VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

FINAL REPORT
INTERNATIONAL PROJECT MANAGEMENT

PROJECT
NOI BAI INTERNATIONAL AIRPORT
RENOVATION

Subject code: INE 3009 03

Lecturer: Nguyen Phu Hung

Students name:
Phùng Kim Anh (19071302)
Nguyễn Đăng Hưng Long (18071150)
Đỗ Tuấn Thành (19071497)

Hanoi, June 20, 2022

 Table of contents
1. Introduction of the project......................................................................................................................1
1.1 Context leading to the project.......................................................................................................1
1.2 Objective of the project..................................................................................................................1
Objective of the project.................................................................................................................1
Mission............................................................................................................................................1
Vision..............................................................................................................................................2
1.3 Scope of project...............................................................................................................................2
1.4 Stakeholders of project..................................................................................................................2
2. Project management................................................................................................................................4
2.1 Challenges facing the project........................................................................................................4
2.2. Define tasks of project...................................................................................................................6
2.3. Define the deliveries of your project............................................................................................7
2.4 Define WBS of tasks and their deliverables.................................................................................8
2.5. Time management........................................................................................................................13
2.5.1. Estimate time require for each task , the inter-relationship among tasks...................13
2.5.2. Estimate total project duration........................................................................................18
2.6. Project Cost Management...........................................................................................................19
2.6.1. Indicators reflecting the cost management performance of the project......................19
2.6.2. Estimate costs associated with each task.........................................................................20
2.6.3. How do you manage costs in the case of your project?..................................................24
2.7. Risk management.........................................................................................................................24
2.7.1. Identify risks......................................................................................................................24
2.7.2. Evaluate the risk of project..............................................................................................24
2.7.3. Build the project risk map................................................................................................26
2.7.4. Discuss economic scenarios that may affect the sustainability of the project..............26
3. Recommendation....................................................................................................................................28
References...................................................................................................................................................32
Contributions..............................................................................................................................................32
List of tables :
Table 1 : Stakeholders management.......................................................................................................3
Table 2 : Task planning source...............................................................................................................9
Table 3 : Time management.................................................................................................................13
Table 4 : Cost management..................................................................................................................20
Table 5 : Risks of project......................................................................................................................25
List of figures:
Figure 1 : Tasks of project......................................................................................................................6
Figure 2 : Work Breakdown Structure (WBS) of project of Noibai international project renovation...8
Figure 3 : PERT chart for project of Noibai international airport renovation......................................18
Figure 4 : Risk map..............................................................................................................................26
 1. Introduction of the project

1.1 Context leading to the project

Noi Bai International Airport is the airport of Hanoi capital, with a very important and favorable
economic, political and geographical position, an ideal stopover in the network of routes from Europe and
the South. Asia to Southeast Asia, Northeast Asia and Asia - Pacific - a potential developing economic
region. On the other hand, in terms of climate, it is located in an area with a fairly mild climate of the
Northern region, along with many special attractions that attract tourists. This is both a potential for
investment and exploitation, and a great advantage in competing with airports in the region in order to
gradually invest and build Noi Bai International Airport into a commercial port, a hub for international
traffic. air transport hub of the region and the world.

Noi Bai International Airport can only handle 25 million passengers per year (according to NIA).
However, at the end of 2019, according to vietnamplus newspaper, the number of visitors to Noi Bai
airport reached about 29 million. The number of passengers choosing Vietnam as a tourist destination is
increasing every year thanks to the media and the government's support in tourism promotion. At some
peak times such as April 30, May 1, the number of visitors to the airport reached a record of up to 75,000
guests, at peak hours there was a traffic jam, especially during the Covid-19 pandemic people who need
to keep their distance. So that NIA decided to coorperate with Japan airport consultants (JAC) to the
expansion of T2 terminal and upgrading of infrastructure and facilities is the way to help NIA become an
attractive airport and capable of serving a large number of tourists in the future.

1.2 Objective of the project

Objective of the project:

Renovating Noibai international airport to improve quality and services involve:

 Infrastructure upgrades airport terminal (control areas, lounges, ticketing, malls,

etc.). Repair, rebuild, build new runways
 Modify, create and apply more modern technology to serve the airport.

Mission:

1
The project's mission is to create a modern international airport, with a larger scale to bring comfort to
tourists when coming here. thereby to attract tourists from all over the world to come and explore
Vietnam

Vision:

The project is expected to be totally accomplished in about 3-4 years. We will provide larger terminals T2
with full modern equipment and facilities for customers and NIA employees.

