Addressing Construction Delays in the Kingdom of Saudi Arabia

Abdullah Albogamy1+, Darren Scott2, and Nashwan Dawood3

School of Science and Engineering, Teesside University, TS1 3BA, UK

Abstract: The work reported in this paper is the part of the PhD study which aims to outline the main causes of delay in public building projects in KSA with their relative importance. The delay is a key issue in the construction industry globally and the Kingdom of Saudi Arabia (KSA) is not an exception. The latest statistics show that approximately 70% public sector projects in KSA have been delayed in the past decade. As a result, the construction projects in KSA are facing a huge financial loss, a compromise in quality, and long waiting times to operate the project for public services. In this context, the study aims to contribute to the discussion by outlining the main causes of delay in public building projects in Saudi Arabia with their relative importance. For this purpose, a comprehensive literature was reviewed and a construction industry survey was conducted using questionnaires in KSA. A total of 98 out of 182 questionnaires were collected as survey data. The survey included 63 delay factors and the participants were asked to indicate their degree of importance. The causes of delay were grouped into 4 categories such as owner/client related factors, contractor related factors, consultant related factors, and external factors. The findings of the paper suggest that the contractor and owner/client related factors are the most critical factors that cause to delay the construction projects in Saudi Arabia. After discovering the key causes, an attempt will be made in the second part of the research paper to develop a risk management framework/model to eliminate or to minimise the impact of delays in the construction projects.

Keywords: Construction Delays, Causes of Delay, KSA

1. Introduction The key challenge for construction companies is to complete the projects on time and within the

estimated budget, as construction delays always amplify project costs (Sweis et al., 2007). The construction industry contributed 30 to 40% to the growth of the KSA economy (Cordsman, 2000) and the government of Saudi Arabia is currently investing heavy amounts in the construction industry. According to Statistical Year Books (2000), KSA Government spent nearly $234 billion on infrastructure projects during 1990 to 2000. Despite the big investment, companies are still facing delays due to different factors that have high impacts on the construction projects and ultimately result in higher project costs than originally estimated. A study conducted by Assaf and Al-Hejji (2006) found that around 70% of all public sector construction projects were delayed due to several factors in construction projects in KSA. Similarly, Al-Ghafly and Al-Khalil (1995) identified that 45 out of 76 water and sewage projects in the Eastern Province of KSA were time overrun in the last ten years. Moreover, from 20 randomly selected delayed projects, the extent of delay was 110%.

The issue of delay in the construction projects in KSA is not a new problem and has created a negative image for the industry (Sweis et al., 2007). This negative image has motivated many researchers (Assaf and Al-Hejji., 2006; Sweis et al., 2007; Al-Kharashi and Skitmore, 2009) to investigate the issue in many previous studies in a KSA context. In a recent interview with Raed Aeeli, the chairman of the Contractor’s Committee at the Jeddah Chamber of Commerce and Industry, it was found that the total estimated value of KSA’s delayed public projects is nearly SR550 billion which is equivalent to $147billion (Arab News, 2011). However, despite the seriousness of the problem with the country’s development plans due to the very high cost incurred as a result of such delays, there has been an attempt to find out the main causes of delays in building construction projects in Saudi Arabia, as viewed by the construction parties involved in construction activities.

2. Background Studies

1+ PhD student at Teesside University, Tel: +447733478688 Email address: Abdullah_2424@hotmail.com 2 Senior Lecturer in Civil Engineering/Construction at Teesside University, School of Science & Engineering 3 Professor of Civil Engineering/Construction at Teesside University, School of Science & Engineering

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In general, the problems in the construction industry vary from country-to-country. Cannon (2008) studied the causes of delay in the building projects in the United Kingdom. He surveyed engineers, architects, and contractors and found that the shortage of project management skills, the large volume of temporary workers, health and safety, insolvency, and litigation are the key issues that the UK construction industry has faced over the last two decades. In the United States, the top five critical factors causing delays in the construction industry are (1) approval for building authorization, (2) changes in order, (3) changes in design, (4) lack of complete documentations, and (5) inspection pressures (Ahmed et al., 2004). Tucker et al (1999) and Ahmed et al (2004) found that most of these problems occurred due to employ unskilled workforce by the contractors.

