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Impact of PESTLE Factors on Power Generation Projects of Bangladesh

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Impact of PESTLE Factors on Power Generation Projects of Bangladesh Impact of PESTLE Factors on Power Generation Projects of Bangladesh Submitted by Farhan Hussain MPSM, Batch-2 Student ID: 13182003 This Thesis Submitted in Partial Fulfillment of the Requirements For the Degree of Masters in Procurement and Supply Management Supervised by Professor & Dean Dr.Nazrul Islam Faculty of Business Administration Eastern University April, 2013 Institute of Governance Studies BRAC University, Dhaka, Bangladesh Declaration I hereby declare that I am the sole author of this thesis. I authorize the Institute of Governance Studies (IGS) and BRAC University to lend this thesis to other Institutions or individuals for the purpose of scholarly research only. I further authorize the IGS and BRAC University to reproduce this thesis by photocopying or by other means, in total or in part, at the request of other institutions for the purpose of scholarly research. Farhan Hussain Student ID: 13182003 Institute of Governance Studies (IGS), BRAC University, Dhaka Acknowledgement I am very grateful to the well known Dr.Nazrul Islam, Professor and Dean, Faculty of Business Administration, Eastern University, Dhaka for reviewing my manuscript in spite of his very busy schedule. He made several important suggestions which enhanced my study. I am also indebted to the Director, the faculty and staff members of Institute of Governance Studies, BRAC University, Dhaka for providing me with crucial study materials on research methodology and dissertation template. They allowed me to use the Computer Lab and the Library facilities of IGS, BRAC University from where I have obtained some important papers and articles which contributed immensely to the success of my study. I am also thankful to my dearest colleagues and classmates of Cohort-2. They have been very helpful and encouraging, which allowed me to achieve my goals regarding this study. I also place on record, my sense of gratitude to one and all who, directly or indirectly have lent their helping hand in this venture. Farhan Hussain Student ID: 13182003 i Abstract Generation of electricity in Bangladesh has been in prolonged crisis. To overcome this hindrance the government according to the road map has taken up several power production projects. However this journey to achieve a load shedding free Bangladesh has been very rocky. Some of the projects have faced criticism from pressure groups whereas other projects have become uncertain due to lack of funding or technical knowhow. The main reason for this failure has been lack of analysis and planning. PESTLE is one of the project management analysis tools that can be used as a solution to this problem. The rationale for this study is (1) To examine how these PESTLE factors or changes to these factors affect the power production projects. (2) To determine best possible solutions when these factor changes or remains unchanged so that projects can still attain their objectives. In this study Literature review has been used to collect both primary and secondary information using the website, obtaining articles from newspapers and the library. Qualitative research is useful during the early stages of a study when the researcher may be unsure of exactly what will be studied or what to focus on and gives the researcher freedom to let the study unfold more naturally. In this study it has been observed that there are some PESTLE factors that have major impact on the outcome of the projects and these major factors vary from one project to another. So it is crucial to examine which factors are major and which are minor. Once the major factors related to a particular project have been determined the next step would be to choose the best possible solution to those factors so that they could be made favorable to accomplish the objectives of the project. ii TABLE OF CONTENT Acknowledgement ............................................................................................................. i Abstract ............................................................................................................................ ii Table of Content ..............................................................................................................iii Acronyms ......................................................................................................................... v List of Tables .................................................................................................................. vii List of Figures ............................................................................................................... viii 1 Introduction ................................................................................................................. 1 1.1 Background .......................................................................................................... 2 1.2 Statement of the problem...................................................................................... 8 1.3 Objective of the study ........................................................................................ 10 1.4 Limitation of this study ...................................................................................... 13 1.5 Chapter Outline .................................................................................................. 14 2 Research Methodology .............................................................................................. 16 2.1 Introduction ....................................................................................................... 17 2.2 Objectives and importance of research................................................................ 17 2.3 Classification of Research models ...................................................................... 19 2.4 Methods of collecting data ................................................................................. 20 2.5 Population and population size ........................................................................... 21 2.6 Place of study, duration and analysis tools used .................................................. 22 3 Scenario of Power Sector ........................................................................................... 23 3.1 Introduction ....................................................................................................... 24 3.2 Renewable Energy ............................................................................................. 25 3.2.1 Solar Energy ................................................................................................. 26 3.2.2 Micro Hydro ................................................................................................. 26 3.2.3 Biogas ........................................................................................................... 26 3.2.4 Wind Energy ................................................................................................. 27 3.2.5 Biodiesel ....................................................................................................... 28 3.2.6 Ocean wave energy and Tidal power.............................................................. 29 3.3 Rental power plants ............................................................................................ 29 3.4 Import of electricity and Regional co-operation .................................................. 34 3.5 Rental power plants ............................................................................................ 36 iii 3.6 The 1320 MW Rampal power project ................................................................. 40 3.7 Cobined Cycle power plants ............................................................................... 43 3.8 Public Private Partnership energy projects .......................................................... 45 4 PESTLE Analysis of Power Generation Projects ........................................................ 47 4.1 Introduction ....................................................................................................... 48 4.2 PESTLE analysis method ................................................................................... 50 4.3 PESTLE analysis template ................................................................................. 54 4.4 Impact of political factors on power generation projects ..................................... 57 4.5 Impact of economical factors on power generation projects ................................ 63 4.6 Impact of socio-cultural factors on power generation projects ............................. 70 4.7 Impact of technological factors on power generation projects ............................. 78 4.8 Impact of legal factors on power generation projects .......................................... 86 4.9 Impact of environmental factors on power generation projects ............................ 91 5 Conclusions and Recommendations ........................................................................... 98 5.1 Conclusions ....................................................................................................... 99 5.2 Reasons for failure and success of power generation projects .............................. 99 5.3 Recommendations ............................................................................................ 103 5.3.1 Suggestions to remedy failure of power generation projects ......................... 103 5.3.2 Adequate planning by writing a good PEST analysis ..................................
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