
Discuss the skills requirement for an effective project
manager.
Set (B)
Short Questions
1. What is project life cycle? Explain it with suitable
examples.
2. Differentiate between project management and
traditional management.

3. Who is called project manager? Describe the project

manager and line manager interface.
Comprehensive Questions
1. How does project environment affect project
management concept? Discuss the skills requirement
for a project manager to cope with environmental
changes.

Chapter 2 Project classification

A.

On the basis of technique

a) Labour intensive project

In very simple word, if the activities of project depend on

labour, it is called labour intensive project. Labour

intensive project are usually operated in developing

countries. The success of project depends on the
efficiency of labour. Skilled and efficient works are given
high priority.
More human resources with low skills are applied
Low capital and machines are used
Such type of projects are mainly carried out in
underdeveloped countries like Nepal, Bangladesh,
India
Example: Green road project of Baglung
Postal road project, Terai
Food for work project, Karnali by WFO
Teaching system of Nepal
Labour intensive project generates employment,
brings social equality and justice, requires less
capital and stabilizes the economy. Thus goods and
services are produced mostly through the use of
labour. The main objective is to create maximum
employment.
Merits

Huge employment opportunity

Low capital requirement
Simple and easy
Social justice
Utilization of local resources

Demerits
Lack of technology
Time consuming

High operating cost

Low economic growth
Not suitable low populous country
Difficulty in handling complexity
b)Capital intensive project

If the activities of a project depend on modern

technology or automatic machine it is called capital
intensive project. Usually developed countries use huge
capital, sophisticated technology and skilled manpower to
run project.
Huge capital, machines and technologies are applied
in capital intensive project
Less but experts or skilled human resources
Means of high economic growth
Such projects are carried out mostly in developed
countries like USA, UK, Japan, France, etc
To evaluate the investments in such proposals,
capital budget techniques are used.
Examples of such projects
Well-equipped army campaign of USA in warfare
CT-Scan, MRI, lithotripsy and other technologies used in
hospital
Robotization, automation and computerization in any
organization
It utilizes the resources optimally and produces superior
quality goods and services. However, this type of project

violates the principle of social justice, invites unwanted

competition and required costly technology.
Merits

High economic growth

Quality product
Mass production
Reduction in price
Increase in export
Adequate facilities
Resource utilization

Demerits

Huge capital requirement

Human aspect ignored
Imbalance development
Lack of social justice
Unsuitable for poor country
B.

On the basis of funding sources

a) Indigenous project

The project which is operated with a country's own

tradition, vision, thought and style is called indigenous
project. It is totally local or home country project.
Indigenous project helps to protect tradition and culture
of the country.
Local thinking, investment, skills, methods and
technologies

 Traditional thinking
Original
More labour than machines
This type of project has unique identity, it helps to
preserve and protect tradition and culture provides
impetus for success of plan ad help to expand people
friendly market for local products.
Examples:
Pagoda style temples in Kathmandu valley
Khukuri production in Bhojpur
Nepali paper production
Nepal woolen carpets
Ancient palaces in Kathmandu valley
Kulo system for irrigation, etc
Merits
i.
ii.
iii.
iv.
v.

Original
Protection of culture and customer
Self-reliant
Export
Historical remark

Demerits
i.
ii.
iii.
iv.

Conventional
Low economic growth
Time consuming
Technological retardation

b)Joint venture project

The project established with the joint effort and
investment of two or more persons, firms or countries is
joint venture project. So joint venture project may be
indigenous or foreign.
The project carried out to produce commercial goods and
services under the joint agreement of both foreign and
local investors. These types of project are conducted for
business purpose. The ownership is proportionately
shared in an agreed ratio. Due to globalization ad
advancement in information and technology joint venture
is becoming popular throughout the world.
Business purpose
Transfer of technology, finance and expertise from parent
country to host country
Examples:
Hero Honda Company in India (Hero Company of India
and Honda Company of Japan)
Maruti- Suzuki Company (Maruti Company of India and
Suzuki Company of Japan)
Nepal lever limited (Hindustan lever limited and Nepalese
investors)
Everest bank limited (Punjab bank of India and Nepalese
investors)
Merits

i.
ii.
iii.
iv.
v.

Transfer of capital and technology

Lower labour cost
Mass production
Employment opportunities
High economic growth

Demerits
i.
ii.
iii.
iv.
v.

Replace of small local industries

Dependence
Disagreement
Low level staff from host nation
Intense competition
c) Bilateral project

The project which is operated with special agreement

between Governments or government level agencies of
two friend countries is called bilateral project. Bilateral
project helps to build bilateral relationship in between two
different countries and accelerates economic growth of
the country.
Generally developed countries provide assistance to
developing or underdeveloped countries. It can be Free of
cost (grants) or cheap cost of capital. The foreign aid may
be both technical as well as economical. The donor
country itself conducts such projects.
Key donor agencies for bilateral project in Nepal JICA,
DANIDA, GTZ, etc.
Examples:

 Road improvement project from Tinkune, Kathmandu

to Suryabinayak, Bhaktapur (Nepal and JICA)
Civil service hospital construction project, Baneshwor
Kathmandu, (Nepal and China)
Optical fiber (India and Nepal)
Lumbini zone water supply and sanitation project
(FINADA and Nepal)
The advanced and developed countries solely or in a
joint form have established many organization to
provide help to least developed, underdeveloped and
developing countries. Bilateral project depends upon
grants from donor countries which does not involve
repayment obligations interest payment. They are
the wheels for the economic development however
bilateral project faster dependency syndrome,
misuse of resources, corruption and stultifies local
initiatives for resources mobilization and inject the
problem of uncertainty.
Merits

