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CHAPTER 5
TIME DELAY AND DELAY ANALYSIS
5.1 INTRODUCTION
Globally various types of public-private partnerships (PPPs) have been practiced in
infrastructure development in order to achieve the best results. The private funding in the
BOT arrangement not only reduces the strain on the government/public pocket but also
facilitates more innovations by harnessing the skills, technologies, and operational
efficiency of the private sector. This arrangement also reduces the risks and
responsibilities of the public sector as most of these are transferred to the private sector.
Many projects in a broad range of sectors have been successfully developed through BOT
with significantly increased value to the outputs. These include roads, bridges, ports,
airports, and railways; power, water supply, and waste disposal systems;
telecommunication networks and other services of information technology; schools,
hotels, hospitals, prisons, and even military facilities.
Though the BOT model for financing of the infrastructure has been a boom for the
construction industry and the developing countries lacking funds, various problems have
been encountered in worldwide infrastructure development through BOT. One major
problem that has been encountered is the slow progress in the execution of BOT. There
are other serious problems like legal, political, environmental, etc. that have even led to
failures of BOT projects worldwide.
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It is generally accepted that the major objectives of any infrastructure project are budget,
schedule and quality, although there are other more specific objectives, such as safety
consideration and market entry, depending on the nature of the project and company. The
problem of delays in the construction industry for infrastructure projects is a global
phenomenon. Research done by Faridi and El-Sayegh revealed that 50% of the
construction projects in UAE encounter delays and are not completed on time. In Saudi
Arabia only 30% of construction projects were completed within the scheduled
completion dates and that the average time overrun was between 10% and 30% [7].
Seventy percent projects in Nigeria suffered delays in their execution [117]. In India, a
study conducted by Infrastructure & Project Monitoring Division of Ministry of Statistics
and Program Implementation [118] reports that out of 646 central sector projects about
40% are behind schedule and the delay ranges from 1 to 252 months. The projects are of
a magnanimous magnitude costing around $50 trillion and having average project
duration of 6 to 7 years.
In this chapter, the factors causing time overruns in construction for both traditional and
BOT projects in India are identified and their relative importance and significance is
established. The results obtained are then compared with other researchers’ results.
5.2 IDENTIFICATION OF FACTOR CAUSING TIME OVERRUNS.
5.2.1 Methodology
Postal surveys were conducted to find the extent and the factors causing time over runs in
construction projects including BOT projects. The analysis of survey is done by Relative
Importance Index (RII) method.
For the survey a questionnaire was prepared in three parts. The first part contains six
important questions that are relevant in forming the opinion on the degree of time
overruns in various organizations. The second part of the questionnaire is based on the
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possible factors causing time-overruns for traditional projects where as the third part
contains the questionnaire based on possible factors causing time overruns for BOT
projects. Both second and third part to the questionnaire consists of 47 factors each which
were identified from the literature survey. These factors are grouped into five different
categories: i) project related; ii) owner related; iii) contractor related; iv) consultant
related; and v) external factors.
The questionnaire was sent to the owners, contractors and consultants who are actively
associated with the construction activities and possessing sufficient experience in the
field of construction.
In the first questionnaire the respondents were asked to give their opinion regarding the
extent of time-overrun in traditional and BOT projects. In part two the respondents were
asked to assess the effect of each factor on the time-overrun of traditional construction
project, on a scale of 1 to 5 depending upon its effect. If the factor is causing ‘lowest’
level of effect, a value of ‘1’ was to be assigned and if it has ‘highest’ level of effect in
causing the time overrun of the project, a value of ‘5’ was to be assigned. Values of 2 to 4
were to be assigned for factors causing intermediate effect. Similarly, in the third part of
the questionnaire, the effect of each factor on time overrun of BOT projects was assessed
on a scale of 1 to 5.
Two hundred and twenty organizations were contacted out of which ninety responded.
Many of the respondents are leading construction, consultancy and government
organizations. Only experts holding senior positions in the organizations were
approached for answering the questionnaire. This was done to preserve the quality of the
opinions gathered in the survey. The experts were made to understand that their responses
should not be biased towards any particular project whether it was highly successful or
highly disastrous. The number and percentage of respondents belonging to each category
of the participants is shown in Table 5.1.
