Business Diversification of Real Estate Company

Thailand’s economy grew at the lowest rate in the past several years resulting in a slow growth in construction. Construction companies encounter financial problems from external factors such as price fluctuation of raw materials and internal factors such as cash flow shortage. Therefore, financial relationship is quite complex, is contacted with lenders, investors, sub-contractors, employees, and customers. The company is careful for managing finance in each function and considering financial problem that can affect financial management in the company.

Business diversification is widely used and the supply chain is one form of diversification. The real estate is one of the business diversify into related business including material supplier, construction, and real estate. The fundamental of the diversification is to create value for stockholders. The additional value is created through synergetic integration of a new business into the existing one thereby increasing its competitive advantage. The real estate company should concentrate on each link between real estate developer and its members especially operation and financial inter-relation. The real estate company decides to diversify because it is more benefits in term of operation and financing. To study business diversification can decrease the cost of construction and can generate the diversity of incomes. It can also make more profit margins and increase the strength of financial capability in Real Estate Company.

Ms. Pichaya Bhanubhak made a study aimed to identify the inter-relationship among real estate developer and supply chain members. Next step, this study is to define the financial relationship through the business diversification and propose the guideline in financial strategy to Real Estate Company. To attain the main objective, three sub-objectives were needed to accomplish: i) to identify the financial and operational inter-relation between real estate developer and its parties through business diversification; ii) to investigate how the real estate developer can diversify business into construction, and iii) to propose the recommendation for financial management that is appropriate for real estate business in handling with the important factors towards diversification into construction.

Conclusions:

The Financial and Operational Inter-relation of Business Diversification in Real Estate Developer

Based on the inter-relation between real estate developer and its parties, it is found that organization business process consists of three major issues including financial, spending, and revenue. There are three parties including material suppliers, land agents, and skilled contractors/skilled labors significantly affect on the operating and financial conditions in the business. Construction material cost, land cost, and labor cost are the main cost of real estate so these expenses relate to sale prices of housing units. Customers are the key parties also relate to the major source of revenue in the company. The key factor has impact on the number of customers who buy the housing products is the sale prices of housing units.

1.There are two parties including financial institutions and investors related to financial. Financial institutions give loan to the company and the company pay back principal and interest payment to them. Investors invest in equity in the company and the company pay dividend back to investors at the end of year. Financial is the process to find funds for operation and investment. The company uses fund for operation to spending to material suppliers, land agents, skilled contractors/skilled labors, and employees. Company uses fund to invest into subsidiaries.

2.Spending comprises of four parties are material suppliers, land agents, skilled contractors/skilled labors, and employees. Cost of materials is the one of the major part in cost of real estate because company purchases materials in high volumes which are more costly for the company. So, company purchases the major construction materials by inviting tenders and entering into long-term price agreement as 3-6 months or 1 year to protect fluctuation of material price.

3.Company purchases land from owners and agents when it develops a project. Skilled contractors and skilled labors hire as outsource contract. High value projects or urgent tasks, company uses bidding process to find competent contractors.

4.Customers are the major source of revenue and the company receives revenue from sales of real estate. More than 90 percent of company’s home buyers borrow by mortgage. Customers lend money from the commercial banks or Government Housing Bank to buy houses and they use their land and house as collateral. They pay principle and interest payment at MRR 4.75% (in 2009). However, the economic slowdown and changing policy of commercial banks or Government Housing Bank on mortgage loans impact confidence and spending of the customers so these situations affect company’s revenue. The company will take the risks of rejection rate of customers that will decrease the revenue from sales of real estate. Thus, the company has appointed a working committee to regularly monitor and track on the bank’s loan policy and the economic status in order to adapt the appropriate strategy.

The business diversification of real estate developer

From the case study, real estate developer diversified into construction business and it also diversified business into sales of real estate. Moreover, the company expands its business in traveling city such as Phuket and Chonburi and foreign markets to capture the business opportunity.

The company diversified into seven subsidiaries that are divided by type of business as following:
1) Subsidiary A to operate as a contractor for home decoration and construction

2) Subsidiary B and Subsidiary C to operate as property developers to sale of real estate

3) Subsidiary D as investors for investment

4) Subsidiary E to operate as real estate developer and housing construction for construction and development of oversea projects.

5) Subsidiary F to operate as real estate developer and housing construction in India

6) Subsidiary G operates as a contractor in India. Furthermore, company manages construction works and constructs houses by itself.

Company A, Subsidiary B, and Subsidiary C sustain in the old market by capture the real estate business. Subsidiary A expands business into construction but it still capture in the old market. Subsidiary E and Subsidiary F expand into new market to capture the real estate business. Moreover, Subsidiary E, Subsidiary F, and Subsidiary G expand to capture the contractor business into new market. There are several benefits from the business diversification as following:

1.The company can reduce the construction period that are shorter than conventional method. The construction of one-story townhouses can build 30 days and two-story townhouses are complete in 60-80 days. The construction period of single-detached houses is about 75-90 days.

2.The company diversified into subsidiary so it can invest more in R&D to improve the efficiency of the business and to improve in high technology to build houses. The company can reduce the cost of construction. Thus, the company can set the sale price that is lower than other developers. The company’s sale prices for townhouses are 15-20% lower than other developers and the prices of the single-detached houses are 10-15% lower than other developers.

3.The company is granted with the Board of Investment (BOI) to exempt tax from BOI promotion privileges because it can build houses that not exceeding 600,000 baht at a unit price including land cost. The company gets the exemption the corporate income tax on net profits receives from sale of residential units in the promoted projects for a period of five years.

4.The company invests into subsidiary A as home decoration and contractor. The company is more flexible to get some benefits. Company separates into two contracts when customers buy houses. The first contract is to sell land and houses that not exceeding 600,000 baht at a unit price to exempt tax from BOI promotion privileges and second contract is decoration by the subsidiary company. The company hires the subsidiary to work in its project.

5.The company invests into subsidiary B and subsidiary C to sales of real estate. It is more flexible in some laws and regulations for the EIA report. Land development for residence, the number of units is more than 500 units or the area is more than 100 rai so the company must do EIA report to office of Natural Resources and Environmental Plans and Policy. Subsidiary B or Subsidiary C develops project after the company in the exceed units to avoid the EIA report.

Her thesis abstract is copied and pasted below.

Abstract

The property market was volatile and impacted by political instability and global financial crisis. These causes affect consumer confidence. However, real estate company adopts business strategy by diversifying business to maintain the business growth. The study focused on diversification of real estate into construction which can affect the operating and financial inter-relation in organization business process to determine the financial outcome of business diversification. The objectives of study are 1) to identify the financial and operational inter-relation between real estate developer and its parties through business diversification 2) to investigate how the real estate developer can diversify business into construction 3) to propose the recommendation for financial management that is appropriate for real estate business in handling with the important factors towards diversification into construction.

The study used qualitative method by using case study as a research design. The research methodology begins with modeling of business diversification which comprise of preliminary modeling and verification. It continued with the data collection by using the modeling to design the case study questions for interviewing and to select the case study. Data analysis is conducted by using explanation which all important evidences are described.

The result from the study showed that there are three main issues in business organization process including financial, spending, and revenue. The financial is the part to find funds for operation and investment. The spending is divided into material cost, land cost, skilled contractors/skilled labors cost, and wages. The revenue comes from to sales of real estate to customers. Finally, the benefits of diversification are to exam tax from BOI promotion privileges, to reduce the cost of construction, to reduce construction period, and more flexibility to operate business such as in some laws and regulations for the EIA report. The modeling of business organization process, business diversification, and money management are developed and discussed in this study. Moreover, the analysis of causes and effects of business diversification are also proposed in this study.

