large scale project, effective management is critical in dealing with key challenges and becoming responsive to the needs of stakeholders. In the case of the Brantas River Basin Development and Ourzazate Solar Power Station projects, these strategies are critical to avoiding cost overruns and ensuring it meets the long-term needs of both regions. To fully understand what is taking place requires carefully examining each one, demand, the regulatory / political environment, ecological / social, the financing model, execution / control, security challenges / safety and post implementation assessment. Together, these different elements will illustrate how to deal with critical challenges and ensure that both are capable of meeting the needs of stakeholders.
Brantas River Basin Development Project
The Brantas River Basin project is focused on developing a hydro electric dam inside Indonesia. The basic idea is to control flooding, provide greater amounts of irrigation and produce electricity that will address the region’s continuing needs. For stakeholders, this helps the local economy to grow and it provides a viable alternative which prevents flooding of the river at certain times of the year. These areas addressing their needs, by providing additional amounts of resources through: ensuring there is a local source of electricity and that farmers will have enough water during the course of the year. This has a positive impact on the local economy by making it more predictable and capable of evolving with numerous issues it will face with a growing population in the region. Politically and from regulatory perspectives; this project was seen as one which could ensure there was enough water. While at the same time, it allowed the government to effectively control the flow of this resource. The environmental implications are the ecosystem and natural habitats are disrupted from the flow of the river. Socially, this has the potential to disrupt entire communities who will be affected by flooding from the development of the dam and it will destroy their way of life. Financing is provided through the issue of bonds, government matching funds and a loan provided by the World Bank. The management of the project experienced increased cost overruns. To deal with these issues, the government established procedures which had an independent auditor to monitor its development. However, there were inevitable delays from weather related factors and having to make adjustments to the original strategy. To address these issues, the government provided additional amounts of funding and increased the sure charge on electricity. Security focused on preventing radicals from disrupting development. While at the same time, more stringent safety standards were imposed on contractors who were constructing the dam. Post implementation management involved the government charging a fee to cover the costs of maintenance from the sale of electricity and water. In this case, the project met the continuing and long-term needs of stakeholders through increased amounts of transparency and controls. The biggest lesson that was learned, is how there will be additional challenges and cost overruns during the course of any large scale building project. (Subijanto 2013)
Ourzazate Solar Power Station
The Ourzazate Solar Power Station is utilizing the tremendous amounts of sunlight inside Morocco and converting it into a renewable source of electricity. It is currently being constructed in a series of stages. This is designed to meet the needs of the local economy and diversify the country’s energy needs towards renewable sources. In this case, the needs of stakeholders are addressed by providing them with a reliable source of continuing power. Politically and from a regulatory perspective, this ensures that the country is able to meet the demands of the general public in way that is socially responsible. Environmentally, this decreases the carbon output and it limits the negative effects of the plant on different communities. At the same time, it will create jobs and improve the standard of living within the region. The financing model is focused on receiving funds directly through the African Development, World and European Development Banks. The project is monitored by having a series of independent contractors evaluate spending and what is happening. Risks are managed by utilizing a variety of local and foreign-based firms to work on specific stages. The independent contractors monitor any changes and oversee key challenges. This helped to reduce the possibility of cost overruns through having a series of checks and balances in place. Security is designed to reduce terrorism and prevent sabotage from those who are opposed to the project. Post implementation, requires using the fees generated to cover operating expenses and help enhance the needs of the local economy. In this case, these techniques allowed for an environmentally friendly project to be developed. However, the biggest lesson is that costs were higher than expected. This is from the importation of specific parts and the utilization of specialists to build / develop the plant. To deal with these issues, there needs to be two estimates provided. One will offer an initial cost for the project. While the other, will concentrate on possible cost overruns by adding a certain amount to the final price. This is designed to deal with setbacks and ensure there is adequate financing during the entire process. (Ourzazate Solar Power Station 2012)
Ourzazate Solar Power Station, 2012, African Development Bank. Available from: < http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Morocco%20-%20%20AR%20Ouarzazate%20Project%20I%20(2).pdf > [24 June 2014].
Subijanto, T, 2013, ‘Key Success Factors,’ Water Policy, vol. 15, pp. 183-205.
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