Article

Metamorphosis

Standard Critical Path and Selection

1–16
© 2019 Indian Institute of
Management, Lucknow
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Contractors for Construction of DOI: 10.1177/0972622519872653

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Thermal Power Plant: A Case

Study in NTPC

D. K. Choudhury1

Abstract
In India, most of the thermal power plants were built by National Thermal Power Corporation (NTPC) Ltd and different state
electricity boards. The thumb rule indicates that out of the total project construction cost, 70 per cent goes to the cost of project
materials, while 30 per cent goes to the cost construction work which leads us to select the most competitive material suppliers and
construction contractors. The objectives of this research work are (a) to select a contractor based on cost economy, (b) to find out
the standard critical path for constructing a thermal power plant, and (c) to identify the critical activities in constructing a 500 MW
thermal power plant. Through literature review, six important factors were identified to judge the quality of the contractor before
awarding the contract. In project management, the selection of contractor on the basis of probability of their performance comes
within the purview of decision under risk, and hence decision tree has been used as a methodology for the selection of contractor. For
computing the critical path, the project network for the construction of the thermal power plant was constructed. The five thermal
power projects of NTPC—NTPC Korba, NTPC Talcher, NTPC Rihand, NTPC Sipat, and NTPC Simhadri—were considered, and the
construction data of these five projects were used to compute the critical path. Since the completion data of different activities of five
projects at different geographical locations with different climates, different site conditions, and different conglomerate of workers
were used, so the critical path estimated was accepted as the standard critical path.

Keywords
Power Project, Decision Tree, Project Network, Critical Path, Project Activities

Introduction to over 40 million families in rural and urban areas by

The power sector plays a very important role in the devel-
opment of national economy. Sources of power generation
range from conventional sources such as coal, lignite,
natural gas, oil, hydro and nuclear power to viable non-
conventional sources such as wind, solar, and agricultural
and domestic waste. Demand of electricity in India has
increased rapidly and is expected to rise further in the years
to come. In order to meet the increasing demand for elec-
tricity in India, massive addition to the installed generating
capacity is required.
India, at this moment, ranks 26th in the World Bank’s
list of electricity accessibility in 2017.
In September 2017, the Government of India launched
the “Saubhagya” scheme to provide electricity connections
December 2018 at a cost of US$2.5 billion.
Indian power sector is undergoing a significant change
that has redefined the industry outlook. Sustained economic
growth continues to drive electricity demand in India. The
Government of India’s focus on attaining “Power for All”
has accelerated capacity addition in the country. At the
same time, the competitive intensity is increasing at both
the market and supply sides (fuel, logistics, finances, and
manpower).
Total installed capacity of power stations in India stood
at 330,260.53 megawatt (MW) as on May 2017. The
Ministry of Power has set a target of 1,229.4 billion units
(BU) of electricity to be generated in the financial year
2017–2018. To attain this goal, we need to construct more
and more power plants within our available resources.

