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.

Contractual Risks of SME Contractors: A Case Study of Mechanical and Electrical Contractor

Before starting any construction project, at least two parties or companies have to prepare or design a contract based on the agreement between them. Once they agreed on each clause in the contract, they will officially enter the contract ruled by laws and other relevant construction regulations.

In Vietnam, all parties working in construction shall sign contracts complying with current laws and rules, Government’s decrees, Ministries’ circulars and local authorities’ regulations. For Foreign Direct Investment (FDI), there are many rules and regulations for them to follow.

By studying the case of a specific project in an FDI investment in Ho Chi Minh City, it was found out that many contractual risks had faced by the SME contractor and obviously taken a serious loss of profit at last.

These risks include: site inspection and work measurement; quantity acceptance and payment certificates; project delays; work omissions by the owner; and payments from the owner.
Mr. Vo Quoc Vinh made a research which objectives were to: (1) identify the risks of a construction contract; (2) verify the causation of contractual risks; and (3) propose possible solutions to protect SME Contractors from uncertain contractual risks.

Conclusion

Contractual risks were found in the contract between two parties or more. Lack of contract review before entering into it would be a failure of a party. Project failure means that the project has failed to meet its cost, schedule and technical performance objectives, or it does not fit in the organization’s future (Cleland and Ireland, 2007:365).

In this report and other similar cases, SME contractors have often taken such risks when dealing with the owner or main contractor whose sizes of business are always larger and stronger in many fields.

That result of project failure came from the way people actively take the chance to prepare, design and compose the contract documents. Instead, SME contractors tend to avoid or ignore the opportunities of transferring the risks by the work of contract design. Moreover, the level of professional policy and working manners in SME contractors cannot compare to big companies, especially the knowledge and experience in legal issues.

The report can be a useful tool for SME contractors in dealing with problematic clauses in similar construction projects in some ways, such as the implementation of current laws, rules and other regulation; systematic frameworks from contract literature reviews; international institutes of contract forms like FIDIC or the organizations of AGC, ASA and ASC or The ICE Conditions of Contract.

The report also raised the way which Lessons Learned documents should be organized to review the good and the bad activities in the project and encourage to be used for future projects in terms of reduction of the same problems in construction contracts.

Last but not least, the report also recommended SME contractors to apply the latest version of ISO 9001 in their businesses for a better quality performance in a rapid competitive market. Invest now, take later!

Recommendations

It is recommended that contractors should avoid or reduce the same type of problems in future projects by applying these approaches as follows:

Post-Project Reviews - offer insight into the success or failure of a particular project as well as a composite of lessons learned from a review of all the projects in the organization’s portfolio of capital projects (Cleland and Ireland, 2007:327-328).

Site Inspection - to maintain smooth operations and the quality of site inspection in construction stage and avoid unforced conflicts from this trade; owner should employ qualified, experienced technical staff. Good coordination and cooperation between project teams are needed.

Project Delays - After being awarded the contract, contractor must prepare and submit a proposed construction schedule for the review and approval of the project owner.

Omissions by Owner

Contingency Cost - To protect from financial loss in a project for any non-prevented reasons, it is important to estimate contingency costs and add them into the tender. These costs are usually expressed as percentage of direct costs or as a specific amount of money in the tender. Mullin and Kantor (1994) compared that “contingency allowances are much like insurance”. Along with contingency cost, hidden costs should be recognized and added to the estimation for bidding. Borg and Borg (1994) advised contractors to examine carefully the general conditions of the contract and visit the site, so as to have a full knowledge of all the possible hidden costs.

Concept of “Unexpected” and “Equitable Price Adjustment” - normally, the specifications give the owner the right to make changes in scope, with specific compensation to the contractor (Borg and Borg, 1994:17-35).

In order to avoid any dispute or different interpretations on this matter, the authors suggested establishing “a formula for pricing changed work” in the contract.

Risk Transfer - “The form of the contract plays a significant role in the respondents’ perception of risk” and “Transferring the responsibilities for the construction documents to another party also transfers the risk” Simu (2006).

Payment Delays - payments from the project owners are considered a vital source of any contractors in construction industry. Late payment will definitely damage contractor’s cash flow in the book of account receivables. Once periodic payment certificates are prepared, properly signed, and forwarded to the owner, prompt payment should be made (ASCE Manual, 1988:145).

Application of ISO 9001 in Quality Management - it is very useful for SME contractors to apply the latest version of ISO 9001 (partial or the whole regulations) to manage their businesses as well as the construction projects in a professional, effective method. This kind of quality control system will need time, effort and some budget to apply ISO in construction but contractors will save a lot and reserve their planned budget.

His thesis abstract is copied and posted.

Abstract

This report reviews the theory of contractual risks in terms of project delays with no compensation, delays in payment with no penalty, work changes by the Client, delays in site inspection and acceptance for quantity of work done, omissions by the Client from the signed contract, and so on.

From a detailed literature review, the report explores major risks that SME Contractors often face during the construction stage throughout a case study. The collected information from the case reflects the hypothesis that the Client has used an unfair treatment to the Contractor by the application of the Contract – obviously prepared by the Client.

The report also suggests some recommendations to minimize the risks from the construction contract in the stake of SME Contractors. These suggestions will somehow help them control the benefits from the protection of losses in the implementation of the contracts. On the other hand, the report asks for a fair treatment from the owners of projects in term of win-win negotiation in the contract preparation by using the theory of FIDIC, ICE Conditions of Contract and other useful, reliable sources.

Hopefully, this report will show the contribution to a better environment of risk reduction in the construction contracts from its findings, analysis and recommendations. It is studied especially for the legal support to SME Contractors in construction industry in Vietnam.

Owner’s Project Schedule Management for High - Rise Office Building Projects: A Case Study of

Applying modern project management techniques in schedule planning and control for high-rise office building projects is not easy. The project schedule is crashed by reasons that are investigated in high-rise office building projects such as the following:
- Using the Work Breakdown Structure (WBS) for schedule planning.
- Using the Critical Path Method (CPM) for schedule planning.
- Proposing the methods for crashing scheduling.
- Making reports for work performance.
- Measuring work performance.

It is very important to explore the project schedule management of the owner. Hence, Mr. Le Nam Binh made a study to enhance understanding of schedule management systems, and how it can be utilized effectively in construction projects. The objectives of his research were: (1) investigating the practice of the owner’s project schedule planning and control for managing high-rise office building construction projects in Vietnam; (2) analyzing the foregoing factors to identify the critical affecting issues, the strengths, weaknesses and consequences of schedule management practices, and (3) proposing particular recommendations and effective methods for managing the project schedule from the owner’s point of view for these projects.

Conclusion

The modern project management era started half a century ago, was the young branch arising from the management discipline, and developed stormily on a stable fundamental with broad application in most of the manufacturing and construction industries over the world. The stream of these scientific technicalities has just been imported into Vietnam along with the expert groups serving the implementation of the petrochemical refinery project and the skyscraper projects of new urbans for the latest ten years.

The project schedule management, or project time management, as one of the four core functions of project management, is an important element contributing to accomplish timely completion of the project through six mutual-interacting processes comprising of activity definition, activity sequencing, activity resource estimating, activity duration estimating, schedule development, and schedule control. The schedule management is the most considerable concern of the project manager as well as the project owner, as an investor, cares mostly about the profitability of the invested capital.

