PRODEVSYS ( PROJECT DEVELOPMENT SYSTEM )
A CONCEPT NOTE
by
Hemen Parekh
Mumbai
28TH JULY 2004
(M) 0 - 98,67,55,08,08
Marketing of Project Development Systems
A Concept Note
BACKGROUND
G O I has
opened up the economy under its liberalization-program. This process is
irreversible and will gain momentum in the coming years.
A key structural
feature of this new policy, is PRIVATIZATION, in all sectors of the
Economy. This will be particularly so in the areas of
- Infrastructure Development
Road /
Transport / Rail / Air / Telecom / Power / Ports / Airports / Cross-country
pipe lines / Bridges / Tunnels / Dams / Jetty etc.
- Property Development
Townships /
Mass Housing / Commercial Complexes / Sports Stadium / Convention Centres /
Holiday Resorts etc.
- Industrial Structures
Process Plants
/ Manufacturing Plants / Industrial Estates etc.
Development of these sectors is vital to rapid growth
of economy.
Central/State Govts. have no funds to spare for these
projects. Hence private-sector participation on a big-scale is
inevitable.
Even foreign parties will be encouraged to enter these
areas by forming joint-ventures with Indian Partners.
Any Industrial Group wanting to grow rapidly must
exploit this opportunity. This must be done quickly before the field gets
crowded with competition. Timely action is the essence.
A major part of Infrastructure/Property Development
Projects consists of
- System Design /
Engineering / Technology
- Construction (leaving
out equipment-supply)
It takes many years to build-up expertise / human assets / Plant &
Machinery assets to become a major Property Development Company.
This is, therefore the single – biggest hurdle for anyone wanting to be
a key player in this sector.
It is, therefore, in the light
of the foregoing observations that I have developed a concept called,
P R O D E V S Y S
Project Development System
|
CONCEPT
|
PRODEVSYS is a concept under which a
company interested to make rapid strides in Project Development shall
develop an EXPERT SYSTEM.
This system shall, broadly cover following modules :
TECHNOLOGY
FINANCE
MARKETING
PROJECT
IDENTIFICATION / EXECUTION
LEGAL
MATTERS
LAND
ACQUISITION
CENTRAL
GOVT. / STATE GOVT. LIASON
PRODEVSYS
|
PROJECT MANAGEMENT
EXPERTISE SYSTEM
|
|
MARKETING
EXPERTISE
SYSTEM
BRAND –
SELLING
|
|
TECHNOLOGY
ASSIMILA –
TION
EXPERTISE
SYSTEM
|
|
FINANCING
EXPERTISE
SYSTEM
|
Each of the above-mentioned departments ( of the
company ) will comprise of a few EXPERTS ( and a few supporting staff ).
The idea is to have a ( manpower-wise ) lean
organisation heavily dependent on computerised, networked EXPERT – SYSTEMS and a very efficient
telecom system.
The central idea behind an EXPERT
– SYSTEM based organisation is that the organisation
itself shall NOT :
- Engage in actual construction
- Develop System-Designs or Construction-Methods on its own
( i.e. Technology - Development )- although it
will have a huge
computerised library of such systems / methods
- Engage in
Architectural Design or Structural Designs
- Own / operate assets such as
Construction – Machinery
The organisations, shall enter into
“project-wise” technical collaborations or joint –ventures with overseas
( or even Indian ) companies to execute the Projects.
These companies will be selected on the basis of their
perceived “expertise” in that particular field of construction.
These tie ups will be aimed at “tapping” from
abroad ( or from within the country ) the most appropriate “Technologies”
needed for the execution of a given project.
The main MODUS OPERAND of this Organisation will be :
OUT - SOURCING / SUB -
CONTRACTING
|
THE
THEME
|
The THEME will be :
Do NOT duplicate within the organisation,
the Skills and the Expertise and the Experience which other organisations have
already built-up over years.
Let us HIRE these Skills /
Expertise / Experience in the execution of our projects.
The only skills that we shall develop " In-house ", are the
skills to :
Identify the best vendor / supplier of
such skills
Frame the “ Scope of work ” sand “ Terms
of Reference ”
to enable such outside expert-organisations
to submit their
detailed offers
Study / analyse / interpret the offers
Negotiate the “Contracts / Commercial
Terms "
Monitor the performance of the contractors and
motivate
them to excel
And such “ Out – Sourcing”
shall not be confined only to the
actual “construction” but
shall encompass :
“ Financing ”
contracts
“ Marketing ”
contracts
“ System Design ”
contracts
“ Detailed Engineering
” contracts
“ Procurement ”
contracts
“ Architectural / Structural /
Monitoring ” contracts
( i.e. Project Management Contracts )
- “ Operating ” contracts
( to manage the property after Commissioning )
The EXPERT Organisation will ,
by itself, NOT undertake / manage
any activities .
By definition, it will only,
Manage the “
Managers ” of various activities.
It will actually Orchestrate /
Coordinate / Synthesize /
Blend / Amalgamate the efforts
of a large number of
SPECIALIST
COMPANIES ,
each of which is “ Expert
” at some specific aspect of the
Project.
