INVESTMENT COST CHANGES FOR AGRICULTURAL PROCESSING PLANT

by

Nguyen Nam Cuong

Abstract

Vietnam is a developing country with about 70% of the population works in the fields related to agriculture and rural. Through a process of development since the Doi Moi to now, Vietnam has become one of the world’s leading exporters of rice and many agricultural commodities such as coffee bean, cashew nut, black pepper… However, almost of agricultural commodities are exported in raw material types or semi products. On other hand, the procurement and exporting system has not been paying attention enough to develop correspondingly.

As the result, the value of exported agricultural products of Vietnam is normally underestimated in the international markets because of low quality. The low margin of agriculture products, in turn, contributes to increase income gap between rural and urban area. Therefore, one of the key objectives of the Vietnamese Government is to develop systems for storage and processing of agricultural products, improving production and processing capacities, autonomy in purchasing and export of agricultural commodities with quality, contributing to improving Vietnam’s position on world agricultural markets.

Executive summary  

Rationale of research

This research has been conducted to find out the way for capital estimates and analysis of estimates

Through frame work, the focus of evaluation is on financial problems analyze and change in actual cash flows and why these changes occur.

Objectives of study

To propose a solution through analysis, doing general feasibility study of project and analysis, evaluation of project cost changes.

Methodology

The qualitative approach has been used to resolve issues during construction to achieve performance.

The process includes data collection, processing and data analysis. Considering mutual relationship inside and outside using standards, normative in accordance and propose solution.

Findings and conclusion

Investment project being important document for owner to assess investment decision, owner can see big picture of project.

However the important factor in investment project is construction cost, which always seen with bias. The feasibility study is always dependant on owner and consultant and project management methods so as to reduce risk in cost fluctuation. And owner can control cash flows.

 List of factors affecting investment project

• Expertise and experience in project management of the Owner.
• The financial capability of the Owner.
• The professional ability and knowledge related to the field of investment consultancy and project design.
• Ability to coordinate the implementation of tasks between the Owner and contractors design and consulting in the preparation period of investment.
• Ability to coordinate between the Owners and construction contractors in the construction process.
• The professionalism of the construction contractor.
• Mechanisms and incentives to support investment in the locality.

The agricultural processing plant from initial stage to implementation is long process with constant change; thus success of project depends upon owner control on such movements and ensuring quality and time of investment.

During the project, the change in cost is often by different reasons, divided into four stages.

1.       The cost of construction in terms of rates of investment costs for Feasibility Study.

2.       The cost determined by the total estimated cost.

3.       The value determined by the construction contractor's proposal is approved.

4.      The actual value of the settlement package.

It is almost impossible to determine the final cost of each package at construction stage except package having fix-price, and change in cost can only be observed in above three steps.

For the changes in fourth stage that can determine final value,it is necessary to consider risk in construction process

·         Project area actually decreased compared to the record.

·         The detail design is inappropriate to the construction.

·         Price volatility of construction materials.

·         Difficult to find workers and construction equipment.

·         The impact of weather on the construction process.

·         Fluctuation of currency exchange rates.

The owner can have actively appropriate countermeasures, to minimize the negative impacts, including the choice of contractual form, in accordance, and contract with the consultant of supervisor, design consultants and contractors to strictly control the changes arising in the construction process. These are also the mission of Project Management.

MPM Can Tho 2013

OWNER’S PROJECT SCHEDULING STRATEGY

A CASE STUDY OF

SHB - DA NANG F.C SPORTS AND TRAINING COMPLEX CENTRE PROJECT 

by

Vuong Hoang Thang

Abstract

A successful construction project is the one that completion within destined time, budget and quality. Project scheduling and project scheduling management are very important parts of any project as they provide the project team, sponsor, and stakeholders a picture of the project’s status at any given time.

The Project schedule is the roadmap for how the project will be executed. A successful construction project is also meaning a successful project scheduling and it is executed in the boundaries schedule's creation.

This report review project scheduling and management theory, time management functions and delay risks address into scheduling management commonly applied in developed countries and developing countries and Vietnam.

The report study the scheduling and management strategy applied in a construction project in Danang city, Vietnam. From the study case, the report identifies and analyses the practical application of project scheduling management functions and strategy. Then, reviews practices of the project scheduling management and suggest some improvements strategy can be applied

Executive summary 

Rationale of research

This research has been conducted to identify scheduling problems and propose good project scheduling practice and strategy for the owner.