1 Gitarattan International Business School, Delhi, India.

Corresponding author:
D. K. Choudhury, Gitarattan International Business School, PSP 2A & 2B Complex-II, Madhuban Chowk, Sector 14, Rohini, Delhi 110085, India.
E-mail: dkc.ashokvihar@gmail.com
2
India is having huge coal deposit, and hence from the
economic point of view, the thermal power plants are easy
to run with coal. But for constructing the power plants, we
need to choose the agencies who have expertise, adhere to
quality, and at the same time are economic also. From this
consideration, this research work has been carried out to
select a contractor who will be most economic and at
the same time enjoys the reputation of providing good
quality workmanship. The other two goals of this research
work are to find out the standard critical path with least
variation for constructing a thermal power plant and to
identify the critical activities in constructing a 500 MW
thermal power plant.
Key Players in Power Sector
in India
The power sector in India is mainly governed by the
Ministry of Power. There are three major pillars of power
sector. These are generation, transmission, and distribution.
As far as generation is concerned, it is mainly divided into
three sectors: central sector, state sector, and private sector.
Major Public Sector Undertakings (PSUs) involved
in the generation of electricity include National Thermal
Power Corporation (NTPC) Ltd., Nuclear Power Corporation
of India (NPCIL), and National Hydroelectric Power
Corporation (NHPC) Ltd. Besides PSUs, several state-level
corporations such as Jharkhand State Electricity Board
(JSEB), Maharashtra State Electricity Board (MSEB),
Kerala State Electricity Board (KSEB), and Gujarat State
Electricity Corporation (GSEC) Ltd are also involved in the
generation and intra-state distribution of electricity.
Other than PSUs and state-level corporations, private
sector enterprises also play a major role in generation,
transmission, and distribution. About 61,409.24 MW of
total installed capacity is generated by private sector.
India is the sixth largest in terms of power generation.
About 65 per cent of the electricity consumed in India is
generated by thermal power plants, 22 per cent by hydroe-
lectric power plants, 3 per cent by nuclear power plants,
and the rest 10 per cent is generated by other alternate
sources such as solar, wind, biomass, etc. It has been found
that about 53.7 per cent of India’s commercial energy
demand is met through the country’s vast coal reserves.
Literature Review
In constructing any project, it is very important for the
project manager to take proper decision. Mainly two
important decisions are required to be taken in project con-
struction. These are selection of good materials suppliers
and selection of good construction contractors as good sup-
pliers contribute in improving product quality, reducing
lead time, and cost, while good contractors help to gain a
competitive advantage over others by achieving milestones
Metamorphosis
of a construction project. The quality of the decision largely
depends on the selection of an appropriate technique. For
selecting an appropriate multi-criteria decision-making
(MCDM) method under a fuzzy environment, Hamed
et al.1 conducted a study to compare statistically the perfor-
mances of 10 MCDM techniques and found analytic
hierarchy process (AHP) ranking method significantly
sensitive to uncertainty levels. But the drawback of AHP
is that the process is very large, elaborate, and not easy in
computing the result.
It has been observed that under uncertain conditions,
when a decision-maker is confronted with more than one
alternative solutions in a multiple event problem, research-
ers used decision tree technique by comparing the expected
value or expected utility of the available alternatives. Hulett2
stated that the term “expected value” or “expected utility”
indicates that there are alternative outcomes that can be
described only with statements associated with probability.
The researcher also prescribed the ways to quantify uncer-
tainty. When assigning a unique probability distribution is
not possible, a prior (posterior) over the possible distribu-
tions can be assessed by the decision-maker and Monte
Carlo simulation can be used to quantify uncertainty as also
to obtain the expected utilities.3
Researchers also used data envelopment analysis (DEA)
for conducting a performance analysis. In the supplier/
contractor selection process, a little attention has been paid
to dual-role factors by the researchers. Jingjing et al.4 pro-
posed a two-step approach to select suppliers using dual-role
factors. The authors conducted supplier selection in a com-
petitive environment using combination of DEA and game
theory and demonstrated successfully the application of the
procedure to a data set of 18 suppliers.
Often, the decision-makers are uncertain about one or
more probabilities of interest while selecting the preferred
course of action. The researchers from their experimental
findings ascertained that the uncertainty (ambiguity) might
affect decision-maker’s preferences. As a result, Emanuele
et al.3 argued that the decision-makers might wish to
incorporate ambiguity aversion in the analysis. The work
of Howard5 (1996) established a systematic sequence for
the solution of decision analysis problems.6–8 Dillon et al.9
stated that a key step in establishing the sequence is the
development of a quantitative model.
In project management, the project completion time
depends on many factors, but mainly on selection of good
materials suppliers and good construction contractors. Once
a contract is awarded to a supplier or contractor, it becomes
difficult to cancel the contract as it takes long time to repeat
the process of awarding the contract to a new agency. This is
why for selection of suppliers/contractors, researchers sug-
gested to verify the competence of suppliers/contractors at
the time of evaluation of their offers. Russell et al.10 pointed
out that the financial capability (FC) is one of the con-
siderations of selecting a supplier/contractor and can be
Choudhury 3
judged on the basis of credit ratings, bank arrangements,
bonding capacity, and bank’s financial statement of the
supplier/contractor. Merna and Smith11 focused on three
factors which are financial stability; managerial capability;
and organizational strength, expertise, and experience of
comparable construction. The Manoliadis et al.12 men-
tioned that the qualification-based selection (QBS) may be
used for the procurement of professional services. This is a
good suggestion as there is a substantial difference between
the performance of an industrial training institute (ITI)-
qualified welder and an ordinary welder.
Severson et al.13,14 stated that the contractors’ financial
data in the form of the assets, liabilities, and stockholders’
equity portion of the contractors’ balance sheet, as well as
the contractors’ income statement are to be examined for
awarding a contract as the aforementioned documents
are indicators of contractors’ likelihood of deviating from
the contract and making a claim. The authors opined that the
trend of financial data of construction contractors are the
indicators of contractors’ sustainable capacity of financing a
contract, and this is the most important decision parameter in
awarding a contract. Saaty15 suggested to consider the fol-
lowing factors for making decision on engaging a contractor
in a project work: (a) the contractor’s permanent place of
business, (b) adequacy of plant and equipment to do the
work properly and expeditiously, (c) suitability of FC to
meet obligations required by the work, (d) appropriateness
of technical ability and experience, (e) performance of work
of the same general type and on a scale not less than 50 per
cent of the amount of the proposed contract, (f) the fre-
quency of previous failures to perform contracts properly
or fail to complete them on time, (g) the current position
of the contractor to perform the contract well, and (h) the
contractor’s relationship with subcontractors, or employees.
In this present era and under increased competition, the
construction agencies make deliberate attempt to complete
the projects in the foresighted time. The project manage-
ment is considered effective when the project is completed
without any time and cost overrun. In construction, Project
Evaluation and Review Technique (PERT) and Critical Path
Method (CPM) are regarded as two contemporary planning
and scheduling techniques. Mazlum et al.16 applied fuzzy
PERT and fuzzy CPM in fuzzy project management of an
online internet branch. The authors expressed that these
