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.
Monday 13 July 2009
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
Wednesday 1 July 2009
PROJECT MANAGEMENT COMPETENCY DEVELOPMENT: A CASE STUDY OF VIETNAMESE SMALL AND MEDIUM-SIZED CONSTRUCTION FIRMS
As one of the most dynamic cities in Viet Nam, Ho Chi Minh City has numinous changes in both its image and infrastructure. In the year of 1998, there were few buildings, most of which were located in the downtown area. However, for the last decade, many large scale projects have been built.
Following Vietnam’s economic growth, the demand for high-rise buildings increases and the need for efficient construction are therefore evident. However, like other developing countries, Vietnam is also facing many weaknesses in project management that weakened domestic competitiveness.
Improper project management competency is present both in the public sector and private sector and in small and large scale projects. Seminars and workshops have been held to discuss and explore the effectiveness of this issue in term of project cost, time and quality, as well as to seek for an enhancement of project management competency.
Mr. Chu Bien Cuong made a case study to (1) identify the project management competency of an SME construction company in Vietnam; and (2) identify on how to enhance project management knowledge and skills for human resources.
Mr. Cuong analyzed the weakness and identified the root causes attributable to project management competence. And based on which, he gave recommendations to solve the problems peculiar to a real-world project, while highlighting the expected enhancements of a real contractor. After all, a project management competence framework was developed for projects under the administration of a small or medium-sized construction firm.
Through this case study, Mr. Cuong found out that among small and medium sized construction firms, the competency of SMEs still does not meet the project management in terms of effectiveness and efficiency. Most SMEs are restricted in applying the management system. Besides, the management knowledge is the most important thing that SMEs have to improve in order to obtain the potential competition with other rivals.
Through various assessments and analyses, his study successfully explored insights in project management competency. The findings are found to be practical for small and medium-sized construction firms. His recommendations are the following:
1. Individual competency. The use of suitable leadership style is of prime importance in the firms. In addition, the individuals should be aware of the necessity to acquire knowledge as well as fundamental project management skills. Lessons from project failures can be a source of experience to learn. Beside, the project management should have full support of his top management and colleagues to carry out project tasks successfully.
2. Team competency. Group leadership and cooperation is crucial for the survival and development of any organization. A good system should therefore be established to address at least the following issues:
(i) line of communication;
(ii) vague and ambiguous defined responsibilities;
(iii) individual relationships;
(iv) decision-making processes;
(v) high cooperation.
3. The organization institutionalization is very important for its own development and as a good working environment for its staff. The organization should be structured in such a way that divisions, departments or strategic development, etc. can meet the project-focused objectives. In addition, the employees also contribute greatly to the development of the organization itself. It is strongly recommended that in setting rules and policies, the top management should, among other things, focus on enhancing individual and team competency through special-purpose capacity-building programs designed for its responsible staff.
His thesis abstract is copied and posted.
ABSTRACT
For the last decade, most projects in Vietnam were in small and medium scales. So with crowded labor sources at that time, contractors satisfied the basic project requirements with inefficient outputs and outcomes. However, construction projects have nowadays been developing in scale as well as in quantity. As a result, the requirements on improvements in competition in terms of quantity, cost, and technology are increasing.
The role of contractors in construction projects is very important since their performance brings successful or failure to these projects. In Vietnam, project management competence of local contractors has recently not satisfied market demand and project requirements. Such low project management competence has resulted in poor performance and side effects. These not only have a direct impact on the stakeholders but also on the project objectives and social interests. To enhance project management competence is therefore required by and from individuals and organizations.
Project owners have been seeking for efficient and effective contractors who can deliver a promised project. As stated, contracts are often awarded to foreign contractors who have experience and capacity to meet their client’s expectations. Meanwhile, the chance to lose contracts in high demand markets is obvious for local contractors due to limited abilities.
The need of approaching and improving project management competence is critical. This study will therefore address the project management competence by investigating a project by a construction firm, and then recommending solutions to improve project management competence in small and medium-sized construction firms in Vietnam.
His research framework is illustrated below.
Following Vietnam’s economic growth, the demand for high-rise buildings increases and the need for efficient construction are therefore evident. However, like other developing countries, Vietnam is also facing many weaknesses in project management that weakened domestic competitiveness.
Improper project management competency is present both in the public sector and private sector and in small and large scale projects. Seminars and workshops have been held to discuss and explore the effectiveness of this issue in term of project cost, time and quality, as well as to seek for an enhancement of project management competency.
Mr. Chu Bien Cuong made a case study to (1) identify the project management competency of an SME construction company in Vietnam; and (2) identify on how to enhance project management knowledge and skills for human resources.
Mr. Cuong analyzed the weakness and identified the root causes attributable to project management competence. And based on which, he gave recommendations to solve the problems peculiar to a real-world project, while highlighting the expected enhancements of a real contractor. After all, a project management competence framework was developed for projects under the administration of a small or medium-sized construction firm.
Through this case study, Mr. Cuong found out that among small and medium sized construction firms, the competency of SMEs still does not meet the project management in terms of effectiveness and efficiency. Most SMEs are restricted in applying the management system. Besides, the management knowledge is the most important thing that SMEs have to improve in order to obtain the potential competition with other rivals.
Through various assessments and analyses, his study successfully explored insights in project management competency. The findings are found to be practical for small and medium-sized construction firms. His recommendations are the following:
1. Individual competency. The use of suitable leadership style is of prime importance in the firms. In addition, the individuals should be aware of the necessity to acquire knowledge as well as fundamental project management skills. Lessons from project failures can be a source of experience to learn. Beside, the project management should have full support of his top management and colleagues to carry out project tasks successfully.
2. Team competency. Group leadership and cooperation is crucial for the survival and development of any organization. A good system should therefore be established to address at least the following issues:
(i) line of communication;
(ii) vague and ambiguous defined responsibilities;
(iii) individual relationships;
(iv) decision-making processes;
(v) high cooperation.
3. The organization institutionalization is very important for its own development and as a good working environment for its staff. The organization should be structured in such a way that divisions, departments or strategic development, etc. can meet the project-focused objectives. In addition, the employees also contribute greatly to the development of the organization itself. It is strongly recommended that in setting rules and policies, the top management should, among other things, focus on enhancing individual and team competency through special-purpose capacity-building programs designed for its responsible staff.
His thesis abstract is copied and posted.
ABSTRACT
For the last decade, most projects in Vietnam were in small and medium scales. So with crowded labor sources at that time, contractors satisfied the basic project requirements with inefficient outputs and outcomes. However, construction projects have nowadays been developing in scale as well as in quantity. As a result, the requirements on improvements in competition in terms of quantity, cost, and technology are increasing.
The role of contractors in construction projects is very important since their performance brings successful or failure to these projects. In Vietnam, project management competence of local contractors has recently not satisfied market demand and project requirements. Such low project management competence has resulted in poor performance and side effects. These not only have a direct impact on the stakeholders but also on the project objectives and social interests. To enhance project management competence is therefore required by and from individuals and organizations.
Project owners have been seeking for efficient and effective contractors who can deliver a promised project. As stated, contracts are often awarded to foreign contractors who have experience and capacity to meet their client’s expectations. Meanwhile, the chance to lose contracts in high demand markets is obvious for local contractors due to limited abilities.
The need of approaching and improving project management competence is critical. This study will therefore address the project management competence by investigating a project by a construction firm, and then recommending solutions to improve project management competence in small and medium-sized construction firms in Vietnam.
His research framework is illustrated below.
Tuesday 30 June 2009
Riza Yosia will join University of New South Wales (UNWS) Australia
Riza Yosia receives a PhD scholarship from UNSW. He will join on 19 July 2009.
Congratulations! and Good luck with your PhD study.
Posted by
Hadikusumo
Congratulations! and Good luck with your PhD study.
Posted by
Hadikusumo
EPC PROJECTS MANAGEMENT AND PROBLEMS: CASE STUDY OF INTERNATIONAL AND LOCAL EPC CONTRACTORS OF OIL/GAS AND PETROCHEMICAL PROJECTS IN VIETNAM
Now with a stable political and social economic status, Vietnam becomes a destination of the foreign investors from developed countries. The foreign investors always perceived to be beneficial to the host countries. In the side of host counties, foreign investment business structures are predicted to bring back the foreign capital, advanced technologies, management know-how and better quality products for re-export or for domestic market distribution. The quest for technology is more essential for the host countries when the requirement of foreign investors’ capital is obvious and great.
Since the start of the opening market economy, hundred investors have transferred their money to Vietnam and found out the business, almost strong and famous chaebol or enterprises invested to Vietnam have concentrated in investment to Oil and Gas industry. With the Joint Venture Agreements selection, they became shareholders with Vietnamese State Owned Companies and have been starting their businesses successfully.
In recent years, Vietnam Oil and Gas Group (PVN) have been carrying out a lot of mega projects. Some have been done and others are progressing like Vietnam-Soviet Union JV (VSP) oil exploration and developing projects.
In order to ensure that most projects will be executed with the aiming cost, quality and time targets, Vietnamese Government and PVN particularly have to invite engineering and technical resources from developing or developed countries by bidding for the International EPC Contractors, International PMC, Certificate Agents, Insurance companies etc
With the Joint Venture Agreements selection, these companies became shareholders with Vietnamese State Owned Companies and have been starting their businesses successfully.
Even though most of EPC Contractors who were selected for PVN’s projects are well experienced and well-known in their particular categories, it does not mean that all the EPC Contractors were successful in reaching clients’ satisfactions. The common problems during the implementation the projects were schedule delay, contingencies, variation orders and unqualified accomplishment
Mr. Nguyen Khoa conducted a case study on “EPC Projects Management and Problems: Case Study of International and Local EPC Contractors of Oil/Gas and Petrochemical Projects in Vietnam” to (1) explore some reasons why some EPC contractors getting troubles in carrying out the project, also their problems in EPC Project Management; and (2) explore the better practices in EPC project management.
His research study focused on how the EPC contractors control and manage the EPC projects in Vietnam including procurement, cost, scheduling management. Three Petrochemical construction projects were selected base on specific criteria such as:
· Medium to large projects
· Executed by International EPC contractors and Local EPC Contractor this have dealing experiences in Vietnamese construction market.
· Mentioned projects were accomplished and now under operation.
The case study projects are Phumy Fertilizer Project, Phumy PVC Project and Thivai Terminal and LPG Pipeline Project since these three have similar things in common:
Belonging to PetroVietnam.
Projects were built in Southern of Vietnam, in 02 adjacent Industrial Zones.
The Execution time of these 03 projects was happened in 1997 to 2005.
The Type of contract is EPC Contract; 02 EPC Contractors were assigned and the other one was selected by bidding.
The 02 Projects were carried out by International EPC Contractors were successful in project execution. The other one was executed by the Local EPC Contractor was the failure one (in time, cost and quality management.)
Based on the result of the study, among hundred projects belonged to PetroVietnam, the Phumy Fertilizer Project was the first and only project that was accomplished on time and under the estimated budget. The reasons for this project’s success were due to the competence of the Consortium, support and direction from the Nation Leaders, and scare of fertilizer in current situation. But, in the point of view of a member who joined this project, the hard working spirit of the Project Management Board in both sides (Client and Consortium) is the only primary reason.
Phumy Plastic Plant was also one of the accomplished projects of PetroVietnam within Joint Venture field. The project itself was started, executed and finished on time and within the approved budget. Most of the site activities were the equipment erection and installation works; the civil and construction works occupied a small part of whole project without any special solution need to be applied. The procurement activities were done by the EPC Contractor with the fixed configuration from the Licensor and PETRONAS (shareholders), so it was not sophisticatedly ordered and contracted to the International Vendors.
