Time and cost overruns of industrial projects in kerala

Poor project planning, implementation and control and the subsequent cost and time overruns are ubiquitous features that have been posing serious concern at all levels - state, national and international. It results in wastage of the nation's scarce resources and retards the socio-economic progress. Although several studies peripheral on project overruns have been made at the national level, no serious attempt has been made at the state level to identify the magnitude of overruns, their causes and impacts on industrial projects. The present study "Time and Cost Overruns of Industrial Projects in Kerala" is an earnest attempt to probe in depth the time and cost overruns and their impact on industrial projects. The study places emphasise on the identification of the real reasons behind the cost and time overruns. It also covers the present project management practices of industrial projects in Kerala.

Implementing value management as a decision-making tool in the design stages of design and build construction projects : a methodology for improved cost optimization

Value Management (VM) has been proven to provide a structured framework, together with other supporting tools and techniques, that facilitate effective decision-making in many types of projects, thus achieving ‘best value’ for clients. One of the major success factors of VM in achieving better project objectives for clients is through the provision of beneficial input by multi-disciplinary team members being involved in critical decision-making discussions during the early stage of construction projects. This paper describes a doctoral research proposal based on the application of VM in design and build construction projects, especially focusing on the design stage. The research aims to study the effects of implementing VM in design and build construction projects, in particular how well the methodology addresses issues related to cost overruns resulting from poor coordination and overlooking of critical constructability issues amongst team members in construction projects in Malaysia. It is proposed that through contractors’ early involvement during the design stage, combined with the use of the VM methodology, particularly as a decision-making tool, better optimization of construction cost can be achieved, thus promoting more efficient and effective constructability. The main methods used in this research involve a thorough literature study, semi-structured interviews, and a survey of major stakeholders, a detailed case study and a VM workshop and focus group discussions involving construction professionals in order to explore and possibly develop a framework and a specific methodology for the facilitating successful application of VM within design and build construction projects.

Evaluation of risk factors leading to cost overrun in delivery of highway construction projects

Accurate owner budget estimates are critical to the initial decision-to-build process for highway construction projects. However, transportation projects have historically experienced significant construction cost overruns from the time the decision to build has been taken by the owner. This paper addresses the problem of why highway projects overrun their predicted costs. It identifies the owner risk variables that contribute to significant cost overrun and then uses factor analysis, expert elicitation, and the nominal group technique to establish groups of importance ranked owner risks. Stepwise multivariate regression analysis is also used to investigate any correlation of the percentage of cost overrun with risks, together with attributes such as highway project type, indexed cost, geographics location, and project delivery method. The research results indicate a correlation between the reciprocal of project budgets size and percentage cost overrun. This can be useful for owners in determining more realistic decision-to-build highway budget estimates by taking into account the economies of scale associated with larger projects.

Overcoming the challenges of building heritage projects: Improvements to time, scope and cost performance

This research was undertaken to encompass and identify challenges and impact factors that affect the successful outcomes of heritage building projects, especially those related to finding major causes of delays and cost overruns across projects in all Australian states. This project determined and analysed the causes of such delays and programme issues emanating from the planning and execution phases, whilst also analysing the requirements for management of multiple stakeholder relationships and the influence of unforeseen technical factors. The research proposes "call for action" guidance and was validated by experienced experts in heritage building projects in Australia. The proposed guidance is designed to ensure that realistic cost targets and delivery timeframes are set in future heritage projects, and necessary interventions made at appropriate project stages to ensure decisions are made that will help to prevent overtime and cost overuns.

Managing uncertainty to improve the cost performance of complex infrastructure projects

There has been a recent spate of high profile infrastructure cost overruns in Australia and internationally. This is just the tip of a longer-term and more deeply-seated problem with initial budget estimating practice, well recognised in both academic research and industry reviews: the problem of uncertainty. A case study of the Sydney Opera House is used to identify and illustrate the key causal factors and system dynamics of cost overruns. It is conventionally the role of risk management to deal with such uncertainty, but the type and extent of the uncertainty involved in complex projects is shown to render established risk management techniques ineffective. This paper considers a radical advance on current budget estimating practice which involves a particular approach to statistical modelling complemented by explicit training in estimating practice. The statistical modelling approach combines the probability management techniques of Savage, which operate on actual distributions of values rather than flawed representations of distributions, and the data pooling technique of Skitmore, where the size of the reference set is optimised. Estimating training employs particular calibration development methods pioneered by Hubbard, which reduce the bias of experts caused by over-confidence and improve the consistency of subjective decision-making. A new framework for initial budget estimating practice is developed based on the combined statistical and training methods, with each technique being explained and discussed.

