ASSESSMENT OF FACTORS AFFECTING COST PERFORMANCE OF CONSTRUCTION PROJECT IN NIGERIA
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ASSESSMENT OF FACTORS AFFECTING COST PERFORMANCE OF CONSTRUCTION PROJECT IN NIGERIA
Chapter one
Introduction
1.1. Background of the Study
Construction sector has complexity in its nature because it comprises a significant number of parties such as clients, contractors, consultants, stakeholders, stockholders, regulators and others. Construction projects in the Gaza Strip suffer from several obstacles and significant issues in performance, such as cost, schedule and safety (Shaban, 2008).
Client satisfaction is consequently a significant concern for construction players who must continually aim to enhance their performance if they are to compete in the global marketplace. However, client satisfaction has remained an elusive issue for a majority of construction professionals (Cheng, Fleming, Proverbs&Oduoza, 2005).
Due to the demand for built products from international investors and the developing economy, Vietnam’s construction industry, experiencing strong growth. While some of the construction projects are effectively performed,
others had challenges (Bui &Ling, 2010). Despite the availability of numerous control methodologies and project control software many construction projects still do not reach their cost and time objectives (Oluwale& Sun, 2010).
Most third world countries experience acute chronic housing problem that over the years has attracted both national and international concerns. Habitat and World Bank, for example, sponsor various housing initiatives globally in tackling the housing issue.
Likewise, official and non-governmental agencies nurture and orchestrateself-help activities geared at eliminating fundamental housing deficit in these poor nations.
However, a growing number of unfinished buildings in such countries seem to eclipse the efforts and so bring numerous issues as to what is behind the failure in providing such a critically required product.
One may wonder whether such a failure has anything to do with architecture, attitudes and practices of the people or is it merely a thing to be anchored on socio-economic platform of the society (Mirema & Mhando, 2005).
Construction cost is one of the most critical variables for project success throughout the project’s lifecycle and is of great significance to individuals in the construction business. Various procurement procedures have been established in order to properly manage building projects.
Despite this, projects are rarely finished within the estimated budget (Abdullah, Aftab,Azis&Rahman, 2010). Maintaining consistent cost projections on construction projects had previously been a major source of concern for both the customer and the project contractors. Cost departure from the initial cost plan was common on construction sites (Amusan,n.d.).
Every year, huge corporations spend significant sums on research and development to determine the best manufacturing combination or the best function and feature of their products and services. The impact of poor quality on product prices and organisational earnings, as well as the amount of cost that should be paid for high quality,
has raised a number of significant issues affecting cost accounting, quality control, repairs and maintenance, supply chain, production management, stores, safety and health, education and improvement, and so on (Amin, 2011).
Leadership is one of the most critical aspects of running a construction company. Although the topic of leadership has been extensively studied in management and business schools,
little emphasis has been paid to the research of managerial behaviour or style of construction project leaders (Bresnen et al., 1986). It is critical for construction improvement to learn from high-performing projects. As a result, we must identify remarkable projects or role models.
The ability to measure performance is a minimum requirement for recognising such programmes. Unfortunately, two difficulties make measuring more difficult: i) diseconomies or economies of scale, and ii) multidimensional inputs and outputs (Myrtveit&Stensrud, 2005).
In terms of key performance measures, the construction industry is widely regarded as having underperformed other industries. Furthermore, the UK construction industry has been chastised for failing to perform at the same level as that of other industrialised countries.
In response to Egan’s study, the UK working groups on Key Performance Indicators (KPIs) have proposed ten metrics for benchmarking projects in order to achieve good performance.
These include seven project performance indicators (Akintoye&Takim, 2002): construction cost, construction time, cost predictability, time predictability, defects, client satisfaction with the product, and client satisfaction with the service; and three company performance indicators (Akintoye&Takim, 2002).
Ankrah and Proverbs (2005) demonstrated that, despite the inherent benefits of performance measurement in assisting in the identification of unnecessary waste so that corrective actions can be taken, performance measurement is not widely implemented due to inadequacy of measures, complexity of measurement,
time consuming and costly nature of performance measurement, and the industry’s project-oriented nature. When performance measurement is used, many frameworks are available, with some focusing on project performance and others on overall business performance.
Construction, along with financial services, transportation, and communication, has emerged as one of the top performing sectors over the era. The sector contributed Sh12.6 billion to GDP during the time, aided by significant road development projects now underway throughout the country (Waithaka, 2011).
Physical assets in various forms, such as commercial structures, residential buildings, schools, hospitals, development infrastructure such as roads, water dams, telecommunications, and power, are constantly acquired by public agencies, private enterprises, and people.
