CE5804 Global Infrastructure Project Management

Term Project

Study of Proposed LRT

Project in Bangkok
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Introduction
◆ Need for alternative transport mode in Bangkok, Thailand:
✓ Severe traffic congestion due to rapid population growth
✓ Limitations of current infrastructure (e.g. lack of connectivity)
✓ Environmental concerns
◆ Elevated Light Rail Transit (LRT) system connecting the existing
Mass Transit System and the Chao Phraya Waterway

4
Analytical Hierarchy Process (AHP)
◆ AHP Structure:
Reduce traffic congestion in the selected
Goal
area in Bangkok, Thailand

Transportation Economic Environmental

Criteria Social Impacts
Service Impacts Impacts

Sub- Connectivity to Construction Accessibility to

Air Pollution
Criteria Other Cost Public
Transport
Modes Disruption to
Operation and Green Spaces
Surrounding
Maintenance Areas
Travel Time Cost Energy
Employment Consumption
Opportunities
Long-Term
Safety
Profitability

Expansion of Bus Rapid Light Rail Congestion

Alternatives
Road Networks Transit (BRT) Transit (LRT) Pricing

Overall
0.113 0.272 0.465 0.150
Priorities 5
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Project Risks

• Technical and Design Risks

Design • Political and Regulatory Risks
Phase

• Non-Completion Risks
• Financial / Market Risks
Construction • Safety Risks
Phase

• Demand / Performance Risks

Operation • O&M Risks
Phase
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Business Environment in Thailand

Legal Supply

Foreign Business Act Architectural

• < 50% shares • Not as critical

M&E
Foreign Working Act
• Package with
• Engineers ≠ Rolling Stock
Foreigner
Raw Materials
Board of Investment • Cement Production
Wavier • Mining Quarries
• River Sand
• Steel Mills
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Cross-Cultural Differences
◆ Hofstede’s Cultural Dimensions Comparison:

11
Cross-Cultural Differences
◆ Religion and Culture:
o Buddhism
o Hierarchical, Values Relationships
o Indirect, Relaxed Attitudes
◆ Language and Communication:
o High-Context, Full of Smiles

12
Cross-Cultural Differences
◆ Business Practices
◆ Holidays:
o Thailand – 16
o Singapore – 10

13
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Investigation Checklist
◆ Visit to cover the following main areas:
o Technical Investigation
o Resources Investigation
o Contractual & Legal Arrangements
o Project Services (Finance, HR management, etc.)

◆ Key fields for the checklist:

Intended
S/N Description responsible Status Remarks
partner
CATEGORY
1 Description of detailed action
…..
Investigation Checklist
◆ Sample Checklist (1/3):

S/N Description
TECHNICAL INVESTIGATION
Traffic Situation Verification: Traffic survey before and after project
1
implementation
2 LRT Site Survey
2.1 Soil investigation
2.2 Civil structures around the site
2.3 Utility supplies (electrical power, water, communication, etc.) around the site
2.4 Climate impact control on project (rainfall, floods, typhoons, etc.)
3 Logistics
3.1 Transport Infrastructure (seaport, expressway, bridge, etc.)
3.2 Fright (rates, capacity, availability)
Investigation Checklist
◆ Sample Checklist (2/3):

S/N Description
RESOURCES
1 Construction Materials (availability, type, cost for cement, lumber, piling, pipe, etc.)
2 Sand & Aggregation
3 Equipment (availability, type, condition, cost)
4 Train and track supply
5 Labour (foreign or local labour, classification, efficiency, cost, etc.)
6 Testing & Certification organizations
CONTRACTUAL AND LEGAL ARRANGEMENT
1 Scope of work distribution
2 Financial structure and organization chart of the joint venture
3 Legal firm appointment
4 Taxation
Investigation Checklist
◆ Sample Checklist (3/3):

S/N Description
PROJECT SERVICES
1 Financial and Accounting arrangement
2 Human Resources Management
2.1 Welfare of employees
2.2 Safety, healthcare, insurance
2.3 Accommodation & transportation of employees
2.4 Training
3 Publication & Communication
Public relations with local government (compliance to laws & regulations,
3.1
networking with local authorities, agencies, etc.)
3.2 Public relations with public, media etc.
Public relations with other business owners, private land owners, social
3.3
organizations, unions, and affected individuals, etc.
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Organization Structure
◆ Structure during the Development Phase:
Organization Structure
◆ Structure during the O&M Phase:
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Financing Plan
◆ Layout of Financing Plan:

