This report is aimed at producing an effective project plan to British Airport Authority (BAA) using Heathrow terminal 5 as a case study. The methodology used in this project is the problem solving approach where a major problem is identified, the possible solution to the problem is analysed and the best solution for the implementation of the project is recommended.
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In producing this plan, a major problem of airport congestion was identified and an option appraisal was carried using the SWOT tool to determine whether the proposed project plan was worth doing, the project’s scope, definitions and deliverables were clearly stated. Some assumption, considerations and constraints had to be made to assist the project team consulted for this project in understanding and delivering the plan effectively. The project’s critical factors, measurable targets dependencies and resource requirements were outlined in this report. Also a detailed cost estimate was done for the allocated budget. Microsoft project package was used to prepare and produce a Gantt chart including a work breakdown structure for each task identifying the major milestones. A communication and risk plan is also included in this report to ensure a smooth implementation of the project plan.
Finally this report recommends time duration for the project and a sustainability framework.
INTRODUCTION
This is a detailed report based on the project plan presentation made by group 5 project consultants to British Airport Authority (BAA) on the 14th of December 2009. The problem solving approach was used in this project plan using BAA terminal 5 as a case study.
This report identifies and addresses the problem of passenger and airline congestion in Heathrow’s existing terminal. In order to fully understand this report, the project background and rational would be discussed in the following section.
1.1 Background
Heathrow located in the London borough of Hillingdon was initially a private airport with one grass runway used to assemble and test aircrafts. During World War II, the land occupied by this private airport was acquired by the government to build a Royal Air Force (RAF) Heston Aerodrome which was an army surplus tent small grass airfield. In 1946 it was handed over to Air ministry as London’s new civil airport. Due to the closure of the old terminal on the North side by 1961, airlines either operated from the Europa terminal or the oceanic terminal which handled long – haul carriers (now terminal 2 and 3 respectively). Terminal 1 was opened in 1969 by which time about 5 million passengers were passing through the airport travelling from Heathrow to and from all parts of the world (British Airport Authority 2009). The demand for air travel and increased congestion in the central area further created the need for the development of terminal 4 in 1986.
As at 2006, Heathrow owned and operated by British Airports Authority (BAA) can boast of nearly 1.4 billion commuters over 14 million flights (British Airport Authority 2009). It is UK’s only international network hub airport. As traffic of commuters increased Heathrow Airport is faced with an ever increasing demand for passenger facilities and capacity constraint which has lead to frequent flight delays. This need has further lead to the construction of terminal 5. Terminal 5 is said to be a passenger terminal and associated facilities that would complement Heathrow’s existing terminals
The planning and building of a new terminal (Exciteh 2009), presents a distinctive challenge compared to the construction of any other structure. Building this new terminal would expand Heathrow’s capacity to accommodate the rapidly increasing number of passengers, improve the safety and security of air transport, introduce high quality facilities, and increase the status of the British airport worldwide. The new Heathrow terminal 5 would be a gateway between the UK and the world.
Group 5, is a project management consultancy team based in Aberdeen. This team has been retained as project consultants by BAA to produce a project plan for the successful delivery of her terminal 5 project at its very best. This report shows explicitly all the steps and phases required to produce the final deliverable (the project plan).
1.2 Project Rationale
Heathrow is synonymous with international travel and is one of the UK’s most significant fiscal assets. As a two runway and four terminal airports in 2005, it is one of the world’s leading airports in terms of passenger and airline capacity. If Heathrow continues to operate within its existing limits, it is forecasted that the airport will handle 87 million passengers a year by 2015 and thereafter 90-95 million passengers a year (Heathrow airport interim master plan 2005). With such an increase in the yearly passenger travel a new terminal is inevitable.
Over the years, these existing terminals could accept more traffic because of the implementation of risk reduction measures. However, the continual congestion in Heathrow’s terminals may reach a condition such that it cannot be said with confidence that these terminals will continue to be safe. However, since the airline industry is a peoples industry without passengers the industry will not thrive. So the objective to build a structure that would stand the test of time and serve its millions of prospective customers thereby reducing congestion cannot be over emphasized.
2.0 PROJECT BUSINESS CASE
The development of a business case to all intents and purposes is to gain support, commitment and eventually approval from the top management. The Business Case depicts the reasons for undertaking for the project, based on the estimated costs of the project, the risks and the expected business benefits and savings (APM 2006). The business case highlights the justification for the project.
