Improvement of Organizational Structure for Power Plant Project Management of PetroVietnam

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.

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.

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.

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

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

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.

Factors Affecting Operation and Maintenance Costs of Ho Chi Minh City Condominium Projects

The management of condominium project during the operation stage is an emerging problem for project owners. Normally, the owners focus on development stage and construction stage of the project. They mainly concern in problems related to planning, design, and execution (Arditi & Nawakorawit, 1999a).

In order to recommend to owners or property managers appropriate solutions to control and reduce O&M expense. Mr. Duong Quang Minh made a study which, first, will develop operation and maintenance cost system of existing condominium projects. The purpose is to identify the most important costs in this system. Second, the study will investigate the reasons that cause the cost. Thus, the three main objectives of his study were to: (1) build a generic framework for operation and maintenance cost system of existing condominium projects; (2) find out and assess factors affecting on operation and maintenance cost of existing condominium projects; and (3) recommend solutions to reduce or control the impact of the factors that influence on O&M costs.

Conclusions

For Objective 1

The study analyzed cost data from five case studies to identify the most important cost of operating condominiums. Each cost was given a brief definition, its components, and characteristic. Then, the study developed the generic framework of operation and maintenance cost of condominium projects. The framework is benchmark to compare O&M costs between condominiums.

From the benchmarking, the study found that cost for condominium management is the highest cost with about 46.42 percent of total O&M cost. In addition, energies supplying for common activities of condominium are also high with about 18.26 percent of electricity consumption and about 9.23 percent for water consumption. Also, costs of cleaning and waste disposal are high by about 9.61 percent and costs for maintaining lifts are 6.01 percent.

The reasons behind this high cost include:

1. Management cost: The reason may be inappropriate choices between in-house or out-source employment.

2. Energy consumption cost (Electricity and water supply): There are three main reasons that cause high expense for this cost center such as general facility influences, installation of an old-fashion technology in the facilities, and maintenance policy including lack of daily inspection and preventive maintenance.

3. Maintaining lift cost: Maintenance costs of lifts are costs connected to planned maintenance works to the lifts in the common areas of condominium.

4. Cleaning and waste disposal cost: Reasons that may cause cleaning service cost is lack of design specification of cleaning tasks and inappropriate choice of construction material, specially decorated material.

Objective 2

There is no significant difference between in-house and out-sourcing employment condominium managers. In general, both managers pay attention into reducing operation and maintenance costs. However, based on characteristic of each employment type, the condominium managers have different maintenance strategy to perform the maintenance task effectively. Therefore, they have different perception about the factors that influence to O&N costs.

Recommended solutions to reduce or control the impact of the factors that influence on O&M costs

For new condominium projects, property manager is usually the one that handles all the defects or design faults after the completion of construction stage. Base on accumulated experiences in handling the defects from different building projects, the property manager can feed back what they have suffered from the experiences to the project team. Besides, as the property manager's role is to manage the property, they usually meet the tenants that propose many expectations or requirements to make better living condition of condominiums. These expectations may be valuable information for the owner to make the right decision when investing in new condominium project. In order to better manage the project, property manager should:

• Select appropriate in-house or out-sourcing staff to perform maintenance tasks efficiently
• Imply conservation energy program in order to control and reduce energy consumption
• Pay attention in the management of maintenance task for lift system
• Pay attention in the management of cleaning tasks

The recommendations for the first finding are shown in the below.

There are two recommendations for condominium managers. One is for in-house employment condominium and another for out-sourcing condominium.

For in-house employment condominium, if the condominium owners decide to employ in-house staff to perform the maintenance task, they should invite maintenance specialists to give their advisories during the design stage in order to reduce the maintenance costs as well as operation costs. On the other hand, if there is no participation of maintenance experts in the design process and there are many problems occurring during the operation stage, the project owners should use external staff to perform the maintenance work.

For out-sourcing employment condominium, there is a strong wish of out-sourcing condominium manager about the provision of construction material information. In order to perform maintenance tasks efficiently, the project owner should ask the designer that provides the specification about the characteristic of construction material using for the project. Especially in the case that project owner decides to use out-sourcing staffs.

His thesis abstract is copied and pasted.

Abstract

High-rise residential property management sector in Vietnam is still staying at the early stage of development. There is lack of maintenance concept of building development because most of project owners are only attracted in completion project. Condominium managers have not appropriate maintenance policy for the completed building, and it deteriorates faster than expected service year. Maintenance issues become emerging problems that should be concerned. This study aims to investigate practical management of condominium projects in Ho Chi Minh City through management of operation and maintenance expenditures.