Collaborative Strategy between Stakeholders of Hydropower and Power Intensive Industry in Bhutan

Before 1960, handicrafts, wood products, bamboo products, agricultural products were manufactured in small scale. The number of industries continued to expand steadily after the implementation of first five year plan in 1961. Today most of produce includes cement, wood products, processed fruits, alcoholic beverages, calcium carbide and other minerals. (Bhutan, 2008). Due to high transportation cost, small domestic markets and under developed infrastructure, industrial development has experienced slow pace. Nevertheless as Bhutan continued cordial relation with India, growing demand for minerals and other products has made inevitable to exploit the available resources.

Industrial growth has increased to 5.8% in 2007 from 3.8 % in 2006. (Royal Monetary Authority, 2009). In spite of unprecedented industrial growth, RGOB has to slacken its development owing to power intensive. The demand of minerals and other products continues to grow but industrial development has to stand still until new hydropower plant is installed which can cater the power to these power intensive Industries.

As per the electricity demand scenario, with considerable increase in domestic demand and based on the existing demand forecast, there will be no power available for export by 2012 during the lean season. Due to increased coverage and industrial demand, 12 MW on average of power has to be added per annum to avoid reduction in export. 1 MW reduction of export of electricity will result in about Nu. 14.89 million losses in cash to the Government. (Department of Energy, 2005). The power intensive industries will be affected as the domestic tariff will make par with the export tariff.

The RGOB is in dilemma as to focus on industrial development which is backbone of socio-economic development or continue to earn enough revenue through the export of electricity. In order to encourage power intensive industries keeping in view the affordable domestic tariff and increased level of revenue through export of electricity, is it possible to have collaborative situation- i.e. “domestic tariff remains affordable while at the same time export earnings continue to grow” (Department of Energy,2005) so as to achieve the national goals of meeting the internal demand of the country at affordable tariff and at the same time increased sufficient revenues from the export of hydroelectricity for investment in socio-economic development sectors to achieve economic self-reliance and Gross National Happiness.

Mr. Karma Gyamtsho made a study which objectives were to: i) explore in-depth into the field of industrialization, hydropower generation and the policies of the Government and identify the key collaborative issues of different stakeholders and their behavioral approaches towards collaborative strategy between hydropower generation and power intensive industries in Bhutan; and ii) develop a collaborative framework between hydropower generation and power intensive industries of Bhutan keeping in view the unique development philosophy & strategy of Gross National Happiness and provide suggestions & recommendations.

Conclusion:

Economic growth in Bhutan through export of electricity and industrial development have become like two sides of coins, both cannot be seen at same time. If Bhutan strives to achieve economic development through export of electricity and industrial development, a complementary strategy of hydropower development by industrialist for its own consumptive uses should be permitted.

The network of interrelationships of the different stakeholders is illustrated in figure below.

The collaborative issues of the different stakeholders surfaced are lack of technical & managerial expertise, high logistic cost, import of foreign workers, land ownership, water user right, equitable regional development, under performance of the machines, excise duty, logistic cost, absence of policy, wheeling charges, feed- in tariff, opportunity cost, high lending rate, high insurance premium, absence of FDI in hydropower sector, environmental clearance, rational power tariff, scarcity of raw materials, excise duty, high lending rate, high insurance premium, equity in investment, access to external source of fund and sustainability. The collaborative approaches to the collaborative issues are human resource development, strategic infrastructural development, more foreign workers, full land ownership, full water user right, balanced development, excise duty refund, policy development, affordable wheeling charges, rights to feed in power, external borrowing, foreign insurance, accelerated environmental clearance, maximum equity in investment and affordable tariff. Based on the study, a collaborative strategy is developed.

The collaborative issues that are desired by the maximum stakeholders are policy development, strategic infrastructural development and human resource development. The collaborative issues such as wheeling charges and feed-in tariff are considered the most significant as it determines the tariff of electricity for the industries.

Recommendations

The following recommendations are made based on the collaborative strategy developed:

1. Policy Development: It is inferred that there is intense need for the policy development by Hydropower plant, Department of Industry, Bhutan Electric Authority, Investor, power intensive industries and department of Industry. The collaborative issues of these stakeholders include the absence of policy which inhibits them to develop such hydropower plant for industrial uses and there is considerable loss of opportunity for the nation. The rational power tariff between industries and hydropower plant can only be determined if the policy is in place and the inclusion of hydropower in foreign direct investment policy can greatly steer the investors. One window clearance system can reduce the lengthy procedures of approvals.

The following recommendations are done with regard to policy development:
The captive power policy formulation should be expedited meanwhile the permit to conduct survey and investigation for hydropower project should be issued to the interested industrialist.

Foreign Direct Investment should be allowed in hydropower sector.
One window clearance system should be established for speedy approvals for projects.

2.Strategic Infrastructural Development: There is also need for the strategic infrastructural development by contracting agencies, machinery supplier, raw material supplier, hydropower and power intensive industries where the collaborative issues is high logistic cost.

Following recommendations are done with regard to strategic infrastructural development:
- Enhanced quality and reliable road network should connect hydropower site and industrial estate.
- Alternate mode of transport such as ropeways and railways should be developed.
- The private sectors should be entrusted with the infrastructural development.

3. Human Resource Development: It also necessitate to have human resource development by the contracting agencies, machinery supplier, hydropower plant and power intensive industries where the collaborative issues includes lack of technical & managerial expertise and underperformance of machines.

The following recommendations are made with regard to human resource development:
- Mandate Indian contracting agencies executing the projects to induct Bhutanese contractors as joint venture.
- Establish more vocational training institutes which provide skill enhancement in Hydro Power and industrial sectors.
- Conduct short term courses and training in hydropower and industrial sectors.
- Financially support private and corporate sector for Human Resources Development.
- There should be involvement of Bhutanese with the reputed firm for the design of machineries and also in the operation & maintenance.

4. Environmental Clearances: An accelerated environmental clearance is also a priority for hydropower plant and power intensive industries where environmental clearance and the scarcity of raw materials are the collaborative issues. It is recommended to have one window clearance system for environmental clearance in the policy and more exploration for mines to meet the inadequate supply of raw materials for the industries.

5. External Borrowing: The permit to external borrowing is also necessary for hydropower plant and power intensive industries where high lending rate is the collaborative issues. It is recommended that the external borrowing should be permitted and the lending should be based on cash flow projection rather than the collateral based.

6. Refund of Excise Duty: The refund and exemption of excise duty is also emphasized by the machinery supplier, raw material supplier, hydropower plant and power intensive industries. It is recommended that there should be exemption of excise duty on import of machineries and refund of excise on the import of raw material.

7. Land Ownership: The land ownership is also area of concern for hydropower plant and power intensive industries. It is recommended that lease period specified in existing relevant policies and regulations should be increased and the lease rate to be made transparent in the relevant policies.

8. Import of foreign workers: It is desirable to allow more foreign workers for hydropower plant, power intensive industries and contracting agencies. It is recommended that entitlement of number of foreign workers should be based on actual requirement.

9. Balanced Development: Equitable regional development is desired by RGOB and is a collaborative issue for hydropower plant and power intensive industries. It is recommended that transmission grid should be extended connecting eastern and western grid. The industrial estate development should be diversified across the country.

10. High Insurance Premium: There is need to access the foreign insurance where high insurance premium is a collaborative issue of hydropower plant and power intensive industries. It is recommended that foreign insurance should be permitted and private insurance company established in the country.

11. Water User Right: The water user right need to assured to the hydro power plant. It is recommended that the full water user right should be assured through the license wherein the quantity and time frame of the use of water is specified.

12. Wheeling Charge: The affordable wheeling charge can be assured to the hydropower plant by BPC through the construction of sub-station and incorporating the cost of sub- station in the wheeling charge thereby reflecting in the contract agreement. It is recommended that wheeling charge be allowed and the necessary infrastructures developed by Bhutan Power Corporation.

13. Feed in Power: Feed in power in the BPC transmission grid is the issue of hydropower plant where the right can be assured through provision of energy banking facilities and willingness of the BPC to take the surplus energy at appropriate tariff. It is recommended that banking of energy be allowed and sale of surplus power to Bhutan Power Corporation at appropriate tariff be made available.