When put into operation, Noi Bai airport will become the largest and most modern airport in Vietnam.
has a green, clean and modern environment for tourism development. Focusing entirely on service
and facilities as well as ensuring safety to provide the best user experience.

1.3 Scope of project

- Location of project: Construction project to upgrade terminal t2 and runway will be

implemented in the existing premises of Noi Bai airport. Address: Noi Bai International
Airport (NIA), Phu Minh Commune, Soc Son District, Hanoi City. The renovation and
construction will include parking, pick-up and drop-off, and transportation services.
Finally, build more trade centers (tax-free goods) to serve customers.
- Time: the project is expected to start construction in April 2022 and complete in October 2025.
- Scale of the project: the old terminal t2 has total area of 139,216m2. The new terminal t2 will
have total area of 170,000m2, including 4 floors,

+ 1st floor will be the area for customers to pick up checked baggage and clear customs,
+ 2nd floor is the place for immigration procedures and medical quarantine,
+ On the 3rd floor, international guests go to do airline procedures,
+ 4th floor vip waiting room, restaurant, shopping and representative offices of airlines.

1.4 Stakeholders of project

The owner of the project is the ministry of transportation because the ministry of transportation is the
main source of funding and uses the project’s supply capacity.

Next is the project leader and staff, who developed the project and met the owner’s needs.

2
 Because the ministry of transport is under the gorventment, so the government also one of the project
stakeholder. Besides, because this is a national project, it needs to be checked by the government to meet
the standards before it can be used.

Foreign partners, Japan airport consultants (JAC) have is a foreign partner with the task of consulting
design, construction combined with supervision during the construction of the work.

The staff of Noi Bai International Airport is also one of the stakeholders, they are the ones who work
directly, often using the facilities as well as the infrastructure after the project is completed.

The supplier who provide the materials, funiture, modern device……. Are also the project stakeholders.

The final stakeholders of the project are the airlines, They are the factors that directly affect the operation
of the airport during the implementation period as well as after the project is completed.

Table 1: Stakeholders management

Stakeholders Interests Obligation Issue Address

Planning  Planning and  Provide a blueprint  This is very big project  Requirement
leader and design fees. of the project’s (national project) relate should be as
staff  Receive more construction. to many people so that detailed and
experience and  Receive, answer and ensure the safety need understandable
achievement in satisfy the project to be cared watchful. as possible.
design, and owner’s questions/  Because of the partners
planning for requirements about the is gorvernment then
construction plan. there are some invisible
project,  Create the plan base on pressures.
especially in the requirements of the
national project. project owner (budget,
operational, …)

Government  Have better  Project inspection and  Cost incurred  Prepare ways to
infrastructure appraisal. prevent and deal
facilities  Maintain a with possible
 Attracting more safe bribery and
visitors come to environment. corruption.
Vietnam.  Preventing crimes
from happening during
3
  Receive more tax construction.
from airport  Provide financial
revenue. resources fo the project.

Foreign  Consultants fees  Provide advices, None None

partner direction for the
engineers,
workers during
the project.

Suppliers  Receive huge  Provide materials,  The supplier provides  Need to a

revenue from the furniture,… follow the delay, which leads to a wirtten
supply of requirements of the shortage of materials commitment to
materials, investor. and affects the project ensure that the
devices,  Ensure the completion time. suppiler will
furniture,….. for materials qualities, always deliver
the project on time delivery. the materials on
time.

Airlines  Have a  Provide the idea, None None

professional contribute idea about the
environment airport construction.
when working in  Organize secure check,
the airport. exploit terminal suitable
 Having more during project time.
passengers using
transportation
services.

2. Project management

2.1 Challenges facing the project

The first challenge is the impact from the Russia-Ukraine conflict leading to the project implementation
being interrupted. Russia is a major supplier in the global market with many items such as metals and
components for electronic devices. Therefore, any restriction or disruption in the supply of goods from
Russia could disrupt the supply chain. At that time, the supply is difficult and the prices of raw materials

4
and fuel may skyrocket. High oil prices increase logistics and transportation costs. Since then, the cost of
raw materials will increase, the budget for the project will change, affecting the progress of the project.

The second challenge is conflict with suppliers, investors and other stakeholders. Since this is a large
construction project, the project requires a lot of materials, so it will work with many suppliers. The main
challenge is that without the same working style, it is difficult for the parties to update the project
progress, leading to conflicts. As a result, suppliers are slow to supply materials, affecting project
completion time.