Around the areas of HCMC, the researcher visited many exiting condominiums that have been operating since year 2000. In achieving these objectives, opinions of in-house employment condominium managers and out-sourcing employment condominium managers were sampled through structured questionnaires. The data collected were analyzed using descriptive and inferential statistics. There is a difference between condominium manager’s perception about two sub-factors affecting on operation and maintenance cost. They are “Lacking of involvement of maintenance experts during design stage” and “Materials selection does not comply with the client's activities due to inadequate accurate material information source”

On the other hand, real cost data were also collected from five condominium projects. The purpose the study was that identified the most important O&M costs of condominium by comparing costs among condominiums. Benchmarking was established to compare cost each other. The result of comparison was that found out six most important cost including management cost, electricity consumption, water consumption, cleaning and waste disposal, and lift maintenance cost. After all, the study proposed many solutions that not only help condominium managers managing their assets better but also help other participants concerning about maintenance issues for developing new projects.

Factors Affecting Constructability Practices in Hydropower Construction in Nepal

Nowadays, the construction industry lacks constructability, which causes many problems, such as increased cost and time required for constructing a project, reduced productivity of project personnel and equipment, and low-quality construction (Nima et al., 2002). In this connection, it is worthwhile to investigate the drawbacks of the existing practices and application of constructability concepts.

Systematic application of constructability concepts will enhance constructability of a project. Consequently, schedule, quality and cost are optimized and all the parties are benefitted from the project. Nepal is practicing constructability concepts in hydropower development however these concepts are not recognized with importance by the key practitioners. Mr. Mukesh Khadka made a case study which objectives were broadly divided into following three parts:

i. To find out constructability concepts and implementation barriers applicable for different phases of hydropower project namely conceptual planning, design and procurement, and construction/field operation.

ii. To identify the degree of importance, level of application and major implementation barriers of constructability concepts in hydropower construction in Nepal.

iii. To propose recommendations for the effective application of constructability concepts in the hydropower project construction in Nepal.

Conclusions

1. Identification of constructability concepts and implementation barriers

For Nepal, thirty-six constructability concepts suitable for hydropower projects are identified out of which seven concepts are suitable for implementation during conceptual and planning phase, twenty-one concepts for design and procurement phase, and last eight concepts are suitable during construction or field operation phase. In hydropower industry, 49 implementation barriers were obtained from expert review and play key role to deter the implementation of constructability concept.

2. Identification of degree of importance, level of application and major implementation barriers

The result of this study confirmed that six concepts are very important constructability concepts in overall respondents’ opinions. The very important constructability concepts are (1) provide detail and clear design information, (2) investigate the impacts of design on safety during construction, (3) documentation of works of good contractors based on quality and time, (4) carry out thorough investigation of the site, (5) evaluation, documentation and feedback of the issues of the constructability concept, and (6) technical specification. Remaining thirty constructability concepts is accepted as important constructability concepts for hydropower construction in Nepal.

The research has also revealed that none of the concepts are being highly applied in hydropower construction in Nepal. All constructability concepts are believed as concept with medium application except three concepts namely, (1) innovation on temporary construction materials/systems, (2) employ any visualization tools such as 3D CAD to avoid physical interference, and (3) design to avoid return visit by trade which fall into category of concepts with little application.

During the study, major constructability implementation barriers were identified and ranked as top ten implementation barriers. These barriers were further grouped into three dimensions named as (1) Ineffective communication and coordination, (2) Socio-political influences, and (3) Insufficient resources using factor analysis. Ineffective communication and coordination between parties may cause conflicts that could eventually impact the project constructability adversely leading to dissatisfaction of the project parties, reworks, variation orders and claims. Not following the execution plan of the project may hamper the critical path of the project thereby causing the time and cost overrun of the project. Socio-political influences are the major barriers of hampering implementation of constructability concepts. Disruption by local people and road strikes imposing various reasonable and sometimes unreasonable causes seriously hamper the project constructability. Insufficient resources due to limited project budget also hinder the implementation of constructability concept. Due to lack of incentives given to the employees, it is very difficult to implement the constructability improvement concepts as employees are the key player for applying them.

