MAOU secondary school No. 1,
Difficulties in working on the project. Ways to overcome them
Motto (of this activity):
"Argue, be mistaken, be mistaken,
but for God's sake, reflect, and although
crookedly, yes themselves" outstanding German
playwright and philosopher.
IN modern school different children study. Each student has his own interests, desires and abilities. Despite this, teachers must give all children knowledge, teach them the basics of knowledge of the world around them, and cultivate in each student a comprehensively developed personality capable of self-determination and self-realization. Nowadays, everyone understands that school should not so much impart a sum of knowledge to students, but rather teach them how to use this knowledge to solve various life problems. It is no coincidence that the well-known slogan “Education for life” has ceased to be relevant. Currently, it can be replaced by the slogan “Education throughout life.” Every school graduate must be prepared for the fact that he will have to study all his life: study new materials, new equipment, new work technologies, improve his skills, receive additional education (7).
IN last years in the domestic school, in connection with the transition to the new Federal State Educational Standard, there is a wave of popularization of the project method, which is not fundamentally new in world pedagogical practice, but fully complies with the modern principles of Russian education: competence-based, personality-oriented approaches to training and education, subjectivity schoolchild in the process of acquiring knowledge.
Currently, the practical experience of many teachers, psychological and pedagogical research, has convincingly proven the possibility of using the project method in working with primary schoolchildren, its universality and compatibility with various educational systems. Publications and others reflect the rich developmental potential of project activities for primary school students, its positive impact on the motivational, cognitive, communicative and emotional spheres of a primary school student.
However, despite its growing popularity and undeniable advantages, the project method has not yet found its proper distribution in the initial level of school education. In my opinion, this is due to the unwillingness to implement the project method, on the one hand, by teachers, and on the other, by students.
I found out how things stand with the practice of using the project method in my school by conducting a survey among teachers. Respondents -20 people
The question was asked: “Do you use the project method in your work?”
During class time - 70% are used to one degree or another in lessons, because it is a necessity.
After school hours - 50%, but irregularly
And only 2% of respondents gave a positive answer about regularly using project activities in their work.
What are the reasons for failure? Let's try to figure it out.
Teachers using the project method may encounter difficulties, as we see, at all stages of its implementation.
First difficulty
During the design process, a personally significant problem for schoolchildren must be solved, which is formulated by the students. In practice, teachers often name it themselves. However, it should be taken into account that it is difficult for children in elementary school to identify the problem on their own based on the educational topic. To do this, it is advisable to lead them to formulate the problem with leading questions.
Second difficulty
The next difficulty is organizing the goal-setting stage. Most often, goals are not clearly formulated. To develop these skills in students, you can use the “Tree of Goals” technique and the SMART method to set a specific, realistic and achievable goal.
Third difficulty
At the third stage of project activity - putting forward hypotheses - it is not always successful to put forward as many ideas as possible. Brainstorming doesn't always go well. Often teachers do not fully understand its purpose, which is to put forward as many ideas as possible. The author of the book “Lateral Thinking,” Edward de Bono, warns that one should not criticize the answers at this stage /2/. After all, by criticizing, we risk losing. Hypotheses should be analyzed and selected only after the brainstorming session, not during the brainstorming session.
Fourth Difficulty
It lies in the inability of students to draw up an activity plan at the project planning stage. T. Lazarev, development director; trainer-consultant, moderator, expert at Petrazavodsk State University. in his article “Project method: errors in use” points out the following typical errors encountered when analyzing school project plans: vague logic for achieving goals, poorly defined connections between activities, tasks and goals of the project; lack of a schedule for the implementation of activities and work on the project; determining the required resources “by eye”; lack of allocation of resources by time and by work, failure to use objective criteria for the implementation of plan items; lack of analysis of possible project risks. The teacher must teach students to compare goals and objectives, develop a schedule of activities to achieve the goal, identify resources, determine the time for completing one or another item of the plan, set the time for current, intermediate and final monitoring of the project. In order to develop basic planning skills, you can use regular lessons. In Russian language and literary reading classes, offer to write a plan for retelling the text, a plan for an essay. In mathematics classes, give a task, write a plan for solving the problem.
Fifth difficulty
Next difficulty. What a teacher may encounter is the inability of children to work in cooperation. For this, there are various psychological games and exercises, for example, “Trio”, “Siamese Twins”, etc. /5/
Sixth difficulty
At the next stage of project activity - project implementation - teachers are very often faced with the absence or insufficient level of information skills in students. After all, they must be able not only to find the necessary material from several sources, but also be able to analyze it and make a choice. The teacher needs to practice this skill in class. In addition, at this stage, many teachers use reminders, for example, “Rules for students to search for information in the library”, “Working with literary sources”, etc.
Seventh difficulty
At the presentation stage, when students present the products of their activities, the teacher should refrain from judging. Here he is only an observer. Many teachers forget about this and end the project with a presentation. However, to develop the ability to work independently, it is important to teach the student reflection. To evaluate the process and result of project activities, students can help questions /1/:
What have we done? How did we do it? Why did we do this? What skills were needed for this? What experience did everyone gain individually and as a group?
What have we done? (The question helps students remember the flow of the entire project from start to finish.)
How did we do it? (Students analyze problems, methods for solving them, difficulties, failures, interesting findings and spontaneous ideas.)
Why did we do this? (The question encourages students to evaluate the goals of the project, the benefits and significance of individual tasks and the project as a whole.)
What skills were needed for this? (The question helps evaluate the skills they acquired as a result of the project. Students understand that the project requires not only good language skills, but also organizational skills, the ability to work in a team, and the ability to be responsible for the assigned task.)
What roles did we take on in working on the project?
(As students discuss this question, they note that this project required them to use different roles: artist, decorator, tour guide, etc.)
What experience have we gained individually and as a group? (Students evaluate the competence and uncertainty of individual students, share their thoughts and emotions, appreciate the help and support of the group. Many make a discovery for themselves: “I didn’t even realize how much I already know in the language.” Students are convinced that the project activates hidden reserves of everyone, which also contributes to success.)
Such parameters for self-reflection make it possible to analyze not only the final, but also intermediate results, to realize the correctness of the choice of goal, the compliance of work methods with the set goal, the optimal pace of work and implementation of the work plan.
Eighth Difficulty
So, the two main problems of presentation are speech and regulations. It is very important to teach children to choose the most important thing, to express their thoughts briefly and clearly. It is better if the text of the presentation is written in the form of abstracts. This will allow you not to read everything from the page, but only check with the main thoughts and not miss anything. During the speech, it is necessary to monitor the time and the reaction of the audience. During the presentation, the author of the project may have to answer questions from the public. You need to be prepared for this.
Ninth difficulty
Thus, teachers using the project method may encounter difficulties at all stages of project activity. However, all these difficulties can be overcome if we do not replace subject-subject relations with subject-object ones, if the teacher gradually moves from an information-controlling function to a consulting-coordinating one, if the project activity he organizes is organically integrated into the teaching and educational process, and is not something a random, episodic phenomenon. After all, you can develop skills in project activities in regular lessons.
In this regard (Ph.D., Head of the Laboratory of Methods and Information Support for Educational Development at the Moscow Institute of Open Education) identifies three types of lessons:
The first type is a project lesson, which includes or consists entirely of work on a project.
The second type is a lesson in which a triune didactic goal is set not only regarding the mastery of one or another subject content, but also regarding the formation and development of universal skills related to project skills. This could be conducting practical lessons involving partially independent activities of students. Such classes are aimed both at developing project activities and at consolidating the acquired subject theoretical and practical knowledge.