Thivai LPG Terminal and Pipeline Project was a small project without any high techniques or sophisticated configuration. It is about 12 ha in total and 20 ha for extension consideration in the future following the International Codes and Standards in engineering design and project management. It was still considered a failure due to the incompetencies of the EPC Contractor. Without historical experiences in role as the EPC Contractor, PVECC did not know how to solve and manage the project.
Mr. Khoa concluded that the main cause in the projects’s failure was depending on the competency of the EPC Contractor. Lack of experiences in the similar works, bad in planning and scheduling, bad financing plan, fragile in contracts negotiation, low reputation, lack of world wide relationships, unskillful in project management, shortcoming of human resources etc. are the constraints that the Local EPC Contractors have to overcome to improve and affirm themselves for getting the reputation from the clients in current competition market.
His thesis abstract is copied and posted.
ABSTRACT
Vietnam social-economic is booming in recent years, with attracting investment policies, the Vietnamese Government have been successful in luring many foreign investors starting their businesses in Vietnam, especially in Oil and Gas Industry.
Known as a country has rich natural fossil resources, Vietnam has large capacity of crude oil and natural gas in his off-shore East Sea areas. But with the restriction of engineering and updated technologies, the Vietnamese Government / PetroVietnam have been exerted themselves to attract as more bilateral relationships from developed countries (US, Russian, England, France, Norway, Japan...) as possible to expand their advantages in exploration and own their fossil energy resources.
Most of the projects that related to Oil and Gas Industry which have been carried out in Vietnam following the EPC type of contract. In the point of view of PetroVietnam, Oil and Gas projects should be implemented effectively, and that is the reason why the international EPC Contractors are the most feasible selection, cause of the lack of experiences in mega projects executing of Local EPC Contractors.
In order to manage and control the project to reach the demands from the Client / Owners, normally are cost, time and quality, the International EPC Contractors should have very efficiency project management methods which could help the International EPC Contractors in order to avoid any problems and adverse factors related to cost overrun, delay and inadequate productivities.
In the contain of this thesis, the author would like to focus on the research of International EPC Contractors Project Management, in Oil and Gas Industry Projects. The three selected case study projects are the Phumy Fertilizer Project, the Phumy PVC Project and the last one is the Thivai LPG Pipeline and Terminal Project. Those mentioned projects will be draft informed as below:
1. Phumy Fertilizer Project:
Petrochemical Industry, that included the Urea (Fertilizer) production, is one of foundation industries, it’s really important for the national economic developing. The shape and growing of this industry will become a force to develop the agriculture and other related industries.
In economic developing strategies of the Government, execution the Fertilizer or Urea Plant, not only to ensure the stability and initiative in supplying the fertilizer with reputedly as the strategic production for national developing, but also to bring back the other effective outcomes aspects such as economic, social, political and also distribute to impulse the industrialize and modernize processing that taken initiative by Vietnamese Communist Party.
In years ago, Vietnamese Government did have the mission the develop the fertilizer industry, but it was impossible due to some objective existences. There have been only some small size plants of Urea and Phosphates were operating in Vietnam in current time, with the supplying capacity approximately only 7% of the national demand, and the remain requires should depend on the importing resources and be paid with valuable foreign currencies.
On the April of 2000, the Prime Minister delegated to PetroVietnam (PVN) incorporated with Vietnam General Chemical Companies (VinaChem) and Vietnam Agriculture Company (Vigecam) to establish the Feasibility Study Report (FS) of Fertilizer Plant with the feedstock from associated (nature) gas resources.
Followed the order of the Prime Minister (correspondence No. 58/TB-VPCP dated 30th April, 2000 referred to Developing the Gas – Power – Fertilizer Program), PVN urgently drafted and submitted to the Government for approval the Feasibility Study Report of Fertilizer Project. This project was invested by Vietnamese Government / PVN, and the selected location of the project is in Phumy 1 Industrial Zone in Baria – Vungtau Province.
This is the first Fertilizer Plant in Vietnam could use the feedstock from the associated nature gas, this Plant supplies the production to the domestic market, concentration to the Mekong Delta provinces and the other areas in the South of Vietnam. Until now, most of Urea used in Vietnam must be imported from regional countries. As forecasting, the 2000 – 2005 Urea demand increased around 4,8%. The predict urea demand in 2000 was 1,975 millions tons, it was 2,07 millions ton on 2001, 2,169 millions ton in 2002, 2,224 millions ton in 2003, 2,29 millions ton on 2004 and 2,37 millions ton in 2005. The demand speed of grow in 2005 – 2010 period is 4,1% and total urea demand in 2010 will be 2,9 millions ton. In case the Plant will operate full design capacity (740.000 ton – 800.000 ton /year) in the initiate stage, it only satisfies 35% of domestic demand (Phumy Fertilizer Project – The Feasibility Study Report). Consequently, the project will have advantages in competition compare to the other imported resources.
The Fertilizer Plant uses the feedstock from the associated gas resources from CuuLong and Nam ConSon gas basins, and the predict output capacity around 740.000 ton / year of urea (2.200 tons of urea / day and 1.350 tons of ammonia / day). The flexible in using the feedstock (gas) will warranty the high efficiency of economic and necessary security for the Plant in case of the fluctuation of cost and supplying resources in the market.
2. The Phumy PVC Plant:
This project was a Joint Venture project between 04 shareholders: PetroVietnam, Petronas - Malaysia, Marubeni - Japan and TMS - Thailand. This project located nearby the Thivai LPG Pipeline and Terminal, in the Caimep Industrial Zone, Baria – Vungtau Province, with total square around 07 ha.
The outputs of this plant is Polyvinyl Chloride with capacity is 100,000 MTPA. Total investment of this project is USD70 millions and via the License of European Chloride, UK. The project has Amended Joint Venture Contract signed on 12th April 2000. Amended Investment License 1305/GPDC3 issued on 6th May 2000. EPCC (Engineering – Procurement – Construction – Commissioning) Contract awarded to Samsung Engineering and site handover on 15th May 2000. Site preparation and soil improvement works essentially completed and Piling scheduled to start end June 2001. The plant on stream by October 2002.
The PVC plant uses the LPG and Natural gas as the feedstock to their inputs. In the project management perspective, this project could be a success. But in operation phase, due to Joint Venture Terms and References, this plant has to face with a lot of difficulties in production and selling their products. But it is a difference aspect of The Phumy PVC Plant. In this scope of research, the author only focus on the EPCC Contractor Project Management side and will present the detail in the Chapter 4.
3. The Thivai LPG Terminal and Pipeline Project:
This project is a complex of the 03 x 06 inches pipelines system connecting the DinhCo Gas Distribution Plant to the Thi Vai LPG Terminal with the distance of on-shore underground pipeline around 48 km. The production was transported via the pipelines system and separated into three kinds of products such as Condensate, Butane-Propane gas and LPG. Products were terminated in separate storages and exported to the customers via barges or lorries.
The processing system of this project is including: 01 Pig Launcher Skid, 01 Pig Receiver Skid, 03 Line Block Valve Skids, 33 x 463m3 horizontal pressure vessels (bullets) for LPG, 02 x 6500m3 floating roof tanks for Condensate. 02 Loading Arm systems for product export, 02 LPG Compressors, Online Bu-Pro Mixing system, the Flare with burning capacity in 7503/h and the Close Drain System, Nitrogen Compressor, Diesel Generators, Fire Fighting System. 02 Product export Berths and function Buildings .etc. This project had the total budget cost was around USD 58 million and scheduled to construct in 02 years, from 1997 to 1999. But actually, this project had delay 02 years more and had a lot of contingencies that raised the budget into USD 71 millions. Finally the project had have finished and handed over to the End-User, the company named PetroVietnam Gas Co. (PV Gas.) on the end of 2001 with 02 years delay.
The EPC Contractor of this project was one of PetroVietnam Subsidiaries – PetroVietnam Engineering and Construction Company (PVECC). It was the biggest construction company of PVN and had construction experiences in most of mega projects which had been invested by PVN in Vietnam. This Company had about 20 Construction Enterprises underneath and they were the subcontractors for PVECC to carry out this project at that time.
This project received a lot of supports from the PetroVietnam, but could not be a success project in cost, time, and quality management aspects. In this case study, the author would like to present some of main reasons that led this project still will be a nightmare of everyone who used to be involved in, and the information of this project will be detail in the Chapter 4.
Since the start of the opening market economy, hundred investors have transferred their money to Vietnam and found out the business, almost strong and famous chaebol or enterprises invested to Vietnam have concentrated in investment to Oil and Gas industry. With the Joint Venture Agreements selection, they became shareholders with Vietnamese State Owned Companies and have been starting their businesses successfully.
In recent years, Vietnam Oil and Gas Group (PVN) have been carrying out a lot of mega projects. Some have been done and others are progressing like Vietnam-Soviet Union JV (VSP) oil exploration and developing projects.
In order to ensure that most projects will be executed with the aiming cost, quality and time targets, Vietnamese Government and PVN particularly have to invite engineering and technical resources from developing or developed countries by bidding for the International EPC Contractors, International PMC, Certificate Agents, Insurance companies etc
With the Joint Venture Agreements selection, these companies became shareholders with Vietnamese State Owned Companies and have been starting their businesses successfully.
Even though most of EPC Contractors who were selected for PVN’s projects are well experienced and well-known in their particular categories, it does not mean that all the EPC Contractors were successful in reaching clients’ satisfactions. The common problems during the implementation the projects were schedule delay, contingencies, variation orders and unqualified accomplishment
Mr. Nguyen Khoa conducted a case study on “EPC Projects Management and Problems: Case Study of International and Local EPC Contractors of Oil/Gas and Petrochemical Projects in Vietnam” to (1) explore some reasons why some EPC contractors getting troubles in carrying out the project, also their problems in EPC Project Management; and (2) explore the better practices in EPC project management.
His research study focused on how the EPC contractors control and manage the EPC projects in Vietnam including procurement, cost, scheduling management. Three Petrochemical construction projects were selected base on specific criteria such as:
· Medium to large projects
· Executed by International EPC contractors and Local EPC Contractor this have dealing experiences in Vietnamese construction market.
· Mentioned projects were accomplished and now under operation.
The case study projects are Phumy Fertilizer Project, Phumy PVC Project and Thivai Terminal and LPG Pipeline Project since these three have similar things in common:
Belonging to PetroVietnam.
Projects were built in Southern of Vietnam, in 02 adjacent Industrial Zones.
The Execution time of these 03 projects was happened in 1997 to 2005.
The Type of contract is EPC Contract; 02 EPC Contractors were assigned and the other one was selected by bidding.
The 02 Projects were carried out by International EPC Contractors were successful in project execution. The other one was executed by the Local EPC Contractor was the failure one (in time, cost and quality management.)
Based on the result of the study, among hundred projects belonged to PetroVietnam, the Phumy Fertilizer Project was the first and only project that was accomplished on time and under the estimated budget. The reasons for this project’s success were due to the competence of the Consortium, support and direction from the Nation Leaders, and scare of fertilizer in current situation. But, in the point of view of a member who joined this project, the hard working spirit of the Project Management Board in both sides (Client and Consortium) is the only primary reason.
Phumy Plastic Plant was also one of the accomplished projects of PetroVietnam within Joint Venture field. The project itself was started, executed and finished on time and within the approved budget. Most of the site activities were the equipment erection and installation works; the civil and construction works occupied a small part of whole project without any special solution need to be applied. The procurement activities were done by the EPC Contractor with the fixed configuration from the Licensor and PETRONAS (shareholders), so it was not sophisticatedly ordered and contracted to the International Vendors.
Thivai LPG Terminal and Pipeline Project was a small project without any high techniques or sophisticated configuration. It is about 12 ha in total and 20 ha for extension consideration in the future following the International Codes and Standards in engineering design and project management. It was still considered a failure due to the incompetencies of the EPC Contractor. Without historical experiences in role as the EPC Contractor, PVECC did not know how to solve and manage the project.
