Good Business Plan On Mzansi Rail Shuttle Project

Type of paper: Business Plan

Topic: Project, Infrastructure, Finance, Management, Vehicles, Transportation, Internet, Investment

Pages: 6

Words: 1650

Published: 2020/12/02

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Mzansi Rail Shuttle

Introduction
There are general aspects of project management. A project plan always includes: project goals; project deliverables (including funding, time and human capital and other resources, among others); project schedule; supporting plan (such as human resource, communications, risk management, etc). However, the exact nature of these aspects (that is, how they behave) varies from one project to another. Moreover, the fact that a strategy has worked successfully elsewhere does not mean it will do the same in all cases. In this, there is the question of context, and this brings about the complexity of a project (Butler 2008; Leijten 2009).
Context and complexity has to do with a lot of factors: and it has to do with the scope (in terms of finance, human resource, etc.) of a project and the environment -both immediate and broader market environment- in which the project occurs, including whether the same type of project has been done in an area before, so that these former projects can help inform the new one; the stakeholders involved, among other factors. All these are strategic drivers that influence the project emergence model, as well as project network (critical path), among other key aspects of project management (Butler 2008; Leijten 2009; Bal et al 2013).
The Mzansi Rail Shuttle (MRS) project is a complex project. The exorbitant sums of money already invested in it (about US$200billion) demonstrates just how big the project it. The rail will link at least 6 cities across 6 countries in the South of Africa. But this also means the project will have to deal with the unique rules and regulations that govern such projects in each of the countries involved, not forgetting the by-laws if the cities councils involved.
Against the many factors involved and the unique ways that interact, complex construction engineering projects tend to face many problems of manageability, including frequent delays and cost overruns, among other results of technical flaws which have also resulted from unexpected results. In particular, underground projects (as the MRS project may be at some points) have been found to face many manageability problems. In the end, there are many uncertainties that accompany project management. But these uncertainties arise mainly from information and knowledge asymmetry (Leijten 2009).
Therefore, the least to do is seek to minimize these uncertainties through information and knowledge gathering about the project and the area. Gathering this information and knowledge is the purpose of constancy. But most importantly, consultancy seeks helps avoid flawed interpretation of information and knowledge. This is why this paper is an important input toward the implementation and closure of this project.

Background Information: GCC, Business Context and Needs

The presence of the Cooperation for the Arab States of the Gulf (GCC) in Africa has been growing steadily for a number of years now. A study in 2011 showed that GCC’s trade share and investment in emerging markets was growing rapidly, while the trade share of the developed world- hit hard by the recession- declined. However, emerging economies are now said to have entered a slow-growth period and the economies of high-income economies starting to record positive growth. Still, with Africa now increasingly becoming a key emerging market, the GCC is increasingly interested in tapping into key industries in the continent. In this regard, the GCC countries are looking to expand their operations. The GCC’s push into the continent is broadening, both in terms of geography (that is, pursuing more trade interests with more countries) and sectors (investment in diverse industries): energy projects, diversifying investment flows and concentrated in small-medium deals (The Economist 2014). The GCC continues to look for equity and direct investment opportunities in the continent.
This planned rail shuttle will link many countries. The decision makes sense considering the importance of transportation infrastructure and business opportunities. The rail shuttle will further open up the continent to facilitate investment not more resources. The high speeds of the trains will ensure faster transportation of goods and services in the region.

Project Scope and Challenges

The project is worth billions of US dollars. AUM Ventures (a joint American and Canadian venture conglomerate) alone will invest US83 billion and the conglomerate of six Emirati Banks led by the Abu Dhabi Investment Bank (ABIB) has also adding another US$120 billion.
These big investments are justified considering the scope of the project. The two possible routes of the Rail shuttle are expected to go through a at least 6 cities across 6 countries, including: Dar es Salaam (Tanzania); Lilongwe and Blantyre (Malawi); Harare and Bulawayo (Zimbabwe); Pretoria and Durban (South Africa); Lusaka (Zambia); and Gaborone (Botswana).
The GCC’s focus in the Southern Africa region is certainly aimed to open up more opportunities for investment. Therefore, as already noted above, it makes sense that the GCC takes on a project of this size. However, it comes with its challenges.
The most important problem would have to do with having to deal with the unique laws and regulations that govern such projects in all the countries involved. Some countries may require that local contractors also get involved in the project. Others impose bigger taxes on foreign contractors.

