Scenario

ZYB Construction (Pvt) Ltd has planned to start a 20 story high rise apartment complex project in mid 2022. Project concept was initiated in mid 2020 and initial project proposal was finalized in Mid 2021. Project budget was Rs:4.5Bn in the preliminary report, without the cost for land, since ZYB already owned land in a high demand area in Colombo. Project was discussed with potential investors and started soon after.

Investment agreement drafted for the project by the ZYB construction with a foreign investor through a joint venture. The complex is to be completed in fully furnished modern design, aiming for foreign and high end domestic owners. Each apartment would be 30 sq.m and each floor contains four (04) apartments. Ground floor contains the entrance lobby and the maintenance & management offices. Apartment complex has an on ground swimming pool and 03 basements for parking.

Top management of the company was expecting to complete the project within 30 months, including preliminary works, investigations, completion of detailed designs and construction works.

But the National economic crisis occurred in the final quarter of year 2021 made material cost rise highly and delays in material imports. ZYB is expecting to finalize the investment agreement as soon as possible.But project budget and duration seems to be not feasible with the new economic situation.

You have been hired as the project consultant to analyze the project feasibility with the current economic situation of the country and report to the top management of the company and foreign investor party.

Constraints and opportunities

● Preliminary project report, feasibility studies and conceptual designs have been completed.

● Material importation duration extended from 03 months to 06 months from LC opening to Deliver to site due to foreign currency issue.

● Estimated breakdowns for cost and time in the preliminary project report as follows 

● Project duration is limited to 02 years and 06 months for all works. Procurement work has to be started 04 months before start construction work, but can be carried out parallel with it.

Assignment

Prepare a brief report to submit to the senior management of the company, as your opinion and view about the project, with following content

1. Introduction

2. Project Summary

a. Summary of the project

b. Assumption made for the analysis

3. Project Management

a. Develop Detailed WBS for the project at least up to 03 sub levels and estimate durations for work items of above WBS

b. Prepare network diagram for the project and use sequential numbering system for nodes

c. Explain project management constraints project manager has to face during the project execution

d. Assess new challenges emerged due to current economic situation of the country

e. Calculate the probability of completing the project within the given time frame and Justify your answer with practical reasoning

f. Propose methodologies to improve construction phase progress rate with modern construction methodologies and justify them

4. Financial Analysis

a. Develop cash flow for the project based on cost estimation details provided and work plan developed above 

b. Analyze for the present time valuation for the above cash flow

c. “What if” analysis for absent of current economic situation of the country

d. Analyze for the present time valuation for above “What if” analysis

e. Analyze the Loss/Profit of the project investment due to economic crisis

5. Conclusion

a. Explain the project feasibility in construction and financial perspectives

b. Conclusion of the analysis