5
2.2. Define tasks of project

Figure 1: Tasks of project

6
 2.3. Define the deliveries of your project

- New office for emplyees: New office for employees: offices will be arranged on the 2nd and 3rd floors
of the expanded building. equipped with the latest equipment to create an ideal working environment for
employees
- Parking lots: The current parking and parking system at the airport no longer meets the needs of
customers. New parking area will be built in the basement of the new building. will be equipped with
an advanced monitoring system to ensure the safety of passengers' property.
- Waitingng room: The waiting area is also extended to both foreign and domestic guests. Distributed on
the 2nd and 3rd floors of the new building.
- Runwayay: The runway will be remodeled and upgraded to accommodate more than the current number
of flights.
- Malls: A tax-free consumer goods shopping area will be built to meet the needs of a large number of
customers in the future.
- It is expected that after the completion of the project, the total maximum capacity of the international
airport is estimated at 32 million passengers per year.

7
2.4 Define WBS of tasks and their deliverables

Figure 2: Work Breakdown Structure (WBS) of project of Noibai international project renovation

8
 Table 2: Task planning source

Amount
WBS Task name Description Person in charge (PIC)
(people)

Identify the key elements of the project (purpose,

Phase 1: Project manager and team
1.1. Defining major factors importance, benefits) to present and plan the 30
Initiation member
project with partners

Looking for potential partners to reduce financial Project manager and team
1.2. Finding partners 20
burden and optimize work member

Phase 2:
Planning/ Making plans about the project, the scale of the Project manager and team
2.1. Giving ideas 30
Designing work, the construction plan member
the project

Reviewing the ideas and making the decision to Project owner, investor,
2.1.1. Approving the ideas 10
approve stakeholder

Making financial planning, project progress, Planning department,

2.2. Planning/ Designing 20
project scale, building design drawings Construction design, engineer

Submitting plans and designs to stakeholders for Project manager and team
2.2.1. Submission for review 5
review member

2.2.2. Correct after review 15

Revising the plan after receiving comments from Project manager and team

9
 stakeholders member

Making a feasibility Prepare detailed project feasibility reports (plan, Project manager and team
2.2.3. 30
report design, timeline, scope) for stakeholders member

Submitting the report to stakeholders for Project manager and team

2.2.4. Submission for approval 5
approval to implement the project member

Approval of planning Investors, partners, stakeholders approve the Project owner, investor,
2.2.5. 10
documents project planning documents stakeholder

Receiving a certificate of land use right to have a

Granted certificates of
2.3. . legal basis for the investment and construction of Airport Corporation Vietnam 3
land use right
the project

Phase 3. Pre- Estimating cost, scope, Detailed estimate of cost, time, work to have a Project manager and team
3.1. 20
construction schedule preparatory plan before starting construction member

The entire project's land area must be finalized

Planning department,
3.2. Clearance for ground clearance to be ready for investment 50
Construction design, engineer
and implementation of construction

Selecting people with experience in building

Choosing project team Project manager and team
3.3. large projects to create a team of members for 10
members member
the project

10
 Inspecting and evaluating construction sites for Planning department,
3.4. Construction survey 10
optimal and effective construction planning Construction design, engineer

Hiring construction workers, managers, Project manager and team

3.5. Hiring labors 200
supervisors member

Material selection for the project with suppliers Planning department,

3.6. Import building materials 20
and manufacturers and transporters Construction design, engineer

Approve source investments to be able to start Project owner, investor,

3.7. Approval investment 10
project implementation stakeholder

Building foundation with concrete, iron, .. The

Phase 4. Construction of foundation serves the function of providing
4.1. Workers, Supervisor 200
Construction foundation ground for the construction of auxiliary
structures

Pouring concrete columns, building walls,

4.2. Construction Workers, Supervisor 200
installing technical pipes

Door installation, wall painting, decorative tiling,

4.3. Finished construction electrical equipment installation, water, fire Workers, Supervisor 200
fighting, alarm,

Phase 5: Post Compare and evaluate the completed

Acceptance of Project manager and team
- 5.1. construction work compared with the original 10
construction works member
construction design

11
 Rearrange equipment and furniture in the correct
5.2. Furniture arrangement Workers, Supervisor 100
area according to each function in the project

Project manager, investor,

5.3. Payment Complete payment of all project costs 10
project owner

Putting the project into operation and monitoring Project manager, investor,
5.4. Going into operation 10
its initial quality project owner

