Analysis of Delay in Airport Construction Projects in Nepal
Analysis of Delay in Airport Construction Projects in Nepal
Analysis of Delay in Airport Construction Projects in Nepal
By Subodh Adhikari
(CM 16-1028)
January 2020
Contents
Chapter 1...................................................................................................................................3
1. Introduction...........................................................................................................................3
1.1 Background..................................................................................................................3
1.2 Statement of problem...................................................................................................4
1.3 Research Questions......................................................................................................5
1.4 Research Objectives.....................................................................................................5
1.5 Significance of study....................................................................................................5
1.6 Scope and limitation of study.......................................................................................6
Chapter 2...................................................................................................................................7
2. Literature Review.................................................................................................................7
2.1 Types of delay..............................................................................................................8
2.1.1 Critical Versus Non-Critical Delays......................................................................8
2.1.2 Excusable versus Non-Excusable Delays..............................................................8
2.1.3 Compensable Delays versus Non-Compensable Delays.......................................9
2.1.4 Concurrent Delays...............................................................................................10
2.2 Causes of Delay.........................................................................................................11
2.3 Effects of Delay.........................................................................................................16
2.4 Methods of Minimizing Construction Delays............................................................17
2.5 Extension of time (EOT)............................................................................................18
Chapter 3.0..............................................................................................................................20
3. Methodology........................................................................................................................20
3.1 Research Design.........................................................................................................20
3.2 Research Approach....................................................................................................21
3.3. Study Area................................................................................................................21
3.4 Sampling and Population...........................................................................................21
3.4.1 Research population.............................................................................................21
3.4.2 Sample size..........................................................................................................22
3.5. Data Collection.........................................................................................................22
3.5.1. Primary data........................................................................................................22
3.5.2 Secondary data collection....................................................................................22
3.6 Data analysis...........................................................................................................23
3. 6 Research Matrix........................................................................................................24
Chapter 1
1. Introduction
1.1 Background
In the study of (Assaf & AL-Heiji, 2006), delay could be defined as the time over run
either beyond completion date specified in a contract or beyond the date that the parties
agrees upon for delivery of a project. It is a project slipping over its planned schedule and
is considered as common problem in construction projects. (Bassioni & El-Razak, 2008)
identified that delay in construction project is considered one of the most common
problems causing a multitude a negative effect on the project and its participating parties.
Therefore, it is essential to identify the actual causes of delay in order to minimize and
avoid the delays and their corresponding expenses.
(Arditi & Pattanakitchamroon, 2006) stated that delays in construction can cause a
number of changes in a project such as late completion, lost productivity, acceleration,
increased costs, and contract termination for the party experiencing damages and the
parties responsible for them in order to recover time and cost. However, in general delay
situations are complex in nature. A delay in an activity may not result in the same amount
of project delay. A delay caused by a party may or may not affect the project completion
date and may or may not cause damage to another party. A delay may occur concurrently
with other delays and all of them may impact the project completion date.
Delays caused by the client such as late submission of drawings and specifications,
frequent change orders, and inadequate site information generates claims from both the
main contractors and subcontractors which many times entail lengthy court battles with
huge financial repercussions. Delays caused by contractors can generally be attributes to
poor managerial skills. Lack of planning and a poor understanding of accounting and
financial principles have led to many a contractor’s downfall.
1.2 Statement of problem
Many construction projects have faced various problems and delay of time is one of the
major problems. The delay in dispute settlement has manifold effects such as it will give
detrimental to the relationship between owner and contractor. Moreover, it will also
contribute to the cost and time overruns. The most serious problem is it sends bad signals
to investors thereby slowing down the national progress. It is generally said that the
contract language is considered difficult to comprehend and they are therefore a major
source of disputes.
The study of (sha et al.,2017) was carried out the cause and effects of delays in
construction projects in Nepal using questionnaire survey with FCAN members and
SCAEF members. The major findings of the survey were cost overrun and time overrun to
be the most important effects of construction delays and major causes include high level
performance of the project managers, standard management practices, wide adoption of
modern management tools, effective time and quality management, and techniques and
team involvement in the project. The survey only took into consideration of consultant and
contractors but did not include the opinion of the client.
Delays are one of the major problems in the construction industry across the globe, and
Nepal is no exception. The Melamchi Drinking Water Supply Project, for instance, was
started in December 2000 with the aim of completing it in 2007, but it is still incomplete.
The World Bank (WB) withdrew its investment from the project in 2005 due to delays.
Gautam Buddha International Airport was started in the year 2015 and was set to be
finished by the end of 2017, but it is also still incomplete. Airport expansion under ADB
of Tribhuvan International Airport had to be terminated in the middle due to delays and
the remaining work has still not been finished.
