In today's business world, corporations must be able to react to the changing market needs rapidly, effectively, and responsively. They must be able to reduce their time to market and adapt the changing environments. Decisions must be made quickly and must be done right at the first time. Corporations can no longer wait their time repeating tasks, thereby prolonging the time it takes to bring new products to market. Therefore, completing a project faster than the normal duration is always a challenge to the management of any project, as it often requires changes in prototype.
The Vietnamese Petroleum Industry is also passing through a very dynamic business environment due to the liberalization of many Government policies and the introduction of multinationals, the participation of International major players and the pressure of globalization and attracting Foreign Direct Investment. Development of Petroleum facilities for handling petroleum products is one of them. Moreover, these projects are required to be completed in faster duration compared to normal schedules to be vital and remain competitive, to get faster return on investment, and to give higher return with longer project life. However, using conventional tools and techniques of project management, it is impossible to handle the problem of reducing the project duration from a normal period.
On the other hand “Increasing competition and the growing technical sophistication of construction processes as well as the size of some projects has led to a growing importance of partnership agreements and strategic alliances in bidding for and implementing construction projects” (Construction Industry Institute - Hong Kong, 2002).
Same approach can be applied to the Client’s project as eventually the success of the subcontractors would be the Client’s success especially for the EPC Oil and Gas Project. Project Sanctions and major contracts usually have a lengthy process requiring various approvals from the Government Agencies.
Mr. Nguyen Quoc Hanh made a case study on “Client’s Project Management Strategy for Fast Track EPC Oil & Gas Project”. His study proposed the Client’s approach for the use of concurrent engineering/ fast track approach and alliance sprit in managing projects for radically reducing project duration. The phases of the project are accomplished simultaneously instead of in a series. The required approvals from the Government and relevant authorities are acquired much quicker with the involvement of local partners from the start.
The complexities that arise in managing projects are tackled through management of Government’s approval process, restructuring project organization, management of subcontractors and independent contract packages, improving management commitment, strengthening project-planning activities, ensuring project quality, managing project risk objectively and integrating project activities through information management systems.
These would not only ensure completion of projects in fast track, but also help to improve project effectiveness in terms of quality, cost effectiveness, long-term relationship building, etc. and in turn overall productivity of the project organization would improve.
His study’s objectives are to explore Client’s strategic approach to manage a Fast Tract EPC Oil & Gas Production Facility Development Project including: (1) management of Government’s approval process; (2) management of subcontractors via a strategic Alliance sprit; (3) management of interfaces and overlapping between contract packages over widely separated geographical areas; (4) contract type and commercial compensation scheme selection and breakdowns of contract packages; (5) project organization, authorization and management commitment; (6) communication and collaboration; and (7) procurement and centralization of logistics supports
Conclusions:
Project Owner required preparation
The conclusions he made based from his study is that to ensure a successful implementation of a fast track Project, the project owner must (1) have full support from its Stakeholder and the Government to the implementation of fast track concept; (2) have a strong leadership and commitment from senior management through out the execution of the Project. The availability and competency of the Project Management core team also contribute an important factor during the initial/ preparation phase when the rest of the team will be mobilized. As many cost-schedule trade-off are may be required and; (3) must prepare a strong financial status and willing to accept or compromise some commercial terms.
As the procurement is under Project Owner’s responsibility, which may not be a common practice, the Project Owner must either public its procurement plan or open an workshop/ briefing to all potential Suppliers to ensure the best interest of the Suppliers. The Suppliers might be able to provide a better offers if they are more confident on the Client’s creditability once the overall picture of the project is presented or published.
Review the requirements of the Petroleum Contract that they may have with the Government Agency to ensure the future compliance or any required exceptions/ changes, which must be accepted by Stakeholders/ Government Agency for the implementation of the Project.
Anticipated Obstacles/ Barriers
The Oil & Gas Client/ Project Owner must consider carefully the terms/ conditions/ requirements of the Petroleum Contract that they may have with the Government Agency as some Petroleum Contract require unanimous consents from all involved parties. Different understanding on fast track requirements within and from Client Project Management Team and Top management, Stakeholders, Primary Contractor, Sub-contractor, which lead to inappropriate response (i.e. provide/ supply inadequate resources or over react in spending money to protect the project schedule un-necessarily).
Extra costs are expected in terms of cost-schedule trade off to meet aggressive schedule and overlapping between project phases/ work packages, which would cause rework and cost overrun. It will be difficult to justify those extra expenses at the end of the Project due to different understanding of the fast track requirements and reasonability of the cost-schedule trade off. Therefore, close communication between Project Owner and Stakeholder/ Government Agency is required.
The selection of Alliance/Partnering concept may lead to the contractual differences came at the end of the contract and it would take longer time for closing out of the Project.
Lastly, it will not be easy to benchmark the effectiveness/ successfulness of a fast tract project as the complexity is varied from project to project.