This report develops the framework of project schedule management, which is joined with the selected tools and techniques of schedule planning and control to be applied in practical projects. These theoretical utilizations are monitored, investigated, analyzed and compared with the experienced knowledge of on-site engineers, whereby the rules and principles are generalized to form the more perfect theory.

The case study focused on applying the researched framework to the typical high-rise office building project for checking the applicability and usefulness of the theory with a particular construction project. In consequence of the actual situations in the building site and their profound changes towards better, the fact leads to the conclusion that the application of these techniques has made some considerable improvements to the project schedule, helps the project manager to catch up the target schedule in case of project delay, and lightens the pressure of stakeholders’ workload.

Moreover, the theory is applied to the construction project, which is always unique and temporary in nature, therefore it cannot help exposing the shortcomings in several cases. These particular limitations are also studied in order to propose some useful solutions for the project manager as well as other partners of the project to mitigate the potential contingencies in hazard prevention and controllability.

The project schedule management tools and technique, which are verified through practice and adjusted for specific situations, are given in the table below.These techniques should be combined to enhance the effectiveness, whereby each of them can minimize its limitations and complement the others.

Recommendation

After studying the theories and the case study of an actual construction project within the analyses of application range and limitations for the implementation in Vietnam, the concise recommendations for project schedule management of high-rise office building projects from the point of view of the project owner are summarized as follows:

- The construction projects are unique and specific entities, no one is like others, except for the buildings of mass housing dwelling. This can be compared in images with human being in the society. The theory of project schedule management with its generalized rules and regulations should be flexibly applied to the construction projects to make use of its academic strength and mitigate its certain limitations. This way of looking at the concepts will facilitate the project stakeholders in planning and controlling the schedule. The experienced qualification of the project manager is a key factor for determining the important degree of schedule management techniques and tools to be used.

- In the initiation stage of the project, when many things are still ambiguous around the project vision, the project manager should make plans for basic tasks, using WBS and CPM techniques to organize all the initial activities into a miniature work breakdown structure as a componential subproject. The total project schedule planning is set up after the approval of the project fundamental design and general description.

- Towards more effective management of large construction projects with less confusion of master schedule chart scale, the project might be organized into smaller work packets in controllable view as separated schedule management charts, which are described in their own work breakdown structure for various monitoring purposes.

- If the project has parallel paths with similar durations, the project manager can utilize heuristics for identifying the essential activities of a selected critical path and focus on enhancing the activities’ quality instead of determining the best critical path. If project’s resources are spreaded and reallocated across different projects and activities, the prime contractor may be forced to undertake supplying sufficient resources for normal project operation and accelerating project schedule in the remaining stage.

- From the beginning of the project, a total quality management should be promulgated widely to all the project stakeholders. This comprises of paperwork transfer process, performance report forms and variance evaluation criteria to unite the comprehension of schedule management techniques through the project process.

- Skill training is an integral demand of the project, which help staff and engineers with specialized professions for such a multicultural working environment as the construction project. This contributes to its smooth run throughout stages. The project should reserve sufficient budgets for investment of management software.

Because of the limitation of the scope and time fund of the study, this report has just explored general issues in implementation of project schedule management for high-rise office building projects under the project owner’s point of view. It’s recommended that analytical research of great depth on the specific benefits of this theory to prove its great efficiency should be carried out. Besides, the higher rates of huge skyscraper investment projects with progressive schedule management techniques need to be penetrated. And after all, the further studies should make polydimensional analysis to draw the overview painting of the modern project management discipline.

His thesis abstract is copied and posted.

Abstract

Project schedule management, which is described and analyzed in a mind of great depth in A Guide to the Project Management Body of Knowledge by the Project Management Institute, is one of the most important knowledge areas of modern project management and interacts closely with other processes. It is a really tough challenge that most of project managers today are aware of but not all of them have done well.

The final report focuses on construction project schedule management for high-rise office building projects in Vietnam from the viewpoint of the owner’s project managers. By reviewing several researches and factual studies on this field, knowledge as regards owner’s project schedule management will be explored gradually.

Through the case study of a typical office building construction project, PetroVietnam Finance Centre in Danang City, the critical issues that affect owner’s project schedule management would be investigated and analyzed. Some proposed solutions based on the reviewed knowledge above will be discussed in order to help project managers improve their project schedule management professionalism better.

Project Owner’s Quality Management System: A Case Study of Sails Tower Project

In recent years, the construction industry in Vietnam is being been recognized having a great contribution to national development as investment has been intensified in many fields such as infrastructure development, industry and public projects. However, more attention have been given to quality management because of the poor quality of some construction projects. Because of these reasons, the development of quality management system is most important concern not only for Contractors, Quality Consultants, but as well as for the investors or developers.

Mr. Nguyen Trung Kien made a research which primary objective was to study the application of Quality Management System (QMS) of Project Owner in a construction project from design to construction phase.

Conclusion

In general, most of the requirements of quality system have been covered and presented in the existing system. However, it was revealed that problems such as missing contract review, improper coordination and communication, lack of the process control, control of quality records and the inspection status monitoring during the course of work are the reasons that caused major problems to owner and caused schedule delay and generating V.O.

In addition, findings showed that there were problems with decision inconsistency relating to quality on job site caused rework and schedule delay. Obviously, besides the reason of work procedures, it would also be the reasons of different quality level and quality perception. Therefore, it is necessary to conduct the internal quality audit and provide training at different position in order to gain the same level of quality perception in the project team.

The causes and the consequences that generated by these missing processes are summarized in the table below.

The complete QMS would be achieved if the missing requirements as mentioned above should be added in the existing Quality Management System. Aside from that, the quality culture in organization should be set-up so that the Company can reach the Total Quality Management.

His thesis abstract is copied and posted.

Abstract

The report expresses the key issues in Quality Management System (QMS) that known as the critical factor for any organization wants to develop and survive in the free trade market.

This study, which refers to the theories and the standards system, has expressed the concept of quality in construction, the QMS in organization, system requirements for owner’s QMS in construction and its benefits. The study has briefed the factors that most effect to project quality studied from public reports and the key points to control project quality from the design to construction stage. The report has introduced a QMS to the property developer for the purpose of amendment to the existing QMS in order to obtain a complete QMS for better managing project quality.

Report the findings of a research study, which was undertaken to examine the underlying factors affecting the quality of a building project. It also aims to identify factors that show a strong correlation to good quality performance. The ultimate goal is to provide clients, project managers, supervising consultants and contractors with information that can help them become more efficient with their limited resources and, as a result, achieve better quality outcomes.

AITCV students visit AIT main campus in Thailand

The AITCV Students from Hanoi and Ho Chi Minh City arrived on February 26 for a week-long site visits, lectures and field trips. They will be here in Thailand until March 6, 2011.

In this photo: 1st Row (L-R): Mr. Bui Viet Thi, Mr. Tran Xuan Canh, Mr. Tran Viet Sinh, Mr. Nguyen Nam Cuong, Dr. Theerathon Tharachai, Dr. BHW. Hadikusumo (MPM&CEIM Coordinator), Dr. Nitin Afzulpurkar (SET Dean), Prof. Said Irandoust (AIT President), Prof. Joydeep Dutta (AIT Vice President for Academic Affairs), Mr. Noppadol Jaisue, Dr. Oulawan Kulchartchai, Ms. Kieu Phuong Ly, Ms. Nguyen Thi Thu Nga, Ms. Tran Ngoc Bich Tram, Mr. La Nguyen Bao.