Mr. Khoa concluded that the main cause in the projects’s failure was depending on the competency of the EPC Contractor. Lack of experiences in the similar works, bad in planning and scheduling, bad financing plan, fragile in contracts negotiation, low reputation, lack of world wide relationships, unskillful in project management, shortcoming of human resources etc. are the constraints that the Local EPC Contractors have to overcome to improve and affirm themselves for getting the reputation from the clients in current competition market.
His thesis abstract is copied and posted.
ABSTRACT
Vietnam social-economic is booming in recent years, with attracting investment policies, the Vietnamese Government have been successful in luring many foreign investors starting their businesses in Vietnam, especially in Oil and Gas Industry.
Known as a country has rich natural fossil resources, Vietnam has large capacity of crude oil and natural gas in his off-shore East Sea areas. But with the restriction of engineering and updated technologies, the Vietnamese Government / PetroVietnam have been exerted themselves to attract as more bilateral relationships from developed countries (US, Russian, England, France, Norway, Japan...) as possible to expand their advantages in exploration and own their fossil energy resources.
Most of the projects that related to Oil and Gas Industry which have been carried out in Vietnam following the EPC type of contract. In the point of view of PetroVietnam, Oil and Gas projects should be implemented effectively, and that is the reason why the international EPC Contractors are the most feasible selection, cause of the lack of experiences in mega projects executing of Local EPC Contractors.
In order to manage and control the project to reach the demands from the Client / Owners, normally are cost, time and quality, the International EPC Contractors should have very efficiency project management methods which could help the International EPC Contractors in order to avoid any problems and adverse factors related to cost overrun, delay and inadequate productivities.
In the contain of this thesis, the author would like to focus on the research of International EPC Contractors Project Management, in Oil and Gas Industry Projects. The three selected case study projects are the Phumy Fertilizer Project, the Phumy PVC Project and the last one is the Thivai LPG Pipeline and Terminal Project. Those mentioned projects will be draft informed as below:
1. Phumy Fertilizer Project:
Petrochemical Industry, that included the Urea (Fertilizer) production, is one of foundation industries, it’s really important for the national economic developing. The shape and growing of this industry will become a force to develop the agriculture and other related industries.
In economic developing strategies of the Government, execution the Fertilizer or Urea Plant, not only to ensure the stability and initiative in supplying the fertilizer with reputedly as the strategic production for national developing, but also to bring back the other effective outcomes aspects such as economic, social, political and also distribute to impulse the industrialize and modernize processing that taken initiative by Vietnamese Communist Party.
In years ago, Vietnamese Government did have the mission the develop the fertilizer industry, but it was impossible due to some objective existences. There have been only some small size plants of Urea and Phosphates were operating in Vietnam in current time, with the supplying capacity approximately only 7% of the national demand, and the remain requires should depend on the importing resources and be paid with valuable foreign currencies.
On the April of 2000, the Prime Minister delegated to PetroVietnam (PVN) incorporated with Vietnam General Chemical Companies (VinaChem) and Vietnam Agriculture Company (Vigecam) to establish the Feasibility Study Report (FS) of Fertilizer Plant with the feedstock from associated (nature) gas resources.
Followed the order of the Prime Minister (correspondence No. 58/TB-VPCP dated 30th April, 2000 referred to Developing the Gas – Power – Fertilizer Program), PVN urgently drafted and submitted to the Government for approval the Feasibility Study Report of Fertilizer Project. This project was invested by Vietnamese Government / PVN, and the selected location of the project is in Phumy 1 Industrial Zone in Baria – Vungtau Province.
This is the first Fertilizer Plant in Vietnam could use the feedstock from the associated nature gas, this Plant supplies the production to the domestic market, concentration to the Mekong Delta provinces and the other areas in the South of Vietnam. Until now, most of Urea used in Vietnam must be imported from regional countries. As forecasting, the 2000 – 2005 Urea demand increased around 4,8%. The predict urea demand in 2000 was 1,975 millions tons, it was 2,07 millions ton on 2001, 2,169 millions ton in 2002, 2,224 millions ton in 2003, 2,29 millions ton on 2004 and 2,37 millions ton in 2005. The demand speed of grow in 2005 – 2010 period is 4,1% and total urea demand in 2010 will be 2,9 millions ton. In case the Plant will operate full design capacity (740.000 ton – 800.000 ton /year) in the initiate stage, it only satisfies 35% of domestic demand (Phumy Fertilizer Project – The Feasibility Study Report). Consequently, the project will have advantages in competition compare to the other imported resources.
The Fertilizer Plant uses the feedstock from the associated gas resources from CuuLong and Nam ConSon gas basins, and the predict output capacity around 740.000 ton / year of urea (2.200 tons of urea / day and 1.350 tons of ammonia / day). The flexible in using the feedstock (gas) will warranty the high efficiency of economic and necessary security for the Plant in case of the fluctuation of cost and supplying resources in the market.
2. The Phumy PVC Plant:
This project was a Joint Venture project between 04 shareholders: PetroVietnam, Petronas - Malaysia, Marubeni - Japan and TMS - Thailand. This project located nearby the Thivai LPG Pipeline and Terminal, in the Caimep Industrial Zone, Baria – Vungtau Province, with total square around 07 ha.
The outputs of this plant is Polyvinyl Chloride with capacity is 100,000 MTPA. Total investment of this project is USD70 millions and via the License of European Chloride, UK. The project has Amended Joint Venture Contract signed on 12th April 2000. Amended Investment License 1305/GPDC3 issued on 6th May 2000. EPCC (Engineering – Procurement – Construction – Commissioning) Contract awarded to Samsung Engineering and site handover on 15th May 2000. Site preparation and soil improvement works essentially completed and Piling scheduled to start end June 2001. The plant on stream by October 2002.
The PVC plant uses the LPG and Natural gas as the feedstock to their inputs. In the project management perspective, this project could be a success. But in operation phase, due to Joint Venture Terms and References, this plant has to face with a lot of difficulties in production and selling their products. But it is a difference aspect of The Phumy PVC Plant. In this scope of research, the author only focus on the EPCC Contractor Project Management side and will present the detail in the Chapter 4.
3. The Thivai LPG Terminal and Pipeline Project:
This project is a complex of the 03 x 06 inches pipelines system connecting the DinhCo Gas Distribution Plant to the Thi Vai LPG Terminal with the distance of on-shore underground pipeline around 48 km. The production was transported via the pipelines system and separated into three kinds of products such as Condensate, Butane-Propane gas and LPG. Products were terminated in separate storages and exported to the customers via barges or lorries.
The processing system of this project is including: 01 Pig Launcher Skid, 01 Pig Receiver Skid, 03 Line Block Valve Skids, 33 x 463m3 horizontal pressure vessels (bullets) for LPG, 02 x 6500m3 floating roof tanks for Condensate. 02 Loading Arm systems for product export, 02 LPG Compressors, Online Bu-Pro Mixing system, the Flare with burning capacity in 7503/h and the Close Drain System, Nitrogen Compressor, Diesel Generators, Fire Fighting System. 02 Product export Berths and function Buildings .etc. This project had the total budget cost was around USD 58 million and scheduled to construct in 02 years, from 1997 to 1999. But actually, this project had delay 02 years more and had a lot of contingencies that raised the budget into USD 71 millions. Finally the project had have finished and handed over to the End-User, the company named PetroVietnam Gas Co. (PV Gas.) on the end of 2001 with 02 years delay.
The EPC Contractor of this project was one of PetroVietnam Subsidiaries – PetroVietnam Engineering and Construction Company (PVECC). It was the biggest construction company of PVN and had construction experiences in most of mega projects which had been invested by PVN in Vietnam. This Company had about 20 Construction Enterprises underneath and they were the subcontractors for PVECC to carry out this project at that time.
This project received a lot of supports from the PetroVietnam, but could not be a success project in cost, time, and quality management aspects. In this case study, the author would like to present some of main reasons that led this project still will be a nightmare of everyone who used to be involved in, and the information of this project will be detail in the Chapter 4.
Monday 29 June 2009
CONSTRUCTION MANAGEMENT PRACTICES UNDER CONSTRUCTION MATERIAL PRICE FLUCTUATION
Project cost management is defined as one of the nine knowledge areas which are applicable knowledge and practices to most projects. Construction materials generally consume about 40 percent to 60 percent of total budget of the project.
In 2002, the result of break-up construction costs by Construction Industry Development Council Survey in India explained that construction material roughly consume at range from 41 percent to 60 percent of total construction costs. Hence, it is very important to closely pay attention on the material cost then build a good material cost management.
In cost management, one of the favorite indicators is the cost index. It is the ratio of cost or price for a given commodity or service or set of commodities or services at a given time and place compared to the cost or price at a base or standard time and place (Humphreys, 2005). Likewise, it is necessary to learn the cost index because one of many factors influencing construction costs is time due to changes in demand, economic conditions, and prices. Cost indexes convert costs which was applicable at a past date to equivalent costs now or in the future (William, 1994).
However, the use of cost indexes has several limitations. For example, cost indexes are based on average values so in specific cases, the actual value may be different from the average. Humphreys (2005) mentioned that at this time, the technology is changed so the method by which any given index is complied may periodically be changed by the complier. In such cases, the index values at different times should not be compared directly. Figure 1.1 is an example of construction material price indexes by Ministry of Commerce Thailand that based year to compare for these indexes is year 2000.
Figure 1.2 revealed that the construction price indexes in Thailand are very uncertain from year 2000 to 2008. A trend of uncertainty at recent years is increasing. To apply escalation in construction project, it should be considered in two levels which are historic and future (Squire, 2008). From historic escalation are such bid results, price indexes, price comparisons and cost record. For future escalation data, it can be found from assessed forecast which attempts to anticipate cost. Hence, it is important to find the way to handle with uncertain material prices in construction.
Squire (2008) stated that in construction, the price fluctuation comprises material, labor, equipment, overhead costs and fees. Cost management on projects becomes a particular challenge in a location where the economic climate is uncertain. In this circumstance, one of the significant consequences is uncertain construction price which can lead to many problems. Gallagher and Riggs (2006) stated that ripple effect of this price escalation has included numerous other impacts. For example, the first impact is putting project on hold while supplemental funding is sought. Second, the alternative of canceling the project if additional money is not available is chosen. Third, scale-down the project scope is attempting to be proceeded. Therefore, the price fluctuation can create enormous difficulty in the construction industry.
Ms. Piyachat Thaveelert made a survey on Construction Management Practices under Material Price Fluctuation to (1) investigate the situation of material price fluctuation and its effects on the practice of construction contractors during each stage namely estimating, bidding and construction stage; (2) identify the existing practices of how contractor strategically do to the situation and indicate interrelationships among practices; and (3) propose recommendation on how to handle the situation of construction price fluctuation.
Ms. Thaveelert found out that construction industry in Thailand usually confronts with the situation of material price fluctuation. Since the materials normally cost at the highest proportion of total cost, the situation of material price fluctuation becomes severe for construction industry. At this point, the appropriate management under material price fluctuation should be found out and investigated in order to be able to handle with the situation.
Her thesis abstract is copied and posted.
ABSTRACT
A construction management is very important for a construction project. To be a successful project, it requires an appropriate management from contractors to cope with especially the situation in construction industry that is unaccustomed. According to the recent record, it has been found that construction industry faced with the situation of material price fluctuation. Due to the material cost usually consumes the highest proportion in the construction cost, it is very significant for contractors to know how to handle with the situation. This research aims to investigate the existing of construction management practices under the construction material price fluctuation and propose the recommendation to respond to the situation.
The study uses a questionnaire as a research instrument to explore the existing practices of contractors. Two statistic methods were mainly used to analyze data from questionnaire surveys. The first analysis was descriptive analysis which used means and rankings to analyze. Second, the hypothesis testing was used to compare practices of the Bill of Quantity making and, procurement and employment among three groups of respondents. Those respondents are contractors focusing on private owners, public owners and both owners. In addition, another hypothesis testing was to compare practices relating to contract conditions between private owners and public owners through contractors’ perceptions. At his point, the correlation between groups of contractors was also tested through the hypothesis testing of correlation. Finally, the factor analysis was carried out to find out the interrelationship among practices by grouping the variables.