12
 2.5. Time management

2.5.1. Estimate time require for each task , the inter-relationship among tasks

Table 3: Time management

Preceding
WBS Task name Duration Start Finish ES EF LS LF Slack
tasks

PERT
Pessi- Most Opti-
work
mistic likely mistic
days

Start 0 Start 0 0 0 0 0 0

Defining
1.1. Start 38 29 24 30 1 30 01/05/2022 30/05/2022 01/05/2022 30/05/2022 0
major factors
Phase 1:
Initiation
Finding
1.2. 1.1. 52 39 34 40 31 70 31/05/2022 09/07/2022 30/05/2022 09/07/2022 0
partners

2.1. Giving ideas 1.2. 76 58 52 60 71 130 10/07/2022 07/09/2022 10/07/2022 07/09/2022 0

Phase 2:

13
Planning/
Approving
Designing 2.1.1. 2.1. 11 7 3 7 131 137 08/09/2022 14/09/2022 08/09/2022 14/09/2022 0
the ideas
the project

Planning/
2.2. 2.1.1. 110 87 81 90 138 227 15/09/2022 13/12/2022 15/09/2022 13/12/2022 0
Designing

Submission
2.2.1. 2.2. 11 7 3 7 228 234 14/12/2022 20/12/2022 14/12/2022 20/12/2022 0
for review

Correct after
2.2.2. 2.2.1. 38 29 24 30 235 264 21/12/2022 18/01/2023 21/12/2022 18/01/2023 0
review

Making a
2.2.3. feasibility 2.2.2. 55 44 39 45 265 309 19/01/2023 04/03/2023 19/01/2023 04/03/2023 0
report

Submission
2.2.4. 2.2.3. 16 10 7 11 310 319 05/03/2023 15/03/2023 05/03/2023 15/03/2023 0
for approval

2.2.5. Apprroval of 2.2.4 46 28 22 30 320 349 16/03/2023 14/04/2023 16/03/2023 14/04/2023 0

planning

14
 documents

Granted
2.3. certificates of 2.1.1. 70 35 28 40 228 267 15/09/2022 24/10/2022 09/06/2023 18/07/2023 267
land use right

Estimating
3.1. cost, scope, 2.2.5. 47 33 29 35 350 384 15/04/2023 19/05/2023 15/04/2023 19/05/2023 0
schedule

3.2. Clearance 3.1. 75 60 45 60 385 444 20/05/2023 18/07/2023 19/05/2023 18/07/2023 0

Phase 3.
Pre- Choosing
constructi 3.3. project team 2.2.5. 76 64 58 65 350 414 15/04/2023 18/06/2023 24/04/2023 27/06/2023 9
on members

Construction
3.4. 3.3. 26 21 14 21 415 435 19/06/2023 09/07/2023 28/06/2023 18/07/2023 9
survey

3.5. Hiring labors 2.2.5. 42 31 23 32 350 381 15/04/2023 15/05/2023 17/06/2023 18/07/2023 63

15
 Import
3.6. building 2.2.5. 52 45 38 45 350 394 15/04/2023 29/05/2023 03/06/2023 18/07/2023 50
materials

Approval
3.7. 2.2.5. 40 30 20 30 350 379 15/04/2023 14/05/2023 18/06/2023 18/07/2023 65
investment

2.3;3.2;3.
Construction
4.1. 4;3.5;3.6; 90 80 70 80 445 524 19/07/2023 06/10/2023 18/07/2023 06/10/2023 0
of foundation
3.7
Phase 4.
Constructi
4.2. Construction 4.1. 320 300 280 300 525 824 07/10/2023 01/08/2024 06/10/2023 01/08/2024 0
on

Finished
4.3. 4.2. 245 219 200 220 825 1044 02/08/2024 09/03/2025 01/08/2024 09/03/2025 0
construction

Phase 5: Acceptance
Post - of
5.1. 4.3. 16 14 10 14 1045 1057 10/03/2025 22/03/2025 10/03/2025 22/03/2025 0
constructi construction
on works

16
 Furniture
5.2. 5.1. 160 140 120 140 1058 1197 23/03/2025 09/08/2025 23/03/2025 09/08/2025 0
arrangement

5.3. Payment 5.2. 42 30 20 30 1198 1228 10/08/2025 09/09/2025 10/08/2025 09/09/2025 0

Going into
5.4. 5.3. 18 14 10 14 1229 1242 10/09/2025 23/09/2025 10/09/2025 23/09/2025 0
operation

Phase 6:
Closing the
Closing 6 5.4 11 10 7 10 1243 1251 24/09/2025 02/10/2025 24/09/2025 03/10/2025 0
project
the project

