8C!

LC1 LAAnlnC
ln
lnulA Anu CCS1 Anu 1lML
CvL88un
8C!LC1 A complex of nonrouLlne acLlvlLles
LhaL musL be compleLed wlLhln a seL of
amounL of resources and wlLhln a seL Llme
llmlL
8C!LC1 MAnACLMLn1 lL deals wlLh
plannlng schedullng conLrolllng and
monlLorlng Lhe complex nonrouLlne acLlvlLles
LhaL musL be compleLed Lo reach Lhe
predeLermlned ob[ecLlves of Lhe pro[ecL
resenLaLlon
And
ConsLrucLlon
CperaLlon
2 hases of
ro[ecL
Jl1L LLLAn1S
W 60 of Lhe ongolng 132 mega and ma[or pro[ecLs
lndlvldually cosLlng more Lhan 8s 100 crores
W 70 of Lhe ongolng 199 medlum pro[ecLs cosLlng
more Lhan 8s 20 crores each ln Lhe publlc secLor
W CosL overruns Lake away abouL 20 of Lhe LoLal
flnanclal ouLlay on lndusLrlal and lnfrasLrucLural
developmenL pro[ecLs Cf Lhe 331 cenLral
pro[ecLs 217 have cosL overruns of 80 of Lhe
orlglnal cosL
u8LlC SLC1C8 lnvLS1MLn1
uLClSlCnS ln lnulA
CovL pollcy Loward Lhe publlc secLor has been
sLaLed
noL only wlll lL be a producer of lmporLanL and
sLraLeglc goods of Lhe baslc naLure buL lL wlll
also be used as a sLablllslng force for
malnLalnlng essenLlal supplles for Lhe
consumer"
lnlLlaLlves Lo lmprove Lhe CuallLy of
lnvesLmenL ueclslons
W ln 1963 Lhe CovernmenL of lndla seL up a separaLe
8ureau of ubllc LnLerprlses (8L)
W ln 1963 Lhe lannlng Commlsslon prepared and
clrculaLed a Mooool of leoslblllty 5toJles fot pobllc
5ectot ltojects
W ln 1972 Lhe CovernmenL of lndla seL up a speclal
dlvlslon ln Lhe lannlng Commlsslon called Lhe ro[ecL
Appralsal ulvlslon (Au) and clrculaLed Lhe olJelloes
fot tbe ltepototloo of leoslblllty kepotts fot loJosttlol
ltojects
W ln 1972 Lhe CovernmenL of lndla seL up a hlgh
powered ubllc lnvesLmenL 8oard (l8)
SLeps ln Lhe ubllc lnvesLmenL
ueclslon Maklng rocess ln lndla
1) C formulaLes Lhe flveyear plan lndlcaLlng Lhe broad sLraLegy
2) AdmlnlsLraLlve mlnlsLrles develop Lhe secLoral plans
3) 1he concerned publlc secLor enLerprlses prepares Lhe feaslblllLy reporL
4) AdmlnlsLraLlve mlnlsLry carrles ouL a prellmlnary scruLlny of Lhe feaslblllLy
reporL
3) Au of Lhe lannlng Commlsslon carrles ouL a deLalled appralsal
6) lnvesLmenL lannlng CommlLLee of Lhe C dlscusses Lhe appralsal noLe of
Lhe Au and recommends Lo Lhe l8
7) 1he l8 conslders Lhe (a) appralsal noLe of Lhe Au along wlLh Lhe vlew
of Lhe C (b) Lhe commenLs of Lhe 8L (c) Lhe commenLs of Lhe plan
flnance dlvlslon of Lhe mlnlsLry of flnance (d) Lhe noLe of Lhe
admlnlsLraLlve mlnlsLry
8) CablneL generally accepLs Lhe recommendaLlon of Lhe l8 and approves
lLs lmplemenLaLlon
8C!LC1 A8AlSAL ulvlSlCn
W 1o suggesL sLandard formaLs for submlsslon of pro[ecLs and
procedures for Lhelr Lechnoeconomlc evaluaLlon
W 1o conducL acLual Lechnoeconomlc evaluaLlon of selecLed
ma[or pro[ecLs and programmes submlLLed Lo Lhe C
W 1o asslsL Lhe sLaLe governmenLs and cenLral mlnlsLrles ln glvlng
effecL o sLandardlsed formaLs and procedures for pro[ecL
evaluaLlon
W 1o underLake and supporL research leadlng Lo progresslve
reflnemenL of meLhodology and procedure for pro[ecL
evaluaLlon
u8LlC lnvLS1MLn1 8CA8u
PR0JFCT C0ST At0 TlHF 0vFRRut
-@-
lL ls unreallsLlc Lo expecL LoLal conformlLy Lo plan on
cosL and Llme erformance can be dlfferenL from
expecLaLlon buL Lhese devlaLlon are expecLed Lo be
wlLhln Lhe bound buL when devlaLlons ln Llme and
cosL are of a slzeable degree Lhere are cosL and Llme
overrun
S0HF C0tTRluTlt6 FACT0RS F0R 0vFRRutS
7 MAnACL8lAL Anu C1L8
lAC1C8S
6 unlC8LSLLn
CCn1lnCLnClLS
3 8LC1lllCA1lCnS Anu
8LLACLMLn1
4unuL8LS1lMA1lCnS
Anu CMlSSlCnS
3 SCCL CAnCLS
2 1lML
CvL88unS
1CCS1
LSCALA1l
CnS
0THFR CAuSFS F0R C0ST 0vFRRutS
uelays ln flnallzlng orders for lmporLed equlpmenL
rocedural and admlnlsLraLlve delays ln flnallzlng Lhe
conLracLs
Commlsslonlng delays ln lnsepecLlng and LesLlng Lhe
equlpmenL arlslng from labour and operaLlonal problems
8epeaLed modlflcaLlon
rlces lncreased lnpuLs and servlces
lnflaLlon
Lack of Lechnlcal experLlse resulLlng ln long delays ln
sorLlng ouL Lechnlcal problem and pushlng up cosL
Lack of aLLenLlon Lo seLLlng up organlzaLlon sLrucLure
wlLh approprlaLe sklll for managlng Lhe pro[ecL
lHPACT 0F C0ST 0vFRRutS
W Slow down Lhe pace of economlc developmenL
W Lack of promoLlng Lhe pro[ecL such as lmporL subsLlLuLlon
and exporL promoLlon
W ulrecL draln on naLlonal exchequer
W lallure Lo achleve soclal obllgaLlon
W ulfflculLy ln paymenL of prlnclpal and lnLeresL
W uecrease Lhe volume of sales and proflL
W LnLerprlse may become slck unlL
W uevold of surplus and reserves
C0ST C0tTR0l At0 C0ST RF0uCTl0t lt THF
0PFRATl0tAl PHASF 0F PR0JFCT llFF
CosL Awareness
and concern
- Supervlsory
Lxamples
- 1ralnlng
- lncenLlves
CosL Avoldance
lmprove Cver
lan
- MeLhods and
sysLems
- value analysls
- JasLe
prevenLlon
CosL 8educLlon
Save uurlng
CperaLlon
- lncreased
producLlvlLy
- Lxpense
reducLlon
- MaLerlal cosL
reducLlon
CosL ConLrol
Conform 1o lan
- CosL sLandards
- 8udgeLary
ConLrol
- llferage
conLrol