2nd Row (L-R): Mr. Pham Viet Cuong, Mr. Chau Anh Tuan, Mr. Tran Minh Nghia, Mr. Vu Van Tinh, Mr. Bui Thanh Nam, Mr. Nguyen Trong KHoa, Mr. Nguyen Nhat Tai, Mr. Ngo Quoc Thai, Mr. Nguyen Thai Son, Mr. Tu Thien Tu, Ms. Phan Hong Ngoc, Ms. Dang Trinh Thanh Phuong, Miss Junya Phuangphay, Miss Huyen Thanh To, Mr. Vuong Hoang Thang, Mr. Pham Quang Cuong, Mr. Tran Phi Long, Mr. Thanapon Buaklom, Ms. Woranuch Chumchat, Mr. Ngo Hoang Linh

3rd Row (L-R): Mr. Nguyen Duc Huan, Mr. Nguyen Thanh Tung, Mr. Huynh Thanh Quang, Mr. Nguyen Anh Khoa, Mr. Ngo Thanh Duc, Mr. Hoang Manh Chi, Mr. Nguyen Viet Cuong, Mr. San Visal, Mr. Le Quang Son, Mr. Vo Khac Kien, Mr. Nguyen Hong Thanh, Mr. Puoy Puthitha, Mr. Hout Venghong, Mr. Nguyen Thanh Tam, Mr.Senjam Romero Singh

Risks Affecting Construction Cost in Vietnam

In project management, there are four core functions: scope, time, quality and cost. In private or business project, cost considered the most important thing. In fact, it is difficult to find a project which initial and final cost are the same despite of owner’s best effort to control the cost.

In any construction project, there are many risks affecting construction cost including, external (economic, politic, legal problems), internal risk (design, contractual, technical), direct risks (inflation, changing of government regulations) and indirect risks (technical problems, delay, contractor capability). In general, risks affect project costs.

Ms. Le Ngoc Diep made a study on the managing risks affecting construction cost in construction phase including evaluation, analysis and response to help owner control the construction cost within authorized budget. The main objective of his research is to study owner’s management status of risk affecting construction cost in Vietnam construction project and suggest recommendations to improve it. In order to achieve this main objective, sub-objective were needed to accomplish such as follows: (1) study the risks affecting construction cost in construction phase and response applied in specific urban center project; (2) study other common risk affecting construction cost in Vietnam construction projects; and (3) assessment and suggestion in order to help owner manage risk more effectively

Conclusions

Construction project is risky due to huge capital, long time implementation and many stakeholders. The awareness on risk management is not that good in Vietnam construction project. In order to limit the effects of risks and control the cost within authorized budget, the owner should carry out appropriate management risk and involve all systems in this process.

In this report, Le Ngoc Diep wanted to study on the status of risk management, in terms of risk affecting construction cost and response applied of one specific construction project which is Chi Linh urban center project.

Over view of managing of risks affecting construction cost in Chi Linh urban center project

- There is no appropriate risk identification (risk list and risk symptom) in the project, and the risk management is not deeply comprehended.
- Awareness of the top management is limited, which lead to design change in construction phase.
- The cost of topography and geological survey is limited.
- The contract document and personnel management is inadequate.
- Risk monitoring and control is passive.
- Awareness of project manager and project team member is not high.

The risks affecting construction cost in Chi Linh urban center project
- Wrong estimate
- Design changes
- Inflation
- Site condition difference
- Poor capability of PMU
- Unclear contract conditions
- Poor site management

The other most popular risk affecting construction cost overrun according to Construction Magazine Census in 2009
- Poor financial capacity of the owner
- Poor financial capacity of the contractor

Responses applied in the project and recommendations are given below

His thesis abstract is copied and posted.

Abstract

The construction industry is one of the most dynamic, risky and challenging businesses because of implementing time is very long with huge capital and many stakeholders.

Risk is inherent in construction projects and risk management in construction projects has been recognized as a very important management process in order to achieve the objectives in terms of time, cost, quality, safety and environmental sustainability. Let say, we are going on the road with the definitive finish, but on that way many obstacles, difficulties facing. So if we do not manage we cannot reach the finish or waste time and energy to reach it.

In construction there are some objectives, but one of the most important thing is cost of project is in authorized budget. There are many risks affecting cost and profit of project from initial to close out phase. In this study I concentrate on risks affecting construction cost and solutions helping owner manage the cost effectively and efficiently to ensure the cost is in budget of project.

The Delay Factors in EPC Contracts in Viet Nam: Case study of Uong bi Thermal Power Plant

Delay in any construction project is inevitable. In construction stage of the project, anticipating many factors that cause delay is one of the important works of the project manager. Therefore, project managers should give solutions for these before the construction starts. However in Vietnam, sometimes both owners and consultants do not care about this, which is why many construction projects are delayed.

In particular, all thermal power plants, fertilizer plants and other projects executed by EPC contractors were delayed by usually 1 to 2 years.

Even though various studies have been considered to know the causes of delays, still, seldom discuss about the common and general causes of delay in construction projects. Thus, comprehensive study on these delays is essential. Since the problems are rather contextual, the study needs to focus on specific causes of delays. Mr. Tran Van Trung made a case study to find out the main factors causing delay and affecting other aspects in Thermal Power plants in Vietnam at all stages of projects.

The objectives of his study were to (1) identify major delays in Thermal Power Plants in Vietnam; (2) identify the major cause (reasons) of delays in Thermal Power Plants in Vietnam; and (3) recommend strategies for improving project delivery based on the finding from the study.

Conclusion

Delay in the construction industry is a serious problem in general and in all the coal-fired Thermal Power plant in Vietnam in particular. The project which was investigated in this study exhibits a delay like in all power plants in Vietnam. Therefore, the results of the research provided a framework for project managers who can better understand the dynamics of project management and taking efforts to reduce incidences of delay.

By administering and analyzing factors affecting the project, this research has identified problems related to delays during construction phase. From these results, once again, it is noted that most causes of delay of the project related to Consultant Company of owner who set up F/S and surveyed site conditions before, and Fishner Company as A/E of owner. Furthermore, subcontractor as PM caused delay in the highest impact, since the quality of its equipment was not reliable and the quantity was not asynchronous in delivery.

In this study, twelve major factors were analyzed to find out the causes, impacts and solutions of delay problems during the construction stage. Although these problems may be unprejudiced or subjective reasons, they were also originated from carelessness in the implementation, management or supervision. Then, this research had deeply analyzed other factors that also affect schedule for each case and summarized some reasons behind these delays, and proposed some recommendations belowwhich might enable to develop the main contractor organization to achieve one of the major goals in power plants which the on time completion.

His thesis abstract is copied and posted.

Abstract

In construction industry, a project is known to be successful when it meets three fundamental criteria such as finishing on time within the budget, the prescribed quality requirements such as satisfying customer’s demand and adapt safety in operation stage. Unfortunately, all of Thermal Power Plants built in Viet Nam had problems of project management leading to their delay. Investigating these problems has become project manager’s indispensable demand.

In general, the problems involved with project delays are solvable. In making effort to solve these problems, the critical factors influencing negatively on construction duration need to be discovered. Hence, it is very important to establish a systematical approach that will be used as a tool for the investigation.

This report will assess and analyze twelve factors causing the delay problems in Uong Bi Thermal Power Plant was executed in the North of Viet Nam. The qualitative method, basically is based on the principle of assessing the risk level of factors impacting negatively on the progress of the project, and it is conducted to fulfill the objective of the study.