Result were found that for the Bill of Quantity making process, contractors prefer to find out the price trend by discussing the price trend with their suppliers with the highest mean. For the procurement and employment of contractors, contractors need to pay more attention on supplier selection process with the highest mean. For practices on contract conditions, it showed that the practice of the Specifying contract condition relating to furnishing materials clearly has the highest level of practice in private owners. In public owners, the Reasonable advance payment has the highest level of practice. The correlation between these two groups is also high positive correlation for practices on contract conditions. Last, the result of factor analysis showed that interrelationships of practices and it could be categorized into eight groups: Negotiating with Owners, Subcontractor Pricing Agreement, Government Pricing Index, Material Price Risk, Proactive Cost Control, Contractors’ Historical Data, Contractor Procurement Strategy and Estimate Pricing.
In 2002, the result of break-up construction costs by Construction Industry Development Council Survey in India explained that construction material roughly consume at range from 41 percent to 60 percent of total construction costs. Hence, it is very important to closely pay attention on the material cost then build a good material cost management.
In cost management, one of the favorite indicators is the cost index. It is the ratio of cost or price for a given commodity or service or set of commodities or services at a given time and place compared to the cost or price at a base or standard time and place (Humphreys, 2005). Likewise, it is necessary to learn the cost index because one of many factors influencing construction costs is time due to changes in demand, economic conditions, and prices. Cost indexes convert costs which was applicable at a past date to equivalent costs now or in the future (William, 1994).
However, the use of cost indexes has several limitations. For example, cost indexes are based on average values so in specific cases, the actual value may be different from the average. Humphreys (2005) mentioned that at this time, the technology is changed so the method by which any given index is complied may periodically be changed by the complier. In such cases, the index values at different times should not be compared directly. Figure 1.1 is an example of construction material price indexes by Ministry of Commerce Thailand that based year to compare for these indexes is year 2000.
Figure 1.2 revealed that the construction price indexes in Thailand are very uncertain from year 2000 to 2008. A trend of uncertainty at recent years is increasing. To apply escalation in construction project, it should be considered in two levels which are historic and future (Squire, 2008). From historic escalation are such bid results, price indexes, price comparisons and cost record. For future escalation data, it can be found from assessed forecast which attempts to anticipate cost. Hence, it is important to find the way to handle with uncertain material prices in construction.
Squire (2008) stated that in construction, the price fluctuation comprises material, labor, equipment, overhead costs and fees. Cost management on projects becomes a particular challenge in a location where the economic climate is uncertain. In this circumstance, one of the significant consequences is uncertain construction price which can lead to many problems. Gallagher and Riggs (2006) stated that ripple effect of this price escalation has included numerous other impacts. For example, the first impact is putting project on hold while supplemental funding is sought. Second, the alternative of canceling the project if additional money is not available is chosen. Third, scale-down the project scope is attempting to be proceeded. Therefore, the price fluctuation can create enormous difficulty in the construction industry.
Ms. Piyachat Thaveelert made a survey on Construction Management Practices under Material Price Fluctuation to (1) investigate the situation of material price fluctuation and its effects on the practice of construction contractors during each stage namely estimating, bidding and construction stage; (2) identify the existing practices of how contractor strategically do to the situation and indicate interrelationships among practices; and (3) propose recommendation on how to handle the situation of construction price fluctuation.
Ms. Thaveelert found out that construction industry in Thailand usually confronts with the situation of material price fluctuation. Since the materials normally cost at the highest proportion of total cost, the situation of material price fluctuation becomes severe for construction industry. At this point, the appropriate management under material price fluctuation should be found out and investigated in order to be able to handle with the situation.
Her thesis abstract is copied and posted.
ABSTRACT
A construction management is very important for a construction project. To be a successful project, it requires an appropriate management from contractors to cope with especially the situation in construction industry that is unaccustomed. According to the recent record, it has been found that construction industry faced with the situation of material price fluctuation. Due to the material cost usually consumes the highest proportion in the construction cost, it is very significant for contractors to know how to handle with the situation. This research aims to investigate the existing of construction management practices under the construction material price fluctuation and propose the recommendation to respond to the situation.
The study uses a questionnaire as a research instrument to explore the existing practices of contractors. Two statistic methods were mainly used to analyze data from questionnaire surveys. The first analysis was descriptive analysis which used means and rankings to analyze. Second, the hypothesis testing was used to compare practices of the Bill of Quantity making and, procurement and employment among three groups of respondents. Those respondents are contractors focusing on private owners, public owners and both owners. In addition, another hypothesis testing was to compare practices relating to contract conditions between private owners and public owners through contractors’ perceptions. At his point, the correlation between groups of contractors was also tested through the hypothesis testing of correlation. Finally, the factor analysis was carried out to find out the interrelationship among practices by grouping the variables.
Result were found that for the Bill of Quantity making process, contractors prefer to find out the price trend by discussing the price trend with their suppliers with the highest mean. For the procurement and employment of contractors, contractors need to pay more attention on supplier selection process with the highest mean. For practices on contract conditions, it showed that the practice of the Specifying contract condition relating to furnishing materials clearly has the highest level of practice in private owners. In public owners, the Reasonable advance payment has the highest level of practice. The correlation between these two groups is also high positive correlation for practices on contract conditions. Last, the result of factor analysis showed that interrelationships of practices and it could be categorized into eight groups: Negotiating with Owners, Subcontractor Pricing Agreement, Government Pricing Index, Material Price Risk, Proactive Cost Control, Contractors’ Historical Data, Contractor Procurement Strategy and Estimate Pricing.
Thursday 25 June 2009
Ms. Htet Htet Shein Joined Ch. Kranchang
Ms. Htet Htet Shein (CEIM 2009 from Myanmar) has joined Ch. Kranchang Contractor.
Congratulations!
Hadikusumo
Congratulations!
Hadikusumo
Ms. Piyachart Thaveelert Joined Foster Wheeler
Dear All,
Ms. Piyachart Thaveelert (CEIM 2009) informed me that she is now joining Foster Wheeler, oil and gas construction company in Rayong.
Congratulations!
Hadikusumo
Ms. Piyachart Thaveelert (CEIM 2009) informed me that she is now joining Foster Wheeler, oil and gas construction company in Rayong.
Congratulations!
Hadikusumo
Mr. Surapong Panja and Ms. Rahongsree Prayongrut Joined TEAM Consulting
Dear All
Mr. Surapong Panja and Ms. Rahongsree Prayongrut(CEIM 2009) have joined TEAM Consulting. They were recruited two months before they graduated from CEIM program.
Congratulations!
Hadikusumo
Mr. Surapong Panja and Ms. Rahongsree Prayongrut(CEIM 2009) have joined TEAM Consulting. They were recruited two months before they graduated from CEIM program.
Congratulations!
Hadikusumo
Mr. Andreas Adihartanto Joined Pakuwon Property Developer
Dear All
I received a phone call from Mr Andreas from Indonesia (CEIM'2008) that he joinned Pakuwon Property Developer in Jakarta.
Congratulations!
Hadikusumo
I received a phone call from Mr Andreas from Indonesia (CEIM'2008) that he joinned Pakuwon Property Developer in Jakarta.
Congratulations!
Hadikusumo
Mr. Raman Awale Joins SINOTHAI Contractor
I received an email from Mr Raman Awale (Nepalese, CEIM'2009). He will join with SINOTHAI starting July 2009.
Congratulation to Mr Raman Awale!
And many thanks to Mr Niraj Baidya (CEIM' 2005) who has been very active in recruiting our AIT alumni.
Regards
Hadikusumo
Congratulation to Mr Raman Awale!
And many thanks to Mr Niraj Baidya (CEIM' 2005) who has been very active in recruiting our AIT alumni.
Regards
Hadikusumo
Seminar in Can Tho Vietnam 22 June 2009 part 2
Posted by
Hadikusumo
Seminar in Can Tho Vietnam 22 June 2009 part 1
Participants attending our seminar
Dr. Hadikusumo and Ms Bich Hoa (AITVN)
Mr Pham Hong Linh - General Director of SouthWest Gas Pipeline 700 Km
I made a presentation about the roles of project management for project performance and organization. Then, I continued with explaining how to build project management competency in an organization.
In the seminar, Mr Pham Hong Linh - the General Director of SouthWest Pipeline 700 km, also attended the meeting and shared his experience on why project management is very important in large construction projects.
The seminar was attended by construction professionals from Cantho city and neighbouring area.
Posted by
Hadikusumo
Wednesday 24 June 2009
RISK FACTORS INFLUENCING INTERNATIONAL CONSTRUCTION PROJECTS IN PAKISTAN
Construction is the second largest sector in Pakistan’s economy after agriculture. Roughly 30-35% of employment is directly or indirectly attached with the construction industry. In contrast to the prospective share of Pakistani construction in the local and global economic market, the development of the sector has not been at par with the market demands. Pakistan’s construction industry is still characterized as pressured and adversarial. Further, construction projects in Pakistan generally run over time and over budget; do not necessarily meet user expectations; and often require remedial works due to construction defects, with many conflicting issues, leading to project disputes and litigation.
Mr. Ahsem Maqsoom (M. Eng’g in CEIM) made a research to (1) understand the basic concepts involved in international construction business and their limitations; (2) study the reasons and characteristics for internationalization of firm; (3) study the problems and risks associated with international construction projects; (4) study the entry modes and formulation of healthy strategies for international construction business; (5) identify the risk factors influencing international construction projects in Pakistan
He found out that new opportunities are constantly growing as a result of globalization in construction sector. Construction firms want to have projects at international level. In every construction project, risks are present. Risks in international construction projects are more critical as compared to domestic projects especially when developing countries are involved. That’s why it is desirable for international construction firms who want to do construction projects in foreign country, to identify the risks as early as possible, so that suitable strategies can be made for the penetration in to the foreign construction market and to manage these risks before the actual execution of projects on international level.
Risk consequences in construction projects may reach an undesirable level because of inadequate resources and lack of advancements in technologies, therefore a thorough awareness and identification of risks is essential to prepare suitable strategies.
Mr. Maqsoom’s abstract is copied and posted.
Abstract
Globally construction companies are entering in an era of internationalization. This brings a need of developing and defining strategies to cope with the international demands of quality, risk and profit. Different models related to the international construction have been studied in context with the following issues.
• Globalization and construction industry development
• Characteristics of internationalization
• Risks or Obstacles associated with international Construction business
• Competitive advantage and strategies for international construction business
International construction projects have many risks involved due to the nature of their structure. There are more parties involved and more phases are present in international construction projects than a conventional construction project. Each party has its different objectives. This difference in the objectives of parties leads to conflict of interest which is a root cause of risks in international construction projects. An international construction adaption model has been developed in this research. This model had been applied on Pakistan construction industry to know the practical example of internationalization. The risks factors which influence the international construction business in Pakistan have been identified and then classified on country, construction industry and project bases. Some critical problems related to international construction projects have been indicated from these identified risks. Some recommendations have also been suggested to manage the critical risk for the success of international projects and development of international construction industry of Pakistan.
Mr. Ahsem Maqsoom (M. Eng’g in CEIM) made a research to (1) understand the basic concepts involved in international construction business and their limitations; (2) study the reasons and characteristics for internationalization of firm; (3) study the problems and risks associated with international construction projects; (4) study the entry modes and formulation of healthy strategies for international construction business; (5) identify the risk factors influencing international construction projects in Pakistan
He found out that new opportunities are constantly growing as a result of globalization in construction sector. Construction firms want to have projects at international level. In every construction project, risks are present. Risks in international construction projects are more critical as compared to domestic projects especially when developing countries are involved. That’s why it is desirable for international construction firms who want to do construction projects in foreign country, to identify the risks as early as possible, so that suitable strategies can be made for the penetration in to the foreign construction market and to manage these risks before the actual execution of projects on international level.
