Some Studies Comparing the Role Of Engineer Between Vietnamese And Fidic Contract

Project management in construction not only manages in general but also one of the core issues is contract management. Both managers and project engineers have the responsibilities to perform their job everyday according to the signed contract, control price changes, time and construction progress.

The implementation of construction contract in Vietnam has been improved due to foreign factor. The Ministry of Construction has promulgated circular No. 06/2007/TT-BXD (25/7/2007) to introduce in detail the types of construction contract, besides, it also encourages parties to apply some developed international conditions on construction contracts such as FIDIC and AIA. This means that conditions in Vietnamese contract must also consider international conditions and the role of engineers who play one of the important roles must be included.

With the aim to improve the quality of contract system in construction in Vietnam, Mr. Nguyen An Khe made a study to preliminary compare the role of Engineer between Vietnamese and FIDIC contract and then contribute to build a perfect responsibilities of Engineer in contract conditions for construction in even local or international contracts.

The objectives of his study were to:
1. study the roles of Engineer in Vietnamese contract with reference of:
- The scope of authority.
- Barriers and obstacles in the implementation in the real projects.
2. compare the roles of Engineer in Vietnamese contract with International contract – FIDIC.
3. propose recommendations for improvements.

Conclusion

It is understood that, according to Bunni 2005:73, when a project is initiated by an Employer/Owner, all the duties related to feasibility, design and supervision during the construction time of the project are entrusted to an independent consulting engineer who is called “Engineer” in FIDIC conditions of contract between the Owner and Contractor. But in Vietnam when people talk about such consulting engineer they are talking about Designer, Verifier, Supervisor, or Quality Assessor separately. It can be summarized as followed:



It is concluded that:

One of the advantages of FIDIC conditions is that it had become a standard international form is which an agreement that had been approved and made public by a prestigious body such as architects, engineers, contractors.

FIDIC conditions are much clearer and useful.

Vietnamese conditions are still set up under a local policies and law-infrastructure, so the following issues are still existent:

1. Government Procurement Practices: Bureaucracy in government approval system, local government policy is not compatible with international practice;
2. Differences in Standards system; differences in interpretation of Contract Document;
3. Law governing contracts are not strong enough to ensure the performance of the contract;
4. The Engineer under Vietnamese conditions are divided into separate Consulting Engineers while the Engineer under FIDIC conditions are the combination of such those roles, this narrowed the power of the Engineer in Vietnam;
5. From above barriers, it is so difficult for Vietnamese Engineer perform their own roles when they have to stand under pressure of other parties such as the Owner or the Investment Decision Maker, they have to suffer so many interferences while the Engineer under FIDIC are empowered to work independently and impartially.

Recommendation

From the overall view, Vietnamese conditions of contract are local conditions of a developing country, FIDIC conditions are created and modified by many members from developed countries and by the time they became one of the standard forms of conditions of construction contracts in the world. Vietnamese have a motto: “Learn the better and leave the worse things”, so Vietnam is on the way to apply types of contract as standard forms such as FIDIC in the preparation of contracts as well as improvement of the roles of parties who join into the contract especially the engineer.
Turn back the Engineer what belong to the Engineer!

1. The authorities should creative application in Vietnam practical conditions to bring the position of the Vietnamese Consulting Engineer to approach standard international ones, such as FIDIC… so that they can perform their authorities and responsibilities with respectfulness from other parties and without any unreasonable interferes.
2. Empower the Engineer what they obviously have.
3. Upgrade the Law system and standards system to approach the international practices.
4. The Engineer – them self – innovate their qualifications so that they can compatible into every environment they work in.

For further study, it would be better if a full comparison between Vietnamese and some other International conditions of construction contract to improve the roles and responsibilities of Engineer as well as the conditions of contract system.

His thesis abstract is copied and posted.

Abstract

Vietnam has become a large construction area with the building of all kinds of infrastructure including road, bridges, residential buildings, factories and power plants. Then the arisen problem is how to manage construction contracts effectively. It is widely recognized that construction contracts are key legal instruments which determine the relationships, and the rights and obligations between all parties and one of the main members is the Consulting Engineer.

This report, under the roles and responsibilities of Consulting Engineer, make some comparison between Vietnamese conditions of contract and FIDIC conditions of contract. Through the case studies problems will be described, analyzed the roles and responsibilities of Consulting Engineer - will be determined from FIDIC and Vietnamese conditions of contract - to see what the obstacles are when implementing in Vietnam practical conditions. Then some solutions/recommendations will be proposed.