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The questionnaire and the list of respondents are given in Appendix 1 and Appendix 2
respectively.
5.2.2 Analysis of Data
The number of respondents in each category is given in table 5.1.
Table 5.1 : Number of Respondents in Each Category
Analysis of the Survey
Analysis of the first part of the Survey
The survey shows (as shown in figure 5.1 & 5.2) that time overruns occur more than
(74%) and the relative contributions of the owner/client, contractor, and consultant to
overruns are 60, 35, and 5%, respectively in traditional construction projects. This shows
that the owner which is mostly the government organizations/bodies takes 60% of the
blame and this arises from (1) refusal to pay for material cost fluctuations; (2) wrongful
and abrupt termination of the contract because of selfishness/greed; (3) government
policies and instability in the system; and (4) not honoring payment certificates for
completed works as and when due. The contractor takes 35% of the blame arising from
incompetence, delays in carrying out instructions on sites, non-performance because of
lack of required skill, poor project supervision, and strikes by workers for improved
conditions of service
S.No. Category No. of
Respondents
Percentage of
Respondents
1.
2.
3.
Contractor
Consultant
Owner / Govt./ Client
44
17
29
49
19
32
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Figure 5.1: Degree of Occurrence of Time Overrun in Traditional Projects
Figure 5.2: Relative contributions in Traditional Projects
It is important to note that time overruns are independent of project size (55%) as shown
in Figure 5.3. The greatest customers of the construction industry are the various
government organizations. Strangely enough, they are also the worst offender as a result
of instability in the government/economy and to some extent because of greed,
27%
43%
4%
12%
7%7%
Always Very often Often Rarely Not at all Undecided
35%
5%
60%
Client/ owner Contractor Consultant
88
5
35
55
5
0102030405060
Large Projects SmallerProjects
Irrespective ofsize
Others
Large Projects Smaller Projects
Irrespective of size Others
insincerity in formulating policies that affect the country, and incompetence. Contractors
on the other hand, do not honor contract deadlines and use shortages of materials as the
excuse.
Figure 5.3 : Relationship Between Project Size and Time Overrun
The respondents were of the opinion that these problems can be averted if professionals
are more prudent in their design and more knowledgeable about the availability and
usage of materials. These types of delays are mostly not encountered in BOT projects
during construction. However, in BOT projects, the delay is mostly because of
inadequate legal, and regulatory framework which does not allow the BOT developers to
structure a contractual vehicle that will be compatible with the country’s law. Delay in
BOT projects is mainly during stage of prequalification/ short listing and signing of the
concession agreement. . Table 5.2 shows the ranking of the type of risk that can be
responsible for project failure.
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47%
31%
22%
Cost Quality Time
Table 5.2 Ranking of type of Risk in BOT projects responsible for project failure.
Over-regulation should be avoided as it can burden and frustrate the BOT developer and
can cause time overrun.
Figure 5.4 shows that out of the three objectives i.e. cost, time and quality, deemed as
important for any BOT or infrastructure project, time of construction is most important
followed by quality of construction and cost of course the third priority. The reasons for
the same can be attributed from the fact that the revenue inflow in BOT projects occur
only after the facility is constructed and is made available for use to the public. And as
the concession period is fixed, the earlier the facility is made available, the sooner the
revenues will start flowing in the system and thus increasing the financial viability of the
project.
Figure 5.4: Relative Importance of the Objectives for the BOT Project
Type of Risk Rank Construction Risk 5 Operation and Maintenance Risk 6 Market Risk 1 Political 2 Financial 3 Environmental 4
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The project quality is defined as “meeting the requirements are translated by the
consultant by providing relevant contract specifications. Quality can be enhanced by
providing tighter tolerance on materials and end products. For the contractor quality
stipulates only meeting minimum quality requirements as per the contract specifications.
Quality has been recognized as the second most important objective for reasons
attributing to the degree of maintenance that is required on the facility during the
operational period. The facility should involve minimum maintenance as during the
maintenance period the concessionaire will loose on account of the revenue loss due to
the unavailability of the facility for use. The cost, however, should be justified but is not
that critical as time and quality in BOT projects. Further, the activities on the critical path
can be crashed to reduce the total duration time in BOT projects.