Risk consequences in construction projects may reach an undesirable level because of inadequate resources and lack of advancements in technologies, therefore a thorough awareness and identification of risks is essential to prepare suitable strategies.
Mr. Maqsoom’s abstract is copied and posted.
Abstract
Globally construction companies are entering in an era of internationalization. This brings a need of developing and defining strategies to cope with the international demands of quality, risk and profit. Different models related to the international construction have been studied in context with the following issues.
• Globalization and construction industry development
• Characteristics of internationalization
• Risks or Obstacles associated with international Construction business
• Competitive advantage and strategies for international construction business
International construction projects have many risks involved due to the nature of their structure. There are more parties involved and more phases are present in international construction projects than a conventional construction project. Each party has its different objectives. This difference in the objectives of parties leads to conflict of interest which is a root cause of risks in international construction projects. An international construction adaption model has been developed in this research. This model had been applied on Pakistan construction industry to know the practical example of internationalization. The risks factors which influence the international construction business in Pakistan have been identified and then classified on country, construction industry and project bases. Some critical problems related to international construction projects have been indicated from these identified risks. Some recommendations have also been suggested to manage the critical risk for the success of international projects and development of international construction industry of Pakistan.
Tuesday 23 June 2009
Quantitative Risk Assessment for Offshore Platform Process System
Oil and gas industry is one of sectors that have high risks. It can range from minor to major events. For instance: oil leaks, gas leaks resulting to catastrophes like explosions, fires and oil spread. These disasters might cause fatality, injury, pollution, economic loss and even disruption of business. How can these accidents be prevented? How can the level of risk be assessed? And how can these things be handled or managed?
Mr. Nguyen Van Thanh made a case study on “Quantitative Risk Assessment for the Process System on an Offshore Platform: A Case Study Of QRA For Process System Of Platfrom RP-3 Of J.V. Vietsovpetro”. This project is a partial requirement for his Professional Masters degree in Construction Engineering and Infrastructure Management.
He concluded that:
(1) to evaluate and calculate the level of risk of a project, a factory or an offshore platform, the general formula that can be used is: R = F x C (where : R = Risk ; F = Frequency and C = Consequence). Based on the formula of risk, reduction of the consequence and reduction of the frequency are the two ways to reduce the risk.
(2) to reduce the consequence or frequency of risk, mitigation measures will be proposed if the risk value is higher compared with the risk criteria. The process system should be divided into the segments based on the properties, functions and working place.
(3) to assess the risk, the process system of platform RP-3 (Vietsovpetro Joint Venture) was divided into 8 segments based on their function, working condition and location. Comparing to the risk acceptance, the calculated risk in the process system of platform RP-3 is lower. Therefore, the risks are acceptable.
Mr. Nguyen Van Thanh’s abstract is copied and posted.
ABSTRACT
Quantitative Risk Assessment is a mean of objectively measuring the risks from hazardous activities of a facility or operation. The risks are qualified in terms of their probability and consequences. By comparison with a suitable risk criterion, the results can be used to help decide whether the facility is unacceptable or whether the improvements are necessary
This thesis attempts to explore the existing approaches of Quantitative Risk Assessment and apply this technique to offshore oil and gas industry, a very high risk sector, by proposing a frame work to conduct quantitative risk assessment for process system of offshore platforms.
Based on the given frame work, a case study will be performed to understand the effectiveness of “Quantitative risk assessment for process system of PR-3 offshore platform in Dragon oil field of Vietsovpetro J.V”
Mr. Nguyen Van Thanh made a case study on “Quantitative Risk Assessment for the Process System on an Offshore Platform: A Case Study Of QRA For Process System Of Platfrom RP-3 Of J.V. Vietsovpetro”. This project is a partial requirement for his Professional Masters degree in Construction Engineering and Infrastructure Management.
He concluded that:
(1) to evaluate and calculate the level of risk of a project, a factory or an offshore platform, the general formula that can be used is: R = F x C (where : R = Risk ; F = Frequency and C = Consequence). Based on the formula of risk, reduction of the consequence and reduction of the frequency are the two ways to reduce the risk.
(2) to reduce the consequence or frequency of risk, mitigation measures will be proposed if the risk value is higher compared with the risk criteria. The process system should be divided into the segments based on the properties, functions and working place.
(3) to assess the risk, the process system of platform RP-3 (Vietsovpetro Joint Venture) was divided into 8 segments based on their function, working condition and location. Comparing to the risk acceptance, the calculated risk in the process system of platform RP-3 is lower. Therefore, the risks are acceptable.
Mr. Nguyen Van Thanh’s abstract is copied and posted.
ABSTRACT
Quantitative Risk Assessment is a mean of objectively measuring the risks from hazardous activities of a facility or operation. The risks are qualified in terms of their probability and consequences. By comparison with a suitable risk criterion, the results can be used to help decide whether the facility is unacceptable or whether the improvements are necessary
This thesis attempts to explore the existing approaches of Quantitative Risk Assessment and apply this technique to offshore oil and gas industry, a very high risk sector, by proposing a frame work to conduct quantitative risk assessment for process system of offshore platforms.
Based on the given frame work, a case study will be performed to understand the effectiveness of “Quantitative risk assessment for process system of PR-3 offshore platform in Dragon oil field of Vietsovpetro J.V”
Monday 22 June 2009
Transformational Style: The Highly Effective Leadership Style in Thai Construction Industry
In Thailand, the construction industry grown quickly especially in the infrastructure sector since the demand of the population on infrastructure is increasing. Construction is a project based industry and its success depends on several factors including the manager’s personality traits, competencies or necessary skills, and leadership styles which are appropriate for dealing with construction work have high impact on project outcomes.
Ms. Kedsuda Limsila conducted a case study on “Effective Leadership In The Construction Industry In Thailand“. This was focused mainly on the influence of project managers’ leadership styles on outcomes and was conducted in order to identify the most appropriate leadership style in the Thai construction industry.
She found out that:(1) in general, project managers in Thai construction projects apply a variety of leadership styles, most often adopted is the transformational style, followed by the transactional style and the laissez-faire style; (2) the entire range of behaviors of transformational project managers and contingent reward behavior from the transactional style are capable of generating leadership effectiveness, subordinate satisfaction and extra effort while the other leadership behaviors cannot; (3) in Thai construction projects, subordinates with extroversion personality tend to produce greater work effectiveness and exert extra effort whereas subordinates with conscientiousness and/or openness to experience personality tend to be satisfied with and exert extra effort into their work; (4) several independent factors affect the decision making of project managers in the process of selecting the leadership styles to apply to their subordinates. The more the factors with positive relationships appear, the higher the likelihood that project managers will select those related leadership behaviors whereas the other factors with negative relationships have the opposite effect; (5) several factors that positively affect leadership outcomes (effectiveness, satisfaction, extra effort, and commitment). Some factors have association with only one outcome whereas other factors have associations with several outcomes. The higher the level of the relevant factors present, the higher the degree to which leadership outcomes will occur.
Her results pointed out that leadership style mostly adopted in Thai construction projects is the transformational style since this is the most effective leadership style to apply with Thai subordinates.
Her Ph.D. dissertation abstract is copied and posted.
ABSTRACT
The success of a construction project depends on several important factors, one of which is the competence of its project manager. There are several issues regarding the project manager have impacts on project outcomes. Examples include the project manager’s leadership behaviours, personal attributes, and competencies or necessary skills which are appropriate for dealing with construction work. Consequently, there are many questions need answers regarding the competence of project managers and issues of effective project management. For instance, what is the most applied leadership style at the current time and what are the different outcomes from applying different leadership styles? What is the most appropriate leadership style? What are the necessary competencies of an effective project manager?
Consequently, this study was conducted to investigate the actual leadership behaviours and personal competencies of project managers. It also explored the key personality traits of subordinates in Thai construction projects. Specifically, this study examined how leadership behaviours, leader personal competencies and subordinate personality traits influence leadership outcomes (effectiveness; satisfaction; extra effort; commitment) and subordinates’ work performance (work quality; work quantity; problem solving creativity; teamwork and work discipline).
Leadership behaviors and outcomes were measured using Bass and Avolio’s (2004) Multifactor Leadership Questionnaire (MLQ), subordinates’ personalities were measured following the Five Factor Model whereas project manager’s personal competencies were measured following the Project Manager Competency Development (PMCD) defined by Project Management Institute (2002). During the data collecting process, data regarding the actual leadership behaviours, leadership outcomes and personal competencies of project managers in Thai construction projects were gathered from subordinate group whereas project managers provided the data on their subordinates’ key personalities and work performance level based on their opinion.
The findings of this study answer several questions on the top of this page that leadership style mostly adopted in Thai construction projects is the transformational leadership style. It further clarifies that this style is suitable for application with Thai people since it created leadership outcomes superior to the other styles (transactional style and laissez-faire style). In addition, transformational leadership supports subordinates to produce better work quality and work quantity. Moreover, the subordinates also tend to have high creativity in problem solving when working with transformational leaders.
Besides, the association between PMCD personal competencies and MLQ leadership behaviours revealed that the entire personal competencies defined by Project Management Institute have significant positive relationship with every factor in the transformational style but they have significant positive relationship with only contingent reward factor in the transactional style whilst having negative relationship with the laissez-faire style. It implies that project managers who apply transformational behaviours are likely to possess the necessary personal competencies required for competent project managers also.
Ms. Kedsuda Limsila conducted a case study on “Effective Leadership In The Construction Industry In Thailand“. This was focused mainly on the influence of project managers’ leadership styles on outcomes and was conducted in order to identify the most appropriate leadership style in the Thai construction industry.
She found out that:(1) in general, project managers in Thai construction projects apply a variety of leadership styles, most often adopted is the transformational style, followed by the transactional style and the laissez-faire style; (2) the entire range of behaviors of transformational project managers and contingent reward behavior from the transactional style are capable of generating leadership effectiveness, subordinate satisfaction and extra effort while the other leadership behaviors cannot; (3) in Thai construction projects, subordinates with extroversion personality tend to produce greater work effectiveness and exert extra effort whereas subordinates with conscientiousness and/or openness to experience personality tend to be satisfied with and exert extra effort into their work; (4) several independent factors affect the decision making of project managers in the process of selecting the leadership styles to apply to their subordinates. The more the factors with positive relationships appear, the higher the likelihood that project managers will select those related leadership behaviors whereas the other factors with negative relationships have the opposite effect; (5) several factors that positively affect leadership outcomes (effectiveness, satisfaction, extra effort, and commitment). Some factors have association with only one outcome whereas other factors have associations with several outcomes. The higher the level of the relevant factors present, the higher the degree to which leadership outcomes will occur.
Her results pointed out that leadership style mostly adopted in Thai construction projects is the transformational style since this is the most effective leadership style to apply with Thai subordinates.
Her Ph.D. dissertation abstract is copied and posted.
ABSTRACT
The success of a construction project depends on several important factors, one of which is the competence of its project manager. There are several issues regarding the project manager have impacts on project outcomes. Examples include the project manager’s leadership behaviours, personal attributes, and competencies or necessary skills which are appropriate for dealing with construction work. Consequently, there are many questions need answers regarding the competence of project managers and issues of effective project management. For instance, what is the most applied leadership style at the current time and what are the different outcomes from applying different leadership styles? What is the most appropriate leadership style? What are the necessary competencies of an effective project manager?
Consequently, this study was conducted to investigate the actual leadership behaviours and personal competencies of project managers. It also explored the key personality traits of subordinates in Thai construction projects. Specifically, this study examined how leadership behaviours, leader personal competencies and subordinate personality traits influence leadership outcomes (effectiveness; satisfaction; extra effort; commitment) and subordinates’ work performance (work quality; work quantity; problem solving creativity; teamwork and work discipline).