Risk Management In New Residential Development Project: A Case Study Of Phuockien 1 Project (Sadeco)

In recent years, the construction industry in Vietnam is having a good reputation of rapid development. However, many large scale projects invested by the government are still facing cost overrun and schedule delay and it seems that risk management at present is still relatively new.

Hanoi and Hochiminh city are two special municipality of Vietnam with a rapid economic development and attracted too many immigrants from rural areas. So, the necessary investment for new infrastructure and expand the territory of the city is necessary, to meet for population growth is to widen the area of urban construction.
However, the implementation of new residential development projects in Ho Chi Minh City areas is still slow and not uniform. The nature of this project is done with large capital, deployed for a long time with many elements involved with the impact of regulations and policies exist in many indispensable element of risk. A proven fact that most projects are late on schedule, and costs exceed the total initial investment and difficulties in connection with the infrastructure system of the area outside the project. Besides the land policy issues as well as land clearance is the main risks affecting the project objectives.

Mr. Nguyen Hoang Anh Chuong made a research to study the risks arising from the new residential development projects in Ho Chi Minh City specifically in small and medium scale project. His case study focused on the Phuoc Kien residential development project invested by the Saigon South Development Corporation (Sadeco). The objective of his study is to identify and find out the risks or uncertainties occur in each stage of implementing processes of a new residential development project. Then assess and analysis any impact factors, and propose to treat a risk to enhance the efficiency of project and ensure project objective.

In order to achieve his goal, the following objective needs to be completed:
1. To identify and find out criterial factors affecting the project time and cost in new residential development project.
2. Propose strategies to effectively eliminate or mitigate major risks.
3. Propose solutions that identify and prevent risks in similar projects

Conclusions

The case in this report describes a practical implementation in the early stages of urban development policy of Vietnam in general and Ho Chi Minh City in particular, and obviously has revealed high-risk factors can seriously affect the success of the project. Actually, Vietnam present has enormous efforts to overcome policy and reduce the cumbersome procedures in investment, but investors still face a lot of problems (risks) when implement project.

The report may not offer the most complete of risk factors in various stages of project implementation, but also clear description of the risk factors may affect the efficiency projects that most projects in Vietnam are all experiencing the problem of clearance, delay progress and project costs incurred up compared to initial estimates. The author proposed appropriate strategies to mitigate these major risks as shown in the table below.





Recommendations

In scope of this report, the author has just emphasized major risks affecting on Phuoc Kien project objective. The findings of this study are expected to contribute to identify major risks and more effective risk management process in project. To achieve this objective, this study proposes some recommendation:

1. Survey, evaluation and recommendations appropriate solution for compensation and ground clearance, to ensure the interests of the parties to minimize delays in this stage. And to set up land use planning consistent with the project requirement in each stage and progress of the mobilization of capital investment

2. Researched the plan for construction planning to ensure compliance with long-term development strategy, taking factors fluctuations in policy and plan for appropriate preventive.

3. To train or mobilize experts with full experience in the concerned fields, such as planning, design, construction techniques, financial ... to set up competence project team for the best implementation.

4. Perform measurements, impact of risk to the investment effectiveness of the project, potential for success of the project when the impact of risk. As analyzed above, evaluating economic efficiency-financing of the project should focus review.

5. Conducting activities to control and limit the adverse impact of risks to ensure the effective investment of project. Risk control plan should be implemented in conjunction with several measures from the active standby unreasonable resources to deal with the risks, actively avoid and share the risk, promptly response when risks occur.

6. Establishing early warning systems and handling risk.

7. Develop a plan to mobilize capital to meet the progress of the project.

8. Risk management should be considered as an important part of project management.

9. Risks management need to be considered into related regulation. Construction Law or Government Decrees.

10. Especially focus on the initiation stage: Investment report, Feasibility Study, Project planning and Detail Design.

11. Proposes in specific institution for risk management in terms of time, cost, resource, regulation, guideline, process and content by the government. For example, the cost estimated for risk management could be considered as essential part among the total investment cost of the project.

12. The Investors should pay appropriate attention to risk management along with project planning while those institution and policies do not approve.

