PROJECT DEVELOPMENT SYSTEM

PRODEVSYS

( PROJECT   DEVELOPMENT   SYSTEM )

A CONCEPT NOTE

by

Hemen Parekh

Mumbai

20^TH  JULY 2004

www.B2BmessageBlaster.com

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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. LIAISON

                                    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 compromise of a few EXPERTS ( and a few supporting staff ).

The idea is to have a (manpower-wise) lean organisation, heavily dependent on computerized, 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 )

    But it will have a huge computerized library of such systems / methods

    

-   Engage in Architectural designs 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 OPERANDS  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 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 recognized 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 merely another Project – Consultancy or a Project Design Organisation , undertaking such assignments on behalf of “Clients” and earning a meager fee , employing hundreds of engineers.

COMPARATIVE SCENARIOS

Project Consultancy   Vs   Project Development

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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	ü
2	Project Identification	X	ü
3	All Permissions	X	ü
4	Land Acquisition	X	ü
5	Funding	X	ü
6	Technology / Engineering	ü	To be sub – contracted
7	Construction	Sometimes own Mostly given out	ü
8	Marketing	Tender based	Aggressive, Concept-based Brand Selling
9	Planning / Mobilising		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	ü
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