Finish 6 0 0 0 0 1251 1251

17
2.5.2. Estimate total project duration

Base on table: time management, we can estimate the total project duration is 1251 days ( 01/05/2022 - 03/10/2025) and the PERT chart
follow:

Figure 3: PERT chart for project of Noibai international airport renovation

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 2.6. Project Cost Management

2.6.1. Indicators reflecting the cost management performance of the project

Project cost management is the process of estimating, budgeting and controlling costs throughout the
project life cycle, with the objective of keeping expenditures within the approved budget.
For a project to be called successful, it’s necessary that
 it delivers on the requirements and scope
 its execution quality is of a high standard
 it’s completed within schedule and
 it’s completed within budget.
There are different metrics for the kinds of costs incurred in a project, and it’s important to substantiate
them when relaying budgeting data to project stakeholders. These include:
 Fixed costs
The type of costs that are static and don’t fluctuate throughout a project’s lifecycle, such as buying a one-
time software license or a fixed tool subscription.
 Variable costs
These are the opposite of fixed costs and are dependent on how long your project runs for. Renting a
space for your project and travel expenses to meet the client will accumulate for as long as the project
goes on for, and so are listed as ‘variable’.
 Direct costs
Direct costs are the type of expenses which are directly linked to the project budget. If you’ve outsourced
some of your work to a contractor, they’ll put in a specific amount of time, which is then billed for.
Those salaries are then cited as direct costs.
 Indirect costs
Indirect costs go beyond the expenses associated with a particular project to include the price of
maintaining the entire company. These overhead costs are the ones remaining after direct costs have been
computed, and are sometimes referred to as the ‘real’ costs of doing business – like office supplies,
internal coordination, overhead spent on essential admin and client communication.
It’s vital to remember not all costs are created equal: most rely on good timekeeping and team
communication to ultimately avoid going over-budget.

19
 2.6.2. Estimate costs associated with each task

Table 4: Cost management

Prec Total costs

Indirect costs ( million
WBS Task name eding Direct cost ( million VND) ( million
VND)
tasks VND)

Total
Labor Cost of raw Cost of Transportation Total
direct Cost name
cost material equipment costs indirect costs
costs

Burdened
personel
cost

Start 0 Start - - - - - none - -

Phase 1: Defining
1.1. Start 542 - - - 542 none - 542
Initiation major

Finding
1.2. 1.1. 368 - - - 368 none - 368
partners

Phase 2:
Plannin/
Designing 2.1. Giving ideas 1.2. 20,340 - - - 20,340 none - 20,340
the
project

20
 Approving
2.1.1. 2.1. - - - - - none - -
the ideas

Planning/
2.2. 2.1.1. 34,000 - - - 34,000 design costs 70,000 104,000
Designing

Submission
2.2.1. 2.2. - - - - - none - -
for review

Correct after
2.2.2. 2.2.1. 18,000 - - - 18,000 none - 18,000
review

Making a
2.2.3. feasibility 2.2.2. 368 - - - 368 none - 368
report

Submission
2.2.4. 2.2.3. - - - - - none - -
for approval

Approval of
2.2.5. planning 2.2.4 120 - - - 120 none - 120
documents

Granted
certificates Certificates of
2.3. 2.1.1. - - - - - 10,000 10,000
of land use land use right
right

21
 Phase 3.
Estimating
Pre-
3.1. cost, scope, 2.2.5. 7,634 - - - 7,634 none - 7,634
constructi
schedule
on

3.2. Clearance 3.1. 500 - - - - Compensation 200,000 200,500

Choosing
3.3. project team 2.2.5. 2,896 - - - 2,896 none - 2,896
members

Construction
3.4. 3.3. 8,340 - - - 8,340 none - 8,340
survey

Hiring
3.5. 2.2.5. 16,782 - - - 16,782 none - 16,782
labors

Import
3.6. building 2.2.5. 160,000 - - - 160,000 none - 160,000
materials

Approval
3.7. 2.2.5. 128 - - - 128 none - 128
investment

2.3;3.
Phase 4. Construction electric and
2;3.4;
Constructi 4.1. of 423,000 100,000 70,000 90,000 683,000 water for 15,000 698,000
3.5;3.
on foundation construction
6; 3.7

22
 electric and
4.2. Construction 4.1. 490,000 230,000 100,000 150,000 970,000 water for 25,000 995,000
construction

electric and
Finished
4.3. 4.2. 750,000 89,000 35,000 42,000 916,000 water for 5,000 921,000
construction
construction

Phase 5: Acceptance
cost of hiring
Post - of
5.1. 4.3. 300 - - - 300 legal 1,000 1,300
constructi construction
department
on works

water and
Furniture
5.2. 5.1. 750 115,000 880 529 117,159 electric for 3,400 120,559
arrangement
construction

5.3. Payment 5.2. 259,000 - - - 259,000 none - 259,000

Going into
5.4. 5.3. 11,000 - - - 11,000 none - 11,000
operation

Phase
Finish 5.4. Finish 200 200
6:Finish

Finish 534,000 205,880 282,529 329,600 3,555,577

2,203,568 3,225,977

- Budget: the total project is expected to be completed at a cost of nearly 4000 billions VND.

