PVN has invested & built the first power plant since 2005 with only one Management Board (MB). The objectives of the MBs change very fast but the organization structure for all MBs is still same from the beginning. Therefore, PVN’s management for power projects has still some outstanding issues which are the weakness in organizational structure for project management.
Mr. Le Anh Thong made a case study which objectives were to: (1) deeply understand the existing organizational structure of PVN power plant project, to analyse the strength and weakness, advantages & disadvantages of the existing system; and (2) propose recommendation for improvement.
Conclusion
The objectives of PetroVietnam Power Plant Projects (PVN’s PPP) are usually changed very fast, but PVN has still kept the type of organizational structure which is “Functional Structure” since 2004. Although this structure has some advantages, but this structure is not suitable with growth of PVN’s PPP which has caused some weakness and disadvantages in its management so far. With four individual Management Boards, they have not achieved perfect result in time. It is very difficult to control the scope, contingency funds, overall project value; and also it is very difficult to monitor or audit the project’s progress, stakeholder’s commitment, results achieved and the leading indicators of failure, and so on.
Recommendation
Therefore, with the study and analyses of this case study, the proposed improvement is given in which the essential issue of this proposed improvement is the recommendation to apply the Matrix Structure for One General Management Board instead of the Functional Structure for Four existing Individual PVN’s project management organizational board. Consequently, the advantages of the Proposed PVN’s project management organization will be almost same the advantages from the Matrix Structure.
The most important advantage of the Proposed Improvement is efficient use of resources of the whole Proposed General Management Board where specialized individuals can be shared and transferred from one Branch to another or in any PVN’s projects. Therefore, the project management cost is minimized; the total quantity management staff shall be decreased, but the professional grade is easily increased. These are the most useful & efficiency of this proposal.
With the detailed analyses and proposal, the strength & advantages of the proposed improvement are very clear and prevailed to compare with its disadvantages. Besides, there has the proposed solution to solve for these disadvantages. Therefore, it should be considered as preliminary study to apply in the PVN’s thermal power project management with the additional study needed.
However, the proposed improvements will not be enough to improve everything for PVN’s project management. It is necessary with best effort to apply some other solutions in order to gain actual significant improvement and overcome other outstanding weakness of PVN’s project management.
His thesis abstract is copied and pasted.
Abstract
Electric Power is an essential energy for people’s daily life and one of the major factors in labor productivity growth. It helps to develop the economy of the countries in the world, especially for the developing countries like Vietnam. Consequently, it’s very important to know how to manage power plant projects effectively and successfully.
PetroVietnam (PVN) who is the biggest Economic Group of Vietnamese State-Owned Groups has been assigned by Government to invest & build some power plants. So it is necessary for PVN to improve their power plant project management. With the scope of my report, I will mention about the improvement for organizational structure of PVN’s thermal power plant project management and my Management Board.
The Objecctive of my Report is the Proposal to improve ORGANIZATIONAL STRUCTURE of PVN’s PPP to manage PETROVIETNAM POWER PLANT PROJECTS (PVN’s PPP), and solve their weakness/disadvantages & gain better effectiveness and success.
The reason to find the above Ojective are the objectives of PVN’s PPP are usually changed very fast, but PVN still has kept the beginning type of organizational structure from 2004 up to now, and some weakness/disadvantages were found in PVN’s PPP management so far.
Therefore, the case chosen for my report which is the organizational structure of PVN’s PPP.
By the analyses based on theory of organizational structure for project management colland my experience during a long time work in PVN’s PPP, my recommendation of the Proposal in my Report is the application of the Matrix Structure for One General Management Board instead of the Functional Structure used by many PVN’s individual Management Boards that expected to gain the above Objective to PVN’s PPP management.
Thursday 7 July 2011
Tuesday 5 July 2011
Risk Management on New Residential Development Project
In recent years, many real estate companies in Vietnam have been establishing and many New Residential Zone Projects were established. In Binh Duong City many of new residential zone Infrastructure development projects have been delayed and these projects suffer cost over run due to many reasons such as land compensation issues, lack of social agreement, insufficient capital for buying the land, late permitted from authority especially in master plan and architectural city design, poor in design and construction, water treat and environment issue and so on. In those projects managers could not deal with the risks and uncertainties which they met in project implementation process.
Mr. Bui Hai Nam made a case on Vo Minh Duc Project, Binh Duong Province to find risk management means that are associated with the project network structure. The objectives of his study were to: (1) find out risk factors in construction and analyzing the relationship of these factors and thereby enhance understanding of construction risks ; (2) propose strategies to effectively eliminate or mitigate major risks, and (3) propose solutions that identify and prevent risks in similar projects
Conclusions
In general, risks from various sources in construction is unavoidable, but it can be minimized. There are several ways to handle risks such as the risk of their transfer to other subjects, reducing the negative impact of the risks, and accepting some or all of the consequences of a specific risk.
The determination of activities and investments, analysis and evaluation, with measures to control and reduce the impact of risks is urgently needed to ensure the feasibility and effectiveness of the project. Risk management should be evaluated and implemented from the first steps of the project and continue in all project implementation cycle. The process involved a construction project in general, as well as developing infrastructure for new residential projects, must be carefully prepared from the initial stages until the end, handing over the project for investors. Moreover, there are several organizations and partners participated in a construction project, especially in new urban projects in infrastructure development. The organization is concerned with land owners, customers, designers, contractors, subcontractors, consultants, suppliers, materials, electricity, water supply, customers, agencies and public facilities, and government. Thus, the establishment of a relationship, and this all opinion really are necessary.
In the project of new urban development, there are many risks affecting the progress of the project implementation, project quality, project financing and timing of delivery and government customers. To cope with risk, it is necessary to establish a strategy that can be effective and efficient in response. Risks and uncertainties from various sources can not be eliminated, but can be reduced, transferred or retained.
There are several ways to handle risks such as transfer risk to another party, avoiding risk, reducing the negative impact of the risks, and accepting some or all of the consequences of a particular risk.
In large projects, limiting the risk is extremely important. Effective implementation of the limited risk will save a lot of time and money to the owner and main contractor for the project.
To deal with risks, it is necessary to establish an effective strategic and effective response. Thus, this research project attempted to identify risk and implement a risk management study for the new urban projects.
Identify major risks
- There are many consulting organization specialized in designing technical infrastructure to participate in the design.
- There are many different contractors from specialized technology, building on the same site on the surface and underground at the same time.
- Running time the project lasts.
- After building the technical infrastructure is completed, the developer must transfer to the agency offices, government management.
- Based on the level of impact and likelihood, we can draw the main risk factors affecting the project schedule. The results are summarized in Table below.
His thesis abstract is copied and pasted.
Abstract
A lot of the risky management researches are targeted to the construction projects. Number of studies are stressing the importance and superiority of the co-operation and less formal risk management means, but concrete methods are not introduced. In addition, the use of already developed risk management methods is modest at construction sites.
Projects Urban VO MINH DUC of ThanhNguyen Real Estate Investment & Constructions Corporation has been building between 2008 to 2012. But so far, the project has achieved only about 20% workload on its completion. The progress delay has been caused by so many factors and different causes. Risks appear frequently causes damage to the efficiency of investment projects. The question for us to research, resolve and identify and evaluate the impact of risks, control them to ensure effective pre-defined investment project.