Recommendations
He recommended that that the constancy and level of effort should be maintained not only from the start of the Project when the gaining on the schedule could have been significant but following up the tailed end of each work phase is not less important. The lack of effort and concentration by Client in following up and pursuing the completion of the engineering tailed end works will lead to the delay of the construction works. Impact of late engineering was a problem both contractually and practically. Delaying the start of the project would probably have more impact on overall schedule than engineering/ fabrication overlap.
His thesis abstract is copied and posted.
Abstract
Completing and delivery a project faster than normal required duration is always a big challenge to any Project Management Team and often demands dynamic approach and paradigm shifts. Many projects are required to be completed in faster duration compared to normal schedules to remain economic vital, to get faster return on investment, and to give longer project life. The conventional techniques of project management are impossible to handle the problem of reducing the project duration drastically. This project report provides an introduction to, and a practical exploration and evaluation of Client’s fastracking approach to manage an Oil and Gas Project.
This final project report presents and explores the Client’s dynamic approaches from the conceptual planning, managing contractors via contractual arrangements and strategic Alliance spirit, managing the Government’s approval process and the use of concurrent engineering concept for radically reducing project duration. The phases of the project are accomplished simultaneously instead of in a series across various areas. Along with its benefits, fast-tracking project delivery also has greater potential to impact the project development process than the traditional method. This final project report also presents the key enablers as well as required preparation and obstacles have been encountered during the actual execution of the project.
These approaches if successfully implemented would not only ensure the completion of projects by the required completion date, but also improve project effectiveness in terms cost effectiveness and in turn overall productivity of the project organization would improve.
Tuesday 14 July 2009
Monday 13 July 2009
FAST-TRACK PROJECT DELIVERY STRATEGY FOR CIVIL ENGINEERING AND ARCHITECTURAL HIGH-RISE BUILDING PROJECTS
Fast Track is known as a method of implementation where construction and design phases are overlapped to expedite completion of the project (Resource for OR design and construction). In addition, it is not only an activity that is simply done fast, but more than that, it refers to an overlap on stages of design and/or construction before other stage is done with the purpose to get an earlier project delivery.
Recently, Fast track has gained the popularity in current project delivery strategies and the popularity keeps on increasing due to its potential advantages in improving project performance. An effective fast track project can bring advantages including: (1) reduced time; (2) lower cost; (3) reduced burden for the project owner by contracting all responsibilities to a single party; and (4) invisible benefits by increasing the reputation of the owner thus offering further business opportunities in a competitive market
On the other hand, fast track project also contains some challenges like: (1) complications and difficulties in; planning procedures for approval; transfer of information; feedback, and evaluation documents (2) requiring a very strict cash-flow; prompt payment; capital resources; (3) requiring strong and experienced manpower resources, especially in project management
Ms. Mai Do Thuy Dung made a case study on “Fast-Track Project Delivery Strategy for Civil Engineering and Architectural High-Rise Building Projects” which goals were to: (1) identify a Fast Track Project Delivery Strategy which is applicable for High Rise Building Projects (private fund); (2) identify advantages and also threats to quality, budget and schedule during applying fast track project.
She concluded that fast track project delivery is a strategy for many high-rise building projects in Viet Nam. By using fast track project, the project owner can gain benefit in terms of earlier revenue and financial return. Aside from that, the unquantifiable benefit is from the improvement of company reputation in the market and the risk on construction can be earlier transferred. Furthermore, due to market demand and its complication, the need of an early deliver project is increasing evidently, especially for high-rise projects at where the footprint area is limited but carries several complicated task at the same time.
Even though fast track delivery is a current strategy for high-rise building, however, there are some problems that can occur when applying fast track due to lack of knowledge and inexperienced consultants. Therefore, the negative effectiveness of unsuccessful fast track projects is significant and can lead to more delay and cost.
The most difficult factor of all fast track projects is negotiating the contract between the owner and contractors and determining price changes. If it is fixed priced contract with changes to be paid by claim each time, it would cause the total cost of the project to overrun budget. But a cost- plus contract with a maximum guaranteed price could cause unnecessary difficulties for the contractors.
On the other hand, fast track delivery gives a limitation to the project owner's ability to make design changes once construction has started. Starting construction before design works are completed can lead to a large number of change orders. More than that it may cause redesign or demolishing and rebuild.
A fast track project method is not a must for all projects, as it depends on each project type and business strategy. The project owners should carry out a benefit analysis and have a business target to decide which strategy is suitable for their case.
Therefore, experienced consultants and project managers should provide a suitable plan for project owners based on analyzed and feasibility studies.
Ms. Dung’s recommended that in using fast track project methods, individual must know how to apply and manage these methods together, and analyzing its strengths and weaknesses.
Her recommendations for efficient fast track project are as follows:
1. A proper and successful fast track project requires skillful and experienced consultants and project management. When a project owner decides on fast track project, designers and contractors should be selected according to their experiences in this construction approach. To make this decision, the project owner should consider using a pre-qualification process to evaluate a contractor's experience.
2. Fast track project requires a clear and simple organization chart and responsibilities, in order to minimize the project confusion about line of approval, comment, who is in charge of what. If the fast track is not done carefully, it becomes a threat to quality, schedule and cost.