Analysis of second and third part of the questionnaire
In these parts of questionnaire the expert opinions on the relative significance of various
factors causing time delays were solicited on a scale of 1 to 5. The part 2 of the
questionnaire contains the factors related to traditional project where as part 3 contain the
factor related to the BOT project. The 47 factors were identified from the literature
survey and personal interviews and were arranged in 5 groups – 1. Project related factor;
2. Contractor related; 3. Owner related; 4. Consultant related; 5. External related. Each
group had a few sub factors for which its significance was obtained on a scale of 1 to 5.
Calculation of Relative Importance Indexes
The data was analyzed by Relative Important Index (RII) method to determine the
relative effect of each factor in causing the time-overrun of projects [119]. The five-point
scale mentioned earlier was transformed to relative importance indices for each factor, to
determine the ranks of the different factors. These rankings made it possible to cross-
compare the relative importance of the factors as perceived by the three groups of
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respondents, namely, contractor, consultant, and owner. The relative importance index
(RII) was evaluated using the following expression:
Relative importance index = ∑ W / (A x N)
Where, W = weights given to each factor by the respondents and will ranges from 1 to 5.
A = highest weight (i.e. 5 in this case), and N = total number of respondents. The value of
Relative Important Index will vary between 1/A (=0.20) and one.
The analysis was done independently for the three categories of respondents. To obtain
the final ranking of these factors, overall average of the three different categories was
taken. It is calculated using the following expression:
Overall Average = [N1 x RII of contractor + N2 x RII of consultant + N3 x RII of owner] /
Total number of respondents
Where, N1 = number of contractors responded
N2 = number of consultants respond
N3 = number of owners responded
Table 5.3 indicates the relative importance index and ranking of the factors causing time
overruns of the traditional projects whereas table 5.3 gives the relative importance index
and ranking of the factors causing time overruns of the BOT projects. The last column of
the table indicates the overall average of relative importance index and final ranking of
each factor.
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Table 5.3: Relative Important Indices (RII) and Ranking of Factors Causing Time-
Overruns in Traditional Projects
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Table 5.4: Relative Important Indices (RII) and Ranking of Factors Causing Time-
Overruns in BOT Projects
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The top ten factors affecting the time overrun of the traditional projects are mentioned in
Table 5.5. The corresponding ranking obtained according to the opinions of the
contractors, consultants and the owners are also given along with overall ranking.
Table 5.5: Top Ten Factors Affecting the Time Overrun of the Traditional Projects
Factor Overall Contractor Consultant Owner Contractor experience in planning and controlling (contractor related)
1 4 1 1
Delay in approval of design documents (consultant related)
2 1 6 9
Delay in payments by owner (owner related) 3 6 2 2 Speed of decision making involving all project teams (project related)
4 10 3 2
Unforeseen ground conditions (external related) 5 2 4 10 Site management and supervision (contractor related)
6 3 7 4
Variations during construction (owner related) 7 7 9 7 Difficulties in financing project (contractor related) 8 14 11 4 Unrealistic contract duration (owner related) 9 10 12 7 Type of project bidding and award (project related) 10 21 4 4
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Comparision of top ten factors causing time overruns of projects with previous studies as
per the opinions of the contractors, consultants and owners are presented in table 5.6; 5.7;
5.8 respectively.
