The challenges facing privatization of infrastructure projects in Libya

Libya with its strategic location and natural resources stands as a crucial link between the Arab world, Europe, and Africa. The people of Libya have an optimistic outlook with regard to the Libyan economy after the suspension of the United Nations sanctions in 1999 that had been imposed on Libya in 1992, as well as the recent emphasis on privatization from the government. Since then, local and foreign investors have been encouraged to take a more prominent role in order to help privatize some of the state run-industries; the attention to privatization is aimed to help Libya’s economic growth and reduce its heavy dependency on oil revenues. Considering the economic situation, Libya is a rich country. However, it needs to modernize, it needs more and better infrastructure, it needs non-oil based financing, furthermore, it needs to develop a financial model for development and investment from the private sector. Although the Libyan government is working on the improvement of the business environment to make it more attractive for foreign investors in a way to move towards privatization, they have ignored some of the challenges that privatization will be facing in Libya. Privatization can not be implemented overnight. They have taken this for granted without careful consideration of its challenges. This paper attempts to investigate and discuss the challenges that need to be taken into account before privatization of infrastructure projects can be introduced in Libya. This paper is based on interviews with senior technical officials in the government.

Understanding UK construction professional services exports: definitions and characteristics

Services are very important to the UK balance of trade; a surplus has been recorded for trade in services every year since 1966. Construction professional services exports (CPS), which cover architecture, engineering and surveying (AES), have also increased, contributing over £3bn to the UK trade balance in 2007. The changing environment of construction professional services exports complicates the validity of the characteristics and definitions of services as described in the research literature and official export statistics. Through semi-structured interviews undertaken with large consulting engineers and a round-table discussion with industry and government representatives, the research found that the impact of globalisation and the changes in the construction business environment, such as increasing foreign ownership and changing forms of procurement, are not fully reflected in the official statistics. There have also been rapid changes in technology, procurement and methods of delivery which have impacted exporting AES firms and a more appropriate set of characteristics is needed to better reflect the project-specific and knowledge-intensive nature of AES firms.

Measuring construction professional services exports: a case for change

There is limited understanding of the role of services in the wave of globalisation and how the strengths of the UK service sector help to respond to the challenge of global competition. The way in which the construction export data are collected does not reflect the impact of globalisation and the changes in the construction business environment, such as increasing foreign ownership, foreign affiliates, and changing forms of procurement. The paper describes construction service exports, how they are collected and classified, highlighting the challenges of recording the export performance of construction services in a changing world. A case for change is made to ensure the collection of statistics better reflects the role of construction professional services

Developing construction professional services in the international market: SWOT analysis of China

Construction professional services (CPSs), such as architecture, engineering, and consultancy, are not only high value-added profit centers in their own right but also have a knock-on effect on other businesses, such as construction and the export of materials and machinery. Arguably, competition in the international construction market has shifted to these knowledge-intensive CPS areas. Yet CPSs represent a research frontier that has received scant attention. This research aims to enrich the body of knowledge on CPSs by examining strengths, weaknesses, opportunities, and threats (SWOT) of Chinese CPSs (CCPSs) in the international context. It does so by triangulating theories with quantitative and qualitative data gleaned from yearbooks, annual reports, interviews, seminars, and interactions with managers in major CCPS companies. It is found that CCPSs present both strengths and weaknesses in talents, administration systems, and development strategies in dealing with the external opportunities and threats brought about by globalization and market evolution. Low price, which has helped the Chinese construction business to succeed in the international market, is also a major CCPS strength. An opportunity for CCPSs is the relatively strong delivery capability possessed by Chinese contractors; by partnering with them CCPSs can better establish themselves in the international arena. This is probably the first ever comprehensive study on the performance of CCPSs in the international marketplace. The research is conducted at an opportune time, particularly when the world is witnessing the burgeoning force of Chinese businesses in many areas including manufacturing, construction, and, potentially, professional services. It adds new insights to the knowledge body of CPSs and provides valuable references to other countries faced with the challenge of developing CPS business efficiently in the international market.