The major risk factors in this project:
- Political environment, nature, infrastructure;
- Economic environment, currency markets;
- Technical factors within the project;
- Non-technical factors within the project;
- Implementation of construction factor.
Research was conducted in 10 / 2010, when five full interview is done in construction projects urban Vo Minh Duc. Interviews were targeted to the representatives of the designers, builders and customers. Apart from the documents obtained from the interviews, subjects also use data sources of other projects and the investors are from The Highlands Company
Theory and practice in managing risk in projects Vo Minh Duc urban poor. In this project, the limitations of risk management is lack of organization, lack of required conditions such as time, resources and cost, managers are not familiar with risky management. In addition, policy factors from the State is also cause to delay for this project.
Mr. Bui Hai Nam made a case on Vo Minh Duc Project, Binh Duong Province to find risk management means that are associated with the project network structure. The objectives of his study were to: (1) find out risk factors in construction and analyzing the relationship of these factors and thereby enhance understanding of construction risks ; (2) propose strategies to effectively eliminate or mitigate major risks, and (3) propose solutions that identify and prevent risks in similar projects
Conclusions
In general, risks from various sources in construction is unavoidable, but it can be minimized. There are several ways to handle risks such as the risk of their transfer to other subjects, reducing the negative impact of the risks, and accepting some or all of the consequences of a specific risk.
The determination of activities and investments, analysis and evaluation, with measures to control and reduce the impact of risks is urgently needed to ensure the feasibility and effectiveness of the project. Risk management should be evaluated and implemented from the first steps of the project and continue in all project implementation cycle. The process involved a construction project in general, as well as developing infrastructure for new residential projects, must be carefully prepared from the initial stages until the end, handing over the project for investors. Moreover, there are several organizations and partners participated in a construction project, especially in new urban projects in infrastructure development. The organization is concerned with land owners, customers, designers, contractors, subcontractors, consultants, suppliers, materials, electricity, water supply, customers, agencies and public facilities, and government. Thus, the establishment of a relationship, and this all opinion really are necessary.
In the project of new urban development, there are many risks affecting the progress of the project implementation, project quality, project financing and timing of delivery and government customers. To cope with risk, it is necessary to establish a strategy that can be effective and efficient in response. Risks and uncertainties from various sources can not be eliminated, but can be reduced, transferred or retained.
There are several ways to handle risks such as transfer risk to another party, avoiding risk, reducing the negative impact of the risks, and accepting some or all of the consequences of a particular risk.
In large projects, limiting the risk is extremely important. Effective implementation of the limited risk will save a lot of time and money to the owner and main contractor for the project.
To deal with risks, it is necessary to establish an effective strategic and effective response. Thus, this research project attempted to identify risk and implement a risk management study for the new urban projects.
Identify major risks
- There are many consulting organization specialized in designing technical infrastructure to participate in the design.
- There are many different contractors from specialized technology, building on the same site on the surface and underground at the same time.
- Running time the project lasts.
- After building the technical infrastructure is completed, the developer must transfer to the agency offices, government management.
- Based on the level of impact and likelihood, we can draw the main risk factors affecting the project schedule. The results are summarized in Table below.
His thesis abstract is copied and pasted.Abstract
A lot of the risky management researches are targeted to the construction projects. Number of studies are stressing the importance and superiority of the co-operation and less formal risk management means, but concrete methods are not introduced. In addition, the use of already developed risk management methods is modest at construction sites.
Projects Urban VO MINH DUC of ThanhNguyen Real Estate Investment & Constructions Corporation has been building between 2008 to 2012. But so far, the project has achieved only about 20% workload on its completion. The progress delay has been caused by so many factors and different causes. Risks appear frequently causes damage to the efficiency of investment projects. The question for us to research, resolve and identify and evaluate the impact of risks, control them to ensure effective pre-defined investment project.
The major risk factors in this project:
- Political environment, nature, infrastructure;
- Economic environment, currency markets;
- Technical factors within the project;
- Non-technical factors within the project;
- Implementation of construction factor.
Research was conducted in 10 / 2010, when five full interview is done in construction projects urban Vo Minh Duc. Interviews were targeted to the representatives of the designers, builders and customers. Apart from the documents obtained from the interviews, subjects also use data sources of other projects and the investors are from The Highlands Company
Theory and practice in managing risk in projects Vo Minh Duc urban poor. In this project, the limitations of risk management is lack of organization, lack of required conditions such as time, resources and cost, managers are not familiar with risky management. In addition, policy factors from the State is also cause to delay for this project.
Friday 1 July 2011
CEIM open applications for August 2011 intake
We open the application for August 2011 intake for AIT Thailand campus. Limited numbers of scholarships are available for talented applicants. Some of the scholarships are Royal Thai Government scholarship, The King of Thailand scholarship, The Queen of Thailand Scholarship, Asian Development Bank scholarship etc.
What is CEIM? CEIM master and doctoral programs aim to prepare engineers to manage large construction projects starting from planning, design, tendering, construction and commissioning.
What will you learn? you will learn important knowledge and skills in project management in construction such as project planning/scheduling, project cost and financial management, organizational management, project contract, project risk, project quality management, project performance management and project financing.
Where will you work after graduation? You can work in strategic industries that highly need project management such as:
- Contractors (highway, building, oil/gas and energy)
- Consultants
- Property and real estate developers
- Bank and Invesment companies
- Public Private Partnership Consortium
- Financial and Banking institutions that lend fundings for construction projects
- hotel and apartment development
- oil and gas construction
What else will you learn during your study with us in AIT?
AIT is a very multicultural insitute. Our students and faculty members come from different parts of the world such as Thailand, Vietnam, Bangladesh, India, Taiwan, Pakistan, Indonesia, China, Korea, European Union. Aside from studying knowledge, you will also learn different cultures and different ways of thinking from your friends; and develop your global international networking.
Please contact CEIM Secretary (Ms. Woranuch, phone 025246060 or email woranuch@ait.ac.th) for further information.
Visit CEIM: http://www.set.ait.ac.th/ceim
How to apply? http://www.ait.ac.th/AIT/admissions/admissions
Regards
Dr. BHW Hadikusumo
Associate Professor
CEIM Coordinator
MPM Coordinator
Contractor Prequalification Criteria, Tendering Criteria, and Tendering Procedure in Cambodia Building and Housing Construction Projects
The construction industry can be considered as one of the largest industries that can contribute significant fraction of national product in Cambodia. However, people in this business face many problems such as prequalification, tendering and selecting a contractor.
Mr. Puoy Puthitha made a research to give the suitable selection criteria whether it will be effective in building construction projects in Cambodia. The process of contractor selection can be achieved, unless the prequalification, tendering criteria and tendering process will be linked to project performance in term of time, cost, quality, and customer satisfaction. It means that different project types and objectives should have different proportion on each selection criteria.
The purpose of his research is to define contractor prequalification criteria, tendering criteria, and tendering procedure in Cambodia building and housing construction projects and then how the contractor prequalification, tendering criteria and tendering procedure affect the project performance. The specific objectives of his research were to: (1) study effective contractor prequalification criteria; (2) study effective contractor tendering criteria; (3) study effective contractor tendering procedure; and (4) how contractor prequalification criteria, tendering criteria, and tendering procedure affect project performance.