Table 5.6 : Comparison of top ten factors with previous studies (As per contractor)
Factor Chan & Kumarswamy
[45]
Assaf & Al-Hejji
[7] Delay in payments by owner √ Variations during construction √ √ Delay in approval of design documents √ √ Inflexibility of consultant √ Delay in producing design documents √ √ Difficulties in financing project √ Speed of decision making involving all project teams √ √ Mistakes/discrepancies in design documents √ √ Unforeseen ground conditions √ Design team experience √
Table 5.7: Comparison of top ten factors with previous studies (As per consultant)
Factor Chan & Kumarswamy [45]
Assaf & Al-Hejji [7]
Contractor experience in planning & controlling √ √ Site management and supervision √ √ Unforeseen ground conditions √ Type of project bidding and award √ Variations during construction √ √ Delay in payments by owner √ Difficulties in financing project √ Low skill levels √ Speed of decision making involving all project teams √ Shortage of labour √ √
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Table 5.8: Comparison of top ten factors with previous studies (As per owner)
The above tables indicates that out of the top ten factors identified in the present study
causing time overruns of the traditional projects in India seven factors were also
identified in the previous studies made for the traditional projects in other countries. This
indicates that the factors identified are consistent with previous studies
Table 5.9 presents the top ten factors affecting the time overruns of the BOT projects in
India. Such type of study for time overruns in BOT projects are not reported in the
literature directly this is because of the facts that in the BOT projects the time of
construction is also included in the concession period and therefore the promoter would
like to complete the construction at the earliest to enhance the viability of the project. Jyh
[54] identified delay causes during various stages of BOT projects as per the opinions of
BOT participants using two questionnaire surveys. Their study results revealed that the
stage of negotiations and signing of concession agreements that is the award of the
contract to the contractor, uncertainty of political issues, debt problems and government
finished items are the most significant delay causes. These factors also figure in the top
ten list of the present study for BOT projects as shown in table 5.9
Factor Chan & Kumarswamy
[45]
Assaf & Al-Hejji
[7] Contractor experience in planning & controlling √ √ Site management and supervision √ √ unforeseen ground conditions √ √ Speed of decision making involving all project teams √ Difficulties in financing project Variations during construction √ √ Low skill levels √ Qualification of technical staff √ Shortage of labour √ √ Project construction complexity √
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Schaufalberger [103], based on the analysis of several case studies of BOT projects in
North America and Asia concluded that the management of the political, financial and
market risk is vital to the success of a project.
Table 5.9: Top Ten Factors Affecting the Time Overrun of the BOT Projects
Factor Overall Contractor Consultant Owner
Market risk 1 4 1 1
Political risk 2 1 6 9
Environmental concerns and restrictions 3 9 2 2
Delay in obtaining permissions 4 10 3 2
Financial risk 5 2 4 10
Changes in rules & regulations 6 3 7 4
Severe weather conditions 7 7 9 7
Accident during construction 8 14 11 4
Non-availability of utilities on site 9 10 12 7
Delay in award of contract 10 21 4 4
5.2.3 Significance of Factor Categories Causing Time-Overruns
The factors considered have been grouped in to the following five categories – Project
related; Owner related; consultant related; and External related. This classification will
help in identifying the nature of the problem and can fix the responsibility and remedial
measures which could be taken to avoid the time delay. For example the factors
concerning the owner, contractor and consultant are attributed to the respective persons
directly; the project manager can focus on the problems of project related and external
related factors as per the prevalent conditions.
Therefore there is a need to compare the relative importance of the factors causing time
overruns in different categories. The relative importance indices and the ranks for the five
different factor categories as perceived by each of the three groups of respondents are
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RII RANK RII RANK RII RANK RII RANK
project related 0.49 5 0.52 3 0.50 4 0.50 4
owner related 0.72 1 0.65 1 0.62 2 0.67 1
contractor related 0.55 3 0.63 2 0.65 1 0.61 2
consultant related 0.68 2 0.49 5 0.55 3 0.59 3
external related 0.51 4 0.50 4 0.45 5 0.48 5
Factor Categoryowner overallcontractor consultant
summarized in table 5.10 and 5.11 for traditional and BOT projects respectively. The
relative importance index of each of the factor categories was obtained from the ‘mean’
of the individual time-overrun factors under the same category. The same approach as for
the individual time-overrun factors was used to calculate the ‘overall average’ of
relative importance indices for each factor category.
Table 5.10: Relative Important Indices (RII) and Ranking of Factor Categories Causing
Time-Overruns for Traditional Projects.
