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AN
INVESTIGATION INTO THE CAUSES OF DELAY IN LARGE CONSTRUCTION PROJECTS IN
NIGERIA
CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
In
the construction industry, the term
delay is used
to describe the
time overrun of a project beyond
the officially agreed completion time due to causes by the parties in
the contract, who are the, employer, contractor and the consultant (Msafiri,
2015). Project delays are a common problem not only with an immeasurable cost to society, but also
with debilitating effects to the contracting parties (Ondari & Gakera,
2013). Project delays are a reoccurring problem and have negative impacts on
project success in terms of time, cost, quality and safety (Knight, Hurst &
Farahani, 2009).
Currently,
construction accounts for a large percentage of the annual gross domestic
product (GDP). However, the growth in the construction industry has influenced
the country’s economic development. As observed in developed countries,
construction is considered unique in that it can stimulate the growth of other
industrial sectors. Hence to consider growth of the construction industry in
terms of its contribution to GDP in isolation is somewhat misleading in that,
to do so understates the crucial role played by the construction industry
.Therefore, improving construction efficiency by means of cost effectiveness
and timeliness would certainly contribute to cost saving for the country as a
whole. Efforts directed to cost and time effectiveness were associated with
management issues. If delay is well mitigated
and managed, it would act as capacity building in the
growth of the small and medium contractors.
According
to Abedi et al., (2011), eight hundred and forty five of Kick starter top
projects in the USA missed their targeted delivery dates. Jonathan and
Arditi(2001), studied 50 most funded projects around the USA and found that out
of the studied projects; only 8 out of the 50 met their set deadlines.
Successful execution of projects and keeping them on time and
within budget depends on effective planning and scheduling right from the
beginning. High levels of experience and accurate time and cost estimating are
necessary to plan a project effectively (Keane & Caletka, 2008). Chan &
Kumaraswamy (1998), studied projects delays in Hong Kong.
They
observed that for projects to be deemed as having been successfully delivered,
they should be on time, within budget and expected quality, otherwise lack of
any of these is deemed a project delay. An investigation by Odeyinka &Yusif
(2010) shows that seven out of ten projects surveyed suffered delays. There are
many factors that contributed to causes of delays in construction projects.
These range from factors inherent in the technology and its management, to
those resulting from the physical, social, and financial environment. Delays
can give rise to disruption of work and loss of productivity, late completion
of project, increased time related costs
and third party claims and abandonment or termination of contract. Delays are
costly and often result in disputes and claims. Therefore, mitigation measures
will minimize or avoid the adverse consequences of delays in construction
projects (Abedi et al., 2011).
According
to Ahmed et al. (2002), delays can be grouped in the following four broad
categories according to how they operate. The four categories include:
excusable or non-excusable delays, excusable compensable delays or
non-compensable delays, concurrent delays or non-concurrent delays and critical
or non-critical delays. Each of these categories of delay is defined by how
they operate contractually.
According
to studies on projects in Ghana by Fugar & Agyakwah (2010), indicate that
project financing, economic and natural material supply are the major causes of
project delays. Akinsiku & Akinsurile (2012) while studying projects in
Nigeria indicate that some of the factors that influence project delays include
poor contractual management, slow or delayed project approval processes by
project stakeholders change in laws and regulations, poor communications and
contractual problems among others.
Kikwasi
(2012), studied causes of project delays in Tanzania. He classified
the causes of project delays according to material related delays,
design related delays, equipment related delays, project related delays,
contractor related delays, and consultant related delays and external related
delays as the most common and highly rated factors influencing delays in
projects. Assaf et al. (1995) summarized main causes of delay in large building
and construction projects in Saudi Arabia and classified causes
of project delays
into contractual factors,
organizational factors,
client
factors, external related factors and
project factors. With each of this they
identified approval of shop drawings, delays in payment to contractors, slow
decision making and executive bureaucracy in owner’s organizations among others
as the most important causes of delay. According to Ayudhya (2011) delays in
construction may be caused by the client, the contractor, the consultants, acts
of God, or a third party and they may occur early or late in the job.
When
projects experience delays, timelines are extended and rate of work is
increased to try and beat the deadlines. This then results in poor quality of
projects, increased costs incurred, little or no return on investment,
inability to meet project need, legal issues arising between parties or total
abandonment of the project. This brings about distrust between parties,
dissatisfaction and sometimes broken work relationships.