23
 2.6.3. How do you manage costs in the case of your project?

Estimating : We estimate how much it will cost the project. We take into account all the resources needed
to complete the project, from obvious requirements like people and time, to less defined requirements like
special problem solving. We use similar estimates - look at previous project spending to understand
potential costs and determine costs as accurately as possible.

Establishing monthly budget. Determine what you expect the project’s monthly running costs to be based
on your knowledge of the project’s resource plan and schedule. Document the monthly expected
expenditure in a spreadsheet encompassing the entire project.

Setting up cost controls. Establish clear cost controls and sign responsibilities for different types of
spending. Consider who will approve and sign supplier timesheets, materials, hardware, software, and
invoices. Check the actual amount charged to the project at the end of each month. From there, we can
compare directly with our budget to keep costs under control.

Update forecast: adjusting the project's forecast monthly to accommodate any changes that have occurred.
Changes may result from actual operating costs being higher (or lower) than forecast or estimated being
higher (or lower) than forecast.

Communication: to create transparency for senior management about project costs, we include cost
metrics and key figures in project reports and steering committee presentations.

2.7. Risk management

2.7.1. Identify risks

Baseline airport risks, you can think of security (attacks,) health (ill passengers, food safety, and improper
waste handling,) environmental (fire, earthquake, etc.), and physical (runway collisions,) pretty much all
get exacerbated by surges in the passenger population.

2.7.2. Evaluate the risk of project

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 Table 5: Risks of project

Types of risk Risk Risk name Description Probability Impact

code

S1 Terrorist attacks Armed attacks, Very rarely 0,1 cause loss of life and 5
hostage property, still have to
Security plan for them.

S2 Information theft Steal customer Rarely 1 loss of property, deal 2

information, flight with the
information consequences

Health H1 Ill passengers Passengers have Sometimes 1 affect the flight 2

health problems schedule

H2 Food safety Quality of food, taste 1 reduced customer 3

of food experience

Environmental E1 Weather Rain, storm, fog, Quite often 3 deal with the 3
condition earthquake,.. consequences,
accident,

E2 Disease Infectious disease, Rarely 1 can inflict large-scale 5

global pandemic damage

Physical P1 Runway incident Runway collisions, Rarely 0,5 health and property 4
fuel problems, … damage

P2 Equipment Sudden mechanical Sometimes 1 property damage 2

damaged failure, equipment
wear and tear

25
Management M1 Overload Passengers focus on Quite often 4 financial issues, labor 2
holidays and empty issues, reduced
on weekdays service quality

2.7.3. Build the project risk map

Figure 4: Risk map

2.7.4. Discuss economic scenarios that may affect the sustainability of the project

 Most likely case:

According to the Airports Council International, passenger traffic at the world’s largest airports increased
over five percent. General Director of the International Air Transport Association (IATA), Mr. Willie
Walsh, said that in 2021, the aviation industry will recover mainly from domestic flights, reaching 72%
compared to 2019, especially the Vietnamese domestic market. After recovering at 96%, international

26
routes are expected to return "fairly strongly" in 2022. More and more countries are reviewing travel
restrictions and some orders. Distances are being eased or lifted. IATA forecasts international travel
demand will double in 2022 and reach 44% of 2019 levels - the time before the COVID-19 pandemic
broke out.

In Vietnam, from February 15, the restriction on operating frequency with international flights has been
removed, and on March 15, it will fully reopen international and domestic tourism activities.

 Optimistic case: open for the economy

The positive factor is that the recovery point of the aviation market has been trending and came earlier
than many previous forecasts, thanks to the good control of the COVID-19 pandemic and the prospect of
the global economy recovery.

Airlines are expected to open more routes and sign more transport contracts when benefiting from many
preferential policies to revive the economy from the government. There will be many "low-profit"
policies with promotions for cheap airline tickets to stimulate tourism demand.