The third type is a lesson in which, in addition to mastering subject content, the transfer of subject skills into general educational and universal ones takes place. These lessons allow you to form project activities element by element, on the one hand, and to intensify students’ cognitive activity in the subject, on the other.
To achieve learning goals in our teaching activities, we adhere to general didactic and methodological principles. The same principles exist in project activities.
They were determined by our domestic scientists:
ü The principle of problem solving -
ü Principles of step-by-step, feedback, productivity - and -Siberian
ü The principle of orientation towards the zone of proximal development, the principle of joint activity -
We invite you to express your opinion on the issue of organizing project activities during and after school hours.
1. Do you use the project method in your work?
During normal hours: Yes No
After school hours: Yes No
During and after school hours: Yes No
2.If you answered negatively, then what prevents you from using the project method?
I heard about the project method, but never used it;
The lack of time for preparation and for carrying out project activities in class is a hindrance;
We tried to use the project method, but were not successful;
The students completed the project without enthusiasm, as if it were ordinary work;
Difficulty in choosing a topic;
Definition of goals and objectives;
Proposing hypotheses and assumptions;
Conducting the practical part: research, experiments;
Preparation for defense and answering questions.
Other_______________________________________________
Thank you for your cooperation!
Appendix 2
TABLE 1 Difficulties and ways to overcome them
Difficulties | Ways to overcome them | Note |
|
Selecting a topic, problem: interesting to the child; doable, original, unusual, quickly doable, exciting. | Leading questions, conversation Material for discussion can be an everyday incident, relationships, educational interests, hobbies, personal problems, etc. Motivation | ||
Organization of the goal setting stage | Reception "Tree of Goals". SMART Method | ||
Proposing a hypothesis | Brainstorming technique | ||
Project planning | In class, make a plan for retelling, essays, problem solving, etc. | ||
Group work, teamwork, collaboration | Openwork saw method Possibility of use: - when working with text. Each student receives a subtopic or part of the text (small material) to develop. Information is being exchanged. Everyone listens to each other, asks questions, makes notes, because this is the only way to get acquainted with all the information. | ||
Lack or insufficient level of development of information knowledge and skills among students | Learn to find the necessary material from several sources, learn to analyze it and make a choice. Design. | ||
Reflection analyze your activities | What have we done? How did we do it? Why did we do this? What skills were needed for this? What roles did we take on in working on the project? What experience have we gained individually and as a group? | ||
Project presentation | A presentation is a showcase of the project. Everything should be subordinated to one goal - to best show the result of the work and the competence of its author, which he acquired in the process of this work. Presentation is speech and regulations | ||
Distribution of roles | The teacher is a consultant, motivator, observer. The student chooses, makes decisions, builds, evaluates. Parent – helps, advises, guides |
Appendix 3
Table 2 Advantages and disadvantages of individual and group projects.
Project type | Advantages | Problems |
Group | ● the skills of cooperation, the ability to show flexibility, to see the point of view of another, to compromise for the sake of a common goal are formed; ● group work allows you to distribute responsibilities, and each group member can show his strengths in the work that he is best at; ● working together makes it possible to enrich ourselves with the experience of other participants, to see the most effective strategies for behavior and educational activities; ● with successful interaction, the status of individual students in the peer group can rise; ● such a project promotes group cohesion. | ● some students do not show activity, but “move out” at the expense of those who are more proactive and responsible; ● it is more difficult to organize and coordinate work; ● it is not possible to gain comprehensive experience at all stages of the project for each group member; ● It is more difficult to evaluate the contribution of each group member. |
Individual |
● develops personal initiative, responsibility, perseverance, and activity; ● the topic of the project can be chosen in maximum accordance with the interests of the author; ● the progress of work and its results depend only on the author of the project; ● the final grade most fully reflects the quality of the author’s work | ● experience of group cooperation is not developed; ● there is no opportunity to enrich yourself with the experience of others, to see more effective work strategies; ● the work is more labor-intensive and responsible at all stages of the project. |
Appendix 4
Table 3 “Question and answer” Development of a plan for your project by students
Question | Answer |
Why was this project topic chosen? | Project problem |
What needs to be done to solve this problem | Objective of the project |
What will you create to achieve the goal? | Image of the project product (expected result) |
If you make such a product, will you achieve the goal of the project and will its problem be solved? | Is there a necessary connection between the problem, the goal and the project product? |
What steps should you take from the project problem to the implementation of the project goal? | Listing the main stages of work |
Do you have everything to complete these steps (information, equipment, etc. for research, materials for making a product, what is missing, where to find it, what you already know how to do and what you will have to learn) | Detailed work plan |
When you do everything you need to do | Individual project work schedule |
Ask these questions to your mentee, and you will teach him to plan his own activities (and not only project ones). A good plan is already half the job!
Continuation
Managing any of the functions existing in project management creates the need to take into account dozens during work, and when implementing large projects, hundreds of factors and parameters. The project management system allows you to systematize all procedures and give them purposefulness. Therefore, any project management is considered as an integrated process with a huge number of interrelations
Taking into account all the information that was given above, we can identify the key problems that arise during the implementation of project management activities. It is necessary to understand why some projects involving qualified specialists end in failure, while most exceed all permissible deadlines for implementation and the volume of initially allocated resources.
Objective of the project. Very often, a situation occurs when the management of a company, starting the implementation of a project, either does not fully understand why the project is being started and what goals it pursues, or they completely lack this understanding. Human nature, combined with the position given to her, suggests that she knows perfectly well the purpose of the activity they are conducting, but in 90% of cases, managers do not understand the purpose of the projects. Very often, the question “Why is the project needed?” managers answer inaccurately, for example, “build a new workshop,” but no one says why this workshop is needed.
Sometimes, when initiators set specific goals for themselves, they do not make them clear to all participants in the implementation process. It is not at all surprising that during the course of work, the project team may deviate from the original task, heading in a different direction.
Project budget. One of the key problems when implementing a project is the lack of understanding of how to evaluate the project and the budget allocated for it. Very often, leaders and managers confuse the concepts of “assessment” and “formation”. The assessment allows you to take into account a huge number of subjective factors to obtain a result.
If a company allocates a budget without first assessing it, then in 90% of cases this budget may turn out to be too low, and it will be impossible to achieve its goals within its framework. The problem associated with budget formation is very acute and requires a competent solution. The consequence of an inadequate budget may be the emergence of problems of a different nature. A small budget leads to large expenses, as there is constant pressure on it. The need to use modern equipment, information technology, and other tools during implementation - all this will not be satisfied. This approach will affect the motivation of employees, their general psychological mood, which will ultimately result in a decrease in work efficiency, and in some cases, in additional expenses.
Implementation deadlines. One of the foundations for successful project implementation lies in strict adherence to established deadlines. Completing work within the agreed time period can reduce all kinds of negative phenomena during implementation.
Often at the initial stage, the team believes that it still has a lot of time, and some short-term delays will not affect the final result and will be easily made up. However, this can only be done at the final stage with the involvement of additional budget funds. In addition, the project may go beyond the time limits, which entails new costs, customer dissatisfaction, an attempt to quickly complete it and, as a result, poor quality of the final product.