techniques can be applied in the programming of large-scale
projects as well. These two techniques provide great benefit
to the decision-makers as these are easy to apply.
Remon17 argued that PERT is the most essential in con-
struction projects as the activities in a project have optimis-
tic, most likely, and pessimistic durations. In his research
paper, the author focused on the probability of completion
of repetitive construction projects within the contractual
duration using Line of Balance technique. The author
mentioned about a simplified software called Repetitive
Projects Evaluation and Review Technique (RPERT)
designed by Java programming to provide information on
the expected project completion probability according to
a set of specified durations (optimistic time, most likely
time, and pessimistic time) as per each identical activity.
To estimate the probability of completing a project by a
given date, researchers used the classical PERT approach
using the path with the longest duration as the critical path.
Soroush18 studied the “most critical path” problem and for-
mulated it as an optimal path problem considering two attrib-
utes fractional objective function in a deterministic network.
The author presented an approach for the solution of optimal
path problem which also provides the solution to the most
critical path problem. Soroush18 with illustrative examples
and computed results argued that the proposed algorithm
provides much accurate estimates for the probabilities of
completion time than those of the classical approach.
Scope and Objective of the
Research Work
This study considered the construction of 500 MW capa-
city of power plants by NTPC with following research
objectives:
1. To select most economic contractor backed up with
quality workmanship.
2. To find out the standard critical path for construc-
tion of thermal power plant.
3. To identify the critical activities for the construction
of thermal power plant.
The entire data used for conducting this study was collected
from NTPC.
Research Methodology
The thermal power project construction work proceeds
through uncertain conditions. For constructing a thermal
power plant, it is required for the client to select a suitable
contractor from available alternatives in an uncertain condi-
tion. Sharma19 stated that the decision tree is a technique that
can be used for taking a decision in an uncertain condition.
Podgorelec et al.20 found decision tree as a reliable and
effective technique in decision-making with the application
of gathered information. The selection of contractor on the
basis of probability of their performance comes within the
purview of decision under risk.21,22 Therefore, on the basis
of recommendations of researchers, the decision tree has
been used as a methodology for the selection of contractor.
The decision tree has been constructed considering three
decision branches which indicate three alternative courses of
actions. These decision branches, originated from decision
node, represent three contractors out of which one is to be
selected. The first branch terminates at the first event node
where from five chance branches, called state of nature,
have emanated. These five branches represent the five states
4
of nature: (a) similar work experience of the contractor
(SWEC), (b) manpower resource of the contractor (MRC),
(c) equipment and machinery resource of the contractor
(EMRC), (d) financial capability (FC), and (e) feedback
from past client (FPC). Each of these five states of nature
branches terminated at second event node where from two
branches originated and ultimately terminated at the last
event node. Out of these two branches, one was represented
by fair chance of completing the project in time and the other
was represented by chance of project not completing in time.
The probability of completing in time and the probability of
not completing in time were decided in consensus by project
management executives of NTPC. At the last node of the
decision tree, the pay-offs, that is, the prices quoted by the
contractor were considered for decision-making. The
expected monetary value of each alternative at the last but
one node of the decision tree was computed and the
minimum value pertaining to the course of action (alterna-
tive) has been selected as most preferred contractor for
awarding the contract.
The construction of thermal power project includes large
number of interrelated activities (or tasks) which are required
to be completed in a specified sequence and time. The PERT
developed by a research team in 1956–1958 for planning
and scheduling the activities for completing the nuclear
submarine missile project involving thousands of activities
was found to be the most useful by researchers for projects
having element of uncertainty in estimating duration of
project, critical areas, and critical path of a project.19 In view
of this, the PERT has been used for identification of critical
activities and estimation of critical path by developing a
network which is the graphical representation of logical
sequence of various activities to be performed for comple-
tion of thermal power plant. A case study was conducted in
NTPC Contract Services at Noida. The data were collected
from project task forces of NTPC Korba, NTPC Talcher,
NTPC Rihand, NTPC Sipat, and NTPC Simhadri for
estimating and standardizing the critical path.
Selection of Most Economic and
Quality Contractor
For the construction of thermal power plant, the following
main contract packages are usually prepared by NTPC:
1. Main plant
2. Coal handling plant
3. Ash handling plant
4. Water treatment plant
5. Boiler plant
6. Turbo-generator plant
7. Fuel oil handling plant
8. Utility services
The five important factors such as (a) similar work experi-
ence (SWE) of the company, (b) manpower resource (MR),
Metamorphosis
(c) equipment and machinery resource (EMR), (d) financial
capability (FC), and (e) past performance have been identi-
fied by researchers10–15 to judge the quality, competence, and
suitability of the contractor before selecting and awarding
the contract.
For awarding a contract for supply, fabrication, and
installation of utility piping, a real-life situation was con-
sidered and a case study was conducted at NTPC Contract
Services, Noida.
The decision tree has been constructed considering
three decision branches which indicate three alternative
courses of actions. These decision branches originated
from decision node represent three contractors out of which
one is to be selected. The first branch terminates at the first
event node where from five chance branches, called state
of nature, have emanated. These five branches represent
the five states of nature: (a) SWEC, (b) MRC, (c) EMRC,
(d) FC, and (e) FPC. Each of these five states of nature
branches terminated at second event node. From the second
event node, two branches originated: (a) pay-off without
any liquidated damage and (b) pay-off after liquidated
damage as per contract agreement. At the last node of the
decision tree, the pay-offs, that is, the prices quoted by
the contractor, have been proportioned for each of five
factors for decision-making. The summation of the product
of probability assigned to each state of nature (decided in
consensus with NTPC project site management) and the
pay-off (the amount quoted by the individual contractor
for executing the contract) became the expected pay-off at
the last but one node of the decision tree. Applying the
backward induction and same methodology as mentioned
above, the resultant pay-off at each of the first chance node
has been computed which is expected monetary value of
the contract and the minimum value pertaining to the
course of action (alternative) has been selected as most
preferred contractor for awarding the contract.
(a) The Decision Table: Based on the above considera-
tions and the data collected from NTPC, the deci-
sion tables (Tables 1–3) have been developed and
are shown in the following.
(b) Construction of Decision Tree: Considering all the
details given in Tables 1–3, the decision trees have
been constructed and are shown in Figures 1–3. The
probability of project completion in time is denoted
by PPCT and the probability of not completion in
time is denoted by PNCT.
(c) Evaluation of Alternatives: The three alternatives
have been evaluated by computing the expected
monetary value of the proposals using the decision
trees as shown in Figures 1–3.
For Contractor 1, the expected monetary value of the proposal
= [(92 × 0.6) + (87.4 × 0.4)] + [(69 × 0.6) + (65.55 × 0.4)] +
[(34.5 × 0.3) + (32.78 × 0.7)] + [(23 × 0.6) + (21.85 × 0.4)] +
[(11.5 × 0.3) + (10.93 × 0.7)]
= `187.72
Choudhury 5

