Application Of FIDIC Contract In Bridge Project

FIDIC is a document that has been used worldwide and is constantly updated with new versions. The application of this provision was to raise the efficiency of project management in Vietnam and help the Government to improve the basis of their legal system on the Project Management. However, in practice, there are still some contents which are inappropriate and not feasible when applied to projects in Vietnam.

In order to improve the efficiency of the application of FIDIC in Vietnam, Mr. Nguyen Thu Trang made a case study on Can Tho Bridge Construction Project. The objective of his study were to: (1) analyze the advantages and disadvantages of using FIDIC as a standard contract; and (2) propose recommendations for improvements.

Conclusion

The applications of FIDIC conditions of contracts for projects using ODA in Vietnam are:
- as a basis for the competent agencies of Vietnam's research, and
- update current regulations to gradually access the international practices, as well as to complete the domestic policies to make them applicable in a feasible way.

Although there are some disadvantages, in overall, FIDIC conditions of contract are clear and it demonstrates fairness to both parties, especially for contractors compared with provisions of current contract in Vietnam.

Recommendations

For improvements of FIDIC
The process of negotiating and signing contracts for ODA projects in Vietnam today is shown in the figure below.

The proposed procedure of negotiating and signing contracts is shown in the figure below.

The following contents must be specified during the contract negotiation through the Particular Conditions of Contract:

- Two parties must identify the time(s) for inspecting the overall progress. If the Contractor does not meet the required progress at such specified inspection times, then countermeasures must be taken.

- If the Engineer opined that such countermeasures submitted by contractor are not satisfactory, or the violation of progress of Contractor after being fined the maximum rate specified in the contract, the Engineer has the right to request the Employer to transfer a part of the contract or the whole contract to another contractor. If the cost transferred to the new contractor is higher than that in the contract of the contractor to be replaced, the replaced contractor has to bear such cost.

- In order to ensure strict management of quantities in the contract, construction diaries must be accurate, specific and confirmed by the Engineer, so that, when disputes arise, their solution will be based on such diaries.

The Employer need to provide sufficient basis to convince the Sponsor to agree when reviewing the contract
For improvements of Vietnamese Regulation of Contract

Currently, the Decree No. 48/2010/NĐ-CP dated 07 May 2010 issued by the Prime Minister applied in all projects under Government’s Budget. Comparison of some Clauses between FIDIC and Decree 48 showed in the table below.

Some recommendations to improve the implementation contract under this Decree:
- Responsibility of Employer: need to specify in detail and perform strictly during contract implementation.

- Variation Procedure: The Executing Agency (Ministry) needs to expand the authorization to IA and Engineer on this issue to shorten the process.

His thesis abstract is copied and posted.

Abstract

Official Development Assistance fund (ODA) has brought a major change for transportation infrastructure system in Vietnam, starting in the early '90s. Rural transport systems, provincial roads and national highways, expressways, major bridges has really brought a new face for the transportation system, connecting and promoting the economic development of many regions nationwide.

The management and effective use of these funds are the issues that the Government always attaches importance because it not only brings economic and social efficiency, but also to create credibility with donors as ODA loans to low interest rates with aimed at "Development Assistance".

Management of Road System Construction under the General Construction Planning by the year 2020 of Cau Giay District, Hanoi City

Nowadays, the urbanization is witnessed almost all over the world and has become an inevitable trend given the increasing economic development. However, there has raised a challenge that the development of local technical infrastructures is failing to catch up with the urbanization speed, thus, failing to be a facilitator for the economic growth.

Cau Giay District is one of Hanoi’s newly-developed districts, which has been recorded with a high-speed urbanization level and a lot of newly-built street and road systems. However, a lot of weaknesses from the district’s road systems have revealed. These problems have become increasingly challenging especially given the growing urbanization process and economic development of Cau Giay district. Therefore, it is essential to thoroughly study the current situation of Cau Giay’s road construction and planning to find solutions for more efficient construction management and planning of the district’s road networks as well as better in accordance with the general construction plan at the present and in the future.

