Christians overwhelmingly voted in favour of leaving the European Union last Thursday but the aftershocks will not only impact heavily on UK economic growth, but also on any foreseeable infrastructure developments due to the uncertainty created by the Brexit vote to leave, an industry source has warned. Polling from Lord Ashcroft showed that nearly six in ten of those who identified as Christian voted for Brexit.
Although numbers have fallen, 93 per cent of Christians in the UK are white. By contrast two-thirds of British Muslims are from an Asian background. And Lord Ashcroft’s poll showed that 67 per cent of Asians and 73 per cent of black people voted to remain compared to 47 per cent of white people.”
The assumed time frame for the UK-EU divorce terms to be agreed is two years which has left many businesses anxious and investors unclear of what the future may hold.
The conclusion of a recent analysis by the Pew Research Center in the US suggests that in the UK, the proportion of the population identifying themselves as Christians was approximately 64% in 2010.
The Knock-On Effects of the Brexit Vote
All Brits must now confront the truths about the forthcoming EU DIVORCE. Don’t kid yourself. Separation always harms both parties. However, what does this mean for investment in the capital project wise? Well, the Brexit verdict will impact construction projects as follows.
Osborne Said “It Is Very Clear That the United Kingdom Is Going to Be Poorer,” on a BBC Radio 4 Programme.
1. Access to Foreign Labour
The first most important issue is access to labour. A core principle of the EU is the right of free movement, which has made immigration between member states somewhat easy and stress-free. The construction industry relies heavily on overseas workers to fill both skilled and non-skilled job roles, and a significant percentage, predominantly within the London market, come from continental Europe.
“Across the UK, Nearly 12% of the 2.1 Million Construction Workers Come from Overseas, Official Statistics Indicate Largely from the EU.”
It’s logical that with an EU DIVORCE those skilled individuals will instead travel to France, Germany, or Spain, where the right of free movement still exists.
David Thomas, chief executive of Barratt Developments Plc the UK’s largest homebuilder said, “an EU DIVORCE would lead to a shortage of construction staff, and impair the UK Construction Industries ability to build houses.”
The free movement of labor in the European market has been seen as a positive for many. However, it’s also possible that a skills shortage may result in increased investment in training and upskilling of local workers to fill the gaps. This could also result in higher wages being demanded by those workers who are in the UK labor market which individual labors would no doubt welcome, but which in turn could escalate the cost of projects.
Migrant construction workers who have arrived in the UK in the past 10 years. – Construction Industry Training Board (CITB) 2014:
Another major concern is the investment in the UK. The EU presently makes it easy for companies in different countries to do business with, and invest in, one another.
European manufacturing giants Airbus has voiced concern about investing in the independent UK. Likewise, German firm Festo has said German companies should be cautious about investing in Britain. And let’s not forget that Germany is the financial driving force of the EU.
On the other hand, Lord Bamford, the Chairman of JCB is however persuaded that an eventual EU DIVORCE could reduce the costs of administration so much so that the costs of leaving the EU will be covered.
3. Prestigious Projects
An enormous question mark hangs over prestigious projects such as a third runway for Heathrow which has now been delayed again in wake of Brexit fallout and the Hinkley Point nuclear power station in Somerset which is now “extremely unlikely”.
A render of the proposed Hinkley Point C nuclear power station.
There are also growing suspicions about the future of less well-known operations such as the London Gateway port in Essex, operated by Dubai’s DP World, which opened in 2013 and is still only half complete.
This new outbreak of ambiguity is also likely to engulf many other scheduled construction projects in the UK.
4. EU Legislation and Regulation
A significant amount of EU legislation is now rooted in UK law and affects construction. The EU DIVORCE would not instantly result in less regulation. By way of example, the CDM regulations basically enacted EU Directive 1992/57/EEC and there is no indication that the regulations or health and safety in the construction cycle will be swept away because of the leave vote. The UK may now choose to reduce the scope of this and other dictates or, abolish them completely. However, one thing is for sure, this will not happen overnight.
5. Imports and Exports
The supply of goods and services for the construction industry is a key driver of growth in the UK. The UK is at least partly dependent on imports from the EU, particularly Germany, Italy and Sweden.
In 2014, 53% of Goods and Services Were Imported into the UK from the EU.
