Printer Friendly

SCHEDULE AND COST BEHAVIOUR IN CONSTRUCTION WORKS OF MALAYSIA.

Byline: I.A. Rahman, L.C. Foo, A.H. Memon and S. Nagapan

Keywords: Schedule performance; cost performance; case study; Malaysia; infrastructure projects and building projects.

INTRODUCTION

Construction Sector registered a strong increase to 5.8% in 2009 which was reached to 8.7% in 2010, whereas overall growth in Gross Domestic Product (GDP) was recorded as of 10.1%. Hence, a lot of money has been spent for construction development. Thus, during third quarter of 2015 and third quarter 2016 worth spent of construction development was increased by 14.0% and 10.7% year-on-year basis to record cost of RM 28.8 billion and RM31.9 billion. While quarter-onquarter basis comparison revealed that increase in construction works was as 5.9% and 4.9% for year 2015 and 2016 respectively as compared to previous quarter (Zachau et al., 2016). This indicated the importance of construction industry in Malaysian development. Although, construction works in Malaysia have got much attention, but yet this sector has face crucial issue to over run in cost which has affected the development works significantly.

This issue is referred as global phenomenon and affecting the amount of physical development that can be under taken. Poor schedule and cost behaviour are decisive matters (Alias et al., 2014; Chen et al., 2016; Suk et al., 2017; Akram et al., 2017) where in developing countries it is more severe and sometimes amount of cost is overran by 100% than the original budget cost (Otanuji, 2008). A report of Ethiopia indicated cost overrun as crucial problem (Mustefa, 2015) where research of 15 completed public construction projects of Ethiopia highlighted that cost was increased by more than 80% of the original cost (Dessa, 2010). Besides that, an investigation carried out by (Al-Momani, 2000) involving 130 public projects in Jordan revealed that 106 (82%) of project were facing time overrun problem. Similarly, in Saudi Arabia, (Assaf and Al-Hejji, 2006) mentioned that on average 70% of projects are delayed with a period of 10% to 30% of the original scheduled period.

This problem of cost overrun is common issue in construction works worldwide which needs a serious attention to reduce and achieve construction projects completed as targeted. A research work conducted in Pakistan reported that almost all the projects faced overrun in cost with a minimum loss of 10% of the project cost. This amount of overrun was more in medium sized projects which were reached up to 60% of project size as compared to large size projects facing overrun up to 40% of project cost (Azhar et al., 2008). In (Zujo et al., 2008), authors studying building projects found that building projects under go overrun in cost on with average increase of 6.84% of estimated cost. Conducting similar research work in Malaysian construction industry (Zujo, 2008; Nadzirah et al., 2014) highlighted that under tenth Malaysian plan 238 projects of worth RM 4.48 billion faced delay problem (Roslan et al., 2015).

Hence, this study has focused investigating cost performance of selected construction projects of Malaysian construction industry related to building and infrastructure category projects.

MATERIALS AND METHODS

Construction sector is essentially to construct fundamental infrastructural structures to assist in civilizing community and financial needs of any country (Rahman et al., 2013). It is one of the major sectors contributing with a significant amount in Gross Domestic Product (GDP). It also engages a huge number of local labour force (Chan, 1999). In (Endut et al., 2009), authors stated Malaysia is a fast developing country in Asian region and it has always added in Gross Domestic Product (GDP) from 3% to 5%. Growth in construction has increased from 6% to 15% (Endut et al., 2009). According to Department of Statistics Malaysia in third quarter 2016, Malaysia construction industry highest growth for type of activity was recorded for civil engineering field 19.3%. Second highest growth was achieved by residential buildings with 16.4% and special trade's activities with 4.2% growth. While, the nonresidential buildings sub-sector registered a negative growth of 1.4%.

The civil engineering sub-sector contributed 34.9% to the total value of construction work done, nonresidential buildings was 30.7%, residential buildings was 30.0% and special trades activities was 4.4%. Construction sector is directly linked with economic development of Malaysia. Construction works are generally classified as construction and special trade works (Ibrahim et al., 2010).

Data collection: The Research involves six construction projects involving 3 infrastructure construction projects and 3 building construction projects. The data of cost overran in cost evaluated by the investigation on site as well as documents of the projects and structured interviews of the officials involved in handling those particular projects.