In the study of (Ahmed, 2000), delays of time in a project, which has divided the reason
of construction delays into 2 parts, i.e. lacking of material and other factors include labor,
material and equipment, and financial problem. Besides those factors, other additional
factors are weather, late of receiving order, change of structure, plan specification error,
force majeure, and workers’ strike. This research had been divided into 9 factors of the
reasons of construction delays.
1.3 Research Questions
This research intends to answers following questions:
a) What are the main reasons of construction delay in airport construction projects?
b) What are the main effects of construction delay?
c) What are the possible methods of minimizing construction delay?
The studyis influential in determining the major causes of delays in airport construction
projects in Nepal. The effects and their importance will also be determined. The study is
significant in reducing the significant delays in future projects.
In the study of (Alaghbari, 2007), delay is generally acknowledged as the most common,
costly, complex and risky problem encountered in construction projects. Because of the
overriding importance of time for both the Owner (in terms of performance) and the
Contractor (in terms of money), it is the source of frequent disputes and claims leading to
lawsuits.
Delays caused by the client such as late submission of drawings and specifications,
frequent change orders, and incorrect site information generates claims from both the main
contractors and sub-contractors which many times entail lengthy court battles with huge
financial repercussions. Delays caused by contractors can generally be attributed to poor
managerial skills. Lack of planning and a poor understanding of accounting and financial
principles have led to many a contractor’s downfall.
(Majid, 2006) stated that delays can be minimized when their causes are identified.
Identification of the factors that contributed to the causes of delays has been studied by
numerous researchers in several countries. Delay is a situation when the contractor,
consultant, and client jointly or severally contributed to the non-completion of the project
within the original or the stipulated or agreed contract period. Add Nepalese context
2.1 Types of delay
Theodore (2009) mentioned that there are four basic ways to categorize type of delays:
a) Critical or noncritical
b) Excusable or non-excusable
c) Compensable or non-compensable
d) Concurrent or non-concurrent
In the process of determining the effect of a delay on the project, the analyst must
determine whether the delay is critical or noncritical. The analyst must also assess if delay
are concurrent. All delays that are identified in the analysis will be either excusable or
non-excusable. Delay can be further categorized into compensable or non-compensable
delays.
Non-excusable delays are events that are within the contractor’s control or that are
foreseeable. These are some examples or non-excusable delays:
Whether or not a delay is compensable depends primarily on the terms of the contract. In
the most cases, a contract specifically notes the kinds of delays that are non-compensable,
for which the contractor does not receive any additional money but may be allowed a time
extension.
Figure 2. 1 Delay Categories (Theodore & Trauner Jr., 2009)
In analyzed concurrent delays, each delay is assessed separately and its impact on other
activities and the project duration is calculated. There are some guidelines for concurrent
delays classification. Firstly, if excusable and non-excusable delays occur concurrently,
only a time extension is granted to the contractor. Next, if excusable with compensation
and excusable without compensation delays occur concurrently, the contractor is entitled
to time extension, but not to damages. Lastly, if two excusable with compensation delays
occur concurrently, the contractor is entitled to both time extension and damages. In
addition, although the guidelines are useful for the purpose of carrying out the delay
analysis, it is in the best interest of all parties involved in a construction project to agree, at
the beginning, the definitions of such delays and accommodate them throughout the
contract language. There was no reliable method to differentiate the impact of contractor
caused delays from client caused delays until the development of CPM schedule analysis
is developed. By the available of sophisticated computerized techniques, the possibility to
segregate the impacts of apparently concurrent client and contractor delays would be
higher.
No Causes of delay
1 Lack of experience of consultants in construction projects
2 Conflicts between consultant and design engineer
3 Delay in approving major changes in scope of work by consultant
4 Delay in performing inspection and testing
5 Inaccurate site investigation
6 Inadequate project management assistance
7 Late in reviewing and approving design documents
8 Poor communication and coordination with other parties
No Causes of delay
1 Complexity of project design
2 Design changes by owner or his agent during construction
3 Design errors made by designers
4 Insufficient data collection and survey before design
5 Lack of experience of design team in construction projects
6 Mistakes and delays in producing design documents
7 Misunderstanding of owner’s requirements by design engineer
8 Poor use of advanced engineering design software
9 Unclear and inadequate details in drawings
No Causes of delay
1 Equipment allocation problem
2 Frequent equipment breakdowns
3 Improper equipment
4 Inadequate modern equipment
5 Low efficiency of equipment
6 Shortage of equipment
7 Slow mobilization of equipment
No Causes of delay
1 Absenteeism
2 Low worker motivation and morale
3 Low worker productivity
4 Personal conflict among workers
5 Labor shortage
6 Slow mobilization of labor
7 Strike
8 Unqualified/inexperienced workers
Causes of delay by material
No Causes of delay
1 Changes in material types and specifications during construction
2 Damage of sorted materials
3 Delay in manufacturing materials
4 Escalation of material prices
5 Late delivery of materials
6 Poor procurement of construction materials
7 Poor quality of construction materials
8 Shortage of construction materials
9 Unreliable suppliers
Causes of delay due to owner/client
No Causes of delay
1 Change orders
2 Conflict between joint owners
3 Delay in approving design documents
4 Delay in progress payments
5 Delay in site delivery
6 Improper project feasibility study
7 Lack of capable representative
8 Lack of experience of client in construction projects
9 Lack of incentives for contractor to finish ahead of schedule
10 Poor communication and coordination with other parties
11 Slowness in decision making
12 Suspension of work by owner
In the study of 20 highway projects in Nepal by (Manavazhia & Adhikari, 2002), delays in
the delivery of materials and equipment to construction sites are often a contributory cause
to cost overruns in construction projects in developing countries. The actual impact of
these delays on project costs was found to be on average, only about 0.5 per cent of the
total budgeted cost of the projects.
