MBA - Main - Case study

The work was done in the twentieth century to attempt to propel the finish of the Alice to Darwin rail connect. From the improvements of the most recent two years the connection is currently a lot nearer to the real world. This BOOT (Build, Own, Operate and Transfer) undertaking to claim, work and keep up the rail connect has been granted to the Asia Pacific Transport Consortium. The element doing the plan and development of the line is AD track, including Brown and Root, Barclay Mowlem, John Holland, and McMahons. The financing bundle is at present being settled, after which the development agreement will start. Financing exchanges are foreseen to be finished during the second quarter of 2000. Presently, for the Alice Springs to Darwin task to be monetarily reasonable it is basic the development stage is inside spending plan and continues all the way in a convenient way. The task marketable strategy expect that the rail connect is fit for the anticipated introductory traffic volume and can extend to suit the foreseen future increments in income traffic request.

Nature of the project is an external project, which is meant to ensure the connection of the mainland states so that the van stretches easily to the North of Australia. Therefore, there was a creation of a land bridge that would reach Asia with ease.

The Alice-Darwin Railway is a project that incorporates a 1420 kilometer, and it was sponsored by the Commonwealth. It is an external project which involved various sponsors like the Commonwealth and the Northern Territory governments (Lees, 2005). Many stakeholders were consulted in the construction of the railway like the John Holland Group and even McMahon Holdings, which renders the project an external entity. However, the project was meant to ensure the connection of the mainland states sp that the van stretches easily to the North of Australia. Therefore, there was a creation of a land bridge that would reach Asia with ease. Moreover, the project was delivered before the scheduled timeline by the Asia Pacific Transport, a consortium led by Kellogg Brown & Root Pty Ltd (KBR).

Moreover, the company ensured that the completion of the project also went within the outlined budget. Therefore, there was the anticipated safety, and the industrial relations were enhanced. The project incurred the country billions of money but it was funded by investors from within and without (Lees, 2005). The railway line touches the two countries; Asia and Australia and negotiations on the way forward towards the project were discussed amicably. Therefore, it is an external project serving various states as well as purposes. The execution of the project was made successful by incorporating various stakeholders to contribute willingly.

The seven major stakeholders are Australasia Railway Corporation, Asia Pacific transport, Kellogg Brown & Root Pty Ltd (KBR), John Holland Group, Trace, Barclay Mowlem, McMahon.

The project had several stakeholders starting with John Holland Group for planning. Another stakeholder was the Barclay Mowlem, who was called for the formation of the Asia Pacific Transport Consortium. Moreover, there was McMahon Holdings, who assisted in better allocations of resources for the project (Trace, 2018). The Australian Railway Group was also included for the contribution of ideas concerning the way the railway will be built. The Asia Pacific Transporters were incorporated to demonstrate their expertise as far as the project was related.

Another stakeholder is the Australasia Railway Corporation, which was mandated to offer full support in the construction and funding of the project. Kellogg Brown & Root Pty Ltd (KBR) was the primary stakeholder behind the development, ensuring everything proceeded as planned. The CEOs of the various corporations formed the Joint Venture Management Committee, which was tasked with ensuring fast and efficient decision making (Trace, 2018). The stakeholders were called upon to offer their support willingly, whereby the KBR was involved in the project management and design and environmental management. Moreover, Barclay Mowlem took charge of the trackwork in the north as well as ensures the efficient completion of the major bridges. McMahon volunteered to stand in for the earthworks and the other minor bridges. Lastly, John Holland supported the trackwork in the south.

Main Point: The expectations of the stakeholders for this railway project is to select the right expertise with the proposed plan and design along with taking charge after completion of the project.