Table 1.  Decision Table for First Alternative: Contractor 1

Pay-off
Contra State of Contractor’s Loading
ctor’s Nature Rating against Pay-off
Quoted Considered Against Each Each state of Estimated Pay-off
Price for Decision- State of Probability of Nature (In Against Each (` in Lakhs) Without and
(` in Lakhs) making Nature completion Percentage) (` in Lakhs) With Liquidated Damage
230 SWE Very good 1. P = 0.6 for fair chance 40 `92 1. `92 without LD when
of completion in time P = 0.6
2. P = 0.4 2. `87.40 with LD
for chance of not when P = 0.4
completing in time
230 FC Very good 1. P = 0.6 for fair chance 30 `69 1. `69 without LD when
of completion in time P = 0.6
2. P = 0.4 2. `65.55 with LD
for chance of not when P = 0.4
completion in time
230 EMR Good 1. P = 0.3 for average 15 `34.5 `34.5
chance of completion in without LD when P = 0.3
time
2. P = 0.7 2. `32.78 with LD when
for chance of not P = 0.7
completion in time

230 MR Very good 1. P = 0.6 10 `23 1. `23

for fair chance of without LD when P = 0.6
completion in time
2. P = 0.4 2. `21.85 with LD when
for chance of not P = 0.4
completion in time
230 FPC Good 1. P = 0.3 for average 5 `11.5 1. `11.5
chance of completion in without LD when P = 0.3
time
2. P = 0.7 for chance of 2. `10.93 with LD
not completion in time when P = 0.7
Source: The Author, using the data collected from project sites of NTPC (National Thermal Power Corporation).

