MANAGEMENT OF A LARGE PUBLIC PROJECT ASSESSING THE OPTIMIZATION OF THE USE OF THE LOCAL RESOURCES
 Benítez Codas, M.M. Electropar S. R. L Paraguay / Brazil Etzel, Fernando Toledo. Logos Engenharia S.A. São Paulo,Brasil The World Congress of Project Management - PMI INTERNET - BOSTON 1981
INTRODUCTION
Sometimes, in developing countries, the public companies face the need of carrying out projects which are, in their size and complexity, far above their financing and managerial ability. These companies, once they find out that the size of the needed financial resources is far greater that in their availabilities, usually turn to local, regional, or international development banks in search of financial support. These banks may finance varying parts of the total amount needed for the project; however, these banks usually require the fulfillment of certain norms, independently of their percentage in the participation, with the purpose of guaranteeing not only the correct application of the resources, but also the fulfillment of the technical specifications and of the physical- financial schedule. Wide scope biddings must be held in the case of projects which surpass the regional or national Capacity, be it due to the size or the technological complexity of these projects. However, to promote the development of the local capacity of engineering, building and manufacture, the bidding documents have some provisions which favors co-partnerships or the participation of subcontractors from the project sponsoring country. Usually, the development banks also have, with in their objectives, to encourage the participation of these regions or countries designers, contractors, and manufacturers and this is also their interest. Never the less, the use of local resources must be carefully planned to be beneficial to the local companies without hindering terms and costs; this would happen, for instance, if the Sub-hi red companies had not the capacity to meet their commitments. The extreme opposite must also be avoided as it would mean that the local participation is minute or purely pro - forma; this would be the case of keys-in-hand types of com tracts, in which cases only the les s qualified 1ocal labor is used. One instance of how the interests of both the regions or countries and banks can be met is by the participation of an outside organization, in charge of the project management, with the experience and independence that would allow it to act impartially and to conciliate the interests of the borrowing country and of the bank that finances the project. In this paper, we take as example the implementation work of a public project, with large size of civil works and relatively sophisticated process unities and we analyze the methodology of a hired managing company and how this methodology can be applied to meet the above-mentioned interests. In this example, we deal with the sum of experiences obtained in other projects carried out in several Latin American countries. DESCRIPTION OF THE PLANN ING STAGES ACTIVITIES
We will now point out some significant features of the planning stages, as these stages are usual projects management and they are generally well known. In our analysis, the activities start when the financial agreement is signed, but we must remember that this will happen only after the financial and technical - economic stages, developed by the project sponsoring entity. During this previous stage the sponsor must count om its own technical team support or that of a specialized consulting company, which has developed the basic design. This same team or the consulting company will keep on working in the following stages to assure that the mentioned project is met in detail and to assessor the technical planning and detail engineering management. In Order to avoid having a extremely long paper, we start our activities which the financing hiring .
 A. FINANCING HIRING This activity must obey the norms and procedures of each financing agency, which include a standardized general pattern, duly adapted to the project conditions. For instance, in the World Bank contracts there are extremely clear clauses demanding that the sponsoring entity organizes the project in a structure separate from its usual one, that is, under the conceptual form of projects management and, even more, employing a consultant (approved by the Bank itself) to render assistance during the implementation works. The Bank on its turn, will have the duty of supplying funds, facilities, services and other resources necessary to the sponsor to conclude the project successfully. The "Guidelines for Procurement " are usually part of the contract; they define the general norms to be employed in the stage of contracting goods and services supplies. The World Bank "Guidelines" were worked out according to three basic criteria : a) The need for economy and efficiency in the project, including here the purchase of goods and services; b) The Bank's interest, as a cooperative institution, in giving to all its Member countries, developed or in development, and to Switzerland the opportunity to compete in the supplying of goods and services financed by the Bank, and C) The Bank's interest, as a development institution, in encouraging the borrowing countries manufacturers, contractors and designers, development.
B. HIRING THE MANAGEMENT
The sponsoring entity works out the Specifications of the services to be rendered and the contract pattern and starts to invite well - known managing companies with acknowledged experience or companies registered with the financing agency (as in the Case of the World Bank) ; the management hiring might be carried out according to the financing agency or the FIDIC (International Consulting Engineering Federation) references, as they are quite similar . The initially adopted organization structure must be defined in the management hiring contract and this structure will be changed along the project implementation, to meet its needs .
