Risks Affecting Construction Cost in Vietnam

In project management, there are four core functions: scope, time, quality and cost. In private or business project, cost considered the most important thing. In fact, it is difficult to find a project which initial and final cost are the same despite of owner’s best effort to control the cost.

In any construction project, there are many risks affecting construction cost including, external (economic, politic, legal problems), internal risk (design, contractual, technical), direct risks (inflation, changing of government regulations) and indirect risks (technical problems, delay, contractor capability). In general, risks affect project costs.

Ms. Le Ngoc Diep made a study on the managing risks affecting construction cost in construction phase including evaluation, analysis and response to help owner control the construction cost within authorized budget. The main objective of his research is to study owner’s management status of risk affecting construction cost in Vietnam construction project and suggest recommendations to improve it. In order to achieve this main objective, sub-objective were needed to accomplish such as follows: (1) study the risks affecting construction cost in construction phase and response applied in specific urban center project; (2) study other common risk affecting construction cost in Vietnam construction projects; and (3) assessment and suggestion in order to help owner manage risk more effectively

Conclusions

Construction project is risky due to huge capital, long time implementation and many stakeholders. The awareness on risk management is not that good in Vietnam construction project. In order to limit the effects of risks and control the cost within authorized budget, the owner should carry out appropriate management risk and involve all systems in this process.

In this report, Le Ngoc Diep wanted to study on the status of risk management, in terms of risk affecting construction cost and response applied of one specific construction project which is Chi Linh urban center project.

Over view of managing of risks affecting construction cost in Chi Linh urban center project

- There is no appropriate risk identification (risk list and risk symptom) in the project, and the risk management is not deeply comprehended.
- Awareness of the top management is limited, which lead to design change in construction phase.
- The cost of topography and geological survey is limited.
- The contract document and personnel management is inadequate.
- Risk monitoring and control is passive.
- Awareness of project manager and project team member is not high.

The risks affecting construction cost in Chi Linh urban center project
- Wrong estimate
- Design changes
- Inflation
- Site condition difference
- Poor capability of PMU
- Unclear contract conditions
- Poor site management

The other most popular risk affecting construction cost overrun according to Construction Magazine Census in 2009
- Poor financial capacity of the owner
- Poor financial capacity of the contractor

Responses applied in the project and recommendations are given below

His thesis abstract is copied and posted.

Abstract

The construction industry is one of the most dynamic, risky and challenging businesses because of implementing time is very long with huge capital and many stakeholders.

Risk is inherent in construction projects and risk management in construction projects has been recognized as a very important management process in order to achieve the objectives in terms of time, cost, quality, safety and environmental sustainability. Let say, we are going on the road with the definitive finish, but on that way many obstacles, difficulties facing. So if we do not manage we cannot reach the finish or waste time and energy to reach it.

In construction there are some objectives, but one of the most important thing is cost of project is in authorized budget. There are many risks affecting cost and profit of project from initial to close out phase. In this study I concentrate on risks affecting construction cost and solutions helping owner manage the cost effectively and efficiently to ensure the cost is in budget of project.

The Delay Factors in EPC Contracts in Viet Nam: Case study of Uong bi Thermal Power Plant

Delay in any construction project is inevitable. In construction stage of the project, anticipating many factors that cause delay is one of the important works of the project manager. Therefore, project managers should give solutions for these before the construction starts. However in Vietnam, sometimes both owners and consultants do not care about this, which is why many construction projects are delayed.

In particular, all thermal power plants, fertilizer plants and other projects executed by EPC contractors were delayed by usually 1 to 2 years.

Even though various studies have been considered to know the causes of delays, still, seldom discuss about the common and general causes of delay in construction projects. Thus, comprehensive study on these delays is essential. Since the problems are rather contextual, the study needs to focus on specific causes of delays. Mr. Tran Van Trung made a case study to find out the main factors causing delay and affecting other aspects in Thermal Power plants in Vietnam at all stages of projects.

The objectives of his study were to (1) identify major delays in Thermal Power Plants in Vietnam; (2) identify the major cause (reasons) of delays in Thermal Power Plants in Vietnam; and (3) recommend strategies for improving project delivery based on the finding from the study.

Conclusion

Delay in the construction industry is a serious problem in general and in all the coal-fired Thermal Power plant in Vietnam in particular. The project which was investigated in this study exhibits a delay like in all power plants in Vietnam. Therefore, the results of the research provided a framework for project managers who can better understand the dynamics of project management and taking efforts to reduce incidences of delay.

By administering and analyzing factors affecting the project, this research has identified problems related to delays during construction phase. From these results, once again, it is noted that most causes of delay of the project related to Consultant Company of owner who set up F/S and surveyed site conditions before, and Fishner Company as A/E of owner. Furthermore, subcontractor as PM caused delay in the highest impact, since the quality of its equipment was not reliable and the quantity was not asynchronous in delivery.

In this study, twelve major factors were analyzed to find out the causes, impacts and solutions of delay problems during the construction stage. Although these problems may be unprejudiced or subjective reasons, they were also originated from carelessness in the implementation, management or supervision. Then, this research had deeply analyzed other factors that also affect schedule for each case and summarized some reasons behind these delays, and proposed some recommendations belowwhich might enable to develop the main contractor organization to achieve one of the major goals in power plants which the on time completion.

His thesis abstract is copied and posted.

Abstract

In construction industry, a project is known to be successful when it meets three fundamental criteria such as finishing on time within the budget, the prescribed quality requirements such as satisfying customer’s demand and adapt safety in operation stage. Unfortunately, all of Thermal Power Plants built in Viet Nam had problems of project management leading to their delay. Investigating these problems has become project manager’s indispensable demand.

In general, the problems involved with project delays are solvable. In making effort to solve these problems, the critical factors influencing negatively on construction duration need to be discovered. Hence, it is very important to establish a systematical approach that will be used as a tool for the investigation.

This report will assess and analyze twelve factors causing the delay problems in Uong Bi Thermal Power Plant was executed in the North of Viet Nam. The qualitative method, basically is based on the principle of assessing the risk level of factors impacting negatively on the progress of the project, and it is conducted to fulfill the objective of the study.

Finally, some solutions dealing with project delay problems in construction executing stages are proposed.

Effectiveness Of Feasibility Study Analysis In Apartment Building Project

The construction projects present a unique situation where each project has different situation and parties. One of the important stages involved in a construction project is the preparation of the feasibility study. Feasibility study is conducted during the formulation phase of Project Cycle. This verifies whether the proposed project is well founded, and is likely to meet the needs of its intended target groups/beneficiaries. The study should design the project in full operational detail, taking account of all policies, and technical, economic, financial, institutional, management, environmental, socio-cultural, and gender-related aspects.

Construction is a complex field, costly and risky. In recent years, the construction industry in Vietnam is having a good reputation of rapid development. However, many large projects invested by private investors are still facing incorrect cash flow, missing indirect cost, less profitable or cost overruns, and feasibility study is not suitable according to economic environment.

To minimize these problems, client needs to improve their skills and abilities in dealing with project Financial Feasibility Study. Recessions and poor economic times have put pressure on the average company for better using effectiveness tools in this stage.

Mr. Truong Ngoc Dung made a case study about the Twenty Six Storey Apartment projects which was invested by Company ABC. The objectives of his study were to: (1) conduct an exploratory study on the factors and process used in financial feasibility study; (2) develop a framework for an effective financial feasibility for Apartment Building Project; and (3) conduct a case study to validate the effectiveness of the framework

Conclusions

The case in this report describes a practical implementation of the Feasibility Study stages in Apartment Building Project of Vietnam in general and Ho Chi Minh City in particularly, and obviously revealed the factors which can seriously affect the success of the project. In fact, Vietnam at present has enormous efforts to overcome policy and reduce the cumbersome procedures in investment, but investors still face a lot of problems (Financial Feasibility Study) which occur during project implementation.

