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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

87

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

94

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

95

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.

102

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.