14. Equity of Investment: The investors can be attracted through the equity of investment. It is recommended that 100% equity in investment should be allowed.

15. Sustainability: The core of competency through cost leadership for the power intensive industries can be achieved through the affordable tariff that will be determined by the performance of hydropower plant. It is recommended that electricity duty should be exempted and subsidy on interest should be provided.

His thesis abstract is copied and pasted below.

Abstract

Bhutan still has the incidence to the poverty and unemployment which poses a challenge to industrial and hydropower sectors to create quality employment for the Bhutanese. The rapid industrial growth has increased the domestic power demand affecting the export quantity considerably. The power intensive industries will be affected if domestic tariff becomes par with export tariff. Therefore economic growth in Bhutan through export of electricity and industrial development have become like two sides of coins, both cannot be seen at same time.

It will be prudent if industrialists are permitted to develop hydropower plant for their own consumptive uses and Royal Government of Bhutan continue to focus on revenue generation through export of electricity. As Bhutan has always chosen middle path of sustainable development guided by central development policy of Gross National Happiness, it is necessary to explore the collaborative issues and the approaches of the stakeholders involved in hydropower development for industrial uses before realigning country’s development plan and policies to address these opportunities and challenges. A framework of collaborative strategy between hydropower generation and power intensive industries has to be sensibly derived based on collaborative issues and approaches of stakeholders for effective implementation without deterring the philosophy and strategy of Gross National Happiness.

Construction Claim Types and Causes: A Study of Tala Hydroelectric Project, Bhutan

One of the key areas of controversy that arises in the field of construction industry is from the claim situation. The inherent problems of most of the construction projects are their uncertainty, complex in nature involving a wide variety of business parties that often extend over a lengthy period of time requiring detail plans and specifications, skillful supervisions and efficient coordination. Thus, in such complex process, the occurrences of claims are common phenomena that hinder the completion of project on time and cause cost overruns. Although the symptoms are well known, the real causes and associated costs that arise due to such claims and disputes are not well understood. Construction contract itself is often very long, complex documents which are not well understood by the parties leading to differing interpretation by the different parties and consequently, disagreements or disputes arises regarding contractual obligations or expectations. When one party feels that the contractual obligations or expectations have not been met by the other party, and believe that they deserve monetary and/or time compensation, they may submit a claim.

It is generally accepted and agreed by both the contractors and the contracting agencies that handling of the claims arising out of the construction projects is a serious problem, and that efforts are needed to improve both methods of preventing claims and procedures for settling them when they occur. It not only drains the energy and resources of the parties in trying to solve them but also brings about adversarial relationship between them. Often, the claims that cannot be settled by negotiated adjustments has to be dealt with higher appellate (arbitration, courts etc) which sometimes takes years to resolve. Thus, it is the common interest of both contractor and owner to device means to avoid claims as far as possible in the first place and manage claim process when it occurs.

With the accelerated hydropower development policy in place to achieve the target of 10,000 MW by the year 2020 in Bhutan, a lot of constructions of hydropower projects are in the pipeline and is expected to see the construction boom within next five years. The construction of Pungtsangchu I and Dagachhu are already in full swing. Punatsangchu II and Mangdechhu projects are expected to begin by early 2010 and the studies are being done on many other projects. It has been estimated that around Nu 442 billion will be invested to generate around 10,406 MW by year 2020 (DGPCL website, 2009).

In view of the expected mega constructions that would be taken up in Bhutan, it is pertinent that we look back to the past projects and learn from the experiences. Hence, this study on the construction claims in the recently completed Tala hydroelectric Project was very important and would be helpful to the project participants in preventing and resolving claims in the upcoming projects.

Mr. Sonam Tobgay made a case study which main objective was to find which causes of claims are important and which types of claims were frequent during the construction of Tala Hydroelectric Project in Bhutan. The objectives of his study were summarized as follows:
- Carry out the comprehensive analysis of the claims, their types and the causes that occurred in Tala Hydroelectric Project.
- Study the frequency and severity of each claim and rank them accordingly.
- Study how the claims have been settled/resolved (study the different modes of resolution applied with references to contract clauses)
- Provide solutions to reduce/ minimize or prevent the claims for the future hydropower projects in Bhutan.

Conclusions:

Two types of claims have occurred in this project namely Change claim and Impact claims. Though Change claims (23/35) were more frequent than Impact claim (12/35), the severity (amount) of the claim and duration for settlement was more with the Impact Claims.

The common causations of claims was also analyzed and result showed that five (05) broad groups namely ‘Differing site conditions’, ‘Delay from Project Participants’, ‘Changes in Design and Specifications’, ‘Force Majeure(Flood)’ and ‘Omissions/Ambiguous Contract Provisions’.

The claims due to ‘Differing site conditions’ ranked first followed by claims due to ‘Delay from Project Participants’. This result supports the similar studies done for hydropower projects in India and Vietnam where they also found ‘Differing site conditions’ as the main cause of Claims (Pillai et.al, 2001 and Thinh V.B, 2004). The Adverse Geological Occurrence (AGO) was the main differing condition claims that triggered and gave rise to both change claims and impact claims in different forms.

The different mode of claim settlement adopted in this project was also studied. Almost all the claims resolved were through negotiation. Only three (03) cases out of thirty-five (35) cases accounting to USD 1,890343.19 (5% of claim amount) went to Arbitration or Litigation, rests of the claims were resolved through mutual agreement or direct negotiation. The findings supports the of study done by Zaneldin (2006) in UAE where he found that more than 77.1% of the claims are resolved using negotiation while only 4.9% of claims are resolved through litigation.

Analysis revealed that duration of claim settlement varied from minimum of six (06) months to as long as four (04) years. The claims that were settled through negotiation took much shorter time than the arbitration cases which took as long as four (04) years. Among others, most of the claim cases that took longer duration for settlement sprung from the ‘omissions or ambiguous/conflicting contract provisions/clauses’(1.64 years) followed by claims due to ‘Force majeure’(1.63 years).

Overall, only 39% of the total claimed amount was successfully achieved by the contractor through negotiation. Rest of the claim either got rejected by the owner in the first place or contractor dropped the case during the process of arbitration or litigation. This indicates that the bargaining power of the contractor is much less than the owners since most of the claim cases were not pursued after being rejected by the owner for fear of future adversarial relationship.

The severity and frequency of claims in different contract packages were also studied and found that major portion of claims appeared from civil works (21/35 cases) with over 81% of the total claimed amount while the rest (19%) was from the hydro-mechanical and electro-mechanical combined. Claims from ‘differing site conditions’ which ranked first were more prominent and high for the contract packages which dealt with underground tunneling works while the claims due to ‘delay from project participants(owner)’ dominated the claim for the electro-mechanical works. This is due to the fact that most all the electro-mechanical items were purchased from foreign countries like Japan, Germany, Italy etc which needed long procurement lead time whereby the supply order for these items and mobilization notifications for other resources were done in order to meet the original schedule. Meanwhile, due to delay in completion of preceding civil works for varied reasons, the electro-mechanical works got delayed leaving the mobilized resources to remain idle. Thus, the claim for compensation for the idling charges of the resources.

All the claim issues being analyzed were originated form contractor side. The contractor put up the claim to client with factual narrative of ‘how’, ‘why’ and ‘when’ claims have arisen along with attachments of detail calculation of claim amount, site records, correspondences, photographs if any, change orders etc. On the other hand, the client verifies the claims referring to the various documented proofs and contract clauses, and makes their own justification. The final approval goes through different hierarchy of officials of different departments for their comments and vetting.

Recommendations for minimizing/avoiding claims in future projects:

Having studied the claim cases in Tala Hydroelectric Project, Bhutan, the author has learnt a lot with regard to how and why the claims happened in this project and the various factors that contribute to the occurrence of claims. The different ways and means adopted by the parties to resolve the claims have also been studied. From the knowledge gained by studying the claim issues in this project, the following are the recommendations for minimizing the occurrence of claims in future projects. However, in view of the constraint of the study: limited study period focused only on one project, the implementations of recommendations would further need the suggestions and inputs of the experts.