In conclusion, the report may not only offer the effective method to make Feasibility Study in the first stages of project implementation, but also clear description that the major factors may affect the efficiency budget projects, that most projects in Vietnam are all experiencing: the problem of cost overrun, bankrupt and project costs incurred up compared to initial estimates.

Recommendations for further study

- This research was concentrated on finance like estimated cost, revenue and how to analyse project financial. However, other influence factors such as local politics, public relationship and strategy of the owners did not mention.

- It is recommended to make a Feasibility Study at difference stages such as design stage, construction stage and after operation and transfer stage for the main purpose of improving the projects later.

- Sensitivity Analysis is also needed to recognize the priority factors after calculating financial factors for the Apartment Building project. These factors are of big concern and have the ways to manage it.

- Mores projects have to be studied in order to get a better result and it is highly recommended to investigate the effectiveness of each strategy by quantitative data.

His thesis abstract is copied and posted.

Abstract

The Real Estate investment is one of the most dynamic, risky and challenging businesses because of their implementing time is very long with huge investment capital and various participating components. Furthermore, this field has poor skills for making Feasibility Study, with many major projects failing to finish on time and cost targets.

Feasibility Study of construction project used to get the alternatives of optimal land use that give the highest profits. Feasibility study analysis also gives information about value of investment and the benefits that investors will get. Define return of investment can be seen from feasibility study. Commonly, Net Present Value (NPV), Internal Rate of Return (IRR) and Benefit/Cost (B/C) are the values that used by investor to consider this project is feasible or not.

The purpose of this study to identify effectiveness methods, main major estimated factors that will be occurs in this stage. To effectively making the financial feasibility study in construction project, it is necessary for oriented path to identify important factors, then provide a suitable tool to measure their effects in each stage of Financial Feasibility Study life cycle and suggest the effective solution methods as minimized/maximized, shared, or accepted.

Design Management in Design-Build Project Base on Design Team of Contractor Perspective

The Design – Build method has many advantages, contractors have to manage some new factors that are not their responsibilities based on the traditional project approach such as design duty, quality of design, design management issues and even authorities approval.

After the contract is awarded, main contractor or design-builder have to established design team promptly and set some roles for each design member as well as define obviously the project scope. Therefore communication, coordination and collaboration between the design teams are significant key leads to project success.

On the other hand, design team also take care authorities submission – a sensitive point which affect project schedule – concurrent with design development progress. Design management had to deal with both tasks in tight schedule, construction permission deadline pressure and balance between main contractor requirements and the owner needs.

Experience was also an issue that design management had to deal with. In order to save design fee, main contractor normally tended to hire design teams whose competence was just enough to develop the preliminary design that provided by the owner. Meanwhile experience of design team who could find out mistakes from the owner concept as well as control changes at initial project phase was underestimated.

These above factors may be due to some inherent problems that contractors and owners have to deal with in Design-Build process. Therefore, Mr. Nguyen Cao Bao Luat made a study to investigate the following issues:

- Coordination and communication between parties
- Lack of time and inexperience design team
- Level of concept and preliminary design which conducted by owner
- Change order and extra work orders
- Design error

The objectives of his study were to: (1) identify design management problem in D-B projects base on architectural design perspective; (2) investigate the nature of problems in order to find causes and solution; and (3) propose a system how to manage design: coordination, interaction for design-build project.

Conclusions

Lessons Learned from JCV Project case study

According to project final report document which done by both contactor and the owner at JCV project, the essential lessons that they learned are as follows:

1. Design-Build team should be carefully chosen in term of experience by the owner;
2. Involved parties should be prepared carefully to deliver the project;
3. Preliminary design which done by the owner should be enough information and specification of performance should be priority;
4. The owner should leave design guidelines "loose," because design-build team will work creatively under performance criteria; and
5. Communications among the involved parties should be opened and maintained particular between design team and the owner.

Summary of lessons learned form case study based on design team perspective


Some keys to success for design – build project in particular for design management

1. The owner and design-build team should create a collaborative environment for working at the beginning of the project. Good communication among key team members and understanding between designer and builder are keys leading to project success.

2. The owner should select and work with the pre-qualified design-build team who has previous experience with similar project types is the essential core. The design-build team experience helps the owner study geographic location and commit that design-build team have ability to deliver a good design and quality of construction are key factors.

3. The owner should make sure that the level of designer team and construction team are meeting the requirement organization of the project, because at equal level, communication will be effective in term of team performance.

4. Take the contractor/construction team into the project as soon as possible to review the concept as well as technical drawing. The contractor should be expected to participate in the preliminary design.

5. The owner should use a concept design to work with the design-builder team to develop a preliminary design. Make design decisions early starting with the Customer Concept Document, Request for Proposal and Concept Design.

His thesis abstract is copied and posted.

Abstract

Design and build is a method of project delivery in which the design and construction phases of a project are combined into the contract, usually awards on either a low bid or best-value basic.

In design-build, the A/E firm and construction contractor have an incentive to become and integrated team that works concurrently on the design and construction phase of different segments of a project, with the potential to expedite delivery and better control product quality and cost.

However, design-build has a few drawbacks, as well.

• The system's short-cut design process. Some steps are reduced
• Owner has their own conceptual planning and schematic design which may not be done by professional A/E firm. The level of preliminary design will impact cost and quality in design development stage and construction stage also.
• The builder is also the designer, it is only natural to expect that the designs will gravitate to technologies most preferable (read profitable) to the builder.
• Inherent checks and balances between design and construction teams no longer independent.

Even though Design–Build (DB) arrangements have several advantages, project contractors are still studying and improving it. This may be due to some inherent problems that both contractors and owners have to face in their D-B projects. This study investigates the problems and difficulties that design team of contractor deal with and how can help the contractor overcome these problems though design management.

Owner’s Involvement in Preliminary Stage of Real Estate Development Project Case Study in Vietnam

What is the main involvement of owner in managing real estate projects while hiring outside consultants during the preliminary stage and how they can manage and monitor these design consultants effectively to achieve the best quality for their projects. It is important to explore the roles and the responsibilities of owner involving decision making in every stage of project development with outsourcing strategy.

Mr. Truong Thai Binh made a case study to design a guideline for owners who do not have enough experience and in-house resource to develop property. His study was carried out to increase a better understanding of owners’ roles and responsibility in developing construction projects.

The objectives of his study were: (1) identify project life cycle and real estate project development procedure, particularly for real estate projects in Vietnam; (2) based on project life cycle, investigating the involvement of owner in every stage of project development, especially in Design phase; and propose recommendation for improvement of project management guideline for managing, controlling and monitoring.

Conclusion

Role and Responsibilities of Owners

A successful project begins with the owner. In general, the broad responsibilities of the owner on construction projects include two major factors that contribute to a quality project. The first is the development of complete and realistic requirement and objectives for the project. By communication and coordination, the second factor is to provide a thorough understanding to other team members of the role and responsibilities of the owner. Besides that, the owner is also responsible for providing adequate financing for the entire project and making prompt payment to team members.

Owner also plays an important role of making a decision in every step of the projects development, particularly in preliminary phase. The key indicators for the owner to consider before making any decision in every step of preliminary phase are given in the table below:

Recommendation

Recommendations are suggested based on the case study and the literature review.

a) The most common causes of the construction problems were the lack of coordination and insufficient drawings. Solution for these problems is the involvement of the Owner and Design Professional at the design and development phase. Their participation will reduce the risks as they help all parties to understand the actual requirements and minimize conflicts between parties to achieve better designs.
In order to reduce the conflicts in the construction project, it is recommended to have a good communication channels among the Owner and other parties to establish a good coordination.

b) To assure the quality management in the design phase of construction projects, the Owner should have a good training program for his/her employees. Training on the job is a good method to help employees become more professional.

Reasonable investment in the design staff will have good effects on the creativity in the Owner project management. The most appropriate skilled, experienced staff should be selected for each project.

c) The Owner should ask for the help of Architect or Designer in formulating the final brief. By working closely with them, the Owners should also help to establish a valuable dialogue and ensure that the Owners have a clear understanding about creative references, functional needs, roles and responsibilities.

