Delay in Government Project Delivery in Kedah, Malaysia

Transcription

1 Delay in Government Project Delivery in Kedah, Malaysia AZLAN OTHMAN a AND SYUHAIDA ISMAIL b a Faculty of Civil Engineering Universiti Teknologi Malaysia Johor Bahru Johor MALAYSIA irazlan@gmail.com b Razak School of Engineering and Advanced Technology Universiti Teknologi Malaysia Kuala Lumpur Kuala Lumpur MALAYSIA syuhaida_ismail@yahoo.com Abstract: In construction industry, delays have become a norm and global phenomenon which led to many negative effects of lawsuits, claims, loss of productivity and revenue and also contract termination between all parties involved, and Malaysia is of no exception. All of these factors retard the development of construction industry, where in Malaysia, only 46.8 percent of the public sector projects completed within the budget whilst 70.3 percent of government s contract were delayed or abandoned for more than three months. Hence, this paper aims at appraising the delay factor of Government project delivery in Kedah, Malaysia through its objectives of identifying of the main causes of construction delay, determining the impact of delay factors in the construction project and ranking the delay factors in government project delivery. A structured questionnaire was distributed to various respondents from within the Kedah State, which include the contractors, clients and consultants. Findings from this study revealed that the most contributing factors and categories to delays were delays in sub contractor s works, ineffective planning and scheduling, delay in approval shop drawing and sample materials and difficulties in financing project. This serves as a guide to the relevant parties to mitigate and alleviate the delay in construction project particularly in government projects in the State of Kedah, Malaysia. KeyWords: Delay, government project, project delivery, Kedah, Malaysia 1 Introduction In today s world of globalization, the construction industry plays an important and integral role to enhance the nation s competitiveness. Malaysian Government has moved forward under the 10 th Malaysia Plan ( ), which has been formulated with various new approaches towards becoming a high income and high productivity economy, in line with the New Economic Model. 52 highimpact projects worth of RM63 billion has been identified for the implementation. To effectively deliver these projects, the government has recognized the need to improve their capacity and competency [1]. In a construction project, completion on time is extremely important because time is essential and time is money. Although timely completion is seen as one of the important criteria of the project success, late completion is a common problem in construction projects not only in Malaysia but worldwide as reported by [2], [3] and [4]. An example of project delayed in Malaysia as reported by [5] is the Bakun hydro project that experienced a huge delay in completing civil works, which in turn caused delays to the implementation of the electromechanical works. According to [6], an audit ISBN: reveals that the performance of activities undertaken in relation to the Bakun project were not satisfactory as there was delay in four major packages. The contractor concerned was allowed one to three extension of time ranging from 555 to 1403 days. Refinery and Petrochemical Integrated Development (RAPID) was also reported delay by [7], which is supposed to start operation in 2016 but can only operate in early 2017 and many more. Delay gives rise to disruption of work and loss of productivity, late completion of project, increased time related cost, third party claims and abandonment or termination of contract [8]. In many cases, construction projects suffer from delay will cause suspension, which means stoppage of works directed to the contractor by a formal form from the client. However, delay when slowing down of work does not mean entire stop to the project. There are many causes, which must be identified in order to control delay in the early stages of the project. Delay could be a result of low performance of contractor, inadequacies or defaults in early planning and design, poor owner administration and involvement in construction, problem in supervision, restriction in government laws and regulations or obstructions at the site [9].