13. In entire project life cycle need to identify sufficient risk of external and internal environment of the project in accordance with reality. Risks occur in each stage of project are also very different but they have the relation and interaction. Each environment have several potential risks, the risks can affect each other both inside and outside the project, and risks could change over time. Therefore the identification of risk should be conducted, update regularly. Especially in the preparation stage for the investment decision must fully recognize the risks can occur throughout the project life cycle.

Besides, investors should accept the extra costs to make good the following rules(10 Golden rules of Project Risk Management, ProjectSmart.com.uk):
1. Make Risk Management Part of Your Project
2. Identify Risks Early in Your Project
3. Communicate About Risks
4. Consider Both Threats and Opportunities
5. Clarify Ownership Issues
6. Prioritise Risks
7. Analyse Risks
8. Plan and Implement Risk Responses
9. Register Project Risks
10. Track Risks and Associated Tasks

His thesis abstract is copied and posted.

ABSTRACT
The construction industry is one of the most dynamic, risky and challenging businesses because of their implementing time is very long with huge investment capital and various participating components. However, the industry has a very poor reputation for managing risk, with many major projects failing to meet deadlines and cost targets.

Risk is inherent in construction projects and managing risks in construction projects has been recognised as a very important management process in order to achieve the project objectives in terms of time, cost, quality, safety and environmental sustainability. Therefore, project risks must be properly analyzed and mitigated to ensure the success of any project.

The purpose of risk management is to identify potential problems before they occur so that risk-handling activities may be planned and invoked as needed across the life of the product or project to mitigate adverse impacts on achieving objectives. To effectively manage the risk in construction project, it is necessary for organizations to identify important risk, then provide a suitable tool to measure their effects in each stage of project life cycle and suggest the effective solution methods as minimised, shared, transferred, avoided or accepted but can not be ignored

CEIM-SET Congratulates Its New Graduates

We would like to congratulate the new graduates who received their diploma during the 113th AIT Graduating Ceremony on 26 May 2010. The names of graduands and their Thesis/Project title are listed below:

Doctor of Philosophy Degree (CEIM)

1. Dr. Oulawan Kulchartchai, Development of a Worker Engagement Measurement Tool (WEMT) for a Construction Safety Program

Master of Science Degree (CEIM)

1. Mr. Mohammad Sharif, Implementation Problems Causing Cost Overrun Of The World Bank-Suppoerted Project, A Case Study In Afghanistan

2. Mr. Tanatat Wisetsurakarn, The Construction Litigation Analysis: A Case Study Of The Thai Supreme Court Cases

3. Mr. Amnarch Pirmsinthavee, Relationship Marketing In Thai Sme Contractors: A Case Study Of Bangkok And Khonkaen Sme Contractors

4. Mr. Raj Kumar Lakhe, Asset Management In Public And Public Private Partnership (PPP) Hydropower Stations In Nepal

5. Mr. Adithep Roobleak, Cultural Dimensions Of Construction Engineers In Thailand Related To On-Site Management

6. Mr. Truong Ngoc Quy, Current Practices Of Public Private Partnership In Low-Income Housing Development In Vietnam

7. Mr. Aung Chan Thar, Web Application For Contractor Claim Analysis

8. Miss Truong Thi My Thanh, Success Factors For Financial Sustainability Of Tool Road Project In China

9. Ms. Saw Sandar, Assessing Project Management In Myanmar Construction Companies

10. Ms. Truong Thi Van Anh, Special Purpose Vehicle I N Too-Road Project Development : A Case Study Of The National Highway 14 Project In Vietnam

11. Mr. Nguyen Xuan Phong, Owner's Contract Administration For Project Time And Cost Control Strategy In Comercial Building Projects

12. Mr. Duong Thanh Hai, Improving Quality Assurance In Construction : Cantho Storage Tank Capacity Enhancement Project Case Study, Vietnam

13. Miss Bich Ngoc Nguyen, Application Of Portfolio Resource Management For Construction Contractors In Vietnam

14. Mr. Le Dang Thuc, Investigation Of Change Order Management: A Case Study Of Oil & Gas Projects

Professional Master Degree (MPM)

1. Mr. Vu Van Ngu, Subcontractor Management In LPG Truck Loading Projects

2. Ms. Phan Thi Hai Giang, Sub-Contractor Management In Gas Projects: A Case Study Fo Pvgas Gas Distribution Centre Project

3. Mr. Trieu Quoc Tuan, Risk Management In Pipeline Operation Management: A Case Study Of Petrovietnam Gas Pipeline System

Project Materials Management For Telecom Steel Towers Erected Project In Viet Nam

Along with the growth of economy, the telecommunication industry also was developed to satisfy the demands for using the internet, voice, fax, data, multimedia, and entertainment of individual, community and company.