RESULTS AND DISCUSSION

This research work involved case study of Six (6) construction projects. In order to maintain the secrecy of personal information of the respondents and their relative projects, the projects were named as project A, project B, project C, project D, project E and project F. The selected projects are constructed under a construction company that was establishes more than 20 years and sites were managed by the person in charge having experience for more than 20 years in the construction field.

Case Study A: This project is located in Seremban, Negeri Sembilan. This is a private project related to earthwork for building 83 units of terrace house. This project was awarded to contractor A by the developer using conventional method of procurement. The duration of project was four (4) months and the actual completed duration took five (5) months. Therefore, the delay of the project was 1 month and causing cost overrun RM158,067.86 over the contract amount of RM 483,779.00. With this the schedule overrun was about 25% while cost overrun was 32.67%. The delay was not caused by contractor but due to changing of project planning by the developer and the developer had to absorb the cost overrun.

Case Study B: This project is located in Seremban, Negeri Sermbilan. This is a private project related to retaining wall for building 83 units of terrace house which was awarded to contractor B by the developer using conventional method of procurement. The duration of project was one (1) month and the actual completed duration was three (3) months. Therefore, the delay project was 2 months and causing cost overrun RM8,300.00 over the contract amount of RM158,000.00. With this the schedule overrun was about 200.00% while cost overrun was 5.25%. The delay was caused due to late site handing over by the developer and the developer had to absorb the cost overrun.

Case Study C: This project is located in seremban, Negeri Sembilan. This is a private project related to sewerage reticulation for 83 units' terrace house construction. This project was awarded to contractor C by main contractor as a nominated subcontractor. The duration of project is four (4) months which completed in seven (7) months. Therefore, the delay project was 3 months without causing cost overrun as the general construction materials was purchased and stockpile in early of construction. Overall schedule overrun was about 75.00% while cost overrun was 0%. The delay was caused due to late site handing over by the developer.

Case Study D: This project of high-rise building construction located in Seremban, Negeri Sembilan was in private sector. This project was awarded to contractor D by the developer using conventional method of procurement. The duration of project was seventeen (17) months and the actual completed took nineteen (19) months' due to the changes of building design by developer. Therefore, the amount schedule date up to 7th of January 2016 is RM30,796,137.93 (81.30%) and the actual amount is RM33,750,689.04 (89.10%) which is RM2,954,551.11 (7.80%) cost overrun caused of the changes of building design and the developer has to absorb the cost overrun.

Case Study F: This project is located in seremban, Negeri Sembilan. This is a private project related to a shopping complex construction. This project is awarded to contractor F by the developer using conventional method of procurement. The duration of project completion is fifteen (15) months which is 2nd of March 2016. As per project schedule date up to 15th of February 2016 the completion of work done is 96.00% and the actual completed work in the same day was 92.00% which is 4.00% behind the schedule due to the changes of building design by developer. Therefore, the amount schedule date up to 15th of February 2016 is RM61,601,807.00 (92.84%) and the actual amount is RM55,064,548.05 which is RM6,537,259,56 (9.85%) behind the planned amount schedule due to the changes of building design.

Table 1. Case Study Results.

Cases###A###B###C###D###E###F

Types of project###Infra###Infra###Infra###Building###Building###Building

Duration (Month)###4###1###4###17###20###15

Expecting Date###9/2013###6/2013###9/2013###9/2015###1/2016###3/2016

Completed Date###10/2013###8/2013###12/2013###10/2015###1/2016###2/2016

Time overrun (months)###1###2###3###2###-###1

Time overrun (%)###25###200###75###11.76###5.82###4

Contract Sum###484.78K###158K###223K###18.97M###37.88M###66.35M

(RM)

Actual Cost (RM)###641.85k###166.3k###223k###19.57m###30.80m###61.60m

Cost Overrun (RM)###158k###8.3k###0###600K###3M###6.5M

Cost overrun (%)###32.67###5.25###0###3.16###7.8###9.85

###changing of###late site###changing of###changing of###changing of

Reasons for overrun###project###handing###late site###building###building###building

###handing over

###planning###over###design###design###design

Responsible Party###Client / Owner###Client /###Client /###Client /###Client /###Client /

###Owner###Owner###Owner###Owner###Owner

Table 1 shows that all the cases faced time overrun ranging from one month to 3 months with the time overrun percentages from 4% to 200%. While, most of the cases faced cost overrun ranging from RM8.3K to RM6.5M with the cost overrun percentages from 3.16% to 32.67% and only case C does not experience cost overrun. It can be concluded that from this case study, the construction industry is facing time and cost overrun and this serves as a platform to further investigate the causative factors and its occurrence and severity to construction projects