The Owners should never be afraid to change their minds at this formative stage of the project. Design briefs often evolve so that the final brief is quite different to the original brief. The important thing is to get it right at this stage because design changes later in the project have the potential to undermine the integrity of the overall design, delay the project and add to the cost.

The Owners empower the Architect or Designer to do what they do best with the potential to deliver a project quite literally beyond the Owners’ comprehension. This can be considered as the pre design phase.

d) It is important to integrate design quality in the overall quality of the project – procurement process, leadership, project team and continuous improvement. Good design will:

- Make a positive addition to the location, the environment and the community;
- Add value and reduce whole-life costs;
- Create built environments that are safe to construct and safe to use;
- Create flexible, durable, sustainable and ecologically sound environments for the community;
- Minimize waste of materials, energy and pollution both in construction and in use;
- Be attractive and healthy for users and the public;
- Contribute to construction that is quick, safe and efficient;
- Produce facilities that are easy and cost effective to manage, clean and maintain.
[Source: Better Public Buildings]

His thesis abstract is copied and posted.

ABSTRACT

Today, with more than 86 million people, Vietnam is one of the potential real estate markets in Southeast Asia. For such reason, there is a great need for professional project management skill, particularly for owners and investors in Vietnam. Therefore the subject of this study is to identify the owner’s roles in managing his projects. This owner organization is established in 2002 and has been working as property investor for almost 7 years. The organization is located in Ho Chi Minh City. The managers are those who do not have enough experience and acknowledgment in real estate and, particularly in construction industry. Important part of this study is to develop a brief guideline to identify the roles and responsibilities of the owner in project investment and management.

Owner’s Project Life Cycle Approach: A Case Study of Rubber Plantation Projects of Vietnam Rubber Company

In recent years, Vietnam Rubber Company (VRC) has invested big capital for expanding rubber plantations and upgrading rubber processing facilities both domestic and outside the country. For VRC, the concept and practice of owner’s project life cycle have been used in rubber plantation projects. Nevertheless, VRC has not built a type of project life cycle appropriating with its specific characteristics; therefore, some projects meet with serious difficulties during performance.

According to internal audit and situation report, VRC’s oversea rubber projects show many problems especially in cost and schedule on the project management in construction during 2007-2010 such as:
- Cost overrunning or over budget;
- Projects are prone to delay;
- Project quality uncontrolled;
- Project scope creep.

Also according to this report, VRC recognize the bad results in Cambodia are created by many reasons; however, poor management of the project life cycle is one of the reasons bring about serious consequences including the followings:

- No establishing a framework of project life cycle;

- Project proposals and business cases and project selecting process in the first phase were carried out incautiously have impacted to all remain phases of the project life cycle;

- Some projects do not have a strong project management team;

- Inadequate delegation from VRC’s head quarter and the project organization is not properly;

- Lack of managerial skills and competencies as well as the internal capacities of the owner

VRC considered that poor management of the project life cycle caused negative impact to the projects. They are the critical problems which VRC and other related parties to Cambodia projects need to consider cautiously.

Mr. Do Huu Phuoc made a research to study Vietnam Rubber Company’s project life cycle approach, analyze situation and develop a framework of project life cycle of a rubber plantation project and guideline to possibly ensure the projects deliver on time, on budget and to the level of quality expected.

Conclusion

All projects have certain characteristics in common which only last for some time.

Projects can be managed using a common set of project management processes. In fact, a similar set of project management processes can be utilized regardless of the type of project. All projects should be well-defined and well-planned, and all projects should manage the scope, risk, quality, status, etc. Although every project is unique, the lifecycle model typically is not. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times in other organizations. There is no reason to reinvent everything for a project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates.

The project life cycle of VRC’s projects may progress through four phases:

- The first phase of a project is the initiation phase.

- The second phase, the project enters the detailed planning phase.

- The third phase involves implementing the plans created during the project planning phase.

- The final phase involves completing the work, closing out the project.

Conclusion for VRC’s project life cycle approach

There is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for VRC to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, VRC should be concerned with the life cycle costs of planted rubber trees, constructed facilities rather than simply the initial costs.

Saving small amounts of money during construction may not be worthwhile if the result is much larger than the operating costs; or not meeting satisfactorily the functional requirements for the new facility or the objective is not align with the scope. Thus, generally a project or particularly a rubber plantation project wants to finish successfully it must be very concerned all the phase of the project life cycle.

Recommendations

With so many ongoing projects like situation at present, VRC may encounter difficulty for all projects to get adequate support, or even the attention of top managements. The particular common problems when trying to manage multiple projects concurrently may be:

a.There is no time for summary experience, so the mistakes from a project can repeat to all projects.

b. Delays in one project may drag other projects because of common resource needs or technological dependencies;

c. The inefficient use of corporate resources results in hills and valleys of resource utilization;

d. There are unwholesome competitions between project teams to get support, or the attention of top managements.

VRC should consider a temporary stopping with the current projects to review all the problems happening. The lessons learn from projects should be analyzed, reviewed and documented for future projects and any other projects will be performed by VRC in Cambodia or other countries in the future.

This study had concentrated on owner’s approach in managing project life cycle to an agriculture project. However, there are many aspects relating to the project management. Further studies should be carried out to find out the approach of owner for agriculture project management.

His thesis abstract is copied and posted.

Abstract

Project life cycle is an approach that links the phases, which can lead to significant results required for completing a project. As the owner has the most authority in enforcing the implementation of constructability, the owners' awareness of the benefit of the project life cycle is the most important. Project owners must be aware that the decisions that are made in the stages of projects are difficult and costly to change once construction begins.

Owners should recognize that there is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should be concerned with the life cycle costs of constructed facilities rather than simply the initial construction costs. Saving small amounts of money during construction may not be worthwhile if the result is much larger operating costs or not meeting the functional requirements for the new facility satisfactorily.

However, the traditional approach to project life cycle limits their option for involving in the phases of the project. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times at other organizations. There is no reason to reinvent everything for your own project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates which to be used in the same industry.

Delay in Planning, Design and Construction: A Case Study of Residential Development Project in Ho Chi Minh City

Vietnam’s construction industry is now suffering from many problems regarding design to operation especially in residential and complex building. These problems include:

1. Coordination between Architect and Structural designer
2. Communication difference between architect and owner regarding the structure
3. Lack of government permit
4. The contractor’s method of construction did not comply with local building standard therefore accident happened
5. Project delay due to owner’s return payment to contractor which is not stipulated in the contract
6. Dispute between project construction management group and main contractor or between main-contractor and sub-contractor about claim, variation order, quality, delay of schedule, and coordination with other contractor
7. Difficulty of taking over from contractor to project management group because the standard is not clear or was not met general standard
8. When PCMG handed over the project to client but the client has financial difficulty
9. Rework
10. Resolving complains from client about service quality and the method of managing the project

Mr. Nguyen Hung Cuong made a case study which objectives were to: (1) study delay in planning, design, construction; (2) find out to solve and prevent problems in each stage; and (3) propose project life cycle strategy in how to develop residential complex.

Conclusions

The project life cycle would be successful if in each phase of the construction phase project, the management had clear plan and had coordinated with all contractors to resolve the problems at an early stage.

The project will be completed on time if clients are pleased and satisfied with the quality and safety. In case of project delay, propositions based on theoretical and recommended practices including guidance from the PMI’s PMBOK guide can be presented in order to solve the problem. Besides, some useful tools were considered and suggested to use as the aids for the project managers to improve control management in the project.

However, this case has limited information because some companies in Vietnam can not provide full information to students.

Recommendations

In order to avoid problems on project delay from concept design to operation which was actually happened in The Manor phase II project, the following steps are recommended:

• PCMG have to get Government permit first together with concept design before construction and have to control the plan well. The plan monitoring is very crucial for project management.

