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THE IMPACT OF DEVIATING FROM SET GUIDELINES AND PROCEDURES IN THE IMPLEMENTATION OF ROAD CONSTRUCTION PROJECTS
ROADS AUTHORITY - MALAWI
Name of the author: Isaac Kunkeyani
Submitted in partial fulfilment of the requirements for the degree of
MSC PROJECT MANAGEMENT
University of Bolton, Off Campus Division
The University of Bolton
April, 2015
DECLARATION
I, Isaac Kunkeyani, declare that this dissertation entitled THE IMPACT OF DEVIATING
FROM SET GUIDELINES AND PROCEDURES IN THE IMPLEMENTATION OF ROAD
CONSTRUCTION PROJECTS ROADS AUTHORITY – MALAWI, is my own work. I
have not submitted this work or any part of it for a degree at any other university within
or outside Africa. All sources have been acknowledged by means of reference
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DEDICATION
This work is dedicated to my wife, Hlalapi Kunkeyani and our daughter, Chimwemwe
Kunkeyani for their support and encouragement during the time I pursued my studies. I
thank God for them.
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ACKNOWLEDGEMENT
First I would like to express my heartfelt gratitude to Dr. Easton Simenti-Phiri and Dr.
Peter Ngoma my supervisors for their continuous guidance in the conducting of this
research study.
I appreciate the encouragement Eng. Benjamin C Kapoteza gave me when I needed
support and time to stay away from work.
I thank Pastor Wellington Thawatha for his spiritual support and encouragement when
my feelings were low due to stress
I would like to thank Dr. Ida Mbendela, who helped me to refine my research proposal
when I was lost
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ABSTRACT
Delay and cost overruns are common in construction projects and road construction
projects in Malawi are not an exception (Yaw Frimpong, 2003). Road construction
projects in Malawi have become a challenging activity to venture into due to uncertainty
of whether payments for work done will be made on time for smooth running of the
project. Public construction projects ought to be lucrative due to their sizes and
availability of funding that they receive. However, in a situation where you have
outstanding payments as huge as US$58,340,766 (Gala, 2014), and in a developing
country, it is only clear that contractors working on these projects must be facing
financial hardships. The aim of the research was to identify difficulties contractors are
facing in view of the existing scenario. This was a quantitative descriptive study.
Convenient sampling was used to obtain the sample size of 220. Self-administered
structured questionnaire was used to collect data. A desk study of relevant secondary
data was also done. The collected data was analysed using excel to obtain frequencies,
percentages and mean.
The respondents included contractors, consultants and clients. Sixty-five percent of
them had between 11 and 20 years of experience in the construction of roads. Only
7.7% (n=17) were registered engineers. The study revealed that 59% (n=144) of the
respondents reported delayed payments as a factor that affected performance
negatively. Eighty three percent (n=183) reported lack of skilled labour force.
Based on the results it is recommended that GoM should stop awarding new contracts
until the arrears are cleared or unless other sources of funding are made available.
GoM should make a deliberate effort to put aside funds for road construction purposes.
Contractors should make deliberate programmes to send their staff for refresher
courses. GoM should enforce observance of road reserves in accordance with Public
Roads Act.
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LIST OF ABBREVIATIONS
ANRP Annual National Roads ProgrammeCEO Chief Executive OfficerESIA Environmental and Social Impact AssessmentEU European UnionEVM Earned Value ManagementFIDIC Internatinal Federation of Consulting EngineersFY Financial YearGDP Gross Domestic ProductGoM Government of MalawiIT Information TechnologyMGDS Malawi Growth Development StrategyMoFEP&D Ministry of Finance, Economic Planning and DevelopmentMoT&PW Ministry of Transport and Public WorksMWK Malawi KwachaNCIC National Construction Industry CouncilODPP Office of the Director of Public ProcurementPAP Project Acffected PeopleQMS Quality Management SystemRA Roads AuthorityRAP Relocation Action PlanRFA Roads Fund Administration
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Table of ContentsDECLARATION..............................................................................................................................................2
DEDICATION................................................................................................................................................3
ACKNOWLEDGEMENT..........................................................................................................................4
ABSTRACT................................................................................................................................................5
LIST OF TABLES...................................................................................................................................10
Table 5.2.1: Contractors project related difficulties..............................................................................10
CHAPTER 1............................................................................................................................................11
1.0 Introduction...............................................................................................................................11
1.1 Background...............................................................................................................................12
1.2 Problem Statement...................................................................................................................12
1.3 Significance of the Study...........................................................................................................13
1.4 Aim of the Study.......................................................................................................................14
Chapter 2.................................................................................................................................................15
2.1 Literature Review.......................................................................................................................15
2.1.1 Introduction......................................................................................................................15
2.1.2 Delays in Project Delivery......................................................................................................15
2.1.3 Risks in Construction Projects................................................................................................16
2.1.4 Contribution to Country Economy by Construction Sector....................................................16
Chapter 3.................................................................................................................................................18
3.0 Methodology.............................................................................................................................18
3.1 Introduction...............................................................................................................................18
3.2 Inclusion Criteria........................................................................................................................18
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3.3 Sampling Method and Sample Size............................................................................................19
3.2.1 Our Problem.....................................................................................................................19
3.2.2 Solution.............................................................................................................................20
3.3 Instrument.................................................................................................................................21
3.4 Validity and Reliability...............................................................................................................21
3.5 Ethical Considerations...............................................................................................................22
3.6 Data Management and Analysis................................................................................................22
Chapter 4.................................................................................................................................................24
4.0 Findings of the Study.................................................................................................................24
4.1. General Information............................................................................................................24
4.2 Consultants’ Responses.............................................................................................................25