1.Involve site people in early recognition of potential areas of claim occurrence and risk sharing by partners.
2.Substantive pre-project site condition and hydro-geological investigations.
3.Proper planning, timely schedule updates and coordination according to the actual progress.
4.Develop clear, complete and unambiguous contract.
5.Have regular constructive meetings at site and device ways and means to prevent claims.
6.Have change orders or variation orders from the client before doing any work beyond the contract.
7.Clear provision in the contract defining the time frame for settling claims.

His thesis abstract is copied and pasted below.

Abstract

Due to the nature of hydropower construction projects being complex, uncertain, having long gestation period, involving many parties and requiring the integration of different work components (Civil, Mechanical and Electrical) together to work as a whole unit, claims are one of the common occurrences in such projects. Since claims are undesirable issues in construction projects, it is the common interest of all the parties involved to prevent/minimize from occurring at the first hand and resolve them in a most amicable way after their occurrence.

In this research, the study was done in Tala Hydroelectric project, Bhutan with the objectives to find out (1) How and why the claims occurred (2) What are the claim types (3) How are the claims raised (4) How are the claims resolved (5) What are the common causes of claims and (6) to provide recommendations for avoiding/minimizing claims in future projects with the experiences from this project. The study result shows that two main types of claims namely: Change Claims and Impact Claims have occurred in this project while the main/recurring sources of claims was found to be from ‘Differing site conditions’ coming mainly from the unforeseen hydro-geological conditions during the underground tunneling works. The methods and measures adopted in resolving the claims issues was mostly through the negotiated settlements while few cases of arbitration did also occur. The fact that most of the claims have been resolved through negotiation indicates that the parties enjoyed cordial relationship which enabled the project to successfully complete despite many hindrances due to encounterance of worst geology.

With the findings and the lessons learnt from this construction project, it is hoped that it will guide and help improve in the project performance and claim management in future hydropower construction projects in Bhutan.

MPM Brochure

AITVN organizes an Opening Ceremony & Welcome Party

The AITVN organized an Opening Ceremony & Welcome Party for the 5th entry of the Professional Master Program in Project Management in Construction (MPM Program) at the Majestic Hotel on Saturday, 10 September, 2011.

This event was attended by Dr. Amrit Bart, AITVN Director; Dr. B.H.W. Hadikusumo, SET Representative; Mr. Hoang Don Dung, SCQC General Director; Dr. Nakhle Kattan, Project Director of

Nestle Vietnam; and Mr. Nguyen Van Nhan, CEIM

student and Amata Project Manager.

The ceremony was followed by dinner party with raffle draws as an additional entertainment.

Group photo with new MPM students 2011 intake and MPM alumni from 2007, 2008, 2009, and 2010



In photo: (L-R) Mr. Hoang Don Dung, SCQC General Director, VIP guest
Mr. Ng Eng Wan, MPM faculty; Dr. Hadikusumo; Mr. Nguyen Van Nhan, CEIM student, Amata Project Manager; Dr. Nakhle Kattan, Project Director of
Nestle Vietnam





Awarding of prizes for the raffle draws

AIT khai giảng chương trình Thạc sỹ chuyên nghiệp

Quản lý dự án đối với các dự án xây dựng quốc tế

Đặc điểm nổi bật của các dự án xây dựng quốc tế là sự tham gia của nhiều tổ chức quốc tế và quy mô của dự án là rất lớn.

Tại các nước phát triển như Việt Nam có rất nhiều các dự án quốc tế đã và đang thực hiện chẳng hạn như nhà máy điện, đường ống dẫn khí, đường cao tốc, hóa dầu, cũng như các dự án cơ sở hạ tầng công cộng như sân bay, cầu và tàu điện ngầm.

Theo Hofstede (http://www.geerthofstede.nl), mỗi quốc gia có những đặc trưng văn hóa riêng, điều đó được biểu hiện qua đặc điểm chính: một là khoảng cách quyền lực; hai là sự biểu thị giới tính; ba là tâm lý ngại rủi ro; bốn là thuộc tính cá nhân; năm là thiên hướng xây dựng mối quan hệ ổn định. Theo kết quả nghiên cứu của chúng tôi tại Viện Công nghệ châu Á thì những vấn đề về văn hóa có ảnh hưởng đến công tác quản lý dự án. Việc quan trọng nhất đó là giải quyết các vấn đề khi các đối tác tham gia dự án có nhiều đặc điểm văn hóa khác nhau. Chúng ta nên xem xét thuộc tính văn hóa nào có thể mang đến cơ hội cho sự thành công của dự án.

Theo một nghiên cứu đang được thực hiện tại AIT, có ba loại niềm tin có thể được áp dụng trong quản lý dự án xây dựng: niềm tin được dựa trên hệ thống pháp luật, dựa trên sự đánh giá về đối tác của mình và dựa trên mối quan hệ. Tại các quốc gia đã phát triển, sự tin tưởng dựa trên hệ thống pháp luật đóng vai trò quan trọng bởi vì hệ thống pháp luật rất rõ ràng. Riêng tại các nước đang phát triển, niềm tin dựa trên các mối quan hệ đóng vai trò quan trọng bởi vì niềm tin dựa trên hệ thống pháp luật chưa thực sự lớn.

Tóm lại, một số vấn đề then chốt cho việc quản lý thành công các dự án quốc tế như sau:
• Năng lực cá nhân trong quản lý dự án
• Hệ thống quản lý dự án thích hợp
• Am hiểu sự khác nhau về văn hóa và cách quản lý chúng
• Quản lý và thương thảo hợp đồng thích hợp
• Xây dựng niềm tin giữa các thành viên dự án như đã nêu trên.

Chương trình Thạc sĩ chuyên nghiệp Quản lý dự án Xây dựng - AIT đang tiến hành tuyển sinh khóa 5 vào tháng 9/2011. Hạn chót nộp hồ sơ: 10/8/2011.

http://www.professionalprojectmanagement.blogspot.com/

Tp. Hồ Chí Minh
Lầu 6, toà nhà FCC, 45 Đinh Tiên Hoàng, P. Bến Nghé, Q.1.
Tel: 08-39107422 (117) – 01 285 265 168
Ms. Tường (ngletuong@aitcv.ac.vn)

Hà Nội:
B3, ĐH Giao thông Vận Tải, Láng Thượng, Đống Đa
Tel: 04-37669450 (133) – 01 285 687 168
Ms. Lương – luongtth@aitcv.ac.vn

Can Tho:
Trung tâm học liệu, ĐH Cần Thơ
Tel: 0710-3815523
Mr. Phuoc – phuoclt@aitcv.ac.vn

AIT offers Professional Master in Project Management in Construction in Vietnam (Ho Chi Minh City, Hanoi, Can Tho and Vung Tau)

Tài chính dự án cho đầu tư hạ tầng tại Việt Nam

Trong hơn hai thập kỷ qua,Việt Nam là nước đứng thứ hai châu Á đạt kết quả cao về xóa đói giảm nghèo, chỉ sau Trung Quốc. Tốc độ tăng trưởng trung bình hàng năm là 7,5% và tỉ lệ đói nghèo giảm từ 51% xuống 8% dân số đã đưa Việt Nam đến con đường trở thành nước có thu nhập trung bình (WB, 2008). Để đáp ứng nhu cầu hạ tầng xuất phát từ mục tiêu xóa đói giảm nghèo, xấp xỉ 11.4% GDP hàng năm cần được cung cấp để đầu tư cơ sở hạ tầng, tăng 2% so với hiện tại. Như vậy, Việt Nam cần xấp xỉ 7 tỉ USD trong năm 2010 để hoàn thành đầu tư vào hệ thống hạ tầng. Trong khi đó, tổng ngân sách từ ODA, chính phủ Việt Nam và người tiêu dùng chỉ khoảng 3.9 tỉ đô la Mỹ (55,7%) như hình. Vậy phần còn lại của ngân sách thiếu hụt là từ đâu? Để trả lời câu hỏi này, chính phủ Việt Nam đã nhận ra sự cần thiết trong việc cải cách thị trường tài chính về việc đầu tư vào các dự án mà trước đây do nhà nước thực hiện và quản lý.


