Risk and uncertainties comes from various sources. In new residential zone project, risk impact schedule of project implement, project quality, project finance and time of customers and government hand-over.
In recent years, many real estate companies have been establishing and many New Residential Zone Projects were established. Along Nguyen Van Linh highway and in HCMC many of new residential zone Infrastructure development projects have been being delayed and project cost over run due to many reason such as land compensation issues, lack of social agreement, insufficient of capital for buying the land, late in permitted from authority especially in master plan and architectural city design, poor in design and construction, water treat and environment issue and so on. In those projects managers could not deal with the risks and uncertainties which they met in project implementation process.
Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective, such as time, cost, scope, or quality (PMI, 2004). Additionally, Ahuja and Nandakumar (1985) demonstrated that a delay in project completion can cause a cost escalation at least equal to the sum of inflation, overhead cost, and addition interest cost for the period.
Furthermore, there is another actuality to be noted that even successful project have not been able to transfer their best performance and knowledge in the effectively and efficiently way to other projects. Consequently, realizing the list of factors contributing to reducing project time and cost is lacking.
Mr. Hoang Ngoc Anh made a study to find out the risks or uncertainties in new urban infrastructure development project in general and in particular An Phu Tay residential zone project of SADECO and to conduct a risk management to response to them. The objectives of his study were: (1) identifying the risk factors in the infrastructure development in new residential area project; and (2) propose strategies to effectively avoid or mitigate the negative impacts of major risks.
Conclusions
Risks and uncertainties come from various sources. Risk can not be eliminated, but can be minimized, transferred or retained. There are some ways of risk dealing such as transfers the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.
The process of taking a construction project in general as well as Development infrastructure for new residential project in particular from initial to completion and transfer is complex. Moreover, there are many organizations and partners who involved a construction project, especial in New urban zone Infrastructure Development project. These organizations involve land owners, client, designers, contractors and subcontractors, consultants, material suppliers, power and water suppliers, customers, public facility agencies, authorities and so on.
In new urban zone development project, risk impact schedule of project implement, project quality, project finance and time of customers and government hand-over. In order to deal with risks, it is essential to establish a strategy that can effectively and efficiently response. Thus, this project study tried to identify major risks and conducted a risk management study for New urban zone Infrastructure Development project. Besides it, the author proposed appropriate strategies to mitigate these major risks.
Identify major risks
Characters of New Urban Development Project as follow:
1. Land area of the project has to big enough over 20ha following Decree 02/ND-CP issued by VN Government. Thus, there are a lot of land owners at area that will be construction site.
2. There are various specialized design consultant organizations on engineering infrastructure joining in design.
3. There are many contractors different from specialized technology, constructing in the same site on surface and underground at the same time.
4. Running time for the project implementation is often long.
5. After engineering infrastructure construction completed, developers have to transfer them to Public Facility Agencies and Government for management.
These above characters related with risks and uncertainties occurring in the project. It is essential to understand project’s characters so that we can deal with risks occurring in the project.
According to data from An Phu Tay residential zone project, statistics of new urban zone development projects and the similar projects in HCMC and throughout VN recent, many major risks were identified and found out that the top three risks occurring in this project as follow:
1. Late in design approval by the authorities,
2. Late in site clearance in construction process, and
3. Construction cost increase because of delay and inflation.
Recommendations
The findings of this study are expected to contribute to identify major risks and more effective risk management process in project. This study proposes some recommendation:
1. When planning the Feasibility Study, it is necessary to study carefully on financial capacity of developers, size and implement time of the project, as well as inflation predictions.
2. Specialists of project planning have to master on engineering, get much working experience. They are to estimate scope of works in order to take project running time reasonably.
3. Feasibility Study Evaluation Authority needs to consider the reality to access project’s feasibility; especially, site clearance issue.
4. It is necessary to define clearly capital flow, option for partitioning investment and business in Feasibility Study. Besides, it is suggested to submit ideas to the Government on construction investment, engineering infrastructure constructions lying outside of fences of the project, connection point and so on.
5. To site clearance, developers need to have planning and schedule suitable to construction procedure of the project.
6. Clients must make timely and quickly decisions in negotiating costs with land owners and need to have good relationship with local authorities to get supports in compensation on site clearance. Beside, it is necessary to make arrangements for resettlement area or temporary residence zone for households living at construction region, so that can hand over site area sufficiently to contractor.
7. Choose experienced design companies; project leader of design team has experienced in design the same construction items.
8. Design contract has to be stipulated conditions on reward and punishment; especially, responsibilities on submission and approval at Public Facility Agencies.
9. Designers and consultants have to always update regulations and standards of Government and Public Facility Agency, and responsible for their acceptance and accept of contract based on their ability only.
10. Design costs are low following Vietnam Government’s regulation; therefore, developers should not recommend designers down expenses.
11. EPC contract should be applied on construction items transferred to Public Facility Agencies. EPC contracts will be signed with high-capable companies dealing with transferring products to Public Facility Agencies.
12. As planning construction schedule, it is necessary to study carefully overlapped building items; from then, take measures fitted with surface and underground engineering items building in the same lay-out.
13. Clients should know that high commitment of all people involved in all processes of project is very important to solve complex conflicts and problems occurring in project. In addition, developers have to set up a Project Management Unit (PMU) that owns a team of experienced and capable experts in order to manage and run the project. The PMU must have authority to make decisions quickly under delegation of developers.
14. Clients should make favorable conditions for staffs improving their knowledge, skills and to update new knowledge. On the other hand, to attract capable and experienced experts and engineers, developers should pay high salaries for them.
15. Building construction progress and program must be planned strictly. It should be taken care of items be able to overlapped. For example, as road contractors finish road foundation, contractors on water, electricity are to install uptime underground systems; avoiding that contractors on underground works excavate the roads accomplished to install underground systems; then, reconstruct them as happened to some projects in Vietnam. Besides, it is avoided damages for road contractors as stopping construction to wait for operation of contractors on underground systems.
His thesis abstract is copied and posted.
Abstract
Risks and uncertainties come from various sources. In New Urban Zone Infrastructure Development Project, risks related participants involving the project, impacted schedule of project implement, project quality, project finance and time of customers and government hand-over.