Mr. Le Van Thu made a case study which objectives were: (1) analysis and assessment on road system construction under the general construction planning of Cau Giay District, Hanoi City; and (2) proposal for management and planning solutions to improve efficiency of road system construction under the general construction planning of Cau Giay District, Hanoi City.

Conclusion

Some new roads have been planned and developed in accordance with the approved planning, forming beautiful, modern and synchronous streets for technical infrastructure and landscape, settling difficulties occurred from the urbanization process. Management of construction planning has been regulated and improved suitable to the practice for the first step.

Beside the attained results in the road system management construction planning, there are still shortcomings to be settled: construction of many roads is in confusion, not in accordance with the planning; the spontaneous building of works along streets still exists and is not timely prevented. The reality requires strengthening management of construction planning of the road system re-organization of construction administration agency, improvement of inspection and supervision of construction in conformity to the planning, supplementation and completion of regulations on disciplines for violations in road construction.

Therefore, we have to correctly assess the real situation of the construction and development of the road system subject to the construction planning to give solutions for effective management and construction, contributing to and accelerating the development of Cau Giay District in coming time.

Mr. Thu’s thesis abstract is copied and posted.

Abstract

The district of Cau Giay is one of Hanoi’s districts achieving high-speed urbanization level. Along the district’s urbanization process, many new traffic systems have been constructed and developed, contributing to renovating and modernizing the general urban picture of Hanoi in general and of the district in particular. However, beside the achievements, there remained a lot of weaknesses in the district’s construction and management of urban traffic systems, especially in that of road systems. This study points out the significant problems existing in Cau Giay’s construction and management of road systems. Among those is the development of road systems in the districts are not catching up with Hanoi’s current urbanization process.

In fact, the construction and management of urban landscape along the district’s streets is not efficient. The local technical infrastructures in some areas of the district are not modern and synchronous enough. There remain a lot of problems in the activities of technical infrastructure construction management in accordance with the district’s general construction plan. Based on the facts and figures, the study refers to the theories to describe the roles of road systems in the city’s urbanization process as well as the role of planning road networks in the city’s general urban plan. It also mentions the requirements and legal basis of road system management under the general construction plan.

In the following part, the study use Cau Giay as a case study for this topic, in which solutions to all the existing problems in the district’s road systems management are analyzed so that the road system development is in accordance with the district’s general construction plan by 2020.

To the study’s conclusion, it is essential to build traffic systems synchronized with the district’s other technical infrastructure systems. At the same time, there need to pay more attention in improvement of the local residents’ compliance with the regulations on construction. In addition, the study also emphasizes that importance of building short-term investment plan within the long-term plan for road system construction and attract the other investment sources beside the state budget by encouraging the various investment forms such as BT (Build- Transfer), BOT (Build – Operate – Transfer) and BTO (Build – Transfer – Operate).

MPM Field Trip in AIT-Thailand

Arrival at the Suvarnabhumi Airport on February 26.



First lecture on Commercial Course under Mr. Burin on February 27.



First site visit: Perfect Part Rama V Project on February 28.



Briefing at the MRT Purple Line Office on February 28.



Second site visit: MRT Purple Line (Bangyai-Bangsue) on February 28.



Lecture on Real Estate under Dr. Theerathon on March 1.



Lecture on Highrise building under Mr. Noppadol on March 2.



Third site visit: Pruksa Precast Factory on March 3.


The students had 2 more site visits at Highrise building Bangkok on March 3, and at Dow Chemicals on March 4.

They also had a lecture in Petrochemical under Mr. Hussarungsri, Mr. Chaiwichit and Mr. Kanchai with Mr. Kiatkhajon who served as Facilitator, and lecture in Applied Management in Airport Project under Mr. Hoang Man Chi.