Project Emergence Model and Strategic Drivers

The emergence model here is based on the concept of holistic and systems thinking approach to management. This involves a focus on the various factors that influence this project. Strategic drivers are some the factors that influence project management strategy, including: government laws and regulations; cost-effectiveness; optimization of human capital return; leveraging human resource information and knowledge; use of technology, among others. In this project, the following are the strategic drivers:

Economic Drivers

This is a key factor for this project. The southern Africa region is said to possess better economic prospects for foreign investment, helped by, among other factors, sophisticated banking and financial systems (EY 2014). This has certainly called for more investment into infrastructure as the key links to that new market (ASGISA 2006, cited in Rust et al 2008). Transport and transport infrastructure, as a key to growth in secondary economy, fits perfectly into this equation. Further, globalization process has increasingly revealed the productive potential of cities. Last but not least, there is increasing need for common markets with harmonized standards as well as procedures for infrastructure development and provision. This facilitates and boosts cross-border integration. This project fits into all this.

Institutional Drivers

This has to do with institutional capacity (that is, the capacity of ASyS) to have serious impact on the project in those regions. There is also the question of decision making and integrated planning, which has to do with the capacity of the infrastructure planning of each of the governments to impact positively or negatively on this project (including issues of systems incompatibility and capacity problems).

Operational Drivers

This is a key driver. This focuses on the removal of obstacles to economic growth. One such obstacle in the region has to do with “the cost, efficiency and capacity of the national logistics system, which pushes up the price of moving goods and conveying services over long distances” (Mpahlwa 2006, cited in Rust et al 2008).
Second, as the economies in this region continue to grow, there will be more demand for private transport. Consequently, traffic congestion as it is currently will also increase.
These will have an impact on safety and security and, in turn, law enforcement. Security and law enforcement may influence urban environment and transport systems design.

Environmental Issues

Concerns about climate change and global warming have raised issues about environmental sustainability. In relation to this project (that is, transport and transportation), there are questions about energy and resource consumption.

SET Drivers

These refer to science, engineering and technology drivers. Generally, the main drivers for the wider transport sector are these three.
Material technology relates to the traditional construction materials, including the scarcity for materials for building rails, the rising costs of bitumen as a result of rising fuel/energy prices, the likely scarcity of cement in the future, the questions of greenhouse gas emissions associated with the manufacture of cement, as well as the need to develop innovative conduction material that exhibit enhanced performance (Rust et al 2008).
Information and communication technologies (ICTs) have to with intelligent construction systems and processes, as well as “monitoring and control of the performance of transport infrastructure assets” (Rust et al 2008, p.7).
Energy optimization concerns sustainable energy use, which is important to design, construction and operation of the region’s transport environment. This is especially considering that South Africa, for instance, consumes a major portion of its available energy in the country. This is related to the push for alternative (renewable) energy sources. At the moment, the region- and most of Africa for that matter- does not focus a lot on these although there are increasing concerns for the environment. However, there are already signs there will soon be increased calls for mitigating the impacts of the transport sector with specific solutions. All these will have an impact on the transport sector (Rust et al 2008).

Stakeholder, Management and Contractual Arrangement

The MRS project is a big and complex project. As expected, there are many stakeholders in this project. Each group of stakeholders have their own expectations for this project, and with their own view of what would constitute success.

Corporate Investors

This is the first groups of stakeholders. They refer to the groups that are investing their monies directly into the project and have a direct interest in the successes of the project and will suffered direct loss if the project fails.
They include the two key entities: AUM Ventures (already put up US$84 billion) and Sandline Ventures the ABIB-led conglomerate of six Emirati Banks (already put up US$120 billion).
The main interest of this group is getting a return on their investment. If this happens, the project will have been a success.
Related to these two entities are the institutions where they got the money. AUM got its money from Sberbank (a Russian Bank) and the Industrial and Commercial Bank of China (ICBC). These too have a financial stake in the project. To them, too, success will be to get a return on their investment

ASyS

This is another important stakeholder. They are the consultants for the project, which means that they will be the ones to blame if the project fails. To them, success is the project going according to plan (in terms of budget, time and deadlines, etc).

Contractors

These include the engineering contractors Emaartec and NKA-D. To these, too, success would be if the rail shuttle link is successfully built: strong and durable, and within the set dealing and budget, among others.

The Countries and Government

The countries through which the line will pass also have a stake. They expect the line to create jobs for its citizens. If the line is constructed successfully and enhances economic activity and provides jobs, it will have been a success

The governments will also want the project implementation process to abide by all laws and regulations regarding such projects

Communities and Environment
Contractual Agreement: Stakeholder Management
Bal et al (2013) discuss a five-stage model for stakeholder engagement (see Figure 1). These stages are: the identification of significant issues and key stakeholders; analysis and planning; the strengthening of engagement capacities; the design of the process and engagement; acting, reviewing and reporting. Broadly, this focuses on “thinking and planning, preparing and engaging, and responding and measuring” (Bal et al 2013, p.698). Effective stakeholder engagement helps: to understand the market and project environment better; promote reputation; build relationships; understand better stakeholder priorities and needs; build trust as well as long-term collaborative relationships; share experiences and skills; and mitigate threats and uncertainties (Pernille & Martina 2013).
Figure 1: Five-Stage Stakeholder Engagement Model
Source: Bal et al (2013)

