Planning for Improving Efficiency of Housing Project’s Development Process

According to the Governmental Investment Project Assessment Report for the year 2009 by Ho Chi Minh City People’s Committee, there are 1,177 projects completed until end of the year 2009 (which are currently equal to 20% of 5,886 operational projects in Ho Chi Minh City). However, 65% of the projects were delayed and 20 projects only achieved up to 30% of the target progress. This is due to the following reasons:

(i) Weak financial capacity of the project owners.

(ii) Lack of experienced project managers and project management human resources.

(iii) Long period for authority submission and lack of transparency of Vietnam law and regulations.

(iv) Land clearance and resettlement.

Bui Quang Huy made a case study which main objective is to investigate the basic requirements by Vietnam law and regulations, the common practice of housing development projects in Vietnam complying with Vietnam law and regulations; and to find out a more efficient process for developing a housing project in Vietnam.

Conclusions

The housing development industry has its own characteristics. Every single activity in the project development process has to comply with local law and regulations. Hence, the good understanding about local law and regulations is very useful for developers in their business. The success of the case project in this study also depends very much on the understanding about local law and regulations beside the project management knowledge.   

The old practice of housing project development process complying with Vietnam law and regulation is not efficient, it takes 60 – 78 months to finish the project from the feasibility study and planning phase to handing over and obtaining the ownerships for the house buyers. The longer the project development period is, the more costly the investment in housing projects is. Besides, Vietnam population and housing demand are developing very fast; the supply could not satisfy the demand. Hence, the housing price could not be reduced and a major part of people with low and medium income do not afford to buy houses. It causes a lot of social issues in Vietnam.

With the improved housing development process proposed, it takes 45 – 57 months to finish the project. If we only consider the Project Launching Preparation phase, the saving is 15 – 21months, it takes 12 -15 months in the improved process instead of 27 - 36 months of the old process. This is a valuable improvement. The investment in housing project becomes more efficient when the developers can recycle their investment faster and cut down financial cost in housing projects. It helps to increase the supply of housing products and reduce house price.

Besides the understanding about Vietnam market, the knowledge from lean production and last planner theory also offers a basis for evaluating the whole development process of housing projects and identify waste times in the process. The project manager/ planner should examine and schedule the project with all constituent and continuous activities as a whole. By implement that, it will make the timing of whole project period more efficient, rather than only taking care of shortening the period of its individual activities. The application of lean theory is absolutely suitable for the current situation of Vietnam housing market. It helps to shorten the project development period and make the process more efficient by ignoring waste time. There are no additional costs to apply these theories.

Recommendations

In general, when the understanding about local law and regulations is very important in housing project development, the developers should continuously update and study local law and regulations, especially, the new issuances.

A good relationship with government also helps developers in their submission works. This relationship could be created by contributing to society and maintaining the good image in the local market, the developers should properly deliver what they committed to the government and buyers.

The developers are recommended to maintain their efforts in evaluating the working and project development process to find any problems for improvement, not only waste of time, but also any other wastes such as cost, manpower, etc.

Lastly, the good schedule should never achieve the good actual result if it is not well controlled. The control system also needs to be established to monitor the execution of the project to ensure it is carried out in accordance with the plan.

ABSTRACT

Vietnam is a developing country which means that the country need a lot of knowledge for development, especially in the field of construction project management.

Some “old men” think that all the construction projects are similar, about the process, technology and method, especially housing development projects. They are actually not similar, there are many projects carried out in such a way of wasting time and cost; and achieving bad quality.

In this study, a more efficient process for housing development project is introduced. Hopefully, it could help the project managers / planners schedule and execute their projects strictly complying with the local law and regulations, in shorter cycle without any additional costs for advanced technology and materials.

This study also affirms that there is always un-efficiency in project development process of every construction projects. The project managers should always spend enough efforts to identify wastes and improve them. This is helping the projects, the company and the country, in a wider angle of view.