Conclusion
There are four main findings in this study such as follows:
1. The effectiveness of contractor prequalification criteria in building construction projects.
2. The effectiveness of contractor tendering criteria in building construction projects.
3. The effectiveness of contractor tendering procedure in building construction projects.
4. Contractor prequalification criteria, tendering criteria, and tendering procedure have different affected on project performance.
In order to get the effective or significant factors and sub-factors from contractor prequalification criteria, tendering criteria and tendering procedure, the results were combined the ranking by mean with the correlation analysis results.
Contractor Prequalification Criteria
1. Financial Consideration: financial stability, financial status, Bank arrangement and bonding capacity.
2. Past Performance: failure to have completed projects, schedule overruns, cost overruns, past failures, owner/contractor relationship
3. Technical Ability: technical expertise, possessed plant and equipment, experience
4. Management Capability: past performance and quality, project management organization, experience of technical personnel
Contractor Tendering Criteria
1. Price: fixed capital cost, variable tender costs during the contract period, maintenance costs
2. Technical Skills: design quality, technical expertise
3. Methodology: program of works, division of works into sub-contracts, key performance indicators, reporting and recoding systems
4. Relevant Experience: project cost
5. Past Performance: quality standards, target performance level; tender price, variations and final cost.
Contractor Tendering Procedure
1. Tender Evaluation: tender quality (technical evaluation); tender price (financial evaluation); determine lowest bid; responsiveness, and responsibility
2. Tender Submission: sealing and marking of the tenderers, tender forms and tender specification document; tender terms and condition for bid preparation; post offer negotiation
3. Prequalification and Registration: prequalification requirement
The following description in details about the conclusion of this research study will support the conformation of each objective. All the results are computerized by SPSS software in order to get the data analysis results.
Project Performance in Building Construction Projects
Most of consultant companies in Cambodia had carefully focused on the process of selecting the qualified contractors in order to get the project successfully. In addition, the project owners were spent enough time in selecting the qualified contractors, particularly running projects and the quality control. As a result, the projects were finished within the budget, the quality of construction projects was good, and the contractors could be able to satisfy to the customer’s requirements.
The Effectiveness of Contractor Prequalification Criteria
Financial consideration found to be the main key factor for contractor prequalification criteria in Cambodia building and housing construction project, this result is related each other, which mean in order to be successful in performing the effective contractor prequalification process, the project owners have an important role in making the right decision for selecting the main contractors for construction works based upon the financial information of the contractors.
The Effectiveness of Contractor Tendering Criteria
The Price found to be the important factor for contractor tendering criteria in Cambodia building and housing construction project. Most of the tenderers still rely on tender price which has been proven its competency to acquire the contracts. The other contractor tendering criteria also are quite significant stimulated in contractor selection?
The Tender evaluation found to be the important selection process for contractor tendering procedure in Cambodia building and housing construction project.
This process is to financially and technically evaluate the tenderers’ performance in order to acquire the projects. The other contractor tendering procedures also are quite significant stimulated in performing the construction tendering practice.
The Correlation between Contractor Prequalification Criteria and Project Performance
The result shows that past performance, technical ability, and management capability are perceived to be the dominant contractor prequalification criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, financial consideration was perceived to affect only time, quality, and customer’s satisfaction. But Contractor’s organization and Past experience did not show any correlation with project performance. It can be concluded that most of the project owners focused on these two factors as somewhat important on how to acquire the qualified contractors by regarding to the perceived impact of the other decision factors on contractor prequalification decision making; the projects were still cost overrun and overtime. That’s why the customer did not satisfy in their performance. This is due to external factors such as lack of accurate data from the contractors, imprecise information, subjective information, and subjective judgment. Furthermore, they were also suffered from the rising of construction costs because of the materials fluctuation, lack of updating their technical performance, and lack of government regulation. Particularly, the projects were stopped due to heavy rain and flooding. Therefore, the external factors need a lot of information for assessing their impacts in order to achieve the project successfully in construction industry,
The Correlation between Contractor Tendering Criteria and Project
Performance
The result indicates that Price and Methodology are perceived to be the dominant contractor tendering criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, Technical skills, Relevant experience, and Past performance were perceived to affect only cost, time, and quality. But Resources and Management skills and systems did not show any correlation with project performance.
However Resources, Management skills and systems can be considered as somewhat important. The contractor tendering criteria had the moderate mean for resources, management skills and systems, the projects were not success. This is because the project owners did not much focused on the information of resources, and management skills and systems. Even these two criteria were somewhat important in selecting the qualified tenderers, the projects were still cost overruns, over time, unqualified quality, and the client didn’t satisfy. It might be affected by other external factors which were concerned with project performance.
The Correlation between Contractor Tendering Procedure and Project
Performance
The result indicates that Tender evaluation and Tender submission are perceived to be the dominant contractor tendering procedure affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, prequalification and registration were perceived to affect only cost, time, and quality. But Contract award/execution, Tender opening, and Invitation to tender did not show any correlation with project performance. However, the Contract award/execution, Invitation to tender, and Tender opening can be concluded as somewhat important. Even the project owners had depicted clearly their requirements in construction contracts during their contract award/execution, invitation to tender, and tender opening; the tenderers were not successful yet to receive the owner’s requirement. Furthermore, the tenderers had been considered as some part of important in these stages, but the project owners and consultants were still not accepted their performance yet as well. The reason is that it might be affected by other external factors which were concerned with project performance.
His thesis abstract is copied and posted.
Abstract
The construction industry today is a highly competitive industry with an enormous amount of risk, particularly many conflicts, problems, adversity, and uncertainty. The construction projects are usually confronted with many conflicts, problems, and uncertainty due to a result of failure in selecting a competent contractor. To perform the project success, the owner’s team has an important role to figure out these many conflicts and problems such as schedule delays, cost overrun, low productivity, and contract disputes by being able to evaluate the contractor’s performance in the proper way. This study is based on quantitative research through questionnaires and carries on to first identify the contractor performance criteria in terms of prequalification criteria, tendering criteria, and tendering procedure and to help the project owners to assess the tenderer’s performance. Second, this study aims at describing how the contractor prequalification criteria, tendering criteria, and tendering procedure affect project performance.
This study was conducted in Cambodia building consultant and construction companies to study effective contractor prequalification criteria, tendering criteria, and tendering procedure for being able to select the competent contractors. In each case, the criteria have been ranged the scores in order to facility the project owners are able to evaluate with flexibility. The result found that first financial consideration, past performance, and technical ability in contractor prequalification criteria; second price, technical skills, and methodology in contractor tendering criteria; third tender evaluation, tender submission, and contract award/execution in contractor tendering procedure respectively are important and should be applied when performing contractor prequalification and tendering systems in practice. They all are the main concern in order to achieve the successful projects.
Based on the correlation analysis result, it shows that different contractor prequalification criteria, tendering criteria, and tendering procedure are significantly positively and differently affected on project performance. That means different contractor prequalification criteria, tendering criteria, and tendering procedure have different affects on project performance. Furthermore, the results from the correlation analysis show that Past performance, Technical ability, Management capability, Price, Methodology, Tender evaluation, and Tender submission are perceived to be the dominant contractor prequalification criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, Financial consideration were perceived to affect only time, quality, and customer’s satisfaction. At the same analysis, Technical skills, Relevant experience, Past performance in construction tendering, and Prequalification and Registration were perceived to affect only cost, time, and quality. But Contractor’s organization, Past experience, Resources, Management skills and systems, Contract award/execution, Tender opening, and Invitation to Tender did not show any correlation with project performance. Practically, the two case studies above showed the correlated study between quantitative and qualitative study. The result indicated that the factors among the construction tendering practices above were tended to the project successfully.