Recommendations

Further study is recommended for the following subjects:
• Further study considering large number of hydropower projects of various sizes, different financing models and identification of specific barriers for each constructability concept is necessary in milieu of developing guidelines for hydropower projects

• Further study can be extended to find the detail procedures for effective application of those constructability concepts in hydropower construction and to find the most suitable contracting approach which facilitates effective constructability application.

• A study on suitability of constructability issues in various kinds of contracting approach can be done.

His thesis abstract is copied and pasted.

Abstract

Nepal has favorable condition to develop numerous hydropower plants yet it is facing eighteen hour load shedding per day during dry season. Traditional approach adopted in Nepal for hydropower construction involves many problems such as design changes, reworks, poor safety practices, time delays, cost overruns, disputes, claims which hampers constructability of the project. In this context, it is worthwhile to conduct research which focuses on investigation of the degree of importance and level of application of constructability concepts and identifying the major barriers hindering effective implementation of those concepts. The findings would be appropriate for the preparation of baseline required in constructability improvement guideline for hydropower construction in Nepal.

Thirty-six constructability concepts and forty-nine implementation barriers related to hydropower construction in Nepal were selected for detail study after extensive literature review and expert verification. Through questionnaire survey, opinions on those constructability concepts and implementation barriers were collected from fifty-three managers/engineers associated with hydropower developers, consulting firms and construction companies involved in hydropower construction in Nepal. The quantitative data gathered were then analyzed using various statistical techniques to conclude and recommend further studies. The result of this study revealed that six constructability concepts were accepted as very important concepts by overall respondents and the remaining concepts were considered to be important. To the contrary, none of the concepts are being highly applied in hydropower construction in Nepal. Further, ten major constructability implementation barriers were identified and grouped as ineffective communication and coordination, socio-political influences, and insufficient resources using factor analysis.

The effective implementation of constructability concepts in hydropower projects in Nepal can be attained by developing guidelines for the application of those concepts. For preparation of the guidelines the concepts identified by the study need to be verified with hydropower projects of various sizes and different financing models and detail procedures for applying those concepts should be documented. Also, identification of specific barriers for each constructability concept is necessary in milieu of developing guidelines for hydropower projects.

Keywords: constructability, buidability, implementation barriers, hydropower, Nepal

Effective Pricing Negotiation Strategy of Variation Claims in Commercial Building Construction

The valuation of variations is near daily task on large construction contracts. It is a norm in the construction industry where one of the contracting parties disagrees about the valuation of work done. Thus, the valuation of variation orders has been admitted as one of the main causes for conflict and disputes in construction management. A mechanism is required to accommodate the process of the changes in order to derive a more objective decision-making. An appropriate mechanism should be identified as a potential feasible solution for modeling the decision making process in the valuation of variation.

As abovementioned, Ms. Supatchana Pumpipat conducted a research studies for proper quantification of variation claims by emphasizing the varied works impact to cost structure which will be claimed by the contractors. Therefore, the major objectives for her study were to: (1) classify the variation works types in civil works of commercial building project and identify the problems that incurred in managing variation; (2) find out how to price the varied works that is generated from variation order that could be caused of claims and disputes; and (3) propose proper valuation process and the effective negotiation on the accepted price for both contractor and owner.
Conclusion

Based on the Case Study, the rebuilding shopping mall project garnered variation orders that were classified into five (5) categories such as:

i) New work – are the additional item in the some part of building for more suitable and aesthetic of the building. Frequently, this category is initiated by owner

ii) Modified work – are the existing of buildings becomes unsuitable for their present use, and then improvement, repair and maintenance are often required to keep them in usable condition.
Change work – are covered amend in some parts or whole scope of work that is stipulate in the contract

iii) Move work – are Moving things without creating any damage to those items including storage of those items, they assume a duty to be included in this section.

iv) Demolishing work – are move the existing part out and would not be reused. And the occupancy of debris that comes from the demolishing process will be agreed before starting work.

v) Correcting Work – items that are corrected or fix the damage of building. Most of them are architectural work.

At first, the author would like to identify the specific valuation method in each variation categories but based on interview, the valuation methods is not related to the variation categories. The valuation methods depend upon the condition and the character of the varied work.

The formulation procedure was initiated in order to manage the emerging variation orders. Basic flows of steps were provided but still flaws were found in processing time in every step. Some VO can be process without any difficulty and some may takes time to verify the submission documents, verify evidence, to gather data to confirm entitlement of the contractor to claim VO. Resolutions to variation order impact through variation order management were viewed and as to the effectiveness of current procedure. Current procedure is useful but can be developed to improve processing period and administer each changes lessening the probable effect to the whole project particularly on the cost.
Actually, the problems of this project are generated in every stage of variation procedure which will only base on the contractor’s viewpoint such as follows.