4.3 Contractors’ Responses.............................................................................................................29
Table 4.3.1: Contractors project related difficulties..............................................................................29
4.4 Clients’ Responses.....................................................................................................................33
4.5 Combined Responses.................................................................................................................37
Table 4.5.3: Projects experiencing cost growths during implementation................................40
4.6 Secondary Data...........................................................................................................................41
4.6.1 Audit of Public Arrears of the Road Sector In 2010................................................................42
4.6.2 Audit of Public Arrears of the Road Sector In 2014................................................................42
Table 4.5: Procurement methods used for contracting.........................................................................42
Chapter 5.................................................................................................................................................44
5.1 Discussions.................................................................................................................................44
5.2 Conclusions and recommendations...........................................................................................46
5.2.1 Contractors project related difficulties..........................................................................46
5.2.2 Failure to achieve quality expectations in projects.....................................................46
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5.2.3 Projects experiencing cost growths during implementation......................................48
5.2.4 Absence of community ownership of projects.............................................................49
Bibliography...............................................................................................................................................51
APPENDICES.........................................................................................................................................53
APPENDIX A...........................................................................................................................................53
PART I: FOR CONTRACTORS............................................................................................................53
PART II: FOR CLIENTS AND CONSULTANTS.................................................................................54
PART III: FOR ALL RESPONDENTS..................................................................................................56
APPENDIX B...........................................................................................................................................61
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LIST OF TABLES
Table 1.1: Arrears for 2009/2010 to 2013/2014
Table 5.1.1: Contractors project related difficulties
Table 5.1.2: Failure to achieve quality expectations in projects
Table 5.1.3: Projects experiencing cost growth during implementation
Table 5.1.4: Absence of community ownership
Table 5.2.1: Contractors project related difficulties
Table 5.2.2: Failure to achieve quality expectations in projects
Table 5.2.3: Projects experiencing cost growths during implementation
Table 5.2.4: Absence of community ownership of projects
Table 5.3.1: Contractors project related difficulties
Table 5.3.2: Failure to achieve quality expectations in projects
Table 5.3.3: Projects experiencing cost growths during implementation
Table 5.3.4: Absence of community ownership
Table 5.4.1: Contractors project related difficulties
Table 5.4.2: Failure to achieve quality expectations in projects
Table 5.4.3: Projects experiencing cost growths during implementation
Table 5.4.4: Absence of community ownership
Table 5.5: Procurement methods used for contracting
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CHAPTER 1
1.0 Introduction
The road construction industry has been vibrant over the past ten years in Malawi. A
major criticism facing the Malawi road construction projects is growing rate of delays in
delivery of these projects. The problem of project delay is not unique to Malawi. In
Nigeria, it was revealed that seven out of ten projects surveyed suffered delays in their
execution (Aibinu, 2002). In addition Haseeb, (2011) affirmed that the delay in
completion of construction projects is a worldwide problem.
Road transport constitutes more than 70% of cargo transported in Malawi in which both
motorised and non-motorised transports are used, (Siwande, 2011). As stipulated in the
Malawi Growth Development Strategy (MGDS), roads are a development catalyst since
they provide means by which goods are transported from one part of a world to another.
In addition, the 2011-2016 Roads Authority Five Years Strategic and Business Plan
states that in medium term, efforts will be made in improving mobility and accessibility of
the population to key road corridors within and out of Malawi. This would facilitate the
improved mobility and accessibility of rural communities to goods and services at low
cost. However, road construction is an investment that requires heavy capital.
The Malawi Roads Authority (RA) is mandated by an Act of Parliament Ch69:07, with
the responsibility of constructing and maintaining the designated road network in
Malawi. It is also guided by other policy documents which include Public Procurement
Act (No. 8 of 2003), Public Audit Act (No. 6 of 2003), Public Finance Management Act
(No. 7 of 2003) and Public Roads Act (Cap. 69.02). The RA uses funds from the Roads
Fund Administration (RFA) for all maintenance works. However, upgrading and new
construction projects are financed by the central treasury of the Government of Malawi
(GoM), which is in two categories; funds provided by development partners through
loans and grants, and funds provided by GoM. Frimpong, et al (2003) recommend that
effective project planning, controlling and monitoring should be established to enhance
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project performance in order to minimise or avoid delay and cost problems on
construction projects.
1.1 Background
The road network in Malawi continued to deteriorate due to lack of adequate
maintenance during the period beginning mid 1990’s to 2005. However, through Road
Maintenance Initiative study conducted between 1995 and 1997, financed by the
European Union (EU), the National Roads Authority was established under an Act of
Parliament. This organisation was mandated to collect funds for the purpose of road
maintenance, and to use such funds in the implementation of the maintenance
activities. This resulted in realisation of relatively more funds dedicated to road
maintenance than was the case before, and the condition of the road network began to
improve. However, due to the backlog of road maintenance that existed, these funds
were only sufficient for maintenance activities other than upgrading.
In 2005, the government benefited from debt relief, such that all the debts that the
country was servicing were cancelled. This resulted in the realisation of more funds in
the GoM treasury to the extent that several projects could be implemented adequately.
In the roads sector, it was decided that some roads which lead to important facilities
such as hospitals, but were still earth/gravel surfaced should be gradually upgraded to
bituminous surface to make them all season roads. This proved to be a very good
indicator for the performance of the government from the perspective of the
stakeholders. As a result, road projects that were planned to upgrade five kilometres
were extended under political influence to several tens of kilometres, and the durations
of the projects were accordingly extended. Eventually the monthly bill for payment of
such projects escalated to levels where government could not cope.
1.2 Problem Statement
Despite GoM making efforts to reduce arrears which were revealed to stand at MWK
27.42 billion (Gala, 2014), they continued to grow. An Audit conducted in 2010 revealed
a total of MWK 3.65 billion of arrears. During that period, GoM made a ‘Road Map’ on
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how the arrears would be cleared so that contractors and consultants would be able to
perform. Despite measures put in place to reverse the situation, the bill has continued to
rise to MWK27.42 billion by 30th June 2014. This is equivalent to US$58.34 million using
a conversion rate of US$ 1.00 to MWK 470.00 prevailing at the time. This was followed
and the arrears were being reduced gradually. However, since the projects were live,
there was accumulation of amounts to be paid to the contractors and consultants at the
end of each month. Table 1.1 illustrates the situation that prevailed over the years up to
30th June 2014. The Financial Year (FY) in Malawi starts on 1 st July and ends on 30th
June.