Infrastructure development
Friendly relation
Economic development
Grants or low cost of fund
Technological development
Employment opportunities
People based relation

Demerits
Dependency

Unnecessary condition
Maximum interference
Possibility of corruption
Threats to national culture
d)Multilateral project

The project which is operated with special agreement

between two or more countries is called multilateral
project. Group of developed countries operate such
projects in developing countries for the development of
health, education communication, irrigation and so on
example: UNDP, WHO, UNICEF etc
The project which is carried out under the agreement of
multilateral agencies and recipient country is called
multilateral project. Multilateral agencies provide loan to
under develop and developing countries for the
development of health, education, communication,
irrigation and so on.
Multilateral agencies such as UN, WB, EU, SAARC, etc
Examples:
Kali gandaki hydro project ADB
Bagmati irrigation project ADB
Food for work project in Karnali WFO
This type of projects is carried out by multilateral
agencies. Such agencies provide fund as loan as loan to
under develop and developing countries under special

terms and conditions which must be repaid according to

the agreement. The multilateral project focuses only on
mega and major project which have potential force to
spur the economic growth of developing and
underdeveloped country. Loan of multilateral project carry
the repayment and interest payment obligations.
Moreover the multilateral project always carries the terms
and conditions for the recipient country. The procedures
for implementations of such project tend to be complex
and cumbersome.
Merits
i.

ii.

iii.

Concessional loan/low cost of funding

The donor agencies have no profit-motive
objective in the multilateral project. The main
objective of these agencies is to invest to make
overall economic development of the poor
countries. Therefore, to provide loan in low rate
is the objective of these donor agencies.
Technology transfer
Multilateral project is conducted by multilateral
agencies, they provides capital and new
technology to underdeveloped and developing
countries to complete the mega and major
project. The technology transferred in this way
to underdeveloped and developing countries.
Economic acceleration
The donor agencies provide loan and technical
support to the mega and major project of the
underdeveloped and developing countries. This

iv.

v.

helps in overall economic development of the

country.
Infrastructure development
The donor agencies invest in infrastructure
development like road, electricity, education,
etc. of the most in underdeveloped and
developing countries. It helps in the
development of the country.
Employment opportunities
The donor agencies of the multilateral project
always focus on the mega and major project
which needs not only non-human resources
(huge capital and equipment) but also human
resources (skilled, semi-skilled and unskilled) in
huge amount. Thus, the multilateral project
provides employment opportunities of the
recipient countrys people.

Demerits
i.
ii.
iii.

iv.
v.

Loan burden
Long term project
Corruption
The national as well as foreign personnel make
economic corruption with loans and aids
received from the donor agencies. While dealing
with loans and aids of donor agencies the
concerned personnel of both country demand for
commission and it enhances corruption.
Difficult in implementation
Uncertainty

vi.

vii.

The budget of developing and underdeveloped

country is prepared on an expectation of grants
and cheap loan. But these are uncertain.
Dependency
The donor agencies provide huge amount of
loans and grants the government become
habituated to accept them rather than speeding
up economic development by increasing GDP. It
increases dependency of the country.
Cumbersome
The donor agencies run multilateral project by
providing cheap loan. Although rate of interest of
the loan is low it should be repaid back. The
governments are habituated to accept such
loans and these loans become cumbersome to
the people of poor countries.

Difference between bilateral project and joint venture

project
Bases of
difference
1. Meaning

bilateral project

joint venture
project
A project run by
The project which
mutual
is undertaken to
agreement
produce goods
between the
and services
projects of two
through
friendly nations is collaboration of
known as bilateral foreign and local
project.
companys
investors is called

joint venture
project
There is joint
investment of
domestic and
foreign investors
in this project.
This project is
profit motive.
There is an
agreement
between native
investors and
foreign investors.

2. Investment

This project is
based on foreign
aids and grants.

3. Motive

This project is
service motive.
In this project,
there is
agreement
between two
countries i.e.
developed and
developing or
underdeveloped
country.
The donor country Both domestic
itself conduct
and foreign
bilateral project.
investors jointly
conduct the joint
venture project.

4. Nature of
agreement

5.

C.On the basis of size/scale

a) Micro project
They are smallest in size in terms of time, capacity,
manpower, output, technology, etc. normally, time

duration is less than one year. E.g. indigenous projects,

etc
b)Medium project
They are bigger than micro project and smaller than
major project in size in terms of time, capacity,
manpower, output etc. Normally, time period less than 3
years e.g. Khimti hydropower, Karnali bridge, etc.
c) Major project
They are bigger than medium project and smaller than
mega project in size in terms of time, capacity,
manpower, output, etc. Normally, time duration 3 to 5
years e.g. Kaligandaki hydro power
d)Mega project
Mega projects are complex type which has long time
duration i.e. 5 to 20 years with advanced technology and
maximum outputs. E.g. Arun and Karnali hydropower,
Melamchi drinking water supply, etc.
D.