1. Notification - Information of change is given by either the PM or Contractors or whoever identifies the variation and all site instructions that may constitute a variation should readily indicate and require the Contractor to submit quotation. In the event that the Contractor submits a proposal like for example value engineering, this is the only time when the Project Management team conducts a preliminary analysis on time, cost, quality and the overall effects of the change in the construction.

2. Evaluation – the stage of gathering data to confirm support documents submitted by the Contractor. Determine the quantities, cost and time involved in the variation request. Coordinate the change with the trade in the construction for probable effect on the progress of the work and the work itself. At the same time coordinate with the contractor’s QS for comparison, checking and correcting evaluation. This will greatly discourage dispute in final cost later and save time on repeated evaluation in cases of disagreements.

3. Negotiation-in the event that the contractor still does not agree and cannot settle among QS of both parties, it is only then that the variation is elevated to negotiation. And in times that QS from both parties cannot decide on particular issues, negotiation among PM is recommended to settle the variation.

4. Final Approval– will include informing the Accounting department for the additional cost due to the variation for budgeting and cash flow management.

Nonetheless, one of the common reasons for dispute is the valuation of variation. The current traditional approach has been claimed inadequate to provide a scheme of compensation for any delay or disruption involved due to variations. Actually, rules for variations, when appropriate, the rate and price quoted is used in the valuation for variations. However, the rate or prices may not necessarily be an accurate figure for individual work items. In other words, it represents the collective amount of the project. Therefore, the rules of valuation should not be implemented in a loose way, simply because the rates to which they are applied are imperfect.

A valuation scheme in valuing variations has been provided. The possible outcomes of the scheme when the valuation is to be determined are as follows:

1. Applying original rate and price from similar works in the bill of quantities.

2. Using the original rate and price of similar works as the basis of valuation, applying necessary adjustment and/or allowances.

3. Determining new rate and price derived from fair valuation.

However, there was an issue arise on this scheme as it is potentially creates conflicts and disputes. The conflicts and disputes has been identified, namely the distinction of the varied works compared to the original works, i.e. similar character and/or under similar conditions. In the case of similar work characteristics and/or work condition, the varied works are valued using the original rate and price of similar works in the Bill of Quantities. If the work character and/or work condition is not similar but in the opinion of the assessor is still appropriate, the original rate and price of similar works in the Bill of Quantities will be used as the basis of valuation applying necessary adjustment and/or allowances. If the work character and/or work characteristic are totally different from those mentioned in the Bill of Quantities, new rate and price will be established by fair valuation. A mechanism for valuation of variations is essential if our understanding of construction management is to be advanced.

On the other hand, difficulties may arise among the related parties in perceiving the conditions to be encountered during execution. Each party may perceive the works characters and/or work conditions differently according to the nature of their own needs and for their own benefits. A framework has been developed to fairly assess all changes resulted from authorized variations and relate the changes to the final decision of valuation method to be. The form of contract also has been especially drafted to accommodate the risks of different perceptions on this matter and distribute the risks fairly to the involved parties. This result in the recommended way to deal with variation events is to look back to the forms of contract to make a careful assessment.

Finally, based on the findings, it can be concluded that each of the condition of contracts has stipulated clearly the rules for method of valuing the claims of variation works. However, the adequacy and appropriateness of the mechanism are different based on the different types of contracts. The selection of the type of contracts to be used for a particular project may influence the project implementation in terms of contractual administration related to claims for variation works. By selecting an appropriate type of contracts for a project to be implemented may reduce the tendency of disputes arising from valuation of variation claims. Disputes related to claims of variation works can be avoided by overcoming the problems of the disputes. This may only be achieved through the proper selection of type of contracts which contain the most effective methods of valuing the variation claims. Despite the fact that BQ rates/Contract rates is the most instant method and agreeable among the contracting parties, it is recommended that this method should be improved by rationalization of the rates accordingly depend on the nature of the work of similar character executed under similar conditions. In other words, the BQ rates/Contract rates despite being the most agreeable rates they should be adjusted accordingly so that the rates for varied works will be fair to both contracting parties.