Financing
Local Foreign Total % of Total
Source
Debt
Loan 2,618,000 10,472,000 13,090,000 35%
Bank Overdraft 374,000 - 374,000 1%
Trade Credit 748,000 - 748,000 2%
Equity
Sponsors 8,377,600 3,590,400 11,968,000 32%
Total Project
26,180,000 70%
Financing
Forecasted Ratios
◆ Forecasted Balance Sheet & Ratios:
Fixed Asset In USD $
Debt Ratio = Total Debt / Total Assets x 100% Buildings & Facility 19,500,000
Equipment & Trains 14,800,000
= $14,212,000 / $37,400,000 x 100% Others 1,400,000
= 38% Total 35,700,000
Current Asset
Cash 1,500,000
Others 200,000
Total 1,700,000
Current Ratio = Current Asset / Current Liability Total Asset 37,400,000
= $1,700,000 / $1,122,000
= 1.5 Liability
Bank Loan 13,090,000
Creditors 1,122,000
Total 14,212,000
Equity
Return on Equity = Net Profit / Equity x 100% Equity Sponsor 11,968,000
= $ 4,540,813 / $23,188,000 x 100% Others 11,220,000
= 19.6% Total 23,188,000
Total Liablity & Equity 37,400,000

*Net Profit after Tax at 6th year: $4,540,813

Structure of Financing/SPV

Local Our Company

Contractor (Foreign)

Shareholder
Equity Agreement
Investor
O&M
Project Contractor
Agreement
Government SPV

Local
Subcontractors
Banks Loan
Agreement
Content
▪ Project Information
▪ Project Risks
▪ Business Environment in Thailand
▪ Cross-Cultural Differences
▪ Investigation Checklist
▪ Organization Structure
▪ Project Financing
▪ Value Management
Value Management
◆ Stakeholder Management:
o Coordinator from Local Government
o Traffic and Transport Officer
o City Planning Officer
o Local Community Representatives
o Business Partner
o Designer
o Engineer
o Urban Designer
o Contractor
o Subcontractors & Suppliers
o Project Manager
o Property Manager
o Workshop Facilitator
Value Management
◆ FAST Diagram:
Value Management
Final

◆ Value Hierarchies: Weight

s
Attractive service
20 0.4 infrastructure and 0.2
facilities

Smart system for

Transport
50 0.5 15 0.3 0.15
scheduling, planning,
Service
and driving of vehicles

Better signaling
15 0.3
system to allow 0.15
greater speed to be
achieved
20 0.4 Cost-efficient
0.04
infrastructure
Create a
modern Cost-efficient
and Economic 20 0.4 0.04
10 0.10 operation &
efficient Perspective
maintenance
LRT
transit 10 0.2 Cost-efficient train 0.02

Social Integrated and

20 0.5 0.1
accessible
20 0.20 Social
Perspective Minimize disruption to
20 0.5
public during 0.1

operation

30 0.6 Environmental
Environmental 0.12
20 0.20 friendly train
Perspective
20 0.4
Energy efficient train 0.08
Value Management
◆ Decision Matrix:
Weight of Importance Option A Option B Option C
Attractive service infrastructure and 30 40 30
facilities 0.2
6 8 6
Smart system for scheduling, planning, 40 35 25
and driving of vehicles 0.15
6 5.25 3.75
Better signaling system to allow greater 45 15 40
speed to be achieved 0.15
6.75 2.25 6
Cost-efficient infrastructure 15 55 30
0.04
0.6 2.2 1.2
Cost-efficient operation & maintenance 40 20 40
0.04
1.6 0.8 1.6
Cost-efficient train 30 10 60
0.02
0.6 0.2 1.2
Socially integrated and accessible 35 45 20
0.1
3.5 4.5 2
Minimize disruption to public during 40 30 30
operation 0.1
4 3 3
Environmentally friendly train 35 30 35
0.12
4.2 3.6 4.2
Energy efficient train 25 35 40
0.08
2 2.8 3.2
Total Worth Score 1.00 35.25 32.6 32.15
Cost Estimate $37.2m USD $33.4m USD $34.5m USD
Value = Worth / Cost 0.95 0.98 0.93
Thank You.