Both the Australasia Railway Corporation and the Asia Pacific transport stakeholders were expected to agree to provide the required design of the railway. Moreover, the stakeholders were supposed to ensure that the railway was constructed as per the proposed plan and then take charge of the railway operations upon completion. However, the Australasia Railway Corporation was executed to offer to fund the execution of the project; hence, it gave $480 million, whereby the consortium provided the remaining money for the construction. KBR, the project director, was expected to ensure the selection of the corporations with the desired expertise for the successful completion of the project. KBR commenced with bidding and then got involved in the negotiations and ensured that the budgeted financial support was present. John Holland Holdings were the design and Construction manager meant for ensuring the best plan for the railway line was provided. Barclay Mowlem was required to be the commercial manager to ensure all the business activities were conducted, MacMahon were expected to be in charge of the construction hence ensuring that all the required materials were available.

The most Important resources used in the project are steep rails, sleepers, sleeper clips, trackwork, goods and services needed for temporary facilities, drilling and bores meant for the supplication of water, consumables, fuel and rolling stock.

There was a need for high-cost items, which were regarded as the main task for the procurement desk. They were approximated to be about 700 packages, including great details that counted as single entities. For instance, there were steep rails, sleepers, sleeper clips, and trackwork. The second category of resources was categorized as the goods and services needed for temporary facilities. Therefore, into his group, there were resources like the ones used for drilling and bores meant for the supplication of water (Trace, 2018). Thus, water was required in large amounts for daily contractions as well as for the treatment of the sewerage. However, the consortium made use of the existing structures like hotels for accommodation purposes.

The next category of resources incorporated the consumables, which were also regarded as the expandable items. Therefore, they included the spare parts meant for use by the mobile plant as well as the fixed plan. There were also things to do with fuel, fencing of the structure, and even signage (Bishop, 2017). Thus, EDI was expected to roll out the stock supplies the way the Bluebird rail operations was in charge of the supplication and maintenance of the five crew cars.

Since this is a railway project, there are always been alternate mode of transportation before the invention of the railways. Hence the three alternative approaches to this project are

1. Airways, the modern system of transportation.

2. Water, the oldest system of transportation.

3. Road, the alternative which is already functional.

The above three are the close alternatives, but as it is indicated, there are cons with these approaches the Airways being expensive & not affordable to everyone. Water transportation which may not be regular & dependent on the service provider, road transportation which has the increased transit times given with increase in risk of accidents.

The government ordered to do an overall comparative analysis of the project taking in considerations of the road as an alternative. The difference between the road option & rail option are analyzed and explained below.

Operational costs in both Truck & Rail is estimated to reduce over the period of 30 years based on the external factors such as

1. Growth in the economy.

2. Increased travel & invention improvements in the rail engines.

3. Increased in the research & development, contributing to better maintenance of the Vehicles, mainly the truck carrying the heavy load – 6 – axle, B-double, double road train.

The Government ordered to do a cost analysis of selective alternative follows as below:

1. The existing line plays a key role in unleashing the key mineral reserves which are not exposed to the mining activities in the Northern territory.

2. The nearest Port that is connected to the rail gives an positive boost to the Australian economy to enter & compete with the Global Era & the local economies benefit highly from that.

3. Tourism is also expected to grow with the help of the project, Darwin becomes the hotspot for tourists & makes it easier to travel within the country.

4. Rail is better & comfortable mode of transportation; it also reduces the risk of accidents & there by reducing the casualties year by year due to the road accidents.

When we look at the comparative price & cost analysis this project on a while looks an awfully expensive one, as each components or stages are completed & delivered the returns are also expected to flow in back to the government. Once the break-even point is met, except the operational & maintenance cost, all the other money will be gained back to the government.

The cost analysis of 50 year evaluation at the discount rate of 5% are explained below. Note that these values are based on the present values

Project cost beefing up the expenses of the whole project to $926 Million (PV), the benefits of the project adds up to $811 Million, making the rate of return of 9.2%. Reducing the budget of building & maintaining the road infrastructure costs as it is getting highly possible to move the freights from trucks to rail is going to be a major benefit.

