Project Report on Road Construction: Budget and Planning

This project report provides a comprehensive analysis of a road construction project, focusing on budget allocation, project stages, and potential risks. The report begins with an executive summary and an introduction that outlines the importance of project management. Part A includes a detailed budget analysis with cash flow projections, followed by a breakdown of project stages using Gantt charts and network diagrams. A memorandum to the CEO highlights the budget and scheduling of the project, emphasizing the importance of cost control and adherence to timelines. Part 2 delves into a literature review of key aspects of road construction, including tender documents and work breakdown structures. The analysis covers various aspects of road construction, such as earthwork, road design, and construction methods. The report provides recommendations for effective project management, cost control, and risk mitigation. The conclusion summarizes the key findings and the importance of proper planning and execution in road construction projects.

PROJECT REPORT

Executive summary
Present research study is prepared on road construction project that will be carried out on two
highways. On basis of analysis it is identified that there are number of risks associated with road
construction projects. Due to this reason project cost increased suddenly. Hence, it is very
important to analyze project in proper manner by performing relevant tests. By doing so cost can
be controlled. Firms need to establish contact with other companies that are operating in same
industry so that whenever required assistance can be obtained and project can be performed
smoothly in effective manner.

TABLE OF CONTENTS
Executive summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................1
Part A...............................................................................................................................................1
(1)Budget for the project.............................................................................................................1
(2) Project stages..........................................................................................................................2
(3) Memorendum to CEO............................................................................................................5
Part 2................................................................................................................................................7
2.1 Literature review on key aspects of project...........................................................................7
2.2 Background analysis of project.............................................................................................9
Tender document for Forest highway and Pacific highway project............................................9
WBS for Forest highway and Pacific highway project...............................................................9
Duration of major steps.............................................................................................................10
Schedule and drawings..............................................................................................................11
Sources of resources..................................................................................................................12
2.3 Analyzing the project...........................................................................................................13
2.4 Recommendation.................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Project management is one of domain which have due importance for the firms. In the
current report budget and activities sequence is prepared. Apart from this, memorendum is also
prepared for CEO. In second part of the report, two highway related projects are picked and same
are analyzed. At end of the report, conclusion section is prepared in the report.
Part A
(1)Budget for the project
Table 1Budget for project
Cash inflow August
Septembe
r
Octobe
r
Novembe
r
Decembe
r
Januar
y
Net cash inflow 0 -23637.5
13362.
5 13362.5 10362.5 9162.5
Bank loan amount used
(Monthly) 70000 70000 70000 70000 70000 70000
Cash expenditure
Employee cost
26637.
5 26637.5
26637.
5 26637.5 26637.5
26637.
5
Logistics expenditures 5000 7000 6000 8000 9200 7000
Purchase of raw material 20000 21000 22000 23000 23000 24000
Purchase of assets 40000 0 0 0 0 0
Documentation or legal fee 2000 2000 2000 2000 2000 2000
Total expenses
93637.
5 56637.5
56637.
5 59637.5 60837.5
59637.
5
Net cash inflow
-
23637.
5 13362.5
13362.
5 10362.5 9162.5
10362.
5
Budget is the one of the important techique that is used by the firms for making
projections. In budget usually cash inflow and outflows are estimated and accordingly net cash
inflow is computed (Schwalbe, 2015). Budget have due importance for the projects because
using same stiff control is maintained on the cost that are incurred in the business. It can be said
that there is significent importance of the budget for the project management teams.
1 | P a g e

Figure 1Work break down structure
(2) Project stages
Task
Mode Task Name Duration Start Finish Predecessors
Manually
Schedule
d
Start date 1 day 1/14/2018 1/14/2018
Manually
Schedule
d
Commerce report outline 35 days 1/15/2018 3/2/2018 1
Manually
Schedule
d
Identify projects for site
evaluation 65 days 3/5/2018 6/1/2018 2
Manually
Schedule
d
Site project evaluation 1 20 days 3/5/2018 3/30/2018 1,2
Manually
Schedule
d
Analyze project
evaluation 1 2 days 6/4/2018 6/5/2018 3
Manually
Schedule
d
Site project evaluation 2 22 days 4/2/2018 5/1/2018 4
Manually Analyze project 2 days 6/6/2018 6/7/2018 5
2 | P a g e
Build road
Construct
road

