AIT alumnus appointed Deputy Minister in Vietnam

An alumnus of the Asian Institute of Technology (AIT), Dr. Cao Quoc Hung has been appointed as Deputy Minister, Ministry of Industry and Trade in Vietnam.

for detail information, please visit:

- http://www.ait.ac.th/news-and-events/2014/news/ait-alumnus-appointed-deputy-minister-in-vietnam/view#.UuTebvb-JYC

- http://www.vietnambreakingnews.com/2014/01/pm-appoints-new-deputy-trade-minister/#.UuHj8KU44lI

- www.moit.gov.vn/en/Pages/Leaders.aspx

Happy Tet 2014

Visit Mekong Delta January 2014

Mekong Delta visit
January 2014

At the beginning of the year 2014, MPM program representative, Dr. Hadikusumo, had a visit to two Mekong Delta provinces: Bac Lieu and Tra Vinh.

- Bac Lieu Department of Planning and Investment and Bac Lieu University; 

- Tra Vinh Management Board of Tra Vinh Economic Zone and Tra Vinh Board of Project Management of Investment and Construction. 

The very good results of those fruitful meetings have promised to bring bright near future for coming corporations between MPM/AIT and those provinces. Once MPM program can be launched at their places, it will take a part to contribute for the province sustainable development with higher quality human resource, esp. in construction project management field. We believe that as what we have being done for Can Tho, Vung Tau, Ha Noi and Ho Chi Minh city since 2007. 

Dr. Hadikusumo, MPM (left) and Mr. Pham Thanh Hien, Vice Director of Bac Lieu Department of Planning and Investment 

Dr. Hadikusumo, MPM (left) and Mr. Tran Manh Hung, Vice-Rector, Bac Lieu University

Dr. Hadikusumo, MPM (left) and Mr. Le Van Kham, Management Board of Tra Vinh Economic Zone 

Dr. Hadikusumo, MPM (left) and Mr. Vuong Hai Khoa, Director of  Tra Vinh Board of Project Management of Investment and Construction

Communication Management in Construction Project

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Development Infrastructure Program To Support For Van Don Economic Zone

The growth of project finance over the last 20 years has been driven mainly by the worldwide process of deregulation of utilities and privatization of public sector capital investment. This has taken place both in the developed world as well as developing countries. It has also been promoted by the internationalization of investment in major projects: leading project developers now run worldwide portfolios and are able to apply the lessons learned from one country to projects in another, as are their banks and financial advisers. Governments and the public sector generally also benefit from these exchanges of experience.

Private finance for public infrastructure projects is not a new concept: the English road system was renewed in the 18th and early 19th centuries using private sector funding based on toll revenues; the railway, water, gas, electricity, and telephone industries were developed around the world in the 19th century mainly with private-sector investment. During the first half of the 20th century, however, the state took over such activities in many countries, and only over the last 20 years has this process been reversing. Project finance, as an appropriate method of longterm financing for capital-intensive industries where the investment financed has a relatively predictable cash flow, has played an important part in providing the funding required for this change.

Infrastructure plays an important role in development Socioeconomic. It contributed greatly to the economic development of Vietnam and Economic zones. In recent years, infrastructure system in Vietnam has appeared more limited. This is a bad influence on the economy. This fact is determined by the following basic reasons:

• Planning and implementation of the plan lacks predictability, synchronization.
• The rapid growth of the economy leads to overloading of the system infrastructure. while capital investment is limited.
• The project was implemented by the state less effective. This is the cause of slow progress and quality of projects.

PHAM VAN THANH conducted a case study which objectives were to:

1. Investigate and identify key infrastructure for developing Van Don economic zone. Estimation general cost and soure of fund for infrastructure system.

2. Determine the overall progress of the program and Analyzing the feasibility of the program and the critical difficulties in capital investment.

3. Propose solution recommendations in field of fund and legal for performance the program from the state authority’s point of view for developing infrastructure system.

Conclusion

The case study had analyzed the development of infrastructure at the Van Don economic zone, which is defined as dynamic economic development and regional areas. The analysis shows that:

• Infrastructure development plays a decisive role in the development of economic zones in particular and economic sector in general.
• The investment in infrastructure construction needs a large and sustained fund. while the project is long cycle life, many risks, capital recovery is slow, less attractive to investors.
• At the macro level, Government will play a major role in investment and development of public infrastructure, because the investment in infrastructure development is low financial benefit but high in Socio-economic benefits and security social welfare.
• But, state funding is not enough, thereby diversifying investments fund is necessary solutions for allocation the risk of capital scarcity in the future.