On the basis of nature

a) Individual project

It is the short duration project assigned to one individual

with the responsibilities to complete it.
b)Staff project
The project assigned to single or particular departments
staff. A task force can be formed for this kind of project.

c) Special project
A project established for a short duration of time where
authority is delegated to specialists outside the
department. The committee or persons who do the work
and prepare their research report for the investigation
work falls under this category.
d)Complex project
A project in which is much larger in magnitude. It requires
a larger team to work out and resources are pooled from
various source.
E.On the basis of orientation
a) Product oriented project
A project which produces product is called productoriented project.
b)Service oriented project
The project which provides the services to the people of
the society of a particular area is called service oriented
project. Its main aim is to produce service.
F. On the basis of sponsorship
a) Organization
The projects sponsor to develop a new products, process,
service or technology e.g. production of noodles, dairy,
juice, factory, etc.

b)Customer
Customers sponsor projects to satisfy their own needs
c) Contractors
The major characteristic of a project is contract which
may be subcontracted by main contractor.
d)Government
e) NGOs/INGOs
International non-government organization (INGO)
sponsor projects for local NGOs for advocacy, income
generation, education, education, health, etc.

f) Donors project
G.

On the basis of speed

a) Normal project

The project which requires normal time for the

Implementation of project.
b)Crash project
A project completes its work a bit faster than its expected
normal period is called crash project. Such project
compromise with quality by increasing its cost the main
aim of compromising quality is to save time.
c) Disaster project

A project does the work during the time of natural

disaster is called disaster project. The time, cost, etc.
have no effect on such project. The project created to
control the effect of floods earthquakes etc are examples
of disaster project.
Questions:
1)Explain the categories of project briefly.
2)Define multilateral project. Explain its features,
merits and demerits in short.
3)What is bilateral project? Distinguish it from joint
venture project.
4)What is joint venture project? Distinguish between
bilateral and multilateral project.

Chapter 3 Project planning and formulation

Meaning and definition of project planning

A process of thinking ahead and around of what,
how, where, who, why is to be work done. The project
planning is made by the project manager.
Future oriented
Framework is prepared In advance
Thinking, looking, forecasting and managing in
advance about ahead and around of the project
One of the major function of management is project
planning
Road map of project

 A process of sequencing, delegating and controlling

project activities
Statement of Work (SOW)
Work breakdown structure (WBS)
It is done before implementing project
Reasons for making project plan
To accomplish project work within the specified
perimeters of time, cost and quality standard
To reduce complexity, uncertainty and risks regarding
to project
To set standard for performance evaluation
To provide basis for monitoring and control
To make sequence and schedule of the work
To minimize wastage
To achieve the project result on time
To estimate and manage everything about project
To know the effects of environmental factors on
project.
Characteristics of project planning
1)Goal-oriented
2)Future-oriented
3)Mental process
4)Perimeters
5)Pervasive
6)Standard for comparison and control
7)Creativity and innovation
Levels of planning in project
National or corporate plan or master plan
Programmes

Project: planning of project

Rough:
Strategic planning
Tactical planning
Operational planning
Stage/Process of project planning
Project planning cannot be prepares at once. It takes
certain steps. Those steps may be different expert to
expert or project to project. However, the common steps
required for project planning are briefly explained as
below:
1. Understand project objectives/goals
Objectives should be SMART
Objectives should be clearly understand
2. Analyze environmental factors
SWOT analysis
Should capitalize and cope to/with those factors
3. Identify key project stages
Key phases: conception, definition, planning and
organizing implementation
4. Prepare work breakdown structure (WBS)
Break down the work into small packages

 A hierarchical work break down

Detail listing of steps required to complete project
5. Define logical sequence of activities
Use of network analysis of activities and other tools
Critical path method (CPM)
6. Estimate time and resources
Data expenses, input, quantity, time
techniques and computer simulation can be helpful
project benefit > project cost
7. Prepare responsibility structure
Allocate right tasks to right person at right time
8. Finalize the project planning
Convert every activities and things into financial
terms
Get approval
Financial planning
Meaning of project proposal
Proposal planning is a formal document to attract donor
or investors convince stakeholders, satisfy customers and
lead the project towards the achievement of goal and
objectives.
A set of documents submitted to in-house and outhouse
for the evaluation of proposed project.

It is also called project initiation document (PID) or blue

print of all project activities.
It is a detail explanation of all project activities to be
performed.
Project proposal is prepared for both corporate (submitted
to parent firm) and social development (submitted to
outside agencies for technical, financial and managerial
assistance.
It is a device to bring income or revenue of funding.
It should be clear, attractive, complete and formal.
It should address following specific issues
The nature of technical problems
The plan of implementation of project
Logistic and administrative support of the project
A description and summery of past experience of
doing the similar type of work
Estimated cost, revenue and profit
Statement of environment impact Analysis
It is generally prepared by professional experts

Contents of project proposal

Project proposal is a well-prepared document of formal
plan for project. It attracts donor, convince stakeholders
and satisfy the customers. Project proposal should
consider following three main parts while preparing
project proposal
A. Technical aspects

Problems to be raised from the project

Resources and techniques used in solution of project
Special requirements of customers
Test and inspection: test of quality, reliability and
performance
Capabilities and logistic information
Information technologies
Machinery and equipment
Key members of project team, etc
B. Financial aspects
Estimated cost < estimated revenue
Major activities of cost
Cost related to machinery, equipments and others
Bar chart, diagram, pictures, graph, etc
An executive summary of the proposal
Estimated time for each activity
Nature, sources and cost of capital, loan or fund
C.Other environmental aspects
Internal environment factors
Project team and its members

