CTPM by Chitkara

Author
construction project management: planning, scheduling
Krishan K. Chitkara
Author and Program Director, CPMT Plus
Krishan K. Chitkara is the Executive Director of the Institute of Construction Project Management,
Gurgaon, located at about 15 KM from New Delhi international airport. He has vast experiences in
construction and academic fields.
Chitkara has worked at senior levels for over 30 years in reputed construction establishment and academic
institutions in India and abroad. The diverse construction tasks executed by him include defence works,
residential and commercial complex, precast turnkey jobs, roads and airfields, and lub-oil refinery works.
He was Project Planning Manager and Construction Manager in Iraq, Chief Engineer (Planning) and
Chief Engineer (Construction) in United Arab Emirates and Sultanate of Oman and General Manager of a
concrete precast Company in Saudi Arabia. In India, he served as the General Manager in a Construction
Company, Project Manager and Planning Manager in Military Engineering Service and Advisor in
Ready-mix Concrete.
He is former Director of the National Institute of Construction Management and Research, New Delhi, and
was Professor in Works Management in the College of Military Engineering, Pune. His book titled "
CONSTRUCTION PROJECTS MANAGEMENT: Planning, Scheduling and Controlling" was published
by Tata McGraw-Hill, New Delhi. He has published several papers and conducted number of
seminars/workshops in Project Management with computer application for senior managers of
government, public and private sectors.
Lt Colonel (Retd) K.K. Chitkara, AVSM, was commissioned into the Corps of Engineers of Indian Army
in the year 1954. He graduated in Civil Engineering and secured first class first in M B A. In India, he is
Fellow of the Institute of Engineers, Institute of Surveyors and Institute of Valuers. He was awarded ATI
VISHISHT SEVA MEDAL by the President of India for the distinguished service of exceptional order
rendered by him for construction of a road in high altitude areas in India.
CPMT plus, Krishan K. Chitkara
chitkara@icpm.com
Contents
Contents
Lessons
Appendices
Illustrations
LESSON - 01
Construction Project Management Techniques Plus

Lesson Contents
Lesson 1: Construction Project Management Framework
1.1
1.2
1.3
1.4
1.5
1.6
Introduction and objectives.

What is a project?
What are the salient characteristics of a construction project?
What are the broad phases and processes encountered in a construction project life cycle?
What does construction project management imply?
How does the management of construction projects differ from the management of ongoing
process industries?
1.7 Who are the participants involved in the management of a construction project?
1.8 How is construction project management organized?
1.9 What is the role and responsibility of a project manager?
1.10 Why do construction projects usually fail to achieve their mission?
1.11 What makes a competent project manager?
Appendix A: Indian Construction Scenario.

SAQ
: Q 01A to Q40A
Exercises
: Ex 01A to Ex 14A
Lesson 2: Project Management Techniques: An Overview

2.1
2.2
What are the techniques employed in making a project go-ahead decision?
2.3
How is project scope defined and communicated?
2.4
How is project time planned?
2.5
How are project resources scheduled?
2.6
How are project costs budgeted?
2.7
How are project objectives controlled?
2.8
Why and how is the planning system codified?
2.9
How is the project information system managed?
2.10 What are the benefits of systematically planning, scheduling and controlling projects?
Appendix B: Project Feasibility Study
SAQ
: Q 01B to Q40B
Exercises
: Ex 01B to Ex 16B
Lesson 3: Project Work Breakdown

3.1
3.2
What does project work breakdown imply?
3.3
How are project work breakdown levels classified?
3.4
What are the methods used for identifying project activities?
3.5
How is the duration of an activity defined?
LESSON - 01
3.6
How is the duration of an activity assessed?
3.7
What are the elements of an activity cost?
3.8
What are the benefits of Work Breakdown Structure (WBS) technique?
Appendix C: Sizing of Work Packages

SAQ
: Q 01C to Q20C
Exercises
: Ex 01C to Ex 17C
Lesson 04: CPM /PERT Network Analysis

4.1 Introduction and objectives.
4.2 What are the basic features of a CPM network?
4.3 How is the CPM network of a major task developed?
4.4 How is a CPM network time compressed?
4.5 How is a PERT network modelled and analysed?
4.6 How does PERT deal with uncertainties in a project duration estimation?
4.7 How is the probability of meeting a project completion date determined in PERT?
4.8 What are the differences between CPM and PERT?
Appendix D: Project Duration Assessment Using Monte Carlo Simulation Technique
SAQ
: Q 01D to Q20D
Exercises
: Ex 01D to Ex 7D
Lesson 05: Precedence Network Analysis

5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8

How is a Precedence Network modelled?
How to time analyse a Precedence Network?
How to draw a Precedence Network for repetitive works projects?
Why and how networks are classified?
How to draw precedence network of a major project?
What are the similarities and differences among the project network analysis techniques?
What are the merits and limitations of network analysis techniques?
Appendix E : Project TimeCost Tradeoff Technique

SAQ
: Q 01E to Q25E
Exercises
: Ex 01E to Ex 4E
Lesson 06 : Project Work Scheduling

6.2 What is bar chart scheduling technique and what are its merits and
limitations?
6.3 Why network plans are time scheduled?
6.4 How network plans are time scheduled?
6.5 How to apply the Line-Of-Balance (LOB) technique for scheduling repetitive projects?
6.6 How to forecast resource requirement?
LESSON - 01
6.7 How are schedules classified?

Appendix F: Decision Network Analysis
SAQ
: Q 01F to Q25F
Exercises
: Ex 01F to Ex 9F
Lesson 07 : Planning Construction Manpower

7.2 What are project manpower planning functions?
7.3 How are construction workers categorized ?
7.4 How are workers productivity norms developed?
7.5 What are the factors affecting workers productivity?
7.6 How to schedule manpower requirement?
7.7 How is project manpower grouped?
7.8 How is indirect manpower forecast prepared?
7.9 What are the guiding principles of organizing workers teams?
7.10 What are the principles of designing a good incentive plan?
Appendix G: Project Management Organization
SAQ
: Q 01Gto Q20G
Exercises
: Ex 01G to Ex 11G
Lesson 08: Planning Construction Materials

8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9

What is the ABC classification of materials?
How is materials provisioning planned?
How is materials quantity estimated?
How is materials procurement processed?
What influences regular stock inventory?
How is project materials inventory planned?
How Operations Research solves materials planning problems?
What is the scope for application of Value Engineering in the procurement of materials and
how to implement it?
Appendix H : Resources Allocation Using Linear Programming

SAQ
: Q 01H to Q25H
Exercises
: Ex 01H to Ex 11H
Lesson 09: Project Construction Equipment

9.2 How is major construction equipment classified?
9.3 How ground conditions affect the performance of earthwork equipment?
9.4 What are the salient features of earth excavating equipment?
9.5 What equipment is commonly used for earth cutting with short hauling distance?
9.6 What equipment is commonly used for scraping and transporting earth with long hauls?
9.7 How the transportation distance affects the selection of earth hauling equipment?
9.8 What are the types of earth compacting and grading equipments?
9.9 What are the types of commonlyused concreting plants and equipments?
9.10 What are the common types of cranes used for material hoisting?
Appendix I : Earthmoving Equipment: Approximate Production Planning Data for
Primary Tasks
LESSON - 01
SAQ
: Q 01I to Q22I
Exercises
: Ex 01I to Ex 10I
Lesson 10: Selecting Construction Equipment

10.1
10.2
10.3
10.4
10.5
10.6

What are the factors that affect the selection of construction equipment?
How task considerations dictate the choice of the equipment?
How cost considerations influence the equipment selection?
What are the equipment engineering factors considered during the selection of an equipment?
What are the equipment acquisition options available to the contractors.
Appendix J : Time Value Of Money

SAQ
: Q 01J to Q30J
Exercises
: Ex 01J to Ex 10J
Lesson 11 : Planning Construction Costs

11.2 How is cost estimated during the project life cycle?
11.3 What are the methods of estimating project costs?
11.4 How is detailed cost estimate structured?
11.5 How are construction costs classified?
11.6 How are resources unit cost standards developed ?
11.7 Why and how is work package standard cost determined ?
11.8 How are S Curve used as a forecasting tool?
Appendix K: Break-Even Analysis
SAQ
: Q 01K to Q25K
Exercises
: Ex 01K to Ex 10K
Lesson 12 : Planning Construction Budget

12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9

Why a project needs budget?
How is a project budget structured?
How is a sales revenue budget prepared?
How is an operating expenses budget compiled?
How are the cost inflation, escalation and contingencies are catered
for in the budget?
What forecasts are included in the master budget?
What is a flexible budget?
What are the essential features of an effective project budget ?
Appendix L: Capital Budgeting Process

SAQ
: Q 01L to Q30L
Exercises
: Ex 01L to Ex 9L
Lesson 13 : Project Scope Control

13.1
13.2
13.3
13.4
13.5
13.6

What does the scope control imply?
How are projects designs and drawings processed?
What are the various modes of executing construction projects?
How is project time and cost performance controlled?
What does a project scope closeup involve?
LESSON - 01
13.7 How is scope control system organized?

13.8 What are the prerequisites and benefits of an effective scope control system?
13.9 What are the guiding principles for implementing project management practices?
Appendix M: Project Quality Management
SAQ
: Q 01M to Q40M
Exercises
: Ex 01M to Ex 9M
Lesson 14: Resources Productivity Control

14.1
14.2
14.3
14.4
14.5
14.6

What does resources productivity control involve?
How is labour productivity controlled?
How is equipment productivity controlled?
How is materials productivity controlled?
How can a jobsite construction manager influence the project success productively?
Appendix N: Workers Safety Comes First

SAQ
: Q 01N to Q40N
Exercises
: Ex 01N to Ex 10N
Lesson 15 : Project Cost Control

15.1
15.2
15.3
15.4
15.5
15.6
15.7

What is project cost control approach?
How is cost performance measured?
How is the value of work done (sales) controlled?
Why and how is direct cost controlled?
How is contribution controlled?
How is budgeted performance controlled using the earned value analysis?
Appendix O: Project Risk ManagementAn Overview

SAQ
: Q 01O to Q40O
Exercises
: Ex 01O to Ex 15O
Lesson 16: Project Time Control

16.1
16.2
16.3
16.4
16.5
16.6

How to monitor time progress?
Why and how to crash the project time?
What is whatif analysis?
How to determine the extension of time in a contracted project ?
What are the guidelines for reviewing work progress?
Appendix P: Construction Contracts Administration

SAQ
: Q 01P to Q40P
Exercises
: Ex 01P to Ex 17P
Lesson 17: Planning Data Codification

17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8

Why is project data codified?
What data in a project needs codification?
How are codes labelled?
How to assign codes at various levels in a work breakdown structure?
How to structure activity identification codes?
How to define resources codes?
How to develop cost and finance accounting codes?
LESSON - 01
17.9 How to prepare technical document codes?

17.10 What are the principles underlying an effective codification system?
Appendix Q: Managing Privatized Infrastructure Projects
SAQ
: Q 01Q to Q40Q
Exercises
: Ex 01Q to Ex 10Q
Lesson 18: Project Management Information System

18.2 What is meant by information?
18.3 What information is needed for managing projects?
18.4 How PMIS is designed to deliver the information?
18.5 How is monitored information communicated?
18.6 How can project management software support PMIS?
18.7 How to select the software for PMIS?
18.8 How have advances in Information Technology supported PMIS?
18.9 What are the functions of the Project Monitor ?
18.10 What is the role of management in PMIS?
Appendix R: Upgrading Total Project Management Skills
SAQ
: Q 01R to Q40R
Exercises
: Ex 01R to Ex 14R
Appendices
Appendices Contents
AppendixA: Indian Construction Scenario
Construction and Scope.
Construction Contribution in the Indian Economy.
Growth of Indian Construction Industry.
Domestic Construction Tasks Ahead.

Globalization: Challenges for the Construction Industry.
AppendixB: Project Feasibility Study

Purpose of the Feasibility Study.
Analysing Factors Affecting Project Feasibility.
Feasibility Report.
AppendixC : Sizing Project Work Packages
Importance of Work Packages.
Factors Affecting Sizing of Work Packages.
Re-sizing Work Packages.
AppendixD: Project Duration Assessment Using Monte Carlo Simulation Technique
Introduction.
Concept.
Activity Duration Probability Distribution Function.
Methodology.
Examples.
Risk in Assessed Project Completion Time.
AppendixE: Project TimeCost Tradeoff Technique
TimeCost Relationship.
Concept.
Plotting Project CostTime Function.
Time Crashing.
A Word of Caution.
AppendixF: Decision Network Analysis
Scope.
Types Of Decision Network Analysis Techniques.
Decision Network Analysis.

Decision Tree Analysis.
Conclusion.
AppendixG: Project Management Organization
Project Organization Concept.

Project Organizational Forms.
Project Organizational Structure.
Project Responsibility Centres.
Appendices
Strengths and Weaknesses of the Project Management Matrix Organization.

Conclusion.
AppendixH : Resources Allocation Using Linear Programming

Introduction and Scope.
Solution of Linear Programming Problems by Graphical Method.
Solution of Linear Programming Problems by Simplex Method.
Solution of Linear Programming Problems by Dual Method.
Conclusion.
AppendixI: Earthmoving Equipment: Approximate Production Planning Data for
Primary Tasks
Introduction.
Tracked Bull Dozer Ideal Output Per Hour in Bulk Volume in Easy-To-Do
Loose Soil.
Front-End Loader Ideal Output Per Hour in Bulk Volume Easy-To
Haul Loose Soil.
Ideal Output of the Tracked Loader Shovel.
Excavating and Lifting Equipment Ideal Output Per Hour in Bulk Volume.
Scrapper Ideal Output Per Hour in Bulk Volume in Easy To Scrap Soil.
Performance Factors.
AppendixJ: Time Value Of Money
Time-Money Link.
The Future Value of a Single Amount.
The Future Value of an Annuity of Equal Amount.
The Present Value of a Future Amount.
The Present Value of an Annuity of Equal Amount.
The Present Value of Cash Inflow of Unequal Amount and Discount.
AppendixK: Break-Even Analysis

Introduction.
Break-Even Analysis Methodology.
Assumptions and Limitations.
Uses of Break-Even Analysis.
AppendixL: Capital Budgeting Process
Importance of Capital Budgeting.
Estimating the Cash Flow.
Establishing the Cost of Capital.
Applying the Investment Appraisal Criterion.
AppendixM: Project Quality Management
Quality Concept.
Quality Management Principles.
Corporate Quality Policy.
Production Quality Management Processes.
Quality Cost Analysis.
Total Quality Management.
Quality in Total Project Management.
Appendices
TQM Vs TPM.
AppendixN : Workers Safety Comes First
Why Safety Comes First?
Causes of Accidents at Construction Site.
Statutory Safety Measures in India.
Formulating Project Safety Policy.
Building Safety in Site Layout and Temporary Facilities.
Safety Related Role of the Project Personnel.
Conclusions.
Annexure (i): Extracts from The Building and Other Construction Workers ( Regulation of Employment and
Condition of Service ) Act 1996 and Central Regulation 1998.
Annexure (ii): Construction Safety Checklist.
AppendixO: Project Risk ManagementAn Overview
How are risks identified?
How are project risks analyzed?
How is risk response plan developed?

How are project risks controlled?
How does the human side affect the management of risks?
What is the role of a Project Manager in managing risks?
What are the benefits of managing project risks?
AppendixP: Construction Contracts Administration

Role of the Participants.
Production Performance Control.
Specification Interpretation.
Scope Change Control.
Sub-contractor Approval.
Disputes, Claims and their Modes of Settlement.
Contract Termination Control.
Interim Valuation Payment Control.
Contract Bonds and Securities.
Project Close-out.
Formal Correspondence Rules.
Guidelines to Minimize Problems in Contract Administration.
AppendixQ : Managing Privatized Infrastructure Projects

Stakeholders.
Role of Government in Designing and Implementing the Concessions.
Concessionaire Project Management Process.
Key factors in Management of Privatized Infrastructure Projects.
Conclusion.
Appendices
AppendixR: Upgrading Total Project Management Skills

Knowledge Areas Needed for Managing Construction Projects.
Skills Development Model.
Skills Up-gradation Methodology.
Academia-directed Project Management Education.
Corporate-directed Project Management Training.
Individual-directed Self-learning.
Distance Learning in Virtual Classroom to Speed up Delivery.
Conclusion.
ILLUSTRATIONS LIST
Illustrations List
Lesson 1
Construction Projects Management Framework
Illustration # 1.1 Typical Housing Project (CPMPSC Exhibit 1.01 pp27).

Section 1.8
Lesson 2
Project Management Techniques: An Overview
Illustration #2.01: 2000 Housing Units Project: Sub-project Work Breakdown Structure (CPMPSC Exhibit 3.1
pp74). Section 2.4.1
Illustration # 2.02: Residential Building Task Work-breakdown Structure (CPMPSC Exhibits 3.2 pp 75).
Section 2.4.1
Illustration # 2.03 : Residential Building Foundation Work Package and Activities Work Breakdown Structure
(CPMPSC Exhibits 3.3 pp 76). Section 2.4.1
Illustration # 2.04 Primary School Construction: Work breakdown Structure
( CPMPSC Exhibit3.6 pp 83). Section 2.4.1
Illustration # 2.05 Construction of Education Buildings: Activities Matrix with Duration (CPMPSC Exhibit 3.7
pp 84). Section 2.4.1
Illustration # 2.06: Pumping Station Project: CPM Network Time Analysis ( CPMPSC Exhibits pp 105). Section
2.4.2
Illustration # 2.07: PERT Network of Pumping Station Project (CPMPSC Exhibits pp 133). Section 2.4.2
Illustration # 2.08 PNA Network of Raft Foundation Construction (CPMPSC Exhibits5.1 pp 148)Note
illustration Section 2.4.2
Illustration # 2.09 Summary Precedence Network of Educational Buildings (CPMPSC Exhibits 5.5 pp 164)
Section 2.4.2
Illustration # 2.10 Summary Precedence Network of Primary School (CPMPSC Exhibits5.4 pp 163) Section2.4.2
Illustration # 2.11 Raw Water Clarifier Tank Construction Precedence Network and Schedule (CPMPSC
Exhibits 5.7 pp 167) Section 2.4.2
Illustration # 2.12 Site Development Project CPM and PNA Networks (CPMPSC Exhibits 5.8 pp 174) Section
2.4.2
Illustration # 2.13 Site Development Project: Bar Chart Work Programme (CPMPSC Exhibit 6.1 pp 183).
Section 2.4.4
Illustration # 2.14 Site Development Project: Resources Limited Schedule (CPMPSC Exhibit 6.5 pp 196).
Presentation to be improved. Section 2.4.4
Illustration # 2.15 2000 Housing Units Project: Summary Schedule of Education Buildings (CPMPSC Exhibit
6.6 pp 197) Section 2.4.4
Illustration # 2.16 Residential Buildings Foundations Construction Cyclograph, (CPMPSC Exhibit 6.7 pp 204).
Section 2.4.4
ILLUSTRATIONS LIST
Illustration # 2.17 Residential Building Finishes Plan: Derived Using Line-of-Balance Technique, (CPMPSC
Exhibit 6.8 pp 205). Section 2.4.4
Illustration # 2.18 Residential Building Finishes Control Chart : Derived Using Line-of-Balance Technique
(CPMPSC Exhibit6.9 pp 207) Section 2.4.4
Illustration # 2.19 : 2000 Housing Units Project: Residential Building Monthly Target Tracking Chart( CPMPSC
Exhibit 6.10 pp 209-210). Section2.4.4
Illustration #2.20: 2000 Housing Units Project, Summary Schedule of Construction Tasks (CPMPSC Exhibit 2.2
pp 44). Section 2.4.4
Illustration # 2.21: 2000 Housing Units Project, Manmonth Requirement and Earned Value Forecast(CPMPSC
Exhibit 2.3pp 48). Section 2.5.1
Illustration #2.22: 2000 Housing Units Project: Extract from Workers 'Requirement Forecast (CPMPSC Exhibit
7.1 pp 235). Section 2.5.2
Illustration # 2.23 :Residential Building's Sub-Project: ABC Classification of Direct Material ( CPMPSC Exhibit
8.1 pp249) Section 2.5.3
Illustration # 2.24: Functional Classification of Construction Equipment (CPMPSC Exhibit 9.1 pp 277). Section
2.5.4
Illustration # 2.25: 2000 Housing Units Project: Major Plant & Equipment Planned (CPMPSC Exhibit 2.6 pp
53). Section 2.5.4
Illustration # 2.26 :Construction Equipment Costing: Hourly Owning and Operating Cost Estimate ( CPMPSC
Exhibit 10.3 pp 328). Section 2.5.4
Illustration # 2.27: Foundation Construction Sub-Project: Activity-wise Workers' Requirement Estimate for One
Foundation Module Construction (CPMPSC Exhibit 2.7 pp 54). Section 2.6.1
Illustration # 2.28: Foundation Construction Sub-Project: Major Materials Requirement Estimate for One
Foundation Module (CPMPSC Exhibit 2.8 pp 56). Section 2.6.1
Illustration # 2.29: 2000 Housing Units Project: Organisation Chart ( CPMPSC Exhibit 12.1 pp 368 same as
Exhibit 1.01 pp27). Section 2.6.2
Illustration #2.30: 2000 Housing Units Project: Task Responsibility Centres (CPMPSC Exhibit 12.2 pp 369).
Section2.6.2
Illustration #2.31 Project Expense Budget Formats (CPMPSC Fig 12.2 pp 374).
Section 2.6.2
Illustration # 2.32: Project Control System (CPMPSC Exhibit 13.1 pp 395).

Section 2.7.1
Illustration # 2.33 : Project Performance Control ( CPMPSC Fig 13.2 pp399).
ILLUSTRATIONS LIST
Section 2.7.1
Illustration # 2.34 Typical Performance Control Responsibility Matrix ( CPMPSC Exhibit 13.6 pp 418). Section
2.7.1
Illustration # 2.35: Labour Productivity Accounting System (CPMPSC Fig 14.1 pp 421). Section 2.7.2
Illustration # 2.36 Project Budgeted Cost Chart ( CPMPSC Exhibit 15.11 pp-463). Section 2.7.3
Illustration # 2.37 Integrated Time- Cost Performance Chart ( CPMPSC Fig 15.1 pp445). Section 2.7.3
Illustration # 2.38 CPM / PERT Updated Network (CPMPSC Fig 16.1 pp 474).
Section 2.7.4
Illustration # 2.39: Primary School Construction: Updated Summary Precedence Network (CPMPSC Exhibit
16.1 pp 478).Section 2.74
Illustration # 2.40: Updated Line-of-Balance Chart (CPMPSC Exhibit 16.2 pp 479).
Section 2.7.4
Illustration # 2.41: Updated Bar Chart Schedules ( CPMPSC Exhibit 16.3 pp 481) Section 2.7.4
Illustration # 2.42: Pumping Station Project Original and Time Compressed Network (CPMPSC Exhibit 16.6 pp
488). Section 2.7.4
Illustration # 2.43 2000 Housing Units Project Work Codes ( CPMPSC Exhibit 17.1 pp 507). Section 2.8
Illustration # 2.44: Labeled List of Drawings for a Health Centre Building ( CPMPSC Exhibit 17.3 pp 526).
Section 2.8
Illustration # 2.45. Project Team Functions and Software Requirements. ( CPMPSC Table 18.1 pp 538)
Section18.3
Lesson 3
Project Work Breakdown
Illustration # 3.1: 2000 Housing Units Project: Sub-project and Task Level Work Breakdown (CPMPSC Exhibit
3.1 pp74) Section 3.3.2
Illustration # 3.2: Construction of Residential Building: Work-breakdown Structure (CPMPSC Exhibits 3.2 pp
75) Section 3.3.2
Illustration # 3.3 : Construction of Residential Building Foundation : Work-breakdown Structure (CPMPSC
Exhibits 3.3 pp 76) Section 3.3.2
Illustration # 3.4: Pumping Station Project: Work-breakdown Structure (CPMPSC Exhibit 3.4 pp 80) Section
3.4.2
Illustration # 3.5 Primary School Construction: Work breakdown Structure ( CPMPSC Exhibit3.6 pp 83)
Section 3.4.2
Illustration # 3.6 :Planning of a Factory Project During Feasibility Stage: Task Matrix (CPMPSC Exhibit 3.5 pp
82) Section 3.4.3
Illustration # 3.7: Construction of Education Buildings: Activities Matrix with Duration (CPMPSC Exhibit 3.7 pp
84) Section 3.4.4
ILLUSTRATIONS LIST
Illustration # 3.8: CI/SfB Table No.1 (CPMPSC Table 3.2 pp 85 ) Section 3.4.5
Lesson 4
Project CPM/PERT Network Analysis
Illustration # 4.1 : Pumping Station Project: CPM Network Time Analysis ( CPMPSC Exhibits pp 105) Section
4.3.1
Illustration # 4.2 : Pumping Station Project: Layout Drawing ( CPMPSC Fig 3.1 pp 78 ) Section 4.3.1
Illustration # 4.3 Activities of Pumping Station Project (CPMPSC Exhibits pp 122) Section 4.3.3
Illustration # 4.4 Activities Dependence Table of Pumping Station Project (CPMPSC Exhibits pp 123) Section
4.3.4
Illustration # 4.5 Work Package Logic Diagram of Pumping Station Project (CPMPSC Fig 4.15 pp 125)
Section 4.3.5
Illustration # 4.6 Logic Diagram of Pumping Station Project (CPMPSC Fig 4.17 pp 127) Section 4.3.5
Illustration # 4.7 Draft Network of Pumping Station Project (CPMPSC Fig 4.18 pp 129) Section 4.3.6
Illustration # 4.8 Critical Path Calculation of Pumping Station Project (CPMPSC Fig 4.19 pp 131-132) Section
4.3.10
Illustration # 4.9 Pumping Station Project: Time Compressed Network (CPMPSC Exhibits16.6 pp 488) Section
4.4
Illustration # 4.10 PERT Network of Pumping Station Project (CPMPSC Exhibits 4.3 pp 133) Section 4.5.1
Illustration # 4.11: Normal Distribution Table (CPMPSC Table 4.4 pp143 with figure) Section 4.7
Lesson 5 Precedence Network Analysis

Illustration # 5.1 Precedence Network of Raft Foundation Construction (CPMPSC Exhibits5.1 pp 148) Section
5.2
Illustration # 5.2 Repetitive Works Project: Precedence Network of Four Rafts Foundation Construction
(CPMPSC Exhibits 5.2 pp 156) Section 5.4
Illustration # 5.3 Summary Precedence Network of Educational Buildings (CPMPSC Exhibits 5.5 pp 164)
Section 5.4
Illustration # 5.4 Primary School Structure Construction Precedence Network( CPMPSC Exhibits 5.3 pp 162)
Section 5.5.1
Illustration # 5.5 Summary Precedence Network of Primary School (CPMPSC Exhibits5.4 pp 163) Section 5.5.2
Illustration # 5.6: Raw Water Treatment Clarifier Layout (CPMPSC Exhibits pp 165) Section 5.5.2
Illustration # 5.7 Raw Water Clarifier Tank Construction Precedence Network and Schedule (CPMPSC Exhibits
ILLUSTRATIONS LIST
5.7 pp 167) Section 5.5.2

Illustration # 5.8 Site Development Project CPM and PNA Networks (CPMPSC Exhibits 5.8 pp 174) Section
5.7.3
Illustration # 5.9A: Factory Construction Project Conversion of CPM into PNA Network (CPMPSC Exhibits
5.9a pp 175) Section 5.7.3
Illustration # 5.9B: Factory Construction Project: PNA Network (CPMPSC Exhibits 5.9 b. pp 176) Section
5.7.3
Lesson 6 Project Work Scheduling

Illustration # 6.1: Site Development Project: Bar Chart Work Programme (CPMPSC Exhibit 6.1 pp 183)
Sections 6.2.1 & 6.4.3
Illustration # 6.2 2000 Housing Units Project: Summary Schedule of Education Buildings (CPMPSC Exhibit 6.6
pp 197) Section 6.2.2
Illustration # 6.3 Site Clearance Project Earliest Start Time Schedule ( CPMPSC Table 6.2 pp188} Section 6.4.5
Illustration # 6.4 Site Development Project: Time Limited Optimum Resources Schedule ( CPMPSC Exhibit 6.4
pp 193) Section6.4.8
Illustration # 6.5 Site Development Project: Resources Limited Schedule (CPMPSC Exhibit 6.5 pp 196) Section
6.4.11
Illustration # 6.6 Residential Buildings Foundations Construction Cyclograph (CPMPSC Exhibit 6.7 pp 204)
Section 6.5.1
Illustration # 6.7 Residential Building Finishes Plan: Derived Using Line-of-Balance Technique (CPMPSC Exhibit
6.8 pp 205) Section 6.5.5
Illustration # 6.8 Residential Building Finishes Control Chart : Derived Using Line-of-Balance Technique
(CPMPSC Exhibit6.9 pp 207) Section 6.5.5
Illustration # 6.9 : 2000 Housing Units Project: Residential Building Monthly Target Tracking Chart( CPMPSC
Exhibit 6.10 pp 209-210) Section 6.5.5
Illustration # 6.10 2000 Housing Units Project: Summary Schedule of Construction Tasks (CPMPSC Exhibit2.2
pp 44) Section 6.5.5
Illustration # 6.11: 2000 Housing Units Project: Manmonth Requirement and Earned Value Forecast (CPMPSC
Exhibit2.3 pp 48) Section 6.6
Lesson 7 Planning Construction Manpower
Illustration # 7.1: Typical Building Construction Workers Production Planning Data( CPMPSC Table7.3
pp225) Section 7.4.1
Illustration # 7.2 :2000 Housing Units Project: Extract from Workers 'Requirement Forecast (CPMPSC Exhibit
7.1 pp 235) Section 7.6.4
ILLUSTRATIONS LIST
Illustration #7.3: Typical Housing Project Organisation ( CPMPSC Exhibit 1.1 pp27and Exhibit 7.2 pp 237)
Section 7.7.1
Lesson 8 Planning Construction Materials
Illustration # 8.1: Residential Building's Sub-Project: ABC Classification of Direct Material (CPMPSC Exhibit
8.1 pp249) Section 8.2.2
Illustration # 8.2: Monitoring Material Schedule ( CPMPSC Table 8.5 pp261 )
Section 8.5.3
.
Illustration # 8.3: Minor Materials Mobilisation Stock (CPMPSC Exhibit 8.2 pp 270) Section 8.7.4
Illustration # 8.4 (CPMPSC Fig 8.3 pp268). Section 8.7.2
Lesson 9 Project Construction Equipment
Illustration # 9.1: Functional Classification of Construction Equipment (CPMPSC Exhibit 9.1 pp 277)- newly
added illustration in the lesson 9.2. Section 9.2
Illustration # 9.2 : 2000 Housing Units Project: Major Plant & Equipment Planned (CPMPSC Exhibit 2.6 pp
53). Section 9.2
Illustration # 9.3: Earth Excavating and Lifting Equipment (CPMPSC Exhibit 9.2 pp 281) Section 9.4
Illustration # 9.4: Earth Cutting and Hauling Equipment ( CPMPSC Exhibit 9.4 pp 286) Section 9.5
Illustration # 9.5: Common Earth Compacting Equipment ( CPMPSC Exhibit 9.5 pp 293) Section 9.8.1
Illustration # 9.6 Typical Major Compacting Equipment: Salient Features (CPMPSC Exhibit 9.6 pp299) Section
9.8.1
Illustration # 9.7: Major Concreting Equipment ( CPMPSC Exhibit 9.7 pp 301) Section 9.9
Illustration # 9.8: Materials Handling Equipment (CPMPSC Exhibit 9.8 pp 306) Section 9.10
Lesson 10 Selecting Construction Equipment
Illustration # 10.1: Standard Methods of Determining Depreciation (CPMPSC Exhibit 10.2 pp 322) Section
10.4.1
Illustration # 10.2: Construction Equipment Costing: Hourly Owning and Operating Cost Estimate ( CPMPSC
Exhibit 10.3 pp 328) Section 10.4.3
Illustration #10.3:Plant Leasing Offer of a Concrete Pump (CPMPSC Exhibit 10.4 pp 335) Section 10.6.3
Illustration #10.4: Equipment Replacement Decisions Data (CPMPSC Exhibit 10.5pp 338) Section 10.6.4
Lesson 11 Planning Construction Costs

Illustration # 11.1 Typical Indirect Costs Classification of a Multi-national Company ( CPMPSC Exhibit 11.1
pp347) Section 11.5.3
ILLUSTRATIONS LIST
Illustration # 11.2 Indirect Costs: Functional Breakdown ( CPMPSC Exhibit 11.2 pp348) Section 11.5.3
Illustration # 11.3 :Foundation Construction Sub-Project: Activity-wise Workers' Requirement Estimate for One
Foundation Module Construction (CPMPSC Exhibit 2.7 pp 54) Section 11.7.1
Illustration #11.4 Foundation Construction Sub-Project: Major Materials Requirement Estimate for One
Foundation Module (CPMPSC Exhibit 2.8 pp 56) Section 11.7.1
Illustration # 11.5 Readymix Concrete Production Cost ( CPMPSC Exhibit 11.2 pp348) Appendix K
Lesson 12 Planning Construction Budgets
Illustration #12.1 : 2000 Housing Units Project: Organisation Chart ( CPMPSC Exhibit 1.1 pp27andExhibit 12.1
pp 368). Section 12.3.2
Illustration # 12.2: 2000 Housing Units Project: Task Responsibility Centres (CPMPSC Exhibit 12.2 pp 369)
Section 12.3.2
Illustration #12.3 : Typical Contractors Monthly Interim Payment Application (CPMPSC Table 12.1 pp 372)
Section 12.4
Illustration #12.4 : Typical Expense Budget Breakdown (CPMPSC Fig 12.2 pp 374) Section 12.5.1
Lesson 13 Project Scope Control
Illustration # 13.1 : Project Performance Control (CPMPSC Fig. 13.2 pp 399)
Section 13.2
Illustration # 13.2: 2000 Housing Units Project: Design and Drawings development Schedule (?)Section 13.3.1
Illustration # 13.3: 2000 Housing Units Project: List of Drawings for Health Centre Building. (CPMPSC Exhibit
17.3 pp526) Section 13.3.2
Illustration # 13.4: 2000 Housing Units Project Typical Responsibility Centre Performance Reports ( CPMPSC
Illustration # 13.5: Project Control System (CPMPSC Exhibit 13.1 pp 395)
Section 13.7.2
Illustration # 13.6 Foundation Construction Sub-Project (CPMPSC Exhibit 13.3 pp 406) Section 13.5.2
Illustration # 13.7 : Typical Performance Control Responsibility Matrix ( CPMPSC Exhibit 13.6 pp 418) Section
13.8
Lesson 14 Resources Productivity Control

Illustration # 14.1: TimeKeeper Daily Time Card (CPMPSC Table 14.1 pp 422). To be developed by the
programmers Section 14.3.2
Illustration # 14.2: Supervisor/Foreman Daily Labour Employment Report (CPMPSC Table 14.2 pp 424)
Section 14.3.2
ILLUSTRATIONS LIST
Illustration # 14.3: Weekly Labour Productivity Report (CPMPSC Table 14.3 pp 425) Section 14.3.2
Illustration # 14.4: Labour Productivity Control Chart (CPMPSC Exhibit 14.1 pp426. Section 14.3.2
Illustration # 14.5: Typical Daily Equipment Employment Report (CPMPSC table 14.4 pp 428) Section 14.4.2
llustration # 14.6: Weekly Equipment Productivity Sheet (CPMPSC Table 14.5 pp 429) Section 14.4.2
Illustration # 14.7: Stock Record Card ( CPMPSC Table 14.6 pp 432) Section 14.5.3
Illustration # 14.8 Typical Materials Requisition and Issue Control (CPMPSC Table 14.7 pp 433) Section 14.5.4
Illustration # 14.9: Typical Materials Return Control (CPMPSC Table 14.8 pp 434) Section 14.5.4
Illustration # 14.10: Typical Stores Accounting Ledger Sheet (CPMPSC Table 14.9 pp 435) Section 14.5.5
Lesson 15 Project Cost Control

Illustration # 15.1 : Project Budgeted Cost Chart (CPMPSC Exhibit 15.1.1 pp 463) Section 15.7
Illustration # 15.2 : Integrated Time- Cost Performance Chart ( CPMPSC Fig. 15.1 pp 445 ) Section 15.7
Lesson 16 Project Time Control
Illustration # 16.1 : CPM / PERT Updated Network (CPMPSC Fig 16.1 pp 474). Section 16.2.2
Illustration # 16.2 : Primary School Construction: Updated Summary Precedence Network (CPMPSC Exhibit
16.1 pp 478) Section 16.2.2
Illustration # 16.3 : Updated Line-of-Balance Chart (CPMPSC Exhibit 16.2 pp 479) Section 16.2.2
Illustration # 16.4:Updated Bar Chart Schedules ( CPMPSC Exhibit 16.3 pp 481) Section 16.2.2
Illustration # 16.5: Master: Network of Pumping Station Project (CPMPSC Exhibit 16.4 pp 483) Section 16.5
Illustration # 16.6 : Pumping Station Project: Modified Network Incorporating Changes ( CPMPSC Exhibit 16.5
pp 484) Section 16.5
Lesson 17 Planning Data Codification
Illustration # 17.1 : 2000 Housing Units Project Work Codes ( CPMPSC Exhibit 17.1 pp 507) Section 17.4.2
Illustration # 17.2 : CI / SfB Table 1 (CPMPSC Table 17.1 pp 505) Section 17.4.4
Illustration # 17.3 :CSI MasterFormat ( CPMPSC Table 17.6 pp 516) Section 17.4.5
Illustration # 17.4 : Manpower Code ( CPMPSC Table 17. 10 pp 524) Section 17.7.1
Illustration # 17.5 :Materials Code ( CPMPSC Table 17.4 pp 512) Section 17.7.2
Illustration # 17.6 :Equipment Code ( CPMPSC Table 17.7 pp 519) Section 17.7.3
ILLUSTRATIONS LIST
Illustration # 17.7 :Finance Accounting Code ( CPMPSC Table 17.9 pp 523)

Section 17.8.3
Illustration # 17.8 : 2000 Housing Units Project Health Centre Building: Labelled List of Drawings ( CPMPSC
Lesson 18 Project Management Information System
Illustration # 18.1 : Typical Software Requirement in Project Management (CPMPSC table 18.1 pp 538) Section
18.3
Acknowledgements
Acknowledgements
Krishan K Chitkara, the author, expresses his sincerest thanks to the contribution and support
extended by the following in making the CPMT Plus:
Construction Industry Development Council, India. Author is grateful to the
Hon. G. V. Ramakrishna, Chairman, for writing the Foreword in CPMT Plus, and
thankful to Mr. P. R. Swarup, Director, CIDC, for his encouragement and
cooperation in developing this CD-ROM.
Housing and Urban Development Corporation (HUDCO). Author is thankful to
Mr. V. Suresh, Chairman, Directors and Staff for their support in developing
the CPMT Plus. In particular, Dr. P. S. Rana, Director Corporate Planning has
been the main source of inspiration in bringing out this CD and the students from
HUDCO have made valuable contribution in the development of the CPMT Plus.
Primavera Systems, INC, of USA, for providing and permitting to use the working
model of Primavera Project Planner 3.0 and SureTrak Project Manager 3.0 in the
CPMT Plus. Primavera Project Planner (R), P3 (R), and SureTrak Project Manager
(R) are registered trademarks of Primavera Systems, Inc.
International Labour Organisation, Geneva, for permitting to reproduce the
Checklist from Safety, Health and Welfare on Construction Sites: A Training
Manual. published in 1995.
Project Management Institute, Inc, PA 19073-3299 USA, for allowing to include
the project manager skill model titled The Superior Project Manager, from The
Quest To Find The Superior Project Manager, published in PM Network, July
1998.
Institute of Construction Project Management, Gurgaon, faculty and staff
engaged in promoting state-of the art knowledge in Construction Management.
Construction Journal of India for the support in development of CPMT Plus.
Publisher and Developer of CPMT Plus, for their untiring effort in bringing this
project to its present form.
Last but not the least, I am thankful to my family for their understanding and
continued support which saw me through the extended working hours.
K. K. Chitkara,
Author and Program Director,
CPMT Plus.
Disclaimer. Despite their best efforts, the author, supporters and contributors of this
CPMT Plus, accept no responsibility for any inaccuracy, errors or omissions resulting
Acknowledgements
from the text and conversion of the text into CD-ROM format.
Appendices
Appendices Contents
AppendixA: Indian Construction Scenario
Construction and Scope.
Construction Contribution in the Indian Economy.
Growth of Indian Construction Industry.
Domestic Construction Tasks Ahead.

Globalization: Challenges for the Construction Industry.
AppendixB: Project Feasibility Study

Purpose of the Feasibility Study.
Analysing Factors Affecting Project Feasibility.
Feasibility Report.
AppendixC : Sizing Project Work Packages
Importance of Work Packages.
Factors Affecting Sizing of Work Packages.
Re-sizing Work Packages.
AppendixD: Project Duration Assessment Using Monte Carlo Simulation Technique
Introduction.
Concept.
Activity Duration Probability Distribution Function.
Methodology.
Examples.
Risk in Assessed Project Completion Time.
AppendixE: Project TimeCost Tradeoff Technique
TimeCost Relationship.
Concept.
Plotting Project CostTime Function.
Time Crashing.
A Word of Caution.
AppendixF: Decision Network Analysis
Scope.
Types Of Decision Network Analysis Techniques.
Decision Network Analysis.

Decision Tree Analysis.
Conclusion.
AppendixG: Project Management Organization
Project Organization Concept.

Project Organizational Forms.
Project Organizational Structure.
Project Responsibility Centres.
Appendices
Strengths and Weaknesses of the Project Management Matrix Organization.

Conclusion.
AppendixH : Resources Allocation Using Linear Programming

Solution of Linear Programming Problems by Graphical Method.
Solution of Linear Programming Problems by Simplex Method.
Solution of Linear Programming Problems by Dual Method.
Conclusion.
AppendixI: Earthmoving Equipment: Approximate Production Planning Data for
Primary Tasks
Introduction.
Tracked Bull Dozer Ideal Output Per Hour in Bulk Volume in Easy-To-Do
Loose Soil.
Front-End Loader Ideal Output Per Hour in Bulk Volume Easy-To
Haul Loose Soil.
Ideal Output of the Tracked Loader Shovel.
Excavating and Lifting Equipment Ideal Output Per Hour in Bulk Volume.
Scrapper Ideal Output Per Hour in Bulk Volume in Easy To Scrap Soil.
Performance Factors.
AppendixJ: Time Value Of Money
Time-Money Link.
The Future Value of a Single Amount.
The Future Value of an Annuity of Equal Amount.
The Present Value of a Future Amount.
The Present Value of an Annuity of Equal Amount.
The Present Value of Cash Inflow of Unequal Amount and Discount.
AppendixK: Break-Even Analysis

Introduction.
Break-Even Analysis Methodology.
Assumptions and Limitations.
Uses of Break-Even Analysis.
AppendixL: Capital Budgeting Process
Importance of Capital Budgeting.
Estimating the Cash Flow.
Establishing the Cost of Capital.
Applying the Investment Appraisal Criterion.
AppendixM: Project Quality Management
Quality Concept.
Quality Management Principles.
Corporate Quality Policy.
Production Quality Management Processes.
Quality Cost Analysis.
Total Quality Management.
Quality in Total Project Management.
Appendices
TQM Vs TPM.
AppendixN : Workers Safety Comes First
Why Safety Comes First?
Causes of Accidents at Construction Site.
Statutory Safety Measures in India.
Formulating Project Safety Policy.
Building Safety in Site Layout and Temporary Facilities.
Safety Related Role of the Project Personnel.
Conclusions.
Annexure (i): Extracts from The Building and Other Construction Workers ( Regulation of Employment and
Condition of Service ) Act 1996 and Central Regulation 1998.
Annexure (ii): Construction Safety Checklist.
AppendixO: Project Risk ManagementAn Overview
How are project risks analyzed?

How are project risks controlled?
AppendixP: Construction Contracts Administration

Role of the Participants.
Production Performance Control.
Specification Interpretation.
Scope Change Control.
Sub-contractor Approval.
Disputes, Claims and their Modes of Settlement.
Contract Termination Control.
Interim Valuation Payment Control.
Contract Bonds and Securities.
Project Close-out.
Formal Correspondence Rules.
Guidelines to Minimize Problems in Contract Administration.
AppendixQ : Managing Privatized Infrastructure Projects

Stakeholders.
Role of Government in Designing and Implementing the Concessions.
Concessionaire Project Management Process.
Key factors in Management of Privatized Infrastructure Projects.
Conclusion.
Appendices
AppendixR: Upgrading Total Project Management Skills

Knowledge Areas Needed for Managing Construction Projects.
Skills Development Model.
Skills Up-gradation Methodology.
Academia-directed Project Management Education.
Corporate-directed Project Management Training.
Individual-directed Self-learning.
Distance Learning in Virtual Classroom to Speed up Delivery.
Conclusion.
CPMT
Appendices
Indian Construction Scenario
Time Value Of Money
Project Feasibility Study
Break-Even Analysis
Sizing Project Work Packages
Capital Budgeting Process
Project Duration Assessment: Using Monte Carlo

Simulation Technique
Project Quality Management
Project TimeCost Tradeoff Technique
Worker's Safety Comes First
Decision Network Analysis
Project Risk Management: An Overview
Project Management Organization
Construction Contracts Administration
Resources Allocation Decisions
Managing Privatised Infrastructure Projects
Earthmoving Equipment: Approximate Production

Planning Data for Primary Tasks:
Upgrading Total Project Management Skills
Lesson 1 Appendix
INDIAN CONSTRUCTION SCENARIO

Appendix A
A.1
CONSTRUCTION SCOPE
The construction activity has been in existence since the dawn of civilisation, when the caveman
started building his dwellings. Even in ancient times, man created architectural marvels which
came to be regarded as the wonders of the world, for example, the Pyramids of Egypt, the Great
Wall of China, the Angkor temples of Cambodia, and the Tower of Babel. The medieval times
witnessed the construction of world-famous landmarks like the Taj Mahal in India and the Leaning
Tower of Pisa in Italy. A more recent example of man's achievements in this direction is the Eiffel
Tower in Paris and the high-rise skyscrapers.
In the present day world, technical breakthroughs have revolutionized construction activity.
Modern construction areas include high-rise buildings, dams and irrigation networks, energy
conversion and industrial plants, environmental protection works, infrastructure facilities like
roads, bridges, railways, airports and seaports, satellite launching stations, on-shore and off-shore
oil terminals.
In India , investment in new construction works during the year 199899 was of the order of Rs.
1367.54 billion
A.2
CONTRIBUTION OF CONSTRUCTION WORKS IN THE INDIAN ECONOMY
Construction activity contributes to the economic development of a country. The GDP per capital
and the investment in the construction per capita generally follows a straight-line relationship, that
is, construction activity increases with the increase in per capita income. In some of the
developing countries, the growth rate of construction activity outstrips that of the population and
of the GDP. In case of India, for example, during the last ten years, the total capital formation by
construction was about 44% of the total investment and the contribution of construction in GDP
was nearly 5%.
Construction accelerates economic growth of a nation. In India, for example, during the plan
period 1980-85 for every rupee of investment, construction added 78 paise to the GDP as
compared with 20 paise per rupee of investment in agriculture.
Construction is an employment spinner. It generates more employment than most of the sectors.
In India, during the eighties, the overall annual employment increased by 2%, whereas increase of
employment in the construction sector during the same period recorded an annual growth of about
7%. Further, in India, the number of persons employed in the Indian Construction Industry is
around three millions.
Indias planned development coupled with the reforms, despite the ever increasing population,
have contributed to the remarkable growth in the countrys economy.
DEMOGRAPHIC INDICATORS
Lesson 1 Appendix
Year
1995
1996
1997
1998
1999
Population
946
963
980
998
999
Population Growth Rate
1.84
1.81
1.79
1.82
Source: Construction Industry Development Council, Third National Conference, Souvenir2; February
2000
Main Macroeconomic Indicators : GDP and Components INR in Trillions

Year
1995
1996
1997
1998
1999
GDP at Real Prices (1993-94)
8.76
9.38
9.99
10.49
11.02
GDP at Current Market Prices
11.27
12.06
12.86
14.27
14.98
Primary Sector
8.11
8.43
9.41
9.77
Manufacturing Sector
0.75
0.84
0.90
0.96
Service Sector
1.50
1.69
1.86
2.05
Construction Sector
1.70
1.90
2.1
2.2
Source: Construction Industry Development Council, Third National Conference, Souvenir2; February 2000
FINANCIAL INDICATORS
Year
1995
1996
1997
1998
Changes in Consumer Price Index %
9.10
8.40
7.2
6.1
Short Term Interest Rate %
18-20
18-20
18-20
18-20
Long Term Interest Rate %
10-13
10-13
10-13
10-13
Rs.32.0
Rs.36.0
Rs.42.7
US $ Annual Average Exchange Rs.31.0
1999
4.20
Rs.43.8
Rate
Source: Construction Industry Development Council, Third National Conference, Souvenir2; February 2000
India witnessed a rapid growth in the production of the essential construction materials.
Production of the Essential Construction Materials

Annual Production in Million Tons Per Year
Year
Cement
Steel
Coal
1947
3.2
1.0
1950
5.3
1.4
32.3
1960
55.2
Lesson 1 Appendix
1970
14.7
4.5
76.3
1980
29.6
8.8
119.0
1990
45.8
12.6
225.5
1995
76.2
22.7
1998
82.9
24.8
318.9
During the last few years, the construction prices of the essential construction materials have
remained fairly stable.

AVERAGE CONSTRUCTION MATERIAL PRICES
ITEM
Unit
1995
1996
(INR)
1997
1998
1999
Cement in bulk
Tonne
2,600
2,700
2,750
2,800
2,800
Steel bars
Tonne
14,000
14,500
15,000
15,000
15,000
Source: Construction Industry Development Council, Third National Conference, Souvenir2Feb.2000
Construction is the second largest industry on the basis of the total labour force engaged.
Development patterns in the construction largely reflect the national trends in terms of growth,
income generation, housing and other economic indicators. However, a lot remains to be done for
the construction workers, most of them live below the poverty line. This largely floating, mostly
untrained workforce with no fixed accommodation and lacking other normal facilities, is engaged
in hazardous work conditions with no appreciable compensatory benefits. The safety, training and
welfare of the construction workers must come first, always and every time.
A.3 GROWTH OF INDIAN CONSTRUCTION INDUSTRY

During Indias pre-independence period, the Indian Construction Industry was mainly confined to
low-tech nature of construction in the field of railways, dams, drains, canals, roads, buildings,
ports, utility services and other facilities. With the dawn of independence, Indian construction
entered into a new era. The new construction increased rapidly from mere Rs2.00 billion in
1951-52 to Rs1367.54 billion in 1998-99. It is expected to rise to Rs 3060.36 billion during
2006-07.
GROWTH IN CONSTRUCTION INDUSTRY

New Construction in Billion IRS
1951-52
Rs 2.00b
1961-62
Rs. 5.50b
1969-70
Rs 13.60b
1980-81
Rs 136.4 9b
1986-1987
Rs 305.73b
GROWTH IN CONSTRUCTION INDUSTRY
19901991
Rs 583.63b
Lesson 1 Appendix
New Construction in Billion IRS

1995-96
1996-97
1997-98
1998-99
Rs 1027.58b
Rs 1129.56b
Rs 1242.44b
Rs 1367.54b
1999-2000
2000-2001
Rs 1497.92b
Rs 1669.94b
(forecast)
(forecast)
Based on the bidding value, Indian contractors are broadly divided into three categories, i.e.
bidding value over Rs 300m, between Rs 100m to Rs 300m, and less than Rs 100 million. There
are over 28,000 construction companies. Majority of the constuction companies fall in the last
category having bidding capacity less than Rs 100 million. There are about 200 companies
including those with joint ventures, who can undertake large-sized turnkey / EPC contracts. The
top ten construction companies in India are tabulated below:
LEADING INDIAN CONSTRUCTION COMPANIES
Name of the Companies
Larsen &Toubro Ltd.
(ECC Group)
Turnover
U.S $ Million
448.24(96-97)
Main Work
Heavy Industrial Construction, Institutional Buildings, Special
Structures.
http://www.larsentoubro.com
http://www.lntecc.com
Gammon India Ltd.
http://www.gammomindia.com
Hindustan Construction Company
Ltd.
61.23 (96-97)
63.54 (97-98)
87.31 (96-97)
88.66 (97-98)
Hydraulic Structures, Tunnelling, Natural Draft Cooling Towers,

Heavy Industrial Construction, Bridges and Flyovers
Hydraulic Structures, Bridges, Flyovers, Irrigation Structures, Heavy
Industrial Construction.
180.70(96-97)
151.76(97-98) for 9
months only
64.07 (1997)
54.86 (1998)
50.50 (95-96)
58.50 (96-97)
Hydraulic Structures, Hydro-Electric Power Plants, Heavy Industrial

Construction.
29.00 (95-96)
27.00 (96-97)
32.00 (97-98)
60.00 (96-97)
61.00 (97-98)
Hydraulic Structures, Roads and Highways, Hydro Power Plants.
54.30 (96-97)
Hydraulic Structures, Roads and Highways, Hydro Power Plants and

Cooling Towers, Directional Drilling.
Cooling Towers, Directional Drilling, Pipelines, Heavy Construction.
http://www.hccindia.com
Jaiprakash Industries Limited
Unitech Ltd.
http://www.unitechlimited.com
Kvaerner Cementation India
Ltd.
Roads, Bridges, Heavy Industrial Construction, Housing and

Institutional Buildings, Real Estate
Hydraulic Structures, Heavy Industrial Construction
http://www.kvaerner.com
Continental Construction Ltd.
http://www.cclindia.com
National Buildings Construction
Corporation Ltd.
http://www.nbccindia.com
Bridges & Roof Co. Ltd.
http://www.bridgroof.com
Punj Lloyd Ltd.
info@punjlloyd.com
43.50 (96-97)
51.50 (97-98)

Cooling Towers, Directional Drilling.
Source: Construction Industry Development Council, Third National Conference, Souvenier -- 2nd Feb., 2000
A.4 DOMESTIC CONSTRUCTION TASKS AHEAD

The economic development of a nation is closely linked with investments in infrastructure. India
with its infrastructure development programme is emerging as one of the top construction markets
in the world.
FORECASTING GROWTH IN CONSTRUCTION INDUSTRY
Lesson 1 Appendix
SECTORWISE CONSTRUCTION FORECAST

New Construction in billion IRs
Sector
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
Power
476.00
518.00
560.00
616.00
679.00
Railways
127.20
139.80
153.30
168.40
185.30
Road
105.70
114.40
124.20
135.20
147.60
Ports
26.50
29.30
32.50
36.20
39.00
Other transport
198.80
232.70
261.50
294.20
342.40
Communication
182.00
191.00
232.00
250.00
312.00
2.00
2.20
2.40
2.70
2.90
1118.20
1227.40
1365.90
Storage
Total basic infrastructure
1502.70
1709.10
Note: All figures in billion Rupees

Source: Union Budget & Construction Industry 1998-99, Context Data Services, Mumbai.
LIKELY INVESTMENT PATTERN BETWEEN THE PUBLIC AND PRIVATE SECTOR

Year
Public Sector %
Private Sector %
1999-2000
66.90
33.10
2002-2003
60.90
39.10
2002-2006
55.80
44.20
Source: Union Budget 1998 99 & Construction Industry Context Data Services
Business Opportunities and Major Projects in the Pipeline in January 2000 include:
(Value in U.S. $ Million)
1.1 Jawaharlal Nehru Port, Liquid Cargo Berth
1.2 Mumbai (JNPT) Marine Chemical Terminal
1.3 Six-berth Terminal at Nhava Creek
1.4 Kandla Container Freight Station
1.5 New Mangalore Bulk Handling Terminal
1.6 Port facilities for Expansion of Mangalore Refinery
1.7 Tuticorin Construction of New Outer Harbour (including modern
container terminal)
1.8 Container Haling Facilities at Berth No. 7
1.9 Chennai Construction of New Outer Harbour
1.10 Visakhapatnam Construction of Outer to Outer Harbour (Port
Construction Through Private Sector)
1.11 Construction of Captive and Multipurpose Berths
1.12 Kochi Construction of Container Terminal
35
535
335
5
100
35
1200
80
700
800
140
800
Lesson 1 Appendix
1.13 Construction of LPG & LNG Terminal at Puthuvypeen

1.14 Calcutta Cargo Handling Facilities at Budge
Budge Container Terminal
1.15 Second Dock Arm at Haldia
1.16 Mormugao Construction of Outer Harbour
1.17 Construction of FRH Master Plan Berths
1.18 Construction of Berths West of Breakwater
1.19 Paradip Dry Dock Ship Repair Facilities
1.20 Upgradation of facilities for Container Berth
1.21 Captive Fertiliser Handling System
Estimated Total Investment
100
40
250
700
75
200
470
35
35
6670
A.5 PROJECT EXPORT

Construction is an everlasting activity across the globe. Its profitability, like that of any other
business, fluctuates according to the law of demand and supply. In most countries, the
construction activity constitutes 6~9% of the gross domestic product (GDP). It covers more than
half of the fixed capital formation.
The total annual value of construction works in the world ranges from 1 to 1.5 trillion US dollars.
Since the early 1980s, the contract market for international construction projects has risen to US$
120-180 billion per annum. There are about 250 international companies competing with each
other for global construction tenders. But Indias share is negligible.
COUNTRY
South Asia
East Asia
North Africa
South and Other
Africa
Middle East
CIS
South America
Total
INDIAS ANNUAL PROJECT EXPORTS (for fiscal years)

(Value in INR Millions)
1994-95
1995-96
1996-97
1997-98
1998-99
596.40
440.00
-
877.00
208.10
757.30
60.00
45.30
7.60
284.10
413.60
1741.40
83.60
266.80
11464.80
1193.20
-
1289.00
273.20
2600.00
437.60
2340.00
659.80
111.60
17.30
3125.40
1802.50
4307.10
2092.90
14751.70
A.6 GLOBALIZATION CHALLENGE FOR INDIAN CONSTRUCTION INDUSTRY

Globalization stands for the interdependence of the entire world and its people. In its generic form,
the globalization aims at growing international linkages in all fields of human activity, i.e. finance,
trade, market strategy, technology development, knowledge exchange, cultural reforms,
governance regulations and political unification of the world. Globalization creates increasing
interdependence and interconnectedness of national economies. It brings about multiplicity of
linkages and interconnections between states, societies and corporate entities.
Although the facilities produced by the construction industry are immobile, the inputs used by it
are highly mobile. Construction materials and services provided by Architectural, Consulting,
Lesson 1 Appendix
Contracting and Construction management firms are transferable across regional and national
boundaries; however, these are subjected to certain national policies like procurement laws,
immigration rules, and cross border movement of sponsors ,contractors and workforce. The
globalization process will:
Accelerate technological exchange.