Mr. Puoy Puthitha made a research to give the suitable selection criteria whether it will be effective in building construction projects in Cambodia. The process of contractor selection can be achieved, unless the prequalification, tendering criteria and tendering process will be linked to project performance in term of time, cost, quality, and customer satisfaction. It means that different project types and objectives should have different proportion on each selection criteria.
The purpose of his research is to define contractor prequalification criteria, tendering criteria, and tendering procedure in Cambodia building and housing construction projects and then how the contractor prequalification, tendering criteria and tendering procedure affect the project performance. The specific objectives of his research were to: (1) study effective contractor prequalification criteria; (2) study effective contractor tendering criteria; (3) study effective contractor tendering procedure; and (4) how contractor prequalification criteria, tendering criteria, and tendering procedure affect project performance.
Conclusion
There are four main findings in this study such as follows:
1. The effectiveness of contractor prequalification criteria in building construction projects.
2. The effectiveness of contractor tendering criteria in building construction projects.
3. The effectiveness of contractor tendering procedure in building construction projects.
4. Contractor prequalification criteria, tendering criteria, and tendering procedure have different affected on project performance.
In order to get the effective or significant factors and sub-factors from contractor prequalification criteria, tendering criteria and tendering procedure, the results were combined the ranking by mean with the correlation analysis results.
Contractor Prequalification Criteria
1. Financial Consideration: financial stability, financial status, Bank arrangement and bonding capacity.
2. Past Performance: failure to have completed projects, schedule overruns, cost overruns, past failures, owner/contractor relationship
3. Technical Ability: technical expertise, possessed plant and equipment, experience
4. Management Capability: past performance and quality, project management organization, experience of technical personnel
Contractor Tendering Criteria
1. Price: fixed capital cost, variable tender costs during the contract period, maintenance costs
2. Technical Skills: design quality, technical expertise
3. Methodology: program of works, division of works into sub-contracts, key performance indicators, reporting and recoding systems
4. Relevant Experience: project cost
5. Past Performance: quality standards, target performance level; tender price, variations and final cost.
Contractor Tendering Procedure
1. Tender Evaluation: tender quality (technical evaluation); tender price (financial evaluation); determine lowest bid; responsiveness, and responsibility
2. Tender Submission: sealing and marking of the tenderers, tender forms and tender specification document; tender terms and condition for bid preparation; post offer negotiation
3. Prequalification and Registration: prequalification requirement
The following description in details about the conclusion of this research study will support the conformation of each objective. All the results are computerized by SPSS software in order to get the data analysis results.
Project Performance in Building Construction Projects
Most of consultant companies in Cambodia had carefully focused on the process of selecting the qualified contractors in order to get the project successfully. In addition, the project owners were spent enough time in selecting the qualified contractors, particularly running projects and the quality control. As a result, the projects were finished within the budget, the quality of construction projects was good, and the contractors could be able to satisfy to the customer’s requirements.
The Effectiveness of Contractor Prequalification Criteria
Financial consideration found to be the main key factor for contractor prequalification criteria in Cambodia building and housing construction project, this result is related each other, which mean in order to be successful in performing the effective contractor prequalification process, the project owners have an important role in making the right decision for selecting the main contractors for construction works based upon the financial information of the contractors.
The Effectiveness of Contractor Tendering Criteria
The Price found to be the important factor for contractor tendering criteria in Cambodia building and housing construction project. Most of the tenderers still rely on tender price which has been proven its competency to acquire the contracts. The other contractor tendering criteria also are quite significant stimulated in contractor selection?
The Tender evaluation found to be the important selection process for contractor tendering procedure in Cambodia building and housing construction project.
This process is to financially and technically evaluate the tenderers’ performance in order to acquire the projects. The other contractor tendering procedures also are quite significant stimulated in performing the construction tendering practice.
The Correlation between Contractor Prequalification Criteria and Project Performance
The result shows that past performance, technical ability, and management capability are perceived to be the dominant contractor prequalification criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, financial consideration was perceived to affect only time, quality, and customer’s satisfaction. But Contractor’s organization and Past experience did not show any correlation with project performance. It can be concluded that most of the project owners focused on these two factors as somewhat important on how to acquire the qualified contractors by regarding to the perceived impact of the other decision factors on contractor prequalification decision making; the projects were still cost overrun and overtime. That’s why the customer did not satisfy in their performance. This is due to external factors such as lack of accurate data from the contractors, imprecise information, subjective information, and subjective judgment. Furthermore, they were also suffered from the rising of construction costs because of the materials fluctuation, lack of updating their technical performance, and lack of government regulation. Particularly, the projects were stopped due to heavy rain and flooding. Therefore, the external factors need a lot of information for assessing their impacts in order to achieve the project successfully in construction industry,
The Correlation between Contractor Tendering Criteria and Project
Performance
The result indicates that Price and Methodology are perceived to be the dominant contractor tendering criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, Technical skills, Relevant experience, and Past performance were perceived to affect only cost, time, and quality. But Resources and Management skills and systems did not show any correlation with project performance.
However Resources, Management skills and systems can be considered as somewhat important. The contractor tendering criteria had the moderate mean for resources, management skills and systems, the projects were not success. This is because the project owners did not much focused on the information of resources, and management skills and systems. Even these two criteria were somewhat important in selecting the qualified tenderers, the projects were still cost overruns, over time, unqualified quality, and the client didn’t satisfy. It might be affected by other external factors which were concerned with project performance.
The Correlation between Contractor Tendering Procedure and Project
Performance
The result indicates that Tender evaluation and Tender submission are perceived to be the dominant contractor tendering procedure affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, prequalification and registration were perceived to affect only cost, time, and quality. But Contract award/execution, Tender opening, and Invitation to tender did not show any correlation with project performance. However, the Contract award/execution, Invitation to tender, and Tender opening can be concluded as somewhat important. Even the project owners had depicted clearly their requirements in construction contracts during their contract award/execution, invitation to tender, and tender opening; the tenderers were not successful yet to receive the owner’s requirement. Furthermore, the tenderers had been considered as some part of important in these stages, but the project owners and consultants were still not accepted their performance yet as well. The reason is that it might be affected by other external factors which were concerned with project performance.
His thesis abstract is copied and posted.
Abstract
The construction industry today is a highly competitive industry with an enormous amount of risk, particularly many conflicts, problems, adversity, and uncertainty. The construction projects are usually confronted with many conflicts, problems, and uncertainty due to a result of failure in selecting a competent contractor. To perform the project success, the owner’s team has an important role to figure out these many conflicts and problems such as schedule delays, cost overrun, low productivity, and contract disputes by being able to evaluate the contractor’s performance in the proper way. This study is based on quantitative research through questionnaires and carries on to first identify the contractor performance criteria in terms of prequalification criteria, tendering criteria, and tendering procedure and to help the project owners to assess the tenderer’s performance. Second, this study aims at describing how the contractor prequalification criteria, tendering criteria, and tendering procedure affect project performance.