Let us note the most important reasons that influence the occurrence of this phenomenon:
- Vague goals and lack of analysis of risk phenomena do not allow us to predict exactly the budget required to achieve the goal;
- The idea that there is still enough time, fueled by the belief that managers or the project manager have the situation under control, leads to additional costs and prolongation of deadlines;
- Some managers measure the competence of their employees based on their own performance, which leads to errors when planning implementation deadlines, as well as overestimation of subordinates’ self-esteem;
- Often overlapping stages of work cause a decrease in work efficiency due to the constant need to make adjustments;
- The need to complete work on time results in the project team wanting to get rid of the project as quickly as possible. This causes a shift from obtaining a quality product to a fleeting effect to convince the customer that all work is being carried out in accordance with the developed plan;
- Excessive consumption of available resources, for example, when concluding subcontracts, causes an increase in the cost of the final product and prolongation of deadlines;
- The motivation of all team members decreases in those projects where the goals are too complex and ambiguous. This results in decreased performance overall.
Labor resources. When using labor resources, many questions arise, the main one of which is why some participants in the process are completely indifferent to the goals facing the project team, while managers are trying to solve the tasks, sparing neither effort nor time. An employee is a key resource in any project activity, since it is employees who process all other types of resources. But using the term “resource” to describe employees gives managers the idea that subordinates must, on demand, begin any task with the competence necessary to complete it. Very often a situation arises when the manager and the performer want to consider the performer only a resource; this eliminates the need to delve into the complexities and problems of other participants in the process. In those projects that are based on the use of human resources, and where the individual characteristics of each member of the team, social components, and culture of behavior are not taken into account, big problems arise that lead to collapse.
Organizational structure. Any project is under the leadership of a company, the organizational structure of which has a huge impact on both the implementation process and the success of the entire event.
Currently, a function-oriented approach to project implementation is common in domestic organizations; it is sometimes called the structural approach. The basis of this approach is the division of functions into separate, small fragments, as well as the narrow specialization of project participants.
In the structural approach, the main decisions concerned only the distribution of positions and powers among members of the project team, that is, this approach was a vertical structure that carries out administrative and power interactions. IN modern world This approach, especially in the part where we are talking about project management, is too old and narrowly focused, since the very definition of power in a company is now undergoing serious transformations. Now the behavior of structural units is influenced not only by management teams, but also by horizontal relationships between departments.
Any project that is a set of one-time activities is characterized by the presence of a clearly defined goal, high uncertainty in the future, limited resources, the presence of risks during the execution of work, and the presence of deadlines for implementation. Achieving set goals requires competent and effective coordination from the team.
But when studying the compliance of the organizational structure with the system of communications that has developed between project participants and with the requirements imposed by the external environment, it shows that a function-oriented approach to project management is ineffective.
Currently, a process-oriented approach aimed at building a new organizational structure has gained enormous popularity. It is based on the following definition of the management process: it is a set of repeatable functions that transform the input material, which is information, into the final product (product or service) based on the rules that were established before the start of the project. The process approach is based on moving away from a vertical management structure to a horizontal one.
Since the activity of any enterprise is an integrated and interconnected process, the introduction of a process approach implies management of activities, and not the structure that characterizes the functional approach, which for a long time remained the main approach in the domestic business sphere.
The process approach allows you to:
- Quickly adapt to any changes (internal and external), since it is much more difficult to perform functions that have no connection;
- Aim all project participants to achieve their goals. In the functional approach, everyone strives to satisfy the needs and desires of the manager;
- Reduce costs as the process approach effectively avoids any duplication of functions and additional costs.
Let's move on to consider some of the results obtained during the implementation of the process approach in the company:
- The project implementation period is reduced while simultaneously improving the quality of the resulting product due to the fact that there is no need for vertical transfer of information from one division to another;
- It is possible to evaluate the effectiveness of certain functions in terms of the efficiency of the process as a whole;
- The final result is agreed upon at various stages between the customer and the contractor;
- The costs of developing and producing the final product are significantly reduced, which has a positive effect on the final cost of the product or service;
- The introduction of a process approach allows you to create a system of personnel motivation based on its achievements: the higher the result, the greater the reward.
The process approach makes the management system more flexible, which is focused on constantly optimizing the process and improving the quality of the final result, reducing costs and meeting the needs and desires of the customer.
In the past, it was believed that project management experience was largely ungeneralizable because each project was unique, and as a consequence, little attention was paid to the area of “problem solving.” But it gradually becomes clear that problem management is a key ingredient to project success: problems must be dealt with, otherwise progress will slow down and the project will suffer.
The accumulated experience allows us to create a specific algorithm for solving problems, consisting of successive steps.
Algorithm "Problem Solving"
Recognizing the Problem
First of all, it is necessary to answer the following questions: is the symptom related to the existing problem; can the symptom be combined with something happening at the moment; what are character traits Problems; what priority should be assigned to it; what to do about the problem first.
Problem Analysis
This is done using a combination of direct observations, interviews, document reviews and meetings. When collecting information, it is not always advisable to draw attention to the problem - it is advisable to talk about symptoms and possible actions. It is recommended to start with the employee who proposed the improvement, collect as much information as possible, determine the category of the problem, give its interpretation - from conservative to radical, and focus on actions.
Defining Alternatives
- To do nothing;
- restructure the project without new resources;
- add resources to solve the problem, regardless of cost;
- redistribute resources within the project team;
- remove resources from the project;
- expand the scope and/or purpose of the project;
- narrow the scope and/or purpose of the project;
- solve a problem outside the project;
- change the technology of work in the project.
Accept problem solving
Actions in this context usually involve either policy or changes in plan and resource arrangements. Once a solution has been selected and actions have been determined, top management should be informed of the problem and the recommended approach.
Announcement of decision and action
Simultaneously with the decision to solve the problem!
Taking action
Actions should be performed simultaneously: if you do this sequentially, a “hybrid” of old and new will exist for some time.
Verification and control of execution
The results of actions and decisions should appear soon after they are implemented. To do this, you should answer the questions: has the “disease” been cured or only its symptoms; whether the by-products of the decisions create new problems; are there additional areas where these steps can be applied and solutions with little extra effort.
For practical use, we can offer three different levels of detail for structuring and analyzing emerging problems:
- formulation of the problem and possible consequences;
- highlighting specific problem areas and monitoring potential difficulties;
- structuring problems and possible ways to solve them.
Each of these methods has both advantages and disadvantages. In practice, any combination of them is possible. The main thing is to realize: problems can be structured and analyzed using certain algorithms. The following are examples of looking at problems in different ways.
There are always several options to solve a problem, but using the wrong approach can only make the situation worse. Even drawing too much attention to a problem can cause harm - sometimes it causes panic. Another option is to recruit new team members, but they will have to be onboarded, which will distract employees from being productive and slow down coordination and decision making.
First method
The problems that arise during the implementation of the project can be divided into several groups and some methods for their most effective solution can be recommended.
Problem 1: Team Morale: If morale is weak, it is wise to strengthen it from the bottom up, increase employee self-confidence, and provide additional support. If morale is strong, don't delude yourself that everything is going well - the team may simply have inflated self-esteem.
Problem 3. Ineffective management of a large project: you can divide the team into subteams, planning their interaction.
Problem 4: Creating a friendly atmosphere: If the project involves employees who have difficult relationships with each other, you should not force them to work together. It is necessary to organize the execution of tasks in such a way as to limit their contact.
Problem 5: Technology Management: It is unwise to take technology for granted - all technology requires management and active evaluation of its use.
Problem 6. Removing critical resources from the project: it should be taken into account from the very beginning that such a threat exists; clearly understand the needs, insist on obtaining certain resources, taking into account the state of the company’s business as a whole.