Reports by BAA (2009) shows that Heathrow runway operates at 95% capacity compared to 75% of its major European competitors. This congestion has lead to increased delay, lower resilience and fewer destinations served. Statistics taken from the UK Parliamentary office of Science and Technology (2000) and Airport council International (2008) shown in the table below portrays a rising trend in Heathrow’s passenger capacity from 1978 – 2008.
Year
1978
1979
1980
1981
1982
1983
1984
1985
No. of Passengers (million)
45.4
49.2
50.4
50.7
51.1
53.7
59.4
61.6
Year
1986
1986
1988
1989
1990
1991
1992
1993
No. of Passenger (million)
66.3
76.3
82.3
87.1
89.9
84.3
94.6
100.2
Year
1994
1995
1996
1997
1998
1999
2000
2001
No. of passengers (million)
109.2
115.6
120.7
130.7
142.2
150.9
64.61
60.74
Year
2002
2003
2004
2005
2006
2007
2008
No. of passengers
63.34
63.49
67.34
67.92
67.53
68.07
67.06
Figure 2.1 Average passenger capacity
(Adopted from UK Parliamentary Office of Science and Technology (2000) and Airport Council International (2008)
To further explain the table above is a graphical representation of the passenger capacity plotted against years.
Figure 2.2 Graph showing increasing passenger trend
(Adopted from UK Parliamentary Office of Science and Technology (2000) and Airport Council international (2008))
GRAPH ANALYSIS
The statistics used for this graph shows all fights into Heathrow airport for terminal’s 1 to 4.
From year 1998 to 2000 there was quite a steady rise in the number of passengers passing through Heathrow.
From year 2001 to 2009 Heathrow experienced a decline in airline and passenger capacity. This could be attributed to the global economic situation in many parts of the world and the threat to aviation from international terrorism. On the other hand with the UK economy gradually coming out of this recession there is an expected rise in the number of aviation travel.
2.1 Available options for addressing the opportunity
Option Appraisal
An option appraisal to determine the best means to achieve the project objectives was done. In carrying out an option appraisal, a need and a cost benefit is first carried out, then objectives are set and options are created and reviewed (Department of Treasure UK 2009). An option appraisal is a decision making technique that identifies the project objectives and explores other alternatives for attaining these objectives. It determines whether the proposal is worth doing and clearly communicates conclusions and recommendation. After a critical analysis a preferred option was taken and used in establishing this project plan. The approach for this project plan also incorporates the traditional project management concept which breaks the project into the various life cycle phases. The three major options identified for this project is as shown below;
2.2 OPTION 1 Do Nothing
This option is the base option it involves not embarking on the project. If chosen it may result in undesirable and increasing risks to air passengers due to airport congestion.
2.3 OPTION 2 Expansion of the existing terminals
Measures could be taken to expand current terminals including runways to accommodate the increase. However carrying out an expansion work on the existing terminals, would be quite challenging on airlines and passengers. This would require a temporal closure of some of the terminals which may lead to potential loss of customers as they would seek alternative routes. In addition, this approach may leave current structures with minimum factor of safety and do little to improve the deficiencies and congestion in current airport.
2.4 OPTION 3 Construct a new terminal
In this option constructing a new terminal of the anticipated capacity would mean that the new terminal would be constructed to expand the operations of older terminals and can potentially replace them. A SWOT analysis for this option was carried out.
2.5 SWOT Analysis
SWOT analysis is a technique used to evaluate the strengths, weaknesses, opportunities and threats involved in the project. This method involves specifying the project objectives and identifying the internal and external factors (Nigel and William 2002) that could stop or improve the success of those objectives. The environmental factors internal to the firm are classified as strength and weakness while the external factors are classified as opportunities and threats. These terms are further explained below:
Strengths
Strengths could either be a positive tangible or intangible attribute and they are usually within the organisation’s control.
Weakness
These are the areas that project needs to improve on. They can be considered as the project’s fault or disadvantage that might prevent them from attaining their goals.
Opportunities
Opportunities propel an organisation. These factors represent the reason for the project or business to exist and develop. Opportunities are beneficial and may assists to negate threat.
Threats
Threats are factors beyond the organisation’s control which could result in project failure. The SWOT Matrix for this project is as shown in Appendix 1. Furthermore a cost estimate is also carried out to determine the preferred option
2.6 Cost Estimate
3.0 PROJECT DEFINITION
James P. Lewis defined project as “a onetime job that has defined starting and ending dates, a clearly specified objective, or scope to be performed, a pre-defined budget, and usually a temporary organization that is dismantled once the project is complete.” For this project the objectives and scope are explained below.