This study was conducted in Cambodia building consultant and construction companies to study effective contractor prequalification criteria, tendering criteria, and tendering procedure for being able to select the competent contractors. In each case, the criteria have been ranged the scores in order to facility the project owners are able to evaluate with flexibility. The result found that first financial consideration, past performance, and technical ability in contractor prequalification criteria; second price, technical skills, and methodology in contractor tendering criteria; third tender evaluation, tender submission, and contract award/execution in contractor tendering procedure respectively are important and should be applied when performing contractor prequalification and tendering systems in practice. They all are the main concern in order to achieve the successful projects.
Based on the correlation analysis result, it shows that different contractor prequalification criteria, tendering criteria, and tendering procedure are significantly positively and differently affected on project performance. That means different contractor prequalification criteria, tendering criteria, and tendering procedure have different affects on project performance. Furthermore, the results from the correlation analysis show that Past performance, Technical ability, Management capability, Price, Methodology, Tender evaluation, and Tender submission are perceived to be the dominant contractor prequalification criteria affecting all project performance in terms of cost, time, quality, and customer’s satisfaction. While, Financial consideration were perceived to affect only time, quality, and customer’s satisfaction. At the same analysis, Technical skills, Relevant experience, Past performance in construction tendering, and Prequalification and Registration were perceived to affect only cost, time, and quality. But Contractor’s organization, Past experience, Resources, Management skills and systems, Contract award/execution, Tender opening, and Invitation to Tender did not show any correlation with project performance. Practically, the two case studies above showed the correlated study between quantitative and qualitative study. The result indicated that the factors among the construction tendering practices above were tended to the project successfully.
Wednesday 29 June 2011
Factors Affecting the Performance of The International Construction Contractors (ICCs) Doing Business in Cambodia
International construction business is the kind which embodies with serious economic, social, and political ramifications leading to the failure of the international project success in term of time, quality and cost (Walewski, 2003). The difficulties such as client communication, understanding new market, avoiding local politics and supervising the diverse group of professionals are confronted by the international construction business (Kangari and Lucas, 1997). Moreover, the inability to understand the clients’ requirement affects the project success in international business (Ling et al., 2006). The increasing of the misunderstanding, delay and costs resulting from unfamiliar environment and different institution such as regulations, norm, and cognitive-cultural belief with diverse participant are critical things (Will and Levitt, 2010). As Han et al.,(2005) stated that the risk factors associated with overseas construction projects can diminish project profitability .There are many researchers found that the delay and cost are increased due to the confusion among project participants (Flyvberg et al., 2003; Miller and Lessard, 2000; Orr, 2005), and due to dispute resulting from different cultures (Ghopshal, 1987).
Mr. Hout Venghong made a research on an international construction contractor (ICCs) doing business in Cambodia in order to: (1) investigate the current practices of the factors affecting the performance of the international construction contractors doing business in Cambodia; (2) develop the causal relationships affecting the performance of ICCs model of each investigated factors and figured out how each contractor copes with; and (3) propose the recommendation and a framework to the international construction contractors to take into account in order to do business in Cambodia.
Research Findings
Investigated factors affecting the performance of the International Construction
Contractors (ICCs) doing business in Cambodia
Based on the data gathered, there are five factors influencing the decision making of the international construction contractors doing business in Cambodia taking to the account to strategize accordingly in order to execute the project lucratively. The current practices of the factors affecting the performance of ICCs doing business in Cambodia are:
(1) condition of the host country and project owner,
(2) international construction contractors’ ability,
(3) characteristic of organization and participation,
(4) entry mode, and
(5) Uncontrollable variables with nineteen sub-factors.
Develop the causal relationships affecting the performance of ICCs model of each investigated factors and figured out how the firms response to each factor
1. Cambodian Government policy. The government does not have clear procedure for project approval and construction law and regulation for the construction projects. The tax and custom system, still, are not transparent which can affect to the project schedule and performance as well. The unethical practice, construction law and regulation should be completely addressed the firm from the beginning of the planning stage. The procured materials have to be taken with high attention in order to meet the projects’ objectives to avoid delay and cost overrun. Lack of construction law and regulation with weak legal system leads the firm hiring a legal advisor or international lawyer to prepare the legal documents related to avoid the conflict during the projects execution. The legal advisor or lawyer is asked to involve after the international construction contractors awarded the contract.
2. The unskilled labor issue in Cambodia construction sector. This is a big problem challenging the international construction contractors, especially when the project is complex and very specialized. Because construction market in Cambodia is not really attractive yet. There are quite few tall buildings and complex projects in Cambodia. Consequently, this provides less opportunity to the local laborers to experience with similar project. Even the local labor cost is cheap but the problem is unskilled laborers who are mostly farmers, so they will quite the project to go back home.
3. Lack of local skilled engineers who are able to use English as official language, especially for technical terms in construction project. The knowledge of local engineers was considerably limited since they did not have a chance to involve with similar complex projects. The local contractors are lack of knowledge in quality control and they are mostly not qualified for either big projects or specific projects. The employment of the staffs has to be mixed because the local staffs need to coordinate at construction site between the local labors and foreign staffs. The research is also found that the entering of the international construction contractors is to consider market attractiveness with the local government support.
4. Owner delayed payment. It plays a crucial role to the quality of the project, delay payment will results to time delay.
5. No local financial institution to help the contractors or subcontractors. The lack of the big local contractors to join the international construction contractor is one constraint that the international firms do not want to do business in Cambodia. The firm has to ask for the home country contractor or the third country to execute the project. This is still riskier than joint venture with the big local contractor in case they find the suitable local contractor to make a joint venture.
6. Most of the projects are under loan or grant projects from ADB, World Bank or the other financial institution, therefore the international construction contractors did not want to bid the projects, because they are so competitive. On the other hand, the contractors who want to launch their projects with high quality to maintain their good reputation will not bid the public projects, because the project volume reflects to the skilled labors and many subcontractors to execute the project as well.
Recommendation
Based on analysis of current practices of the international construction contractors doing business in Cambodia, below is the summarized recommendation for the International Construction Contractors.
His thesis abstract is copied and pasted.
Abstract
This study aimed to investigate the factors affecting the performance of the international construction contractors (ICCs) doing business in Cambodia. Five firms in Cambodia were investigated through case study approach explanation building strategy as specific analytic approach in case study. The current practice factors/sub-factors were verified with nine industry experts and practitioners experienced in Cambodia construction industry. The administered research questions developed by a researcher being conducted with seven top management level of ICCs. In addition, the secondary data and the direct observation of the construction projects are carried out to get the supportive evidence to the result from the interview session. However, the short interview with the persons who were responsible at construction site was carried out during project direct observation. The research showed that the unethical practice, unclear tax and custom system, material availability, unskilled labor issues, lack of construction law and regulation, lack of legal system, unwillingness of local government support, different practices between the contractor and designer. From the finding, the response of the international construction contractors was pointed out with the each investigated factors accordingly. Objectively, the causal relationships affecting the performance of ICCs doing business in Cambodia was developed with the recommendation for better practices in Cambodia construction industry.