Hình 1: Đầu tư tài chính cho phát triển hạ tầng tại Việt Nam

Thành công của nhiều nước Đông Nam Á chỉ ra rằng hệ thống tài chính cho cơ sở hạ tầng của Việt Nam cần thay đổi từ hệ thống tài chính với các khoản nợ chính phủ và quốc tế thành hệ thống tài chính tư nhân. Đây là lý do giúp cho chính phủ Việt Nam có nhiều thay đổi năng động hơn và thiết lập hệ thống tài chính cho cơ sở hạ tầng theo định hướng thị trường, đặc biệt khuyến khích các thành phần kinh tế tư nhân tham gia. Với nhận thức được tầm quan trọng về vai trò của khu vực kinh tế tư nhân, chính phủ đã và đang phát triển mô hình Hợp tác Nhà nước – Tư nhân (Public Private Partnership-PPP) cho các điều kiện hạ tầng đa dạng.

Mặc dù PPP được ứng dụng để tiến đến việc huy động vốn từ khu vực kinh tế cá nhân từ năm 1990 nhưng khái niệm này chỉ tiếp cận Việt Nam đầu những năm 2000. Tuy nhiên, những bất lợi trong khuôn khổ pháp lý PPP là rào cản chủ yếu ngăn chặn khu vực kinh tế cá nhân đến với các dự án hạ tầng tài chính tại Việt Nam. Để cải thiện tình hình, chính phủ Việt Nam đã phát hành nghị định mới 108 để thay thế nghị định 78 cũ trong năm 2010. Do đó, tiến trình phát triển PPP đã rõ ràng và hiệu quả hơn trước đây. Hy vọng rằng điều này sẽ khuyến khích nhiều hơn sự tham gia của tư nhân vào đầu tư hạ tầng tại Việt Nam.
Điều quan trọng đối với một công ty đầu tư là phải hiểu được cách tham gia vào các dự án PPP. Một khi quyết định tham gia các dự án PPP, các công ty nên biết cách xác định phạm vi tham gia, đưa ra nghiên cứu tính khả thi về tài chính, phân tích ảnh hưởng của các điều khoản nhượng quyền, và kiểm soát rủi ro trong suốt các giai đoạn khác nhau của dự án.

Thông tin liên hệ:
Tp. Hồ Chí Minh: 45 Đinh Tiên Hoàng, P.Bến Nghé, Q.1
Tel: 08-39107422 (117) – 01 285 265 168

Ms. Tường–ngletuong@aitcv.ac.vn
Hà Nội: tòa nhà B3, ĐH Giao thông Vận Tải, Đống Đa
Tel: 04-37669450 (131) – 01 285 687 168

Ms. Lương–luongtth@aitcv.ac.vn


Hội thảo thông tin chương trình tại AIT-VN

- Hà Nội: 9:00, ngày 18/06/2011

- Tp. Hồ Chí Minh: 9:00, ngày 19/06/2011

Prof. Gary E. Griggs gives lecture at AIT-CV

Prof. Gary E. Griggs, an Adjunct Professor in the Construction, Engineering and Infrastructure Management of the School of Engineering and Technology, AIT-CV delivered a 3-day lecture/course which includes Applied Project Management, Communications and Negotiation Skills, and Legal and Contract Risk Management.

Prof. Griggs is also a Consulting Professor in the Civil and Environmental Department, at Stanford University. Some of his selected projects are:

1. Bay Area Rapid Transit (BART) System, Bay Area, California
2. Doyle Drive Replacement Project, San Francisco, CA
3. San Francisco Municipal Transportation Agency, Central Subway Project, San
Francisco, California
4. Cooper River Bridges Replacement Project, Charleston, South Carolina
5. East Side Access Project, New York City
6. San Francisco International Airport AirTrain, California
7. Central Puget Sound Region Link Light Rail Facilities Design, Seattle, SeaTac, Tukwila,
and Tacoma, Washington
8. State Route 520 Corridor Improvement Project, Seattle, Washington
9. Federal Emergency Management Agency (FEMA) Disaster Response Services
Technical Assistance, Western U.S. and Pacific Territories
10. Mexico City Water Project, Mexico
11. Kaohsiung Mass Rapid Transit, Taiwan
12. Seoul Metropolitan Subway, South Korea
13. Busan Metropolitan Subway, South Korea
14. Florida High Speed Rail
15. Northeast Corridor Improvement Project, Washington, DC to New Haven, Connecticut
16. Iscor Railroad Electrification, South Africa
17. EFVM Railroad Electrification Study, Brazil

World Bank's expert in transportation planning and engineering gives lecture at AIT

Dr. Asif Faiz, an adviser/consultant with the World Bank in transportation planning and engineering, delivered a lecture entitled “The Promise of Rural Roads” on 30 August 2011 at the Milton Bender Auditorium. All students from the field of Construction, Engineering and Infrastructure Management were encouraged to attend this seminar.

Dr. Faiz’ presentation is based on his keynote address at the 10th International Conference on Low Volume Roads, held in Orlando, Florida in July 2011. Below is the abstract.

Abstract

About 33.8 million km. of roads girdle the earth‘s land mass of 148.9 million sq.km., (an average 0.23 km of road per sq.km of land area); about 61%.of this kilometerage is paved. Nearly all the unpaved roads (13 million km) and an estimated 85% of paved roads (17 million km) are low-volume roads (LVRs) -- with an Average Annual Daily Traffic (AADT) of less than 1000. These 30 million km of LVRs have a wide variety of geometric and paving standards ranging from barely motor able earth roads to modern high-speed two-lane paved highways. The global asset value (replacement cost) of these LVRs is conservatively estimated at about US$ 7.6 trillion (a lower-bound estimate) equivalent to about 50% of the estimated 2010 Gross Domestic Product of the United States. Beyond this classified system is another realm of designated trails, tracks, and paths as well as minor roads that serve enclave development (mines, industrial estates, agricultural plantations , irrigation schemes, tourism, forestry and so on), that together number into millions of kilometers and also contribute to basic access and mobility.

The presentation reviews the role of rural roads in improving rural connectivity, catalyzing economic growth and reducing poverty, managing natural disasters and man-made crises, sustaining rural livelihoods and enhancing livability. In short the paper highlights the promise of rural roads as a harbinger of opportunity, progress and prosperity. In addition, the presentation discusses what sustainability and its more practical subset--livability, mean in relation to rural roads and how the application of context sensitive solutions to rural roads could help achieve a better balance among the economic, social, and environmental dimensions of sustainability.

About the speaker

Dr.Asif Faiz, a Pakistani citizen, is currently an adviser/consultant with the World Bank in transportation planning and engineering. He holds a Ph. D. in transportation engineering from Purdue University and is a Member Emeritus of the Low Volume Roads Committee of the US Transportation Research Board. He has had a distinguished 33 year career in the World Bank including several advisory and management positions. He served as the World Bank's Highways Adviser from 1999-2002, and the Country Manager for Sudan from 2005-08. He is the author of over 60 publications including a book on automotive air pollution. He has received several awards for his professional and research work from ASCE, IRF, Purdue University, and TRB, including the Eldon Yoder Award from the US Transportation Research Board .His professional work covers some 40 countries and he has lived in Pakistan United states, Argentina, Nepal and Sudan.