According to IATA estimates, the total number of passengers traveling will increase to 3.4 billion next
year from 2.3 billion in 2021. Passenger revenue in 2022 is expected to increase by about 67% compared
to the previous year. with the same period last year to 378 billion USD. Air cargo is forecast to remain a
bright spot, with demand up 13.2% from 2019 levels. The General Statistics Office forecasts that
international arrivals to Vietnam in March 2022 will increase by 41.4% over the previous month and
increase 2.2 times over the same period last year because Vietnam has opened up tourism and restored a
lot of tourism. international flights.

 Pessimistic case:

Global vaccine coverage is very difficult, especially in the context of complicated changes of virus strains
and huge disparities in rich and poor between countries. Therefore, the evolution of the epidemic is very
difficult. unpredictable, can make the forecast of the world and Vietnam aviation not on the right track.
The impact of the new strain can reduce travel demand, especially slow the recovery of tourism. In a
slower recovery scenario, it will not be until 2023, even 2024, that Vietnam's aviation industry will return
to the same growth rate as 2019. The tourism industry can only recover 10-20%, focusing on the market.
The domestic market makes it impossible for businesses to solve financial problems. Besides, there is a

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very important challenge of the shortage of labor force that has not been solved yet. A large number of
the labor force, especially the qualified and skilled workforce, has been greatly reduced in quantity and
quality after 2 years of having to "retire" or even lose their jobs.

3. Recommendation

There are countless management issues when it comes to developing a project, however, if we choose an
issue that we consider the most important and essential, it is probably a matter of cost and budget.
Because those are issues related to money and capital management, when going into a project, the first
thing that project makers or stakeholders are interested in is the potential profit from that project. Because
of that, to be able to optimize profit margin, the project developer first needs to optimize the cost as well
as the budget. Therefore, we will give some views on the role of cost and budget management in a project,
the factors that can affect cost and budget, as well as give opinions on how Project managers can optimize
their costs and budgets.

 The importance of cost and budget management

Project cost management (PCM) is the process of estimating, controlling, processing, and allocating a
business's budget so that project costs are not exceeded. Managing budgets in works are needed to
confirm that the project is completed, as well as all processes at intervals within the allowable budget.
sensible project price management, project managers can perceive the business plans, the particular state
of affairs of investment comes yet because of the standing of the complete project. From there, it'll be
promptly promoted to confirm the project reaches the set schedule, and at a similar time, take measures to
handle at intervals the allowable budget. Thus price management plays a really necessary role within the
success of the project:

- Guarantee project implementation progress further as guarantee project potency.

- Good, timely, and fast management of prices to see the distinction compared to the initial setup.

- Because of project price management, it'll forestall unauthorized changes, not consistent with the setup.

Project price management is additionally used to properly assess the operating capability of an associate
enterprise within the downside of equalization construction prices.

 Factors that can affect cost and budget management

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When undertaking a project, there are probably a multitude of factors that can affect budget and cost.
However, the common factors that can be mentioned are unreasonable cost accounting, lack of measures
to manage incurred costs, Inability to control input costs, costs from arising risks, hidden costs.

Firstly, about the unreasonable cost accounting, if the initial steps are not accurate, it will lead to errors
in budget calculation, which means that the project may fall into a budget deficit or the costs incurred are
too high compared to the calculation. Serious mistakes from the beginning often bring great losses,
especially financially.

Lack of measures to manage incurred costs can also be a dangerous factor affecting cost and budget
management. If the calculations do not cover all the possibilities, it will lead to additional costs as well as
financial risks.

The inability to control input cost obviously will hinder the progress and optimization of the project's
quality. The input cost per unit is too high, which will make later tasks difficult, on the other hand, the too
low cost will reduce the overall quality of the project and make it difficult to operate.

As we discussed above about project risks, each risk has potential financial costs based on severity. For
example: If the project encounters legal problems such as failing to meet the occupational safety
standards or having an occupational accident, ... those who are responsible will have to take
responsibility and there will certainly be costs incurred for fines or penalties.

One of the most important and also very “underrated” factors is hidden costs - a type of cost that is not
included in the cost calculation, but its appearance in any project or any business is inevitable. If project
managers don't put in place a plan to deal with it, hidden costs will cause wear and tear on the project.
Hidden Costs are defined as any expenses that are not obvious and need not be reported as a separate
expense, some of the potential hidden costs are:

● Cost for team activities: Meetings are one of the regular activities of the project for the
personnel in the enterprise to gather together to discuss, solve This is an expensive activity as it
usually involves many people. Every minute in a meeting should be multiplied by the number
of attendees so that an accurate assessment of the true cost of the business can be assessed.