The NPV of the project is ranging between $310 million to $1714 million with benefit cost ratio(B/C) ranging from 1.35 to 2.78. The internal rate of return (IRR) ranges between 7.5% to 11% indicates that considering all the scenarios there is going to be a positive NPV at the discount rate of 5%.

Figure 2Network Diagram for the project

Figure 1Gantt chart

During the period from in June 1999 Asia pacific Transport received tender status and in April 2001 Financial closure is completed and commenced construction.

It is important for any project to meet & be in the timeline of a project, but the most important part of it is to be in the budget and based on reading the journal, this rail way project was able to attain both, this matters the most to be a successful.

Based on the project key stages, this Alison Darwin railways project has been able to meet key stages on time due to which the cost of the project stayed in the initial budget according to the plan. The track laying component of the project is completed as per the plan, end of June 2003, the company was able to meet its financial commitment. Below are the cost breakdown on the high level

The high-level cost breaks up is based on the number from the project the $ value which is spent on each of the items. Most of the cost is associated with Construction & track works as this is an Engineering project, most of the cost is deviated towards buying the components & engineering equipment which is as expected. The next high costs seen is Subcontracts, this is expected given the vast project to complete the small jobs which are setup to completed by creating the subcontracts, it also includes the subcontractor pay as well. 120 Million on the Design, they are the most important piece of this project. Since the team was able to get the designs correct, rest of the project had to worry less. Consumables & purchasing is mandatory expenses to take care

Main point: Major / broad categories of risks in the project was time constraints, communication, challenging task of providing materials required for the 1420km railway line. operations went to a remote area, there was slow in the coordination of the usage of the preferred materials and personnel.

The project's execution was not smooth as there was a challenging task of providing materials required for the 1420km railway line. This because everything needed to be sourced either within or even outside and ensure that they are within the budgeted finances. Moreover, the resources necessary adequate time for purchasing and supplication, which was supposed to be done within a short period of time? The issue of communication was behind all the hurdles because there was a dire need for coordination by all the stakeholders.

Time was a significant constraint in the execution of the railway line. This is because the project experienced a delay in the process of securing high costs and other long-lead items. However, the purchase of goods agreements was made following the supplies that were made. Yet, the procurement team was already established, and this was close to a year before the achievement was done. Therefore, they were forced to ensure the establishment of an office in Darwin to try catching up with the proposed time.

Preconstruction:

· The lands required for the construction needs time and support from local government and people.

· Financial stability; uninterrupted cashflow into the project.

· Over process and utilization of resources: Over processing of existing resources to build the project, with more than what is required.

· Failures involved in subcontracting the project.

· Resources utilization failure (Steel rails and ballast)

· Environmental concerns - which raised public opposition.

Post construction: The Northwest territory region is small, but has good scope of economic growth, Additional risks that were involved in post construction include

· The Maintenance costs were high as it one of the longest railway project in southern pacific, arid landscapes and mountainous terrain of the central Australia make it extremely hard for maintenance.

· Cost effectiveness: Increasing project costs may have effects on execution of the project. The stakeholders and investors may consider continuing with the project in financial point of view.

· Australian coasts are known for severe natural calamities such as cyclone and Tsunamis, the project must consider these factors while designing the project.

· The global market impacts: Trade and Tourism growth was the objective of completing this project, but recession and financial situations around the region will affect the mode of transportation and tourism.

Effective Design of Railway Lines: High speed Rail lines require wide corridor designs than the existing conventional one. Similarly, electrification of the railway lines is required for high speed rails, which can be done near city limits and heavily populated areas but not on barren landscapes. The existing design achieves maximum speed of 115 kph, with the need to handle 250 double stacked containers, powered by 4000 horsepower. These factors call for upgrade in the existing corridor designs.

Allocation of Subcontractors: The project has been subcontracted to two companies Adrail and Freightlink pty. The advantage of having multiple contractors in a project is if one of them fails, the tasks can be transferred to the alternative. For example, Whyalla, which is sole subcontractor for rails may face with difficulties, yet the consortium took enough precautions and all the payments were made in advance reducing the financial risks in the project.