Recommendation

It is also suggested that the application of Information Technology by using an expert system as a potential decision-making tool in the valuation of variation claims to be further explored as it has the potential to deliver the best solution in the valuation of variations which based on the expertise of the professional decision-makers. It has been previously explored that the valuation of variations needs a mechanism that represents the expertise and knowledge of the human experts for its decision-making. Decision-making by experts regarding the valuation methods to be applied, based on the determination of the extent of the changes affecting the work characteristics and/or work condition, plays an essential role in the valuation scheme.

However, the majority of human decision making is answerable to more than a single person, and involves higher level functions that can be constrained and frustrated by any attempt to enforce rigid or methodical practices. In other words, consensus decision-making is required from several human experts for an appropriate decision. The human experts for the valuation of variations are the quantity surveyors due to their important role and involvement in financial and technical aspects of a construction project management.

Here are some knowledgeable key points to manage a Variation Order:

- Out-Source Information - for variations that need price comparison, outsource information must be obtained such as price indices from the government, quotations from suppliers and price information from consultants.

- Data collection – is to collect the correct information to support the validity of the any variation order. It can be Site Records such as site diaries, weather charts, site instructions, inspection reports, shop drawings and materials approval, RFIs and other forms of communication like emails, transmittals, minutes of meeting and project reports.

- Investigation - For variation order due to differing site conditions, site investigation is imperative. It is essential in determining the actual site situations and for observing if the proposed change were feasible to the site. It is also done to verify quantities, type of material applied by the contractor and to confirm the methods proposed for application for use.

- Know your references - reference materials would be the basis for evaluation first, entitlement of the contractor to a variation order, validity of the change, and determination of quantities either additive or deductive. Reference may include Construction Contract, Drawings, Specifications and other forms of site communications.

Her thesis abstract is copied and pasted.

Abstract

Construction industry is often described as a volatile industry which can be true in implementing a project. Construction itself is more often unpredictable due to the different situations a project may face. Variations may occur in the preparation, during construction and even upon completion of the project. The veracity of inconsistent nature of construction, variation management procedures must be considered to minimize the effects particularly to project cost, time schedule and overall quality of the project.

There are an increasing number of construction contracts resulted in claims and disputes. All of the parties involved in the Thai construction industry are fully aware that disputes not only lead to cost overruns, but can end up as expensive and lengthy courtroom battles. However, very few studies related to construction contract claims and disputes in Thailand have been presented. This study is an attempt to gain further insight to construction contract claims and disputes in the Thai construction industry.

The big challenge for Thai Construction industry is to advance the management styles to cope up with challenges faced in a project. Procedures in managing contract and change orders are viewed to know the effectiveness and liability ensuing steps observed. Disruptions in cash flow and programme when mitigated and handled correctly may create confidence in handling changes that transpire in any project.

However, knowledge and skill in managing this challenging changes and observing effective procedures may eventually create a norm in Project Management system in the industry where tradition of strong relationship among Owner and Contract still prevails.

From the aforementioned information, it can be seen that the engineers have high levels of responsibility and must be knowledgeable and experienced in their work. They also have to work carefully to complete their work. Therefore, it is suitable for both engineers and involved personnel to study work data and past court cases that are related to their work, so that they can be careful about their work.

Risk and Project Contract Management for Preventing and Solving Disputes in FIDIC Contract

A project is highly successful when risks are strictly controlled and the contract is effectively managed.

Mr. Dang Thai Son made a case study on the Can Tho Bridge Construction Project. In his study, the following core issues were aimed to achieve:

* To study issues on project risk management: implicit risks, the tenor and process of project risk management.

* To study issues on project contract management: signing and implementing the project contract, amending, canceling or terminating the contract.

* To find approaches to mitigate risks as well as to prevent and resolve disputes, litigations in project contract.

Conclusion

Risks are unavoidable in construction projects, yet it is still possible to prevent them before and during a project. With such a length (15.85 km), Cantho Bridge was a typical example for risk management. The project has received full financial support from the Japanese government which is Twenty Four Billion Eight Hundred Forty Seven Million Japanese Yen (¥24,847,000,000). However, there was still delay in land requisition. Although only two local households did not agree on their compensation, they affected the progress of the project. In addition, shipping equipment and complex custom procedures also hindered the progress.