• Owner should estimate the project expenditure and should have a board in order to double check the project phase by phase.

• Project Construction Management Group has to undergo an organizational training in order for them to know the use of the process to accomplish the project and to learn the contract condition.

• Documents control for project is very important. All the site instruction should make the process for resolving and return it to contractor soonest, with the process that all the scope of work will be completed on time.

• In case of ISO certified company, Project Manager should give feedback to the company Quality Manager to add in personality test forms together with Job Application Assessment Procedures forms. That will save Project Manager’s time whenever there is new job applicant coming to job site for an interview.

• PCMG have to request contractors to submit the schedule of material delivery in order to double check it. PCMG can also check and give the project schedule to contractor for site instruction.

• The contractors should make a report of human resource to PCMG in order to inform if that manpower is enough to finish the scope of work and if the project can be completed on time.

• Relation division and contractors should always have the plan to solve the method problems.

• The weekly meeting is very important for PCMG and contractor. All problems will be resolved during that meeting and since relation division have limited time to return the request to contractors for information.

• All contractors must provide safety policy to PCMG to reduce accidents on site.

• Delays caused by taking over and claim of payment during construction which is the bigger problem between contractors and the Owner.

His thesis abstract is copied and posted.

Abstract

The planning process in project lifecycle is one case study in the Project Management Institute’s A guide to the Project Management Body of Knowledge. In the case study of Project management is established planning process in project lifecycle is very importance therefore this is really a tough challenge and time-consuming task to any project manager.

The drawing up the plan from concept design to operation project that it suggested management must have large line of vision also experience .The planning process will be evaluated clear that must link everything from the owner, design, contractor. This final project report focuses on construction project as lifecycle project needs who’s have responsibility to design planning process to be clear within knowledge. Though a case study of residential and complex project in Ho Chi Minh City, many problems that we can saw which cause project interruption will be investigate and analyzed. A lot of solutions be proposed which base on the knowledge will be discussed to help project management in order to improve skill in the project.

Owner’s Organization Project Management Maturity: A Case Study of Petrolimex Saigon

Construction owners nowadays are facing two general problems which are the lack of the modern project management knowledge and the lack of a system of procedures and instructions for continuously measuring, evaluating the performance of project and project staff; collecting, storing lesson learned and making convenient access for project staff; and planning and implementing the improvements.

Mr. Le Quang Khanh made a case study which objectives were to: (1) assess the organization project management maturity of an stated owned enterprise on the role of project owner, analyze what it has and what it has not in comparison with the modern project management theory; and (2) propose recommendations for project management improvement.

Conclusion

This study has demonstrated an intensive exploration into the current status of an owner construction project management system. Each management process has been described, assessed, analyzed basing on the definitions, requirements of modern project management processes established by PMI in PMBOK Guide (2008) and OPM3(2003).

The assessment has found that, although the assessed company applied nearly all processes of project management, the maturity level of these processes in the company are still rather low. Company is at the first steps of project management maturity ladders. Reference to OPM3 (PMI, 2003), the Company project management maturity level is at about the standardization stage as shown in the figure below. There are many process need to be standardized, many procedures, guidelines need to be established in order to help the company improve its project management maturity, develop the company competence.
Following are some main problems of the company in project management system:

1. Many processes are not standardized: performed basing only on the experience, practice; there are no standard documented procedures, instructions/guidelines to conduct. Many useful tools and techniques are not applied during project management processes because of the lack of the modern project management knowledge in project staff.

2. The planning processes are not well implemented. There is no specific project management plan, project scope, or project quality plan for each project. The project control and execution activities of project team members are almost unplanned, basing on experience.

3. There are no standards, procedures, no formal performance system to measure, evaluate the degree of success and failure of each process, phase or project, the performance of project team members. Therefore there is no steady foundation to plan for project management performance improvements.

4. There is a formal process for assessing, auditing the existing procedures, instructions and suggesting, implementing improvements (included in ISO9001 quality system). However, because of the limit of the staff knowledge and skill about the modern project management, there are not many effective improvements as expected.

5. There are no procedures or instructions about collecting information of the contractors/suppliers, the project issues, lessons learned…to keep in a convenient place (like project management office) for analyzing and using in future project management. Therefore, there is also no formal historical information and lessons learned knowledge databases system. All the project records, after the project completion, are kept in the store.

Recommendations

1. For the assessed company and other state owned companies in general on the role of owner:

- There should be more training on modern construction project management for the company staff. The training content include (but are not limited to) the knowledge/skills of project management for individual, for organization; the experience in organizing and managing a project management organization, the existing effective systems of construction management procedures and instruction of international project management groups. The staff need to be trained are: the top management for having far more vision, more correct evaluation about the importance and effectiveness of building a standard project management system; the middle management and the project team member to be more effective in managing projects and composing the necessary procedures and instructions;

- Company should pay more attention on the planning processes; make all the management plans before carry out management activities.

- Company should improve the formal system of procedures and instructions to standardize all the project management processes in the company. The guidelines about the applied range of each process are also needed. This help to keep the consistency of quality and increase the effectiveness of management processes.

- Company should improve and increase the effectiveness of ISO9001 assessing and auditing processes by using the competent auditors who are professional in construction project management, training the project staff to be good and innovative self-auditors.

- Company should establish and apply the formal standards, tools, guidelines for measuring, evaluating the success, failure of project goals in order to collect experience and lessons learned for future investments.

- Company should build a small project management office/center where the project management staff can easily access to the historical information and lessons learned of all past projects; refer to the modern project management tools and techniques. And besides, Company should build the procedure, instruction for collecting, storing those data. These works will be very useful for the future project management of the project staff, especially the new comers.

2. For further study

Further study needs to be carried out to have more comprehensive assessment of state owned project management organizations and give more detailed recommendations for competency development of this type of project management organization.

His thesis abstract is copied and posted.

Abstract

Nowadays, the increase of world population, the development of technology and the globalization of competition are day by day giving construction industry the increasingly requirements both for the quantity and the quality of construction projects. Hence, many organizations and the individuals involved in construction industry are paying more concern in studying and applying the modern project management knowledge/skill into project management process.

To be successful in managing projects, not only contractors but also the owners need to be competent in project management.

This case study will assess the degree to which an owner-a state owned company, apply the project management processes and give the recommendations for improvements.

Method & Effectiveness of Feasibility Study in Apartment Project: A Case Study of Carina Plaza Building

In the real estate investment business, decision making is important to influence the success or failure of the project. One of the significant stages is the Feasibility Study (FS) stage.

Based on the characteristics of construction industry having high uncertainty, many risks occur during Project Feasibility Study. Correct decision and assumption will help to make the project a successful one. To those assumption, main construction factors should have been anticipated and calculate it into the feasibility analysis so that risks will not be happened and will be of advantage for the investor.

Mr. Le Mien Thuy made a case study on the method and effectiveness of FS. His research objectives were: (1) Framework of FS in Apartment Project, (2) study the application of the framework in project case; (3) find the problem in FS for Apartment Project; and (4) proposal the solution base on theory.

This issue is more significant to some of the construction investors facing serious problems with budget control, as an effective budget control is critical for investing in large projects. Construction project management, which includes project Cost Estimation, is an area of weakness for those investors who want to expand or invest more in the international construction market.

Conclusions

A successful project is determined by Feasibility Study. This is one of the most important stages of project life cycle. There are some problems occurred in Feasibility Study and how to prevent those in future project are really important. Below are some tips such as:

1. Incorrect assumption: The people conduct with good experience in construction industry.

2. Misunderstand the Demand of Market: To study carefully the market situation base on survey data of professional company.

3. Cost & revenue estimate is not match reality: To study some similar successful project and collect good information from contractor.