The erection for self support steel towers for telecommunication industry is one of the difficult infrastructures in Vietnam. Two main problems of telecom projects are:

1. Difficult geographical and topography conditions to access the construction sites to deliver materials.
2. Difficulties of fabricating the steel on site

These problems are different for each project since every project has particular geography and topography, and problems are not only happen for purchasing and managing materials but also in transporting materials to site.

Nguyen Huu Phuc made a case study which main objective is to find out An Effective Project Materials Management for erecting of self-support steel towers for telecom based on real conditions in Vietnam.

Conclusion

The project material management is major function in construction to assure quality, cost and schedule of project. With good way for project material management, the contractors can reduce project cost and make more profit from project.

An effective material management is not only good techniques for planning, monitoring and control of processes, materials and products at the site, office and factory but also is good function to avoid the most frequently occurring problem and the most frequently occurring place or step of problems.

The planning is the first step to do the project material management. It is a blueprint to set up sound basis for project life cycle. Due to data of planning, the activities for processes behind the planning were determined. Thus, planning is major figures to get the success of project. If the actual work does not meet the requirement of the planning for schedule or budget, the project will fail.
The appropriate organization in construction for each project and for the success depends on personal skills of members and their geographical location in the department or on the site. The skills of members in organization are very important to do their tasks.

One more thing, the purchasing in the project must connect between planning for requirement and ordering of demand for material and equipment on the site. The purchasing ensures that materials and equipment are supplied with competitive price, on schedule work and good quality. In purchasing, the relationship with suppliers and performance of suppliers are keys to have the effective material management

For the transportation, the company can save the cost through out the negotiated agreements or special agreement such as special scope of transportation work or special duty of transporters or special for handling and packaging. In addition, the survey for conditions of transportation also has the main role to eliminate the risk in the traffic.

The activities for monitoring and controlling of estimation, ordering, checking of the performance and surplus on the site are supported by requirement planning and actual work on the site. It affects project productivity and other factors in the project. Solving procedures for improving the site monitoring and controlling are requirements that the project manager must be consider.

According to the contract, the quality always is the most important provision. It involves all material management cycle and affects all project phase. Accordingly, quality assurance and control related with all responsible of contractor, suppliers and owner.

Recommendations

In order to improve actions and processes for project management in the future, from this study, some proposals are given to correct activities and reduce cost for materials in construction such as:

A plan for short interval planning, monthly planning and project planning should be written down and communicated to the related people. In planning for material management, the material that it has the high value, when comparison with project cost, must be cared first. The information for planning must be more detail and complying with the scope. Beside, historical data and job review should be collected to help us to learn from past successes and failure. It is a tool to plan with accurate data to implement the work on site.

Top leader must support the organization for project material management and have the members with appropriate skill based on the scope of work. The individual must know his responsibility and his role in the organization.

The evaluated suppliers must be checked carefully not only with their history but also their performance in the present. The price, quantity, quality, delivery time, the rights and penalties must be defined clearly in the contract with suppliers.

The materials for the project must be tested to meet the standard on the sources before using on the site. When the site manager receives these materials, they must check against to ensure the quality of material that they use for work. In addition, the procedure work must be inspected and review to ensure the quality of products.
The communication for the organization and other parties must set up with appropriate ways to connect all related people. With good communication processes, the contacts of related people will be come easily to avoid the refusing actions.

For further study, the study should research deeply on material cost variance and behaviors of workers when they use the materials on the site to get more effective material management.

His thesis abstract is copied and posted.

Abstract

The reported project relate materials management in construction and applications for erecting of steel towers based on real conditions of Viet Nam to identify an effective process of the project materials management for erecting steel towers in Viet Nam.

With using qualitative approach, the report explains more detail about project materials management when using the single case study to maintain the real conditions of materials management in the project to analyse the situations to find the problems and solution for it.

In this report, the documents will summarize the knowledge for the project materials management in project materials planning, in project materials logistic management, in supplier management, in project materials monitoring and controlling and focus on some problems in erecting of steel towers in Viet Nam.

Based on the knowledge for the project materials management and the case study, what are the advantages for the project materials management and the disadvantages are faced in erecting the steel towers in Viet Nam. For example: location, scope, size, transportation....