The significance of owner participation in a successful detached housing development in Malaysia: A literature review

The detached housing scheme is a unique and exclusive segment of the residential property market in Malaysia. Generally, the product is expensive and for many Malaysians who can afford them, owning a detached house is a once in a lifetime opportunity. In spite of this, most of the owners fail to fully comprehend the specific need of this type of housing scheme, increasing the risk of it being a problematic project. Unlike other types of pre-designed ‘mass housing’ schemes, the detached housing scheme may be built specifically to cater the needs and demands of its owner. Therefore, maximum owner participation is vital as the development progresses to guarantee the success of the project. In addition, due to it’s unique design the house would have to individually comply with the requirements and regulations of relevant authorities. Failure of owner to recognise this will result in delays, fines and penalties, disputes and ultimately cost overruns. These circumstances highlight the need for a model to guide the owner through the entire development process of a detached house. Therefore, this research aims to develop a model for a successful detached housing development in Malaysia through maximising owner participation during it’s various development stages. To achieve this, questionnaire surveys and case studies methods shall be employed to acquire the detached housing owners’ experiences in developing their detached houses in Malaysia. Relevant statistical tools shall be applied to analyse the responses. The results gained from this study shall be synthesised into a model of successful detached housing development for the reference of future detached housing owners in Malaysia.

The impact of contractor’s characteristics in gauging level satisfaction

The outcomes of the construction projects can be evaluated in numerous ways. One method is to measure the satisfaction of participants as represented by the differences between their expectations and perceptions. This measurement is used widely in construction as it promises benefits, such as the improvement of product delivery, and enhances services quality by identifying some necessary changes. Commonly satisfaction measurement is gauged by evaluating the level of client satisfaction of construction performance. The measurement of customer satisfaction on the other hand, is based on the quality of the end product. This evaluation is used to encourage contractors to improve their performance to a required level and to ensure that the projects are delivered as expected- in terms of time, budget and quality. Several studies of performance measurement have indicated that contractor performance is still not satisfactory, as the outcome delivered is not as required (because of cost overruns, time overruns or because it is generally unsatisfactory). This drawback may be due to the contractors’ lack of expertise, motivation and/or satisfaction. The measurement of performance based on contractor satisfaction levels is still new and very few studies have yet taken place in the construction industry. This paper examines how the characteristics of a contracting organisation – namely its experience in the industry, background, past performance, size of organisation and financial stability- may influence its satisfaction levels with regards to project performance. Previous literature reviews and interviews are used as research tools in the preliminary investigation. The outcome is expected to present a basic understanding of contractor satisfaction measurement and its potential for improving the performance of project outcomes.

Controlling chaos? The value and the challenges of applying complexity theory to project management

The literature abounds with descriptions of failures in high-profile projects and a range of initiatives has been generated to enhance project management practice (e.g., Morris, 2006). Estimating from our own research, there are scores of other project failures that are unrecorded. Many of these failures can be explained using existing project management theory; poor risk management, inaccurate estimating, cultures of optimism dominating decision making, stakeholder mismanagement, inadequate timeframes, and so on. Nevertheless, in spite of extensive discussion and analysis of failures and attention to the presumed causes of failure, projects continue to fail in unexpected ways. In the 1990s, three U.S. state departments of motor vehicles (DMV) cancelled major projects due to time and cost overruns and inability to meet project goals (IT-Cortex, 2010). The California DMV failed to revitalize their drivers’ license and registration application process after spending $45 million. The Oregon DMV cancelled their five year, $50 million project to automate their manual, paper-based operation after three years when the estimates grew to $123 million; its duration stretched to eight years or more and the prototype was a complete failure. In 1997, the Washington state DMV cancelled their license application mitigation project because it would have been too big and obsolete by the time it was estimated to be finished. There are countless similar examples of projects that have been abandoned or that have not delivered the requirements.