The degree to which these may be affected depends upon the post-Brexit model.
6. Exchange Rates
Can Sterling’s Recovery Continue with Brexit Looming? From the moment the EU leave vote was announced, the Pound Euro exchange rate has been volatile.
Pound Euro Exchange Rate Reaches 1.2150 – Half-Way Recovered to the Week’s Opening Levels
In a trade where margins are tight, there is heavy dependence on the import and export of goods and services, currency fluctuations will have a major fiscal impact on construction projects. Whereas the inclusion of exchange rate phrases in constructions contracts is always an option, it does mean companies will need to undertake an additional level of strategizing, prior to planning or otherwise undertaking construction projects in the immediate future.
7. Access to Finance
The availability of money is often a pre-requisite for construction projects. Access to money can control whether or not a specific projects can proceed from design to construction.
Currently UK small and medium enterprises have access to SME financing which will at some point no longer be available once the EU DIVORCE is complete.
Standard & Poor’s stripped Britain of its “AAA” credit rating reducing it to “AA”. Fitch Ratings also downgraded its ranking for Britain’s creditworthiness by one notch.
It is therefore clear that the UK’s connection with the EU enhanced its creditworthiness. The looming EU DIVORCE is quickly changing all that. The cost for developers of finding finance for construction projects will no doubt also increase as lenders seek to impose higher interest rates.
The results of an imminent EU DIVORCE are complex and widespread and something that the wise business should be planning for now. There will be significant insecurity for businesses in the months, if not years, resulting from the vote to leave.
This failure to convince Christians of either the economic, spiritual or cultural benefits of the EU was disastrous for the Remain campaign and has changed the face of the UK forever.
Abandoned projects including building, engineering and infrastructure development projects litter the whole of the world.
Most of them were started to symbolise a country’s prosperity and vision but after years of abandonment, stalled development and economic crisis, some of the world’s most amazing projects have been abandoned and now have come to epitomise national struggle.
From Bangkok’s ‘Ghost Tower’ which was abandoned after the 1997 financial crisis to the Tower of David, here is a selection of some of the world’s most famous abandoned and incomplete projects in no particular order.
1. Bangkok’s ‘Ghost Tower’
On stormy days debris from this unfinished and abandoned skyscraper rains down on the streets of Bangkok
A towering waste. It’s called Bangkok’s ‘ghost tower’. This 49-storey prominent unfinished skyscraper in the Thai capital city of Bangkok was destined to be a state-of-the-art office and residential complex, but has instead become a destination for urban explorers. Planned as a high-rise condominium complex, construction of the building was halted during the 1997 Asian financial crisis when it was 80% complete.
Now the 174-meter graffiti-covered building mainly houses squatters.
The “Tower of David” can be seen from practically anywhere in Caracas. The tower has 46 floors
Torre de David (The Tower of David) named after David Brillembourg, the tower’s main investor who died in 1993 has been depicted as a haven for drug lords and assassins in the TV series Homeland, lauded as an experiment in social empowerment at the Venice Architecture Biennale and featured in countless articles and documentaries around the world. In May 2014, the tower was also featured in the BBC World News documentary, Our World.
For eight years, the Tower of David a half-built skyscraper in downtown Caracas the capital of Venezuela. was home to thousands of squatters who transformed the abandoned block into a ghetto complete with grocery shops, tattoo parlours, internet cafes and a hair salon.
Construction of the tower began in 1990 but was halted in 1994 due to the Venezuelan banking crisis. As of 2016, the building remains incomplete.
This vertical ghetto can be seen from almost every corner of this densely populated capital.
In 2014 Ernesto Villegas, the minister for the revolutionary transformation of greater Caracas, said all the tower’s residents would be relocated to “dignified homes”. “This is not an eviction, but rather a relocation,” he told reporters. Villegas said several children had fallen to their deaths from the tower, which in some places is lacking walls or windows.
The newspaper Tal Cual reported that Chinese banks were interested in buying the tower and renovating it for its original use.
3. Mothballed Oil Rig
Oil rigs definitely fall into the mega category when it comes to size.You might think of them more as structures than machines. The rig above is a accomodation platform rather than an oil drilling rig, re-built in Belfast in the late 1990s. Mothballed as opposed to completely abandoned, the rig stands alongside the derelict area of the old Harland and Wolff shipyard.