Besides, the analyses also provide some figures to prove the knowledge for the materials management in a logical and discuss about some effective materials management to find the conclusions. And then, the recommendations are established for the effective process in the future.

Safety and Quality Management for Construction Based on Construction Regulation and Contract in Vietnam

For the last 20 years, the political innovation of the Vietnam leaders has made the face of the whole country be changed. With the new policies of government, all of sectors of Vietnam economy have been developing strongly since beginning of decade 1990 and construction industrial sector may not be out of that movement, it has been booming to meet the requirements of economical development. In fact, construction industry achieved complete success in executing its mission.

However, in other side of success, the weakness has appeared: many accidents happened in recent years, hundreds construction workers died and injury, many construction parts and elements collapse. These accidents happened in many projects with different owners, contractors and consultants. Number of dead and injury people is very big, many times comparing 10 years ago.

The fatal accidents still happen everywhere in the whole country and many times more than decades before. Moreover, the happened accidents are not only influence to workers and projects but also to money and time. It normally takes much money to compensate the loss of workers and to repair the damages of the project and many other expenses. Besides, is takes much time-consuming for accident investigation and designing and repairing and sometime for legal questions.

Some people think they are just bad lucky of those projects due to the rate between the projects in which accident happened and total projects each year is not too high. That is worth for developing economy. Evenly they said that accidents are unavoidable. Is that true? Should we have the right to feel contempt the workers’ life when they serve for construction projects?

To have a better situation, with the supporting from studying of AIT dossier I hope that this material will give a hand to improve it analyzing every aspect of the problem in detail and then putting forward proper recommendation.

Mr. Hoang Don Dung made a study aimed to : (1) analyze the reasons of the recent constructing accidents in Vietnam which are related with the quality of temporary structure; (2) apply the regulation of Vietnam government and FIDIC contract to study these accidents; and (3) give out some recommendations to improve the safety and quality of temporary support structure in construction process.

His Conclusion

Studying occupational accidents happened in the past, we can recognize that there were two kinds of them: predictable or unpredictable. But the damages of these accidents were taken by human. A predictable occupational accident means avoidable if we do the right work. Most accidents of temporary construction structure in the past are predictable and avoidable but they have happened because a behavior of construction employees: subjective.

Many people at site often think that every temporary structure is just serving for executing a super-structure, it is not worth for long time. The executing weight loading on temporary structure is short-term load, too. They suppose that owners or customers won’t check it closely and in detail like other parts of project. In fact, some kinds of loading capacity may load on superstructure but not on temporary structure such as loads defined by probability, loads following seasons, earthquake, etc. This makes ideas of disregarding the temporary structure systems.

Combination with the conclusion in the end of Chapter 3 and my above opinion, I have a general conclusion for all happened occupational accidents caused by the quality of temporary structures at site:

In many projects, temporary structures have not been considering as superstructure in processes of designing and executing.

That means before implementation the temporary structure at site, it must be designed in detail attending the applied standard and codes. The design drawings and specification must be verified and accepted carefully by the Engineer/Supervisor as defined by Fidic terms or Vietnam Decree 209 to the superstructure.

Before implementation the temporary structure at site, its materials must be tested attending the applied standard and codes. Contractor may use old material but loading capacity must be ensured. Besides, using materials for the temporary structure must obey specification.
Contractor’s technical staff and owner’s supervisor must supervise and accept temporary structures carefully to achieve technical requirements defined by approved design and specification.

Recommendations

To solve the problems, the support of authority is indispensable. Government policies should have to regulate besides the regulations that were defined in Decree 209 (or the Fidic conditions of contract if applied) as follows:

a. Every temporary structure must be behaved as superstructure in designing and executing process.

b. Contractor’s employees have to be trained appropriately. They have to have proper profession certificates.

Abstract

Years by years, the persons who do their routine work at construction site still try to devote themselves to their jobs. Now and then there is information of a construction accident happened some where, they hear information and feel sorry for their coworkers. Then they can forget it at once because they think simply that accident was not their case; it does not relate to them.

Is that true? Don’t they relate completely and absolutely to any occupational accident though it happens out of their construction site? The answer is no because each of them is playing a roll in construction sector. Each person has his obligation of occupation. Somehow, by his opinions or activities he can help either to prevent accidents or reduce damage. He may not keep it for himself. Therefore those opinions must be written down.