Her thesis abstract is copied and posted.
ABSTRACT
Nowadays, with the rapidly growing of economic as well as construction market, the need of effective fast track project is obviously. Many high rise building construction projects are implemented using fast track approaches. With fast track project delivery system, construction tasks begin before design and construction documents are completed, which allow other works to start earlier than with traditional method. Without doubt, fast-tracking offers many advantages and benefits, such as an earlier project completion, a shorter time spent before the work starts compared to the traditional design bid build method, earlier operation and earlier financial return. Therefore, fast track project delivery strategy which become applicable for high rise building projects. In order to understand how the current strategies are being operated together with the strengths and the weaknesses of the strategy, a case study is explored by approaching its documentations, interviewing involved persons. The results show the fast track project is not suitable to all projects, however, there are also some problems that can occur when applying fast track due to many reasons such as unforeseen changes, lack of knowledge and inexperienced consultants. As a result, the negative effectiveness of unsuccessful fast track projects is huge and can lead to more delay and cost. Therefore, in order to apply fast track project successful, owners should have proper plan.
Recently, Fast track has gained the popularity in current project delivery strategies and the popularity keeps on increasing due to its potential advantages in improving project performance. An effective fast track project can bring advantages including: (1) reduced time; (2) lower cost; (3) reduced burden for the project owner by contracting all responsibilities to a single party; and (4) invisible benefits by increasing the reputation of the owner thus offering further business opportunities in a competitive market
On the other hand, fast track project also contains some challenges like: (1) complications and difficulties in; planning procedures for approval; transfer of information; feedback, and evaluation documents (2) requiring a very strict cash-flow; prompt payment; capital resources; (3) requiring strong and experienced manpower resources, especially in project management
Ms. Mai Do Thuy Dung made a case study on “Fast-Track Project Delivery Strategy for Civil Engineering and Architectural High-Rise Building Projects” which goals were to: (1) identify a Fast Track Project Delivery Strategy which is applicable for High Rise Building Projects (private fund); (2) identify advantages and also threats to quality, budget and schedule during applying fast track project.
She concluded that fast track project delivery is a strategy for many high-rise building projects in Viet Nam. By using fast track project, the project owner can gain benefit in terms of earlier revenue and financial return. Aside from that, the unquantifiable benefit is from the improvement of company reputation in the market and the risk on construction can be earlier transferred. Furthermore, due to market demand and its complication, the need of an early deliver project is increasing evidently, especially for high-rise projects at where the footprint area is limited but carries several complicated task at the same time.
Even though fast track delivery is a current strategy for high-rise building, however, there are some problems that can occur when applying fast track due to lack of knowledge and inexperienced consultants. Therefore, the negative effectiveness of unsuccessful fast track projects is significant and can lead to more delay and cost.
The most difficult factor of all fast track projects is negotiating the contract between the owner and contractors and determining price changes. If it is fixed priced contract with changes to be paid by claim each time, it would cause the total cost of the project to overrun budget. But a cost- plus contract with a maximum guaranteed price could cause unnecessary difficulties for the contractors.
On the other hand, fast track delivery gives a limitation to the project owner's ability to make design changes once construction has started. Starting construction before design works are completed can lead to a large number of change orders. More than that it may cause redesign or demolishing and rebuild.
A fast track project method is not a must for all projects, as it depends on each project type and business strategy. The project owners should carry out a benefit analysis and have a business target to decide which strategy is suitable for their case.
Therefore, experienced consultants and project managers should provide a suitable plan for project owners based on analyzed and feasibility studies.
Ms. Dung’s recommended that in using fast track project methods, individual must know how to apply and manage these methods together, and analyzing its strengths and weaknesses.
Her recommendations for efficient fast track project are as follows:
1. A proper and successful fast track project requires skillful and experienced consultants and project management. When a project owner decides on fast track project, designers and contractors should be selected according to their experiences in this construction approach. To make this decision, the project owner should consider using a pre-qualification process to evaluate a contractor's experience.
2. Fast track project requires a clear and simple organization chart and responsibilities, in order to minimize the project confusion about line of approval, comment, who is in charge of what. If the fast track is not done carefully, it becomes a threat to quality, schedule and cost.
Her thesis abstract is copied and posted.
ABSTRACT
Nowadays, with the rapidly growing of economic as well as construction market, the need of effective fast track project is obviously. Many high rise building construction projects are implemented using fast track approaches. With fast track project delivery system, construction tasks begin before design and construction documents are completed, which allow other works to start earlier than with traditional method. Without doubt, fast-tracking offers many advantages and benefits, such as an earlier project completion, a shorter time spent before the work starts compared to the traditional design bid build method, earlier operation and earlier financial return. Therefore, fast track project delivery strategy which become applicable for high rise building projects. In order to understand how the current strategies are being operated together with the strengths and the weaknesses of the strategy, a case study is explored by approaching its documentations, interviewing involved persons. The results show the fast track project is not suitable to all projects, however, there are also some problems that can occur when applying fast track due to many reasons such as unforeseen changes, lack of knowledge and inexperienced consultants. As a result, the negative effectiveness of unsuccessful fast track projects is huge and can lead to more delay and cost. Therefore, in order to apply fast track project successful, owners should have proper plan.
