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.