Objectives of study

To identify project delay and risks of project delay in construction stages, and approach to schedule creation to propose owners strategy for project scheduling management.

Methodology

The exploratory research method is used to study delay and understand factors that affect project scheduling management.

By undergoing into project case and practice implementing in scheduling management .

Findings and conclusion

The administration of schedule is the most significant concerns of project management for  project owner, as an investor, mainly concerned about the profitability of investment.

The project scheduling management is resulted from the frame of project management planning and related directly to time aspect in each project.

considering the review of project schedule management, analysing the practice in Project of SHB-Danang Sports and Trainings Complex Centre, 1^st phase, a project sponsored by non-state owner resources. The learning from the study is that from the initial stage up to now this project is applied some project management tools and methods to manage cost, time, procurement, etc. And the same to other common projects in Vietnam the scheduling management and time management is always a big challenge to the Owner.

The Owner of project (SHB) wished of completion construction and moving the club into new centres at the end of September 2012 latest. The construction duration is planned maximum of 8,5 months from the earth works till completion the 1^st phase. However, the actual performance is slow than schedule and now estimated delay about 5 months hopefully.

The project was traditional design bid and built, each participant team was working well at their responsibility and used computer tools to reduce risk.

But the major problems were in communication and decision making which caused delay and un-professional attitude from owner side.

The team got some unrealistic milestones but overall project management unit from owner side is weak.

Recommendations

To put project schedule on realistic channel owner should focus on following points

·         Set & manage Buffer in the time frame and activities duration.

·         Reduce dependencies by applying tools and methods such as: WBS, OBS, CPM, LSM, PERT and delay risk management.

·         In the estimation of task / activities, should focus on the Critical path, LOB.

·         Develop communication and report mechanism with some tools such as EV, SV, in order to update and adjust baseline making decision of the Owner.

·         Set penalty/ award provision in the contract both to the contractor and the designer.

·         Put realistic milestones into the contract and general time frame and bound to all the project's stakeholders (Owner, PMU, PMC, and contractor, and consultants, designer).

SEMINAR on 17 Nov 2012

NEW ISO 9000 IMPLEMENTATION IN CONSTRUCTION COMPANIES

Presented 

by 

Mr. Wiboon Tachaipasakul, Specialized Consultant and Registered Auditor in Construction Project Quality Management and Development of Productivity, Massbiz Co.,Ltd. Thailand. 

Mr. Wiboon explained briefly how ISO 9001:2008 is applied to establish and implement the QMS for construction industry for capturing on project-oriented concept in order to meet the specific needs to each construction project. Besides, introduction of Integrated Management Systems (IMS) that combined ISO 9001, ISO 14001, and OHSAS 18001 into a single management system and new ISO 9001:2015 in the construction industry was discussed as well.

Happy VN Teacher's Day!

 

SEMINAR

NEW ISO 9000 IMPLEMENTATION IN CONSTRUCTION COMPANIES

CAN THO

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

By

Le Van Thu

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 analysed 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 firms such as BT (Build- Transfer), BOT (Build – Operate – Transfer) and BTO (Build – Transfer – Operate).

Executive summary

Rationale of research

This research has been conducted to identify problems in road system of Cau Giay District, Hanoi City.

Objectives of study

To study and analyse, general planning of roads in Cau Giay District, Hanoi City. To suggest improvement in the efficiency of planning.

Methodology  

The exploratory research method is used to study road planning and management Cau Giay District, Hanoi City and the current Vietnam regulations for road planning and management.

Findings and conclusion

Management of the road system under the construction planning is a complicated system involved with different sectors. The road system construction planning management may be assessed comprehensively as follows:

            Attained results: 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.

            Shortcomings: 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.

To conclude, it is very necessary to manage the construction of road system in Cau Giay District under the general construction planning in order to improve the living standards, conforts and create favourable environment for urban inhabitants.

Recommendations

·         In the investment and construction of road system, besides the construction of new urban areas, it must be focused on the investment of infrastructure reform with existing construction area.

·         Routes must be defined the heart and boundary line that have been approved and closely managed, avoiding re-occupying and violating boundary line.

·         Positively taking part in the completion of legal document system on management of urban construction planning as well as management of urban roads; proposing difficulties during the execution; simultaneously, increasing the work of construction management as planned.

·         Increasing capacity of management, adding power and responsibilities of ward-level authority in the work of management of road system construction and management of road boundary line.