Project Management

Group Members:
Farhan Khalid
Makhdoom Khurshid Ali
Naeem ul Hassan
Sohaib Maqsood
Zaka ul Hassan

Project Justification
APL has FSA (Fuel Supply Agreement) with different IPPs

(International Power Plants), RPPs (Rental Power Plants), Cement

and Textile industries for supply of Furnace fuel oil (FFO) to them.
Product has to be imported due to limited production of local

refineries.
As APL has no infrastructure at Port Qasim, the hub for imported

oil, therefore, APL needs to have its own terminal and storage
facility at this port.

Existing Setup
Presently, imported FFO is unloaded and stored at the storage

tanks of Bakri Pvt. Ltd, another oil marketing company to which

APL has outsourced its storage at Port Qasim.

Project Evaluation Factors

Financial Factors
APL pays PKR 12.5 million per month (Rs. 150 m pa) for the

storage of its oil at Bakri Pvt. Ltd.

Capital expenditure (CAPEX) in building a new oil terminal will
be approximately PKR 479 million.
Cost of operating (OPEX) the new terminal will be approximately
PKR 2.95 million per month (Rs. 35.4 m pa)
PKR 115 million (150-35.4)can be saved per year
Breakeven point will be approximately 4 years. (479/115)

Cost Break down

S.No.
i.
ii.
iii.
iv.

Unit Details
PKR
PKR
PKR
6 units x PKR 10,000,000

Total Cost
100,000,000
100,000,000
5,000,000
60,000,000

v.

Capital Expenditure
Land Acquisition
Infrastructural Development
Office Building
Loading Facilities (Filling gantry, Loading
arms, Meters)
Storage Tanks (Capacity: 10000 tons each)

3 units x PKR 25,000,000

75,000,000

vi.

Oil Suction Pumps

6 units x PKR 3,000,000

18,000,000

vii.
viii.
ix.

Generator
Testing Laboratory
Measuring Equipment (Weigh Bridge)

PKR
PKR
PKR

5000000
2,000,000
4,000,000

x.

PKR

10,000,000

PKR

100,000,000

S.No.
a)
i.

Safety Measure (Fire pumps and hydrant

system)
Installation
of
Office
Accessories
(Computers, Furnishing)
Revenue Expenditure
Resource Acquisition and Management
Management Staffing

Unit

Cost
1,000,000

ii.

Labor

iii.

Security

iii.
vi.
b)
i.

Security charges
Building Maintenance
Operational Costs
Measuring
Equipment
Hydrometer, Thermmeter)
Testing Equipment
Terminal Maintenance
Generator fueling

10 personnel @ PKR 100,000

per month
20 personnel @ PKR 15000 per
month
10 personnel @ PKR 15000 per
month
PKR per month
PKR per month

xi.

ii.
iii.
iv.

(Dip

Road, PKR per month

PKR per month
PKR per month
PKR per month

300,000

50,000
200,000
100,000
100,000
1,000,000
50,000

Production Factors

Installation of machines and Raw materials

Tendering/ Evaluation and job award to

qualified bidders
Cos monitoring system and quality control
checks

Effects on waste and Rejects

Procurement as per specifications
Liabilities/ penalties on sub-standard purchases

Energy requirements
KESC/Government Authority Approvals
Standby Genset for smooth operation

Equipment requirements
Responsibility of bidders

Safety or process
NFPA (National Environmental Policy Act)/OGRA compliance
NFPA (National Fire Protection Association) compliance

Application of technology
State of art structured development

Suppliers
Preferably globally renowned suppliers registered with the

company

Marketing Factors
Size of potential market for output
Reliable supply source for South and up country
Import/ Export option to capture market
Hospitality arrangements for competitors
Probable Market share
Business expansion as hub for oil industry

Impact on current product line

Market hold for furnace oil
Product line extension- HSD, PMG, SKO, LDO, JP1
Consumer or preferences
Local market, Power plants
Estimated life of output
Life time project with renovation/ replacement of machinery

Personnel Factors
Recruitment
Project Engineer and Site Management/ Janitorial services/

security guards
Training requirement/ Skilled labors Availability
Contractors responsibility
Level of resistant from current workforce
Contractors responsibility to accommodate local residents
workforce

Change in labor size

Depends upon the project pace and timeline for completion
Impact on working condition
State of art structure development

Administrative and Miscellaneous

Factors

Meet govt. safety standards

Licensing authorities rules regulations compliance.
Meet Federal/ Provincial autonomous bodies policies like Explosive, Custom, KPT,

Weight and Measured Department, etc.

Meet govt. environmental standards

ISO 14001 -International Standard for Environmental Management
OHSAS 18000- Occupational health and safety management.

Reaction of stockholders
Strong Bullish trend in stock market
Increase in Turnover

 Impact on customers, suppliers and competitor

Uninterrupted Supplies of oil products
Flourishing Business to affiliated Business partners like transporters
Competitors become weak and dormant
Logistics requirements
Clearing agent/ Suppliers responsibility for shipment of imported materials
Contractors responsibility for local material

Benefits of Port Qasim Terminal

Supply Chain improvement
Product Storage increase
Multiple product storage facility
Independent Control of the Facility
Better Logistics support
Regulatory Authority Requirements

Conclusion
PKR 115 million p.a. could be saved if APL decides to build its

own terminal
APL can also expand gradually to build new storage tanks of
other products in the facility to be rented out.
Administrative control would be there for APL
Inventory gain can be accommodated
Establishment of new terminal would not only help APL
strengthen its supply chain but will also help it improve its oil
marketing efforts

Thankyou