Table 1.2: Arrears for 2009/2010 to 2013/2014
Financial Year(July to June)
Amount of Arrears(MWK)
Amount of Arrears(US$)
2009/2010 5,229,247,418 34,402,943
2010/2011 11,469,374,000 38,231,246
2011/2012 10,991,008,000 31,402,880
2012/2013 8,502,442,845 22,673,181
2013/2014 27,420,160,151 58,340,766
It is this trend of affairs that made the author consider researching on the existing
guidelines that are supposed to be followed when implementing road construction
projects; find out the level of adherence to such guidelines, and why the arrears have
continued to rise. Structured questionnaires were used to gather information on why
road construction projects are running for much longer periods than planned and the
respondents are key players in the road construction industry either as client, consultant
or contractors. It is hoped that after the study, the recommendations made will be
adopted by policy makers to avoid such trends continuing in the future.
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1.3 Significance of the Study
The results of this study will assist implementers of road construction projects to
develop more effective strategies to adhere to existing guidelines, so that it facilitates
improved mobility and accessibility of rural communities to goods and services at low
cost. Since there is dearth of information on the impact of deviating from set guidelines
in Malawi the results of this study will provide baseline information for further research
so as to improve mobility and accessibility of the population to areas of importance. It is
hoped that after the study, the recommendations made will be adopted by policy makers
to avoid such trends continuing in the future.
1.4 Aim of the Study
The aim of the research is to explore GoM accumulated huge outstanding bills to be
paid to contractors and consultants engaged in road construction projects over the
period 2007-2014.
1.5 Specific Objectives
The specific objectives were:-
1) To review projects that were implemented or are being implemented by the
Roads Authority since 2007 to 2014, including those that are ongoing.
2) To determine to what extent the implementation of these projects adhered to
laid down guidelines for project implementation at Roads Authority
3) To develop a framework to be used by Roads Authority management for
guiding policy makers in the selection of projects
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Chapter 2
2.1 Literature Review
2.1.1 IntroductionThis section presents a review of studies that have been done in relation to the
construction industry and public institutions performance. The selected literature was
taken because it explains issues that are similar to the study being undertaken
(construction of roads) and the set up of the institution (public institution). Fisher, (2010)
explains that the first step in literature review involves identifying the different fields of
literature that may be appropriate to the study without, at this stage, looking at any of it
in detail. So, this means a collection of books, journals and papers that deal with the
same issues and that respond to each other in the developing debates mapping and
describing the literature about a topic.
2.1.2 Delays in Project Delivery
The problem of delays in the construction industry is a global phenomenon
(Sambasivan & Soon, 2007). The magnitudes vary considerably depending on the
economy of the country and training of the players. In Nigeria, a major criticism to the
construction industry, at least in the early 1990’s, was delays in project delivery, (Aibinu,
2002). In Saudi Arabia, it was found that only 30% of construction projects were
completed within the scheduled completion dates. It was also established that the
average time overrun was between 10% and 30%, (Assaf, 2006). González, (2013)
reported that to stay on top or compete with large organizations, today’s construction
organizations need to run their projects within scope, time and cost in the midst of crises
and uncertainty to achieve their strategic objectives and vision. According to the
author’s observations, in a country where factors that contribute to project delivery
delays; such as delayed payments, incomplete design details and variation orders, it is
unlikely that construction organisations operating under these conditions would prosper.
Delay happens in many construction projects, but the priority of delay causes varies in
different countries as they are governed by environmental effects (Sepasgozar, 2015).
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He argues that delays can lead to considerable effects such as lawsuits between clients
and contractors, loss of productivity and revenue, and contract termination.
2.1.3 Risks in Construction Projects
A broad range of the project management literature points to early warning signals
through the treatment of risk management as one important part of the field’s toolbox
(Haji-Kazemi, 2013). In addition, Haji-Kazem states that the choice of approach in a
given project will be up to the direction of the project management team, in order to
exploit as many early warning signs as possible and timely enough to be able to take
preventive actions. Sociologists such as Beck and Giddens have argued that in modern
society risk has increasingly become central to all aspects of human affairs; that we live
in a ‘risk society’ where deliberation about social, economic, political and environmental
issues is bound to fail if it does not take risk into account (Flyvbjerg, 2003). An
examination of failed Information Technology (IT) projects reveals that long before the
failure there were significant symptoms or “early warning signs” (Keppelman, 2006).
Another concept found in literature is that of “earned value management” (EVM). The
earned value project management method integrates three critical elements of project
management; thus, scope management, cost management and time management
(Anbari, 2003). If the scope is not managed well, chances are that it will increase to
levels where the cost will increase beyond the budget. In addition it will also entail
increasing the implementation time if acceleration costs may not be allowed. However, if
earned value management is applied it will be possible at any stage to calculate earned
value for individual break down structures by measuring achieved performance against
planned performance. Necessary adjustments can be made based on the values of
earned value calculated.
2.1.4 Contribution to Country Economy by Construction Sector
Construction projects are perceived to have an importance in some economies, such as
Colombian economy, (Petrovic-Lazarevic, 2008). In his article he argues that the
importance of the construction industry to the economy is based on three factors.
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Firstly, it is believed that it contributes significantly to the increase of the gross domestic
product (GDP). Secondly, it uses unskilled labour intensively (in countries where
construction projects are labour intensive), providing a positive effect on employment
rates. Thirdly, it interacts with other industries, thereby fostering economic activity.
According to the author’s observation, in large road construction projects most of the
labour that benefits from their existence are skilled labourers such as artisans, truck
drivers, plant operators and materials technicians. This is so because the projects are
generally equipment intensive. In Malaysia’s the Construction Sector is one of the
important sectors that contribute to its economic growth. The sector accounted for
nearly 3.3% of GDP in the year 2005 and employed about 600,000 workers including
109,000 foreign workers (Sambasivan, 2007)
SummaryMost studies reviewed were done outside the country. Furthermore, most studies have
concentrated on causes and effects of delays. There is inadequate information on
arrears accumulated in construction projects. However, there is paucity of information of
Malawi literature. Therefore it was necessary to conduct this study in Malawi.
