FACTORS AFFECTING THE PERFORMANCE OF CONSTRUCTION PROJECTS IN NIGERIA (CASE STUDY OF MONIER CONSTRUCTION COMPANY)

Project Abstract

<p>               <b>ABSTARCT&nbsp;</b><br></p><p>Construction industry has complexity in its nature because it contains large number of parties as clients, contractors, consultants, stakeholders, shareholders, regulators and others. Construction projects in portharcourt suffer from many problems and complex issues in performance such as cost, time and safety. The aim of this thesis is to identify and evaluate the main factors affecting the performance of construction projects in portharcourt. Literature review about performance was reviewed to identify the factors affecting the performance of construction projects. In addition, other local factors have been added as recommended by local experts. Pilot study of the questionnaire was achieved by a scouting sample, which consisted of 30 questionnaires. A questionnaire survey was conducted and 63 factors were identified, categorized into 10 groups, evaluated and ranked from owners, consultants and constructors perspectives. 120 questionnaires were distributed as follows 25 to owners, 35 to consultants and 60 to contractors. 88 questionnaires were received (73%) as follows 17 (70%) from owners, 25 (72%) from consultants and 46 (77%) from contractors as respondents. The most important factors agreed by the owners, consultants and contractors were average delay because of closures and materials shortage; availability of resources as planned through project duration; leadership skills for project manager; escalation of material prices; availability of personals with high experience and qualification; and quality of equipments and raw materials in project. The degree of agreement between parties regarding the ranking of factors was determined according to Kendall's Coefficient of Concordance. For Cost, Time, Quality, Productivity, Client Satisfaction, People, Innovation and learning factors, and all groups together, there is a significant degree of agreement among the owners, consultants and contractors. On the other hand, for Regular and community satisfaction, Health and Safety, and Environment factors, there is disagreement of agreement among the owners, consultants and contractors. The practices concerning with the Key Performance Indicators (KPIs) such as time, cost, project owner satisfaction and safety checklists were analyzed in order to know the main practical problems of projects performance in portharcourt and then to formulate recommendations to improve performance of construction projects in portharcourt. It was concluded that projects were delayed and the actual cost of projects was more than the estimated cost because of portharcourt political conditions. Overall project safety factors had been moderately implemented in construction organizations. It is recommended for construction organizations to have a clear mission and vision to formulate, implement and evaluate their performance. A structured methodology and technique should be identified to overcome the effect of local political and economic situations on the performance of construction projects in portharcourt.</p><p>In addition, it is recommended to develop human resources in the construction industry through proper and continuous training programs about construction projects performance. It is necessary for construction organizations in portharcourt to evaluate both of market share and liquidity before implementation of any construction project because of difficult economic situation. All of that will assist organizations to perform projects successfully and strongly. <br></p>