On the better side, the Contractor has implemented good management starting with the designed hierarchy of management with well-targeted goals as well as backup plans. This helped the project progress even in case of force majeure. Second, the contractor had good management on quality and quantity on various aspects of working requirements such as materials, equipment, construction methods and skilled labors that were focused and well-prepared. Thirdly, the Contractor showed that environment was taken with extreme care so that almost no effects on the local landscape, and ecosystem were done by pollution from the construction. Finally, the Contractor always followed the most important motto: "Safety first." The disastrous accident in foundation settlement showed the nature of risk on one hand; but on the other hand, it showed that the Contractor prepared and implemented practical and helpful steps in preventing diseases and treating injuries to workmen. As a result, construction workers felt better and secure to continue their work and the project could be completed in due time.

After Can Tho Bridge was completed, it has provided the researcher with practical experience in terms of capital, specific infrastructure conditions, hi-tech quality of the contractor and compensation negotiation. This study showed that reality is always unexpected but with well-planned risk management, we can still handle and heal the uninvited damage to project effectively and in time so as to fulfill the project as pre-planned.

In conclusion, throughout the analysis, the Can Tho Bridge Construction Project achieved more successful factors than its constrained ones. This project obtained good delivery system from setting to closing out phase owing to good environments such as stable society economy and politics, favorably legal environment especially the great support from the project stakeholders: Financier (JIBIC), Owner, Consultant, Contractors, Suppliers and others (Local Authorities and so on).

Apart from the strengths achieved as analyzed, there are many weaknesses that the project stakeholders should pay much attention to and should take them as valuable recommendations for future projects:

- Before carrying out the construction of any project, the Project Owner together with Local Authorities shall ensure land requisition to be well-executed and give right of access and site possession to the Contractor at appropriate time without any delay and obstruction from local residents.

- When making the estimation for a project, besides calculating an official capital source for the main items of the project, the project planner should carefully calculate an extra money fund for nearby existing land compensation including the crops. Therefore, the Project Owner will be able to get sufficient land area and provide further access to the Contractor for construction. Because the construction activities of the Contractor definitely affect to the neighboring structures of the inhabitants.

- The Project Owner should thoroughly consider selecting competent, qualified contractors who are healthy in finance and capable of high technology. Not to give the award to the bidder of the lowest price, and poor equipment and poor technology transfer.

It was time for Vietnamese Government and its subordinating Ministries consider carefully when deciding to select the bidder especially for foreign ones. Before inviting them for bidding, a well pre-qualified selection of experienced, prestigious and competent bidder list should be made and elimination of unqualified bidders from the list should be done. If doing so, the Government saves a lot of time and money for unreasonable loss and damage from rectification of defects and re-works.

His thesis abstract is copied and posted.

Abstract

Risk management is an indispensable job because it will help the project reduce and minimize the extraordinary impacts occur which affect to the general objective of the project.

In this study, we should learn about the concept of risk with its two specific characteristics: probability of occurrence and degree of impact. In addition, the classification of risk is also a meaningful deed; each kind of risk is different, therefore, risk management issue is also totally different. To manage risk, a process of six steps can be applied. First, making risk management plan for general orientation of work and scope of performance to manage the risks. Then, carrying out risk determination, it means to list out the risks might occur in the project. Since then analyzing probability of occurrence and the degree of impact of the risks, Control and adjustment of risks are to implement the plan for dealing with actual risks.

Contract management is extremely important in the project management. Referring to the contract, the project manager will treat and adjust the relationship as well as contradiction between interests and liability of the parties concerned in the project. Therefore, being a project manager, he or she needs to master the sequence of steps of signing and implementing the project contract, the arising issues and conditions of alteration, omission or termination of project contract as well as the approaches to resolve and settle disputes in the contract. Once dispute arises, it is wise that the parties should seek for negotiation, discussion or conciliation. This approach is simple, effective and little cost while claim and arbitration approach is more complicated, costly and waste of time.

“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fee, expenses and waste of time.”- Abraham Lincoln

Business Cooperation Contract Management in Gas Pipeline Project – A Case Study of Block B – O Mon Gas Pipeline Project

The signing of the business cooperation contract (hereinafter called BCC) to develop the Block B Gas Pipeline Project among PV Gas, Chevron, MOECO, and PTTEP will help to ensure the country's energy security and to promote industrial development in the Mekong Delta. The project will also save a significant amount of foreign currency for Vietnam on fuel imports, create more employment for the community, protect the environment by using a clean fuel, ensure a stable source of power, and open opportunities to connect with the gas pipeline systems of other countries in the region. However, how to well monitor and manage the pipeline project under the BCC is the challenge for operator.