Finally, some solutions dealing with project delay problems in construction executing stages are proposed.

Effectiveness Of Feasibility Study Analysis In Apartment Building Project

The construction projects present a unique situation where each project has different situation and parties. One of the important stages involved in a construction project is the preparation of the feasibility study. Feasibility study is conducted during the formulation phase of Project Cycle. This verifies whether the proposed project is well founded, and is likely to meet the needs of its intended target groups/beneficiaries. The study should design the project in full operational detail, taking account of all policies, and technical, economic, financial, institutional, management, environmental, socio-cultural, and gender-related aspects.

Construction is a complex field, costly and risky. In recent years, the construction industry in Vietnam is having a good reputation of rapid development. However, many large projects invested by private investors are still facing incorrect cash flow, missing indirect cost, less profitable or cost overruns, and feasibility study is not suitable according to economic environment.

To minimize these problems, client needs to improve their skills and abilities in dealing with project Financial Feasibility Study. Recessions and poor economic times have put pressure on the average company for better using effectiveness tools in this stage.

Mr. Truong Ngoc Dung made a case study about the Twenty Six Storey Apartment projects which was invested by Company ABC. The objectives of his study were to: (1) conduct an exploratory study on the factors and process used in financial feasibility study; (2) develop a framework for an effective financial feasibility for Apartment Building Project; and (3) conduct a case study to validate the effectiveness of the framework

Conclusions

The case in this report describes a practical implementation of the Feasibility Study stages in Apartment Building Project of Vietnam in general and Ho Chi Minh City in particularly, and obviously revealed the factors which can seriously affect the success of the project. In fact, Vietnam at present has enormous efforts to overcome policy and reduce the cumbersome procedures in investment, but investors still face a lot of problems (Financial Feasibility Study) which occur during project implementation.

In conclusion, the report may not only offer the effective method to make Feasibility Study in the first stages of project implementation, but also clear description that the major factors may affect the efficiency budget projects, that most projects in Vietnam are all experiencing: the problem of cost overrun, bankrupt and project costs incurred up compared to initial estimates.

Recommendations for further study

- This research was concentrated on finance like estimated cost, revenue and how to analyse project financial. However, other influence factors such as local politics, public relationship and strategy of the owners did not mention.

- It is recommended to make a Feasibility Study at difference stages such as design stage, construction stage and after operation and transfer stage for the main purpose of improving the projects later.

- Sensitivity Analysis is also needed to recognize the priority factors after calculating financial factors for the Apartment Building project. These factors are of big concern and have the ways to manage it.

- Mores projects have to be studied in order to get a better result and it is highly recommended to investigate the effectiveness of each strategy by quantitative data.

His thesis abstract is copied and posted.

Abstract

The Real Estate investment is one of the most dynamic, risky and challenging businesses because of their implementing time is very long with huge investment capital and various participating components. Furthermore, this field has poor skills for making Feasibility Study, with many major projects failing to finish on time and cost targets.

Feasibility Study of construction project used to get the alternatives of optimal land use that give the highest profits. Feasibility study analysis also gives information about value of investment and the benefits that investors will get. Define return of investment can be seen from feasibility study. Commonly, Net Present Value (NPV), Internal Rate of Return (IRR) and Benefit/Cost (B/C) are the values that used by investor to consider this project is feasible or not.

The purpose of this study to identify effectiveness methods, main major estimated factors that will be occurs in this stage. To effectively making the financial feasibility study in construction project, it is necessary for oriented path to identify important factors, then provide a suitable tool to measure their effects in each stage of Financial Feasibility Study life cycle and suggest the effective solution methods as minimized/maximized, shared, or accepted.

Design Management in Design-Build Project Base on Design Team of Contractor Perspective

The Design – Build method has many advantages, contractors have to manage some new factors that are not their responsibilities based on the traditional project approach such as design duty, quality of design, design management issues and even authorities approval.

After the contract is awarded, main contractor or design-builder have to established design team promptly and set some roles for each design member as well as define obviously the project scope. Therefore communication, coordination and collaboration between the design teams are significant key leads to project success.

On the other hand, design team also take care authorities submission – a sensitive point which affect project schedule – concurrent with design development progress. Design management had to deal with both tasks in tight schedule, construction permission deadline pressure and balance between main contractor requirements and the owner needs.

Experience was also an issue that design management had to deal with. In order to save design fee, main contractor normally tended to hire design teams whose competence was just enough to develop the preliminary design that provided by the owner. Meanwhile experience of design team who could find out mistakes from the owner concept as well as control changes at initial project phase was underestimated.

These above factors may be due to some inherent problems that contractors and owners have to deal with in Design-Build process. Therefore, Mr. Nguyen Cao Bao Luat made a study to investigate the following issues:

- Coordination and communication between parties
- Lack of time and inexperience design team
- Level of concept and preliminary design which conducted by owner
- Change order and extra work orders
- Design error

The objectives of his study were to: (1) identify design management problem in D-B projects base on architectural design perspective; (2) investigate the nature of problems in order to find causes and solution; and (3) propose a system how to manage design: coordination, interaction for design-build project.

Conclusions

Lessons Learned from JCV Project case study

According to project final report document which done by both contactor and the owner at JCV project, the essential lessons that they learned are as follows:

1. Design-Build team should be carefully chosen in term of experience by the owner;
2. Involved parties should be prepared carefully to deliver the project;
3. Preliminary design which done by the owner should be enough information and specification of performance should be priority;
4. The owner should leave design guidelines "loose," because design-build team will work creatively under performance criteria; and
5. Communications among the involved parties should be opened and maintained particular between design team and the owner.

Summary of lessons learned form case study based on design team perspective


Some keys to success for design – build project in particular for design management

1. The owner and design-build team should create a collaborative environment for working at the beginning of the project. Good communication among key team members and understanding between designer and builder are keys leading to project success.

2. The owner should select and work with the pre-qualified design-build team who has previous experience with similar project types is the essential core. The design-build team experience helps the owner study geographic location and commit that design-build team have ability to deliver a good design and quality of construction are key factors.

3. The owner should make sure that the level of designer team and construction team are meeting the requirement organization of the project, because at equal level, communication will be effective in term of team performance.

4. Take the contractor/construction team into the project as soon as possible to review the concept as well as technical drawing. The contractor should be expected to participate in the preliminary design.

5. The owner should use a concept design to work with the design-builder team to develop a preliminary design. Make design decisions early starting with the Customer Concept Document, Request for Proposal and Concept Design.

His thesis abstract is copied and posted.

Abstract

Design and build is a method of project delivery in which the design and construction phases of a project are combined into the contract, usually awards on either a low bid or best-value basic.

In design-build, the A/E firm and construction contractor have an incentive to become and integrated team that works concurrently on the design and construction phase of different segments of a project, with the potential to expedite delivery and better control product quality and cost.

However, design-build has a few drawbacks, as well.

• The system's short-cut design process. Some steps are reduced
• Owner has their own conceptual planning and schematic design which may not be done by professional A/E firm. The level of preliminary design will impact cost and quality in design development stage and construction stage also.
• The builder is also the designer, it is only natural to expect that the designs will gravitate to technologies most preferable (read profitable) to the builder.
• Inherent checks and balances between design and construction teams no longer independent.