Friday 10 July 2009
Public Private Partnership Project for Bangladesh
Abu Naser Chowdhury (CEIM 2006) finds out what it means for the Bangladesh government to take up this new method of infrastructure financing.
Public Private Partnership (PPP) has become an icon of any public procurement. It has gained a very wide interest around the world and has been used in many infrastructures development with widespread purpose -- ranging from construction of high revenue generating projects, to economic projects, to provision of social services. Various countries have introduced PPP from different backgrounds of thought such as fiscal deficit, budgetary pressure, demand supply gap, inefficient public services to infrastructure.
http://www.thedailystar.net/forum/2009/july/public.htm
Posted by
Hadikusumo
Public Private Partnership (PPP) has become an icon of any public procurement. It has gained a very wide interest around the world and has been used in many infrastructures development with widespread purpose -- ranging from construction of high revenue generating projects, to economic projects, to provision of social services. Various countries have introduced PPP from different backgrounds of thought such as fiscal deficit, budgetary pressure, demand supply gap, inefficient public services to infrastructure.
http://www.thedailystar.net/forum/2009/july/public.htm
Posted by
Hadikusumo
Wednesday 8 July 2009
A CONCEPTUAL APPROACH TO GREEN BUILDING DEVELOPMENT: PRACTICALITIES AND PROSPECTS
the construction industry nowadays faces a quite number of major challenges that necessitate our constant efforts to change and adapt our activities in a more environment-friendly way. Sustainable construction or ‘green’ building is common knowledge in the developed world, but much less so in developing countries, which are facing major and serious developmental problems. The built environment therefore calls for green innovations and mechanisms that are seen as more urgent than ever.
Energy crisis is currently among the major challenges for the international community. The recent years have seen a surging trend of oil price escalation. Power supply is particularly a major challenge for developing countries, including Vietnam, where approximately 31% of the electricity is generated by hydro-electric power. Although this can be said to be a recyclable source of energy, water supply is not sufficient to meet the demand and power cuts are necessary in periods of high demand, or low water levels.
Current building design is generally not energy efficient, resulting in excessive use of electricity and water. Many buildings are poorly designed and do not always make the best use of natural light and ventilation as a result of owners’ use of excessive power for lighting, air conditioning and ventilation systems.
Mr. Nguyen Le Hoai Tam made a case study on “A Conceptual Approach to Green Building Development: Practicalities and Prospects”. It focused in the context of sustainable construction. The conceptual analysis and evaluation carried out the practicalities and adaptability of green building mechanisms addressed particularly to developing economies. Furthermore, the study focused on three specific objectives such as:
(1) understanding the LEED concept for Green Building; (2) Exploration of the applicability and adaptability of LEED in building design in Vietnam; and (3) discussion of the problem and obstacles in implementing the LEED concept for building projects in Vietnam.
Mr. Tam’s study had successfully discussed and analysed the practicalities and adoptability of the green building concept as a means to achieve sustainable development. For purpose of analysis and illustration, the LEED (Leadership in Energy and Environment Design) concept was introduced as among the world’s most trusted approaches to be applied in the built environment.
He proposed that in the engineering and construction industry, these recommendations should be carefully considered to maintain and improve the effect of LEED or any other universally acceptable methodologies.
1) Enhance biodiversity—not use materials from threatened species or environments and improve natural habitats where possible through appropriate planting and water use;
2) Support communities—identify and meet the real needs, requirements and aspirations of communities and stakeholders and involve them in key decisions;
3) Use resources effectively—not consume a disproportionate amount of resources, including money and land during material sourcing, construction, use or disposal; not cause unnecessary waste of energy, water or materials due to short life, poor design, inefficiency, or less than ideal construction and manufacturing procedures. Buildings have to be affordable, manageable and maintainable in use;
4) Minimise pollution—create minimum dependence on polluting products and materials, management practices, energy, power and forms of transport;
5) Create healthy environments—enhancing living, leisure and work environments; and not endanger the health of the builders or occupants, or any other parties, through exposure to pollutants, the use of toxic materials or providing host environments to harmful organisms;
6) Manage the process—stewardship of projects is a vital and overarching aspect in delivering sustainable projects, both in the first instance and also in ensuring their performance over time. Too many aspirations are undermined by failure to manage the design process, particularly at crucial handover points where responsibilities change. This requires us to identify appropriate targets, tools and benchmarks, and manage their delivery;
7) Looking ahead—teaching the younger generation about sustainability early provides a foundation for green thinking in the future.