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Chapter 3
3.0 Methodology
3.1 Introduction
This chapter describes the study design, sample and sampling method, instrument, data
collection method, data analysis and ethical consideration. This is a quantitative
descriptive study. The aim of the research is to explore GoM accumulated huge
outstanding bills to be paid to contractors and consultants engaged in road construction
projects. The researcher used structured questionnaires to gather information on road
construction projects from the key players in road construction industry as clients,
consultants or contractors. A desk review was also done on documents that had
information on progress of the road construction projects.
3.2 Inclusion Criteria
For the client, members involved directly to a considerable degree in the implementation
of such projects were targeted. These included people from the Roads Authority, Roads
Fund Administration, Ministry of Transport and Public Works (MoT&PW) and Ministry of
Finance, Economic Planning and Development (MoFEP&D). It included engineers,
economists, accountants and administrators.
Respondents from the contractors were mostly technical, although a few were finance
people. The technical respondents included engineers and technicians, those that were
directly involved with the management of construction projects at various levels, and
would give informed opinions on the subject.
Consultants were not included in the pilot survey, but based on comments and
questions raised by the respondents from the contractors, it was considered that
consultants needed to be included in the survey. They were only consulted during the
main survey.
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3.3 Sampling Method and Sample Size
In order to make sure that the research findings may be relied, it is necessary to
calculate a sample size that if used, can represent the population under consideration
and collect data from the smaller size grouping (Mark Saunders, 2009). Accordingly, the
sample size was determined as follows:-
Sample size
Where n is the sample size
Z /2 is half the difference between sample size and confidence level.
E is the standard error and
is the standard deviation
This formula can be used when is known and you want to determine the sample size
necessary to establish, with a confidence of , the mean value to within . You
can still use this formula if you don’t know your population standard deviation and you
have a small sample size. Although it’s unlikely that you know when the population
mean is not known, you may be able to determine from a similar process or from a
pilot test/simulation.
3.2.1 Our Problem
We would like to establish an unknown problem, that of road construction projects which
are started and take too long to finish, with GoM continually accumulating a huge bill of
arrears in payments due to contractors and consultants. However, we want the
confidence level of our survey to be 95 percent sure that the sample mean is within 1
minute of the population mean . Previous survey results show = 6.95 minutes, and
this was adopted as a starting point.
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3.2.2 Solution
We are solving for the sample size .
A 95% degree confidence corresponds to = 0.05. Each of the shaded tails in the
figure below has an area of = 0.025. The region to the left of and to the right of
= 0 is 0.5 – 0.025, or 0.475. In the table of the standard normal ( ) distribution, an area
of 0.475 corresponds to a value of 1.96. The critical value is therefore = 1.96.
Figure 1: Normal Distribution Curve
The margin of error = 1 and the standard deviation = 6.95. Using the formula for
sample size, we can calculate :
So it was established that in this research we needed to sample at least 186 (rounded
up) randomly selected respondents. In this research 100 respondents came from client,
100 from contractors and 20 from consultants giving a total of 220 which is higer than
the required minimum sample size. As explained above, the questionnaire was the
same except for the introductory section where details of the respondent in terms of
employment, training and road construction industry were sought using different
questions.
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3.3 Instrument
The research instrument was developed based on study objective and construction
standard guideline. The construction standard guidelines stipulate standard
specifications to be used, conditions of contract that will be used, construction design
drawings that guide the contractors when tendering and carrying construction work. The
instrument was divided into five parts. Part A obtained general information about the
respondents which included age, personal experience in road construction, gender and
academic & professional qualifications. Part B obtained information about contractor’s
project related difficulties, Part C, Achievement of quality expectations, Part D, Project
experiencing growths during implementation, Part E, absence of community ownership
of projects, Part F, was a request for general comments with regards to interventions
that could improve the implementation of road construction projects in Malawi and Part
G, was request for comments with regard to the barriers in the implementation of road
construction projects in Malawi, (See Appendix A).
3.4 Validity and Reliability
Validity is concerned with the extent to which the instrument reflects the phenomenon
being examined and addresses the appropriateness, meaningfulness, and usefulness of
specific conclusion drawn from instrument scores (Burns & Grove, 2009). In order to
ensure content validity, the research instrument was reviewed by research experts to
establish whether the content being asked was accurate to obtain the desired
information. Reliability refers to the accuracy and consistency of information obtained in
a study (Polit & Beck, 2008).
For reliability of the instrument the researcher adapted from existing check list tools
based on standard road construction specifications, guidelines for procurement of
contractors for road construction projects. A pilot study was conducted on ten (10)
respondents from the client and ten (10) from the contractors. The questionnaire was
refined at the completion of the pre-test.
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3.5 Ethical Considerations
The research instrument was first approved by the research supervisor before it was
used. The respondents were provided with detailed information regarding the research
and their consent was obtained (See Appendix C). Respondents were told that they had
the right to refuse to participate in the study. Their refusal to participate in the study
would not risk their job in anyway. They were free to withdraw from the study at any
point. Respondents were assured of privacy and confidentiality. All data was stored
under lock.
factors that affect performance of contractors Secondary data was analysed done using
survey questionnaire questions and use of secondary data. As the research was
focusing on why GoM had accumulated such a huge arrears bill as shown in Table 1.1,
and what could be done to get out of the deficit pit, secondary data was also considered
to be vital, as it would provide factual information on the ground. The secondary data
consisted of reports obtained from the implementing agency in the road construction
projects and independent reports compiled through a studies conducted with funding
from the EU.
The questionnaires were initially prepared for two groups, namely staff from the client’s
side and contractors representatives. Eventually it was considered necessary to include
one to be given to consultants involved in the design and construction supervision of the
road projects, as they might give different opinions from those given by clients and
contractors. The difference in the presentation of these questionnaires was only in the
introductory section; otherwise the pertinent questions were the same; thus obtaining
similar information from all three groups of people.
