Contract
administration is very complex which sometimes lead to cost overrun and delay
of the construction project. It is extremely difficult to verify the
authenticity of the contract and it requires skillful human resource to control
and evaluate the process to ensure the transparency especially in the
procurement. Documentation in the bidding stage must be written accurately so
that contractors can fully understand the owner’s preferences. All pertinent
documents must be monitored, diligently recorded and filed before, during and
after construction for auditing. If these
processes are not done well, the project will be delayed, suspended or even
terminated.
Mr.
Ngo Viet Hoang made a case study on Trung Son Hydropower Project aimed to: (i) study the World Bank
contract requirements and procedures; (ii) analyze strengths and weaknesses of
2 packages of entire project; (iii) study the practice of owner contract
administration in Trung Son hydropower project;
and (iv) discuss
the lessons learned from the strengths and provide recommendations to improve
the weaknesses.
Conclusion
The
contract administration is perceived to start from simple to the complex. Its
processes are of importance and how problems had been happened in case. The World Bank contract
requirements and procedures recognize the basic similar theory, but World Bank
focus on fair, transparent, anti-fraud and incorrupt bidders.
Furthermore,
analyzing the strengths and weaknesses of the 2 packages of the entire project,
it was found out that the difficult thing is in contract administration. The
manager or the project team has no capability and experience as well as ethics
to handle the project very well. The Trung Son Company is using the guidelines
of the World Bank and coordinates it with some tools that are created by the
company to improve the contract administration process. Summarizing these, it
is recommended to verifying the step to make the framework perfectly suited for
the other future project in Vietnam.
Based on the case study, it is revealed
that the World Bank funded projects are being performed with commitments financially,
environmental development sustainability, and socially by making the
pre-feasibility study using a lot of program such as Environmental
Impact Assessment and Supplemental (SESIA), Resettlement,
Livelihoods and Ethnic Minorities Development Program (RLDP), Policy Framework
for Compensation, Ethnic Minorities' Planning Framework and Environment
Guidance under the Transmission Line Component, Trung Son Hydropower Project, Final
Resettlement Action Plan (RAP) for Bridges and Access Road under Trung Son
Access Road work item.
Furthermore, the borrowers also commit
to have a skillful, ethnic and experience human resource. In addition, the
borrowers must follow the World Bank’s guideline in procurement tightly. Another
important thing behind a successful project is the finance. In construction, the contractors cannot finish
the workload on time if they do not receive the payment based on schedule.
However, not all guidelines are suited for some areas especially in Vietnam
where contract administration is unprofessional. There are still problems in
corruption and fraud leading to wrong bidding result and choosing contractors.
The author opined that the World Bank should allow the borrower to propose the
adjustment suitable for their countries in terms of policies, economy, and social
but still keeping the core things of World Bank guidelines.
His thesis abstract is copied and pasted
below.
Abstract
The economic growth over several years is at the root of many
of the issues in Vietnam’s energy sector. It lead to the government must have a
plan to develop the power generation .
Vietnam’s options for power generation include a hydropower,
sizable resources of coal and gas, renewable energy potential of possibly as
well as some nuclear power.
From an emissions standpoint, every source that displaces
coal from the generation mix would reduce emissions of both local pollutants
including sulfur dioxide, oxides of nitrogen and particulates and global
pollutants, especially carbon dioxide (CO2). And Development of
hydropower could have a decisive impact on Vietnam’s future emissions path,
since it will avoid building new coal fired plant. Hydropower represents one of the lowest cost
sources of new power supply and Vietnam is constructing the Son La (2,400MW)
and developing the Lai Chau (1,200MW) large plants on the Da River, adding to
the current facility at Hoa Binh (1,920MW).
Besides these large projects, the main focus is on medium-sized projects
(typically 100-600 MW each) distributed throughout the country. About 22 such
projects are under construction or are planned to enter construction over the
next decade, providing a total of about 4,800 MW.
Trung Son hydropower
project is the first hydropower project that’s funded by World Bank, and its
processes must follow the World Bank guideline. It’s the challenge for entire
member of Trung Son hydropower company. Especially, in contract administration.
How to avoid the threat of delay(time), over budget(cost), uncetain risk of
construction(quality) is the big question.
Through this final report,the author hope everyone, who read
it, can find out their own way to solve the edges related to contract
administration problems in the difference projects.
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