Conclusion: This paper reported case study of infrastructure and building works undertaken in Malaysia. The projects were studies to understand the behaviour of schedule and cost in of the construction works. Findings of this study showed that all the 3 infrastructure projects considered in the research work were facing problem of schedule and cost behaviour. All the 3 projects were overrun where schedule delay was 25% to 200% while in building work schedule delay was experienced ranging from 4% to 11.76%. Two infrastructures had cost increase ranging from 5.25% to 32.67% while in 2 buildings cost increase was ranging from 3.16% to 9.85%. However, one building project experienced cost saving by 7.8%. These findings help in understanding the behaviour of the construction works and plan according for future developments.

REFERENCES

Akram, M., T. Ali, N.A. Memon and S.H. Khahro (2017). Causal Attributes of Cost Overrun in Construction Projects of Pakistan. International Journal of Civil Engineering and Technology, 8(6):477-483

Alias, Z., E.M. Zawawi, K. Yusof and N.M. Aris (2014). Determining critical success factors of project management practice: A conceptual framework. Procedia-Social and Behavioral Sciences, 153:61-69

Al-Momani, A.H. (2000). Construction delay: a quantitative analysis. International journal of project management, 18(1):51-59

Assaf, S.A. and S. Al-Hejji (2006). Causes of delay in large construction projects. International Journal of Project Management, 24:349-357

Azhar, N., R.U. Farooqui and S.M. Ahmed (2008). Cost overrun factors in construction industry of Pakistan. First International Conference on Construction in Developing Countries (ICCIDC-I), Advancing and Integrating Construction Education, Research and Practice, held on 4th August at Karachi, Pakistan

Chan, A.P. (1999). Modelling building durations in Hong Kong. Construction Management and Economics, 17(2):189-196

Chen, Q., Z. Jin, B. Xia, P. Wu and M. Skitmore (2016). Time and cost performance of design-build projects. Journal of Construction Engineering and Management, 142:1-7

Dessa, A. (2010). Claims in Ethiopian construction industries, [M.Sc. Thesis]. Addis Ababa: Addis Ababa University

Endut, I.R., A. Akintoye and J. Kelly (2009). Cost and Time Overruns of Projects in Malaysia. Retrieved on August, 21:243-252

Ibrahim, A.R., M.H. Roy, Z. Ahmed and G. Imtiaz (2010). An investigation of the status of the Malaysian construction industry. Benchmarking: An International Journal, 17(2):294-308

Mustefa, A.J. (2015). Factors affecting time and cost overrun in road construction projects in Addis Ababa. Unpublished Master of Science in Civil Engineering (Construction Technology and Management): Addis Ababa University

Otanuji, O.A. (2008). A comparative analysis of tender sums and final costs of public construction and supply projects in Nigeria. Journal of Financial Management of Property and Construction, 13(1):60-79

Rahman, I.A., A.H. Memon and A.T. Karim (2013). Relationship between factors of construction resources affecting project cost. Modern Applied Science,7(1):67-75

Roslan, N., N.Y. Zainun and A.H. Memon (2015). Relevancy of Factors and Mitigation Measures in Controlling Time and Cost Overrun Towards Malaysian Environment. Applied Mechanics and Materials, Trans Tech Publications, 773:1007-1011

Suk, S.J., S. Chi, P. Mulva, C.H. Caldas and S.H. An (2017). Quantifying combination effects of project management practices on cost performance. KSCE Journal of Civil Engineering, 21(3):603-615

Zachau, U., S. Shetty, M.A. Verghis, M.A. and R.M. Moreno (2016). Malaysia Economic Monitor December 2016: The QUEST for Productivity Growth

Zujo, V. (2008). Contribution of Construction Time Planning to Construction Project Management. PhD thesis
COPYRIGHT 2019 Knowledge Bylanes
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2019 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:I.A. Rahman, L.C. Foo, A.H. Memon and S. Nagapan
Publication:Pakistan Journal of Science
Geographic Code:9MALA
Date:Dec 31, 2019
Words:2453
Previous Article:COLLECTION OF AUTONOMOUS SYSTEM LEVEL TOPOLOGY USING LOOKING GLASS SERVERS.
Next Article:SINGLE CELL MASSIVE MIMO DOWNLINK SYSTEM: ENERGY EFFICIENCY SOLUTION.
Topics:

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |