Mt. Hagen Airport Rebuilding: Project Management

Planning Process

Project Objectives and Benefits

The current state of airports in Papua, New Guinea, has not been good. Papua, New Guinea, is home to several airports including Wewak airport, Hoskins airport, Gurney airport and Mt. Hagen airport. Collectively, the current state of the four airports have significantly stifled commercial and tourism activities in New Guinea because they have not been able to meet the demand of the increased commercial and tourism activities in the country. Several works therefore ought to be done on the four airports to improve the current situation. However, this study focuses on the rebuilding of Mt Hagen airport as a unique project.

Mt. Hagen airport is the second biggest airport in New Guinea, but many of its facilities are old and unsustainable (ADB 2009). For instance, its terminal building is frequent to flooding because of a poor drainage system. The airport is also known to fall short of universal airline safety regulations because of its poor adjustment to new technological safety requirements. The airport’s short runway has also been attributed to the lack of the airport’s capacity to handle large aircrafts. For example, the airport is seen to fail to accommodate F100 operations (ADB 2009). Certain architectural accessories of the airport, such as the airport car park are also in a deplorable state and cannot meet the demand of airline services in the airport. For example, the airport is not effectively served by enough access roads to accommodate the automobile traffic that goes in and out of the airport. These, among other factors, such as the thin pavements for aircraft services, provide the framework for this airline upgrade project.

To effectively address the needs of Mt. Hagen airport, this project seeks to expand the runway by about 110 meters and the also expand the Western end of the runway to accommodate F100 operations. This project also seeks to see Mt. Hagen’s main runways receive an expansion of surface shoulders by three meters and the strengthening of the same surface shoulders to accommodate F100 operations. With the accommodation of F100 operations in mind, this project will also be aimed at improving the safety compliance of the airport so that, it is strategically placed to serve not only its primary market but also other highland regions of New Guinea, which neighbor the airport. This project also seeks to upgrade the airport’s secondary runway to match the standards of the main runway and to do this; the secondary runway will be widened by 30 meters. In addition to the new developments, this project also aims at building another terminal building to compliment the services of the older terminal building which is prone to extreme flooding. However, so that the services of the airport are not disrupted, an interim measure for this project will be to construct an interim terminal, which ensures domestic and international services are still operational as the project is underway. Finally, this project is aimed at constructing new terminal roads which will link the airport with other major roads leading into or out of the airport.

These objectives will provide several benefits not only to the airport users, but also industries which majorly rely on the airport for commercial activities. For instance, with the upgrading of the airport’s facilities; tourism will be boosted, in the sense that, more tourist numbers will be realized because the airport will be upgraded to accommodate more tourists. Moreover, the improvement of the airport’s facilities, such as the terminal building, will be an attraction to tourists, considering the old terminal building was more prone to flooding and consequently inconvenienced many people using the facility (ADB 2009). The new upgrades will also enable the airport to accommodate F100 operations which will improve the airport’s capacity to handle more commercial activities. The improvement of the airport’s facilities will also elevate the airport’s status (with regards to safety standards) and this means more business and aviation approval of the airport’s standards in the international aviation market. Moreover, more international airlines will consider New Guinea as a viable destination of operation once the project is completed. The building of new access roads linking the airport is also bound to increase the airport’s capacity to deal with logistical issues regarding transportation. For instance, the delivery of export goods to the airport and the transport of imported goods into the country (from the airport) will be eased. Moreover, the general traffic congestion which was initially characteristic of the airport will not be witnessed anymore. These structural changes withstanding, the entire project will only be successful once certain important documents are sufficiently provided.

Description of Project Management Documents

Project Title 1 (Project Charter)

Before the start of the Mt. Hagen project, a project charter needs to be provided. This document will outline the pieces of information regarding the project, such as the project title, project working title, proponent agency and such like factors (Helpnet 2011, p. 1).

Information captured and Choice: The project charter encompasses information relating to the points of contact of the project (people to be contacted during the project and their addresses). A short detail encompassing all aspects of the project will also be captured in the project charter as a summary of the important details attributed to the project. Other details captured in the charter include the project purpose, project assumptions, project description (scope and management milestones), project authority, project resources and project organization (Helpnet 2011, p. 1).

The elements identified above are selected to be in the project charter because collectively, they encompass all the functional areas of the project. In other words, collectively, the pieces of information act as an umbrella of the project functional areas.

Writers and Users of the Document: the writer of the project charter is normally the project manager but the users of the document may vary. The users will majorly include the project stakeholders (like financiers, government or the airport officials) who are expected to primarily gain from the project.

Project Title 2 (Project cost-benefit Analysis)

The purpose of the project cost-benefit analysis document will be to establish the viability of the Mt. Hagen airport project as a viable undertaking which will benefit all the stakeholders involved. Specifically, the purpose of the project is to compare the overall cost of the project and determine the benefits associated with it.

Writers and Users of the Document: The writers of the project cost-benefit analysis document will be the proponent agency (Mt. Hagen airport) and the project secretariat. Many people may find the use of the cost-benefit analysis document useful (such as researchers- for reference purposes), but the major user of the document will be the main financier of the project.