According to the study of Faridi and El-Sayegh (2006), which was conducted in the UAE, the most crucial factors causing delay were: (1) drawings on preparation and approval, (2) inadequate and poor planning, (3) lack of quick decision making from owner, (4) lack of manpower, (5) lack of proper supervision and management, (6) lack of labour productivity, (7) lack of labour skills, (8) lack of availability of equipment and material, (9) difficulties in taking approvals from government authorities and municipal committees, (10) contractor related financing during construction. Many researchers from other countries have conducted parallel studies in finding the reasons for the delay in the construction projects. For instance, Frimpong et al (2003), from Ghana, highlight many delay factors such as finance problems and changes in natural and material related factors; Razek et al (2008) studied the causes of delays in construction projects in Egypt and found that inadequate contractor experience, payment delays, ineffective and improper planning, non utilization of professional construction/contractual management are the main factors causing delays.

Falqi (2004) described construction delay as a ‘cankerworm’ that is destroying the fabric of the construction sector in the KSA. There were 56 main causes of delays in large building projects of KSA were outlined in Assaf et al (1995) study. In the view of contractors, most imperative delay factors were: shop drawings, payment delays, and changes in order and design. From the consultant’s point of view, significant reasons for delays were: money issues, lack of quick decision making by the owner, and a lack of association between subcontractor schedules. From the owner’s perspective, the factors causing delays were: errors in infrastructure design, bureaucracy problems in project-owner organization, and lack of skilled labour. Al-Khalil and Al-Ghafly (1999) highlighted 60 reasons for delays where three factors were most crucial: cash flow difficulties and financial issues, issues with obtaining permits from different authorities and government agencies, and low bid win system.

3. Causes of Delay Based on the previous studies and the literature review, 63 causes of delay were identified and included

in this research. These causes of delay were classified into four major categories such as owner/client related factors, contractor related factors, consultant related factors, and external factors. The attempt was made to include delay factors that cover all the areas of the construction project. These areas include equipment and materials, workforce, the environment and order changes, financing, government regulations, scheduling and controlling techniques, and contractual relationships.

4. Research Methodology The scope of the research was limited to public building projects and the mixture of primary and

secondary data was used to identify most crucial causes of delays in the construction industry.

4.1. Sample The population of the study was based on construction participants (i.e. owners, contractors, and

consultants) in five cities in the KSA including Riyadh, Jeddah, Dammam, Abha, and Tabuk to reduce the location bias. These professionals and parties were chosen because it was believed that this population represented the key people in the construction industry and would be able to give accurate information about the delay problem according to their individual experiences. The decision to include cities was based on some reasons as well. Riyadh and Jeddah were chosen because they are the largest cities in KSA located in the middle and west of the country and the majority of construction projects take place in these two cities. However, the researcher believed that it was important to obtain information from smaller cities especially from different geographical areas in the country in order to obtain accurate information and results. Therefore, three additional smaller towns (i.e. Dammam, Abha, and Tabuk) were chosen.

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4.2. Procedure The research was completed in two phases. In the first phase, a comprehensive literature review was

reviewed to identify the current trends and the state-of-the-art techniques utilised in the identifying, analysing and responding to the delay issues associated with construction projects. The result of this phase was the identification and categorisation of 63 causes of delay in KSA construction industry. The second phase consisted of developing the questionnaire and conducting detailed interviews with construction parties in Saudi Arabia. The questionnaire was divided into three sections. In the first section, the important information was asked to the respondents about their roles, experiences, and the type of constructions they are involved in. The second part consisted of the performance of the projects which they completed over the last 10 years. The final and the most important section was based on 63 delay factors where it was asked to the respondents to rank each delay factor according to its frequency of occurrence and degree of impact. A total of 98 out of 182 questionnaires were collected as survey data.

The data collected from the questionnaire was analysed using Importance Index (IMPI) consisting of Frequency Index and Severity Index. The Important Index formula was also used by Assaf et al (2006) to rank each delay factor associated with construction projects in KSA. The detail of the formulas is as follows:

Importance Index = (F.I x S.I) / 100 Where,

Frequency Index (F.I.) = Σ [a. (n/N)] × 100/5; and Severity Index (S.I) = Σ [a. (n/N)] × 100/5

Where (a) is a constant of weighting given to each despondence (1=unknown, 2=never, 3=low, 4=middle, and 5=high), (n) is the frequency of responses and (N) is the total number of responses for this research.