Even though Design–Build (DB) arrangements have several advantages, project contractors are still studying and improving it. This may be due to some inherent problems that both contractors and owners have to face in their D-B projects. This study investigates the problems and difficulties that design team of contractor deal with and how can help the contractor overcome these problems though design management.

Owner’s Involvement in Preliminary Stage of Real Estate Development Project Case Study in Vietnam

What is the main involvement of owner in managing real estate projects while hiring outside consultants during the preliminary stage and how they can manage and monitor these design consultants effectively to achieve the best quality for their projects. It is important to explore the roles and the responsibilities of owner involving decision making in every stage of project development with outsourcing strategy.

Mr. Truong Thai Binh made a case study to design a guideline for owners who do not have enough experience and in-house resource to develop property. His study was carried out to increase a better understanding of owners’ roles and responsibility in developing construction projects.

The objectives of his study were: (1) identify project life cycle and real estate project development procedure, particularly for real estate projects in Vietnam; (2) based on project life cycle, investigating the involvement of owner in every stage of project development, especially in Design phase; and propose recommendation for improvement of project management guideline for managing, controlling and monitoring.

Conclusion

Role and Responsibilities of Owners

A successful project begins with the owner. In general, the broad responsibilities of the owner on construction projects include two major factors that contribute to a quality project. The first is the development of complete and realistic requirement and objectives for the project. By communication and coordination, the second factor is to provide a thorough understanding to other team members of the role and responsibilities of the owner. Besides that, the owner is also responsible for providing adequate financing for the entire project and making prompt payment to team members.

Owner also plays an important role of making a decision in every step of the projects development, particularly in preliminary phase. The key indicators for the owner to consider before making any decision in every step of preliminary phase are given in the table below:

Recommendation

Recommendations are suggested based on the case study and the literature review.

a) The most common causes of the construction problems were the lack of coordination and insufficient drawings. Solution for these problems is the involvement of the Owner and Design Professional at the design and development phase. Their participation will reduce the risks as they help all parties to understand the actual requirements and minimize conflicts between parties to achieve better designs.
In order to reduce the conflicts in the construction project, it is recommended to have a good communication channels among the Owner and other parties to establish a good coordination.

b) To assure the quality management in the design phase of construction projects, the Owner should have a good training program for his/her employees. Training on the job is a good method to help employees become more professional.

Reasonable investment in the design staff will have good effects on the creativity in the Owner project management. The most appropriate skilled, experienced staff should be selected for each project.

c) The Owner should ask for the help of Architect or Designer in formulating the final brief. By working closely with them, the Owners should also help to establish a valuable dialogue and ensure that the Owners have a clear understanding about creative references, functional needs, roles and responsibilities.

The Owners should never be afraid to change their minds at this formative stage of the project. Design briefs often evolve so that the final brief is quite different to the original brief. The important thing is to get it right at this stage because design changes later in the project have the potential to undermine the integrity of the overall design, delay the project and add to the cost.

The Owners empower the Architect or Designer to do what they do best with the potential to deliver a project quite literally beyond the Owners’ comprehension. This can be considered as the pre design phase.

d) It is important to integrate design quality in the overall quality of the project – procurement process, leadership, project team and continuous improvement. Good design will:

- Make a positive addition to the location, the environment and the community;
- Add value and reduce whole-life costs;
- Create built environments that are safe to construct and safe to use;
- Create flexible, durable, sustainable and ecologically sound environments for the community;
- Minimize waste of materials, energy and pollution both in construction and in use;
- Be attractive and healthy for users and the public;
- Contribute to construction that is quick, safe and efficient;
- Produce facilities that are easy and cost effective to manage, clean and maintain.
[Source: Better Public Buildings]

His thesis abstract is copied and posted.

ABSTRACT

Today, with more than 86 million people, Vietnam is one of the potential real estate markets in Southeast Asia. For such reason, there is a great need for professional project management skill, particularly for owners and investors in Vietnam. Therefore the subject of this study is to identify the owner’s roles in managing his projects. This owner organization is established in 2002 and has been working as property investor for almost 7 years. The organization is located in Ho Chi Minh City. The managers are those who do not have enough experience and acknowledgment in real estate and, particularly in construction industry. Important part of this study is to develop a brief guideline to identify the roles and responsibilities of the owner in project investment and management.

Owner’s Project Life Cycle Approach: A Case Study of Rubber Plantation Projects of Vietnam Rubber Company

In recent years, Vietnam Rubber Company (VRC) has invested big capital for expanding rubber plantations and upgrading rubber processing facilities both domestic and outside the country. For VRC, the concept and practice of owner’s project life cycle have been used in rubber plantation projects. Nevertheless, VRC has not built a type of project life cycle appropriating with its specific characteristics; therefore, some projects meet with serious difficulties during performance.

According to internal audit and situation report, VRC’s oversea rubber projects show many problems especially in cost and schedule on the project management in construction during 2007-2010 such as:
- Cost overrunning or over budget;
- Projects are prone to delay;
- Project quality uncontrolled;
- Project scope creep.

Also according to this report, VRC recognize the bad results in Cambodia are created by many reasons; however, poor management of the project life cycle is one of the reasons bring about serious consequences including the followings:

- No establishing a framework of project life cycle;

- Project proposals and business cases and project selecting process in the first phase were carried out incautiously have impacted to all remain phases of the project life cycle;

- Some projects do not have a strong project management team;

- Inadequate delegation from VRC’s head quarter and the project organization is not properly;

- Lack of managerial skills and competencies as well as the internal capacities of the owner

VRC considered that poor management of the project life cycle caused negative impact to the projects. They are the critical problems which VRC and other related parties to Cambodia projects need to consider cautiously.

Mr. Do Huu Phuoc made a research to study Vietnam Rubber Company’s project life cycle approach, analyze situation and develop a framework of project life cycle of a rubber plantation project and guideline to possibly ensure the projects deliver on time, on budget and to the level of quality expected.

Conclusion

All projects have certain characteristics in common which only last for some time.

Projects can be managed using a common set of project management processes. In fact, a similar set of project management processes can be utilized regardless of the type of project. All projects should be well-defined and well-planned, and all projects should manage the scope, risk, quality, status, etc. Although every project is unique, the lifecycle model typically is not. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times in other organizations. There is no reason to reinvent everything for a project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates.

The project life cycle of VRC’s projects may progress through four phases:

- The first phase of a project is the initiation phase.

- The second phase, the project enters the detailed planning phase.

- The third phase involves implementing the plans created during the project planning phase.

- The final phase involves completing the work, closing out the project.

Conclusion for VRC’s project life cycle approach

There is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for VRC to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, VRC should be concerned with the life cycle costs of planted rubber trees, constructed facilities rather than simply the initial costs.

Saving small amounts of money during construction may not be worthwhile if the result is much larger than the operating costs; or not meeting satisfactorily the functional requirements for the new facility or the objective is not align with the scope. Thus, generally a project or particularly a rubber plantation project wants to finish successfully it must be very concerned all the phase of the project life cycle.

Recommendations

With so many ongoing projects like situation at present, VRC may encounter difficulty for all projects to get adequate support, or even the attention of top managements. The particular common problems when trying to manage multiple projects concurrently may be:

a.There is no time for summary experience, so the mistakes from a project can repeat to all projects.

b. Delays in one project may drag other projects because of common resource needs or technological dependencies;

c. The inefficient use of corporate resources results in hills and valleys of resource utilization;

d. There are unwholesome competitions between project teams to get support, or the attention of top managements.