Table 2. Decision Table for Second Alternative: Contractor 2

Pay-off
State of Pay-off Estimated
Nature Loading Against Each
Contractor’s Considered Contractor’s Against State of Pay-off
Quoted Price for Decision- Rating Probability of Each (In Nature (` in Lakhs) Without or
(` in Lakhs) making Against Each Completion Percentage) (` in Lakhs) With Liquidated Damage
242 SWE Very good 1. P = 0.6 for fair chance 40 `96.8 1. `96.8 without LD
of completion in time when P = 0.6
2. P = 0.4
for chance of not 2. `91.96 with LD
completion in time when P = 0.4
242 FC Good 1. P = 0.3 for average 30 `72.6 1. `72.6 without LD
chance of completion in when P = 0.3
time
2. P = 0.7 2. `68.97 with LD
for chance of not when P = 0.7
completion in time
(Table 2 continued)
6 Metamorphosis

(Table 2 continued)

Pay-off
State of Pay-off Estimated
Nature Loading Against Each
Contractor’s Considered Contractor’s Against State of Pay-off
Quoted Price for Decision- Rating Probability of Each (In Nature (` in Lakhs) Without or
(` in Lakhs) making Against Each Completion Percentage) (` in Lakhs) With Liquidated Damage
242 EMR Good 1. P = 0.3 for average 15 `36.3 1. `36.3
chance of completion in without LD when P = 0.3
time
2. P = 0.7 2. `34.77 with LD when
for chance of not P = 0.7
completion in time
242 MR Good 1. P = 0.3 10 `24.2 1. `24.2
for average chance of without LD when P = 0.3
completion in time
2. P = 0.7 2. `22.99 with LD when
for chance of not P = 0.7
completion in time
242 FPC Average 1. P = 0.1 for less chance  5 `12.1 1. `12.1
of completion in time without LD when P = 0.1
2. P = 0.9 for chance of 2. `10.89 with LD
not completion in time when P = 0.9
Source: The Author, using the data collected from project sites of NTPC (National Thermal Power Corporation).

Table 3.  Decision Table for Third Alternative: Contractor 3

Pay-off Loading
State of Nature Against Pay-off
Contractor’s Considered Contractor’s Each State of Estimated Pay-off
Quoted Price for Decision- Rating Against Probability of Nature (In Against Each (` in Lakhs) Without or
(` in Lakhs) making Each Completion Percentage) (` in Lakhs) With Liquidated Damage
237 SWE Good 1. P = 0.3 for average chance 40 `94.8 1. `94.8 without LD
of completion in time when P = 0.3
2. P = 0.7 for chance of not 2. `90.06 with LD
completion in time when P = 0.7
237 FC Good 1. P = 0.3 for average chance 30 `71.1 1. `71.1 without LD
of completion in time when P = 0.3
2. P = 0.7 for chance of not 2. `67.55 with LD
completion in time when P = 0.7
237 EMR Very good 1. P = 0.6 for fair chance of 15 `36.3 1. `36.3
completion in time without LD when P = 0.6
2. P = 0.4 for chance of not 2. `34.77 with LD when
completion in time P = 0.4
237 MR Very good 1. P = 0.6 for fair chance of 10 `24.2 1. `24.2
completion in time without LD when
P = 0.6
2. P = 0.4 for chance of not
completion in time 2. `22.99 with LD when
P = 0.4
237 FPC Good 1. P = 0.3 for average chance  5 `12.1 1. `12.1
of completion in time without LD when P = 0.3
2. P = 0.7 for chance of not 2. `10.89 with LD
completion in time when P = 0.7
Source: The Author, using the data collected from project sites of NTPC (National Thermal Power Corporation).
Choudhury 7
Figure 1.  Decision Tree (Part 1) for Contractor 1
Source: The Author, applying the fundamental principles of “Operations Research”.
Similarly, for Contractor 2, the expected monetary value
of the proposal = `234.45
Similarly, for Contractor 3, the expected monetary value
of the proposal = `230.35
Based on the evaluation done above, the contract is to
be awarded to Contractor 1.
Estimation of Critical Path
First, the project network has been constructed which is
shown in Figures 4–6. The critical path was computed
based on the data collected from contracts department of
NTPC, Noida. For finding out the critical path, the most
likely time (tm), the optimistic time (to), and the pessimistic
time (tP) were computed with following considerations
using the collected set of data pertaining to NTPC Korba,
NTPC Talcher, NTPC Rihand, NTPC Sipat, and NTPC
Simhadri:
1. Most likely time (tm): The mean of the time taken to
complete each activity of the collected five data
series was considered.
2. Optimistic time (to) : The least time for each activity
from collected five data series was considered.
3. Pessimistic time (tP) : The highest time for each activ-
ity from collected five data series was considered.
8 Metamorphosis

Figure 2.  Decision Tree (Part 2) for Contractor 2

Source: The Author, applying the fundamental principles of “Operations Research”.
Choudhury 9

Figure 3.  Decision Tree (Part 3) for Contractor 3

Source: The Author, applying the fundamental principles of “Operations Research”.
10 Metamorphosis

