Background:

Aditya Aluminium project is initiated to fulfill Hindalco vision of

Vision: To be a premium metals major, global in size and reach, excelling in everything we
do, and creating value for its stakeholders
To become metals power house our company has embarked on 5 green filed projects which
span across aluminum value cycle from bauxite mining to downstream products. This was
initiated before global financial crisis of 2008, after seeing global slowdown and LME
fluctuations Hindalco devised its strategy of excellence by design and decided to have its
presence throughout the metal value chain of aluminium and copper by new greener
technologies and high volumes so that input costs and LME prices doesn’t impact
organization over various business cycles. Aditya Aluminium project consists of 359Ktpa
Aluminium smelter and 900MW captive power plant with a project cost of Rs.9200 crores,
the actual work on field started in late 2011.This project contributes to high margin
upstream Aluminium vertical of Hindalco

Source: Hindaclo Annual report

Project location: Aditya Aluminium is located in Sambalpur district of Odisha state. The
location is selected based on the pro-industrial government of Odisha, a large block of land
availability to the tune of 3000 acres at one place, its logistic connectivity both from Alumina
and coal resources. The site selected is few kms away from Thalibara mines which was the
coal block won in auction for the supply of coal to Aditya CPP. The major contributor to cost
of Aluminium is cost of power which is 45% and of which coal contributes 65%, so the green
field location is selected close to coal mine and also has a direct rail connectivity to Utkal
which supplies Alumina to Aditya smelter
 Cost Components : Metal
13%

6% 34%

2%

44%

Alumina +AlF3 Power cost OPEX

Fixed Cost Anode cost

Major activities in the project:

The major activities in Aditya CPP include selecting a technical consultant which co-
ordinates between Hindalco and all other contractors. This consultant is responsible for
providing all inputs from technical design, technology selection, potential EPC supplier
shortlisting and affective execution of project. DCPL was chosen as this consultant. Various
feasibility studies were carried out, project layout was prepared. After this entire plant was
divided in to various packages namely BTG (Boiler Turbine Generator), CHP, AHP, DM plant,
civil works. All these packages were given to renowned EPC suppliers like BHEL, Gammon
India, ThyssenKrupp, Ion exchange, B&R. Although entire land allotted was 3000 acres,
rehabilitation and evacuation of affected people was Hercules task. This resulted in time
creep on several occasions and many technical design changes and project phases execution
changes which will be discussed in challenges faced. The next big activitiy was the erection
of power house and all the balance of plant like DM plant, CHP. As there are 6 units of
150MW each erection and commissioning activities happened simultaneously. The major
activities discussed so far are project defining, planning, organizing, controlling and closing.
The detailed time line of various phases of project and final closure will be discussed in
project plan section which follows
 Project Plan:
The initial plan was to achieve the project closure in 29 months of project start and best
plan prepared forecasted project closure by 2012. Due to multiple issues like land, crucial
resources like water, leveled and graded land for storage of equipment, the project started
in December 2011 and achieved first unit synchronization in December 2013. The initial plan
was to bring first unit in 24 months of project start and one unit in every next month
resulting in 29 months for project closure. The various feasibility studies carried out for this
project are