3.1 Goals and Objectives
Project objectives as defined by Westland (2007) are “statements describing in more details what it is that the project will achieve”. It is the desired outcome of the project. Unclear objectives could result in conflict when information is not adequately understood. The objectives of this project plan include the following:
To supplement Heathrow’s other existing terminals to accommodate her increasing customer base and increase the airport current capacity by 30% BAA (2009)
To reinforce Heathrow’s position as Europe’s principal intercontinental hub
To provide excellent customer service and travelling experience to her highly esteemed customers
3.2 Statement of the Project Scope
The project scope can be defined as “the specific and overall definition of what the project’s end result should accomplish” (Briggs 2009). It specifies what work is included and excluded in a project perhaps defining in effect the boundaries of the project (Carmichael 2004).
3.2.1 Scope
The scope of this project is as follows:
An effective project plan for the successful delivery of BAA’s Heathrow Terminal 5 project
Recommendation of a sustainable development plan for the new terminal
3.2.2 Scope Exclusions
Exclusions are done in order to avoid misunderstandings they spell out what the project won’t do. The following are the exclusions considered in developing this project plan
The project plan would not include the conceptual design of the project
The effects of inflation on budgeted cost would not be included
The project plan does not include obtaining the necessary permits and authorization documents
The project plan does not include the ground rules to be adopted during the implementation of the project plan
3.3 Project Deliverables
A deliverable is any unique and verifiable product, result or capability to perform a service that is identified in the project management planning documentation, and must be produced and provided to complete the project (PMBOK 2004). It can also be described as the output of the project during the project and at the end. According to PMBOK (2008) there are four generic life cycle phases for a project. However since this is a mega project, five distinct phases have been identified for efficient planning. For this project, the key deliverables are grouped into the various project life cycle phases as shown in the diagram below:
Fig 3.1 Project Life cycle diagram showing the deliverables
The life cycle for this project is made up of the conception, planning, execution and control, completion/handover and post project review. These phases are further explained below.
Conception phase
This is the birth phase of any project in which the scope of the project is defined along with the methodology for delivering project desired outputs.
Planning Phase
This is the phase where all the plans required to deliver the project objectives and scope is done. This phase is characterized by breaking down the project into smaller more manageable work packages.
Execution/ Monitoring phase
This is the implementation phase of the project where work towards direct achievement of the project’s objectives and the production of the project’s deliverables take place (APMBOK 2006).This phase also involves monitoring and control. This involves recording, analysing and reporting project performance and comparing it to the planned performance in order to identify and report deviations as well as develop targets and plans.
Completion/Handover Phase
This is the project exit phase and the formal orderly end point of a project, either because it has been completed or because it has been terminated early (PMBOK 2004).
Post project Review
In this phase the lessons learned are reviewed. Below is a detailed explanation of the various deliverables at each project phase, their targets, dependencies and resource requirements.
Description of Deliverables
Project phase
Deliverable
Brief Description, targets, dependency and resource requirement
Conception
Business case
This is a document that describes the project justification
Target: Approval of top management
Dependency:Project objective
Resource Requirement:Project client or sponsor
Project Initiation document (PID)
Project initiation document is a statement of the scope, objectives and participants in a project. It defines the authority of the project manager and roles and responsibilities of project stakeholders.
Target:
Dependency:
Resource requirement:project manager
Planning
Responsibility matrix
It is a tool used to assign tasks relating to each project activity in the Work breakdown structure. It indicates clearly the role and responsibility of each project player
Target:roles and responsibility of project players
Dependency:work breakdown structure
Resource requirement: Project manger
Work breakdown structure (WBS)
It is a hierarchical decomposition of the
project into smaller elements or deliverables
called work packages thereby allowing for
effective management and control of project
scope and objectives (PMBoK 2008).
Target: work packages in relation to project
objectives
Dependencies: Project scope and
deliverables
Resource requirement: Project manager
and input from project team
Gantt chart
This is a Microsoft project tool that illustrates
the project schedule.
It is a useful tool in planning, predicting and
deciding how resources are used to achieve time and cost goals.
Target:Project schedule and project
resource requirements.
Dependency:Work breakdown structure
Resource requirement:Project manager
Risk matrix
This is a plan used in assessing risk
Categories their probability of occurrence and
the impact on the project it also highlights
controls identified to mitigate the risks.
Target:
Dependency:Risk assessment
Resource requirement;project team
Execution/ control phase
Completion/ handover
Certificate of practical completion (CPC)
it is a certificate handed over to the project manager after the project has been completed and has been certified to meet clients and stakeholders requirement.