Risk management is an important part of the decision-making process of all construction companies. Risk and uncertainty can potentially have damaging consequences for some construction projects. Risk can be affect productivity, performance, quality, and the budget of the project. Risk can not be eliminated, but can be minimised, transferred or retained
Risk management is a systematic approach to managing unexpected related to a threat, through a sequence of human activities including: Risk identification, Risk classification, Risk analysis, Risk response, Risk evaluation.
In the organization, there are some ways of risk dealing such as transfers the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.
Monday, 24 May 2010
Friday, 21 May 2010
Safety Management In Steel Structure Fabrication And Erection
Safety in Construction is considered the success of project. In developed countries, safety is the always concern and closely controlled whereas in developing countries, in order to reduce expenses, this work seems unconcerned in many projects which results in many accidents that really affect the project seriously.
Safety in the fabrication and erection steel structure has always been a major problem. Steel construction is found to be one of the most dangerous on safety and health criteria, particularly in developing countries with a lot of accidents. Though much improvement in steel construction safety has been achieved, the steel structure fabrication and erection still continues to lag behind most other activities with regard to safety.
In Vietnam steel construction industry, safety accident rate is very high. This is due a lot of causes such as lack of workers’ awareness on safety, lack of safety training for workers to implement in the project, lack of PPE for workers, substandard construction equipments, lack of safety policy, safety plan, and so on.
The company-TT Construction has set the safety management system and it has been implemented in the GREEN STAR projects. In construction stage, some minor accidents and one major accident happened.
Mr. Bui Giang Nam wanted to assess the project safety plan and the safety management system of the project so we have information and experience for other projects in analyzing accidents happened in his company. His study focused on the specific objectives as follows:
1. Analyze the typical accident in the steel structure project;
2. Assess the project safety plan and safety management system; and
3. Propose recommendations for improvements safety management system
Conclusion
Most of the construction companies in Vietnam emphasize more on quality and productivity in terms of output. However, safety is one of the key measurements of good productivity which the people seldom realize. Through the analyzing of some accidents happened on the Green Start Project, the Safety plan was lack of some articles . The characteristic of ironworks are different and more dangerous from other works in construction . TT company should establish some procedures on the safety plan in future project
Following the Accident/Incident theory: Management of TT Company does not establish a comprehensive safety policy. Responsibility and authority with regard to safety are not clearly defined. Safety procedures such as measurement, inspection, correction, and investigation are ignored or given insufficient attention. Employees do not receive proper orientation. Employees are not given sufficient safety training or persons were trained on hazards and safe work procedures but not follow when performing the task.
Some problems of the Safety management system of TT Company :
- Unadequate commitment of top management
- Lack of Human resources for SMS
- Lack of Incentive and Reward
There are some key elements that can be the examples for other companies especially construction companies in Vietnam has written job description for each safety personnel on company and on site, provide safety training and record keeping which can be used as the document for safety measurement. Furthermore, there are written rules and regulations for each site personnel, safety committees to ensure the deployment of the safety plan, policy and programs.
Recommendation
TT Company should has some adjustments with their Safety management system such as:
1. Top manager should has commitment to supporting OH&S
2. Top manager commit to support OH&S. Establishing a Safety Management Organization with defined responsibilities of management staff as overall co-ordination and implementation of the Policy and the Safety Management System in the project
Besides financial supporting adequacy, top management staff have to realize their roles to play in safety. They should appreciate the communication between them and the frontline workers, which could impress the workers and thus improve the workers’ risk-taking mindset.
- Ensure that human resource is adequate for implementing and maintaining Safety Management System
TT company should recruit safety managers and safety supervisors for other projects in the future. The supervisor should provide the means to ensure that all workers are adequately instructed and trained , ensure that workers doing dangerous work have adequate training, experience and other qualities to carry out the work safely.
- Establish the incentive programme in order to motivate workers doing their jobs safely
• Behaviors required to achieve a safety reward should be specified and perceived as achievable by participants
• Everyone who meets behavioral criteria should be rewarded
• It is better for many participants to receive small rewards than for one person to receive a large reward
• Rewards should be displayable and represent safety achievement (I.e., coffee mugs, t-shirts, hats or jackets with a safety message)
• Contests should not reward one group at the expense of others
• Groups should not be penalized (lose rewards) for failure by individuals
• Progress towards achieving a safety reward should be systematically monitored and publicly posted
TT Company should also conducts Job Hazard Analysis which includes hazard identification and risk assessment to anticipate the hazard on site, the harshness of the consequences and the probability to happen. Moreover, TT company should also implement PPE program, accident investigation to reduce the probability of re-happening, emergency preparedness, safety promotion to induce the workers to work safely, evaluation of the subcontractor, health and welfare, security control, equipment inspection and waste material movement plan.
There are some key provisions of steel fabrication and erection when setting procedures for ironworks like: Cold stress; Heat stress; Lead exposure; Site Layout and Construction Sequence; Site-Specific Erection Plan; Hoisting and Rigging; Structural Steel Assembly; Column Anchorage; Beams and Columns; Open-Web Steel Joists; Systems-Engineered Metal Buildings; Falling Object Protection; and Training
Besides establishing appropriate safety procedures related with steel fabrication and erection Safety Policies of TT company should include:
1. The commitment of the top management to support OH&S. Ensure adequate supporting for implementing, maintaining and improving the SMS. To give Safety to be the highest priority and to inject safety consideration into every aspect of the Project
2. To recognize employees are the most important assets and to enrich their safety awareness by ways of Interactive Safety Training, Safety Promotion, Safety Meeting and Counseling.
3. To regular review, not least than once per year, the Policy, the Safety Management System for its efficiency and effectiveness by way of Management Inspection and Review and Safety Audit conducted by Senior Management Staff,
4. To maintain a high standard of safety performance and to the satisfaction of the Client at all time and also a progressively improvement in the standard achieved by continue monitoring and regular review.
His Thesis abstract is copied and posted.