Information captured and reasons for choice: The main information to be captured in the cost-benefit analysis document is the problem plaguing the Mt. Hagen airport facility and the possible solutions that can be used to solve the problems. The reason for the choice of such information is that, the business problems faced by the Mt. Hagen airport facility represent the cost of the project, while the solutions advanced to solve the business problems represent the benefits of the project. From this analysis, we see that, the cost-benefit analysis document is especially useful to secure adequate finances to undertake the project because from the document, the project financiers will be satisfied that, undertaking the project will be of utmost importance for all stakeholders involved.

Project Title 3 (Project budget)

The purpose of the project budget document is to provide a breakdown of all the expected cost of the Mt. Hagen project. The estimated costs stipulated by the project budget will be used as a benchmark of expectations to determine the variance in project costs.

Writers and users of Document: The main writer of the project budget document will be the project manager, but he or she may be helped by the project secretariat if need be. The main user of the project budget will be the project sponsor because such a document is important in the determination of overall project costs.

Information captured and reasons for choice: The information to be captured in the project budget includes categories of expected costs; expected cash flow during the project period; and the total cost estimated of the project. The reason for the selection of the project document is primarily because the project sponsor ought to establish the total expected cost of the project, to determine the amount needed to complete the project. The details included in the project document are also essential in determining the cost breakdown over the project time period (Helpnet 2011, p. 1).

Project Title 4 (Risk Management Plan)

The purpose of the risk management document is to assess possible risks that may occur in the course of undertaking the project, so that, they can be effectively mitigated before they actually occur.

Writers and Users of the Document: The risk management document is to be prepared by the project manager and the proponent secretariat, but the users are majorly the writers themselves (including the entire project team). The proponent agency of the entire project (Mt. Hagen airport) will also find the risk management process of high value because it will enable them to assess the safety standards of the project on the airport facility.

Information captured and reasons for choice: The information contained in the risk management document include a risk assessment report; the roles and responsibilities of project team members in eliminating project risks; risk management activities; risk identification procedures; risk analysis procedures; risk planning procedures; risk tracking procedures; risk control procedures; risk communication and documentation methods and the risk event escalation procedures (Helpnet 2011, p. 1). The reason for choosing the above information is because risk elements in project management have the potential of delaying the entire project schedule if they occur. It is therefore important to asses all the elements of risks (as captured in the “information captured” section), and communicate the same in the risk management document.

Ongoing Management Process

Risk Management (Proposed vs. Actual)

Proposed: since the occurrence of identified risks in the Mt. Hagen airport project may prevent the realization of project goals, it is important to formulate a risk management plan that will bridge the gap between the proposed vs. actual risk expectations. The first step in undertaking the risk management plan is to carry out a risk assessment procedure where all the potential risks for the project will be listed down in a log, and the measures that can be undertaken to mitigate such risks, identified (Kendrick 2009). After the identification of the project risks, the roles and responsibilities of project team members in mitigating such risks will be identified and each person held up to the task. Also, in planning for the proposed risks, a risk planning process will be rolled out to provide a blueprint for the methods the risks will be mitigated. To develop the best blueprint to tackle the potential risk, it will be important to accept the potential risks, and come up with strategies to help reduce the potential for the risk occurring (mitigation). Finally, it will be essential to avoid circumstances which may lead to the occurrence of such a risk.

Actual risks: In tackling actual risks, the risk communication and documentation process will be of utmost importance. Of the realized risks, a three framework category of the risks will be developed to categorize the impact of the risks into three categories of high impact risks, medium impact risks and low impact risks. After the categorization of the risks, appropriate measures should be taken to mitigate the risks, starting with the high impact risks, down to the low impact risks, in that order.

Altered Market Conditions (Proposed vs. Actual)

Proposed Risk: A market condition alteration may significantly affect the viability of the Mt. Hagen project proposal because it will significantly impact the market portfolio where the project lies in (Smith 2006, p. 134). In dealing with the proposed market conditions, it will be essential for the project manager to enter into contracts with reputable companies which have posted a good financial report for the past few years, and which have a low debt rating. This will be one strategy of preventing any adverse market alterations with contracted third parties such as suppliers. It will also pay to carry out a proper research of the past alterations in market conditions to develop a proper comprehension of the expected alterations in market conditions which may affect the project.

Actual Risks: In preventing any severe impact of an actual alteration in market conditions for the Mt. Hagen project, it is important to have an emergency fund which will be used to cater for any increment in project costs (say from an increase in labor wages or an increase in cost of materials). When an alteration in market conditions is therefore detected, the emergency fund will be used to provide any extra funds realized as a result to the eventuality. This strategy however works on the basis of a ‘surplus concept’ where the project manager will stock most of the project resources in-excess of the required amount. For instance, to mitigate the effects of a materials shortage, brought about by an alteration in market conditions, the project manager will have to maintain a surplus stock level to prevent any shortcoming in material quantities. The same strategy is also applicable to the emergency fund concept, which implies an increase in project funds to mitigate the effects of a funds shortage, as a result of market alterations.