The contribution of leadership attributes to large scale, complex project success

Mismanagement of large-scale, complex projects has resulted in spectacular failures, cost overruns, time blowouts, and stakeholder dissatisfaction. We focus discussion on the interaction of key management and leadership attributes which facilitate leaders’ adaptive behaviors. These behaviors should in turn influence adaptive team member behavior, stakeholder engagement and successful project outcomes, outputs and impacts. An understanding of this type of management will benefit from a perspective based in managerial and organizational cognition. The research question we explore is whether successful leaders of large-scale complex projects have an internal process leading to a display of administrative, adaptive, and enabling behaviors that foster adaptive processes and enabling behaviors within their teams and with external stakeholders. At the core of the model we propose interactions of key attributes, namely cognitive flexibility, affect, and emotional intelligence. The result of these cognitive-affective attribute interactions is leadership leading to enhanced likelihood of complex project success.

A multi-level model of leadership in complex project management

Management (or perceived mismanagement) of large-scale, complex projects poses special problems and often results in spectacular failures, cost overruns, time blowouts and stakeholder dissatisfaction. While traditional project management responds with increasingly administrative constraints, we argue that leaders of such projects also need to display adaptive and enabling behaviours to foster adaptive processes, such as opportunity recognition, which requires an interaction of cognitive and affective processes of individual, project, and team leader attributes and behaviours. At the core of this model we propose is an interaction of cognitive flexibility, affect and emotional intelligence. The result of this interaction is enhanced leader opportunity recognition that, in turn, facilitates multilevel outcomes.

Developing a predictive contractor satisfaction model (CoSMo) for construction projects

Over the last few decades, construction project performance has been evaluated due to the increase of delays, cost overruns and quality failures. Growing numbers of disputes, inharmonious working environments, conflict, blame cultures, and mismatches of objectives among project teams have been found to be contributory factors to poor project performance. Performance measurement (PM) approaches have been developed to overcome these issues, however, the comprehensiveness of PM as an overall approach is still criticised in terms of the iron triangle; namely time, cost, and quality. PM has primarily focused on objective measures, however, continuous improvement requires the inclusion of subjective measures, particularly contractor satisfaction (Co-S). It is challenging to deal with the two different groups of large and small-medium contractor satisfaction as to date, Co-S has not been extensively defined, primarily in developing countries such as Malaysia. Therefore, a Co-S model is developed in this research which aims to fulfil the current needs in the construction industry by integrating performance measures to address large and small-medium contractor perceptions. The positivist paradigm used in the research was adhered to by reviewing relevant literature and evaluating expert discussions on the research topic. It yielded a basis for the contractor satisfaction model (CoSMo) development which consists of three elements: contractor satisfaction (Co-S) dimensions; contributory factors and characteristics (project and participant). Using valid questionnaire results from 136 contractors in Malaysia lead to the prediction of several key factors of contractor satisfaction and to an examination of the relationships between elements. The relationships were examined through a series of sequential statistical analyses, namely correlation, one-way analysis of variance (ANOVA), t-tests and multiple regression analysis (MRA). Forward and backward MRAs were used to develop Co-S mathematical models. Sixteen Co-S models were developed for both large and small-medium contractors. These determined that the large contractor Malaysian Co-S was most affected by the conciseness of project scope and quality of the project brief. Contrastingly, Co-S for small-medium contractors was strongly affected by the efficiency of risk control in a project. The results of the research provide empirical evidence in support of the notion that appropriate communication systems in projects negatively contributes to large Co-S with respect to cost and profitability. The uniqueness of several Co-S predictors was also identified through a series of analyses on small-medium contractors. These contractors appear to be less satisfied than large contractors when participants lack effectiveness in timely authoritative decision-making and communication between project team members. Interestingly, the empirical results show that effective project health and safety measures are influencing factors in satisfying both large and small-medium contractors. The perspectives of large and small-medium contractors in respect to the performance of the entire project development were derived from the Co-S models. These were statistically validated and refined before a new Co-S model was developed. Developing such a unique model has the potential to increase project value and benefit all project participants. It is important to improve participant collaboration as it leads to better project performance. This study may encourage key project participants; such as client, consultant, subcontractor and supplier; to increase their attention to contractor needs in the development of a project. Recommendations for future research include investigating other participants‟ perspectives on CoSMo and the impact of the implementation of CoSMo in a project, since this study is focused purely on the contractor perspective.