Environment Impact Assessment (EIA)

Socio-cultural factors
Bio-diversity and its influences
Considerations for preparing project proposal
1. Project problem
Problems
Solutions
Three types of problem
2. Organization and staffing for implementation
Organizational structures
Qualified skilled and experience technician
Right person in right post at right time
Employees turnover
3. Costing estimates
Estimation of quantity and quality of raw materials
and machinery and equipments
Contracting policy
Customers demand
Price
4. Cost of proposal

Cost of proposal on the basis of project summary

request and statement of work
Procedures for developing project proposal
1)Project brief/summary
Customers need list/wish list
Scope
Output of projects
Estimated budget
Time table with deadlines
Problems and solution
2)Project objectives
Objectives: 1
Objectives: 2
Objectives: 3
SMARTER Specific, Measurable, Acceptable Time
fare, Extending and Rewarding
3)Preliminary design
An elaboration of prefeasibility study
Specially technical aspects
Survey engineering design
Preliminary Schedule

FEMMTE (Financial, Economic, Managerial,

Marketing, Technological, Environment) Analysis
4)Project resources
Human and non-human resources
Provider of resources
Effective utilization of resources
5)Proposal development
Project activities
Project implementation
Organization, parties, strategies, etc
Project schedules
Bar, chart, format to review project progress
6)Work break down structure
List of tasks to be performed to make work easier and to
avoid risks
7)Project deliverables
Product, information, service, report, etc
Delivery date for deliverables
8)Project monitoring and evaluation
Standards

Verifiable performance
Appendices
Project programme and system
System approach of project management
Composition of many ingredients or parts to form a
unitary whole
A structure of interrelated organs or elements
Succession design
Synergistic effect
Input- process-output-environmental factorsfeedback
Leads to completion on time within predetermined
resources
Channelization of each and every tasks of project
David I Cleland opined, A system viewpoint is based
on the concept of interdependency of sub-systems. It
is a complex whole and assemblage or combination
of things or parts farming a complex or unitary
whole.
Micro part will be sub-system of big part
Project specification
A list of technical aspect of materials, manpower,
machinery and equipment, quantity, etc.
It is serially prepared by describing technical
contents procedures and activities to be undertaken.
Activities or work may be construction, procurement,
installation, scheduling, and work break down
structure and so on.

 Small change in such specification can result

substantial changes in cost, resources and time
period.
Herold Kerzner has defined, Specifications are used
for man-hour, equipment and material estimates
small changes in specification cause large cost
overrun.
Project specification has following common
particular/ contents
a. Statement of work (SOW)
List of project parameters
List of works, procurement, installation, construction,
and turnover and so on.
b. Detail design
Engineering designs
Unique design
c. Quality of materials
Superior, moderate and inferior
Materials required by project
d. Workmanship
Right man in right post at right time
Reconcile man and work
Devotion and dedication
e. Work in progress (WIP)

 Schedule and guidelines for work in progress

Control mechanism
Important theme:
The project proposal should be given all required
information of customers on project proposal submitting.
To give such information project provides the list of
important tasks (activities) which is called project
specification.
Total planning process
Total planning means common planning or national
planning or corporate planning. Total planning indicates
the total planning of project departments, financial
department, and others. Project planning is a part of total
planning.
For example: academic development of education
ministry is a programme but adult education is a project.
And overall national education planning is a total
planning.
To make such planning commonly following steps are
applied:
1. Identify problems or needs
Firstly, environmental factors should be analyzed and
scanned. It shows the condition of SWOT in the
organization. It makes us known about current problems
or needs.
2. Search available alternatives

Particular problem needs particular means for solution.

Various methods and strategies can be applied in the
search of alternative solution. These methods or tools are
statistical, financial and economical such as data
collection correlation and regression, ratio analysis,
capital budgeting, etc.
3. Evaluating alternatives
After searching possible alternatives manager should
evaluate alternatives by using various scientific criteria.
These criteria are technical, economical and
environmental.
4. Select the best course of action
Out of evaluated alternatives manager should rank on
different criteria and select the best course of action.
That course of action should be appropriate form overall
point of views.
5. Formulate action plan
After selecting the best course of action, manager should
formulate the action plan for different departments of the
organization. This action plan divides tasks of whole
organization into various fractions.
This step is the most important step of total planning
process.
6. Prepare budget

At last step of total planning process available resources

including money should be allocated with the help of past
experience, present scenario and future possibilities.
Chief Manager with required specialist or expert is
responsible to prepare the budget for different activities if
any organization.
Meaning of project formulation
Ideas are created with the feeling of needs or problems
and the observation of surroundings. By considering
various ideas, project proposal is prepared or drafted. In
other words, relevant ideas of proposal are forwarded for
project formulation. Project formulation is a scientific
study and analysis of converting informal concept to a
formal plan of action. To implement the project plan, plan
should be studied and analyzed on rational and
institutional basis. It is also an analysis of
implementablility of the proposed project concept. It
ensures the security of investment in project. It also
decides whether to implement or not the project that
aims I preliminary formal commitment for the project
ideas. It studies and analysis in a micro manner of all
aspects of probable project. It is a process of developing
concept in a scientific manner. There are different types
of studies and analysis such as feasibility analysis,
network analysis, input and output analysis, financial
analysis, cost benefit analysis and so on.
Methods/techniques of project formulation
A. Feasibility analysis/study

 The first step of project formulation

A process of determining the implementability of
project
It examines or studies the best proposed idea
through the detail investigation on the basis of
accurate information.
It is required to take the final decision of
implementing the project idea.
Examination to see whether to go for investment
proposal or not.
It is also called pre-investment stage.
It consists FEMMTE analysis/study
Analysis is done by technicians, economists,
financialist, and sociologists and so on.
a) Financial study/analysis (Capital )

i.
ii.