Understanding absorptive capacity in Malaysian small and medium sized (SME) construction companies

Purpose – The construction industry is a very important part of the Malaysian economy. The government's aim is to make the industry more productive, efficient and safe. Small to medium-sized enterprises (SMEs) are at the core of the Malaysian construction industry and account for about 90 per cent of companies undertaking construction work. One of the main challenges faced by the Malaysian construction industry is the ability to absorb new knowledge and technology and to implement it in the construction phase. The purpose of this paper is to consider absorptive capacity in Malaysian construction SMEs in rural areas. Design/methodology/approach – The research was conducted in three stages: first, understanding the Malaysian construction industry; second, a literature review on the issues related to absorptive capacity and discussions with the Construction Industry Development Board (CIDB); and third, multiple case studies in five construction SMEs operating in a rural area to validate the factors influencing absorptive capacity. Findings – Nine key factors were identified influencing absorptive capacity in Malaysian construction SMEs operating in rural areas. These factors involved: cost and affordability; availability and supply; demand; infrastructure; policies and regulations; labour readiness; workforce attitude and motivation; communication and sources of new knowledge and; culture. Originality/value – The key factors influencing absorptive capacity presented in this paper are based on validation from the case studies in five construction SMEs in Malaysia. The research focuses on how they operate in rural areas; however, the research results have wider application than just Malaysia. The key factors identified as influencing absorptive capacity can serve as a basis for considering knowledge absorption in the wider context by SMEs in other developing countries.

Developing construction professional services in the international market: a SWOT analysis of China

In contrast to their bustling construction counterparts, Chinese construction professional services (CPS) such as architecture, engineering, and consultancy, seem still to be stagnant in the international market. CPS are not only high value-added profit centers in their own right, but also have a knock-on effect on subsequent businesses such as construction, and the export of materials and machinery. Arguably, competition in the international construction market has shifted to knowledge-intensive CPS. Yet,CPS represent a research area that has been paid scant attention. This research aims to add to the body of knowledge of CPS by examining strengths, weaknesses, opportunities, and threats (SWOT) of Chinese CPS (CCPS) in the international context. It does so by triangulating theories with quantitative and qualitative data gleaned from yearbooks, annual reports, interviews, seminars, and interactions with managers in major CCPS companies. It is found that CCPS present both strengths and weaknesses in talents, administration systems, and development strategies in dealing with the external opportunities and threats brought about by globalization and market evolvement. Low price, which has helped the Chinese construction business to succeed in the international market, is also a CCPS major strength. An opportunity for CCPS is the relatively strong delivery capability possessed by Chinese contractors. By partnering with them CCPS can better edge into the international arena. This is probably the first ever comprehensive study in investigating the performance of CCPS in the international market. The research is also timely, particularly when the world is witnessing the burgeoning force of Chinese businesses in many areas including manufacturing, construction, and potentially, professional services.

Sustaining growth and profits in a rapidly changing world - a Chinese perspective

The aim of this paper is to stimulate discussion about how Chinese construction and professional service companies can best equip themselves and grow sustainably and profitably in a rapidly changing world. It identifies some of the issues and risks faced by Chinese construction and professional service companies operating domestically and overseas. China has experienced a period of rapid economic growth which is also reflected in the annual construction output. China’s population is the largest in the world, but the demographic profile is changing with an ageing population and a changing dependency ratio. The population is urbanising at a fast rate, putting pressure on housing, and infrastructure. The government must plan for the future and the construction sector must be involved in that planning. The paper considers the drivers shaping China’s construction market, how companies are responding by embracing change and internationalising by seeking to exploit their skills overseas. The drivers are globalisation, urbanisation, demographic change, sustainability, safety and health, and the evolution of professional services as a core part of construction activity. Clients/owners are driving change by demanding more certainty and more sustainable projects.

