Project Planning, Management

& Engineering Economics

Course Code – CE407

Project Life Cycle

Lecture # 4
 Learning Objectives

By the end of this lecture, you will be able to;

• Define of project life cycle.
• Differentiate between project phases & project
management process groups.
• Understand the characteristics of project life cycle.
• Understand the types of projects based on their phases
– Single phase project
– Multiphase projects
• Fast Track projects
• Know & demonstrate the different phases of project life
cycle (in general & with specific reference to Pakistan).
 Project Life Cycle
“A project life cycle is the series of phases that
a project passes through from its initiation to its
closure”
 It is a representation of life story of an entity in terms of
phases. The entity can be a product, project, human
being, animal etc.
 The phases are generally sequential, but can be
overlapping for reducing the project duration.
 Projects are transient and unique but their phases are
generally the same (hence the project life cycle).
 The project life cycle is a helpful structure for project
management in general and project planning in
particular.
 Single Phase Project

Sequential Multi Phase Project

Overlapping Multi Phase Project

Source PMBOK5, PMI, USA

 Project Life Cycle (cont.)

 Fast track construction is the example of

overlapping multi phase project.

 It is project delivery strategy to start construction

before the design is complete.

 It is a scheduling technique that can be used to

reduce the overall duration of projects by
overlapping tasks (e.g. design & Construction).

 It is likely that fast-track construction will be more

expensive than a normal track traditional contract.
 Project Life Cycle (Cont.)

 Don’t confuse project phases and life cycles with the

project management process groups. Project phases
and life cycles describe how the work associated with the
product of the project will be completed. For example, a
construction project might have phases such as feasibility
study, design, build, inspection, and turnover.

 The five project management process groups (Initiating,

Planning, Executing, Monitoring and Controlling, and
Closing) organize and describe how the project activities
will be conducted in order to meet the project
requirements. These processes are generally performed
for each phase of a large project.

Project Management Professional Exam STUDY GUIDE 5th Edition by Kim Heldman
 Characteristics of Project Life Cycle

 Cost and staffing levels are low at the start, peak as the
work is carried out, and drop rapidly as the project
draws to a close.
 Characteristics of Project Life Cycle (Cont.)

 Risk and uncertainty are greatest at the start of the

project. These factors decrease over the life of the
project as decisions are reached and as deliverables
are accepted.
Project Life Cycle Problem
Identification

Evaluation Definition

Implementation
Project
Design

Development
 1. Problem Identification

 Also referred to as the concept stage or need

stage where the project is just a thought.

 Someone realizes that there is a problem in

search of a solution
or
 An opportunity that the organization can take
advantage of.
 2. Definition Phase
 In this stage, a person or group of people accurately
describes the problem (or, more positively, the
challenge or opportunity) that the project is
attempting to solve.

 The definition stage is more often neglected, which

helps explain why some projects fail.

 The challenge of definition stage is to take the time to

thoroughly describe the problem.

 Define the problem and its solution from the

customer’s point of view.
 3. Project Design Phase
 Define the project objectives
 Finalize the project scope
 Identify project activities
 Break each activity into logical components
 Assign resources and
 Create estimates for time and costs
– Go/no go stage
– Outcome is project budget and timeline
– Decides the success of the project
 4. Development Phase
 During the development phase, everything that will
be needed to implement the project is arranged.
 Potential suppliers or subcontractors are brought
in, a schedule is made, materials and tools are
ordered, instructions are given to the personnel and
so forth.
 In some projects, particularly smaller ones, a formal
development phase is probably not necessary.
 The important point is that it must be clear what
must be done in the implementation phase, by
whom and when.
 5. Implementation Phase

 Project execution stage

 Field testing and measurement
 Product is modified or re-engineered
 6. Evaluation Phase

 Review of a project.
 Reports and personal experience with the
project.
 Identify areas to improve.
 Project Management Life Cycle (With
Specific Reference to Pakistan)

1) Identification & Formulation;

2) Appraisal & Approval;
3) Implementation;
4) Completion/Closure; and
5) Post Evaluation.
 1) Project Identification & Preparation

 Project identification and its formulation is the most

important segment in a project cycle in which the
sectoral priorities must be followed. Projects in various
sectors are proposed and prepared by concerned
Ministries / Departments.

• In advanced countries, there are special organizations

which are employed continuously in the field surveys and
necessary investigations required for formulation of
feasible projects while in case of Pakistan projects are
normally identified by the line Ministries/Deptt., public
sector corporations, NGOs, and public representatives.
 1) Project Identification & Preparation
Cont.
• Plan Priorities: “It is said that fixation of priorities is the
first step to wisdom.”

• The National & Annual development plans (ADP) are

prepared after thorough scrutiny of the most important
projects by the Planning Commission / Planning and
Development Division of the Government of Pakistan.

• The order of priority assigned to each project depends on

the viability and desirability of the project's impact on
national economic growth, social development,
generation of greater resources/revenues and overall
Government policy.
 1) Project Identification & Preparation
Cont.
 Feasibility Study: Projects of Infrastructure Sector and
Production Sector costing Rs.300 million and above
should undertake proper feasibility studies before the
submission of PC-I.

• For mega projects, where huge amount for feasibility

studies is involved, a separate proposal on PC-II
Proforma is to be submitted for approval. For other low
cost projects, in-house feasibility is carried out.