Development Infrastructure Program to Support the Van Don Economic Zone

Infrastructure plays an important role in the economic development of Viet Nam and Economic zones. Since Van Don Economic Zone will focus on maritime tourism, financial and trading services unlike most of the Economic Zones which focus on industrial development, a wide range of economic activities are permitted in the VDEZ.

The development of utilities infrastructure is a principal prerequisite for the successful implementation of the Van Don EZ. Mr. Pham Van Thanh made a case study which objectives were to: (1) investigate and identify key infrastructure for developing Van Don economic zone; (2) determine the overall progress of the program and analyzing the feasibility of the program and the critical difficulties in capital investment; and (3) propose solutions and recommendations from the state authority’s point of view for developing infrastructure system.

Conclusion

The case study had analyzed the development of infrastructure at the Van Don economic zone, which is defined as dynamic economic development and regional areas. The analyses revealed that:
• Infrastructure development plays a decisive role in the development of economic zones in particular and economic sector in general.

• The investment in infrastructure construction needs a large and sustained fund, while the project has long life cycle, many risks, capital recovery is slow, and less attractive to investors.

• At the macro level, Government will play a major role in investment and development of public infrastructure, because the investment in infrastructure development is low financial benefit but high in Socio-economic benefits and security social welfare.

• State funding is not enough, thereby diversifying investments fund is necessary solutions for allocation of the risk of capital scarcity in the future.

Besides making uniformity of implementation planning, analysis to develop sustainable financial resources for infrastructure development is a critical condition. Diversify forms of capital to increase capacity to mobilize capital in the application of financial modeling is essential. Special issue of privatization, project finance, public private partnership should be carefully considered depending on the maturity level of the economy as well as the sustained commitment of the government through the mechanism management.

Advanced methods can be successfully applied in developed countries but by no means will succeed when brought into Vietnam without appropriate adjustments, there are reasons for differences in the provisions of policies and economic conditions - social, especially when developed countries already have experience and maturity level of the market economy.

The adoption and implementation of the program should have a general policy relating to all political system in which government plays a key role in forming the mechanism.

Recommendation for Improving Developing Infrastructure Program

Within the scope of research at the Van Don economic zone, the author proposes three other group solutions in policy mechanisms to ensure the viability of the programs such as:

1. Source of State Capital Financial Risk

• Government needs to approve the plan capital allocated for investment in infrastructure of Van Don economic zone in a 5-year cycle. This program needs to be passed by National Assembly.

• Government should allow Quang Ninh province actively planning and using land fund along the highway to create capital from land use fees for development infrastructure.

• Allows the Quang Ninh province to keep and use tax revenues in Van Don EZ to invest in infrastructure construction.

This policy will ensure the resources of the state capital and overcome the risks of capital investment.

2. Government Support Public Infrastructure investors

• Complete planning and publicizing a list of infrastructure projects, which required investment.

• Government should issue legal and Regulatory Framework of PPP, PF, Concession model, to ensure the objectives of attracting private sector capital in the country and foreign investment in developing infrastructure to provide public services.

• Governments should publicize the commitment when establishing forms of cooperation in Public-Private Partnership or Private public infrastructure project.

• Create all favorable conditions and methods to ensure the recoverability capital and interest of enterprise or SPV company.

3. Government Support Business investors

Development of infrastructure for economic and social development. Economic and social development, and business development are the keys to making business in public infrastructure a success. Thus, promoting business investment has an important role but might also the cause of infrastructure investment.

• Special tax incentives for investment projects in the VDEZ, profit repatriation and reinvestment incentives.

• Special land tax and leasing rates.

• Simplified and fast approval process for key development initiatives.

• Special incentives and simplified approval process for foreign skilled workers.

• Land allocation complete with infrastructural facilities provided to expedite development.

• A more liberal policy on housing ownership and lease arrangements for Vietnamese, Overseas Vietnamese residents, Permanent Residents and Foreign Investors.

• A preferential policy to regulate sources of revenue and increase reinvestment capital.

• To establish special development funds to promote development initiatives in Van Don.