Standardize labour practices.
Increase exports of products and services.
Shorten the product life cycle.
Share costs in product development.
Gain greater access to foreign markets.
Provide access to highly qualified people.
Broaden access to financial resources.
Establish joint ventures and partnerships in the distance markets.
The tasks ahead, in the global context, will place high demands on the Indian construction
industry. The construction promoters will demand better facilities at cheaper rates with short
delivery period. Emphasis, especially in case of privatized infrastructure projects will be on
completion within budget, earlier than the stipulated time and better quality than that specified.
Construction related specialities and disciplines will grow. Mega projects, both at national and
international level, will need global joint ventures. Innovation and creativity coupled with
professionalism, new practices, new technologies and mechanization will win in the long run.
In the global environments, Government can make the construction industry competitive by
reducing duty on imports of high tech engineering plant and equipment, giving incentives to the
local equipment manufacturers, providing sale tax benefit to encourage precast industry, reforming
contract practices, providing facilities for capturing overseas markets, backing construction
professional bodies, reducing interest rates and encouraging money supplies through financial
institutions. In order to prevent social crimes in the construction industry, the Government must
enforce exemplary punishments and heavy penalties for unsafe working, sub-standard
construction, corrupt practices and other construction related crimes.
In todays dynamic global environment, the rate of obsolescence of knowledge is very high. With
the fast emerging new knowledge and the rapidly changing technology, the organization needs
mechanism to react faster than their competitors. Challenge for organizations is to make learning
available to its members, faster than competitors, when and where the need arises. It is particularly
important in the highly competitive construction field. This has made updating of knowledge and
skills a continuous process.
India is a member of the WTO. India has signed GATT. Therefore, there is no going back on
globalization. The Indian Construction Industry, to survive in the global context, must gear up to
face the challenges ahead. In the construction field, upgrading of technology, improving
construction practices and upgrading managerial skills, is a continuous process and it is not a
one-time effort.
Appendix B
PROJECT FEASIBILITY STUDY

Appendix B
B.1 Purpose of the Feasibility Study
Construction project are capital intensive. Capital expenditure decisions have long-term effects,
are irreversible, and involve substantial outlays. The basic characteristic of a business- related
capital project, like real estate and privatized public infrastructure construction is that it needs a
huge investment of funds in the expectation of a stream of benefits extending far into the future.
The success of such a project, to a great extent, depends upon the feasibility study.
The objective of feasibility study, invariably, is to analyze the factors affecting the viability of a
project and to present the findings with recommendations in the form of a project feasibility
report for implementation. A feasibility report forms the basis for the investment decisions made
by the project promoters, for the support extended by the financial institutions, for the clearance
given by the appropriate approving authorities, and for giving an insight to the project manager
into the techno-economic basis on which the project is approved.
B.2 Analysing Factors Affecting Project Feasibility
The factors influencing the feasibility vary with the nature of the project, e.g. the risk factor in a
privatized infrastructure five years' duration road project is far more dominant than that in
two-year duration lump-sum road construction contract. The typical factors considered in the
feasibility study of a business related construction project, like real estate development and
privatized infrastructure construction, are given below:
Market analysis.
Technical and ecological analysis.
Financial and economic analysis
The analysis of factors generates enough information to select the most appropriate course of
action for implementing the project, if feasible.
B.2.1 Market Analysis. This is concerned primarily with the aggregate demand and market
share. The market analyst requires a wide variety of information and appropriate forecasting
methods. These include:
Sales trends in the past and the present sales level.
Past and present supply position.
Competition.
Cost structure.
Consumer behaviour, intentions, motivation, attitudes, preferences and requirements.
Distribution channels and marketing policies in use.
Administrative, technical and legal constraints.
B.2.2 Technical Analysis. This seeks to determine whether the pre-requisites for the successful
commissioning of the project have been considered and reasonably good choices have been made
Appendix B
with respect to location, size, process etc. or not. The important aspects considered in technical
analysis are:
Preliminary investigations, tests and pre-feasibility studies already done.
Conceptual design and specifications.
Layout of the site, buildings and plant.
Construction methodology.
Availability of manpower, raw materials, power and other inputs.
Equipment and machines required.
Necessary auxiliary equipment and supplementary works.
Pollution control measures.
Work schedules.
Approximate cost breakdown.
B.2.3 Financial Analysis. This ascertains whether the proposed project will be financially
viable in the sense of being able to meet the burden of servicing debt and whether the proposed
project will satisfy the return expectations of those who provide the capital or not. The aspects,
which have to be looked into while conducting financial analysis, are:
Cost of project.
Investment outlay.
Break-even point.
Cash flows of the project.
Projected financial position.
Risks analysis and contingencies.
Projected profitability.
A business related project is considered profitable if:
Net present value (NPV) > 0
Payback period (PBK) < Target period
Internal rate of return (IRR) > Cost of capital
Accounting rate of return (ARR) > Target rate
Benefit-Cost ratio (BCR) > 1
The projected profitability analysis methodology is covered in Appendix L.
B.3 Feasibility Report
Several institutes have published feasibility study guidelines. These institutions include UNIDO
Geneva, the World Bank, Industrial Development Bank of India (IDBI), Planning Commission
and so on. The contents of a typical feasibility report include the following heads and each of
these heads is supported with data:
1. Project background and mission statement.
2. Market demand, where applicable.
3. Project description and location.
4. Scope of work and design feature.
5. Resource inputs required and sources of supplies.
6. Project organization.
7. Implementation schedule.
Appendix B
8. Capital cost estimate.

9. Cash flow and sources of funding.
10. Cost benefit analysis.
11. Risks analysis and contingencies.
12. Profitability analysis.
13. Conclusion.
Feasibility studies consume time. In large-sized projects, undertaking a feasibility study may
become a project in itself. A project manager may or may not be associated with the feasibility
study but it is important that he understands how the project was conceptualized, analyzed and
evaluated prior to a go-ahead decision.
Appendix C
SIZING PROJECT WORK PACKAGES

Appendix C
C.1 Importance of Work Packages
Work packages (WP) form a common base for linking the key functions in project management.
In the project master plan or the contracted works control plan, each work package is assigned
its performance objectives. These are generally stated in terms of its completion period, standard
cost, resource productivity standards and the standard sale price. A project team uses
work-packages as the common database. The work package duration forms the basis for the time
planning and scheduling of the project work. Detailed information about the resources such as
men, materials and machinery needed for the execution of each activity in a work package
enables the preparation of resource forecasts. The work package sale price and the production
cost is used to determine the income and cash-flow forecasts. The measure of performance thus,
gets closely linked with the execution of its work packages. The work package concept, thus,
leads to a simple project management theory, i.e. use work packages as the base for designing,
estimating, planning, scheduling, organizing, directing, monitoring, communicating and
controlling projects. Sizing and defining the work contents of a work package is of prime
importance in project management
C.2 Factors Affecting Sizing of Work Packages

By definition, each work package contains an identifiable, quantifiable, costable, measurable,
sizeable, assignable and controllable package of work. But there is a wide gap in its size and
development methodology as it has no single solution. However, the following factors should be
considered while defining and sizing a work package:
Identifiable. It is the smallest identifiable independent work element in which work can be
executed with the least interference from the preceding and succeeding work packages. In
general, each work package consists of identifiable and quantifiable inter-dependent activities,
which consume time and, possibly, resources.
Quantifiable. A work package, generally, consists of more than one activity. In the case of a
multi-activity work package, each activity has its own unit of measure which, in some cases, is
related to the bill of quantities. It is necessary that a work package should be expressible in one
unit of measure, say length, area or volume, so that its performance can be measured. In case it
is not possible to define its unit of measure, then its work content should be further divided into
more than one package, each becoming a work package.
Costable. Each work package consumes resources. Its cost is the sum of the costs of the
activities consisting the work package. The cost of executing a work package, while working
efficiently under normal conditions, is termed as the standard work package cost and it forms the
building block for planning, budgeting and controlling project costs.
The smaller the size of the work package, the lesser is the margin of error in estimating the time
and cost. The estimation errors, whether positive or negative, usually reduce the margin of errors
when considered collectively.
Appendix C
Measurable. In contracted projects, the sales prices for various items of work are fixed and
these are listed in the bill of quantities (BOQ). The sale price in the BOQ, is generally expressed
in the units of the work item. But for forecasting and monitoring the work done , it is necessary
to compute the sale price, preferably activity-wise. This computation is carried out by
developing a correlation between each work item and activity by breaking down an item of work
into activities, or sub-dividing an activity into items of work, as the case may be.
Example No. 1. Illustrates splitting up the sale price of the Bill of Quantities (BOQ) work item
into work package sale price.
Consider a BOQ item representing Concrete M 25 in the plinth-wall of a module of a building of
the repetitive type residential building construction complex. This work item can be broken
down into sale prices of connected activities of the work package as under:
BOQ
Activity
A-5 Bitumen painting

A-11 Reinforcement fixing
Qty. Unit Rates ($)

362 SM
-
Amount ($)
2.45
886.90
Included in raft work package
A-8 Shuttering
485 SM
A-8 Concreting
43.7 CM
163.50
7144.95
A-8 De-shuttering
A-8 Curing
8031.85
Total ($)
Standard unit sale price of work package of the plinth-wall expressed in work unit of CM
concrete poured works out to be $ 8031.85 / 43.70 = $ 183.80 / CM
Example No.2 - Shows the determination of sale price of work package for the construction of
ground- floor-slab of one module from given BOQ work item.
BOQ
Activity
Qty.
Unit
Rates ($)
Amount ($)
A-5
Bitumen painting
319
SM
2.45
781.55
A-2
Back filling
120
CM
5.00
600.00
A-5
Plinth filling
305
CM
20.00
6100.00
A-4
A-4
172
SM
7.50
1290.00
A-6
Polythene sheeting
225
SM
1.00
225.00
A-9
Shuttering
11
SM
A-10 Weld mesh laying
0.651 TON
A-9
Concreting
28.34
A-9
Curing
Total ($)
Included
1518.10
988.28
CM
163.5
4633.59
14618.42
Sale price of work package for the construction of ground-floor-slab in work units of CM
concrete works out to be $ 515.82/CM, i.e. 14618.42 divided by 28.34.
Sizeable. A small-sized work package is beautiful, but there is a limit. A work package must be
reasonable in size, so that it can be assigned to a single supervisor. As far as feasible, it should
comprise of one large-sized group of sequentially interacting activities. Further, it should not
Appendix C
contain too many activities independent or parallel, requiring a suitably grouped team of workers
for each activity, as this will increase the foreman's span of control and adversely affect the
internal cohesion. As a rough guide, the package size can be kept within 0.25% to 5% of the cost
of the project and, in the case of non-repetitive work, the time duration for the construction work
package could generally be kept between one to five progress reporting periods.
Assignable. Organizationally, a project is divided into a number of construction responsibility
centres or cost centres. Each of these centres is allocated resources and assigned targets,
expressed in terms of work packages. Each cost centre is further divided into work centres. Each
of these work centres consists of one or more work packages. Each work centre is assigned
targets to be achieved and is allocated resources to accomplish the targets. The work package is
the lowest level which can be assigned to a single person. If the work package is large in size,
then it must be re-defined to enable a single supervisor to be its head. If it is not possible, then a
single person may have to be nominated to oversee the tasks.
Controllable. The project performance can be best measured and controlled in terms of work
packages. The smaller the size of a work package, the greater is the precision in measurement
and controlling of performance.
C.3 Re-sizing Work Packages
The size of a work package should be determined after considering the factors given above. If
the work under consideration does not fulfil most of the above criteria, then it should be further
decomposed into more than one work package, if necessary, so as to be able to:
Identify the physical accomplishment of a work item.
Avoid overlapping from the preceding and succeeding work packages.
Reduce the parallel activities.
Minimise the sequential inter-dependent activities.
Further improve the time and cost estimates.
Enable one person to supervise the work package.
Eliminate time-breaks, if they occur in the execution of sequential activities.
Reduce the variations in the type of resource needed for execution.
Separate the quality acceptance criteria.
Conform to the contract bill-of-quantity measurement unit.
Appendix D
PROJECT DURATION ASSESSMENT USING MONTE CARLO

SIMULATION TECHNIQUE
Appendix D
D.1 Introduction
Monte Carlo simulation technique uses the model of a system to analyse the behaviour of a
system. In simulation analysis, the project network model is given the large number of sets of
random inputs within the specified probability distribution of each activity, and the output is
then statistically analysed to determine the probabilities of various project completion time
schedules.
D.2 Concept
Consider a construction contract pretender stage, where the preparation of the tender involves
the following three concurrent activities:
Code
Activity duration
A Preliminary design
B
Site investigation
C Preparation of bid documents
Assessed duration
55 days
60 days
50 days
Based on the one-time duration estimate, the site investigation activity B is critical and is
expected to take 60 days. However, after considering various risk factors, the team reviews the
one-time estimate and arrives at the following results using PERT, which indicates the
completion period as 61 days with a 50% probability of completion.
Activity
A
B
C
Optimistic
Time
50
50
45
Most Likely
Time
55
60
50
Pessimistic
Time
65
75
70
Expected
Time
56
61
50
The above case, when simulated 10 times with randomly selected inputs, shows that the
completion period works out to be 66 days with a 50% chance of completion, i.e., 6 days more if
one-time (most likely estimate) is used and it is 5 days more if three-time estimate (PERT) is
used. The 100 iterations simulation gives assessed duration as 63 days with 50% probability of
completion.
COMPLETION ESTIMATION FOR TENDER PREPARATION
Appendix D
Duration
Iteration No.
1
2
3
4
5
6
7
8
9
10
Expected
Mean
Assessed Manually Using Simulation Technique (10 iterations)

Activity A Activity B
Activity C Completion
50-55-65
50-60-75
45-50-70 Time
Ra
62
57
55
60
65
50
52
58
51
61
Rb
71
58
67
55
60
63
57
72
73
51
Rc
48
65
59
49
52
58
47
56
53
69
71
65
67
60
65
63
57
72
73
69
66.2 with
50% Probability
The results obtained using different techniques are summarized below:

Activity duration
Technique
Completion time (days)
basis
60 with deterministic
CPM
most likely time
estimate
PERT
three-time estimate 61 with 50% chance
Monte Carlo (10
iterations)
Monte Carlo (100
iterations)
The 10 simulated iterations, given above, demonstrate that for project time scheduling, PERT
estimates need further refinements. The Monte Carlo simulation process (say, with more than
1000 simulation) gives a better estimation of the project completion time. It needs a computer to
simulate the model understudy in the Monte Carlo technique, say by 1000 a times, to determine
a real life solution to a network having varying activity duration probability distribution.
D.3 Activity Duration Probability Distribution Function
The duration of an activity, which forms the basis of network time analysis, is an estimate. The
changes in estimates are inevitable due to uncertain future. Probability provides a yardstick to
measure the uncertainty.
Histograms constructed from small sample measurements do not show the exact pattern of the
population. If the number of supervisors estimating the activity duration is large, with relative
frequency plotted along ordinate axis and time against abscissa, the histogram will show more
and narrower rectangles. If the size of sample is made infinite, this discrete distribution will
approach a smooth curve profile. In Monte Carlo technique, each activity is assumed to have a
probability distribution pattern (i.e. a profile) for its duration. If by suitable choice of scale of
axes, the area under the curve is made unity, the resultant figure is called a probability
distribution. The probability concept uses this scale that runs from 0 to 1. In probability
distribution, zero represents the impossible situation and one depicts the almost certain case.
The divisions in-between represent the varying degree of likelihood.
Appendix D
The method of fitting of a distribution based on a set of data are covered in the standard books in
statistics. There are computer programs available which can determine the probability
distribution function. But in practice the selection of an appropriate input distribution is based
on the estimator's perception of the range and probability of the likely outcome. Such
distributions should be relatively easy to understand and simple to determine. For these reasons,
the simple distributions pattern like uniform distribution, triangular distribution, binomial
(trapezoidal) distribution, gamma distribution and exponential distribution and normal
distribution are considered adequate for project time estimation.
A probability distribution gets defined when its equation, mean and standard deviations are
known. In PERT, three-time estimate of the activity duration is assumed to follow beta
probability distribution, with standard deviation as one-sixth of the difference between
pessimistic and optimistic times (Note Beta distribution requires more than 3 points to define the
distribution, and as such, it cannot be simulated using Monte Carlo Technique). In triangular
distribution three-time estimate, the two extreme values are defined as percentage (or numerical
value or percentile) with respect to most likely time (say minus 5% and plus 15% of most likely
value) rather than the end points of the beta distribution. The mean and variance of a project
probability distribution are derived (as in PERT), and these are used to compute the probability
of meeting arbitrary selected scheduled completion time or determining the probability of
meeting the given scheduled duration without crashing the project.
D.4 Methodology
The Monte Carlo simulation for estimating probable project completion time follows the
procedure given below:
Develop the network model.
Assess the probability distribution (uniform, triangular or trapezoidal) for the duration of
each activity.
Generate a uniform random number on the interval (0-1). Such data can be extracted from
random tables or can also be calculated manually (refer books on Statistics or Operations
Research). Random numbers can also be generated by computer.
Transform the random number to a random variant conforming to the activity duration
probability distribution, using relationship as explained in the examples given in
subsequent paragraphs.
Incorporate the random variant for the duration of each activity in the network model.
Time analyse the network to determine critical activities and project completion time.
Store this output data for further statistical analysis.
Run the above process, number of times, using different random numbers.
Analyse the stored output data of each iteration to determine project probability
distribution, its mean value and standard deviation.
The project probability distribution with its stored data, is then used to identify criticality
Appendix D
probability of activities that will be critical to project completion. This enables estimation of:
the probability of completion of a project on a given date, and
the probability of occurrence of a given scheduled event.
D.5 Examples
The procedure for the application of Monte Carlo technique for time scheduling of a project is
illustrated in subsequent examples using a simple network model drawn below with varying
activity duration distribution patterns:
D.4.5.1 Example Using Uniform Distribution
Formulae
Random number at x = R = Area of probability distribution at x = x h 'h' is the height of
rectangle represented by uniform probability distribution.
Random variant at x = R / h , within the range L ~ U
Since total Area of probability distribution = h( U L ) = 1
Therefore, expected duration at x = X = L + x = L + R ( U L )
Consider the model network given above with activities having durations that follow uniform
distribution pattern as tabulated below:
Activity
Assessed Duration
Minimum (weeks)
Assessed
Duration
Maximum
(weeks)
A
B
C
12
10
12
16
15
20
Expected
Duration
X=L+R(UL
)
12 + Ra (16 12)
10 + Rb (15 10)
12 + Rc (20 12)
Appendix D
D
E
F
6
8
7
10
14
12
6 + Rd (10 6)
8 + Re (14 8 )
7 + Rf (12 7)
Where,
Ra, Rb, Rc, Rd, Re and Rf, are the random number in an iteration.
For example, if in an iteration Ra = 0.26, then expected duration of Activity A
Xa = 12 + 0.26 ( 16 - 12 ) = 13.04
The result of 10 iterations used for determining expected activity durations with
probabilities selected at random using statistical tables, are given in Table D 4.4.
Table D4.4. UNIFORM DISTRIBUTION
Manually Using Simulation Technique (10 Iterations)
Blue colour shows critical activities and the percentage of an activity becoming critical can be
calculated from this table. For example, chances of activity A becoming critical are 4 out of 10
i.e. 40%.
D.4.5.2 Example Using Triangular Distribution by different methods
Duration probability distribution
Appendix D
Formulae1; when L < X < M,

Random number = R = Area of probability distribution at x = R = x h ....................1
But H (U L) = 1, and h / H = x / ( M L)
Eliminating H, h ( U L ) = x / ( M L)(2).
From (1) and (2), Random variant = x =
Therefore X = L + x = L +
, where 0 < R <
Formulae-2: when M < X < U

Random number = R = Area of probability distribution at x = (1 R ) = (U x ) h . ( 1)
But H ( U L ) =1 , and h / H = (U x) / (U M)
Eliminating H, h (U L) = (U x) / (U M) ...................................................2
From (1) and (2), Random variant = x =
Therefore X = U
where
< R < 1.
Considering formulae 1 and 2 above, it can be deduced that for R between the interval (0,1) :
If R <
, Set X = L +
If R >
, Set X = U
Consider the model network given above with activities having three time duration estimate that
follow triangular distribution pattern as tabulated below:
Activity
Assessed Duration
Assessed Duration
Assessed Duration
Appendix D
Minimum ( weeks)
12
Most likely (weeks) Maximum (weeks)

14
16
10
12
15
12
18
20
10
12
14
12
The graph given below shows the probability of the activity becoming critical in Monte Carlo
and PERT.
D4.6 Risk in Assessed Project Completion Time

Risk is the possibility of economic or financial loss or gain, physical damage, injury or delay as a
consequence of the uncertainty associated with pursuing a course of action. It signifies a
situation where the actual outcome of an activity or an event is likely to deviate from the
estimated or forecast value. Risk consequences due to delay in the project completion do have
financial implications. It can attract heavy penalty or a loss of goodwill. The contractor may
loose a contract in the offing. He may miss the bonus for early completion. He may fail to
transfer resources planned elsewhere. All of these have financial bearing and the financial loss in
each case can be determined by the concerned stakeholder.
Risk has three components:
A situation leading to an event, the occurrence of which is likely to deviate

from the estimated or forecast value.
The probability of occurrence of that event.
Monetary consequence of that event i.e. loss or gain.
Appendix D
A risk value is mathematically quantified by multiplying risk consequences with the probability
of its occurrence.
Risk value = Probability of occurrence of risk x Risk consequences.
CPM and PDM are being widely used for assessing project duration. These network techniques
use one time duration estimate and focus on deterministic critical path. It makes these
techniques static as they do not indicate probability aspect, which measure the risk.
PERT is a valuable tool that can be used to determine probability of completion of the project on
varying dates. For example, assuming Z days correspond to 50% probability of completion and
the project normal distribution having s standard deviation, the probability of variations from the
project planned completion date (Z) can be determined from the table given in Illustration 4.11.
The frequently used data is given below:
Likely Completion Period
As planned within
Z days
Probability %
50.00 %
Within exactly
days after Z
84.13 %
Within exactly
2s
days after Z
97.73 %
Within exactly
3s
days after Z
99.865 %
Within exactly
days before Z
15.87 %
Within exactly
2s days before Z
2.28 %
Within exactly
3s days before Z
0.135 %
Unlike PERT where the activity duration follows beta distribution, the Monte Carlo can take
duration of activities with varying probability distribution patterns. PERT deals with unique
critical path(s) whereas Monte Carlo projects a number of paths which can become critical.
Unlike PERT where the critical activities do not change, Monto Carlo gives an unbiased
estimate of the mean and variation of the project duration along with the degree of criticality of
each activity. It considers the probable range and pattern of duration of each activity to
determine its probability of appearing on critical path. This information enables forecasting
probability of project completion on a given time schedule and to decide the acceptable risk
level while developing the project master schedule.
Appendix E
PROJECT TIME-COST TRADE-OFF TECHNIQUE

Appendix E
E.1 Time-cost Relationship
Project time and cost are inter-related. The project cost function shows the relationship of the
cost versus the completion time. Its ordinate represents the cost and the abscissa has a time
scale. In the formulation of the project cost function, the direct and indirect costs and the
financial gains resulting from early completion are considered.
The project time corresponding to the minimum value of the cost function gives the most
economical duration of the project. The project cost curve also gives the minimum cost of
reducing the project duration from its optimum (economical) completion time. All crash points
correspond to the maximum time crashing possible. In addition, it provides a ready reckoner for
assessing the changes in cost with varying project duration and resulting critical activities.
E.2 Concept
The basic concept behind the formulation of a project time-cost function is that the normal time
duration of an activity is based on considerations of normal cost, using an efficient or desired
method of performance of the activity. Each activity is considered in isolation, while working
out its normal time and normal cost. The reduction in duration below the normal time by a
changed method of execution implies an increase in the cost. There will also be a stage beyond
which the activity duration cannot be further reduced. The lower limit up to which an activity
time can be reduced, is called the crash time and the corresponding cost is referred to as the
crash cost.
Appendix E
The difference between the normal time and the crash time of an activity indicates its potential
to undergo crashing. The slope of the activity cost function shows the rate of increase of cost,
with the reduction in time for the activity.
Crashing potential of an activity = Normal time Crash time.
There are a number of ways of reducing the activity duration from the normal time and these
will depend upon the activity under consideration. The most common methods of time reduction
are as follows:
Increase the resources allotted and/or work overtime.
Change the mode of execution/performance of an activity, say from the manual method to
the mechanical method.
In some cases, the use of several methods of performance of an activity may give a non-linear
relation between the activity time and cost, but with a view to simplify the calculations in the
formulation of the project cost function, it is assumed that the portion of the curve between the
normal point and the crash point is linear.
The procedure for plotting the project cost-time function is:
Time analyse the network and determine the critical path.
Tabulate the normal and crash duration and normal and crash cost for all the activities.
Estimate the activity crashing potential for each activity.
Determine the rate of crashing of all the activities.
Crash critical activities beginning with the activity having the least rate of crashing. Each
activity is shortened until its crashing potential is exhausted or a new critical path is
formed. If a new critical path is formed, reduce the combination of the critical activities
having the combined lowest rate of crashing and continue till there is no more scope for
crashing.
6. At each crashing, incorporate the cost implication in a table.
7. Add direct cost, indirect cost and saving for early completion, date-wise and tabulate their
commutative effect. Aggregate the cumulative effects of direct and indirect costs and the
savings for early completion.
8. Plot the data thus obtained by selecting a suitable scale with time along the abscissa and
cost along the ordinate axis. The lowest point of the project cost curve indicates the lowest
cost and the corresponding optimum completion time.
1.
2.
3.
4.
5.
E.3 Plotting Project Cost-Time Function
Appendix E
The procedure of preparation of the least cost schedule is illustrated with the example of a
simple project. The network, the activity cost data, assessed crashing costs and their crashing
potential are as shown below. In the given example, the indirect cost at $500 per week and the
anticipated cost for early completion is $800 per week:
1. Time analyse the network and determine the critical path.
2. Tabulate the normal and crash duration and normal and crash cost for all the activities.
Estimate the activity-crashing potential for each activity.
The Assessed Crashed Costs and the Crashing Potential for a Project
S. No. Activity
Duration in Weeks
Normal
4
Crash
2
Cost in $
Crashing Potential
Normal Crash
4000
7000
in weeks
2
3000
4000
2000
2000
2000
5000
2000
4000
1000
1000
3000
8000
3000
5000
2000
3000
3. Determine the rate of crashing of all the activities
Appendix E
Determination of the Rate of Crashing

S. No. Activity Crashing Potential
Rate of Crashing in $
1
A
2
1500
2
1000
1500
2000
5000
2000
1000
4. Crash critical activities beginning with the activity having the least rate of crashing.
Each activity is shortened until its crashing potential is exhausted or a new critical path is
formed. If a new critical path is formed, reduce the combination of the critical activities having
the combined lowest rate of crashing and continue till there is no more scope for crashing.
Activity
A
B
Lowest Rate of Crashing

Crashing Potential
Rate of Crashing in $
2
1500
1
1000
First crashing. With the crashing by one week of Activity B, the cost of the project increases by
$1,000 and the revised project duration works out to be 9 weeks.
Second crashing. Scrutiny of the network after the first crashing reveals that there are two
Appendix E
critical paths. Further, reduction means that the sum of the durations of the critical activities
along each critical path be reduced by one week. The total increase in the cost for crashing the
project duration from 10 weeks to 8 weeks is $2,500, i.e. cost of crashing Activities A and B
each by one week.
Third crashing. The number of critical paths increase after the second crashing. The various
ways of reducing the project time during the third crashing are utilized and the revised duration
of the activities for 7 weeks completion time is given in the network drawn below.
Determining Course of Action of Reducing Project Time During
Third Crashing
Options
1
Affected Activities
A&D
Cost of Crashing in $
1500 + 1500
= 3000
E, G & J
2000 + 5000 + 1000
= 8000
E, G & H
2000 + 5000 + 2000
= 9000
A, E & G
1500 + 2000 + 5000
= 8500
D, G & J
1500 + 5000 + 1000
= 7500
Fourth crashing. Proceeding similarly, it can be easily verified that although all the activities
are critical, there is still room for crashing. It may be noted that after the fourth crashing,
Appendix E
although activities E and H can be reduced, further crashing of all the critical paths is not
possible. Therefore, the fourth crashing becomes the final crashing.
5. At each crashing, incorporate the cost implication in a table. The network, after its fourth
crashing, shows the duration of the crashed activities and depicts the network plan of the least
cost of the project.
6. Add direct cost, indirect cost and saving for early completion, date-wise and tabulate
their commutative effect. Aggregate the cumulative effects of direct and indirect costs and the
savings for early completion.
Activity
Reduction Rate of
Possible Crashing
Project Duration in Weeks
1500
1000
1500
2000
5000
2000
1000
Crashing Cost Per Week

No
First Second Third Fourth
Crash Crash Crash Crash Crash
9
10
11
12
13
1500
1500
1000
1500 1500
5000
1000
Crashing cost
1000
1500
3000 7500
Cumulative crashing cost
1000
2500
5500 13000
Normal cost
22000 22000 22000 22000 22000
Indirect cost
5000 4500
Total cost
27000 27500 28500 31000 38000
4000
3500 3000
Appendix E
Gains for early completion
800
1600
2400 3200
Net financial effects
27000 26700 26900 28600 34800
Project duration in weeks
10
7. Plot the data thus obtained by selecting a suitable scale with time along the abscissa and
cost along the ordinate axis. The lowest point of the project cost curve indicates the lowest
cost and the corresponding optimum completion time. The optimum duration for the project
under consideration comes out to be 9 weeks and its optimum cost works out to be $267,000.
Time-Cost Trade-Off Function
Cost in 000'$
E.4 Time Crashing

The project cost curve, which shows the pattern of the cost variation with time, provides a ready
reckoner for assessing the increase in cost for a given project duration. All crash points
correspond to the maximum time crashing possible. The crashing cost can be determined from
Appendix E
the project cost curves. In addition, the tabulated data gives the information regarding the
corresponding critical activities and their revised duration.
To quote an example, the implications of completing the project in 7 weeks are:
(a) The increase in cost for the optimum completion period is given as:
Estimation of economical cost for 9 weeks completion
Assessed cost for 7 weeks completion
Increase in cost due to crashing by 2 weeks
= $26,700.00.
= $28,600,00.
= $1,900,00.
(b) The revised durations of the critical activities are shown in the network drawn
after third crashing and the increase in the cost of affected activities are:
Critical Activity
A
B
D
G
J
Increase in Cost in $
3,000.00
1,000.00
3,000.00
5,000.00
1,000.00
c) The revised network shows that all the activities have become critical, This implies stricter
control during the execution.
Since all the activities are on the critical path, the optimization of resources during scheduling
also becomes difficult.
E.5 A Word of Caution
There are many gains which can be achieved by the early completion of the project. The early
project completion can yield added revenue, early release of capital and facilities and, in some
cases, can save idle time expenses of machinery. The non-financial gains can be earning
goodwill, boosting of reputation and raising of morale.
But the technique of minimizing the cost by crashing of activities, although mathematically
feasible, as explained, has a great many inherent practical difficulties. One of the main reasons is
that it is not possible to predict the activity cost-time data accurately. In addition, the advantage
gained by economizing the project cost is nullified by the fact that optimization of resources
becomes extremely difficult, resulting in increased cost and resource wastage.
Lesson 6 Appendix
DECISION NETWORKS ANALYSIS

Appendix F
F.1 SCOPE
In a system, decision implies commitment to an action. Decision making involves defining the
objective, formulating the alternate courses of action, developing the model, evaluating the
alternatives and finally selecting the best course of action for implementation.
Decision network is a graphic model of decision environment. It structures alternate strategic
options or courses of action, where each action is followed by an outcome or a chance event
termed state resulting in conditional returns (benefits or losses), which in turn influence the next
decision. The decision network is analyzed to determine the optimal strategy or course of action
that best achieves the defined objective. In decision networks, it is assumed that the adjacent state
is independent of how the state previous to taking action was reached.
The spheres of application of the Decision Network Analysis techniques in project management
are vast and varied. It includes decision relating to market strategy, investments, project selection,
production planning, manpower planning, material procurement, inventory planning, vehicles and
plant forecasting, equipment replacement and investment appraisals. Some of these applications
are illustrated with examples in the subsequent sections.
The text in this Appendix is divided as under:
Types of decision network analysis techniques.
Decision networks.
Decision tree.
The rules for making decisions are covered in Appendix O.
F.2 TYPES OF DECISION NETWORK ANALYSIS TECHNIQUES
Decision Network is a generic term. There are two types of decision network analysis techniques.
These are openended Decision Tree analysis, and, the framedstructured Decision Network
where the model is developed in relation to horizontal and vertical axes. Each type of decision
network analysis technique is further divided into deterministic networks and probabilistic
networks.
Lesson 6 Appendix
To quote an example, the decision network and decision tree models of a decision situation faced
by a Readymix Concrete Company , which aims at maximizing profits, are shown in sections of
this Appendix.
The decision network technique and the decision tree technique, both aim at determining the
optimal course of action but have different models. The decision network technique is better suited
for real life complex problems than the decision tree technique. In fact, decision tree is a particular
case of a simple decision evaluation problem in which the network takes the shape of a tree with a
few branches. But when the branches multiply, the decision network presents a compact model.
The situation under which the sequential decisions are modelled may present information, which is
either deterministic or probabilistic.
Deterministic decision networks represent situations where a decision maker makes the decision
under assumed certainty. In these networks, there are no probabilities assigned to the state of
nature. These networks have deterministic action plan, in which a decision maker can determine
the outcome of his actions.
In probabilistic networks, the choice of action plan is influenced by the expected values, which are
determined by summing up of the products of expected outcome (or payoff) with the probability of
occurrence of the outcome. When the reasonable probabilities of outcome in the judgement of the
decision maker cannot be evaluated, the situation is said to be operating under uncertainty. The
approach for making decision under uncertainty is covered in Appendix O.
F.3 DECISION NETWORK ANALYSIS
F.3.1 Elements of a Decision Network
A decision network consists of circles symbolizing the events or the changing states of the system,
and arrows denoting the courses of action by which these states are affected. The numerical value
of the outcome of an action, termed return, is written above the action arrow. A stage represents
the transitional interval between the present and the adjoining state.
S.No
Element
Representation
1.
State of the system
Circle
2.
A course of action
3.
Return
4.
Stage
Arrows in forward direction. Action numbers are

written inside the rectangle.
Return value shown on the arrow culminating into
an adjacent state.
Transition interval between the present and the
adjoining state.
Symbol
Lesson 6 Appendix
The chains of action, in a decision network are connected logically with the states and the states
are correlated to the stages of their occurrence and these are depicted in relation to a framework of
vertical and horizontal axis representing state levels and stages in the system respectively.
The above decision sub-network shows that in the present month, the ware-house is full.
Thereafter two courses of actions are open. These are :(a) Course No.1. Keep the ware-house full till next month and do not sell the stores. This will
involve expenditure of 2 units.
(b) Course No. 2. Sell the stores within this month. This course will result in a return of 3 units, but
the ware-house will be empty next month.
Notes
State: A state depicts the nature of the start or termination of an action. The existing state, after an
action, moves to the adjacent state, e.g. from a ware-house full with stores, if the stores are
moved out after sale, it can be said that the selling of stores (an action) has resulted in changing
the state of the ware-house from full to empty state.
State is represented by a circle. In decision networks, the pattern of changing states of a system is
always represented along vertical axis, whereas in the decision tree technique it moves from start
to finish, i.e., from left to right.
Action: The action changes the state and is depicted by an arrow connecting the previous state
with the adjacent state. A rectangle or a square is drawn close to the tail of the action arrow.
Various courses of action are labelled numerically and each action number is written inside the
action rectangle /square.
Stage: It is the transitional phase or an interval that marks the movement of a system from one
state to the adjacent state. For example, the time interval between the two states corresponds to a
stage of the system. In decision network, stage is represented along horizontal axis.
Return: The return represents the yield such as profit, cost, consumption, or distance; resulting
from a given action which changes the state. The return in numerical value is written above the
arrow / branch, in between action rectangle /square and the adjacent state circle.
Lesson 6 Appendix
Payoff: It denotes the benefit that accrues from a given combination of a decision alternative and
the state of a system.
Optimal Decision: It implies selecting the most suitable chain of course of action that aids in
achieving objectives. This chain, representing the course of action, is identified by analyzing the
decision networks, usually following rollback ( backward pass) method.
F.3.2 Decision Network Modelling and Analysis Procedure
It is as follows:
(a) Define the objective of a decision process. It can maximize or minimize the effect of the
decision. Example maximize profits.
(b) Develop the alternate course of action.
(c) Model the decision network (process) using standard symbols.
(d) Assign returns and investments to each of the branches, as applicable.
(e) Analyze the decision network by rolling back (backward pass method).
In succeeding Sections, the above procedure is illustrated with examples of deterministic and
probabilistic networks.
F.3.3 Deterministic Decision Under Assumed Certainty
In deterministic decision networks, there are no probabilities assigned to the state of nature. In
such cases, the decision maker is operating under conditions of assumed certainty. For example,
while evaluating income from various alternatives for investment of money, a decision to purchase
bonds of a Government backed commercial bank, in which a decision maker can assume with
fair accuracy the outcome, represents a case where a decision maker has made the decision under
assumed certainty.
Example of maximizing return in ware-housing a product. The management is faced with a
problem as to whether to keep a ware-house full or empty with a perishable product having two
months life. In the present month, the ware-house is full. Thereafter following courses are open:
Action No.1. Do not sell the stores now and sell them next month. This will involve
expenditure of 1 unit but the sale in the beginning of next month is likely to give a return of 3
units.
Action No. 2. Sell the stores within this month. This course will result in a return of 2 units, but
the ware-house will have to remain empty thereafter.
Action No. 3. Sell now from the full state and later (during this month) buy fresh stock to keep
the ware-house full for the next months sale. This course will result in a net return of 1 units
during the first month, but the sale in the beginning of next month is likely to give a return of 3
units.
Management has also decided to discontinue the trading of the present product and market another
product after two months.
The decision network of this simple problem is given below:
Lesson 6 Appendix
The rollback analysis shows that the Action No. 3 followed by Action No. 1, is the most profitable
option and it yields a return of 4 Units. Note that all states and actions are labelled for reference
purposes.
Maximizing Profit in Production Planning. A construction company is to construct buildings
out of three types of houses designated as A, B and C for a property dealer. The indenter wants at
least one of A type house and he wants total value of order not to exceed $ 28,000. The
construction company assessment of cost and profit is shown below:-
PayOff Matrix
Houses types
A
B
C
Sale price ($)

each
10,000
9,000
6,000
Profit ($)
one each type
1100
800
400
Profit ($)
two each type
2300
1700
900
Profit ($)
three each type
Not feasible
Not feasible
1400
The various options within the budgeted cost of $28000 are:
Option 1. Build
Option 2. Build
Option 3. Build
Option 4. Build
2A + C,
A + 3C,
A + 2B,
A + B +C,
Value $26000
Value $28000
Value $28000
Value $25000
It is a simple problem in decision-making. By forming various combinations, the alternatives can

be evaluated easily and the option which gives the maximum profit can be decided. In this
example, types of houses in the decision network are shown along horizontal axis. The decision
network for the situation faced by the contracting company is shown below:
Lesson 6 Appendix
The ordinate represents the state of supply order and abscissa shows the stage after a particular
product is earmarked for supply. Stage zero of abscissa corresponds to the initial state showing
zero supply. From the above, it is evident that the supply one of A and two of B is the most
profitable one and it yields a return of 2800. This optimal decision is evaluated by finding out the
longest path using roll back computation. Roll back is the backward analysis method used in
decision networks to determine the optimal course of action. It involves working from the
end-point to start-point in the network.
Note. If the objective of the problem is to minimize a given system then shortest path analysis is
determined instead of longest path analysis.
Minimizing Manpower Cost. A contracting company engaged in pipe laying in a refinery project
needs high precision welders. The schedule requirement of the project is as under:Month
Welders
Jan
Feb
Mar
Apr
May
The company has 5 regular welders. The management after due appraisal has evaluated the
following information:(a) The cost of moving in welders from outside to the worksite is SR. 1000 and SR. 1500 for one
and two welders respectively. The transfer out of each welder from work site costs the
company Rs.1000/-. It is not feasible to induct more than two welders at a time from the level
existing on the previous month.
(b) All transfers to the worksite generally take place on the last day of the month and the men are
effective from the next day.
(c) Cost of having surplus precision welder at site is SR. 500/- per month as the spare precision
welder can also be used for normal welding purposes.
(d) Existing welders can be put on overtime but due to precise nature of work overtime must not
exceed the equivalent of one welder per day, i.e., SR. 1500/- per month.
Lesson 6 Appendix
The company wants to evaluate the move plan in and out of work site for mobilizing welders
which shall minimize the companys total cost but at the same time assure that the requirement of
welders are met.
Solution
In the initial stages in January, five welders present at site are adequate and hence no action is
required to be taken during this month. Number of welders required from the start of February to
May varies. There are number of courses open for mobilization of welders at various stages. These
courses of action with implications are tabulated below:
Options
S.
No.
1.
2.
3.
4.
5.
6.
Code
Course of Action
Expenses in SR.
N
O
A
B
C
D
No additional welder required

Overtime work
Transfer in 1 welder
Transfer in 2 welders
Transfer out one welder
Transfer out two welders
0
1500
1000
1500
-1000
-2000
In the decision network, the varying manpower state is scaled along vertical axis and the monthly
stages are shown on horizontal axis. The decision network for various courses of action involved
in the mobilization of manpower with cost involved is drawn below, shortest path is shown in
bold lines and circles:
Since, the problem relates to minimizing the cost, the shortest path of the decision network
Lesson 6 Appendix
calculated by back-pass reveals a minimum mobilization expenditure of SR. 4500/-.(shown in bold

lines and circles). Decision plan for minimizing additional manpower mobilization costs works out
as under:
S. No.
Month
Code
Action
Expenses in SR.
1.
2.
Jan
Feb
0
0-1
0
1500 +500
3.
Mar
1-4
4.
5.
Total
Apr
May
4-5
5-8
No additional welder required

Induct two welders, utilize one.
Or, induct one per month
No addition welder required if two
welders inducted in the beginning of
February
Overtime work
Transfer out one welder
1500
1000
4500
In particular, action 0-1 entails expenditure of SR. 1500 at the start of February towards
transportation of two welders and additional SR 500 is incurred as one of the welders is not fully
utilized as precision welder on the ground during the month.
F.3.4 Probabilistic Decision Under Risk.
The decision models, where several outcomes with varying chances of occurrence, could possibly
follow the selection of a particular course of action are referred to as probabilistic models. In such
cases, the decision maker depending upon the extent of information available can assign the
probabilities of occurrence to each possible outcome. In such cases, where reasonable
probabilities can be predicted, the decisions are said to be made with a specific risk.
Salient Features of a Probabilistic Decision Network
In probabilistic decision network, each action has a number of transition probabilities associated
with it. The method of representing of actions which takes into consideration transitional
probabilities is different from those of deterministic actions:-
Figure Showing a Stage of a Probabilistic Decision Network
The salient features of a probabilistic decision network model are:(a) Return is written above the branch / arrow in between the action and the present state.
(b) Each action has probability of transition to other states associated with it. These probabilities
have to be assessed by the decision maker.
(c) The lower portion of action rectangle is used for writing the weighted values of the adjacent
states. For example, if A and B are the values of total returns at two adjacent states and p1 and
p2 respectively are the transitional probabilities associated with these states resulting from a
Lesson 6 Appendix
given action then

Weighted total return or expected profit = p1 A + p2 B
(d) Action identification labels are written on the upper half of the action rectangle.
(e) Sum of the transitional probabilities associated with an action is always equal to one. One
arrow resulting from an action implies probability of 1.
(f) A probabilistic network can contain both probabilistic as well as deterministic actions.
Example: Developing Market Strategy
Ready-mix concrete (RMC) is a pre-mixed quality-controlled concrete. The mix has designed
proportions of concreting materials. It is delivered to construction sites for ready use. An RMC
plant has batching plant(s), transit mixers and storage bins for the aggregates and sand. The
cement is stored in silos. For bag delivery cement, it has bag-cutting and cement-conveying
equipment. Water is stored in tanks and is pumped in measured quantity to the mixer. In addition,
an RMC plant usually has a laboratory and housing facility for the workers.
The RMC produced is transported to the construction site in transit mixers. The mixer capacity
ranges between 3cm to 6 cm usually 6 cm are universally used. These transit mixers have rotating
drums with 10 to 20 revolutions per minute. At a construction site, the concrete is pumped at the
place of laying.
The main advantages of using RMC are that it guarantees strength, reduces life cycle costs due to
longer life, reduces construction site logistic and pollution problems, increases concrete placing
rate, ensures concrete quality and consistency and minimizes wastages in the use of concrete. In
advanced countries, concreting using RMC is obligatory and mixing of concrete at site is not
allowed, due to both pollution and quality reasons. In India, the use of RMC is fast catching-up.
An RMC company is planning its market strategy for the next year. The planners, after carrying
out investment appraisal on alternative strategies, assessed the profitability for the company over
next 12 months as follows:
Installing new plant immediately can increase the profit by $ 1.0 m
Adding new plant gradually can result in a profit of $ 0.6 m
Continuing business with present facilities can yield a profit of $ 0.4 m.
The above profitability is based on the assumption that the market with its up-trend will grow by
20 %. However the possibility of market demand remaining stable or the market falling cannot be
ruled out. The expected probabilities and profit by the experts are tabulated below:
MARKET OUTCOME
PROBABILITY
20% RISE
STABLE
10 % FALL
0.6
0.3
0.1
Lesson 6 Appendix
Trend
Probability of change
Options
S1: Expand immediately by
inducting new plant
S2: Expand gradually
S3 Maintain present capacity
PAY-OFF MATRIX
Nature of Market with Probability of Growth
20 % rise
Stable
10% fall
0.6
0.3
0.1
Expected Profitability
$1.0m
$0.2m
$0.6m
$0.4m
$0.3m
$0.3m
$0.1m
$0.1m
Solution
The steps involved are:
Step 1. Draw the network
Step 2. Calculate pay-off for each strategy
Step 3. Select the strategy which yields maximum benefit.
Step 4. Calculate the risk in pay-off for each strategy.
Step5. Select the dominant strategy for making a decision. Apply the rules of decision making
(Appendix O) if there is no dominant strategy.
Step 1. Draw the network
The given situation is when the market is expected to rise, but there is a probability of its
remaining stable or even falling of demand. These trends can be represented along the vertical axis
and the stage showing the change in the present state to the next years situation can be
represented along the horizontal axis. The network thus developed is shown below:
Step 2. Calculate pay-off for each strategy as follows:

Pay-offs for strategy S1
FACTOR
PAY-OFF
PROBABILITY
Expected Outcome
Lesson 6 Appendix
Growth
Stable
Fall
1.0m
0.2m
0m
0.6
0.3
0.1
Total
=
=
=
0.60m
0.06m
0m
0.66m
Similarly, the expected profits of S2 and S3 can be worked out. These are tabulated below:
Pay-offs in Expected Monitory Value (EMV) for Strategy S1, S2 and S3

STRATEGY
EMV
S1
Expand immediately by inducting

new plant
Expand gradually
Maintain present capacity
S2
S3
$0.66m
$0.46m
$0.34m
Step 3. Select the strategy which yields maximum benefit.

The pay-offs for various strategies reveal that S1, is the strategy that yields maximum expected
profit. But degree of risk in terms of variance and standard deviation for each action must be
calculated before making a decision.
Step 4. Calculate the risk in pay-off for each strategy. The degree of risk is determined by
calculating variance and standard deviation for each course of action.
Variance and Standard deviation for strategy S1:
Outcome
EMV
Deviation
D2 Probability
1.0
0.2
0
Variance
Standard
deviation
0.66
0.66
0.66
+0.34
-0.46
-0.66
0.1156 x 0.6
0.2116 x 0.3
0.4356 x 0.1
Total
=
=
=
=
=
0.06936
0.06348
0.04356
0.1764
0.42
Calculating similarly, the Coefficients of Variance and Standard Deviation are as under:
Strategy
EMV
S1
S2
S3
$0.66m
$0.46m
$0.34m
Coefficient of
Variation
0.1764
0.04
0.0196
Standard Deviation
0.42
0.20
0.14
Step5. Select the dominant strategy for making decision.

Decision network supplies expected values for making decisions , but a decision based purely on
Lesson 6 Appendix
expected monitory values is not enough. For example, in the Ready Mix Concrete problem solved
above, each of the expected values have certain degree of risks associated with it. The higher the
expected value, greater is the risk. It calls for the individuals ability to make a decision. Rules for
making decisions are covered in Appendix O.
F.4 DECISION TREE ANALYSIS
Decision network is a graphical method of analyzing the outcome from a series of interdependent
possible courses of action generated by the decision process. Decision tree is a special case of
structured decision network, where the decision model is open-ended. In this model, decision
points are represented by the squares, chance events or the outcome are denoted by circles and the
branches indicate the courses of action and returns.
Decision tree for making Ready Mix Concrete decision is given below:
Other steps for making a decision are similar to the decision network given above.
F.5 CONCLUSION
A decision network structure a decision process. It helps the managers to generate an approach
for solving the decision making problems in a systematic manner, examining all possible courses
of action and the resulting outcome prior to making a decision. In particular, decision network
analysis technique provides a compact model to structure decision process, whereas decision tree
is easy to develop but becomes cumbersome with the increase in the number of sequential
decisions.
Decision network supplies expected values for making a decision , but a decision based purely on
expected values is not enough. The higher the expected value, greater is the risk. It calls for the
individuals ability to make a decision. Rules for making decisions are covered in Appendix O.
Lesson 6 Appendix
Lesson 7 Appendix
PROJECT MANAGEMENT ORGANIZATION

Appendix G
G.1 Project Organization Concept
Organization enables a group of people working together with divided tasks and responsibilities, to
co-ordinate their activities harmoniously in order to achieve a common goal. A traditional formal
organization (form and structure) integrates various components of the organization by assigning tasks
to individuals, defining lines of authority and responsibility through hierarchical levels, and formalizing
authority, responsibility and accountability, and reporting relationship. Traditionally the organizations
are based on certain classical principles such as Unity of Command, Scalar Chain of Command, the
Division of Labour and the Span of Control. Excessive reliance on the 'principles' of organizations can
lead to over-centralization, curbed initiative, and unnecessary bureaucratic controls, delays and
interference in management. It also neglects the 'human' factor, as the people are integrated into the
organization more by regulation than by commitment. The fast-changing technology and the demand
for cheaper, better and faster delivery of new products, has led to new thinking towards restructuring,
downsizing, and empowerment of the organizations.
Project organization is a result of this new evolutionary process. Project organizational requirements
differ from the traditional organization. Unlike the on-going corporate, each project is an entity in itself.
It is organized to achieve its mission, within pre-determined objectives. Project is a one- time job with
definable parameters and a specific lifespan. Project organization is temporary; it ceases after
completion of the project. It undergoes changes in various stages of the project life-cycle to meet the
project needs. The fast-changing environment imposes numerous technical, financial, legal, ethical,
environmental and logistical constraints. They interact technically, economically and socially within the
environment as well as with other organizations, structures and systems. Projects special attributes
include its innovation capacity to overcome problems as they arise. It has to be staffed with experienced
persons to respond speedily with changing situations and to speed up decision making. Its
accomplishment is entrusted to a single person - the project manager who acts as the single point of
responsibility. The project organization demands include:
Innovation to overcome problems as they arise.
Experience on which to make sound, efficient decisions.
Rapid response to changing situations.
Effective control of time, cost and quality objectives.
With the accelerated rate of change in environment , management of multi-discipline,
multi-dimensional, multi-location multi-national project tasks need organization different from the
traditional, functional organizational structures. Corporate have high stakes in the projects undertaken
by them. Delay in the projects invite high penalty, cost overruns; and can even mar the very existence of
the firm. In general, large construction corporate create special organization to handle a project.
But there are no tailor-made project organization forms and structures to meet all situations in all
projects, and there are no two projects which are alike. Organisational forms and structures are dictated
by many parameters. These include project size, objectives, people relationship, technology, complexity
, administrative component, specialization, span of control, need for delegation, decision levels,
organization culture, and the emotional stability of the people. Therefore, organizational form and
structural design in each project need to be customized.
Lesson 7 Appendix
G.2 Project Organization Structure

Organizational structures are designed using the principles of organization, to specify pattern of
inter-relationship of various components of the organization. Organisation chart shows the graphical
representation of the organizational structure. The organization manual lays down the charter of
position, roles, responsibilities, functions, duties and authority of each member of the organization.
Organizational structures are dictated by such factors as technology, complexity, resource availability,
competition and decision making requirements.
The guidelines for designing of the project organizational structure include the following:
Organizational groups are designed to generally conform to the project work breakdown structure.
Each group is assigned responsibilities and allocated resources to meet the assigned tasks.
The size and structure of the organization is changed due to alternation in requirements. However,
the core project team continues till the end.
Project groups are suitably structured with emphasis on teamwork and informal relationship.
Organizational structure is kept flat to avoid bureaucratic tendencies and reduce channels of
communication with the project manager
The functional heads constitutes the project management and planning chief, is assigned the
responsibility of the co-ordination function.
The project hierarchy or pyramid of positions is developed to co-ordinate and control project activities.
To quote example, outline of the organizational structure of 2000 Housing units construction project at
Baghdad, Iraq is shown in Illustration G1.
The staffing of the organization describes the role and the involvement of the staff in each phase. This
must clarify and indicate part-time or full-time employment of an individual. This will ensure that there
is no uncertainty in an individuals mind about his role in each phase of the project, and has a clear idea
as to when he finally reverts to his parent department. To ensure economy of effort, and to avoid any
wastage in any 'idle' capacity having been created, a "Responsibility Assignment Matrix" (RAM) is
included in supporting details to the organizational chart, lying down 'time' and 'degree' of
"participation" and "accountability" of each member during various phases of the project. The RAM
will also indicate as to when, an individual's role may be 'reviewed' or when he 'signs off' from a phase,
when not required.
G.3 Project Responsibility Centres
Project objectives are linked with the performance of a number of result -oriented organizational units.
These units are structured according to their task-responsiblity-reporting relationship, as can be seen in
Illustration G1 depicting the organizational chart of the housing units project. The number of
organizational units depends upon the magnitude and complexity of the project. A simple project may
have only a few organizational units whereas a large number of interacting organizational units are
required for a large complex project. In a major project, each organizational unit is usually headed by a
manager and it is referred to as a 'responsibility centre'.
In construction projects, responsibility centres can be broadly divided into three categories viz.
construction (or production) centres, support service centres, management and administration centres.
See Illustration G2.
Construction/Production Centres: A construction centre consists of one or more work centres. A
Lesson 7 Appendix
work centre is entrusted with the execution of a group of activities constituting one or more
work-packages. The work-packages in a work centre are identifiable, measurable and costable units.
This concept makes it possible to express the input resources and expected performance of each work
centre in physical and monetary terms.
Service Centres: Service centres support construction centres with technical, material, manpower
equipment and general services like accommodation and temporary utility services. Examples of such
investment-oriented centres are ready-mix concrete production plant, steel reinforcement fabrication
workshop, GRC elements manufacturing factory, metallic doors and windows fabrication unit, and plant
and machinery operation and maintenance establishment.
Administration Centre: This includes the project management, staff, workers and all types of
resources needed for setting up and operating the project office which supports the project
management.
G.4 Project Organizational Forms
An organizational form is a configuration of authority given to a body of people to provide direction.
Organization forms vary from centralized functional form on one extreme and a highly decentralized
pure product/project form on the other end; there are many matrix- types organizational forms
in-between these two extremes.
Centralised Functional Organisation: Traditionally the corporate is organized on centralized
functional forms. These are characterized by center of power and co-ordination being concentrated at
the top with the chief executive. Its departments are arranged by functions such as marketing,
engineering, production, contract, resource procurement, finance, HRD; each headed by a
director/specialist manager.
Functional organizational form has its advantages and limitations. Traditional functional organizational
form provides stable environments unified command, better technical control, quick reaction capability,
economical utilization of specialists, excellent co-ordination within functions, and requires fewer
inter-personal skills. The main limitations of traditional form are that no one person is accountable for
achieving the organizational goals, the communication is poor across functional departments,
co-ordination is difficult, response time to external changes is slow and it fails to encourage innovation
and creativity.
Pure Product (or Project) Form: Pure product /project organization is a division of the corporate
organization, but it operates independent of the parent organization. It has dedicated multi-discipline
resources assigned to accomplish the specified product goals. A product organization is headed by a
programme director / manager, who maintains complete line authority over the product. The main
advantage of product organization is that one person is accountable for achieving the organizational
goals, there are strong communication channels, co-ordination is easy, response time to external
changes is speedier, and it encourages innovation and creativity. The main limitations are that it is
temporary.
Matrix Form. In the project management matrix structure, the key staff is derived from their
respective parent departments in a corporate office and their interfaces and communication links are
clearly defined. A typical matrix structure of project management staffing is shown in Illustration G3.
It has a single project manager accountable for the whole project. Project management, working as a
team, performs basic management functions of planning, organizing, staffing, directing, controlling and
co-ordinating the project work. All managers owe their allegiance to the project manager and not to
their parent departmental heads.
Lesson 7 Appendix
Depending upon the nature of the project and the corporate policy, the project management
organization matrix pattern can vary from a highly centralized functional organization to a dedicated
project team with fully decentralized authority. The matrix organization of project management lies in
between these two extreme organizational concepts. The factors affecting designing of matrix
organization is reproduced below:
Project
Characteristics
Functional
Organization
Matrix Organization
Weak Matrix
Balanced
Matrix
Strong Matrix
Projectized
Organization
Project
Manager's
Authority
Little or None
Limited
Low to
Moderate
Moderate to High
High to Almost
Total
Per cent of
Performing
Organization's
Personnel
Assigned
Full-time to
Project Work
Virtually None
0 25%
15 60%
50 95%
85 100%
Part-Time
Full-Time
Full-Time
Full-Time
Project
Part-Time
Manager's Role
Common Titles Project

Project
Project
Project
Project
for Project
Coordinator/Project Coordinator/Project Manager/Project Manager/Program Manager/Program
Manager's Role Leader
Leader
Officer
Manager
Manager
Project
Management
Administrative
Staff
Part-time
Part-time
Part-time
Full-time
Full-time
In a weak 'matrix' organization, the project manager's role is that of a co-ordinator or an expeditor.
Whereas in a strong 'matrix' organization, the project manager has a collaborative role. In the
projectized organization, with a weak matrix, authority for decision making and direction rests with the
project manager. Whereas in a strong 'matrix' structure, information sharing is mandatory and
decision-making rests with the task-oriented teams.
G.5 Strengths and Weaknesses of the Project Management Matrix Organization
The matrix structure is viewed as a temporary organization with reduced vertical hierarchy so as to
respond speedily in a changing complex situation for achieving the specified performance objectives.
The managers in a project team are charged with the responsibility of their respective areas of activity.
In this way, communication and co-ordination between top management and project management is
improved.
Following are the advantages of the matrix structure:
(a) It has a single project manager accountable for the whole project. The project
management, working as a team, performs the basic management functions of planning,
organizing, staffing , directing, controlling and co-ordinating the project work.
(b) All managers owe their allegiance to the project manager, and not to their parent
departmental heads.
Lesson 7 Appendix
(c) Personal commitment to objectives is the key note of matrix organization. It provides a
climate for motivation, effectiveness and personal development.
(d) The specialist staff is employed effectively. The matrix organization balances their
conflicting objectives by reducing the communication gap.
(e) The top management is freed from making routine decisions, as the decision-making
machinery forms an integral part of the matrix structure.
(f) It provides enough flexibility to meet uncertain and changing situations by establishing
a project planning and control system at site to monitor the input flow of resources and the
performance output.
However, if not properly conceived and directed, the matrix organization can result in increased
conflicts, lack of co-ordination, low productivity, and enhanced costs.
G.6 Conclusion
Corporate world is undergoing silent revolution in the organizational changes. The emerging
organizations have many forms. These include grouping of activities by functions; products; processes;
location,, countries, or a combination of these. There is no such thing as ideal organization that can
meet all situations. No doubt the principles of organizational theories have universal application, but
they need to be modified to suit the situation. In the fast changing environments and technology, each
project organization will have to be tailored to the meet the requirement by adopting the correct
'martrix' which will put 'authority', 'responsibility' and ' accountability' in the right perspective. An
project organization can be responsive to change in environment, if it is provided with inbuilt flexibility
and the necessary delegation of power to the project manager. A good organization does not necessarily
produce good performance, but a poor organization even with competent people, invariably results in
poor performance.
Lesson 8 Appendix
RESOURCES ALLOCATION USING LINEAR PROGRAMMING

Appendix H
H.1 INTRODUCTION AND SCOPE

Resources allocation aims at apportioning of limited resources such as men, materials, machinery
and money, among number of competing organizations or groups, within specified constraints. In
resources allocation problems, we determine that allocation which optimizes the total
effectiveness. The resources allocation problem has certain common features. These are
characterized by the presence of a number of variables, each of which can assume values within a
specified range. These variables have certain associated constraints. The main objective of solving
resources allocation problems is to determine that allocation which optimizes the total
effectiveness such as maximizing profit/contribution or minimizing costs while allocating
resources.
Solution of the each of the allocation problem involves the following steps:
(a)
(b)
(c)
Formulation of the problem.