3.6 Data Management and Analysis
Every completed questionnaire was checked for completeness as it was handed back to
the researcher. This was done to make sure data was consistent and correct for
credible analysis (Polit & Hungler, 1999) 22
Data were entered and analysed using excel spreadsheet. The descriptive statistics
such as frequencies, percentages and mean were calculated to describe the
respondents’ perception of the factors affecting performance of contractors. The results
are presented in tables in the “Findings” section – Chapter 4.
The data collected was enumerated according to frequencies of response to the
questionnaire by simply marking with “ones”, for first four, and the fifth count was shown
by crossing the four “ones” preceding it. This was then given actual numbers by working
out the responses for each question. The results are presented below starting with
consultants, followed by contractors and finally the client.
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Chapter 4
4.0 Findings of the Study
4.1. General InformationTable 4.1: Age Group & Gender
Age Group FrequencyMale % Male Female % Female Total % Total
(21-25) 1 33.33 2 66.67 3 1.36(26-30) 11 64.71 6 35.29 17 7.73(31-35) 26 66.67 13 33.33 39 17.73(35-40) 49 77.78 14 22.22 63 28.64(41-45) 44 77.19 13 22.81 57 25.91(46-50) 27 79.41 7 20.59 34 15.45(>50) 7 100 0 0 7 3.18Total 165 75 55 25 220 100
The respondents comprised of a total of 220 people working in positions related to road
construction projects. 75% (n=165) were male and 25% (n=55) were female. The
majority of the respondents were within the age group of 35-45 years of age and this
represented 54.55% (n=120)
Table 4.2: Years of Experience in Road Construction Industry
Years of Experience in Road Construction Industry (1-5) (6-10) (11-15) (16-20) >20 NFrequency 16 43 91 53 17 220% 7.27 19.55 41.36 24.09 7.73 100
Sixty-five percent (n=144) have 11-20 years of experience. This is in tandem with most
of the requirements in terms of experience as many times for key personnel minimum
years of experience are set at 10 years.
24
Table 4.3: Academic and Professional Qualification
Academic and Professional Qualification Cert or Dip Degree Post Grad Pr Eng (R Eng) N
Frequency 145 37 21 17 220% 65.91 16.82 9.55 7.73 100
Only 7.73% (n=17) were registered/professional engineers. These were mostly from the consultants and clients.
4.2 Consultants’ Responses
Table 4.2.1: Contractors project related difficulties
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
1.1 Delayed payments by the client Frequency 20 0 0 0 0 0 20 5 11.2 Contractor’s cash flow problems Frequency 20 0 0 0 0 1 19 4.95 31.3 Lack of access to credit facilities Frequency 20 0 0 0 0 1 19 4.95 3
1.4 Shortage of skilled labour force in the market Frequency 20 0 0 0 0 0 20 5 1
1.5 Lack of professional management skills by contractor staff Frequency 20 0 0 0 6 3 11 4.25 7
1.6 Delayed instructions from the consultant Frequency 20 0 1 7 6 6 0 2.85 8
1.7 Incomplete contract documentation Frequency 20 0 13 3 4 0 0 1.55 9
1.8 Unavailability of plant and equipment in the market Frequency 20 0 0 0 0 3 17 4.85 4
1.9 Inclement weather Frequency 20 0 20 0 0 0 0 1 10
1.10 Bureaucracy from government agencies Frequency 20 0 0 0 1 1 18 4.85 4
Average 3.93
In the table above, the consultants’ perception is that the client was supposed to play a
significant role in the smooth running of the project. However, this has not been the
case especially in terms of making payments. There is also a high score on the question
concerning skilled labour force. This is clearly as a result of their daily interaction with
the contractors’ staff on site, where the consultants expect the contractor’s personnel to
25
deal with issues on site professionally, which apparently has not been satisfying to the
site supervision team. This table and all the others to follow were worked in excel for
easy calculation of the mean and average scores based on the pattern of respondents.
Table 4.2.2: Failure to achieve quality expectations in projects
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
2.1 Shortage of skilled labour force in the market Frequency 20 0 0 2 1 4 13 4.4 4
2.2 No quality management systems (QMS) by contractors Frequency 20 0 1 2 1 3 13 4.25 5
2.3 Non standardised specifications Frequency 20 0 17 1 2 0 0 1.25 8
2.4 Lack of technical skills by consultant’s site staff Frequency 20 0 0 0 2 12 6 4.2 6
2.5 Usage of lowest price tender method of contract procurement Frequency 20 0 0 0 1 2 17 4.8 2
2.6 High levels of corruption Frequency 20 0 4 13 3 0 0 1.95 7
2.7 Mistakes and discrepancies in contract document Frequency 20 0 0 0 4 2 14 4.5 3
2.8 Contract duration too long (≥ 3 years) Frequency 20 0 0 0 0 3 17 4.85 1
2.9 Shortened contract durations Frequency 20 0 18 2 0 0 0 1.1 9
2.10 Scarcity of materials meeting contract specifications (gravel / quarry stone) Frequency 20 0 18 2 0 0 0 1.1 9
Average 3.24
In this table, the consultants’ common opinion is that the client’s procurement method in
awarding contracts to the lowest price tender. This could be supported by the
contractors’ own opinion as their questionnaire is analysed. The consultants also
demonstrate that contracts that have long periods of implementation are prone to facing
difficulties. Some authors suggest that projects need to be run in the shortest possible
time. They recommend durations of 18 to 36 months as ideal. In developing countries
whose economies are driven by external forces, long duration projects may end up
costing much more than planned.