C. THE PROJECT PLANNING
Once the manager takes over the project and acknowledges all available historic backgrounds , the planning activities begin. By means of the historic backgrounds analysis there begins the first structured subdivision of the project, which might be called technological dissociation, considered as an overall system made up by subsystems which are also made up by process functional units. Then, the managing company will make a detailed analysis to assess the possible technical dissociation degree of the project so that it may be carried out . The project might be placed anywhere between two extreme situations: a) the hiring of a turn key package for its project, building, supplying and assembling; b) working out a project at its components detailing levels and the separate purchase of similar items. Between the two above mentioned positions there are several intermediate situations, as can be observed in EXHIBIT I. The project detailing and equipment manufacturing activities have their difficulty degrees conversely set, to use the local resources. The project detailing maximization, difficult to be worked out with the local resources, enables the manufacturing local resources maximum use (1). The sponsor's usual choice is the first option (a), due to the lack of adequate conditions for carrying out the project, as his resources are, naturally, turned to the project exploration. The managing company must determine, for each stage of the project the project detailing ideal point for carrying it out. It is here that the fact of being able to rely on a company with great projects management experience has a direct influence over the greatest degree of local resources use. The managing company can take over, to a much higher degree than the client, that is having his first experience in great projects, the tasks of planning, coordinating, and speeding up the activities which arise from the great packages or subsystems dissociation. In order to have a real increase of the local resources participation level in the project, the managing company must analyze each stage of the project, having in hands the basic project elements and considering the potential of the surveyed resources, to pre- determine the content of each activity. When the project is dissociated in functional units, the detail engineering availability, and the construction, assembling and supplying capacities for each one can be analyzed. In this way, it will be possible to choose a degree of local resources use compatible with the available de tailing level of engineering, fundamentally based in the managing company experience in carrying out projects. There are several methods available to survey the local resources potential for carrying out executive project stages and the most used of these methods is the matrix system. In this method, all kinds of activities needed for the projects development are listed, and they receive points according to a pre-set weight system. EXHIBIT II shows a typical matrix with the most important features to be considered, a suggestion for classifying the companies; we believe that supplementary explanations about the Exhibit are unnecessary, as all of them are self - explanatory. Using the mentioned method, it is possible to obtain a reasonable profile of the local market development level, in the project, construction and material and equipment supply areas. Once the market profile is ready, the overall scope of the project, already worked out in its conceptual stage and the subsystems scope are consolidated. The activities needed to work out the first precedence logical network are defined and inter-related. The policies and goals, defined by the sponsoring entity, at the side of the estimate terms for carrying out the activities and the preliminary network will allow the setting up of a more complete network. If the complexities of the project demand it , the execution terms are incorporated to the activities network and the dates for working out the overall schedule and the detailed engineering, construction, assembling and supplying schedules are defined. An adequate accounting plan for the project is developed; it starts by the Costs Center definition, based on the project division in to subsystems and in the services scope and, afterwards, the Accounts and Accounts Plan are defined. It must be stressed that the financing agency almost always requires that the project accounting be kept independent of the company general accounting.
 D. MANAGEMENT CRGANIZATION
The managing norms and procedures are worked out, taking into account each region or country characteristics and the financing company requirements. This organization must be approved by the sponsoring entity, that, on the other hand, must then set up its own structure to support the management. Care must be taken to avoid the doubling of staffs and to observe the basic function of this sponsor structure; this will be done in such a way that the project implementation follows (whenever it is possible the local facilities technical standards (if there are any) and the usual local procedures. It must be remembered that to merely adopt the sponsor's hiring norms and rules will weaken the manager's greatest advantage, which is his independence from normal bureaucratic routines of public companies. The manager must have a perfectly defined actuation mechanism for the sponsor's decision-making process, in order to avoid delays in the schedule originated in decision delays. In this moment, the managerial company must implement its own in infra-Structure, which should be extremely simple and nimble, and, still more, self-sufficient, trying to employ, as much as possible, the sponsor's available resources.
 E. CARRYING OUT THE MANAGEMENT
Once the project subdivision reaches the consolidation stage, the definite criteria for forming services sets and supply packages are incorporated to it. The Services Division will be, by then, perfectly defined and each contract scope will be perfectly characterized. The hiring general condition is, the bidding rules as well as the general conditions and contract patterns for each bidding are worked out according to the financing agency "Guidelines " and to local legislation. Schedules, cost estimates and corresponding cash flows must be added to each bidding It is convenient that this general planning plus the bidding documents be approved by the financing agency, which could, in this way, examine regularly the bidding results, authorizing, as soon as possible the contracts signature. It is not always possible to de tail all the biddings at the same time, so it is quite usual for the biddings to be carried out as the documents are ready, obviously within a purchase general schedule, which makes for an easier process follow-up and control. The contracts management is planned and organized in such a way as to deal with the processing of securities, insurance , fines, invoices, payments, import licenses, readjustments and so on. The sponsoring entity and financing agency existing criteria are adjusted and the management experience is added to it to work out the supervision and physical progress and disbursement control systems. It is very important that during this stage both the sponsoring entity and the financing agency agree as to the systems and reports which will be presented at pre-set intervals of time. The project general budget is worked out following the previously established Accounts Plan and the cost estimates must be compatible with the engineering project detailing level. These estimates must be periodically up - dated, as their value will become more and more accurate as the project proceeds and the supplying and works contracts are worked out. The up-dating methods also must meet the inflationary features and it is necessary to establish readjustment methods that take in account local and international inflation process as well as possible exchange rates fluctuations of the currencies used in the project. The cash flow is worked out in the basis of the existing schedule and it will be adjusted as the work goes on and as soon as possible to avoid resources shortages or surpluses, resulting from possible change in scopes and terms.
SUMMARY
The participation of a managing company, with experience in great public undertakings management can be an efficient - tool for the optimization of local resources use, mainly when the project size is far above the usual work scale of the sponsoring company. It is convenient that the managing company be independent from the local designers, builders, and manufacturers to enable a better choice of the degree and way of use of their real abilities. The criteria analyzed in this paper represents a work philosophy which might be easily explained by those responsible for the public and private project management in developing countries, whether these projects be or b e mot financed by international credit agencies.
NOTE:

(1) This process now is named Work Breakdown Structure. “Another milestone for WBS was established in 1987 when the Project Management Institute (PMI) in cooperation with DoD further processed and spread WBS in order to be applied in organizations out of the defense industry. First of all, PMI standardized WBS in a document Project Management Body of Knowledge (PMBOK). The document explains WBS as a term and integrates it into the project management processes. After that PMI standardized WBS in the standard itself “Practice Standard for Work Breakdown Structures”. Both documents were subjects to many revisions in the past years (PMBOK 4th edition, Standard for WBS 2th edition) [4;5]. https://www.unob.cz/eam/Documents/Archiv/EaM_3_2012/Pita%C5%A1.pdf