Project Schedule Delay and Risks in Rural Infrastructure Development Project: A Case Study of Rehabilitation of Calamity Damage in Vietnam

Viet Nam has been visited by more than 10 tropical storms and typhoons every year. In 2005, a tropical storm and typhoon caused damage to many infrastructures especially the sea dike system from Nam Dinh province to Quang Tri province. The Government evaluated the damage of flood brought about by this typhoon and submitted to the Asian Development Bank who agree to finance the Initial Loan 2273-VIE(SF)-Emergency Rehabilitation of Calamity Damage Project.

During the project implementation, problems occurred like rural infrastructure is affected directly by nature, lead to ground features, and geology changes year by year. Besides, problems in designing and constructions leading to project schedule delay. These factors create many risks in progress of the project.

Mr. Bui Duc Luong made a research which objectives were: (1) to know the sources and type of risk; (2) effect of every type of risk on the project; and (3) to set-up strategies to avoid or mitigate effectively the negative impact of major risks.

Conclusions

The risks came from various sources. These can not be eliminated but can be minimized and changed to other forms. There are some methods to overcome these risks such as avoiding these risks, minimizing its negative impacts, and accepting some or all results of these.

The period of the construction project implementation in general as well as the rural infrastructure development project in particular from the first phase to the final phase is so complex. Furthermore, there are so many agencies and other partners that will take part in the construction project, especially for Emergency Rehabilitation of Calamity Damage Project. The related agencies are ADB, CPMU, PPMUs, investors, designers, contractors, subcontractors, consultants, material suppliers, equipment suppliers, authorities, and etc.

Risk will affect schedule, quality, cost estimate and life of public in rural infrastructure development project. To reduce and mitigate risks, establishing a strategy is essential because it is the most effective and efficient response. Thus, author tried to identify major risks and carry out a risk management study for Emergency Rehabilitation of Calamity Damage Project. Besides, the author suggested appropriate strategies to mitigate these major risks.

Identify main risks

Characters of Emergency Rehabilitation of Calamity Damage Project as follow:
• It takes a lot of time to recruit international consultants who will review the documents in relation with the project such as Safeguard, construction design and bidding before ADB approves;

• The Project is financed by ADB, during the progress of the project there are some works that must be approved by ADB as construction design, safeguard, bidding and disbursement;

• Normally, it takes time (between one year and 2 years) to approve the construction design until construction commencement;

• Scope of the project is large; number of staff is not enough in CPMU and PPMUs. Beside most of the position is working both in PPMUs and another place;

• Inflation in 2008 caused increase in price of material and changed basic salary in 2009 and 2010.

These above information show major risks and uncertainties that are occurring in the project. We have to know these risks in order to method to solution such as mitigate or remove.

Based on the data from rural infrastructure in 10 provinces, statistics of Emergency Rehabilitation of Calamity Damage Project (ERCDP) and the same as projects in rural infrastructure, a lot of major risks were discussed, identified and analysed. According to their level of effect and sources of occurrence, author’s purpose is to setup strategies to mitigate them. The table below showed the main risk factors.


Data analyses revealed the top three risks occurred in this project as follow:

• international consultants recruited late;
• typhoon and flood will happen every year
• delay in constructions because of material price increased

His thesis abstract is copied and posted.

Abstract

Risks and uncertainties affect schedule, quality and cost estimate of the project and relation with most of participants involving the project.

Risk management is very important, controlling risk and reduces risk to increase economics effectively. When risk can not removed, will be minimized, transferred or retained

Risk management is implemented step by step including: Risk identification, Risk classification, Risk analysis, Risk response, Risk evaluation, every step must be implemented carefully, when has a problem in one step will affect the project.

When happen risk, the project will be used methods such remove, minimize, transfer and retain suitable for actual situation.