Construction Industry in Vietnam: Design Software Regulations

The Ministry of Construction (MoC) in Vietnam regulates the use of certain technologies in the design and construction industry. We discuss the scope of the regulations and foreign investment opportunities in the application of digital technologies as Vietnam’s architecture, engineering, and construction industry modernizes.

Design software firm Autodesk and the Institute of Construction Economics, a division of the Ministry of Construction (MoC), signed a memorandum of understanding (MoU) on September 5 to speed up the implementation and integration of technology in all phases of the construction process in Vietnam.

Specifically, the MoU focuses on the application of Building Information Modeling (BIM), Geographic Information Systems (GIS), and the use of technologies to maximize resources and improve design productivity. This includes, over the next three years, Autodesk and the MoC developing specialized BIM training programs and guidelines to enhance the effective adoption of BIM.

This collaborative initiative is in alignment with the recent Decision No 258/QĐ-TTg on the approval of the Roadmap for the application of BIM in the construction sector, dated March 17, 2023. This should be clearly understood to ensure foreign construction firms are fully compliant.

The roadmap for applying Building Information Modeling in Vietnam

What projects will be impacted?

The BIM roadmap is applicable to projects supported by public investment, projects funded by non-public investment state capital, projects funded by public-private partnerships (PPPs), and projects funded by other sources of capital.

Timeline for implementation

The roadmap will be implemented in two stages. These are:

• Stage 1: Beginning in 2023, BIM implementation will be required for all class I or special class projects.
• Stage 2: Beginning in 2025, BIM implementation will be required for all class II or higher projects.

The class of a project will depend on the proposed use for the structure and its size. There is a matrix for these classifications under Appendix 1 of Circular 06/2021/TT-BXD.

Technical requirements

There are a number of technical requirements that firms must adhere to. These include:

• BIM files must display the architectural and primary dimensions of the construction works, the three-dimensional shapes of the primary structures, as well as the air conditioning, ventilation, and drainage systems.
• If two-dimensional component drawings are included with BIM files, they must be made in digital format. The drawings and primary volumes of work items must be retrievable from BIM files.
• The designs and as-built documentation of projects and construction works for which the application of BIM is required should include the corresponding BIM files. Main investors in charge of investment preparations must provide BIM files and other documents as required.

Digital construction technologies as a strategic imperative

The construction industry in Vietnam is a leading sector for foreign direct investment (FDI), with over US$10.9 billion of FDI poured into the industry in 2022. Additionally, the global architecture, engineering, and construction (AEC) tech industry has accelerated, securing nearly US$50 billion in investment globally from 2020 to 2022.

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There is a growing interest among foreign investors in accelerating digitization in the construction sector. In Vietnam, the application of BIM (as outlined above) has emerged as the mandatory standard in major construction projects, requiring Vietnamese enterprises to integrate the new technology into all work processes.

This has already begun, with Vietnam’s construction industry already engaged in a digital transformation. Becamex IDC Corporation, Ricons Construction Investment JSC, and the VC Group are major construction firms that have successfully integrated IoT, AI, and cloud-based BIM technology into their construction processes.

“BIM applications… enhance the efficiency of design, construction, and project management. BIM has been implemented in various projects with complicated designs and technical systems, including using state or foreign investment capital,” Lê Minh Long, Deputy Director of the Science, Technology and Environmental Department, a division of the MoC, told Vietnam News.

By recognizing the significant benefits that innovative technology offers, the implementation of BIM is becoming a new business imperative in the construction sector.

There are several construction-technology software tools for multiple use cases in the market, ranging from digital collaboration to on-site execution. This helps to tackle the over-reliance on manual work, optimize resources, improve design capabilities, and enhance field productivity.

Key trends shaping the construction technology landscape in Vietnam

Vietnam’s digitization in the construction sector is acquiring significant momentum as enterprises aggressively adopt modern technologies to meet international standards and keep up with industry trends. Here are three key issues driving the digital transformation in Vietnam’s construction sector.

• Over-reliance on outdated manual processes

Many facets of the construction sector in Vietnam still rely heavily on manual labor for tracking the progress of projects, placing material orders, finishing the safety paperwork, and carrying out the actual work. This causes construction project delays, numerous installation errors, and communication failures on the job site. The over-reliance on manual layout processes will negatively impact profits and the project quality.

Additionally, Vietnam has a surplus of unskilled labor and a shortage of high-tech personnel in the context of current international integration. As per the Ministry of Labour, only 11 percent of the domestic labor force is highly skilled, whereas only 26 percent of workers have degrees. The labor market in Vietnam has experienced a twofold increase from 1986 to 2022, reaching a total of nearly 51.4 million workers. But although the number has grown substantially, the percentage of trained laborers remains low.

The lack of skilled labor poses a major challenge to the construction industry, as it cannot be addressed with short-term solutions, but rather requires significant investment, new approaches, and planning.

However, the emergence of new technologies can help solve these problems. It acts as an enabler for promoting labor productivity on the worksite, thus contributing significantly to the bottom line of the project. If companies can incorporate innovative tools in their construction processes, the industry could grow by US$1.6 trillion per year globally. Furthermore, the application of new digital tools will help attract a new generation of workers, according to David Barnes, Policy & Public Affairs Manager at the Chartered Institute of Building.

• Stakeholder’s pressure on data transparency

As the construction sector in Vietnam is accelerating international integration, it puts massive pressure on firms to monitor and report sustainability metrics via data. Several stakeholders, including government regulations, contractors, investors, and eco-conscious consumers, require construction firms to provide transparent and accurate data throughout the project’s lifespan.

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Moreover, stakeholders are increasingly concerned about the volatile and rising construction costs. They want to minimize losses and cost inefficiencies in every stage of a project.

The application of BIM across several projects in Vietnam has already proven successful. The recent collaboration between Autodesk and VC Group has helped significantly in calculating energy usage, managing waste, and reducing greenhouse gas emissions. As calls for sustainable practices from the Vietnamese government continue to grow, the adoption of new digital tools will help businesses create sustainable impacts in their operations.

• Growing need to address supply chain bottlenecks

Another critical issue that remains unresolved is supply chain bottlenecks in construction sites. The problem clearly surfaced during the COVID-19 pandemic, when demand for building supplies and services decreased markedly. As the world economy starts to bounce back, the orders have unexpectedly surged, causing raw materials suppliers to struggle to keep up with the increased demands. This has severely disrupted deliveries to worksites and created additional cost pressures.

Therefore, firms need disruptive technologies to develop a strong supply-chain backbone and to streamline their tracking and ordering of materials. Emerging technology can improve a project’s supply chain systems by performing demand forecasting or boosting tracking capabilities, hence making it easier to maintain cost efficiency and optimize resources.

Looking toward the future

Vietnam’s construction industry has seen several developments in the adoption of innovative technologies and regulations in recent years. More and more tools have emerged for different use cases across many projects. Moving forward, Vietnam’s construction-technology sector is expected to utilize an even broader range of technologies to boost productivity and performance management. Firms should also, however, keep in mind that the use of BIM software is now regulated and ensure their use of this technology is compliant with the regulations outlined above.

For support with legal and regulatory requirements in Vietnam, contact the legal experts at Dezan Shira and Associates.

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