MPM alumni list: December 2008

1. Chu Bien Cuong
Project: Project Management Competency Development: A Case Study of Vietnamese Small and Medium-Sized Construction Firms

2. Nguyen Anh Dao
Project: Delay Causations in Construction: A Case Study Of Pipeline Projects

3. Khuong Minh Dat
Project: Risk Management in the Pre-Commissioning Phase of an Oil and Gas Pipeline Project

4. Nguyen Van Diep
Project: Contract Clauses in EPC Oil and Gas Projects: A Case Study of the Pearl Development Project

5. Mai Do Thuy Dung
Project: Fast-Track Project Delivery Strategy for Civil Engineering and Architectural High-Rise Building Projects

6. Do Hong Hai
Project: Risk Management in Offshore Platform Installation Projects: A Case Study of PTSC Offshore Services

7. Tran Duc Hanh
Project: Owner’s Project Scope Development for Seaport Projects: A Case Study of Sao Mai Ben Dinh Project in Vietnam

8. Nguyen Quoc Hanh
Project: Client’s Project Management Strategy for Fast Track EPC Oil & Gas Project

9. Nguyen Tan Hoang
Project: Managing Subcontractor Schedule Performance in an EPC Contract

10. Nguyen Manh Hung
Project: Subcontractor Claims and Management in EPC Pipeline Projects: A Case Study of PM3 – Ca Mau Gas Pipeline Project

11. Nguyen Quang Hung
Project: Safety Audit in Oil and Gas Exploration Projects


12. Nguyen Hoang Loc
Project: An Owner’s Project Planning Approach for High Rise Building in Design and Construction: A Case Study of PetroVietnam Commercial and Financial Centre

13. Bui Quang Luong
Project: An Evaluation of Problems in International Construction Contract Conditions: A Case Study of the Third Provincial Towns Water Supply and Sanitation Project

14. Nguyen Dang Thong Nhat
Project: An Owner’s Project Cost Control Strategy for Building Projects

15. Phan Minh Nhut
Project: Lessons Learned from International Oil and Gas Projects: How PV Engineering Can Improve the Safety Management System

16. Mai Phong Phu
Project: Public Private Partnership Models for a Water Supply Project in Dongnai Province, Vietnam

17. Vo Hoang Phuong
Project: Delay Causations in Water Supply Projects in Dong Nai Province, Vietnam: A Lesson Learned From Nhon Trach Water Supply Project

18. Nguyen Le Hoai Tam
Project: A Conceptual Approach to Green Building Development: Practicalities and Prospects

19. Nguyen Van Thang
Project: Risk Management in an Offshore Fabrication: A Case Study Of “Ca Ngu Vang” Project In Vietsovpetro Joint Venture

20. Nguyen Van Thanh
Project: Quantitative Risk Assessment for the Process System on an Offshore Platform: A Case Study Of QRA for Process System of Platfrom RP-3 of J.V. Vietsovpetro

21. Dang Huu Trinh
Project: Claim and Conflict Management in International Oil and Gas Projects

22. Pham Van Tuan
Project: Safety Improvement Programs in an Oil and Gas Construction Company: A Study of PetroVietnam Technical Services Company (PTSC Production)

23. Dao Manh Tuong
Project: Assessment and Improvement of a Safety Management System: A Case Study of a Diving Contractor in Vietnam

24. Bao Bui Van
Project: Quality Management System for Consultant Supervision for Managing Performance of Building Contractors in Vietnam

25. Lu Dinh Vu
Project: Quality Management System for Supervising Consultants for Managing Performance of Highway Contractors in Vietnam

List of CEIM alumni: May 2011

Master of Engineering

1. Mr. Hassan Ashraf

Thesis: Claims in Building Construction of Pakistan: A Statistical and Pathogenic Analysis

2. Mr. Thanapon Buaklom

Thesis: Development of Worker Safety Attitude Construct and Model in Oil & Gas Construction Project

3. Mr. Duong Quang Minh

Thesis: Factors Affecting Operation and Maintenance Costs of Ho Chi Minh City Condominium Projects

4. Mr. Nguyen Phung Hai

Thesis: Project Procurement Performance Models: A Case Study of Power Transmission Line Projects in EVN

5. Mr. Asmat Nabi Hotaki

Thesis: Sustainable Construction: A Study of Drivers, Barriers and Design Practices in Building Projects in Thailand

6. Mr. Mukesh Khadka

Thesis: Factors Affecting Constructability Practices in Hydropower Construction in Nepal

7. Mr. Pye Phyo Maung

Thesis: Resource Allocation Strategy for Construction Safety at Hydropower Project: A Study on Shwegyin Hydropower Project in Myanmar

8. Mr. Janeyut Naiyarat

Thesis: The On-Site Behavior of a Construction Project Team during the Implementation of The Planning and Quality System

9. Mr. Nguyen Tuan Tu

Thesis: Strategic Management Implementation of Vietnamese Construction Organizations

10. Ms. Kyawt Phyu Phyu

Thesis: Insurance and Surety Bonds: A Case Study of Petrochemical, Oil and Gas Projects in Myanmar and Thailand

11. Ms. Supatchana Pumpipat

Thesis: Effective Pricing Negotiation Strategy of Variation Claims in Commercial Building Construction

12. Mr. Puoy Puthitha

Thesis: Contractor Prequaification Criteria, Tendering Criteria, and Tendering Procedure in Cambodia Building and Housing Construction Projects

13. Mr. Kittawat Sukosi

Thesis: Quality Management System for Different Construction Project Strategies

14. Mr. Kyaw Min Thu

Thesis: Life Cycle Cost Analysis for Hydropower Projects

15. Mr. Nguyen Quoc Trung

Thesis: Influence of Financial Risk for Project Financing Throughout Real Estate Development Process: A Case Study of a High Rise Apartment Project in Vietnam

16. Mr. Hout Venghong

Thesis: Factors affecting the performance of the international construction contractors (ICCs) Doing Business in Cambodia

17. Ms. Vu Tuyet Mai

Thesis: Orientation Risk Management Model for Pre-Bidding Process in Low-Income Housing Projects with Public Private Partnership in Vietnam

Master of Science

1. Mr. Gentaku Goto

Thesis: Project Life cycle risk management plan in Urban Railway Development Project: A Case Study of Urban Railway Development Applied in Vietnam

List of CEIM alumni : May and December 2008

May Batch

1. Mr. Phouthasen Sinthavong
Thesis: The Role of Lao Governtment on ADB Operation of Partnership Financin Stratege: Case Study of Vientiane Urbaninfrastructure Services Project

2. Mr. Rathsayam Tiyarathtagarn
Thesis: Factors Affecting Project Delivery Time Delays and Cost Overruns of Project Development at the Royal Irrigation Department of Thailand

3. Miss Surangkana Trangkanont
Thesis: High-end Residential Property Development Process: A Case Study of Projects in Thailand

4. Miss Atcharaporn Suwan
Thesis: A Study of Hotel Renovation Project Management Process in Thailand

5. Mr. Braj Kishor Mahato
Thesis: Conflict Dynamics in Dam Construction Projects

6. Miss Vivi Megawati
Thesis: Financial Management in Construction Small and Medium-Sized Enterprises Towards Financial Capability Enhancement: Case Study in Thailand and Indonesia

7. Mr. Pakawat Pormmoon
Thesis: Framework Implementation of Reduc, Reuse, Recycle, and Residual Management Concept for Thai Construction Industry

8. Miss Suphitcha Phoemphoonthanyakit
Thesis: Strategic Planning and Budgeting Allocation of Intermodal Transportation Logistics Development in Thailand

9. Mr. Jirachai Thaewthiang
Thesis: Corporate Social Responsibility in Construction Companies in Thailand: The Case Study of Preuksa Real Estate Public Company Limited

10. Mr. Tran Ngoc Tuyen
Thesis: The Adoption of Sustainable Construction Principles in the Construction Industry in Vietnam

11. Miss Nguyen Thi Xuan Dan
Thesis: Criteria for Selection Process of Local Infrastructure Project in Vietnam

12. Mr. Tran Quang Ninh
Thesis: Public Private Partnership Models for Low-Income Housing Development of Cantho City, Vietnam