Effect of
construction
Delays
Total
Time Cost Abandonment
Dispute Arbitration Litigation
Overrun Overrun
No Methods
1 Frequent progress meeting (majid, 2006)
2 Use up-to-date technology utilization (Majid, 2006)
3 Use proper and modern construction equipment (Majid, 2006)
4 Use appropriate construction methods (Majid, 2006)
5 Effective strategic Planning (Majid, 2006)
6 Proper material procurement (Majid, 2006)
7 Accurate Initial cost estimates (Majid, 2006)
8 Clear information and communication channels (Majid, 2006)
9 Frequent coordination between the parties involved (Majid, 2006)
10 Proper emphasis on past experience (Majid, 2006)
11 Proper project planning and scheduling (Majid, 2006)
12 Complete and proper design at the right time (Assaf & AL-Heiji,
2006)
13 Site management and supervision (Long et.al, 2008)
14 Collaborative working in construction (kumaraswamy, 1997)
15 Compressing construction durations (Long et.al, 2008)
IN Public Procurement Regulations 2064: PPR rule 120 states the following:
Time of Procurement Contract may be extended:
(1) If the work under the procurement contract cannot be completed within the time of
such a contract due to the occurrence of conditions set out in Section 56 of the Act, the
concerned construction entrepreneur, supplier, service provider or consultant, as the case
may be, shall have to make an application, for extension of time, stating reasons thereof, to
the concerned Public Entity at least seven days before the time of such contract expires.
(2) Upon receipt of the application pursuant to Sub-rule (1), the concerned competent
authority may conduct or cause to be conducted necessary inquiry in respect thereof. In so
conducting or causing to be conducted inquiry he /she must take into account the
following matters:-
a. Whether the concerned construction entrepreneur, supplier, service
provider or consultant ,as the case may be, had made, to his/her best efforts,
to complete the work under the procurement contract on time or not,
b. Whether the concerned Public Entity had made available to the
construction entrepreneur, supplier, service provider or consultant, as the
case may be, the matters to be made available as per the contract or not,
c. Whether the work is delayed due to force majeure circumstances or not,
(3) If, upon an inquiry made pursuant to Sub-rule (2), the grounds referred to in the
application are found to be reasonable, the authority accepting the bid may extend a period
of up to six months and the chief of Department may extend a period above it.
Chapter 3.0
3. Methodology
Statement of Problem
Research Question
Data Collection
visor’
Super
Guid
ature
Liter
Revi
ance
ew
s
Data Analysis
In this study, the population means all the personnel of Client, Consultant and Contractor
staffs involved in the airport construction projects. There are 20 technical staffs of client,
20 staffs of consultant and 40 staffs of contractor currently working in various projects in
airport construction projects in Nepal under the study area. The research population is
selected so that they have a good knowledge of construction delays such as managers,
supervisors, engineers etc.
3.4.2 Sample size
Expert Interview
The data collected from the questionnaire survey will be analyzed using the Microsoft-
Excel software. Since the study is the descriptive type, simple frequency distribution table
will be used as analytical tool. Data will be analyzed, interpreted and presented using
simple descriptive statistics, tables, bar charts and pie charts.
Questions in the survey will be prepared in Likert scale. The Relative Importance Index
(RII) will be adopted for determination of significance of factors because, Adnan et al
(2007) asserted that to analyze data on ordinal scale (e.g. Likert scale 1-5), the application
of Relative Importance Index is suitable. Hence, RII will be used to rank the variables.
The Relative Importance Index is computed as in (Adnan et al., 2007):
= (5*𝑛5+4*𝑛4+3*𝑛3+2*𝑛2+1*𝑛1)/ 5(𝑛1+𝑛2+𝑛3+𝑛4+𝑛5)
It is worth to note that nearer the value of importance index to unity (1) or 100%, the more
significant it is and hence, it possesses a greater impact on the rest of the variables.
For conducting t-test and paired t-test secondary data related to before and after delay of
the project was collected from respective offices. Hypothesis testing was done by the use
of the following formula (Arora et al., 2007).
Population mean( μ)