Question

please explain how capital project financing gives rise to the triple imperative (Triple Constraint) in project management.

Answer 1

Triple Constraints of Project Managemet are: TIme, Scope and Cost.

If we focus on general basis all these give rise to insights above constraints will be applicable in every small projects also.( Principal of Materilaity falls hereunder).

Time , Scope and Cost Trinagle OCnstraint also paly sam erole in Capital Project financing also.Becasue Capital Project is also associated with theses constraints Time ( when the project will complete), Scope ( Benefit , Utility will be dervied from project) and Cost ( How much cost required to fund for the project)

Let Examples on Entity Level: Looking for Heavy Machinery for its production.

Time Consraint: How Long it will take for its Installation if Ready to USe AMchinery ( Importing Time, Training Time, Installation Time ) All these requirement need to be followed for making the imported machine ready to use.

Scope Constraint: Whether the Imported Machine is provide the level of expectation of 20000 Unit in One batch , or reduction in wastage level is achieved from such machine.

Cost Constraint: The fund Availability or sources from where the fund will be available for Importation of Machine. Here Company will look either Equity, Debt or Other sources like Government grants for the same.

Above Constraint will also stick in Case of any infrasture , Bridge etc.

Time: Required time to complete the project either yeras, Months etc. Like making a bridge or Metro line one place to another.

Scope: Making metro line the benefit is reduction in Traffic as well reduce the time to reach within 10 minutes or reduce the earlier time of approx 40 Minutes to 10 minutes. These are benefits can be provided by the above projects.

Cost : The Fundng is either from Govet Funds or from Contribution from Central Govt. Looking for outsource funding.

As from Above example it can be concluded that above triplicate constraints is applicable in every case either small, medium or large capital projects as it depends upon the need, requirement , benefit at proprietorship level.