Abstract
Safety in the fabrication and erection steel structure has always been a major issue. Wherever reliable records are available, steel construction is found to be one of the most dangerous on safety and health criteria, particularly in developing countries. Though much improvement in steel construction safety has been achieved, the erection steel structure still continues to lag behind most other activities with regard to safety. In developing countries, safety in fabrication and erection rules usually do not exist; if any exist, the regulatory authority is usually very weak in implementing such rules effectively. Further, work hazards at the construction workplace are either not perceived at all, or perceived to be less dangerous than what they actually are.
Most steel companies can give many good reasons why they want to implement management safety system. A well-designed safety management system can help to reduce injuries and illnesses and prevent risks and hazards. In addition, a good management system can increase efficiency, improve productivity and quality of services.
Through the assessment of some typical accident cases in steel construction of one project in LONG AN- The Green Star Factory, I want to assess the project safety plan and the safety management system of TT Company. Furthermore, I want to improve the existing safety management system of the company in order to prevent the accident happening in the future.
Safety in the fabrication and erection steel structure has always been a major problem. Steel construction is found to be one of the most dangerous on safety and health criteria, particularly in developing countries with a lot of accidents. Though much improvement in steel construction safety has been achieved, the steel structure fabrication and erection still continues to lag behind most other activities with regard to safety.
In Vietnam steel construction industry, safety accident rate is very high. This is due a lot of causes such as lack of workers’ awareness on safety, lack of safety training for workers to implement in the project, lack of PPE for workers, substandard construction equipments, lack of safety policy, safety plan, and so on.
The company-TT Construction has set the safety management system and it has been implemented in the GREEN STAR projects. In construction stage, some minor accidents and one major accident happened.
Mr. Bui Giang Nam wanted to assess the project safety plan and the safety management system of the project so we have information and experience for other projects in analyzing accidents happened in his company. His study focused on the specific objectives as follows:
1. Analyze the typical accident in the steel structure project;
2. Assess the project safety plan and safety management system; and
3. Propose recommendations for improvements safety management system
Conclusion
Most of the construction companies in Vietnam emphasize more on quality and productivity in terms of output. However, safety is one of the key measurements of good productivity which the people seldom realize. Through the analyzing of some accidents happened on the Green Start Project, the Safety plan was lack of some articles . The characteristic of ironworks are different and more dangerous from other works in construction . TT company should establish some procedures on the safety plan in future project
Following the Accident/Incident theory: Management of TT Company does not establish a comprehensive safety policy. Responsibility and authority with regard to safety are not clearly defined. Safety procedures such as measurement, inspection, correction, and investigation are ignored or given insufficient attention. Employees do not receive proper orientation. Employees are not given sufficient safety training or persons were trained on hazards and safe work procedures but not follow when performing the task.
Some problems of the Safety management system of TT Company :
- Unadequate commitment of top management
- Lack of Human resources for SMS
- Lack of Incentive and Reward
There are some key elements that can be the examples for other companies especially construction companies in Vietnam has written job description for each safety personnel on company and on site, provide safety training and record keeping which can be used as the document for safety measurement. Furthermore, there are written rules and regulations for each site personnel, safety committees to ensure the deployment of the safety plan, policy and programs.
Recommendation
TT Company should has some adjustments with their Safety management system such as:
1. Top manager should has commitment to supporting OH&S
2. Top manager commit to support OH&S. Establishing a Safety Management Organization with defined responsibilities of management staff as overall co-ordination and implementation of the Policy and the Safety Management System in the project
Besides financial supporting adequacy, top management staff have to realize their roles to play in safety. They should appreciate the communication between them and the frontline workers, which could impress the workers and thus improve the workers’ risk-taking mindset.
- Ensure that human resource is adequate for implementing and maintaining Safety Management System
TT company should recruit safety managers and safety supervisors for other projects in the future. The supervisor should provide the means to ensure that all workers are adequately instructed and trained , ensure that workers doing dangerous work have adequate training, experience and other qualities to carry out the work safely.
- Establish the incentive programme in order to motivate workers doing their jobs safely
• Behaviors required to achieve a safety reward should be specified and perceived as achievable by participants
• Everyone who meets behavioral criteria should be rewarded
• It is better for many participants to receive small rewards than for one person to receive a large reward
• Rewards should be displayable and represent safety achievement (I.e., coffee mugs, t-shirts, hats or jackets with a safety message)
• Contests should not reward one group at the expense of others
• Groups should not be penalized (lose rewards) for failure by individuals
• Progress towards achieving a safety reward should be systematically monitored and publicly posted
TT Company should also conducts Job Hazard Analysis which includes hazard identification and risk assessment to anticipate the hazard on site, the harshness of the consequences and the probability to happen. Moreover, TT company should also implement PPE program, accident investigation to reduce the probability of re-happening, emergency preparedness, safety promotion to induce the workers to work safely, evaluation of the subcontractor, health and welfare, security control, equipment inspection and waste material movement plan.
There are some key provisions of steel fabrication and erection when setting procedures for ironworks like: Cold stress; Heat stress; Lead exposure; Site Layout and Construction Sequence; Site-Specific Erection Plan; Hoisting and Rigging; Structural Steel Assembly; Column Anchorage; Beams and Columns; Open-Web Steel Joists; Systems-Engineered Metal Buildings; Falling Object Protection; and Training
Besides establishing appropriate safety procedures related with steel fabrication and erection Safety Policies of TT company should include:
1. The commitment of the top management to support OH&S. Ensure adequate supporting for implementing, maintaining and improving the SMS. To give Safety to be the highest priority and to inject safety consideration into every aspect of the Project
2. To recognize employees are the most important assets and to enrich their safety awareness by ways of Interactive Safety Training, Safety Promotion, Safety Meeting and Counseling.
3. To regular review, not least than once per year, the Policy, the Safety Management System for its efficiency and effectiveness by way of Management Inspection and Review and Safety Audit conducted by Senior Management Staff,
4. To maintain a high standard of safety performance and to the satisfaction of the Client at all time and also a progressively improvement in the standard achieved by continue monitoring and regular review.
His Thesis abstract is copied and posted.
