Delays are the most critical part of construction projects. They have huge negative effects on projects such as court cases between contractors and clients, increase in cost, poor quality of end products etc. This chapter throws light on what kind of effects are there due to the causes of delays which are identified in last chapter, or in other words effects of delays caused in construction projects. This chapter will also discuss required actions and methods to minimize such delays in construction industry.
3.2 EFFECTS OF DELAY:
Lot of work has been carried out to identify effects of delay in construction projects. Sambasivan and Soon (2007) distinguished six effects of delays they were time overrun, cost overrun, disputes, arbitration, litigation and total abandonment. Aibinu and Jagboro (2002) also gave same six effects of delay. Kaliba et al (2009) gave effects as poor quality of end products, project extension, litigation and cost overrun.
Time Overrun: When project is delayed and time is extended to complete that situation is called time overrun. Client and contractor related factors of delay are responsible for time overrun. Inadequate planning, improper site management, inadequate experience of projects, delay in interim payments, change in design etc. are such factors.
Cost Overrun: Contractual factors such as change orders, mistakes and disagreements in contract and inflation due to time overrun also lead to cost overrun. Correlation analysis between cost and time overrun and cost overrun indicated a strong linkage.
Disputes: Client related factors, external factors, contractual relationships that arise during project. Delayed interim payments, owners interference, change requirements, improper management information system etc. creates disputes which inturn can lead to arbitration or litigation.
Arbitration: Client related and contractual relationship related factors which creates disputes leads to be settlement by arbitration, which involves third party to settle issue out of court.
Litigation: Client related, labour related, contractual relationship related factors and external factors leads to disputes which are not even solved by arbitration leads to litigation. Litigation is the last way to settle disputes.
Total Abandonment: Sometimes client related, contractual relationship related, consultant, resource related etc., any cause which creates disputes and is unable to reach some result is totally abandoned.
EFFECTS OF DELAY
Table 3.1 The effects of delays and its rankings (Aibinu and Jagboro 2002)
3.3 RECOMMENDATIONS AND METHODS TO MINIMIZE DELAYS:
Several scholars have studied problem of delay and their effects as a result they have given their recommendations and methods to minimize delay in construction projects.
Aibinu and Jagboro (2002): identified two methods to minimize delay in construction projects they studied Nigerian construction industry.
Acceleration of site activities: They suggested that in case of delay successive site activities are accelerated but this not always make up for loss of time or delay occurred. The reason behind this is that due to set up of acceleration it seems progress but due to inefficient project management problem that caused delay remains in force and results overall acceleration ineffective.
Contingency Allowance: Contingency fund is some extra amount kept at the budget stage. This amount is must be realistic and sufficient to contain risk of unforeseen cost increase during construction. As per Aibinu amount kept as contingency allowance in most of the construction projects is not sufficient to cover cost escalations. They suggested that 17.34% of project estimate should be kept as contingency allowance.
Nguyen et al (2004): They identified various methods of minimizing delays in construction projects. They studied projects of Vietnam. This table below shows all the factors given by them.
COMPONENT 1 FIRST COM
COMPONENT 2 SECOND COM
COMPONENT 3 THIRD COM
COMPONENT 4 FOURTH COM
Adequate funding throughout the project.
Up to date technology utilization.
Commitment to project
Comprehensive contract documentation.
Proper emphasis on past experience.
Clear objectives and scopes
Clear information/communication channel
Availability of resources
Multidisciplinary/ competent project team.
Top management support.
Frequent progress meetings.
Continuing involvement of stakeholders
Awarding bids to the right designer/ contractors
Competent project managers
Table 3.2 Source Nguyen et al (2004); Factor analysis grouping for success factors.
Odeh and Battaineh (2002): suggested following ways to minimize construction delays.
Implementation of liquidated damage clause in contracts and offering incentives or awards for early completion.
Transforming way human resources are taken in construction industry. Proper training must be provided and craftsmen must be classified. This also involves construction engineers so that their managerial skills could be improved. Proper training in scheduling, time and cost control, information systems, and management of human resources is required.
Contract award procedure must be transformed by giving less weightage to price and more weightage to skill and past performance of contractor.
Adopting new types of contracts which reduce delay by limiting owner’s interference, improving design and contractual relationship. Contracts for example construction management and design build are good for such purpose.
Sambasivan and soon (2007): They suggested their recommendations in three groups.
Client: Contractor must not be selected only on lowest bid, but experience, technical capability, skill, financial ability, and adequate manpower. Client must not interfere during execution and must not bring major changes to design. Client must pay interim payments properly, he must have sufficient funds. Client must have quick decision power.
Consultant: Consultant must not leave any discrepancy in contract drafting. He must approve drawings and designs on time. Work should be monitored regularly at appropriate intervals so as to judge progress.
Contractor: Job out of expertise and experience must not be taken. Contractor’s staff must be technically sound, there must be proper site managers. Work should be properly planned and plan must be given to client. Contractor must have proper finance as back up.
From the above literature review it can be seen that a lot of work has been done in understanding causes, effects and methods to minimize construction delay. The major effects of construction delay are described as time overrun, cost overrun, dispute, arbitration, litigation and total abandonment. To reduce these effect lot of recommendations and methods are suggested. Out of which major factors are related to proper project management, scheduling and cost estimating which can reduce disputes and other delays. Some other factors are design management, client’s interference, changing orthodox ways to tender or awarding project to contractor.
But in spite all above recommendations and methods delay occurs, disputes are there, claims are there because construction industry is vast which involves lot of stakeholders and parties. So its complex to keep every sector satisfied. It depends on management skill and leadership quality of hierarchy involved. Proper work breakdown structure and task responsibility matrix is also important parts which must be taken into account when it comes to minimize delay. Construction projects are complex projects and involve lot of funding. Money could be the main reason of dispute so all funding must be arranged before project is given green signal to start.