Problem 7. Poor performance and behind schedule: first of all, it is necessary to identify the reasons for its occurrence (tasks were not included in the plan; the project does not receive resources on time; the team does not complete the work on time, etc.). Some problems can be prevented with good planning, but if an issue does occur, it's worth talking to your team to see what can be done to resolve it with the resources available.
Problem 8. Coordination of work with suppliers and contractors: Even before the project begins, the personal interest of the supplier or contractor should be identified and exploited. When choosing suppliers or contractors, it is necessary to clearly formulate the objectives of the project. To facilitate coordination of work with them, identify dependencies between projects; identify ways to control quality and change schedules and priorities; Establish a coordination process between projects at the project manager level and below.
Second method
Let's look at three problems that can arise in groups, their causes and possible solutions.
Problem 1. Poor performance. The client believes that the group is not interested in solving the problem and its members are not able to work together.
Possible reasons:
- group members cannot reach agreement about the group's task;
- the group's task in relation to results and resources was not clearly defined;
- managers can't do their jobs;
- the project team leader does not have the appropriate authority or leadership qualities;
- group members do not have sufficient technical and functional qualities.
Possible ways to correct the situation:
- more clearly formulate the group’s task;
- clarify the division of responsibilities and accountability within the group;
- organize leadership training for the group leader;
- Conduct training for team members on technical and functional skills.
Problem 2. Personality conflicts in the group. There are very strong contradictions within the project team. Based on experience, we assume the following causes of interpersonal conflicts in groups:
- group members are confident that they, and not the manager, bear full responsibility for the results of the group’s work;
- The group leader did not distribute tasks and responsibilities among group members.
Possible solutions to problems:
- make it clear to group members that the leader is responsible for the results of its work;
- Explain to each employee the scope of his duties and responsibilities and hold a general meeting to resolve any conflicts that arise.
Problem 3: Group members cannot work as a team. One of the most common problems in both functional and project teams. Possible reasons:
- managers cannot agree on specific task groups and accountability;
- The group's task was not clearly defined in terms of results and resources.
Solution: consult top management on the distribution of powers and responsibilities between them.
In all three cases, we considered situations with a hierarchical group structure. Let's assume we are dealing with a group of partners. Depending on the suspected causes of the problems, one of the following solutions can be proposed:
- develop a collective vision of the group's mission in relation to resources and results;
- develop a personal vision of everyone’s task in relation to resources and results;
- discuss together the importance of the division of responsibilities and distribute areas of responsibility between group members;
- provide training to team members on leadership, interpersonal and technical skills. Place special emphasis on collective discussions and conflict resolution.
Of course, this is not a complete list of problems, their causes and possible actions. But the methodology for analyzing the situation itself is quite universal.
Problem Database. From experience, it is useful to have a database of issues that does not require much effort to compile. Here are its main elements: problem identification code; status (identified, resolved, analyzed, completed, etc.); priority level; what it affects; date of origin; description; the employee responsible for the problem; date of expected decision; solution code (replaced with another, resolved, postponed indefinitely, completed); solution to the problem; actions; comments.
Summary
The occurrence of certain problems during the implementation of a project is normal. There are many different methods for structuring and resolving them. The choice of the most effective method depends on many different circumstances. The main thing is to work to resolve problems systematically and in an organized manner. The accumulated experience allows us to identify common mistakes when solving problems:
- lack of awareness of the problem;
- incorrect “diagnosis”;
- the solution is not “sold” to top management;
- making decisions without planned actions;
- actions in the absence of a decision framework;
- inability to act when needed;
- actions that do not correspond to the decisions made.
Pyatenko Sergey Vasilievich,
General Director of the FBK Economic and Legal School,
Doctor of Economics, Master of Business Administration
Views: 7,505
Why do problems arise when carrying out a project within a company that can lead to the failure of the undertaking? Our expert Maxim Yakubovich talks about this. He also makes recommendations for solving them.
2 . Combination of roles. Now imagine that the head of the sales department was appointed as the head of CRM implementation and he was also identified as the customer. Due to the lack of experience in project management, he will obviously make mistakes when planning, thereby planting a “bomb” under the entire work. And the combination of two roles will lead to the fact that he will begin to correct mistakes made during planning through a compromise with himself (in matters of requirements for the CRM system). For example, an IT company does not have time to implement functionality related to receiving reports on transactions. The specialist may refuse this option. And at the stage of launching the system, in case of failure, blame everything on the IT company or employees who do not know how to use the program.
My belief is that there should be a healthy “conflict of interest” between the project manager and the customer: the manager needs to deliver the project on time and on budget, and the customer needs to get the expected result and start using it. Therefore, I advocate that in internal projects the roles of the manager and the customer should not be combined.
3. What does a lack of understanding of the role of the project customer lead to?- from the employee who is assigned to this role?
Let's take the example of CRM. First, the sales manager must understand that, as the customer, he makes all decisions regarding the project's performance requirements. You need to take responsibility for making such decisions, and not try to shift it to a manager or sponsor. Otherwise, this will lead to delays and disruption of the timing of the entire project.
Secondly, the head of the sales department should be responsible for coordinating all requirements for the project result, and not just those needed to improve the performance of his department. This may be difficult, because... the requirements of other departments will most likely seem not so important and the customer may ignore them.
4. ABOUTlack of motivation among employees to implement a CRM system will lead to sabotage of the introduction of new software. The time frame for completing the task with this approach will increase. Perhaps the project will be closed altogether without achieving any results.
5. Problem with allocating scheduled time- if an employee combines work on a project with his main job, then his priority will most likely be his main job. This jeopardizes the timely allocation of resources and will derail even a well-planned project. I wrote more about the problem.
6. Lack of reporting practices according to project tasks is expressed in the fact that employees do not want to fill out reports. Because of this, it is difficult for the manager to understand whether everything is going according to schedule or whether there are already delays. This is fraught with loss of project control.
7. Lack of rules for acceptance tests upon delivery of the project will lead to the fact that the customer will not understand how to check how adequately the requirements for the results are implemented. This will lead to delays in general.
In a situation where the head of the sales department combines the roles of customer and manager, he will find a way to come to an agreement with himself and accept the project. At the same time, the quality of the work is unlikely to be properly checked. There is a possibility that when using a CRM system, company employees will “suffer” with an unfinished product.
I had experience managing an internal project of a company where there was no regulated acceptance and delivery procedure. We butted heads with the customer for a long time to come to an agreement on this issue. After that, I decided that for any internal project, even at the start, a procedure for accepting and delivering results should be prescribed. The customer must agree on this procedure.
So, we’ve sorted out the problems of internal projects, let’s move on to recommendations for solving them:
In conclusion, I would like to note that my experience does not cover all possible problems. Perhaps I missed some important points. You may also disagree with the proposed solutions. If so, I look forward to your suggestions in the comments to the article. Think about it.
Maxim Yakubovich
Project management expert, consultant and business coach of the Here and Now consulting group.
More than 10 years of experience in project management.
20 completed projects in the role of project manager and project program manager.
Teaching experience - 10 years. About 2,200 students have attended his seminars.
Teacher of the Project Management module at the Russian School of Management.
Guest lecturer on the Project Management course at the British Higher School of Design.
"Economic analysis: theory and practice", 2007, N 2
The greatest difficulties are caused by forecasting large and international investment projects, usually construction ones. The main reasons for the difficulties encountered in forecasting them are:
Objective factors:
- rising prices for construction components (materials);
- clarification of technical solutions at various stages of project implementation;
- significant technical changes made to the project;
- additional regulatory requirements, including in the field of safety and ecology;
- construction delays and downtime caused by both financial and non-financial reasons;
- social obligations;
- deterioration of the money market in the country where the project is being implemented: rising inflation, changes in tax conditions, devaluation, etc.;
- Researchers consider the complexity and complexity of the project to be a special factor in increasing construction costs, which increases the level of uncertainty due to a combination of risks of different nature.