Construction of mathematical model.
Determination of optimum solution of the model.
The analysis of allocation situations, which can be formulated in terms of linear algebraic
equations, is called Linear Programming. This technique is applicable to problems in which the
total effectiveness is expressible as linear functions of individual allocation and the limitations of
resources constraints. This enables conversion of objectives to a linear decision variable and the
constraints to linear inequalities. The problem thus reduces to maximizing or minimizing a linear
function subject to a number of linear inequalities. Some linear programming problems have
typical simple structures and these can be solved by using transportation and assignment
techniques (not covered in this Appendix). The basic approach in solving the Linear Programming
problems is explained with simple examples.
H.2 SOLUTION OF LINEAR PROGRAMMING PROBLEMS BY GRAPHICAL
METHOD
Linear Programming problems with two decision variables can be solved graphically. Graphical
technique is illustrated with an example. Simplex method, explained in Section H.3, is used to
solve problems with two and more decision variables.
H.2.1 Formulation of the Problem.
The first step in solving Linear Programming problems is to formulate the problem.
Consider a sand and gravel company that operates two pits producing different mixes of sand and
gravel. After computing the output, it is separated into three grades. A construction company has
entered into a contract with the sand and gravel company to take 120 tons of fine, 80 tons of
medium and 240 tons of coarse grade per week. Its cost sand and gravel company $20 per hour to
operate one pit and $25 per hour to operate the other. In 8 hours operation, the first pit produces
Lesson 8 Appendix
20 tons fine, 20 tons medium and 120 tons coarse material. The second pit produces 60 tons of
fine, 20 tons of medium and 40 tons of coarse material. For how many hours should each pit be
operated to meet the requirements most economically, that is, to minimize the operating cost of
aggregate pits?
H.2.2 Construction of mathematical model.
It involves development of the objective function and translation the specified constraints into
algebraic equations.
Developing Objective Function. Let the two pits be named as A and B, and let x1 and x2 be the
operating times in hours per week respectively. The weekly operation cost of these pits can be
worked out as under:Name of pit
Pit A
Pit B
Hourly production
cost
$ 20 per hour
$ 25 per hour
Weekly production time
Weekly production cost
x1 hours
x2 hours
20x1
25x2
Therefore, the total cost of operations per week for both the pits is equal to 20x1+25x2
Let Z be the objective function. Hence, to economize on operation cost of pits, we must aim at
Minimizing
Z=20x1+25x2, where x1 and x2 are the decision variables.
Setting up technical specifications. In this case, the sand and gravel company has undertaken to
supply 120 tons of fine grade, 80 tons of medium and 240 tons of coarse grade per week. Since it
is a contractual requirement, the supply must not be less than this quality.
a. Fine grade requirement. The operation of pit yields the following quantities of fine grade.
Name of pit
Pit A
Pit B
Rate of production per 8 hours

$ 20 per hour
$ 60 per hour
No of hours run per week

x1
x2
Production per week

20/8 x1
60/8 x2
Therefore, total production of fine grade per week is 20/8 x1+60/8 x2.
Since the supply to be made is 120 tons, and it is a contractual requirement, the production
must not be less than 120 tons, it can be equal to or more than this subject to optimization of
operation time. This constraint can be expressed algebraically as 20/8 x1+60/8 x2 > = 120,
or
For fine grade x1+ 3x2 > 48
b.
Medium and coarse grades. Proceeding similarly, we can express the constraints on
medium and coarse grade production in the form of the following inequalities:-
Lesson 8 Appendix
For medium grade x1 + x2 > 32

For coarse grade 3x1+x2 >48
c.
Operating time. Each pit can be operated for 8 hours per day. Assuming that there are
maximum 6 working days in a week and no overtime is permissible, then the total operating
time per pit can be expressed as:For pit A 0 < x1 <48
For pit B 0 < x2 <48
Mathematical Model. The problem can now be stated as:Minimize

Z=20x1+25x2. Where x1 and x2 are the decision variables.
Subject to
x1+ 3x2 > =48
x1 + x2 >= 32
3x1+x2 >= 48
0 < x1 <48
0 < x2 <48
H.2.3 Determination of optimum solution of the model by Graphical Method
The given problem contains two decision variables. Such problem can easily be solved by
graphical method. After the mathematical model is developed, the graphical solution follows the
following steps:
Step 1. Convert the constraints into linear equations.
Step 2. Draw the linear equations graphically using suitable scale.
Step 3. Identify the feasible region and the points that define the region.
Note. If anyone of the constraint line falls outside the region formed by others, then
an optimal unique solution is not possible.
Step 4. Determine the point that optimizes the objective function.
Step 5. Interpret the results to indicate the optimum course of action for making
decisions.
The above steps are illustrated using the derived mathematical model of:
Minimize
Z=20x1+25x2. Where x1 and x2 are the decision variables.
Subject to
Lesson 8 Appendix
x1+ 3x2 >= 48

x1 + x2 >= 32
3x1+x2 >= 48
0 < x1 <48
0 < x2 <48
Step 1. The first step in the solution of linear programming problem by the graphical method is to
change the inequalities into equations, so as to plot these graphically on a suitable scale.
Convert the constraints into linear equations.
x1+ 3x2 = 48
x1 + x2 = 32
3x1+x2 = 48
Within the boundary
0 < x1 <48
0 < x2 <48
Step 2. Draw the linear equations graphically using suitable scale. To draw the line graphically
determine their intersecting points with horizontal and vertical axes and then join them as shown
below:
Graphical Solution of Linear Programming Problem
Step 3. Identify the feasible region and the points that define the region. Thus region for the
example under consideration is A, B, C, D and E ( shaded in the figure). Any point within the area
bounded by the fringes of the lines of inequalities will provide a solution meeting all the
constraints of the problem. There are infinite member of points in the area; and therefore there are
infinite number of feasible solutions to the problem. But what is being sought, however, is
that solution which minimizes the objective function: Z=20x1+25x2
Note.
In case of minimization problems, the feasible region is concaved: where as for
maximization problems have convex feasible region. Further, if anyone of the constraint lines falls
outside the region formed by others, then an optimal unique solution is not possible.
Step 4. Determine the point that optimizes the objective function. The objective function
represents a family of parallel lines having slope of minus 20/25 (= 4/5). Since every equation in
the family of objective function has the same slope (i.e. they are parallel to each other), the
technique is to keep extending the parallel line away from the origin, till we arrive at a unique
point (obviously one of the points of intersection of the lines forming the region) which gives
minimum value of the objective function. This point will be one of the points of intersection of the
lines forming the feasible region. This involves tabulating the values of the function at the points of
Lesson 8 Appendix
interaction at the region, as shown below.

Feasible Region
Intersections
A
Decision Variables
x1
x2
48
0
Objective Function
Z = =20x1+25x2
= 20 x 48 + 25 x 0 = 960
48
= 20 x 0 + 25 x 48 = 1200
24
= 20 x 8 + 25 x 24 = 760
24
= 20 x 24 + 25 x 8 = 680
48
48
= 20x 48 + 25 x 48 = 1960
Hence Z min = Rs. 680, for x1 = 24 and x2 = 8 is the optimum solution of the problem.
Step 5. Interpret the results to indicate the optimum course of action for taking
decisions.
Therefore, to supply the contracted amount of fine, medium and coarse aggregate, at the least cost
of production, the sand and gravel company should operate pits A and B for 24 hours and 8 hours
in a week respectively. The minimum operating cost of the firm, thus will be $ 680/- per week.
Example: Solve graphically the LP problem.

Maximize Z = 8x1+ 7x2
Subject to
2x1+ 3x2 <= 72
3x1+ 2x2 <= 96
x1 and x2 are non-negative.
Step 1. Convert the constraints into linear equations.
Therefore
2x1 + 3x2 =72
4x1 + 3x2 =96
Step 2. Draw the linear equations graphically using suitable scale.
Step 3. Identify the feasible region and the points that define the region. The
region in the example under consideration is bounded by the points O, A, B and C.
Note. If anyone of the constraint lines falls outside the region formed by others, (for example,
another additional constraint like 4x1 + 3x2 = 120), then an optimal unique solution satisfying all
Lesson 8 Appendix
the constraints is not possible.

Step 4. Determine the point that optimizes the objective function. This involves
tabulating the values of the function at the points of interaction at the region, as
shown below.
Feasible Region
Intersections
O
A
B
C
Maximize
Z = 8x1+ 7x2
0
188
212
192
Decision Variables
x1
x2
0
0
0
24
16
12
24
0
Step 5. Interpret the results to indicate the optimum course of action for making
Decisions.
The optimum value of the objective function is achieved when x1 = 16 and x2 =12.
It leads to Z = 8x1+ 7x2 = 212
Example: Solve the following LP problem graphically.

Maximize Z = 11x1+ 22x2
Subject to
2x1+ 3x2 <= 6

2x1+ 2x2 <= 5
3x1 x2 >= 0
x1 and x2 are non-negative
The graph of linear equations is obtained after converting constraints.

The feasible region bounded by the constraints is shaded in the graph.
The points of intersection and the corresponding value of the Objective
Functions is tabulated below:
Feasible Region
Intersections
O
A
B
C
Decision Variables
x1
x2
0
0
2/11
6/11
1.5
1.0
2.5
0
Maximize
Z = 11x1+ 22x2
0
14
38.5
27.5
Therefore, the optimum value of 38.5 of the objective function is achieved when x1 = 1.5 and
=1.0.
x2
H.3 SOLUTION OF LINEAR PROGRAMMING PROBLEMS BY SIMPLEX METHOD
Lesson 8 Appendix
H.3.1 Procedure for Solving Problems

The simplex method is an orderly search procedure for solving Linear Programming problems in
two or more variables. This method starts with step by step iteration process using simple
iterations rules until it reaches an optimal solution where no further improvement in the objective
function can be achieved. The step-by-step procedure in Simplex method is illustrated with an
example. The important terms used in Simplex methods are explained in these steps.
General Case
Typical Example
Maximize Z = p1 x1 + p2 x2
Maximize Z = 4 x1 + 5 x2
Such that
a11 x1 + a12 x2 <=C1
a21 x1 + a22 x2 <= C2
Where x1 , x2 are non-negative.
Such that
3 x1 + 2x2 <= 6
2 x1 + 4x2 <= 5
Where x1 , x2 are non-negative.
Step I. Convert system of linear inequalities into linear equations by introducing slack or surplus
variables. A slack variable corresponds to less-than or an equal-to type of constraint. A surplus
variable corresponds to greater-than or an equal-to type of constraint. These variables are
introduced to convert the constraint into an equation.
General Case
Typical Example
Add slack variable to convert inequality into equation

a12 x1 + a12 x2 + A = C1
a21 x1 + a22 x2 + B = C2
Where x1 , x2, A , B are non-negative.
Z = p1 x1 + p2 x2 + p3 A + p4 B
A and B are called basic variables
x1 and x2 are termed non basic variables
p3 = p4 =0
Add slack variable to convert inequality into equation

3 x1 + 2x2 +A= 6
2 x1 + 4x2 +B= 5
Where x1 , x2 , A , B are non-negative.
Z = 4 x1 + 5 x2 + aA + bB
A and B are called basic variables
x1 and x2 are termed non basic variables
a = b =0
Similarly, if a x1 + bx2 +c x3 = > P, then by introducing surplus variable D, this inequality can be
converted into an equation
a x1 + bx2 +c x3 D = P
(b) Step II. Determine Initial Basic Feasible solution. Initial basic feasible solution is a solution of
the system of m equations and n variables (n > m), where m variables are nonnegative and ( n
m) variables are zero. Feasible solution is obtained by putting non-basic variable ( x1 and x2 )
equal to zero. This solution satisfies the set constraints and the non-negativity condition.
General Case: Initial Basic Feasible Solution
Put non-basic variable x1 = x2, = 0, in above
equations
Therefore, A = C1
B = C2
Z = 0; as p3 = p4 =0
Where x1 , x2, A , B are non-negative.
This solution satisfies all equations and is called
Initial Basic Feasible Solution
Typical Example: Initial Basic Feasible Solution

Put non-basic variable x1 = x2, = 0, in above
equations
Therefore, A= 6
B= 5
Z = 0; as a = b =0
Where x1 , x2 , A , B are non-negative.
This solution satisfies all equations and is called Initial
Basic Feasible Solution
Lesson 8 Appendix
Note. The initial basic solution is a must for using Simplex method. In this connection, see the
subsequent minimization example.
Step II. Detach co-efficient and put them into a tabular form called Simplex Table in such a
manner than the initial basic feasible (.BF) solution is obvious. There are many varieties of
Simplex Tables, but its essentials are included in all its forms. Typical Simplex Table for the given
example is drawn below:
Table No.1
Basis
Coeff.
Basis
Variable
0
0
A
B
Basis
Solution
(Ci)
6
5
Z Coeff
Row No.
4
x1
R1
R2
IBF solution
5
x2
3
2
0
0
A
2
4
0
0
B
1
0
6
0
1
5
Simplex table reflects the data pertaining to the basic variables. Z Coefficient written on the top
row of the Simplex table is for reference only.
Step III. Calculate Simplex criteria for non-basic variables.
In the equation Z = p1 x1 + p2 x2 + p3 A+ p4B ; let x1 (or x2) change from 0 to 1 and the other
non basic variable ( x2) be equal to zero as before.
Substituting x1 = 1 and x2 = 0 in a1 x1 + a2 x2 + A = C1:
We get, A = C1 a11
Similarly B = C2 a21
Therefore Z1 = p1 + p3 (C1 a11 ) + p4(C2 a21 )
Hence change in Z or the objective function, from x1 = 0 to x1 = 1; when x2 = 0 is :
Z1 Z = { p1 + p3 (C1 a11 ) + p4(C2 a21 ) } {( p3 C1 + p4 C2)}
SCx1 = p1 ( p3 a1 + p4 a21 ) , putting in matrix form we get.
SCx1 = p1 [ p3 p4]
In generalized form, Simplex criteria, SCxi of a variable is given by:
Sxi = { Co efficient of xi in objective function}
minus
{ row matrix of coefficient of basic variables in Z }{ Column matrix of coefficient of xi in
constraints equations}
In the given example, Simplex value for x1 and x2 , nonbasic variables, are:
SCx1 = p1 ( p3 a12 + p4 a22 ) = 4 (0*6 + 0*5) = 4
SCx2 = p2 ( p3 a12 + p4 a22 ) = 5 (0*6 + 0*5) = 5
Note SCA = p3 ( p3 *1 + p4* 0 ) = 0
Lesson 8 Appendix
And SCB = p4 ( p3 * 0 + p4 * 1 ) = 0
If all the Simplex values turn out to be zero or negative, then optional solution is reached. If not,
proceed further to step IV.
The method of determining entering variable, Quotient and leaving variable are described in the
next step.
Step IV. Determine the entering variable pivot column and the departing variable pivot row.
Pivot column is that column which has the largest positive simplex value SCxi . It is indicated by
the symbol and it shows the entering variable pivot column. In a typical example ( see Table No.
2), SCx2 having value of 5 is the larger than SCx1 = 4; column x2 becomes the entering variable
pivot column.
Table No.2
Basis
Coeff.
Basis
Variable
0
0
A
B
Basis
Solution
(Ci)
6
5
Z Coeff
(Zi)
Row No.
R1
R2
IBF solution
SCx
x1
3
2
0
4
x2
2
A
1
0
6
-
B
0
1
5
-
4*
0
5
Quotient
6/2 =3
5/4 =1.25
Pivot row is the row generating smallest positive quotient value when each element in the
Quotient column is divided by the corresponding element of the pivot column. Point of intersection
of pivot row and pivot column is denoted by *. In the typical case, row generating smallest
positive value is 1.25 ( see Table No.2). Note the variable associated with the pivot row
(containing B variable) will leave the basis and is replaced by variable (x2) associated with pivot
column in the new iteration.
Step VI. Draw the new co-efficient matrix by manipulating rows in such a way that it generates
1 at the intersection of the pivot row and the pivot column; and zeros elsewhere in the pivot
column. In the typical example this is done by:
Table No.3
Basis
Coeff.
Basis
Variable
x2
Basis
Solution
(Ci)
7 /2
5 /4
Z Coeff
Row No.
R3 = R11/ 2 R2
R4 = R2 / 4
BF solution
SCx
4
x1
2*
1/ 2
0
3/2
x2
0
A
1
B
1/ 2
1
5 /4
0
0
7 /2
0
1/4
0
5/4
Basic Feasible Solution: Z = p1 x1 + p2 x2 + p3 A+ p4B

= 4*0 + 5*5/4 + 0.0*7/2 +0.0 *0 = 25 / 4
Quotient
Ci /pivot cln
3.5 / 2
1.25 / 0.5
Lesson 8 Appendix
SCx1 = 4 (0*2 + 5*2.5) = 3/2

SCx2 = 5 (0*0 + 5*1) = 0
SCA = 0 (0*1+ 5*0) = 0
SCB = 0 (0*0.5 + 5*0.25 ) = 5/4
Since all the SCxi values are not zero or negative, the optional solution is sill not reached.
Therefore proceed with the next step.
(g) Step VII.
Repeat step III to step VI till optional solution is finally reached.

Table No.4
Basis
Coeff.
Basis
Variable
Basis
Solution
Z Coeff
. Row No.
x1
7 /4
R5 = 1/ 2 R4
x2
3 /8
R6 = R5 / 4
Feasible Solution
SCx
4
x1
5
x2
0
A
0
B
1/ 2
1/ 4
0
7 /4
0
1
3/8
0
1/ 4
0
3/4
3/8
0
13/8
Quotient
Since all the SCxi values turn out to be zero or negative, the optional solution is reached.
Optimum Solution Z = p1 x1 + p2 x2 + p3 A+ p4B
= 4*7/4 + 5*3/8 + 0*0 + 0*0 = 71 / 8, when x1 = 7 /4 and x2 = 3 /8
H3.2 BigM method for Minimization Problems
The start point for Simplex method is the initial basic solution. It is a pre-requisite in Simplex
method. In maximization problems initial basic solution is obtained by putting nonbasic variables
equal to zero as explained above, but in cases involving minimizing of objective function and
less-than or an equal-to type of constraints, Big M method is used to derive initial basic solution
for solving minimization problems by Simplex method.
Example:
Minimize Z = 150 x1 + 100 x2
Such that
x1 + x2 => 8
3x1 + x2 => 12
x1 => 0
x2 => 0
Solution.
Introducing S1 and S2 as surplus variables to change the inequality into equations, we get
x1 + x2 S1 = 8
Lesson 8 Appendix
3x1 + x2 S2 = 12
Putting x1 = x2 = 0, turns S1 equal to 8 and S2 as 12. It does not yield the initial basic solution
as S1 and S2 are nonnegative. Initial basic solution is a prerequisite in Simplex application.
Therefore, the artificial variables A1 and A2 are introduced with M as the coefficient, where M is a
number ( say 9999999......)dominating all numbers of the problem and the values of As approach
zeroes in the final solution.
The inequality thus changes to
x1 + x2 S1 + A1
=8
3x1 + x2 S2 + M A2 = 12
and the objective function takes the form of:
Minimize Z = 150 x1 + 100 x2+0*S1 + 0*S2 + M A1 + M A2
The Simplex tableau for the initial basic solution and the iterations can then proceed as under:
Initial Basic Solution
Basis
Coeff.
Basis
Variable
Basis
Solution
Z
Row
M
M
A1
A2
8
12
R1
R2
IBS
SCx
150
100
x2
x1
1
0
S1
1
1
0
100-2M
3*
0
150-4M
0
S2
1
0
0
M
M
A1
0
1
0
M
Quotient
M
A2
1
0
8
0
0
1
12
0
8 /1
12 /3
First Iteration: Basic Solution

Basis
Coeff.
Basis
Variable
Basis
Solution
Z Row
150
x1
100
x2
0
S1
0
S2
M
A1
A1
2/3*
-1
1/3
-1/3
150
X1
R3=
R1-R4
R4=
R2/3
BS
SCx
1/3
-1/3
1/3
12
4
0
0
502M/3
0
M
0
-M/3
+50
4
0
0
4M/3-50
M
A2
Quotient
Second Iteration: Basic Solution

Basis
Coeff.
Basis
Variable
Basis
Solution
100
150
X2
X1
6
2
Z Row
150
x1
100
x2
0
S1
0
S2
M
A1
0
1
2
0
1
0
6
0
-3/2
1/2
0
150-150/2
1/2
-1/2
0
25
3/2
-1/2
0
M-150+75
M
A2
-1/2
1/2
0
M+50-150
H.3.3 Solving Linear Programming Problems with Mixed Constraints:
Quotient
Lesson 8 Appendix
Maximize Z = 4 x1 + 8 x2
Such that
2x1 + x2 16
3x1 +2 x2 => 32
x1 + 2 x2 = 26
x1 => 0, x2 => 0
Basis
Coeff.
0
-M
-M
Basis
Variable
Basis
Solution
Z Row
150
x1
100
x2
0
S1
0
S2
M
A1
2
3
1
0
4M+2
1
2
0
-1
0
0
-M
0
1
0
32
0
0
0
1
26
0
16
16
13
0
4M+4
1
0
0
16
0
1/2
0
0
1
1
0
0
0
-1
0
0
1
0
-1/2
-1
1/2
10/3
2
26
BS
SCx
0
2M
13
0
5
0
0
-M
4
0
0
-2
2M
OS
SCx
0
1
0
2
0
0
0
1
12
0
1
0
0
2
0
3/4
-1/2
1/4
0
0
-3/4
1/2
-1/4
0
M
-1/2
3/4
0
M
Initial Basic Solution

S1
16
A1
32
A2
26
BS
SCx
0
M
4
0
2
4
First Iteration
S1
A1
X2
5
4
13
3/2
2*
Second Iteration
S1
2
X1
2
X2
12
2*
M
A2
Quotient
H.4 SOLVING LINEAR PROGRAMMING PROBLEMS BY DUAL METHOD

Example:
Minimize Z = 150 x1 + 100x2
Such that
x1 + x2 => 8
3x1 + x2 => 12
x1 => 0
x2 => 0
Solution:
The primal of the problem is derived while analyzing the basic facts of the situation. For every
primal problem, there is a relative dual problem. The dual problem can be easily set up from the
primal problem by using the following steps:
Lesson 8 Appendix
a. Choose new variables, one of each constraint of the primal.

b. Construct the dual matrix.
c. Write the dual inequalities from the dual matrix.
The above steps are illustrated from the given problem. The optimum solution to the dual
problem, in terms of the evaluation of the objective function, is identical to that of the primal
problem. Further, if the optimum solution of the dual is known/obtained, then the optimum
value of the ith primal variable is equal to the negative simplex value of the ith slack variable in
the final simplex tableau representing the dual linear programming solution.
Minimize Z = 150 x1 + 108 x2
Such that
x1 + x2 => 8
3x1 + x2 => 12
x1 => 0
x2 => 0
Setting up dual problem from the primal:
a) Primal Problem.
Minimize Z = 150 x1 + 108 x2
Such that
x1 + x2 => 8
3x1 + x2 => 12
x1 => 0
x2 => 0
b) Dual Problem
i) Choose new variables y1 and y2 (equal in number of constraints of the primal)
ii) Construct dual coefficient matrix
Dual
y1
y2
Primal Objective
x1
1
3
150
x1
1
1
100
c) Write dual objective function and inequalities from the above matrix.
Maximize Z = 8 y1 + 12 y2
Such that
y1+ 3 y2 <= 150
y1+ y2 <= 100
Constants
8
12
To Minimize
Lesson 8 Appendix
Adding slack variables to convert inequality into equations , we get

Maximize Z = 8 y1 + 12 y2
Such that
y1+ 3 y2 + y3 = 150
y1+ y2 + y4 = 100
Top row( Cj) has the values of the coefficient of objective function for each variable. The Ci
column lists the coefficient of the objective function of basic variables.
Basis
Coeff
0
0
-
Variable Solution
y3
150
100
y4
12
0
-
y2
y4
12
8
-
y2
y1
50
50
Cjj
Row No.
R1
R2
IBF solution
Scy
Quotient
R1/3
R4 = R2 - R3
BF solution
Scy
25
75
R5 = R3 R6 /3
R6 = 3/2 R4
Op solution
Scy
8
y1
12
y2
1
1
0
8
1/3
2/3*
0
4
0
1
75
-
0
y3
3*
1
0
12
1
0
50
150
1
0
25
-
0
y4
Quotient
1
0
150
50
0
1
100
100
150/3
100/1
1/3
-1/3
0
-4
0
1
50
75
150
75
1/2
-1/2
0
-2
-1/2
3/2
0
-6
Therefore solution of dual is:

Z Max = 8 y1 + 12 y2 = 8 x75 + 12 x 25 = 900
SC y3 = -2,
SC y4 = -6
Hence the solution of primal is:
Z Min =Z Max = 900 &
x1= - SC y3= 2
x2= - SC y4= 6
Note.
The value of the optimal solution to a primal problem and of its dual are identical. The examination
of the dual problem can be useful for sensitivity analysis. The variables in the dual are the prices
of the constraints in the primal. The value of these prices at the optimum indicate whether or not it
is desirable to obtain more of any resource. The slack variables of the dual are the opportunity
costs of the variables in the primal; they indicate the penalty involved for using non-optimal
solutions.
H.5 CONCLUSION
Lesson 8 Appendix
Linear programming is a technique for optimizing the allocation of resources within specified
constraints. Linear programming guarantees an optimal solution provided that two main
conditions are met. First, the constraints must be strictly linear and second the variables must be
non-negative.
Each linear programming problem can be converted into a dual problem. The dual solutions can
be helpful for sensitivity analysis.
Some linear programming problems have particularly simple structures and can be solved by using
transportation and assignment techniques ( not covered in the above text). However, the main skill
in solving allocation problems using linear programming lies in the formulation of a mathematical
model, as the solution of mathematical models can be easily obtained using computers having
suitable software. Readers should refer to standard books on Operation Research for in-depth
study of allocation problems.
Appendix I
EARTHMOVING EQUIPMENT
Appendix - I
APPROXIMATE PRODUCTION PLANNING DATA FOR PRIMARY TASKS

I.1 INTRODUCTION
(Planning Output Norms = Ideal Output Performance Factor Correction Factor)
The output of the earthmoving plant depends upon many variables. These include nature of work,
depth of cut, earth hauling, job conditions, management conditions, skill of operator, performance
worthiness of equipment and method of disposal of the excavated material. The output of the
equipment can be best assessed by an experienced person from the past performance data of the
equipment, This data includes number of hours done, output achieved, speed of operation,
maintenance and repairs and the skill of the operator. But such reliable data is rarely available.
In case of new equipment, the performance diagrams given in equipment manual do provide a
useful method of estimating equipment, but there is no substitute to the knowledge and experience
of the manager employing equipment. In particular the construction manager and the planning
engineer of construction project should be able to assess the approximate output of equipment
which they expect to employ at the construction site. This appendix provide thumb rule for
determining output of the earthmoving equipment.
I.2 TRACKED BULL DOZER IDEAL OUTPUT PER HOUR IN BULK VOLUME IN
EASY-TO-DOZE LOOSE SOIL
(Planning Output Norms = Ideal Output Performance Factor Correction Factor)
Job Conditions. Assumed dozing speed 3 km/h, return speed 6 km/h and maneuvering time as
0.15 min. Ideal output in one hour = St blade capacity cycles in one hour
HP range
Straight Blade capacity

yd
M
8
6.11
6
4.58
4
3.06
3
2.23
1.53
250-300
180-250
120-180
100-120
75-100
2
50-75
1.5
1.14
Dosing Distance in Metres (one way)

Up to 25
50
75
400
220
150
300
160
110
200
110
70
150
80
50
100
40
50
40
70
30
100
110
80
60
40
30
20
I.3 FRONT-END LOADER IDEAL OUTPUT PER HOUR IN BULK VOLUME

EASY-TO HAUL LOOSE SOIL
Job Conditions. Assumed digging and dumping time as 0.4 min and speed (loaded) as 4 km/h and
return empty as 12 km/h.
Bucket
Capacity
6.12 m
Output per hour in m

410
265
245
155
130
110
95
85
Bucket
Capacity
8 Yd
Appendix I
4.6 m
3.06 m
2.3 m
1.5 m
0.76 m
310
205
155
100
50
25
Distance m
200
135
100
65
35
50
185
125
95
60
30
75
115
75
60
40
20
100
95
65
50
30
15
125
80
55
40
25
15
150
70
50
35
25
10
175
6 Yd
4 Yd
3 Yd
2 Yd
1 Yd
One way
60
40
30
20
10
200
Hauling Distance in Metres
I.4 IDEAL OUTPUT OF THE TRACKED LOADER SHOVEL

Job Conditions. Assumed digging manoeuvring and dumping time 0.4 min and speed (loaded) as
3 km/h and empty return as 6 km/h
Bucket
Capacity
3.06 m
1.53 m
0.76 m
Distance m

260
130
65
10
185
90
45
20
140
70
35
30
115
60
30
40
95
50
25
50
85
40
20
60
75
35
15
70
60
30
15
80
Bucket
Capacity
4 Yd
2 Yd
1 Yd
One way
I.5 EXCAVATING AND LIFTING EQUIPMENT IDEAL OUTPUT PER HOUR IN

BULK VOLUME
Job Conditions: Easy To Dig Soil Swing 90 Degree with 23 seconds cycle. Refer Illustration 9.3.
I.6 SCRAPPER IDEAL OUTPUT PER HOUR IN BULK VOLUME IN EASY TO
SCRAP SOIL
1.6.1 Ideal output of the towed scraper
Job Conditions. Assumed loading, manoeuvering and dumping time as 3.0 mins, and speed
(loaded) as 3 km/m and empty as 6 km/h
Bucket
Capacity
6.12 m
4.6 m
3.06 m
2.3 m
1.5 m
0.76 m
410
310
205
155
100
50
25
Distance m
265
200
135
100
65
35
50
245
185
125
95
60
30
75
110
80
55
40
25
15
150
95
70
50
35
25
10
175
Bucket
Capacity
85
8 Yd
60
6 Yd
40
4 Yd
30
3 Yd
20
2 Yd
10
1 Yd
200
One way

Heaped
Capacity
21.4 m
18.4 m
13.8 m
10.7 m
6.9 m

215
185
140
105
70
140
120
90
70
50
105
95
70
50
35
85
75
55
40
30
70
60
45
35
25
60
50
40
30
20
Heaped
Capacity
28 Yd
24 Yd
18 Yd
14 Yd
9 Yd
Appendix I
Distance m
100
200
300
400
500
600
One way
1.6.2 Ideal output of the motorised scraper

Job Conditions. Assumed loading, maneuvering and dumping time as 2.0 mins. haul road is less
than 5% and speed (loaded) as 20 km/h and empty as 40 km/h rolling resistance of
Output Per Hour in m3
Heaped Capacity
Heaped
Capacity
38.3 m
600
410
350
310
250
225
210
190
30.6 m
485
325
230
250
200
180
170
150
170
150
135
50 Yd
120
40
90
30
Yd
22. 3 m
360
245
210
185
150
135
125
115
85
75
100
yd
15. 3 m
Distance m
240
400
165
140
125
100
90
65
60
800 1000 1200 1600 1800 2000 2200 2600 3000
20 yd
One way
I.7 PERFORMANCE FACTOR

I.7.1 Management Factor
Job Conditions
Management Conditions
Excellent
Good
Average
Poor
Favourable
1.0
0.9
0.8
0.7
Average
0.9
0.8
0.7
0.6
Unfavourable
0.8
0.7
0.6
0.5
Note: (1) Management conditions, under control of management include operators'
efficiency, equipment operation worthiness, equipment maintenance
capability, planning and supervision effectiveness, client attitude etc.
(2) Job conditions, which affect eficiency but are beyond the control of
management cover terrain, weather conditions, temperature etc.
I.7.2 Common Correction Factors

1. Soil Factor, Multiply
Easy Dig
(loam, sand, gravel)
1.00
Medium Dig
(common earth)
0.85
Hard Dig
(Stiff, slay, soft rock)
0.67
2. Swell Factor for in-place volume conversion, divide

Common earth
Sand and gravel
Clay (dry)
Appendix I
1.2
1.1
1.3
3. Altitude, reduce performance

0-300 in, 300 in and above
Nil
Performance reduction 1% per 100 in increase in altitude above 300 m
Temperature derating effect, reduce performance
Temp C
Performance change %
0
+3
15
0
30
3
45
5
4. Working Efficiency, Multiply

60 Min.
1.00
I.7.3
55 Min.
0.92
50 Min/h 45 Min.
40 Min/h
0.83
0.75
0.67
Correction Factors Special For Bull Dozer
Blade Factor Multiply

S Blade
1.0
A Blade or P Blade
0.65
U Blade (used only in loose soil)

1.20
Transmission system Factor Multiply

Power Shift
1.0
Direct drive
0.8
Grade Factor (Approximate), Multiply

Up Grade
1- 2.5 Grade %
100
Down Grade
1 - 2.5 Grade %
100
I.7.4 Correction Factors Special for Excavators

Swing Factor
Angle of swing (Degrees)
Factor
45
1.25
60
1.15
75
1.05
90
1.0
120 150
0.90 0.80
180
0.70
Appendix I
Load Factor
Side Casting
1.0
Loading in Vehicles
0.8
I.7.5 Correction Factors Special For Scrapers

Maximum Load Carrying Capacity
= Weight of volumetric capacity, or,
Scraper pay load, which ever is less.
Appendix C
TIME VALUE OF MONEY

Appendix J
J.1 Time-Money Link.
The value of money is linked with the time when it is received or paid, e.g., an investment in a
bank fixed deposit of Rs.100 today would grow to (100 + r) a year hence, where 'r' is annual rate
of interest in percentage. Similarly, in an inflationary period, a rupee today represents a higher
real purchasing power than a rupee at the end of the year as Rs.100 received at the end of a year
has less present value. Accordingly, cash transactions occurring at different points of time need
adjustments for the time value of money. These adjustments involve determining the following
The future value of a single amount.
The future value of an annuity of equal amount.
The present value of a future amount.
The present value of an annuity of equal amount.
The present value of cash inflow of unequal amount and discount.
J.2 Future Value of a Single Amount
Annual Compounding Period. If the interest is compounded annually, then:
n
FV = PV (1 + r)
where
FV
PV
r
n
=
=
=
=
future value n years hence

present value
interest rate per annum
number of years compounded
Example: A bank deposit of Rs. 10,000 at 12 per cent interest compounded annually and
invested for six years will become Rs. 19,738.23 on maturity. It can be calculated as follows:
The future value six years hence will be:
Calculating the future value using the formula
6
Rs. 10,000(1.12) = Rs. 10,000 (1.973823 )

= Rs. 19,738.23
Calculating the future value using Table J.1
= Rs. 10,000 Interest factor from Table J.1
= Rs. 10,000 (1.974 )
= Rs. 19,740
TABLE J.1 : FUTURE VALUE INTEREST FACTOR
Interest Factor =
(1+r)n
Appendix C
Year
Hence
1
2
3
4
5
6
7
8
9
10
1%
2%
4%
6%
8%
10%
12%
14%
15%
16%
18%
20%
1.010
1.020
1.030
1.041
1.051
1.062
1.072
1.083
1.094
1.105
1.020
1.040
1.061
1.082
1.101
1.126
1.149
1.172
1.195
1.219
1.040
1.082
1.125
1.170
1.217
1.265
1.314
1.369
1.423
1.480
1.060
1.124
1.191
1.262
1.338
1.419
1.504
1.594
1.689
1.791
1.080
1.166
1.260
1.360
1.469
1.587
1.714
1.851
1.999
2.159
1010
1.210
1.331
1.464
1.611
1.772
1.949
2.144
2.358
2.594
1.120
1.254
1.405
1.574
1.762
1.974
2.211
2.467
2.773
3.106
1.140
1.300
1.482
1.689
1.925
2.195
2.502
2.853
3.252
3.707
1.150
1.322
1.521
1.749
2.011
2.313
2.660
3.059
3.518
4.046
1.160
1.346
1.561
1.811
2.100
2.436
2.826
3.278
3.803
4.411
1.180
1.392
1.643
1.939
2.288
2.700
3.185
3.759
4.435
5.234
1.200
1.440
1.728
2.074
2.488
2.986
3.583
4.300
5.160
6.192
Shorter Compounding Period: If the interest is compounded more frequently, say four times a
year, then the future value of Rs 10,000 at 12% nominal interest at the end of six years can be
calculated as follows:
Doubling Period: Its approximate value can be calculated using the following thumb rules:
(a) Rule of 72 = Divide 72 by the interest rate
(b) Rule of 69 = 0.35 + 69 / interest rate. This rule is more accurate than the 'Rule
of 72'
(c) Examples
Thumb Rule
Rule of 72
Rule of 69
Formula
72 / Interest rate
72 / Interest rate
0.35+69 / Interest rate
Interest rate
(%)
12
10
12
Doubling Period
72 / 12 = 6 years
72 / 10 = 7.2 years
0.35+69 / 12 = 7.2 years
0.35+69 / Interest rate
10
0.35+69 / 10 = 7.25 years
(More accurate)
J.3 Future Value of an Annuity of Equal Amount An annuity is a series of periodic cash
flows of equal amount. It can be payments or receipts.
Example: Calculate the value of Rs. 10000 per year at the end of three years, deposited
regularly at the start of each year in a bank account at 10% interest.
Calculating the future value using the formula
Appendix C
Calculating the annuity interest factor using Table J.2, we get 3.31 Therefore, future value
of the annuity =10000 ( 3.31) = Rs. 33100
TABLE J.2: FUTURE VALUE INTEREST FACTOR FOR AN ANNUITY
Year
Hence
1
2
3
4
5
6
7
8
9
10
1%
2%
4%
6%
8%
10%
12%
14%
15%
16%
18%
20%
1.000
2.010
3.030
4.030
5.101
6.152
7.214
8.286
9.369
10.462
1.000
2.020
3.060
4.122
5.204
6.308
7.434
8.583
9.755
10.950
1.000
2.040
3.122
4.246
5.416
6.633
7.898
9.214
10.583
12.006
1.000
2.060
3.184
4.375
5.637
6.976
8.394
9.897
11.491
13.181
1.000
2.080
3.246
4.506
5.867
7.336
8.923
10.637
12.488
14.487
1.000
2.100
3.310
4.641
6.105
7.716
9.487
11.436
13.579
15.937
1.000
2.120
3.374
4.779
6.353
8.115
10.089
12.300
14.776
17.549
1.000
2.140
3.440
4.921
6.610
8.536
10.730
13.233
16.085
19.337
1.000
2.150
3.473
4.993
6.742
8.754
11.067
13.727
16.786
20.304
1.000
2.160
3.506
5.066
6.877
8.977
11.414
14.240
17.518
21.321
1.000
2.180
3.572
5.215
7.154
9.442
12.142
15.327
19.086
23.521
1.000
2.200
3.640
5.368
7.442
9.930
12.916
16.499
20.799
25.959
J.4 Present Value of a Future Amount

Annual Discounting Period: For interest compounded annually, the present value is the inverse
of compounding. The present value formula can be obtained as follows:
Example. Find the present value of Rs. 10,000, receivable six years hence if the rate of discount
is 12 per cent.
Calculating the present value using the formula
Calculating the present value using Table J.3

= Rs 10.000 Interest factor from Table J.3
= Rs. 10,000 (0.507 )
= Rs. 5,070
TABLE J.3: PRESENT VALUE DISCOUNTED FACTORS FOR FUTURE SINGLE
PAYMENTS
Year
Hence
1
2
3
4
5
6
7
1%
2%
4%
6%
8%
10%
12%
14%
15%
16%
18%
20%
0.990
0.980
0.971
0.961
0.951
0.942
0.933
0.980
0.961
0.942
0.924
0.906
0.888
0.871
0.962
0.925
0.889
0.855
0.822
0.790
0.760
0.943
0.890
0.840
0.792
0747
0.705
0.665
0.926
0.857
0.794
0.735
0.681
0.630
0.583
0.909
0.826
0.751
0.683
0.621
0.564
0.513
0.893
0.797
0.712
0.636
0.567
0.507
0.452
0.877
0.796
0.675
0.592
0.519
0.456
0.400
0.870
0.756
0.658
0.572
0.497
0.432
0.376
0.862
0.743
0.641
0.552
0.476
0.410
0.354
0.847
0.718
0.609
0.516
0.437
0.370
0.314
0.833
0.694
0.579
0.482
0.402
0.335
0.279
Appendix C
8
9
10
0.923
0.914
0.905
0.853
0.837
0.820
0.731
0.703
0.676
0.627
0.592
0.558
0.540
0.500
0.463
0.467
0.424
0.386
0.404
0.361
0.322
0.351
0.308
0.270
0.327
0.284
0.247
0.305
0.263
0.227
0.266
0.225
0.191
0.233
0.194
0.162
Shorter discounting period: If the discount is compounded more frequently, say four times a
year, then the present value of Rs.10,000 discounted at 12% in six years can be calculated as
follows:
where
m = 4 = number of times compounding is done in a year.

n = 6 = number of years compounded 4 6
J.5 Present Value of an Annuity Amount

An annuity is a series of periodic cash flows of equal amount. It can be payments or receipts.
where
PVa = Present value of amount received in n years

A = Regular annual cash inflow
r = Discount rate per annum
n = Period of annuity
Example: Calculate the present value of Rs 10,000 received per year regularly at the end of
each year for three years when the discounted rate is 10% per annum.
Calculating the present value using formula
Calculating the future value using Table J 10.4, the present value annuity interest factor is
(2.487).
Therefore, present value of the annuity
= 10000 (2.487) = Rs. 24870
J.6 Present value of cash inflow of unequal amount and discount.
Example: Calculate the Present Value of a stream of cash flows, the amount and the discount
projections of which are given below:
Cash flow
Year 1
24.87
Year 2
43.86
Year 3
45.87
Year 4
55.05
Appendix C
Discounted rate
12%
10%
10%
10%
Solution: Using the values of discounting factor given in Table 10.4 for one year, two years,
three years and four years:
PV in lakhs
= 24.87* 0.893 +43.86*0.826 +45.87* 0.751+55.05*0.683

= 113.05
Table J.4: PRESENT VALUE DISCOUNTED FACTORS FOR ANNUITIES
Year 1%
2% 4%
Hence
1
0.990 0.980 0.962
6%
8%
10%
12%
14%
15%
16%
18%
20%
0.943
0.926
0.909
0.893
0.877
0.870
0.862
0.847
0.833
1.970 1.942 1.886
1.883
1.783
1.736
1.690
1.647
1.626
1.605
1.566
1.528
2.941 2.884 2.775
2.673
2.577
2.487
2.402
2.322
2.283
2.246
2.174
2.106
3.902 3.808 3.630
3.465
3.312
3.170
3.037
2.914
2.855
2.798
2.690
2.589
4.853 4.713 4.452
4.212
3.993
3.791
3.605
3.433
3.352
3.274
3.127
2.991
5.795 5.601 5.242
4.917
4.623
4.355
4.111
3.889
3.784
3.685
3.498
3.326
6.728 6.472 6.002
5.582
5.206
4.868
4.564
4.288
4.160
4.039
3.812
3.605
7.652 7.325 6.733
6.210
5.747
5.335
4.968
4.639
4.487
4.344
4.078
3.837
8.566 8.162 7.435
6.802
6.247
5.759
5.328
4.946
4.772
4.607
4.303
4.031
10
9.471 8.983 8.111
7.360
6.710
6.145
5.650
5.126
5.019
4.833
4.494
4.192
Lesson 11 appendix
BREAK-EVEN ANALYSIS
Appendix -K
K.1 INTRODUCTION
The term break-even analysis is interpreted in a narrow as well as broad sense. Used in its narrow
sense, it is concerned with finding out the break-even point. Break-even point is the point at
which total revenue is equal to total cost, i.e., the point of no profit no loss. In its broad sense,
break-even analysis means a system of analysis that can be used to determine the probable profit
at any level of production.
At project site, break-even analysis can be used to determine the cost of services rendered by
various service responsibility centers. Costing depends upon the nature of service rendered. For
example, the service centre like 'materials transporting centre' will have to go into service costing
to calculate the charges per km of product transported. Similarly, the 'equipment supplying centre'
will need to work out the owning and operating costs to determine the hiring charges to be levied
against the responsibility center utilising this service.
K.2 BREAK-EVEN ANALYSIS METHODOLOGY
Breakeven analysis involves establishing the relationship among the three variables, i.e. sales
price, production volume and profit.
Break-even analysis can be done both graphically as well as analytically.
Graphically the three variables can be represented as under:
For example, price at which to supply site manufactured readymix concrete to the user
responsibility centre (say by the Production Centre to the Foundation Construction Centre) can be
determined by computing the breakeven point. Let us consider the capacity of the Ready-mix
Concrete Production Centre to supply concrete as 2500 CM concrete per month, working 10
hours per working day. The concrete production cost data for 2500 CM consists of variable costs
(V) at SR 121.95 per CM and fixed costs (F) at SR 69625 per month. The cost breakdown is
detailed below:
Cost of Production of One Cubic Metre Ready-Mix Concrete
Cost (SR) per Variable per
m3
m3
Fixed per
month
Lesson 11 appendix
A-Material Cost
1. Cement
81.30
2. 3/4" aggregate
10.45
3. 3/4" aggregate
4.80
4. Washed sand
6.05
5. White sand
4.20
6. Water
1.20
Total
108.00
B-Manufacturing and Transportation Expenses
1. Manpower costs (all permanent
17.30
categories)
2. Repair & maintenance (based on
10.05
past records)
3. Oil, diesel & lubricant (based on
3.90
past records)
4. Administration costs
3.15
5. Insurance
0.60
6. Contingencies
2.00
7. Depreceiation
5.00
Cost of production and transportation
150.00
in SR
108.00
43350
10.05
3.90
7875
900
5000
12500
121.95
69625
Considering the above example, analytically the break-even price of readymix concrete can be
calculated as under:
Let,
V = Variable cost of one month production
= Variable cost per CM Quantity manufactured and delivered during the month
= v x q = SR121.95 x 2500 CM
F = Fixed cost per month = SR 69625
S = Sales value for one month production
= sale price per CM concrete Quantity delivered
= p x q= px2500CM
Then, at break-even, for 2500 CM concrete supply,

S
=V+F
Or, p .q= v . q + F
Or, p =v + F/q
Therefore, price/M3 (p) to break-even for monthly 2500 CM delivery with variable cost of SR per
cubic meter and fixed cost of SR per month is:
Lesson 11 appendix
p = 121.95 + 69625 /2500 = SR 150 ( approximate )

Note that the budgeted sales price is estimated for assumed most frequently occurring level of
deliveries. Higher volume of delivery can thus yield marginal profit to cater for contingencies.
K.3 ASSUMPTIONS AND LIMITATIONS.
Break-even analysis establishes a relationship among the three variables, i.e. sales price,
production volume and profit. It can highlight the effect of changes in any of these parameters. But
it is based on certain assumptions and certain limitations which include:
All costs are categorized into fixed and variable costs. This in practice is difficult. Further,
the concept of variability varies with situation, the break-even analysis for a given
situation may not hold good for another similar situation.
The fixed cost and the rate of variable cost of each unit of production remains constant even
with the rise in production volume, though in practice this may not be true.
Variable costs will fluctuate in direct proportion to the volume of output. Generally, these
assumed linear relationships of various parameters may take the shape of curves instead of
straight lines.
Selling price, production quantity, productivity will remain constant, but this may not be true
always.
The above example considers one grade of concrete production, but in practice, each
activity has a product-mix, and a construction project consists of wide and varied types of
activities.
K.4 USES OF BREAK-EVEN ANALYSIS

In spite of its limitations, the break-even analysis is a useful management device, if it is developed
and used by those who fully understand its limitations. Scientifically prepared from reliable data,
break-even analysis is a useful tool for:
1.
2.
3.
4.
5.
6.
7.
Determination of the sales price which will give the desired profits.
Fixation of sales volume level to cover a given return on capital employed.
Forecasting costs and profits as a result of change in volume.
Suggestions for shifts in sales mix.
Inter-firm comparison of profitability.
Determination of costs and revenue at various levels of output.
Impact of increase or decrease in fixed and variable costs on profit.
Lesson 12 Appendix
CAPITAL BUDGETING PROCESS

Appendix L
L1.
Introduction and Scope
A project involves the current outlay (or current and future outlays) of funds with the expectation
of getting future benefits. While capital expenditure decisions are extremely important, they also
pose difficulties. Capital expenditure decisions involve substantial investment. Due to the inherent
uncertainty, future predictions become difficult. It is difficult to identify and measure the costs and
benefits of a capital expenditure since they are spread out over a long period of time, usually 10 to
20 years for industrial projects and 20 to 50 years for infrastructure projects. Capital expenditure
decisions are irreversible; a wrong capital investment decision often cannot be reversed without
incurring a substantial loss. Capital loss increases with advances in technology. Capital investment
decisions have an enormous bearing on the future of an organization. Capital budgetary proposals,
therefore, demand a conscious approach in the early stages of the project formulation.
Capital budgeting is the process of analysing the financial benefits of acquiring a capital asset with
a view to determine the viability of the project. It is a complex process, as it takes into
consideration depreciation, taxes and cash flow. This appendix outlines the methodology of the
project budgeting. The capital budgeting process involves the following steps:
a) Estimate the cash flow.
b) Establish the cost of capital.
c) Apply the investment appraisal criterion.
L.2. Estimating Cash Flow

L.2.1 Cash Flow Components. These components in the product lifecycle costing can be divided
into an initial investment, operating cash flows and a terminal cash flow.
Initial investment. It represents the relevant cash outflow or the cost of setting up the
project.
Initial investment = Cost of capital assets
+ Installation costs
+ Working capital margin
+ Preliminary and pre-operative expenses
Tax benefit on capital assets, where applicable.
Operating Cash Flows. These are the relevant cash inflows and outflows resulting from the
operation of the project during its economic life.
Operating cash inflow in a given year= Profit after tax + Depreciation + Other non-cash
charges + Interest on long-term debt Tax rebate
Terminal Cash Inflow. It is the relevant cash inflow occurring at the end of the product
Lesson 12 Appendix
lifecycle on account of project liquidation.

Terminal cash inflow = Post -tax proceeds from the sale of capital assets
+ Net recovery of working capital margin
+ tax adjustment, where applicable.
L.2.2. Time Period Considered for Analysis. It is the minimum of the following:
Physical life of the project or plant. It refers to the number of years the project or plant
would perform the function for which it has been acquired.
Technological life of the project or plant. It refers to the period after which the present
project or plant would become obsolete.
Product market life. It refers to the period for which the product of the project or plant
enjoys a reasonably satisfactory market.
Investment planning horizon of the firm. It is the time period which a firm wishes to
consider for the investment analysis. It varies with the complexity and size of the
investment. For small investments (say, the installation of a pumping set), it may be five
years; for medium sized investments (say, purchasing a bull dozer or installing a readymix
concrete plant), it may be ten years, and for largesized investments (say, setting up of a
new precast concrete factory), it may be fifteen years.
L.3. Establishing the Cost of Capital

It involves determination of the present value of the cash flow projections occurring at different
points of time and making adjustments for the time value of money. The method for evaluation of
the time value of money is covered in Appendix J.
L.4 Applying the Investment Appraisal Criterion

After the capital costs and cash flows are computed, the next step is to analyse the financial
worthiness of the investment proposal. There are many methods for analysing investment
proposals for making financial decisions. The commonly-used decision criterion can be divided
into two broad categories, i.e., discounting criterion and non-discounting criterion.
Discounting criterion. These are based on net present value, internal rate of return
techniques and cost-benefit analysis.
Non-discounting criterion. In this category, payback period is the commonly-used

technique.
Net Present Value (NPV). It is the total of all the cash flows, out and in, over the product / plant
lifecycle. The Net Present Value (NPV) is calculated as follows:
Lesson 12 Appendix
NPV = PV of cash flows Investment

Note.
1) The expected future net cash flows (Inflows outflows) are discounted at the cost of capital (r)
to the base year (present time) to obtain the present value (PV) of these flows. Therefore, it is
assumed that all future proceeds can be invested by the organization at the cost of capital.
2) The initial cost of the investment (1) is subtracted from the present value (PV) to obtain the net
present value (NPV) of the investment.
3) If the cost of the investment is spread over more than one year, the future cost must also be
discounted at the cost of capital to the base year.
4) Calculation of the Net Present Value (NPV) is accomplished using the following formula:
where NCF1, NCF2, NCF3, NCFn, are the net cash flows (NCF) for the respective years,
r is the cost of capital and n is the expected life of the project.
An organization should accept projects with a positive NPV and reject projects with a negative
NPV.
Internal Rate of Return (IRR). It is the interest rate or discount rate, which gives zero Net
Present Value (NPV) of the investment over the project/plant lifecycle.
IRR ( r ) is calculated using the following formula:
where all the terms have the same definitions as those used in the NPV method.
IRR can be found using trial and error using PV tables. In the IRR method, it is assumed that all
the future proceeds can be invested at the IRR rate.
An organization can accept a project that exceeds its cost of capital and reject those projects with
IRR below its cost of capital. Projects with higher IRR can be preferred over lower IRR projects.
Payback Period. It is the time (in years) that a project / plant takes to pay back the initial cost
of investment from the expected future net cash flows resulting from the investment. In other
words, it is the time during which the cumulative cash inflows equal to the original cash outflow.
Lesson 12 Appendix
In this method, a cut off number of years can also be used to select or reject the investment
proposal. Projects/Plants with shorter pay-back periods is preferred to those with longer payback
periods.
The payback period method does not take into consideration the time value of money and as
such, can lead to incorrect results. If the expected future net cash flows can be discounted at the
cost of capital to the base year (present time), then the pay-back period ranking conforms with the
results obtained from NPV and IRR methods.
Benefit-Cost Ratio. It is the ratio of the present value of benefits to the initial investment. In other
words, it measures the NPV per rupee of outlay.
BCR = Present Value of benefits / Initial investment
If BCR > 1, accept the proposal.
If BCR < 1, reject the proposal.
If BCR = 1, consider other factors for decision.
Summary of Decision Criterion
Factors
Acceptance Criterion
Payback Period (PBP)

Net Present Value ( NPV )
Internal Rate of Return ( IRR )
Benefit-Cost ratio ( BCR )
< Target period

>0
> Cost of capital
>1
Example. A reputed industrialist is considering a proposal to set up a block-making factory on his

plot located in the industrial area. Initially he proposes to run this factory for four years and sell off
the land and plant thereafter. For making the investment decision, the industrialist wants to know
the NPV, IRR, payback period and Benefit-Cost ratio. The forecast of the cash flows is given in
table L.3.
Table L.3 : Cash Flow Forecast
Years
0
A.
Building
and 50.00
preliminaries
B. Plant and equipment
44.00
C. Working capital margin 05.00
D. Revenue
E. Annual operating costs
F. Depreciation
G. Interest on shortterm
bank
Borrowings
H. General administrative
cost
I. Total cost of sale
(E+F+G+ H)
Rs. (In Lakhs)

4
209.95
137.44
5.68
14.04
279.45
181.47
5.68
11.03
279.45
181.47
5.68
8.02
279.45
181.47
5.68
5.01
24.00
24.00
24.00
24.00
181.16
222.18
219.17
216.16
Lesson 12 Appendix
J. Profit before tax (D-I)

K. Tax (Assessed)
L. Net profit after tax
M. Sale value of plant &
equipment
after four years
N.Net recovery working
capital
Margin
O.
Initial
investment (99.00)
(A+B+C)
P. Operating cash inflows
(L+F)
Q. Terminal cash flow
(M+N)
R. Net cash flow (O+P+Q) (99.00)
S. Discounted rate
28.79
9.60
19.19
56.27
19.09
38.18
60.28
20.09
40.19
63.29
21.10
42.19
12.18
(05.00)
24.87
43.86
45.87
47.87
7.18
24.87
12%
43.86
10%
45.87
10%
55.05
10%
Net Present Value of Cash Inflow on Investment
From Table J.3,

NPV in lakhs = 24.87* 0.893 +43.86*0.826 +45.87* 0.751+55.05*0.683
=113.05 - 99
= 14.05
Internal Rate of Return (IRR)
The interest rate or discount rate, which gives zero IRR ( r ) is calculated using the following
formula:
0 = 24.87 / (1 + r) + 43.86 / (1 + r) + 45.87 / (1 + r) + 55.05 / (1+r)4 99

By trial using statistical table, r = 22%
Payback Period. It is the time (in years) that a project/plant takes to pay back the initial cost of
the investment from the expected future net cash flows resulting from the investment.
99 = 24.87 + 43.86 + x45.87
Payback Period = First year + Second year + ( 99 24.87 43.86) / 45.87 of Third year
= 2.66 years.
Lesson 12 Appendix
Benefit-Cost Ratio = Present Value of benefits / Initial investment

= 168.05 / 99
= 1.70
Appendix M
PROJECT QUALITY MANAGEMENT

Appendix M
M.1 INTRODUCTION AND SCOPE
During the last 100 years, the concept of product quality management has dramatically changed
from the inspection-only scenario to the Total Quality Management (TQM). In the early part of the
20th Century, the focus on quality was on inspection of the end product. Gradually, it moved to
the production process control using statistical quality control techniques followed with
acceptance sampling of the end products. The work of Deming, Crosby, Juran, Taguchi, Ishikawa
and many other quality gurus have contributed greatly in the development of the quality
management movement.
In ISO 10006, International Organization for Standardization highlights that there are two aspects
to the application of quality in project management: the quality of the project product (construction
facility) and the quality of the project management processes. Accordingly these processes can be
broadly divided into two groups, that is, product quality management related processes and project
quality management related processes. Product quality management processes include planning,
assurance, control, inspection and performance audit. The ISO 10006: 97 Guidelines to Quality in
Project Management identifies ten groups of project management quality related processes. These
project management processes relate to management of scope, time, resources, costs,
procurement, human resource, communication, risk and integration. The Total Project
Management (TPM) implies management of both product quality management processes and
traditional project management processes.
This Appendix outlines the product quality concept, product quality management principles,
corporate product quality policy, production quality management processes, product quality control
tools and techniques, the cost of quality and the philosophy of total quality management. In the last
Section, this Appendix briefly describes the processes in Total Project Management and highlights
the common features and the differences between TQM and TPM. The basic approach to quality in
TPM described in this Appendix is compatible with that of the International Organization for
Standardization (ISO) as detailed in the ISO 10006.
Readers are advised to refer to the standard books and specifications for studying construction
quality control tools and techniques, material testing, inspection checklist, and the construction
methodology of the numerous items of construction works.
M.2 QUALITY CONCEPT
Quality, like time and space, is an abstract term. In the business environments, quality is viewed
from different angles such as customers requirement, fitness for use, conformance to standards,
degree of craftsmanship, zero-defect product, organizations brand / credibility and so on.
The ISO 8402 defines quality as the totality of features and characteristics of a product or service
that bear on its ability to satisfy stated or implied needs. Basically, the totality of features and
characteristics of a product or service, that is quality, depends upon the customers satisfaction.
Since the customers satisfaction will depend upon his stated or implied needs, quality will vary
Appendix M
from customer to customer. Therefore, it is not easy to specifically define the quality of a product,
facility or a service.
The customer concept in quality management makes every agency involved in a construction
project a customer. The architects, designers, tradesmen team, sub-contractors, contractors,
suppliers, all are customers. Each of these is performing three roles that of a supplier, processor
and customer. In other words, everyone is a customer to some one from whom he receives his
inputs, and a supplier to another to whom he delivers his processed output. For example, a
contractor is a customer of the designers who provide drawings and specifications of the work to
be executed, he is the processor who with his ability converts resources into designed facility, and
supplier to the client who needs the product with specified quality. Similarly, an architect/engineer
firm is a customer to the owner, a processor of the facility design, and the supplier of plans and
specifications to the contractor.
SupplierProcessorCustomer Relationship
In the project context, the customers are divided into two categories: the external customers and
the internal customers. The external customers are the project stakeholders, who have stated or
implied interests. These are the promoters, the client, the financing institutions, architect /
engineering firms, the input suppliers and the consultants. The internal customers are all the parties
working within the project environment.
It is important to note that the quality must be built into construction from the early stages of the
project development. An error in the design stage will have more impact on quality than, say a
rework on defect rectification during construction. For example, a design discrepancy in an RCC
beam design, if noticed during pre-concreting stage will cost for redesigning and work stoppage, if
observed after concreting will cost for dismantling and recasting, and if it cracks after the building
is occupied then the cost of rectification will include cost of users vacation / inconvenience, and
cost of rework of all the affected structural components. Conceptually, a design defect, will cost n
times for design rectification prior to construction, not less than n times for rectification during the
construction stage and for more than n times for rework during the operation / maintenance stage.
M.3 QUALITY MANAGEMENT PRINCIPLES
Quality management is that aspect of overall management function which determines the quality
Appendix M
policy, objectives and responsibilities and implements them by means such as quality planning,
quality control, quality assurance and quality improvement. Quality system comprises of the
organizational structure, procedures, processes and resources needed to implement quality
management. In the last fifty years, number of renowned quality gurus have propounded the
tenants of quality management.
Deming postulated that about 85% of all problems are process related and the balance 15% are
people related. Deming lists 14 points for corporate improvements. According to Deming, quality
improvement starts A chain reaction~cost decreases~productivity improves ~ prices lower~
business grows ~more jobs are created.
Philips Crosby advocated 14 steps to improve quality by setting performance standard as zero
defect and the measure of quality as the cost of non-conformance.
J.M. Juran developed 10 steps for quality improvement. His philosophy is summarised in the Juran
trilogy: quality improvement, quality planning and quality control. He highlighted that reduction of
defects on a job produces happiness and improvement of quality reduces the costs and increases
the market share.
Genichi Taguchi emphasized on the reduction of variation and creation of robust designs that have
inbuilt quality. Taguchi Loss Function states that the loss increases with increase in variation
from the target value .
Kaoru Ishikava contended that 95% problems of the company can be solved by using seven basic
quality management tools, i.e., flow charts, cause and effect charts, check lists, histograms, Pareto
charts, scattered diagrams and control charts. He advocated QM backed with moral values of
honesty and integrity in providing quality to the customers.
The principles of the quality management thus evolved through the teaching of the quality gurus
are:
Quality is crucial for business survival.
Quality direction is top-down with commitment at all levels in the organization.
Quality of the product should be right the very first time, aim is zero-defect.
Quality assurance must be built into the system so as to ensure adherence to specified
standards.
Quality control implies zero-defect performance standard.