His thesis abstract is copied and posted
ABSTRACT
this project report provides an introduction to, and a practical evaluation of, green building development. For the past decade the concept has become well-known in the developed world, but still a challenge for developing and emerging economies, especially. The study focuses in the first place on the concept of green building as part of a practical approach to sustainable development, which is nowadays an emerging and even urgent issue for global development. It goes on to discuss and evaluate the same subject but in a more practical methodology in a case study where the Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ is introduced as one of the desired measures. What is of special interest is that the practicality and applicability are evaluated and analysed for adoptability in Vietnam, a developing country facing serious developmental and environmental problems. The LEED concept and adoptability have been taken into special consideration not only by Government strategic decision-makers, but more significantly by designers in the construction industry. From this introduction, more will hopefully be detailed and reflected in future design works as a contribution to the built environment and construction innovations.
Energy crisis is currently among the major challenges for the international community. The recent years have seen a surging trend of oil price escalation. Power supply is particularly a major challenge for developing countries, including Vietnam, where approximately 31% of the electricity is generated by hydro-electric power. Although this can be said to be a recyclable source of energy, water supply is not sufficient to meet the demand and power cuts are necessary in periods of high demand, or low water levels.
Current building design is generally not energy efficient, resulting in excessive use of electricity and water. Many buildings are poorly designed and do not always make the best use of natural light and ventilation as a result of owners’ use of excessive power for lighting, air conditioning and ventilation systems.
Mr. Nguyen Le Hoai Tam made a case study on “A Conceptual Approach to Green Building Development: Practicalities and Prospects”. It focused in the context of sustainable construction. The conceptual analysis and evaluation carried out the practicalities and adaptability of green building mechanisms addressed particularly to developing economies. Furthermore, the study focused on three specific objectives such as:
(1) understanding the LEED concept for Green Building; (2) Exploration of the applicability and adaptability of LEED in building design in Vietnam; and (3) discussion of the problem and obstacles in implementing the LEED concept for building projects in Vietnam.
Mr. Tam’s study had successfully discussed and analysed the practicalities and adoptability of the green building concept as a means to achieve sustainable development. For purpose of analysis and illustration, the LEED (Leadership in Energy and Environment Design) concept was introduced as among the world’s most trusted approaches to be applied in the built environment.
He proposed that in the engineering and construction industry, these recommendations should be carefully considered to maintain and improve the effect of LEED or any other universally acceptable methodologies.
1) Enhance biodiversity—not use materials from threatened species or environments and improve natural habitats where possible through appropriate planting and water use;
2) Support communities—identify and meet the real needs, requirements and aspirations of communities and stakeholders and involve them in key decisions;
3) Use resources effectively—not consume a disproportionate amount of resources, including money and land during material sourcing, construction, use or disposal; not cause unnecessary waste of energy, water or materials due to short life, poor design, inefficiency, or less than ideal construction and manufacturing procedures. Buildings have to be affordable, manageable and maintainable in use;
4) Minimise pollution—create minimum dependence on polluting products and materials, management practices, energy, power and forms of transport;
5) Create healthy environments—enhancing living, leisure and work environments; and not endanger the health of the builders or occupants, or any other parties, through exposure to pollutants, the use of toxic materials or providing host environments to harmful organisms;
6) Manage the process—stewardship of projects is a vital and overarching aspect in delivering sustainable projects, both in the first instance and also in ensuring their performance over time. Too many aspirations are undermined by failure to manage the design process, particularly at crucial handover points where responsibilities change. This requires us to identify appropriate targets, tools and benchmarks, and manage their delivery;
7) Looking ahead—teaching the younger generation about sustainability early provides a foundation for green thinking in the future.
His thesis abstract is copied and posted
ABSTRACT
this project report provides an introduction to, and a practical evaluation of, green building development. For the past decade the concept has become well-known in the developed world, but still a challenge for developing and emerging economies, especially. The study focuses in the first place on the concept of green building as part of a practical approach to sustainable development, which is nowadays an emerging and even urgent issue for global development. It goes on to discuss and evaluate the same subject but in a more practical methodology in a case study where the Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ is introduced as one of the desired measures. What is of special interest is that the practicality and applicability are evaluated and analysed for adoptability in Vietnam, a developing country facing serious developmental and environmental problems. The LEED concept and adoptability have been taken into special consideration not only by Government strategic decision-makers, but more significantly by designers in the construction industry. From this introduction, more will hopefully be detailed and reflected in future design works as a contribution to the built environment and construction innovations.
Tuesday 7 July 2009
RISK MANAGEMENT IN THE PRE-COMMISSIONING PHASE OF AN OIL AND GAS PIPELINE PROJECT
The transportation of gas from fields (offshore) to the shore is normally by using the sub-sea pipeline. The constructions of Offshore Gas Pipelines are quite complex, in which pre-commissioning activities contains high risk that cause schedule and cost impact. In some case, the risk occurrence leads to the delay of the whole project complex and have negative impacts to Client and Contractors. And sometimes even serious disputes between the involved parties if no precautions are undertaken.
To run the project at highest efficiency, Contractor must look the whole picture of construction phase including pre-commissioning phase.
Due to special conditions of Construction of Offshore Gas Pipelines such as ocean conditions, weather, marine activities and seabed conditions, the pipeline installation is normally contained high risks. The risk management works are normally carried out at starting of design. However, the risk management for pre-commissioning phase is not taken care sufficiently.