Transportation costs: Special factories were built around the project sites to reduce the transportation costs involved. Additional Ballast sites were built nearby the corridors location and a logistics center was built in Roe creek where the raw materials coming from south region are stored and transported to north location (Alice Springs- Darwin Line construction (n.d)).

Global Recovery: Revenues and Costs were calculated based on recent economic data and market forecasts. The consortium’s objective is that this project would bring new opportunities for the local population. Eastern markets being one of the worst affected in the 2001 recession has been growing steadily. This project aids in recovering job markets and bring economic stability to the local governments involved.

Main point: The project was a success because it was completed before the speculated timeline. The project was successful because there was a coordinated allocation of roles and responsibilities by the CEOs from the various corporations.

The project was a success because it was completed before the speculated timeline, which indicated that there was adequate time given for the project. Moreover, there was planning that was done before the commencement of the project; hence; it acted as a guiding map for successful completion. Moreover, I believe the project was completed successfully because there was the assembling of tea having the anticipated expertise to take care of the operations and the management of the project. Moreover, the preferred strategies were developed efficiently, and incorporation of engineering was done to ascertain the efficiently.

The project was successful because there was a coordinated allocation of roles and responsibilities by the CEOs from the various corporations. They made sure that the project was completed as a team and that unity means behind their success. This made the KBR, the corporation in charge of the execution of the project to have an easy time in the coordination of the activities. The management approach that was embraced by consortium helped in the success of the project also because there was excellent planning (Lees, 2005). Moreover, there was total commitment to innovations as well as the establishment of good relations especially with the stakeholders who did a great job.

Adrail and FreightLink ply were the two main contractors working on this project, which further assigned subcontracting to other companies such as Austrak and indigenious companies based on their technical expertise and work needed. The contractors were chosen in Asian pacific regions by the approval of stakeholders from the consortium. Over the entire 1.3 billion spent on the project, 1.07 billion were distributed to the industries along the southern and northern territory regions based on the contracts. So most of the construction works and infrastructure such as sleepers, setting up quarries, construction of railway corridors, buildings and fueling stations were outsourced.

Subcontractors such as Austrak allocated resources and built factories near tenant creek and Katherine. To enable flexibility in the construction, ballast quarries were built near rail’s corridor. Subcontracting was bound by tight schedule, where each contractor was assigned stipulated time with backup to work on any unforeseen delays and interruptions. The stringent planning on subcontracting was successful that the project was delivered by the scheduled time.

· Design of the project involving teams with technical expertise and establishing good communication flow is key factor of success in the planning stage.

· Good Planning and preparation of contingency plans if something goes wrong is important to save time during the implementation of the project. Response plans must always be part of the project charter and must be approved by control authority.

· Outsourcing and subcontracting works may allow for better use of resources, improving quality.

This paper endeavors to depict how the development of a 1,420 km long railroad line through for the most part desert conditions in a mainland is a monstrous strategic exercise and an activity in overseeing work to perform productively in exceptionally troublesome climatic conditions. Through answering the questions of the on the project, we were able to learn some of the project management techniques and try to apply in our work. The way this project was handled makes it different and meeting the timeline was the great, the real mastermind of the project Dick Lees has to be given the credit for handling such a bigger project without losing the grip of it. The outcome will be accomplished - this enormous venture will be conveyed on schedule, inside spending plan and with a great deal of fulfillment by the developers.

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and Planning D: Society and Space , 34.

Lees, D. (2005). The Alice-Darwin railway: a feat of project. Australian Journal of Civil

Engineering , 2:1, 25-36.

Trace, K. (2018). The Alice Springs-Darwin Rail Line: National Development Project or

Political Gesture? A Journal of Policy Analysis and Reform , Vol. 4, No. 4, pp. 521-528.

Lees, D. (2005). The Alice-Darwin railway: a feat of project. Australian Journal of Civil

Engineering , 2:1, 25-36