2 Any of these factors could cause problems in the progress of the construction project leading to delay. As Malaysia moves from developing country status towards a developed and industrialized nation as envisaged in Vision 2020, her construction industry needs to respond to the changes in construction demand. This has resulted in rapid implementation of several largescale infrastructure and building projects. However, Malaysian construction industry also faced many problems which affect this industry in terms of manpower, quality of productivity, time and payment issues especially during the closing of final accounts in the construction projects [10]. Like other developing countries, such as Saudi Arabia [11], Libya [12] and Nigeria [13] construction industry has suffered many setback in terms of completion of the project at stipulated period within the predetermined sum. [14] find out that only 46.8 percent and 37.2 percent of public sector and private sector projects out of 259 projects in Malaysia were completed within the budget respectively with an average cost deviation of 2.08 percent. It is also revealed that 90 percent of MARA large construction project experienced delay since 1984 due to time and cost overrun [15]. [16] also report that in 2005, about 70.3 percent of 417 government s contract in Malaysia were delayed or abandoned for more than three months. Since majority of the construction projects in Malaysia experienced time and cost overrun, which in turn lead to the abandonment of project, the delay would definitely jeopardize the government s agenda or policies in setting up their vision to develop projects for the public interest and also retard the national progress with regards to investment. The state of Kedah is not exceptional from the construction delay. Based on SKALA JKR Kubang Pasu Kedah, the Proposed Technical Laboratory for Politeknik Sultan Abdul Halim Mua adzam Shah Jitra, has been delayed for four months. Its original completion was in July 2010, whereas the project only completed in November Another project, under Kementerian Kesihatan Malaysia (KK3) at Tunjang Kedah, was also delay by 9 months [17]. Several crucial questions that have been addressed to understand these phenomena are: what are the main causes of the delay and what are the impacts and consequences that affect the relevant parties especially the users? Hence, in this study, there is a need to identify the causes of actual delay, the frequency and extent of delay in the government project and also ranking the delay factors to mitigate the problems and delays from recurring in construction projects. This will eventually assist various parties involved in the construction industry to determine the severity of delay, improve their involvement in the construction phase while avoiding the cause of delay. It is also important to ISBN: identify the most crucial delay factors that need to be addressed especially in the government project delivery. These challenges are the motivating factor in this study because completion on time of construction projects is in the interest of all construction parties involved including the public. Hence, this paper aims to appraise the delay factor of Government construction project delivery in Kedah. To achieve the aim of this paper, the objectives identified are (1) To identify the main causes of construction delay in Kedah; (2) To determine the impact of delay factors in the construction project; (3) To rank the delay factors in government project delivery. 2 Causes of Delay in Construction Project According to [18], delay has been acknowledged as one of the most common, costly, complex and risky problems. Many studies have been conducted to identify and overcome the causes of delay in construction projects both locally and internationally. [11] identify 56 causes of scheduled delay that existed in Saudi Arabia construction projects, where the most important causes of delay were approval of shop drawings, delays in payment to contractors and the resulting cash problems, design changes, conflict in works schedules of subcontractors, slow decision making and executive bureaucracy in owner s organizations, design errors, labour shortage and inadequate skill. A decade later, the delay causes have increased to 73 [19]. The delay factors were grouped into nine major categories with different levels of importance to different parties. These groups comprise of owner/client related, consultant related, contractor related, project related, design team related, material related, labour related, external related and plant/equipment related delay factors. The results from the survey indicated 76 percent from the contractor and 56 percent from the consultant contributed between 10 percent and 30 percent from the original duration. The survey also found that 45 out of 76 projects are considered delay. The main causes of delays related by the owners are slowness in decisionmaking, delay in progress payments, late in reviewing and approving and change orders. Causes of delay related to consultants are mistakes and discrepancies in design, inflexibility (rigidity) of consultants and late reviewing and approving and delay in producing design, whereas delays contributed by contractor are late procurement of materials and difficulties in financing project. On the other hand, [10] identify and classify 60 causes of delay which occurred frequently in