Abstract
Safety in the fabrication and erection steel structure has always been a major issue. Wherever reliable records are available, steel construction is found to be one of the most dangerous on safety and health criteria, particularly in developing countries. Though much improvement in steel construction safety has been achieved, the erection steel structure still continues to lag behind most other activities with regard to safety. In developing countries, safety in fabrication and erection rules usually do not exist; if any exist, the regulatory authority is usually very weak in implementing such rules effectively. Further, work hazards at the construction workplace are either not perceived at all, or perceived to be less dangerous than what they actually are.
Most steel companies can give many good reasons why they want to implement management safety system. A well-designed safety management system can help to reduce injuries and illnesses and prevent risks and hazards. In addition, a good management system can increase efficiency, improve productivity and quality of services.
Through the assessment of some typical accident cases in steel construction of one project in LONG AN- The Green Star Factory, I want to assess the project safety plan and the safety management system of TT Company. Furthermore, I want to improve the existing safety management system of the company in order to prevent the accident happening in the future.
Thursday, 20 May 2010
SET Industry Day in HCM, 29 May 2010
ENGINEER FOR FUTURE - TECHNOLOGY AND APPLICATION FOR SUSTAINABLE DEVELOPMENT
SOFITEL HOTEL, HCM
29 MAY 2010
Wednesday, 19 May 2010
SET/CEIM opens first batch of MPM in Cantho City
The Professional Master in Project Management Specialized in Construction was launched in Can Tho City on May 7, 2010. The opening ceremony was attended by Dr. Amrit Bart, AIT-CV Director; Ms. Nguyen Thi Bich Hoa, AIT-CV Deputy Director; Dr. Nitin Vasant Afzulfurkar, Associate Professor and Dean of School of Engineering and Technology; Dr. B. H. W. Hadikusumo, Associate Professor and Coordinator for Construction Engineering and Infrastructure Management and Master in Project Management (Professional); Ms. Nguyen Le Tuong, Local Program Coordinator for AIT-CV; Ms. Kieu Phu Ly, SET Secretary-Hanoi; and Ms. Bui Thuy Nga, SET Secretary-Ho Chi Minh City.
Twenty students enrolled in the MPM program for May (2010) Semester intake. Below is the complete list.
Full name Organization
1 Mr. Nguyễn Hoàng Đạo, Can Tho Department of Transportation
2 Mr. Hồ Chí Linh, College of Engineering Technology - CanTho University, Campus II
3 Mr. Tạ Chí Nhân, Can Tho Department of Construction
4 Mr. Lê Minh Nhựt, Hoa Binh Company
5 Mr. Lê Thành Phiêu, College of Engineering Technology - CanTho University, Campus II
6 Mr. Đặng Thái Sơn, TKN Kajima-Nippon steel
7 Mr. Huỳnh Thanh Sử, Can Tho Housing Development and Trading Company
8 Mr. Nguyễn Tiến Thực, Board of management of development and investment project - Thoi Lai district, Can Tho city
9 Mr. Nguyễn Thanh Trong, Soc Trang Department of Construction
10 Mr. Phạm Thành Trung, Constexim Holdings Projects
11 Mr. Phùng Quang Hiệp, PVSWG ( Petro Vietnam South West Gas )
12 Mr. Phạm Văn Hùng, PVSWG ( Petro Vietnam South West Gas )
13 Mr. Phạm Bình Lâm, PVSWG ( Petro Vietnam South West Gas )
14 Mr. Lê Quang Sơn, PVSWG ( Petro Vietnam South West Gas )
15 Mr. Lê Anh Thông Long Phu, Song Hau Petroleum Power Project Management Board
16 Mr. Nguyễn Viết Hiến, PVC (Petro Vietnam construction joint stock Corporation)
17 Mr. Hoàng Duy Phước, PVC (Petro Vietnam construction joint stock Corporation)
18 Mr. Lưu Hồng Linh, PVF Can Tho
19 Mr. Nguyễn Thanh Hải, PVF Can Tho
20 Ms. Lê Trương Mai Hoàng, PVF Can Tho
Photos during the opening ceremony.
Thursday, 13 May 2010
Wednesday, 12 May 2010
Construction Work Performance Under Bovis Lend Lease Safety Program
Throughout the construction projects starting from the design phase till the end of construction execution phase, numerous project management actions are deployed i.e. planning, quality assurance, communication system, and so forth (Chan et. al, 2004). Safety issues action is also included in order to execute the project safely. This is because if the accident occurs during execution, particularly major accidents, it leads to many disadvantages for company such as cost incurred from medical treatment, interrupting construction schedule, and impairing the reputation of firms.
Consequently, each company has established its own safety program for preventing the occurrence of accidents, as many companies have recognized the potential impacts of accidents. But do they ever review “What are the impacts of such safety program”, or in other words whether the program positively or negatively affected their execution. NOHSC (National Occupational Health & Safety Commission) has stated that most of companies have traditionally focused only on outcome measures of performance, for example, the accident records.
Systematic reviewing of performance is the key to successful management as stated in Holt (2001) since it reflects the actual conditions of the operation. Thus it will enable the re-development and modification of the strategy.
Therefore, these problems have arisen in Mr. Thanapat Leingtong’s study. His study focused in two aspects for reviewing the actual position. The first aspect is, for example, under their safety program, do they know that:
• Whether the root causes of accidents still exist or were eliminated – according to Holt (2001), the root causes of accidents are primarily referred to unsafe activities and conditions.
• Whether project participants satisfied the program.
• How does such safety program contribute to improving or declining the project work performances?
The second aspect is, whether their situation is superior or inferior to other companies that applied different programs.
According to the first aspect, the research has developed three significant issues in terms of effectiveness, efficiency, and satisfaction in order to determine the impact of safety implementation. To this effect, Bovis Lend Lease Company has been selected as a case study and also it has been compared with other Non-BLL companies to study the second aspect of this study.
The study aimed to investigate the actual construction work performances under safety operation of Case Study Company i.e. Bovis Lend Lease Company. The main objectives of the study were enumerated as follows:
1. To study the Environment Health & safety program under Bovis Lend Lease Company
2. To study the impacts of Bovis Lend Lease EH&S program and safety management on construction work performances in terms of effectiveness, efficiency, and satisfaction.