Key words: Factors, Performance, International construction contractors, Business,
Cambodia
Mr. Hout Venghong made a research on an international construction contractor (ICCs) doing business in Cambodia in order to: (1) investigate the current practices of the factors affecting the performance of the international construction contractors doing business in Cambodia; (2) develop the causal relationships affecting the performance of ICCs model of each investigated factors and figured out how each contractor copes with; and (3) propose the recommendation and a framework to the international construction contractors to take into account in order to do business in Cambodia.
Research Findings
Investigated factors affecting the performance of the International Construction
Contractors (ICCs) doing business in Cambodia
Based on the data gathered, there are five factors influencing the decision making of the international construction contractors doing business in Cambodia taking to the account to strategize accordingly in order to execute the project lucratively. The current practices of the factors affecting the performance of ICCs doing business in Cambodia are:
(1) condition of the host country and project owner,
(2) international construction contractors’ ability,
(3) characteristic of organization and participation,
(4) entry mode, and
(5) Uncontrollable variables with nineteen sub-factors.
Develop the causal relationships affecting the performance of ICCs model of each investigated factors and figured out how the firms response to each factor
1. Cambodian Government policy. The government does not have clear procedure for project approval and construction law and regulation for the construction projects. The tax and custom system, still, are not transparent which can affect to the project schedule and performance as well. The unethical practice, construction law and regulation should be completely addressed the firm from the beginning of the planning stage. The procured materials have to be taken with high attention in order to meet the projects’ objectives to avoid delay and cost overrun. Lack of construction law and regulation with weak legal system leads the firm hiring a legal advisor or international lawyer to prepare the legal documents related to avoid the conflict during the projects execution. The legal advisor or lawyer is asked to involve after the international construction contractors awarded the contract.
2. The unskilled labor issue in Cambodia construction sector. This is a big problem challenging the international construction contractors, especially when the project is complex and very specialized. Because construction market in Cambodia is not really attractive yet. There are quite few tall buildings and complex projects in Cambodia. Consequently, this provides less opportunity to the local laborers to experience with similar project. Even the local labor cost is cheap but the problem is unskilled laborers who are mostly farmers, so they will quite the project to go back home.
3. Lack of local skilled engineers who are able to use English as official language, especially for technical terms in construction project. The knowledge of local engineers was considerably limited since they did not have a chance to involve with similar complex projects. The local contractors are lack of knowledge in quality control and they are mostly not qualified for either big projects or specific projects. The employment of the staffs has to be mixed because the local staffs need to coordinate at construction site between the local labors and foreign staffs. The research is also found that the entering of the international construction contractors is to consider market attractiveness with the local government support.
4. Owner delayed payment. It plays a crucial role to the quality of the project, delay payment will results to time delay.
5. No local financial institution to help the contractors or subcontractors. The lack of the big local contractors to join the international construction contractor is one constraint that the international firms do not want to do business in Cambodia. The firm has to ask for the home country contractor or the third country to execute the project. This is still riskier than joint venture with the big local contractor in case they find the suitable local contractor to make a joint venture.
6. Most of the projects are under loan or grant projects from ADB, World Bank or the other financial institution, therefore the international construction contractors did not want to bid the projects, because they are so competitive. On the other hand, the contractors who want to launch their projects with high quality to maintain their good reputation will not bid the public projects, because the project volume reflects to the skilled labors and many subcontractors to execute the project as well.
Recommendation
Based on analysis of current practices of the international construction contractors doing business in Cambodia, below is the summarized recommendation for the International Construction Contractors.
His thesis abstract is copied and pasted.
Abstract
This study aimed to investigate the factors affecting the performance of the international construction contractors (ICCs) doing business in Cambodia. Five firms in Cambodia were investigated through case study approach explanation building strategy as specific analytic approach in case study. The current practice factors/sub-factors were verified with nine industry experts and practitioners experienced in Cambodia construction industry. The administered research questions developed by a researcher being conducted with seven top management level of ICCs. In addition, the secondary data and the direct observation of the construction projects are carried out to get the supportive evidence to the result from the interview session. However, the short interview with the persons who were responsible at construction site was carried out during project direct observation. The research showed that the unethical practice, unclear tax and custom system, material availability, unskilled labor issues, lack of construction law and regulation, lack of legal system, unwillingness of local government support, different practices between the contractor and designer. From the finding, the response of the international construction contractors was pointed out with the each investigated factors accordingly. Objectively, the causal relationships affecting the performance of ICCs doing business in Cambodia was developed with the recommendation for better practices in Cambodia construction industry.
Key words: Factors, Performance, International construction contractors, Business,
Cambodia
Monday 27 June 2011
Influence of Financial Risk for Project Financing throughout Real Estate Development Process: A Case Study of a High Rise Apartment Project in Vietnam
Many risks and opportunities occur in real estate market, especially during development phases (Mou, 2007). However, in Vietnam, there is a lack of knowledge about the influence of financial risk in real estate development process. Therefore, Mr. Nguyen Quoc Trung tried to research the influence of financial risk to project financing throughout development process. Furthermore, his study tried to explore relationship between the financial risk, the development process and the project financing to reduce its influence. The objectives of his study were: (1) to investigate the real estate development process in high rise apartment project and to indentify financial risk factors in each activity of process; (2) assessment the critical factor of financial risk on the development process and the influence of these factors to project financing throughout development process; and (3) purpose the conclusion and recommendation to reducing the influence of these factors on the project financing throughout the development process.
Research findings
1. The real estate development process and financial risk factor happen on this process in high rise apartment project
The first objective of this study is to find the financial risk and development process of high rise apartment project. After analyzing the data, it was found out that financial risk has 4 categories: legal risk, leverage risk, financing risk, inflation risk and risk of construction cost. While the development process of high rise apartment project includes 4 phases, there are project allocating, feasibility study, contract – license – commitment and execution and sell. The financial risk factor in each phase of development process is verified by expert and this supports for the developer, the real estate company and who related in development process of high rise project to get the overview picture of real estate development process and the financial risk happen in each step of process.
2. Assessment the critical factor of financial risk on the development process and the influence of these factors to project financing throughout development process
Base on the frame work, the development process and financial risk happen in each step of process. The researcher assessed all financial risk factors in each step of development process throughout the case study. This assessment was done by the development team of Project A, who directly manages this project. The assessment of influence of financial risk factor in development process and database of this project is analyzed to get the critical factor of financial risk on development process. The financial model of project is integrated with the critical factor of financial risk throughout development process for analyzing influences of critical factor of financial risk to project financing model throughout development process.
This finding shows the practice of development process in high rise apartment project and the influence of financial risk on development process. In this finding, the legal risk and leverage risk can lead to financing risk, inflation risk and risk of construction cost on the development process. Every activity of development process has relationship to each other. So, in each phase of project, the financial risk factor has impact to each other. This finding also shows the gap of perception of Real Estate Company about the influence of financial risk on development process. The Real Estate Company always wants to control the cost of the construction project but the real estate company forgets that the more important is the maximum profit of project. With this reason, the real estate company does not understand the demand of housing characteristic for project design of each segment in market. They always focus on the cost if this project is mid end or low end project. The delay for project operation increases the inflation cost and construction cost but decrease the profit of project.
3. Recommendation to reducing the influence of financial risk to project financing throughout development process.
The project financing in real estate development process is the key for successful project. To reduce the influence of financial risk in each phase of development process is the key for making decision for risk management. In order to achieve the maximum profit of project and control the cost of project, all of financial risk need to reduced and controlled. The recommendation to reducing the influence of financial risk to project financing model throughout development process is summarized in the table below.