Leadership behaviors and outcomes were measured using Bass and Avolio’s (2004) Multifactor Leadership Questionnaire (MLQ), subordinates’ personalities were measured following the Five Factor Model whereas project manager’s personal competencies were measured following the Project Manager Competency Development (PMCD) defined by Project Management Institute (2002). During the data collecting process, data regarding the actual leadership behaviours, leadership outcomes and personal competencies of project managers in Thai construction projects were gathered from subordinate group whereas project managers provided the data on their subordinates’ key personalities and work performance level based on their opinion.
The findings of this study answer several questions on the top of this page that leadership style mostly adopted in Thai construction projects is the transformational leadership style. It further clarifies that this style is suitable for application with Thai people since it created leadership outcomes superior to the other styles (transactional style and laissez-faire style). In addition, transformational leadership supports subordinates to produce better work quality and work quantity. Moreover, the subordinates also tend to have high creativity in problem solving when working with transformational leaders.
Besides, the association between PMCD personal competencies and MLQ leadership behaviours revealed that the entire personal competencies defined by Project Management Institute have significant positive relationship with every factor in the transformational style but they have significant positive relationship with only contingent reward factor in the transactional style whilst having negative relationship with the laissez-faire style. It implies that project managers who apply transformational behaviours are likely to possess the necessary personal competencies required for competent project managers also.
Friday 19 June 2009
MPM and CEIM Photo in AIT Main Campus Thailand
Hi all, i am attaching a photo taken in April 2009 in AIT Main Campus Thailand.
Professional Master in Project Management in Construction and CEIM students took photo at the NEW landmark of AIT in front of our administration building.
Dean Prof. Worsak, Dr. Hadikusumo, Dr Therathorn (Adjunct Faculty from Perfect Property), Mr Mike Woodward (Adjunct Faculty from Foster Wheeler) were participating in the photo.
This is a photo to remember our Green Campus in AIT Thailand.
Posted by
Hadikusumo
Thursday 18 June 2009
NEGOTIATION ISSUES, STYLES AND OUTCOMES IN BUIDING CONSTRUCTION PROJECTS IN THAILAND
In construction industry, conflicts are inevitable in any construction projects.
Construction projects require that every parties are related in term of negotiation such project managers, safety managers, clients, suppliers, designers, site engineers, and consultants. Negotiation is one potential consequence to succeed projects when comparing with other factors. Many negotiators need to understand their personal characteristics for bargaining.
For any given issues, problem or conflict encountered, the participant has a negotiating position. Different construction projects have different conflict styles and different departments try to work together.
Mr. Surapong Panja made a case study on “Negotiation Issues, Styles, And Outcomes: A Study of Building Construction Projects in Thailand”. He learned that construction industry always has conflicts that can be attributes to more factors such as change order, variation work, job safety, price adjustment (inflation or deflation), and time extension. These factors can produce many conflicts itself and may contribute germination and manifestation. Dispute is always negotiated by project participants, and the process of negotiation is the first task before considering other resolution methods. The project manager of contractor tends to use avoiding style. It is suggested that it is more important for negotiation outcome to understand the proper negotiation style on each negotiation outcome in order to make beyond benefit to negotiation outcome with satisfaction.
His abstract is copied and posted here.
ABSTRACT
Negotiation is one potential process to make construction projects to succeed or fail. The negotiation between project participants is the first step to do businesses even construction industry, and it can take place all stages of construction projects. In negotiation process, the characters of project participants can affect to their behavior which can lead to resolve conflicts and outcome with satisfaction. Thus, the ability of project participants for negotiating effectively is a one essential success or failure. Weakness of negotiation can also affect to a sizable loss not only negotiator’s needs but also affect to other sides involve. Notwithstanding, understanding both the behavior of negotiation style, negotiation issues, and outcomes are valuable for practices and academics.
This study also emphasized on five aspects: (1) to study negotiation styles regarding with the project manager of consultant and contractor in the way they use negotiation styles. (2) To study what are important negotiation issues between the project manager of consultant and contractor those are important to both parties (contractors and consultants) and issues that are possible for value exchange in bidding and construction stage. (3) To find out the relationship between negotiation styles and negotiation outcomes. The questionnaire survey involved in thirty high-rises building projects.
Based on the results, the finding can suggest that different negotiation styles will affect to different negotiation outcomes, and what the negotiation style are appropriate with each negotiation outcome. The suitable negotiation style on negotiation outcome may be helpful to increase negotiation outcome. The understanding the strongest negotiation style can provide more beneficial as well as weakness styles can also provide drawback. Furthermore, the significant responsibility of project manager is to identify the important issues for one’s side, and another side may be less important issues which can apply to possible value exchange concept.
Construction projects require that every parties are related in term of negotiation such project managers, safety managers, clients, suppliers, designers, site engineers, and consultants. Negotiation is one potential consequence to succeed projects when comparing with other factors. Many negotiators need to understand their personal characteristics for bargaining.
For any given issues, problem or conflict encountered, the participant has a negotiating position. Different construction projects have different conflict styles and different departments try to work together.
Mr. Surapong Panja made a case study on “Negotiation Issues, Styles, And Outcomes: A Study of Building Construction Projects in Thailand”. He learned that construction industry always has conflicts that can be attributes to more factors such as change order, variation work, job safety, price adjustment (inflation or deflation), and time extension. These factors can produce many conflicts itself and may contribute germination and manifestation. Dispute is always negotiated by project participants, and the process of negotiation is the first task before considering other resolution methods. The project manager of contractor tends to use avoiding style. It is suggested that it is more important for negotiation outcome to understand the proper negotiation style on each negotiation outcome in order to make beyond benefit to negotiation outcome with satisfaction.
His abstract is copied and posted here.
ABSTRACT
Negotiation is one potential process to make construction projects to succeed or fail. The negotiation between project participants is the first step to do businesses even construction industry, and it can take place all stages of construction projects. In negotiation process, the characters of project participants can affect to their behavior which can lead to resolve conflicts and outcome with satisfaction. Thus, the ability of project participants for negotiating effectively is a one essential success or failure. Weakness of negotiation can also affect to a sizable loss not only negotiator’s needs but also affect to other sides involve. Notwithstanding, understanding both the behavior of negotiation style, negotiation issues, and outcomes are valuable for practices and academics.
This study also emphasized on five aspects: (1) to study negotiation styles regarding with the project manager of consultant and contractor in the way they use negotiation styles. (2) To study what are important negotiation issues between the project manager of consultant and contractor those are important to both parties (contractors and consultants) and issues that are possible for value exchange in bidding and construction stage. (3) To find out the relationship between negotiation styles and negotiation outcomes. The questionnaire survey involved in thirty high-rises building projects.
Based on the results, the finding can suggest that different negotiation styles will affect to different negotiation outcomes, and what the negotiation style are appropriate with each negotiation outcome. The suitable negotiation style on negotiation outcome may be helpful to increase negotiation outcome. The understanding the strongest negotiation style can provide more beneficial as well as weakness styles can also provide drawback. Furthermore, the significant responsibility of project manager is to identify the important issues for one’s side, and another side may be less important issues which can apply to possible value exchange concept.
Wednesday 17 June 2009
CORRELATION BETWEEN PERSONALITY AND JOB PERFORMANCE
People are now considered as one of the factors that sustain advantage in an increasing globally work oriented competition among organizations. Human Resources (HR) are appreciated as an asset to corporate success, among other factors because its functions cover a wide range of activities which are required for different skills.
Construction compared with other organizations has the highest degree of applying HR for all hierarchical levels and one of the largest global employment sectors, providing work for a significant proportion of the labor market and accounting for a significant share of the world gross domestic product.
Human Resources in a labor construction have many varieties; from top to bottom; comes from different backgrounds; and have various skills and diverse aptitudes that make difficulty in controlling them. Therefore, construction companies must have appropriate Human Resources Planning (HRP).
Ms. Swe Zin Myint conducted a case study in “The Relationships Between Personality and Job Performance in Myanmar Construction Projects”. The analysis result of his study shows that there are correlations between personality and job performance of respondents who work in construction sites. He found out that (1) conscientiousness and integrity play crucial role in managers’ personality trait because it is related with most of managers’ job performance categories by positive correlation. Therefore, in recruiting for manager’s position, the employers must check the applicants’ personality traits especially in conscientiousness (2) Organizational factors influence more than the personality factors level to job performance. Therefore, employers better manage HR in an effective way to get high performance from them. The employers can recruit employees by testing their personality required for the job and if the personality is not fit with the HR job position or job performance, employers can exert effort to increase it by providing organizational factors.
His thesis abstract is copied and posted.
ABSTRACT
In order to achieve the success, every organization has to metain their competitive strategy by modifying it according to rapidly growth of technology. There are many strategies to overwhelm competitors but all of them are based on human resources (HR). Consequently, one of the important factors to have proper human resource management is their personality traits. This study intends to investigate the relationship between personality and job performance of HR in construction to manage HR effectively by achieving high performance. A survey for the study was conducted in Yangon, the previous capital city of Myanmar and target on manager, site engineer and site supervisor of ongoing construction projects. The study indicated that not only correlation of personality and job performance but also fundamental personality traits for manager especially for human resource management. Moreover, it also compared the influential level of personality traits and organizational factors on job performance.
Construction compared with other organizations has the highest degree of applying HR for all hierarchical levels and one of the largest global employment sectors, providing work for a significant proportion of the labor market and accounting for a significant share of the world gross domestic product.
Human Resources in a labor construction have many varieties; from top to bottom; comes from different backgrounds; and have various skills and diverse aptitudes that make difficulty in controlling them. Therefore, construction companies must have appropriate Human Resources Planning (HRP).
Ms. Swe Zin Myint conducted a case study in “The Relationships Between Personality and Job Performance in Myanmar Construction Projects”. The analysis result of his study shows that there are correlations between personality and job performance of respondents who work in construction sites. He found out that (1) conscientiousness and integrity play crucial role in managers’ personality trait because it is related with most of managers’ job performance categories by positive correlation. Therefore, in recruiting for manager’s position, the employers must check the applicants’ personality traits especially in conscientiousness (2) Organizational factors influence more than the personality factors level to job performance. Therefore, employers better manage HR in an effective way to get high performance from them. The employers can recruit employees by testing their personality required for the job and if the personality is not fit with the HR job position or job performance, employers can exert effort to increase it by providing organizational factors.
His thesis abstract is copied and posted.
ABSTRACT
In order to achieve the success, every organization has to metain their competitive strategy by modifying it according to rapidly growth of technology. There are many strategies to overwhelm competitors but all of them are based on human resources (HR). Consequently, one of the important factors to have proper human resource management is their personality traits. This study intends to investigate the relationship between personality and job performance of HR in construction to manage HR effectively by achieving high performance. A survey for the study was conducted in Yangon, the previous capital city of Myanmar and target on manager, site engineer and site supervisor of ongoing construction projects. The study indicated that not only correlation of personality and job performance but also fundamental personality traits for manager especially for human resource management. Moreover, it also compared the influential level of personality traits and organizational factors on job performance.
Congratulation for Mr Nguyen Van Diep, CEIM/MPM Vung Tau
Dear Mr Nguyen Van Diep (CEIM/MPM 08)
We would like to congratulate you with your new promotion as the Deputy of General Director of PTSC-OS (Petrovietnam Technical Service Offshore Servive - Tong cong ty dich vu ky thuat dau khi- Cong ty Dich vu khai thac bien) ( ma tren TT chung khoan- PVS).
We wish you successfull with your new position.
We are proud of your achievement.
Regards
Hadikusumo
We would like to congratulate you with your new promotion as the Deputy of General Director of PTSC-OS (Petrovietnam Technical Service Offshore Servive - Tong cong ty dich vu ky thuat dau khi- Cong ty Dich vu khai thac bien) ( ma tren TT chung khoan- PVS).