Target:client satisfaction
Dependency:Project completion
Resource requirement: project owner
Lessons learned
it is a documentation of all lessons learned in
course of executing the project and is kept
for future references in order to prevent
pitfalls in the execution of similar projects in
future.
Target;should clearly highlight lessons
learned from the project.
Dependencies: project completion and client
satisfaction
Resource requirement: Project manager
3.4 Critical Success Factors
The primary objectives of any project being completed within the specified cost, time and good performance are not the only determinants of a successful project. These primary objectives can identify immediate contribution to profit (kerzner 2006) but will not identify if the project has been properly managed. These success factors can be seen as value enhancing practises (VEP). The following are some required factors that will determine the success of BAA’s Heathrow terminal 5 project (HT5):
Clearly established project goals and procedures
Strong support and shared vision from BAA’s top management
Satisfaction of the various groups of stakeholders with minimum or mutually agreed upon scope changes.
The contracting strategy employed would enable suppliers focus on delivery
Excellent teamwork and good communication among key players to align and convey objectives
The use of standard project management methodologies, tools and techniques. For example monitoring and change management practices should be employed to identify and resolve problems early
Availability of technological expertise and equipment
3.5 Critical Project Barriers
Unlike risks, critical project barriers are overwhelming issues that can be critical to a project’s plan. Should any of these events occur the project plan would become invalid. In this project, the following are possible critical barriers:
Removal of project funding
Occurrence of force majeure e.g. natural disasters or acts of war
4.0 PROJECT CONSTRAINTS CONSIDERATIONS AND ASSUMPTIONS
According to APM Body of knowledge (2006), constraints are issues that could cause a delay or restrictions that would affect the project; considerations are the key elements required to have a binding contract; and assumptions are statements that will be taken for granted as fact and upon which the project business case will be justified.
4.1 Constraints
In an airport environment, height limitations are placed to avoid interference with the airport radar systems and this could affect the project team during construction.
Logistics challenge due to condensed site area.
Ecological constraints and the landscape of the area to support such a project
Permit, licensing or consent approvals could take a long time to be obtained considering the sensitive nature of this project
Health and safety of the project team and locals during and after construction due to pollution
Legal requirements of the construction regulation and environmental act
4.2 Considerations
There could be potential changes to the structure in future so provision would be made available for that in the project design.
Satisfaction of the project’s large and diverse group of stake holders.
4.3 Assumptions
BAA the project sponsor and client will accept the project plan offered by this consultant team
All project participants will abide by the guideline identified within this plan
All necessary approvals have been obtained
The time frame for the project is 10 years
Management will ensure that the project team is available as at when required to complete project tasks.
All project participants will abide by the guideline identified within this plan
The required resources are available, and the estimated budget would be adequate for the project
Inflation would be constant throughout the period of the project
5.0 PROJECT DEVELOPMENT PLAN
A project development plan defines the phases that connect the beginning of a project to its end (PMBOK 2004). Because projects have a beginning and an end, there is a logical sequence of activities or tasks to accomplish project’s objectives. This sequence of activities leads to the Work Breakdown Structure
5.1 Work Breakdown Structure
Work breakdown structure is defined as “a way in which a project may be divided by level into discrete groups for programming, cost planning and control purposes” (APMBOK 2006). It acts as a control and monitoring tool in any project and also shows full clarity and understanding of the project scope. The work breakdown structure for this project is shown in appendix 2.
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5.2 Gantt Chart
The Gantt chart is used in scheduling the work breakdown structure. It is a useful tool in planning, predicting and deciding how resources are used to achieve time and cost goals. It is a type of bar chart used to represent when activities are being carried out or when resources are required. It uses time lines and other symbols to illustrate multiple time-based activities of a project on a horizontal time scale (Carmichael 2004). The Gantt chart for this project is as shown in appendix 3
6.0 Project Organisation and Management
Project organizational structure clarifies the makeup of the project board and teams. It identifies the roles and responsibility of the various stakeholders involved in the project.
Lock (2007) defined stakeholders as “the people and organizations who affect, or will be affected by the project.” Stakeholders can be grouped into primary and secondary stakeholders. The principal/primary stakeholders stand to make profit or loss from the project while the secondary stakeholders are non profit making stakeholders. The following are the stakeholders for the HT5 project.