Quality improvement focus is mostly on the process and less on the employee, as about 85%
of the defects occur due to process malfunctioning and 15% are attributable to people..
Quality improvement is a continuing process. The aim is first to maintain zero defect quality
and then to incrementally affect improvements in processes through better methods,
procedures and technology.
Appendix M
Quality is measured by the cost incurred on the non-conformance.

Quality process is controlled by facts/data derived from the time tested quality tools.
M.4
CORPORATE QUALITY POLICY
The contribution of the quality gurus has changed the mindset of the corporate world. The Quality
Management movement is bringing in a cultural change as shown below:
Old Paradigms
New Paradigms
Bottom-line emphasis
Conformance to specifications
Quality first
Continuous improvement above
specifications
Customer satisfaction
Long term view
Management-led improvements
Prevention orientation
People are assets
Team work
Quality partner suppliers
Focus on target driven production

Short term objectives
Delegated quality responsibility
Inspection orientation
People are cost burdens
Individual responsibility
Lowest quotation suppliers
The corporate quality management policies are now focusing on the top management commitment,
all employees involvement, process improvement, team work, and training of the employee to
achieve customer satisfaction through cost effective and defectfree quality work.
Project quality policy reflects the overall intentions and direction of the corporate quality policy.
However the project management will have to develop the project quality policy in case the parent
corporate organization, like a newly formed joint venture, do not have their formal quality policy.
Finally, it is the project management who is responsible for ensuring that the project stakeholders
are made fully aware of the project management quality policy, plan, assurance manual and the
quality control methodology.
M.5 PRODUCTION QUALITY MANAGEMENT PROCESSES
The quality management principles have found wide applications in the industrial field. The quality
requirements in construction projects differ in many ways from the manufacturing industry. A critical
aspect of the project quality management is the necessity to turn implied onetime needs with
stated specifications to a construction facility within the project cost and time. Construction
projects are unique and their peculiar features include difficulty in defining construction quality
standards, difficulty in verifying quality standards which cannot be easily measured with
instruments, type and form of building contract, variable geographical and geological conditions,
specific local rules and regulations, illiterate and unorganized manpower, one time people
relationships, stakeholders conflict, and lack of experience of client. This, therefore, calls for a
greater sensitivity towards quality by all the operators, i.e., customer/client, consultant and
Appendix M
contractor.
In a construction project, the quality management includes the processes required to ensure that
the project will satisfy the needs for which it was undertaken. It includes all activities of the
overall management function that determine the quality planning, quality assurance, quality control
and inspection, and quality audit.
Process
Quality Planning
Quality Assurance
Quality Control
Quality Inspection
Quality Audit
Quality Improvement
Quality -related Processes

Description
It involves identifying the quality
standards that are relevant to the
project and determining how to ensure
conformance to these standards.
All the planned and systematic
activities implemented within the
quality system and demonstrated as
needed,
to
provide
adequate
confidence that an entity will fulfill
requirements for quality.
The operational techniques and
activities
which together sustain the product,
service or quality to specific
requirements.
It determines the acceptability of a
product or a service or stages of
construction. It includes activities
such as measuring, examining, and
testing undertaken to determine
whether results conform to the
requirements.
A systematic and independent
examination to determine whether
quality activities and related results
comply with planned arrangements
and are implemented effectively and
are suitable to achieve objectives.
It stands for the actions taken
throughout the organization to
increase the effectiveness and
efficiency of activities and processes
in order to provide added benefits to
both the organizers and its customers.
Reference
ISO 8402:3.5
ISO 8402:3.5
ISO 8402:
ISO 8402:2.15
ISO 8402:4.9
ISO 9004-1:5.6
The project quality development pyramid links up closely with the role and responsibilities of the
managers, and the quality management policy.
Appendix M
M.5.1
Quality Planning
Construction facility quality objectives are defined in terms of the specifications and its enduse.
The quality planning involves identifying the quality standards that are relevant to the project and
determining how to ensure conformance to these standards. The primary aim of planning quality is
less rework, higher productivity, lower costs, and increased stakeholder satisfaction.
Quality management plan describes as to how to achieve the quality objectives. It includes
organizational structure, responsibilities, procedures, processes, benchmarking, material testing
facilities, quality checklist and allocation of the resources needed to implement the quality
specifications.
M.5.2
Quality Assurance
Quality assurance provides confidence to the customer that the project will satisfy the relevant
quality standards. The ISO 9000 ( currently under revision) is a series of generic standard that
bring out the basic requirement for quality assurance. The series is enunciated by the International
Organization of Standards based in Geneva and is adopted by majority of countries worldwide,
including all developed countries.
ISO 9001 Quality assurance in Design, Development, Production, Installation and servicing.
ISO 9002 Quality assurance in Production, Installation and Servicing.
ISO 9003 Quality assurance at final Inspection and Testing.
The ISO 9000 model for quality assurance has 20 elements. These elements as applicable to ISO
9001, 9002 and 9003 are tabulated below:
Elements
1.
Responsibility
2. Quality System
3. Contract Review
4. Design Control
ISO
9001
Management 3
3
3
3
ISO
9002
3
ISO
9003
3
3
3
NA
3
NA
NA
Appendix M
5. Document & Data Control

6. Purchasing
7. Control ofCustomersupplied product
8. Product Identification and Liability
9. Process Control
10. Inspection and Testing
11. Control of Inspection, Measuring and Test
Equipment
12. Inspection and Test Status
13. Control of Non-conforming Product
14. Corrective and Preventive Action
15. Handling,Storage, Packaging, Preservation
& Delivery
16. Control of Quality Records
17. Internal Quality Audits
18. Training
19. Servicing
20. Statistical techniques
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
NA
NA
3
NA
3
3
3
3
3
3
3
3
3
3
3
3
NA
3
3
3
3
3
3
3
3
3
NA
3
3
NA
3
NA
3
Applicable 3. Not applicable NA

Quality improvement resulting from implementation of quality assurance model includes action
taken to increase the effectiveness and efficiency of the project to provide added benefits to the
project stakeholders.
Outputs
M.5.3 Quality Control and Inspection
Quality Control involves monitoring output of specific stages in the production of facility under
construction to determine if they comply with relevant quality standards and identifying ways to
eliminate causes of unsatisfactory results. Quality Control in a large sized project is performed by
a fully-equipped and staffed Quality Control Department or similarly titled organizational unit. The
quality control measures in construction projects include:
Creating quality consciousness.

Mobilising resources.
Setting up site material testing laboratory and establishing other sources for materials testing.
Training the concerned staff.
Implementing quality plan.
Testing incoming and locally produced materials.
Monitoring quality performance.
Investigating cases relating to quality failure to prevent recurrence.
Formulating plan for rework when needed.
Feedback quality performance for effecting improvements.
Quality Inspection. It determines the acceptability of a product or a service or stages of

construction. It includes activities such as measuring, examining, and testing undertaken to
Appendix M
determine whether results conform to requirements. Inspections may be conducted at any level
(e.g., a single activity or the final product of the project).
Project scope is verified through inspections. Inspectors primary function is to make sure that the
scope production complies with the construction document. In addition, the inspector anticipates
the future errors and takes measures to prevent them. An inspector should never be satisfied with
merely reporting mistakes in the work after they are made. Inspector can prevent problems by
continually reviewing the construction documents, and personally visiting all stages of
construction. Timely inspection of the delivered materials can prevent reworks and time delays, if
the incorrect material gets incorporated into the work. It is an established fact that a competent
construction inspector is worth many times its cost in preventing omissions of construction and can
jeopardize the safety and the structure of the project.
Rework. The work rejected on inspection for deviating from the technical specifications falls into
two categories, i.e., repairable or totally rejected. The totally rejected non-repairable work is
dismantled/ demolited and re-done. The repairable work is subjected to rework. The rework is
aimed at bringing a defective or non-conforming item into compliance with requirements or
specifications. Rework results into extra costs and time delays.
It is important to identify the agency responsible for substandard work or faulty supply of
materials. The non-conforming work should always be investigated to find out possible reasons to
ensure non-repetition of such defects. In some organizations, a quality deviation report is prepared
to record the reasons, responsibility, remedial action, time implication and cost incurred for the
defective work.
M.5.4
Quality Audit
A quality audit is a structured review of quality management activities. Its objective is to identify
measures that can improve performance of this project quality or that of other projects. Quality
audit is necessary to simulate and maintain unending improvement in team performance and
product quality. In particular, audit at project sites should be focused at the project defined quality
standards. Quality audits may be scheduled or random, and they may be carried out by properly
trained in-house auditors or by registered third parties such as quality system agencies.
M.5.5 Quality Control Tools And Techniques
Quality control tools and techniques identify and separate the causes of quality problems and
communicate these in precise language that can be understood by all the concerned team members.
Notable quality control tools and techniques are listed below:
Data distribution analysis

Cause and Effect Analysis ( also called fishbone diagram)
Pareto Analysis
Control charts
SCurve Trend Analysis
Acceptance Inspection
Process capability analysis
Appendix M
Benchmarking
M.6
QUALITY COST ANALYSIS
M.6.1 Quality Costs Involved

The primary cost of meeting quality requirements is the expense associated with the quality
management activities. These quality costs can be divided into control costs and failure costs.
Control costs are made up of preventive costs and appraisal costs, and the failure costs include
internal failure costs and external failure costs.
Quality cost = Control costs + Failure costs
Control costs = Prevention costs + Appraisal costs
Failure cost = Internal failure costs + External failure costs
M.6.2 Preventive Costs
These are the costs arising from the quality related activities implied requirements to eliminate
negative deviations from the conformance specifications. These costs include
Quality planning
Preparation of inspection
Design review, Capability analysis
Cooperation with Subcontractors
Training in inspection/control
Establishment and maintenance of quality system
M.6.3 Appraisal costs

These costs comprise of expenses incurred to determine whether a product, process or service
conforms to specified requirements or not. Examples of appraisal costs are
Incoming inspection, production inspection

Final inspection, quality analysis
Procurement of testing/measuring equipment
Installation inspection at customers situation
M.6.4 Failure Costs

Failure costs are those resulting from the non-adherence to the specifications. These can be
divided into internal failure costs and external failure costs. Examples of these are:
Internal Failure Costs
Wastage spoilage, breakage, under-utilization of resources, excessive use of energy, losses

due to fire accident pilferage, high equipment replacement cost due to lack of proper
maintenance.
Appendix M
Investigation of defective tests, other errors

Unnecessary repetition of activities
Idle time/wasted time
Re-inspection and correction
External Failure Costs
Customers/Clients complaints response

Insurance against liability
Loss of goodwill/image
Loss of customers
M.6.5 Cost Benefit Model

In a typical project, the prevention/appraisal costs and cost of failure are inversely related, i.e.,
when prevention cost increases the failure cost decreases and vice versa. However, there is a point
where the total costs are lowest (optimum).
Relationship between Cost of Quality and Quality on any Project
Considering the above, in the initial stages, the cost of controlling quality ( prevention and
appraisal costs) at near zero-defect is higher than the cost of failures under uncontrolled
conditions. However, as the work progresses, the number of failures falls due to better
management of quality, the need for appraisal and control fall, thus reducing the project life cycle
cost. Eventually, with better management, the total cost of quality becomes lesser than it was at
the start, even though the cost of prevention initially was higher.
Better quality management has also certain indirect benefits. Deming identified these invisible
amounts as unknown and unknowable and stresses that management must take them into
consideration if the company is to remain successful. Examples of unknown and unknowable
benefits includes a satisfied customer and on the other hand loss of business of an unhappy
customer. This also includes improved productivity of a satisfied employee and the lost
productivity of a dissatisfied employee. Ultimately, it is the corporate that benefits from the quality
work produced at the project site and in the long run the quality management benefits outweigh the
initial costs incurred.
M.7 TOTAL QUALITY MANAGEMENT
Total Quality Management (TQM), the buzzword of the 1980s, has now resurfaced again with
Appendix M
the ISO 1900:2000. TQM has rightly been called as a quality revolution in the industrial sector.
TQM is the management approach of an organization. Its focus is on quality, based on the
participation of all its members and aiming at long term success through customers satisfaction,
with benefits to all members of the organization and the society. TQM is a continuous process for
improving quality of the product.
The principles of total quality management can be summarized as under:
Customer satisfaction.
Management leadership to create quality culture.
Improvement of processes.
Education and training on job skill and TQM tools.
Defect prevention in lieu of inspection.
Use of data and statistical tools.
Developing a team approach.
Aiming at continuous improvement.
Crosby, Deming, Feigenbaum, Ishikawa and Juran can be considered the most important gurus of
the quality management movement. A brief comparison of the ideas of these quality gurus in
relation to the TQM dimensions show the common threads and the differences. It can be seen that
the need of top management support and the importance of customer relationship is shared by all.
Deming and Crosby focus their approaches in the production process without reference to the
design process; however, their approaches are different. Crosby advocated the achievement of
zero defects through employees commitment, whereas Deming criticises slogans and exhortations
to achieve zero defects. Ishikawas approach is more employee focused than the other four, which
consider that quality management needs to be guided mainly by managers. Juran, Ishikawa and
Feigenbaum have emphasized the need for sampling inspection, whereas Deming criticises this
technique and Crosby considers that it is not necessary in a zero defects environment.
In the global market place number of companies are applying TQM. The criteria for the Malcolm
Baldrige National Quality Award in USA to a total quality managed company includes the
companys performance on:
The leadership role of the senior executive.

The companys strategic planning.
The customer and the market focus.
The use of information to support key company processes.
HRD and utilization of full potential of the work force.
Management of processes to achieve better performance.
The companys better performance related to competitiveness.
In the coming millennium, TQM appears to be a well-accepted system of management. There are
differences in the definition and application of TQM amongst different authors and countries.
Since the culture of the company influences the approach to the application of TQM, different
countries with different cultures apply TQM in different ways. However, with the passage of time
these differences are bound to diminish.
Appendix M
M.8 QUALITY IN TOTAL PROJECT MANAGEMENT

M.8.1 Total Project Management Processes
Project management shows the road map and controls the journey through the stages of the project
life cycle for evolving product/service/facility with the active cooperation of the stakeholders.
Traditionally, the PM has been regarded as an exclusive management process of scientific nature
with specialized planning, monitoring and control techniques, and applied to the operations of very
few project-oriented industries such as construction, engineering and defence. Total Project
Management (TPM) aims at managing the quality of all the processes in the entire project. TPM
includes management of the following processes:
Interdependency Management Processes. Projects consist of processes and an action in one of
these usually affects the others. The overall management of the interdependencies among the
project processes is the responsibility of the project manager. The interdependency management
processes include the following :
Interdependency Management Processes
Process
Description
Reference
Project
initiation
and Evaluating customer and other ISO 10006.5.3.1
project plan development
stakeholder requirements, preparing a
project plan and initiating other
processes
Interaction management
Managing interactions during the ISO
10006.
project
5.3.2
Change management
Anticipating change and managing it ISO
10006.
across all processes
5.3.3
Closure
Closing processes and obtaining ISO
10006.
feedback
5.3.4
Managing Scope-related Processes. Project scope defines the work that must be done in order to
deliver a facility, a product or a service with the specified features and functions. It covers the
processes required to ensure that the project includes all the work required, and only the work
required, to complete the project successfully. Project Charter aims to form the basis for future
project planning, implementation and decisions during the life cycle of a project. Table given
below outlines the processes involved in managing project scope:
Scope-related Processes
Process
Description
Reference
Concept Development
Defining the broad outlines of what ISO 10006.5.4.1
the project product will do
Scope Development and Documenting the characteristics of the ISO 10006.5.4.2
Control
project product in measurable terms
and controlling them
Appendix M
Activity Definition
Activity Control
Identifying and documenting activities

and steps required to achieve the
project objectives
Controlling the actual work carried
out in the project
ISO
5.4.3
10006.
ISO
5.4.4
10006.
.
Managing Time-related Processes. Project Time Management includes the processes required to
ensure timely completion of the project.
Time-related Processes
Process
Description
Activity
Dependency Identifying inter-relationships and the
Planning
logical interactions and dependencies
among project activities
Estimation of Duration
Estimating the duration of each
activity in connection with the specific
conditions and with the resources
required
Schedule Development
Inter-relating the project time
objectives, activity dependencies and
their durations as the framework for
developing general and detailed
schedules
Schedule Control
Controlling the realization of the
project activities, for confirming the
proposed schedule or for taking
adequate actions for recovering from
delays
Reference
ISO 10006.5.5.1
ISO 10006.5.5.2
ISO
5.5.3
10006.
ISO
5.5.4
10006.
Managing Cost-related Processes. Project Cost Management includes the processes required to
ensure that the project is completed within the approved budget.
Process
Cost Estimation
Budgeting
Cost Control
Cost-related Processes
Description
Developing cost estimates for the
project
Using results from cost estimation to
produce the project budget
Controlling costs and deviations from
the project budget
Reference
ISO 10006.5.6.1
ISO 10006.5.6.2
ISO
5.6.3
10006.
Managing Resources-related Processes. These processes aims to plan and control resources.
Appendix M
They help to identify any possible problems with resources. Examples of resources include
manpower, materials, equipment, facilities, finance, information system, associates and
consultancy services and space.
Process
Resource Planning
Resource Control
Resource-related Processes
Description
Reference
Identifying, estimating, scheduling ISO 10006.5.7.1
and allocating all relevant resources
Comparing actual usage against ISO 10006.5.7.2
resource plans and taking action, if
needed
Managing Personnel-related Processes. Project Human Resources Management includes the

processes required to make the most effective use of the people involved with the project. It
includes all the projects stakeholders.
Personnel-related Processes
Description
Structure Defining a project organizational
structure tailored to suit the
project
needs
including
identifying roles in the project
and defining authority and
responsibility
Staff Allocation
Selecting and assigning sufficient
personnel
with
appropriate
competence to suit the project
needs
Team Development
Developing individual and team
skills and ability to enhance the
project performance
Process
Organizational
Definition
Reference
ISO
10006.5.8.1
ISO
10006.5.8.2
ISO
10006.5.8.3
Managing Communication-related Processes. Project Communication Management includes the

processes required to ensure timely and appropriate generation, collection, dissemination, storage,
and ultimate disposition of project information. It provides the critical links among people, ideas,
and information that are necessary for success. Everyone involved in the project must be prepared
to send and receive communications in the project language and must understand how the
communications they are involved in as individuals affect the project as a whole.
Communication-related Processes
Process
Description
Reference
Communication Planning
Planning
the
information
and ISO 10006.5.9.1
communication systems of the project
Appendix M
Information Management
Communication Control
Making
necessary
information ISO 10006.5.9.2
available to the project organization
members and other stakeholders
10006.
Controlling
communication
in ISO
accordance
with
the
planned 5.9.3
communication system
Managing Risk-related Processes. Project Risk Management includes, the processes concerned
with identifying, analyzing, and responding to the project risk. It includes maximizing the results of
positive events and minimizing the consequences of adverse events.
Risk-related Processes
Process
Description
Risk Identification
Determining risks in the project
Risk Estimation
Evaluating
the
probability
of
occurrence of risk events and the
impact of risk events on the project
Risk
Response Developing plans for responding to
Development
risks
Risk Control
Implementing and updating the risk
plans
Reference
ISO10006.5.10.1
ISO10006.5.10.2
ISO10006.5.10.3
ISO10006.5.10.4
Managing Purchase-related Processes. Project procurement Management includes the processes

required to acquire goods and services from outside the performing organization. For simplicity,
goods and services, whether one or many, will generally be referred to as a product.
Process
Purchase Planning
control
Documentationof
Requirements
Evaluation
Sub-contractors
Sub-contracting
Contract Control
Purchase-related Processes
Description
and Identifying and controlling what is to
be purchased and when
Compiling commercial conditions and
technical requirements
of Evaluating and determining which
sub-contractors should be invited to
supply products
Issuing invitations to tender, tender
evaluation, negotiation, preparation
and placing of the sub-contract
Ensuring
that
sub-contractors
performance meets the contractual
requirements
Reference
ISO10006.5.11.1
ISO 0006.5.11.2
ISO10006.5.11.3
ISO10006.5.11.4
ISO10006.5.11.5
Appendix M
Managing Quality-related Processes. Project Quality Management includes the processes

required to ensure that the project will satisfy the needs for which it was undertaken. It includes
all activities of the overall management function that determine the quality policy, objectives, and
responsibilities and implements them by means such as quality planning, quality control, quality
assurance, and quality improvement, within the quality system. Also see product quality
management processes Section M.5.
M.8.2 TQM VS TPM
The two key aspects in the Total Project Management are the quality of the delivered
product/services and the quality of the project management process. In this era of high technology
and accelerated rate of change, with fast reducing delivery time and costs in competitive market,
management of multi-disciplined, multi-dimensional, multi-national, multi-tasks large-size projects
calls for philosophy different from the traditional project management. The emerging Total
Project Management (TPM) (see Appendix R) also called the Modern Project Management
approach, links it with the TQM philosophy; it has similarities as well as differences with the
TQM.
In the project context, TPM implies total active involvement and commitment of everyone in the
project for meeting quality requirements of the clients, by managing the production efficiently
within the specified time and budgeted costs, with all working enthusiastically as a team to achieve
customers satisfaction. Both TQM and TPM focus on the customer satisfaction, the process
management, and the management responsibility for creating an environment for quality, but that is
where the traditional similarity ends.
TPM and TQM concepts have some differences. TQM is a strategic approach to create a quality
focussed culture in an organization for long term gains whereas TPM uses cross-functional and
multidisciplinary project teams using a tactical approach to manage product quality processes and
project management processes to the project stakeholders satisfaction. TQM provides a long term
vision of how to achieve the best to satisfy the present and future customers; while the art and
science of TPM focuses on planning, scheduling, monitoring and controlling, with the active
participation of the stakeholders and the project team, to ensure that the vision is accomplished
within the project specified completion period, in a cost-effective manner, to the satisfaction of the
client. TPM is a service that delivers a new service whereas TQM focus is on the manufacturing
industry mostly dealing with the ongoing product. TQM aims at continuous improvement of the
Appendix M
product in the long run whereas project is designed to accomplish its mission within a limited time
in a temporary organization.
Lesson 14 Appendix N
WORKERS SAFETY COMES FIRST

Appendix N
N.1 WHY SAFETY COMES FIRST?

Construction involves risky operations in dangerous areas, such as working at heights, working on
slippery surfaces and working under material handling equipment. Constantly changing sites,
nature of work, construction methodology and technology add new dimension to the safety
problems. Safety is a question of life and death for those working at construction sites.
Unsafe working leads to accidents. An accident is an unplanned, unwanted, undesirable, sudden
mishap which interrupts an activity or a function; and causes sufferings and/or damages. Accidents
do not just happen, they are caused. A cause of accident is an uncontrolled hazard. The worst
sufferer due to an accident is the worker. These accidental unintentional unsafe acts result in loss
of life, limb, time and money. A worker who meets with an accident suffers from financial,
physical and mental loss, and he could be the sole bread earner. These accidents add to avoidable
death toll and crippled human population. No amount of money can compensate for the lost life,
lost limb or lost time of the family
breadearner. These permanent damages to the life of a worker can be avoided.
Employers do face serious economic consequences of avoidable accidents and health hazards.
Employers monetary cost of such consequences represent the replaceable cost of losses. These
losses include reduced output, wasted wages, lost time, lowered morale, damaged property, lost
experienced hand replacement, insurance cost and incidental expenses such as statutory reporting,
investigations, medical aids, additional office expenses and work breakdown till restarting of the
activity. The accidents and the unhealthy environments, eat away the employers profits. Accidents
subtract employers pleasure, add to employers miseries, divide employers income, multiply
employers worries.
An effective accident prevention programme is the best gurantee against the accidents.
Time, money and efforts spent on safety always pays dividends. Safety and efficiency go hand in
hand. Safe practices yield high productivity, boost workers morale, project corporate image, cut
accident costs and ensure compliance with law. The studies highlight that it is economical to
enforce safety measures at construction sites rather than face the consequences of unsafe project
environments.
This Appendix covers the causes of accidents at project site, highlights the statutory
responsibilities of the employer, outlines the salient features of the project safety policy, describes
safety considerations in
the layout of site temporary facilities, covers safety related
responsibilities of personnel at site.
N.2 CAUSES OF ACCIDENTS AT CONSTRUCTION SITE
Main causes of accidents can be analyzed from the data reported by some of the construction
organizations and the statisitics released by the statutory bodies. In one of the studies extending
over two years covering 45,000 workers in a public sector construction company, in power plants,
the causes of reported accident were as under:
S.
No.
Causes of Accidents
1.
2.
Fall from height

Slip and fall from
same level
Struck by falling
speed or moving
objects
Electric shocks /
burns
Cave in excavation
Others ( 7 causes)
Total
3.
4.
5.
6.
S No.
1.
2.
3.
4.
5.
Public sector company in construction projects

Deaths
Injuries
Total
No.
56
-
%
60.1
No.
200
20
%
37
3.7
%
40.38
3.15
25
2.9
168
31.1
30.44
6.5
31
5.7
5.84
6
93
6.5
100
15
107
541
2.8
19.7
100
3.31
16.88
100
Findings of a Study in UK
Causes of fatal injuries
Fall of people
Falling materials / objects
Transport / mobile plant
Electricity
Others
Percentage
52 %
19 %
18 %
5%
6%
A Reputed Public Sector Construction CompanyActuals

Sl.
Causes of Injuries and Fatalities
Percentage
No.
1.
Fall of persons from height
48 %
2.
Vehicles
14 %
3.
Fall of objects from height
11 %
4.
Electrocution
6%
5.
Collapse of excavation / structures
8%
6.
Pressed under loads
6%
7.
Others
7%
The studies on the safety of persons at work site reveal the following:
1. The basic causes of accidents in civil engineering works in the order of seriousness are as
follows:
(a) Persons falling from height.
(b) Persons being struck or trapped by moving objects.
(c) Persons stepping on or striking against objects.
(d) Persons handling objects in such a way so as to cause injury.
(e) Persons using hand tools.
(f) Other causes.
2. There is an increase in the frequency of accidents in case of new employees specially during
the first year of service.
3. In industrialized countries, the average number of fatalities per 1,00,000 workers are around 12,
with some countries reporting 35 deaths per 1,00,000 workers. In India, one of the reputed
company has recorded the death rate of around 100 per 1,00,000 workers.
4. The accident rate in construction is 4 to 5 times higher than that of the manufacturing sector on
the global scale .
N.3 STATUTORY SAFETY MEASURES IN INDIA

According to the Building and Other Construction Workers (Regulation of Employment and
Conditions of service) Act, 1996 and Central Rules, 1998; the employer has the sole
responsibility for ensuring safety of construction workers.
In case of an accident causing death or any body injury by reasons of which the person injured is
prevented from working for a period of 48 hours or more, the employer has to give notice thereof
to appropriate authorities who may make such investigations or enquiry as is considered
necessary. However, in case of accident causing death of five or more persons, the appropriate
Government authorities are also required to make an enquiry into such accidents within one month
of the receipt of the notice. An overview of the salient statutory requirements is outlined below.
The subject covered is placed in sequence as it is listed in the clause 40(2) Chapter VII on Safety
and Health Measures in the Building and Other Construction Workers (Regulation of
Employment and Conditions of service) Act, 1996.
In particular, statutory safety provisions for Safety and Health Measures included in the Act
cover the following:
(a) Safe means of access and safety of working place.
(b) Demolition work to be undertaken with experienced workers and under competent persons.
(c) Safe handling and use of explosives under competent persons.
(d) Safe erection, installation, use and maintenance of transporting equipment.
(e) Safe erection, installation, use and maintenance of lifting equipment.
(f) Adequate and suitable lighting of workplace and approaches.
(g) Prevention inhalation of dust, fumes, gases or vapours.
(h) Safe stocking and handling of materilals or goods.
(i) Safeguarding of machinery.
(j) Safe handling and operation of plant and equipment.

(k) Precautions against fire.
(l) Limits on weights to be lifted and moved by workers.
(m) Safe transportation of workers over water.
(n) Prevention from electricity danger.
(o) Use of personal safety equipment, including safety nets, safety sheets and safety belts.
(p) Compliance of safety standards regarding scaffolding, ladders and stairs, lifting appliances,
ropes, chains and accessories, earth moving equipments and floating operational equipments.
(q) Safety in construction operations connected with pile driving, concrete work, work with hot
asphalt, tar or other similar things, insulation work, demolition operations, excavation,
underground construction and handling materials.
(r) Safety policy to ensure the safety and health of the building workers.
(s) The information to be furnished to the Bureau of Indian Standards (BIS) regarding the use of
any article or process covered under the BIS Act 1986, in a construction work.
(t) The provision and maintenance of medical facilities.
The topics covered in the Central Rules 1998, framed by the Central Government, under the
Clause 41of the said Act, are given below, these are detailed in Annexure ( i ) to this Appendix.
THE BUILDING AND OTHER CONSTRUCTION WORKERS
( REGULATION OF EMPLOYMENT AND CONDITION OF SERVICES) ACT 1996
CENTRAL RULE,1998
PART III : SAFETY AND HEALTH
CHAPTER
VI
VII
TOPICS
General Provisions: Excessive noise and vibrations; Fire protection; Emergency action
plans; Fencing of motors and machinery,
Manual lifting and carrying of excessive weights; Health and safety policy,
Dangerous and harmful environment; Overhead protection; Slipping, tripping, cutting,
drowning and falling hazards; Dust, gases, fumes; Corrosive substances, Eye protection;
Head protection and other protective apparel; Electrical hazards, Vehicular traffic; Stability
of structures; Illumination of passageways; Stacking of materials; Disposal of debris;
Numbering and marking of floors;Use of safety helmets and shoes.
Lifting of Appliances and Gear: Construction and Maintenance of lifting appliances; Test
and periodical examination of lifting appliances,
Automatic safe load indicators; Installation, Winches, Buckets; Identification and marking of
safe working load; Loading of lifting appliances and lifting gears; Operators cab or cabin;
Operation of lifting appliances; Hoists; Fencing of means of access to lifting appliances;
Rigging of derricks, Securing of derrick foot; Construction and maintenance of lifting gear;
Test and periodical examination of lifting gears; Ropes, Heat treatment of lifting gears;
Certificate to be issued after actual testing and examination; Register of periodical test,
VIII
IX
X
XI
XII
XIII
X IV
XV
XVI
XVII
XVIII
XIX
XX
XXI
XXII
XXIII
XX IV
XXV
examination and certificates thereof,

Vacuum and magnetic lifting gear; Knotting of chains and wire ropes; Carrying on persons
by means of lifting appliances; Hoists carrying persons,
Attachment of loads; Tower cranes; Qualification of operator of lifting winches and of
signaller.
Runways and Ramps: Use of runways and ramps by building worker, Use of vehicles, Slope
of ramps, Use by wheel barrows,
Work on or adjacent to water: Transport by water, Prevention from drowning,
Transport and Earth Moving Equipment: Earth moving equipment and vehicles, Power
shovels and excavators, Bulldozers, Scrappers, Mobile asphalt layers and finishers, Pavers,
Road rollers, General safety,
Concrete Work: General provisions regarding use of concrete, Preparation and pouring of
concrete and erection of concrete structures, Buckets, Pipes and pumps, Mixing and pouring
of concrete, Concrete panels and slabs, Stressed and tensioned elementsVibrators, Inspection
and supervision, Beams, floors and roofs, Stripping, Reshoring,
Preparation, Protection of adjacent structures, Demolition of walls and partitions, Method of
operation, Access to floor, Demolition of structural steel, Storage of material or article, Floor
openings, Inspection, Warning signs and barricades, Mechanical method of demolition,
Excavation and Tunnelling Works: Notification of intention to carry out excavation and
tunnelling work, Project engineer, Responsible person, Warning signs and notices, Register
of employment, Illumination, Stability of structure, Piling, shoring and bracing, Safe access,
Trenches, Depth of trenches, Positioning and use of machinery, Breathing apparatus, Safety
measures for tunnelling operation, Pneumatic tools, Shafts, Lift for shaft, Means of
communication, Signals, Clearances, Shelters, Use of internal combustion engine,
Inflammable oils, Coupling and hoses, Hose installation, Fire resistant hoses, Flame proof
equipment Storing of oil and fuel underground, Use of gases underground, Water for fire
fighting, Flooding, Steel curtains, Rest shelters, Permissible limit of exposure of chemicals,
Ventilation, Air supply intake point, Emergency generators, Air mains, Bulk head and
air-locks, Diaphragms, Portable electrical hand tools, Circuit breaker, Transformer, Live
wires, Welding sets, Quality and quantity of air, Working temperature, Man-locks and
working in compressed air environment, Safety instruction, Medical lock,
Construction, Repair and Maintenance of Steep Roof: Work on steep roofs, Construction
and installation of roofing brackets, Crawling boards,
Ladders and Step-ladders: Construction and safe use, Rungs, Materials for ladders,
Cath Platform and Hoardings, Chuts, Safety Belts and Nets: Catch platforms, Hoardings,
Chutes, its constrction and use, Safety belt and its use, Safety net and its use, Storage of
safety belts and nets,
Structure Frame and Form Work: General provision, Form work, false work and shoring,
Erection or dismantling of steel and pre-fabricated structure, Form work, Deshoring,
Stacking and Unstaking: Stacking and unstaking of materials and articles, Stacking of
cement and other material bags,
Scaffold: Scaffold construction, Supervision by a responsible person, Maintenance,
Standards, ledger and putlogs, Working platform, Board, plank and decking, Repair of
damaged scaffold, Opening, Guardrails, Scaffold used by building workers of different
employers, Protection against electric power line, Screening net and wirenets, Tower scaffold
Gear for suspension of scaffold, Trestle scaffold and cantilever scaffold, Scaffold supported by
building, Use of winches and climbers for suspended scaffold, Safety devices for suspended
scaffold,
Cofferdams and Caissons: General provisions, Pressure plant and equipment,
Safety Organisation: Safety committees, Safety officer, Reporting of accidents, Procedure
for enquiry into causes of accident or dangerous occurrence,
Explosives: Handling of explosives, Precautions
Piling: General provisions, Stability of adjacent structure, Protection of operator, Instruction
to and supervision of building workers working on a pile driving equipment, Entry of
unauthorised person, Inspection and maintenance of pile-driving equipment, Operation of
pile driving equipment, Working platform on piling frames, Pile testing
Medical Facilities: Medical examination of building workers, Duties of construction medical
officers, Occupational health centres, Ambulance room, Ambulance van, Stretchers,
Occupational health services for the building workers, Notice of poisoning or occupational
diseases, First aid boxes, Emergency care services or emergency treatment,
Information to Bureau of Indian Standards: Furnishing of information to Bureau of
Indian Standards,
The special provisions in the Act, pinpoint the responsibility of the employer. It makes employer
responsible to ensure compliance with the provision of statutory requirements relating to safety
and for taking all practical steps necessary to prevent accidents. The penalty for contravention of
safety provisions includes punishment with imprisonment for a term which may extend upto six
months or with fine upto Rs. 2000.00 or both, as specified in the Act.
N.4 FORMULATING PROJECT SAFETY POLICY

N.4.1 Corporate Safety Policy
Object of The Safety Policy. As described in the Safety Act, the safety policy relates to steps to
be taken to ensure the safety and health of the building workers, the administrative arrangements
thereof and the matters connected therewith, to be framed by the employers and contractors for the
operations to be carried on in a building or other construction work. Project safety policy aims at
ensuring safety of each individual employed at the project site. At the project site, the safety
policy is transformed into an action programme. The actionoriented safety programme of a
project comprises of a safety policy statement , safety plan, safety organization, safety
responsibility, safety performance monitoring, safety related communication / reporting system,
safety training programme, continous safety awareness drive and specially trained technically
qualified safety officer to implement it. Workers are also involved through safety committee
formed at the project office. Maintenance of safety records as well as periodic safety audit are
essential requirements of a sound safety programme.
Safety Policy Statement. It demonstrates the safety objectives and top management commitment
to safety. Large organization may state its safety policy in a printed brochure and circulate it
widely amongst employees. A small contractor may make this clear through notice board. The
policy statement generally comprises of few direct sentences. To quote an example, the safety
statement of a reputed company in Middle East reads as :
Prevention of all injuries and occupational diseases
Health and safety is a line management responsibility
Health and safety are of equal importance to other business objectives
Creation of a safe and healthy work environment
Establishment of safe and healthy working practices
Ensuring effective health and safety communications
Creating interest and enthusiasm in health and safety
Developing personal responsibility for health and safety
A typical project safety policy statement may also contain sentences such as
Eliminate all risks to visitors, public and damage to property adjacent to the site.
Safety Evaluation Of Construction Agencies. During the prequalification stage, most of the
major clients nowadays demand the following three safety performance indices along with Health,
Safety & Environment (HSE) documents.
Frequency Rate. It gives the number of Accidents resulting in time loss per million man-hours
worked:
Frequency Rate
No. of Accidents 1000,000

Man-hours Worked
Severity Rate. It shows the number of man days lost due to accidents, per million man-hours
worked:
Severity Rate
No. of Man-days lost due to Accidents 1000,000

Man-hours Worked
Loss Time Injury Frequency. It indicates the number of injuries resulting in time loss per million
man-hours worked:
Injury Frequency =
No. of injuries 1000,000

Man-hours Worked
In the above formulae, a time loss accident is defined as an accident causing disablement for a
period of 48 hours or more to the injured. The days of disability (Lost time) is the number of full
calendar days on which the injured person was unable to work as a result of a temporary injury.
(IS: 3786 may be referred for more details)
Project Safety Programme. Project safety policy aims at providing safe working environment by
implementing statutory provisions and taking other measures to ensure safety of each individual
worker employed at the project site. The purpose of the project safety programme is to state who
is responsible for safety, explain how the project safety policy will be implemented, state specific
arrangements for maintaining the safe working conditons, and provide a management tool for
monitoring project safety programe. It includes:
Safety organization with well-defined responsibilities.
Safety training on construction methods and equipment operation practices.
Management tool to monitor project safety.
Safety related reporting system.
N.4.2 Project Safety Organisation

Its role is to create an environment in which the workers will be trained and motivated to perform
safe and productive construction work. The implementation of safety at site requires thorough
knowledge of the laws govering safety and indepth knowledge of construction methods. Its
functions are:
1. To specify in writing, managerial responsibility for safety, health and welfare of the
employees.
2. To ensure that appropriate training and instruction is provided for all employees particularly
to graduates, trainees, apprentices.
3. By a programme of regular presentations and publicity to sustain an awareness of the need
to prevent accidents and health risks in the minds of the employees.
4. To require sub-contracts to operate a safety policy no less stringent than the company. To
provide training to employees of the sub-contractors.

5. To make appropriate accident prevention arrangements by effective liaison with employers
other than sub-contractors.
To encourage the discussion of health and safety matters at all levels including setting up of
arrangements for joint consultations with employees through their safety representatives.A large
organization may set up a safety department to implement the safety policy. This department
should be integrated in the general organization in the same way as the technical engineering and
finance departments are. Direct control of the safety department may be vested in a senior safety
officer or a personnel manager, but it is essential that the overall direction of the programme is
vested in a nominated member of the top management.
The project safety organization is headed by the Project Safety Officer who as per the law should
be a technical graduate with work experience. The safety officer /department can be assigned the
following functions:
1. To establish the norms and guidelines for the provision of safety of sites, men, materials,
equipment and structures for the line management incharge of these functions.
2. To prepare check lists, manuals, and other documents for use by the line management in
carrying out the function No. 1
3. To supervise safety at site and within the organization.
4. To give advice on all safety matters in accordance with the safety policy.
5. To maintain all safety records, prepare reports and monitor the same to all concerned.
6. To conduct safety training in the organization.
7. To carry out safety audit periodically.
8. To discharge all statutory obligations of the organization regarding safety, and maintain
liaison with the government safety machinery and other industry associations.
9. To organize competitions, posters, melas and other such activities that promote safety
consciousness amongst employees.
Small organisations which cannot create separate safety dzpartments should, however, nominate a
suitable officer to supervise safety precautions.
The safety law specifies that in every project / establishment wherein 500 or more building
workers are ordinarily employed, in addition to the technically qualified safety officer, the
employer has to constitute a Safety Committee consisting of representatives of employer and the
building workers. The safety committee facilitates the necessary co-operative effort to affect
safety measures at the project site. In addition to the project team, the safety committee should
have representatives from supervisors and the workers. It acts as an advisory body and meets
regularly.
N.4.3 Safety Records

The statutory safety records required to be maintained at sites are as follows:
1. Accident register.
2. Dangerous hazards register.
3. First aid register.

4. Register for inspection notes by government officers.
5. Copies of all accident reports and hazard reports filed to the prescribed authority.
Non-statutory records may be such as prescribed by the head officer or the safety department.
These will vary from one organization to another.
N.4.4 Safety Training
Safety training aims at making the participants recognise unsafe working conditions, avoid
environmental hazards and prevent hazardous situation. Recognition of unsafe working conditions
improves the ability to understand the adverse situations that can result in physical harm to the
workers. Avoidance of environmental hazards includes acts such as fencing and guarding heights
and openings, erecting safe access scaffolds and ladders and developing safe operating procedures
for machinery, tools and equipment. Prevention means to anticipate and to take actions to prevent
occurrence of dangerous and hazardous situations. The level and scope of safety training varies
with the organizational hierarchy but formal safety training is a must at all levels.
N.4.5 Safety Checklists
A checklist is a structured list of points used to verify that the specified safety standards have been
correctly performed. A checklist will vary from project to projecct. The model safety checklist,
given in Training Manual on Safety and Health in Construction, International Labour Organisation,
1987, is covered under the following heads. This is detailed in Annexure (ii) to Appendix N.
Site Planning and layout
Exvacations
Scaffolding
Ladders
Roof work
Steel erection
Work over water
Demolition
Confined spaces
Transport
Cranes
Gin or pulley wheels
Goods and platform hoists

Hand tools
Cartridge tools (or bolt guns)
Concrete formwork
Electricity
Fire precautions
Noise
Hazardous substances
Welfare facilities
N.5 BUILDING SAFETY IN SITE LAYOUT AND TEMPORARY FACILITIES
The construction site is the "factory" for the production of the building products. The aim in
planning site layout and facilities is to produce a working environment that will maximize
efficiency and reflect the organizations attitude to the project, its commitment to the safety and
well-being of the workforce and its determination to satisfy the needs of its customers.
The typical facilities required at a site include:
Welfare canteen/mess rooms, drying/changing rooms, toilets/washrooms, car

parking/transport, worker accommodation, time office.
Offices main contractor, package contractor, client/design team.
Accessdelivery access, site access roads, pedestrian access.
Storage, etc. off-loading areas, long-term storage, workface storage, tool storage, secure
stores, hazardous material store, prefabrication areas, batching plants.
Transportationhoists, craneage, horizontal transportation.
Site cleanliness and rubbish removal.
Temporary utility services electricity/gas/water, drainage/surface water, existing services.
Testingon-site laboratories.
Securityhoarding/fencing, site access, stores security, identification passes, image signage,
public relations.
The location and the layout of each temporary facility in the construction factory, will affect or be
affected by one or all of the key resources, namely: labour, plant and equipment, materials and
components. An estimate of the requirements of these resources is made at tender stage for costing
of the tender. Following the award of the contract the site management team produce a site plan
showing relationship between the permanent works, the site boundary and temporary facilities.
The site layout and facilities planning process is complicated, time-consuming and intellectually
demanding. It is a skill acquired from experience over a long period of time. In most companies
the planning method is not written down but remains locked in the minds of experienced
personnel.
Most managers plan site facilities using a combination of knowledge from previous experience,
company policy and statutory legislation. The fundamental principle is to allocate the best space
to the most important facility. The site topography changes as construction progresses and this
must be considered and planned before work commences. Common fault is to concentrate on the
initial activities and s forgetting that the needs towards the end of the project are different from
those at the start. Failure to plan site layout properly will significantly reduce the workers morale
and efficiency and ultimately adversely affect the project onjectives.
It is the safety and security requirements that dictates the location of hoarding/fencing, site access
ways, stores, equipment installations, identification check posts, signage, first aid, site cleanliness,
lighting, existing services, and fire prevention. In particular, site layout should take into
consideration the following:
Site Fencing. A two meter high fence can keep out the unauthorised people and can protect the
public from common hazards at the site.
Signage. Signs enable workforce to move safely and speedily from place to place. These also
warn the people against safety hazards. Signboard at important places highlight safety related
procedure. Use of appropriate signs is important from many angles. These include, site safety,
labour morale, work efficiency and the image of the organization.
First-Aid. Many countries have statutory regulations for enforcing provisions of first-aid
facilities. The first-aid box kits and emergency response procedures must be located at appropriate
places.
Safe Assess. Safe access and good visibility for workers and vehicles is necessary. These should
be well marked, both for labour and vehicular traffic.
Living Accommodation and Storage. This should be carefully sited to avoid hazards.
Lighting. Adequate light should be provided at work places and in the living areas.
Site Cleanliness. Proper disposal measures should be provided for removal of rubbish and
specially of inflamable material.
N.6 SAFETY RELATED ROLE OF THE PROJECT PERSONNEL

The responsibilities and duties of employers, architects, project engineers and designers, building
workers etc. are given in Chapter II of The Building and Other Construction Workers (Regulation
of Employment and Conditions of Service) Act, 1996. The main rsponsibilities of the project
personnel are highlighted below:
N.6.1 Project Managers Responsibility
Plan and administer all programmes.
Disseminate information to all concerned.
Monitor compliance.
Identify potential violators and take corrective action.
Cooperate with government, statutory bodies and other organizations having jurisdiction. over the
work.
Ensure all reporting is timely and accurate.
N.6.2 Safety Manager Responsibility
Organize safetyrelated information to be passed from management to workers, including
sub-contractors.
Conduct of safety training programmes, including induction training for all workers on site.
Investigate and report causes of accidents and occupational diseases and take remedial preventive
measures.
Act as adviser on safety matters.
N.6.3 Site Superintendents Responsibility
Know all safety aspects of each operation and equipment at project site.
Ensure that all operations are performed safely.
Prepare reports on violations observed.
Reprimand the violators.
Forward all safety related reports to all concerned regularly.
Ensure that all supervisors are trained to administer basic first aid.
Stock adequate first aid materials.
Ensure safety policy and rules are displayed at prominent places and are regularly
communicated through site meetings.
N.6.4 Architect and Designers Responsibility
Safe design of engineering structures.
Safe engineering of structures components. These include form work and scaffold, erection of
precast concrete components, erection of roofing and equipment foundation.
Preparation of the method statements for executing dangerous activities.
N.6.5 Site Supervisors Responsibility:
To keep working conditions and eqpments safe.