Subjective factors:
- the desire of project managers for easier approval and launch of projects;
- submission by contractors of underestimated financial proposals during tenders to strengthen their competitive positions;
- "political decisions" on the start of projects.
Let's look at these factors in more detail.
Objective factors. Forecasting large and international projects is becoming less effective every year, despite seemingly proven forecasting models and experience in implementing a variety of projects. Let's give some statistics. A study of 260 projects carried out between 1910 and 1998 by Aalborg University (Denmark). in 20 countries of the world, showed that 90% of all of them were completed in excess of the initial estimate. In most cases, the increase in price ranged from 50 to 100% of the initial cost; for some projects it increased 10 to 20 times.
The most significant cost overruns were observed during the construction of the Suez Canal, the construction of the supersonic passenger airliner Concord (USA), the construction of the Trans-Alaska Oil Pipeline System and the Big Dig Highway (Boston). In them, actual costs exceeded the original estimate by 19, 11, 8 and 5 times, respectively. The situation was no better in Russia. One of the most large-scale projects in Russia and in the world was the construction of the Siberian Railway (SMR), the decision on which was made in 1897. Most of the meetings of the committee for the construction of the SMR were devoted to revising and increasing the initial construction estimate (350 million rubles) for certain sections of the route. The final cost overrun for the construction of the SJM (including the Chinese Eastern Railway) was 186%. Another well-known project (albeit already in the USSR) is the construction of the Baikal-Amur Railway (BAM). During construction, which lasted several decades, the budget was exceeded 5 times and amounted to 10 billion rubles. Overexpenditures have always been a characteristic phenomenon in the electricity sector of the USSR, for example, during the construction of the Volzhskaya Hydroelectric Power Station (1950 - 1958) and the Irkutsk Thermal Power Plant (1952 - 1961).<1>.
<1>The history of large projects in the former USSR shows that cost overruns were common, and in-depth analysis of their causes was the exception rather than the rule. The search for specific culprits of cost overruns often replaced a systematic approach to project management.The reasons for the rise in cost of projects in planned and market economies are externally different, but systemic factors do not depend on the state regime. When applied to large-scale projects, various external causes can be considered as expressions of similar systemic problems:
- failure to mobilize the resources needed for large-scale construction within limited time frames and in limited sectors. Often projects require resources of a fundamentally different scale and new technologies that have not been used before;
- a large project in most cases is a self-developing system, the elements of which require constant adjustment;
- large projects, as a rule, are highly sensitive to changes in the political and legal spheres;
- They are characterized by high costs of adaptation to the environment and conservation measures.
The greatest influence on changes in project parameters is exerted by:
- price changes (even with a short forecast horizon) affect the cost of the project by an average of 40 - 50%;
- problems associated with the complication of technical solutions. It is almost impossible to fully foresee all potential technical risks, especially when it comes to work in regions with difficult climatic conditions or the implementation of innovative projects;
- environmental factor. The construction of large facilities is almost always associated with a negative social effect. Initial coordination of environmental parameters with relevant government agencies does not insure the initiators from additional difficulties. The activity of environmental non-governmental organizations and foundations is constantly increasing<2>;
- legal aspect. The construction of large projects is subject to many regulations - from federal laws to regulations (orders) of local authorities. A change in the legal field in any part of it can lead to the suspension of the project, but their comprehensive forecast at all levels is almost impossible;
- control. Organizing international projects is a complex management task that is associated with various types of errors.
Let's look at the problems of increasing project costs using examples from individual industries.
Transport construction projects are characterized by a number of properties inherent in most large projects:
- high cost of implementation;
- the influence of difficult natural conditions, geological parameters and geographical extent;
- high level of regulatory regulation of transport construction;
- participation of joint capital - private and public;
- a complex system of relations with suppliers and contractors, forming a chain of inter-industry interactions;
- the great impact of the project on the livelihoods of the population living in the construction area;
- high level of environmental impact.
Research shows that out of 10 transport infrastructure projects in nine there are cost overruns, with:
- the final cost of railways is on average 45% higher than the initially determined cost;
- the final cost of stationary communications (tunnels and bridges) is on average 34% higher than the initially established cost;
- the final cost of roads is on average 20% higher than the initially established cost.
The final cost of all types of transport projects is on average 30% higher than the initial cost (examples for some projects are given in Table 1).
Table 1
Examples of cost overruns on various projects
Source: "Expert RA".
The main reason for the rise in cost of the Great Belt railway tunnel construction project in Denmark by 80% was steel ecological problems identified during the project. The excess of the initial cost of the work on the construction of the Channel Tunnel was caused by a complex of reasons, including changes in safety requirements, delays in the construction phase and rising prices, which in itself increased the cost of the project by 40%.
According to experts (in particular, the manager of one of the world's largest Swedish construction company Skanska, J. Ots), during the construction of large projects it is quite acceptable to exceed the estimate by 20 - 30%, and when constructing, for example, an underground or underwater tunnel, a double cost overrun is considered a normal phenomenon. The Estonian newspaper Delovye Vedomosti cites facts about the implementation of road projects in Tallinn, which confirm Ots's opinion. According to the financial report of the Tallinn City Government for 2001, only for road construction the planned budget was exceeded by 107% - from 84 to 175 million crowns, while not a single company (!) met the stated estimate.
According to the data in Table. 2, for the considered projects, the most common reason for the increase in cost was the clarification of technical solutions at the design stage. Secondly, the increase in cost is associated with downtime and delays in construction, which entail fines, penalties and even obsolescence of already built structures. An important factor in the rise in cost of Russian and foreign projects are also changes in the regulatory framework governing the execution of construction work. The longer the project implementation period, the higher the likelihood of legislative changes and additions affecting the cost of the project.
table 2
Reasons and comments regarding the rise in costs of large projects
Project | Initial price | Rise in price | Basic causes rise in price | Comments |
1. Communication tunnel through Irtysh River, Semipalatinsk, Kazakhstan | 3.5 million US dollars | 71,4% | Change design solutions for promotion environmental security (replacement semi-through channel on tunnel) | Data provided as of June 2002, When construction there was no tunnel completed. Fact flooding tunnel and suspense construction by reason insufficient financing from the outside Kazakh governments, throughout visibility, led to further rise in price project |
2. Liquidation section "Razmyv" (restorative work at construction St. Petersburg metro), Russia | 1 billion rub. | 46,4% | Downtime due to untimely financing from the outside urban authorities | Rise in price assessed within volume financing for 2004 |
3. Ring automotive road (Ring Road), Saint Petersburg | 24 billion rub. | 166% | Clarification technical decisions regarding with complex geological conditions, long chain suppliers, downtime due to interruptions in financing | Construction Ring Road should have end in 2005, complete input into exploitation was planned for 2007 |
4. Bus station "Moscow", Minsk | 11 million rub. | 54,5% | Rising prices application of new construction materials, introduction of new construction standards | Construction was carried out in period since 1987 to 1999 |
5. Freeway Big Dig, Boston | 2.6 billion US dollars | 461,5% | Rising prices additional requirements for ecology, costs for maintaining order and security | Grade produced according to according to April 2003 - moment of entry into bridge action, tunnel and almost full graduation construction. Administration state Massachusetts to present time conducts detailed investigation reasons rise in price |
Source: "Expert RA".