His thesis abstract is copied andposted.
ABSTRACT
The real estate company always want maximum the profit and minimum the cost of project. With this purpose, the real estate company manages the financial risk to get the profit and control the cost. The real estate development process is complex project and very risky. In this process, the financial risk impact to project financing dramatically. With this reason, the influence of financial risk to project financing throughout development process is studied to support the real estate company and actor related in development process in order to make solution reducing the influence of financial risk to achieve objective of project.
This research was conducted to fulfill the three objectives. (1) to investigate the real estate development process in high rise apartment project and to identify financial risk factor in each step of development process; (2) to assess the critical factor of financial risk on the development process and the influence of these factors to project financing throughout development process; (3) to purpose the conclusion and recommendation to reducing the influence of these factors on project financing throughout the development process.
The result of this study found that the perception of Real Estate Company do not correspond with the influence of financial risk. The financial risk factor impact the both source of fund and use of f
und of project which is included the project financing model throughout each phase of development process. All of consequence of risk factor is show in execution and sale phase. This makes profit of project decrease dramatically and increase the construction cost. This study also shows that Vietnam has not yet created a convenience environment for the real estate business.
Key words: Real estate, development process, project financing, financial risk, risk factor, case study, Vietnam
Research findings
1. The real estate development process and financial risk factor happen on this process in high rise apartment project
The first objective of this study is to find the financial risk and development process of high rise apartment project. After analyzing the data, it was found out that financial risk has 4 categories: legal risk, leverage risk, financing risk, inflation risk and risk of construction cost. While the development process of high rise apartment project includes 4 phases, there are project allocating, feasibility study, contract – license – commitment and execution and sell. The financial risk factor in each phase of development process is verified by expert and this supports for the developer, the real estate company and who related in development process of high rise project to get the overview picture of real estate development process and the financial risk happen in each step of process.
2. Assessment the critical factor of financial risk on the development process and the influence of these factors to project financing throughout development process
Base on the frame work, the development process and financial risk happen in each step of process. The researcher assessed all financial risk factors in each step of development process throughout the case study. This assessment was done by the development team of Project A, who directly manages this project. The assessment of influence of financial risk factor in development process and database of this project is analyzed to get the critical factor of financial risk on development process. The financial model of project is integrated with the critical factor of financial risk throughout development process for analyzing influences of critical factor of financial risk to project financing model throughout development process.
This finding shows the practice of development process in high rise apartment project and the influence of financial risk on development process. In this finding, the legal risk and leverage risk can lead to financing risk, inflation risk and risk of construction cost on the development process. Every activity of development process has relationship to each other. So, in each phase of project, the financial risk factor has impact to each other. This finding also shows the gap of perception of Real Estate Company about the influence of financial risk on development process. The Real Estate Company always wants to control the cost of the construction project but the real estate company forgets that the more important is the maximum profit of project. With this reason, the real estate company does not understand the demand of housing characteristic for project design of each segment in market. They always focus on the cost if this project is mid end or low end project. The delay for project operation increases the inflation cost and construction cost but decrease the profit of project.
3. Recommendation to reducing the influence of financial risk to project financing throughout development process.
The project financing in real estate development process is the key for successful project. To reduce the influence of financial risk in each phase of development process is the key for making decision for risk management. In order to achieve the maximum profit of project and control the cost of project, all of financial risk need to reduced and controlled. The recommendation to reducing the influence of financial risk to project financing model throughout development process is summarized in the table below.
His thesis abstract is copied andposted.
ABSTRACT
The real estate company always want maximum the profit and minimum the cost of project. With this purpose, the real estate company manages the financial risk to get the profit and control the cost. The real estate development process is complex project and very risky. In this process, the financial risk impact to project financing dramatically. With this reason, the influence of financial risk to project financing throughout development process is studied to support the real estate company and actor related in development process in order to make solution reducing the influence of financial risk to achieve objective of project.
This research was conducted to fulfill the three objectives. (1) to investigate the real estate development process in high rise apartment project and to identify financial risk factor in each step of development process; (2) to assess the critical factor of financial risk on the development process and the influence of these factors to project financing throughout development process; (3) to purpose the conclusion and recommendation to reducing the influence of these factors on project financing throughout the development process.
The result of this study found that the perception of Real Estate Company do not correspond with the influence of financial risk. The financial risk factor impact the both source of fund and use of f
und of project which is included the project financing model throughout each phase of development process. All of consequence of risk factor is show in execution and sale phase. This makes profit of project decrease dramatically and increase the construction cost. This study also shows that Vietnam has not yet created a convenience environment for the real estate business.
Key words: Real estate, development process, project financing, financial risk, risk factor, case study, Vietnam
Wednesday 22 June 2011
Life Cycle Cost Analysis for Hydropower Projects
Life cycle cost is a key economic figure resulted from condensing an almost overwhelmingly large quantity of data (Pelzeter et al, 2007). The accuracy and sensitivity of these data can be difficult to analyze to become reasonable inputs for life cycle costs assessment.
For hydropower projects, there is a master plan to develop these projects in almost every country. However, because of the available budgets, the projects are needed to be ranked in order to decide which projects are necessary, economical and beneficial more than others. Life cycle cost analysis is one of the useful ways in decision making process and long term planning of the project. So, different projects are needed to compare their life cycle costs and incomes. Because of the various factors that can affect on hydropower projects, the uncertainty and the risks are high and difficult to predict.
Mr. Kyaw Min Thu made a case study which major objectives were to: (1) compare the life cycle costs and net present values of hydropower projects/plants with different types of turbine; and (2) identify the major cost contributors in life cycle cost of each project,
Conclusions
In this research, life cycle cost analysis of hydropower projects installed different types of turbine are conducted on the costs incurred in the hydropower plants to determine the most beneficial technology in terms of cost effectiveness. The hydropower plants for this research are selected among the hydropower plants in Thailand which are operating under management of EGAT. To conduct the analysis, all accessible cost data are collected and the researcher followed the cost categories of responsible agencies. All the costs incurred in the selected hydropower plants that can be accessed are considered and then converted into the same period to analyze. The costs data are converted in the same unit (thousand baht per year) at the end of each year within the analysis period.
Moreover, the energy generated data from each selected hydropower plant are collected and calculated the incomes of the power plants each year using the average energy sales price. The incomes getting from the energy generation are considered and calculated as one of the parameters in life cycle cost analysis for wider perspective to determine the outputs. The net present values of the hydropower plants are achieved from the costs and incomes incurred each operation year in the hydropower plants. The analysis’s results are converted into cost per capacity and cost per energy as the capacity of the hydropower plants can affect the results of the analysis.
Among factors influencing the selection of the turbine types of hydropower plants, the result of life cycle cost analysis can be just one of those factors. A final decision may include a number of additional factors outside the LCCA process, such as availability of funding, capability to perform the required construction, expertise and experiences with a particular turbine type and so on.
1. Comparison of Life Cycle Costs of Hydropower Plants
As the capacities of the hydropower plants that can get enough data to conduct analysis are different, the analysis is performed to get the values for unit capacity and unit energy generated for each hydropower plants.
Based on the data analysis for three types of hydropower plants with three different types of turbine, the Francis turbine power plant is more cost-effective than other two types of power plants with respect to the life cycle cost per installed capacity, life cycle cost per energy, net present value per installed capacity and net present value per energy.