13. Miss Pham Thi Cam Tien
Thesis: Sustainable Construction Development Project to Support Tourism Industry in Phu Quoc Island in Kien Giang Province Vietnam

14. Mr. Le Hai Son
Thesis: Cost Control System in Vietnam Construction Company

15. Mr. Nguyen Duy
Thesis: Motivation of Construction Engineers in Ho Chi Minh City, Vietnam

16. Mr. Tran Minh Tung
Thesis: Project Time and Cost Management in Water Supply Pipeline Construction in Dong Nai Province, Vietnam: A System Dynamics Approach

17. Mr. Tran Huong Quang
Thesis: Corporate Social Responsibility in Vietnamese Construction Industry

18. Mr. Pham Hoang Anh
Thesis: Enhancing Sources of Funds by Private Participation for Transport Development: Case Study in Ben Tre Province

19. Mr. Truong Vinh Hiep
Thesis: Study of Project Management Personnel Needs for Infrastructure Development in Dong Nai

December Batch

1. Mr. Andreas Adihartanto
Thesis: Safety Rules and Procedures Development and Implementation: A Study on Construction Industries in Thailand

2. Mr. Alvin Agustinus Gahari
Thesis: Workers Participation in Safety Management System in Construction Projects in Thailand

3. Mr. Nguyen Khoa
Thesis: EPC Project Management and Problems: A Case Study of International and Local EPC Contractors of Oil Gas and Petrochemical Projects in Vietnam

4. Mr. Dang The Phuong
Thesis: Quantitative Risk Assessment for the Offshore Platforms in "Vietsovpetro" Joint Venture

Construction, Engineering and Infrastructure Management (CEIM) alumni in January and August 2007

Master of Engineering

1. Mr. Nguyen Viet Dung

Thesis: Risk Management in Port & Waterway Projects: A Case Study of the Southern Focal Economic Area of Vietnam

2. Mr. Phan Thanh Hai

Thesis: Audit Safety Management in Business Progress of Offshore Oil & Gas Project

Case Study: Oil & Gas Projects in Ba Ria - Vung Tau, The Southern of Vietnam

3. Mr. Nguyen Kim The Anh

Thesis: Evaluation of Effective Design Architectural Process

4. Miss Nang Kham Kyi Oo

Thesis: Risk Approaches for Making Go/No-Go Decisions by Thai Consulting Engineering Firms

5. Mr. Pham Hiep Luc

Thesis: Application of Neuro-Fuzzy Networks to Forecast Cost and Duration Variances for Building Projects in Vietnam

6. Mr. Arasavindiran Mariappan

Thesis: Effect of Globalization on the Supply Chain Competitiveness of Large Scale Contractors: A Case Study

7. Miss Ramya Kanaganayagam

Thesis: Kaking Construction Employment Decent Work: A System Dynamics Investigation

8. Mr. James Suvanaphen

Thesis: Technology Selection Practices in Building Construction Projects Through the Perspectives of Design Consultants

9. Mr. Le Phi Hai

Thesis: Business Performance Measurement Framework for Construction Organizations

10. Mr. Aut Thaitrong

Thesis: Performance of Capital Investment Analysis on Project Evaluation in Mass Rapid Transit Projects in Thailand

11. Miss Narumon Jongcharoensub

Thesis: Cost Management Behavior Under Cost Overruns

12. Mr. Somjate Chatutewaprasit

Thesis: Safety Communication in Construction Project

13. Miss Chanagarn Watanantachai

Thesis: Strategic Guidelines for Financial Crisis Management in Thai Small and Medium-Sized Construction Enterprises

14. Mr. Apinun Tantiviriyapan

Thesis: Analysis the Office Market Economic by Using System Dynamic Approach

15. Mr. Nguyen Van Long

Thesis: Project Financing for Power Plant in Vietnam: An Innovative Approach

16. Mr. Dau Xuan Thuy

Thesis: Risks in the Construction of Hydropower Tunnels in Vietnam

17. Mr. Tran Tan Tin

Thesis: An Evaluation of Client Roles in Projects Procured Through the Traditional Process in Vietnam

18. Mr. Dinh Truong Giang

Thesis: Knowledge Sharing Process Within Power Engineering and Construction Company: A Case Study

19. Miss Pham Nguyen Quynh Huong

Thesis: Quality Function Deployment Approach in Apartment Construction Project: A Case Study

20. Mr. Fredy Kurniawan

Thesis: Case Study of Concession Contract in the Public Private Partnership: Financial Clauses Investigation of Don Muang Tollway and Second Stage Expressway in Thailand and Cipularang Tollway in Indonesia

Doctor of Engineering

1. Ms. Suchanya Posayanant

Thesis: Development of KPIS for Local Government Infrastructure Development: The Case of Sub-District (Tambon) Administrative Organization

2. Mr. Oei, Fuk-Jin

Thesis: The Assessment of the Development Role of a Statutory Body from Customer Perspective: A Relational Exchange Approach

3. Mr. Wasan Teerajetgul

Thesis: Knowledge Management in Construction Project Environment

4. Mr. Dussadee Satirasetthavee

Thesis: Optimal Value-Based Pavement Management System

5. Mr. Raju Bahadur Shrestha

Thesis: Factors In Power Purchase Agreements Affecting Investment Flows in Independent Power Production in the Nepalese Environment

6. Mr. Martinus P. Abednego

Thesis: An Examination of the Relationship between Risk Allocation and Project Success on PPP Project through Good Project Governance Assessment: Case Studies of Tollway Projects in Indonesia, Thailand and Vietnam

7. Ms. Piyanut Vorasubin

Thesis: Management of Strategic Assets for Sustainable Competitiveness of Construction Organizations

8 Mr. Thanet Aksorn

Thesis: Safety Program Performance in the Thai Construction Industry

9. Mr. Thanapun Prasertrungruang

Thesis: Modeling the Dynamics of Highway Construction Equipment Downtime

List of the CEIM First Batch in 2006

1. Mr. Bunpot Luttakoon

Thesis: Assessment of Critical Infrastructures: December 2004 Tsunami in the Southern Region of Thailand

2. Mr. Warut Neamnoi

Thesis: Capital Investment Analysis Model From Outputs/Outcomes Framework of Public-Private Partnership (PPP) Project: The Case Study of the Bangkok Mass Rapid Transit Project

3. Mr. Bhaskar Jyoti Das

Thesis: IT Application for Construction Safety Management: Planning, Monitoring and Trending

4. Mr. Abu Naser Chowdhury

Thesis: Special Purpose Vehicle (SPV) for Infrastructure Projects Financing through Public Private Partnerships (PPPs)

5. Mr. Muhammad N. Mahmood

Thesis: Development of Performance Model for an International Construction Joint Venture: A System Dynamics Approach

6. Ms. Azmeri Rahman

Thesis: Modeling Contractor's and Subcontractor's Trust: A System Dynamics Approach

7. Mr. Arthit Krachang

Thesis: Risk-based Multicriteria Decision Management for a Railway System in Thailand

8. Mr. Nguyen Duy Ninh

Thesis: Stakeholders' Perspective on Risks and Opportunities of Bot Infrastructure Projects in Vietnam: A Case Study of Yen Lenh Bridge Project

9. Mr. Nguyen Tuan Nghia

Thesis: Case Studies on Risk Allocation in Highway Projects Under Bot Scheme in Vietnam

10. Mr. Muhammad Afzal

Thesis: Profiling a Truly World-Class Construction and Engineering Company

11. Mr. Aung Khin Tun

Thesis: Strategic Financial Modeling for Capital Investment Program

12. Mr. Siwachon Limpakornkul

Thesis: A study of safety budgets process in Thai Construction projects

13. Mr. Niraj Baidya

Thesis: Consistency of Safety Management System Implementation: A System Dynamics Approach