Figure 5.5 indicates the profiles of different factor categories for time overruns of the
traditional projects
Figure 5.5 : Profiles of Different Factor Categories for Time Overruns of Traditional
Projects
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RII RNK RII RNK RII RNK RII RNK
project related 0.53 4 0.60 2 0.60 2 0.572 2
owner related 0.48 5 0.49 5 0.44 5 0.471 5
contractor related 0.48 3 0.48 3 0.46 3 0.469 4
consultant related 0.65 2 0.48 4 0.51 4 0.560 3
external related 0.79 1 0.77 1 0.79 1 0.783 1
contractor consultant owner overallFactor Category
The table 5.10 indicates that both contractors and consultants agreed that owner related
factors category is most significant for causing time overruns of the projects, while
owners considered contractor related factors category is more significant because they
thought that a lack of contractor experience in planning and control on-site would
contribute to most of the time overruns. These results suggest a possible bias by
individuals, depending on their role in the construction industry and evading their
responsibilities for project delays.
Table 5.11: Relative Important Indices (RII) and Ranking of Factor Categories Causing
Time-Overruns for BOT Projects.
Figure 5.6 : Profiles of Different Factor Categories for Time Overruns of BOT Projects
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Comparison of various factor categories with previous studies is presented in Table 5.12.
Table 5.12: Comparison of Ranking of Factor Categories with Previous Studies for
Traditional Projects and BOT projects.
5.2.4 Validity and Reliability of the Questionnaire survey
The quality of the questionnaire is examined by conducting a validity and reliability
analysis. The validity analysis examines whether what is expected to be measured is
measured. The ranks of the delay factors have been derived according to overall
responses, and responses of various participants. It is useful to examine the agreement in
the ranking of these factors across various participants.
Okpala and Aniekwu [120] provides a quantitative method for rank agreement analysis.
In this method, the “rank agreement factor” (RAF) is used. The RAF shows the average
absolute difference in the ranking of the factors between two groups.
For any two groups, let the rank of the ith item in group 1 be Ri1 and in group 2 be Ri2 , N
be the number of items, and j=N−i+1.
Factors Categories Present Study
Traditional
Chan &
Kumarswamy [45]
Assaf &
Al-Hejji [7]
Present Study
BOT Projects
Project Related 4 3 5 2
Owner Related 1 4 1 5
Contractor Related 2 1 2 4
Consultant Related 3 5 3 3
External Related 5 2 4 1
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The RAF is defined as, N
RRN
iii∑
=
−
= 121 ||
RAF
The maximum rank agreement factor (RAFmax) is defined as
N
|RR|N
iji
max
∑=
−
= 121
RAF
The percentage disagreement (PD) is defined as
100||
|| PD
121
121
×
−
−
=
∑
∑
=
=
N
iji
N
iii
RR
RR
The percentage agreement (PA) is defined as PA = 100 – PD
The higher the value of RAF is lower the agreement between the two groups. A RAF of
zero will mean perfect agreement. The calculation details of these delay parameters are
given is table 5.13.
It is seen from table 5.13 that there is a big agreement in the ranking of delay parameters
between all the three groups of respondents that is contractor-consultant, consultant-
owner, and contractor-owner indicating that the study done is valid and reliable.
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Table 5.13 Agreement Analysis between all the three groups of respondents.
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5.2.5 Discussion of Result
Delay in construction contract is one of the most common problems in the construction of
traditional projects. In the BOT projects delay is mostly during the negotiation and
signing of concession agreement rather than the actual construction phase. The results
also show near agreement between the project participants- contractor, consultant and
owner. An analysis of the responsibilities of delay causes suggests that all the participants
should jointly make efforts to mitigate delays. A comparison between previous
international literature shows that in traditional projects the causes of delay are mostly the
same and there is no significant difference in causes based on geographic, cultural and
socio economic factors. Contractor experience in planning and controlling is the most
important factor which affects the time overrun of the projects. In fact completing a
project on schedule realistically depends on the contractor’s experience and ability to
control the site operations and to optimally allocate resources. The effective site
management depends solely depends on the contractor’s experience.
Delay in payments by owner hampers the progress of projects especially delays in
running payments. Unforeseen ground conditions also affect the schedule of the project,
after the work commences on the site. These may be on account of poor sub-soil
conditions or obstructions, etc. Variations are a source of increase in time and cost.
Project delivery method of Built-Operate-Transfer (BOT) can increase the speed of
construction. Although many BOT projects have been implemented worldwide, some
projects have encountered major obstacles. Study results reveal that the political and the
government issues are the most significant delay causes.