Schedule
d evaluation 2
Manually
Schedule
d
Prepare draft report 1 day 6/6/2018 6/6/2018 4,5
Manually
Schedule
d
Team review of draft 1 day 5/2/2018 5/2/2018 6
Manually
Schedule
d
Ammend draft report 1 day 6/8/2018 6/8/2018 7
Manually
Schedule
d
Submit draft to CEO 2 days 6/7/2018 6/8/2018 8
Manually
Schedule
d
CEO review 1 day 5/3/2018 5/3/2018 9
Manually
Schedule
d
Convert draft to final
report 1 day 6/11/2018 6/11/2018 10
Manually
Schedule
d
CEO final review 1 day 6/11/2018 6/11/2018 9,10
Manually
Schedule
d
Preparation for Board
presentation 1 day 6/11/2018 6/11/2018 11
Manually
Schedule
d
Presentation to board 1 day 5/4/2018 5/4/2018 12
Manually
Schedule
d
Distribute Board decision
internally 1 day 6/11/2018 6/11/2018 11,12
3 | P a g e

Figure 2Network diagram
Figure 3GANTT chart
4 | P a g e

PERT and CPM is the one of the most improtant method that is used to evalute the project. By
using these tools varied stages through which project will pass is identified. Accordingly, it is
identified that which tasks can be delayed and which one need to be performed on time. It can be
said that project management methods have due importance for the firms because by using same
project related day to day decisions can be taken in easy and effective manner (Fleming and
Koppelman, 2016). Managers need to monitor progress of project time to time and accordingly
they need to make changes in their plan. By doing so project cost is managed in easy and
effective manner. This is the reason due to which project management method is widely used by
the firms in their business to manage project in proper manner.
(3) Memorendum to CEO
To George Stirling
From Herry
Date 12-1-2018
Subject Budget and scheduling of project
Structure of team
Determining new milestones are very important for the business success. Due to this reason
time to time it is very important to take new projects. In present time also management is
planning to pick two new and similar projects and in respect to same budget is prepared along
with scheduling of project related activties is also done. It must be noted that bank loan
5 | P a g e
CEO
Project manager
Personal
assistant to
CEO
Scheduler Planning
engenieer
Clerical
support
Estimato
r

amount is arranged and it is expected that bank loan of approximately will be required to be
invested in the business in order to complete the project. Major target is to keep stiff curb on
expenditures, in respect to same workforce will kept same in size. No additional recruitment is
planned and it is anticipated that employee cost will remain constant. Raw material cost will
get changed and with passage of months relevant expenditures will enhanced in business from
20000 to 24000. Assets single time purchase will be made and investment will be equal to
40000. It can be seen from the budget that expenses are increasing continuosly in the project.
Logistics expenses increased from 5000 to 8000 and then this value declined to 7000. It can be
said that value of logistics is fluctuating sharply. Employee cost almost remain same as it is
assumd that no new additions will be made to the project in terms of workforce. Raw material
price increased consistently from 20000 to 24000. This is done because with progress
happened in project expenses will also elevate. It is assumed that bank loan will be secured
and in installment investment will be made. Budget for legal fee is determined at 2000 on
monthly basis. Project will be completed in 128 days and it is advised to the project team that
they must not delay the activities that are marked as red in network diagram. In sequence all
activities must be performed so that project get completed on time and in proper manner.
Completion of each task of the project on time is very challanging but it is very important to
perform all relevant tasks in proper manner and on time so that strict control can be
maintained on expenses in the business. It can be said that there is huge significence of the
network diagram method and due to this reason project team strictly need to follow stipulated
time while working on project. This is the only way that will ensure control on project cost.
Table 2Cost calculation sheet
COST ELEMENT BASE
ESTIMATE
PROJECT MANAGEMENT 220,000
PLANNING 30,000
DESIGN
PRELIMINARY DESIGN 60,000
DETAILED DESIGN SERVICES 300,000
DESIGN TOTAL 360,000
6 | P a g e

