Critically analyze the business operating environment of a project you are familiar with and what are the prospects of its success, What are the area of improvements of any would you recommend to the project sponsors for it to be successfully.

1. MIDLAND STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF BUSINESS MANAGEMENT
NAME: CHIBARINYA KUDZAI
REG NUMBER: R112742Q
M.O.E: CONVENTIONAL
LEVEL: 4.1
MODULE: PROJECT MANAGEMENT (BM404)
Critically analyze the business operating environment of a project you are familiar with and what
are the prospects of its success, What are the area of improvements of any would you
recommend to the project sponsors for it to be successfully.
“The Lord will perfect that which concerns me”
Psalms 138 vs 8

2. Business operating environment of a project can be called project environment. This refers to the
impact of the operating factors to the project. Project environment needs to be analyzed,
understood and addressed if project is to be implemented successfully. Project environment
provides managers and investors with a structured approach to analyzing and handling possible
external constraints. There must be continued interaction between the project and its
environment, and the project itself affects the environment just as it in turn is affected by it, so
that there is a two way relationship between them.
The political and economic situation in Zimbabwe for the last decade has severely affected all
sectors of the economy, including infrastructure. In this regard, the AfDB has identified the
rehabilitation of key power sector assets as the fastest and least-costly option for restoring the
country‟s capacity to increase electricity supply to meet part of the current demand and enhance
system stability. The African Development Bank (AfDB) launched the physical implementation
of the sub-transmission component of the Emergency Power Infrastructure Rehabilitation Project
(EPIR) in Harare on April 24, 2013.
The Emergency Power Infrastructure Rehabilitation Project (EPIR) is to improve the provision
of adequate and reliable power supply in an environmentally sound manner through the
rehabilitation of the Ash Plant at Hwange Power Station and the sub-transmission and
distribution facilities in the country. Once complete, the rehabilitation of the sub-transmission
and the distribution networks will improve system reliability and allow the restoration of supply
services to about 22,000 customers in various neighborhoods across the country that presently
have no access to electricity services.
ANALYSIS OF THE PROJECT ENVIROMENT OF EMERGENCY POWER
INFRASTRUCTURE REHABILATION PROJECT (EPIR)
PHYSICAL AND TECHNOLOGY ENVIROMENT
This refers to the natural setting of the project, its geology, soils, landscape, climate, water
resources and ecological systems. The Emergency Power Infrastructure Rehabilitation Project
target areas are Kwekwe, Gweru, Bulawayo, Masvingo, Mutare, Harare and Hwange with

3. a combined target population of 4.13 million people. Hwange is selected because is the site
of Hwange Colliery to undertake rehabilitation of the Ash Plant at Hwange Power Station. The
nature of the project is such that it will yield more environment and social benefits than negative
impacts. Most impacts are expected to be site specific and temporary such as dust and noise and
will mainly occur during construction. There are two main impacts, one being the management
of transformer oil decanted from old transformers which contain polychlorinated biphenyls.
The weather is also a major risk since most of the project‟s activities are undertaken on the
physical environment. Bad weather conditions such as raining can result in delays of the project
activities. Basically, our technology environment in our country always constrains many projects
since we are still backward in terms of sophisticated machines but AfDB brought better
machines for this project to be successful stated on the Herald Newspaper news.
POLITICAL ENVIROMENT
The political environment presents the most salient risk to our outlook for the Zimbabwean
economy. Concerns on the credibility of the electoral process on 31 July 2013 are likely to
affect donor participation in the country‟s economic recovery process. Some development
partners have expressed preconditions for meaningful re-engagement with Zimbabwe, and
these include concrete evidence of credible and tangible progress on political and
democratic reforms. Based on the foregoing, the donors‟ role and engagement with the new
government on the country‟s development process is rather uncertain. The expectations on the
AfDB leadership, as a trusted partner, in the Emergency Power Infrastructure Rehabilitation
Project (EPIR) remain high despite the challenges. Going forward much will depend on the
willingness of all parties to dialogue and commitment by the government to pursue
prudent, consistent, credible and inclusive policies and political reforms.

4. ECONOMIC ENVIROMENT
The economy continues to experience structural challenges emanating from the limited sources
and high cost of capital; uncertainties arising from policy inconsistencies, especially with respect
to economic empowerment and indigenization regulations; dilapidated infrastructure and
obsolete technologies. The economic environment in Zimbabwe for this project is unpredictable
since our country‟s politics plays a crucial role in economic growth. Undercapitalization of
resources compounded by debt ridden financial position of our country affect also the project.
Basically, during GNU era our country‟s economic indicators were growing at a favorable rate
.Our real GDP growth rate increased from 9% in 2011 to 14% in 2013.Since Emergency Power
Infrastructure Rehabilitation Project (EPIR) is partly affected by our government economic
policies such as indigenization and empowerment regulations, economic environment remain
favorable for AfDB to carry on its projects. The downside risks on the political front include
the integration of the opposition and the future role of development partners such as donors
in the providing funds to carry on this project. However, because of the country‟s loan arrears
situation, donors may continue to be engaged although to a limited extent. Also, if the
macroeconomic and political stability attained during the GNU era is maintained, investor and
donor confidence may remain.
SOCIAL ENVIROMENT
Basically, in our country human social indicators remain below international baselines. The weak
growth of the country‟s economy, characterized by declining employment for more than a
decade, resulted in poverty levels that remained high. While individual poverty prevalence for
Zimbabwe dropped from 75.6% in 2010 to 70.9% in 2012 and slightly increased to 72.3 %
in 2013 these levels are critical. The drop was partly attributed to remittances from the
diasporas gifts and transfer incomes. While all the human social indicators are below acceptable
international baselines, this increases cases of theft and vandalism of infrastructure. Emergency
Power Infrastructure Rehabilitation Project (EPIR) is greatly affected by our poor social
environment, many cases of theft and vandalism is reported even if the project is the answer to