• Based on the data and positive findings of feasibility

study, PC-I is prepared and submitted for approval by the
concerned forum.
 1) Project Identification & Preparation
Cont.
 Project Preparation: Development projects are prepared
on the approved format i.e. PC-I Proforma.

• PC-I Proforma contains the project description, scope,

population coverage, objectives, cost estimation,
financial phasing, physical scheduling (PERT/CPM/Gantt
Charts) & period of implementation etc.

• The PC-I should be supported with a feasibility study,

survey and investigation and market survey report etc.
 2) Project Appraisal & Approval

 Project Approval involves a careful checking of the basic

data, assumptions and methodology used in project
preparation.

• An in-depth review of the work plan, cost estimates and

proposed financing plan, an assessment of the projects
organizational and management aspects.

• Finally the validity of the financial, economic and social

benefits expected from the project.
 2) Project Appraisal & Approval Cont.
 Project Approval: If the project is found technically sound,
financially & economically viable and socially desirable only
then the project is approved.
• Projects are approved by different approving bodies
depending upon the cost of project. (PC-I Approval)

Approving Authority Cost Limit

• Departmental Development Working Party (DDWP) Up to Rs.60 M
• Central Development Working Party (CDWP) Up to Rs.3000 M
• Executive Committee of National Economic More than Rs.3000 M
Council (ECNEC)
• Provincial Development Working Party (PDWP) Up to Rs.10,00 M
 2) Project Appraisal & Approval Cont.
• All the projects irrespective of the cost are to be considered
by the DDWP. The projects costing Up to Rs.40 million are
approved by the DDWP, while, projects costing more than
Rs.60 million are submitted to the CDWP for their
consideration.

• The CDWP only approves the projects costing Up to

Rs.3,000 million, while, projects costing more than the
financial competency of CDWP are recommended to ECNEC
for approval.

• The PDWP approves the projects Up to Rs 10,000 million,

for projects, other than water sector, provided no federal
funding or external financing is involved in the cost of the
project (foreign fund upto 25% only).
 2) Project Appraisal & Approval Cont.

• Project Authorization: The sanction is issued by the

“Public Investment Authorization” Section of P&D
Division in case of projects approved by CDWP and
ECNEC, while Provincial P&D Departments issue sanction
for the projects approved by the PDWP. In case of DDWP
level projects, the sanction is issued by the concerned
Ministry/Departments.

• After issuance of sanction letter by the approving

authority, the Ministry concerned issues administrative
approval of the project. The day, the administrative
approval is issued the project implementation period
starts.
 2) Project Appraisal & Approval Cont.

• Project Activation: Activation of the project is the

appointment of a Project Director. As per ECNEC decision
dated 18th February, 2004, an independent (full time)
Project Director should be appointed for the project
costing Rs.100 million and above. Project Director can be
appointed on additional charge basis, if the cost of the
project is below Rs 100 million.

• Delegation of Power: According to ECNEC decision,

dated 24th April, 2000, the Project Director should be
delegated full administrative and financial powers and be
made accountable for any lapses.
 3) Project Implementation / Execution

• This consists of a set or series of actions in parallel or

sequence - represented by Bar Charts or a Network
Diagram - whereby words are transformed into works
and the potential of the project becomes a physical fact.
• Hiring of office space and appointment of key project
staff is the first step in this stage.
• The physical activities like civil work, procurement of
machinery & equipment, etc., may be undertaken in
accordance with the approved Work Plan/Activity Chart.

• Monthly progress of the project is prepared (PC-III) &

submitted in implementation phase.
 4) Project Completion/Closure
• The project is considered to be completed / closed when
the objectives are achieved, or abandoned due to various
reasons.

• A Project Completion report on a PC-IV proforma is

prepared & forwarded to the Projects Wing of Planning
Commission.

• Project closure involves handing over to the concerned

authorities, closing of suppliers contracts, and closure of
bank account, releasing security money, staff and
equipment and informing stakeholders of the closure of
the project.
 5) Post Evaluation
• After closure of the project, annual operation reports
have to be submitted to the Planning & Development
Division over a period of five years on PC-V proforma.

• Looking systematically at the elements of success and

failure in the project experience to learn how to plan
better for the future
 PC Performa: Summary
For the project cycle following six (6) proforma have
been designed by the Planning Commission.
No Performa Purpose

1 PC-I Form
Detailed project document

2 PC-II Form For preparation of pre-feasibility, feasibility study,

conducting survey
3 For submission of quarterly monitoring/progress
PC-III Form
report of project
4
PC-IV Form For submission of completion report of project
5 For submission of evaluation /implementation
PC-V Form report on annual basis for five years (helps in
policy formulation for future)
6 Low cost PC-I For preparation of small projects costing less
Form than Rs. 1.0 million
 Summary
• Definition of project life cycle from PMBOK.
• Difference between project phases & project management
process groups.
• Characteristics of project life cycle.
• Types of projects based on their phases
– Single phase project
– Multiphase projects >> Fast Track projects
• Project life cycle phases (in general)
– Problem identification, definition, project design,
development, implementation & evaluation
• Project life cycle phases (in general)
– Identification & Preparation, Appraisal & Approval, Execution,
Completion & Evaluation
 Reference
• PMBOK Guide 4th Edition.
• National Impact Assessment Program, Institutional
Coordination Mechanism draft discussion papers 22nd
November 2011.
• Handbook on Planning Commission Govt. of Pakistan
2008.
THANK YOU!