The determination of the appropriate number and location of the phasor measurement units (PMUs) has raised the issue of the system monitoring as the main challenge. In this study, the problem of optimal PMU placement (OPMUP) is carried out in order to achieve a fully observable power system under normal and contingency conditions considering network expansion. For this purpose, network expansion is investigated considering two fixed and flexible PMU placement scenarios. The contingency index is introduced through the modelling process of N − 1 contingency states. This index is inserted as a new term in the objective function by compromising the observability confidence level and the number of PMUs. Other goals including minimising the number of PMUs, measurement channels and redundancy are considered along with the OPMUP process. The IEEE 57-bus standard network in the MATLAB is studied during the expansion time horizon with the proposed algorithms to achieve the above goals.