5. our country poor social environment. Because of the country‟s social situation, donors may
continue to be engaged although to a limited extent. Also, if the macroeconomic and political
stability attained during the GNU era is maintained, investor confidence may remain.
PROSPECTS OF SUCCESS OF EMERGENCY POWER INFRASTRUCTURE
REHABILITATION PROJECT
According to Newsday Newspaper the African Development Bank on 25 January 2014 approved
phase two of Zimbabwe‟s Emergency Power Infrastructure Rehabilitation Project worth close to
US$20 million. Its objective is to improve the availability and reliability of electricity supply
through the rehabilitation of electricity generation, transmission and distribution facilities. The
Phase II of the project is designed to enhance benefits gained under Phase one interventions and
to address issues that are not covered in Phase one. When complete, Phase II will enable full
utilization of national produced capacity through restoration of transformer capacity. Utilized
installed capacity will rise from 1 237MW in 2013 to 1 960MW by 2016 with due attention to
environmental safety and protection.
The financing comes in through the Zimbabwe Multi-Donor Trust Fund administered by the
AfDB. This clearly indicates that EPIR project phase one was completed successful due to better
physical, economic and political environment in our country. Also the prospects of success of
EPIR project phase one was on the following opportunities which all our business operating
environments holds. The country‟s loan arrears situation, allows donors to continue to be
engaged with our projects although to a limited extent. Also, if the macroeconomic and political
stability attained during the GNU era is maintained, investor confidence may remain. Donors
regard ZimFund as the best modality for development finance in infrastructure given
Zimbabwe‟s arrears situation. The AfDB policy dialogue, technical assistance, capacity
building and knowledge work are relevant for deepened engagement and consensus to this
project even if our technological environment constrains the activities.
Despite all the prospects of success of the project, uncertainty with regard to normalization of
relations with the international community and implications of this on the country‟s debt and
arrears situation. Following some concerns over the credibility of the electoral process, the
future of Zimbabwe‟s re-engagement with the international community remains somewhat

6. uncertain. More so, the non-resolution of arrears will continue imposing significant limits on
the amount of support available from development partners and constrain Zimbabwe‟s access
to international capital markets and private investment which also limits the capacity of
borrowing of AfDB in financing the project concern our country.
RECOMMENDATIONS TO AfDB FOR SUCCESS OF EPIR PROJECT PHASE (11)
Since the financing comes in through the Zimbabwe Multi-Donor Trust Fund
administered by the AfDB. AfDB should closely monitor and administered all the
finance since our current government is characterized by corruption and mismanagement
of funds
Additional resources for Zimbabwe will be necessary for the Bank to sustain its
engagement. These resources include capital equipments and funds from donors.
To deliver on the mandate entrusted to the Bank, the AfDB‟s engagement in Zimbabwe
over the next two years will be to consolidate the assistance and progress already made
and to avoid policy reversals. Policy reversal is the failure to continue with ongoing
reforms.
To curb the risks of political instability in the aftermath of the election. The AfDB
should enhance international and regional efforts to maintain dialogue between the
different parties.
AfDB should continue injection of investment capital by government of Zimbabwe into
ZESA and the Zimbabwean Power Sector and application of cost recovery tariff regime
to mitigate the revenue risks leading to failure to properly operate, and maintain the
rehabilitated facilities.
The AfDB should also enactment and enforcement of legislation that criminalizes acts of
vandalism and reduction in power outages ensuring that the system is live most of the
time.
Engagement of independent procurement agent to reduce delays and red tape in our
government management

7. Reference
Aaker. D, (2007) „Project Management‟, 8th edition, California, John Wiley and sons inc.
Brace, I. (2004), „Business Project Management‟, Kogan Page Ltd, London
Zimbabwe receives $12 million for EPIRP II from AfDB,News Day Newspaper,26January
2014,Nyaradzo Phiri
Emergency Power Infrastructure Rehabilitation Project Phase II (EPIRP II)News Day
Newspaper,25January 2014,Victoria Mtomba
Zimbabwe - Country Risk, Herald Newspaper, 12 February 2014 ,Siphose Ncube
http://www.businessmonitor.com/news-and-views
http://www.afdb.org/topics-and-Zimbabwe
http://www.afdb.org/ufms/zimbabwe epri.pdf
http://www.afdb.org/zimbabwe economic outlook.html