Conclusions
Similar with finance, production or sales, the companies also need to measure and study the impact of their health and safety performances in order to find out if they are being successful. They need to know: where they are; and what’s the difference –and why. Therefore, the safety performance measurements are taken into account in order to answer these questions and provide related information as well as facilitate the management in decision making. Measures of safety performance are intended to give an indication of how a company is performing. The above mentioned questions such as where they are, what’s the difference and why, can be answered by conducting the safety performances measurement and making comparisons against a company’s past performances, industry standard, or other companies. Since this study undertakes to capture safety performances of Bovis Lend Lease Company, which is the case study company, the comparisons against other companies approach was selected in order to identify where BLL is and also the difference between BLL and Non-BLL Company.
After having determined the approach to track the company performances, the next problem was what should be measured to make comparisons. The reviews of past researches on the various types of safety performance measures showed that different types of information are provided by different measures. Therefore, the study has employed various effective measures, which are both positive and negative indicators, and reasonably measured the process, output, and outcome of each company for making comparisons against other companies.
Commencing from “input”, the study controlled the samples by selecting same scale and type of comparative companies, therefore, the uncontrolled hazards are not much of difference. In addition, comparative companies must have safety management system and its implementation during execution. Next, the measurement of “process” is conducted to see the differences and adequacy of system. Subsequently, the “output” and “outcome” are measured and compared to identify the differences in effectiveness and satisfaction of safety implementation in all aspects. Furthermore, the study of efficiency and productivity of workers are also included in this research to identify the labor productivity of each project i.e. if they have the same or different proportion of productivity when the site conditions are different.
His thesis abstract is copied and posted.
Abstract
Similar with finance, production or sales, the companies also need to measure the impact of their health and safety performances to analyze if they are being successful. Therefore, safety performance measurements are considered to provide information and facilitate management in decision-making relevant to re-evaluation and development of strategy. This study is concerned with the systematic reviewing of safety performance in terms of effectiveness, efficiency, and satisfaction. Study has been carried out with an aim to examine safety performances of BLL and Non-BLL Company. In order to compare BLL against Non-BLL Company, the study has employed various effective measures, both positive and negative indicators. The study has also reasonably measured the process, output, and outcome of the companies for making comparisons and in order to identify the current status of BLL and their differences with the Non-BLL in terms of safety management. The study indicated that BLL has better safety management than Non-BLL. Moreover, BLL’s performances are statistically better in terms of site conditions and employee satisfaction. But unsafe acts performed, worker satisfaction, and proportion of productivity are not statistically different. Strengths of BLL are comprehensive safety management, clear safety roles and responsibilities, systematic hazard control, well-organized safety training, high commitment, regularly conduct self-inspection, and employed full-time safety manager. Weaknesses of BLL are negligence, numerous subcontractors, and team conflicts.
Consequently, each company has established its own safety program for preventing the occurrence of accidents, as many companies have recognized the potential impacts of accidents. But do they ever review “What are the impacts of such safety program”, or in other words whether the program positively or negatively affected their execution. NOHSC (National Occupational Health & Safety Commission) has stated that most of companies have traditionally focused only on outcome measures of performance, for example, the accident records.
Systematic reviewing of performance is the key to successful management as stated in Holt (2001) since it reflects the actual conditions of the operation. Thus it will enable the re-development and modification of the strategy.
Therefore, these problems have arisen in Mr. Thanapat Leingtong’s study. His study focused in two aspects for reviewing the actual position. The first aspect is, for example, under their safety program, do they know that:
• Whether the root causes of accidents still exist or were eliminated – according to Holt (2001), the root causes of accidents are primarily referred to unsafe activities and conditions.
• Whether project participants satisfied the program.
• How does such safety program contribute to improving or declining the project work performances?
The second aspect is, whether their situation is superior or inferior to other companies that applied different programs.
According to the first aspect, the research has developed three significant issues in terms of effectiveness, efficiency, and satisfaction in order to determine the impact of safety implementation. To this effect, Bovis Lend Lease Company has been selected as a case study and also it has been compared with other Non-BLL companies to study the second aspect of this study.
The study aimed to investigate the actual construction work performances under safety operation of Case Study Company i.e. Bovis Lend Lease Company. The main objectives of the study were enumerated as follows:
1. To study the Environment Health & safety program under Bovis Lend Lease Company
2. To study the impacts of Bovis Lend Lease EH&S program and safety management on construction work performances in terms of effectiveness, efficiency, and satisfaction.
Conclusions
Similar with finance, production or sales, the companies also need to measure and study the impact of their health and safety performances in order to find out if they are being successful. They need to know: where they are; and what’s the difference –and why. Therefore, the safety performance measurements are taken into account in order to answer these questions and provide related information as well as facilitate the management in decision making. Measures of safety performance are intended to give an indication of how a company is performing. The above mentioned questions such as where they are, what’s the difference and why, can be answered by conducting the safety performances measurement and making comparisons against a company’s past performances, industry standard, or other companies. Since this study undertakes to capture safety performances of Bovis Lend Lease Company, which is the case study company, the comparisons against other companies approach was selected in order to identify where BLL is and also the difference between BLL and Non-BLL Company.
After having determined the approach to track the company performances, the next problem was what should be measured to make comparisons. The reviews of past researches on the various types of safety performance measures showed that different types of information are provided by different measures. Therefore, the study has employed various effective measures, which are both positive and negative indicators, and reasonably measured the process, output, and outcome of each company for making comparisons against other companies.
Commencing from “input”, the study controlled the samples by selecting same scale and type of comparative companies, therefore, the uncontrolled hazards are not much of difference. In addition, comparative companies must have safety management system and its implementation during execution. Next, the measurement of “process” is conducted to see the differences and adequacy of system. Subsequently, the “output” and “outcome” are measured and compared to identify the differences in effectiveness and satisfaction of safety implementation in all aspects. Furthermore, the study of efficiency and productivity of workers are also included in this research to identify the labor productivity of each project i.e. if they have the same or different proportion of productivity when the site conditions are different.
His thesis abstract is copied and posted.
