PRE-CONSTRUCTION DELAY IN BUILDING PROJECT DEVELOPMENT

A CASE STUDY OF “INVESTCO BABYLON” PROJECT

 IN HO CHI MINH CITY

By

Nguyen Tran Toung Ly

Abstract

             

During construction, a project is considered successful when it meets three basic conditions: completed on time within the approved budget with quality to meet customer requirements and current standards quality. As well as in the investment Real Estate projects, the above three important elements are in close contact with each other. The Real Estate needs turnaround quickly, so that the new Real Estate market can be developed.  Furthermore, according to HOUSING LAW, the owner can only sell the product after having completed the foundation works. This means that to have budget to continue to have completed projects, the owner have to accelerate the pre-construction work. However, most current construction projects in Vietnam are delayed, especially in pre-construction phase. This shows that the project manager has not done their job well. Therefore, the investigation the causes to delayed in pre-construction phase and find solutions to reduce this problem is necessary to have better job in management of projects in Vietnam, and help to solve the puzzle of the Real Estate industry.

To solve this problem, first, determine the cause and extent of impact, and then the important factors that need to resolve will be recognized. Therefore, this report will identify, evaluate and analyze the factors that cause delayed in pre-construction phase in Vietnam. Based on the method of assessing the impact of each factor and then suggest prevention solutions, in order to eliminate similar mistakes in the future.

Case study is used for researches and discussions are: INVESTCO BABYLON - The High-Rise Apartment Commercial Office Building Project.

 Executive summary

Rationale of research

This research has been conducted to identify factors involved in pre-construction delay in building project development.

Objectives of study

To identify the delay and causes of delay in pre-construction stage, investigate the impact of delay on overall project, and propose recommendations for improvement.

Methodology  

The exploratory method is used to review the literature and to study, analyze the pre-construction delay in high rise commercial project.

Findings and conclusion

Delay has always been an unsolved problem to the construction industry worldwide since then. However in developing countries, delay is more serious because in addition to those caused by human, the weather, the Government Policies are still inadequate.

“In fact, the administrative procedures in construction investment are still complex and time consuming, especially for the new urban projects, housing projects, the technical infrastructure of industrial parks. Ministry of Construction have already in cooperation with the People's Committee of Hanoi, Ho Chi Minh City and some of enterprises started to review the administrative procedures of a some of projects in the area of ​​Hanoi City Ho Chi Minh and Ha Tay Province and the results showed that the number of project’s procedures are still many (about 33 procedures / 1 project), preparation time was long (average 3 years / 1 project). There are still some procedures issued by local authorities or request the investor to proceed without the provisions of the Government’s permissions, and some procedures in the legal documents are insufficient need to be reviewed to consider improvements to match the fact.”

This led to delay in pre-construction stage is the most significant and take longest time. Therefore, the identification of factors that cause serious delay and then to propose to restrict, prevent or remove are sorely needed.

Recommendation

For Project Manager

·               Each individual responsibilities and rights must be clearly defined.

·               Set up the clear project Development Process Flowchart.

·               The working conditions should be improved gradually aiming at building proper working atmosphere.

·               Project Manager should give feedback to the company Quality Manager to add in personality test forms together with Job Application Assessment Procedures forms base on ISO.

·               Relation divisions always have the plan to solve problems with the method soon.

·               The weekly meeting is very important , all problems will be resolve on that meeting and relation division have limited time to return the request for information to Designer or for Agreement from Government.

·               The payment during project implementation, for example: land using fee, are a big problem. Project will be delay have some reason relate to this problems. So the Project must be actively capital.

For Project Employee

·               Trying to self-improvement skills.

·                Set the interests of work to the highest.

·               Recognize delay problems which will lead to large losses as well as benefits of the project completion on time.

·               Monitor the Design Consultant’s works of every period, if any changes happen, Design Consultant must be accelerate in next period for catch up schedule.

·               Exchange information dissemination and unified design concept from the start to avoid the disagreement.

For Human Resource Department

·               Organization training the Project Construction Management Group in order for them to know how to use the process to accomplish project and contract condition.

·               Build an ideology for all employees so that they can recognize delay problems which will lead to large losses as well as benefits of the project completion on time. Simultaneously, top management should establish a fair reward and punishment policy which has to be strictly applied.

·               Wage policy should meet the minimum standard of living. This will reduce the pressure of economic and help managers focus on their work fully and integrally.

·               It is necessary to build up the relationship between benefits from the project completed on schedule and the benefits of project manager and participants.

·            The project management training should be paid more attention in the future. It should be the main    goal in Construction University. It is not only reduces delay problem but also enhances the success probability of construction project. Not only project manager must be educated professionally, but also their capacity has to comply with the assigned duty.

·            Employees of Government could make difficulties for process. This intricate question not only happens in Vietnam but also in developing countries. To restrict this problem to a minimum, the wage policy should satisfy actual living standard and establish a strictly reward or punishment

·            The procedures of legal regulation in imports and some other areas have remained very limited and inadequate. To be the member of WTO is a challenge which forces Vietnam to improve this legal procedure. This legal process not only in import-export but also in the other fields must be clear and transparent. This will help project planners to have the basis to plan for their projects accurately. If this procedure is not improved soon, Viet Nam will be left behind, compared to other countries in the region and we, will be faced with great damages.