We wish you successfull with your new position.
We are proud of your achievement.
Regards
Hadikusumo
Congratulation for Mr Nguyen Khoa, CEIM/MPM Vung Tau
Dear Mr Khoa (CEIM/MPM 2008)
CEIM family would like to congratulate you with your new position as the Deputy of General Director of PVC-IC (Petro Vietnam Construction - Industrial Construction Tong cong ty thiet ke va xay lap dau khi-Cong ty IC)
We are proud of you, Mr Khoa.
We wish you successfull with your new position.
Regards
Hadikusumo
CEIM family would like to congratulate you with your new position as the Deputy of General Director of PVC-IC (Petro Vietnam Construction - Industrial Construction Tong cong ty thiet ke va xay lap dau khi-Cong ty IC)
We are proud of you, Mr Khoa.
We wish you successfull with your new position.
Regards
Hadikusumo
PROBLEMS AND PRACTICES IN EPC PROJECT MANAGEMENT
EPC projects face many challenges to stay in the competitive world despite of the efforts made towards compressing activities by phase overlapping, in order to reduce time scale and to obtain better EPC projects. These project challenges lead to cost overrun and schedule delay.
But what are the specific factors and problems in EPC Projects; and the effective Project Management (PM) practices especially on petrochemical and oil and gas EPC projects in Thailand?
Mr. Raman Awale made a case study on “Problems and Practices in EPC Project Management: A Case Study on Petrochemical, Oil and Gas EPC Projects in Thailand”. His study reveals that major factors contributing to schedule delay and cost overrun are mostly related to material and equipment; lack of EPC contractor’s experience, lack or poor coordination and communication between Client, contractor and suppliers resulting to late approvals; poor planning and controlling; lack of top management commitment and unrealistic project scheduling.
His full abstract is copied and posted here.
ABSTRACT
EPC (Engineering, Procurement and Construction) projects are highly schedule driven where phases are overlapped to complete the project as early as possible. Moreover, these EPC projects are massive, utilize high skill and well train employee, acquires complex and complicated methodology/technology, needs fast information flow between different phases and close collaboration of multidiscipline as well. EPC projects are facing serious problems like crew idleness, rework and management dilemma which lead to cost overrun and schedule delay. Hence, this study aims to explore effective project management practices and problems faced in EPC projects especially on petrochemical and oil and gas EPC projects in Thailand, such that necessary proactive planning can be performed before to conduct such project effectively.
Methodology consists of three steps - pilot survey, interview approach and case study approach. Interview Approach (adjusted Grounded Theory Approach) is purposed to find out the significant delay and success factors together with effective management practices from various factors collected from literature review and pilot survey. Later, case study approach is used to validate the information gathered previously and to understand the relation and consequences of each factor in real situation. The respondent and interviewee were chief civil engineer, deputy chief engineer, director, project managers, construction manager, project engineers, process engineer, vice presidents, (Professional Experts) etc from 15 different EPC companies (9 Client companies and 6 Contractor companies).
The study reveals that major factors contributing to schedule delay and cost overrun are mostly related to material and equipment such as material shortage, procurement delay, or late delivery on site. Besides, delay in placing purchase order, design changes, lack of EPC contractor’s experience, late approvals, vendor information coming in late and further most due to the lack of coordination between Client, contractor and suppliers regarding exchange of information are other factors contributing cost overrun and schedule delay.
In addition, poor planning and controlling, lack of top management commitment, unrealistic project scheduling and poor coordination and communication are poor project management practices explored. However, subcontractor management and control mechanism, lesson learnt practice, involvement of construction and operational personnel during conceptual phase are success project management practice found. Furthermore, interface management and control, integrated team management, real time reaction, dispute management, risk management, stakeholder management, continuous and dynamic detail planning and monitoring during execution and being proactive to issues, carrots and sticks approach (incentive criteria), clear roles and responsibilities, etc are also the big concerns in terms of project management practice regarding controlling cost overrun and schedule delay.
The findings from this study can be helpful to EPC contractors, owners, investors, project managers, construction managers, engineers and other construction stakeholders to understand the major factors, causes and problems related to phase overlapping of EPC process. This will guide them in developing and adopting necessary effective and efficient project management practice to conduct EPC projects on cost, on schedule with good quality providing clients satisfaction and safety measures. This research can be viewed as a lesson learned approach.
Keywords: EPC Projects, Phase Overlap, Delay and Success Factors, Project Management Practice, Long Lead Items, Scope Changes, Lesson Learned
But what are the specific factors and problems in EPC Projects; and the effective Project Management (PM) practices especially on petrochemical and oil and gas EPC projects in Thailand?
Mr. Raman Awale made a case study on “Problems and Practices in EPC Project Management: A Case Study on Petrochemical, Oil and Gas EPC Projects in Thailand”. His study reveals that major factors contributing to schedule delay and cost overrun are mostly related to material and equipment; lack of EPC contractor’s experience, lack or poor coordination and communication between Client, contractor and suppliers resulting to late approvals; poor planning and controlling; lack of top management commitment and unrealistic project scheduling.
His full abstract is copied and posted here.
ABSTRACT
EPC (Engineering, Procurement and Construction) projects are highly schedule driven where phases are overlapped to complete the project as early as possible. Moreover, these EPC projects are massive, utilize high skill and well train employee, acquires complex and complicated methodology/technology, needs fast information flow between different phases and close collaboration of multidiscipline as well. EPC projects are facing serious problems like crew idleness, rework and management dilemma which lead to cost overrun and schedule delay. Hence, this study aims to explore effective project management practices and problems faced in EPC projects especially on petrochemical and oil and gas EPC projects in Thailand, such that necessary proactive planning can be performed before to conduct such project effectively.
Methodology consists of three steps - pilot survey, interview approach and case study approach. Interview Approach (adjusted Grounded Theory Approach) is purposed to find out the significant delay and success factors together with effective management practices from various factors collected from literature review and pilot survey. Later, case study approach is used to validate the information gathered previously and to understand the relation and consequences of each factor in real situation. The respondent and interviewee were chief civil engineer, deputy chief engineer, director, project managers, construction manager, project engineers, process engineer, vice presidents, (Professional Experts) etc from 15 different EPC companies (9 Client companies and 6 Contractor companies).
The study reveals that major factors contributing to schedule delay and cost overrun are mostly related to material and equipment such as material shortage, procurement delay, or late delivery on site. Besides, delay in placing purchase order, design changes, lack of EPC contractor’s experience, late approvals, vendor information coming in late and further most due to the lack of coordination between Client, contractor and suppliers regarding exchange of information are other factors contributing cost overrun and schedule delay.
In addition, poor planning and controlling, lack of top management commitment, unrealistic project scheduling and poor coordination and communication are poor project management practices explored. However, subcontractor management and control mechanism, lesson learnt practice, involvement of construction and operational personnel during conceptual phase are success project management practice found. Furthermore, interface management and control, integrated team management, real time reaction, dispute management, risk management, stakeholder management, continuous and dynamic detail planning and monitoring during execution and being proactive to issues, carrots and sticks approach (incentive criteria), clear roles and responsibilities, etc are also the big concerns in terms of project management practice regarding controlling cost overrun and schedule delay.
The findings from this study can be helpful to EPC contractors, owners, investors, project managers, construction managers, engineers and other construction stakeholders to understand the major factors, causes and problems related to phase overlapping of EPC process. This will guide them in developing and adopting necessary effective and efficient project management practice to conduct EPC projects on cost, on schedule with good quality providing clients satisfaction and safety measures. This research can be viewed as a lesson learned approach.
Keywords: EPC Projects, Phase Overlap, Delay and Success Factors, Project Management Practice, Long Lead Items, Scope Changes, Lesson Learned
Saturday 13 June 2009
“How does infrastructure relate to national development?”
Global infrastructure development clearly represents the world synchronization and globalization. Infrastructures play a major role to facilitate country’s logistic, communication and accesses to energy as an important part of national development.
Based on the IMD World Competitiveness Yearbook (2008) report, Thailand has climbed-up the global competitiveness ranking from thirty-third to twenty-seventh at the end of 2007. Thailand’s infrastructure ranking supported the fact that the development of infrastructure directly affect to national competitiveness and that the origin of each fast growing country is rooted from its well-managed infrastructure.
Mr. Kantanat Chaipermsak had just defended his case study on “Megaproject Development Relationships Among Stakeholders”. He concluded that infrastructures made their contributions to economic growth and poverty reduction. It is also vital to national development and affect to the national competitiveness. It has been proven that the mechanism of each fast growing country was running by the well-managed infrastructure since it supports country’s logistic, communication and accesses to energy.
This is his abstract.
ABSTRACT
Availability and efficiency of infrastructure contribute to economic growth and poverty reduction while the absence of adequate infrastructure services is one of the main problems that hinder the effort of development. In most developing countries, the demand of service infrastructures rising while existing infrastructures ranges of services are still far too scant. The problem might come from their readiness on such a big investment on infrastructure development. The potential megaproject development mechanism should be created in order to get people prepared and react firmly when the opportunity is coming. This research aims to find out how the megaproject development mechanism works.
The research has been conducted under the unique single-case study basis. The research began with factors identification in order to develop the megaproject development model. After the model has completed, Thai Landbridge megaproject has been selected to be analyzed. Data collection was performed by a data observing process in one of the Landbridge conceptual meeting. Data analysis has been conducted by using explanation building method in which all the observed information and important evidences have been revealed and explained.
Four key stakeholders’ activities have been analyzed. It was found that, most of the time, government and infrastructure investor always play key roles on the Landbridge project development mechanism while the business investors’ activities are mostly based on the key trade-related or commercial activities. By voluntarily involved in some part of the megaproject mechanism process, the communities had received their huge benefits as well.
Based on the IMD World Competitiveness Yearbook (2008) report, Thailand has climbed-up the global competitiveness ranking from thirty-third to twenty-seventh at the end of 2007. Thailand’s infrastructure ranking supported the fact that the development of infrastructure directly affect to national competitiveness and that the origin of each fast growing country is rooted from its well-managed infrastructure.
Mr. Kantanat Chaipermsak had just defended his case study on “Megaproject Development Relationships Among Stakeholders”. He concluded that infrastructures made their contributions to economic growth and poverty reduction. It is also vital to national development and affect to the national competitiveness. It has been proven that the mechanism of each fast growing country was running by the well-managed infrastructure since it supports country’s logistic, communication and accesses to energy.
This is his abstract.
ABSTRACT
Availability and efficiency of infrastructure contribute to economic growth and poverty reduction while the absence of adequate infrastructure services is one of the main problems that hinder the effort of development. In most developing countries, the demand of service infrastructures rising while existing infrastructures ranges of services are still far too scant. The problem might come from their readiness on such a big investment on infrastructure development. The potential megaproject development mechanism should be created in order to get people prepared and react firmly when the opportunity is coming. This research aims to find out how the megaproject development mechanism works.
The research has been conducted under the unique single-case study basis. The research began with factors identification in order to develop the megaproject development model. After the model has completed, Thai Landbridge megaproject has been selected to be analyzed. Data collection was performed by a data observing process in one of the Landbridge conceptual meeting. Data analysis has been conducted by using explanation building method in which all the observed information and important evidences have been revealed and explained.
Four key stakeholders’ activities have been analyzed. It was found that, most of the time, government and infrastructure investor always play key roles on the Landbridge project development mechanism while the business investors’ activities are mostly based on the key trade-related or commercial activities. By voluntarily involved in some part of the megaproject mechanism process, the communities had received their huge benefits as well.
Friday 12 June 2009
How to Manage the Thailand’s Best Oil Refinery? Find out from Mr. Chalermchai Udomranu
Mr. Chalermchai Udomranu is a Vice President for Refining Project of the Bangchak Petroleum Public Company Limited in Thailand. He has more than 20 years experience in Bangchak’s oil refinery and accomplished a lot of projects.