26
Table 4.2.3: Projects experiencing cost growth during implementation
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
3.1 High inflation rates Frequency 20 0 0 1 3 7 9 4.2 13.2 Unavailability of foreign exchange Frequency 20 0 0 0 3 8 9 4.3 23.3 Scarcity of construction materials Frequency 20 0 0 2 3 4 11 4.2 33.4 Changes in scope of works Frequency 20 0 0 1 3 7 9 4.2 5
3.5 Incomplete designs at project commencement Frequency 20 0 1 1 4 5 9 4 4
3.6 High labour wages Frequency 20 0 3 1 5 5 6 3.5 63.7 Rising costs of construction materials Frequency 20 0 1 2 8 4 5 3.5 7
3.8 Under-estimation of cost of works during tender stage Frequency 20 0 2 5 6 2 5 3.15 8
3.9 Delayed payments by the client Frequency 20 0 0 0 4 4 12 4.4 9
3.1 High transportation costs Frequency 20 0 0 2 3 5 10 4.15 10
Average 3.96
The consultants’ responses in this table seem to be betraying them that they are not
doing a good job on providing designs. However, this is a manifestation of what is
happening in these projects. Sometimes a contract is first awarded to the contractor,
and later on the consultant is engaged. The design may have to begin at that point in
time. This results in consultant providing the designs “late” in the mind of the client and
contractor. Also, the issue of delayed payments has been rated high by the consultant.
This affects the cash flow of the contractor.
27
Table 4.2.4: Absence of community ownership
U Minor........................Major
Mea
n Sc
ore
Ran
king
Factor 0 1 2 3 4 5
4.1 Lack of initial community input at design stage Frequency 20 0 0 3 4 7 6 3.8 4
4.2 No consultation with the community by contractor on site Frequency 20 0 7 4 3 6 0 2.4 9
4.3 Disputes relating to employment of local people Frequency 20 0 2 4 11 2 1 2.8 6
4.4 Negative social impacts brought by the contractor Frequency 20 0 9 3 0 5 3 2.5 8
4.5 Negative environmental impacts on the community Frequency 20 0 3 5 7 5 0 2.7 7
4.6 No formal channels of communication Frequency 20 0 6 4 3 3 4 2.75 5
4.7 Delayed assessment of compensation Frequency 20 0 0 0 4 3 13 4.45 1
4.8 Delayed payments of compensation Frequency 20 0 0 0 4 3 13 4.45 1
4.9 Under-evaluation of properties to be compensated Frequency 20 0 0 0 4 3 13 4.45 1
4.10 Lack of timely intervention by the local authorities Frequency 20 0 10 3 7 0 0 1.85 10
Average 3.22
Road construction projects have a lot of stakeholders. Owing to the nature of these
projects, every person in the country is an interested member of the project, either as an
expected user or project affected people (PAP). Compensations on road construction
projects are unique in comparison with what happens in the neighbouring countries.
Both due to fast growing population in Malawi and lack of enforcement by authorities,
the road reserves are not observed, such that encroachers are paid compensations to
relocate from the road reserve. This adds to the bill that government has to settle apart
from the certified work bills.
28
4.3 Contractors’ Responses
Table 4.3.1: Contractors project related difficulties
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
1.1 Delayed payments by the client Frequency 100 0 2 10 8 20 60 4.26 1
1.2 Contractor’s cash flow problems Frequency 100 5 11 17 17 19 31 3.27 3
1.3 Lack of access to credit facilities Frequency 100 2 2 8 22 30 36 3.84 2
1.4 Shortage of skilled labour force in the market Frequency 100 15 12 8 24 19 22 2.86 4
1.5 Lack of professional management skills by contractor staff Frequency 100 5 13 27 27 19 9 2.69 8
1.6 Delayed instructions from the consultant Frequency 100 6 17 15 26 26 10 2.79 5
1.7 Incomplete contract documentation Frequency 100 11 16 16 18 21 18 2.76 6
1.8 Unavailability of plant and equipment in the market Frequency 100 13 15 15 24 24 9 2.58 9
1.9 Inclement weather Frequency 100 25 29 20 20 4 2 1.55 10
1.10 Bureaucracy from government agencies Frequency 100 6 9 20 41 21 3 2.71 7
Average 2.93 The contractors have a high rating for delayed payments, 60% of the respondents
strongly felt that delayed payments were a major factor affecting contractors’
performance. Unfortunately credit facilities are not conducive either as they attract high
interest rates.
29
Table 4.3.2: Failure to achieve quality expectations in projects
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
2.1 Shortage of skilled labour force in the market Frequency 100 2 0 5 10 64 19 3.91 1
2.2 No quality management systems (QMS) by contractors Frequency 100 0 11 10 26 29 24 3.45 2
2.3 Non standardised specifications Frequency 100 2 10 17 24 26 21 3.25 6
2.4 Lack of technical skills by consultant’s site staff Frequency 100 0 17 12 12 28 31 3.44 3
2.5 Usage of lowest price tender method of contract procurement Frequency 100 1 10 17 19 24 29 3.42 4
2.6 High levels of corruption Frequency 100 0 14 36 15 21 14 2.85 6
2.7 Mistakes and discrepancies in contract document Frequency 100 0 28 17 17 19 19 2.84 7
2.8 Contract duration too long (≥ 3 years) Frequency 100 0 17 19 10 29 25 3.26 5
2.9 Shortened contract durations Frequency 100 2 36 24 24 12 2 2.14 9
2.10 Scarcity of materials meeting contract specifications (gravel / quarry stone) Frequency 100 0 42 29 19 10 0 1.97 10
Average 3.05
The contractors agree with the consultants that there are not adequate numbers of
skilled labour on the market. This has been ranked the highest factor in this category
coupled with lack of skilled consultancy staff. As a country, there is need to address this
area by providing training to people that can effectively work on road construction
projects. The National Construction Industry Council (NCIC) has been in existence for a
long over fifteen (15) years. It is expected that they will offer the necessary training.
Probably there is confusion as to which organisation should be offering such trainings.
Currently the Polytechnic offers several courses that would help alleviate such
shortfalls. There are several Technical Colleges offering technician courses that are
30
desired in the construction industry. If these can be enhanced with appropriate material,
the problem of shortage of skilled labour may be alleviated.