Under BCC, each party will appoint a representative to the board of coordinators (hereinafter called BoC) to provide overall supervision and direction over and control all matters pertaining to the system operation. Therefore, the operator cannot decide on its own for the system operation which may lead to run late project, over-budget or fail to meet key needs of parties and so on. There are definitely some shortcomings in project under BCC need to be over, that are:
i. Take time for mutual agreement among parties;
ii. Misunderstanding and misinterpreting of stipulated clauses in contracts
iii. Conflict between contractor and the project company during project execution
iv. Conflict between cultures

A BCC is generally applied for managing the oil and gas project, in case of problems or disputes happen during the project execution, then these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract, therefore Mr. Phung Quang Hiep made a case study which main object was to focus the Phung Quang Hiep
issues related to BCC:

1. To study BCC contract objectives
2. To study BCC contract conditions
3. To study BCC contract implementation and problems occurring
4. To propose effective solutions for project management under BCC

Conclusion

BCC Objectives:

The purpose of this report is to describe the BCC objectives in which the project is implementing the design, procurement, construction, ownership, operation, maintenance of the upstream Block B & 48/95 and Block 52/97 facilities to ensure economic, efficient System development on an integrated, aligned basis, as set forth in this Contract.

BCC Conditions:

These objectives are concretized under BCC conditions of conditions precedent and participating interest. Block B – O Mon pipeline project has some difference phases. Therefore, the writing displays them in three main groups of technique, finance and legality. Technical phases include construction, operation and maintenance of system; transportation proposal and capacity; usage of the system, transportation of gas and tariffs; as well as decommission. In addition, financial issues of BCC are focused on taxation; government and corporation support; work program and budget; and contracting procedures. Also, BCC requires legal items in operation that are, insurance and litigation; default, assignment of participating interest; withdrawal; and dispute resolution.

BCC Implementation And Problems:

The above analysis is to result to business cooperation contract management for block B – O Mon pipeline project through making up factors affecting to take time for mutual agreement among parties, underground drivers of misunderstanding and misinterpreting of stipulated clauses in contracts and conflict between contractor and the project company during project execution as well as conflict between cultures. To response to these problem statements, this report concentrates on studying problems occurring and proposing effective solutions for project management under BCC as well.

This project may be continued if precedent conditions are satisfied or waived. That foreign- factors take part in business of gas pipeline and that disadvantages are caused by BCC have created some outstanding problems to system operation. The report asserts that issues of finance, accounting, culture, legality, risks, approval and human resource are needed to analyzed, improved and boosted. Otherwise, project will be delayed in the manner of time and quality and not achieved project objectives.

Effective Solutions for Project Management under BCC:

For finance and accounting issues, the operator has to harmonize regulations between BCC and Vietnamese Corporation Accounting which is first priority while the parties are required to obtain deep understanding of investee country, that is, Vietnamese laws. Moreover, due to four different management cultures the operator should set up harmonious business culture, seminars, team build to interpersonal communication and friendly atmosphere and especially maintain internal control of approval procedure and authorization for expenditure procedure. A unified and well defined organizational chart for human resource management is so important for continuous system operation. All above is to minimize business risks led by project specialization.

In addition, the report shows out main experience lesson groups to solve these problem statements. First, the operator should take full advantages of local authorities and governmental support in all tax and foreign currency issues. Second, the operator needs to have closer direction and management of higher authorities to keep the project be in the right way. Third, taking an initiative of finance, positioning negotiators of BCC in the board of operator and maintain frequently periodic meeting are considered as meaningful recommendations to unbind stuck bars during implementing project and achieve project objectives in timely and quality basis.

His thesis abstract is copied and posted.

Abstract

Natural gas is a fossil fuel extracted from the ground that can be used as a source of energy for household, industrial and commercial use, as well as to generate electricity. So, natural gas is an important factor for the development of countries that have strong economies and people who enjoy good living conditions. To be able to have a viable and efficient supply requires the construction of a pipeline from faraway regions that have large reserves of natural gas to onshore terminals. In Vietnam, the projects of pipeline construction and operation are almost under direct foreign investment of which business cooperation contract is the most favor.

The management of this contract is a challenge to Vietnamese operator due to foreign factors. This report let a case of BCC for block B – O Mon pipeline project as a study of project management in construction. It tries to work out common and regular problems this kind of BCC is encountering. These difficulties are divided into four groups that are, take time for mutual agreement among parties, misunderstanding and misinterpreting of stipulated clauses in contracts and conflict among contractors and the operator during project execution as well as conflict among cultures.

