PROJECT MANAGEMENT

Project Planning, Project Appraisal, Project

Financing & Project Implementation

SUBMITTED BY:

ROLL NO: -..

Introduction
A project is an activity sufficiently self-contained to permit financial and
commercial analysis. In most cases projects represent expenditure of capital
funds by pre-existing entities which want to expand or improve their operation.
In general a project is an activity in which we will spend money in expectation
of returns and which logically seems to lead itself to planning. Financing and
implementation as a unit, is a specific activity with starting point and a specific
ending point intended to accomplish a specific objective. To take up a new
project involves a capital investment decision and it is the top management
duty to make a situation and feasibility analysis of that particular project and
means of financing and implementation it. Financing a project involves a good
deal of risk. Project finance is a rapidly expanding field, which focuses not
only the credit status of a company, but on cash flows that will be generated by
a specific project. Project finance has its origins in the natural resources and
infrastructure sectors. The current demand for infrastructure and capital
investment is being fueled by deregulation in the power, telecommunications,
and transportation sectors; by the globalization of product markets and the

need for manufacturing scale; and by the privatization of government-owned

entities in the developed and developing countries. The concept of private
finance is a new method based on the use of private sector resources to build,
maintain, manage and operate public infrastructure. Interest in this approach has
grown stability as fiscal resources become more constrained. One key
advantage is the potential to use the management skills and other resources of
private enterprise to provide better public services at a lower cost. Another
benefit is economic revitalization through the creation of business opportunities
for private enterprise. In addition it is possible to form new public-private
partnerships based on the appropriate sharing of roles between the government
and private enterprise. The advantage of the project finance method is that the
various parties, including financial institutions which are able to control these
risks most appropriately can share the various risk factors inherent to projects.
In this way projects risk can be both spread and reduced. In recent years there
has been a rapid increase in the number of companies opting for project finance.
There are three basic reasons for this trend. First, companies have become
aware of their own credit ratings.

Second, improved risk control is needed for large scale projects. Third, access
to finance can be facilitated by isolating good projects from the reduced credit
status of business corporations.
Need of the Study:
Innovation is the key to achieve a competitive edge in the any public sector
unit undertaking innovation in its use sense new technologies, new ways of
discovering new replacement or establish segment. Now-a-days the project
finance is necessary to study because to learn how the allocation of financial
resources in the implementation of new project or expansion of existing
project of any company. Visakhapatnam Steel Plant is a genetic under taking
constricted with a huge government investment in the public sector it has the
unique feature of being a sea based interrogated Steel Plant belt with the latest
technology with an annual capacity of 3.MT Steel employees and total man
power of more than 17000. To study the process of billing of contracts and
clearance procedure for imports.2

Objectives of the Study

The study aims at achieving the following objectives:
Visakhapatnam steel plant is a multi-produce steel manufacturing unit with various
cycle times for each product. The capital required by each depot in a large organization
like Visakhapatnam steel plant depends in the product target for that the study is based
upon the way of billing for the contracts and customs clearance for import cargo. The
main objective of the study is to know how a project for expansion takes place and how
the billing occurs as soon as possible. It also includes the way of customs clearance for
the import cargos.
Scope of the Study:
The study of the project finance will helpful to know the allocation of the financial
resources and know how it is applicable to individual projects that any organization
takes up. The scope of our study The process of expansion projects and its billing for
the contractors as soon as possible within the limited time.

Research Methodology
Methodology:
Methodology is a systematic procedure of collecting information in order to
analyze and verify a phenomenon. The collection of information is done two
principal sources.
Primary Data.
Secondary Data.
Primary Data
It is the information collected directly from financial department for further
studies, it was mainly through interviews with concerned officers and staff, either
individually or collectively, sum of the information has been verified or
supplemented with personal observation. The data collection includes,
Conducting group seminars and with the concerned managers and officers of
finance department of V.S.P.

Secondary Data
This is taken from the annual reports, websites, company journals, magazines
and other sources of information of steel plant.
Limitations:
Though the project is completed successfully a few limitations may be there..
Since the procedure and policies of the company do not allow disclosing of
all financial information the project has to be completed with maximum effort.
Most of the matter related to project contracts were confidential it is not
possible together much information.
The period of study that is 8 weeks were not enough to go into the detailed
aspects of the study.

Company Profile
To meet the growing domestic needs of steel, the decision of the Government of
India to set up an Integrated Steel Plant at Visakhapatnam was announced by the
Prime Minister Smt. Indira Gandhi in parliament on 17 th April 1970. The Selection
Committee chooses the site near Balacheruve creek and the prime minister did the
formal inauguration and laid the foundation stone on 20 th January 1971. The
consultant, M/s M.N.Dastur and company ltd., submitted a techno-economic
feasibility report for thplant, with an annual capacity of about 3 million tones of
liquid Steel, in October 1977.
VISION
To be a continuously growing world class company we shall Harness our growth
potential and sustain profitable growth. Deliver high quality and cost competitive
products and be the first choice of customers. Create an inspiring work environment
to unleash the creative energy of people. Achieve excellence in enterprise
management. Be respected corporate citizen, ensure clean and green environment
and develop vibrant communities around us.

MISSION
To attain 16 million ton liquid steel capacity through technological upgradation, operational efficiency and expansion; to produce steel at
international standards of cost and quality; and to meet the aspirations of the
stakeholders.
Expand plant capacity to 6.3 Mt by 2010-11, with the mission to expand
further in subsequent phases as per the corporate plan

Conclusion
Project financing is an innovative and timely financing technique that has been
used on many high-profile corporate projects, including Euro Disneyland and
the Eurotunnel. Employing a carefully engineered financing mix, it has long
been used to fund large-scale natural resource projects, from pipelines and
refineries to electric-generating facilities and hydro-electric projects.
Increasingly, project financing is emerging as the preferred alternative to
conventional methods of financing infrastructure and other large-scale projects
worldwide. Project Financing discipline includes understanding the rationale
for project financing, how to prepare the financial plan, assess the risks, design
the financing mix, and raise the funds. In addition, one must understand the
cogent analyses of why some project financing plans have succeeded while
others have failed. A knowledge-base is required regarding the design of
contractual arrangements to support project financing; issues for the host
government legislative provisions, public/private infrastructure partnerships,
public/private financing structures; credit requirements of lenders, and how to
determine the project's borrowing capacity; how to prepare cash flow

projections and use them to measure expected rates of return; tax and
accounting considerations; and analytical techniques to validate the project's
feasibility. Project finance is finance for a particular project, such as a mine,
toll road, railway, pipeline, power station, ship, hospital or prison, which is
repaid from the cash-flow of that project. Project finance is different from
traditional forms of finance because the financier principally looks to the
assets and revenue of the project in order to secure and service the loan. In
contrast to an ordinary borrowing situation, in a project financing the financier
usually has little or no recourse to the non-project assets of the borrower or the
sponsors of the project. In this situation, the credit risk associated with the
borrower is not as important as in an ordinary loan transaction; what is most
important is the identification, analysis, allocation and management of every
risk associated with the project.

Reference
I.M. Pandey
Financial Management Vikash Publication 2012
P.V. Kulkurni
Financial Management Himalaya Publishing House 2011
Shailendra Nigam Total Quality Management Excel Books 2010
The Journals:
Steel Times
SAIL News.
Iron & Steel Technology.