His thesis abstract is copied and posted.

Abstract

Vietnam is developing country having population of about 90 millions. From 90s year of 20th century, After 20 years of renovation, Vietnam has achieved important milestone in economic development, politics, society as well as foreign affairs such as remaining sustainable and high development rate (average 10% per year), stable politics, attractive and potential market to foreign investors. Nowadays, Vietnam has become member of UN, WTO and many international organizations and forums, especially playing important role in ASEAN. Vietnam has never have great opportunities and challenges to develop country like now.

Vietnam also located in trading hub area and economical corridors of region. In order to utilize such advantages with consideration to importance of economical integration to provide equal development in country wide, Vietnam has established 15 costal economical zones in decision 1353/QD-TTg dated 23 September 2008. It will be cores and driving forces for economic development of Vietnam.

However, one of basic and key matter obstructing the development of Vietnam like other economies also, is the lack of financial capital to improve the shorted infrastructures Providing proper policies and directions to mobilize capital sources investing in infrastructure development in economic zones is the key of Vietnamese economic development policy to promote the effects of such economic zones.

This research focus study on Van Don economic zone of Quang Ninh province, which is one of costal economic zone established in year 2007 according to decision 120/QD-TTg dated 26 July 2007, and having administrative and natural area of 2171km2 and 553km2 respectively. It is northern costal economic zone having many potentials regarding to tourist, luxury recreational, industry and high-tech industry, and free trade. Study of mechanism, funding program of infrastructure development support for this economic zone is the objective of this research.

Schedule Planning and Control in Engineering, Procurement and Construction Project

In Vietnam, many building projects funded by government experienced budget overrun and schedule delay. The main reason is lack of knowledge in applying project planning and control, and also how to use the proven principles and methodologies of modern project management techniques to improve the projects performance. In order to understand the impact of project planning and control in project implementation, a case study was explored, and its results show the strengths, weakness, and consequences. However, there are also some problems that can occur when applying project planning and control such as cultural thought, political and social systems, lack of knowledge and inexperienced consultants. As a result, the negative effectiveness of unsuccessful practice of EPC project schedule planning and control can lead to more budget overruns and schedule delays.

Applying modern project management techniques in schedule planning and control for EPC project which funded by government is very difficult. It is important to explore the practice of EPC project schedule planning and control. Therefore, Mr. Vo Si Hoai made a case study on city hall project to increase a better understanding on schedule planning and control systems, and how it can be applied effectively in construction projects.

The objectives of his study were to: (1) identify schedule planning process in EPC project; (2) study and develop the schedule of each stage in EPC project; (3) develop schedule planning and control in EPC project; and (4) identify the potential problem, consequence and solution in EPC contract, also identify the advantage and advantage as suggestion should apply the EPC contract for which of project well as.

Conclusion

The case study found out that there is similar EPC project planning strategy from local EPCC. It can be concluded that EPC project planning strategy in terms of design, procurement and construction from EPCC has been aligned and organized, but, in terms of schedule aspects, it has been yet organized. Major improvements are needed for the EPC project planning strategy in EPCC in order to improve the management performance. In contrast, it can be concluded that the EPCC planning strategy has been aligned and organized in all aspects. However, there are some major points, which need to be improved in order to strengthen and continually improve the strategy performance. This study found out the good points and the “not” good point yet of schedule planning and control as shown in the table below.

Recommendations

Re-evaluate current project planning e.g. schedule planning and control in project implementation, and explore the possibility of training for weak areas. Encourage an expert in project management to explore ways to fund and put in place a specialized body of knowledge, potential certification program and cooperate with world’s project management community for the advancement of professional and its disciplines.

The recommendations to improve the schedule planning and control are shown in the table below.


His thesis abstract is copied and posted.