Besides making uniformity of implementation planning. Analysis to develop sustainable financial resources for infrastructure development is a critical condition.

Diversify forms of capital to increase capacity to mobilize capital in the application of financial modeling is essential.

Special issue of privatization, project finance, public private partnership should be carefully considered depending on the maturity level of the economy as well as the sustained commitment of the government through the mechanism management.

Advanced methods can be successfully applied in developed countries but by no means will succeed when brought into Vietnam without appropriate adjustments, there are reasons for differences in the provisions of policies and economic conditions - social, especially when developed countries already have experience and maturity level of the market economy.

The adoption and implementation of the program should have a general policy relating to the all political system in which government plays a key role in forming the mechanism.

Recommendations

1. For Improving Developing Infrastructure Program

Within the scope of research at the Van Don economic zone, the author proposes three other group solutions in policy mechanisms to ensure the viability of the programs. The solution set to ensure the following objectives:

1. Source of State Capital Financial Risk

2. Government Support Public Infrastructure investors

3. Government Support Business investors

(Source of State Capital and Financial Risk)

• Government need approves the plan capital allocated for investment in infrastructure of Van Don economic zone in a 5-year cycle. This program needs to be passed by National Assembly.
• Government should allow Quang Ninh province actively planning and using land  fund along the highway to create capital from land use fees for development infrastructure.
• Allows the Quang Ninh province keep and use tax revenues in Van Don EZ to invest in infrastructure construction.

This policy will ensure the resources of the state capital and overcome the risks of capital investment

2. Government Support Public Infrastructure investors

• Complete planning and publicizing a list of infrastructure projects, which required investment.
• Government should issued legal and Regulatory Framework of PPP, PF, Concession model. To ensure the objectives of attracting private sector capital in the country and foreign investment in developing infrastructure to provide public services.
• Governments should publicly the commitment when establish forms of cooperation in Public-Private Partnership or Private public infrastructure project.
• Create all favorable conditions and methods to ensure the recoverability capital and interest of enterprise or SPV company.

3. Government Support Business investors

Development of infrastructure for economic and social development. Economic and social development, business development is the key to making business  in public infrastructure success. Thus promoting business investment has an important role and as a result but also the cause of infrastructure investment.

• Special tax incentives for investment projects in the VDEZ, profit repatriation and reinvestment incentives.
• Special land tax and leasing rates.
• Simplified and fast approval process for key development initiatives.
• Special incentives and simplified approval process for foreign skilled workers.
• Land allocation complete with infrastructural facilities provided to expedite development.
• A more liberal policy on housing ownership and lease arrangements for Vietnamese, Overseas Vietnamese residents, Permanent Residents and Foreign Investors.
• A Preferential policy to regulate sources of revenue and increase reinvestment capital.
• To establish special development funds to promote development initiatives in Van Don.

Abstract

Vietnam is developing country having population of about 90 millions. From 90s year of 20th century, After 20 years of renovation, Vietnam has achieved important milestone in economic development, politics, society as well as foreign affairs such as remaining sustainable and high development rate (average 10% per year), stable politics, attractive and potential market to foreign investors. Nowadays, Vietnam has become member of UN, WTO and many international organizations and forums, especially playing important role in ASEAN. Vietnam has never have great opportunities and challenges to develop country like now.      

Vietnam also located in trading hub area and economical corridors of region. In order to utilize such advantages with consideration to importance of economical integration to provide equal development in country wide, Vietnam has established 15 costal economical zones in decision 1353/QD-TTg dated 23 September 2008. It will be cores and driving forces for economic development of Vietnam.

However, one of basic and key matter obstructing the development of Vietnam like other economies also, is the lack of financial capital to improve the shorted infrastructures Providing proper policies and directions to mobilize capital sources investing in infrastructure development in economic zones is the key of Vietnamese economic development policy to promote the effects of such economic zones.

This research focus study on Van Don economic zone of Quang Ninh province, which is one of costal economic zone established in year 2007 according to decision 120/QD-TTg dated 26 July 2007, and having administrative and natural area of 2171km2 and 553km2 respectively. It is northern costal economic zone having many potentials regarding to tourist, luxury recreational, industry and high-tech industry, and free trade. Study of mechanism, funding program of infrastructure development support for this economic zone is the objective of this research.