 Soil test
 Power system flow dynamics test
 Lightning impact test
 Earthing test for switchyard selection
 Project feasibility study
The actual achieved timelines are as follows
 Challenges faced during implementation of the project:
There are many challenges faced during implementation this huge project, here we are
highlighting few important challenges
Land handover: The allocated land was not fully handed over until 2013. Due to this
problem the project which was planned to start with unit 1 had to be started with unit 4 and
followed a unique sequence of 3,2,1,5& then 6.
Technical re-design: The above issue was also faced with clarified pump house which was
initially beside DM plant but as it was not feasible at that time the entire pump house was
shifted with all necessary technical reevaluations like water head, piping. The same was
done with cooling towers as well
Material handling: No store was built as water logging and pond backfilling and other
levelling activities took time, by the time all major equipment have arrived, there was no
designated place and some costly equipment were also lying in heaps
Skilled manpower: Although project packages were assigned to renowned companies,
continuous skilled manpower availability wasn’t there, highly skilled manpower of certain
PSU’s like BHEL had left early due to other project assignments causing project closure and
hand over delays
Regulatory clearances: Some of the regulatory clearances got delayed due to technical
issues like fault withstand study, this lead to clearance of connectivity initially only for 4
units synchronization with grid later we got clearance for other units.
 Ways in which challenges are overcome:
Land handover: A dedicated team is formed to co-ordinate with local authorities to
facilitate rehabilitation and facilitate quick handover of land patches for project execution. A
separate R&R colony was first started even before colony for employee. In certain special
conditions extra compensation was provided over and above that offered by government. A
CSR drive to educate family members of land losers and absorb them as employee was done
which helped others to come forward and complete the entire 3000-acre planned land
availability
Technical re-design: Rather than wait and watch various technical re-design were carried
out with the involvement of all stakeholders so that time creep is controlled. For example,
chemical cleaning of boilers requires de-mineralized water, our DM plant commissioning
was behind schedule, so DM water was procured from our Hirakud plant which is 60Kms
away from our location and stored in DM storage tanks. This de-bottle necking idea helped
save 5 months of project team as after chemical cleaning five months’ time has to be given
before steam blowing. Certain piping are common for entire 6 units but as entire land was
not available for project work initially, piping work was started from middle and later
extended on both sides which is again against convention. These unconventional and
innovative solutions meant project time creep was not so high without these initiatives by
various teams project would have even further got delayed
Material handling: Proper store availability and segregation of equipment unit wise was not
possible due to land constraints. This was overcome by team by bringing in project material
in multiple lots and also the project team was highly motivated in arranging all necessary
parts of various structures like pressure parts of boiler by assembling materials of various
units
Skilled manpower: To handle this unavailability of skilled manpower issue, internal teams
were developed, as one by one units commissioning started the same group of people who
accompanied BHEL in initial units were given responsibility of other units so that the
dependence on BHEL will be less and at the same time the skills gained in prior units
commissioning is used to fasten the process. Moreover, frequent review meetings are
organized to know the gaps and EPC companies were asked to comply by schedules both in
terms of timelines and manpower availability
Regulatory clearances:
Special technical teams along with external expert support taken to overcome these
clearance issues. Few recommendations were implemented and special liaison teams were
formed to quicken the process of approvals

Key learnings:
Being the member of this project from 2013 to completion and after going through project
management module following are my key learnings
  In our project all the preparatory works like defining the project, planning the project
have been done nicely
 Many bottle necks and unforeseen problems were faced during the execution phase
of the project
 Highly motivated teams lead by good leader adopted on the feet thinking and
executed project with many minor changes to reduce time creep
 Due to the nature of project and location, availability of quality subcontractors was
an issue which needs to be worked up on in future projects
 No project specific software is used to track the progress of project which can be
incorporated in future projects
 For a project of this magnitude if the EPC provider could have been single
organization both quality and time creep could have been less and more over it
would be easy to handle and fix the accountability rather than handling multiple
contractors
 For closing the project and giving out all monetary benefits more stringent clauses
should have been included in initial contract, although cash flow was controlled by
retaining money of unfinished work but time creep did happen due to improper
handover this should be taken care in future projects
 The R&R issues do exist for projects of this magnitude, our organization has done
reasonably well in this aspect although it would be better if entire land allocated
would have been available before project work started

Conclusion:
Being a global conglomerate all the bottle necks faced in execution of the project have been
successfully overcome, today Aditya Aluminium is one of the low cost high quality
aluminium producer in world. All the key performance indicators of this site are either
above or on par with global leading firms. The main objective of this green filed project of
making Hindalco a metal power house is fulfilled. This is possible only with best in industry
project execution, although there are areas of improvement like land procurement,
handling multiple contractors, avoiding time and quality creep there are even greater
achievements like innovative solutions, developing in house project management talent,
highly motivated team building lead by good leaders.