This Patch of Wasteground Is Probably One of the Most Famous in Maritime History, Being the Construction Site of the Rms Olympic and Her Sister Ship Titanic.
Today modern redevelopment is breathing new life.
4. The Maunsell Forts of the Thames Estuary
Abandoned Maunsell Sea Forts
Abandoned Maunsell Sea Forts
Abandoned Maunsell Sea Forts
Abandoned Maunsell Sea Forts
Abandoned Maunsell Sea Forts
Abandoned Maunsell Sea Forts
“Surreal Riveted Sea Forts Once Protected the Kent Shores from German Attack”
Rising from the water like rusty invaders out of H.G. Wells, the Maunsell Army Forts in the Thames Estuary built by the British Royal Navy are decaying reminders of the darkest days of World War II. These sea forts still stand today and are abandoned in the North Sea not far from the coast of eastern England. Standing as monuments for maritime explorers, the forts are now in varying states of decay, but are a historical portrayal of how the country protected itself against air raids. Attempting to enter them is probably ill-advised, if not illegal.
5. Project Babylon
A section of the Iraqi supergun from Imperial War Museum Duxford
Project Babylon: The Story of Saddam’s Supergun
Project Babylon was a project with unknown objectives commissioned by the then Iraqi president Saddam Hussein to build a series of “superguns”. The Iraqi government engaged world-renowned artillery expert Gerald V. Bul whose lifetime obsession was a the construction of a “Supergun,”. The design was based on research from the 1960s Project HARP,
In early April 1990, United Kingdom customs officers confiscated several pieces of the second Big Babylon barrel, which were supposedly disguised as “petrochemical pressure vessels”. Components, such as slide bearings for Big Babylon, were seized at their manufacturers’ sites in Spain and Switzerland. After the Gulf War in 1991, Iraq confirmed the existence of Project Babylon, and permitted U.N. inspectors to destroy the hardware. A section seized by UK customs officers is on display at The Royal Artillery Museum, Woolwich, London.
6. Sagrada FamÃlia
The BasÃlica i Temple Expiatori de la Sagrada FamÃlia is a large Roman Catholic church in Barcelona, designed by Spanish architect Antoni Gaudà (1852–1926). Although incomplete, the church is a World Heritage Site and has been visited by the Pope. Inspired by GaudÃ’s vision, and funded almost exclusively by the millions of tourists who flock to it every year, today, the Sagrada FamÃlia is more than halfway done, with a estimated completion date of 2026. The lead architect is confident that it will be finished “ within the next century.
7. Westminster Cathedral
It’s one of the most famous and beautiful churches in the world and is by all accounts an architectural masterpiece, however, it’s never actually been completed. Westminster Cathedral must also be one of the busiest churches in the United Kingdom.
How Lovely Is Your Dwelling Place, Lord God of Hosts…” Psalm 83
Work is still ongoing, supposedly. Work began in 1895, but apparently it’s been too expensive to finish decorating the mother church of literally all of England and Wales. However, the unfinished internal brickwork is amazing.
Transport for London
Westminster Cathedral
Westminster Cathedral is the architectural master-work of John Francis Bentley (1839-1902). Bentley was a Victorian church architect of great accomplishments. It was to buildings such as Hagia Sophia, San Vitale in Ravenna and St Mark’s, Venice, that Bentley turned to for inspiration to prepare himself mentally and spiritually for the work of designing the Cathedral in 1894.
The whole building, in the neo-Byzantine style, covers an floor area of about 5,017 square metres (54,000 sq ft); the dominating factor of the scheme, apart from the campanile, being a spacious and uninterrupted nave, 18 metres (59 ft), covered with domical vaulting.
The Nigerian construction industry is mostly concerned with the development and provision of projects such as roads, bridges, railways, residential and commercial real estates, and the maintenance necessary for the socio-economic developments contributes immensely to the Nigerian economic growth (Bureau of Statistics, 2015). Butcher and demmers (2003) described projects as an idea which begins and ends by filling a need. However, a project fails when its idea ends without meeting the needs and expectations of its stakeholders.
Nigeria Has Become the World’s Junk – Yard of Abandoned and Failed Projects worth Billions of Naira!