4. Time schedule planning is not practice: To get the advice of contractor and expert

5. Forecasting of cash flow is wrong: To break down detail a task base on general schedule and the selling program

6. Mistake in term of FS calculation technical: Competent people should be in charge with the professional software.

7. Lack of information in term of information of land: Good connection to authority.

Based on above study we can understand deeply a significant element which impacts the consequence of the project. Based on the literature review, typical Feasibility study Framework for apartment project comprised of 6 phases: identify conceptual, input data, estimate method application, method of evaluation, identify requirement, and identify benefit. In the initial step of FS framework, the preparation work is the most important. This section conducts entire of data for FS processing to ensure that the result is true .In the processing step of FS framework, the method of estimate and evaluation demonstrate that the project is feasible. There are many tools to measure the benefit of the project and specify the good decision –making in apartment investment.

The important point in theory of FS is the cost estimation method and cost estimation element. These methods are functional unit method, superficial method, element cost plan, approximate quantities techniques, all of them can be implemented in real apartment project efficiently. The cost estimation element describes the detail of some important figure such as: cost of land, cost of legal and professional fee in acquiring the land, construction cost, cost associated with facilities management, and cost of finance. Because cost is the input data for FS processing, thus knowledge to understand it is critical study in this report.

Recommendations

Based on the case study analysis, some problem occurring in feasibility study for apartment project was identified. In other hand, the cause was also revealed based on the comparison between actual and theory.

In order to improve the Feasibility Study of Apartment Project, the existing problems such as increasing cost of land, high inflation, revenue changing, fluctuation of material should be avoided.

The method of cost estimation should be implemented properly and appropriately to ensure it is accurate as much as possible. The knowledge of construction industry is most important factor to implement project result. Cash flow control is should be under-taken by people who have enough experience in construction work.

To get the information is highly important to eliminate the risk in future stage. The revenue of the project to be executed should follow the real market. Beside, the input data and output data for the calculation technique should be carried out carefully and should be checked by many people involved, to make-sure that the decision making is good.

The leader should support the team to carry out the FS by the information from other party side such as: Marketing research, contactor, consultant, designing company and some experts especially that in Viet Nam, the Policy of Government is not stable that is why the good relationship with government is the most important point in feasibility study.

Conclusion, in order to achieve the feasibility study in apartment project, the people who will conduct should have an integrated knowledge competence in terms of construction industry, financing, marketing, politic, and selling.

His thesis abstract is copied and posted.

Abstract

Viet Nam is the developing country which is booming economic and the new medium classification increasing rapidly. The movement of people from rural region to urban region is growing up every year. The population growing is 2% a year that is compressing of Housing Supply for social need. The entire above figure is good reason for real estate business in Viet Nam. However in order to success in property business the Feasibility study stage is most important factor should be consideration.

The subject of this study is analysis the method & effectiveness of feasibility study in Apartment Project. Base on theory and actual project the problem statement occurring in FS will be identified such as: Incorrect assumption , misunderstand the Demand of Market, cost & revenue estimate is not match reality, time schedule planning is not practice, forecasting of cash flow is wrong, mistake in term of FS calculation technical, lack of in formation in term of information of land. According the literature review the object study is summarized as Framework of FS in Apartment Project. To study the application of the framework in project case. To find the problem in FS for Apartment Project .To proposal the solution base on theory.

With the real project Carina Plaza the analyze of the comparison between theory and the actual activity is show up the different and causing of it . The method of cost estimate is concentrate to study according the theory and project case. The revenue estimate is also access careful to ensure the catch flow management always is positive and project is archive.

The final report specify the most important factor to impact the FS and a successful of project in medium apartment. The FS should be conducted by the people who is integrate knowledge such as: construction knowledge, financing , marketing, communication.

Organizational Project Management Structure in a Real Estate Developing Company: A Case Study of Namlong Corporation

Project management structure is a new issue in Vietnam. There are more and more real estate development companies in Vietnam in which many of them process great potential for the project management team. But the concept of project management structure is one thing that not all the companies are aware off. In fact, there is still confusion in choosing the model for organizational project management structure.

Mr. Nguyen Duc Trong made a case study which primary objective was to identify and find out the ideal project management structure for a developing company. In order to achieve this main objective, sub-objectives were needed to accomplish such as: (1) study the literature of Organization Project Management Structure in construction project; and (2) analyze a Case Study in application of Organization Project Management Structure in Viet Nam

Conclusion

Organizational structure can get in the way of, or help support, the overall success of projects. To a certain extent, we can change the organizational structure. In fact, we can change the organization chart frequently, and some companies just did that. Culture, on the other hand, is not easily changed. It can take years for a large organization to develop a culture of excellence (although it doesn't take nearly as long to fall back into mediocrity).

Some organizational structures can definitely impair the ability to deliver projects. First are those organizations whose project teams are doing support work. If the project organization does support as well, it usually means that support issues will pop up and take the focus away from the project. A lot of multitasking and thrashing takes place as we move from support work to project work to support work. It’s usually very difficult to prepare good estimates and meet the scheduling commitments. We may be forced into this structure if our staff is small. Sometimes we have 15 people who work on support, projects, and enhancements. However, we do not have enough people to specialize in either support or project work. This makes it difficult to meet all of our project commitments. Instead, we
have to do a good job of managing expectations.

The organizational structure may also impede the ability to share resources. For instance, if our project team needs a resource with a specific expertise, we may not be able to easily share that person with another functional area. Some of this is also related to our culture. We have to consider whether a different organizational structure would help. If it would, we may have an organization problem. If it wouldn't help, our culture is probably not supportive of resource sharing.

The organizational structure can also help or hinder the success rate. The structure can determine how well we focus on projects and how easy it is to share resources between organizations.

Recommendation

1. Consider the system of Project Management structure. Develop individual assessment form for functional manager, project manager. By involving functional management in project initiation activities-recognizing that functional managers often have the best insight into the skills and limitations of staff members-we made the process of assigning resources to roles more collaborative. We also instituted a formal requisition process for internal resources. Project managers were added to the performance development process training classes and required to provide periodic performance-related information to functional managers. At the same time, functional managers now shared individual goals and objectives with project managers, seeking to align project assignments with objectives

2. Build up the enterprise culture and create the transparent competition among departments. Have good authority system and empowerment so that all the department leaders can have the conditions to give out the right decisions

3. Have clear annual plan and transfer this plan to every department, every individual. Check, monitor and access this plan monthly, quarterly to create fair in bonus sharing

4. Re-define Roles and Responsibilities: establish a policy statement and matrix document that clearly identified the project manager and functional manager roles and responsibilities.

5. Establish a Communications Plan: developed a comprehensive program communications plan identifying who reports what to whom, and when. Acknowledge the information needs of the functional management team by including them in the communications plan. Project websites could be established to facilitate communications.

His thesis abstract is copied and posted

Abstract

A project organization is a structure that facilitates the coordination and implementation of project activities. Its main reason is to create an environment that fosters interactions among the team members with a minimum amount of disruptions, overlaps and conflict. One of the important decisions of project management is the form of organizational structure that will be used for the project. Each project has its unique characteristics and the design of an organizational structure should consider the organizational environment, the project characteristics in which it will operate, and the level of authority the project manager is given. A project structure can take on various forms with each form having its own advantages and disadvantages. One of the main objectives of the structure is to reduce uncertainty and confusion that typically occurs at the project initiation phase. The structure defines the relationships among members of the project management and the relationships with the external environment. The structure defines the authority by means of a graphical illustration called an organization chart.

Integrated Project Management Assessment For Development Property Project At Capital Fund In Viet Nam

Vietnam’s economy has been tremendously grown recently. Due to this economic growth, people from urban places move to major cities to seek employment which leading to huge demand for residential apartments as well as public building such as office and commercial or retail center. Currently, the supply could not match the demand which causes high property price particularly for residential projects with area yet to be built with investors camping in the streets to get a chance to buy off-plan.