Key Performance Indicators (Proposed Vs. Actual)

Proposed Risks: The key performance indicators for the Mt. Hagen project may vary in the course of the project or even after the completion of the project and the results expected may fail to be observed in the short term or long term. To prevent the chances of an adverse realization of key performance indicators, it will be essential to evaluate the proponent agencies of the project, to evaluate their reliability (Wilson 2010, p. 245). In coming up with the best strategies to engage with proponent agencies, a thorough background check will be done to evaluate the credibility of the third parties, and agents who are identified to have a poor track-record of performance will be disqualified from the entire project. Only agents who have a good track record of performance will be included in the project undertaking. Employee scrutiny will also be done to evaluate the ability of project team members to deliver successful project tasks. A thorough recruitment process will therefore be undertaken to wean weak employees from strong employees who have a high potential of delivering good results. Lastly, a quality benchmark for project materials will also be established to scrutinize the project materials being supplied for the project. This measure is adopted because a major indicator for poor realization of key performance indicator is the use of poor quality materials in construction (Wilson 2010, p. 245). Once the project materials are certified according to the stipulated project materials quality benchmark, the chances of meeting the standards of good key performance indicators will be high.

Actual Risks: In mitigating poor key performance indicator standards, the kind of measures to be undertaken will be expensive and possibly very severe. For example, if it is established that, the building quality for the terminal building is poor, it will warrant the project team redo the work, and this will imply more use of project resources and a revision of project time to be able to complete the project in time (again). However, this is the best strategy to use because it is not advisable to tolerate poor project standards since they may have severe and adverse effects in future. Alternatively, a revision of the standards of key performance indicators may be appropriate if the actual results do not meet the expected standards. This strategy will ensure the project does not fall behind schedule, and conversely, it will also mean that, the project standards meet the stipulated performance indicator standards.

Sponsor Change of Project Description and Specifications

A sponsor change in product specification or description may potentially lead to the revision of project completion timeline because it will set back the project process by considerable timelines, to get new products that fit the new product description or specifications. Moreover, a change in product specifications or description may lead to unwarranted financial challenges, if the initial product was already purchased (Rowe 2007, p. 100). To deal with such kind of problems, in the course of the project, constant communication between the project manager and the project sponsor will be arranged, so that, in case of any changes in product description, the project manager will be in a position to know (in good time). Communication is important in the success of this strategy because timely communication of a change in product description may save the project manager a lot of trouble of having to change product standards (especially after purchase).

Also, to avoid project challenges which may come as a result of a change in sponsor product description, it will be important to seek the approval of the project sponsor when any project materials are being purchased. This will mean that, the project sponsor will be a part of the purchasing team, and whose approval will be the final consent needed to purchase the project materials. Moreover, it will be important for the project manager to carry out periodic evaluations of the project materials purchased to ensure they meet the description and standards of the project sponsor. Dealing with a flexible supplier will also be a key strategy of redemption when the project sponsor changes the product specifications after purchase. When a flexible supplier is sought, it will be easy for the project manager to change the product purchased, at no cost.

Suppliers and Contractors’ Ability to Satisfy Their Contractual Obligations

The ability of suppliers and contractors to meet their contractual obligations is important in meeting project goals. If the contractors or suppliers fail to meet their contractual goals, it be very difficult for key performance indicators to be effectively realized, and in the same manner, it is impossible for the project to be completed in time (Stoehr 2002, p. 111). However, there are several strategies which can be used to ensure contractors and suppliers meet their contractual obligations. The first method will be to carry out a thorough scrutiny of the kind of contractors and suppliers to be contracted. An examination of contractor’s past record is important in determining the reliability of the potential contractor because if the potential contractor does not show a past record of meeting contractual obligations, there is also a very minimal possibility that, they will meet future contractual obligations.

Secondly, a periodic and consistent evaluation of contractual performance standards is important in keeping contractors on toes with what they are supposed to do. This strategy is enshrined within the monitoring framework, where contractor’s contractual obligations will be monitored to ensure they are up to task. Lastly, a performance contract should be written to ensure suppliers (and most especially, contractors) deliver what is agreed upon. If they fail to do so, they will be liable in a court of law. This strategy is the most effective.

References

ADB. (2009) Initial Environmental Examination (Lee) Proposed Upgrading and Rehabilitation of Mt. Hagen Airport. Web.

Helpnet. (2011) Administrative Information System Project. Web.

Kendrick, T. (2009) Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project. New York, AMACOM Div American Mgmt Assn.

Rowe, S. (2007) Project Management for Small Projects. New York, Management Concepts.

Smith, N. (2006) Managing Risk in Construction Projects. London, Wiley-Blackwell.

Stoehr, T. (2002) Managing E-Business Projects: 99 Key Success Factors. New York, Springer.

Wilson, R. (2010) Managing Sport Finance. London, Taylor & Francis.