Hanachor (2013), revealed that projects form part of the basis for assessing a country’s development. However, a damming report from the Abandoned Projects Audit Commission which was set up by the Ex-President Goodluck Jonathan in 2011 revealed that 11,886 federal government projects were abandoned in the past 40 years across Nigerian (Abimbola, 2012). This confirmed the assertion by Osemenan (1987) “that Nigeria has become the world’s junk –yard of abandoned and failed projects worth billions of naira”.
Abandoned projects including building and other civil engineering infrastructure development projects now litter the whole of Nigeria.
Physical projects do not only provide the means of making life more meaningful for members of the community where the projects are located, successful projects also result in empowerment and collective action towards self improvement (Hanachor, 2013).
This Issue of Abandonment Has Been Left Without Adequate Attention for Too Long, and Is Now Having a Multiplier Effect on the Construction Industry in Particular and the Nigeria’s National Economy as a Whole. (Kotngora, 1993)
PROJECT FAILURE
Project Failure might mean a different thing to different stakeholders. A project that seemed successful to one stakeholder may be a total failure to another (Toor and Ogunlana, 2008). Some stakeholders, more especially the project users and some private owners, think of failed projects as a situation where a completed building project collapsed, a situation where by a completed dam project stopped working after few days of completion, or a completed road project that broke down after few months of completion. Other experienced stakeholders, such as engineers and architects conform to the iron triangle by Atkinson (1999) which states that the most strategically important measures of project failure are “time overrun”, “cost overrun”, and “poor quality”.
Turner (1993) noted that a project fails when the project specifications are not delivered within budget and on time;the project fails to achieve its stated business purpose; the project did not meet the pre-stated objectives; the project fails to satisfy the needs of the project team and supporters; and the project fails to satisfy the need of the users and other stakeholders. Lim and Mohamed (1999) cited in Toor and Ogunlana (2009) clarified that there are two possible view points to project failure namely; the macro-level and the micro-level. They further explained that the macro view point reviews if the original objectives and concepts of the project was met. Usually the end users and the project beneficiaries are the ones looking at the project failure from the macro view point, where as the project design team, the consultants, contractors, and suppliers review projects from a micro view point focusing on time of delivery, budget, and poor quality.
In the early 1990s, the failure as well as the success of any project was determined by the project duration, monetary cost, and the performance of the project (Idrus, Sodangi, and Husin, 2011). Belout and Gauvrean (2004), also confirmed that the project management triangle based on schedule, cost, and technical performance is the most useful in determining the failure of a project. Moreover, a project is considered as an achievement of specific objectives, which involves series of activities and tasks which consume resources, are completed within specifications, and have a definite start and end time (Muns and Bjeirmi 1996, cited in Toor and Ogunlana, 2009). Reiss (1993) in his suggestion stated that a project is a human activity that achieves a clear objective against a time scale. Wright (1997) taking the view of clients, suggested that time and budget are the only two important parameters of a project which determines if a project is successful or failed. Nevertheless, many other writers such as Turner, Morris and Hough, wateridge, dewit, McCoy, Pinto and Slevin, saarinen and Ballantine all cited in Atkinson (1999), agreed that cost, time, and quality are all success as well as failure criteria of a project, and are not to be usedexclusively.
FACTORS OF PROJECT FAILURE
Cookie-Davies (2002) stated the difference between the success criteria and the failure factors. Hestated that failure factors are those which contributed towards the failure of a project while success criteria are the measures by which the failure of a project will be judged. The factors constituting the failure criteria are commonly referred to as the key performance indicators (KPIs).
Timeand Cost Overrun
The time factor of project failure cannot be discussed without mentioning cost. This is because the time spent on construction projects has a cost attached to it. Al-Khali and Al-Ghafly, (1999); Aibinu and Jagboro, (2002) confirmed that time overrun in construction projects do not only result in cost overrun and poor quality but also result in greater disputes, abandonment and protracted litigation by the project parties. Therefore, focus on reducing the Time overrun helps to reduce resource spent on heavy litigation processes in the construction industry (Phua and Rowlinson, 2003). Most times, the time overrun of a project does not allow resultant system and benefits of the project to be taking into consideration (Atkinson, 1999). Once a project exceeds the contract time, it does not matter anymore if the project was finally abandoned or completed at the same cost and quality specified on the original contract document, the project has failed. Furthermore, Assaf and Al-Hejji, (2006) noted that time overrun means loss of owner’s revenue due to unavailability of the commercial facilities on time, and contractors may also suffers from higher over heads, material and labour costs.