Mr. Nguyen Phan Hoa Binh, the author, recognizes that in the planning management process, the link between business strategy plans and the project execution plan are not properly planned, organized, controlled and evaluated because of the critical problems such as:

1. The constraint of matrix organization structure at portfolio Project
2. The constraints of communication, difference communication channel
3. The conflict interest between shareholders

Due to these problems, Mr. Binh made a research which purpose was to analyze the said problems in order to come up with suggestions on how these should be solved. The objectives of his research were to: (1) explore the structure of close end property fund, to explore the linking structure model of portfolio company with the structure of property fund; (2) review the literature of strategic planning, the project strategy; (3) investigate the planning process of property project, to critical analysis and identify what is missing link between business strategy (fund) and project management (portfolio) via two case studies that the study author is working on it; and (4) adopt the project strategy in the project management in the aim to add a new tool to project execution that will contribute to project success and overall business results as initiation plan from property fund.

Conclusion

In the competitive market and globalization, the project strategy is the essential competitive weapon for company organization in the coming years. These are selecting the right strategy at the project initiation, making it compatible to the business strategy, carefully articulating the four components of project strategy will contribute to project success and overall business results.

Mr. Binh investigated the organization of property fund structure aiming to deeply understand the property fund structure that form up the portfolio company. It is the tool that helps to define the end property product, and its explicit competitive advantage. Based on the project case study- Aqua City Development, Mr. Binh has emphasized on how to define project strategy, how to define end project, how to define the project scope and classify project type. Although it has limited constraints to implement the project strategy, however the immediate mitigation plan could be solved out the critical issue in this case.

Argument hypothesis and External condition

As hypothesis statement, the project strategy framework can be used as a tool to start a strategic process. It will be succeeded when it has a clear project definition, project production. It needs to build up a flexible organizational structure that helps facilitate the competitive attribute.

The strategy framework could elaborate in the integrated project management when project cultures obtain the reciprocal relationship between project stakeholders and shareholder, but it is not an easy mission for the project strategy developer.

As a conclusion, the author could argue that the project strategy framework need to be defined and elaborated in interactive and cyclic way with its four element.

Recommendation

The concept of project strategy and integrated project management is still not common, while there are many developer properties provide the similar product. The project manager is required to expand the role that plays in the project development business and add more responsibility, which will contribute to project success. It could be done, when the project manager could be learn how to direct the new path will lead to better project results and better business performance.

His thesis abstract is copied and posted.

Abstract

The purpose of this study report investigate the integrated planning process of portfolio project, which is formed up by property development fund. As working at the property development fund in Viet Nam for four years, the study author recognizes the missing link between business strategies (fund level) and project execution plan (portfolio level) when the project runs in the implementation planning process. It could be argued that the project strategy plan has not been emphasized in this case or it has not been integrated and controlled properly during the day-to-day project execution work that involves both effectiveness and efficiency for project evaluation. In this study report, the author refers the summary literature review that focusing how to move corporate strategy to project strategy. The study report has combined a project case study (Aqua City Project) in the aim to analyze the organization structure/ functional management analysis/ project strategy/ project planning process to explore the missing link of project strategy and project implementation plan in this case.

How to have “a two way influence between strategy and project management” is an finding attempt that the author would like to capture the strategic approach to apply in the integrated project management development activity that serve to get the project runs in the competitive advance of energizing prosperity. It needs to get the project manager to expand the role that steps up in the project development business. It will gain more project succeed when the link between project strategy and project implementation has been integrated in the strategically.


Keywords: Strategic project management, Project strategy framework, Project execution plan

Owner’s Project Control Strategy

Success or failure of a project relies on how it is being controlled. Project control strategy is an activity which compares overall project performance against the planned project. The purpose of project control strategy is to evaluate and analyze the project situation, generation of forecasts, and definition of actions to be implemented in the whole project process.

That is a process that should be continued during the construction period to make certain that the final product meets the quality, completion and budget expectations of the owners. Project control process can be divided into three major areas: the control of cost, time, and quality during the design phases; the control of cost, time, and quality during the tendering phases; and the control of cost, time, and quality during the construction phases of the project.

Mr. Nguyen Le Thuan made a case study which objectives were to: (1) study the framework and identify the problems of owner’s project control process; and (2) study the practical implementation of the framework in terms of effectiveness and obstacles.

Conclusion

There were too many components that caused problems in project control. Despite of the project owner’s effort to solve the problems and arranged all requirements in suitable order, still there were some causes that made the project out of control. In this case study, Mr. Thuan found some problems in project control such as:
1. Poor estimating techniques and/or standards, resulting in unrealistic budgets
2. The technical design is lack of regulatory system or legal appropriation
3. Database is not correct
4. Value engineering is not popular
5. Awareness of standard design is limited
6. Policies and procedures are always changed
7. Communication and coordination among participants are not homogeneous
8. Need correct awareness to lowest bid.
9. The project owner uses nominated contractor method in tender stage
10. Inadequate work breakdown structure
11. No management policy on reporting and control practices
12. Management reduces budgets or bids to be competitive
13. Inadequate formal planning having unnoticed result, or often uncontrolled, thus increases in scope of effort
14. Poor comparison of actual and planned costs
15. Comparison of actual and planned costs at the wrong level of management
16. Unforeseen technical problems and unforeseen financial fluctuation.
17. Schedule delays that require overtime or idle time costing

Conclusion for Owner’s Project Cost Control in Design Stage

The project owner should specify all performance and design standard. The design professional is responsible for producing a set of preliminary drawings as well as written report for approval by the owner. The responsibility of the designer comprises drafting complete specifications for inclusion in project tender documents, approving or initiating all design related deletions, additions and changes to project specifications and accepting ultimate responsibility for the safety and utility of all project design elements.

In this phase, the project owner must approve all design related work performed and must coordinate the overall design integration, safety of the public, compliance with legal and codes.

Conclusion for Owner’s Project Control in Tender Stage

All services must be specifically required in the contract documents and not be in violation of any applicable law. Tender documents should be clear before they are issued. The content includes tender time, date, approximate contract amount, project location, licensing requirements, approximate size, plus tender, payment bond requirements, performance, etc.

Conclusion for Owner’s Project Control in Construction Stage

The fundamental purpose of the conference is to establish acceptable ground rules for all parties concerned, and to assure that each party understands the complete job requirements and coordinates its work to produce a completed job in a minimum amount of time, with maximum economic gains, and in proper coordination with the owner, architect, engineer, prime contractor, and all subcontractors. The pre-construction conference is primarily concerned with management and operational considerations. It is in these areas of contract interpretation and clarification that the greatest value of the construction conference can be achieved.

Progress payment and management of progress payments begins with the contract specifications clearly stating how the contractor’s work progress is to be measured, how payments are determined based on the measured progress, and what documents and reports are required to be submitted by the contractor to justify the payment request. The project owner should authorize payment only when the contractor’s progress payment request is in full compliance with the contract requirements and the progress claimed has been independently verified by supervisor.

Periodically, perhaps monthly, the project owner should compare schedule progress with that shown on the project program. The purpose is to determine whether those various activities were planned.

Recommended framework for owner’s project control:

Based on the literature review, case study and PMBOK (third edition), Mr. Thuan recommended a framework for an owner’s project control as shown in the table below:

Abstract

The report expresses the key issues in Project Control Strategy that known as the important factor for any owner wants to develop and survive in the construction industry.

This study, which refers to the theories have expressed the concept of project control process in design stage, tender and construction stage. What should the owner control in these stages? How can the owner control in these stages? The study has briefed the factors that most effect to them, they consist of cost, quality and schedule. Through a case study, project control problems will be analyzed. Some proposed solutions are recommended in order to help the owner can be improved in project control process.

Project Management Life Cycle and Risk Managerment in a New Residental Development Project in Vietnam

The development of residential projects in urban areas in Dong Nai province is still not uniform just like in other parts of Vietnam. The nature of this project usually involves large capital and needs long time to accomplish due to many elements concerned such as government regulations and policies which are indispensable.

Mr. Tran Thanh Liem wanted to study the project management life cycle in new residental deveplopment project in Vietnam and the most serious proplems arising from every stage of project life cycle.