Objects of the oil and gas complex. The process of putting fields into operation at the beginning of the new century is more difficult than in the 1970s, and the cost of one ton of proven hydrocarbon reserves is becoming higher every year. As a rule, the development of oil fields is carried out in extremely difficult natural conditions. Distances from fields to large populated areas can be up to several thousand kilometers, which significantly complicates the delivery of cargo, fuel, equipment, food and workers to the work site. The inaccessibility of power lines forces the creation and use of autonomous energy sources, which, given the energy-intensive projects, significantly increases the cost. The inaccessibility of most fisheries requires the development of expensive road infrastructure at the initial stage of the project, which is associated with large financial costs. The least predictable are the risks associated with geological exploration technologies, which in turn depend on natural factors.
As already indicated, oil and gas projects usually include not only the development of fields, but also the construction of transport infrastructure - pipelines. The reasons for the increase in the cost of their construction are similar to ordinary large transport projects. The large territorial extent of pipelines and difficult climatic conditions largely determine the high probability of error in calculating their cost. In recent decades, adjustments to the regulatory framework in terms of compliance with environmental requirements at all construction sites have become a serious factor in the rise in costs; costs associated with the protection of environment, including due to the emergence of new modern technologies(Table 3).
Table 3
Main raw material projects and the circumstances of their rise in price
Name project | Initial price (billion dollars) USA) | Rise in price | Main reasons rise in price | Comments |
1. Baku - Tbilisi - Ceyhan | 3,2 | 12,5% | Delays in implementation project, acceptance additional measures for ensuring security in Georgia, depreciation dollar against other leading world currencies, rising prices for equipment and services in oil sector | Data given as of November 2004 When construction oil pipeline was completed 99% |
2. Development gas-condensed satny Place of Birth Shah Deniz (Azerbaijan) | 3,2 | 25% | Increase in cost materials used for construction, devaluation of American dollar, which was cost calculated project | According to BP company, project partner, rise in price in mostly touched construction TPG-500 platforms |
3. Project Snohvit - construction complex for production LNG<3>, Norway | 5,8 | 30% | Significant change design solutions, change of conditions taxation | According to mid 2004 construction in within the project doesn't continue |
4. Modernization Kremenchug Refinery | Unknown | 30% | Rising prices, lack of competition when choosing contractors | - |
5. SWG (development shallow parts of Guneshali - rehabilitation old site and development new), Azerbaijan | 0,5 - preliminary GNK calculations, 0.7 - feasibility study | 114,3% | Gradual decline productivity developed formations and need for investment funds in new ways production and intensification oil recovery, growth equipment wear | Information about rise in price given by as of 2001 Assessment rise in price produced according to towards according to the feasibility study (1997) |
6. Trans-Alaskan oil pipeline system | 0,9 | 788,9% | Additional costs for installation of supports for ground part pipeline, measures for protection of the pipeline from explosion during an earthquake, price rise | - |
7. Construction large pipeline systems (first queue), Russia | 0,4 | 20,7% | Price rise, change designs hydraulic engineering structures, clarification technical solutions for increasing reliability and environmental system security, provision of necessary port infrastructure | Along with overspending on individual articles happened significant cost savings |
8. Caspian pipeline consortium | 2,1 | 76% | Not known | According to 1998 data |
9. Experienced industrial development sea Place of Birth Kashagan, Kazakhstan | 7 | 114% | Rising prices, necessity additional geological surveys, delay in receiving/ lack of necessary approvals and permits and etc. | Largest oil project Kazakhstan is being developed on terms section products. Initial calculation the cost was produced in the beginning of the past decades |
Source: "Expert RA".
The presented data on the rise in cost of oil and gas projects allows us to draw the following conclusions. Rising prices are the most common reason for price increases. The second reason was the refinement of technical solutions or the transition to new solutions, which is typical for projects carried out in difficult climatic conditions. Less pronounced, but no less significant, are the regulatory requirements and orders of regulatory expert bodies. In some cases, cost overruns are due to contributions to social programs, but they do not significantly affect the project.
A typical example of an increase in the cost of an oil and gas project is the construction of the first stage of a large pipeline system in Russia. The reasons for the increase in project costs are complex (the share of each item in the total cost increase is indicated):
- increase in prices for equipment, materials, electricity, pipe products, construction work, petroleum products and services - 50.4%;
- clarification of technical solutions - 16%;
- execution of additional work on the construction of second-stage facilities - 14.7%;
- changes in the design of hydraulic structures - 8.9%;
- additional costs for land acquisition - 5.1%;
- agreement with the regional administration on targeted financing of housing construction - 3.5%;
- provision of the necessary administrative infrastructure of the terminal (organization of customs and border services, providing them with necessary housing) - 0.9%;
- cleaning construction areas from explosive objects - 0.5%.
Along with overexpenditure on a number of items, savings occurred (in particular, instead of purchasing funds, they were rented, and part of the costs was transferred to a later period).
An analysis of the causes of excess costs also points to the leading role of the price factor, including inflation. Active construction of the first stage of the system took place in 2000 - 2001, when average inflation rates were more than 32%. If the project had been carried out under modern conditions, the impact of inflation would have been less, but it is unlikely that price increases would have lost their decisive importance.
The development of the Kashagan oil field in Kazakhstan is the largest project in the Caspian region and is carried out under production sharing agreements. The investor of the project is the North Caspian Consortium (NCC), the operator is one of the participants of the CCC, the Italian company Agip KCO.
At the first stage, it was necessary to carry out pilot industrial development of the field; the start of oil production was scheduled for 2005. According to the latest data, actual production will take place no earlier than 2009. Simultaneously with the increase in commissioning time, the cost of pilot development doubled, which increased the total cost of the project by $5 billion - up to $29 billion. USA. Experts note that as the budget grows, pressure on the initiators from the government of Kazakhstan to increase donor support increases. Apparently, donor contributions become an additional “payment” for initially made mistakes in identifying project expenses<4>.
<4>According to Agip KCO estimates, the main reasons for the increase in project costs are:- increase in world prices for equipment and services for the oil field;
- increasing the number of appraisal wells;
- delays due to the need to obtain numerous permits from various departments of the republic;
- delays in the fulfillment of financial obligations by certain shareholders;
- errors in calculations when estimating costs, etc.
Of particular interest is the Trans-Alaska Pipeline System (TAPS) project, which was built at a huge cost overrun due to changes in the technical plan. In 1969, the cost of the work was estimated at $900 million, assuming that the entire pipeline would be laid underground. As a result of a partial change in the technical plan, it was decided to install about half of the pipeline on special supports above ground, which increased its cost to $4.5 billion. Upon completion in 1977, the total cost of TATS (including pumping stations, valves, and marine terminal) was $8 billion.
Several years ago, an assessment was made of the possible cost of the project taking into account modern conditions. According to calculations, if construction had begun in 1999, the costs would have been $22 billion in that year's prices—almost three times the final cost. In addition, an additional 25% of the specified cost would be spent on law enforcement measures in accordance with current regulations.
Military industrial complex. As a rule, the largest military developments are characterized by a high share of innovation. In most cases, they are classified, but information on individual projects is still publicly available (Table 4).