To inspect working safety regularly.
To ensure that workers are adequately trained for the job.
To implement work place safety measures.
To adopt best solutions using available resources and skills.
Make available necessary PPEs and ensure their usage.
N.6.6 Workers Responsibility and Safety Precautions
To comply with the requirements of such rules as relate to him.
To act and co-operate in carrying out the requirements of these rules.
To report to concerned authority, if he discovers any defects in the lifting appliance, lifting
gear, lifting device, concerning any transport equipment or other equipment.
Unless duly authorized or except in case of necessity, not to remove or interfere with any
fencing, gangway, gear, ladder, hatch covering, life-saving appliances, lighting or other things,
engaged in that work.
To keep the latrines, urinals, washing points, canteen and other facilities provided by the
employer for securing his welfare in a clean and hygienic condition.
In order to create safe working environment, a worker should:
Think, talk and practice safety.
Cultivate safety sense.
Use safety helmet and other safety equipment when required.
Cultivate better house keeping culture.
Protect eyes; sight once lost is gone forever.
Watch steps, tread warily.
Avoid practical jokes that can cause serious injuries.
Always know what to do, in case of accident.
To see future work, make it safe today.
It should be noted that the workers safety is the prime responsibility of the line executives.
N.7 CONCLUSION
Safety comes first always and every time. Every job can be done safely. Safety awareness saves
accidents. Accidents multiply worries, miseries and costs. Controlling accident reduces saddest
product human scrap. Safety is everyones responsibility, take pride in accident prevention.
Time, money and efforts spent on safety always pay dividend. Safety adds to corporate
reputation. Safety serves society and safety is the builders first reponsibility. Most profitable
companies in the world have most impressive safety performance.It is the responsibility of all
concerned with construction to prevent accidents by creating safety awareness.
Annexure (i) of Appendix N
Back to Appendix N
THE BUILDING AND OTHER CONSTRUCTION WORKERS (REGULATION OF EMPLOYMENT
AND CONDITION OF SERVICES) ACT 1996
CENTRAL RULE,1998
The topics covered in the Central Rules 1998, framed by the Central Government, under the Clause 41of the said
Act, are tabulated below:
PART III : SAFETY AND HEALTH

Chap.
Clause
TOPICS
VI
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
GENERAL PROVISIONS
Excessive noise and vibrations
Fire protection
Emergency action plans
Fencing of motors and machinery
Manual lifting and carrying of excessive weights
Health and safety policy
Dangerous and harmful environment
Overhead protection
Slipping, tripping, cutting, drowning and falling hazards
Dust, gases, fumes
Corrosive substances
Eye protection
Head protection and other protective apparel
Electrical hazards
Vehicular traffic
Stability of structures
50.
51.
52.
53.
54.
VII
55.
Illumination of passageways
Stacking of materials
Disposal of debris
Numbering and marking of floors
Use of safety helmets and shoes,
LIFTING OF APPLIANCES AND GEAR
Construction and maintenance of lifting appliances
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
Test and periodical examination of lifting appliances

Automatic safe load indicators
Installation
Winches
Buckets
Identification and marking of safe working load
Loading of lifting appliances and lifting gears
Operators cab or cabin
Operation of lifting appliances
Hoists
Fencing of and means of access to lifting appliances
Rigging of derricks,
Securing of derrick foot
Construction and maintenance of lifting gear
Test and periodical examination of lifting gears
Ropes
Heat treatment of lifting gears
Certificate to be issued after actual testing and examination
Register of periodical test, examination and certificates thereof
Vacuum and magnetic lifting gear
Knotting of chains and wire ropes
Carrying on persons by means of lifting appliances
Hoists carrying persons
Attachment of loads
Tower cranes
Qualification of operator of lifting winches and of signaller
VIII
82.
83.
RUNWAYS AND RAMPS

Use of runways and ramps by building worker
Use of vehicles
84.
85.
IX
86.
87.
X
88.
89.
90.
91.
Slope of ramps
Use by wheel barrows
WORK ON OR ADJACENT TO WATER
Transport by water
Prevention from drowning,
TRANSPORT AND EARTH MOVING EQUIPMENT
Earth moving equipment and vehicles
Power shovels and excavators
Bulldozers
Scrappers
92.
93.
94.
95.
XI
96.
97.
Mobile asphalt layers and finishers

Pavers
Road rollers
General safety
CONCRETE WORK
General provisions regarding use of concrete
Preparation and pouring of concrete and erection of concrete structures
98.
99.
100.
101.
102.
103.
104.
Buckets
Pipes and pumps
Mixing and pouring of concrete
Concrete panels and slabs
Stressed and tensioned elements
Vibrators
Inspection and supervision
105.
106.
107.
XII
108.
Beams, floors and roofs

Stripping
Reshoring,
DEMOLITION
Preparation
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
XIII
119.
120.
121.
122.
123.
124.
125.
126.
Protection of adjacent structures

Demolition of walls and partitions
Method of operation
Access to floor
Demolition of structural steel
Storage of material or article
Floor openings
Inspection
Warning signs and barricades
Mechanical method of demolition
EXCAVATION AND TUNNELLING WORKS
Notification of intention to carry out excavation and tunnelling work
Project engineer
Responsible person
Warning signs and notices
Register of employment
Illumination
Stability of structure
Piling, shoring and bracing
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
Safe access
Trenches
Depth of trenches
Positioning and use of machinery
Breathing apparatus
Safety measures for tunnelling operation
Pneumatic tools
Shafts
Lift for shaft
Means of communication
Signals
Clearances
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
X IV
169.
170.
Shelters
Use of internal combustion engine
Inflammable oils
Coupling and hoses
Hose installation
Fire resistant hoses
Flame proof equipment
Storing of oil and fuel underground
Use of gases underground
Water for fire fighting
Flooding
Steel curtains
Rest shelters
Permissible limit of exposure of chemicals
Ventilation
Air supply intake point
Emergency generators
Air mains
Bulk head and air-locks
Diaphragms
Portable electrical hand tools
Circuit breaker
Transformer
Live wires
Welding sets
Quality and quantity of air
Working temperature
Man-locks and working in compressed air environment
Safety instruction
Medical lock,
CONSTRUCTION, REPAIR AND MAINTENANCE OF STEEP ROOF
Work on steep roofs
Construction and installation of roofing brackets
171.
XV
172.
173.
174.
XVI
175.
176.
Crawling boards
LADDERS AND STEP-LADDERS
Construction and safe use
Rungs
Materials for ladders,
CATCH PLATFORM AND HOARDINGS, CHUTS, SAFETY BELTS AND NETS
Catch platforms
Hoardings
177.
178.
179.
Chutes, its construction and use

Safety belt and its use
Safety net and its use
180.
XVII
181.
182.
183.
184.
185.
XVIII
186.
187.
XIX
188.
189.
190.
191.
192.
Storage of safety belts and nets

STRUCTURE FRAME AND FORM WORK
General provision
Form work, false work and shoring
Erection or dismantling of steel and pre-fabricated structure
Form work
Deshoring,
STACKING AND UNSTAKING
Stacking and unstaking of materials and articles
Stacking of cement and other material bags,
SCAFFOLD
Scaffold construction
Supervision by a responsible person
Maintenance
Standards, ledger and putlogs
Working platform
193.
194.
195.
196.
197.
198.
199.
200.
201.
202.
203.
Board, plank and decking

Repair of damaged scaffold
Opening
Guardrails
Scaffold used by building workers of different employers
Protection against electric power line
Screening net and wirenets
Tower scaffold
Gear for suspension of scaffold
Trestle scaffold and cantilever scaffold
Scaffold supported by building
204.
205.
Use of winches and climbers for suspended scaffold

Safety devices for suspended scaffold
XX
206.
207.
XXI
208.
COFFERDAMS AND CAISSONS

General provisions
Pressure plant and equipment,
SAFETY ORGANISATION
Safety committees
209.
210.
211.
Safety officer
Reporting of accidents
Procedure for enquiry into causes of accident or dangerous occurrence,
XXII
212.
213.
XXIII
214.
215.
216.
217.
218.
219.
220.
221.
222.
XX IV
223.
224.
EXPLOSIVES
Handling of explosives
Precautions
PILING
General provisions
Stability of adjacent structure
Protection of operator
Instruction to and supervision of building workers working on a pile driving equipment
Entry of unauthorised person
Inspection and maintenance of pile-driving equipment
Operation of pile driving equipment
Working platform on piling frames
Pile testing
MEDICAL FACILITIES
Medical examination of building workers
Duties of construction medical officers
225.
226.
227.
Occupational health centres

Ambulance room
Ambulance van
228.
229.
230.
Stretchers
Occupational health services for the building workers
Notice of poisoning or occupational diseases
231.
First aid boxes
232.
XXV
233.
Emergency care services or emergency treatment,

INFORMATION TO BUREAU OF INDIAN STANDARDS
Furnishing of information to Bureau of Indian Standards,
Annexure (i) of Appendix N

EXTRACT FROM THE BUILDING AND OTHER CONSTRUCTION WORKERS (REGULATION OF EMPLOYMENT
AND CONDITIONS OF SERVICE) CENTRAL RULES, 1998.
PART III
SAFETY AND HEALTH
CHAPTER VI
GENERAL PROVISIONS
34. Excessive noise, vibration etc. An employer shall ensure at a construction site of a building or other construction work that
adequate measures are taken to protect building workers against the harmful effects of excessive noise or vibration at such construction
site and the noise level in no case exceeds the limits laid down in Schedule VI annexed to these rules.
top
35. Fire protection An employer shall ensure at a construction site of a building or other construction work
that,
top
(a)
such construction site is provided with

(i) fire extinguishing equipment sufficient to extinguish any probable fire at such
construction site;
(ii) an adequate water supply at ample pressure as per national standards;
(iii) number of trained persons required to operate the fire extinguishing equipment provided
under sub clause (i)
(b)
fire extinguishing equipment provided under sub-clause (i) of clause (a) is properly
maintained and inspected at regular intervals of not less than once in a year by the responsible
person and a record of such inspections is maintained;
(c)
in case of every launch or boat or other craft used for transport of building workers and the
cabin of every lifting appliance including mobile crane, adequate number of portable
fire-extinguishing equipment of suitable type shall be provided at each of such launch or boat or
craft or lifting appliance.
36. Emergency action plans An employer shall ensure at a construction site of a building or other construction work that in case
more than five hundred building workers are employed at such construction site emergency action plan to handle the emergencies like
(a) fire and explosion,
(b) collapse of lifting appliances and transport equipment,
(c) collapse of building, sheds or structures etc.,
(d) gas leakage or spillage of dangerous goods or chemicals,
(e) drowning of building workers, sinking of vessels, and
(f) land slides getting building worker buried, floods, storms and other natural calamities, is prepared and submitted for the
approval of the Director General.
top
37. Fencing of motors, etc. An employer shall ensure at a construction site of a building or other construction work that
top
(a) all motors, cogwheels, chains, and friction gearing, flywheels, shafting, dangerous and moving parts
of machinery (whether or not driven by mechanical power) and steam pipes are securely fenced or
tagged. use;
(b) the fencing of dangerous parts of machinery is not removed while such machinery is in motion or
in use;
(c) no part of any machinery which is in motion and which is not securely fenced is examined,
lubricated, adjusted or repaired except by a person skilled for such examination, lubrication,
adjustment or repairs;
(d) machine parts are cleaned when such machine is stopped;
(e) when a machine is stopped for servicing or repairs, adequate measures are taken to ensure that
such machine does not re-start inadvertently.
38. Lifting and carrying of excessive weight An employer shall ensure at a construction site of a building or other construction
work that
top
(a)
no building worker lifts by hand or carries over-head or over his back or shoulders any material, article, tool or
appliances exceeding in weight the maximum limits set out in the following table :
(b)
no building worker aided by other building workers, lift by hand or carry overhead or over their back or shoulders,
any material, article, tool or appliance exceeding in weight the sum total of maximum limits set out for each building
worker separately under clause (a), unless aided by a mechanical device.
39. Health and safety policy (1) (a) Every establishment employing fifty or more building workers shall prepare a written
statement of policy in respect of safety and health of building workers and submit the same for the approval of the Director General;
top
(b)
the policy referred to in clause (a) shall contain the following namely: (i) the intentions and commitments of the establishment regarding health, safety and
environmental protection of building workers ;
(ii) organizational arrangements made to carry out the policy referred to in clause (a)
specifying the responsibility at different levels of hierarchy.
(iii) responsibilities of the principal employer, contractor, sub-contractor, transporter or
other agencies involved in the building or other construction work;
(iv) techniques and methods for assessment of risk to safety, health and environmental and
remedial measures therefor;
(v) arrangements for training of building workers, trainers, supervisors or to other persons
engaged in the construction work;
(vi) other arrangements for making the policy referred to in clause (a), effective;
(c)
the intention and commitment referred to in sub-clause (i) of clause (b) shall be taken into
account in making decisions relating to plant, machinery, equipment, materials and placement
of building workers.
2. A copy of the policy referred to in clause (a) of sub-rule (1), signed by an authorised signatory shall be sent to the Central
Government.
3. The establishment shall revise the policy referred to in clause (a) of sub-rule (1) as often as necessary under the following
circumstances, namely : whenever any expansion or modification having implication on safety and health of the building workers is made in such
building or other construction work; or
whenever any new building or other construction work, substances, articles or techniques are introduced having implication
on health and safety of building workers.
4. A copy of the policy referred to in sub-clause (a) of sub-rule (1) shall be displayed at the conspicuous places in Hindi and a local
language understood by the majority of building workers at a construction site.
40. Dangerous and harmful environment An employer shall ensure at a construction site of a building or other construction work
that, top
(a)
When an internal combustion engine exhausts into a confined space or excavation or tunnel or any other work place
where neither natural ventilation nor artificial ventilation system is adequate to keep the carbon monoxide content of
the atmosphere below fifty parts per million, adequate and suitable measures are taken at such work place in order to
avoid exposure of building workers to health hazards;
(b)
No building worker is allowed to enter any confined space or tank or trench or excavation wherein there is given-off
any dust, fumes or other impurities of such nature and to such extent as is likely to be injurious or offensive to the
building worker or in which explosives, poisonous, noxious or gaseous material or other harmful articles have been
carried or stored or in which dry ice has been used as a refrigerant, or which has been fumigated or in which there is
a possibility of oxygen deficiency, unless all practical steps have been taken to remove such dust, fumes, or other
impurities and dangers which may be present and to prevent any further ingress thereof, and such work place or tank
or trench or excavation is certified by the responsible person to be safe and fit for the entry of such building workers.
41. Overhead Protection (1) The employer shall ensure at the building or other construction work that overhead protection is
erected along the periphery of every building under construction which shall be of fifteen metres or more in height when completed.
top
(2) Overhead protection referred to in sub-rule (1) shall no be less than two metres wide and shall be erected at a height not more
than five metres above the base of the building and the outer edge of such overhead protection shall be one hundred fifty milli metres
higher than the inner edge thereof or shall be erected at an angle of not more than twenty degrees to its horizontal sloping into the
building.
(3) The employer shall ensure at the building and other construction work that any area exposed to risk of falling material, articles or
objects is roped off or cordoned off or otherwise suitably guarded from inadvertent entry of persons other than building workers at
work in such area.
42. Slipping, tripping, cutting, drowning and falling hazards (1) All passageways, platforms and other places of construction
work at the building or other construction work shall be kept by the employer free from accumulations of dust, debris or similar
material and from other obstructions that may cause tripping.
top
2. Any sharp projections or protruding nails or similar projections which may cause any cutting hazard to a building worker at the
building or other construction shall be removed or otherwise made safe by tanking suitable measures by the employer.
3. No employer shall allow any building worker at building or other construction work to use the passageway, or a scaffold, platform
or any other elevated working surface which is in a slippery and dangerous condition and shall ensure that water, grease, oil or other
similar substances which may cause the surface slippery, be removed or sanded, saw dusted or covered with suitable material to make
it safe from slipping hazard at a building or other construction work.
4. Wherever building workers at a building or other construction work are exposed to the hazard of falling into water, they shall be
provided by the employer with adequate equipment for saving themselves from drowning and rescuing from such hazard and if the
Director General considers necessary, well-equipped boat or launch manned with trained personnel shall be provided by the employer
at the site of such work.
5. Every open side or opening into or through which a building worker, vehicle or lifting appliance or other equipments may fall at a
building or other construction work shall be covered or guarded suitably by the employer to prevent such fall except where free access
is necessary by reasons of the nature of the work.
6. Wherever building workers at a building or other construction work are exposed to the hazards of falling from height while
employed on such work, they shall be provided by the employer with adequate equipment or means for saving them from such
hazards. Such equipment or means shall be in accordance with the national standards.
7. Whenever there is a possibility of falling of any material, equipment or building worker at a construction site relating to a building
or other construction work, adequate and suitable safety net shall be provided by employer in accordance with the national standards.
43. Dust, gases, fumes etc. An employer shall prevent concentration of dust, gases or fumes by providing suitable means to control
their concentration within the permissible limit so that they may not cause injury or pose health hazard to a building worker at a
building or other construction work.
top
44. Corrosive substances The employer shall ensure that corrosive substances, including alkalis and acids, shall be stored and used
by a person dealing with such substances at a building or other construction work in such a manner that it does not endanger the
building worker and suitable protective equipment shall be provided by the employer to a building worker during handling or use of
such substances at a building or other construction work and in case of spillage of such substances on the building worker, immediate
remedial measures shall be taken by the employer.
top
45. Eye protection suitable personal protective equipment for the protection of eyes shall be provided by an employer and used by
the building worker engaged in operations like welding, cutting, chipping, grinding or similar operations which may cause hazard to
his eyes at a building or other construction work.
top
46. Head protection and other protective (1) Every building worker required to pass through or work within the areas at building
or other construction work where there is hazard of his being struck by falling objects or materials shall be provided by the employer
with Safety helmets of type and tested in accordance with the national standards.
top
2. Every building worker required to work in water or in wet concrete or in other similar work at a building or other construction
work, shall be provided with suitable water-proof boots by the employer.
3. Every building workers required to work in rain or in similar wet condition at building or other construction work, shall be
provided with water proof coat with hat by the employer.
4. Every building worker required to use or handle alkalies, acid or other similar corrosive substances at a building or other
construction work shall be provided with appropriate protective equipment by an employer, in accordance with the national standards.
5. Every building worker engaged in handling sharp objects or materials at a building or other construction work which may cause
hand injury, shall be provided with suitable hand-gloves by the employer, in accordance with the national standards.
47. Electrical Hazards (1) Before commencement of any building or other construction work, the employer shall take adequate
measures to prevent any worker from coming into physical contact with any electrical equipment or apparatus, machines or live
electrical circuit which may cause electrical hazard during the course of his employment at a building or other construction work.
top
2. The employer shall display and maintain suitable warning signs at conspicuous places at a building or other construction work in
Hindi and in a local language understood by the majority of the building workers.
3. In workplaces at a building or other construction work where the exact location of underground electric power line is not known,
the building workers using jack hammers, crow bars or other hand-tools which may come in contact with a live electrical line, shall be
provided by the employer with insulated protective gloves and foot-wear of the type in accordance with the national standards.
4. The employer shall ensure that, as far as practicable, no writing, which may come in contact with water or which may be
mechanically damaged, is left on ground or floor at a building or other construction work.
5. The employer shall ensure that all electrical appliances and current carrying equipment used at a building or other construction
work are made of sound material and are properly and adequately earthed.
6. The employer shall ensure that all temporary electrical installations at a building or other construction work are provided with
earth-leakage circuit breakers.
7. The employer shall ensure that all electrical installations at a building or other construction work comply with the requirements of
any law for the time being in force.
48. Vehicular Traffic (1) When ever any building or other construction work is being carried on, or is located in close proximity to
a road or any other place where any vehicular traffic may cause danger to building workers, the employer shall ensure that such
building or other construction work is barricaded and suitable warning signs and lights displayed or erected to prevent such danger
and if necessary, he may make a request in writing to the concerned authorities to control such traffic.
top
2. The employer shall ensure that all vehicles used at construction site of a building or other construction work comply with the
requirements of the Motor Vehicles Act, 1988 (59 of 1988) and the rules made hereunder.
3. The employer shall ensure that a driver of a vehicle of any class or description operating at a construction site of a building or other
construction work holds a valid driving licence under the Motor Vehicles Act, 1988 (59 of 1988).
49. Stability of structures The employer shall ensure that no wall, chimney or other structure or part of a structure is left
unguarded in such condition that it may fall, collapse or weaken due to wind pressure, vibration or due to any other reason at a site of
a building or other construction work.
top
50. Illumination of passageways, etc. The employer shall ensure that illumination sufficient for maintaining safe working
conditions at a site of a building or other construction work is provided where building workers are required to work or pass and for
passageways, stairways and landing, such illumination is not less than that provided in the relevant national standards.
top
51. Stacking of materials The employer shall ensure, at a construction site of a building or other construction work that
top
(a)
All building materials are stored or stacked in a safe and orderly manner to avoid obstruction of any passageway or
place of work;
(b)
Material piles are stored or stacked in such a manner as to ensure stability;
(c)
Material or equipment is not stored upon any floor or platform in such quantity as to exceed its safe carrying capacity;
(d)
Material or equipment is not stored or placed so close to any edge of a floor or platform as to endanger the safety of
persons below or working in the vicinity.
52. Disposal of debris the employer shall ensure at a construction site of a building or other construction work that
top
(a)
debris are handled and disposed of by a method which does not cause danger to the safety of a person;
(b)
debris are not allowed to accumulate so as to constitute a hazard;
(c)
debris are kept sufficiently moist to bring down the dust within the permissible limit;
(d)
debris are not thrown inside or outside from any height of such building or other construction work;
(e)
on completion of work, left over building material, article or other substance or debris are disposed of as soon as
possible to avoid any hazard to any traffic or person.
53. Numbering and marking of floors The employer shall ensure that each floor or level of a building or other construction work
is appropriately numbered or marked at the landing of such floor or level.
top
54. Use of safety helmets and shoes The employer shall ensure that all persons who are performing any work or services at a
building or other construction work, wear safety shoes and helmets conforming to the national standards.
top
CHAPTER VII
LIFTING APPLIANCES AND GEAR
55. Construction and maintenance of lifting appliances The employer shall ensure at a construction site of a building or other
construction work that
top
(a)
all lifting appliances, including their parts and working gear, whether fixed or moveable and any plant or gear used
in anchoring or fixing of such appliances, are
(i) of sound construction, sound material, and of adequate strength to serve the purpose for which
these are to be used and all such appliances shall be free from patent defects; and
(ii)maintained in good repair and working condition.
(b)
(i) every drum or pulley around which the rope of any lifting appliance is carried, is of
adequate diameter and sound construction in relation to such rope;
(ii) any rope which terminates at the winding drum of a lifting appliance is securely attached to such drum and at
least three dead turns of such rope remain on such drum in every operating position of such lifting appliance.
(iii) the flange of a drum projects twice the rope diameter beyond the last layer of such rope and if
such projection is not available, other measures like anti-slackness guards shall be provided to prevent
such rope from coming off such drum;
(c)
Every lifting appliance is provided with adequate and efficient brakes which -
(i) are capable of preventing fall of a suspended load (including any test load) and of effectively
controlling such load while it is being lowered;
(ii) act without shock;
(iii) have shoes that can be easily removed for running and
(iv) are provided with simple and easily accessible means of adjustment;
provided that nothing contained in this clause shall apply to steamwinch which can be operated as
safely as with brakes as provided in accordance with this clause.
(d)
Controls of every lifting appliance.
(i) are so situated that the driver of such appliance at his stand or seat has ample room for operating and
has an unrestricted view of building or other construction work, as far as practicable, and that he
remains clear of the load and ropes, and that no load passes over him;
(ii) are positioned with due regard to ergonometric considerations for proper operation of such
appliance;
(iii) are so located that the driver of such appliance remains above the height of the heel block during
the whole operation of such appliance;
(iv) have upon them or adjacent to them clear markings to indicate their purpose and mode of
operations;
(v) are provided, where necessary, with a suitable locking device to prevent accidental movement or
displacement;
(vi) move, as far as practicable, in the direction of the resultant load movement; and
(vii) wherever automatic brakes are provided, automatically come to the neutral position in case of
power failure.
56. Test and periodical examination of lifting appliances The employer shall ensure at construction site of a building or other
construction work that, top
(a)
all lifting appliances including all parts and gears thereof, whether fixed or moveable, are tested and examined by a competent
person before being taken into use for the first time or after it has undergone any alterations or repairs liable to affect its
strength or stability or after erection on a construction site and also once at least in every five years, in the manner specified
in Schedule I annexed to these rules;
(b)
all lifting appliances are thoroughly examined by a competent person once at least in every twelve months and where the
competent person making such examination forms the opinion that the lifting appliance cannot continue to function safely, he
shall forthwith give notice in writing of his opinion to the owner of the lifting appliance;
Explanation For the purpose of this rule, thorough examination means a visual examination, supplemented, if necessary, by
other means such as hammer test, carried out as carefully as the conditions permit, in order to arrive at a reliable conclusion as to the
safety of the parts examined; and, if necessary, for such examination, parts of the lifting appliance and gear, shall be dismantled.
57. Automatic safe load indicators (a) The employer shall ensure at a construction site of a building or other construction work
that top
(i)
every crane, if so constructed that the safe working load may be varied by raising or lowering of the jib or otherwise,
is attached with an automatic indicator of safe working loads which gives a warning to the operator wherever the
load exceeds the safe working load;
(ii)
cut out is provided which automatically arrests the movements of the lifting parts of every crane if the load exceeds
the safe working load, wherever possible;
(b)
the provisions of sub-clause (a) apply, except where it is not possible to install an automatic safe load
indicator, in which case, provision of a table showing the safe working loads at the corresponding
inclinations or radi of the jib on the crane shall be considered sufficient.
58. Installation (a) The employer shall ensure at a construction site of a building or other construction site of a building or other
construction work that top
(a)
(b)
fixed lifting appliances are installed
(i)
by competent persons;
(ii)
in a manner that such appliances cannot be displaced by the load, vibration or other influences;
(iii)
in a manner that the operator of such appliances is not exposed to danger from loads, ropes or drums; and
(iv)
in a manner that the operator can either see over the zone of operation or communicate with all loading and
unloading points by signal, or other communication system.
adequate clearance is provided between parts or loads of lifting appliances and
(i)
the fixed objects such as walls and posts; or
(ii)
electrical conductors;
(c)
the lifting appliances, when exposed to wind load are given sufficient additional strength, stability and rigidity to
withstand such loading safely.
(d)
No structural alterations or repairs are made on any part of the lifting appliances that affect the safety of such
appliances without obtaining the opinion of the competent person to this effect.
59. Winches The employer shall ensure at a construction site of a building or other construction work that, -
top
(a)
(b)
(i)
winches are not used if control levers operate with excessive friction or play;
(iii)
double gear winches are not used unless a positive means of locking the gear shift is provided.
(iv)
there is no load other than the fall and the hook assembly on the winch while changing gears on a two gear
winch;
(v)
adequate protection is provided to winch operator against abnormal weather;
(vi)
temporary seats or shelters for winch operators which may pose hazard to the winch operator on any other
building workers are not allowed to be used;
(vii)
control levers are secured in the neutral position and, whenever possible, the power is shut off whenever
winches are left unattended.
in use of every steam winch
(i)
measures are taken to prevent escaping steam from obscuring any part of the construction site or other work
place or from otherwise hindering or injuring any building worker;
(ii)
extension control levers which tend to fall of their own weight are counter balanced;
(iii)
winch operators are not permitted to use the winch control extension levers except for short handles on
wheel type controls and that such levers are of adequate strength, secure and fastened with metal
connections at the fulcrum and at the permanent control lever;
in use of every electric winch, a building or other construction worker is not permitted to transfer, alter
or adjust electric control circuits in case of any defect in such winch.
(d)
electric winches are not used for building work where
(i)
the electro-magnetic brake is unable to hold the load; or
(ii)
one or more control points, either hoisting or lowering, are not operating properly.
60. Buckets The employer shall ensure at a construction site of a building or other construction work that tip-up buckets are
equipped with a device that effectively prevents accidental tipping.
top
61. Identification and marking of safe working load The employer shall ensure at a construction site of a building or other
top
(a)
every lifting appliance and loose gear is clearly marked for its safe working load and identification by stamping or
other suitable means;
(b)
(i) every derrick (other than derrick crane) is clearly marked for its safe working load when such
derrick is used either in single purchase with a lower block or in union purchases in all possible
block positions;
(ii) the lowest angle to the horizontal, to which the derrick may be used, is legibly marked;
every lifting appliance having more than one working load is fitted with effective means to enable the
operator to determine safe working load at each point under all condition of use;
(d)
means to ascertain the safe working load for lifting gears under such conditions in which such gears may
be used are provided to enable a worker using such gears may be used are provided to enable a worker
using such gears and such means shall consist of
(i)
marking the safe working load in plain figures or letters upon the sling or upon a tablet or ring of durable
material attached securely thereto in case of chain slings; and
(ii)
either the means specified in sub-clause (i)or notices so exhibited as can be easily read by any concerned
building worker stating the safe working load for the various sizes of the wire rope slings used in case of
wire rope slings.
62. Loading of lifting appliances and lifting gears The employer shall ensure at a construction site of a building or other
top
(a)
no lifting appliance, lifting gear or wire rope is used in an unsafe way and in such a manner as to involve risk to life
of building workers, and that they are not loaded beyond their safe working load except for testing purposes under
the direction of a competent person in the manner as specified in Schedule I annexed to these rules.
(b)
No lifting appliance, lifting gear or any other material handling appliance is used, if
(i) The inspector having jurisdiction is not satisfied with reference to a certificate of test or
examination or to an authenticated record maintained as provided under these rules; and
(ii) In the view of such Inspector, the lifting appliance, lifting gear or any other material handling
appliance is not safe for use in building or other construction work;
(iii) no pulley block is used in building or other construction work unless the safe working load and its
identification are clearly marked on such block.
63. Operators cab or cabin The employer shall ensure at a construction site of a building or other construction work that
top
(a)
the operator of every lifting machine in outdoor service is provided with a cab or cabin which-
(i)
is made of fire resistant material;
(ii)
has a suitable seat, a foot rest and protection from vibration;
(iii)
affords the operator an adequate view of the area of operation;
(iv)
affords the necessary access to working parts in cab;
(v)
affords the operator adequate protection against the weather;
(vi)
is adequately ventilated; and
(vii)
is provided with a suitable fire extinguisher.
64. Operation of lifting appliances The employer shall ensure at a construction site of a building or other construction work that top
(a)
every crane driver or lifting operator possess adequate skill and training in the operation of the particular lifting
appliance;
(b)
no person under eighteen years of age is in control of any lifting appliance, scaffold which, or to give signals to the
operator.
precaution is taken by the trained operator to prevent lifting appliance from being set in motion;
(d)
The operation of lifting appliance is governed by signals, in conformity with the relevant
national standards;
(e)
The lifting appliance operators attention is not distracted while he is working;
(f)
no crane, hoist, winch or other lifting appliance or any part of such crane, hoist, winch or other
lifting appliance is, except for testing purposes, loaded beyond the safe working load;
(g) during the hoisting operations effective precaution is taken to prevent any person from standing
or passing under the load in such operations;
(h) operator does not leave lifting appliance unattended while power is on or load is suspended to
such appliance;
(i) no person rides on a suspended load or on any lifting appliance;
(j) every part of a load in course of being hoisted or lowered is adequately suspended and supported
to prevent danger;
(k) every receptacle used for hoisting bricks, tiles, slates or other material is suitably enclosed as to
prevent the fall of any such materials;
(l) the hoisting platform is enclosed when loose materials or loaded wheel-barrows;
(m) no material is raised, lowered or slowed with any lifting appliance in such a way as to cause
sudden jerks to such appliance;
(n) in hoisting a barrow, any wheel of such barrow is not used as a means of support unless adequate
steps are taken to prevent the axle of such wheel from slipping out of its bearings;
(o) long objects like planks or girders are provided with a tag line to prevent any possibility of danger while raising or
lowering such objects;
(p) during the process of landing of material, a building worker is not permitted to lean out into
empty space for finding out the loading and unloading of such material;
(q) the hoisting of loads at places where there is regular flow of traffic is carried out in an enclosed space, or in case such
hoisting is impracticable in enclosed space, measures are taken to hold up or divert the traffic during the time of such
hoisting;
adequate steps are taken to prevent a load, in the course of being hoisted or lowered from
coming into contact with any object to avoid any displacement of such load;
(s) appliances are provided and used for guiding heavy loads when raising or lowering heavy loads
to avoid crushing of hands of building workers during such raising or lowering of loads;
65. Hoists The employer shall ensure at a construction site of a building other construction work that
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(a)
hoist towers are designed according to relevant national standards;
(b)
hoist shafts are provided with rigid panels or other adequate fencing
(c)
(i)
at the ground level on all sides of such shafts; and
(ii)
at all other levels on all sides of the access to such shafts;
the walls of hoist shafts, except at approaches extend at least two metres above the floor or
platform of access to such shafts;
(d)
approaches to a hoist are provided with gates which are
(i)
gridded to maintain visibility;
(ii)
at least of two metres height ; and
(iii)
equipped with a device which requires such gate to be closed before the platform of such hoist can leave the
landing and prevents the gate from being opened unless such platform, is at the landing;
(e)
approaches to a hoist are adequately lit;
(f)
the guides of hoist platforms offer sufficient resistance to bending and, to bucking, in the case of jamming, by
providing a safety catch;
(g)
overhead beams and their supports are capable of holding the total maximum live and dead loads that such beams
and supports will be required to carry, with a safety factor of at least five;
(h)
a clear space is provided-
(i) above the highest stopping place of a cage or platform to allow sufficient unobstructed travel of such cage or
platform in
case of overwinding; and
(ii)below the lowest stopping place of such cage or platform
(i) adequate covering is provided above the top of hoist shafts to prevent materials from falling into such shafts;
(j) outdoor hoist towers are erected on adequately firm foundations and are securely braced, guyed and anchored;
(k) a ladderway extends from the bottom to the top of every outdoor hoist tower in case no other ladder way exists within easy
reach and such ladderway comply with the relevant national standards.
(l) the rated capacity of a hoisting engine is at least one and a half times the maximum load that such engine will be required
to move;
(m) all gearing on a hoisting engine is securely enclosed;
(n) steam piping of a hoisting engine is adequately protected against accidental contact of such piping with a building worker;
(o) electrical equipment of a hoisting engine is effectively earthed;
(p) a hoist is provided with suitable devices to stop a hoisting engine as soon as the platform of such hoist reaches its highest
stopping place;
(q) a hoisting engine is protected by a suitable cover against weather and falling objects;
a hoisting engine set up in a public thoroughfare is completely enclosed;
(s) all exhaust steam pipes discharge steam in such a manner that the steam so discharged does not scald any person or
obstruct the operators view;
(t) the motion of a hoist is not reversed without first bringing it to rest to avoid any harm from such reverse motion;
(u) a hoist, not designed for the conveyance of persons, is not set in motion from the platform of such hoist;
(v) pawls and ratchet wheels of a hoist, requiring disengagement of such pawls from such ratchet wheels, before the platform
of such hoist is lowered, are not used;
(w) a platform of a hoist is capable of supporting such maximum load, that such platform may carry, with a safety factor of at
least three;
(x) a platform of a hoist is equipped with suitable safety gear which can hold such platform with its maximum load in case its
hoisting rope breaks;
(y) on platform of a hoist, the wheelbarrows or truck are efficiently blocked in a safe position;
(z) a cage of a hoist or a platform, where the building workers are required to enter into such cage or to go on such platform
at landing level, is provided with a locking arrangement to prevent such cage or platform from moving during the time a
worker enters or leaves such cage or platform;
(za) the sides of a platform of a hoist which, are not used for loading or unloading, are provided with toe-board and
enclosures of a wire mesh or any other suitable means to prevent the fall of any part of a load from such platform;
(zb) a platform of a hoist, which has any probability of falling any part of load from it, is provided with an adequate covering
with such fall;
(zc) the counter-weights of a hoist consisting of an assemblage of several parts are so constructed that such parts are rigidly
connected together;
(zd) the counter-weights of a hoist run between guides;
(ze) at every level of work the building worker are provided with adequate platforms for performing such work;
(zf) a legible notice in Hindi as well as in a local language is displayed at
(i)
a conspicuous place of the platforms of a hoist and that such notice states the maximum carrying capacity of
such hoist in kilograms;
(ii)
a conspicuous place on the hoisting engine and that such notice states maximum lifting capacity of such
hoist in kilograms;
(iii)
a conspicuous place on a hoist authorised and certified for the conveyance of the person on the platform or
cage and such notice states the maximum number of persons to be carried on such hoist at one time;
(iv)
a conspicuous place on a hoist carrying goods and other materials and such notice states that such hoist is
not meant for carriage of persons.
66. Fencing of work that and means of access to lifting appliances The employer shall ensure at a construction site of a
building or other construction work that top
(a)
safe means of access is provided to every part of a lifting appliance;
(b)
the operators platform on every crane or tip driven by mechanical power is securely fenced and is provided with safe means of
access and where access to such platform is by a ladder, (i)
the sides of such ladder extend to a reasonable height beyond such platforms or some other suitable handhold
is provided in lieu thereof to prevent any falling of persons from such platforms;
(ii)
the handling place on such platform is maintained free from obstruction and slipping; and
(iii)
in case the height of such ladder exceeds six meters, the resting platform are provided on such ladder at
every six metres of its height and where the distance between last platform so provided and the top end of
such ladder is more than two metres then on such top end;
67 Rigging of derricks the employer shall ensure at a construction site of a building or other construction work that every derrick
has current and relevant rigging plans and any other information necessary for the safe rigging of such derricks and its gear.
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68 Securing of derrick foot The employer shall ensure at a construction site of a building or other construction work that
appropriate measures are taken to prevent the foot of a derrick being lifted out of its socket or support.
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69. Construction and maintenance of lifting gear The employer shall ensure at a construction site of building or other
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(a)
(b)
by ten
every lifting gear is (i)
of good design and construction, sound material and adequate strength to perform the work for
which it is used;
(ii)
free from patent defects; and
(iii)
properly maintained in good repair and working order;
components of the loose gear, at the time of its use, are renewed if one of its dimensions at any point has decreased
per cent or more by user.
(c)
a chain is withdrawn from use
(d)
rings, hooks,
(e)
The voltage of electric supply to any magnetic lifting device does not fluctuate by more than plus ten per cent or minus ten per
cent.
70. Test and periodical examination of lifting gears The employer shall ensure at a construction site of a building or other
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(a)
a lifting gear is initially tested for the manufacturer by a competent person, in a manner specified in Schedule I
annexed to these rules before taking into use or after undergoing any substantive alterations which renders its any
part liable to affect its safety and such gear alters such test shall subsequently be retested for the use of its owner at
least once in every five years.
(b)
A lifting gear in use is thoroughly examined once at least in every twelve months by a competent person;
(c)
A chain in use is thoroughly examined once atleast every month by a responsible person for its use;
(d)
Certificates of initial and periodical tests and examinations of loose gears under these rules are obtained in Form VII
annexed to these rules;
71. Ropes The employer shall ensure a construction site of a building or other construction work that
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(a)
no rope is used for building or other construction work unless

(i)
it is of good quality and free from patent defects; and
(ii)
in the case of wire rope, it has been tested and examined by a competent person in the manner specified in
Schedule I annexed to these rules;

(b)
every wire rope of lifting appliance or lifting gear used for building or other construction work is inspected by a
responsible person for such use, once atleast in every three months;
Provided that after any sucy wire is broken in such rope, it shall thereafter be inspected once at least in every month
by the responsible person;
(c)
no wire rope is used for building or other construction work if in any length of eight diameters of such wires, the total
number of visible broken wires exceed ten percent of the total number of wires in such rope, or such rope shows sign
of excessive wear, corrosion or other defects which in the opinion of the person who inspects it or inspector, having
jurisdiction, is unfit for use.
(d)
Eye splices and loops of ropes for the attachment of hooks, rings and other such parts to wires ropes are made with
suitable thimble.
(e)
A thimble or loop splice made in any wire rope sling conforms to the following standards, namely:
(i)
wire rope sling shall have atleast three tucks with full strand of rope and two tucks with one-half of the wires
cut out of each of such strand in all cases, such strands shall be tucked against the lay of the rope;
(ii)
protruding ends of such strands in any splice of wire rope slings shall be covered or treated so as to leave no
sharp points;
(iii)
a fibre rope or a rope sling shall have atleast four tucks; tail of such tuck being whipped in a suitable
manner; and
(iv)
a synthetic fibre rope or rope sling shall have atleast four tucks with full strand followed by further tuck with
one-half filaments cut out of each of such strand and final tuck with one-half of the remaining filaments
cut-out from such strands. Any portion of the splices containing such tucks, with reduced number of
filaments shall be securely covered with suitable tape or other materials.
Provided that nothing contained in this sub-clause shall apply where any other form of splice, which may be shown
to be as efficient as the splice with above standards, is used.
72. Heat treatment of lifting gears The employer shall ensure at a construction site of a building other construction work that
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(a)
all chains other than briddle chains attached to derricks and all rings, hooks, shackles and swivels used in hoisting or
lowering of such derricks are effectively annealed under supervision of a competent person and at the following
intervals, namely : -
(i)
such chains, rings, hooks, shackles and swivels which are not more than twelve and a half millimetre of
length are so annealed at least at least once in every six months; and
(ii)
all other such chains, rings, hooks, shackles and swivels are so annealed at least once in every twelve
months;
Provided that such annealing as referred to in sub-clause (i) and sub-clause (ii)shall not be required if the Inspector, having
jurisdiction after obtaining the approval of the Director General, directs that such chains, rings, hooks, shackles and swivels
undergo some other treatment and in such case the treatment directed by such Inspector shall be followed;
Provided further that in case of such chains, rings, hooks, shackles and swivels used solely on such derricks and other
hoisting appliances which are worked by hand, the provisions of sub-clause (i) and sub-clause (ii), as the case may by, shall
apply as if for the period of six months and twelve months the periods of twelve months and two years have respectively been
substituted therein :
Provided also that in case where the Inspector, having jurisdiction, is of the opinion that owing to the size, design material or
frequency of use of any such chains, rings, hooks, shackles and swivels, the requirement of this clause for annealing is not
necessary for the protection of building worker, he may after obtaining the approval of the Director General, certify in writing
to such chains, rings, hooks, shackles and swivels are exempted from such annealing and thereafter the provision of this
clause shall apply subject to such exemption;
Provided also that this clause shall not apply to
(i)
pitched chains, working on sprocket or sprocketed wheels;
(ii)
rings, hooks and swivels permanently attached to pitched chains, pulley blocks or weighing machines; and
(iii)
hooks and swivels having ball bearings or other case hardened parts;
(b)
a chain or a loose gear made of high tensile steel or alloy steel is plainly marked with a mark indicating that it is so
made;
(c)
no chain or loose gear made of high tensile steel or alloy steel is subjected to any form of heat treatment except where
such treatment is necessary for the purpose of repair of such chain or loose gear and that such repair is made under
the direction of the competent person;
(d)
that the wrought iron gear the past history of which is not traceable is suspected of being treated at incorrect
temperature is normalised before using it on any building or other construction work that
73. Certificate to be issued after actual testing and examination, etc. The employer shall ensure at a construction site of a
building or other construction work that a competent person issues a certificate for the purpose of rule 56, rule 62, rule 71 and 71 only
after actual testing or, as the case may be, examination of the apparatus specified in the said rules.
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74. Register of periodical test, examination and certificates thereof The employer shall ensure at a construction site of a
building or other construction work that
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(a)
a register in form XXVI, annexed to these rules is maintained and particulars of such test and examination of lifting
appliances, lifting gears and heat treatment as required under rule 56, rule 62 and rule 72 are entered in such register;
(b)
certificate in respect of each of the following is obtained from competent person in the forms as mentioned below, namely : -
(i)
in case of initial and periodical test and examination of loose gears under clause (d) of rule 70 in Form VII annexed to these
rules;
(ii)
in case of test, examination and re-examination of loose gears under clause (d)of rule 70 in Form VII annexed to these rules.
(iii)
In case of annual thorough examination of the loose gears under clause (b) of rule 70, except where required particulars of
such exemption have been enclosed in the register referred to in clause (a), in Form XXVI, annexed to these rules, and such
certificates are attached to the register referred to in clause (a);
(iv)
In case of heat treatment and examination of loose gears under rule 72 in Form IX annexed to these rules;
(v)
In case of annual thorough examination of the loose gears under clause (b) of rule 70, except where required particulars of
such exemption have been enclosed in the register referred to in clause (a), in Form XXVI, annexed to these rules, and such
certificates are attached to the register referred to in clause (a);
(c)
the register referred to in clause (a) and the certificates referred to in clause (b) attached to such register are
(i)
kept at such construction site in case such register and certificate relate to lifting appliances, loose gear and wire
ropes;
(d)
(ii)
produced on demand before an Inspector having jurisdiction; and
(iii)
retained for at least five years after the date of the last entry made in such register;
no lifting appliances or lifting gear in respect of which an entry is required to be made in register referred to in clause (a) and
certificate of test and examination are required to be attached in such register in the manner as specified in clause (a) or
clause (b), as the case may be, is used for building or other construction work unless the required entries have been made in
such register and certificates.
75. Vacuum and magnetic lifting gear The employer shall ensure at a construction site of a building or other construction work
that
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(a)
no vacuum lifting gear, magnetic lifting gear or any other lifting gear where the load on it is held by adhesive power, is used
while workers are performing operations beneath such gear;
(b)
a magnetic lifting gear used in connection with building or other construction work is provided with an alternative supply of
power, such as batteries, which may come into operation immediately in the event of failure of the main power supply;
(c)
no building worker shall work within the swinging zone of the lifting gear or load or building or other construction material
suspended to such lifting gear.
76. Knotting of chains and wire ropes The employer shall ensure at a construction site of a building or other construction work
that no chain or wire rope with a know in it is used in building or other construction material suspended to such lifting gear.
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77. Carrying on persons by means of lifting appliances, etc. (1) The employer shall ensure at a construction site of a building or
other construction work that no building worker is raised, lowered or carried by a power driven lifting appliance except
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(a)
on the drivers platform in the cage of a crane; or
(b)
on the hoist ; or
(c)
on an approved suspended scaffold;

Provided that a building worker may be raised, lowered or carried by a power driven lifting appliance
(2)
(i)
in circumstances where the use of a hoist or of a suspended scaffold is not reasonably practicable and the
requirements of sub-rule (2) are complied with; or
(ii)
on an aerial cableway or aerial ropeway in case where the requirements of sub-rule (2) are complied with :
The requirements referred to in proviso to sub-rule (1)are as below, namely : -
(i)
that the appliance referred to in such proviso can be operated from one position only;
(ii)
that any winch used in connection with the appliance referred to in such proviso comply with the requirements of rule
59;
(iii)
that no person shall be carried by the appliance referred to in such proviso except
(a)
in a chair or cage, or
(b)
in a skip or other receptacle at least three feet deep which is suitable for safe carriage of a person and any
such chair, cage, skip or other receptacle is made of good construction, sound material, and has adequate
strength and is properly maintained with suitable means to prevent any occupant therein from falling out of
it and is free from any material or tools which may interfere with the handhold or foothold of such occupant
or otherwise endanger him; and

(iv)
that suitable measures shall be taken to prevent the chair, cage, skip or other receptacle from spinning or tipping in a
manner dangerous to any occupant therein.
78. Hoists carrying persons The employer shall ensure at a construction site of a building or other construction work that
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(a)
no building worker is carried by a hoist unless it is provided with a cage which
(i)
is so constructed as to prevent, when its gates are shut, any building worker carried by such hoist from
falling out of it or from being trapped between any part of such hoist or from being struck by articles or
materials falling down the hoist way on which such hoist is moving ; and
(ii)
is fitted on each of its side from which access is provided to a landing place with a gate which has efficient
interlocking
or other devices to secure so that such gate cannot be opened except when such cage is at a landing place
and that such cage cannot be moved away from any such place until such gate is closed;
(b)
every gate in the hoistway enclosure of such hoist used for carrying persons is fitted with efficient inter-locking or
other
devices to secure so that gate cannot be opened except when the cage of such gate is at the landing place, and that
such
cage cannot be moved away from the landing place until such gate is closed;
79.
Attachment of loads The employer shall ensure at a construction site of a building or other construction work that
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(a)
when a sling is used to hoist long materials, a lifting beam is used to space the sling legs for proper balance and when
a load is suspended at two or more points with slings, the eyes of the lifting legs of such slings are shackled together
and such shackle or eyes of the shackled slings are placed on the hook or the eyes of such lifting legs are shackled
directly to the hoisting block, ball or balance beam, as the case may be;
(b)
every container or receptacle used for raising or lowering stone, bricks, tiles, slates or other similar objects is so
enclosed with the hoist as to prevent the fall of such objects;
(c)
a loaded wheel barrow placed directly on a platform of a hoist for raising or lowering of such wheel barrows is so
secured that such wheel barrows cannot move and such platform is enclosed to prevent the fall of the contents kept in
such wheel barrows;
(d)
landings of a hoist are so designed and arranged that building workers on such hoist are not required to lean out into
empty space for loading and unloading any material from such hoist;
80. Tower cranes The employer shall ensure at a construction site of a building or other construction work that
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(a)
no person other than the operator trained and capable to work at heights are employed to operate tower cranes;
(b)
the ground on which a tower crane stands has adequate bearing capacity;
(c)
bases for towers cranes and trucks for rail-mounted tower cranes firm and levelled and such cranes are erected at a
reasonably safe distance from excavations and are operated wihting radient limits as specified by the manufacturer of
such cranes;
(d)
tower cranes are sited where there is a clear space available for erection, operation and dismantling of such cranes;
(e)
tower cranes are sited in such a way that the loads on such cranes are not handled over any occupied premises, public
thoroughfares, railways or near power cables, other than construction works for which such cranes are used;
(f)
where two or more tower cranes are sited and operated, every care is taken to ensure positive and proper
communication between operators of such cranes to avoid any danger or dangerous occurrences;
(g)
tower cranes are used for loading magnet or demolition ball service, piling operation or other similar operations
which could impose excessive load stresses on the crane structure of such cranes;
(h)
the instructions of the manufacturer of tower crane and standard safe practices regarding such crane are followed
while operating or using such crane.
81. Qualification of operator of lifting winches and of signaller, etc. The employer shall ensure at a construction site of a
building or other construction work that no person is employed to drive or operate a lifting appliance whether driven by mechanical
power or otherwise or to give signals to drive or operator of such lifting appliance or to work as a operator of a rigger or derricks
unless he
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(i)
is above eighteen years of age;
(ii)
is sufficiently competent and reliable;
(iii)
possess the knowledge of the inherent risks involved in the operation of lifting appliances; and
(iv)
is medically examined periodically as specified in Schedule VII annexed to these rules.
CHAPTER VIII
RUNWAYS AND RAMPS
82. Use of runways and ramps by building worker The employer shall ensure at a construction site of a building or other
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(a)
runway or ramp provided for use by building worker is not less than four hundred and thirty millimetres in width and
is constructed of not less than twenty five millimetre thick planking or any other material of adequate strength to
withstand the required load supported substantially in relation to the span and braced of such runway or ramp and
design and construction of such runway or ramp is in accordance with the relevant national standards;
(b)
every runway or ramp provided for use of building workers located more than three metres above the floor or ground
is on open sides provided with a guard rail of adequate strength and height of not less than one thousand millimeters.
83. Use by vehicles The employer shall ensure at a construction site of a building or other construction work that
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(a) all runways and ramps are of sound construction, strength and are securely braced and supported;
(b) every runway or ramp for the use of transport equipment like trailers, trucks or heavier vehicles has a width of not less
than three point seven metres and is provided with timber curbs or any other material of adequate strength with not less
than two hundred millimeters by two hundred millimeters in width placed parallel to, and secured to, the sides of such
runway or ramp and such runways or ramps are designed in accordance with the relevant national standards.
84. Slope of Ramps The employer shall ensure at a construction site of a building or other construction work that every ramp has a
slope not exceeding one in four and the total rise of a continuous ramp used by building workers carrying material or usint wheel
barrows does no exceed three point seven metres, unless broken by horizontal landing of at least one point two metres in length or as
provided in accordance with the relevant national standards.
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85. Use by wheel barrows, etc. The employer shall ensure at a construction site of a building or other construction work that
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(a)
every runway or ramp used for wheel-barrows, hand carts or hand trucks is not less than one metre in width and is
constructed of not less than fifty millimeters thick planking and is supported and braced suitability for such use;
(b)
every runway or ramp located more than three metres above the floor or ground is provided on the open sides with
suitable guard rails of adequate strength.
CHAPTER IX
WORK ON OR ADJACENT TO WATER
86. Transport by water The employer shall ensure at a construction site of a building or other construction work that
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when any building worker has to proceed to or from any working place by water for purposes of carrying on a building or
other construction work, proper measures are taken to provide for his safe transportation and vessels used for such
purpose are used in charge of a responsible person, and are properly equipped for safe navigation and are maintained
in good condition;
maximum number of persons which can be safely carried in a vessel as certified under the relevant law in force is marked
plainly and conspicuously on such vessel and use number is not exceeded during use of such vessel for carrying
persons.
(2)
the vessel referred to in clause (a) of sub-rule (1) shall conform to the following, namely:
(i)
that adequate protection is provided to the building workers in such vessel from inclement weather;
(ii)
that such vessel is manned by adequate and experienced crew, as per the relevant law for the time being in
force;
(iii)
that in case the bulwarks of such vessel are lower than sixty centimetres from the level of the deck of such
vessel, the open edge of such bulwarks are fitted with suitable fencing to a height of at least on metre above
such deck and the post and stanchions and similar parts used is such fencing are not spaced more than two
metres aparat;
(iv)
that the number of life buoys on deck of such vessel is at least equal to the number of crew members of such
vessel and is not less than two;
(v)
that all life buoys on deck of such vessel are kept in good state of maintenance and are so placed that if such
vessel sinks then they remain to float and one of such buoys is within the immediate reach of the Steerman
of such vessel and another is situated after part of such vessel; and
(vi)
that the position of the Steerman of the vessel is such that the has a reasonably free view of all sides.
87. Prevention from drowning The employer shall ensure at a construction site of building or other construction work that where,
on or adjacent to the work place of any construction site to which these rules apply, there is water into which a building worker
employed for work on such site is, in the course of his employment, may fall and has the risk of drowning, suitable rescue equipment is
provided and kept in an efficient state for ready use and measures are taken to arrange for the prompt rescue of such building worker
from the danger of drowning and where there is a special risk of such fall from the edge of adjacent land or from a structure adjacent
to or above the water or from floating stage on such water, secure fencing is provided near the edge of such land, structure or floating
stage, as the case may be, to prevent such fall, and such fencing may be removed or allowed to remain unerected for the time and to
the extend necessary for the access of building workers to such work or the movement of material for such work.
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CHAPTER X
TRANSPORTATION AND EARTH MOVING EQUIPMENT
88. Earth moving equipment and vehicles The employer shall ensure at a construction site of building or other construction work
that
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(a) all vehicles and earth moving equipment are made of good material, proper design and sound construction and are
sufficiently strong for the purpose for which such equipment are used and are maintained in good state of repair and are
properly used in accordance with standards safe operating practices;
Provided that the truck or trailer employed for transporting freight containers are of the size sufficient to carry the
containers, without overhanging and are provided with twist locks conforming to national standards at all the four
corners of each of such truck or trailers are certified for such use by an authority under the relevant law for the time being
in force and is inspected by a responsible person, at least once in a month and record of such inspection is maintained;
(b) all transport or each moving equipment and vehicles are inspected at least once a weak by a responsible person and in
case any
defect is noticed in such equipment or vehicle, it is immediately taken out of use;
power trucks and tractors are equipped with effective brakes, head lights and tail lamps and are maintained in good
repair and
working order;
(d)side stanchions on power truck and trailers for carrying heavy and long objects are
(i)of sound construction and free from defects;
(ii)provided with tie chains attached to the top across the loads for preventing such stanchions from spreading out; and
(iii)kept in position while loading and unloading;
(e) safe gangways are provided for to and fro movement of building workers engaged in loading and unloading of lorries,
truck,
trailers and wagons;
(f)truck and other equipment are not loaded beyond their safe carrying capacity which shall be clearly marked on such trucks
and other equipment;
(g)handles of hand trucks are so designed as to protect the hands of the building workers working on such trucks, or such
handles are provided with knuckle guards;
(h) no unauthorized person rides the transport equipment employed in such work;
(i) a driver of a transport equipment manoeuvres such equipment under the direction of a signaler;
(j) adequate precaution such as isolating the electric supply or erecting overhead barriers of a safe height is taken when earth
moving equipment or vehicles are required to operate in dangerous proximity to any live electric conductor;
(k) vehicles and earth moving equipments are not left on a slope with the engine of such vehicles or equipment running;
(l) all earth moving equipments, vehicles or other transport equipment are operated only by such person who are adequately
trained and possess such skill as are required for safe operation of such equipment, vehicle or other transport equipment
89. Power shovels and excavators The employer shall ensure at a construction site of building or other construction work that
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(a)
a shovel or an excavator whether operated, by steam or electric or by internal combustion, used for such work is
constructed, installed, operated, tested and examined as required under any law for the time being is force and the
relevant national standards;
(b)
(c)
90.
excavator equipped for use as a mobile crane is
(i)
examined and tested in accordance with the requirements for such mobile crane under these rules; and
(ii)
fitted with an automatic safe working load indicator;
buckets or grabs of power shovels are propped to restrict the movement of such buckets or grabs while being repaired
or while the teeth of such buckets or grabs are being changed.
Bulldozers The employer shall ensure at a construction site of a building or other construction work that
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(a)
an operator of a bulldozer before leaving such bulldozer

(i)
applies the brakes;
(ii)
lowers the blade and sipper; and
(iii)
puts the shift lever into neutral.
(b)
a bulldozer is left on level ground at the close of the work for which such bulldozer is used;
the blade of a bulldozer is kept low when such bulldozer is moving uphill;
(d)
the bulldozer blades are not used as brakes except in an emergency.
91. Scrappers The employer shall ensure at a construction site of a building or other construction work that
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(a)
a tractor and scraper is joined by safety line at the time of its operation;
(b)
the scraper bowls are propped while blades of such scraper are being replaced;
(c)
a scraper moving downhill is left in gear.
92. Mobile asphalt layers and finishers The employer shall ensure on a construction site of a building or other construction work
that
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(a)
a mixture elevator is within a wooden or sheet metal enclosure with a window for observation, lubrication and
maintenance.
(b)
Bitumen scoops have adequate covers;
(c)
When asphalts plants are working on a public road, adequate traffic control is established on such road and the
building workers working with such plant are provided with reflecting jackets;
(d)
A sufficient number of fire extinguishers are kept in readiness on such work place where fire hazards may exist;
(e)
The materials are loaded on the elevator after the drying drain has warned up of such elevator;
(f)
No open light is used for ascertaining the level of asphalt;
(g)
Inspection opening is not opened till there is a pressure in the boiler which may cause injury to a building worker.
93. Pavers The employer shall ensure at a construction site of a building or other construction work that pavers are equipped with
guards suitable to prevent building workers from walking under the skip of such pavers.
top
94. Road rollers The employer shall ensure at a construction site of a building or other construction work that
top
(a)
before a road roller is used on the ground, such ground is examined for its bearing capacity and general safety,
especially at the edges of slopes such as embankments of such grounds;
(b)
a roller is not moved downhill with the engine out of gear.
95. General Safety The employer shall ensure at a construction site of a building or other construction work that
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(a)
every vehicle or earth moving equipment is equipped with

(i)
silencers;
(ii)
tail lights;
(iii)
power and hand brakes;
(iii)
reversing alarm; and
(iv)
search light for forward and backward movement, which are required for safe operation of such vehicle or
earth moving equipment;
(b)
the cab of vehicle or earth moving equipment is kept at least one metre from the adjacent face of a ground being
excavated;
(c)
when a crane or shovel are travelling, the boom of such crane or shovel is in the direction of such travel and the
bucker or scoop attached to such crane or shovel is raised and without load, except when such travelling is downhill.
CHAPTER XI
CONCRETE WORK
96. General provisions regarding use of concrete The employer shall ensure at a construction site of building or other
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(a)
all construction with the use of concrete or reinforced concrete are based on plans as
(i)
include specifications of steel and concrete and other material to be used in such construction;
(ii)
give technical details regarding methods for safe placing and handling of such materials as specified in
sub-clause (i);
(iii)
indicate the type, quality and arrangement of each part of a structure of such construction and
(iv)
explain the sequence of steps to the be taken for completion of such construction.
(b)
formwork and shores used for concrete work are structurally safe and are properly braced or tied together so as to
maintain position and shape of such formwork or shores;
(c)
formwork structure used for concrete work has sufficient cat-walks and other secure access for inspection of such
structure if such structure is into or more tiers.
97. Preparation and pouring of concrete and erection of structures The employer shall ensure at a construction site of a building
or other construction work that
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(a)
a building worker handling cement or concrete

(i)
wears close-fitting clothing, gloves, helmet or hard hat, safety goggles, proper foot wear and respirator or
mask to protect him from danger is such handling;
(ii)
keep as much of his body covered as is required to protect him from danger is such handling;
(iii)
takes all necessary precautions to keep cement and concrete away from his skin in such handling;
(b)
lime pits are fenced or enclosed;
(c)
lime pits are filled and emptied by such devices which do not require workers to go into the pit;
(d)
moving parts of the elevators, hoists, screens, bunkers, chutes, grouting equipment used for concrete work and of
other equipment used for storing, transport and other handling ingredients of concrete are securely fenced to avoid
contact of building workers with such moving parts;
(e)
screw conveyors used for cement, lime and other dusty materials are completely enclosed;
98. Buckets The employer shall ensure at a construction work that

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(a)
concrete buckets used with cranes or aerial cableways are free from projections from which accumulations of concrete
could fall;
(b)
movements of concrete buckets are governed by signals necessary to avoid any danger by such movements.
99. Pipes and Pumps The employer shall ensure at a construction site of a building or other construction work that
top
(a)
a scaffolding carrying a pipe for pumped concrete is strong enough to support such pipe at time when such pipe is
filled with concrete or water or any other liquid and to bear all the building workers who may be on such scaffold at
such time, safely;
(b)
every pipe for carrying pumped concrete is

(i)securely anchored at its end point and at each curve on it;
(ii)provided near the top of such pipe with an air release valve and
(iii) securely attached to a pump nozzle by a bolted collar or other adequate means;
(c)
the operation of concrete pumps are governed by standard signals relevant in accordance with the relevant national
standards
(d)
100.
building workers employed around a concrete pump wear safety goggles.
Mixing and pouring of concrete The employer shall ensure at construction site of a building or other construction work that
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(a)
the concrete mixture does not contain any material which may unduly affect the setting of such concrete, weaken
such
concrete or corrode steel used with such concrete;
(b)
when dry ingredients of concrete are being mixed in confined space such as silos
(i) the dust shall be exhausted at the time of such mixing; and
(ii) in case the dust cannot be exhausted, as specified in sub-clause (i), the building workers shall wear respirators
at the time of such mixing;
when concrete is being tipped from buckets, building workers are kept out of the range of any kickbacks of such
buckets;
(d)
loads are not dumped or placed on settling concrete.
101. Concrete panels and slabs The employer shall ensure at a construction site of a building or other construction work that
top
(a)
all parts of a concrete panel or concrete slab are hoisted uniformly;
(b)
concrete panels are adequately braced in their final positions and such bracings shall remain in such position until
such panels are adequately supported by other parts of the construction for which such panels are used;
(c)
temporary bracing of concrete panels are securely fastened to prevent any part of such panels from falling when such
panels are being moved.
102.Stressed and tensioned elements The employer shall ensure at a construction site of a building or construction work that
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(a)
building workers do not stand directly over jacking equipment while stressing of concrete girders and beams is being
done;
(b)
a pre-stressed concrete unit is not handled except at points on such unit and by the devices specified for such work by
the manufacturer of such devices;
(c)
during transport, pre-stressed concrete girders or concrete beams are kept upright by bracing or other effective means;
(d)
anchor fittings for pre-tensioned strands of pre-stressed concrete girders or concrete beams are kept in a safe
condition in accordance with the instructions of manufacturer of such anchor fittings;
(e)
building workers do not stand behind jacks or in line with tensioning elements and jacking equipment during
tensioning operations of pre-stressed concrete girders or concrete beams;
(f)
building workers do not cut wires of pre-stressed concrete girders or concrete beans under tension before such
concrete used for such girders or beams is sufficiently hardened.
103. Vibrators The employer shall ensure at a construction site of a building or other construction work that
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104.
(a)
a building worker, who is in good physical condition, operates vibrators used in concreting work;
(b)
all practical measures are taken to reduce the amount of vibration transmitted to the operators working in concreting
work;
(c)
when electric vibrators are used on concreting work