The objective of his study were to: (1) identify project tasks and activities for accomplishment and find out proplems affecting the project time; (2) propose strategies to effectively eliminate or mitigate major risks; and (3) propose solutions that identify and prevent risks for the sister projects.

Conclusions

The investment in real estate sector in Vietnam is currently out with a difference. Applying the expertise of professional knowledge and ability to finance is unlikely to succeed when investing in Vietnam.

The case study revealed a practical implementation in the early stages of residential development policy of Dong Nai province in particular and Vietnam in general. The author introduced a project with very nice location in the center of Bien Hoa city which is belong to Company D2D (a Vietnamese company which is knowledgeable on laws and policies in Vietnam and capable of performing the procedures quickly) and Joint venture company Berjaya D2D (having capacity on the implementation of procedures, adequate financial capacity, investment experience and professionalism in the field of real estate investment).

This project has all the favorable factors for success. Currently it is also one of the most successful projects of the company D2D, but the schedule shows that the project still face a lot of problems (risks), which mostly concerned to the management and policies of the government.

The report may not offer the most complete risk factors in various stages of project implementation, but clear description of the risk factors affecting the schedule of most projects in Vietnam are well established such as clearance problem and progress delay. In addition, the author proposed appropriate strategies to mitigate these major risks.

Recommendations

The author had clarified the stages in the life cycle of a project and the main works done at each stage. He also determined main risks causing delay in the implementation of D2D residential projects, its secondary project in particular and all investment projects in the field of real estate in Vietnam in general.

This study proposes some recommendations for each delay problem as shown in the tale below:

When implementing real estate projects in Vietnam, anticipate that there are many negative issues in the system of policies and regulations and have to set the elimination risks that causing uncontrollable delays.

To reduce the delay problems for similar projects in the future, this study proposes some guidelines as follows:

1. To find out carefully the system of Vietnam's policies and continuously update the change of policies during the time of project execution in order to timely adjust work flow at various stages of the project life cycle; identity sufficient risk of external and internal environment of the project in accordance with reality.

2. Together with changing policies, the corruption in Vietnam is an ominous issue and investors even consultants can not understand all the issues for investment. However, the costs for Vietnamese consultants is so cheap compared with other countries, sometimes it is necessary to pay more payola for direct consultant from administrative official.

3. To implement the procedures while waiting for the approval of governments.

4. To survey, evaluate and recommend appropriate solutions for compensation and ground clearance in order to ensure the interests of the parties and minimize delays in this stage.

5. To set up land use planning appropriate with the project requirements in each stage and progress of the mobilization of capital investment

6. To research the plan for construction planning in order to ensure compliance with long-term development strategy, to take factors fluctuations in policy and plan for appropriate preventive.

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

8. To conduct activities in order to control and limit the adverse impact of risks to ensure the project in time. Risk control plan should be implemented in conjunction with several measures from the active standby to deal with the risks, actively avoid and share the risk, promptly response when risks occur.

9. To establish early warning systems and handle risk.

10. To develop a plan for mobilizing capital to response the progress of the project.

11. Risk management should be considered as an important part of project management and construction law , urban planning law, housing law or government decrees.

12. To focus on the initiation stages : Investment report, Feasibility Study, Project planning and Detail Design.

His thesis abstract is copied and posted.

Abstract

Vietnam has just been developing in recent years. Together with urban development, real estate and construction market are growing rapidly. The speed of economic development is growing rapidly but substandard managerial capacity has not satisfy the actual requirements, so great urban areas of Vietnam are now facing with complicated issues of urbanization process and urban development such as migration, accommodation, labor, career, traffic jam, flood, environment pollution.

The real estate and construction fields have reputation of the most opportunity, risk, expensiveness and challenge. The implementation of construction also requires long time with huge investment capital and various participating components.
Besides, there are so many unsound problems, for example government policies in real estate market and construction industry are usually amended and overlapped among authorities. Therefore; the implementing process of project will be usually changed, risks would easily arise and we will meet difficulties in estimation, appreciation and control… All these will make project not completed as expected.

Risk Management of Basement Construction Affecting Adjacent Buildings: A Case Study of Construction Project in Ho Chi Minh City, Vietnam

With restricted height in the central of Ho Chi Minh City, basements for building are even more needed. However, recently, a lot of basement construction has encountered incidents affecting adjacent buildings which may be due to difference in geologic conditions and number of basements, and probably use of different execution method.

Mr. Dang Tuan Anh made a research just to present the risks that are related to basements construction by top-down method with diaphragm wall for soil retaining. This is an advanced execution method and usually use for those buildings having more than two basements. However, if risks in this method were not checked carefully, it will seriously affect adjacent buildings.

The table below shows some typical problems and consequences of basements construction in Ho Chi Minh City:
With these problems, developing risk management frame in basements construction is critically important to reduce impacts on adjacent buildings.

Conclusions

At present, most of the buildings in Ho Chi Minh City have basements. Therefore, risk management to reduce impact on adjacent buildings becomes more and more important. Practice shows that quite many projects caused problems during process of basement construction and create serious consequences such as damages, collapse and casualties.

From data analyses, the problems below still need to address:

The above problems are mainly due to subjective factor and lack of experience of the managers. Besides, awareness of Clients in preparing finance for risk management is one of the key issues. If the budget of risk management is not enough, plans for risk management will be limited and not efficient.

Recommendations

It is necessary to have adequate finance package to cover risk management, and based on that finance, planning risk management will be studied carefully and combined from experts. In addition, advanced techniques and equipments can be used to observe, prevent and deal with incidents when they happen.

For those risks that might cause serious incidents (pierced holes on diaphragm wall, deformation of king-post system, etc), there must have strict observation and control. It is necessary to plan urgent risk-solving methods with respect to manpower, equipment and finance. Moreover, establishing good relationship with people who live around the project is also very important to have their cooperation during the process of observing and solving incidents, even temporary moving if necessary. Therefore, professional verifying teams should be combined to observe and propose solutions when problems occur. This will set surrounding people’s mind as well as local government’s mind at rest.
It is suggested to study carefully risk management frameworks whichever is suitable with each specific project to get the most efficient and which will contribute in achieving the project.

His thesis abstract is copied and posted below.

Abstract

This project report studied about risk management of basement construction affecting adjacent buildings. In the field of construction, basement construction in rural areas is one of the most risky and difficult works.

To limit risks in this issue, it is very important to study about risk identification and solving methods when preparing and constructing basements. Although many projects have risk management system, risk still occurs, even causing very serious damages.

Therefore, experience and thoughts in risk identification becomes more and more critical.

Risk Factors In Resettlement Project Project: A Case Study Of Binh Khanh Development Project

In recent years, Vietnam’s construction industry has improved. However, many projects which invested by the government are still meeting some problems like cost overrun and schedule delay, which are caused not only by weak project management but also complicated legal procedures.

Ho Chi Minh City is one of the centers of Vietnam with a rapid growth in economic. However, the urban projects development in Ho Chi Minh City is not synchronic and slow because problems happened in investment process. The main reason is the land clearance and resettlement. Resettlement projects were built without profit for moving vulnerable people before the main project were deployed.

Mr. Le Minh Dang made a case study to research and find out the risk factor occurs in each stage of a resettlement development project, and then analysis impact of some typical risk factors, and propose effective method to mitigate them and ensure project objectives. The objectives of his study were to: (1) identify risks create in resettlement development project in each stage and find out risk factors effect to project finance, implementation; (2) propose strategies to effectively eliminate or mitigate major risks; and (3) propose solutions that identify and prevent risks in similar projects and improve management of Resettlement development project.

Conclusions

The case in this report described a special project implementation of urban development in Ho Chi Minh City, and obviously revealed high-risk factors that can seriously affect the success of the project. Actually, the government has enormous efforts to overcome policy and reduce the cumbersome procedures in investment, but investors still face a lot of problems (risks) when implementing project.

