A Study Into the Effects of Timely Delivery of Construction Project on Economic Development of Nigeria (A Case Study of Some Selected Project Supervisors From Julius Berger Nigeria Plc and Marlum Nigeria Plc, Uyo Offices)
Chapter One
OBJECTIVES OF THE STUDY
The study had the main objective of assessing the effects of timely delivery of construction projects on the economy of Nigeria, but specifically it had the following objectives.
- To establish the extent to which time factors have impacted on construction of projects in the public sector in Nigeria.
- To find out the change in the perception of contractors on time effects on public sector construction in Nigeria.
- To find out the relationship between timely delivery of construction projects and the economic development of Nigeria.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
Continual advances in construction of projects provide contractors and owners the opportunity to manage the impact of timely delivery of projects. Insurance provides financial protection against a loss arising out of happening of an uncertain event. The construction time, in particular the critical path method (CPM) schedule has become the most significant tool available for projects stakeholders to understand the status of a project – whether a project is on, ahead, or behind the agreed upon completion date. In situations where a project falls behind schedule or time and the completion date becomes less achievable, typically a time impact claim is prepared to prove how and why an impact event(s) delayed the project.
COST AND TIME GROWTH OF PROJECT CONSTRUCTION
Construction projects are notorious for running over budget and time Hester et al. 1991; Zeitoun and Oberlander 1993; Ibbs and Allen 1995. Change orders have been found to be a major contributor to time and cost overruns Jahren and Ashe 1990, yet the impact that rework has on the cost and time performance of projects remains unexplored in the construction management literature. Hence, supervisors always learn details of projects so that cost and schedule growth could be calculated for each project.
FORECASTING CONSTRUCTION PROJECT TIME IN CONSTRUCTION INDUSTRY
The nature of construction industry is to be profitable in extremely competitive environment.
More specifically, the construction environment is continuously changing and resulted to uncertain variable in project data. As a consequence, Project Manager faced with performance problem in determining the accurate project performance. In attempting to gain better profits, Project Manager needs to make timely and informed decision. However, today’s deficiencies in monitoring and control of project operation unable Project Manager to manage project effectively and resulted to major cause of project failure (Al-Tabtabai 1996).
When controlling project performance, Project Manager should not only monitor cost and time variances for actual project progress, but also to properly establish the actual project status based on objective predictions of final project performance. At completion project performance can be predicted by comparing estimates of planned total budget and final duration with their respective most likely forecasted values (Ahuja et al. 1994). This, however, are necessary for Project Manager to determine if corrective actions are required to minimize the expected variances from planned performance Thus, forecasting is needed to predict the project performance at completion based on current performance.
SIGNIFICANCE OF TIME FORECASTING IN THE CONSTRUCTION INDUSTRY
In reality, the original estimates may be considered the first project forecast and, at the point of project completion, the latest updated estimate (last forecast) and the actual amount of what is being expended should be the same (Barazza et al 2004). In controlling a construction project, Project Manager should understand the importance of using project baselines which serves as a benchmark. This is to ensure the project is running smoothly and early indication on deficiencies of project can be identified. Thus, necessary corrective action can be made in due time.
In current practice, project baselines or planned S-Curves is used to determine variances in cost or schedule and to measure the earned value. In this context, it explains why this method is widely used in construction industry to measure the performance of projects. One of the advantages of this method is that it can identify any cost and schedule variances at the end of the project. However, there is still lacked within this method of providing corrective action plans if negative variances is identified. Therefore, the needs of forecasting performance variances at completion is necessary to Project Manager in order to decide the suitable corrective action plans and the effect on final project performance (Crandall et al 1982).
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter discusses method adopted in carrying out the data collected for the survey. Specific areas covered are the research design, population, sample and sampling procedure, instruments for data collection and the procedure for analyzing the data. In order to obtain the relevant data both primary and secondary data were used to address the specific details under the study.
The primary data for the study was obtained through distribution of questionnaires as well as direct personal interviews with people involved in project construction. In order to enrich the questionnaire for the research, a review of text books and journals were used to identify the various efforts that have been made in the past to evaluate and examine the effects of timely delivery of construction projects on the economic development of Nigeria. Secondary sources of data were obtained from relevant literature that covered research and publication on the subject matter.
The survey method is generally used when the researcher wishes to elicit opinions (Bogman and Biklen, 1998). Since the objective of the study is to assess the cost and time impacts of the public sector construction, the survey method was deemed most appropriate.
The study was fundamentally a descriptive quantitative research. Data collection was done by means of questionnaires which were completed by a selected group of 30 project supervisors. The questionnaires tested respondents’ views and knowledge regarding issues relating to the effects of timely delivery of projects on the economy of Nigeria.
RESEARCH DESIGN
Biklen and Bogman (1998) define research design as the overall plan for collecting and analysing data including measures to enhance both internal and external validity. Research design is the term often used to describe a number of decisions which need to be taken in the data collection process (Durrheim, 1992). The design therefore constitutes the blueprint for the collection, measurement and analysis of data. This study is designed to collect data in order to assess construction time impacts on the economy of Nigeria, with a view to generalizing the results and making inferences.
Leedy and Ormrod (2005: 183) define survey research as follows:
- The researcher poses a series of questions to willing participants,
- Summarizes the participants responses with percentages, frequency counts or more sophisticated statistical indexes, and
- Draws inferences about a particular population from the responses of the sample.
The purpose of the descriptive research is to solve the research problems through the interpretation of the data that have been gathered.
POPULATION AND SAMPLE SIZE
In order to evaluate and assess cost and time impacts of construction projects, a wide range of personnel (project supervisors) involved in construction of projects were targeted. Personnel were randomly selected from Nigerian construction industries.