Mr. Khuong Minh Dat made a case study on “Risk Management in the Pre-Commissioning Phase of an oil and gas pipeline project” to offer a risk management methodology, especially for pre-commissioning phase of Offshore Oil and Gas Pipeline Project.
His conclusions are:
1) Pre-Commissioning Process of Oil and Gas:
The pre-commissioning process is normally performed by Construction Contractor to ensure that the pipeline construction is completed successfully before handover to start-up activities and put project into operation. It determines how well the construction phase is done; how the project quality is met; stipulates the minimum requirements for the flooding, cleaning, gauging, hydrostatic testing, dewatering, drying and commissioning of the offshore Oil/Gas pipeline; and is the last and important process of offshore pipeline construction.
2) Risk identification for Pre-Commissioning Process
There are many risks can occur from some sources. However, one of the major problems is the risk related with Piping Internal Gauging (PIG) operation that may get stuck inside a pipeline section due to many reasons. The contractors need to develop a strategy that allows him to manage their process effectively and efficiently. The risk identification has crucial role throughout Pipeline Risk Management. The six typical hazards identified in this study are (1) Accident; (2) Gas Explosion; (3) Pig is stuck; (4) Bad gauging performance; (5) Bad cleaning/testing/drying performance; and (6) Schedule delay.
3) Propose Risk Management for Pre-Commissioning Process
There are three frame works recommended for risk management such as:
Ø The systematic approach to risk management for construction” by Anthony Mills (2005)
Ø Risk management Approach in “Managing Risk in Large Projects and Complex Procurements” by Dale F. Cooper et al (2004)
Ø Practical Risk Management in Construction Industry” framework by Leslie Edwards (1995)
Based on the above three typical frameworks which are advisable for Pre-Commissioning Pipeline Risk Management at their practical recommendations, the author offers the PPRM frame work.
His recommendation are as follows:
o It is important to have a good plan is not only for pre-commissioning work but also for the whole construction phase, in which the bad weather window of the sea must avoid. The necessary equipment for work must be arranged probably. Review the quality document and certificates completed with conformance inspect of materials and equipments are also conducted probably.
o The design of pipeline is important requirement. The designer has to foresee construction requirements and all project constrains have to be incorporated in his design. Any insufficient design can cause of problems for construction and pre-commissioning phase.
o The manufactures of line pipes and equipment preparation are taken a very important part of the PPRM. The most finding is the awareness of the preparation work’s impact on PPRM performance.
o PPRM not eliminate almost risks but the risks are minimized and concentrated to acceptable level. Hence, PPRM can save the cost of risk transfer.
o PPRM is recommended applying for the Oil/ Gas pipeline projects not only in Viet Nam but also on the worldwide.
His thesis abstract is copied and posted.
ABSTRACT
Many pipeline projects have been continuously building to get the gas and oil from sea to the shore. The transportation of gas from fields (offshore) to the shore is normally by using the sub-sea pipeline. The constructions of Offshore Gas Pipelines are quite complex, in which pre-commissioning activities contains high risk that cause of schedule and cost impact. In some case, the risk occurrence leads to delay the whole project complex. The negative impacts to project (cost and schedule) at Client and Contractors, or even serious disputes between the involved parties could be raised if no precautions are undertaken.
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 affect productivity, performance, quality, and the budget of a project. Risk cannot be eliminated, but it can be minimized, transferred or retained (Burchett, 1999).
In this report, a risk management for pre-commissioning phase of oil and gas project is presenting. Six important risks
To run the project at highest efficiency, Contractor must look the whole picture of construction phase including pre-commissioning phase.
Due to special conditions of Construction of Offshore Gas Pipelines such as ocean conditions, weather, marine activities and seabed conditions, the pipeline installation is normally contained high risks. The risk management works are normally carried out at starting of design. However, the risk management for pre-commissioning phase is not taken care sufficiently.
Mr. Khuong Minh Dat made a case study on “Risk Management in the Pre-Commissioning Phase of an oil and gas pipeline project” to offer a risk management methodology, especially for pre-commissioning phase of Offshore Oil and Gas Pipeline Project.
His conclusions are:
1) Pre-Commissioning Process of Oil and Gas:
The pre-commissioning process is normally performed by Construction Contractor to ensure that the pipeline construction is completed successfully before handover to start-up activities and put project into operation. It determines how well the construction phase is done; how the project quality is met; stipulates the minimum requirements for the flooding, cleaning, gauging, hydrostatic testing, dewatering, drying and commissioning of the offshore Oil/Gas pipeline; and is the last and important process of offshore pipeline construction.
2) Risk identification for Pre-Commissioning Process
There are many risks can occur from some sources. However, one of the major problems is the risk related with Piping Internal Gauging (PIG) operation that may get stuck inside a pipeline section due to many reasons. The contractors need to develop a strategy that allows him to manage their process effectively and efficiently. The risk identification has crucial role throughout Pipeline Risk Management. The six typical hazards identified in this study are (1) Accident; (2) Gas Explosion; (3) Pig is stuck; (4) Bad gauging performance; (5) Bad cleaning/testing/drying performance; and (6) Schedule delay.