Figure 4.  Project Network (Part 1) for Construction of Thermal Power Plant
Source: The Author, applying the fundamental principles of “Operations Research”.
Choudhury 11

Figure 5.  Project Network (Part 2) for Construction of Thermal Power Plant
Source: The Author, applying the fundamental principles of “Operations Research”.
12
Figure 6.  Project Network (Part 3) for Construction of Thermal Power Plant
The computed values of tm, to, and tp are furnished in Table 4.
Using the expected completion time as computed and
furnished in Table 4, the earliest starting time, latest starting
time, and slack for each activity have been computed and
presented in Table 5. From Figure 5 and the slack computed
in Table 5, it is evident that the critical path is 1–8–9–10–11–
12–13–14–15–45 and the length of the critical path is 58.89
months.
Discussion of the Result
The decision tree has been used in this article for finding
out the most suitable contractor. The study was conducted
Metamorphosis
in NTPC, Noida where from all the relevant data pertaining
to piping contract of NTPC, Korba and other required
project construction data were collected. The piping work
was awarded to Stewarts and Lloyds of India Ltd, Kolkata
by NTPC. It has been found that NTPC, as per their
standard practice, asked the contractors to submit along
with their bid (a) the solvency certificate issued by their
banker to verify the contractor’s FC, (b) the completion
certificate issued by the client for executing the contracts
in last three years for assessing the performance and
verifying if the contractors do have similar nature of work
experience, and (c) the list of available construction
equipment and manpower available with them. Based on
Choudhury 13

Table 4.  Completion Time of Project Activities for Construction of a Thermal Power Plant (500 MW Capacity)

Expected
Most Likely Optimistic Pessimistic Completion
Project Time (tm) Time (to) Time (tP) Time (te)
Activities Name of Project Activities in Months in Months in Months in Months
Civil Works
A1 Piling and foundation for chimney 4.3 3.8 5.2 4.37
A2 Construction of super structure 7.3 6.8 8.5 7.42
B1 Levelling of boiler plant area 5.2 4.3 9 5.68
B2 Piling and foundation of boiler 14.3 13.6 15.5 14.38
C1 Levelling of Mill Bunker base area 10.3 9.8 12.3 10.55
C2 Piling and foundation of Mill Bunker 11.3 10.7 12.4 11.38
C3 Bunker base structural erection 5.5 4.5 6.8 5.55
C4 Roof clad floor 5.2 4.7 7.3 5.47
C5 Precast slab 3.3 2.5 4.9 3.43
C6 Finishing touch 2.3 1.6 3.8 2.43
D1 Levelling of turbo-generator main plant area 12.3 11 14 12.37
D2 Piling and foundation of turbo-generator plant 15.3 13.9 17 15.35
E1 Piling and foundation of turbo-generator 5.3 3.8 5.8 5.13
E2 Structural erection of turbo-generator plant 5 4.6 6.3 5.15
E3 Precast slab for turbo-generator control bay 4 3.7 5.7 4.90
E4 Roof clad floor of turbo-generator control bay 4.2 3.5 6.5 4.47
E5 Balance finish 2.3 1 3 2.2
E6 Underground trench for turbo-generator bay 8.3 6.8 8.9 8.15
F1 Construction of unit pump house 21.4 20.5 21.5 21.27
F2 Construction of fire-fighting building 17.5 17 18.3 17.55
F3 Construction of switch gear building 12 10.6 13.4 12
F4 Laying of intake and discharge ducts 18.8 17.6 20.1 18.82
G1 Construction of intake pump house 20 19.5 22.5 20.33
G2 Pedestals for laying pipelines 14.2 13.5 16.1 14.40
H1 Construction of diesel generator set building 22 20.9 23.8 22.12
H2 Construction of DM plant building 26 25.1 27.6 26.12
H3 Construction of cooling tower and SG room 22 20.7 24 22.12
H4 Construction of cooling towers 26 25.5 27.3 26.13
I1 Construction of coal handling plant 15 14.3 16.8 15.18
I2 Construction of balance portion of coal handling plant 13.3 12.7 15.3 13.53
J1 Construction of ash pump house 24.2 23.1 24.8 24.12
J2 Construction of fuel oil plant 24.1 22.8 25.5 24.12
J3 Construction of hydrogen plant 26.3 25 28 26.37
J4 Construction of compressor house 24.6 23.1 26 24.58
J5 Construction of steel trestles for pipes and cable support 24.6 23.5 25.9 24.63
J6 Construction of water treatment plant 17.6 16.6 18.4 17.57
Mechanical Works
B1 High pressure piping 9.5 8.3 9.8 9.35
C1/ Erection of boiler 22 20.6 23.8 22.06
C2// Erection of milling plant 10.3 9.4 10.8 10.23
D1/ Erection of overhead cranes 2.6 1.5 3.5 2.57
D2/ Erection of condenser 3.5 2 4.8 3.33
D3/ Turbo-generator box up 11.2 9.3 13 11.18
D4/ Flushing of pipelines 2.5 1.6 3.5 2.52
E1/ Cooling tower erection 4.6 3.1 5.7 4.53
G1/ Erection of coal handling plant equipment (Bay 1) 13.5 12.5 15.4 13.65
G2/ Erection of coal handling plant equipment (Bay 2) 2.7 1.7 3 2.58
F2// Installation of fire-fighting system 5.3 4.1 6.7 5.33
F1// Erection of utility piping system 6 5.5 7.5 6.16
E1// Testing of cooling tower system 2.5 1.5 4 2.58
G1// Installation of make-up pumps 6.6 5.5 7.9 6.63
J1/ Installation of equipment and piping system in ash handling 5.4 4 6.3 5.32
plant
J2/ Installation of equipment of fuel oil system 5.7 4 7.4 5.70
(Table 4 continued)
14 Metamorphosis