(i)
such vibrators shall be earthed;
(ii)
the leads of such vibrators shall be heavily insulated; and
(iii)
the current shall be switched off when such vibrators are not in use.
Inspection and supervision The employer shall ensure at a construction site of a building or other construction work that
top
(a)
to such inspection and produced them for inspection upon the demand of an Inspector having jurisdiction. a person
responsible for a concreting work supervises the erection of the formwork, shores, graces and other supports used for
such concreting work;
(b)
a person responsible for concreting work makes a through inspection of every formwork after erection of such
formwork in such concreting work to ensure that such formwork is safe;
(c)
a person responsible for a concreting work regularly inspects the formwork, shores, braces, reshores and other
supports during the placing of concrete;
(d)
any unsafe condition which is discovered during the inspections mentioned under clause (b) and (c) is remedied
immediately;
(e)
a person responsible for a concreting work keeps all records of inspections referred to in clause (a) and clause (b) at
the workersplace relating
105. Beams, floors and roofs The employer shall ensure at a construction site of a building or other construction work that
top
(a)
horizontal and diagonal bracings are provided in both longitudinal and transverse directions as may be necessary to
provide structural stability to formwork used in concreting work and shores used in such concreting work are
properly seated top and bottom and are secured in their places;
(b)
where shores used in concreting work rest upon the ground, base plates are provided for keeping such shores firm and
in level;
(c)
where the floor to ceiling height of a concreting work exceeds nine meters or where the formwork deck used in such
concreting work is supported by shores constructed in two or more tiers, or where the dead, live and impact loads on
the formwork used in such concreting work exceed seven hundred kilogram per square meter, the structure of such
formwork is designed by a professional engineer in the relevant field and the specifications and drawings of such
formwork are kept at such construction site and produced on demand before the Inspector having jurisdiction;
(d)
where the structure of the form work used in concreting work is designed by a professional engineer, such engineer
shall be responsible for the supervision of construction and stability of such structure.
106. Stripping The employer shall ensure at a construction site of a building or other construction work that
top
(a)
stripping of formwork used in concreting work commences until the concrete on such formwork is fully set, examined
and certified to this effect by the responsible person and record of such examination and certification is maintained;
(b)
stripped forms in concreting work are removed or stock-piled promptly after stripping from all areas in which
building workers are required to work or pass;
(c)
protruding nails, wire ties and other formwork accessories not required for subsequent concreting work are pulled, cut
or otherwise made safe.
107.Reshoring The employer shall ensure at a construction site of a building other construction work that
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(a)
reshoring used in concreting work is provided to a slab or beam for its safe support after its stripping ow where such
slab or beam is subjected to superimposed loads due to construction above such slab or beam;
(b)
the provisions applicable to shoring in a concreting work under this chapter shall also be applicable to reshoring in
such work.
CHAPTER XII
DEMOLITION
108.
Preparation The employer shall ensure at a construction site of a building or other construction work that all glass or
similar material or article in exterior openings are removed before commencing any demolition work and all water, steam electric, gas
and other similar supply lines are put-off and suitably rapped and the concerned department of the appropriate Government or local
authority is informed and permission obtained wherever required before commencing such demolition work and wherever it is
necessary to maintain water, gas or electric line or power during such demolition, such line shall be so located or protected with
substantial coverings so as to protect it from damage and to afford safety to the building workers and the general public.
top
109. Protection of adjacent structures The employer responsible for a demolition work at a construction site of a building or
other construction work shall, during demolition process of such demolition work, examine the walls of all structures adjacent to the
structure to be demolished to determine the thickness, method of support to such adjacent structures and in case, such employer has
reason to believe that any of such adjacent structure is unsafe or may become unsafe during such demolition process, he shall not
perform demolition activity affecting such unsafe adjacent structure unless and until remedial measures like sheet piling, shoring,
bracing, or similar other means so as to ensure safety and stability to such unsafe adjacent structure from collapsing are taken.
top
110.
Demolition of walls, partitions, etc. The employer shall ensure at a construction site of a building or other construction
work that
top
(a)
any demolition of walls or partitions is proceeded in a systematic manner as per the standard safe operating practices
and all work above each tier of any floor beams is completed before the safety of the supports of such beam is
impaired;
(b)
masonry is neither loosened nor permitted to fall in such masses or volume or weight as to endanger the structural
stability of any floor or structural support;
(c)
no wall, chimney or other structure or part of a structure is left unguarded in such a condition that it may fall,
collapse or weaken due to wind pressure or vibration;
(d)
in the fase of demolition of exterior walls by hand, safe footing is provided for the building workers employed for
such demolition, in the form of sound flooring or scaffolds;
(e)
walls or partitions which are to be demolished by hand are not left standing more than one storey high above the
uppermost floor on which persons are working.
111.
Method of operation The employer shall ensure at a construction site of a building or other construction work that debris,
bricks and other materials or articles are removed
top
(i)
by means of chutes;
(ii)
by means of buckets or hoists;
(iii)
through openings in the floors; or
(iv)
by any other safe means.
112.
Access to floor The employer shall ensure at a construction site of building or other construction work that safe access to
and egress from every building is provided at all times in the course of demolition of such building by means of entrances, hallways,
stairways or ladder runs which are so protected as to safeguard the building workers using means from falling material or articles.
top
113.
Demolition of structural steel The employer shall ensure at a construction site of a building or other construction work that
top
114.
(a)
all steel structures are demolished column by column and tier by tier and every structural member which is being
demolished is not under any stress and such structural member is suitably lashed to prevent it from any uncontrolled
swinging or dropping or falling;
(b)
large structural members are not thrown or dropped from the building but are carefully lowered by adopting suitable
safe method;
(c)
where a lifting appliance like a derrick is used for demolition, the floor on which such lifting appliance rests is
completely planked over or supported and such floor is of adequate strength to sustain bearing load for such lifting
appliance and its operation.
Storage of material or article The employer shall ensure at a construction site of a building or other construction work that
top
(a)
all materials or articles are not stored or kept on platform, floor or stairways of a building being demolished;
Provided that this clause shall not apply to the floor of a building when such floor is of such strength as to support
safely the load to be superimposed by storing such materials or articles;
(b)
an access to any stairway or passageway is not affected or blocked by storing any material or article;
(c)
suitable barricades are provided so as to prevent materials or articles from sliding or rebounding into any space used
by the building workers.
115. Floor opening The employer shall ensure at a construction site of a building or other construction work that every opening
used for the removal of debris from every floor which is not closed to access, except the top or working floor is provided with an
enclosure from such floor to its ceiling, or such opening is so barricaded that no building worker has access to within a horizontal
distance of six metres from such opening through which debris is being dropped.
top
116. Inspection The employer shall ensure at a construction site of a building or other construction work that a person responsible
for demolition work makes continuous inspections during demolition process of such demolition work so as to detect any hazard
resulting from weakened or deteriorated floors or walls or loosened materials or articles during such demolition process and that no
building worker is permitted to work where such hazard exist unless remedial measures like shoring or bracing are taken to prevent
such hazards.
top
117. Warning signs, barricades, etc. The employer shall ensure at a construction site of a building or other construction work that
top
(a)
barricades and warning signs are erected along every side throughout the length and breadth of a building or other
construction work to be demolished to prevent unauthorised persons from entering into the site of such building or
other construction work during demolition operations;
(b)
during the demolition of an exterior masonry wall or a roof from a point more than twelve metres above the adjoining
ground level of such wall or roof, if persons below such wall or roof are exposed to falling objects, suitable and safe
catch platforms shall be provided and maintained at a level not more than six metres below the working level except
where an exterior built up scaffold is provided for safe and adequate protection of such persons;
(c)
suitable and standard warning signs in accordance with national standards are displayed or erected at conspicuous
places or position at the workplace.
118. Mechanical method of demolition The employer shall ensure at a construction site of a building or other construction work
that the following requirements are fulfilled in case the mechanical method of demolition like used swinging weight, clamshell bucket,
power shovel, bulldozer or other similar mechanical methods are used for the purpose of demolition; namely : top
(a)
that the building or structure or remaining portion thereof shall be not more than twenty four metres in height;
(b)
that where a swinging weight is used for demolition, a zone of such demolition having a radius of at least one and a
half times the height of the structure or portion thereof being so demolished shall be maintained around the points of
impact of such swinging weight;
(c)
where a clamshell bucket is being used for demolition, a zone of demolition shall be maintained within eight metres
of the line of travel of such bucket;
(d)
that where other mechanical methods are being used to affect total or partial collapse of a building or other
construction work, there shall be maintained, in the area into which the affected portion of such building or other
construction work may fall, a zone of demolition at least one and a half times the height of such affected portion
thereof; and
(e)
no person other than building workers or other persons essential to the operation of demolition work shall be
permitted to enter a zone of demolition referred to in clause (a) which shall be provided with substantial barricades.
CHAPTER XIII
EXCAVATION AND TUNNELING WORKS
119. Notification of intention to carry out excavation and tunnelling work

top
(1)
Every employer carrying out any excavation or tunnelling work at a construction site of a building or other construction work
shall, within thirty days, prior to the commencement of such excavation or tunnelling work, inform in writing the detailed
layout plans, method of construction and schedule of such excavation or tunnelling work to the Director General.
(2)
In case compressed air is used in such excavation or tunnelling work or any work incidental to or required for such excavation
or tunnelling work, that the technical details and drawings of all man-locks and medical locks together with names and
addresses of all construction medical officers having qualification as laid down in Schedule XI annexed to these rules and so
appointed by such employer for the purpose of such excavation or tunnelling work shall be sent to the Director General.
120. Project engineer (1) Every employer undertaking any excavation or tunnelling work shall appoint a project engineer for safe
operation of such projects of such excavation or tunnelling work for which such engineer is appointed.
top
(3)
Such project engineer shall exercise overall control of the operations and the activities at such project and be responsible for
carrying out the activities safely.
121. Responsible person (1) Every employer undertaking excavation or tunneling work at a construction site of a building or other
construction work shall appoint a responsible person for safe operation for such excavation or tunneling work.
top
(2) Duties and responsibilities of the responsible person referred to in sub-rule (1) person shall include
(a)
to carry out smoothly such excavation or tunneling work;
(b)
to inspect and rectify any hazardous situation relating to such excavation or tunneling work;
(c)
to take remedial measures to avoid any unsafe practice or conditions relating to such excavation or tunneling work.
(3)The name and address of the responsible person referred to in sub-rule (1) shall be forwarded to the Director General.
122. Warning signs and notices The employer shall ensure at a construction site of a building or other construction work that
top
(a)
suitable warning signs or notices, required for the safety of building workers carrying out the work of an excavation
or tunnelling, shall be displayed or erected at conspicuous places in Hindi and in a language understood by the
majority of such building workers at such excavation or tunnelling work;
(b)
such warning signs and notices with regard to compressed air working shall include
(i) the danger involved in such compressed air work;

(ii) fire and explosion hazards;
(iii) the emergency procedures for rescue from such danger or hazards.
123. Register of employment etc. (1) Every employer shall ensure that a construction site of a building or other construction work
where an excavation or tunnelling work is being carried on, a register of employment of building workers carrying out such excavation
or tunnelling work, is maintained and produced on demand to the Inspector having jurisdiction.
top
(2). Periods of work of such excavation or tunnelling work, in which such building worker are employed, shall be maintained in a
register on day-to-day basis and such register shall be produced on demand to the Inspector having jurisdiction.
124. Illumination (1) The employer shall ensure at a construction site of a building or other construction work that all work places
where excavation or tunnellig works are carried out shall be adequately illuminated in accordance with the relevant national standards.
top
(2). Every employer carrying out excavation or tunnelling works at a construction site of a building or other construction work
shall provide for emergency generators on such construction site to ensure adequate illumination at all work places where such
excavation or tunnelling work is being carried out, in case of power failure.
125. Stability of structure The employer shall ensure at a construction site of a building or other construction work that
top
(a)
where there is any doubt as to the stability of any structure adjoining the work place or other areas to be excavated or
where tunnelling work is to be carried out, the project engineer referred to in rule 120 arranges for measures like
underpinning, sheet piling, shoring, bracing or other similar means to support such structure and to prevent injury to
nay building worker working adjacent to such structure or damage to property or equipment adjacent to such
structure;
(b)
where any building worker engaged in excavation is exposed to hazard of falling or sliding material or article from
any bank or side of such excavation which is more than one and a half metre above his footing, such worker is
protected by adequate piling and bracing against such bank or side;
(c)
the excavation and its vicinity are checked are checked by a responsible person referred to in rule 121 after every rain,
storm or other occurrences carrying hazards and in case a hazard is noticed at such checking, adequate protection
against slides and cave-in to prevent such hazard is provided;
(d)
temporary sheet piling installed for the construction of a retaining wall after excavation is not removed except on the
advice of the responsible person referred to in rule 121 after an inspection carried out by such responsible person;
(e)
where banks of an excavation are undercut, adequate shoring is provided to support the material or article
over-hanging such bank;
(f)
excavated material is not stored at least zero point six five metres from the edge of an open excavation or trench and
the banks of such excavation or trench are stripped of loose rocks and other materials which may slide, roll or fall
upon a building worker working below such bank;
(g)
adequate and suitable warning signs are put-up at conspicuous places at the excavation work to avoid any person
falling into the excavations or trenches;
(h)
the responsible person referred to in rule 121, ensures at the excavation work that no building worker is permitted to
work where such building worker may be struck or endangered by the excavation machinery or material or article
used in such excavation.
126. Piling, shoring and bracing The employer shall ensure at a construction site of a building or other construction work that
top
(a)
plank used for sheet piling in excavation or tunnelling work is of sound material with adequate strength;
(b)
shores and braces used in excavation or tunnelling work are of adequate dimensions and are so placed as to be
effective for their intended purposes;
(c)
earth supported shores or braces used in excavation or tunnelling work bear against a footing of sufficient area and
stability to prevent the shifting of such shores or braces.
127. Safe access The employer shall ensure at a construction site of a building or other person by suitable measures if stair cases or
ramps are provided, as the case may be, for safe access to and egress from excavation where the depth of such excavation exceed one
point five metres and such ladders, stair cases or ramps comply with the relevant national standards.
top
128. Trenches The employer shall ensure at a construction site of a building or other construction work that a trench or excavation
is protected against falling of a person by suitable measures if the depth of such trench or excavation exceeds one and a half metre and
such protection is an improved protection in accordance with the design and drawing of a professional engineer, where such depth
exceeds four metres.
top
129. Depth of trenches The employer shall ensure at a construction site of a building or other construction work that, top
(a)
where the depth of a trench requires two lengths of sheet piling, one above the other, the lower piling is set inside the
bottom strings or wales of the upper piling and such sheet piling is drive down and braced as the excavation
continues;
(b)
all metal sheet piles used in excavation or a trench are welded end to end and secured by other similar means.
130. Polishing and used of machinery Every employer shall ensure that a construction site of a building or other construction
work that any machinery used in excavation and tunnelling work is positioned and operated in such a way that such machinery does
not endanger the operator of such machinery or any other person in the vicinity.
top
131. Breathing apparatus The employer shall ensure at a construction site of a building or other construction work that
top
(a)
suitable breathing apparatus is provided to a building worker while working in compressed air environment for his
use at excavation or tunnelling work; and
(b)
such breathing apparatus is maintained in good working condition at all times.
132. Safety measures for tunnelling operation The employer shall ensure at a construction site of a building or other construction
work that
top
(a)
where there is a danger of falling or sliding of material from the roof face or wall of a tunnel, adequate measures such
as shoring, supporting by means of rock bolts, segments or steel sets are taken for the safety of building workers;
(b)
the excavated areas are made safe by use of suitably designed and installed steel sets, rock bolts or similar other safe
means;
(c)
the responsible person referred to in rule 121 examines and inspects the workplaces in a tunnel before the
commencement of work in such tunnel, and at regular intervals thereafter, to ensure safety of the building workers in
such tunnel;
(d)
the portal areas of a tunnel with loose soil, or rock, likely to cause injury to a person are adequately protected with
supports.
133. Pneumatic tools Every employer shall ensure that a construction site of a building or other construction work that supply lines
to pneumatic tools used within a tunnel are fitted with water trap or safety chain or safety wire, as the case may be.
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134. Shafts The employer shall ensure at a construction site of a building or other construction work that
top
(a)
surroundings of a shaft used in excavation or tunnel work are protected from being washed away by construction of
sufficient height;
(b)
where a building worker is required to enter a shaft at an excavation or tunnelling work, safe means of access is
provided for such entry;
(c)
every shaft at excavation or tunnelling work is provided with a steel casing, concrete piping, timber shoring or other
materials of adequate strength for the safety of building workers working in such shaft;
(d)
such casing and bracing are provided to a shaft at an excavation or tunnelling work up to the depth of such shaft at an
excavation or tunnelling work according to the appropriate design for such casing and bracing;
(e)
a reinforced concrete raft and beam is provided around the opening of a shaft at an excavation or tunnelling work if
the ground surrounding such opening is unstable or unsafe.
135. Lift for shaft Every employer shall ensure that a construction site of a building or other construction work that
top
(a)
the minimum lateral clearance of half a metre is maintained between any part of a vehicle and any fixture or any
equipment used in an excavation or tunnelling work after allowing the throw or swing of such fixture or equipment;
(b)
the overhead clearance for a locomotive drive at excavation or tunnelling work is into less than one point one zero
meters above the seat of such driver and not less than two meters above the platform where such driver stands or of
any other dimension in accordance with the relevant national standard.
136. Means of communication The employer shall ensure at a construction site of a building or other construction work that
top
(a) reliable and effective means of communication such as telephone or walkie-talkie arfe provided and are maintained in
working
order for arranging better and effective communication at an excavation or tunneling work at the following locations,
namely
(i) working chamber at the face of an excavation ;

(ii)
intervals of hundred meters along the tunnel;
(iii)
working chamber side of a man lock near the door of such man lock;
(iv)
interior of each chamber of a man lock;
(v)
location conspicuous a lock attendants attention;
(vi)
a compressor plant;
(vii)
a first-aid station; and
(viii)
outside the portal or the top of a shaft;
(b) such number of bells and whistles are made available at all times at the locations referred to in sub-clause (i) to sub
clause (viii) of
clause (a) as are necessary for the safety of persons at such locations.
137. Signals The employer shall ensure at a construction site of a building or other construction work that the standard audio or
video signals are used in excavation or tunneling work and are conspicuously located or displayed near entrance to the workplace and
in such other locations as may be necessary to bring such signals to notice of all building workers employed in such excavation or
tunneling work.
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138.
Clearances The employer shall ensure at a construction site of a building or other construction work that top
(a) the minimum lateral clearance of half a metre is maintained between any part of a vehicle and any fixture or any
equipment
used in an excavation or tunneling work after allowing the throw or swing of such fixture or equipment;
(b) the overhead clearance for a locomotive drive at excavation or tunneling work is into less than one point one zero meters
above
the seat of such driver and not less than two meters above the platform where such driver stands or of any other
dimension in
accordance with the relevant national standard.
139. Shelters Every employer shall ensure that a construction site of a building or other construction work that the adequate
number of shelters for the safeguard of the building workers are provided where, in the course of working, they are liable to be struck
by a moving vehicle or other material handling equipment in a tunnel.
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140. Use of internal combustion engine Every employer shall ensure that a construction site of a building or other construction
work that no internal combustion engine is used underground in excavation or tunnelling work unless such engine is so constructed
that
top
(a)
the air entering the engine gets cleared before entry; and
(b)
no fumes or sparks are emitted by the engine.
141. Inflammable oils Every employer shall ensure that a construction site of a building or other construction work that
inflammable oils with the flash point below the working temperature that is likely to be encountered in a tunnel are not used in
excavation or tunnelling work.
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142. Coupling and hoses Every employer shall ensure that a construction site of a building or other construction work that only
high pressure hydraulic hose and couplings are used on hydraulic plants underground and such hoses and couplings are adequately
protected against any possible damage in excavation or tunnelling work.
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143. Hose installation Every employer shall ensure that a construction site of a building or other construction work that all
hydraulic lines and plants working at a temperature exceeding seventy degree centigrade are protected by adequate insulation or
otherwise against accidental human contact in excavation or tunnelling work.
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144. Fire resistant hoses Every employer shall ensure that a construction site of a building or other construction work that no fire
hydraulic hoses other than fire resistant hydraulic hoses are used when hydraulically activated machinery and equipment is employed
in tunnels.
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145. Flame proof equipment Every employer shall ensure that a construction site of a building or other construction work that
only flame proof equipment appropriate type as per relevant national standards is used where there is a danger of flammable or
explosive atmosphere being prevalent inside the tunnel.
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146. Storing of oil and fuel underground Every employer shall ensure that a construction site of a building or other construction
work that
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(a)
all oils, greases or fuels stored underground in excavation or tunnelling work are kept in tightly sealed containers and
in fire resistant areas at safe distances away from explosive and other flammable chemicals;
(b)
appropriate flame proof installation is used in such storage areas as specified in clause (a).
147. Use of gases underground Every employer shall ensure that a construction site of a building or other construction work that
top
(a)
Petrol or liquified petroleum gas or any other flammable substances are not used, stored inside the tunnel except with
the prior approval of the project engineer under rule 120;
(b)
After the use of the petroleum or liquified petroleum gas, or highly inflammable substances referred to in clause (a),
all remaining petroleum or liquified petroleum gas or highly inflammable substances are removed immediately from
such tunnel;
(c)
No oxy acetylene gas is used in a compressed air environment in excavation or tunnelling work.
148. Water for fire fighting Every employer shall ensure that a construction site of a building or other construction work that
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(a)
adequate number of water outlets are provided on excavation or tunneling work and are readily made accessible
throughout the tunnel for fire fighting purposes ad such water outlets are maintained for effective fire fighting.
(b)
All air locks are equipped with fire fighting facilities at excavation or tunnelling work;
(c)
An audible fire alarm is provided to warn the building workers whenever a fire breaks out on an excavation or
tunnelling work;
(d)
Adequate number and types of fire extinguishers, in accordance with relevant national standards, are provided and
made readily available to fight any outbreak of fire at an excavation of tunnelling work;
(e)
Fire extinguishers with vapourising liquids and high pressure carbon dioxide are not used in tunnels or other
confined spaces;
(f)
The instructions regarding steps to be followed to fight outbreak of fire, at an excavation or tunnelling work, writer in
Hindi or local language understood by the majority of the building workers employed on such excavation or
tunneling work, are displayed at conspicuous and vulnerable places of such excavation or tunnelling work.
149. Flooding The employer shall ensure that a construction site of a building or other construction work that
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(a)
water tight bulkhead doors are installed at the entrance of a tunnel to prevent flooding during a tunnelling work
where more than one tunnel is driven from a shaft;

(b)
all necessary measures are taken to ensure that no building worker is trapped in any isolated section of a tunnel when
any bulkhead door of such tunnel is closed;
(c)
where there is likelihood of flooding or water rushing into a tunnel during a tunneling work, arrangements are made
for immediate starting of water pumps to take out water of such flooding or water rushing and for giving alert signals
to the building workers and other persons to keep them away from danger.
150. Steel curtains The employer shall ensure that a construction site of a building or other construction work that air tight steel
curtains are provided in areas liable to flooding at tunnelling work and in case of descending tunnel such curtains are provided in the
top half of such tunnels to ensure the retention of pockets of air for rescue purpose.
top
151. Rest shelters The employer shall ensure that a construction site of a building or other construction work
top
(a)
where building workers employed in a compressed air environment in a tunnelling work are required to remain at the
work site for one hour or more after de-compression from pressure exceeding one bar, adequate and suitable facilities
are provided for such building workers to rest;
(b)
every man-lock, medical-lock and nay other facility these locks at an excavation a tunnelling work is maintained in a
clean state and in good repairs;
(c)
a first-aid room is provided and is readily available at a construction site of a tunnelling work;
(d)
each man-lock attendant station is provided with a first-aid box at a construction site of a tunnelling work.
152. Permissible limit of exposure of chemicals The employer shall ensure that a construction site of a building or other
construction work top
(a)
the working environment in a tunnel or a shaft in which building workers are employed does not contain any of the
hazardous substances in concentrations beyond the permissible limits as laid down in the Schedule XII annexed to
these rules;
(b)
the responsible person referred to in rule 121 conducts necessary test before the commencement of a tunnelling work
for the day and at suitable intervals as fixed by the Director General to ensure that the permissible limits of exposure
are not exceeded and a record of such test is maintained and is made available for inspection to the Inspector having
jurisdiction, on demand.
153. Ventilation The employer shall ensure that a construction site of a building or other construction work that all working areas
in a free air tunnel are provided with ventilation system as approved by the Director General and the fresh air supplied in such tunnel
is not less than six cubic metre per minute for each building worker employed underground in such tunnel and the free air-flow
movement inside such tunnel is not less than nine metres per minute.
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154. Air supply intake point The employer shall ensure that a construction site of a building or other construction work that the
air intake points for all air compressors are located at places where such intake air does not get contaminated with dust, fumes, vapour
and exhaust gases or other contaminants.
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155. Emergency generators The employer shall ensure that a construction site of a building or other construction work
top
(a)
every compressed air system in a tunnel is provided with emergency power supply system for maintaining continued
supply of compressed air in such compressed air system and is capable of operating air compressor and ancillary
systems of such compressed air system;
(b)
the emergency power supply system is maintained and is readily available at all times at an excavation or tunnelling
work.
156. Air mains The employer shall ensure that a construction site of a building or other construction work that every air main
supplying air to the working chamber, man-lock or medical-lock used at an excavation or tunnelling work is protected against
accidental damage and where it is not practicable to provide such protection, a stand by air main is provided.
top
157. Bulk head and air-locks The employer shall ensure that a construction site of a building or other construction work
top
(a)
a bulk head or air tight diaphragms retaining compressed air, when used within a tunnel or a shaft, is constructed to
withstand the maximum pressure at one point two five times the maximum working pressure of such bulk head or
diaphragm and such bulk head or diaphragm is tested before its each use by a responsible person referred to in rule
121 to ensure that such bulk head or diaphragm is in proper working order;
(b)
such responsible person keeps the record of each test referred to in clause (a) and such record is produced for
inspection to the Inspector having jurisdiction on demand;
(c)
the bulk head or diaphragm referred to in clause (a) are made of sound material of adequate strength and are able to
withstand the maximum pressure on which they are subjected to at any time of their use;
(d)
a bulk-head anchorage and air lock is tested at its work place at an excavation or tunnelling work immediately after
their installation at such place.
158. Diaphragms The employer shall ensure that a construction site of a building or other construction work that all diaphragms
which are in the form of horizontal decks across a shaft used at excavation or tunneling work are securely anchored.
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159. Portable electrical hand tools - The employer shall ensure that a construction site of a building or other construction work that
all portable electrical hand tools and inspection lamps used underground or in a confined space at an excavation or tunneling work are
operated at a voltage not exceeding twenty four volts.
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160. Circuit breaker - The employer shall ensure that a construction site of a building or other construction work that top
(a)
adequate numbers of differential ground-fault circuit breakers are installed for every electrical distribution system
and its sub- systems used at an excavation or tunnelling work and the sensitivity of each of circuit breaker is adjusted
in accordance with the requirement set out in accordance with the relevant national standards;
(b)
no semi-enclosed fuse and unit is used in underground place at an excavation or tunneling work.
161. Transformer - The employer shall ensure that a construction site of a building or other construction work that no transformer is
used in any section of a tunnel under compressed air unless such transformer is of the dry type and conforms to the relevant national
standards.
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162. Live wires. The employer shall ensure that a construction site of a building or other construction work that there is no exposed
live wire in working areas at an excavation or tunnelling work which are accessible to building workers other than those authorised to
work on such live lines.
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163. Welding sets - The employer shall ensure that a construction site of a building or other construction work that all welding sets
used in a tunnel are of adequate capacity and of suitable type approved by Director General.
top
164. Quality and quantity of air The employer shall ensure that a construction site of a building or other construction work that
top
(a)
every working chamber at an excavation or tunnelling work where compressed air is used, the supply of such air is
maintained not less than zero point three cubic meters per minute per person working therein;
(b)
a reserve supply of compressed air is made available at all times for man-locks and medical locks used at a
tunnelling work;
(c)
the air supplied in a compressed air environment at a tunnelling work is as far as practicable free from odour and
other contaminants, namely, dust, fumes and other toxic substances.
165. Working temperature - The employer shall ensure that a construction site of a building or other construction work that the
temperature in any working chamber at an excavation or tunneling work where building workers are employed does not exceed twenty
nine degree centigrade and that the arrangement is maintained for keeping records in which the temperatures measured by dry bulb
and wet bulb inside such working chamber once in every hour and to produce such records for inspection on demand to the Inspector
having jurisdiction.
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166. Man-locks and working in compressed air environment - The employer shall ensure that a construction site of a building or
other construction work
top
(a)
(b)
man-locks used at a tunnelling work are of adequate strength, made of sound material and designed to withstand any
air pressure, internal or external, to which it may be subjected to in the normal use or in an emergency;
(i)
doors of man-locks at an excavation or tunnelling work are made of steel;
(ii)
men-locks used at a tunnelling work are airtight and devices are provided for sealing the doors when such
locks are under pressure;
(iii)
the anchorage of a man-lock used at tunneling work have adequate strength to withstand the pressure
exerted by air on the man-lock;
(iv)
there is adequate room available for the building worker for working in the man-lock used at tunnelling
work
(v)
where work is carried out in any compressed air tunnel, a man-lock in accordance with the relevant national
standards is used for such tunnel;
(c)
(i)where a man-lock is used at tunneling work, safety instructions in Hindi an in local language understood by
majority of
building workers employed therein are displaced at conspicuous place at such tunnelling work;
(ii)
except in an embergency, compression and de-compression operations are carried out in a man-lock used at
tunnelling work;
(iii)
in an emergency any material lock may be used at tunnelling work for compression and de-compression of
building workers, where it is impracticable to install both the man-lock and the material lock at a tunnelling
work;
(iv)
material lock is used at tunnelling work for compression and de-compression of building workers, where it is
impracticable to install both the man-lock and the material lock at a tunnelling work;
(v)
de-compression of all building workers to atmospheric condition at tunnelling work is carried out in
accordance with a decompression procedure approved by the Director General;
(vi)
the man-lock at tunnelling work is not used for any purpose other than compression or de-compression of
building workers;
(vii)
no de-canting of building workers at tunnelling work is carried out without prior approval of Director
General, except in an emergency;
(viii)
in case a building worker collapses or is taken ill during his de-compression in a man-lock used at
tunnelling work, the lock attendant of such man-lock raises the pressure in such man-lock until such
pressure is equal to the maximum pressure which that building worker was exposed to in the working
chamber prior to such de-compression and such lock attendant immediately reports the matter relating to
such collapse to the medical lock attendant and medical officer on duty at such tunnelling work;
(ix)
a building worker who had previously received training with a trained building worker to work in a
compressed air environment at tunnelling work is employed to work independently in such a compressed air
environment;
(x)
a building worker who had undergone three de-compressions from a pressure exceeding one bar in a period
of eight hours at tunnelling work is not allowed to enter a compressed air environment except for the
purpose of carrying out rescue work;
(xi)
a building worker employed in a compressed air environment for a period of eight hours in a day at
tunnelling work is not employed again in such environment unless he has spent not less than twelve
consecutive hours of rest at atmospheric pressure;
(xii)
no building worker is engaged in a compressed air environment at a pressure which exceeds three bars at
tunnelling work unless prior permission, in writing, has been obtained from the Director General for such
engagement;
(xiii)
no building worker is employed in a compressed air environment for more than fourteen consecutive days in
a month at tunneling work;
(xiv)
a register of employment of all building workers employed in compressed air environment at tunnelling
work, is maintained;
(xv)
an identification badge is supplied to a building worker employed in compressed air environment at

tunnelling work;
(xvi)
the badge of a building worker referred to in sub-clause (xv) contains particulars of his name, location of the
medical lock allotted to him for work, the telephone number of the Construction Medical Officer concerned
for his treatment and the instructions in case of his illness of unknown and doubtful causes;
(xvii)
record of all identification badges supplied to building workers under sub-clause (xvi), is kept in a register;
(xviii) every building worker whose name appears in the register referred to in sub-clause (xv) at all times during
his duty hours at tunnelling work;
(xix)
suitable warning signs are displayed, in the compressed air environment at tunnelling work, for the
prohibition of following, namely : (a)
use of alcoholic drinks;
(b)
use and carrying of lighters, matches or other sources of ignition;
(c)
smoking; and
(d)
an entry to person who has consumed alcoholic drinks.
167. Safety instruction The employer shall ensure that a construction site of a building or other construction work that all building
workers employed in compressed air environment at tunneling work follow the instructions issued for their safety in the course of such
employment.
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168.
Medical lock - The employer shall ensure that a construction site of a building or other construction work that
top
(a)
a suitably constructed medical lock is maintained at tunnelling work where building workers are employed in a
working chamber at a pressure exceeding one bar;
(b)
where more than one hundred building workers are employed in a compressed air working environment exceeding
one bar at tunnelling work, one medical lock is provided for every one hundred building workers or part thereof and
such medical lock is situated as near as possible to the main lock used at such tunnelling work.
CHAPTER XIV
CONSTRUCTION, REPAIR AND MAINTENANCE OF STEEP ROOFS
169. Work on steep roofs -The employer shall ensure that a construction site of a building or other construction work that all
practicable measures are provided to protect the building workers against sliding when carrying out work on steep roofs.
top
170. Construction and installation of roofing brackets The employer shall ensure that a construction site of a building or other
top
(a)
roofing brackets are constructed to fit the pitch of steep roof and such brackets are used to provide level working
platform;
(b)
a roofing bracket referred to in clause (a) is secured in its place by nailing pointed metal projects attached to the
underside of such bracket and securely driven into a step roof on which it is used or secured by a rope passed over the
ridge pole and tie of such roof.
171. Crawling boards The employer shall ensure that a construction site of a building or other construction work that
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(a)
all crawling boards used for work on steep roofs are of adequate strength, made of sound material and of the type
approved for the purpose of their use as per relevant national standards;
(b)
crawling board referred in clause (a) are kept in good repairs and inspected by a responsible person before being
taken into use;
(c)
crawling board referred to in clause (a) is secured to a steep roof on which it is used by ridge hooks or other effective
means;
(d)
a firmly fastened life line of adequate strength is strung beside each crawling board referred to in clause (a)
throughout its length while using such crawling boards.
CHAPTER XV
LADDERS AND STEP-LADDERS
172. Construction and safe use - The employer shall ensure that a construction site of a building or other construction work that
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(ix)
(a)
every ladder or step-ladder used in building or other construction work is of good construction, made of sound
material and of adequate strength for the purpose for which such ladder or step-ladder is used;
(b)
when a ladder is used as a means of communication, such ladder is lashed to a fixed structure so that while working
on such ladder it does not slip;
(c)
a ladder or step-ladder does not stand on loose bricks or other loose packing and has a level and firm footing;
(d)
where it is required, in case of use of fixed ladders, sufficient foothold and hand-hold are provided for use by the
building worker;
(e)
every ladder is
(i)
secured so as to prevent undue swaying;
(ii)
equally and properly supported on each of its upright;
(iii)
so used as not to cause undue sagging; and
placed as nearly as possible at an inclination of four in one;

(f)
the use of all ladders and step ladders conform to the relevant national standards for their use.
173. Rungs The employer shall ensure that a construction site of a building or other construction work that no ladder is used
which has a missing or defective rung or a rung which depends for its support solely on nails, spikes or other similar fixing.
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174. Materials for ladders The employer shall ensure that a construction site of a building or other construction work that
top
(a)
are constructed upright of adequate strength and are made of straight gained wood, free from defects and having the
grain of such wood running lengthwise;
(b)
have rungs made of straight grained wood free from defects and mortised or securely notched into the upright; and
(c)
have reinforcing metal ties, if the tenons of such ladders are not secured by wedges.
CHAPTER XVI
CATCH PLATFORM AND HORDINGS, CHUTS, SAFETY BELTS AND NETS
175. Catch platforms - The employer shall ensure that a construction site of a building or other construction work thattop
(a)
catch platform is not used for storage of material or as a working platform;
(b)
catch platform is at least two metres wide and is inclined so that the position of outer edge of such platform is fifteen
hundred millimetres higher than the inner edge;
(c)
the open end of catch platform is properly fenced to the height not less than one metre.
176. Hoardings - The employer shall ensure that a construction site of a building or other construction work that hoardings are
constructed when the Director General consider it necessary for protection of building workers and directs such employer to construct
such hoardings;
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177. Chutes, its construction and use The employer shall ensure that a construction site of a building or other construction work
that
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(a)
wooden or metal chutes which are at an angle of more than fourty five degrees to the horizontal and used for the
removal of materials are closed on all sides except at their openings used for receiving or discharging of materials or
articles;
(b)
all openings of chutes except their top openings are closed when not in use;
(c)
every chute
(i)
is constructed of sound material, adequate strength and is suitable for the purpose it is intended for use;
(iii)
exceeding twelve metres in height is constructed in accordance with the design and drawings of a
professional
engineer for
such construction and approval of the Director General.
(d)
a suitable warning notice is displayed at conspicuous location, written in Hindi and in a local language, at the
discharge end of every chute;
(e)
every chute is cleared when debris has accumulated to a height which can pose danger to building worker but such
clearance is done in no case less frequently than once a day.
178. Safety belt and its use - The employer shall ensure that a construction site of a building or other construction work that
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(a)
safety belt, life lines and devices for the attachment of such life lines conform to the relevant national standards;
(b)
every building worker is supplied with safety belt and safety life lines for his protection and such building worker
uses such belts and life lines during the performance of his work;
(c)
all building workers using safety belts and safety life lines have the knowledge of safe use and maintenance of such
belts and life lines and are supplied with necessary instructions;
(d)
the responsible person for supervising the use of safety belts and safety life lines referred to in clause (b) inspects and
ensures that such safety belts and life lines are fit for use before taken into use at every time.
179. Safety net and its use - The employer shall ensure that a construction site of a building or other construction work thattop
(a)
every safety net is of adequate strength, made of sound material and is suitable for use and conforms to the relevant
national standards;
(b)
the responsible person for maintenance of safety nets and their use ensures safe fixing of such safety nets and
provides such safety nets with suitable and sufficient anchorage so that the purposes for which such safety net is
intended for use, is served;
180. Storage of safety belts and nets, etc. - The employer shall ensure that a construction site of a building or other construction
work that proper arrangement is made for the safe storage of safety belts, safety life lines and safety nets when they are not in use and
are protected against mechanical damage, damages from chemicals and damages from biological agents.
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CHAPTER XVII
STRUCTURE FRAME AND FORM WORK
181. General Provision - The employer shall ensure that a construction site of a building or other construction work that
top
(a)
the trained building worker under the direct supervision of a person, responsible for structural frame and form work,
are employed for erection of such structural frame or formwork, dismantling of building and structure and
performance of an engineering work, form work, false work and shoring work;
(b)
adequate measures are taken to guard against hazards arising from any temporary state of weakness or unsuitability
of a structure.
182. Form work, false work and shoring - The employer shall ensure that a construction site of a building or other construction
work that
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(a)
form work and false work are so designed, constructed and maintained that such form work and false work support
the load that may be imposed on them;
(b)
such formwork is so erected that working platform, means of access, bracing, means of handling and stabilising could
easily be fixed with such form work.
183. Erection or dismantling of steel and pre-fabricated structure The employer shall ensure that a construction site of a
building or other construction work that
top
(a)
the safety of building workers employed for the erection or dismantling of steel structures and pre-fabricated
structures is ensured from danger by using appropriate means such as the following, namely
(i)
ladders, gangways or fixed platforms;
(ii)
platforms, buckets, boatswains chair or other appropriate means suspended from lifting appliances;
(iii)
safety harness, life lines, catch net or catch platform;
(iv)
power-operated mobile working platforms;
(b)
the work of erection or dismantling of buildings or structures or form work or false work or shoring or any other civil
engineering work is carried out by trained building workers under the supervision of a person responsible for such
work;
(c)
steel or prefabricated structures are so designed and made that such structures can be safely transported or erected;
and weight of each unit of such structures is clearly marked on such unit;
(d)
the design of each such part maintains stability of each part of the structures referred to in clause (a), clause (b) and
clause (c), when erected, and to prevent danger, design shall explicitly take into account
i. the relevant conditions and methods of attachment in the operations of stripping, transport, storing and
temporary support during erection of such parts; and
ii. safeguards, such as provision of railings with working platforms, and for mounting such railings and
platforms easily on the structural steel or prefabricated parts;
(e)
the hooks and other devices built in or provided on the structural steel or prefabricated parts that are required for
lifting and transporting such parts are so shaped, dimensioned and positioned to withstand the stresses to which such
hooks or other devices are subjected;
(f)
prefabricated parts made of concrete are not stripped or erected before such concrete has set and hardened sufficiently
to the extent provided for in the plans, and such parts are examined by the responsible person for any sign of damage
before their use;
(g)
store places are so constructed that
(i)
there is no risk of structural steel or prefabricated parts falling or overturning;
(ii)
storage conditions generally ensure stability and avoid damage having regard to the method of storage and
atmospheric conditions; and
(iv)
racks are set on firm ground and designed so that units cannot move accidentally in such store places;
(h)
structural steel or prefabricated parts are not subjected to stresses prejudicial to their stability while they are stored or
transported or raised or set down.
(i)
tongs, clamps and other appliances for lifting structural steel and prefabricated parts are
(a)
in such shape and dimensions as to ensure a secure grip without damaging such parts ; and
(b)
marked with the maximum permissible load in the most unfavourable lifting conditions;
(j)
structural steel or prefabricated parts are lifted by such methods and appliances that prevent them from spinning
accidentally;
(k)
structural steel or prefabricated parts are provided with railings and working platforms before raising such parts to
prevent any danger of falling of building workers, materials or articles at the time of any work with such parts;
(l)
all reasonably practical measures are taken to avoid injury to building workers, building structure or equipment while
structural steel or prefabricated parts are handled or stored or transported or raised or lowered;
(m)
structures are not worked on during violent storms or high winds or any other such hazardous situation;
(n)
the risk of falling to which building workers, moving on high or sloping girders, may be exposed is limited by all
means of adequate collective protection or by the use of a safety harness which is well secured to a sufficiently strong
support;
(o)
structural steel parts which are to be erected at a great height are, as far as practicable, assembled on the ground;
(p)
when structural steel or pre-fabricated parts are being erected, a sufficiently extended area underneath the workplace
shall be barricaded or guarded;
(q)
steel trusses which are being erected are adequately shored, braced or guyed until they are permanently secured in
position;
(r)
structural members are not forced into place by the hoisting machine while any building worker is in such a position
that he is likely to be injured by such operation.
184. Form work The employer shall ensure that a construction site of a building or other construction work that
top
(a) all form work are properly designed keeping in view the safety of building workers, building or structures;
(b) a responsible person for structural frame and form work
(i) inspects and examines the material, timber, structural steel and scaffolding for its strength and suitability before
being taken
into use;
(ii)
lays-down procedures to cover all stages of such structural frame and form work;
(iii)
supervises such structural frame and form work;
(iv) take all necessary steps or measures to correct any situation with a view to prevent accident or dangerous
occurrence during
performances of such structural frame and form work that.
185. Deshoring - The employer shall ensure that a construction site of a building or other construction work thattop
(a) when shoring is removed, sufficient props are left in place of such shoring to prevent any possible hazard ; and
(b) deshoring is adequately braced or tied together with support to prevent any hazard;
CHAPTER XVIII
STACKING AND UNSTACKING
186. Stacking and unstacking of materials and articles - The employer shall ensure that a construction site of a building or other

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(a)
where stacking, unstacking, stowing or unstowing of construction material or article, or handling in connection
therewith cannot be safely carried out unaided, reasonable measures to guard against accident or dangerous
occurrences are taken by shoring or otherwise to prevent any danger likely to be caused by such handling;
(b)
stacking of material or article is made on firm foundation not liable to settle and deviate such material or article and
does not overload the floor on which such stacking is made;
(c)
the material or articles, are not stacked against partition or walls of a warehouse or store place unless it is known that
such partition or the wall is of sufficient strength to withstand the pressure of such materials or articles;
(d)
the materials or articles are not stacked to such a height and in such a manner as would render the pile of such stack
unstable and cause hazards to the building workers or the public in general;
(e)
where the building workers are working on stack exceeding one point five metres in height, safe means of access to
the stack is provided;
(f)
all stacking or unstacking operations are performed under the supervision of a responsible person for such stacking or
unstacking;
(g)
the stacking of construction materials or articles is not made near the site of excavation, shaft, pit or any other such
opening;
(h)
stacks which may lean heavily or become unstable or collapse are barricaded.
187. Stacking of cement and other material bags - The employer shall ensure that a construction site of a building or other
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(a)
a stack pile is not more than ten bags in height unless such stack pile is stacked in a suitable enclosure or otherwise
adequately supported;
(b)
while removing bags from the stack pile, the stability of such stack pile is ensured;
(c)
bags containing cement or lime are stored in dry places;
(d)
the materials like bricks, tiles or blocks are stored on a firm ground;
(e)
reinforcing steel is stored according to its shape, size and length;
(f)
stack of reinforcing steel is kept as low as possible;
(g)
no pipe is stored on rack or in stack where such pipe is likely to fall by rolling;
(h)
the angle of repost is maintained where loose materials are stacked;
(i)
when dust ladden material is to be stored or handled, measures are taken to suppress the dust produced by such
storing or handling and suitable personal protective equipment are supplied to and used by the building workers
working for such storing or handling;
CHAPTER XIX
SCAFFOLD
188. Scaffold construction - The employer shall ensure that a construction site of a building or other construction work that
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(a)
every scaffold and every component thereof is of adequate construction, made of sound material and free from defects
and is safe for the purposes for which it is intended for use;
(b)
in case bamboo is used for scaffolding, such bamboo is of suitable quality, good condition, free from protruding knots
and stripped off to avoid any injury to building workers during handling such bamboo;
(c)
all metal scaffolds used in building or other construction work conform to the relevant national standards.
189. Supervision by a responsible person - The employer shall ensure that a construction site of a building or other construction
work that no scaffold is erected, added, altered or dismantled except under the supervision of a responsible person for such erection,
addition, alteration or dismantling.
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190. Maintenance - The employer shall ensure that a construction site of a building or other construction work that
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(a)
the scaffold used in building or other construction work is maintained in good repairs and the measures are taken
against its accidental displacement or any other hazard;
(b)
no scaffold or part thereof is partly dismantled and allowed to remain in such a condition unless
(i)
the stability or safety of the remaining portion of such scaffold has been ensured by a responsible person for
the safety of such scaffolds;
(ii)
in case the remaining part of such scaffold cannot be used by the building workers, necessary warning notice
written in Hindi and in a language understood by the majority of the building workers that such scaffold is
unfit for use, is displayed at the place where such scaffold is erected.
191. Standards, ledger, putlogs - The employer shall ensure that a construction site of a building or other construction work that
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(a)
standards of a scaffold are
(i)
plumb, where practicable;
(ii)
fixed sufficiently close together to secure the stability of such scaffold having regard to all the possible
working situations and conditions for the intended use of such scaffold;
(iii)
spaced, as close as practicable, to ensure safety and stability of such scaffold;
(b)
adequate measures are taken to prevent displacement of a standard of a scaffold either by providing sole plate or a
base plate, as necessary;
(c)
ledgers of metal scaffold are placed at vertical intervals with due regard to safety and stability of such scaffold;
(d)
bamboo ledgers are kept as nearly as possible and are placed and fastened to the standards of a scaffold with due
regard to the stability of such scaffold.
192. Working platform - The employer shall ensure that a construction site of a building or other construction work that
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(a)
working platform is provided around the face or edge of a building adjoining at every upper most permanent floor of
such building under construction and at any level where construction work of such building is carried out;
(b)
a platform is designed to suit the number of building workers to be employed on each bay of a scaffold work on such
platform and the materials or articles and tools to be carried with them in such bay;
(c)
the safe working load and the number of building workers to be employed in each bay of a scaffold are displayed for
the information of all the building workers employed at such construction site.
193. Board, plank and decking - The employer shall ensure that a construction site of a building or other construction work that
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(a)
board, plank and decking used in the construction of a working platform is of uniform size and strength and is
capable of supporting the load and number of building workers in accordance with the relevant national standards
keeping in view the safety of such building workers;
(b)
metal decking, which forms part of a working platform, is provided with non-skid surface;
(c)
no board or plank which forms the working platform is projected beyond its end support unless it is effectively
prevented from tripping or lifting;
(d)
board, plank or decking is fastened and secured;
(e)
at any one time, not more than two working platforms per bay, are used to support building workers or materials or
articles at such bay;
(f)
adequate measures are taken to prevent injury which may be caused by falling material and objects by using safety
nets or other suitable means;
(g)
concrete, other debris or materials are not allowed to accumulate at any platform on a scaffold;
(h)
where a work is to be done at the end of a wall, working platform at such workplace is faced or, wherever practicable,
at least zero point sixty metres beyond the end of such wall.
194. Repair of damaged scaffold - The employer shall ensure that a construction site of a building or other construction work that
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(a)
no building worker is permitted to work on a scaffold which has been damaged or weakened unless adequate safety
measures have been taken to ensure the safety of such building worker;
(b)
necessary warning signs are displayed at such places where repairs of scaffold are undertaken.
195. Opening - The employer shall ensure that a construction site of a building or other construction work that
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(a)
there is no opening in any working platform except for allowing access to such working platform;
(b)
where opening on a platform is unavoidable, necessary measures for protection against falling of objects of building
workers from such platform are taken by providing suitable safety nets, belts or any other similar means;
(c)
access from one working platform to another platform on a scaffold, if required, is provided with suitable and safe
ladder for the use of building workers working on such platforms.
196. Guardrails - The employer shall ensure that a construction site of a building or other construction work that every side of a
working platform from which a person is liable to fall is provided with suitable and safe guardrails and toeboard of adequate strength
to prevent fall of any building worker, material or tools from such platform.
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197. Scaffold used by building workers of different employers - The employer shall ensure that a construction site of a building or
other construction work that
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(a)
where scaffold or a part of a scaffold is used, which has previously been used by another employer for his building
workers, such scaffold or part thereof is used only after its inspection and examination by a responsible person for its
use that such scaffold or part is safe and fit for such use;
(b)
if any rectification, alternation or modification in a scaffold or part thereof is needed to suit its use, such rectification,
alternation or modification is made in consultation with the responsible person referred to in clause (a) before using
such scaffold or part.
198. Protection against electric power line - The employer shall ensure that a construction site of a building or other construction
work that all necessary and practical measures for protection are taken to prevent any building worker, working on a scaffold, from
coming into contact with the electric wires or dangerous equipment.
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199. Screening net and wirenets - The employer shall ensure that a construction site of a building or other construction work that
where a scaffold is erected in an area where the construction activities may pose hazards to pedestrians or vehicular traffic nearby from
the falling of objects, wirenets or screening nets are used to envelope such scaffold.
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200. Tower scaffold - The employer shall ensure that a construction site of a building or other construction work that
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(a)
the height of every tower scaffold used in building or other construction work is not more than eight times, the lesser
of a base dimension of such scaffold;
(b)
a tower scaffold is lashed to a building or a fixed structure before being used by the building workers;
(c)
any tower scaffold which can be moved or castered is
(d)
(i)
constructed with due regard to the stability and, if necessary, adequately weighted at the base;
(ii)
used only on plain and even surface; and
(iii)
has casters provided with positive locking devices to hold such scaffold in position;
no building worker remains on board scaffold, tools, material when it is being shifted from one position to another
position
201. Gear for suspension of scaffold - The employer shall ensure that a construction site of a building or other construction work
that, top
(a)
chains, ropes or lifting gears used for suspension of a scaffold are of adequate strength, made of sound material and
suitable for the purposes of their use and are maintained in good repairs;
(b)
chains, wires, ropes or metal tubes used for the suspension of a scaffold are
(i)
properly and securely fastened to every anchorage point and to the scaffold ledgers of other main supporting
members used for the support of such scaffold; and
(ii)
so positioned as to ensure stability of the scaffold.
202. Trestle scaffold and cantilever scaffold - The employer shall ensure that a construction site of a building or other construction
work that
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(a)
no trestle scaffold is constructed with more than three tiers or if its working platform is more than four point five
metres above the ground or floor or other surface upon which such scaffold is erected, such trestle scaffold is
designed by professional engineer and has the approval of Director General before being taken into use;
(b)
no trestle scaffold is erected on a suspended scaffold;
(c)
no cantilever or jib scaffold is used unless it is adequately supported, fixed and anchored on opposite side of its
support has out-riggers of adequate length and where necessary sufficiently supported and braced to ensure safety
and stability of such scaffold;
(d)
no working platform resting on bearers let into a wall at one end and without other support is used unless such
bearers are of adequate strength, braced through the wall and securely fastened on the other side.
203. Scaffold supported by building - The employer shall ensure that a construction site of a building or other construction work
that
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(a)
no part of a building is used as support or part of a scaffold unless such part of the building is made of sufficient
strength and made of sound material to afford safe support;
(b)
overhanging eaves gutters are not used for supporting scaffold;
(c)
suspended scaffold is made of in accordance with the relevant national standards before being used by the building
workers;
204. Use of winches and climbers for suspended scaffold - The employer shall ensure that a construction site of a building or other
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(a)
no suspended scaffold is raised or lowered by winches or climbers unless such scaffold is made of sound material,
adequate strength and has been tested and certified safe for use of winches or climber for such raising or lowering by
a competent person before being taken into use;
(b)
all suspended scaffolds counter balanced by counter weights are of types, approved by the Director General before
taken into use for building or other construction work;
(c)
the working platform of a suspended scaffold is securely fastened to the building or structure as to be safe and to
prevent such platform from swing;
(d)
the safe working load which a suspended scaffold can carry, is displayed where such scaffold is being used;
205. Safety devices for suspended scaffold - The employer shall ensure that a construction site of a building or other construction
work that every suspended scaffold, raised or lowered by the winches or climbers, is provided at each of its suspension point with a
safety rope with automatic safety device mounted on each of such rope so that such safety rope with such automatic safety device
supports the platform of such scaffold in the event of failure of the primary suspension wire ropes, winches, climbers or any part of the
mechanism used for raising or lowering such suspended scaffold.
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Provided that this rue shall not apply, -
(a)
where the platform of such scaffold is supported at two independent suspension wire rope at or near each end of such
platform so that in the event of failure of one of such suspension wire rope, the other wire rope is capable of
sustaining the weights of such platform and its load and prevent it from tilting; or
(b)
where a system is incorporated which operates automatically to support the platform of such scaffold and its load in
the event of failure of the primary suspension wire rope of such scaffold.
CHAPTER XX
COFFERDAMS AND CAISSONS
206.
General provisions - The employer shall ensure that a construction site of a building or other construction work that
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(a)
every cofferdam and caisson is

(i) of good construction, sound material and of adequate strength;
(ii) provided wit adequate means for building workers to reach safely at the tope of such cofferdam or caisson, as the
case may be, in the event of an in rush of water;
(iii) provided with safe means of access to every place where building workers are employed in such cofferdam and
caisson as the case may be;
(b)
the work relating to construction, positioning, modification or dismantling of cofferdams or caissons is carried out under the
supervision of a responsible person;
(c)
all cofferdams and caissons are inspected by a responsible person at intervals specified by the Director General;
(d)
a building worker is allowed to work in a cofferdam or caisson after such cofferdam or caisson is inspected and found safe by
responsible person within such preceding period as approved by the Director General and a record of such inspection is
maintained in a register;
(e)
the work in compressed air in a cofferdam or caisson is

(i)
carried out in accordance with the procedure laid down in the relevant national standards;
(ii)
carried out by such building workers who have completed eighteen years of age and are medically examined
as required under rule 223;
(iii)
carried out under the supervision of a responsible person;
(f)
if the work in cofferdam or caisson is carried out in shifts, a record of the time spent by each building worker in each such
shift for carrying out the work is maintained in a register with particulars of time taken for the compression of such building
worker, if any;
(g)
at every work site or project in a cofferdam or caisson, where building workers are employed to work in compressed air
environment, a construction medical officer assisted by a nurse or trained first-aid attendant, is available at all times at such
site or project during such work;
(h)
there is one stand by reserve compressor to meet the emergency at each work place or project in a cofferdam or caisson.
207. Pressure Plant and equipment - The employer shall ensure that a construction site of a building or other construction work
that
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(a)
The pressure plant and equipment

(i)
are examined and tested by the competent person before being put into use for such work;
(ii)
is of proper design and construction, sound material and adequate strength to perform the work for which it
is used;
(iii)
(b)
is properly maintained in good repairs and working condition;
the pressure plant and equipment referred to in clause (a) is fitted with
(i)
a suitable safety valve or other effective device to provide maximum safe discharge pressure from being
exceeded at any time;
(c)
(ii)
a suitable pressure gauge with a dial range not less than one point five times and not exceeding twice the
maximum working pressure, easily visible and designed to show at all times, the internal pressure in
kilogram per square centimeter and marked with the maximum safe working pressure at such plant and
equipment/
(iii)
a suitable stop valve or valves by which the pressure plant or the system of the pressure plant may be isolated
from the source of supply of pressure or otherwise;
every pressure plant or equipment shall be thoroughly examined by the competent person
(I)
externally, once in every period of six months;
(II)
internally, once in every period of twelve months; and
(III)
by hydraulic test once in a period of four years.
208. Safety Committees (1) Every establishment wherein five hundred or more building workers are ordinarily employed, there
shall be a safety committee constituted by the employer which shall be represented by equal number of representatives of employer and
building workers employed in such establishment. In no case the number of representatives of the employer shall exceed the
representatives of building workers. The committee shall be represented by representatives of the recognised unions wherever such
unions exist.
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(2)
The main functions of the Safety Committee shall be
(a)
to identify probable causes of accident and unsafe practices in building or other construction work and to suggest
remedial measure;
(b)
to stimulate interest of employer and building workers in safety by organising safety weeks, safety competition, talks
and film shows on safety, preparing posters or taking similar other measures as and when required or as necessary;
(c)
to go round the construction site with a view to check unsafe practices and detect unsafe conditions and to
recommend remedial measures for the rectification including First Aid Medical and Welfare Facilities;
(d)
to look into the health hazards associated with handling different types of explosives, chemicals and other
construction material and to suggest remedial measures including use of proper personal protective
(e)
to suggest measures for improving welfare amenities in the construction site and other miscellaneous aspects of
safety, health and welfare in building or other construction work;
(f)
to bring to the notice of the employer the hazards associated with use, handling and maintenance of the equipment
used during the course of building and other construction work.
(3)
The safety committee shall meet at regular intervals at least once in a month and it shall be chaired by the senior person
having overall control over the affairs of the construction site.
(4)
The agenda and minutes of the meeting shall be circulated to all concerned and it shall be in the language understood by
majority of the building workers and shall be produced to the Inspector on demand for inspection.
(5)
The decisions and recommendations of the safety committee shall be complied with by the employer within reasonable time
limits.
CHAPTER XXI
SAFETY ORGANISATION
209. Safety Officer (1) In every establishment wherein five hundred or more building workers are ordinarily employed, the
employer shall appoint safety officers as per the scale laid down in Schedule VIII annexed to these rules. Such safety officers may be
assisted by suitable and adequate staff.
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(2)
Duties, qualifications and the condition of service of safety officers appointed under sub-rule (1) shall be as provided in
Schedule VIII annexed to these rules.
(3)
Duties wherever number of workers employed by single employed is less than five hundred, such employers may form a group
and appoint a common safety officer for such group of employers with prior permission of Director General.
210. Reporting of accidents (1) Notice of any accident on the construction site which either
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(2)
(a)
causes loss of life; or
(b)
disables a building worker from working for a period of forty eight hours or more immediately following the accident,
shall forthwith be sent by telegram, telephone, fax or similar other means including special messanger within four
hours in case of fatal accidents and seventy two hours, in case of other accidents involving building worker, to
(i)
the Regional Labour Commissioner (Central), having jurisdiction in the area in which the establishment in
which such accident or dangerous occurrence took place is located. Such Regional Labour Commissioner
(Central) shall be the authority appointed under section 39 of the Act;
(ii)
Board with which the building worker involved in accident was registered as a beneficiary;
(iii)
Director General; and
(iv)
The next in kin or other relative of building worker involved in accident.
Notice of any accident at a construction site of a building or other construction work which
(a)
causes loss of life; or
(b)
disables such building worker from work for more than ten days following the accident, shall also be sent to
(i)
the officer incharge of the nearest police station;
(ii)
The District Magistrate of if the District Magistrate by order so desired to the Sub-Divisional Magistrate.
(3)
In the case of an accident falling under clause (b) of sub-rule (1) or clause (b) of sub-rule (2), the injured building worker shall
be given first-aid and immediately thereafter be transferred to a hospital or other place for medical treatment
(4)
Where any accident causing disablement subsequently results in death of a building worker, notice in writing of such death
shall be communicated to the authorities as mentioned in sub rule (1) and sub rule (2) within seventy two hours of such
death.
(5)
The following classes of dangerous occurrences shall be reported to the Inspector having jurisdiction, whether or not any death
or disablement is caused to a building worker, in the manner prescribed in sub-rule (1) namely : (a)
collapse or failure of lifting appliances or hoist or conveyors or other similar equipment for handling building or
construction material or breakage or failure of rope, chain or loose gears; over turning of cranes used in building or
other construction work; falling of objects from height;
(b)
collapse or subsidence of soil, any wall, floor, gallery, roof or any other part of any structure, platform, staging,
scaffolding or any means of access including formwork;
(c)
contract work, excavation, collapse of transmission;
(d)
explosion of receiver or vessel used for storage, at a pressure greater than atmospheric pressure, of any gas or gases or
any liquid or solid used as building material;
(e)
fire and explosion causing damage to any place on construction site where building workers are employed;
(f)
spillage or leakage of hazardous substances and damage to their container;
(g)
collapse, capsizing, toppling or collision of transport equipment;
(h)
leakage or release of harmful toxic gases at the construction site.
(6)
In case of failure of a lifting appliance, loose gear, hoist or building and other construction work machinery and trasnport
equipment at a construction site of a building or other construction work, such appliances, gear, hoist, machinery or
equipment and the site of such occurrence shall, as far as practicable, be kept undisturbed until inspected by the inspector
having jurisdiction.
(7)
Every notice given under sub-rule (1), sub-rule (2) or sub-rule (4) shall be followed by a written report to the inspector,
authority under Section 39 of the Act, the Board and the Director General in Form XIV under proper acknowledgement.
211.
Procedure for enquiry into causes of accident or dangerous occurrence