● Costs due to mismatched procurement: The process of activities from inputs (sourcing,
payment ...), to production activities (unloading raw materials, converting materials between
production stages, storing finished products, etc.) ...), and output activities need to be
coordinated. When there is a bottleneck between these processes, the project will have to generate

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many

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 unnecessary operations, mobilize beyond the number of personnel, cause many delays due to
conflicts between the stages of coordination... This means additional costs such as warehousing,
personnel, transportation, etc.

● Idle resource cost: Idle resources are the most common “hidden costs” of a project. It is the cost
of idle equipment, machinery and manpower.The contractor still has to pay the monthly salary for
the employees and the cost of repairing the equipment used in the project.The amount of idle
resources also clearly reflects the efficient (or inefficient) allocation and use of resources within a
project management team.

 Based on the problem discussed above which may occur during the project, we provide the following
recommendations for effective cost and budget management
 Project costs management

Project costing is the process of predicting the quantity and price of all the resources you will need to
complete a project. Since the estimate is made before the start of the project (meaning it cannot take into
account the costs incurred due to changes in plans, etc.), it is often uncertain and only serves as a basis for
prediction. budgeting and handling costs. When planning your project, make sure you estimate:

- Be exact about costs: don't overestimate, but don't underestimate either. Make an estimate regarding
what you are looking to accomplish, with what resources, and in what time period.

- Time accuracy: Learning from previous projects, accurately estimate implementation time for each
stage, avoid arranging tasks that are too overlapping or deadlines are too close so that employees have
enough time to ensure performance and quality. Estimated time for each task directly affects project
costs and results

- Be precise about project requirements (and limitations): project misunderstandings are the most
common reason projects go over budget.

- Anticipate and set up worst-case scenarios so you can have a plan to deal with them when they actually
happen. In this way, your project will minimize costs arising from risks

 Project budget management

A project budget is the total amount of money planned and allocated to carry out a project over a specific
period (term). Project budgets are based on an initial project cost estimate and often depend on the

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effectiveness of project cost controls – project cost control techniques that ensure you cover all costs,
project costs, including equipment, man-hours, materials, and direct costs while staying within budget.

To make sure your project goes within your budget, you should:

- Effectively manage employees' working time: assigning tasks correctly ensures employees complete
tasks in the best way within their time budget.

- Use technology software : In addition to project management tools, you should apply technology
software that helps automate work in a cost-effective way.

- Outsourcing work : Hiring a reputable professional from outside the company to handle part of
your work (business-related work or specific project) will help you cut costs.

- Cut your overall costs : Insurance is a non-negotiable expense, but there are some unnecessary expenses
that can be cut to get the most out of your budget.

We cannot deny the importance of project cost management. When you want to manage costs to stay
within a set project budget, you are essentially letting the set budget govern your decisions. If you don't
set goals for project cost management, they can get out of control and your entire project can fall apart
due to problems in management practices.

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References
1. Airport, N.B.I. (n.d.). “Noi Bai International Airport”. [online] viags.vn. Available at:
http://noibaiairport.vn/ [Accessed 18 Jun. 2022].
2. Phạm, T.T.B.& Vũ, T.S. 2022, “ Kinh tế Việt Nam với ảnh hưởng xung đột Nga - Ukraine” [Online],
tapchinganhang.gov, Available at https://tapchinganhang.gov.vn/kinh-te-viet-nam-voi-anh-huong-xung-
dot-nga-ukraine.htm, [ Accessed June 19, 2022].
3. “Project cost management – what it is, how to do it well” [Online], 2022, timelyapp.com, Available at
https://timelyapp.com/blog/project-cost-management, [Accessed June 19, 2022].
4. “Project Cost Management: Steps, Basics and Benefits” [Online], Ecosys.net, Available
at https://www.ecosys.net/knowledge/project-cost-management/, [Accessed June 19, 2022].
5. T.H. 2020, “ Project Cost Management (PCM) là gì? Toàn bộ về quản lý chi phí dự án bạn cần biết”
[ Online], fastwork.vn, Available at https://fastwork.vn/project-cost-management-pcm-la-gi-toan-bo-ve-
quan-ly-chi-phi-du-an-ban-can-biet/, [ Accessed June 20, 2022].

Contributions

Student name Student ID Contribution

Phùng Kim Anh 19071302 100%

Đỗ Tuấn Thành 19071497 100%

Nguyễn Đăng Hưng Long 18071150 100%

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