Primary Stakeholders
Her Majesties Government
British Airport Authority (BAA)
British Airways (BA)
Local Authorities
Major contractors
Suppliers
Project managers
Project team
Secondary Stakeholders
Sub-contractors
Local communities
Non-Governmental Organisations
Employees of Heathrow airport
Regulatory Authorities
Customers
6.1 Project Structure
The diagram shown in Appendix 4 depicts the project organisation structure.
6.2 Roles and Responsibilities
Roles and responsibilities needs to be clearly defined among the project team to avoid conflict. The responsibility charts clarifies the duties of each persons involved in the project .The roles and responsibilities table for this project is as shown in Appendix 5.
6.3 Project Approach/Methodology
The methodology for managing the implementation of this project plan for BAA Heathrow terminal 5 is the problem-oriented approach. With this approach, a major problem is identified, the cause and the possible solution to the problem and finally a best solution for implementation recommended. For this project, the problem identified was the congestion of passengers and airline capacity constrain which lead to the decision to construct a new terminal in Heathrow.
6.4 Project Controls
Lewis (2001) described project control to be the process of “comparing where you are and where you are supposed to be so that corrective action can be taken when there is a deviation from target” The project manager will monitor and control the project on a daily basis ensuring that issues are properly resolved. The steering committee shall meet at the completion of each milestone as indicated on the Gantt chart, to ensure that no previous issues are carried over and that quality has not been compromised in any form.
6.5 Project Communication
In any successful project, there must be a continuous need for communication to issue directives, solve problems, make decisions, resolve conflicts and keep everyone supplied with the required information (Burke 2003). According to Westland (2007) the communication plan “identifies the type of information to be distributed to stakeholders (what), the methods of distributing the information (How), the frequency of the distribution (when) and the responsibilities of each person in the project team for distributing the information (who).” For this project, the communication plan as shown in appendix 6 is divided into the external and internal communication for the following stakeholders:
Project sponsor
Project team
Steering committee
Local community
General public
7.0 Project Risk Management
Project risk is defined as “the cumulative effect of the chances of uncertain occurrences which will adversely affect project objectives. It is the degree of exposure to negative events and their probable consequences. Project risk is characterized by three factors: risk event, risk probability and the amount at stake” (PMBOK 2004)
Project risk management is ” a structured process that allows individual risk events and overall project risk to be understood and managed proactively, optimising project success by minimising threats and maximising opportunities” (APMBOK 2006). In order words risk management is an approach of identifying, assessing and controlling risk that occurred during the project life cycle
7.1 Project Risk Assessment
Issues of risk (uncertainties) cannot be over emphasized. It must be properly identified, analysed and mitigated. The political, technical, financial, environmental and sociological aspects are the key factors that were considered during the risk assessment.
For this project, the probabilities of risks occurrence were classified as:
1 – Almost impossible to occur
2 – Slight tendency of occurrence
3 – Likelihood of occurrence
4 – Expected possibility of occurrence
5 – Extreme possibility of occurrence
And the risks impacts were classified as:
1 – Little or no impact and work will continue
2 – Slight impact but work will continue
3 – Limited Impact but could slow down activity and extend completion date
4 – Significant impact and could result in the project standstill
5 – Massive impact and could result in termination of project
The risk breakdown structure and risk identification mapping for this project is as shown in Appendix 7 and 8 respectively.
7.2 Risk Mitigation and Control
The process of lowering the probability of a risk occurrence or reducing its effect or impact should it occur in a project is project risk mitigation and control.
To be able to mitigate and control risk, we classified the resulting risk indices into three categories using the colour coding as shown below:
Colour Coding
Red: High Risk (18 – 25)
Yellow: Medium Risk (11 – 16)
Green: Low Risk (1 – 10)
For this project, the risk assessment matrix is as shown in Appendix 9
8.0 SUSTAINABLE DEVELOPMENT
BAA’s sustainability development policy sets a context for improving its environmental performance. This recommendation will look at the following: noise, air, water and the building.
AIR
Aviation is one of the fastest growing sources of the UK’s carbon emissions.
It currently represents 6.4 % of the UK’s CO2 emissions or 13% of the total climate change.
For an important and massive project like the Terminal 5, the following should be considered;
Air quality should be weighted on the overall balance of costs and benefits
An elaborate air quality computer modelling should be done around major vicinity where the Terminal will be located and around the local areas. Pollutants to model should include but not limited to NO2, PM10 ,Ozone and CO2
The benefit of another runway will surely be of great benefit to the UK Government as facts below states;
Benefit to the UK economy of mixed mode at Heathrow is £2.5 bill
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