The impact of project definition readiness index on capital projects for coal-fired power station projects

Abstract: ESKOM constantly manages capital projects to sustain its assets (power stations, transmission lines, distribution lines and buildings) and to increase its operational life cycle. The past decade was marked by an increasing number of capital projects, completed by the power utility in South Africa, meeting the organisation's objectives to supply power. ESKOM expanded its generation and transmission capacity to meet South Africa’s energy demands. ESKOM adapted the Project Definition Readiness Index (PDRI) instrument as part of its Front End Planning (FEP), to address the challenge of poor scope definition resulting in scope creep, project costs escalations and delays. The PDRI provides a quantitative measure of the level of the scope definition of the project. It correlates the level of the scope definition to project success factors. This research focussed on evaluating the impact of the PDRI on ESKOM’s coal generation capital projects. A case study evaluated the direct and indirect outcome of the PDRI on ESKOM’s FEP for capital projects. The case study was based on completed projects; one project underwent Project Definition Readiness Index Assessment (PDRA) in FEP whilst the additional project did not. The main findings were that the project that completed PDRI as part of FEP performed better than that which did not undergo the PDRA. The project that completed PDRA spent less than the budgeted amount and it completed earlier than the schedule time. The project that did not complete PDRI as part of its FEP planning, had several change orders due to scope changes, resulting in changes in the project contractual basis, leading to costs escalation and delays in the schedules. Earned value management principles were used to evaluate the project performance of the completed projects. Interviews were conducted to evaluate customer satisfaction with PDRI. The outcome indicated that the users of the PDRI instrument are satisfied with the value it added in the FEP. There was a strong indication that the PDRI instrument assisted the project team in planning for the next project phase, as the instrument identifies outstanding items that need to be addressed. The interviews also evaluated how the project team impact the PDRI score. As the use of PDRI matures, and more...M.Ing. (Engineering Management