(Table 4 continued)

Expected
Most Likely Optimistic Pessimistic Completion
Project Time (tm) Time (to) Time (tP) Time (te)
Activities Name of Project Activities in Months in Months in Months in Months
J3/ Installation of equipment of hydrogen plant 3.5 2 5 3.5
J4/ Installation of compressors in compressor house
J6/ Installation of equipment in water treatment plant 7.5 6 8 7.33
H1// Station piping 19 16.3 19.3 18.6
W1/ Fabrication and erection of fuel oil tanks 13 10.5 15 12.92
Electrical Works
K Installation of generators and transformers 5 4.3 6 5.05
L Installation of HT switch gear 5.5 5 6.7 5.05
M Installation of LT switch gear 5.5 5 6.8 5.63
N Installation of cable tray and high tension cables 12 11 13.6 12.10
O Installation of cable tray and low tension cables 12 11 13.6 12.10
Source: The Author, using the data collected from project sites of NTPC (National Thermal Power Corporation).

Table 5.  Computation of Critical Path

Earliest Starting Latest Starting Slack Project Earliest Starting Latest Starting Slack
Project Activities Time (ES) Time (LS) (LS–ES) Activities Time (ES) Time (LS) (LS–ES)
C1(1–2) 10.55 20 9.45 H3 (1–24) 22.12 58.49 36.37
C2(2–3) 21.93 31.38 9.45 B1(1–25) 5.68 22.05 16.37
C3(3–4) 27.48 36.93 9.45 B2(25–26) 20.06 36.43 16.37
C4(4–5) 30.91 40.36 9.45 B1/(1–27) 9.35 58.49 49.14
C5(5–6) 36.38 45.83 9.45 A1(1–28) 4.37 38.15 33.78
C6(6–7) 38.81 48.26 9.45 A2(28–29) 11.79 45.57 33.78
C2//(7–45) 38.81 49.04 10.23 G1(1–30) 20.33 51.86 31.53
D1(1–8) 12.37 12.37 0 G2(1–31) 14.40 15.26 0.86
D2(8–9) 27.32 27.32 0 J5(1–32) 39.03 39.89 0.86
E2(9–11) 29.22 32.25 3.03 I1(1–33) 15.18 42.26 27.08
E5(10–12) 38.89 38.89 0 G1/(33–34) 28.83 55.91 27.08
D1/(12–13) 41.46 41.46 0 J1(1–35) 24.12 53.17 29.05
D2/(13–14) 44.79 44.79 0 J2(1–36) 24.12 52.79 28.67
D3/(14–15) 55.97 55.79 0 J3(1–37) 26.37 54.99 28.62
E1(9–16) 35.47 38.89 3.42 J4(1–38) 24.58 54.91 30.33
E3(9–10) 32.22 32.22 0 E4(10–11) 36.69 36.69 0
F1(1–17) 21.27 52.33 31.06 J6(1–39) 17.57 51.16 33.59
F2(1–18) 17.55 53.16 35.61 K(1–40) 5.50 58.49 52.99
F3(1–19) 12 58.49 46.49 L(1–41) 5.05 58.49 53.44
F4(1–20) 30.66 55.91 25.25 M(1–42) 5.63 58.49 52.86
H4(1–21) 26.13 51.38 25.25 N(1–43) 12.10 58.49 46.39
H1(1–22) 22.12 58.49 36.37 O(1–44) 11.20 58.49 47.29
H2(1–23) 26.12 58.49 32.37
Source: The Author, using the data collected from project sites of NTPC (National Thermal Power Corporation).