To have knowledge of some techniques, around forty (40) students under the Professional Program Management program will be participating in his lecture in “Applied Project Management in Oil Refinery Project” which is scheduled from 24-26 July 2009 at Vung Tau City.
Mr. Chalermchai Udomranu’s Concise Background
Education
- Masters in Business Administration - Thammasat University, Bangkok (1993)
- Bachelor in Engineering (Electrical Engineering) - Chulalongkorn University, Bangkok (1982)
- Successfully enrolled in the following Refinery Improvement Projects,
- Plant 3 Restructuring Project
- Plant 2 Modification Project
- Gas Oil Hydrotreating Project
- Reformer Modification Project
- Sulfur Plant Project
Work Experience
- Vice President – Refining Project (Product Quality Improvement Project, PQIP) (2005-present)
- Senior Manager – Refining Project (2003-2004)
- Senior Manager – Technical Service Division (2002)
- Senior Manager – Maintenance Division (2001)
- Maintenance Division Manager (1997-2000)
- Engineering Division Manager (1994-1996)
- Electrical and Instrument Section Head (1993)
- Senior Project Engineer (1990-1992)
- Project Engineer (1985-1989)
To have knowledge of some techniques, around forty (40) students under the Professional Program Management program will be participating in his lecture in “Applied Project Management in Oil Refinery Project” which is scheduled from 24-26 July 2009 at Vung Tau City.
Mr. Chalermchai Udomranu’s Concise Background
Education
- Masters in Business Administration - Thammasat University, Bangkok (1993)
- Bachelor in Engineering (Electrical Engineering) - Chulalongkorn University, Bangkok (1982)
- Successfully enrolled in the following Refinery Improvement Projects,
- Plant 3 Restructuring Project
- Plant 2 Modification Project
- Gas Oil Hydrotreating Project
- Reformer Modification Project
- Sulfur Plant Project
Work Experience
- Vice President – Refining Project (Product Quality Improvement Project, PQIP) (2005-present)
- Senior Manager – Refining Project (2003-2004)
- Senior Manager – Technical Service Division (2002)
- Senior Manager – Maintenance Division (2001)
- Maintenance Division Manager (1997-2000)
- Engineering Division Manager (1994-1996)
- Electrical and Instrument Section Head (1993)
- Senior Project Engineer (1990-1992)
- Project Engineer (1985-1989)
Prof. Chritian Brockmann, CIB Helsinki Awardee, will give Lecture at Professional Masters in Project Management Program in Ho Chi Minh City, Vietnam
Prof. Dr. Christian Brockmann, who is an awardee, academician and researcher, will give a 3-day lecture (in practical aspect) in “Applied Project Management in Highway Project” from 26-28 June 2009 at Ho Chi Minh City.
Prof. Dr. Brockmann at present is a Professor in the University of Applied Sciences - Bremen, Germany and Stanford University. He teaches following courses:
- Introduction to Project Management
- Estimating / Accounting in Construction
- Organization in Construction
- Project Planning
- Construction Technology
- Construction Economics
- Introduction to Ecological Economics; and
- Research Methodology
Before he joined the universities, he was one of the top highway project managers. He is involved in many highway project including the Bangna Trad Expressway.
Christian will teach Professional Masters in Project Management (MPM) students in HCM. He will share his years of experience with MPM students.
Prof. Dr. Brockmann at present is a Professor in the University of Applied Sciences - Bremen, Germany and Stanford University. He teaches following courses:
- Introduction to Project Management
- Estimating / Accounting in Construction
- Organization in Construction
- Project Planning
- Construction Technology
- Construction Economics
- Introduction to Ecological Economics; and
- Research Methodology
Before he joined the universities, he was one of the top highway project managers. He is involved in many highway project including the Bangna Trad Expressway.
Christian will teach Professional Masters in Project Management (MPM) students in HCM. He will share his years of experience with MPM students.
Thursday 11 June 2009
Benchmarking for Track Mechanized Maintenance System
Due to high fuel costs, commuters now a days prefer the railway mode of transit - in bringing them to work place and back to their homes.
But how these railway systems, which are usually owned and operated by the government, manage and maintain to provide the society and industry a dependable form of transportation?
Mr. Werayutdh Chuenchan prepared a case study which is entitled “Benchmarking for Track Mechanized Maintenance System: A case study of the State Railway of Thailand”.
This study is focused on the on-track mechanized maintenance in the SRT; identifying the advantages and disadvantages of general characteristics of railway contexts; the factors that affecting to time, cost, quality, and safety management of the on-track mechanized maintenance in the SRT; and applying the benchmarking concept to SRT track mechanized maintenance management.
He concluded that, in order to achieve the stated objectives, the understanding of general characteristics of railway contexts, on-track mechanized maintenance system and maintenance management concept are required. Then the principal of benchmarking is applied in finding the best practice of on-track maintenance management among the sections.
This is his abstract.
ABSTRACT
Presently, the State Railway of Thailand (SRT) faces a vast competition from the other transportation mode. If it is to survive as a viable mode it must considerably improve service quality and economic efficiency. The effectiveness and efficiency of railway maintenance system directly affects to railway service and its economy. To maintain a good performance of railway maintenance, the good management of track mechanized maintenance is required.
To apply the benchmarking methodology in order to find out the best practice of track mechanized maintenance, is a very effective tool that can assist the management in their pursuits of continuous improvement of their operations. Planning and executing consideration of track mechanized maintenance chief is one of measurement. Besides, working process management and working performance are also considered.
The results from the study show that quality consideration is the most significant for planning. Then safety, time, and cost are considered respectively. Once it executes the plan, the safety of their work is the most important. During working process, the supporting and cooperation from outside colleagues are required. The factors that affect to the cost performance of track mechanized maintenance section are labors cost, fuel cost, materials cost, and parts cost. The most affected factor is labor cost. The one, who has good performance in cost and time management, also gives high significant to time and cost planning. In other word, it is difficult to compare the working performance in term of quality if who is the best. Because of there are external factors that need to be considered such as the general characteristics of the railway contexts and collaboration of external colleagues.
Keywords; best practice, benchmarking, railway maintenance, track mechanized maintenance, working process, working performance
But how these railway systems, which are usually owned and operated by the government, manage and maintain to provide the society and industry a dependable form of transportation?
Mr. Werayutdh Chuenchan prepared a case study which is entitled “Benchmarking for Track Mechanized Maintenance System: A case study of the State Railway of Thailand”.
This study is focused on the on-track mechanized maintenance in the SRT; identifying the advantages and disadvantages of general characteristics of railway contexts; the factors that affecting to time, cost, quality, and safety management of the on-track mechanized maintenance in the SRT; and applying the benchmarking concept to SRT track mechanized maintenance management.
He concluded that, in order to achieve the stated objectives, the understanding of general characteristics of railway contexts, on-track mechanized maintenance system and maintenance management concept are required. Then the principal of benchmarking is applied in finding the best practice of on-track maintenance management among the sections.
This is his abstract.
ABSTRACT
Presently, the State Railway of Thailand (SRT) faces a vast competition from the other transportation mode. If it is to survive as a viable mode it must considerably improve service quality and economic efficiency. The effectiveness and efficiency of railway maintenance system directly affects to railway service and its economy. To maintain a good performance of railway maintenance, the good management of track mechanized maintenance is required.
To apply the benchmarking methodology in order to find out the best practice of track mechanized maintenance, is a very effective tool that can assist the management in their pursuits of continuous improvement of their operations. Planning and executing consideration of track mechanized maintenance chief is one of measurement. Besides, working process management and working performance are also considered.
The results from the study show that quality consideration is the most significant for planning. Then safety, time, and cost are considered respectively. Once it executes the plan, the safety of their work is the most important. During working process, the supporting and cooperation from outside colleagues are required. The factors that affect to the cost performance of track mechanized maintenance section are labors cost, fuel cost, materials cost, and parts cost. The most affected factor is labor cost. The one, who has good performance in cost and time management, also gives high significant to time and cost planning. In other word, it is difficult to compare the working performance in term of quality if who is the best. Because of there are external factors that need to be considered such as the general characteristics of the railway contexts and collaboration of external colleagues.
Keywords; best practice, benchmarking, railway maintenance, track mechanized maintenance, working process, working performance
Tuesday 9 June 2009
List of New Graduates (May 2009)
Construction, Engineering and Infrastructure Management
No. * Name * Country * Degree
1 . Kedsuda Limsila , Thailand - D. Eng'g
2 . Raman Awale , Nepal - M. Eng'g
3 . Pichaya Bhanubhak , Thailand - M. Eng'g
4 . Dam Thanh Binh , Vietnam - M. Eng'g
5 . Kantanat Chaipermsak , Thailand - M. Eng'g
6 . Werayutdh Chuenchana , Thailand - M. Eng'g
7 . Tran Viet Dung , Vietnam - M. Eng'g
8 . Aung Myo Hein , Myanmar - M. Eng'g
9 . Panwimon Jornjaran , Thailand - M. Eng'g
10 . Kriangsak Kiatkittikorn , Thailand - M. Eng'g
11 . Ahsen Maqsoom , Pakistan - M. Eng'g
12 . Swe Zin Myint , Myanmar - M. Eng'g
13 . Nguyen Viet Nhan , Vietnam - M. Eng'g
14 . Tran Duc Nhat , Vietnam - M. Eng'g
15 . Surapong Panja , Thailand - M. Eng'g
16 . Rahongsree Prayongrut , Thailand - M. Eng'g
17 . Thotsaphol Rattananapalai, Thailand - M. Eng'g
18 . Htet Htet Shein , Myanmar - M. Eng'g
19 . Korakade Thamphongsri , Thailand - M. Eng'g
20 . Piyada Thanarojsakul , Thailand - M. Eng'g
21 . Piyachat Thaveelert , Thailand - M. Eng'g
22 . Pham Vuong Trung , Vietnam - M. Eng'g
23 . Le Quang Tuan , Vietnam - M. Eng'g
Project Management in Construction
1 . Ngo Duc Binh , Vietnam - Professional Master
No. * Name * Country * Degree
1 . Kedsuda Limsila , Thailand - D. Eng'g
2 . Raman Awale , Nepal - M. Eng'g
3 . Pichaya Bhanubhak , Thailand - M. Eng'g
4 . Dam Thanh Binh , Vietnam - M. Eng'g
5 . Kantanat Chaipermsak , Thailand - M. Eng'g
6 . Werayutdh Chuenchana , Thailand - M. Eng'g
7 . Tran Viet Dung , Vietnam - M. Eng'g
8 . Aung Myo Hein , Myanmar - M. Eng'g
9 . Panwimon Jornjaran , Thailand - M. Eng'g
10 . Kriangsak Kiatkittikorn , Thailand - M. Eng'g
11 . Ahsen Maqsoom , Pakistan - M. Eng'g
12 . Swe Zin Myint , Myanmar - M. Eng'g
13 . Nguyen Viet Nhan , Vietnam - M. Eng'g
14 . Tran Duc Nhat , Vietnam - M. Eng'g
15 . Surapong Panja , Thailand - M. Eng'g
16 . Rahongsree Prayongrut , Thailand - M. Eng'g
17 . Thotsaphol Rattananapalai, Thailand - M. Eng'g
18 . Htet Htet Shein , Myanmar - M. Eng'g
19 . Korakade Thamphongsri , Thailand - M. Eng'g
20 . Piyada Thanarojsakul , Thailand - M. Eng'g
21 . Piyachat Thaveelert , Thailand - M. Eng'g
22 . Pham Vuong Trung , Vietnam - M. Eng'g
23 . Le Quang Tuan , Vietnam - M. Eng'g
Project Management in Construction
1 . Ngo Duc Binh , Vietnam - Professional Master
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