1.1.1 Project Delays in Nigeria
In
Nigeria, construction projects are referred to as part of the main pillars
contributing to economic growth. Delays in Nigerian construction projects are
said to be a common and re-occurring phenomenon and are experienced in
any-sector that delivers services through project constructions (Msafiri,
2015). The government of Nigeria and its developing partners continue to
allocate huge financial resources to finance development. However the benefits
intended for the developments are partly or never realized due to un-successful
project implementations. Specific, research undertaken to investigate what ails
construction projects in Nigeria especially in the public sector provides
insights to what is said to be the major causes of project delays including
poor planning, poor quality and risk measures, poor communication and poor stakeholder
involvement (Kagiri & Wainaina, 2008).
According
to KNBS (2012), the construction industry contributed 3.8%, 4.1%, 4.3%
and
4.1% towards Gross Domestic Product (GDP) for the years 2008, 2009, 2010 and
2011 respectively. This is an average of 4.1% as compared to the 10% for the
developed economies. KNBS (2012) attributes delay of Nigerian projects to
various factors including financial constraints and political influence, poor
bidding and awarding processes among others.
In
Nigeria, construction projects continue to experience delays hence never taking
off (Mbaluka & Bwisa, 2013). Project management procedures are said to
guide managers on how to manage project resources efficiently ensuring
delivery. Pre project activities
comprising of planning, designing, estimating, negotiating, purchasing,
scheduling, controlling and accounting should be done carefully before embarking
on any project development activities to ensure elimination of project delays
.According to a report done for African Development Bank to its board of
directors on its projects portfolio, the biggest delay facing its projects is
the approval process delay (Gohou & Soumare, 2010).
Talukhaba
(1999), in his study of Nigerian high-rise projects observed that factors that
cause project delays are associated with the project participants, the process
and the environment of project implementation. He further described the effects
of each of these factors on the projects and their implications on the same.
Some of the described effects include cost overruns, time overruns and the
legal issues arising due to delay. In summary, one can conclude that the main problem
with Nigerian construction industry is related to client erratic payment,
architects instructions, improper planning, clients’ instruction, climatic
related factors such rock, underground water and rain, design changes, slow
decision making and executive bureaucracy.
1.2 Statement of the problem
The
success of a construction project is critically affected by the capacity of the
implementing firms, design variations, nature of the contract and stability of the economic environment.
However there seems to be no agreement among scholars and practitioners as to
the nature of the causes of delays in construction projects. There also seems
to be lack of consensus as to the principal causes of delays in public
construction projects. For instance, Aibinu et al (2002) argue that the main
cause of delay is poor planning. According to Frimpong (2003), poor risk
management is to blame while Karimi (1998) argues that lack of experience and
intellectual ability among contractors as the main reason. Other causes that
have been highlighted include; poor organizational culture (Kagiri, and
Wainaina 2008)
poor
government policy guidance (Karimi, 1998). In Nigeria, more than 40% of all
project failures leading to litigation arise from delays in project completion
(Kagiri, and Wainaina, 2008).
The
increase in project delays in the construction industry is hurting the economy
because it results in wastage of resources, enhanced costs of projects and
frustration among customers, yet construction is one of the principal sectors
that can revitalize economic growth in Nigeria. Investment in construction
projects and related infrastructure and services has multiple direct and
indirect effects. It triggers forward and backward linkages through additional
investment in manufacturing of building material, transport and government
(GOK, 2001). Unfortunately, delays in large construction projects particularly
buildings, will continue to plague the construction industry in the foreseeable
future unless strategic measures are taken by the industry. The government may
lack sufficient mitigating measures to address the problem. Although much has
been done in identifying the factors that influence projects delay in large
construction projects in Nigeria, the industry still experiences delays
(Alaghbari & Salim 2007). This is attributed to the fact that there is
still lack of information for the effective mitigation of delay. This study
therefore seeks to contribute to these attempts by others in identifying
further the causes of delay in large construction projects in Nigeria and then
come up with strategies to mitigate such delays.
1.3 Aim of the Study
The
rationale of this evaluation is: (a) to appraise the major causes of delay in
large construction projects in terms of the impact on the parties involved. (b)
to minimize the delays by improving the functionality of management of projects
within the construction industry.