The Kaplan turbine hydropower plant and Pelton turbine hydropower stand as decreasing order with respect to their life cycle costs per installed capacity, life cycle costs per energy generated and net present values per capacity and energy generated by the Pelton turbine plant has the larger values than that of Kaplan turbine plant. Thus, the Pelton turbine hydropower plant is more favorable than that of Kaplan plant in terms of cost-effectiveness.
2. Major Cost Contributors in Hydropower Plants
The present values of each cost categories involved in total costs of hydropower plants for each year are calculated to find out the contributors and their ratios in the life cycle costs. The researcher follows the responsible agencies in categorization the costs incurred in the hydropower plants.
In every plant, the life cycle costs spent for civil structures are the largest in the life cycle costs for the whole plants, in other words, life cycle costs of civil structures are major cost contributors in whole life cycle costs of hydropower plants. However, taking account only the operation and maintenance costs, the costs incurred for the electromechanical equipment are the larger than for the civil structures.
In terms of costs per capacity and energy generated, for each cost category, the hydropower plants can be arranged as Kaplan, Pelton and Francis turbine hydropower plant in decreasing order.
According to the results of the analysis, Francis turbine power plant has the least cost per energy generated in all cost categories so Francis turbine is the most favorable among hydropower plants with different types of turbine.
Thus, life cycle costs of civil structures in the analysis period are the major costs contributors in all types of plants while the operation and maintenance costs of the electromechanical equipment are major cost contributors among the total operation and maintenance costs of hydropower plants
His thesis abstract is copied and pasted.
Abstract
The hydropower projects are needed relatively large amount of investment relative to most of the other projects in construction industry. Thus, the decision making on selecting the technologies using in the hydropower plants are needed to analyzed well because of the costs incurred in the whole life of the plant come from the decisions made before starting construction and operation of the plant. Life cycle cost analysis is worth to be conducted as it can give the results not only on the initial costs but also on the costs in the whole life of the studied assets.
In this study, the objective is set to conduct the life cycle cost analysis for the hydropower plants which are installed different types of turbines. The life cycle cost analysis for each type of plant is carried out and the results are shown as per capacity and per energy generated of the plant. The main components of the inputs, which are historical data from hydropower plants, are gathered from the representative agencies. The comparisons of the results of the analysis are performed to select the most cost-effective technology for the hydropower plants in long term basis.
As the results of the analysis, it is found that Francis turbine hydropower plant is more cost effective over than other types.
For hydropower projects, there is a master plan to develop these projects in almost every country. However, because of the available budgets, the projects are needed to be ranked in order to decide which projects are necessary, economical and beneficial more than others. Life cycle cost analysis is one of the useful ways in decision making process and long term planning of the project. So, different projects are needed to compare their life cycle costs and incomes. Because of the various factors that can affect on hydropower projects, the uncertainty and the risks are high and difficult to predict.
Mr. Kyaw Min Thu made a case study which major objectives were to: (1) compare the life cycle costs and net present values of hydropower projects/plants with different types of turbine; and (2) identify the major cost contributors in life cycle cost of each project,
Conclusions
In this research, life cycle cost analysis of hydropower projects installed different types of turbine are conducted on the costs incurred in the hydropower plants to determine the most beneficial technology in terms of cost effectiveness. The hydropower plants for this research are selected among the hydropower plants in Thailand which are operating under management of EGAT. To conduct the analysis, all accessible cost data are collected and the researcher followed the cost categories of responsible agencies. All the costs incurred in the selected hydropower plants that can be accessed are considered and then converted into the same period to analyze. The costs data are converted in the same unit (thousand baht per year) at the end of each year within the analysis period.
Moreover, the energy generated data from each selected hydropower plant are collected and calculated the incomes of the power plants each year using the average energy sales price. The incomes getting from the energy generation are considered and calculated as one of the parameters in life cycle cost analysis for wider perspective to determine the outputs. The net present values of the hydropower plants are achieved from the costs and incomes incurred each operation year in the hydropower plants. The analysis’s results are converted into cost per capacity and cost per energy as the capacity of the hydropower plants can affect the results of the analysis.
Among factors influencing the selection of the turbine types of hydropower plants, the result of life cycle cost analysis can be just one of those factors. A final decision may include a number of additional factors outside the LCCA process, such as availability of funding, capability to perform the required construction, expertise and experiences with a particular turbine type and so on.
1. Comparison of Life Cycle Costs of Hydropower Plants
As the capacities of the hydropower plants that can get enough data to conduct analysis are different, the analysis is performed to get the values for unit capacity and unit energy generated for each hydropower plants.
Based on the data analysis for three types of hydropower plants with three different types of turbine, the Francis turbine power plant is more cost-effective than other two types of power plants with respect to the life cycle cost per installed capacity, life cycle cost per energy, net present value per installed capacity and net present value per energy.
The Kaplan turbine hydropower plant and Pelton turbine hydropower stand as decreasing order with respect to their life cycle costs per installed capacity, life cycle costs per energy generated and net present values per capacity and energy generated by the Pelton turbine plant has the larger values than that of Kaplan turbine plant. Thus, the Pelton turbine hydropower plant is more favorable than that of Kaplan plant in terms of cost-effectiveness.
2. Major Cost Contributors in Hydropower Plants
The present values of each cost categories involved in total costs of hydropower plants for each year are calculated to find out the contributors and their ratios in the life cycle costs. The researcher follows the responsible agencies in categorization the costs incurred in the hydropower plants.
In every plant, the life cycle costs spent for civil structures are the largest in the life cycle costs for the whole plants, in other words, life cycle costs of civil structures are major cost contributors in whole life cycle costs of hydropower plants. However, taking account only the operation and maintenance costs, the costs incurred for the electromechanical equipment are the larger than for the civil structures.
In terms of costs per capacity and energy generated, for each cost category, the hydropower plants can be arranged as Kaplan, Pelton and Francis turbine hydropower plant in decreasing order.
According to the results of the analysis, Francis turbine power plant has the least cost per energy generated in all cost categories so Francis turbine is the most favorable among hydropower plants with different types of turbine.
Thus, life cycle costs of civil structures in the analysis period are the major costs contributors in all types of plants while the operation and maintenance costs of the electromechanical equipment are major cost contributors among the total operation and maintenance costs of hydropower plants
His thesis abstract is copied and pasted.
Abstract
The hydropower projects are needed relatively large amount of investment relative to most of the other projects in construction industry. Thus, the decision making on selecting the technologies using in the hydropower plants are needed to analyzed well because of the costs incurred in the whole life of the plant come from the decisions made before starting construction and operation of the plant. Life cycle cost analysis is worth to be conducted as it can give the results not only on the initial costs but also on the costs in the whole life of the studied assets.
In this study, the objective is set to conduct the life cycle cost analysis for the hydropower plants which are installed different types of turbines. The life cycle cost analysis for each type of plant is carried out and the results are shown as per capacity and per energy generated of the plant. The main components of the inputs, which are historical data from hydropower plants, are gathered from the representative agencies. The comparisons of the results of the analysis are performed to select the most cost-effective technology for the hydropower plants in long term basis.
As the results of the analysis, it is found that Francis turbine hydropower plant is more cost effective over than other types.
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