Poor quality/Technical Performance
The word “Performance” has a different meaning which depends on the context it is being used and it can also be referred to as quality. Performance can be generally defined as effectiveness (doing the right thing), and efficiency (doing it right) (Idrus and Sodangi, 2010). Based on this definition of performance, at the project level, it simply means that a completed project meets fulfilled the stakeholder requirements in the business case.
CAUSES OF PROJECT FAILURE
A lot of research studies have investigated the reasons for project failures, and why projects continue to be described as failing despite improved management. Odeh and Baltaineh, 2002; Arain andLaw, 2003; Abdul-Rahman et al., 2006; Sambasivan and Soon, 2007; all cited in Toor and Ogunlana, 2008, pointed out the major causes of project failures as Inadequate procurement method; poor funding and availability of resources; descripancies between design and construction; lack of project management practices; and communication lapses
The contract/procurement method
A result obtained from two construction projects which were done by the same contractor but using different procurement methods showed that rework, on the design part which occurs when the activities and materials order are different from those specified on the original contract document, makes it difficult for the project to finish on the expected time (Idrus, Sodangi, and Husin, 2011). This is as a result of non-collaboration and integration between the design team, contractor, and tier suppliers. The rework on the design portion has a huge impact on project failure leading to the time overrun. The traditional method of procurement has inadequate flexibility required to facilitate late changes to the project design once the design phase of the construction project has been concluded.
Nigerian most widely used procurement method is the traditional method of procurement (design-bid-construct) which has been confirmed to be less effective to successfully delivery of a construction project (Dim and Ezeabasili, 2015). And, the world bank country procurement assessment report (2000) cited in Anigbogu and Shwarka, (2011) reported that about 50% of projects in Nigeria are dead even before they commence because they were designed to fail.
The way the construction projects are contracted, in addition to the way the contracts are delivered, contributes to the causes of projects failure. Particularly, among the methods of project contracting is lump-sum or a fixed-price contracting method, in which the contractor agrees to deliver a construction project at a fixed price. The fixed-price contract can be low-bid or not however, once the contract cost has been agreed upon the contract award, it cannot be changed. And, contractors are expected to honor and deliver the contract agreement, failure to do so can result in a breach of contract which can result in the contractor being prosecuted.
Awarding a contract to an unqualified personnel also contributes to project failures. When a contractor places more emphasis on money and the mobilization fee after a construction project has been initiated instead of getting the right workforce and skilled professionals that will execute the project. Instead the workforce chosen will often not be base on competence and required skills rather it will be based on availability. Moreover, poor strategy and planning by contractors who have overloaded with work also contributed to one of the causes of project failure.
Poor funding/Budget Planning
A lot of public projects in the Nigerian construction industry failed as a result inadequate funding, and the difference between the national annual budget and the budget actual released. Most of the Nigerian public projects are signed even before the actual release of the national budget. The difference in budget of the contracted project and the actual budget release can get the contracted company stuck as a result of inflation of prices, scarcity of construction material at the time of the budget release and mobilization to site. Also un-planned scope of work which can be as a result of the contractor working on another contract when he is called back to mobilization to start work. Moreover, poor budget planning is a regular mistake made by some contractors by not undertaking feasibility assessments before starting the design. The construction project should be planned according to the available resources and not according to the unrealistic expectations a client has in mind.
Discrepancies Between the Design and Construction
Limited collaboration between the contractors, engineers, and the architect results in discrepancies between the project designs and construction on site, and further leads to rework. Changes on a project designs, and changing to the scope of work in the middle of construction processes on site can be dangerous, and can lead to time overrun, increase in cost, and most of all can lead to abandonment. Moreover, many cases have been seen where the designs from the architects are not buildable on site, whileIn some cases, most contractors are unable to adequately specify the scope of work for the construction processes on site. Therefore any default on the design by the architect can be an opportunity for the contractor to make more money which might cause the project duration to exceed the time specified on the contract document.