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(1)
The enquiry under sub-section (2) or sub-section (3) of section 39 of the Act, as the case may be, shall be conducted by the
authority referred to in sub-clause (i) of clause (b) of Sub-rule (1) of rule 210, in the following manner, namely : (a)
the enquiry shall be commenced as early as it may be, and in any case, within fifteen days of the receipt of notice of
accident or dangerous occurrence under rule 210;
(2)
(b)
the enquiry may be conducted by the authority referred to in sub-clause (i) of clause (b) of sub-rule (1) of rule 210
himself or by an enquiry officer appointed by such authority;
(c)
the authority or enquiry officer, as the case may be, shall serve or cause to be served, notices in writing, informing the
date, time and place of such enquiry to all persons entitled to appear in such enquiry and whose names and addresses
are known to such authority or enquiry officer;
(d)
not withstanding the provision of clause (b) of the purpose of notifying other persons who may in any way be
concerned or be interested in such enquiry, the authority or enquiry officer, as the case may be, may publish notice of
such enquiry in one or more local newspapers, informing the date, time and place of such enquiry.
The person entitled to appear at the enquiry may include

(a)
an inspector or any officer of the Central Government or the State Government or an undertaking or public body,
concerned with the enforcement or compliance of safety provisions of the Act and these rules in the concerned
establishment;
(b)
a trade union or a workers association or an employers association;
(c)
the worker involved in the accident or his legal heir or authorised representative;
(d)
the owner of the premises in which the accident took place;
(e)
any other person, at the discretion of the authority or the enquiry officer, as the case may be, who may be interested in
or be concerned with the cause of an accident or may have knowledge about such cause or is likely to give material
evidence or produce a relevant document in connection with such accident or dangerous occurrence.
(3)
In case the entitled person referred to in sub-rule (2) is a body corporate, a company, or any other organisation, association,
group of persons such group may be represented through an authorised representative including a counsel or a solicitor.
(4)
Subject to the provisions of sub-rule (5) the enquiry shall be held in public.
(5)
In cases where
(a)
the Central Government is of the opinion that the matter of the enquiry or any part of it are of such nature that it
would be against the interests of national security to hold the enquiry in public and directs the said authority or the
enquiry officer, as the case may be, to hold the enquiry in camera; or
(b)
on an application made by any part to the enquiry, the authority or the enquiry officer, as the case may be, referred to
in sub-rule (1), if it or he is of the opinion that the holding of public enquiry will lead to disclosure of information
relating to a trade secret, decides to hold the enquiry of such part of it in camera, such enquiry shall not be held in
public.
(6)
Information disclosed by any person during the course of hearing or evidence in the cases covered under sub-rule (5) shall not
be disclosed to any person except for the purpose of the enquiry.
(7)
The person entitled to appear under sub-rule (2), called for evidence or representing in an enquiry officer to call for specified
document or evidence, cross examine other person or to the extend and at the stage permitted by the authority or enquiry
officer holding the enquiry.
(8)
Any evidence in an enquiry may be admitted at the discretion of the authority or enquiry officer during the enquiry, who may,
also direct that documents to be tendered in evidence may be inspected by any person entitled or permitted to appear at such
enquiry and that facilities be afforded to such person to take or obtain copies thereof.
(9)
The authority or the enquiry officer holding an enquiry may authorise any person, being an officer of the Central Government,
to assist such authority or enquiry officer where necessary, for the purpose of conducting the enquiry, and the officer so
authorised may enter the premises of the concerned establishment during working hours, inspect the records relevant to such
enquiry, investigate and take such evidence as may be required to conduct such enquiry.
(10)
The findings of the enquiry along with all evidence, in original, including statements of witnesses shall be forwarded to the
authority specified under section 39 of the Act within five days of the completion of the enquiry in cases where sub-enquiry
was not conducted by such authority itself.
(11)
A copy of the findings along with a brief statement of facts relating to an enquiry conducted under this rule shall be forwarded
to the Director General and the Central Government by the authority referred to in sub-rule (1) of rule 210.
CHAPTER XXII
EXPLOSIVES
212. Handling of Explosives - The employer shall ensure that a construction site of a building or other construction work that
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(a)
all explosives are handled, used or stored in accordance with the instructions and the material data sheet supplied by
the manufacturer of such explosives;

(b)
the use of explosives is carried out in safe manner to avoid injury to any person and under the direct supervision of a
responsible person;
(c)
before using any explosive, necessary warning and danger signals are erected, at conspicuous places of such use to
warn the building workers and the general public of the danger involved in such use.
213. Precautions - The employer shall ensure that a construction site of a building or other construction work that
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(a)
notwithstanding the provisions of rule 212 the following precautions are observed at the places of transporting,
handling, storage and use of such explosives, namely : (i)
prohibition of smoking, naked lights and other sources of ignition in the vicinity where explosives are
handled, stored and used;
(ii)
to keep safe distance and to use non-sparking tools while opening packages containing explosives;
(iii)
to stop the use of explosives and handling thereof while the weather conditions are not suitable for such use
or handling;
(b)
in addition to the provisions of this chapter, all measures and precautions required to be observed for use, handling,
storing or transportation of explosives under the rule framed under the Explosives Act, 1884 (4 of 1884) are
observed.
CHAPTER XXIII
PILING
214. General Provisions - The employer shall ensure that a construction site of a building or other construction work that
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(a)
all pile driving equipment are of good design and sound construction, taking into account the ergonomic principles
and are properly maintained;
(b)
a pile driver is firmly supported on a heavy timber sill, concrete bed or other secured foundation;
(c)
in case a pile driver is required to be erected in dangerous proximity to an electrical conductor all necessary
precautions are taken to ensure safety;
(d)
the hoses of steam and air hammer are securely lashed to such hammer so as to prevent-them for whipping in case of
connection or break;
(e)
adequate precaution is taken to prevent the pile driver from over turning;
(f)
all necessary precaution is taken to prevent hammer from missing the pile;
(g)
a responsible person for inspecting pile driving equipment, inspects such equipment before taking it into use and
takes all appropriate measures as required for the safety of building workers before commencing piling work by such
equipment.
215. Stability of adjacent structure - The employer shall ensure that a construction site of a building or other construction work that
where there is any question of stability of a structure for its adjoining areas to be piled, such structure is supported, where necessary, by
underpinning, sheet piling, shoring, bracing or by other means to ensure safety and stability of such structure and to prevent injury to
any person.
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216. Protection of operator - The employer shall ensure that a construction site of a building or other construction work that an
operator of every pile driving equipment is protected from falling objects steam, cinders or water by substantially covering or otherwise
or by other means.
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217. Instruction to and supervision of building workers working on a pile driving equipment - The employer shall ensure that a
construction site of a building or other construction work that every building worker working on a pile driving equipment is given
instructions regarding safe work procedure to be followed in piling operation and is supervised by a responsible person throughout
such work.
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218. Entry of unauthorised person - The employer shall ensure that a construction site of a building or other construction work that
all piling areas where pile driving equipment is in use are effectively cordoned off to prevent entry of unauthorised persons.
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219. Inspection and maintenance of pile-driving equipment - The employer shall ensure that a construction site of a building or
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(a)
pile-driving equipment is not taken into use until it has been inspected by a responsible person and found to be safe
for such use;
(b)
pile-driving equipment in use is inspected by a responsible person for such inspection at suitable intervals to ensure
safety to the building worker working on such equipment;
(c)
all pile lines and pulley blocks are inspected by a responsible person for such inspection at suitable intervals to ensure
safety to the building worker working on such equipment;
220. Operation of pile driving equipment - The employer shall ensure that a construction site of a building or other construction
work that
(a)
Only experienced and trained building worker operates pile-driving so as to avoid any probable danger from such
operation;
(b)
Pile-driving operations are governed by generally prevalent and accepted signals so as to prevent any probable danger
from such operations;
(c)
Every building worker employed in pile driving operation or in the vicinity of such pile driving operation wears ear
protection and safety helmet or hard hat and safety shoes;
(d)
Piles are prepared at a distance, at least equal to twice the length of the longest pile, from the place of pile-driving
operations;
(e)
When a pile driver is not in use, the hammer of such pile driver is blocked at the bottom of the heads of such pile
driver.
top
221. Working platform on piling frames - The employer shall ensure that a construction site of a building or other construction
work that where a structural tower supports the lead of a pile driver, suitable working platforms of adequate strength are provided on
levels of such leads at which it is necessary for the building workers to work and such platforms are provided with a safety railing and
toe boards on each side of such platforms, except on the hammer of such pile driver or lead sides of such platform and where such
platforms cannot be provided with such railing and toe boards, a safety belt is provided to each such building worker.
top
222. Pile testing - The employer shall ensure that a construction site of a building or other construction work that
(a)
the testing of pile is conducted under the supervision of a responsible person for such testing;
(b)
all practicable measures like displaying of warning notices, barricading the area and other similar measures are taken
to protect the area where the pile testing is carried out;
(c)
entry to a pile testing area is prohibited to general public to ensure safety.

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CHAPTER XXIV
MEDICAL FACILITIES
223. Medical examination of building workers, etc. - The employer shall ensure that a construction site of a building or other
top
(a)
(i) a building worker who is employed for a work involving such risk or hazards, inherent in such work as the
Director General considers appropriate for the periodical medical examination of such worker, is medically
examined at such intervals as the Director General may direct from time to time;
(ii)
every operator of a crane, winch or other lifting appliance, transport equipment or vehicle, is medically
examined before employing such operator and again periodically, at such intervals as the Director General may
direct from time to time;
(iii)
the medical examination referred to in sub-clause (i) and sub-clause (ii) is in accordance with Schedule VII,
annexed to these rules and is conducted by such medical officers or at such hospitals as are approved by the Central
Government for the purpose from time to time;
(iv)
in case of a building worker who is exposed to special occupational health hazard owing to job or work
assigned to such worker, the periodical medical examination referred to in sub-clause (i) or sub-clause (ii) includes
such special investigation as may be deemed necessary by the construction medical officer examining such building
worker for the diagnosis of occupational disease;
(b)
no building worker is charged for the medical examination referred to in sub-clause (i) or sub-clause (ii) of clause (a)
and the cost of such examination is borne by the employer employing such building worker;
(c)
certificate of medical examination referred to in sub-clause (i) or sub-clause (ii) of clause (a) of every building worker
employed by him is maintained in a register in Form XII annexed to these rules and such register shall be made
available to the inspector having jurisdiction, on demand;
(d)
certificate of medical examination referred to in sub-clause (i) or sub-clause (ii) of clause (a) is issued in Form XI
(e)
in case a construction medical officer examining a building worker under sub-clause (i) or sub-clause (ii) of clause (a)
is of the opinion that such building worker so examined is required to be taken away from the building or other
construction work at which he is employer of such building worker accordingly and such employer shall inform such
opinion to the Board where such worker is registered as a beneficiary.
224. Duties of construction medical officers (1) The medical examination referred to in sub-clause (i) or sub-clause (ii) of clause
(a) of rule 223 shall be carried out by a construction medical officer.
top
(2)The duties and responsibilities of such construction medical officer shall be as given below, namely : (a)
medical examination of building workers;
(b)
first-aid care including emergency medical treatment;
(c)
notification of occupational diseases to the concerned authorities in accordance with these rules;
(d)
immunisation services;
(e)
medical record upkeep and maintenance;
(f)
health education including advisory services on family planning, personal hygiene, environmental sanitation and
safety;
(g)
referral services.
225. Occupational health centres - The employer shall ensure that a construction site of a building or other construction work
involving hazardous processes specified under Schedule IX annexed to these rules that
top
(a)
an occupational health centre, mobile or static, is provided and maintained in good order at such site;
(b)
services and facilities as per the scale laid down in Schedule X, annexed to these rules are provided at the
occupational health centre referred to in clause (a);
(c)
a construction medical officer appointed at a occupational health centre possess the qualification as laid down in
Schedule XI, annexed to these rules.
226. Ambulance Room - The employer shall ensure that a construction site of a building or other construction work that
top
(a)
in case five hundred or less workers are employed at such construction site there is an ambulance room at such
construction site or an arrangement with a nearby hospital for providing an ambulance room and such ambulance
room is in the charge of a qualified nurse and the service of such ambulance room is available to building worker
employed at such construction site at every time when he is at work;
(b)
in case more than five hundred building workers are employed at such construction site there is an ambulance room
with effective communication system and such ambulance room is in the charge of a qualified nurse and the service
of such ambulance room is available to a building worker employed at such construction site at every time when he is
at work, and such ambulance room is in overall charge of a construction medical officer;
(c)
an ambulance room referred to in clause (a) or clause (b) is equipped with the articles specified in Schedule IV,
(d)
record of all cases of accidents and sickness treated at the ambulance room referred to in clause (a) or clause is
maintained and produced to the inspector having jurisdiction on demand.
(e)
the special medical service referred to in clause (a) is headed by a construction medical officer and is provided with
adequate staff, laboratory and other equipments;
(f)
the premises of the special medical service referred to in clause (a) are conveniently accessible, comprise at least a
waiting room, a consulting room, a treatment room, a laboratory and suitable accommodation for nurses and other
staff of such service;
(g)
the special medical service referred to in clause (a) maintains records pertaining to its activities referred to in
sub-clause (i) to (vii) of clause (a) and sends to the Director General, once in every three months, information in
writing on
(iii)
the nature and causes of occupational injuries or disease suffered by any of such building workers, treatment
provided
(i)
the state of health of such building workers ; and
to such worker and measures taken to prevent recurrence of such injury or disease.
227. Notice of poisoning or occupational diseases The employer shall ensure that a construction site of a building or other
top
(a)
when a building worker contracts any disease specified in Schedule II annexed to these rules, a notice in Form XIII
annexed to these rules is sent without delay to the Inspector, having jurisdiction and to the Board with which such
building worker is registered as a beneficiary;
(b)
if any medical practitioner or construction medical officer attends on a building worker suffering from any disease
referred to in clause (a), such medical practitioner or construction medical officer sends information regarding the
name and full particulars of such building worker and the disease suffered by him, to the Director General without
delay.
228. First aid boxes - The employer shall ensure that a construction site of a building or other construction work that
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(a)
sufficient number of first aid boxes or cupboards are provided and maintained for providing first-aid to the building
workers;
(b)
every first-aid box or cupboard is distinctly marked First Aid and is equipped with the articles specified in
Schedule III annexed to these rules;
(c)
nothing except appliances or requisites for first-aid is kept in a first-aid box or cupboard and such box or cupboard is
so kept as to protect it against contamination by dust or other foreign matters and against penetration of moisture and
such box or cupboard is kept in the charge of a person trained in first-aid is always readily available during working
hours.
229. Emergency care services or emergency treatment - The employer shall ensure that a construction site of a building or other
top
(a)
essential life saving aids and appliances required to handle
(b)
head injuries and spinal injuries;
(c)
bleeding;
(d)
fractures and dislocations of bones and joints
(e)
crush injuries;
(f)
shock, including electric shock;
(g)
dehydration due to any cause;
(h)
snake bite, insect bite, scorpion and bee stings;
(i)
burns, including chemical burn;
(j)
bends or divers paralysis;
(k)
other surgical, gynecological, obstetric, or pediatric emergencies
(l)
drowning;
(m)
sunstroke and frost bite to building workers,
(b)
the essential life saving aids for any emergent situation referred to in sub-clause (i) to (xii) of clause (a) are provided
to an injured or a sick building worker during his transportation from such building site to a hospital and till such
building worker is attended by a doctor in such hospital;
(d)
any other equipment or facilities required for emergency care or treatment to the building workers arising from
special local conditions and construction processes at such building it, as specified by the Central Government from
time to time are provided.
are provided and properly maintained under the supervision of a construction medical officer;
CHAPTER XXV
INFORMATION TO BUREAU OF INDIAN STANDARDS
230. Furnishing of information to Bureau of Indian Standards - The employer shall ensure that a construction site of a building or
top
(a)
every architect and other professional like structural engineer or project engineer involved in the execution of a
building or other construction project, furnishes to the Bureau of Indian standards, the details regarding the
performance of and deviations or short-comings, if any, of the building materials, articles or processes used in such
building and other construction project for which the Indian standards are already available;
(b)
the architect and other professional referred to in clause (a) informs to the Bureau of Indian Standards, the details of
building materials, articles or processes used in the building and other construction activities for which the Indian
Standards do not exist with the Bureau of Indian Standards and the performance of such materials, articles or
processes along with the suggestions for their improvement to enable the Bureau of Indian Standards to consider and
form necessary standards.
Lesson 15 Appendix
PROJECT RISK MANAGEMENTAN OVERVIEW

Appendix O
O.1 INTRODUCTION AND OBJECTIVES

Business decisions are based on future predictions about environment. In the early days of project
management , the projects were generally of short duration, say one to two years, and the
environment generally remained stable. The modern day construction projects, like privatised
infrastructure power plants have project life spread over many years. Modern projects are subject
to certain sensitive and volatile, external and internal environments and fast growing new
technology. These projects involve large capital outlay, generate unbalanced cash flows, involve
complex contractual arrangements, encounter changing economic and financial situations, face
unstable political climate resulting in changing regulatory issues and have to cater for
unpredictable environmental changes. The instability in these risk prone environments, calls for a
structured approach for managing risks to achieve the specified projects performance objectives.
Project Risk Management is the art and science of managing risks and uncertainties that might
effect the performance of the project. It involves identifying, analyzing, planning and controlling
risks at the project site. These processes are not discrete, they do overlap and interface with each
other.
Risk Response Planning
Project Risk Management

Tools and Techniques
Information source analysis
Management process analysis
System flow analysis
Work breakdown analysis
Check list scrutiny
Brain storming
Knowledge experts judgement
Risk quantification techniques
Risk ranking techniques
Risk mitigation methods
Risk Response Control
Monitoring risks
Processes
Risk Identification
Risk Analysis
Outcome
Sources of risks
Potential risk events
Risk assessment
Risk contingency allowance
Risk response strategy
Risk related corrective
action
Project managers cannot stop the fast changing instable risk prone environments but they must
prepare themselves to manage the resulting impacts of risks to their projects. It can be done by
developing a risk response plan, well in advance, to minimize the consequences of possible
adverse future events and to maximize the benefits of positive future events. This Appendix covers
answer to the following questions:

How are risks analysed?
How are risks controlled ?
Lesson 15 Appendix

O.2
HOW ARE RISKS IDENTIFIED?
O.2.1 Risk Source

Risk, in general, signifies situations where the actual outcome of an activity or an event is likely to
deviate from the estimated or forecast value. Risk is defined as an exposure to the possibility of
economic or financial loss or gain, physical damage, injury or delay as a consequence of the
uncertainty associated with pursuing a course of action. Further, favourable outcome or impact of
risk are called opportunities, whereas the unfavourable are termed as threats. Factor that induces a
risky situation is called hazard. Risk increases with hazards but decreases with safeguards.
Risk identification process involves researching the project to determine sources of risk, and
connected potential risk factors that lead to riskevents. Sources of risks are the categories of
possible riskevents.
Construction projects, from inception to closure stages, encounter unlimited risks. Some of these
risks may arise from the following changes:
(a) Changes in the external environment caused by unstable political, legal, economic and
financial conditions, natural disasters like fire and floods. External risks can be further
divided into external unpredictable risks (unknown uncertainties) and external predictable
risks (known risks). External risks are mostly handled by the corporate office as these affect
the project objectives and its direction.
(b)
Changes in the internal environment concerned technology change, quality considerations,
legal problems, commercial dealings, internal safety and security of resources, accidents,
errors in estimation, design alterations, labour strikes, materials wastage, equipment
breakdown, project management internal conflicts, client holds, clientcontractor disputes,
corruption, and manmade catastrophes like burglary and fraud. These can be further
divided into risks arising from technical sources and nontechnical sources. Changes in
technology demands special resources and skills, and requires complex contractual
arrangements for developing cheaper, better and faster products. The internal risk
management falls within the preview of project management.
.
The sources of risk in a typical construction project can be classified as under:
Lesson 15 Appendix
Sources of risk are generally independent of each other and they are split up into risk factors.
Most of the risk factors can be identified, if the project is broken down into manageable level of
details. This breakdown enables the risk planners to recognize the nature of risks encountered in
each work package. Once a risk is established, it can be suitably priced and a methodology can be
developed to cope with it.
O.2.2 Risk Factors
Typical potential risk factors, categorized under risk sources, encountered in the project life cycle
of construction projects, are listed below:
Force Majeure and Ecological Risks Acts of God like earthquake, floods, landslide, ecological
damage, epidemic.
Political and Legal Risks Changes of Governments, policies, regulations, rules, laws, war,
revolution, civil disorder, risks under criminal law and the law of tort, pollution, waste treatment,
Lesson 15 Appendix
local regulations, constraints on the availability of labour, importexport restrictions and

procedures, joint venture rules, inconsistency of regulations within the country, requirements for
licenses and permits.
Financial and Economic Risks Investment risk, inflation, escalation of prices, availability and
exchange rate fluctuations, local and national taxes, inadequate sources and availability of funds,
cash flow problems, effect of time and cost overruns, default of stakeholders and suppliers.
Project Scope and Quality Risks High complexity, illdefined project scope, frequently
changing scope requirements, no project charter, no delegation of authority, ineffective control
system, no extrawork control, no analysis of changes and problems in quality control.
Design and Specifications Risks No soil investigation, inadequate design information, frequent
changes in designs, incorporation of new construction technology, unrealistic specifications,
likelihood of design changes, difficulties in interaction of design with method of construction,
nonstandardization of resources, designers delays, poor design and shop drawings,
nonconformity with national and local specifications.
Time and Cost Overrun Risks Inaccurate activity time estimates, inaccurate cost estimates ,
unrealistic time schedule, incomplete work breakdown structure, no formal sequencing plan, poor
allocation of resources, incomplete assessment of project time, cost, resources and quality
implementation plans, no database, ineffective control system, no extra work control, no analysis
of changes, inflexible and unrealistic project plans, constantly changing market conditions,
unsatisfactory conduct of status review meetings, inability to take timely corrective action,
incomplete project closure.
Leadership Risks No project vision, no team building, poor motivation of participants, high
turnover of critical team members, indecisiveness, unreasonable stakeholders expectations, lack of
senior management support, lack of team consensus over project plans, limited authority / control
for project manager, poor communications, poor industrial relations, high rate of sickness and
absenteeism, unsafe working conditions resulting in accidents and poor turnover, conflicts among
staff and participating organisations, lack of coordination, insufficient liaison with public
services, barriers in information communication.
Organisational Risks Inappropriate organization network, poor assignment /allocation of tasks
and responsibilities, lack of competent persons, no project manual/ documented
procedures/processes, project being too complex for the resources available, inadequate
communications infrastructure, wrong selection of project management, no database, inflexible and
unrealistic project plans, constantly changing market conditions, poor quality control,
unsatisfactory conduct of status review meetings, inability to take timely corrective action,
incomplete project closure.
Physical Resources Mobilisation and Utilisation Risks Inadequate and low quality
procurement of resources, nonavailability of spares, parts, special equipments and materials,
transshipment delays, possible causes of low productivity, weather and working conditions,
availability and productivity of' sub contractor, damage during construction due to negligence,
transportation or storage vandalism, accident, wastage, theft and fraud.
Lesson 15 Appendix
Technology and Construction Methodology Risks Inadequate site investigation, inadequate

information in documents, unachievable quality specifications, new technology or methods
application risks, nonavailability of competence and professional staff, lack of managerial skills.
Contractual Risks Conditions of contract, insufficient time to prepare bid tenders, delay in
possession of site, errors or omissions in bills of quantities, payment problems, extra work
variations, unrealistic tendered amount, nocredit worthiness of contractor, cost of legal decision,
insufficient insurance, claims and dispute, local laws.
6.2.3 Methods of Risk Identifications
It is said that the real risks in project management are the ones which we fail to identify.
According to Murphys Law, if something can go wrong it will, and if something cannot go
wrong it still will. This law implies that even if things tend to go wrong when least expected, you
will be able to respond quickly provided you had done the prior thinking. The identification
process, therefore, must aim at exploring all avenues to locate the risk source and risk factors,
thereby reducing the chances of overlooking any potential risk. Any information which indicates
potential problem should be included for identifying risks. There are numerous methods for
identification of risk factors. Some of these methods are:
O.3
Performance analysis of past projects.

Project management functions analysis.
Management process analysis.
Work breakdown analysis.
Project documents /data and system flow analysis.
Brain storming.
Knowledge experts judgement.
HOW ARE RISKS ANALYSED?
O.3.1 Nature of Risk analysis

Risk analysis or risk assessment involves identifying risk factors and quantifying of risks
exposures. Risks analysis approach varies with the purpose and the project. There is no unique
solution as no two project are alike. For example, there are different approaches for time risk
analysis, budgeting project contingencies, analyzing risks in selecting a project out of alternate
opportunities, analyzing economic viability during project feasibility studies, sourcing and
selecting contractors and input suppliers, and analysis completion cost risk.
Some of the techniques used in risk analysis are listed below:

Risk Analysis Applications
Risk Parameter
Completion time risk
Risk Analysis Techniques

PERT network analysis techniques.
Monte Carlo simulation
Reference
Lesson 04.
Appendix D
Lesson 15 Appendix
Completion cost risk
Project risk exposure estimation.

Project contingency allowance estimation.
Appendix O.
Appendix O.
Economic viability during

project feasibility studies
Expected monetary value (EMV) estimation.

Expected net present value (NPV)
estimation.
Decision tree and decision
networks analysis.
Appendices J & L
Project selection out

alternate opportunities
of
Appendix
F
In the project context, another name for risk analysis is Risk Engineering. Like any engineering
process, risk analysis subdivides the project risks into potential risk factors, and synthesis different
risks evaluation approaches for quantifying and mitigating these risk factors, with a view to
produce risk response plan. Note, at the project site, generally it is the planners who identify and
quantify risks for developing project risk plan and monitoring the future trends. In case of
complex hightech projects, the specialist risk consultants can be engaged to analyse risks, if
necessary.
O.3.2 Risk Quantification Approach
Risk has three components:
A situation leading to an event, the occurrence of which is likely to deviate from the estimated
or forecast value.
The probability of occurrence of that event.
Impact of that event i.e. loss or gain.
Risk impact is a measure of the probability and the failure consequences(amount of damage or
gain) of not achieving a planned goal. Risk is mathematically quantified by multiplying exposure
consequences with the probability of its occurrence.
Risk impact = Probability of occurrence of risk Impact of the event.
For example, risk of encountering hard soil instead of estimated soft during excavation in a
building project , costing Rs 15.00 per cubic meter extra with 20% chances of its occurrence (due
to lack of proper soil investigations), is worked out as under:
Risk of excavation in hard soil = 20% Rs 15.00 per CM = Rs 3.00 per CM.
If risk is affected by the public perception like a fatal accident due to safety lapse, then such risk
can be defined as :
Risk Impact = Probability of occurrence consequences public perception.
Therefore, risk exposure is a function of risk event probability, event failure (or favourable)
consequences and the perception of the project participants.
O.3.3 Assessing probability of occurrence of risk
Lesson 15 Appendix
The probability of occurrence of a risk, depending upon the nature of its source, can be of two
types as given below:
Objective probabilities It is based on observed relative frequencies of past incidences of an
event. For example, lesson learnt from past occurrences and past performance data.
Subjective probabilities It is based on opinions and judgements of experts about the
occurrence of a risk event. It applies to any risk event and involves the following steps:
Identification of risk factors

Comparative weighing of each risk factor
Assessment of risk for each factor by experts
Aggregation of the opinions of experts
Determination of the total effect of all the risk factors
In the real life situations, faced in construction projects, generally subjective method of probability
assessment is used. The two commonly used expert judgement techniques are Delphi Method
and Nominal Group Technique. In Delphi Method , the identity of experts is not revealed to each
other and they do not interact facetoface, whereas in the Nominal Group Technique experts
meet to discuss their opinions.
Delphi Method adopts the following procedure:
Select a panel of experts from inside and outside the organization.

Ask experts to make a prediction on the subject under study.
Compile their replies and send this to each expert in the panel to make new predictions based
upon the feedback.
Continue this process of receiving predictions and feedback of replies, till a near unanimity is
reached among the experts.
Nominal Group Technique employs the following steps:
Constitute a panel of experts to study the subject and give their views in writing.
Convene a joint meeting of the panelists and discuss each idea among them.
Rank the ideas mathematically and repeat the process till a near unanimity is reached
among the experts.
In order to narrow down the gap in the assessment of the risk probability, the guidelines tabulated
below, can be used by the different people asked to assess subjective probability:
Subjective Probability Assignment Indicator
Lesson 15 Appendix
in Percentage
Factual statement
Almost likely
Highly probable
Very good chances
Likely
Probable
Doubtful
Improbable
Unlikely
Little chance
Highly unlikely
No chance
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
5%
0%
Based on the experts judgement, the subjective probability is evaluated for each risk factor.
Thereafter risk weightage is assigned to each risk factor and total overall risk is evaluated.
O.3.4 Risk impact categorization
The four main categories of risk ranks, in a simplified approach are:
Rank Cost impact Probability
1.
High
2.
Low
3.
High
4.
Low
Occurrence Probability
High
High
Low
Low
Risk Outcome Category

High probabilityhigh impact
Low probabilityhigh impact
High probabilitylow impact
Low probabilitylow impact
The risk exposure can be positive or negative. Further, some of the low probability and low cost
risks may carry a marginal cost impacts. The Paretos 80 / 20 Rule ( implying 80% of the risk
events account for 20% of risk exposure and 20% of risk events contribute to 80% of risk
exposure) can be used to categorize and rank the risks. It is about 20% high probabilityhigh
impact risk factors, which need to be then examined in details, for the estimation of the project
risk exposure and preparation of the risk response plan.
Another method is to rank the risk sources in descending order using probability impact grid as
follows:
RISK IMPACT GRID TO DETERMINE SEVERITY OF RISK
PROBABILITY
CONSEQUENCES
Low value
(say within Rs 10,000)
Medium value
(say Rs 10,000 to
Rs50, 000)
High value
(say above Rs 50,000)
Low Probability
Medium Probability
( say 10%)
( say 20%)
High Probability
( say 60%)
Low probability
low impact
Low probability
medium impact
Medium probability
low impact
Medium probability
medium impact
High probability
low impact
High probability
medium impact
Low probability
high impact
Medium probability
high impact
High probability
high impact
Lesson 15 Appendix
The risk exposure can be quantified by assessing subjective probability of each risk event ( say
010% for low probability, 1130% for medium probability and 3160 % high probability) and
defining range of monetary value for each type of impact either as percentage of profit or within a
specified range (say within Rs 10,000 for low value, Rs 10,000 to Rs 50,000 for medium value
and above it for high value). Another method is to assign weightage factors in terms of project
profit or project cost instead of monetary value. The sum of weightage factors equal to one.
Example: Ranking Of Work Package with respect to Uncertainty
A project consist of three work packages WP1, WP2 and WP3. The typical breakdown
structure of a work package is given below:
The ranking of this project is done by calculating the risk probability for each work package and
then multiplying these with the respective weightage. In this case, the weightage for high , medium
and low level of risk is taken as 0.6, 0.2, and 0.1.
Assessed Risk Probability for WP1 using Expert Judgement
Medium Risk
Low Risk
Subfactor
High Risk probability
probability
probability
0.397
T1
0.125
T2
0.079
T3
0.601
0.005
P1
0.007
P2
0.011
P3
0.029
P4
0.052
0.019
N1
0.062
N2
N3
0.017
0.062
0.036
0.049
L1
0.053
L2
L3
0.147
0.147
0.102
Total
0.601
0.209
0.190
Lesson 15 Appendix
1
2
3
Work
Package
Weightage
High
Medium
Low
High
Medium
Low
WP1
WP2
WP3
0.601
0.508
0.400
0.209
0.367
0.434
0.190
0.125
0.166
0.6
0.6
0.6
0.2
0.2
0.2
0.1
0.1
0.1
Risk probability
Rank
Overall
weightage
0.421
0.391
0.344
1
2
3
Another Example: Risk exposure in a project

Consider a project which has 11 risk factors. The subjective probability and the prorata
weightage of each of these risk factors has been determined using experts opinions. The weighted
aggregate and the normalized aggregated values of these are tabulated below:
RISK ANALYSIS
Analysis of Eleven Risk Factors
Based on Experts Opinion
Risk Factor
Aggregated probability
(A)
Weights as ratio of the
profit (B)
Weighted Impact
( A*B)
Normalized
Impact
Values
( A*B) / ( A*B)
Ranking
F1
0.43
F2
0.51
F3
0.35
F4
0.47
F5
0.37
F6
0.31
F7
0.33
F8
0.36
F9
0.49
F10
0.42
F11
0.36
0.08
0.04
0.03
0.03
0.03
0.08
0.15
0.14
0.18
0.16
0.08
0.03
0.02
0.01
0.01
0.01
0.03
0.05
0.05
0.09
0.07
0.03
0.07
0.05
0.03
0.03
0.03
0.08
0.12
0.13
0.22
0.17
0.07
10
11
The value (0.22* profit) indicates the overall maximum risk exposure, assuming that all risk factors are
independent.
O.3.5 Risk Cost Contingency Allowance

Contingency or the risk cost allowance, is the amount allocated in the budget to meet the costs of
risks and uncertainties in a project. The amount covered under contingency includes minor changes
within the scope of work, minor estimating errors and other unforeseen risks resulting from
unusual political, geographical, economic and natural changes. The evaluation of the contingency,
in terms of monetary value, is done by the quantity surveyors at the estimation stage based on his
experience. Traditionally the contingency is assessed as flat percentage over the estimated basic
cost of the project. In the presentday competitive market, a large contingency in a project may
make the contractors bid price unattractive whereas a low contingency amount may result in
reduction in the estimated profits. Therefore, it is important to have an indepth assessment of the
contingency amount and its allocate at various levels for exercising better control.
Contingency estimation. There is no single standard method for determining project contingency,
as no two projects are alike. Mathematically, the contingency corresponds to the difference
between the maximum risk of the project and the base estimate.
Project contingency = Maximum risk cost base estimate
Project contingency distribution curve can be plotted by determining the base cost, the expected
risk cost, the maximum risk cost and the standard deviation of the distribution. Maximum risk cost
is the amount estimated to cover all risks if they were to occur to their full extent. Expected risk
Lesson 15 Appendix
cost is the mean value, which is estimated as having a 50% probability of being exceeded from the
base value.
Consider the cost estimate of the work packages in a project given below:
Item
Work package
Distribution
1
2
3
4
5
6
7
8
9
10
11
12
13
14
A
B
C
D
E
F
G
H
I
J
K
L
M
N
Total
Rectangular
Trapezoidal
Triangular
Triangular
Triangular
Trapezoidal
Triangular
Triangular
Rectangular
Triangular
Triangular
Triangular
Triangular
Linear
Base
estimate
2.5
25.00
2.50
2.50
45.00
8.50
0.80
4.20
1.50
8.00
0.50
0.25
1.04
50.28
151.49
Next
estimate
Next
estimate
30.00
2.75
2.80
50.00
9.25
1.10
5.00
32.00
10.00
10.00
2.50
2.00
1.07
Upper
estimate
3.00
38.00
3.25
4.50
60.00
11.50
1.80
5.80
2.00
11.50
3.50
2.75
1.12
50.28
200.00
Using spreadsheet software, the parameters of the contingency distribution curve works out as:
Base cost
= 151.49
Mean
= 181.59
Maximum cost = 200.00
Standard cost = 4.34
Contingency / Risk cost
= 200.00 181.59 = 18.41 (about 10% over basic cost)
Contingency can also be estimated based on the ranking method. Take the ranking example given
above. The contingency for each work package can be estimated as under:
Rank
Work
Package
WP1
2
3
WP2
WP3
Overall Probability Z
risk
cost >
from
mean
Table
0.42
0.92
1.75
0.39
0.89
1.17
0.34
0.84
1.14
Base Expected
cost cost
Variance Standard Contingency %

deviation
9613 9986
1103 1144
522 543
431399
6963
1328
656.8
83.4
36.4
1523
138.56
62.74
15.8
12.5
12.0
Contingency Allocation. For allocation purposes, the contingency or the risk cost in a project, is
divided into the sitecontrolled contingency and clientcontrolled project reserve. Sitecontrolled
contingency covers the risks that can be managed at site by the project manager. The amount
assessed for unmanageable risks generally forms a part of the 'project reserve'. Project reserve is
earmarked to cover special uncertainties, currency exchange rate fluctuations, abnormal changes in
the market prices, cost of major losses, unforeseen environmental changes etc. Project reserve are
funds in addition to the site contingency. The project reserve does not form a part of control
Lesson 15 Appendix
estimates, as it is the client reserve for the total project.cost target cost (the budgeted cost)
Project contingency = Sitecontrolled contingency + Project reserve
Target Cost or the budgeted cost = Base Estimate + sitecontrolled contingencies Estimate
+ Project Reserves
In practice, the targeted cost is generally taken as 90% confidence level of the maximum risk cost.
It is shown graphically below;
RISK CONTINGENCY PROFILE

Target Cost = Base Estimate + 50/50 Contingencies Estimate + Project Reserves
The allocation for controlling cost, can then be made as under:
Contingency Control Responsibility
Contingency Category
Responsibility
Project reserve = Mean + 40 % confidence level
The owner
Site contingency = 50% confidence level
Project Manager
Base + 10% confidence level
Delegated to respective project team members
.
O.4 HOW IS RISK RESPONSE PLAN DEVELOPED?

O.4.1 Risk planning strategy
In construction projects, both the client and the contractor face risky situations. Both aim to
Lesson 15 Appendix
minimize their risks. Both prepare contingency plans to handle risks, if circumstance may arise in
the future.
A client may resort to a lumpsum type contract to overcome resource fluctuations, cost inflation
and quantity variation risks. The client may also opt for a turnkey contract approach to prevent
design risks and incorporate penalty clauses in the contract to compensate for damages resulting
from time delay risks.
Similarly, a contractor may decide to go in for insurance to quantify safety and security risks, book
forward supplies of costly materials in the stock market, enter into backtoback agreements with
his subcontractor and suppliers, and incorporate suitable escalations and other safeguards as part
of the contract agreement.
Despite various strategies of the client and the contractor to prevent risks, risks are unavoidable.
These vary from project to project. In business, risks are considered , they are priced and the risk
response is planned to control the risks.
Risk mitigation measures aim at minimizing the loss, damage or disruption in a project due to
unforeseen events. These mitigation measures are described as follows:
(a) Risk Transfer: Project risks can be transferred to someone who is more capable of dealing
with such problems, such as specialist subcontractor or by passing the risk to insurance
firms monetarily. Risk can be transferred :
To contractor or designer by the client.
To subcontractor by the contractor.
To insurance by the client, contractor and sub contractor.
(b) Risk Deferred: Certain project risks can be deferred by time by moving the activities to a
later date in the project when the adverse effects of events is minimized or reduced. For
example, postponing road bitumen paving scheduled during the rainy season to a different
period of time in the year.
Risk Reduction: Project risk reduction aims either to reduce the probability of risk
occurrence or reduction of the adverse impact on the project or a combination of
both. For example, a client may cover the risk of unknown underground soil
conditions by suitably wording the contract.Risks can be reduced by:
Welldefined Specifications.
Detailed site survey.
Detailed design.
Completing design before execution.
Minimizing client variation.
Showing implication of changes.
Determining logical cost contingency.
Determining logical float
Early involvement of owners project group
Appropriate responsibility matrix
Lesson 15 Appendix
(d) Risk Acceptance: Once the risks have been identified and their adverse effects are
assessed, a contingency plan to encounter them have to be planned, developed and
implemented as a good risk management strategy.
a.
Risk Avoidance: Once project risks have been identified, they could be avoided in
some cases such as changing designs, construction methods that may involve additional
costs.
Allocation of risk among parties depends on :
Which party can best control the events that may lead to the risk occurrence.
Which party can best manage the risk if it occurs.
How far it is preferable for the client to retain the management of risk.
Which agency / party should carry the risk.
Whether premium charged is reasonable.
Whether transferee is likely to be able to sustain consequences, if the risk occurs.
Whether transferred risk is likely to return in a different form.
O.4.2 Typical Risk Mitigation Methodology

How project risks have been mitigated determines the chances of project success and
hence the project quality. Typical tools and practices that can be employed to mitigate risks by a
client are given below:
Nature of Risks
Completion time
overrun
Project cost overruns

Force majeure, ecological,
safety & security
Political and legal
Foreign exchange
Resource supply risk
Operation / Maintenance risk
Technology risk
Some Typical Practices for Mitigating Risks

Include contract clauses for penalties, liquidated damages,
performance bonus, completion/performance guarantees.
Select experienced turnkey contractor.
Use proven technology.
Adopt fixed/lumpsum contracts, earmark standby credit and
contingency plan, ensure performance guarantees.
Transfer risk to project insurers
Transfer risk to project insurers
Obtain Central bank assurances, convertibility guarantees from
the host country.
Negotiate long term raterunning reliable supply contracts
Employ experienced operational personnel, ensure contractor
liability for initial maintenance.
Use proven technology, consider high damages in case of
nonconformance to specifications
O.4.3 Risk Response Plan

Risk plan ensures that appropriate risk warning tools are in place to handle risks efficiently. This
is achieved by developing an effective warning system in the form of a contingency plan. The risk
response plan, prepared after due consideration of the above factors should document the
procedures that will be used to manage risks.
Lesson 15 Appendix
The risk events are generally recorded in the risk response ledger. This record should highlight the
anticipated timing of risk and the possible responses for countering risk responses. Each risk
source in this ledger should preferably contain the following information in a tabular form:
Risk title and description.

Likely causes that can trigger off risk event.
Description and quantitative range of likely impact on project objectives, where appropriate.
Nature of interdependence with other risk sources.
Anticipated time and probability of occurrence.
Possible responses for countering risk.
State of risk after effective response.
Individual / department responsible for managing risk.
O.5 HOW ARE PROJECT RISKS CONTROLLED ?

O.5.1 Risk Response Control
Risk control aims at controlling deviations to cut down risks and maximize project value. It
handles risks in a manner that achieves project objectives efficiently and effectively. It is based on
proaction and not reaction approach by having the right measures in place and improving them
constantly. There are no readymade solutions to minimize risks, but the following remedial
measures can assist in controlling them:
(a)
(b)
(c)
(d)
Adjust plans, scope of work and estimates to counter risk implications.

Monitor risks regularly. Evolve alternate plans to manage foreseeable risks, when
necessary.
Make timely decisions.
Keep all concerned informed about the possible risks.
O.5.2 Risk Related Decision

Risk related decisions in particular are classified into three categories. They are:
Decision under certainty.
Decision under risk.
Decision under uncertainty.
The difference between decision under risk and decision under uncertainty is that risk has
assigned probabilities and its exposure can be evaluated, whereas under uncertainty the
probabilities are nonexistent.
Decision under certainty: It implies expected predetermined pay off (outcome) based on
deterministic response strategies. Such strategies with no assigned probabilities can be
represented by a payoff matrix shown below:
PAYOFF MATRIX ( Profit in 000s Rs.) IN A CONTRACT
States of the Market
Options
Strong market
Even market
Low market
Lesson 15 Appendix
A continue with existing

resources and work load
B induct additional resources
with present work load
Csecure contract and induct
additional resources
50
40
50
50
50
60
100
80
90
The above shows that Option C will produce maximum gain as compared with other strategies.
Such a strategy is called dominant strategy.
Decision under risk: In practical situation, higher profits are usually accompanied by higher
risks. In the absence of a dominant strategy in such cases a probability is assigned to the
occurrence of each situation. The controlling factor in decision making under risk is the
assignment of probabilities to each strategy.
PAYOFF MATRIX (Profit in 000s Rs.) IN A CONTRACT

States of the Market
Strong market
Even market
Low market
Options
0.25 probability
0.25 probability
0.50 probability
A continue with existing
50
40
90
resources
B induct additional resources
50
50
60
Csubcontract the work
100
80
50
The expected value for the option A, works out as (50) (0.25) + (40) (0.25) + (90) (0.50) =67.5
Decision making under uncertainty: Uncertainty implies that there is no meaningful probability
and there is no dominant strategy. In such cases, there are four basic criterion for making decision
and in each case the criterion will depend upon the type of project and the project managers
tolerance to risk.
(a) Maximax or Hurwicz criterion: Under this, the decision maker is always optimistic and
tries to maximize profit.
(b) Maximin or Wald criterion: In this case a pessimistic instead of an optimistic approach
is taken by the project manager so as to minimize the maximum loss. In Walds criterion
only the minimum pay offs are considered.
(c)
Minimax or Savage criterion: Under this the project manager is a sure loser and he
attempts to minimize the maximum regrets.
(d) Equal Chance or Laplace criterion: It is an attempt to transform decision making under
uncertainty to decision making under risk. This criterion makes an assumption that if the
probability of state of nature is not known, then it can be assumed that each state has equal
chance of occurrence.
Lesson 15 Appendix
O.6 HOW DOES THE HUMAN SIDE AFFECT THE MANAGEMENT OF RISK?
Risk analysis cannot be mechanized, and the most important characteristic needed to analyse and
manage risk is an appropriate frame of mind or the 'risktaking' attitude of the project manager.
The risk taking decision depends upon the utility or the pleasure or displeasure one derives from
the expected outcome. The 'Utility' theory explains how, not why, rational people sometimes prefer
outcomes which do not necessarily have the highest monetary value. Utility theory suggests that
instead of maximizing the EMV, people maximize their own expected utility or what pleases /
satisfies them. The equation that describes the utility curve is the utility function. Utility functions
vary from person to person. Also utility function of an individual may not be identical to the utility
function of that individual's employing organization. Behavioural Scientists have classified
individuals with risk tolerance characteristic into three categories, i.e., risk averter, risk neutral and
risk seeker. The utility curves showing these characteristics are sketched below:
Utility Risk Averter (or Avoider)
Risk Neutral
Risk Seaker (or lover)
Cost
Yaxis represents utility, it shows the project managers willingness to take decisions
gladly.
Xaxis reflects the money at stake.

Shape of the decision makers tolerance curve indicates the response to alternate decision.
In case of risk averters, utility rises is marginal as the slope of the curve decreases with increase in
expected monetary value. In other words, a risk averter project manager is cautious and
conservator as his tolerance reduces when more money is at stake, more money increases his
utility only very slightly. On the other hand, risk seeker or risk lover may be willing even to pay
high penalty to gain a higher uncertain outcome. A risk neutral project manager with linear utility
curve, is most likely to use expected outcome as the decision criterion and will act only when the
expected outcome is positive.
It is important to note that the knowledge of the risk analysis tools and techniques is necessary to
manage risks, but it is not sufficient in controlling risk. The final piece of the jigsaw is the human
being. Achieving this involves gaining a clear understanding of human perception of project risk
and uncertainties.
Lesson 15 Appendix
O.7 WHAT IS THE ROLE OF THE PROJECT MANAGER IN MANAGING RISKS?

Project managers capability to accomplish the mission in a modern large size construction project
is a function of the professional skills in risk management. His role in managing risks calls for the
following:
Estimate cost and time contingency allowances, and allocate these commensurate with the
identified major risks and uncertainties.
Regularly monitor risk response plan review these with the concerned persons regularly to
reduce misunderstandings and ensure that the full spectrum of uncertainties is exposed.
Adopt methods for allocating the remaining risks to the various parties in a way, which will
optimise project performance.
Recognise that the risk and reward go handinhand and that the allocation of a risk to a
party should be accompanied by a suitable incentive.
Keep an openminded approach to innovative solutions to problems.

Make appropriate timely decisions.
O.8 WHAT ARE THE BENEFITS OF MANAGING PROJECT RISK?
The overall awareness of the risk exposure and the mode of handling risk adds to the effectiveness
and efficiency of the project management due to the following:
The risk response development process gives an insight into the project management process.
Accordingly, the issues/problems of the project are clarified, understood and allowed for right
from the start.
The preplanned contingency plan provides clearer definitions of the specific risk associated
with a project. It allows prompt, controlled and preevaluated response to any risk that may
materialise.
The structure and definition of the project risk are continually and objectively monitored. This
in turn reduces exposure to project risks.
Risk response decisions are supported by thorough analysis of available data.
Fully documented risk management process, buildsup a profile of historical risk to allow better
modelling for future projects.
It encourages problem solving and provides innovative solutions to the risk problems within a
project.
Lesson 15 Appendix
Risk reporting framework avoids sudden risk shocks.

It is sometimes argued that risk identification process induces negative and cautious attitudes
among the team or the project sponsors. Contrary to this, it can also be said that the risk
identification process, if developed with the project team participation, enables:
Identifying the participants who can be entrusted with management of risks.
Creating environments for managing risks efficiently and effectively among concerned
people, as they become aware of the risky situations well in advance.
The very process of breaking a project down into its sources of risk and systematically analysing
them ensures that the managers develop a much more realistic feel for the project and its range of
possible outcomes. Risk analysis supplements the professional judgement. However, the risk
analysis is not a substitute for professional experience, judgement and the attitude of mind of the
appropriate decision makers. Project managers cant stop the fast changing instable risk prone
environments but they must prepare themselves to manage the resulting impacts of risks to their
projects. This in turn reduces exposure to project time, cost and performance risks.
Lesson 16 Appendix
CONSTRUCTION CONTRACTS ADMINISTRATION

APPENDIX P
P.1 INTRODUCTION AND SCOPE

The Indian Contract Act governs contracts concluded in India. A construction contract is an
agreement with legal backing between the owner and the contractor, by which the contractor
agrees to construct a facility or provide a service for the owner; for a lawful consideration for the
facility or service rendered. Contract documents include General Conditions, Special Conditions,
Particular Specifications, Technical Specifications and Construction Drawings. For general
guidance, the major tendering organizations standardize their contract documents.
Construction contractors form the backbone of the construction business as they execute most of
the construction works. The contractual option for executing construction option has many
advantages (Section 13.4.5). But administration of contracts is not troublefree. It is the client
team consisting of Project Manager, Contract Manager and the Engineerinchargecontract
(called Engineer), who plays an important role in the administration of the construction contracts.
This Appendix briefly describes the role of the participants, key functions in contract
administration and the guidelines for smooth administration of contracts. This Appendix is divided
under the following heads:
Role of the participants.

Production performance controls.
Specification interpretation.
Scope change control.
Subcontractor approval.
Disputes, claims and their modes of settlement.
Project termination.
Payment control.
Bonds and securities.
Project closeout.
Formal correspondence.
Guidelines to minimize problems in the contract administration.
The legal aspect of contracts is a subject in itself and as such is not covered in this Appendix. The
key terms used in contract administration are listed in the Glossary.
P.2
ROLE OF THE PARTICIPANTS
Construction at the site of the contracted projects is supervised and carried out by two separate
agencies. These are, the client team led by the project manager, and the contractors workforce
managed by his construction manager. Both the teams have a common goal of completing the
project on time within specified costs and quality specification. However, their roles differ. The
key person who deals with contractual matters is the client Contract Administrator.
P.2.1
Role and Obligations of the Client Project Manager
Lesson 16 Appendix
It is the client project manager who plays the dominant role; he represents the client and acts as
the boss at the site. He ensures smooth functioning at the site and makes decisions when the site
faces problems. He manages the entire construction process so as to achieve the assigned project
objectives. He manages the contractors employed at the site, and the site activities, with the help
of his supervisory team that reports to him for decisions. It is he who is accountable to the client
for the construction of the project. He, on behalf of the client, performs the following duties in
discharging the main obligations under the contract. These include:
To hand over the construction site to the contractor, after the order to commence the work.
To approve nomination of contractors managers, sub-contractors and suppliers in time.
To comply with statutory requirements, as applicable.
To control performance of contractor and issue appropriate instructions to contractor

through his representative Engineer.
To make interim and final payment to the contractor.
On contractual matters, the Contract Manager / Quantity surveyor assists the Project Manager.
P.2.2 Role and Obligations of the Contractors

Construction contractors form the backbone of the construction activity at project site. It is the
contractor who estimates the work, plans the execution, inducts resources, executes the work
under pressure, incurs costs and takes the risk of cost overruns. Contractor bears the cost of input
resources employed by him for the execution of the work. These input resources and site expenses
include cost of men, materials, machinery, and capital. He also incurs expenditure on interest on
loans, statutory payments, insurance, depreciation and so on. In addition, like the client, he has
also to control his finances to meet the cash requirements from time to time. His motto is to
maximize profits by effective cost control. In fact, he is the hub around which the construction
industry revolves.
At site, the contractor's construction manager manages the work execution as well as the
resources, and the workforce. He operates to achieve the contractor's objectives, which include
optimizing profit, maintaining a cooperative and harmonious relationship with the project manager
and others engaged in the construction activity at site.
Despite the frequent crises during the execution of the contract and the risks at the time of
procurement of work, the contractors obligation is to complete the contracted work to his client
satisfaction, on time, within budgeted cost, conforming to quality specifications, and at the same
time avoiding conflicts and disputes, as his business survival depends upon his performance.
P.2.3 Role of the Client Contract Manager and Engineer
There are three persons engaged by the client who deal in contract matters. These are project
manager, contract manager and the client appointed engineer. The term contractor administrator is
used in a broader sense to cover contract related functions performed by the project manager, the
engineer and the client contract manager.
Lesson 16 Appendix
It is the client appointed engineer who represent the client at site to ensure accomplishment of
fitforuse contracted work on time, within the cost and quality specifications. He assists the
project manager and the contract manager to perform their contractual duties. The architects and
quantity surveyors, work side by side with engineer and assist him in discharging his
responsibilities. In most of the contracts, all instructions and the correspondence of the client is
sent to the contractor under the signature of the engineer. In fact at site, the engineer is the
controller of the contract.
Duties and powers of the engineer, are specified in the general conditions of the contract. He has
a dual role to play. He acts as an agent of theemployer and as an independent person in
quasi-judicial capacity. He is also required to have due consultation with employer and contractor
before deciding certain matters as per the provision in the contract. To quote an example,
engineers duties as given in the FIDIC are tabulated below:
FEDERATION INTERNATIONALE DES INGENIEURS CONSEILS (FIDIC)
Conditions Of Contract For Works Of Civil Engineering Construction
Part 1 General Conditions
Engineer's Duties and Authority (Clause 2.1)
(a) The Engineer shall carry out the duties specified in the Contract.
(b) The Engineer may exercise the authority specified in or necessarily to be implied from the Contract,
provided, however, that if' tile Engineer is required, under the terms of his appointment by the Employer, to
obtain the specific approval of the Employer before exercising any such authority, particulars of such
requirements shall be set out in Part 11 of these Conditions. Provided further that any requisite approval shall
be deemed to have been given by the Employer for any such authority exercised by the Engineer.
(c)Except as expressly stated in the Contract, the Engineer shall have no authority to relieve the Contractor of
any of his obligations under the
Contract.
Engineer to Act Impartially (Clause 2. 6)
Wherever, under the Contract, the Engineer is required to exercise his discretion by:
(a) giving his decision, opinion or consent,
(b) expressing his satisfaction or approval,
(c) determining value, or
(d) otherwise taking action which may affect the rights and obligations of the Employer or the Contractor,
he shall exercise such discretion impartially within the terms of the Contract and having regard to all the
circumstances. Any such decisions, opinion, consent; expression of satisfaction, or approval, determination of
value or action may be opened up, reviewed or revised as provided in Clause 67.
P.3 PRODUCTION PERFORMANCE CONTROL

As an agent of the client, the Engineer ensures compliance by the contractor to the contract's
terms and conditions, and to make sure that the end product is produced as per the requirement of
the client, fitfordesired purpose. To quote an example, performance control duties of the
Engineer in FIDIC contracts include the following:
Engineer Functions as Quality Controller

Clause
No.
Description of the clause
7.2
Approval of drawings submitted by contractor.
14.1
Approval of programme.
16.2
Objection and replacement of incompetent staff members.
Lesson 16 Appendix
19.1
Security and protection of environment.
36.1
Instructions and tests on materials.
37.2
Inspection and testing.
38.1
Examination/approval before work to be covered up.
39.1
Instruction for removal of work not compliant with requirements.
46.1
Notice to expedite work, which is slow and giving consent to extend

working hours.
48.1,2
Taking over certificate, taking over of section or part.
48.3
Issue of Substantial Completion Certificate
49.2
Instruction for remedial work.
50.1
Instruction to search the cause of defective work.
In particular, Quality Assurance Plan containing complete guidelines for checking quality of
materials and workmanship and responsibility of contractor engineers should be jointly finalised
by the contractor and the engineer prior to the commencement of work.
P. 4 SPECIFICATION INTERPRETATION
Each contract is different, but there are several basic principles that govern interpretation of
specifications in construction contract. These principles form the basis for the initial interpretation
of the law in deciding how conflicts can be resolved. The interpretation of commonly used
specifications given in the following paragraphs is in short outline form. These are based on the
principles and the legal justifications have been omitted. It should be noted that a "Contract"
includes the entire contract documents. These documents include the plans, specifications, and
drawings
P. 4.1 Ambiguity In Interpretation
The ambiguity arising in the contract, which would need interpretations can be considered under
two heads: those discrepancies relating to the language interpretation and those discrepancies
having more than one interpretation.
Language discrepancies. The language of the contract implies that it would be understood
by the normally intelligent people competent in their profession, with complete knowledge of all
related facts. Further, the contract document is mutually explanatory. It means that:
1. The ordinary meaning of language is given to words unless circumstances show that a different
meaning is applicable.
2. Technical terms and works of art are given their technical meaning unless the context indicates
a different meaning.
3. A writing is interpreted as a whole, and all writings forming a part of it are interpreted
together.
4. All circumstances are taken into consideration.
Lesson 16 Appendix
5. If the conduct of the parties defined a particular interpretation, that meaning is adopted.
6. Specific terms are given greater weightage than general language.
7. Separately negotiated or added terms are given greater weightage than standardized terms or
terms that are not specifically negotiated.
Following are the standard rules established through the precedents set out from court judgements:
1.
While interpreting the meaning of the document or a particular part of the document is to
be sought for from the document itself.
2.
3.
4.
5.
The intention may prevail over the ambiguous words used in the documents.
Technical legal term shall be given their legal meanings.
The contract is to be construed as a whole.
Written words shall prevail over printed words.
6.
7.
Words shall prevail over figures.