1.4 Objectives of the Study
1.4.1 General Objective
The
overall objective of this study is to determine the causes of delays in the
completion of large construction projects in Nigeria and find solutions to this
problem.
1.4.2 Specific Objectives
The
specific objective is of the study are:-
i. To identify the causes of delays in the
completion of large construction projects in Nigeria.
ii. To
analyze how finance
causes delays on
the completion of
large construction projects in Nigeria.
iii. To analyze the influence of design
variation on delays in the completion of large construction projects in
Nigeria, and
iv. To
develop a strategy
to mitigate delays
in the completion
of large construction projects in
Nigeria.
1.5 Research Questions
The
study sought to answer the following research questions:
i. What are the causes of delays in the completion of large
construction projects in Nigeria?
ii. What
is the effect
of finance on
delays in the
completion of large construction projects in Nigeria?
iii. What is the influence of design variation
on delays in the completion of large construction projects in Nigeria? and
iv. What strategy can be developed to mitigate
delays in the completion of large construction projects in Nigeria?
1.6 Justification of the Study
This
study will provide insights that reveal the factors influencing project delays
in Nigeria with an aim of enabling project delivering organizations become more
knowledgeable of the factors hence looking into ways that can
minimize project delay. With this, project delivering organizations
shall maintain productivity and sustainability by identifying, acquiring and
adequately implementing measures that prevent delays in projects hence leading
to improved delivery.
The
study sought to highlight the important factors accounting for the delays in
large construction projects. In this way, the study findings will contribute to
the universe of knowledge regarding the initiation, planning, execution and
termination of construction. This knowledge is important especially to the
construction industry which is
constantly looking for better ways to complete projects on time, within costs
and agreed- upon performance parameters. An understanding of the key causes of
delays will play an important role in the ways large projects are
conceptualized, planned and executed.
This
study will also be important to the government in formulation of construction
industry policies and the way these policies are implemented. An informed policy
provides useful guidelines to the industry which minimizes project failures,
reduces risks and severally enables order in the construction industry. This
study will also benefit other stakeholders such as;
Contractors:
The results of this study will be of great importance to any individual
involved in project construction and implementation since it will give them
an insight on the factors that influence project delays in Nigeria.
Developers:
The results of this study will be of great importance to the owners of the
project since it will give them an insight on how effectively projects can be
implemented and delivered without experiencing delays caused by the identified
factors.
Scholars:
The results of this study will be of great importance to scholars since it
shall provide insight on the factors influencing project delays in Nigeria
hence enable them attain informed information on the same.
This
study also intends to spawn practical and theoretical further research
questions that can become useful study basis for future researchers. Study
findings should be considered as a contribution in the debate about how to
improve the efficiency and effectiveness in the construction industry
particularly with regard to scheduling and cost management.
1.7 Definition of Terms
Delay:
Akinsiku & Akinsulire (2012), define delay as a pervasive phenomenon in
construction project delivery. According to Aibinu & Jagboro (2002), delay
can be defined as a situation in which a project contractor and project owner jointly or separately fail to meet their end
of the bargain in project completion.
Construction
Delays: Assaf et al. (2008) defined delay as the time overrun compared to
completion date as specified in a contract, or beyond the date that the parties
agreed upon for delivery of a project. Majid & McCraft (2009) defined
delays as the time overrun beyond the contract date or the date that the
critical activities have been delayed.
Contract
Delays: Akinsiku & Akinsulire (2012) define contract delays as delays that
are caused by inability of a contractor to proceed with the project diligently
or efficiently due to lack of or as a result of inadequate resources needed to
perform work on a project.
Finance:
Finance, related delays are said to be delays that are concerned with financial
characteristics. Some of these characteristics include cash flow problems,
financial constraints among others (Ibironke. Oladinrin, Adeniyi &
Eboreime, 2013).
Organization:
Organizational factors that contribute to project delays are said to be factors
that are as a result of organizational activities, processes and guidelines.
Organizational related delay factors are said to be influenced mainly by the
organization’s operations hence the influence of factors coming from this on projects
(Frimpong, Oluwoye & Crawford, 2003).
Concurrent
delays: Delays caused by both parties in the contract.
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