THE SIGNIFICANT TIME AND COST OVERRUN FACTORS IN VIETNAM POWER PLANT CONSTRUCTION PROJECTS

Time and cost overrun problems are considered as the two most severe factors contributing to the failure of construction projects and causing negative impacts on its project stakeholders in many countries all over the world, especially developing countries including Vietnam. The PetroVietnam Power Corporation (PVP) power plant construction projects are not an exception. This research attempts to identify the major time and cost overrun factors in the power plant construction projects of PVP and examine the differences in the perception of time and cost overrun factors from the perspective of three major construction practitioners involved in PVP power plant construction projects, namely, owners, contractors and consultants. Through a comprehensive literature review, some professionals’ forums on the internet, and discussions with experts, a questionnaire survey of 36 time and cost overrun causes was conducted. The data collected was then further analyzed and ranked with respect to indices of frequency, severity and importance. The findings showed that the top ten most important factors were: (1) Slow site clearance and unsatisfactory compensation; (2) Price fluctuations for materials and labor; (3) Contractors’ financial difficulties; (4) Owner’s financial difficulties; (5) Inadequate experience of contractors; (6) Poor site management and supervision; (7) Shortages of skilled workers and technical personnel; (8) Low bid values; (9) Improper planning & scheduling by contractors; and (10) Additional work. Based on data from all three respondents, there was particularly high agreement for the first four factors. Spearman''s rank correlation tests were used to determine the extent of agreement in the perceptions from gleaned from the viewpoints of three main practitioners involved in PVP power plant construction projects. The results revealed a relatively strong agreement between them with the highest degree of consensus between project owners and consultants (74% with importance index, level of significance 99%) while the lowest degree of association between owners and contractors (60.4% with importance index, level of significance 99%). It is believed that these research findings can give more insight into the current situation in the Vietnamese construction industry in general, the power plant construction projects explored in this thesis in particular, as well as other PVP projects such as those in oil and gas and industrial zone development