TUESDAY 9 OCTOBER, 2007

Project Management - Setting the Standard

Australian Institute of Project Management National Conference 2007
Hobart Tasmania October 7 10, 2007
CS3.3.2
The Project Management Consultant
in Chinese Construction Industry
The Roles and Responsibilities
Jian Zuo
Presented by Tony Ma
2
THE PROJECT MANAGEMENT
CONSULTANTS IN CHINESE
CONSTRUCTION INDUSTRY THE ROLES
AND RESPONSIBILITIES
Jian Zuo
Presented by
Tony Ma

University of South Australia
3
The purpose of this paper is to
Review the project management practices in
Chinese construction industry in the past
decade;

Investigate the roles and responsibilities of
PM consultants by means of semi-structure
interviews

Make suggestions on how Chinese
practitioners can improve the project
management practice to a better extent
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Chinese Construction Industry
Ever since the economic reform with the open
door policy from 1978, there has been a rapid
growth in Chinas economy.

In 2003-2004, the total value of production
brought about by the construction industry
reached RMB 957.2 billion (~US 115.65
billion), contributing 7% to the Gross
Domestic Product

Chinas construction industry is under the
overall control of the central government

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Relevant Government Authorities
The Ministry of Construction (MoC) and the
National Development and Reform Commission
(NDRC) share the leadership and administration of
the construction sector.

The MoC was established in the late 1980s to
implement new strategies for developing the
industry. Their responsibilities include formulating
policies, preparing development programmes,
monitoring implementation, training personnel,
improving construction technology and managing
standards, surveys, design and construction
institutions.

6
Relevant Government Authorities
The National Development and Reform
Commission (NDRC), is a macroeconomic
management agency under the State
Council, and formulates policies for
economic and social development,
manages macroeconomic policy and
guides overall economic restructuring.
7
Relevant Government authorities
Source: www.gov.cn, Adopted from Luo and
Gale, 2000; Xu et al., 2004
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Traditional approach of management
a Project Headquarter is established to take
charge of the whole construction project process
on behalf of the client.
Features:
a temporary organization
consist of in-house staff of the client from various
departments
Managers often have a general management
background lacking technical knowledge
Lessons learned from the project cannot be retained or
transferred
Not unusual to have project overrun in time & cost
Lack of transparency & can lead to corruption

9
Supervision Engineer
(Construction Supervision unit)
The MoC introduced a legal requirement to
appoint a Supervision Engineer for all
construction projects in China since the
implementation of the Provisional Construction
Supervision Ordinance in 1988.

is responsible for supervising the works of a
construction project (e.g. quality, schedule, etc.)
from the inception phase through to completion.


10
Project Management Consultant
In 2003, the MoC issued a document aimed at
encouraging the industry to adopt the
Engineering-Procurement-Construction (EPC) or
Design & Build (D&B) approach and to promote
the engagement of a Project Management
Consultant (PMC) to manage the project on behalf
of the client

the PMC is employed directly by the client to
manage the entire project from its inception to
completion.
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Project Management Consultant
Acting on behalf of the client, the PMC
is authorized to manage the project
and ensure that it achieves its
objectives.
An incentive scheme is often used to
encourage the PMC to perform e.g.
the PMC can be paid a certain
percentage of an incentive pool if his
actions result in cost savings

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Standards for Project Management
Consultants
Guiding Opinions on Cultivation and Development
of Project General Contracting Enterprises and
Project Management Enterprises [7]

Trial Measures on Construction Project
Management [8]

The Code of construction project management,
GB/T (Recommended national standards) 50326-
2006 [9]

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Research findings by Interviews
To understand more of their roles and
responsibilities in practice, in-depth semi-
structured interviews were conducted:
convenience sampling

target population: senior managers of the major
consultancy firms (construction supervision and
project management consultant) in Beijing and
Shenzhen

11 were interviewed (more than 20 years of
experience)
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Roles and responsibilities of project
management consultants
Conception phase
conduct the feasibility study
apply for various approvals
Design and construction phase
brief the clients requirements and engage the design
team
establish the project team (e.g. the construction
supervision engineer, the design institute, the
contractors, the suppliers) via tendering
develop the project management plan to control project
objectives (e.g. cost, schedule, quality)
deal with claims and disputes
Post-construction phase
organize the completion check associated with relevant
government authorities, client representatives,
supervision engineer, etc.
post-occupancy evaluation
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Comments:
It is no hard to find that these
responsibilities overlap with those of
supervision engineers very much,
especially in the construction phase and
post-construction phase.
one interviewee commented: it is not
uncommon that the client does not fully
trust the project management
consultants the intervene from client
makes it difficult for project management
consultants to manage the project.
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The issues/barriers of the application of project management
in the local industry
The qualification of project management
consultants no PM qualification is required

There are just a few PM consulting firms who can
provide various PM services

The responsibilities of project management
consultants need to be defined clearly

Lack of regulation system

The fee scale of consultancy service

The use of modern project management tools and
techniques
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The way the current practice can be improved
Governments initiatives - If the Government
pushes the adoption of project management in more
government-funded projects, practitioners in the private
sector will be motivated to follow through.
Training the industry practitioners PM
principles
Assistance of foreign project management
consultants - Ministry of Construction and Ministry of
Commerce issue a joint document in January 2007 to
encourage and regulate the entry of foreign investment
firms when providing consulting services in construction
projects.
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Conclusions
The project management practice in the Chinese
construction industry has achieved substantial
developments in past decade.
The construction supervision engineer and project
management consultants are on the way to replace the
project headquarter to manage construction projects in
China on behalf the client.
The major qualification is still in surveying and construction
The project management approach has yet been popularly
used in the local industry.
There is still a long way to go for Chinese construction
industry to adopt the principles of project management
even with the support from the Government.