Nexus between contracting and construction professional service businesses: empirical evidence from international market

he construction market around the world has witnessed the growing eminence of construction professional services (CPSs), such as urban planning, architecture, engineering, and consultancy, while the traditional contracting sector remains strong. Nowadays, it is not uncommon to see a design firm taking over the work of a traditional main contractor, or vice versa, of overseeing the delivery of a project. Although the two sectors of contracting and CPS share the same purpose of materializing the built environment, they are as different as they are interrelated. Much has been mentioned about the nexus between the two but little has been done to articulate it using empirical evidence. This study examined the nexus between contracting and CPS businesses by offering and testing lead-lag effects between the two sectors in the international market. A longitudinal panel data composed of 23 top international contractors and CPS firms was adopted. Surprisingly, results of the panel data analyses show that CPS business does not have a significant positive causal effect on contracting as a downstream business, and vice versa. CPS and contracting subsidiaries, although within the same company, do not necessarily form a consortium to undertake the same project; rather, they often collaborate with other CPS or contracting counterparts to undertake projects. This paper provides valuable insights into the sophisticated nexus between contracting and CPS in the international construction market. It will support business executives’ rational decision making for selecting proper contracting or CPS allies, or a proper mergers and acquisitions strategy in the international market. The paper also provides a fresh perspective through which researchers can better investigate the diversification strategies adopted by international contracting and CPS firms.

The dilemma of scope and scale for construction professional service firms

Construction professional service (CPS) firms sell expertise and provide innovative solutions for projects founded on their knowledge, experience, and technical competences. Large CPS firms seeking to grow will often seek new opportunities in their domestic market and overseas by organic or inorganic growth through mergers, alliances, and acquisitions. Growth can also come from increasing market penetration through vertical, horizontal, and lateral diversification. Such growth, hopefully, leads to economies of scope and scale in the long term, but it can also lead to diseconomies, when the added cost of integration and the increased complexity of diversification no longer create tangible and intangible benefits. The aim of this research is to investigate the key influences impacting on the growth in scope and scale for large CPS firms. Qualitative data from the interviews were underpinned by secondary data from CPS firms’ annual reports and analysts’ findings. The findings showed five key influences on the scope and scale of a CPS firm: the importance of growth as a driver; the influence of the ownership of the firm on the decision for growth in scope and scale; the optimization of resources and capabilities; the need to serve changing clients’ needs; and the importance of localization. The research provides valuable insights into the growth strategies of international CPS firms. A major finding of the research is the influence of ownership on CPS firms’ growth strategies which has not been highlighted in previous research.

Auto ID-Bridging the physical and the digital on construction projects

This book looks at how auto-ID has evolved and how it can be used in the construction industry and across projects from the perspective of all the stakeholders, from owners to design consultants, contractors and the supply chain. It could help to improve efficiency, reduce costs, ensure quality, protect the environment, and enhance safety.

Whole life thinking and engineering the future

Whole-life thinking for engineers working on the built environment has become more important in a fast changing world.Engineers are increasingly concerned with complex systems, in which the parts interact with each other and with the outside world in many ways – the relationships between the parts determine how the system behaves. Systems thinking provides one approach to developing a more robust whole life approach. Systems thinking is a process of understanding how things influence one another within a wider perspective. Complexity, chaos, and risk are endemic in all major projects. New approaches are needed to produce more reliable whole life predictions. Best value, rather than lowest cost can be achieved by using whole-life appraisal as part of the design and delivery strategy.

Managing the complexity of information flow for construction small and medium-sized enterprises (CSMEs) using system dynamics and collaborative technologies

With the increase in e-commerce and the digitisation of design data and information,the construction sector has become reliant upon IT infrastructure and systems. The design and production process is more complex, more interconnected, and reliant upon greater information mobility, with seamless exchange of data and information in real time. Construction small and medium-sized enterprises (CSMEs), in particular,the speciality contractors, can effectively utilise cost-effective collaboration-enabling technologies, such as cloud computing, to help in the effective transfer of information and data to improve productivity. The system dynamics (SD) approach offers a perspective and tools to enable a better understanding of the dynamics of complex systems. This research focuses upon system dynamics methodology as a modelling and analysis tool in order to understand and identify the key drivers in the absorption of cloud computing for CSMEs. The aim of this paper is to determine how the use of system dynamics (SD) can improve the management of information flow through collaborative technologies leading to improved productivity. The data supporting the use of system dynamics was obtained through a pilot study consisting of questionnaires and interviews from five CSMEs in the UK house-building sector.