Source of capital
Cost of capital

iii.

Return of capital

iv.

Mix of capital

v.
vi.
vii.

Fund of capital
Capital budgeting
Projected cash inflow and outflow

b)Economic study/analysis (profit )

i.

Private project

ii.

Public project

iii.

Platform for the preparation of detail project

report

iv.

Overall prosperity

v.

Profitability
c) Marketing study/analysis (market )

i.

Production goal

ii.

Raw materials

iii.

Sales forecast

iv.

4Ps

v.
vi.

Competitive strategy
Delivery strategy
d)Managerial study/analysis
i.

Management theory

ii.

Managerial functions

iii.

Institutional relation

iv.

Key shareholders

v.

Structure

e) Technical study/analysis
i.
ii.

Size and location

Resources

iii.

Working conditions

iv.

Design requirement

v.

Choice of technology

vi.

Civil engineering

vii.

Service facilities

viii.

Time scale
f) Environment study/analysis

i.
ii.

Environmentally sustainable
Environmental impact Assessment (EIA)

iii.

Pollution, soil erosion, damages

iv.

Negative effects of project to environment

v.

Acts related to ecology or environment

B. Input-output analysis/study

Input depends upon output

Quality input tends to Quality output

In p u t

M oney
H u m a n re s o u rc e s
N o n -h u m a n
re s o u rc e s
S e m i-s k ille d
S k ille d
M a t e r ia l
T e c h n o lo g y
M a c h in e
U n s k ille d
M e th o d s
In fo r m a t io n

O u tp u t

C.Financial analysis/study
i.

Source of capital

ii.

Amount of capital

iii.

Cost of capital

iv.

Projected cash flow

v.
vi.
vii.

Maturity period of capital

Short term and long term capital
BEP, etc
D.Cost-benefit analysis/study

Benefit> Cost the project is accepted

Benefit< Cost the project is rejected

P u b lic a w a r e n e s s
S o c i a l b e n e fi t s
C u sto m e r
s a t is fa c t io n
M o n e ta ry
b e n e fi t s
Change

Benefit= Cost the project is accepted/rejected on the

basis of social benefit and commercial benefit
E. Capital budgeting
PBP, ARR, NCO, CFAT, Final years CFAT, NPV and IRR
F. Network analysis/study
Network means net on different task, time period, budget
and resources required for project. It shows the logical
net to complete the project on time. Whole project works
are broken into various smaller tasks to make whole
project complete in easier way. It maintains the balances
between resources and time period with applying
techniques for planning, scheduling, controlling and
monitoring for large and complex projects or programmes
involving large number of activities. To meet the objective
of systematic planning the most popular techniques are
through Critical path method (CPM) and Programme
evaluation and review technique (PERT).
Network analysis includes following tasks.
Identification of the activities must be completed
before a particular activity starts
The activities follow to the particular one.
Activities must be performed concurrently with that
Determination of succeders and preceeders events
Estimation of cost, time, resources and budget
Estimation of require human resources for required
job in right time

The graphical diagram of Network for the project

completion can be depicted as follows.

I.

Critical path method (CPM)

This method was firstly used in 1957 A.D. by DuPont

Company of USA. There are various paths in networks
technique. Among them, the complicated or largest or
longest route or way to complete a project is called
Critical path method (CPM). A critical path is the chain of
activities with the longest time duration. These are also
called critical or bottle neck activities in the sense that
delay in any of them results in the delay of the
completion of project. Thus to quicken the process of
activities lying on the critical path should be taken first.
The shortest or moderate channel of activities or periods
is non-critical path. They have some slack associated with
them and their extension or delay is not likely to affect
the final completion date. In Critical path method (CPM),
the duration of critical activities is reduced by introducing
additional resources for completing the project in
optimum time period.
The critical path method consists of the following steps:
Break down the activities
Plan, schedule and co-ordinate the broken activities

 Estimate time schedule for each activity

Calculate the time period for the completion of entire
project
Identification of critical activities and critical paths

By considering critical path, project manager

plan, schedule and co-ordinate the project activities
for the timely achievement of project goal. Critical
path is depicted as follows:

CPM is used
To use work breakdown structure (WBS)
To make sequences
Determination of cost, time and resources in
each activity
To draw network lines assembly
Such method is extensively used in large
and complex projects like construction,
information and research for their planning,
scheduling, controlling and coordinating
activities.

II.