This report writes about occupational accidents happened in Vietnam construction site in several recent years. The accidents happened by poor-quality and un-safety of the different temporary structure systems at the different site but basically the causation is human. They did not put all their consideration to the temporary structure because it’s non-permanent. In fact, they did design, manage, execute and check the temporary structure carelessly.

The author hopes that this report will give a more opinion to persons who do their routine work at construction site related to temporary structure systems. They will play very well their rolls at site as defined by government regulations and/or terms of Fidic contract.

Analyzing the Logistic Process for Pre Engineering Building (P.E.B) Construction

In the industrial construction projects, Erection is the last important stage of P.E.B product life cycle which deals with installation P.E.B products. This stage needs the fulfillment of previous stages such as design, fabrication, shipping to job sites. However, in the real erection job sites, especially the job sites in Vietnam, there are lots of problems happened in these stages that make erection stage being delay and can not be completed as expected.

As observation from industrial construction projects in Vietnam, the schedule delay currently becomes very popular. Among the causes of this issue, problems have occurred as a result of poor logistics supply chain network management such as:

1. Delay in delivery time of material , equipment , labor compare to plan
2. Materials were delivered inadequately.
3. Materials were delivered wrongly in type as well as differently from specification.
4. Raw materials for production main structures can not be provided enough for production.
5. Plan and schedule ineffectively that leads to inefficiency in arrangement of equipments and labor.

Mr. Le Khac Bao made a study on construction logistic for Pre Engineering Building construction where the integration of all process of designing, detailing, procurement, fabrication and delivery of finished products to job site for the accomplishment of erection work.

The objectives of his case study were to: (1) provide further insights into the arising problems from construction logistic process for erection job sites of P.E.B company as a real case study; and (2) develop specific recommendations for future improvements.

Conclusion

The results revealed that many causes come from the processes in Plant such as fabrication, purchasing or logistic deliveries, than other stages such as job site and office , and stage should be paid more effort to improve than the other ones . The office stage of engineering department could be seen as the best, but there are still more issues need to be solved.

Finally, no matter what the stage issues were in, all issues should be solved properly in order to implement the current logistic process for propose of success of P.E.B projects.

With objectives of continuous improvement, the implement of these improvements might lead to the needs of new improvements; the new similar studies will be made for implement them.

Recommendation

With the objectives of sustainable development of a new construction area - Steel structure in Vietnamese market, these recommendations should be carefully considered to maintain and improve for final result is the increasing of trade mark reputation and long term relation ship with the customers.

As above analysis, almost of issues of construction logistic process for erection are related closely with human factor, therefore , if something need to be recommended , I would like to recommend to improve which related to human factors. Hereafters are the characters might need to consider to success the purpose of improvement construction logistic for P.E.B projects:

1. Clear policy —Top management should take a leader role in commitment toward improvement. There should be clear policy from top management to support the implement process.

2. The term ‘Just-In-Time’ (JIT) — used for instance to describe the delivery of materials to a construction job site, suggests that materials will be brought to their location for final installation and be installed immediately upon arrival without incurring any delay due to storage in a lay down or staging area. The ultimate objective of JIT production is to supply the right materials at the right time and in the right amount at every step in the process.

3. Being responsible — Each people who involved into construction logistic process should be responsible to what they were assigned is to contribute their part to the success.

4. Honest — always be honest in every situation is the key to success in developing construction logistic.

5. Clear in scope of work — always make clear every thing to Customer Subcontractors as well as between internal departments to avoid unexpected conflict later.

6. By establishing a subcontractor database — we are able to know the information about subcontractors. It helps to have better understanding about sub contractors’ performance.

7. Flexible and Creation — apply the existing value and properties to increase maximum their effectiveness.
8. Looking ahead for sustainable development — doing in professional way for sustainability in development.

His thesis abstract is copied and posted.

Abstract

Erection is the last important stage of P.E.B product life cycle, to complete success this stage, it is requested the fulfillment of previous stages as the erection logistic stage. However, in the real erection job sites, especially the job sites in Vietnam, there a lot of problems happened in this stage that make erection stage can not be completed as expected, by analyzing to find out the root causes of these problems from the data, which are investigated from a real P.E.B company, base on key relevant theories, the Author would like to develop the solutions for future improvements.

Note : (P.E.B : Abbreviation of Pre-Engineering-Building )

New Urban Zone Infrastructure Development Project Risks

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.