Abstract
Similar with finance, production or sales, the companies also need to measure the impact of their health and safety performances to analyze if they are being successful. Therefore, safety performance measurements are considered to provide information and facilitate management in decision-making relevant to re-evaluation and development of strategy. This study is concerned with the systematic reviewing of safety performance in terms of effectiveness, efficiency, and satisfaction. Study has been carried out with an aim to examine safety performances of BLL and Non-BLL Company. In order to compare BLL against Non-BLL Company, the study has employed various effective measures, both positive and negative indicators. The study has also reasonably measured the process, output, and outcome of the companies for making comparisons and in order to identify the current status of BLL and their differences with the Non-BLL in terms of safety management. The study indicated that BLL has better safety management than Non-BLL. Moreover, BLL’s performances are statistically better in terms of site conditions and employee satisfaction. But unsafe acts performed, worker satisfaction, and proportion of productivity are not statistically different. Strengths of BLL are comprehensive safety management, clear safety roles and responsibilities, systematic hazard control, well-organized safety training, high commitment, regularly conduct self-inspection, and employed full-time safety manager. Weaknesses of BLL are negligence, numerous subcontractors, and team conflicts.
Tuesday, 11 May 2010
Risk Management In The Pakistan Construction Industry: A Contractors’ Perspective
The Construction Industry in Pakistan has gone through a rough patch with its compound annual growth rate (CAGR) in the three years up to FY2002 being well below the two percent as compared to a CAGR of nearly four percent for the overall GDP of the country during this period. This shows that instead of being a source of economic stimulus, the construction industry has actually lagged behind the rest of the economy in terms of growth. This negative perception regarding the macroeconomic and political instability and the law and order situation has deterred serious investors (JCR, 2003).
The problems facing the construction industry of Pakistan has persisted despite efforts made. It is important that the construction industry of Pakistan is more fully understood in order for more appropriate solutions, relevant to its contexts, to be found. This industry requires separate, special treatment.
Now there is a need to search the difficulties and problems being faced by the Pakistan construction industry, along with recommended solutions. Researchers, Developers, Builders and Contractors working together can identify the solutions to the problems and can boost the Pakistan Construction Industry.
Construction is a high-risk business which haunts every participant in the business, the project owner, construction companies, consultants, bankers, financial institutions, vendors & suppliers and even the service providers, each has his own fears of facing risks in the conduct of business. Risk management is important part of the decision making process in the construction. Risk is also the object of attention because of time overrun associated with the construction projects. Although the risk analysis and management is important to the activities of the construction industry, little is known about the industry response and the techniques employed for the risk management in the Pakistan construction industry. There is a need to investigate the construction industry's perception of risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.
Mr. Asif Hameed Malik made a study which main objective to investigate the risk management practices of the construction contractors in public sector projects of Pakistan and to recommend the appropriate risk management techniques, which better fit the Pakistan context and environment.
To achieve his objective, the sub-objectives can be identified as follows:
a) To evaluate the current attitude of the contractors regarding the importance of risk and risk allocation.
b) To uncover the underlying relationships between the identified risks using the factor analysis.
c) To investigate the difficulties and the benefits relevant to the risk management and the current usage of risk management techniques in the construction organizations.
d) To propose recommendations to the contractors to cope with the major risks in the industry and manage risk effectively in long terms.
Conclusions
The following are the conclusions based on the work carried out and the results of the analyses.
1.Risk Importance and allocation
a. The ten-top major risks identified are: (1) Delays in resolving contractual issues; (2) Delayed payment on contracts; (3) Political uncertainty; (4) Financial failure; (5) Scope of work definition; (6) War threats; (7) Suppliers/subcontractors poor performance; (8) Change in work; (9) Defective design; (10) Labor and equipment productivity.
b. Out of thirty-one listed construction risks, thirteen construction risks are allocated to the contractor; seven to the owner and eleven are shared between the contractor and owner. Although, it is generally recognized that the risk should be transferred to the party that is in the best position to deal with it, the survey indicates that Pakistani contractors are often responsible for most of the risk. Contractors consider themselves responsible to take care of the risks associated with physical and environmental problems. The risks of this type include differing site conditions and adverse weather conditions.
c. Experienced engineers have rated the importance of risk events lower than less experienced engineers. The main reasons are experience level and management level of the experienced engineers. The experience gained in construction life may have enabled the engineers to develop additional ability and competency in managing, anticipating and solving possible problems. This result is contradictory to the findings of the Dung (2004) and Thuyet (2003), in which they concluded that experience level has a no big influence on engineers’ attitude. However this result is supportive to some extent to the findings of Santoso (1999).
d. The result shows that the respondents working in large companies have rated the risks less, which are of technical and managerial nature. This may be due to the reason that the large contractors have formal management practices in their organizations and also they have enough resources to mitigate the encountered risks more efficiently than the small contractors.
2. Grouping of identified risks
Factor analysis is applied to find any interrelationship existing among the risks in terms of their importance.The components extracted are labeled as managerial and technical risks; project scope and design risks; political, economic and regulatory risks; contractual delay risks and; site and weather risks.
3. Risk management practices
The results of risk management practices are similar to the findings of the other surveys conducted in developing countries by Dung (2004) and Thuyet (2003).
a. Importance of systematic risk management is well recognized in the Pakistan construction industry while the practice is far behind its importance.
b. The importance of training cannot be ignored in any organization. Conversely, the construction organizations in Pakistan provide poor job training in risk management to their staff.
c. There is a lack of formal risk identification teams in the organizations. Also the roles and responsibilities are not stated. Even sometimes only one person is responsible for the risk management process.
d. The main difficulties in the risk management process are lack of qualified experts, lack of budget and top management commitment.
e. Qualitative risk analysis techniques are more popular due to their simplicity and effectiveness. In qualitative analysis, the most used tools are checklist, brainstorming and interviewing. Quantitative risk analysis techniques have been rarely used due to limited understanding and experience.
f. The effectiveness of the risk responses in the descending order are: risk transfer, risk reduction, risk retention and risk avoidance.
g. Preventive actions are used to avoid and reduce risks at the early stage of project construction. Produce a proper schedule by getting updated project information and produce a proper program using subjective judgment are the two most effective risk preventive actions.
h. Mitigative actions are remedial steps aimed at minimizing the effects of risks. The most effective risk mitigative methods are to coordinate closely with subcontractor and to increase manpower and/or equipment.
i. Contract management is quite well performed, helping much risk allocation through contracts. Insurance serve as a second risk transfer for the parties involved. However, in reality they face lots of difficulties on the way of finding the insurance. High premium in insurance buying, long claim coverage procedure and lack of qualified experts are the most perceptible problems in purchasing insurance.