Improvement of Organizational Structure for Power Plant Project Management of PetroVietnam

Electric energy is crucial for the development of Vietnam. From 2006-2010, the actual consumption of electric energy is the same with the actual generated net electric energy of about 13.7% per year to gain 85.4 billion KWh in 2010 only. There are many different power sources such as thermal power, hydropower, nuclear power etc. But in Vietnam, country's electricity is mainly produced from thermal power and hydro-power. However, in Vietnam's power system nowadays, the rate and capacity of hydro-power is being decreased if compared to the capacity and other electrical power sources.

The PetroVietnam (PVN) is implementing the accelerated development program. As a leading economic Group in Vietnamese energy sector including search, exploration and exploitation of oil and gas, power generation, PVN is assigned as the big investor of many important projects, including projects on thermal power plants. PVN is also one of the leading biggest Vietnamese State-Owned companies with the aim of looking for investment partners who are reliable and have enough financial capacity and modern technology to develop and build the power plants quickly in order to meet the electricity demand growth in Vietnam.

With this big task, PetroVietnam now is in “hot development” status. PVN has invested & built the first power plant since 2005 with only one Management Board (MB). Now, PVN is managing five thermal power plant projects at the same time. Besides, the objective of MBs is usually changed very fast, but organization structure for all MBs is still same with the first MB in the beginning. Therefore, PVN’s management for power projects still has some outstanding issues which are the weakness in organizational structure for project management. LE ANH THONG made a case study which objectives were to:

1. Deeply understand the existing organizational structure of PVN power plant project to analyze the strength and weakness, advantages & disadvantages of the existing system

2. propose recommendation for improvement

Conclusion

The objectives of Petrovietnam Power Plant Projects (PVN’s PPP) are usually changed very fast, but PVN still has kept the beginning type of organizational structure which is “Functional Structure” from 2004 up to now. Although this structure have some minor advantages, this structure is not suitable with the growth of PVN’s PPP which has caused some weakness and disadvantages in PVN’s PPP management so far. With four individual Management Boards, they have not achieved perfect result, and in case there are complicated tasks such as different features, sizes, location and many changes which are usually very fast and extreme in PVN power plant projects, it is very difficult to control the scope, contingency funds, and overall project value. It is also 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 Report, 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 advantages of the Proposed Improvement are efficient use  of  resources of the whole Proposed General Management Board where specialized  individuals can be shared and transferred from one it’s Branch to other Branches or among all 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, etc. These are the most useful and most efficient in this proposal.

With the detailed analysis and proposal, the strength and 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 Improvement will not be enough to improve everything for PVN’s project management. It is necessary with best effort to apply some more other solution in order to gain actually significant improvement and overcome other outstanding weakness of PVN’s project management.

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 Objective 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

The Delay Factors in EPC Contracts in Vietnam

Many construction projects in Vietnam have experiencing delay which becomes a big problem for each project because of lack of solution. In the construction stage of any project, anticipating many factors that may cause delays is one of the important works of the project manager. Therefore, project managers should give solutions for them before the construction starts. However, sometimes it is not important for each project because both owners and consultants do not care about this. That is why many construction projects are delayed.  There are a lot of reasons that causing delays, including force majeure and human acts. We could not solve these problems absolutely.

Tran Van Trung made a research, which is a general view about delay problems in construction projects such as problems happened during the foundation work, escalation in cost of material, equipment import management for construction, to find out the reasons and solutions for each case. The purpose of his report was to find out the main factors causing delay and affecting other aspects in Thermal Power plants in Vietnam at all stages of projects. These factors were analyzed in different ways of parties such as the Laws, Authorities, the Owners, the Contractors, Consultants, and Sub-contractors. From that, factors which are mainly effective to prevent and control delays in Thermal Power plants can be seen.

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.

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 investigated in this study exhibits a delay like in all power plants in Vietnam. Therefore, the results of the research provide a framework for project managers who can better understand the dynamics of project management and taking efforts to reduce incidences of delay time.

By administering and analyzing factors affecting the project, this research had 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, the quality of its equipment was not reliable and the quantity was not asynchronous in delivery.

In the case of this study, so as to find out the causes, impacts and solutions when facing delay problems, the research had analyzed twelve major factors that cause delay in construction stage. Although these problems may be unprejudiced reasons or subjective reasons, they were also originated by carelessness in the implementation, management or supervision. Then, this research had deeply analyzed other factors that also affect schedule for each case. Therefore, for each delay case, the overall view and solutions for preventing or reducing delays in future projects have seen.

In summary, this research summarized some reasons behind the delays caused to project, and proposed some recommendations which might enable the main contractor organization to develop in the competitiveness to achieve one of the major goals in power plants, on time completion, after that, we can prevent these causes in next projects.

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.