3) Propose Risk Management for Pre-Commissioning Process
There are three frame works recommended for risk management such as:
Ø The systematic approach to risk management for construction” by Anthony Mills (2005)
Ø Risk management Approach in “Managing Risk in Large Projects and Complex Procurements” by Dale F. Cooper et al (2004)
Ø Practical Risk Management in Construction Industry” framework by Leslie Edwards (1995)
Based on the above three typical frameworks which are advisable for Pre-Commissioning Pipeline Risk Management at their practical recommendations, the author offers the PPRM frame work.
His recommendation are as follows:
o It is important to have a good plan is not only for pre-commissioning work but also for the whole construction phase, in which the bad weather window of the sea must avoid. The necessary equipment for work must be arranged probably. Review the quality document and certificates completed with conformance inspect of materials and equipments are also conducted probably.
o The design of pipeline is important requirement. The designer has to foresee construction requirements and all project constrains have to be incorporated in his design. Any insufficient design can cause of problems for construction and pre-commissioning phase.
o The manufactures of line pipes and equipment preparation are taken a very important part of the PPRM. The most finding is the awareness of the preparation work’s impact on PPRM performance.
o PPRM not eliminate almost risks but the risks are minimized and concentrated to acceptable level. Hence, PPRM can save the cost of risk transfer.
o PPRM is recommended applying for the Oil/ Gas pipeline projects not only in Viet Nam but also on the worldwide.
His thesis abstract is copied and posted.
ABSTRACT
Many pipeline projects have been continuously building to get the gas and oil from sea to the shore. The transportation of gas from fields (offshore) to the shore is normally by using the sub-sea pipeline. The constructions of Offshore Gas Pipelines are quite complex, in which pre-commissioning activities contains high risk that cause of schedule and cost impact. In some case, the risk occurrence leads to delay the whole project complex. The negative impacts to project (cost and schedule) at Client and Contractors, or even serious disputes between the involved parties could be raised if no precautions are undertaken.
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 affect productivity, performance, quality, and the budget of a project. Risk cannot be eliminated, but it can be minimized, transferred or retained (Burchett, 1999).
In this report, a risk management for pre-commissioning phase of oil and gas project is presenting. Six important risks
Monday 6 July 2009
KEY INTERACTIVE ACTIVITIES AND RISKS OF PPP INFRASTRUCTURE DEVELOPMENT PROJECTS: THE MASS RAPID TRANSIT IN THAILAND
Construction industry has played the vital role in world’s and country’s economic growth. Large construction project such as infrastructure needs to be proposed to cover the national strategic investment and national demand including community needs resulting to the increase in national growth rate. Therefore, infrastructure development and growth rate become linked.
In Thailand, government initiates to invest the physical and social infrastructures in 2008 such as mass transit rail (ADB, 2007). But due to political instability, the construction industry growth is declining. In order to develop successful infrastructure, the attractive alternative for government is to use the privatization approach called called “Public Private Partnerships” (PPP). In this approach, the government will allow the private sector to finance, design, construct and operate depending on the contract or procurement option. The private sectors use their technical and financial expertise to put a viable infrastructure project.
Since Thailand is one of the developing countries that have many infrastructure development projects, the Royal Thai Government (RTG) also has difficulty to propose infrastructure project because the infrastructure development project has high capital investment cost. The public private partnerships are used by RTG or state-own enterprises as the tool to provide the infrastructure service for community. The RTG increased the participation of private sector in infrastructure development.
Therefore, it is important to have a study public private partnerships in order to understand the interactive relationship and risks along development process between public and private sector. By understanding this interaction and risks between public and private sector, the PPP infrastructure projects will be completed with effective and efficient management.
Mr. Thotsaphol Rattananapalai made a study that aimed to investigate the interactive activities, relationships and risks between public and private sector in PPP infrastructure projects.
His results from the data analyses were found that the case study met twenty-six risks along the project development. It has nine, two, one, four, five and five risks in conceptual, tendering, financing, design and planning, construction and operation and maintenance phase, respectively. However, the concession agreement between public and private sector had covered only nine risks without any clause in first four phases. The key activities in PPP project development were found out: demand-supply assessment, signing concession agreement, developing financing plan, procuring outline and definitive design, revenue service commencement and operating and maintaining facilities. Then the key risks were found out: uncertainty of government policy, poor public decision making process, delay in financial closure, unavailability of fund, service commencement delay and revenue shortfall. Finally, the interactive model between public and private sector and risks relationship model were illustrated in this research.
His thesis abstract is copied and posted.
ABSTRACT
Due to increasing of the infrastructure projects, the public private partnership approach is getting more using. However, the public private partnership project development is complicated with the interrelation between public and private sector. For that reason, both public and private sector are getting into many problems along project life cycle. Therefore, it is necessary to have a study concerned with the development of public private partnership project along project life cycle. This research aims to investigate the interaction between public and private sector in project life cycle of PPP project. It also identifies the key risks and key activities along the project development.