Programme evaluation and review technique

(PERT)
This technique was firstly developed and practiced
by US Navy Force for The Polaris Fleet Missile
Project in 1958 A.D. when the activities of the

critical paths are delayed, the entire project will be

delayed. Thus Programme evaluation and review
technique (PERT) is developed for estimating
multiple time period. They are The Most Optimistic
Time (To), The Most Pessimistic Time (Tp) and The
Most Likely Time (Tm). The following formula is used
in PERT technique to determine expected time as
follows.
Expected time completethe project ( Te )=

+4 TmTp
6

Where,
To = The Most Optimistic Time
It is the shortest possible of everything goes
perfectly with no complication; the chance of this
occurring might be one in hundred.
Tp = The Most Pessimistic Time
It is the longest time period including time for unusual
delay. Thus, the chance of this happening might be only
one in hundred.
Tm = The Most Likely Time
It would be the best estimation of what normally would
occur.
PERT provides
Information about the time period
Finished time of the project
Starting and finishing time for each activity
Activities that need to be done sequentially

 Possibility of shifting the resources from non critical

activities to critical activities
Reduction of uncertainty in project, etc.
Difference between Critical path method (CPM) and
programme evaluation and review technique
(PERT)
While formulating project plan and controlling project
activities various analysis or study are carried out or
applied. Out of them, network analysis is one of the most
important technique network analysis studies and breaks
the whole project activities allocate power, rights and
responsibilities and resources for them for planning,
scheduling, controlling and coordinating the relevant
project activities. Network analysis has two main
techniques i.e. CPM and PERT.
Both CPM and PERT are the parts of network
analysis. Both of them are applied in planning and
controlling activities. Inspite of such similarities, they
have also some distinctions which are as follows:

Bases of
difference

1. Orientation
2. Modes

Critical path
method (CPM)

Programme
evaluation and
review
technique
(PERT)
CPM is an activity- PERT is an event
oriented.
oriented.
CPM is
PERT is a general

3. Consciousnes
s
4. Estimation

5. Delay

deterministic
model.
CPM is cost
conscious.
CPM estimates
latest time and
cost to complete
the project.

and risk-oriented
model.
PERT is time
conscious.
PERT estimates
normal estimated
time to complete
the project by
using three time
period The Most
Optimistic time
period (To), The
Most Pessimistic
time period (Tp)
The Most Likely
time period (Tm)
When any one
There is no such
activity is delay in rigidity in PERT
CPM the whole
which have more
project will be
alternative time
delayed in the
periods.
completion of
project.

Position of railway transportation in Nepal

Railway transport has been a pioneer of modern
mechanical age. It needs huge capital expenditure and
operational cost. Thus, it is mostly owned and operated
by government. In least developed countries like Nepal

can hardly undertake railway transport due to huge

investment required.
Railway transport is fast in speed and cheap in fare.
History of the establishment of railway project is 9
decades old. Railway transport was initiated in Nepal
since 1984 B.S. in Rana rule (Chandra Shamser Rana).
Any substantial development in railway transport could
not be done till yet.

Nepal has following railway transport networks up to now.

Network

Distance (km)

Cost

Raxual
Amlekhgunj by
East-India
Company
Jayanagar Janakpur by EastIndia Company
Raxual Birgung
(Sirsiya)

Has been closed

Was not disclosed

Total 51 km but
Was not disclosed
now only 29 km
been used
5 km goods carrier $28.5 million with
the aid of world
bank

Now Jayanagar Janakpur and Raxual Birgung (Sirsiya)

railway networks are in operating stage. But, Raxual
Amlekhgunj railway network was closed since the
operation of Tribhuwan Highway. Jayanagar Janakpur
railway network serves for carries of goods and
passengers. But Raxual Birgung (Sirsiya) railway
transport has been providing carriage of goods only
based o Inland Clearance Depo ICD. Such type of network
is very important for landlocked countries like Nepal. This
project is based o multilateral agreement. However,
Jayanagar Janakpur railway network is based o bilateral
agreement i.e. Nepal government and the East India
Company. International agencies are consulting Nepal to
open railway network from East to
West I Terai of Nepal i.e. Jhapa to Kachanpur
Problems of railway transport in Nepal
Nepal is one of the most problematic of the world In
terms of railway transport. The major problems faced by
Nepal railway are presented as follows.
1. Geographical difficulties
Being the most mountainous country, Nepal is unable to
invest huge capital in the establishment and operation of
railway transport.
2. Poor maintenance
For the maintenance of railway transport highly
experience ad experts manpower should be required.

Also, spare parts of railway transport are not easily

available In Nepal.
3. Disruption
Natural disasters, calamities hamper the transportation of
railway network.

Chapter 4 Project organization and implementation

Project organization is a goal-oriented temporary network

of structures, resources and relationship.
It is the platform for the implementation of project.

Its elements: resources, structures, techniques ad

process.
Project goal cannot be achievable without Project
organization.
The unification of interrelated elements for the specific
purpose of project is known as the system of the Project
organization.
It produces synergistic effect i.e. unity is strength.
Project organization system is a sub-system of the total
project system.
Project organization system conducts following functions:
1. Designing a project structure
2. Pulling project team together
3. Establishing authority and responsibility
4. Establishing project office
Types of project organization structure
A. A part of functional structure
This structure introduced after the arrival of the concept
of functional foremanship by Frederick Winslow Taylor.

Vertical relation
One way downward communication
The oldest structure
Not separate independent structure for the project
Departmentation
Unity of command

 Consists of different functional structure: production,

finance
It is hierarchical.
It is suitable for small projects.
Merits
1)Specialization
2)High effi ciency
3)Flexibility
4)Suitable for small projects
5)Economy structure
6)Simple and easy
Demerits
1)Low priority on projects
2)Ineffective communication
3)Unsuitable for large projects
4)Not participative management
B. Pure project organization structure
This structure is different (separate) from functional units.
The project manager has its own line organization with
project authority and responsibility.
The project has its own resources and management.