14. Mr. Ariono Dhanisworo Indra Budhi

Thesis: Cost Variances During Construction Period: A Case Study of Indonesian Contractors

15. Mr. Prawat Tuptone

Thesis: Constraints-Based Scheduling of Precast Housing Project: A Case Study of Preuksa Village III

16. Miss Yessie Agustina

Thesis: Enhancing Financial Viability Through Government Support Machanism in Public Private Partnership (PPP) Contractual Framework

17. Mr. Allan Janwar Tannaya

Thesis: Subcontractor Management Strategy: An Approach to Manage Subcontractor in Construction Project

18. Mr. Suphachoke Meeampol

Thesis: Project Performance Improvement in the Public Sector: The Case of Thailand

19. Mr. Ektewan Manowong

Thesis: An Assessment of the Performance of Public Hearing as Vehicle of Public Participation in Infrastructure Development Project in Thailand

20. Mr. Surapon Puthamont

Thesis: Strategic Project Selection in Public Sector: Construction Projects in the Ministry of Defence in Thailand

FYI

Did you know that from 2006 to 2011, there are 24 Ph. D., 175 Masters and 115 Professional Masters graduated from CEIM and MPM fields of study? These alumni come from 17 countries, and 80% of these are male.

Safety and Health Management in Oil and Gas Construction Projects

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Delay & Contract Management in Construction

In order to manage a project successfully, project management is very important because this will determine the quality, time, and expense of the project. The process of project management includes:
- Organizing, choosing, advising, and creating investment projects.
- Managing research and investigating projects;
- Analyzing data and evaluating projects;
- Constructing investment projects and profiles for designing the construction’s total estimates will be sent to authorities for approval.
- Signing economic contracts dealing with survey, design, construction, and installation.
- Supplying materials and equipment

The contract is really important since it is not only the basis of payment but also the basis of solving some legal problems. To get well-completed projects, all sides must have knowledge about the conditions of the contract. Managers are searching for the best ways to manage contracts more effectively. By doing so, the project will be more successful.

Mr. Ho Chi Linh made a on Administration Centre and Postgraduates Trainings at Can Tho University to find out the main factors that cause cost inflation, poor quality and delay at all stages of projects. These factors were analyzed in different ways of parties such as the Laws, Authorities, the Owners, the Contractors, Consultants, Sub-contractors. From that, the factors which are effective to prevent and control delays in the project can be seen.

The objectives of his study were to: (1) study the contract management practice of the case study project; (2) analyze the project management problems (time, cost, quality) in relation to contract administration; (3) identify delay causation in construction projects which were completed up to now or are building; and (4) make recommendation for improvement of the future project with similar characters.

Conclusion

Contract management is an important factor which directly affects projects. The contract management includes managing 3 main factors: quality, price and time. Most projects in Vietnam so far have been strongly influenced by these 3 factors, which leads to the poor quality, costs increases or delays. All these problems are popular and are still going on. However, it is possible for us to prevent even during the time the project is on going. With the total area of 18.990 square meters, 9 floors, the total cost is over 133 billion, the Administration and Post-Graduate Building – Can Tho University project is also affected by these factors.

This project was approved by the Ministry of Education and Training in 2008 and the investment was from the government budget. Although it has got supports and grants from the Government, relevant sectors as well as rector board from Can Tho University, the project was still delayed and the original estimated costs still increased due to objective and subjective reasons.

Objective reasons

Dramatic change in market price which affected workers and materials because the rate of price slipping was not specified in the contract.

There have been many problems in the transportation of materials and equipment because the construction site is located right in the center of the city which is very crowded with many students. The supply of materials was limited because of the fluctuation in the market price which significantly affected the progress and quality of the works.

Subjective reasons

The contract is not really logical, which does not express all the regulated contents that can tie the contractors as well as sub-contractors in materials, human sources and finance to implement the works.

The contractors did not provide with enough machines and modern equipment as regulated in the contracts. This is also due to the fact that the contractors selected were not well-qualified and have poor experience.
The contracts did not state clearly the time for the period of pile pressure and experiments, which does not include the time for implementation. This is the reason why the contractors often blame the experimental institutions for delays.

Solution

- Require the contractors to set up a quality management system suitable to project requirements
- Additional engineers, who have got experience about quality management and check equipment before being put into the work
- Contractor Material Supply who are responsible for the quality of their products
- Request the contractor to focus on human resources, equipment and time
- Providing a clear time for each job. Support the contractor to shorten the time.
- Investor has to set up the slippery of price coefficient.
- Having a strict and frequent monitoring, urge the contractors to solve any unexpected problems if occurred.
- Organizing frequent meetings with the contractors to remind and require them to commit and implement all the articles specified in the contract and follow the project timetable.
- Looking for sufficient extra financial sources to compromise slipping rate so as to assure the contractors to implement well with the rest of the project.

● Although there have been certain limitations, the contractors have successfully implemented some works for the project as well as strictly followed the procedure and legal documents. They did well with the work of environmental protection and guarantee the urban scenery, and especially the assurance of work safety. Therefore, there has been no accident in the construction site so far.

● Upon the completion of the project, it will significantly improve the prestige of Can Tho University in general as well as for the work of post-graduate training, scientific research and technology transfer, which promotes Can Tho University to a higher level in the region and in the whole country. This can help Can Tho University become comparable to other universities in the area as well as in the world. This also creates opportunities for the university managers to get access to and study with new technology thanks to good infrastructure because this is the first and biggest building in Can Tho University.

Recommendations

Due to the time as well as the limited scope of the thesis, not all aspects of the project were examined and analyzed. However, based on what has been achieved and not achieved, as mentioned in the conclusion, the following recommendations are proposed for better management to future projects.
- Contracts need to be more detailed with enough articles and regulations, in which all agreements need to be stated clearly.

- Trained engineers specializing in the fields of quality management and cost management.

- The investor should choose capable contractors with enough modern technical equipment as well as financial sources together with sufficient human resources.

- Bid winning price was not lower than the actual price of the project

- Build price fluctuation factor to deal with changing market prices.

- Utilize all funds to ensure implementation of the project.

- Checking materials, components, construction products through quality certificates where production and results of standard laboratory.

- Checking equipment and technology works before installation through quality certificates where production and results of quality testing of equipment.

- Need unified management of construction cost on a clue to avoid cross situation such as is now

- Complete the system of estimating construction

- Additional norms for construction and installation work is not yet in practice the detailed estimates of current, complete content and methods of synthesis unit set up in construction.

- List building , select a method of calculating overall cost consistent with the actual situation in the country, regional and international levels in each period.

His thesis abstract is copied and posted.

Abstarct

Since Vietnam joined the WTO, global platform for the construction industry were opened, bringing many new opportunities and also many difficulties and challenges. But in recent years, most of of projects are behind schedule, exceeding the estimate is very popular to make the management of the project have many difficulties, specially the management contract. In any investment project construction, the key elements necessary to ensure that the range or scope of the project, the total investment (Money) and the progress Time) of project implementation. Three elements make up a triangle project, including Scope - Money - Time is each edge of the triangle project. When an edge that will make these changes, the other edge changed. A project called good management when the triangle is less than the change triangle is created from investment projects approved construction. In fact the work of our building has been lost on the market at the home of their own, most projects are delayed and exceeded the total original investment to affect performance investment results as well as competitiveness.

The cause of the delayed and costs overcome, there are many such as institutional policy, in the uniform of the other central agencies and localities, these factors impact the world market, the capacity of entities involved in construction activities
This study will also discuss on the advantages and disadvantages of EPC contract from both Contractor and Project Company’s point of view and how to manage the EPC contract in accordance with term and condition clauses stipulated in the signed contract documents; how to resolve problems by understanding the contract clauses. However, the improvement of some major clauses are still needed in order to specify and define clearly the duties and responsibilities as well as obligations of involved parties to minimize the conflicts, interfaces, risks and disputes that can be happened during the project execution phase.