Table 4.3.3: Projects experiencing cost growths during implementation
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
3.1 High inflation rates Frequency 100 0 0 5 14 21 60 4.36 1
3.2 Unavailability of foreign exchange Frequency 100 0 0 0 17 38 45 4.28 23.3 Scarcity of construction materials Frequency 100 0 2 10 17 21 50 4.07 33.4 Changes in scope of works Frequency 100 0 2 8 12 38 40 4.06 43.5 Incomplete designs at project commencement Frequency 100 0 5 5 19 26 45 4.01 53.6 High labour wages Frequency 100 0 10 12 24 28 26 3.48 83.7 Rising costs of construction materials Frequency 100 0 7 10 24 21 38 3.73 6
3.8 Under-estimation of cost of works during tender stage Frequency 100 0 12 26 31 19 12 2.93 9
3.9 Delayed payments by the client Frequency 100 0 9 16 20 22 33 3.54 7
3.10 High transportation costs Frequency 100 0 12 29 26 33 0 2.8 10
Average 3.73
From the table above, the perception of contractors is that high inflation rates, lack of
foreign exchange, scarcity of construction materials, incomplete designs at project
commencement, rising costs of construction materials and delayed payments are all
significant factors that influence growing costs of projects during implementation. This is
understandable as they all relate to finances that are required for procurement of
resources.
31
Table 4.3.4: Absence of community ownership of projects
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
4.1 Lack of initial community input at design stage Frequency 100 7 7 6 26 33 21 3.34 3
4.2 No consultation with the community by contractor on site Frequency 100
5 7 24 7 19 383.42 1
4.3 Disputes relating to employment of local people Frequency 100 5 11 5 19 36 24 3.42 1
4.4 Negative social impacts brought by the contractor Frequency 100 7 5 17 21 29 21 3.23 4
4.5 Negative environmental impacts on the community Frequency 100
5 10 26 14 24 213.05 5
4.6 No formal channels of communication Frequency 100 0 19 21 26 10 24 2.99 6
4.7 Delayed assessment of compensation Frequency 100 0 24 19 33 12 12 2.69 7
4.8 Delayed payments of compensation Frequency 100 2 21 24 34 12 7 2.54 8
4.9 Under-evaluation of properties to be compensated Frequency 100
2 35 19 24 10 102.35 9
4.10 Lack of timely intervention by the local authorities Frequency 100
2 31 33 19 10 52.19 10
Average 2.92
The rating in this table indicates that contractors have challenges with consultations with
the community on site, demands for employment from local people who may not
necessarily be preferred by the contractors as they would spend time training them
before they can be reasonably productive.
32
4.4 Clients’ Responses
Table 4.4.1: Contractors project related difficulties
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
1.1 Delayed payments by the client Frequency 100 0 2 20 20 8 50 3.84 1
1.2 Contractor’s cash flow problems Frequency 100 5 11 17 17 19 31 3.27 3
1.3 Lack of access to credit facilities Frequency 100 2 8 3 29 30 28 3.61 2
14 Shortage of skilled labour force in the market Frequency 100 15 12 8 24 19 22 2.86 4
1.5 Lack of professional management skills by contractor staff Frequency 100 5 13 27 27 19 9 2.69 5
1.6 Delayed instructions from the consultant Frequency 100 6 17 26 26 15 10 2.57 6
1.7 Incomplete contract documentation Frequency 100 11 21 18 18 16 16 2.55 7
1.8 Unavailability of plant and equipment in the market Frequency 100 13 15 24 24 15 9 2.4 8
1.9 Inclement weather Frequency 100 25 29 20 20 4 2 1.55 9
1.10 Bureaucracy from government agencies Frequency 100 41 20 20 10 6 3 1.29 10
Average 2.66
The clients’ respondents seem to agree that delayed payments by the client contribute
to difficulties encountered by contractors during project implementation. Fifty percent of
the clients’ respondents acknowledged that delayed payments do impact negatively on
the contractors’ performance. This can be a good footing to start from if the problems
are to be eliminated or alleviated where even the clients’ staff perceives delayed
payments as an issue requiring to be dealt with. Even on the contractors’ cash flow
problems is acknowledged to be a significant factor in influencing poor performance by
contractors. However, the clients’ average of the mean scores is the lowest in this
category when compared with that obtained from consultants and contractors
corresponding section.
33
Table 4.4.2: Failure to achieve quality expectations in projects
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
2.1 Shortage of skilled labour force in the market Frequency 100 2 0 10 5 19 64 4.31 1
2.2 No quality management systems (QMS) by contractors Frequency 100 0 12 10 23 26 29 3.5 2
2.3 Non standardised specifications Frequency 100 2 10 17 24 26 21 3.25 3
2.4 Lack of technical skills by consultant’s site staff Frequency 100 10 17 12 18 12 31 2.98 5
2.5 Usage of lowest price tender method of contract procurement Frequency 100 2 10 23 19 29 17 3.14 4
2.6 High levels of corruption Frequency 100 5 14 10 36 21 14 2.96 6
2.7 Mistakes and discrepancies in contract document Frequency 100 0 28 17 17 19 19 2.84 7
2.8 Contract duration too long (≥ 3 years) Frequency 100 0 25 19 29 10 17 2.75 8
2.9 Shortened contract durations Frequency 100 2 36 24 24 12 2 2.14 9
2.10 Scarcity of materials meeting contract specifications (gravel / quarry stone) Frequency 100 0 42 29 19 10 0 1.97 10
Average 2.98
According to clients’ perception, shortage of skilled labour force in the market is
significant factor that contributes to poor quality of work done by contractors. It must be
pointed out here that where it has been observed that the work produced is not meeting
the required standard specifications the contractors are asked to remedy such defects
at their own cost. Thus, shortage of skilled labour force may result in delays (as some
work has to be reworked), higher expenditures by the contractors and lengthened
period of project delivery.