Recommendations
Based on the research results, the recommendations are made to the construction contractors to cope with the major risks in the industry and to improve their risk management practices.
1. Strategies to Mitigate the Major Risks
For projects to be successful, it is extremely important that the major risks affecting the projects should be thoroughly examined. The causes and characteristics must be carefully analyzed in order to propose the most appropriate and practical strategies to mitigate them. For the top-ten major risks, the proposed strategies to mitigate them are shown in the table below.
2. Strategies to Improve the Risk Management Practices
a. Integrate risk management in organizational culture in which everybody is a risk manager. This is more important than developing and issuing extensive policies and procedures. Management of risk is embedded in the management philosophy.
b. Implementing risk management requires resources. Investments will be required in: training, developing processes and techniques, management systems, specialist groups. Senior management must be committed to support the initiative with the required resources.
c. Open communication is necessary for risk management to succeed. Without open communication risk management cannot be "everybody's business". Managers require direct communication channels up, down and across their business units to help identify risks and take appropriate actions. Information must be shared.
d. Informal and formal teams are a mechanism that organizations should use to manage risks. Teaming brings together various risk attitudes and brings fresh thinking to issues and solutions. It also focuses diverse disciplines on common objectives.
e. A common business risk language enables managers to talk with individuals in terms of everybody understanding. This is important also in cases where everybody is expected to manage risks.
f. Set up a responsibility center for risk management. A Chief Risk Officer (CRO) who defines consistent approaches to managing risk should head it. The CRO is the organizational risk champion and is responsible for providing leadership and establishing and maintaining risk awareness across the organization.
g. Communicate the risk performance to top management and stakeholders/ shareholders. The reports should outline the major risks and how they are managed.
h. There is a need for risk management training, as part of a corporate training curriculum. Topic areas include: objectives for managing risk: risk-awareness, risk assessments, safety and legislative requirements.
i. The authorities should implement the performance assessment scoring system (PASS) as a mechanism for evaluating the effectiveness of a contractor's ability and to change the attitude of the contractors to simply win the projects rather than to deliver the projects to specified standards.
j. The internal audit function plays a key role in implementing risk management throughout an organization. Examples of this practice are: monitoring and reporting on the management of significant risks and reviewing processes for managing risks.
His thesis abstract is copied and posted.
ABSTRACT
The research study, on the basis of a questionnaire survey, describes the perception of construction contractors in Pakistan about the risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.
The study has investigated the perception of the contractors regarding risk importance and risk allocation. The purpose was to provide insight into the current attitude of Pakistani contractors towards construction risk allocation and also to examine the importance of different risk categories.
Risk management practices in the construction industry of Pakistan have also been presented and discussed. First the organizational culture and support to the risk management is described and it is found that the importance of systematic risk management is well recognized in the Pakistan construction industry while the practice is far behind its importance. Then the extent/scope, responsibilities and problems in the risk identification; risk analysis; risk response; risk monitoring and control processes are discussed. The research results indicated that the application of the formal risk management techniques in the Pakistan construction industry is limited. It is also investigated that there is a lack of formal risk management teams in organizations and roles and responsibilities are not stated. The main difficulties during the risks management processes in the descending order are: the lack of qualified experts; lack of budget; complexity of tools and techniques; lack of top management commitment and support; and lack of historical data. This research also presents two types of risk management methods: preventive, which are effective at the early stages of the project life, and mitigative, which are remedial actions aimed at risk minimization during construction. At the end, risk allocation between the parties involved, through contract and insurance, is discussed.
The problems facing the construction industry of Pakistan has persisted despite efforts made. It is important that the construction industry of Pakistan is more fully understood in order for more appropriate solutions, relevant to its contexts, to be found. This industry requires separate, special treatment.
Now there is a need to search the difficulties and problems being faced by the Pakistan construction industry, along with recommended solutions. Researchers, Developers, Builders and Contractors working together can identify the solutions to the problems and can boost the Pakistan Construction Industry.
Construction is a high-risk business which haunts every participant in the business, the project owner, construction companies, consultants, bankers, financial institutions, vendors & suppliers and even the service providers, each has his own fears of facing risks in the conduct of business. Risk management is important part of the decision making process in the construction. Risk is also the object of attention because of time overrun associated with the construction projects. Although the risk analysis and management is important to the activities of the construction industry, little is known about the industry response and the techniques employed for the risk management in the Pakistan construction industry. There is a need to investigate the construction industry's perception of risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.
Mr. Asif Hameed Malik made a study which main objective to investigate the risk management practices of the construction contractors in public sector projects of Pakistan and to recommend the appropriate risk management techniques, which better fit the Pakistan context and environment.
To achieve his objective, the sub-objectives can be identified as follows:
a) To evaluate the current attitude of the contractors regarding the importance of risk and risk allocation.
b) To uncover the underlying relationships between the identified risks using the factor analysis.
c) To investigate the difficulties and the benefits relevant to the risk management and the current usage of risk management techniques in the construction organizations.
d) To propose recommendations to the contractors to cope with the major risks in the industry and manage risk effectively in long terms.
Conclusions
The following are the conclusions based on the work carried out and the results of the analyses.