Table 4
Some military-industrial complex projects and the circumstances behind their rise in cost
Name project | Initial price | Rise in price | Main reasons rise in price | Comments |
1. Laser NIF installation (National Ignition Faculty), USA | 2.1 billion US dollars | 138% | Necessity new technical protection solutions anti-dust optics | The project is in implementation stage. Installation will be have multifunctional meaning and used as in military and civilian purposes |
2. Development fighter- "stealth" F-35, USA | 5 billion US dollars | 660% | Development of new technologies and extension opportunities airplane. Weight reduction airplane. Installation on aircraft protective systems that are not will allow foreign buyers copy secret nodes and units | Provides information about planned growth aircraft cost |
3. Modernization 18 intelligence Nimrod aircraft, Great Britain | 3 billion US dollars | 33,3% | Requires complete redesign cars: from existing fleet Nimrod machines can be leave only fuselages. Planned create a plane with the other wing, cabin, engines and combat systems | Contract in progress implementation |
Source: "Expert RA".
A significant factor in the rise in cost of defense projects are new technical solutions, the possibility of developing and using which was not possible at the initial stages of planning. For this reason, accurate cost planning is more difficult in defense projects compared to projects in other areas of the economy. Innovative projects, as a rule, change their configuration at each subsequent stage of implementation. As the Pentagon official overseeing the development of the F-35 stealth fighter noted: "The price goes up because at the beginning of the project you don't know how much it costs. It's about development and new understanding of the program." Another factor in the rise in cost of defense projects can be considered longer work periods than previously planned.
Nuclear power. The decisive condition for the implementation of nuclear projects is to ensure their high reliability and compliance with strict safety parameters. Available data on the rise in cost of these projects are given in table. 5.
Table 5
Some projects in the field of nuclear energy and the circumstances of their rise in cost
Name project | Initial price | Rise in price | Main reasons rise in price | Comments |
1. Factory recycling nuclear waste, Hanford, USA | 4,35 billion Doll. USA | 31% | Clarifications in technical solutions for every implementation stage project | The project was approved in 2000 Construction the plant continues. The cost increase is indicated as of July 2004 |
2. Project refurbishment Y-12 plant (operations with enriched uranium), Oak Ridge, USA | 120 million US dollars | 252% | Lag from graphic arts construction at 5 years | Overrun data given by as of March 2004 Project not completed |
3. Clinton Nuclear Power Plant, USA | 430 million US dollars | 900% | Unspent technology, problems with providing security | Completed project. Planned construction of a new block on the square power plants |
4. Completion and launch of the 3rd power unit Kalinin NPP | 400 million US dollars | 175% | Definitely not installed. Had place deviation from schedule construction - more than one year | Block started in exploitation. Marked high degree of quality and ready when block start |
Source: "Expert RA".
Most nuclear projects are characterized by time delays due to additional elaboration of safety and reliability issues at various stages of implementation. In addition, decision-making on the construction of nuclear power plants in different countries of the world is often complicated by the presence at the government level of conflicting opinions on the feasibility of developing nuclear energy, as well as by the negative reaction of the public and local population to them.
Summarizing the above, we will derive a unified influence algorithm various factors on the cost of projects, taking into account their industry specifics (Table 6).
Table 6
The influence of objective factors on the rise in cost of large projects depending on their industry structure
Price increase factor | Projects | ||
oil and gas | transport | defense | atomic |
1. Price increases and changes financial parameters | Widely spread | ||
2. Specification of technical solutions | Widely spread | Not typical | |
3. New technical solutions | Distributed | Not common | Widely spread |
4. New regulations requirements/comments | Distributed | Not common | Wide common |
5. Delays (downtime) | Distributed | Not characteristic |
|
6. Management errors project | Not distributed | Distributed | |
7. Unforeseen factors | Distributed | ||
8. Social obligations | Distributed | Not typical |
Source: "Expert RA".
Subjective factors. Among the subjective factors that make it difficult to forecast projects, we note the mechanism for making decisions based on the political (strategic) importance of projects. Let us highlight the five most common types of situations in the field of international projects that have shaped the “political” decisions made at the state level.
- In most of these cases, the possibilities of the world market regarding the prospects for project implementation are completely ignored. A striking example of this thesis was the Blue Stream project. In 1997, in accordance with the intergovernmental agreement, OAO Gazprom entered into a commercial contract with the Turkish state company BOTAS to supply gas to Turkey for 25 years. In terms of technical implementation, Blue Stream is one of the most complex and capital-intensive gas pipelines in the world (the cost of its construction amounted to $2.7 billion). According to preliminary estimates by the Turkish company, by 2005 national gas needs were expected to reach 43 billion cubic meters. m, and in 2020 they would have amounted to 82 billion cubic meters. m of gas. It seemed possible to ensure such demand through established channels: since 1987, the republic has been actively purchasing raw materials from Russia, Iran and Nigeria. It was expected that the project would pay off in 5 - 7 years.
However, in 2000, during additional verifications, the economic efficiency of the deal was called into question: the Turkish prosecutor's office opened a criminal case into fraud involving government officials. The results of the investigation forced the Turkish authorities to refuse subsequent deliveries, which entailed the threat of economic sanctions for non-fulfillment of the contract. As a result of the negotiations, the parties agreed to reduce the volume and cost of supplies. As of mid-2004, about 1.2 billion cubic meters had been supplied under the contract. m of gas, while the volume previously planned for 2002 - 2004. exports were recorded at 12 billion cubic meters. m! To make up for the lost profit (Gazprom's lost profit over 25 years when the project was liquidated was estimated at 25 - 42 billion US dollars), Gazprom began construction of another branch of the pipeline to the Israeli market, which increased the cost of the project and extended its payback period for an indefinite period . In addition, the project received similar sales risks: in Israel's fuel and energy balance the share of oil is 67%, coal - 30%, natural gas - only 1%. The project's prospects still look uncertain.
- In a number of cases, hasty development of the basic elements of the project entails a subsequent conflict of interests of shareholders, which is most clearly expressed in the project of the Caspian Pipeline Consortium (CPC). The CPC oil pipeline system, the first major oil pipeline in the territory of the former USSR built with the participation of private capital, came into operation in 2001. It connects the Tengiz field in Kazakhstan with a marine terminal located near Novorossiysk. At the time of its founding, CPC was the only transport corridor for the sale of Kazakh raw materials for export. The founders of the consortium in 1992 were the governments of Russia, Kazakhstan and the Sultanate of Oman (their total share as of 06/01/2006 was 50% of the share capital). In 1996, leading Russian and foreign companies joined the project. The project documentation (feasibility study) was prepared by the specialized institute Giprovostokneft and the American company Fluor Daniel, the total costs of the first stage of construction amounted to 2.6 billion US dollars (total for the project - 3.7 billion US dollars).
In 2004, the volume of supplies via the pipeline reached 22.5 million tons (capacity in 2005 allowed transporting 28.2 million tons, of which 13.5 million directly from the Tengiz field). It is expected that by 2006, production at this field will increase to 23 million tons per year. Despite the need to expand capacity (up to the 67 million tons per year established in the feasibility study), the corresponding memorandum has not yet been signed, which is explained by the intention of the Russian side to resolve a number of technical issues, in particular in the field of sales, as well as due to disagreements in tariff policy (the current the tariff for pumping raw materials was agreed upon by all shareholders of the consortium and formed the basis for the project’s payback)<5>. The situation is further aggravated by the fact that without increasing the tariff, the Russian authorities may not approve the start of construction of the second stage of the project, in which both private shareholder companies and the Republic of Kazakhstan are interested. The situation is largely confusing and is based on the desire of shareholders not to miss out, sometimes to the detriment of previously reached agreements and the competitiveness of the project itself in comparison with alternative ones (for example, Baku - Tbilisi - Ceyhan or Baku - Novorossiysk).