Abstract

Nowadays, construction market is growing rapidly in Vietnam so that the needs of knowledge of professional project management are very necessary. Many high-rise building construction projects funded by government are implemented using traditional method for project management. Lacking of knowledge of applying the proven principles and methodologies of modern EPC project management techniques is one of the reasons that cause project delay and cost overrun. Schedule planning and control is one of the factors that project managers have a lot of interest. By investigating and analyzing the weakness, and consequence for EPC project schedule planning and control in public building project funded by government, the result show the reasons cause schedule delay and cost overrun are the method delivery, using professional project management software, and lack of modern EPC project management knowledge of Vietnamese project manager. Therefore, the government should encourage professional with experience in project management to explore ways to fund and put in place a specialized body of knowledge, potential certification program and cooperate with world’s project management community for the advancement of professional and its disciplines.

A Study on Risk of Delay in Power Plant Projects

During 35 years of recovery and development, Vietnam economy has become stable and strongly developed. Many factories have been opened and producing a large quantity of goods for domestic and international market. Therefore, the demands of electric power become essential. Understanding this huge demand, Vietnam has focused on developing the domestic power production.

Looking at the picture of Power development in Vietnam, and with the characteristics, complexity and high rate of construction and installation, all of the Power project must be done under EPC Contract. EPC contract is the best solution that has been selected for such project in Vietnam. Like any other types of Contract, risk of delay also occurs in EPC contract under different stage such as:
- Engineering: Delay caused by change in design, lack of input data, and mistake in design
- Procurement: Risk of transportation, shortage of material, and cost fluctuation
- Construction: execution capability, inappropriate construction management, and bad coordination

There are a lot of participants who take part in Power Plant Project, and each of party plays a different role and therefore carries a different potential risk of delay. When delay occurs, it will not only affect the time schedule, but also the cost, and quality of project. Understanding delay factors and root causation is a foundation to help Vietnamese companies to develop their project management system, thus to avoid risk of delays in future projects.

Mr. Nguyen Le Minh made a case study on Nhon Trach 1 combined cycle power plant project in Dong Nai, Vietnam. The purpose of his study were to: (1) identify & classify delay events in Thermal Power Plant Project; (2) investigate major delay events, detail analysis to find out delay behaviors and main causations; and (3) propose recommendation for improving so that such delays and causation factors can be prevented for future projects.

Conclusion

From the case study of Nhon Trach 1 Power Plant, out of 10 major delays that have been found out, there are 5 delays which are critical to the whole projects. These factors are events in engineering stage, procurement stage, and construction phase. In these 10 delays, 4 factors are caused by owner, 1 factor by consultant, 3 factors by unforeseen condition and 4 factors by contractor.

By analyzing situations and key factors, it was discovered that the major delay behaviors includes:
i) Owner’s failure in making timely decision
ii) Owner’s failure in following up contract commitment
iii) Consultant’s mistakes in design/specification
iv) Contractor’s mistakes in project scheduling, planning
v) Contractor make fault in project management
vi) Lack of cooperation among Parties
vii) Unforeseen/unpredictable situations causing delay

These factors are also classified into:
i) Technical factors: 5 events
ii) Managerial factors: 4 events
iii) External factors: 3 events

We can see that the causations come from not only Contractor but also Owner and Consultant, which postulates a gap in large scale project management of Vietnamese companies (in the role of either Owner, Consultant or Constructor) when being compared with international level.

Although the study may not present typical situations for all Power Plant Projects, it still demonstrates some delay causations that properly happen in power plant projects in Vietnam, including:
i) Inability of large scale project management from Owner, Contractor and Consultant;
ii) Being inactive in problem solving due to bureaucracy mechanism; and
iii) Parties’ interaction which is based on personal relationship rather than contract commitment.