Project Overview

<p><b>1.0 INTRODUCTION&nbsp;</b></p><p><b>1.1 BACKGROUND STUDY&nbsp;</b></p><p>Construction industry plays a major role in development and achievement the goals of society. Construction is one of the largest industries and contributes to about 10% of the gross national product (GNP) in industrialized countries (Navon, 2005). Construction industry has complexity in its nature because it contains large number of parties as clients, contractors, consultants, stakeholders, shareholders and regulators. The performance of the construction industry is affected by national economies (Navon, 2005). In Nigeria, efficient construction projects can provide a solid platform for reviving the Nigerian economy and for building a more balance and independent economy during stable political conditions. In 1993, neglect of such systems, services, and institutions, however, has harmed the quality of life of Nigerians and their health and environment. However, project performance in Nigeria has suffered since conflict erupted in September 2000 after the breakdown in Israel-Palestinian negotiation on permanent-status issues.&nbsp;&nbsp;So, they have had to work in every difficult physical, social, political, economic and institutional circumstance. For a number of reasons, the performance of construction projects has not been as impressive, fundamentally because of the PA's failure to establish a coherent institutional and policy framework. (World Bank, 2004).&nbsp;</p><p> Performance is related to many topics and factors such as time, cost, quality, client satisfaction; productivity and safety. Construction industry in the PORTHARCOURT, RIVERS STATE, NIGERIA suffers from many problems and complex issues in performance. For example, construction of&nbsp; dwelling units at flauks Area suffered from poor performance because of delay for about 110 days. There are many realistic reasons such as closures, amendment of drawings and amendment of the design. In addition, there are other different reasons affecting construction projects performance in Portharcourt such as poor management and leadership; inappropriate participants; poor relations and coordination; absence of motivation, control, monitor or decision making systems; inadequate infrastructure, political problems; cultural problems and economic conditions (UNRWA, 2000). While individual organizations have been measuring their performance for many years, there has been little consistency in the data, and the way it has been published. The performance can be measured by key indicators for evaluation. The purpose of Key performance indicators (KPIs) is that clients want their projects delivered: on time, on budget, free from defects, efficiently, right first time, safely, by profitable companies. So, Regular clients expect continuous improvement from their construction team to achieve year-on-year: reductions in project costs and time. In addition, the Key Performance Indicators (KPIs) can be used for bench marking purposes, and will be a key component of any organization move towards achieving best practice. Clients, for instance, assess the suitability of potential suppliers or contractors for a project, by asking them to provide information about how they response to a range of indicators. Some information will also be available through the industry's bench-marking initiatives, so clients observe how potential suppliers compare with the rest of industry in a number of different areas. Construction supply chain companies will be able to benchmark their performance to enable them to identify strengths and weaknesses, and assess their ability to improve over time. The KPIs framework consists of seven main groups: time, cost, quality, client satisfaction, client changes, business Performance, health and safety (DETR, 2000) In Monier, there are many construction projects fail in performance. In addition, performance measurement systems are not effective or efficient to overcome this  problem. Construction projects performance problem appears in many aspects in the Monier. There are many constructed projects fail in time performance, others fail in cost performance and others fail in other performance indicators. In 2006 there were many projects which finished with poor performance because of many evidential reasons such as: obstacles by client, non-availability of materials, road closure, amendment of the design and drawing, additional works, waiting the decision, handing over, variation order, amendments in Bill of Quantity (B.O.Q) and delay of receiving drawings (UNRWA, 2006). There are other indicators for problems of performance in Monier such as project management, coordination between participants, monitoring, feedback and leadership skills. In addition, political, economic and cultural issues are three important indicators related to failures of projects' performance in the Portharcourt. (UNRWA, 2006&amp;2007). In this study, factors affecting the performance of construction projects in Portharcourt&nbsp; will be analyzed. Performance indicators are used to measure performance in construction projects. These indicators can then be used for benchmarking purposes, and will be a key component of any organization's move towards achieving best practice in order to overcome performance problem. However, this study aims at identify the factors and attributes affecting the performance of construction projects in the Portharcourt and to obtain main criteria and indicators to measure performance.&nbsp;</p><p><b>1.2</b>&nbsp;<b>RESEARCH OBJECTIVES&nbsp;</b></p><p>The aim of this research is to analyze the local factors affecting the performance of construction projects in portharcourt. The aim of this research can be broken down into the following objectives:&nbsp;</p><p>1. To identify the factors affecting the performance of construction projects (Key performance indicators)&nbsp;</p><p>2. To determine owners, consultants and contractors perceptions towards the relative importance of the key performance indicators in Portharcourt, Rivers state construction projects in order to evaluate performance of construction projects in the Portharcourt.</p><p>3. To identify the most significant key performance indicators of construction projects in Portharcourt.</p><p>4. To evaluate the degree of agreement/disagreement between owners, contractors and consultants regarding the ranking of key performance indicators&nbsp;</p><p>5. To test the hypothesis to verify the association between the ranking of owners, contractors and consultants parties regarding key performance indicators&nbsp;</p><p>6. To formulate recommendations to improve performance of construction projects in Portharcourt&nbsp;</p><p>1.3&nbsp;<b>STATEMENT OF THE PROBLEM</b></p><p>&nbsp;It is shown from previous studies (Karim and Marosszeky, 1999; DETR (KPI Report), 2000; Lehtonen, 2001; Samson and Lema, 2002; Kuprenas, 2003; Cheung, 2004; Iyer and Jha, 2005; Navon, 2005; Ugwa and Haupt, 2007) that the failure of any project is mainly related to the problems and failure in performance. Moreover, there are many reasons and factors which attribute to such this problem. In Portharcourt, there are many construction projects fail in performance. In addition, performance measurement systems are not effective or efficient to overcome such this problem. In Portharcourt, construction projects performance problem appears through different directions. There are many constructed projects fail in time performance, others fail in cost performance and others fail in other performance indicators. In 2006 there were many projects which finished with poor performance because of many evidential reasons such as: obstacles by client, non-availability of materials, roads closure, amendment of the design and drawing, additional works, waiting the decision, handing over, variation order, amendments in Bill of Quantity and delay of receiving drawings (UNRWA, 2006&amp;2007). For example, project of Repair of 58 Shelters at fluaks area finished with problems in both of time and cost performance (UNRWA, 2007).&nbsp;</p><p>In addition there are other indicators of performance in portharcourt such as project managers, coordination between participants, monitoring, feedback and leadership skills. However, there are three important issues related to failures and problems of performance in the Gaza strip which are political, economic and cultural issues.  Therefore, this research will evaluate the factors affecting the performance of construction projects in portharcourt in order to assist owners, consultants and contractors to overcome performance problem and to improve performance of their construction projects. Hence, performance of any construction projects can be evaluated according to key performance indicators.&nbsp;</p><p><b>1.4 JUSTIFICATION&nbsp;</b></p><p>Construction industry has complexity in its nature because it contains large number of parties as clients, contractors, consultants, stakeholders, shareholders, regulators and others. Construction projects in Portharcourt suffer from many problems and complex issues in performance because of many reasons and factors. This thesis is very important to identify and to evaluate the main factors affecting the performance of construction projects in Portharcourt. The practices concerning with the KPIs such as time, cost, project owner satisfaction and safety checklists will be analyzed in order to know the main practical problems of projects performance in portharcourt and then to formulate recommendations to improve performance of construction projects in portharcourt. Because of performance problem in porthacourt as shown previously and because previous studies in portharcourt about this topic do not deal wish all aspects of construction project performance; this study is required and very important to be considered. In this study, it will be studied the factors affecting the performance of construction projects in portharcourt. These factors can be said as key performance indicators (KPIs). These KPIs can be used to measure performance in construction projects and can then be used for benchmarking purposes. This will be a key component of any organization move towards achieving best practice in order to overcome performance problem in portharcour.</p><p><b>1.5 THESIS STRUCTURE</b></p><p>This research consists of five main chapters as followings:&nbsp;</p><p>ï‚· Chapter one: Introduction: this chapter shows the main objectives of research, statement of the problem and justification of research&nbsp;</p><p>ï‚· Chapter two: Literature review: this chapter shows a historical review from previous studied to identify the main factors affecting the performance of construction projects&nbsp;</p><p>ï‚· Chapter three: Methodology: this chapter shows the main methodologies used in previous studies and the methodology used in this research in order to achieve the required objectives&nbsp;</p><p>ï‚· Chapter four: Results analysis: this chapter shows analysis, description and discussion of research results&nbsp;</p><p>ï‚· Chapter five: Conclusions and recommendations&nbsp;</p><p>ï‚· Appendix <br></p>