Moreover, BCC conditions and project phase operation are analyzed in details. Above all, the author suggests some solutions focusing on outstanding problem statements to improve the project operation and implement it in the manner of time and quality.

Project Schedule Internal Risk Management in EPC Gas Pipeline Project: A Case Study

Oil and gas sector is considered as a backbone of any country’s economy. In Viet Nam, the promotion of gas industry development since the early 1990s has significantly contributed to the economic development of the country.
The demand of domestic gas consumption is being increased in a very short time. Therefore, Petro Vietnam has cooperated with national and international petroleum companies to speed up the plan of developing and building of the new gas fields in the southeast sea and southwest sea of Vietnam. As a result, lot of new pipelines will be installed to transport gas from field to shore of Vietnam, and this process involves many risks. Due to the unique characteristic of this project, the risk management during project execution became very important activity because the risks may have effect on cost, schedule and quality of the project. Risk management is a key to successful project implementation.

For most effective and efficient risk management, it is recommend to plan, analyze and manage risk in all phases of project life cycle specifically from design to construction phase.

Mr. Pham Binh Lam made a case study which objectives were to: (1) describe key activities in EPC gas pipeline project ; (2) identify risk factor in implement the EPC gas pipeline project which may affect the project schedule; and (3) propose risk solution that can be used to manage in the EPC gas pipeline project

Conclusion

Based on the data collected mainly from Bloc B&52-Omon gas pipeline project of Petro VietNam Gas Corporation, the author has clarified that EPC gas pipeline project contains high risk during project execution. The very important stages are from engineering stage to construction stage because these stages influence the quality of gas pipeline project. There are a lot of risk factor impacts on the project schedule in these periods such as experience, knowledge and skill of owner, contractor, subcontractors, design change, and environment impact. Pipeline construction in the offshore environment as well as onshore environment which across many rivers and canals are difficult and dangerous activity which lead to accidents and incidents frequencies happen especially if this project have a long distance from offshore to onshore pipeline route. It will not only cause project delays but also directly and indirectly cause very high project cost.
Major risk factors which may affect EPC gas pipeline project schedule has been identified by and facilitated during the brainstorming session of key experience stakeholders in this project such as top management, project manager, site manager, HSE manager, office personnel and the author.

The author has proposed appropriate strategies to reduce major risks schedule in EPC gas pipeline project by conducting a Framework on EPC Schedule Risk Management through a real gas pipline project case study -Block B – Omon gas pipeline project.The results are shown in the table below.


Recommendation

In order to obtain efficient schedule risk management in EPC gas pipeline project this study proposes a number of recommendations:
- Experience project management team should be appointed to the selection EPC contractor

- The EPC contractor has to contribute audit procedure for detailed designer to select qualified designer effectively. In addition, review and approval by Project Management team (PMT) of both selection of detailed designer and approval of designed document

- The EPC contractor and subcontractor should contribute an effective and efficient safety management system

- An effective communication and coordination system between lower stake holder (e.g. EPC contractor, subcontractor, vendor, etc) should be set up

- The owners should have high commitment of all people involved especially top management commitment in all stage of project and hand over authority to make decision.

- The Risk Management Plan should be reviewed during the EPC phase as specified in the Project Management Plan to ensure that appropriate actions have been taken and followed up. Reviews should also occur at the commencement of a new project phase or if there are significant changes to the project scope or operating environment.
His thesis abstract is copied and posted.

Abstract

In order to adapt the demand of domestic gas consumption is being increased in very short time PetroVietnam has cooperated together with national and international petroleum companies to speed up the plan of developing and building new gas fields in the southeast sea and southwest sea of Vietnam. Therefore a lot of new pipelines will be installed to transport gas from field to shore of Vietnam. In oil and gas project specify gas pipeline project contains high risk during project execution because of interacting activities of many event in condition of limited time, human resource and budget and the participation of many different parties in the project with the role, responsibilities as well as different objectives make the project more complex. Additional, only four gas pipelines project that built in Vietnam. Due to the unique characteristic of these project, the risk management during project execution is became very importance activity because the risks effect on cost, schedule and quality of the project. Risk management is a key to successful project implementation The author has identified mayor significant risks which impact project schedule and has proposed appropriate strategies to reduce major risks schedule in EPC gas pipeline project by conducting a Framework on EPC Schedule Risk Management through a real gas pipeline project case study -Block B – Omon gas pipeline project.