<5>At the end of 2004, the Ministry of Fuel and Energy of the Russian Federation approved the proposals of the Federal Energy Commission (FEC) to include the Russian section of the oil pipeline in the register of natural monopolies, which allows the commission to set transportation tariffs after agreeing with the main shareholders.- The “strategic” nature of some projects completely overshadows the need to study their feasibility and economic efficiency. The Russian project for the construction of an oil pipeline to the Pacific Ocean (Angarsk - Nakhodka), which has been actively discussed since 1999 with a view to determining optimal routes, has every chance of becoming such a lifesaver. Only in May 2005, the Ministry of Fuel and Energy of the Russian Federation issued an order on the construction of the first stage of the facility to the city of Skovorodino, which is located 70 km from the border with China. The total cost of the project (including its component to China) is estimated at $6.5 billion. Although the route of the oil pipeline provides favorable opportunities for selling oil to China, no final decision has been made on it, which is associated with the risk of supplying raw materials through it in the required volume, including due to insufficient investment in geological exploration of the East Siberian subsoil . The project's strategy gives rise to serious criticism. Russian officials believe that “the first stage of the pipeline can be guaranteed to be filled with West Siberian oil.”<6>, analysts do not have such confidence, because currently only two large deposits are known: Talakanskoye and Verkhnechonskoye, which together should provide no more than 17 million tons of raw materials by 2010 (out of 80 million tons required). President of Transneft OJSC S. Weinstock called these concerns fair, arguing the need for construction by the fact that “we will never get the development of the East Siberian province if we do not build a pipe there... Economic feasibility can only be ensured thanks to such plasticity.”<7>.
<7>From an interview with S. Weinstock to Kommersant dated April 29, 2005.
The efficiency of financial forecasting of Transneft OJSC as a whole cannot be called high: the company prefers to formulate a marketing strategy during construction or after it. In particular, in 2004, there were cases of downtime of the transport capacities it had previously created, which, according to its representatives, were associated with the low rates of raw material extraction by Russian producers and shortcomings in the formation of export schedules. In this regard, the company, together with the Russian Ministry of Industry and Energy, had to make a decision to reduce the previously planned turnover of the Baltic Pipeline System (BPS).
Despite the general approval of the project, the justification for the return on investment is so superficial that it entails a high probability of a significant change in its cost parameters. Apparently, few people care about this - the project is being implemented by a state company in the national interests. Let us recall that earlier, in 2002, a much more effective and economically justified project implementation scheme was proposed by YUKOS, which, as part of a joint venture on a parity basis, intended to carry out construction for $2.5 billion, laying a pipeline to Dadtsin, where the main processing plants are located. power of China. An organizational and financial alternative to the option previously proposed by YUKOS has not yet been presented.
- Obvious mistakes in the territorial construction of international projects associated with momentary decisions of the state to comply with the conditions of the commodity market do not occur often, so such cases always attract attention. In August 2001, the Odessa-Brody pipeline was opened in Ukraine with a throughput capacity of 14.5 million tons of oil per year for the transit of Caspian oil to Europe. The cost of public investment in construction amounted to $465.4 million. The case is unprecedented in international practice - for 3 years the pipeline was virtually empty, and since July 2004 it has been used by Russian companies in reverse mode (in the northern direction). For 2004 - 2005 Only a few million tons of oil were transported. Strategic miscalculations were cited as the reasons for the downtime - the previously planned influx of raw materials from the Caspian Sea was eventually placed in the Transneft pipeline system, and prices for Russian oil in Central Europe turned out to be more profitable for buyers. As is now clear, the assessment of the effectiveness of pipeline construction was carried out superficially due to the need for the state to quickly gain access to serious energy channels and facilities in conditions of favorable market conditions.
Experts also confirm the validity of this assumption. According to TNK-BP President A. Gorodetsky, “the oil pipeline... will operate in reverse mode until a comprehensive analysis of the most effective options for its operation is completed... (and)... direct operation of the oil pipeline is possible after its completion...”<8>. The prospects for this project are unclear to this day.
<8>From an interview with A. Gorodetsky to Kommersant dated March 16, 2005.- As already indicated, environmental and social violations in large international projects are observed quite often, which has become a chronic (and almost impossible to eliminate) disadvantage for the vast majority of such projects. In some cases, they become quite egregious. As the most obvious example, consider the international project Baku - Tbilisi - Ceyhan, despite the complimentary nature of statements addressed to it by authoritative foreign publications. The violations committed are unlikely to cause irreparable damage to the countries; they can be partially justified given the technical complexity of the project and its capital intensity. However, some mistakes have repeatedly jeopardized the project's timeline and resulted in significant cost overruns. Maybe that’s why the well-known Italian bank Banca Intesa, which at the end of 2004 announced the sale of its share in the project, “couldn’t stand the nerves.” Previously, in mid-2004, the Georgian Ministry of Environmental Protection and Natural Resources suspended construction for two weeks to conduct a safety assessment. And environmentalists created the Baku - Ceyhan Campaign project in order to attract public attention to the environmental and social damage from the project. The effectiveness of project management was investigated by the British House of Commons Committee on Trade and Industry, which published a specialized report on the poor quality of coating of a quarter of pipe joints laid in Georgia. The large-scale social effect of the project, guaranteed by investors during the period of drawing up its estimate, is also ambiguous: the prospects for subsequent employment of personnel after the completion of ongoing work on the construction of the relevant sections of the pipeline are very vague<9>.
According to the British company BP, the commissioning of the oil pipeline is scheduled for mid-2006. The disbursed investments amounted to 2.7 billion US dollars (out of 3.6 billion US dollars). However, there remains the threat of failure to meet the deadlines for supplying the pipeline with raw materials due to force majeure circumstances: the corresponding costs could amount to an additional $400 million. Returning to the activities of the British company, we note that scandals caused by violations of the environment have already unfolded around its name. For example, due to the Prudhoe Bay explosion incident in Alaska in 2003, the company was fined $716 thousand<10>. Another major foreign company, Total (also with a stake in the project), has been flagged in connection with major corruption investigations against its former executives.
<10>"Vedomosti" dated March 30, 2005 - S. B-3.In any case, a more complete assessment of the initiator’s activities can be given after the facility is put into operation. However, the circumstances in which the project is being implemented hardly allow us to note its high level of elaboration. And the ability of British company managers to smooth out fleeting conflicts, including with regional authorities on the allocation of donor contributions and compensation, is “worth its weight in gold.”
As can be seen, the adequacy of forecasting international projects is significantly distorted as a result of the impact on them of factors that are far from economic in nature. In many cases, the economic and social feasibility of projects is replaced by respect for national interests, which as a result are increasingly undermined by clumsy and ill-considered political decisions. Based on the facts presented, we are forced to admit that an international project is increasingly becoming a toy in the sphere of political interests of various states, and no one is interested in analyzing their economic efficiency.
- A significant discrepancy between the final cost of a project and its initial budget is a systemic risk, depending on many reasons; and it is almost impossible to accurately predict the complex effect.
- A steady increase in prices for the main types of materials used in construction, primarily cement and steel, is characteristic of both the global and Russian economies. Rising prices for building materials and metals are the most significant and common reason for the rise in costs of construction projects in the world.
- The main reasons for rising prices for building materials in the global economy, according to researchers, are:
- rising oil prices. Increase in the transport component in the cost of materials;
- a construction boom driven by the "world's largest construction site" - China, which consumes more than 20% of global cement production, about 30% of iron ore, 25% of steel;
- political instability in the world.
A.E. Barinov