THE EFFECT OF TIMELY DELIVERY OF CONSTRUCTION PROJECTS ON THE ECONOMIC DEVELOPMENT OF NIGERIA ( A CASE STUDY OF SOME SELECTED PROJECT SUPERVISORS IN JULIUS BEGER PLC AND MARLUM CONSTRUCTION COMPANY)
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Time impacts are inevitable on construction projects, primarily because of the uniqueness of each project and the limited resources of time and money that can be spent on planning, executing, and delivering the project. Time factors are inherent in all of project construction’s undertakings. Construction projects have long been recognized as particularly cost, time, and risk-laden. Some of the time and cost factors associated with the construction process are fairly predictable or identifiable; others may be totally unforeseen. The constructed project may not perform as anticipated because the owner may have unrealistic expectations regarding the delivery time of construction forcing contractors into unrealistic gambles, corner-cutting, or commitments that may not be realistic (Frimpong 2003). Project success can be defined as meeting goals and objectives as prescribed in the project plan. A successful project means that the project has accomplished its technical performance, maintained its schedule, and remained within budgetary costs. Project management tools and techniques play an important role in the effective management of a project. Therefore, good project management lies in the management tools and techniques used to manage the project. Project management involves managing the resources—workers, machines, money, materials, and methods used. Some projects are effectively and efficiently managed while others are mismanaged, incurring much delay and cost overruns and negatively affecting the economy (Frimpong 2003). Assessing construction projects’ delivery time is critical in today’s market-driven economy. To improve the economy and maximize long-term return on this public investment, government agencies have recently started utilizing new types of contracting methods that are designed to achieve multiple project objectives, including minimizing construction cost and duration, while maximizing its quality. In recent years, many departments of transportation, in various states have started to apply new highway contracting methods, including Bidding on time i.e., to encourage competition among contractors to minimize project duration (Holt et al 2000), Incentive/ disincentive contract clauses that provide financial incentives to reduce construction duration, Nighttime construction that seeks to cut service disruption and project time by requiring contractors to work during off-peak night time hours, Warranty contracting that attempts to improve construction quality by making contractors liable for the performance of the facility after project completion. These new and emerging contracts place increasing pressure on decision-makers in the construction industry to search for an optimal/near-optimal resource utilization plan that minimizes construction time while maximizing its quality. This creates new and pressing needs for advanced resource utilization models that are capable of optimizing the multiple and conflicting objectives of construction time, cost, and quality. Significant research advancements have been made in the area of optimizing construction resource utilization. This led to a number of optimization models. These models can be classified according to their optimization objectives into models that attempted to: • Minimize project time and/or improve resource utilization; • minimize time and cost for non-repetitive construction using time-cost trade-off analysis • minimize time and/or cost for repetitive construction
While the above research study seeks to provide significant contributions to the area of optimizing construction resource utilization, there has been little or no reported research focusing on multi-objective models for optimizing construction time, cost, and quality.
1.2 PROBLEM STATEMENT Misallocation and misperception of the time factors in construction projects have resulted in the government of Nigeria paying more than necessary for many projects. Improper time assessment can also cause additional costs in the form of delays which result in poor utilization, increasing social and economic costs. Are contractors using the most appropriate resources to execute projects in Nigeria? Do they mobilize the needed resources within the approved time frame allotted to their contracts? What effects do short time periods and/ or extended time periods have on their project costs? Are there remedies to these situations? These are some of the situations that have prompted the researcher to go deep into the assessment of the cost and time impacts of public sector construction projects in Nigeria.
1.3 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 the 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.
1.4 RESEARCH QUESTIONS In order to achieve the objectives of the study, the following research questions were used by the researcher:
What effects do time factors have on the construction of projects in Nigeria? Has the perception of contractors on time factors in projects construction changed in recent years? What relationship exists between timely delivery of construction projects and economic development in Nigeria?
1.5 RESEARCH HYPOTHESIS Ho: There is no significant relationship between timely delivery of construction projects and the economic development of Nigeria.
Hi: There is a significant relationship between the timely delivery of construction projects and the economic development of Nigeria.
1.6 SIGNIFICANCE OF THE STUDY All construction contracts allocate time between owners and contractors. Hence the significance of this study would better inform improved project relationships and communications and enhance construction administration practices between owners and contractors. The findings would also enhance and broaden the time of a wide range of risks that could materialize during the design and construction phases of a project which would subsequently result in better and more prudent design specifications.
1.7 SCOPE OF THE STUDY The researcher will limit the study to the effects of timely delivery of construction projects on the economy of Nigeria, using the Fly Over 2 project constructed by Julius Berger in Uyo, Akwa Ibom State as a case study. Findings and recommendations by the researcher may not be used for general analysis as the researcher could not assess numerous construction projects due to time and financial constraints.
1.8 LIMITATIONS OF THE STUDY Construction of projects in the public sector has assumed significant functions, hence the need for an assessment of the cost and time impacts of construction of projects in order to achieve overall project objectives. Historical project schedule and duration data are treated as confidential by Julius Berger Nigeria Plc hence getting data for this study was very difficult. Data collection and analysis was therefore limited to the data received from project supervisors in the field of project construction.
DEFINITION OF TERMS Economy: An economy consists of the economic system in a certain region, comprising the production, distribution or trade, and consumption of goods and services in that region or country. An economy is the total aggregate sum of all transactions of value between two agents, such as one individual to one other individual, or between groups of individual activity, such as in organizations to other organizations, and between one nation and another nation. Construction: In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large-scale construction is a feat of human multitasking. Normally, the job is managed by a project manager and supervised by a construction manager, design engineer, construction engineer, or project architect.
Deliverable: Deliverable is a term used in project management to describe a tangible or intangible object produced as a result of the project that is intended to be delivered to a customer (either internal or external). A deliverable could be a report, a document, a server upgrade, or any other building block of an overall project. Project management: this is the discipline of planning, organizing, motivating, and controlling resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. Time: This is a dimension in which events can be ordered from the past through the present into the future, and also the measure of durations of events and the intervals between them.
Frimpong, Y. (2003). Project management in developing countries: causes of delay and cost overruns in construction of groundwater projects. Unpublished Masters Research Project, University of Technology, Sydney, Australia. Holt, G. D., Proverbs, D., and Love, P. E. D. 2000. ‘‘Survey findings on UK construction procurement: Is it achieving lowest cost or value?’’ Asia Pac. Building Construct. Manage. J., 5, 13–20.