3 medium and large projects and considered severe in small projects on public water and sewage projects. There are many important causes of delay related to owner involvement, contractor performance and the early planning and design of the project. The most important causes were financial problems, delay in making decision and approval by the owner, difficulties in obtaining permit of work, poor coordination and communication and changes in the design and scope. In Lebanon, [20] reveal that there are 60 causes of delay which has been grouped into 10 major groups and the cause of delay from the survey showed that project management issues, financial issues and contractual matters were the most important factors that contribute to the delay. In Jordan, a quantitative analysis on 130 public building projects has identified that the main causes of delay in construction projects were related to weather, site conditions, late deliveries, user changes, designers, economic conditions and increase in quantities [3]. Meanwhile, [21] who conduct a survey to identify the factors contributing to the delay and cost overrun in Ghana groundwater construction projects concluded 26 factors were responsible for project delays and cost overrun, which then been listed and ranked. The results of the study indicate that the main causes of delay and cost overrun includes poor contractor s management, poor technical performance, escalation of material prices, improper material procurement and difficulties in payment by the agencies. In Egypt, [22] conduct a survey to identify the causes of delay in the construction projects. The focus was from the point of view of the owners, consultants and contractors. The researchers identify 32 causes of delay, which were grouped into nine and contributed to the causes of delay in the construction industries in Egypt. These groups were financing, contractual relationships, scheduling and control, materials, equipment, manpower, changes, rules and regulations and environmental related causes. In the construction industry in Malaysia, [23] highlights the main factor for causing delay is financial followed by coordination problem. According to [16], 17.3 percent of Malaysian public sector projects in 2005 were considered sick projects with more than three months delay or been abandoned. [24] on the other hand claims that 80 percent of the government projects in Malaysia were delayed. [25] indicate that 90 percent of MARA (Malaysian Government Agency) projects exceeded scheduled of the completion dates. Table 1 shows theoretical framework on causes of delay in construction industry some of the countries in the world including Malaysia. Referring to the studies conducted by various researchers as highlighted in the problem ISBN: statements, delay is vital and problems arising from this delay should be mitigated. [26] summarize some of the survey conducted by various researchers to determine the causes of delay in construction industries, which is also regarded as a theoretical framework to be further used and improvised as a conceptual as a part of key findings of this study. However, the major causes or ranking of the delay may differ across the region. The ranking of the delay when identified will assist in alleviating or mitigating the delay factor throughout the construction process. 3 Research Methodology This paper is mainly focused on the government project delivery in Kedah. Kedah state is chosen for this paper because no study has been conducted previously and furthermore, the State Government also has the social responsibility towards the development of the nation for the interest of the public at large. This is also to accomplish the Malaysian Government s vision to achieve highincome nation in The cause of delay factors was conducted on both ongoing and completed projects because the data is easily accessible. Questionnaire surveys were designed based on the causes of construction delays, where the ranking of the delay factors are carried out based on various categories of key players in the construction industry. The categories involved in the distribution of the questionnaires are the clients, consultants (architects, quantity surveyors and engineers) and contractors because they are directly involved in the government project. This paper began with a comprehensive literature review on the construction delay phenomena. Questionnaires were designed based on the issues as highlighted in the problem statement to address the objectives of the paper. Initially, a pilot study was conducted on 15 respondents, which is 10 percent of the 150 respondents in this paper. The Cronbach Alpha results generated via pilot study to test the reliability of questionnaires were recorded between and which indicates that the questionnaire survey were appropriate and reliable for the actual survey. Subsequently, the data was analyzed via Statistical Package for Social Science (SPSS) Version 17 using Relative Importance Index (RII). A focus group with five experts in construction industry was selected to validate the data. All the experts agreed that the findings of this paper were acceptable as the delay factors of the government project delivery in Kedah. 4 Findings The findings, as illustrated in Table 1, show that the delay factors for the government project delivery in