1.Risk Importance and allocation
a. The ten-top major risks identified are: (1) Delays in resolving contractual issues; (2) Delayed payment on contracts; (3) Political uncertainty; (4) Financial failure; (5) Scope of work definition; (6) War threats; (7) Suppliers/subcontractors poor performance; (8) Change in work; (9) Defective design; (10) Labor and equipment productivity.
b. Out of thirty-one listed construction risks, thirteen construction risks are allocated to the contractor; seven to the owner and eleven are shared between the contractor and owner. Although, it is generally recognized that the risk should be transferred to the party that is in the best position to deal with it, the survey indicates that Pakistani contractors are often responsible for most of the risk. Contractors consider themselves responsible to take care of the risks associated with physical and environmental problems. The risks of this type include differing site conditions and adverse weather conditions.
c. Experienced engineers have rated the importance of risk events lower than less experienced engineers. The main reasons are experience level and management level of the experienced engineers. The experience gained in construction life may have enabled the engineers to develop additional ability and competency in managing, anticipating and solving possible problems. This result is contradictory to the findings of the Dung (2004) and Thuyet (2003), in which they concluded that experience level has a no big influence on engineers’ attitude. However this result is supportive to some extent to the findings of Santoso (1999).
d. The result shows that the respondents working in large companies have rated the risks less, which are of technical and managerial nature. This may be due to the reason that the large contractors have formal management practices in their organizations and also they have enough resources to mitigate the encountered risks more efficiently than the small contractors.
2. Grouping of identified risks
Factor analysis is applied to find any interrelationship existing among the risks in terms of their importance.The components extracted are labeled as managerial and technical risks; project scope and design risks; political, economic and regulatory risks; contractual delay risks and; site and weather risks.
3. Risk management practices
The results of risk management practices are similar to the findings of the other surveys conducted in developing countries by Dung (2004) and Thuyet (2003).
a. Importance of systematic risk management is well recognized in the Pakistan construction industry while the practice is far behind its importance.
b. The importance of training cannot be ignored in any organization. Conversely, the construction organizations in Pakistan provide poor job training in risk management to their staff.
c. There is a lack of formal risk identification teams in the organizations. Also the roles and responsibilities are not stated. Even sometimes only one person is responsible for the risk management process.
d. The main difficulties in the risk management process are lack of qualified experts, lack of budget and top management commitment.
e. Qualitative risk analysis techniques are more popular due to their simplicity and effectiveness. In qualitative analysis, the most used tools are checklist, brainstorming and interviewing. Quantitative risk analysis techniques have been rarely used due to limited understanding and experience.
f. The effectiveness of the risk responses in the descending order are: risk transfer, risk reduction, risk retention and risk avoidance.
g. Preventive actions are used to avoid and reduce risks at the early stage of project construction. Produce a proper schedule by getting updated project information and produce a proper program using subjective judgment are the two most effective risk preventive actions.
h. Mitigative actions are remedial steps aimed at minimizing the effects of risks. The most effective risk mitigative methods are to coordinate closely with subcontractor and to increase manpower and/or equipment.
i. Contract management is quite well performed, helping much risk allocation through contracts. Insurance serve as a second risk transfer for the parties involved. However, in reality they face lots of difficulties on the way of finding the insurance. High premium in insurance buying, long claim coverage procedure and lack of qualified experts are the most perceptible problems in purchasing insurance.
Recommendations
Based on the research results, the recommendations are made to the construction contractors to cope with the major risks in the industry and to improve their risk management practices.
1. Strategies to Mitigate the Major Risks
For projects to be successful, it is extremely important that the major risks affecting the projects should be thoroughly examined. The causes and characteristics must be carefully analyzed in order to propose the most appropriate and practical strategies to mitigate them. For the top-ten major risks, the proposed strategies to mitigate them are shown in the table below.
2. Strategies to Improve the Risk Management Practices
a. Integrate risk management in organizational culture in which everybody is a risk manager. This is more important than developing and issuing extensive policies and procedures. Management of risk is embedded in the management philosophy.
b. Implementing risk management requires resources. Investments will be required in: training, developing processes and techniques, management systems, specialist groups. Senior management must be committed to support the initiative with the required resources.
c. Open communication is necessary for risk management to succeed. Without open communication risk management cannot be "everybody's business". Managers require direct communication channels up, down and across their business units to help identify risks and take appropriate actions. Information must be shared.
d. Informal and formal teams are a mechanism that organizations should use to manage risks. Teaming brings together various risk attitudes and brings fresh thinking to issues and solutions. It also focuses diverse disciplines on common objectives.
e. A common business risk language enables managers to talk with individuals in terms of everybody understanding. This is important also in cases where everybody is expected to manage risks.
f. Set up a responsibility center for risk management. A Chief Risk Officer (CRO) who defines consistent approaches to managing risk should head it. The CRO is the organizational risk champion and is responsible for providing leadership and establishing and maintaining risk awareness across the organization.
g. Communicate the risk performance to top management and stakeholders/ shareholders. The reports should outline the major risks and how they are managed.
h. There is a need for risk management training, as part of a corporate training curriculum. Topic areas include: objectives for managing risk: risk-awareness, risk assessments, safety and legislative requirements.
i. The authorities should implement the performance assessment scoring system (PASS) as a mechanism for evaluating the effectiveness of a contractor's ability and to change the attitude of the contractors to simply win the projects rather than to deliver the projects to specified standards.
j. The internal audit function plays a key role in implementing risk management throughout an organization. Examples of this practice are: monitoring and reporting on the management of significant risks and reviewing processes for managing risks.
His thesis abstract is copied and posted.
ABSTRACT
The research study, on the basis of a questionnaire survey, describes the perception of construction contractors in Pakistan about the risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.
The study has investigated the perception of the contractors regarding risk importance and risk allocation. The purpose was to provide insight into the current attitude of Pakistani contractors towards construction risk allocation and also to examine the importance of different risk categories.
Risk management practices in the construction industry of Pakistan have also been presented and discussed. First the organizational culture and support to the risk management is described and it is found that the importance of systematic risk management is well recognized in the Pakistan construction industry while the practice is far behind its importance. Then the extent/scope, responsibilities and problems in the risk identification; risk analysis; risk response; risk monitoring and control processes are discussed. The research results indicated that the application of the formal risk management techniques in the Pakistan construction industry is limited. It is also investigated that there is a lack of formal risk management teams in organizations and roles and responsibilities are not stated. The main difficulties during the risks management processes in the descending order are: the lack of qualified experts; lack of budget; complexity of tools and techniques; lack of top management commitment and support; and lack of historical data. This research also presents two types of risk management methods: preventive, which are effective at the early stages of the project life, and mitigative, which are remedial actions aimed at risk minimization during construction. At the end, risk allocation between the parties involved, through contract and insurance, is discussed.
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