RESEARCH METHODOLOGY
This research starts with a general reasoning or theory which says that the major cases of project failure in the Nigerian construction industry are defined based on time overrun and cost overrun. The findings from the data analysis will help on the decision to accept the theory or not. The research data was collected from the progress report for the month ending of October, 2015 published by the Nigeria of Federal Ministry of works on thirty-nine on-going highway construction projects at the South-South geopolitical zone. The table 1 below shows the information on the data collected which comprises of the project title, contract Number, project description, the contractor that was awarded the projects, the date of project commencement, date of completion and the extended date if any. The scheduled time for each project was specified as follows: project commencement date labeled as “a”,project completion date labeled as “b”, and the extended date labeled as “c”.
Table 1: The analyzed data on the highway project at the South-South zone in Nigeria.
DATA ANALYSIS
The data analysis was done with the use of Microsoft excel. The analysis started by obtaining the number of days between the date of commencement of each project and the date of completion to show the duration of each highway project. And, the number of days between the project completion date and the extension date showed the time-overrun. The project duration and the extended days were obtained with the use of NETWORKDAYS function in Microsoft Excel which calculates the number of working days between two dates excluding weekends and any dates identified as holidays.
The standard deviation between the specified project duration for each highway projects and the extended days was calculated to obtain the extent to which each highway project contract failed on its time of delivery. This was denoted as the degree of failure. The table 1 above showed the projects ranking which was done based on the degree of failure of all the highway projects. The highway projects that were ranked from one to sixteen have low degree of failure and are represented with green color, while the rest are those with high degree of failure and are represented with red color.
FINDINGS
The findings made showed that the successfully completed highway projects have no extended days or time overrun, and the successful on-going highway projects are still on schedule and have no extended days unlike the on-going highway projects that have already failed as a result of the extended dates. Other projects have been abandoned because they have exceeded the delivery date as specified on the contract document, and have no extended date of completion. Thus, no work is going on.
Figure 1: Abundance of failed highway projects at south-south zone, Nigeria.Figure 2: On-going failed highway projects
Figure 2 above showed that 14% of highway projects are still on-going projects because they have not exceeded the original date of completion as specified on the contract document. However, they are heading towards failure because they have been given an extended date of completion which can be as a result of some critical activities running behind schedule, causing delay on the critical path network of the projects. Moreover, the other 86% completely failed because they have exceeded their completion date specified on the contract document.
Figure 3: Successful on-going highway projects
The figure 3 above showed that 63% of the successful highway projects are still on-going because they have not exceed their completion dates, and they are not yet completed. However, those on-going highway projects might end up as failed projects as a result of poor funding, discrepancy between the design and the construction on site, and conflict between the construction parties or stakeholders.
“Say what you will do, and do what you said” or “Say as you will do it, and do it as you said”
CONCLUSION AND RECOMMENDATION
The idea of knowing what a failed project is, the factors and the causes is very important in project management. Success in project management can neither be achieved nor measured without the knowledge of project failure, its factors, and causes in the Nigerian construction industries. This work has shown that project failure is as a result of exceeded time of delivery, cost overrun, and poor quality. However, the analysis was only done based on exceeded time of project delivery because of the nature of the data collected.
This work suggested a few approaches to help reduce the number of failed projects in the Nigerian construction industry if properly implemented. Firstly, Having good collaboration between the project stakeholders involved in a construction project at the early stage of project conception is most important in order to accomplish the project objectives, and deliver the project on time, within budget, and quality specified on the original contract document (Othman, 2006).
Secondly, Adopting the ISO 9000 technique which is used for quality management will also help in achieving a successful project delivery. This technique states “ say what you will do, and do what you said” or “say as you will do it, and do it as you said”. This technique is not an indication of high quality but it promotes control and consistency which leads to specialization, and improved productivity and quality. Also, adopting the principles of lean construction will help to reduce waste within the construction and stream-line activities in order to improve the on-time delivery of projects.
Thirdly, Learning from the precedent failed projects, how those projects failed, and the reason for their failures. This will help the project manager to plan and mitigate the risks of project failures in the future. And, finally, more seminars and workshops will help to educate and enlighten clients (the federal government representatives), users, contractors, engineers, and architects on what is project failure, the factors that contributes to abundant failed projects, and their causes.
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