It hires its staff from open market for the particular period
of job
Merits
1)Focus on project activities
2)Clear authority and responsibility
3)Effective communication
4)Flexible labour force
5)Separate identity
Demerits
1)Expensive
2)Inconsistency
3)Lack of job security
4)Projectities
5)Imbalance work load

C.Matrix organization structure

Combination of the advantages of functional structure
and pure project structure
Temporary structure

Harold Kerzner has said, Matrix organization can e

descended as a combination of functional structure and
pure project structure advantages
Always effective communication
More temporary and a small number of permanent staff
The best organization structure for the project
Report vertically to department manager ad horizontally
they report to the project manager
Merits
1. Focus on project objective
2. Flexibility
3. Employees development
4. Multi-relationship
5. Motivation
6. Co-ordination
Demerits
1. Dual boss system
2. High cost
3. Diffi culty in monitoring and controlling
4. Power struggle in resource distribution
5. Insecure job

Linear responsibility chart (LRC)

Linear responsibility chart is a table that determines
ranks and interfaces among the general manager,
programme manager, functional manager and other
subordinate staff. It is young dimension of project
activities based on matrix organization structure. This
chart is used to avoid confusion, complication and conflict
in performing project work among all participants of the
project. The authority, responsibility and accountability
are clearly defined determined in linear responsibility. It is
also called Responsibility and authority matrix (RAM) or
responsibility interface matrix (RIM) or matrix interface
model (MIM). Linear responsibility chart can be prepared
for all key activity to be done in the project to answer who
does what, how degree, how much or who may be
consulted or approved, etc.
The following chart depicts the responsibility,
accountability and authority of all participants and
stakeholders involve in project.
Linear responsibility chart (LRC)
S Activities
General Program
.
Manage me
N
r
manager
o
1) Formulatio
n of
department
al policy

Project
manag
er

Function
al
manager

2)
3)
4)
5)
6)

7)

and
objective
Integration
of projects
Direction to
project
Project
planning
Functional
planning
Project
budgeting
and
breaking
Functional
direction
Where,
=Actual responsibility
=General supervision
Must be consulted with
May be consulted with
Must be notified to
Must be approved from

Merits
Is beneficial to schedule and define the
responsib4ility and rights of the project participants.
To remove or minimize confusions among the
participants

 To combine the Work breakdown structure (WBS)

with organization positions
To ensure timely completion of project without over
cost, time and resources
Demerits
It determines responsibility but does not consider the
relationship of participants (manager-manager)
It is difficult to determine the responsibility of
different participant
It considers responsibility by ignoring situation.
It focuses on supply by ignoring customers order.
Project authority
Meaning
Project manager should play important leading role in
project team
Reasonable and rational authority
Legal right to plan, command and lead the team toward
the goal
Informal power to implement the project plan
Traditionally, power comes from higher level and
delegated to junior level
From modern point of view, authority is based on persons
skills, competence, decision making capacity, and
interfacing skills

Modern concept focuses not only on delegation but also

on granted by team members to superior level
Purpose of delegating authority
To make plan and decision
To implement plan in action
To select organizational structure
To determine project scope and goals
To utilize project resources to perform project
contracts
To lead project team members to complete the
project on time

Types
1. De-jure authority (Legal authority)
Legal power to command project team
Comes from higher level and delegated to junior level
Its sources:
Organizational position or post
Corporate laws, policies and procedures
Delegated power
Job description
2. De-facto authority (Real authority)

The power granted by project team members to superior

level staff on the basis of skills, experiences,
competencies and creditability
Competence viewpoint of authority
Real authority (modern authority)
Its sources:
Technical skills
Decision making capacity
Organizational skills
Managerial skills
Building alliences skills
Human relation skills
3. Project charter (Planned authority)
Charter is drafted with the participation of all levels of
project team
Mixture of above both authorities
Its sources:
Project plan/charter
Project details and commitment
Project schedules

Concept of responsibility and accountability

Responsibility
A moral or legal obligation
It generally comes from authority
Upward
Accountability
A answerability of responsibility
Comes from responsibility
Downward
The project manager must have entire responsibility and
accountability for the project from inception to
completion.
Appropriate degree of authority should be provided to
discharge responsibility and accountability
Conflict in project environment
Disputes or opposition or antagonist among persons
ideas, views and opinions
The environment of disputes, oppositions and antagonist
among persons, groups, ideas and os on in a project is
called the conflict environment of project
Different members of a project teams from different
backgrounds, interest and behaviours

Joe Kelly says, conflict is opposition or disputes in

persons, groups or ideas.
Conflict are inevitable in project environment it arrives
with anyone over anything
It is situational and varies from person to person, time to
time and place to place
Causes of conflict in project
Mutual disparity, objectibes, priorities, schedules,
interest, roles, values and procedures, relationship, etc.
Conflicts are either constructive or destructive
Conflicts to some extent are necessary in project.
Types of conflict in project management
1. Functional conflict
2. Dyfunctional conflict
Levels of conflicts
1)Interpersonal conflict level
2)Intrapersonal conflict level
3)Intergroup conflict level
4)Interproject conflict level
Conflict management techniques
1. Conflict reduction
A technique of conflict minimization
Reduces conflict upto acceptable level

To maintain conflict in a desirable level

Techniques of conflict reduction
Effective communication
Provision of sufficient resources
Better coordination
Establishment of priorities
Goal clarity
2. Conflict resolution
Technique of conflict avoidance
Mostly used in dyfunctional (personal) conflict
Eliminate the entire conflict
The most complicated technique
Techniques of conflict reduction
Ignoring conflict
Compromising (Negotiation)
Forcing
Confrontation
3. Conflict stimulation
Creating conflict
Increasing conflict upto desirable level

Increases performance and productivity

a. Introducing new technologies
b. Introducing new ideas
c. Expansion of responsibilities
d. Reward and punishment
Causes of conflict
Project priorities
Manpower
Resources
Schedule
Personal attitudes and behavior
Meaning of project team or team building
Project team with team spirit
Various backgrounds priorities and behavior
A group that works together to accomplish project
objectives within certain limitation
There is a common goal of project and each project staff
Objective of project must be connected with the goal of
team members
Project manager is the leader of the project team and
team members are the follower
Team work with team spirit
Team is dissolved after the completion of project work

The team is a mechanism which is concerned with

collective rather than individual outcomes which are

Specific
Measurable
Meaningful to all team members
Come from various background
Synergistic effect

Distinction between work group and work team

Points of
Work group
Work team
difference
1. Goal
Different
Collective
2. Synergy
Neutral
Positive
(sometimes
negative)
3. Accountability Individual
Individual and
mutual
4. Skills
Random and
Complementary
varied
5. Dependency
isolated
interdependence

Features of project team

1)Result oriented
Individual as well as collective goal
SMART
2)High level trust

High level trust from high level staff

Trust among the all members of the project team reliaility
3)Effective communication
Exchanging members views, ideas, opinions and interest
horizontally, vertically and diagonally
Information about the works ad goals
4)Enthusiasm
Energy, courage, interest of the team members to make
team meaningful
5)Change oriented
Flexible to adopt the team as per the chances in internal
and external environmental factors
6)Creative and innovative
Senior, training, research and discussion
Unique project and product
7)Interfacing
Distinct backgrounds, professional and department
Differences should be accepted and coordinated toward
the goal
8)Authority and responsibility

Separate Authority, responsibility and accountability

Stages/process used in project team building
1. Forming
Assembling introduction and making tentative team
structure
2. Storming
Conflict and hostility among individual members arises
Discussion, sharing, conclusion
3. Norming
Establishment common norms, values, objectives and
culture
Clear about post, rules, responsibilities and authorities of
each team member
Determines implementation techniques
4. Performing
Implementation of project plan with the collective efforts
co-operation and problem solving skills
The longest and most complicated and expensive stage
5. Adjourning
Last stage

Team members are disbanded after the project is

completed
Barriers to project team development
(problems/difficulties)
While building effective project team mainly following
barriers come into the project team development
1)Competition for leadership
Desire to be leader
Presents and advocates of skills, experiences and
qualification
2)Role conflict
Unsatisfied with their roles and rights
Creates conflict
3)Communication problems
Ineffective communication, co-ordination and direction
4)Improper selection
Nepotism, flatterism, and favourism
5)Lack of support
Required sufficient support
6)Dynamic environment
Changing rapidly

SWOT
Flexible
7)Distinct priority and outlook
Various backgrounds, priorities and outlooks
Different opinions and ambitions
8)Lack of commitment
Sufficient facilities
Passiveness
Types of work team (project team)
a. Virtual team
Use information technology and computers to tie together
to achieve a common goal
Members collaborate on-line through communication such
as E-mail, voice mail, Video conference, etc
Such teams lack face to face communication
Limited social interaction
Work together with persons miles away
b. Problem solving team
Problem solving teams share ideas and offer suggestions
Problem related with quality, efficiency and safety at work
place

Concerned with improving quality, efficiency and safety

at work place
Members of such team meet for a few hours each week
Also known as quality circle
From same department

c. Cross functional team (project management team)

Employees or members from different work areas or
departments to accomplish specific
Objective
Members are generally experts in their areas
Take time to build trust and team work
Work with diversity and complexity
d. Self managed team
Autonomous team who take many responsibilities
Perform independent jobs
They select their own members and each others
performance
Responsibilities:
Planning and scheduling work
Collective control and norms

Creative members
Seven Cs of team building
1. Conceiving mutual trust
2. Concurring
3. Committing
Team committed towards actions or work
4. Communicating
Exchange of opinions, views and ideas among the team
members
5. Co-ordination
Co-ordination among work, efforts, departments and
team members
6. Control
Actual performance of team standard (estimated)
performance of team
If there is deviation control
7. Counseling
Exercise of self discipline and self created solution
Ten characteristics of effective team
1)The right team leader
2)The right team goals
3)The right team members
4)The right team meeting location

5)The right solution to critical problems and

measuring outcomes of actions
6)An effective monitoring system for tracking
progress
7)Effective communication
8)Regular evaluation of the teams performance
9)The right plan of action
10)
Celebration of successes

Bibliography
i. Dr. Govind Ram Agrawal, MK publication
ii. Khanal publication

iii.

G 7 publication

Prepared by Shyam kumar kc

Kcshyamkumar20@gmail.com
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