Deleted words and alterations are not to be looked into while interpreting the contract.
8.
9.
10.
Specific provision shall prevail over general provision.

Obvious clerical errors to be corrected to give correct meaning.
Antecedent Facts or Correspondence not forming a part of the contract are not to be
considered except in the case of real doubt about the contract meaning.
Inconsistent or repugnant clause to be rejected and the clause which gives correct meaning
is to be followed.
Alternative method to perform a promise option lies on the party who is to perform the
promise.
Contract to be construed according to plain grammatical and popular meaning of the words
used.
Express words to be followed and presumed intention of party to be rejected.
Earlier clause is to be preferred to the later.
11.
12.
13.
14.
15.
16.
Interpretation, which brings harmony between different parts of the contract documents, is
to be preferred.
P. 4.2 Ambiguities Resolved Against the Drafter

It is a common knowledge that those drafting the contract would have had every opportunity to be
sure that their intentions are clearly defined so as to allow the contractor to understand them.
Further, the architects and the designers would have had sufficient time to be sure that the contract
documents are clear and complete. It is unreasonable to expect a contractor to find flaws in a
short time prior to the bid. Therefore, if anything is subject to more than one reasonable
interpretation, the contractor has the right to choose the interpretation.
If, on the other hand, the contract itself is the product of extensive negotiation, it will have at least
to a great degree been "drafted" by both parties. In such a case, both parties are responsible for
the ambiguity.
P. 4.3 Ambiguities on Trade/ Patent Deficiencies
Lesson 16 Appendix
Generally an ambiguity in the contract is interpreted against the party who drafted the document.
However, there are some exceptions. Such exceptions are based on the principle that the
contractor is expected to be knowledgeable about ordinary and normal trade or construction
practices pertinent to its work. Therefore, any failure to ignore such normal trade or construction
practices can go against the contractor, if he files a claim on such grounds. .
Example: A building contractors knowledge and experience is that rebar is to be fixed with steel
ties. If such details are omitted on drawings, the omission cannot absolve a contract not to price
such item at the time of tendering.
On the other hand, a serious omission on the part of the architect cannot be covered under the
designer intent clause. Design intent will apply only if the gap being bridged is so obvious that a
professional contractor would not normally overlook it. Further, the more "obvious" the design
error, the more in question is the designer's competence.
P.5 SCOPE CHANGE CONTROL
During the execution stage, the changes involving additions and alteration is in the scope of the
contract are inevitable. These changes include:
Administrative changes that do not affect the substantive rights of the parties.
Changes and modifications ordered in writing, directing the contractor for action in the
terms of the contract.
Supplemental agreement requiring changes that are accomplished by mutual action of

both the parties.
Constructive changes that cause a contractor to perform work differently than required
by the written contract.
Effective change instructions such as acceleration of performance and ensuring

cooperation in progressing works as per the contract.
The scope change clause in a contract authorizes the owner to order changes in the scope of
work. Typically, this change clause specifies:
1. Adjustments to the contract may only be effected by a change order.
2. The change order must be in writing, signed by both parties.
3. The change order must specify adjustments to both the contract price and the net
effect
on the project time.
4. The change order will be for work that is within the scope of the original contract.
5. No changed work is to be performed without a properly executed change order except
in the case where the contractor must act in an emergency to prevent injury or property
damage.
A contractor is obliged to follow such change instructions, but he is to be reasonably compensated
by the client with time extension and cost, as applicable.
Extension of time for completion due to causes outside the control of contractor and for extra work
Lesson 16 Appendix
within deviation limit is admissible. Where the extension of time is granted due to reasons
attributable to Employer, such as late handing over of site, late issue of
drawings/instruction/approval, suspension of work within the specified period, special risks, if
delay is for limited period and delay due to adverse physical condition and artificial obstruction,
contractor is entitled not only for extension of time but for extra cost and both should be
determined by Engineer without delay and simultaneously to avoid cash flow problems to
contractor.
P.6 SUBCONTRACTOR APPROVAL
The engineers consent in writing is required by the contractor for engaging / employing a
subcontractor for a work. Since the prime contractor remains fully responsible for the work, the
engineer normally approves the subcontractor unless he finds him unsuitable for the job. Similarly
for the removal of a sub-contractor due to unsatisfactory performance, the discretion rests with the
prime contractor but the approval of the Engineer/Employer is necessary.
P.7 DISPUTES, CLAIMS AND THE MODE OF SETTELEMENT
P.7.1 Disputes
Construction is a complex process. It involves many participants with different interests. Contract
documents link the construction participants. Even with the best of intentions, no contract
document can cover varying unpredictable situations in the construction process. Disputes are
unavoidable. In general, dispute in a contract can arise due to a number of reasons such as:
(a) Discrepancies in site data, drawings, quantities.
(b) Delays in handing over of site and releasing of drawings.
(c) Disagreement on specifications and extra works.
(d) Inaccuracies in the contract documents.
(e) Differences on the interpretation of contract terms and conditions.
(f)
Delay in the timely supply of clientresponsibility materials and payments by the
owner.
(g) Unforeseen adverse situations like floods, earthquakes, changes in working conditions,
accidents, political unrest etc.
(h)
Implications of force majeure delays, such as those resulting from strikes, severe
weather, and acts of God. These delays cannot be attributed to the fault of either party
to the contract. Usually, for these delays, a contractor can file for extension of contract
time, but not for expenses. The owner correspondingly cannot seek actual or
liquidated damages.
A contract makes provision for raising claims for compensation by both the parties, that is the
client and the contractor. The dispute clause provides the specific procedure for resolution of
serious problems. It may detail a progressive series of steps (such as appealing to higher
authorities) or may simply describe the ultimate option (arbitration). Parties to the contract must
understand the Dispute Clause and always follow its instruction precisely.
The succeeding paragraphs focus on claims by contractor and the similar approach is applicable in
case of the clients claim on the contractor.
Lesson 16 Appendix
P.7.2 Claims
The claims can be divided into three categories, that is, Contractual Claims, ExtraContractual
Claims and Ex-gratis Claims.
Contractual Claims. These are due to happening of certain events or circumstances for which
contract provides express remedy. Settlement of these claims is within the powers of the project
manager.
Examples: Suspension of work, delay caused due to artificial obstruction, late possession of entire
site, and delay in release of interim payments beyond the period specified in the contract.
ExtraContractual Claims. These arise where contract does not provide express provision and
therefore these are to be based on principle of common law. Project manager does not have
authority to decide these claims and he can make his recommendations to the client.
Examples: Claims relating to prolongation/disruption/dislocation due to default of the client
engineer, unreasonable orders, unreasonable delay in inspecting work and testing of materials, and
delay caused by nominated sub-contractors.
Ex-gratia Claims. These arise where no ground exists either in the contract or in common law.
These claims are nothing but seeking sympathy for financial compensation from the client on
account of loss which happens either due to absurd rate or due to circumstances beyond the
control of the contractor but outside the responsibility of the employer. The client can consider
ex-gratia payment for such claims depending upon the nature of the case.
P.7.3
Processing Claims
Registering Claims. Claim is registered by giving a notice. Contract provisions enable a

contractor to give notice of his intention to claim additional payment whenever the cause for such
an action arises. Failure on his part to comply with this requirement may prejudice credibility of
such claims.
Establishing Claims. The claims are established from the correspondence in which the fact of
matter and reasons for lodging or rejecting the claim by the client are given. A claim is also
supported from the record of losses suffered especially when these are in the full knowledge of the
client.
Claim Presentation. Formation and presentation of the claim is an important aspect of dispute
resolution. A proper structure for presentation of a claim should be:
- Background
- Who are the participants
- Project phase where claim arose
- Contract terms
Lesson 16 Appendix
- Intentions of claimant (expectations while quoting)

- Actual experience
- Conclusion (exact suffering)
- Damage
- Arguments based on records/documents
Every claim has to be established based on documentation. Contractor has to foresee the
possibilities of claims and keep the supporting records. As claim situation can occur at any time,
these documents must always be kept up-to-date.
From the owners side claim prevention as a management technique needs careful preparation of
contract, adopting methodology to resolve construction difficulties, willingness to share risks
equitably. The owners manager must keep his own records to verify, counter or recommend the
claim for grant of equitable treatment to the contract.
P.7.4
Modes of Resolving Disputes
Contract disputes can be settled in one or more of the following ways:

Conciliation Through Negotiations. reasonable. In this case, both the parties willingly
discuss the dispute and arrive at a settlement. During negotiations unequal bargaining
power plays an important part in hastening a settlement. Capitulation can also occur
when one party gives in to the other, either because it has realised the strength or
reasonability of the other's stand or because it feels that the advantages to be gained by
capitulation outweighs those of pressing its claims, even though they must be quite
Arbitration. If conciliation/mediation fails, then the next stage is arbitration. In this case,
concerned parties approach a third party to arbitrate for settlement of their disputes. Usually all
contracts contain an arbitration clause, but even in the absence of one, the parties are free to refer
their disputes to arbitration by mutual agreement. Arbitration presupposes that the parties agree
that there are some disputes, which they are not able to settle among themselves and that they feel
that a third party, in whom both have confidence, will be able to decide the disputes to their
satisfaction. Arbitration agreement also specifies the mode of appointment of arbitrator(s), and
also include such other provisions, which the parties may deem fit to incorporate. The decision
given by the arbitrator is called an Arbitration Award. Arbitration of disputes in engineering
contracts comes under the category of commercial arbitration. Neither party can unilaterally
revoke the arbitration agreement. The appointment of arbitrator, conduct of arbitration, and
publication and implementation of awards, is as prescribed in the Indian Arbitration Act 1996.
Litigation. If the parties do not agree to refer the disputes to arbitration, then the aggrieved party
can take up the dispute to the court. However, if an arbitration clause exists in the contract, the
dispute cannot be contested in the court as the existence of arbitration clause acts as a barrier to
litigation.
Advantage Of Arbitration over Litigation for Settling Disputes. The main advantages
of arbitration over litigation are:
Speedy decision, less expensive.
Lesson 16 Appendix
In arbitration, both parties maintain goodwill, litigation can result in animosity.

Arbitration proceedings are private and secret, court proceeding is a public affair.
Arbitration proceedings can be convened at a convenient place, but in litigation the proceedings
are generally held in the court.
Arbitration awards are generally final, whereas a court judgement can be contested in higher
courts.
P.8 CONTRACT TERMINATION CONTROL

A contract can come to an end by any of the methods mentioned below:
By mutual agreement between the contracting parties.

By completing the task and as stipulated in the contract.
By breach of contract by one party.
By unforeseen circumstances like bankruptcy and impossibility of task execution.
By making a new contract to substitute the old.
By terminating of the contract by either party.
The termination of a contract due to contractors fault is the most serious matter. Based on the
type of contract, terms and conditions, the client has the right to terminate a contract due to
contractors fault. Some of the reasons for termination of contract after repeated notices by client
to the contractor could be due to:
Failure to observe statutory laws and rules.
Failure to induct resources to maintain / accelerate adequate rate of progress.
Failure to conform with the contract specifications.
Failure to obey instructions for properly coordinating activities with other contractors to avoid
work interference.
Failure to pay the subcontractors or suppliers for resources supplied to the project.
Filing for bankruptcy or committing other similar acts.
Subletting the work without the approval of the contract administrator.
If a contract is terminated due to fault of the contractor, then the contractor may not be entitled to
the compensation but the client may claim cost of completion for the balance work.
The client can also terminate the contract, if he wants to discontinue the project for his
convenience say due to change of need for the project or the budgetary constraints. However, in
Lesson 16 Appendix
such cases, the client will have to suitably compensate the contractor.
The contractor also has a right to terminate the contract in certain cases such as if the work is
stopped by a court order and the client fails to issue certified payments. Under clause 69.1 of
FIDIC, if the employer has failed to pay the amount due under the certificate of Engineer within 28
days or the time specified in the agreement or if the client is interfering with/obstructing/refusing
such certificate of payment, the contractor can terminate his employment under the contractor, by
giving 14 days notice. On such termination by the contractor, he shall be entitled to the payment of
the work done including cost of materials delivered at site or he is legally liable to accept delivery
(these will become the property of the employer) reasonable cost of removal of the plant and
machinery, repatriation cost of staff and workmen, expenditure reasonably incurred in expectation
of completing the whole work. The termination takes effect automatically after 14 days notice to
the employer. Although the parties may negotiate the resumption of work during the notice period
but is not automatic even if the default is rectified during notice period itself.
It should be noted that termination of contract is a serious matter and must be considered as a last
resort after taking due legal advice.
P.9
INTERIM VALUATION AND PAYMENT CONTROL
The conditions of the contract provide for payment to be made to a contractor on monthly basis
for the completed and in- progress work, permanent materials brought at site and other advances,
as per the contract. Each contractors interim statement shall also include amount claimed in
respect of days work and extra approved work. The interim payment bill is submitted by the
contractor through the project engineer for certification and onward transmission to appropriate
authorities.
The engineer is responsible for interim and final settlement accounts. Every effort should be
made to measure work progress jointly with the contractors representative in order to avoid
unnecessary delays and controversies.
The FIDIC contract (clause 60) provides a mechanism for payment to the contractor. Certification
by the engineer is necessary before the contractor becomes entitled to the payment from the
employer. The employer is contractually bound to make payment within 28 days of the delivery of
the interim certificate and within 8 weeks in respect of final certificate. The employer is also liable
to pay interest in case of delay. Further, if the employer fails to pay the contractor dues under the
certificates mentioned above within 28 days after expiry of the time stated above, it would amount
to default of the employer entitling the contractor to terminate the contract by giving a due notice.
The responsibility for preparation of final account lies with the contractor. The final accounts
should contain items of all payments for which the contractor considers that he is entitled. All
payments shall be supported with documents. The final account shall consist of the following:
Measured account.
Provisional sum and prime cost item.
Days work account.
Claims account.
The final accounts include liquidated damages/ penalty for delayed completion. The amount of
liquidated damages are determined by the employer before tenders are invited as a reasonable
Lesson 16 Appendix
assessment of actual damages which he would suffer in the event of delay in the completion of
work. As per section 74 of the Indian Contract Act and Supreme Court decision, the liquidated
damages and penalty are to treated in the same manner. The party who suffers on account of
breach of other party will be entitled to such compensation as deemed reasonable with regard to
all circumstances of the case subject to the limit specified in the contract. It would thus appear that
even if the delay is attributable to contractor, only reasonable amount of compensation can be
recovered. However, all such recoveries together shall not exceed the amount named in the
agreement.
P.10 Contract Bonds and Securities
A bond is the guarantee of one party for the performance of another. Construction bonding is
essentially a three-party contract among the contractor, the owner, and the surety. In addition to
the safeguards, another purpose of a bond is to identify the actual ability of a contractor to get
one. Before any surety guarantees, the performance of any contractor will be subjected to detailed
investigations regarding contractor's financial strength to carry the type of work contemplated, and
of its management ability to deal with all factors of production. This ability tends to separate
unqualified contractors out of the process.
There are mainly three main types of bonds in construction contracts. These are bid, payment, and
performance bonds.
Bid Bonds. A bid bond is an assurance to the owner that if selected, the contractor will actually
proceed with the contract at the bid price. If the contractor does not, the bid bond becomes
payable to the owner as compensation for damages sustained. Value of bid bonds is 5 percent of
the amount of the bid.
Performance Bonds. The performance bond protects the owner from the contractor's failure to
complete the contract in accordance with the contract documents by indicating that a financially
responsible party stands behind the contractor to the limit of the penal amount of the bond.
Payment Bonds. Labour and Material Payment Bonds protect those who have supplied material
and labour to a project, first because there may be no lien rights against public properties. The
bonds also protects owners from liens or other claims made against the property on nonpublic
projects after completion of the work, and after final payment has been made to the contractor.
Typically payment bonds cover the following items:
Materials incorporated into the work and delivered at the jobsite.
Labour payments for work at or off the jobsite.
Freight and transportation costs.
Equipment rental and repair costs.
Fuel and maintenance costs.
Insurance premiums.
Lesson 16 Appendix
Unpaid taxes.
Bonds, as per the contract are submitted by the contractor to the Engineer for check and onward
transmission to the legal department. Guarantees are either of the parent company or the share
holders.
P.11 CLOSEOUT
For proper closing of a project:
(a)
The post-completion maintenance is usually entrusted to an agency familiar with the

construction. In most cases, the contractor responsible for construction is given this
responsibility for one year after completion; and this aspect is included in the scope of
work of the contractor.
(b) A proper record of the operating instructions and as-built drawings is maintained.
(c)
The staff and workers necessary for operating and maintaining the facility are trained prior
to its taking over.
(d) The site is cleared of the left-outs of the construction and unwanted materials.
(e)
The client fully safeguards his interests prior to rendering the completion certificate to the
contractor, and also before making the final payments.
After completion by the contractor, it is the project team of the client that hands over the project to
him. The team also prepares a project completion report which includes the scope and schedule of
work, the important events, the contract executed, the addresses of the suppliers of materials and
equipment, the equipment maintenance manual, the as-built drawings, the costs involved, the
problems encountered during execution, the lessons learned and the minor defects noticed at the
time of handing over.
P.12.
FORMAL CORRESPONDENCE RULES
All correspondence initiated by the Contract Administrator is for documentation purposes and it
may have to be referred to at a later date. Therefore, each communication must be clear, concise
and comprehensive. Each document should identify an issue, record the history and lead to an
action. An effective formal correspondence, as far as practical, should conform to the following
rules:
Deal each contract separately.

Take up one issue or a small group of issues, in one letter.
Start with background or reference or both, in brief.
Preferably use a single page for each letter.
Avoid unnecessary / superfluous writing.
Use simple language and be factual.
Adopt causeandeffect style.
Lesson 16 Appendix
The last paragraph of the letter should bring out as to what you want the addressee to do.
P.13 GUIDELINES
ADMINISTRATION
FOR
MINIMISING
PROBLEMS
DURING
CONTRACT
Contract administration is not troublefree. Both the owner and contractor face problems in
administering contracts. But there are ways to minimize it.
P.13.1
Problems Faced by the Contractors
Generally the contractors complain that:

1.
The tender documents need be standardised for a State or the country as a whole. Present
practice of each department having its own contract format, imposes too much of strain and
risks on contractors. For special types of works, an additional list of conditions could be
included and the rest could be as per the standard format.
2.
The conditions are loaded in favour of the owner. This situation leads to disputes and
claims, and a vicious circle appears.
3.
The soil conditions, sub-soil conditions, hydrology, materials, resources, etc. are not
properly investigated and proper data is not available in the tender documents.
4.
The construction material requirement and its availability are not estimated, investigated
and planned by the owner, even for items of materials to be supplied by him.
5.
If there are changes in work. The resources arranged as per the earlier scope of work may
become redundant.
6.
The construction drawings are never ready in time. Changes in construction drawings seem
to be an accepted privilege of the owner. This situation again leads to claims and disputes.
7.
The contract conditions generally do not allow for escalation in prices.
8.
In the absence of any credit policy applicable to this industry, there is almost no opening
with banks and financial institutions to serve the construction activity in the country.
9.
Financing the contract itself. Tight money conditions deprive contractors of the facility of
even the short-term credits from suppliers and manufacturers of construction materials,
stores and spares.
P.13.2
Problems Faced by the Client
Mostly the owners or clients have their own problems with the contractors. Some of these are as
follows: 1.
Normally the private contractors except for a few who are wellorganized have no
Lesson 16 Appendix
organization at all, nor qualified men to manage the work.

2. Technical personnel are not employed, and the contracts have to specify the employment
of technical personnel and many times enforce this.
3.
Haphazard construction practices are adopted which cause failures of structures during
construction.
4.
Quality is at stake always, particularly in all concrete works and asphalt works, as the
contractors do not employ qualified personnel who understand the specifications and code
of practice.
5. Many contractors quote very low bids, and try to make up by bad workmanship and use of
sub-standard materials.
6.
Contractors do not pay attention to the welfare of the workers, and their wages and
amenities.
7.
The contractors do not treat their sub-contractors or labour contractors fairly, and the
contract conditions between them are not fair. The general contractor does not passe on
backtoback benefits to his sub-contractors.
P.13.3
Guidelines for Smooth Administration of Contracts
These problems in contract administration can be minimised, if the participants follow their
professional practices, and administer the contract in a proper manner with mutual confidence.
The following measures for improvement in contract administration; both from employers and
contractor's side can go a long way in smooth execution of construction projects eliminating time
and cost overrun cases, and disputes and arbitration to a considerable extent.
Awareness of legal implications of contractual matters.

Safety and welfare of workers must come first always and every time.
No compromise on quality of work.
Ensure site receives drawings and prompt decisions on technical matters.
Jointly plan and review costs, schedule, and technical performance.
Design and implement efficient contract change control system to enable prompt settlement
of variations and claims.
Maintain documentation of contractual correspondence and proper recording of the site
data.
Ensure contractor receives prompt payment of progress bills.
Ensure timely procurement and control of materials.
Use serviceable Construction Equipment.
Appreciate problems of all the participants involved in the implementation of the contract.
The most important factor that can contribute in smooth administration of the contracts is the
proper selection of the client and contractor project leaders. According the client should select
project team fully committed to work, having adequate experience, good exposure on project
problems and courage to give prompt and fair decision. Similarly contractor should have a
Lesson 16 Appendix
competent site manager and other members of his team, who can plan and deployment of required
resources, execute work as per planning with quality better than specified, control performance,
and lead his team to implement the contract work efficiently and effectively to the satisfaction of
the stakeholders.
In the modern context, a project mission is considered successfully accomplished, if the project is
completed:
Within the allocated time period.
Within the budgeted cost.
At the proper performance or specification level.
With acceptance by the customer/user.
When you can use the customers name as a reference.
With minimum or mutually agreed upon scope changes.
Without disturbing the main flow of the organization.
A contract thus can be graded as having been completed successfully, if it is accomplished within
time, cost and quality performance, all to the satisfaction of the client, and where the contractor
can quote the client as reference for his rolemodel in the project.
Lesson 17 Appendix
MANAGING PRIVATISED INFRASTRUCTURE PROJECTS

Appendix Q
Q.1. INTRODUCTION AND SCOPE

Infrastructure is the base on which the economy of a country is built. The infrastructure projects
include services such as power, telecommunication, transport, water and gas distribution networks,
and sanitation needed for the development of industry and improving the quality of life. The
infrastructure projects are high-value time-bound special missions, undertaken by the government
to create a unique new facilities and services within the specified time, quality and imposed
constraints.
Till recently infrastructure projects were entirely funded by the government. In some countries
government has been able to shift a part of the burden of new infrastructure development to the
private sector. The emerging trend is to build infrastructure by privatizing them, at no cost to the
State, using procurement methods like BOT, BOOT, BOO and similar approaches of the BOT
family. The common features of BOT projects are that they are government promoted, have
identified infrastructure product with revenue forecast, are undertaken and mostly funded by the
private sector, have long gestation period and encounter high risks, and finally these assets are
taken over by the government after the franchise (concession ) period. The basis of a privatized
infrastructure project is that the private sector company undertaking the project can finance,
develop, construct and operate the developed service / facility, by charging some toll / fee at
predetermined rate from the public using the facility, for a pre-arranged period. During the agreed
concession period, the development is regulated by the government and at the end of the
concession period, the facility is handed over to the government.
The success of a BOT project primarily depends upon the construction cost estimate, the realistic
revenue projections, the finance engineering, the risk management, and the leadership of the
project manager to get the project completed before the specified completion period within the
budgeted cost and with superior quality than specified so as to extend the toll collection period
without teething operational problems.
This Appendix briefly describes the stakeholders of the privatized infrastructure, the role of the
government in designing and implementing the concessions, the contractors project management
processes and the key factors for successfully accomplishing the project mission by the
concessionaire. In the end, it brings out the prerequisites, benefits and drawbacks of the
privatized infrastructure projects.
Q.2
STAKEHOLDERS
In infrastructure projects, the promoters are those agencies that identify the project. It is mostly the
government that identifies the infrastructure project. In some cases, the contactor or financer also
locate and promote a project. The private group / company formed to accept the franchise and to
manage the BOT project is called the concessionaire.
Lesson 17 Appendix
The privatized infrastructure projects the stakeholders include the government who promotes the
project, the private group/ companies (concessionaire) who accept the franchise, lenders who
loans the funds, the investors who contribute equity, contractors who undertake turnkey
construction, suppliers who provide input resources, insurer who cover risks, the public customers
who pays the toll / fee to use the service; and the project leader with his team, lawyers and
consultants who are entrusted with the task of accomplishing the mission .
Q.3 ROLE OF GOVERNMENT IN DESIGNING AND IMPLEMENTING THE
CONCESSION
The government uses the concession instrument to procure the infrastructure, practically free of
cost. A concession is a legal arrangement in which the government offers a firm to construct a
facility/ service and gives it the legal rights to operate at a pre-determined tariff rate for an agreed
period. Concession defines the rights and obligations of the government and the private firm. The
formulation of the concession by the government involves number of issues. These include
political, legal, social, financial, risk, environmental, technical and regulatory issues
The design and implementation of concessions comprises of number of processes. The processes
for formulating concessions are detailed in the World Bank Technical Paper No. 399. These are
outlined below:
3.1
Role of the Government in Identification and Analysis of the Project
Identifying and prioritizing projects amenable to concessions.

Selecting a specific project.
Determining the form of the government support to the project.
Hiring advisers.
Performing a preliminary review of the costs and benefits of the project.
Determining support measures including legal provisions to enable the granting of concessions.
Establishing or identifying regulatory authorities.
Managing public support to infrastructure projects.
Determining concessionaire selection criteria.
Granting permission for the project to go ahead .
Setting a time-table for the project.
Lesson 17 Appendix
3.2 Role of the Government in Designing of the Concession Arrangement

Choosing legal instruments.
Allocating responsibilities.
Choosing and designing pricing rules and performance targets.
Determining bonuses and penalties.
Determining duration and termination.
Designing adaptation mechanisms to new or unforeseen circumstances.
Choosing and designing a dispute settlement mechanism.
3.3 Role of the Government in Awarding Concession
Choosing the method of the award.
Making decisions regarding shortlisting of competitors.
Reviewing legal and regulatory issues.
Determining bid structuring methods .
Determining bidding rules and procedures.
Proceeding with the bidding.
Negotiating.
Awarding contract.
3.4 Role of the Government in Implementing Regulatory Measures During Execution Phase
Implementing regulatory terms.
Supervising and monitoring development.
Enforcing rules for toll collection.
4 CONCESSIONAIRE PROJECT MANAGEMENT PROCESSES.
4.1 Project Phases
Each infrastructure project has a pre-determined duration with a definite beginning and an
identifiable end. A typical infrastructure project life cycle can be divided into three phases for
management control. These are pre-construction development phase, construction phase, and
facility operational phase. These phases are composed of one or more processes. A process
involves series of actions to achieve desired results. Each process is fed with inputs, these inputs
are processed using appropriate skills to produce outputs. An output is a tangible, verifiable work
product. In BOT fast-track approach, sequential phases and processes overlap. The project
manager (from the time of resuming the charge ) becomes the key participant in all these phases
and acts as a catalyst who motivates the participants for achieving the stage objectives.
Typical infrastructure project management phases and processes are outlined in succeeding
paragraphs.
4.2 Project Development Phase.
It aims at formulation of project scope and implementation strategy, if the project is approved for
implementation. Development phase commences with government inviting proposal for BOT
infrastructure development project through advertisement and issuing of a project brief to the
interested parties. Generally a lead contractor, who decides to compete for the project, tries to
identify his potential partners and become their sponsor. The newly formed joint venture team
Lesson 17 Appendix
starts to prepare the proposal and submits it to the government by due date . The processes
involved from the receipt of the government project brief till issue of project directive by the
successful bidder (joint venture sponsor) are outlined below:
Government project-brief legal analysis. It involves scrutiny of government offers relating to
legal provisions, statutory measures concessions, regulatory measures, revenue stream analysis,
and economic assessment of the commercial viability.
Project feasibility study. It includes analysis of market, cash flow, finance, logistics ,
engineering, costs, time, and risks; to enable the perspective concessionaire (sponsors) to
formulate his proposal. Bankers and investors use the financial indicators like Return on
Investment (ROI), Return on Equity (ROE), Net Present Value (after taxes) (NPV), Payback
Period (PP), and. Debt Service Coverage (DSC) models to determine the expected financial
performance.
BOT concession agreement finalisation. The government scrutinizes the proposal and it is
followed up with negotiations, if the government considers proposal reasonable. It includes
contract agreement, scope of work, design features with typical design and drawings, guarantee
bonds, environmental permits and approvals, toll rates structure, maintenance bonds, insurance
during construction and operation etc.
4.3 Construction Phase
It includes three sub-phases, i.e., design and planning, execution, and performance control.
Construction Design and Planning Sub-Phaseits objective is to develop a workable plan to
accomplish the project mission. . Major contracts are finalised by the end of this phase. The
processes involved in this phase include:
Basic designs and drawings planning.
Construction method statement preparations.
Drawing up of Integrated Master Plan including time schedule , resource procurement plan, cost
plan and budget, communications plan, quality management plan, organizational plan, risk
management plan, and schedule of tendering.
Execution Sub-Phase it addresses to co-ordinating, leading people and managing resources to
carry out the plan. The processes includes organizing and mobilising project site, developing
team, energising people, managing safety, deploying resources, assuring quality , distributing
information.
Controlling Sub-Phaseit involves tracking of progress and taking corrective action ,when
necessary, for accomplishing project objectives. The processes include scope change control,
resources control, schedule control, cost control, quality control, risk response control and contract
administration.
4.4 Facility/ Service Operational Phase
This constitutes the longer period of time in the project life cycle. In addition to collecting revenue,
it also maintains the facility as the transfer of assets in the BOT formula specifies as to the
condition in which the assets created under BOT agreement are to be handed over to the
government. The three main processes in this phase are tariff management, maintenance
Lesson 17 Appendix
management and administration of the establishment.

Depending upon the tariff management complexity basis, BOT projects can be broadly categorised
as under:
Basis of Tarrif
Multiple collection
centres
Collection at toll stations
Single customer
collection
Types of Infrastructure Projects

Airports, Telecom networks
Roads, Ports, Railways
Public waste management, Maintenance facilities,
Power stations, Water management, Sewage
disposal
5 KEY FACTORS IN MANAGEMENT OF PRIVATISED INFRASTRUCTURE

PROJECTS
5.1 The Key Factors
Infrastructure Projects, inherit all the characteristics and the problems faced in construction
projects. The peculiar nature of the BOT projects adds to complications. There is no single
blueprint that can provide solutions to these problems. But the understanding of the typical key
factors which affect the concessionaires management can go a long way to solve the complicated
issues encountered in the privatized infrastructure projects. The key factors affecting the
concessionaires management are listed below:
Forecasting revenue and estimating life cycle cost.
Engineering finance.
Safeguarding legal issues.
Managing risks.
Leadership makes all the difference.
5.2 Forecasting Revenue and Estimating Life Cycle Cost
The crux of the problem is quantification of income over the concession period. Quantifying
revenues from toll collection involves extensive studies to identify the needs, establish a feasible
toll data and quantify the risks. The estimates of toll collection and construction costs enable
calculation of the likely return on investment.
For a BOT project to be viable, it is essential that:
Return on investment (ROI) should be sufficiently high, say around eight to ten points above prime
borrowing rate.
Return on Equity ( ROE) should be at least ten points above the prime rate.
Net Present Value (NPV) after tax is positive and yields higher return than the ROI on other
alternatives.
Payback Period (PP) should be as short as possible, particularly if the political risks are high.
5.3
Engineering Financing
Most of the companies undertaking large-sized BOT projects employ a financial advisor, normally
a merchant or an investment bank, to assist them in the financial packaging in their proposal.
Lesson 17 Appendix
Usually the financial advisor are assigned the task of actual raising the necessary debt and equity
for the project.
The success of the BOT project financing depends upon the cash flow and the structuring of the
debt and equity. A common approach is to utilize as much debt as the cash flow permits with least
equity of the sponsors. However, lesser the equity in a project the greater is the threat to the
project cash flow. Similarly, lenders to BOT project would like sponsors to put more equity in
their project. The World Bank paper ( August 1990) states that equity investments range from 10%
to 30% of the total cost.
5.4 Safeguarding Legal Issues
For any privatize infrastructure to succeed, it is a must that legal relationship among the
participants is well defined. This is necessary to establish their rights and obligations. For this
reason, it is desirable that the legal consultant is appointed in the initial stage of the development
of the project.
5.5 Risk Management
Project risk is a key element of the infrastructure approach. The success and failures in
performance, to a great extent, depends upon the effective management of risks. Most of the
formal communications with stakeholders and management of project change revolves around risk
management. Typical tools and practices that can be employed to manage risks are tabulated
below:
Nature of Risks
Completion delays
Cost overruns
Force majeure
Political risk
Infrastructure
Revenue forecast
Performance
Operation/
maintenance
Use flexible price
formula
Tools & Practices for Mitigating Risks

Make provision for penalties, liquidated damages,
performance bonus
Ensure completion/ performance guaranteed through
select experienced turnkey contractor
Use proven technology
Adopt Fixed/lump-sum contracts
Earmark stand-by credit
Increase equity
Insurance
Government indemnities
Insurance
Export credit agency cover
Government assurances
Analyse market and tariff growth
Ensure performance guarantees
Involve contractors in equity
Involve contractor/licensor in equity
Employ reliable and experienced operator /
sub-contractor
Obtain Central Bank assurances
Obtain convertibility guarantees from the host
country
Lesson 17 Appendix
Other
contingencies
Seek government support
Leadership Makes All the Difference

Effective leadership is an essential requirement for successful accomplishment of all management
activities, but it does assume far greater significance in the infrastructure construction projects, at
all levels of management. Project leader functions include developing project vision, energising
people, enabling people to work harmoniously and enthusiastically, managing change and the
conflict, filling in gaps in incomplete organisational design and delivering product and service that
satisfies the customer. Therefore selecting the leader is the most important step in the initial stages
of the project.
6 CONCLUSION
Most of the countries are experiencing BOT revolution. According to the World Bank, during the
period 1990-95, there were 361 BOT projects valued over US$ 150 billion, and an average BOT
projects were completed 3% under budget. Some of the projects were completed before the
specified completion time and this increased the toll recovery period. Delays resulted where there
were difficulties in resolving risk allocation among project participants.
Privatization of infrastructure is a policy decision. It has political and social implications. These
projects have certain merits and can create problems if not properly conceived. The main
benefits to the government include:
Relieves government of the financial and administrative burden of investing, developing and
maintaining the much-needed infrastructure.
Provides additional financial resources to the government for massive investment projects.
Improves economic efficiency and productivity by reducing bureaucratic practices.
Accelerates the rate of growth of the economy and encourages adaptation of new technology by
involving the private sector.
Provides better and faster service to the public as the builders cost benefit lies in it.
Transfers the risks of finance, construction and operation to the private sector.
The main drawbacks of the infrastructure privatization are:
Financing budget deficits by overlooking public interests, is not a sound strategy for balancing the
budget.
Negotiation secrecy prior to award of the concession, promotes corrupt practices
Awarding concession without competitive bedding increases costs to the public. People pay for the
infrastructure facility instead of the government.
Awarding concession raises political issues, which can threaten the development of the project.
The success of a privatized infrastructure BOT project depends upon many factors which vary
from project to project. These include government proper design and implementation of the
concessions; and the sponsors realistic revenue predictions, early completion within the budget
and quality specifications, funding with interest rates lower than estimated and efficient operation
of the created facility within the franchised period. The key factors that determine the outcome of a
project are timely selection and early induction of the project leader, legal adviser, facility
designer, and finance consultant and project management team. The project management team
Lesson 17 Appendix
efficiency and effectiveness, to a great extent, depends upon their professional skills, and it is a
must that these skills be kept continuously updated with the help of mentors, consultants and the
universities/management institutes. The skills upgradation methodology is covered in Appendix R.
Lesson18 Appendix
UPGRADING TOTAL PROJECT MANAGEMENT SKILLS

Appendix R
NEED OF THE HOUR, BUT HOW TO DO IT ?

R.1 INTRODUCTION AND SCOPE
Project management is the art and science of converting a vision into reality. The British Standard
BS 6079: 1996, defines project management as the planning, monitoring and controlling of all
aspects of a project and the motivation of all those involved in it to achieve the projective
objectives on time and to the specified cost, quality and performance. Project Management
Institute of the USA, describes project management as the application of knowledge, skills, tools
and techniques to project activities in order to meet or exceed stakeholder needs and expectations
from a project. Construction Industry Project Management Guide of Australia advocates project
management as the process of integrating everything that needs to be done (typically utilizing a
number of special management tools and techniques) as the project evolves through its life cycle
from concept definition to handover) in order to insure that its (the project) objectives are
achieved.
Construction projects, are risky by definition. These are managed by individuals, whose work
delivers product or services, which is the life blood of construction industry and the construction
corporate. It is the project manager and the project team, who skillfully leads the
multi-disciplinary, multi-functional team of managers, to accomplish the assigned mission. Project
team is a mix of brainpower, varying with the nature of project wisdom. The facts of life in
project work (crises, uncertainties, risks, pitfalls) continually test the mettle of these managers.
Clearly this is not the field for the timid and the untrained. The success of a project hinges on the
competency of the project team.
In todays dynamic environment the rate of obsolescence of knowledge is very high. With the fast
emerging new knowledge and the rapidly changing technology, the organization needs mechanism
to react faster than their competitors. This has made updating of knowledge and skills a continuous
process. Challenge for organizations is to make learning available to its member, faster than
competitors, when and where the need arises. It is particularly important in the highly competitive
construction field.
This Appendix highlights the knowledge areas needed to develop the skills, it describes the mode
of development of a PM Education and Training model, and it outlines the various modes of
conducting education and training to upgrade skills in PM.
R.2 KNOWLEDGE AREAS NEEDED FOR MANAGING CONSTRUCTION
PROJECTS
In the last few years, the common knowledge areas needed to provide a direction to the project
and upgrade skills required to form a common basis of understanding among the managers, have
changed from its original emphasis on time and cost management of sixties to the total project
management. Total Project Management( TPM) approach links it with the TQM philosophy, it
has similarities as well as differences with the TQM (refers to Appendix M). TQM is at the core of
TPM.
Total Project Management Objectives Interdependence
Lesson18 Appendix
Commendable work on the development of the global body of knowledge for managing modern
projects has been done by the Project Management Institute (PMI) of USA, Association for
Project Management in the United Kingdom(APM), and project management related bodies in
Australia, France, Germany and many other countries and institutions.
The Guide to the Project Management Body of Knowledge (PMBOK), published in 1996 (now
under revision), by the PMI of USA has nine subjects. These knowledge areas are shown in Table
R.1.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Table R.1: Construction Project Management Knowledge Areas

Knowledge Areas
Components
Project Integration management
project plan development, project plan execution,
overall project plan development, and execution,
overall change control
Project Scope Management
initiation, scope planning, scope definition, scope
verification, scope change control
Project Time Management
activity definition, activity sequencing, activity
duration estimation, schedule development,
schedule control
Project Cost Management
resource planning, cost estimation, cost
budgeting, cost controls
quality planning, quality assurance, quality control
Project Human Resource Management
organization planning, staff acquisition, team
development
Project Communications Management
communications planning, information
distribution, performance reporting,
administrative closure
risk identification, risk quantification, risk
response development, risk response control
Project Procurement Management
procurement planning, solicitation planning,
solicitation, source selection, contract
administration, contract close-out
PMBOK of the PMI has practically become a global standard. The ISO 10006:97, Guidelines to
Quality in Project Management, of the International Standard Organization includes processes
covered in PMBOK. But the Total Project Management includes many more processes than
those listed in PMBOK and ISO 10006, and obviously, these processes will vary with projects and
the organization. PMBOK of the PMI clearly states that their guide deals with the core subject of
project management and it does not cover disciplines in General Management and Technology
Management. The International Project Management Association (IPMA) guide covers the totality
of the Project Management. The IPMA Competence Baseline includes 42 disciplines (UMIST
study of APM, defines 44 topics on the knowledge and skills used and needed in project
management).
.
Table R.2: IJPM BoK

A
A1
A2
A3
A4
A5
A6
General
Implementing Strategy
Managing Programmes
Managing Projects
Success and Strategy
Processes, Procedures
Systems, Project Office
D
D1
D2
D3
D4
D5
D6
Life-Cycle
Integration Life Cycle
Start-up
Proposal and Feasibility
Design and Appraisal
Implementation
Progress
G
G1
G2
G3
G4
G5
G6
People
Management Structure
Teams
Individuals
Managing and Leading
Stakeholder
Competence
Lesson18 Appendix
A7
A8
B
B1
B2
B3
B4
C
C1
C2
C3
C4
C5
C6
C7
C8
C9
Audits, Health Checks

Systems Approach
External Context
PEST
Legal
Environmental
Value, Benefit, Finance
Implementation
Functionality, Value
Configuration
Scope of Work
Organization Resources
Quality
Cost
Time
Risk
Safety and Health
D7
E
E1
E2
E3
E4
E5
F
F1
F2
F3
F4
F5
F6
F7
F8
F9
Commissioning and Close-out

Commercial
Value and Benefit
Finance
Cash Flow Management
Taxation
Insurance
Contractual
Organization Design
Partnerships, Alliance
Procurement
Bidding
Contract Administration
Materials, Purchasing & Supply
Commercial Law
Claims
International Projects
G7
G8
G9
H
H1
H2
H3
H4
H5
H6
H7
Culture
Ethics
Change
General Management
Human Resource Management
Marketing
Operations
Information Technology
Finance & Accounting
Strategy
Technology, Innovation
R.3 SKILLS DEVELOPMENT MODEL

To manage construction projects, mere knowledge of the project management discipline is not
enough. What is needed are the skills to apply this knowledge. These skills are acquired with
knowledge and experience. Fortune 500, project managers competency model is depicted below.
In the fast changing technology, project management skills up-gradation is a continuous process.
Skills needed for managing construction projects covered in the Lesson Section 1.10, are tabulated
below:
Source: pm Network: The official magazine of the Project Management Institute, July 1998
S. No
1.
Skills Category
Managerial skills
Knowledge Areas
Project Management tools and techniques
Project Scope Management
Project Time Management
Project Resources Management
Project Cost Management
Project Information Management
Analytical DecisionMaking Techniques
Lesson18 Appendix
2.
Leadership skills
Leadership Effectiveness
Project Site Organization & Management
Project Human Resources Management
Project Communications Management
3.
Technical skills
Construction Management practices

Construction Technology Management
4.
Conceptual skills
Project Contract Management

Project Integration Management
The skill development model for a given project or accomplishing organizations goals, can be
developed by considering the processes to be handled for achieving the objectives and linking
these with the knowledge areas. To example, a matrix showing the project management training
model developed for a reputed public sector financing and construction company to meet its stated
needs is shown below:
PROJECT MANAGEMENT SKILLS UPGRADE
Based on ISO 10006 and PMBOK (PMI Standard of USA)
Designed for a reputed Public Sector Company
Project Processes
Project Management Knowledge Areas

Scope
Project Formulation
Project Management
basics
Feasibility study
Appraisal
Cost estimation
Time
Resc.
Cost
Qlty.
Cont.
Risk
Ldr.
4
4
4
4
4
4
4
4
4
Manpower
Planning
Material planning
Equipment planning
Cost Planning
Budgeting.
Quality Planning
4
4
4
Org. Planning
Risk Planning
Contracts
Procurement
Communication.
Planning
Project Execution
Leadership
motivation
Site organization
&layout
Safety management
Quality. assurance
Team management
Intg.
4
Project report writing

Project Planning
Design / Drawings
system
Work breakdown
Activity networking
Time scheduling
Comn.
4
44
4
4
4
4
4
4
4
Lesson18 Appendix
Communication
Contract law & admn.
Project Control
Scope Control
4
44
4
Resource Control
Cost Control
4
4
Time Control
Quality control
4
44
Risk control
PMIS
4
4
Project Close-up
Admn. Close
Contract.
Claims/Arbt.
Project
close-up
Report
Contact period (
hours)
Tutorial
exercises(
hours)
4
4
4
6
Note. Above excludes training in project management software.
R.4
SKILLS UP-GRADATION METHODOLOGY
Education is the organized and sustained instructions designed to communicate a combination of

knowledge, skills, and understanding valuable for all the activities of life, developing both a depth
and breadth of knowledge and understanding.
Training focuses on the development of narrow competencies or skills that will be applied to a
particular task or in a particular context.
The methods of education and training have undergone a sea change, as is evident from the table
given below:
How do people learn best?
Traditional approach
Modern approach
Lecture
Individual learning
Student as listener
Instructor as source
Stable content
Homogeneity
Evaluation and test
Facilitation
Team learning
Student as collaborator
Instructor as source
Dynamic content
Diversity
Performance
The education and training for the development of the Total Project Management processes can be
divided into the following categories:
Academia-directed project management education: Ininstitute or distant learning approach.
Corporate-directed project management training: Inhouse seminars conducted by experts or
online distant learning teaching ending up with contact seminars.
Individualdirected selflearning education and training: Own time self study using
Lesson18 Appendix
published literature.
Distance learning in virtual classroom to speed up delivery.
R.5 ACADEMIADIRECTED PROJECT MANAGEMENT EDUCATION
Project management education is the organized and sustained instructions, designed to
communicate a combination of knowledge, skills, and understanding valuable for all the project
activities. Academia-directed project management educational program for individual and
corporate are conducted by universities and technical institutes. To quote example, such program
are now available at post-graduate and doctoral levels in the following universities in the USA.
Some Project Management Degree Programme in the USA
S. No
1.
2.
3.
University / Institute
George Washington University
www.sbpm.gwu.edu/programs/mspm
University of Quebec
University of Phoenix
M Sc, Ph D
B Sc
4.
University of Calgary
M Sc, Ph D
5.
Western Carolina University

www.cess.wcu.edu/cobmpm.
Northwestern University
MPM
Boston University
www.butrain.bu.edu
6.
7.
Degree
M Sc, Ph D
MPM
Remarks
Since 1996. Both Campus and
Distanct options.
M Sc since 1976.
Largest provider of distance
learning-based degrees.
Eligibility minimum 5year
experience in the industry.
Includes specialization in
construction project
management.
All instructions conducted on
internet.
These are for qualified civil
engineers.
Training project management
teams.
Source : PM Network May 1998.
Most of the above universities base their curriculum on Guide to project Management Body of
Knowledge (PMBOK), standard of the Project Management Institute of USA. The project
management knowledge areas included in PMBOK are tabulated in Table R1.
Education in project management can also be conducted in modules, packages as well as for
the total knowledge areas. Project management education package can be divided as under:
About one-month duration course for each module, at one time. These modules include
scope, time, resources, cost, quality, procurement ( contract), leadership, communication
and risk management.
Four -month duration Construction Project Management Techniques Course (CPMT).
Nine to twelve months duration Total Construction Project Management (TCPM). This
training can bring the student at the educational level of the universities in USA.
Each of the knowledge areas can be made a project management training module. To quote an
example, the contents of a Project Time Management and Project Risk Management modules can
Lesson18 Appendix
include the following:

Project Time Management: Tools and Techniques
Processes
Output
Activities Identification
Project Work Breakdown
Activity List
Activity Duration Estimation
Estimation Method
Activity Database
Activities Networking
Project Network Analysis
Critical Activities
Floats of Non-Critical Activities
Project Completion Time
Project Schedule Development
Simple Project Scheduling
Bar Chart
Complex Network-based
scheduling
Time-Limited Schedule
Resource-Limited Schedule
Project Time Control
Repetitive Projects
Line-Of-Balance (LOB)
Schedule
Time Updating Techniques
Completion Time Plan
Time Crashing Techniques
Project Review Report
Whatif Analysis
Lesson18 Appendix
Project Risk Management: Tools and Techniques

Processes
Risk Identification
Risk Assessment

Information source analysis
Management process analysis
System flow analysis
Work breakdown analysis
Check list scrutiny
Brain storming
Risk quantification techniques
Risk ranking techniques
Risk Response Planning
Risk mitigation methods
Risk Response Control
Monitoring risks
Risk status reporting
Output
Sources of risks
Potential risk events
Risk categorization
Risk response strategy
Contingency plan
Risk- related corrective action
On campus vs distance learning approach. Academia directed education can be conducted

within campus as well as through distance learning media. On-campus educational institutions
have some advantages over the institutions conducting distance learning. On-campus institutions
provide access to information and instruction infrastructure like libraries, laboratories, research
and experiences beyond what instructor teaches. On-campus environments encourage socialization
and formal and informal out-of-the-class interaction.
But distance learning online education and training methodology, conducted in virtual class rooms
and ending up with oncampus seminars, can outsmart the on-campus as well as distance learning
correspondence methodology (Section R.8 of this Appendix).
R.6 CORPORATE-DIRECTED PROJECT MANAGEMENT TRAINING
In todays dynamic environments with fast changing technology, the organization needs
mechanism to react faster than their competitors. This has made in-house updating of knowledge
and skills a continuous process. Therefore, the organization will have to make knowledge
available to its members and to train them, when and where the need arises. Inhouse corporate
directed training focuses on the development of narrow competencies or skills that will be applied
to a particular task or in a particular context. In the in-house training, organization decides on the
members to be trained for achieving the desired goals.
The inhouse training can be conducted through seminars, workshops, courses, consultants /
mentors and online distance learning programme.
One of the ways to speedily enhance knowledge and skills in project management in a
construction organization, is to have a project management mentor. The mentor is an individual
retained by an organization to play the role of an advisor and knowledge promoter.
A mentor must be a seasoned project manager who has "been there, done that, faced it up and
lived to learn from the experience." Mentor is not a consultation firm.
Mentor can identify and help in the development of knowledge, skills and experiences needed by
the upcoming leaders of the organization. A mentor can conduct classes, conferences, workshops,
Lesson18 Appendix
and recommend books and publications to help in the project management practices.
The mentor needs to be accessible to the organization and their project managers during the crucial
periods such as the development of new systems, planning, tracking, re-planning exercises, and
crises. In most cases, face-to-face contact of one to three days per month should be adequate as
long as telephonic access is available within 24 hours.
Mentors can help the organizations in assisting their project managers while they are at work. By
this way, the project manager can avoid learning from their mistakes from project to project.
Mistakes will happen at project sites, even with the best of managers and mentors, but with the
active mentors there is bound to be continuous improvements. On the whole, the time and cost
invested in acquiring a mentor is small compared to the benefits that can be gained.
A mentor can also conduct training in a virtual classroom. This mode of training is explained in the
subsequent section.
R.7 INDIVIDUALDIRECTED SELFLEARNING
Traditionally professional books, journals and other printed material has been the main source of
learning. But the technology now is changing rapidly. Due to the economic reasons, the hardcopy
print media cannot keep pace with these rapid changes. The rapid growth in the information
technology, has ushered in the multimedia approach to learn faster with updated knowledge and
continuously updated skills. The learning material in project management is now available on
CDROM. Authors and publishers claim that their CDROM is easy to use by saying that it is
fully menu driven and it provides on-line helps. Therefore, an intelligent person, with technical
background can easily gothrough the subject.
There are online project management CDROM teaching aids being used in some of the institutes
in the advanced countries. Project Management Institute of USA has produced a CD-ROM on
world-renowned Guide to Project Management Book of Knowledge. Further, the interactive CD
of PMBOK is also included as instructional manual in the Primavera Project Planner software.
Dr. H Kerzner, an authority on project management, has produced an interactive CD-ROM to
supplement his book on Project Management for training managers. There are a number of project
management educational enterprises, which are running courses on the Internet on project
management.
In the field of project management techniques with construction application, the CD-ROM
promoted by Tata McGraw-Hill, New Delhi, titled CPMT (Construction Project Management
Techniques), is probably the first of its kind in the world, specially as it is fully supported with the
text book on Construction Project Management: Planning, Scheduling and Controlling. It is a
complete package for Skills Upgrading, Training and Implementing practices in Construction
Project Management Techniques. The CD-ROM contains 18 lessons. Each lesson is in
question-answer form, and provides the near summary of the material covered in each chapter of
the book. Each lesson is supported with self-assessment objective- type questionnaire (SAQ),
review exercises, real-life illustrations, with interactive data presentation, for online rapid-learning
of construction project management techniques.
The main drawback of the individual directed selfeducation learning technique is that face-to-face
Lesson18 Appendix
contact with the trainer and the colleagues is missing. Virtual classroom learning environment
overcomes this drawback with many additional features.
R.8
DISTANCE LEARNING
DELIVERY
IN A VIRTUAL CLASSROOM TO SPEED UP
Learning faster than competitors through distance learning process- is one of the hottest topic in
education and training. With the rapid developments in digital, multimedia, and
telecommunications technologies, the move to integrate the Internet in teaching and learning is
rapidly gaining momentum. There are number of institutes and universities in the world, imparting
education and training on the Internet.
The educational process of learning over the Internet without having face-to-face contact is known
as virtual learning. Learning can be individualized through virtual classes on the Internet.
Students retrieve information via telephone, modem, and computer from anywhere in the world. A
virtual class is not limited by geographical location, time, or space. Learners learn at their own
speed, at times convenient to the learner, either from work place or from home. The Internet
replaces conventional lecture halls and classrooms, creating new opportunities and challenges for
teachers and learners.
To quote an example, the World Banks African Virtual University is bringing knowledge to an
undereducated continent( Africa) via satellite. Launched in 1997, this university enables students
in African countries to take courses taught by professors from universities around the world.
Harvard Business Review ( SeptemberOctober 1999) calls it as the best practice. Further, there
is a virtual university in Malaysia.
The rapidly changing technology demands that both the teacher and the learner need to use the
Internet to continuously upgrade their knowledge. The Internet places the learning environment of
the whole world in a learners PC, with enormous learning opportunities. Internet employs
different media for learning such as e-mail, web pages, web bulletin boards, chat, and online
courses.
Internet's instructional opportunities do not require much of skills in the personal computer. There
is no need to suddenly learn HTML programming for the Web. It uses everything from e-mail to
slide shows on the Internet. Even the powershortage cannot pose serious problems in online
environments.
The online education and training methodology, conducted in virtual classrooms outsmarts the
on-campus instructional methodology. Internet based distance learning approach provides the
means to continuously update knowledge and skills, better than the traditional classroom approach
that often repeats the text-book recorded past events. It delivers knowledge, when and where
needed, at faster rate, to upgrade the skills, using most appropriate technology. At the clicking of a
mouse, it enables access to the knowledge stored in the world libraries.
R.9
CONCLUSION
The unprecedented rate of emergence of new technology calls for continuous updating of
managerial skills. The construction projects thus will have to resort to outsourcing to just-in-time
Lesson18 Appendix
training rather than live with just-in-case-a- situation-arises type of education. The emerging trend
is to develop managers competencies based on corporate goals. Training performance are subject
to return-on-investment analysis, and not just on the "reaction sheets" compiled at the end of a
training workshop. The various methods that can be employed for upgrading skills in project
management are:Re-engineer corporate heavily-staffed training centres ( where existing) by changing their role as
"training co-ordination centre" and conducting job-related training by employing expert
consultants /monitor who possess know-how.
Use online electronic media delivery methods such as the Internet, teleconferencing and
CD-ROM. These enables access to up-to-date knowledge, as and when required, rather than
waiting for several weeks for a new training session to begin.
Encourage self-initiated learning practices in managers using distance learning programmes,
specially during non-traditional delivery hours such as evening / week-end classes. This will help
them in gaining new insights, skills and tools needed to keep the competitive edge in the
fast-paced global market for shaping their future career. In turn organizations also gain from their
acquired knowledge.
Corporate firms can adopt construction management training institutions /consultants to provide
customized state-of-the-art knowledge and know-how, and act as mentors to managers as the
project grows.
Colleges and universities should impart customized training to managers on construction related
subjects at post graduate level, as and when required. In addition, universities can conduct
specialised courses, like the 'Master in Science in Project Management' being conducted with
in-campus and distance learning options by the George Washington University.
It is the virtual classroom Internet based education and training system that enables imparting
knowledge speedily. It provides the win-win environment for all the participants. It maintains
consistency in education in the whole organization. For the learner, e-mail based online distance
learning reduces travel times, unproductive costs, enables delivery at home, with no disturbance in
job assignments. It can provide training to more people in more subjects, in a much more cost
effective way than ever before. The trainer can impart job required training to more people at less
cost and learners get training at cheaper rates.

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construction project management: planning, scheduling

construction project management: planning, scheduling

construction project management: planning, scheduling

Construction Project Management Techniques Plus

Introduction and objectives.

Appendix A: Indian Construction Scenario.

Lesson 2: Project Management Techniques: An Overview

Introduction and objectives.

What are the techniques employed in making a project go-ahead decision?

How is project scope defined and communicated?

How is project time planned?

How are project resources scheduled?

How are project costs budgeted?

How are project objectives controlled?

Why and how is the planning system codified?

How is the project information system managed?

Lesson 3: Project Work Breakdown

Introduction and objectives.

What does project work breakdown imply?

How are project work breakdown levels classified?

What are the methods used for identifying project activities?

How is the duration of an activity defined?

construction project management: planning, scheduling

How is the duration of an activity assessed?

What are the elements of an activity cost?

What are the benefits of Work Breakdown Structure (WBS) technique?

Appendix C: Sizing of Work Packages

Lesson 04: CPM /PERT Network Analysis

Lesson 05: Precedence Network Analysis

Introduction and objectives.

Appendix E : Project TimeCost Tradeoff Technique

Lesson 06 : Project Work Scheduling

construction project management: planning, scheduling

6.7 How are schedules classified?

Lesson 07 : Planning Construction Manpower

Lesson 08: Planning Construction Materials

Introduction and objectives.

Appendix H : Resources Allocation Using Linear Programming

Lesson 09: Project Construction Equipment

construction project management: planning, scheduling

Lesson 10: Selecting Construction Equipment

Introduction and objectives.

Appendix J : Time Value Of Money

Lesson 11 : Planning Construction Costs

Lesson 12 : Planning Construction Budget

Introduction and objectives.

Appendix L: Capital Budgeting Process

Lesson 13 : Project Scope Control

Introduction and objectives.

construction project management: planning, scheduling

13.7 How is scope control system organized?

Lesson 14: Resources Productivity Control

Introduction and objectives.

Appendix N: Workers Safety Comes First

Lesson 15 : Project Cost Control

Introduction and objectives.

Appendix O: Project Risk ManagementAn Overview

Lesson 16: Project Time Control

Introduction and objectives.

Appendix P: Construction Contracts Administration

Lesson 17: Planning Data Codification

Introduction and objectives.

construction project management: planning, scheduling