4 Kedah are categorized into seven groups of causes, namely client/owner, consultant, contractor, manpower, material, equipment and external factors. Three important respondents, who are clients/owners, consultants and contractors, have evaluated causes of delay under those seven groups. The highest Relative Importance Index (RII) is the delay, which has been caused by sub contractor s work giving the value of This high percentage was due to the inexperienced and incompetent subcontractor to carry out the work. In addition, the top three ranking of delays was dominating by the contractor which is common in construction industry elsewhere that is due to ineffective planning and scheduling of project as well as difficulties in financing the project. Slowness in decisionmaking process and delay in progress payment caused by client/owner are also in the top list with the RII of Other causes contributing to the delay are shortage of, late procurement of material and late material delivery, escalation of material prices and delay in approving major changes in scope of work are in the top 10 list as illustrated in Table 1. Table 1. Ranking of delay factors for overall sample (n = 96) Category RII Delay in sub contractor s work Contractor Ineffective planning and scheduling of project Contractor Difficulties in financing project Contractor Shortage of Manpower Slowness in process of making decision Delay in progress payment Delay in material delivery Material Late procurement of materials Material Escalation material prices Material Delay in approving major changes in scope of work Consultant Change orders by owner Delay in site mobilization Contractor Shortage of construction materials in market Material Mistakes and discrepancies in design Consultant Changes in material types and specifications during construction Delay in manufacturing special building materials Delay in producing design Incompetent or unskilled Rework due to errors Material Material Consultant Manpower Contractor ISBN: Conflicts in subcontractors schedule in execution of project Poor coordination Delay in approving shop drawing and sample materials Effects of subsurface conditions (soil, high water table, etc) Frequent change of subcontractors Contractor External Contractor Poor coordination Contractor Shortage of equipment Equipment Poor communication and coordination Poor qualification of contractor s technical staff Contractor Low productivity level of Suspension of works Manpower Improper construction methods implementation Contractor Poor quality of construction materials Material Price fluctuation External Working permit of Manpower Delay to furnish and deliver the site Low productivity and efficiency of equipment Equipment Late in approving design Damage of sorted materials while they are needed urgently Material Equipment breakdown Equipment Unclear details in drawing Consultant Conflicts between contractors Delay in performing final inspection and certification by a third party Contractor External Inadequate details in drawing Consultant Poor communication Contractor Insufficient data collection and survey before design Consultant Inadequate contractor s work Lack of high technology mechanical equipment Low level of equipment operator skills Inadequate experience of consultant Late in revising design Slow mobilization of equipment Delay in obtaining permit of work from local council Conflicts between consultant and design Contractor Equipment Equipment Consultant Equipment External Consultant

5 engineer Conflict between consultant and owner Delay in performing Contractor Consultant inspection and testing Poor coordination Consultant Unreliable suppliers Material Poor communication Consultant Global financial crisis External Lack of experience of owner in construction projects Changes in government regulations and laws Delay in providing services from utilities (water, electricity, telecommunication) External External Delay in performing testing Consultant Accident during construction External Inadequate project management assistance Consultant Traffic control and restriction at job site External Conflicts between joint ownership Personal conflicts among Manpower Conflict, war and public enemy External Neighbours problem External Unused advanced engineering software Consultant Hot weather effect on construction activities External On the other hand, Table 2 shows the top 10 ranking causes of delay from the client s/owner, contractor and consultant s perspective. Ineffective planning and scheduling of projects are in the top list giving the RII value of followed by delay in sub contractor s work. Other factors contributing to the delay are traffic control and restriction of job site, difficulties in financing, escalation of material prices, shortage of, mistakes and discrepancies in design, poor qualification of technical staff, changes in material type and specifications and price fluctuation. The RII values are ranging from to The owners/clients dominated top three ranking from the contractor s view giving the RII of that contribute to the delay in the construction. They are delay in approving shop drawing and sample materials, change orders by owner during construction and slowness in process of making decision. The contractor also agreed that delay due sub contractor s work caused the delay to the project. Others are related to consultant, materials and which give the RII values ranging from 0.810to Survey also showed that difficulties in financing project by the contractor gave the highest value of RII that is 0.859, which records the top most rank from the consultant s view and dominates top ISBN: three from the lists causes of delay. Others