5. Results and Discussion The full results of the analysis are displayed in table 1.

5.1. Owner/Client Related Factors There were 17 owner/client related delay factors were included in the questionnaire. According to the

survey results, the most crucial delay factor from the owner’s point of view is the ‘low performance of the lowest bidder contractor in the KSA government tendering system’. This factor was ranked at first place due to the importance index rating 46.44 where 62 out of 98 respondents (63%) marked it high on the ordinance scale. According to the survey participants, the other key factors related to the owner/client which are causing delay problem are: delays in progressing payments by the owner, Inadequate early planning of the project, delays in the approval of contract submittals to the owner, delays due to a slow decision making process of the owner, and design changes by the owner. The respondents believe that insufficient available utilities on site and mistakes in soil investigation are the least influencing factors in cause delays.

5.2.Contractor Related Factors The contract related factors were consisted of 23 delay factors where ‘delays in the sub-contractor’s

work’ with important index 45.74 was highlighted as a top most critical factor causing time overrun in the KSA construction sector. Total 46 out of 98 participants (47%) selected highly important option on the ordinance scale. Similarly, poor qualification skills and experience, poor planning and scheduling, shortage of qualified engineers, delay in preparation of shop drawings, and cash flow problems faced by the contractor were ranked as next five causes of delays according to their respective importance indexes. According to the contractors, ‘breach of contract’ and ‘delay in test samples of material’ are the slightest issues in time overrun context.

5.3.Consultant Related Factors Due to a high degree of impact (47%), ‘Delay in approval of shop drawings’ with highest importance

index (i.e. 34.23) was chosen as the most influencing factor among 11 delay factors related to the consultants. In addition, design changes, poor and inadequate qualification of supervisory staff, documentation issues, and absence of key workforce were ranked as next four crucial issues that result in delaying the construction projects in KSA. Alternatively, according to the consultants, design errors and poor communication and coordination by the consultant engineer have less importance in delaying the projects.

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5.4.External Factors There were total 12 external factors also included in the questionnaire to see their impact on the

construction projects. It was discovered that the ‘non utilization of professional construction contractual management’ and ‘rise in the prices of the materials’ with their respective indexes 37.97 and 37.93 were the most significant external factors causing delays in KSA construction sectors. Many other external factors such as not applying systematic engineering methods, delays in resolving contractual issues, economic local and global conditions, and conflicts among contractor, owner and consultant were also marked as an imperative external factors result in delays.

6. Summary and Conclusion The survey was conducted to find out the most crucial factors causing delays in public building projects

in Saudi Arabia. In analysing the delay factors from the perspectives of the construction participants, the highest mean average (34.54) in table1 shows that large numbers of delays are occurring due to the contractors. The second highest mean average (31.22) of delay factors is representing an owner/client as second most influencing construction party causing delays. Similarly, consultant related factors and external factors were having least mean averages 29.51 and 24.39 respectively.

In order to identify delay factors with highest impacts on the construction projects in KSA, the researcher attempted to rank all 63 delay factors without classifying them in any category (see table 2). It was found that top 10 factors causing delays are: (1) Low performance of the lowest bidder contractor in the Government Tendering system, (2) delays in sub-contractors work, (3) poor qualification, skills and experience of the contractor’s technical staff, (4) poor planning and scheduling of the project by the contractor, (5) delay in progress payments by the owner, (6) shortage of qualified engineers, (7) delay in preparation of shop drawings (8) cash flow problems faced by the contractor, (9) inadequate early planning of the project, and (10) non-utilization of professional construction contractual management.

7. Direction of the Future Work Following the findings from the literature review and survey investigation, the attempt will be made to

develop a risk management model/framework that will help the companies to reduce the impact of delay factors associated with construction projects in KSA. The model will be validated through the experiments of case studies and its practical benefits will be evaluated by construction professionals in KSA.

8. Acknowledgement The author appreciates the participation, contribution and comments from the construction participants

from KSA. The author would also like to thank Teesside University for providing various facilities for conducting this research.

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10. Appendix I

TABLE 1: Classified causes of delay

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TABLE 2: Causes of delay

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