VRC should consider a temporary stopping with the current projects to review all the problems happening. The lessons learn from projects should be analyzed, reviewed and documented for future projects and any other projects will be performed by VRC in Cambodia or other countries in the future.

This study had concentrated on owner’s approach in managing project life cycle to an agriculture project. However, there are many aspects relating to the project management. Further studies should be carried out to find out the approach of owner for agriculture project management.

His thesis abstract is copied and posted.

Abstract

Project life cycle is an approach that links the phases, which can lead to significant results required for completing a project. As the owner has the most authority in enforcing the implementation of constructability, the owners' awareness of the benefit of the project life cycle is the most important. Project owners must be aware that the decisions that are made in the stages of projects are difficult and costly to change once construction begins.

Owners should recognize that there is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should be concerned with the life cycle costs of constructed facilities rather than simply the initial construction costs. Saving small amounts of money during construction may not be worthwhile if the result is much larger operating costs or not meeting the functional requirements for the new facility satisfactorily.

However, the traditional approach to project life cycle limits their option for involving in the phases of the project. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times at other organizations. There is no reason to reinvent everything for your own project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates which to be used in the same industry.

Delay in Planning, Design and Construction: A Case Study of Residential Development Project in Ho Chi Minh City

Vietnam’s construction industry is now suffering from many problems regarding design to operation especially in residential and complex building. These problems include:

1. Coordination between Architect and Structural designer
2. Communication difference between architect and owner regarding the structure
3. Lack of government permit
4. The contractor’s method of construction did not comply with local building standard therefore accident happened
5. Project delay due to owner’s return payment to contractor which is not stipulated in the contract
6. Dispute between project construction management group and main contractor or between main-contractor and sub-contractor about claim, variation order, quality, delay of schedule, and coordination with other contractor
7. Difficulty of taking over from contractor to project management group because the standard is not clear or was not met general standard
8. When PCMG handed over the project to client but the client has financial difficulty
9. Rework
10. Resolving complains from client about service quality and the method of managing the project

Mr. Nguyen Hung Cuong made a case study which objectives were to: (1) study delay in planning, design, construction; (2) find out to solve and prevent problems in each stage; and (3) propose project life cycle strategy in how to develop residential complex.

Conclusions

The project life cycle would be successful if in each phase of the construction phase project, the management had clear plan and had coordinated with all contractors to resolve the problems at an early stage.

The project will be completed on time if clients are pleased and satisfied with the quality and safety. In case of project delay, propositions based on theoretical and recommended practices including guidance from the PMI’s PMBOK guide can be presented in order to solve the problem. Besides, some useful tools were considered and suggested to use as the aids for the project managers to improve control management in the project.

However, this case has limited information because some companies in Vietnam can not provide full information to students.

Recommendations

In order to avoid problems on project delay from concept design to operation which was actually happened in The Manor phase II project, the following steps are recommended:

• PCMG have to get Government permit first together with concept design before construction and have to control the plan well. The plan monitoring is very crucial for project management.

• Owner should estimate the project expenditure and should have a board in order to double check the project phase by phase.

• Project Construction Management Group has to undergo an organizational training in order for them to know the use of the process to accomplish the project and to learn the contract condition.

• Documents control for project is very important. All the site instruction should make the process for resolving and return it to contractor soonest, with the process that all the scope of work will be completed on time.

• In case of ISO certified company, Project Manager should give feedback to the company Quality Manager to add in personality test forms together with Job Application Assessment Procedures forms. That will save Project Manager’s time whenever there is new job applicant coming to job site for an interview.

• PCMG have to request contractors to submit the schedule of material delivery in order to double check it. PCMG can also check and give the project schedule to contractor for site instruction.

• The contractors should make a report of human resource to PCMG in order to inform if that manpower is enough to finish the scope of work and if the project can be completed on time.

• Relation division and contractors should always have the plan to solve the method problems.

• The weekly meeting is very important for PCMG and contractor. All problems will be resolved during that meeting and since relation division have limited time to return the request to contractors for information.

• All contractors must provide safety policy to PCMG to reduce accidents on site.

• Delays caused by taking over and claim of payment during construction which is the bigger problem between contractors and the Owner.

His thesis abstract is copied and posted.

Abstract

The planning process in project lifecycle is one case study in the Project Management Institute’s A guide to the Project Management Body of Knowledge. In the case study of Project management is established planning process in project lifecycle is very importance therefore this is really a tough challenge and time-consuming task to any project manager.

The drawing up the plan from concept design to operation project that it suggested management must have large line of vision also experience .The planning process will be evaluated clear that must link everything from the owner, design, contractor. This final project report focuses on construction project as lifecycle project needs who’s have responsibility to design planning process to be clear within knowledge. Though a case study of residential and complex project in Ho Chi Minh City, many problems that we can saw which cause project interruption will be investigate and analyzed. A lot of solutions be proposed which base on the knowledge will be discussed to help project management in order to improve skill in the project.

Owner’s Organization Project Management Maturity: A Case Study of Petrolimex Saigon

Construction owners nowadays are facing two general problems which are the lack of the modern project management knowledge and the lack of a system of procedures and instructions for continuously measuring, evaluating the performance of project and project staff; collecting, storing lesson learned and making convenient access for project staff; and planning and implementing the improvements.

Mr. Le Quang Khanh made a case study which objectives were to: (1) assess the organization project management maturity of an stated owned enterprise on the role of project owner, analyze what it has and what it has not in comparison with the modern project management theory; and (2) propose recommendations for project management improvement.

Conclusion

This study has demonstrated an intensive exploration into the current status of an owner construction project management system. Each management process has been described, assessed, analyzed basing on the definitions, requirements of modern project management processes established by PMI in PMBOK Guide (2008) and OPM3(2003).

The assessment has found that, although the assessed company applied nearly all processes of project management, the maturity level of these processes in the company are still rather low. Company is at the first steps of project management maturity ladders. Reference to OPM3 (PMI, 2003), the Company project management maturity level is at about the standardization stage as shown in the figure below. There are many process need to be standardized, many procedures, guidelines need to be established in order to help the company improve its project management maturity, develop the company competence.
Following are some main problems of the company in project management system:

1. Many processes are not standardized: performed basing only on the experience, practice; there are no standard documented procedures, instructions/guidelines to conduct. Many useful tools and techniques are not applied during project management processes because of the lack of the modern project management knowledge in project staff.

2. The planning processes are not well implemented. There is no specific project management plan, project scope, or project quality plan for each project. The project control and execution activities of project team members are almost unplanned, basing on experience.

3. There are no standards, procedures, no formal performance system to measure, evaluate the degree of success and failure of each process, phase or project, the performance of project team members. Therefore there is no steady foundation to plan for project management performance improvements.

4. There is a formal process for assessing, auditing the existing procedures, instructions and suggesting, implementing improvements (included in ISO9001 quality system). However, because of the limit of the staff knowledge and skill about the modern project management, there are not many effective improvements as expected.

5. There are no procedures or instructions about collecting information of the contractors/suppliers, the project issues, lessons learned…to keep in a convenient place (like project management office) for analyzing and using in future project management. Therefore, there is also no formal historical information and lessons learned knowledge databases system. All the project records, after the project completion, are kept in the store.

Recommendations

1. For the assessed company and other state owned companies in general on the role of owner:

- There should be more training on modern construction project management for the company staff. The training content include (but are not limited to) the knowledge/skills of project management for individual, for organization; the experience in organizing and managing a project management organization, the existing effective systems of construction management procedures and instruction of international project management groups. The staff need to be trained are: the top management for having far more vision, more correct evaluation about the importance and effectiveness of building a standard project management system; the middle management and the project team member to be more effective in managing projects and composing the necessary procedures and instructions;

- Company should pay more attention on the planning processes; make all the management plans before carry out management activities.

- Company should improve the formal system of procedures and instructions to standardize all the project management processes in the company. The guidelines about the applied range of each process are also needed. This help to keep the consistency of quality and increase the effectiveness of management processes.

- Company should improve and increase the effectiveness of ISO9001 assessing and auditing processes by using the competent auditors who are professional in construction project management, training the project staff to be good and innovative self-auditors.

- Company should establish and apply the formal standards, tools, guidelines for measuring, evaluating the success, failure of project goals in order to collect experience and lessons learned for future investments.

- Company should build a small project management office/center where the project management staff can easily access to the historical information and lessons learned of all past projects; refer to the modern project management tools and techniques. And besides, Company should build the procedure, instruction for collecting, storing those data. These works will be very useful for the future project management of the project staff, especially the new comers.

2. For further study

Further study needs to be carried out to have more comprehensive assessment of state owned project management organizations and give more detailed recommendations for competency development of this type of project management organization.

His thesis abstract is copied and posted.

Abstract

Nowadays, the increase of world population, the development of technology and the globalization of competition are day by day giving construction industry the increasingly requirements both for the quantity and the quality of construction projects. Hence, many organizations and the individuals involved in construction industry are paying more concern in studying and applying the modern project management knowledge/skill into project management process.

To be successful in managing projects, not only contractors but also the owners need to be competent in project management.

This case study will assess the degree to which an owner-a state owned company, apply the project management processes and give the recommendations for improvements.

Method & Effectiveness of Feasibility Study in Apartment Project: A Case Study of Carina Plaza Building

In the real estate investment business, decision making is important to influence the success or failure of the project. One of the significant stages is the Feasibility Study (FS) stage.

Based on the characteristics of construction industry having high uncertainty, many risks occur during Project Feasibility Study. Correct decision and assumption will help to make the project a successful one. To those assumption, main construction factors should have been anticipated and calculate it into the feasibility analysis so that risks will not be happened and will be of advantage for the investor.

Mr. Le Mien Thuy made a case study on the method and effectiveness of FS. His research objectives were: (1) Framework of FS in Apartment Project, (2) study the application of the framework in project case; (3) find the problem in FS for Apartment Project; and (4) proposal the solution base on theory.

This issue is more significant to some of the construction investors facing serious problems with budget control, as an effective budget control is critical for investing in large projects. Construction project management, which includes project Cost Estimation, is an area of weakness for those investors who want to expand or invest more in the international construction market.

Conclusions

A successful project is determined by Feasibility Study. This is one of the most important stages of project life cycle. There are some problems occurred in Feasibility Study and how to prevent those in future project are really important. Below are some tips such as:

1. Incorrect assumption: The people conduct with good experience in construction industry.

2. Misunderstand the Demand of Market: To study carefully the market situation base on survey data of professional company.

3. Cost & revenue estimate is not match reality: To study some similar successful project and collect good information from contractor.

4. Time schedule planning is not practice: To get the advice of contractor and expert

5. Forecasting of cash flow is wrong: To break down detail a task base on general schedule and the selling program

6. Mistake in term of FS calculation technical: Competent people should be in charge with the professional software.

7. Lack of information in term of information of land: Good connection to authority.

Based on above study we can understand deeply a significant element which impacts the consequence of the project. Based on the literature review, typical Feasibility study Framework for apartment project comprised of 6 phases: identify conceptual, input data, estimate method application, method of evaluation, identify requirement, and identify benefit. In the initial step of FS framework, the preparation work is the most important. This section conducts entire of data for FS processing to ensure that the result is true .In the processing step of FS framework, the method of estimate and evaluation demonstrate that the project is feasible. There are many tools to measure the benefit of the project and specify the good decision –making in apartment investment.

The important point in theory of FS is the cost estimation method and cost estimation element. These methods are functional unit method, superficial method, element cost plan, approximate quantities techniques, all of them can be implemented in real apartment project efficiently. The cost estimation element describes the detail of some important figure such as: cost of land, cost of legal and professional fee in acquiring the land, construction cost, cost associated with facilities management, and cost of finance. Because cost is the input data for FS processing, thus knowledge to understand it is critical study in this report.

Recommendations

Based on the case study analysis, some problem occurring in feasibility study for apartment project was identified. In other hand, the cause was also revealed based on the comparison between actual and theory.

In order to improve the Feasibility Study of Apartment Project, the existing problems such as increasing cost of land, high inflation, revenue changing, fluctuation of material should be avoided.

The method of cost estimation should be implemented properly and appropriately to ensure it is accurate as much as possible. The knowledge of construction industry is most important factor to implement project result. Cash flow control is should be under-taken by people who have enough experience in construction work.

To get the information is highly important to eliminate the risk in future stage. The revenue of the project to be executed should follow the real market. Beside, the input data and output data for the calculation technique should be carried out carefully and should be checked by many people involved, to make-sure that the decision making is good.

The leader should support the team to carry out the FS by the information from other party side such as: Marketing research, contactor, consultant, designing company and some experts especially that in Viet Nam, the Policy of Government is not stable that is why the good relationship with government is the most important point in feasibility study.

Conclusion, in order to achieve the feasibility study in apartment project, the people who will conduct should have an integrated knowledge competence in terms of construction industry, financing, marketing, politic, and selling.

His thesis abstract is copied and posted.

Abstract

Viet Nam is the developing country which is booming economic and the new medium classification increasing rapidly. The movement of people from rural region to urban region is growing up every year. The population growing is 2% a year that is compressing of Housing Supply for social need. The entire above figure is good reason for real estate business in Viet Nam. However in order to success in property business the Feasibility study stage is most important factor should be consideration.

The subject of this study is analysis the method & effectiveness of feasibility study in Apartment Project. Base on theory and actual project the problem statement occurring in FS will be identified such as: Incorrect assumption , misunderstand the Demand of Market, cost & revenue estimate is not match reality, time schedule planning is not practice, forecasting of cash flow is wrong, mistake in term of FS calculation technical, lack of in formation in term of information of land. According the literature review the object study is summarized as Framework of FS in Apartment Project. To study the application of the framework in project case. To find the problem in FS for Apartment Project .To proposal the solution base on theory.

With the real project Carina Plaza the analyze of the comparison between theory and the actual activity is show up the different and causing of it . The method of cost estimate is concentrate to study according the theory and project case. The revenue estimate is also access careful to ensure the catch flow management always is positive and project is archive.

The final report specify the most important factor to impact the FS and a successful of project in medium apartment. The FS should be conducted by the people who is integrate knowledge such as: construction knowledge, financing , marketing, communication.

Organizational Project Management Structure in a Real Estate Developing Company: A Case Study of Namlong Corporation

Project management structure is a new issue in Vietnam. There are more and more real estate development companies in Vietnam in which many of them process great potential for the project management team. But the concept of project management structure is one thing that not all the companies are aware off. In fact, there is still confusion in choosing the model for organizational project management structure.