The report may not define all problems in various stages of project implementation because the author only analyzed main problems that may affect the efficiency of the projects such as: progress delay and project costs incurred compared to initial estimates. Based on the analysis, the author proposed appropriate strategies to mitigate these major risks and problems as shown in the table below.

Recommendations

In scope of this report, the author just emphasized major problems effecting on Binh Khanh project objective. The findings of this study are expected to contribute to identify major risks and more effective project management process in project. To achieve this objective, this study proposed some recommendation:

1. Researched carefully feasibility study, legal procedures, investment policies to ensure compliance with long-term development strategy, taking factors fluctuations in policy and plan for appropriate preventive.

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

3. Investigate and research risk factors of project, impact of risks to the investment effectiveness of the project. Setup the risks control plan to minimize impact of risks to project, especially in project finance.

4. Setting up risk monitor plan for opportune action such as dealing with the risks, actively avoid and share the risk, promptly response when risks occur.

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

6. Propose and persuade Director Board to approve risk management and risk management cost.

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

8. The Investors should monitor to changing of investment policies to avoid the risk factors effect to project planning.

9. Design&Build contractor must be selected by biding. The contractor must have appropriate capacity management and experience in Design&Build method.

His thesis abstract is copied and posted below.

Abstract

Social projects that change patterns of use of land, water, and other natural resources can cause a range of resettlement effects. Resettlement losses most often arise because of land acquisition, through expropriation and the use of eminent domain or other regulatory measures, to obtain land. Housing, community structures and systems, social networks, and social services can be disrupted. Productive assets, including land, income sources, and livelihoods can be lost. Cultural identity and potential for mutual help may be diminished. Loss of resources for subsistence and income may lead to exploitation of fragile ecosystems, hardship, social tensions, and impoverishment. In urban areas, displaced people might swell a growing squatter population. The people affected have no option, and must try to rebuild their lives, incomes, and asset base elsewhere.

To ensure that some people are not disadvantaged in the process of development, the Government tries to avoid or minimize resettlement effects by Real estate law.
The law stipulated the rate of land for resettlement and business. The investor have to develop the resettlement projects for vulnerable people.
So, the management of resettlement projects is an important issue for the investor because the resettlement projects are always low benefit and affect to time schedule and cost of the main project.

The purpose of management of resettlement project is identify all problems before they occur so that management may be planed and mitigate adverse impacts on achieving objectives. To effectively manage the resettlement project, it is necessary for organizations to identify important issues in time, cost, quality and safety , then provide a suitable method to manage in each stage of resettlement project life cycle and suggest the effective solution methods as minimized, shared, transferred, avoided or accepted but can not be ignored.

Assessment of Risks on Design Management Aspects in Luxury Hotel Development Projects

Each building project has a unique process. Thus, requirements for planning, construction, and service systems of most modern buildings are really complex, and taking control of the process becomes a continuing issue for management, as the pressures to satisfy these diverse requirements are often conflicting.
The hotel that was being studied in this case has many complex issues which required comprehensive incorporation with a great diversity of technological inputs and diverse requirements from clients to adapt the market needs. This is the first issue for the design management team to focus on & build their competency.

Ms. Tran Thi Thien Trang made a case study which main objectives were to find out the risks or obstacles in a hotel construction projects and to conduct a risk mitigation to improve the situation. In order to achieve her main objectives, the following sub-objectives needed to accomplish: (1) to identify the risk factors by averaging different views of project experts, PM, CM, DM for the hotel project through project phases impacted by design management aspects; and (2) propose mitigation for the major project risks averaged by different views of PM, CM, DM and literature review.

General conclusion for the risk identified of this case study

This research found out series of consequences caused from management aspects to the project. Mitigation for the shown obstacles are systematized under scheme by necessary activities remarked in each stage. With appropriate project coordination, stake holder requirement and adequate management tools will lead to the success of the project.

Causes of the risks discussed are mostly come from:
1. Lack of the process for controlling project program, un-stable program, restrain schedule

2. Defining scope and client/operator requirement.

3. Inadequate in contract review, procedures and strategy in tender

4. Organization between construction and design management team with other department
and lead to negative results to project

5. Obstacles caused to next stages to be run.

6. Project delay from sub-key project mile stone to potential delay in final completion date.

7. Reworks are often occurred due to the project condition of management, which in turn lead to cost overrun,

8. Project quality would be potential affected since design deliverables under expected.

Design management responsibilities and scope of work

The list below shows the design management responsibilities and scope of works. Based on this, it is clear that design management team is one of the most important key departments in a project that contribute much to reducing project risks impacted by design factors as well as improve project quality in general. These responsibilities are as follows:

1. DM prepares coordinating schedule with required inputs, outputs, its milestones to ensure clear project targets and programs.

2. DM establishes tools to control design quality and to manage project requirement coming from owner, operators and other.

3. DM identifies additional consultants, pre-selection, evaluation and final selection (such as kitchen and laundry, lighting, SPA specialists or any other required consultants...) to ensure required inputs for project on time.

4. DM reviews consultant contracts to ensure required scope of services in lined with project program and DM reviews contractor contracts to ensure arranged scope of work reflected on design document to be bound in contracts, to ensure contractor service or their deliverable/ offers met project requirement.

5. DM sets up target dates for design output and to ensure the timely submission of the design so as to obtain expected project milestones and in line with intended purposes.

6. DM sets up program required operators, owners and third parties review and approval to ensure designs complies with requirements and design can be moved to next stage.

7. DM reviews with clients and design consultants to clarify required code and standard for project, in compliance with government.

8. DM manages and coordinates all issues on design aspects in during project phases so as to ensure design quality, project budget, project schedule in lined with project program contracted with owner and operators.

9. DM coordinates design during phases and with cost estimation to ensure design within budget, and DM evaluates and prepares MEMOs, letters for phase completion record to owner.

10. DM develops/ monitors/ controls drawing schedules in coordination with the design consultants.

11. DM establishes design procedures with associated flowcharts, forms and reports during phases.

12. DM develops/ monitors and controls drawing schedules in coordination with the design consultants.

13. DM effectively communicates & coordinates with various designs to ensure conformity of designs as well as minimize conflict among designs.

14. DM chairs design review workshops and meetings.

15. DM verifies design development against the agreed brief to ensure designs met project, owner / operators objectives.

16. DM verifies design deliverables with contract, with owner and operator requirement.

17. DM organizes value-engineering workshops.

18. DM prepares scope of work of contractor to ensure design consultants providing comprehensive design information for tender purpose.

19. DM prepares tender document to call contract together with relevant parties.

20. DM evaluates tender submission by coordinate with experts in the project.

21. DM reviews shop drawings together with CM, then works with design consultant and owner, operator to ensure latest design come to site for executing on time.

22. DM prepares plan for solving and updating changes to construction works, changes management during construction stage.

23. DM controls also the proper coordination between the Architect, the C&S and the Engineering Consultants and others.

24. DM manages design information filing well in a system.

25. DM is a center to manage, to coordinate with all design consultants, owners, operators, independent checkers, QS department and construction management team to ensure quality for project optimized in term of design impacts.

Her thesis abstract is copied and posted below.
Abstract

Project outputs are in lined with client’s expectation in term of time, cost and quality, which is one of the targets of a project and the competitive factors among organizations. On PMC aspect, how to sail successfully the wind for obtaining objectives is a critical point that I focus to study. My research is based on surveys about the project risks on design management aspect impacted by planning stage and been causes for other next stages. Risk assessment is studied together with theory application for reducing the consequences of poor performance; What to be prepared, done shall be systemized as a well being prepared for future projects (Risk management) and a contribution to improve overall project management performance through project phases.

The Le Meridien Saigon Hotel is the case for this thesis, it is located in heart of the center of Ho Chi Minh city, invested by TP& 990 co. Ltd and operated by Starwood organization with Le Meridien brand name, a mix project with 5 star international hotel and office grade A. Thus, it seems challenge for management!

‘Do the right thing at beginning stage’.