Project Testing Programs – Avoid schedule extensions, and finance defaults.
A couple of mining projects that started commercial production this year had a rocky time to get there, and then to also avoid finance defaults because of schedule overruns. Firstly, let’s consider the general broad test programs:
a) Commissioning tests with ore - ultimately completes when each equipment has singularly achieved the quality and quantity specifications as stipulated in its purchase order. This is usually a continuous 48- or 72-hour test during Commissioning managed between the Supplier and the EPC(CM), and with the Owner project team (as the “Client” for this stage) monitoring closely.
b) Performance tests - completes when the project process throughputs have achieved holistically as a Plant meeting the quality and quantity criteria/specifications as stipulated in the EPC(CM) Contract. These are fundamentally a few tests over some weeks/months during Ramp-up managed among the EPC(CM), the Owner project team, and the Owner operations team (as the “Client”).
c) Commercial Acceptance tests - completes when the project has accomplished the programs as per the terms of the Lending Agreements. Essentially, this is a test period of a few weeks/months during the latter stages of Ramp-up managed between typically the Lender’s Engineer (as the “Client”) and the Owner operations team.
On both projects these final test programs had a tough time owing to:
These delays impacted the Commissioning test timeline, to which the reaction was numerous simultaneous construction and commissioning activities overlapping in sub-areas and on sub-systems. Not an ideal situation to enable safe, efficient, systemized and sequential Commissioning testing.
When the Supplier’s technical representatives arrived on site they introduced revisions to the test schedule detail and durations, and consequently the project completions were extended. The projects had used only the broad schedule provided in the purchase order and had not reached out to the Supplier’s technical department before their arrival on site to be privy to the test nuances.
The corrections required time consuming fixes, caused a depletion of commissioning spares (hence re-purchasing), and resulted in a strain on the availability of Suppliers’ technical representatives and of contractor workforce skills.
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The language and descriptions were not always clear for practical implementation in the field. These interpretations could have been alleviated with the use of SMART (specific, measurable, achievable, relevant, time-bound) definitions during the formulation of the contract’s technical clauses.
Additionally, there were different parameters for the KPI’s (Key Performance Indicators) such as for what measurables, criteria, etc. Furthermore, the KPI’s were at times out of step with Feasibility Study documents, particularly the PDC (Project Design Criteria).
So, how can we do better on the next project:
1. No surprise here; more time spent on the Project Execution Plan during the Feasibility Study (FS) to define the schedule and controls, and to mitigate the risks in engineering, procurement, construction and commissioning planning.
2. Reference data is relevant (i.e. McNulty Start-up Curves) during the FS to time the test programs. But actual project progress as construction is completing must be assessed to re-evaluate your project’s test-program schedule.
3. The Owner Project Manager needs to interface with the Company’s CEO, CFO and COO to understand the project Stakeholders requirements for test programs.
4. The Owner Project Manager needs to sign off on the Lender’s Agreement and on the EPC(CM) contract technical clauses concerning test programs.
5. Your suggestions?
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Nicely done Allan, felt every word of that!