So the CORE
– COMPETENCE of our company will be to
“ Manage ” a number of
such Expert Companies
– and through them,
their respective professional
technologies – be these expertise at ,
Raising “ Finances ”
“ Marketing ” the concept of the project
“ Designing ”
" Constructing ” etc.
It is only such an
approach that can catapult a company in
the BIG – LEAGUE within a short
– span of time and with
minimum of resources.
|
RESOURCES
|
Manpower
I have earlier said that there
will be only 6/8 departments .
And may be 60/80 persons
altogether ( half of whom will be
Experts in some or other field
)
Space
To begin with an office – space
of 10,000 sq - ft should suffice
to kick-off the operations
Equipment
These will be largely office-
automation equipment such as
Computer Systems
Telecom Systems / Modems
Audio / Video equipment
Photocopying equipment
Software packages.
Library ( Books / CDs )
Finance
Here again the idea would be to
deploy a bare minimum of
“own” funds.
Fund shall be raised from “
Investors ” as
* Down Payment
* Progress Payments
as each project advances.
.
|
FUNDS
|
The funds shall be raised by
giving-out “ Franchises “,for operating of :
Convention Centres
Theatres / Cable TV Services
Amusement Parks
Exhibition Halls
Restaurants / Hotels
Transport Systems ( for township )
Educational Institutes
Telecom Services
Shopping Centres
Banking Premises
etc.
It is envisaged that the “
Investors ” and the “ Franchises ”
shall be two separate sets of
people.
For certain projects, it should
be possible to float widely
held, public – limited
companies and raise funds from
NRIs
Overseas Mutual Funds
Public at large
|
ORGANISATION
|
|
PRODEVSYS EXPERT COMPANY
|
 FUNDS |
|
FRANCHISES
|
|
EXTERNAL EXPERT SERVICE –
SUPPLIERS
|
|
NRI
|
|
SYSTEM DESIGN
|
|
MUTUAL FUND
|
|
ENGINEERING
|
|
PUBLIC DEPOSIT
|
|
CONSTRUCTION
|
|
PROJECT MANAGEMENT
|
|
PUBLIC EQUITY
|
|
ADVANCE
FROM INVESTORS
|
|
OPERATING
RUNNING THE PROJECT
|
The PRODEVSYS
Company shall primarily focus on the DEVELOPMENTAL aspect.
As far as
“Execution” aspect is concerned, the emphasis shall be on the Management of Execution , rather than the execution itself.
Over a period of
time, PRODEVSYS must come to be recognised as a BRAND which is synonymous with
property-development projects.
It will undertake
such projects, not only on its own but also on behalf of others, who do not
have the necessary expertise to get into this business.
For such
individuals or Corporate, PRODEVSYS will provide a TOTAL TURNKEY solution.
In fact, a time
shall and come when PRODEVSYS can been seen as
“ A Solution in Search of a Problem ”
Over the last 3
years we have seen that hundreds of companies have gone to public and raised
thousands of crore of rupees from the market.
Almost anybody has
been able to raise funds in the market. So apparently there is no dearth of
funds.
But whereas any
number of companies have been able to raise funds, very few have been able to
put-up their projects in time, largely due to lack of expertise in
“ Project Planning & Project Management ”
This is where the
USP of PRODEVSYS comes in, viz :
PROJECT
PLANNING / PROJECT MANAGEMENT
But it is NOT just another
Project – Consultancy or a Project Design Organisation , undertaking such assignments
on behalf of “Clients” and earning a meagre fee , employing hundreds of
engineers.
|
COMPARATIVE
SCENARIOS
|
Project Consultancy Vs Project
Development
------------------------------------------------------------------------------------------------
The following
tabulation will clearly bring-out the differences :
|
|
PARAMATER
|
A TYPICAL
ENGINEERING
CONSULTANCY CO. WORKING FOR OTHERS
|
PRODEVSYS
( DEVELOPING
IT'S OWN PROPERTY)
|
|
1
|
Conceptualising
|
X
|
|
|
2
|
Project Identification
|
X
|
|
|
3
|
All Permissions
|
X
|
|
|
4
|
Land Acquisition
|
X
|
|
|
5
|
Funding
|
X
|
|
|
6
|
Technology / Engineering
|
|
To be sub –
contracted
|
|
7
|
Construction
|
Sometimes own
Mostly given out
|
|
|
8
|
Marketing
|
Tender based
|
Aggressive, Concept-based Brand Selling
|
|
9
|
Planning / Mobilising
|
YES
|
X
|
|
10
|
Procurement
|
Rarely-mostly
done by client
|
To be sub -
contracted
|
|
11
|
Project Execution
|
Own team
|
To be sub –
contracted
|
|
12
|
Implementation / Commi –
ssioning
|
By self
|
To be sub –
contracted
|
|
13
|
Operating
|
X
|
To be sub –
contracted
|
|
14
|
Franchising
|
Not Applicable
|
|
|
15
|
Equity base
|
Small
|
Small
|
|
16
|
Asset base
|
Small
|
Small
|
|
17
|
Manpower
|
Large
|
Small
|
|
18
|
Equipment
|
Nil
|
Nil
|
|
19
|
Working Capital
|
Nil
|
Large
|
|
20
|
Profit Margin
|
Low
|
High
|
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