These initiatives entail large capital investments that are motivated by market demand or perceived needs. To remain competitive in either for-profit or non-profit engagements, you must concentrate on methods that provide a competitive advantage and value. You must understand the needs of the customer and correctly deploy available resources to match the client’s expectations while preserving a competitive advantage over your competitors.
A Nigerian family will treasure the luxury of privacy and safety when purchasing a home. Overruns in time and expense on infrastructure development projects during implementation continue to be a major concern for developing countries (Kigari & Wainaina, n.d.).
Projects developed and managed by highly skilled construction experts and performed by competent contractors chosen for their capability should, ideally, satisfy project performance targets. These objectives include contract duration, budget, quality, environmental sustainability, and client satisfaction.
However, there is evidence that, despite the high level of consultant training in Nigeria’s building sector and industry regulation in large urban areas, construction projects do not always accomplish their objectives.
This is exemplified by a plethora of projects that have cost overruns, delayed completion dates, and poor quality, resulting in collapsed structures in various parts of the country, high maintenance expenses, unsatisfied clients, and even non-functional buildings (Kibuchi & Muchungu, 2012).
1.2. Statement of the Problem
Nigeria has seen a significant increase in the number of stalled projects as a result of inefficient project organisation structures and leadership. There is evidence that construction performance in Nigeria is poor,
as time and cost performance of projects are to the extent that over 70% of projects initiated are likely to escalate with time by more than 50% and over 50% of projects are likely to escalate in cost by more than 20% (Nyangilo, 2012).
Kibuchi and Muchungu (2012) discovered that, despite the high level of consultant training in Nigeria’s building sector and industry regulation in large urban areas, construction projects do not always accomplish their objectives.
This is expressed by a plethora of projects that have cost overruns, delayed completion periods, and poor quality, resulting in collapsed structures in various regions of the country, high maintenance expenses, dissatisfied clients, and even non-functional buildings.
Previous research: Nyangilo, 2012; Lepartobiko, 2012; Kibuchi&Muchungu, 2012; Takim&Akintoye, 2002; Mhando & Mrema, 2005, show that project failure is primarily due to issues and poor performance. In general, prior industry experiences demonstrate that medium to large-scale projects fail at a high rate.
The ramifications can be costly and time-consuming, with the worst-case scenario frequently resulting in unfavourable litigation engagements. Developing countries outperform developed countries in terms of project success (Lepartobiko, 2012).
As a result, the purpose of this research was to investigate the factors influencing the performance of construction projects in Nigeria in order to assist owners, consultants,
and contractors in overcoming performance issues and improving the performance of their construction projects. As a result, the performance of every construction project may be measured using key performance indicators.
The investigation’s goal
The goal of this study was to look into the elements influencing the success of construction projects in Nigeria through a survey of low-rise buildings in Nairobi’s Central Business District.
To ascertain the impact of material costs on the performance of Nigerian construction projects.
To determine the impact of quality management on the performance of Nigerian construction projects.
To investigate the impact of time management on the success of Nigerian building projects.
To determine the impact of leadership style on building project performance in Nigeria.
1.4. Research Questions
Is the cost of materials a factor in the performance of Nigerian construction projects?
To what extent does quality management influence building project performance in Nigeria?
How does time management affect the performance of Nigerian building projects?
What effect does leadership style have on the performance of Nigerian construction projects?
1.5. Significance of The Study
Clients, contractors, consultants, stakeholders, stockholders, regulators, and others are all involved in the construction sector. Many complications and complex issues in performance plague Nigerian construction projects for a variety of reasons and factors. This study was critical in determining the primary elements influencing the performance of construction projects.
The practises related with KPIs such as time, cost, quality, and leadership styles were analysed in order to identify the key practical challenges of project performance in Nigeria, and then recommendations were developed to improve the performance of construction projects in Nigeria.
Because of the previously demonstrated performance problem in Nigeria, and because prior studies on this topic in Nairobi CBD did not address all aspects of building project performance, this study was required and must be examined. The factors influencing the performance of construction projects in Nigeria were investigated in this study.
These elements are known as key performance indicators (KPIs). These KPIs can be used to measure construction project performance and then utilised for benchmarking. This will be a critical component of any organization’s efforts to achieve best practises in order to address performance issues in Nairobi CBD.
1.6. Scope of The study
The study concentrated on a few low-rise building construction projects in Uyo local government. Other structures were omitted since it would have been impractical to investigate every structure in Uyo. Uyo was chosen because he was close to the researcher.
The study looked at the cost of materials, quality management, time management, and leadership style as independent variables, and construction project success as the dependent variable.
1.7. Limitations Of the Research
Inadequate preceding knowledge on the elements influencing construction project performance for comparison purposes, as well as the twenty-two building sample size, may not be a good basis for extrapolation or generalisation of a study finding.
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