Mr. Nguyen Duc Trong made a case study which primary objective was to identify and find out the ideal project management structure for a developing company. In order to achieve this main objective, sub-objectives were needed to accomplish such as: (1) study the literature of Organization Project Management Structure in construction project; and (2) analyze a Case Study in application of Organization Project Management Structure in Viet Nam

Conclusion

Organizational structure can get in the way of, or help support, the overall success of projects. To a certain extent, we can change the organizational structure. In fact, we can change the organization chart frequently, and some companies just did that. Culture, on the other hand, is not easily changed. It can take years for a large organization to develop a culture of excellence (although it doesn't take nearly as long to fall back into mediocrity).

Some organizational structures can definitely impair the ability to deliver projects. First are those organizations whose project teams are doing support work. If the project organization does support as well, it usually means that support issues will pop up and take the focus away from the project. A lot of multitasking and thrashing takes place as we move from support work to project work to support work. It’s usually very difficult to prepare good estimates and meet the scheduling commitments. We may be forced into this structure if our staff is small. Sometimes we have 15 people who work on support, projects, and enhancements. However, we do not have enough people to specialize in either support or project work. This makes it difficult to meet all of our project commitments. Instead, we
have to do a good job of managing expectations.

The organizational structure may also impede the ability to share resources. For instance, if our project team needs a resource with a specific expertise, we may not be able to easily share that person with another functional area. Some of this is also related to our culture. We have to consider whether a different organizational structure would help. If it would, we may have an organization problem. If it wouldn't help, our culture is probably not supportive of resource sharing.

The organizational structure can also help or hinder the success rate. The structure can determine how well we focus on projects and how easy it is to share resources between organizations.

Recommendation

1. Consider the system of Project Management structure. Develop individual assessment form for functional manager, project manager. By involving functional management in project initiation activities-recognizing that functional managers often have the best insight into the skills and limitations of staff members-we made the process of assigning resources to roles more collaborative. We also instituted a formal requisition process for internal resources. Project managers were added to the performance development process training classes and required to provide periodic performance-related information to functional managers. At the same time, functional managers now shared individual goals and objectives with project managers, seeking to align project assignments with objectives

2. Build up the enterprise culture and create the transparent competition among departments. Have good authority system and empowerment so that all the department leaders can have the conditions to give out the right decisions

3. Have clear annual plan and transfer this plan to every department, every individual. Check, monitor and access this plan monthly, quarterly to create fair in bonus sharing

4. Re-define Roles and Responsibilities: establish a policy statement and matrix document that clearly identified the project manager and functional manager roles and responsibilities.

5. Establish a Communications Plan: developed a comprehensive program communications plan identifying who reports what to whom, and when. Acknowledge the information needs of the functional management team by including them in the communications plan. Project websites could be established to facilitate communications.

His thesis abstract is copied and posted

Abstract

A project organization is a structure that facilitates the coordination and implementation of project activities. Its main reason is to create an environment that fosters interactions among the team members with a minimum amount of disruptions, overlaps and conflict. One of the important decisions of project management is the form of organizational structure that will be used for the project. Each project has its unique characteristics and the design of an organizational structure should consider the organizational environment, the project characteristics in which it will operate, and the level of authority the project manager is given. A project structure can take on various forms with each form having its own advantages and disadvantages. One of the main objectives of the structure is to reduce uncertainty and confusion that typically occurs at the project initiation phase. The structure defines the relationships among members of the project management and the relationships with the external environment. The structure defines the authority by means of a graphical illustration called an organization chart.

Integrated Project Management Assessment For Development Property Project At Capital Fund In Viet Nam

Vietnam’s economy has been tremendously grown recently. Due to this economic growth, people from urban places move to major cities to seek employment which leading to huge demand for residential apartments as well as public building such as office and commercial or retail center. Currently, the supply could not match the demand which causes high property price particularly for residential projects with area yet to be built with investors camping in the streets to get a chance to buy off-plan.

Mr. Nguyen Phan Hoa Binh, the author, recognizes that in the planning management process, the link between business strategy plans and the project execution plan are not properly planned, organized, controlled and evaluated because of the critical problems such as:

1. The constraint of matrix organization structure at portfolio Project
2. The constraints of communication, difference communication channel
3. The conflict interest between shareholders

Due to these problems, Mr. Binh made a research which purpose was to analyze the said problems in order to come up with suggestions on how these should be solved. The objectives of his research were to: (1) explore the structure of close end property fund, to explore the linking structure model of portfolio company with the structure of property fund; (2) review the literature of strategic planning, the project strategy; (3) investigate the planning process of property project, to critical analysis and identify what is missing link between business strategy (fund) and project management (portfolio) via two case studies that the study author is working on it; and (4) adopt the project strategy in the project management in the aim to add a new tool to project execution that will contribute to project success and overall business results as initiation plan from property fund.

Conclusion

In the competitive market and globalization, the project strategy is the essential competitive weapon for company organization in the coming years. These are selecting the right strategy at the project initiation, making it compatible to the business strategy, carefully articulating the four components of project strategy will contribute to project success and overall business results.

Mr. Binh investigated the organization of property fund structure aiming to deeply understand the property fund structure that form up the portfolio company. It is the tool that helps to define the end property product, and its explicit competitive advantage. Based on the project case study- Aqua City Development, Mr. Binh has emphasized on how to define project strategy, how to define end project, how to define the project scope and classify project type. Although it has limited constraints to implement the project strategy, however the immediate mitigation plan could be solved out the critical issue in this case.

Argument hypothesis and External condition

As hypothesis statement, the project strategy framework can be used as a tool to start a strategic process. It will be succeeded when it has a clear project definition, project production. It needs to build up a flexible organizational structure that helps facilitate the competitive attribute.

The strategy framework could elaborate in the integrated project management when project cultures obtain the reciprocal relationship between project stakeholders and shareholder, but it is not an easy mission for the project strategy developer.

As a conclusion, the author could argue that the project strategy framework need to be defined and elaborated in interactive and cyclic way with its four element.

Recommendation

The concept of project strategy and integrated project management is still not common, while there are many developer properties provide the similar product. The project manager is required to expand the role that plays in the project development business and add more responsibility, which will contribute to project success. It could be done, when the project manager could be learn how to direct the new path will lead to better project results and better business performance.

His thesis abstract is copied and posted.

Abstract

The purpose of this study report investigate the integrated planning process of portfolio project, which is formed up by property development fund. As working at the property development fund in Viet Nam for four years, the study author recognizes the missing link between business strategies (fund level) and project execution plan (portfolio level) when the project runs in the implementation planning process. It could be argued that the project strategy plan has not been emphasized in this case or it has not been integrated and controlled properly during the day-to-day project execution work that involves both effectiveness and efficiency for project evaluation. In this study report, the author refers the summary literature review that focusing how to move corporate strategy to project strategy. The study report has combined a project case study (Aqua City Project) in the aim to analyze the organization structure/ functional management analysis/ project strategy/ project planning process to explore the missing link of project strategy and project implementation plan in this case.

How to have “a two way influence between strategy and project management” is an finding attempt that the author would like to capture the strategic approach to apply in the integrated project management development activity that serve to get the project runs in the competitive advance of energizing prosperity. It needs to get the project manager to expand the role that steps up in the project development business. It will gain more project succeed when the link between project strategy and project implementation has been integrated in the strategically.


Keywords: Strategic project management, Project strategy framework, Project execution plan