In order to achieve the objective of research, the research uses case study approach as a research design. The process begins with framework identification that comprises of activity identification, framework development and framework verification. The selected PPP case study is the first underground mass rapid transit in Thailand. It continues with the data collection that uses the documentation, archival record and interview. The data analysis is conducted towards the case study evidences using explain and describe method to reveal and explain the important evidences.
Results from the analysis were found that the case study met twenty-six risks along the project development. It has nine, two, one, four, five and five risks in conceptual, tendering, financing, design and planning, construction and operation and maintenance phase, respectively. However, the concession agreement between public and private sector had covered only nine risks without any clause in first four phases. The key activities in PPP project development were found out: demand-supply assessment, signing concession agreement, developing financing plan, procuring outline and definitive design, revenue service commencement and operating and maintaining facilities. Then the key risks were found out: uncertainty of government policy, poor public decision making process, delay in financial closure, unavailability of fund, service commencement delay and revenue shortfall. Finally, the interactive model between public and private sector and risks relationship model were illustrated in this research.
In Thailand, government initiates to invest the physical and social infrastructures in 2008 such as mass transit rail (ADB, 2007). But due to political instability, the construction industry growth is declining. In order to develop successful infrastructure, the attractive alternative for government is to use the privatization approach called called “Public Private Partnerships” (PPP). In this approach, the government will allow the private sector to finance, design, construct and operate depending on the contract or procurement option. The private sectors use their technical and financial expertise to put a viable infrastructure project.
Since Thailand is one of the developing countries that have many infrastructure development projects, the Royal Thai Government (RTG) also has difficulty to propose infrastructure project because the infrastructure development project has high capital investment cost. The public private partnerships are used by RTG or state-own enterprises as the tool to provide the infrastructure service for community. The RTG increased the participation of private sector in infrastructure development.
Therefore, it is important to have a study public private partnerships in order to understand the interactive relationship and risks along development process between public and private sector. By understanding this interaction and risks between public and private sector, the PPP infrastructure projects will be completed with effective and efficient management.
Mr. Thotsaphol Rattananapalai made a study that aimed to investigate the interactive activities, relationships and risks between public and private sector in PPP infrastructure projects.
His results from the data analyses were found that the case study met twenty-six risks along the project development. It has nine, two, one, four, five and five risks in conceptual, tendering, financing, design and planning, construction and operation and maintenance phase, respectively. However, the concession agreement between public and private sector had covered only nine risks without any clause in first four phases. The key activities in PPP project development were found out: demand-supply assessment, signing concession agreement, developing financing plan, procuring outline and definitive design, revenue service commencement and operating and maintaining facilities. Then the key risks were found out: uncertainty of government policy, poor public decision making process, delay in financial closure, unavailability of fund, service commencement delay and revenue shortfall. Finally, the interactive model between public and private sector and risks relationship model were illustrated in this research.
His thesis abstract is copied and posted.
ABSTRACT
Due to increasing of the infrastructure projects, the public private partnership approach is getting more using. However, the public private partnership project development is complicated with the interrelation between public and private sector. For that reason, both public and private sector are getting into many problems along project life cycle. Therefore, it is necessary to have a study concerned with the development of public private partnership project along project life cycle. This research aims to investigate the interaction between public and private sector in project life cycle of PPP project. It also identifies the key risks and key activities along the project development.
In order to achieve the objective of research, the research uses case study approach as a research design. The process begins with framework identification that comprises of activity identification, framework development and framework verification. The selected PPP case study is the first underground mass rapid transit in Thailand. It continues with the data collection that uses the documentation, archival record and interview. The data analysis is conducted towards the case study evidences using explain and describe method to reveal and explain the important evidences.
Results from the analysis were found that the case study met twenty-six risks along the project development. It has nine, two, one, four, five and five risks in conceptual, tendering, financing, design and planning, construction and operation and maintenance phase, respectively. However, the concession agreement between public and private sector had covered only nine risks without any clause in first four phases. The key activities in PPP project development were found out: demand-supply assessment, signing concession agreement, developing financing plan, procuring outline and definitive design, revenue service commencement and operating and maintaining facilities. Then the key risks were found out: uncertainty of government policy, poor public decision making process, delay in financial closure, unavailability of fund, service commencement delay and revenue shortfall. Finally, the interactive model between public and private sector and risks relationship model were illustrated in this research.
Saturday 4 July 2009
Professor Christian Brockmann delivered Applied Project Management in Highway Project Lecture on 26-28 June 2009 in Vietnam
Prof Christian Brockmann has delivered his lecture on applied Project Management in Highway Construction. He discussed effective project management approach and technology for highway construction. He presented some highway projects that he managed in the past, including Expressway BangNa Trad in Bangkok Thailand.
Students were very pleased to learn his practical knowledge in highway project management.
We will invite him again next semester! and he has agreed to come to Thailand and Vietnam to teach in our CEIM and MPM program.
Posted by
Hadikusumo
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