PROPERTY
MARKET VALUE OF LAND 1,000,000
VARIABLE COSTS 250,000
LESS: SURPLUS LAND RECOVERIES 0
PROPERTY TOTAL 1,250,000
ENVIRONMENT
ENVIRONMENTAL COMPENSATION 200,000
ENVIRONMENT TOTAL 200,000
CONSTRUCTION
ROAD CONSTRUCTION
GRADE CONSTRUCTION 1,000,000
PAVING CONSTRUCTION 500,000
UTILITY CONSTRUCTION 100,000
OPERATIONAL CONSTRUCTION 200,000
ROADSIDE CONSTRUCTION 100,000
OTHER CONSTRUCTION 100,000
ROAD CONSTRUCTION SUB-TOTAL 2,000,000
STRUCTURAL CONSTRUCTION 1,000,000
CONSTRUCTION TOTAL 3,000,000
CONSTRUCTION SUPERVISION 270,000
OTHER COSTS
<INSERT ITEMS> 45,000
OTHER COSTS TOTAL 45,000
PAST COSTS (prior to <insert date> ) 50,000
MANAGEMENT RESERVE (if
applicable)
TOTAL 5,425,000
Part 2
2.1 Literature review on key aspects of project
According to Walker, (2015) while constructing roads lots of things need to be done.
Project basically refers to series of activities that are performed to achieve specific task and on
which multiple people are involved to achieve that specific objective. This is because in road
7 | P a g e

construction there are number of obstacles that construction company have to face. It must be
noted that new construction material need to be used while road construction and many times
due to internal corruption wrong quality of material is used to construct roads which reduce life
of mentioned infrastructure. During construction of roads rocks are one of the most important
barrier that create complexity in operations. Sometimes forest also need to be eliminated from
land. Experts sometimes make wrong estimation of cash flows and due to this reason expenditure
increased at fast rate on many projects. Such kind of things need to be taken in to consideration
while preparing cost sheet for the project. By doing so it can be ensured that project costing is
done in proper manner.
As per views of Boud,Cohen and Sampson, (2014) earthwork is the one of the main
complicated operation that one have to perform on the project. During excavation lots of
operations need to be performed like material removal, filling of holes, compaction annd
construction of supporting items. All these things lead to fast increase in cost of the project.
Thus, it can be said that there are lots of factors that must be taken in to account while doing
costing of product. Many times experts failed to make perfect estimation of situation and
calculate cost in wrong manner which ultimately lead to fast increase in project cost. In case of
many road construction projects of Austrlia it is observed that cost increased at very high rate
then anticipated value. In order to solve this problem some of the past projects data can be taken
in to account and by doing so to some extent accurate estimation can be made about capital
expenditure that will be made on construction project. Simulation methods are the another
alterntive that are also available to firms that are working on construction projects. Such kind of
things help managers in taking more accurate decisions.
According to Boulangé and Sterczynskia, (2012) there are different methods of road
construction like earth road, gravel roads, soil stabilized and water bound roads and cement
concrete roads. Cement concrete roads are usually prepared in rural areas where lots of vehicles
passes day and night. In residential colonies also cement roads are prepared. Soil stablized roads
are prepared in areas where natural calamities frequently occur. By preparing such roads in those
areas government reduce cost of destruction of property. Gravel roads are observed in rural areas
where gravel are put on roads and by doing so road is made balanced. However, highways are
also developed by using gravel but cost of same is very high as one need to use road rollers and
many other equipments to build strong and durable road.
8 | P a g e

As per views of Knox and Harvey, (2011) in order to design roads CBR technique is
commonly used and is more effective. Under this sample of soil is taken and test is performed.
This approach is used to measure strength of road subgrades. It consistt of linger of stsandard
area to penetrate as soil sample at standard rate. If subgrade is identified stronger road is made
less thick by the road contracters. Thus, it can be said that in order to design road first of all test
is performed by experts on land.
2.2 Background analysis of project
Tender document for Forest highway and Pacific highway project
 Pre construction information: Company having experience in road construction from
last five years. Equiments equiped with modern technology are used by the workforce
for road construction (Lam, Varbanov and Klemeš, 2010). Road rollers, crans and other
excavation machines that are commonly used are in well condition and are able to do
work at fast rate for road construction. Thus, company can complete task in short
duration and at minimum cost.
 Site waste management plan: As part of site waste management plan entire wastage will
be shift to waste carrying vehicles which will dump entire waste to area where city entire
garbage is dumped (Rahmat and Kinuthia, 2011). This process will be performed on daily
basis and by doing so waste will be managed.
9 | P a g e