contributing factors of delay are from owner/client manpower and material, giving the RII values from to Table 2. Ranking of delay factors from different categories Owner s / s perspective Category RII Ineffective planning and scheduling of project Contractor Delay in sub contractor s work Contractor Traffic control and restriction at job site External Difficulties in financing project Contractor Escalation material prices Material Shortage of Manpower Mistakes and discrepancies in design Consultant Poor qualification of contractor s technical staff Changes in material types and specifications Contractor Material Price fluctuation External Contractor s perspective Category RII Delay in approving shop drawing and sample materials Change orders by owner Slowness in process of making decision Delay in sub contractor s work Delay in producing design Mistakes and discrepancies in design Contractor Consultant Consultant Escalation material prices Material Shortage of Manpower Shortage of construction materials in market Material Delay in material delivery Material Consultant s perspective Category RII Difficulties in financing project Contractor Delay in sub contractor s work Contractor Ineffective planning and scheduling of project Contractor Shortage of Manpower Delay in progress

6 payment Slowness in process of making decision Rework due to errors Late procurement of materials Delay in site mobilization Frequent change of subcontractors Contractor Material Contractor Contractor Based on the survey results as shown in Table 1 and Table 2, there are two main common causes of delay, which has been agreed by the professional respondents, which are delay in sub contractor s work and shortage of. However, other causes of delay cannot be neglected since they are still in the top 10 causes of delay which also contribute to the delay in the construction industry. While in Table 3, the most frequent impact due to construction delay is time overrun, giving the frequency value of 32.3 percent, followed by cost overrun and dispute which occurred occasionally but still recorded a high frequency value of 31.3 percent and 32.3 percent. Arbitration, total abandonment and litigation rarely happened and gave a frequency value of 36.5 percent, 42.7 percent and 43.8 percent respectively. Table 3. Summary results of descriptive analysis on impact of construction delays Time overrun Cost overrun Dispute 9 (9.4) Arbitration Total abandonment Litigation Frequency (%) N R O S F Impact of Construction Delays (16.7) 13 (13.5) 20 (20.8) (15.6) 15 (15.6) 22 (22.9) 35 (36.5) 41 (42.7) 42 (43.8) (26.0) 30 (31.3) 31 (32.3) 29 (30.2) 23 (24.0) 20 (20.8) (32.3) 26 (27.1) 8 (8.3) 2 (2.1) 5 Conclusion This paper has successfully achieved its aim of appraising the delay factors in government project delivery in Kedah by identifying the main causes of construction delay consisting of 72 causes, determining the impact of delay factors which encompassed of six impacts and finally ranking the top 10 causes of delay factors in government project delivery. As a conclusion, the top 10 delay factors identified in Malaysian context of government project particularly with high rankings are contributed mainly from the contractor, manpower, owner/client and materials categories. With regards to the impact of delays in construction, the most frequent occurrence is due to time overrun with cost overrun and dispute (26.0) 25 (26.0) 26 (27.1) 14 (14.6) 19 (19.8) 14 (14.6) ISBN: occurring occasionally. Hence, these findings is which have been listed in the top 10 ranking is very useful and will enable relevant parties to focus and mitigate or alleviate the delay in construction project particularly in government projects in the State of Kedah, Malaysia. 6 Acknowledgement The authors would like to express their sincere gratitude to Ministry of Education Malaysia, Universiti Teknologi Malaysia (UTM) and the Research Management Centre (RMC) of UTM for providing the financial support for this paper to be published. This study is financed by the Grant for Research University (GUP) of UTM for research funding under Cost Centre No. Q.K H87. References: [1] The Star Online, (June2010) le%3d/2010/6/10/nation/ [2] Arditi, D. and Robinson, M.A. (1995) Concurrent Delays in Construction Litigation. Cost Engineering, Vol. 37(7), pp [3] Al Momani, H.A. (2000) Construction Delay: A Quantitative Analysis, International Journal of Project Management, Vol. 18, pp.519 [4] Chan, D.W., Kumaraswamy, M.M.(1996) An Evaluation of Construction Time Performance in the Building Industry in Hong Kong. Building and Environmental Journal, Vol.31, No. 6 pp [5] Shanmugam, N. (2013) agsreportrevealsstartlingclaimsfrombakuncontractors.html [6] Auditor General (2012). Definisi Projek Perumahan Terbengkalai, (n,d) Retrieved August 12,2011, from Portal Rasmi KementerianPerumahan&KerajaanTempatan:htt p:// [7] Zurairi, AR (2013), Petronas blames RAPID delay on Johor The Malaysian Insider. rticle/petronasblamerapiddelayonjohor [8] Tumi, S.A.H., H. Omran, and A.H.K. Pakir, Cause of Delay in Construction Industry in Libya, in The International Conference on Administration and Business, 2009: University of Bucharest, Romania. [9] AlGhafly, M.A. (1995) Delays in the Construction of Public Utility Projects in Saudi Arabia. Master Thesis, CEM Dept., KFUPM, Dhahran, Saudi Arabia. [10] Zarabizan Zakaria, Syuhaida Ismail and Aminah MdYusof (2012). Cause and Impact of Dispute

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