For each delay factor occurred in this project, and to prevent such root causations in this project that may re-occurs in the future, below are recommendations which have to be considered.

i) Establishing a Site Coordination Board: Most of problems can be reduced or eliminated impacts by strengthening cooperation among Parties. Therefore, it’s very important that the project should have an efficient information transmit and coordination system. It should have a Coordination Board comprises of members of all Parties (Owner, Consultant, Contractor, Subcontractor), this Board makes sure that information and coordination will be transferred from top managers to site supervisors. Coordination Board is supposed to take responsibility of analyzing any arising problem and suggest most suitable solutions.

ii) Employing advance management technology: Most of Contractors in Vietnam haven’t fully developed a total management system. Instead of this, they usually use human experience and old management mechanism which is mostly based on paper and meeting work. This system is hard to manage a huge information and activities of large scale projects. To fulfill large requirement of power projects, Contractors should apply advanced management technology (i.e. Primavera) as the first step; and build up an own management system for their long-term development.

iii) Improving contract management competency: Most of local companies consider Contract just a binding of cost and payment. In fact, Contract binds responsibility, authority, scope of work and of Participants. Learning from the case study, Owner, Consultant and Contractor sometime cannot comply with Contract commitment, which cause delay in the whole projects. Hence, it’s very critical for domestic companies to understand and comply with the contract thoroughly.

His thesis abstract is copied and posted.

Abstract

In recent years, construction industry in Vietnam has been developed dramatically, contributing to national development. Besides civil construction, infrastructure, residential development, there are a large number of Power plant projects are and will be implemented in the next 20 years.

Similar to other types of construction project, power plant project must also deal with risk of delay on construction stage. As a large scale project with thousands of activities, power plant project requires a very carefully planning, scheduling and monitoring to avoid these risks
There is a fact that in reality, implementation of power projects usually goes behind the schedule, causing a huge loss to social economy and obstructs the development of local construction market.

The purpose of this report, by studying a real case in Nhon Trach 1 Power Plant project, is to analyze some main factors that cause delay in such power plant projects; from that, to suggest solutions to prevent occurrence of same delays in future projects.

A Feasibility Study of Curtain Wall Testing Company in Hanoi

Hanoi, the capital city of Vietnam, has been growing very fast since 1995. The construction in Hanoi booms with a great number of high-rise buildings, which significantly contributes to the new face of the transforming city.

The architectural elevations of those high-rise buildings are almost glass, and curtain walls are typically used. The main features of curtain walls are noise insulation, anti-heat, water proofing, stain resistance, high wind pressure tolerance, easy maintenance and energy saving.

However, what worries developers and contractors the most, is the quality of curtain walls. While there are a large numbers of suppliers – both joint ventures and foreign ones – there is no official standards for curtain walls since Vietnam has just recently exposed to this new technology. As a result, developers and contractors of each individual project apply their own standard, which makes it very difficult to confirm and identify the quality of the products.

Unfortunately, no laboratory can carry out this testing as there lack of equipment, technology and commonly accepted standards. Owners have to take samples to overseas such as from Korea, Hong Kong or Singapore for testing, which is very costly and time consuming.

As no current wall test is being conducted in Vietnam, there is a need for the establishment of a quality testing company.

Some considerations include:
(i) whether such a company is feasible and profitable,
(ii) how to process this kind of testing company technically and economically,
(iii) Whether the demand is high, and what are architecture demands and trends?

Mr. Nguyen Duy Duc Thu made a case study which objectives were to: (1) develop technical and economic feasibility study of Curtain wall testing company; (2) identify demand (volume and market trend) and the needed supply of curtain wall testing company in Vietnam; (3) identify technical requirements of curtain wall testing in Vietnam which includes testing specifications, labs and equipment engineering knowledge competency and quality control; and (4) develop business plans and marketing plans.

Conclusion

The table below summarized the conclusion of this study.


His thesis abstract is copied and posted.

Abstract

Nowadays there are many high rise building had been built in over Vietnam, especially in Hanoi. The building was using for many find of propose such as office building, commercial building, hotels… and others. But they had a common that is using the curtain wall for elevation.

But there’s very difficult in order to testing and qualify this kind of material.

The thesis is focus on feasibility study of curtain wall testing company, under the perspective of technical requirement, business plan and marketing plan.