This study covered 200 contractors, project supervisors of Julius Berger Nigeria Plc and Marlum Nigeria Plc all in Uyo, Akwa Ibom state of Nigeria. Julius Berger and Marlum were selected for data collection for two main reasons: Both are construction firms which have several years of project construction in the public sector and finally to enable the researcher obtain differences in perceptions on the topic among the various construction firms thereby increasing the utility of information obtained.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
This chapter is presentation of data, information collected from the questionnaire issued to the respondent; it will be presented and analyzed through frequency table.
The instrument for data collection was a 15- items questionnaire made up of two sections, section ‘A’ was based on the personal data of the respondents while section ‘B’ addressed the research questions on the questionnaire title ”the effect of timely delivery of construction project on the economic development of Nigeria. Four scale will be used and the weighting will be Strongly Agree(SA)= 4, Agree(A) = 3, Strongly Disagree(SD) = 2, Disagree(D)=1. The average of the point will be (4+3+2+1) = 10/4= 2.5.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
FINDINGS
The first objective of the study was to find out the extent to which timely delivery of construction projects have impacted on construction projects. Findings from the study revealed that time factor was a major determinant for the success or failure of a construction project (see table 2). This hypothesis was further tested with chi-square and since majority of the respondents strongly agreed or agreed to this assertion the mean was accepted. All respondents indicated that time factor was the major key performance indicator in a construction project phase and contractors are measured with how timely they deliver construction projects. Timely delivery of construction projects was also identified to yield in high quality projects is it is thoroughly planned for and budgeted for.
The second objective of the study was to examine the perception of contractors towards timely delivery of construction projects in Nigeria over the years. The study revealed that although construction workers take timing seriously there are still lapses in the construction industry as some construction projects are widely abandoned or done poorly.
The third objective of the study was to determine the relationship between timely delivery of construction projects and economic development of Nigeria. The study revealed that timely delivery of construction projects is significantly related to economic development (see table 3) as it encourages rapid growth and development through the creation of social and economic infrastructures to enable trade and commerce in the country. Respondents also indicated that though timely delivery of construction projects, more room is created for more contracts to be awarded by the government hence fostering creation of newer infrastructures for rapid growth and development (see table 3).
CONCLUSION
Many projects experience extensive delays and thereby exceed initial time and cost estimates. In addition to impairing the economic feasibility of capital projects, extensive delays provide a fertile ground for costly disputes and claims.
According to the contractors and project supervisors, monthly payments difficulties from agencies was the most important delay and cost factor, while owners ranked poor contractor management as the most important factor. Despite some difference in viewpoint held by the project supervisors surveyed, there is a high degree of agreement among them with respect to their placing of the factors. The overall results indicates that the project supervisors felt that the major factors that can cause excessive project delays in developing countries are poor contractor management, monthly payment difficulties from agencies, material procurement, poor technical performances, escalation of material prices according to their degree of influence.
Delay in the delivery of materials and equipment to construction sites is often thought of as a contributory cause of cost overruns in construction projects in developing countries. A cursory examination of the environment in which projects are executed in developing countries appears to support this thinking according to project supervisors.
Construction delay has become endemic in Ghana. It is imperative to create awareness of the extent to which delays can adversely affect project delivery with regards to cost and time.
Forecasting project cost performance is a paramount important to the project controls process in construction industry. In making profits, today’s construction organization requires an ability to predict, well ahead of time, project performance.
Other factors that emerged clearly as not very important, but of interest, are bad weather and unexpected natural events. These are the natural factors. The bad weather and unfavourable geological conditions are most difficult and unknown factors because they cannot be controlled.
The result shows that many of the problems in the construction of projects are originated from poor resources management (human, technical and material). In practice, this phenomenon is expected to continue unless actions are taken to control these causes right away from the planning to the implementation and management stages. Therefore, good practice in planning, coordinating, controlling and monitoring procedures needs to be recognized.
Accounting for each of the strategies explained in the survey, it is clear that there is still a need for innovative research in the area of forecasting systems in project construction with regards to cost and time. There is still lacking of many aspects in forecasting methods implemented by today’s Project Managers. In a challenging construction industry nowadays, to have accurate forecasting methods require an approach that would cater subjective data and consider experts’ experience and knowledge.
RECOMMENDATIONS
Based on this study, some recommendations are given as follows:
Appropriate funding levels should always be determined at the planning stage of the project so that regular payment should be paid to contractors for work done.
In order to improve contractors’ managerial skills there is need for continuous work-training programs for personnel in the construction industry to update their knowledge and be familiar with project management techniques and processes. Have effective and efficient performances.
Effective and efficient material procurement systems should be established within projects. Material procurement has the potential to cause major delays to construction projects. Therefore, material procurement process should be executed properly by improving procurement process in order to avoid supply delays.
Developing effective and efficient technical performances in project construction through different types of training programs. The training should cover project planning, scheduling, time and cost control, and the information systems.
There should be adequate contingency allowance in order to cover increase in material cost due to inflation.
Employers or owners of projects should allow more time and funds for the study phases of projects.
Contractors should regularly try to identify and to bring to the attention of the client project risks such as an ill defined scope in the early stages (tender clarification meetings) of a project etc.
Project Managers must agree that delays or impacts which cause extension of time and/or increase in cost are a frequent occurrence in project construction.
Regarding cost and time factors in project construction, if the employer intends to gain the most advantage from the programme (optimisation), the cost and time should be prepared jointly by the contractor and consultant and be accepted as the baseline programme.
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