the above information and the bid value of lowest bidder,
that is, `230 lacs, NTPC awarded the contract to Stewarts
and Lloyds of India Ltd. The comparison between the
prices quoted by the first lowest and second lowest bidders
shows the difference of `7 lakhs only. Whereas the difference
between expected monetary value of the first and second
lowest bidders, as evaluated above using decision tree,
comes out to be `43.03 lakhs which is quite substantial. The
PSU companies sometimes award the contract to the second
lowest bidder whom they have much trust than the first
lowest bidder when the second lowest bidder agrees to
match the prices quoted by the first lowest bidder. The
evaluation done by using decision tree gives the impression
that awarding of contract to the second lowest bidder just
by considering the quoted prices is not justified, if the
impact of factors such as SWEC, MRC, EMRC, FC, and
FPC and probability of completing the work in time are not
considered. It is recommended that the expected monitory
Choudhury 15
value of the first and second lowest bidders based on the
above-mentioned factors should be considered in the
evaluation process.
For standardizing the critical path for construction of a
thermal power plant, the construction data of five construc-
tion projects such as NTPC Korba, NTPC Talcher, NTPC
Rihand, NTPC Sipat, and NTPC Simhadri were consid-
ered. The project completion time get delayed mainly for
wrong selection of contractor, late release of construction
drawings to contractors, late release of work front to con-
tractor, and late release of payment to the contractor.
In case of the above-mentioned projects, the best contrac-
tor was selected by NTPC taking into consideration their
resourcefulness and past performance. The release of con-
struction drawings and payments to the contractor, accord-
ing to NTPC, was in time. But despite all these standard
practices, the completion time of all the activities differed
from project to project and this is quite obvious. Therefore,
to standardize the critical path, the average time of a par-
ticular activity of all the five projects was considered as
most likely time, the highest observed time of an activity
out of all the five projects was considered as most pessi-
mistic time, and the lowest observed time of an activity out
of all the five projects was considered as most optimistic
time. Thus, the estimated longest time of 58.89 months has
been accepted as the standard critical path for constructing
a thermal power plant.
Conclusion
In this study, the operations research tools have been used
effectively to select the best alternative in decision-making
process. By and large, in all PSUs, the decision for selecting
construction contractor is taken on the basis of prices quoted
by the contractors against a particular tender floated by
the organization. It has been explained above under dis-
cussion of result that there may be substantial difference
between the quoted price differential and the differential
of expected monetary value of the first lowest and second
lowest bidders. Based on this fact, the decision tree approach
was found justifiable to select appropriate contractor where
important factors such as SWEC, MRC, EMRC, FC, and
FPC were considered along with probability of timely
completion of the job by contractors. This consideration
provides good impetus on the selection process leading to
more accurate result.
For computing critical path, the construction data from
NTPC Korba, NTPC Talcher, NTPC Rihand, NTPC Sipat,
and NTPC Simhadri were considered. These power plants
were constructed by reputed and resourceful contractors
of India. For standardizing the critical path, the most likely
time, optimistic time, and pessimistic time were found
out from the construction data of the above-mentioned
five power plants. Since, the completion data of different
activities of five projects at different geographical locations
with different climates, different site conditions, and diff-
erent conglomerate of workers were used, so the critical
path estimated was accepted as the standard critical path.
The present study reveals that the length of the standard
critical path of a thermal power plant of 500 MW capacity
was found to be 58.89 months. The study also indicates
that the activities such as levelling of turbo-generator main
plant area, piling and foundation of turbo-generator plant,
precast slab for turbo-generator control bay, roof clad floor
of turbo-generator control bay, balance civil work of turbo-
generator plant, erection and commissioning of overhead
cranes, erection of condenser, turbo-generator box up, and
flushing of entire piping system lie on the critical path,
and these activities will have to be taken care of for the
construction of power plant to avoid any time and cost
overrun.
The outcome of this study will help project managers to
make use of decision tree to select good contractors for the
construction of thermal power plant. The present study will
also assist project managers to make use of PERT network
for the execution of the project. The length of the critical
path provides information on the longest time that is required
to complete a thermal power plant of 500 MW capacity.
The present study did not include the comparative anal-
ysis of contractors of the above-mentioned projects with
respect to equipment and manpower resources deployed
by them vis-à-vis their time of completion of each activity
of those projects. This exercise is left to be done by future
researchers to select more realistic time for completion of
activities. Moreover, further study may be conducted to
find out how the length of critical path may be minimized
using technology.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect
to the research, authorship and/or publication of this article.
Funding
The author received no financial support for the research,
authorship and/or publication of this article.
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Computation of Critical Path
Using the expected completion time as computed and
furnished in Table 4, the earliest starting time, latest starting
time and slack for each activity have been computed and
presented in Table 5. From Figure 5 and the slack computed
in Table 5, it is evident that the critical path is 1–8–9–10–
11–12–13–14–15–45 and the length of the critical path is
58.89 months. The critical path is shown in Figure 5 by
“double arrow”.