Project Network and Critical Path

There is need to plan well for a complex project; that is, a project that involve many people. There will be constant need to identify the relationship between the activities involved in the process of implementing this project to help work out the best way to complete the project. The network analysis is a framework for scheduling complex projects- and is also usually known as the Critical Path Analysis (CPA).
In the MRS project, the network will generally involve network scheduling and network control. Each section involves various activities. Network scheduling will help to determine the ‘critical path’, which in turn will determine the minimum completion time possible. Under network control, there will be the monitoring of project progress based on the network schedule. This will also involve taking correction action: crashing the project; adoption of reward or penalty approach.
Figure 2: Project Network &Activities in Tabular Form
The critical path helps to determine days between activities and float time. It is therefore an important part of project management

Structures and Methods for Project Governance and Management

Structures and methods for project governance and management are informed by corporate governance. Butler (2008) defines corporate governance as “the mechanism for ensuring internal controls” (p.1). This involves a complex network of interrelationships between the management of the company (ASyS), its Board of Directors, shareholders and stakeholders.
In this respect, strategy formulation should focus on: the organizations current position; what it wants in both the short- and long-term; and how to achieve those goals and objectives. The organization must also consider and anticipate the potential future change in the transport sector and the broader market in the southern Africa region and prepare accordingly instead of waiting to be run by market forces. These factors influence budgeting.
After strategy formulation, there is systems thinking. This is a holistic approach that focuses on the smaller parts of the organization (strategy, goals and objectives) and the project (including finance, human resource, stakeholders, etc.). The plan is to unify these toward a single destination.

Project Structure

Project structure has to do with the division of roles and responsibilities in the process of project management:
Indeed, this list does not exhaust all the possible positions there could ever be in a project (and their roles and responsibilities).

Project Plan and Work Breakdown

Project Plan
The entire project plan was divided into six main stages, each constituting of various work tasks:
Project management
Steering committee meetings (monthly)
Monthly progress reports
Project management plan
Peer Review Panel
Development of panels
Peer review panels
PowerPoint presentations
Response to peer review panels
Scoping/Outreach
Stakeholder consultations
Outgoing public output
Policy outreach
Scoping technical report
Methodology, Collection of Data and Existing (Contextual) Conditions
Methodology report
Market database
Engineering database
Technology database
Property database
Existing (Contextual) report
Preliminary Service Scenarios
Identifying alternatives
Developing initial service concepts
Technical report on alternatives development
Analysis of Alternatives
Ridership and revenue forecasts
Evaluation of alternatives
Operating and capital costs
Report on ridership and revenue
Technical report on alternatives
Determination of Feasibility
Financial and user economy benefits
Arrangements for financing and funding
Institutional frameworks
Costs and revenues allocation
Final recommendations
Documentation of Tasks
Implementation plan
Business plan
Final report
Work Breakdown
The project gets going at the start of 2019.
Conclusion
The Mzansi Rail Shuttle project is a complex project. It covers a big area, it involves many stakeholders, among others. This paper provides a general overview of the factors involved. However, what it is on paper and what it will be in the field, in the actual process of project implementation may differ. Besides, there is a lot of uncertainty in project management, and equally a lot to learn in the process of project management. Therefore, this paper is not a dictated a rule. Rather, it is guideline to inform the project implementation process. It is meant to help guide the work back on track in case of uncertainties, which are certain to be there.

Bibliography

Bal, M, Bryde, D, Fearon, D & Ochieng, E 2013, “Stakeholder engagement:
achieving sustainability in the construction sector.” Sustainability, vol.6: pp.695-710
Butler, Y 2008, Governance in the boardroom: how project management can
deliver organizational strategy. https://iccpm.com/sites/default/files/kcfinder/files/YButler%20The_Role_of_Project_Management_and_Governance_in_Strategy_Implementation%20160808.pdf (Accessed 26 February 2015)
EY 2014, Executing growth: attractiveness survey Africa
2014. http://www.ey.com/Publication/vwLUAssets/EY-attractiveness-africa-2014/$FILE/EY-attractiveness-africa-2014.pdf (Accessed 26 February 2015)
Leijten, M 2009, Manageability of complex construction engineering projects: dealing
with uncertainty. Second International Symposium on Engineering Systems, MIT, Cambridge, Massachusetts, June 15-17
Pernille, E & Martina, H 2013, “Sustainable development and project stakeholder
management: what standards say”, International Journal of Managing Projects in Business, vol.6, no.1: pp.36-50
Rust, FC, Van Wyk, L, Ittmann, H & Kistan, K 2008, The role of R&D in
transport infrastructure in South Africa. http://repository.up.ac.za/bitstream/handle/2263/7532/rust_role.pdf?sequence=1(Accessed 26 February 2015)
The Economist 2014, GCC trade and investment flows. A Report by The Economist
Intelligence Unit

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