Brownfield re-development : Perceptions and risk mitigation strategies

Scarcity of large parcels of land in well-serviced areas has motivated people to re-develop brownfield land. Most of brownfield land has high risk of contamination from wide range of industrial activities such as gas works, factories, railway land and waste tips. In addition, people who live in brownfield re-development areas may be exposed to health hazards. This paper discusses public perceptions on the brownfield sites and also the risk and mitigation strategy to promote brownfield re-development. Data is gathered from face to face survey of fifty respondents who work in Brisbane Central Business District (CBD) and interview with an expert on remediation of contaminated land. From this preliminary study, it is found that majority of the population are not aware of any brownfield sites near their residence and those who are aware showed very little concern on their proximity to the site. Further discussion on the paper based on a simple cross tabulation analysis. The main risk mitigation strategy of re-development of brownfield site is by updating the registration through Environmental Management Register (EMR) and Contaminated Land Register (CLR). In addition, insurance may offer to cover cost overruns on remediation cost.

Determinants of contractor satisfaction

Performance in the construction industry is increasingly scrutinized as a result of the delays, cost overruns and poor quality of the industry’s products and services. Increasingly, disputes, conflicts and mismatches of objectives among participants are contributory factors. Performance measurement approaches have been developed to overcome these problems. However, these approaches focus primarily on objective measures to the exclusion of subjective measures, particularly those concerning contractor satisfaction (Co-S). The contractor satisfaction model (CoSMo) developed here is intended to rectify the situation. Data derived from a questionnaire survey of 75 large contractors in Malaysia in respect of a key project are analysed to identify participant factors and their strength of relationship with Co-S dimensions. The results are presented in the form of eight regression equations. The outcome is a tool for use by project participants to provide a better understanding of how they, and the project, affect contractor satisfaction. The developed model sheds some light on a hitherto unknown aspect of construction management in providing an increased awareness of the importance of major Malaysian construction contractors’ needs in the execution of successful projects.

The significance of owner participation for a successful detached housing development in Malaysia

The detached housing scheme is a unique and exclusive segment of the residential property market in Malaysia. Generally, the product is expensive and for many Malaysians who can afford them, owning a detached house is a once in a lifetime opportunity. In spite of this, most of the owners failed to fully comprehend the specific need of this type of housing scheme, increasing the risk of it being a problematic undertaking. Unlike other types of pre-designed "mass housing" schemes, the detached housing scheme may be built specifically to cater the needs and demands of its owner. Therefore, owner participation during critical development stages is vital to guarantee the success of the development as a whole. In addition, due to its unique design the house would have to individually comply with the requirements and regulations of relevant authorities. Failure by the owner to recognise this will result in delays, penalties, disputes and ultimately cost overruns. These circumstances highlight the need for a research to guide the owner through participation during the critical development stages of a detached house. Therefore, this research aims to develop a guideline to improve owner participation for a successful detached house development in Malaysia. To achieve the aim, questionnaire surveys and semi-structured interviews were employed to collect the detached house owners' and consultants' & contractors' responses through their experiences in developing detached houses in Malaysia. Stratified and random sampling were utilised to gather information from both parties to represent Malaysian detached house participants. The questionnaire responses were analysed through the application of quantitative analysis such as descriptive analysis, factor analysis and structural equation modelling which were substantiated through qualitative analysis procedure such as content analysis. This research had identified that in order to produce a successful outcome detached house owners are required to participate during critical stages of the development. In the planning stage, the owner needs to provide proper specific input to the consultant regarding his/her expectations of the cost for the entire development, its detailed specification and general idea of the internal and external design of the detached house and its compound. In the contracting stage, the owner must make the appropriate choice of selecting the right contractor for the job. This decision may be taken after recommendations from the consultants or from the owner's personal contacts or experiences but it is not recommended for the owner to select a contractor primarily on the basis of the lowest bid. In the completion stage, the owner may need to attend a number of important site meetings to ensure that the progress of the works is according to what had been planned and the completion date is achievable. By having the owners undertake an active role during critical stages of the development, not only the quality and delivery of the development improved but also there is an increase in satisfaction to the owners themselves.