ANALYSIS OF THE IMPACT OF FEASIBILITY/VIABILITY STUDY ON CAPITAL PROJECT DEVELOPMENT IN NIGERIA

 ANALYSIS OF THE IMPACT OF FEASIBILITY/VIABILITY STUDY ON CAPITAL PROJECT DEVELOPMENT IN NIGERIA 

CHAPTER ONEINTRODUCTION   1.1 BACKGROUND OF THE STUDY  

Until relatively recently, the discipline of development appraisal has remained the provenance of surveyors and developers. It largely been ignored by other participants in the development process, particularly planners, architects and construction specialists. This is now changing. Close attention is now paid to the feasibility and viability (and profitability) of development proposals as government and other stakeholders seek to extract developer and/or landowner contributions to affordable housing, public services and infrastructure. Consequently the theory, application and outputs from development appraisal are under intense scrutiny from a wide range of users. Since Circular 05/05 proposed the submission of financial information‟ to provide a basis for negotiations between developers and local planning authorities about viable levels of affordable housing, tests of the financial viability of development projects have become an integral part of the planning process, both at the forward planning and development control stages. At the large-scale, macro-level Strategic Housing Land Availability Assessments require proposed plans to be achievable. However, the timeframe for development can be decades rather than years and, as a result, generating detailed and reliable cost and revenue projections can be impractical. At the other end of the scale, viability appraisals are carried out to inform negotiations about affordable housing levels for a scheme about which there may be a high level of information on permitted development and expected costs over a relatively short timeframe.

In terms of critical evaluation from the real estate academic community, development appraisal has remained something of a backwater. In contrast, often linked to market traumas, over the last four decades methods of appraising standing investment properties have been the subject of widespread academic and professional debate. Whilst the RICS monitors variance and accuracy of investment valuations, there is no comparative institutional evaluation of the performance of development appraisals. Nevertheless, conventional development viability models have been subject to some criticism, particularly their simplified composition, failure to mirror reality and theoretical weaknesses.

1.2 PROBLEM STATEMENT The general low usage of formal feasibility and viability appraisal techniques by contractors and developers globally often culminates into project failures, incessant claims for variations, huge financial losses and sometimes brings discomfort for people who came to enjoy themselves at these recreational centres. (Allan et al, 2007). This situation is more prevalent in redevelopment projects due to the inevitable problems of unexpected additional work, excessive requirements and scope management issues, project funding not aligned with project plans, delay, structural failure, cost overrun, etc (Naaranoja and Uden, 2007). These problems or uncertainties, among others, increase the project risk and make their management crucial if success is desired.

Some construction projects in Owerri Urban have been abandoned due to poor or no feasibility and viability appraisal on them, while some recreational developments Owerri Golf Club, Silver Bird Cinema etc have stood the test of time, due to proper planning and forecasting. This huge expenditure and apparent failure in the primary objectives of the project led to complaints, probe panels and subsequent abandonment of the project. Research has shown that financial, political and physical risks are the most significant to Nigerian Contractors (Dada, 2010). However, of the different levels of risk (country, market or project), there is shortage of research as to how Contractors approach project planning at organisational level.

1.3 RESEARCH OBJECTIVES

To explore feasibility and viability appraisal techniques used by Contractors of capital projects in Owerri Urban. To assess awareness and usage of formal feasibility and viability appraisal techniques by Contractors in Owerri Urban. To examine the success or failure of the feasibility and viability appraisal methods by Contractors in Owerri urban. To evaluate the impact of feasibility and viability appraisals on the development of capital projects in Owerri Urban.

1.4 RESEARCH QUSTIONS

What feasibility and viability appraisal techniques are used by capital project contractors in Owerri Urban? How do you gather information about newer feasibility and viability appraisal techniques and strategies to be applied in your on-going projects? What are the impacts of feasibility and viability appraisal on the development of capital projects?

1.5 RESEARCH HYPOTHESISHo: There is no significant relationship between feasibility study and the performance of contractors.Hi: There is a significant relationship between feasibility study and the performance of contractors.Ho: Feasibility study does not enhance quality deliverable in capital projects.Hi: Feasibility study enhances quality deliverable in capital projects.

1.6 SIGNIFICANCE OF THE STUDY This study gives a clear insight into the various ways in which Capital Project developers and owners in Owerri can maximise efficiency and profits through effective and efficient application of feasibility and viability appraisal methods and techniques. The study also gives a clear insight into the various impacts of feasibility and viability appraisal methods on the development of recreation properties in Owerri. The findings and recommendations of the researcher will help in building a strong and better appraisal technique and strategies for Capital Project developers in Owerri state. The impact of feasibility and viability on Capital Project development in Owerri Urban are outlined in-order for drastic measures to be taken to tackle any challenge property owners and developers may face when developing recreational centres in Owerri state.

1.6 SCOPE OF STUDY This research focuses mainly on the impact of feasibility and viability appraisal on the development of capital projects in Owerri urban. Results and recommendations may not be used to generalise other Cities in Nigeria, as the researcher could not cover a wider scope due to financial and time constraints. Based on the findings of this study other possible researchable areas may include studies on the various effects of other aspects of recreational development such as property laws in Nigeria and property management and control.

1.7 LIMITATION OF THE STUDY The only limitation faced by the researcher in the course of carrying out this study was the delay in getting data from the various respondents. Most respondents were reluctant in filling questionnaires administered to them due to their busy schedules and nature of their work. The researcher found it difficult to collect responses from the various respondents, and this almost hampered the success of this study.

1.8 DEFINITION OF TERMS Definitions of terms serve as the dictionary of this research.  The terms are defined to enable the reader understand the research more clearly.Feasibility:  Erikson (2002) defined feasibility as an evaluation and analysis of the potential of the proposed project which is based on extensive investigation and research to give full comfort to the decisions makers. Viability: According to Simmons (2007), Viable or viability is the ability of a thing (a living organism, an artificial system, an idea, etc.) to maintain itself or recover its potentialities.

Capital Project: this refers to long term investment requiring relatively large sums to acquire, develop, improve, and to maintain.

REFERENCES

Allan et al, 2007 Techniques for Effective property management  (A John Wiley & Sons, Inc., Publication Hoboken, New Jersey. Published simultaneously in Canada.) Erikson O. U., (2002) Urban Planning and development in a Depressed Economy.Unpublished M.Ed. Dissertation Submitted to University of Ibadan. Ibadan Naaranoja J.K and Uden P.I., (2007).  Principle and practice of Feasibility Studies In Nigeria (Owerri: Springfield publishers, 2006) p.31 Simmons P.K. (2007) Understanding Feasibility and Viability Analysis New York: Westside Publishers

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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