34
Table 4.4.3: Projects experiencing cost growths during implementation
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
3.1 High inflation rates Frequency 100 0 0 5 14 21 60 4.36 1
3.2 Unavailability of foreign exchange Frequency 100 0 0 0 17 45 38 4.21 2
3.3 Scarcity of construction materials Frequency 100 0 2 10 17 21 50 4.07 3
3.4 Changes in scope of works Frequency 100 2 2 8 12 38 38 3.96 5
3.5 Incomplete designs at project commencement Frequency 100 0 5 5 19 26 45 4.01 4
3.6 High labour wages Frequency 100 0 10 12 24 28 26 3.48 6
3.7 Rising costs of construction materials Frequency 100 0 7 10 38 21 24 3.45 7
3.8 Under-estimation of cost of works during tender stage Frequency 100 0 12 26 31 19 12 2.93 8
3.9 Delayed payments by the client Frequency 100 2 14 21 31 22 10 2.87 9
3.10 High transportation costs Frequency 100 0 29 33 26 12 0 2.21 10
Average 3.56
Sixty percent of the respondents view high inflation rates as seen from the high
frequency at the peak of the Likert scale. This is probably because they observe the
escalating project costs as inflation rates rise. Normally there is a formula for calculating
how contractors should be compensated for meeting costs of inflation effects, in what
International Federation of Consulting Engineers (FIDIC) conditions of contract refer to
as price escalation formula. The effect of this formula is that at base rate, i.e. when
contractors tender for contracts, a date is fixed as the date for base rates. Using
appropriate indices for materials, labour and plant; and with the use of weighting pre-
determined at tender (which must add to 1) current indices for the month are obtained
and the amount of inflation is calculated. At the base rate, price escalation factor is
calculated as one, since everything has remained the same. However, when these
35
prices vary from their original values either upwards or downwards, the calculated price
escalation factor is less than one or greater than one.
Table 4.4.4: Absence of community ownership
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
4.1 Lack of initial community input at design stage Frequency 100 7 7 6 21 26 33 3.51 3
4.2 No consultation with the community by contractor on site Frequency 100 5 7 19 7 24 38 3.52 2
4.3 Disputes relating to employment of local people Frequency 100 5 11 5 19 24 36 3.54 1
4.4 Negative social impacts brought by the contractor Frequency 100 7 5 17 29 21 21 3.15 5
4.5 Negative environmental impacts on the community Frequency 100 5 10 14 26 24 21 3.17 4
4.6 No formal channels of communication Frequency 100 0 19 21 26 24 10 2.85 74.7 Delayed assessment of compensation Frequency 100 0 12 19 33 24 12 3.05 64.8 Delayed payments of compensation Frequency 100 2 21 34 24 12 7 2.44 9
4.9 Under-evaluation of properties to be compensated Frequency 100 2 19 35 24 10 10 2.51 8
4.10 Lack of timely intervention by the local authorities Frequency 100 2 31 33 19 10 5 2.19 10
Average 2.99
The clients perceive community ownership of road construction projects as an important
factor in enhancing its performance. Probably this is because vandalise parts of the
road infrastructure. During the month of January 2015, several roads had some sections
washed away. On following up to repair the damages, it was found that metal pipe
culverts had been stolen during the dry season. When the rain came, the fill under the
bituminous paved road collapsed. Such cases make the clients staff view lack of
ownership of the roads by the communities where this occurs. There is also
encroachment into the road reserve by way of cultivating crops; right in the side drains
of the roads.
So far, the data has been analysed in accordance with particular grouping. However,
none of these groups satisfies the sample size requirements for the research findings to
36
be worth relying upon. Thus, the three sets of respondents were again merged, giving a
total sample size of 220 which is higher than the calculated sample size of 186.
4.5 Combined Responses
The first group of factors to be assessed related to difficulties contractors encounter as
they execute construction projects.
Table 4.5.1: Contractors project related difficulties
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
1.1 Delayed payments by the client Frequency 220 0 4 30 28 28 130 4.14 1
1.2 Contractor’s cash flow problems Frequency 220 10 22 34 34 39 81 3.42 3
1.3 Lack of access to credit facilities Frequency 220 4 10 11 51 61 83 3.84 2
1.4 Shortage of skilled labour force in the market Frequency 220 30 24 16 48 38 64 3.05 4
1.5 Lack of professional management skills by
contractor staffFrequency 220 10 26 54 60 41 29 2.83 5
1.6 Delayed instructions from the consultant Frequency 220 12 35 48 58 47 20 2.7 6
1.7 Incomplete contract documentation Frequency 220 22 50 37 40 37 34 2.55 8
1.8 Unavailability of plant and equipment in the
marketFrequency 220 26 30 39 48 42 35 2.7 6
1.9 Inclement weather Frequency 220 50 78 40 40 8 4 1.5 10
1.10 Bureaucracy from government agencies Frequency 220 47 29 40 52 28 24 2.26 9
Average 2.9
The average “mean score” for the individual grouping were 2.66 for clients, 2.93 for
contractors and 3.93 for consultants. In the excel spreadsheet where these figures were
computed, for each factor, the mean score is calculated using the formula:-
37
µ = Sum of all Likert scale value multiplied by frequency of respondents under that entry
divided by the total sample number for all the six entries, rounded to two decimal
places.
Mathematically presented, taking value on Likert scale as A1, A2 up to A6, sample size N
and the frequency entered under particular Likert scale rating F1, F2 up to F6, this can be
presented as below:-
µ = ROUND(Sum(A1xF1/N + A2xF2/N + A3xF3/N + A4xF4/N + A5xF5/N + A6xF6/N),2)
This was done on every factor. The unsure respondents of course had a total of zero as
their numbers were multiplied by zero on the Likert scale. The Likert scale was chosen
because it was observed to be used in a number of literatures where questionnaire
surveys were used, and was considered to be authentically acceptable. The group
factors average was calculated by dividing the sum of mean scores for that group by ten
(10) as there were ten factors per grouping.
Second group of factors related quality of work produced in which contractors are
supposed to adhere to contract quality standards.
38
Table 4.5.2: Failure to achieve quality expectations in projects
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
2.1 Shortage of skilled labour force in the market Frequency 220 4 0 17 16 87 96 4.14 1
2.2 No quality management systems (QMS) by contractors Frequency 220 0 24 22 50 58 66 3.55 2
2.3 Non standardised specifications Frequency 220 4 37 35 50 52 42 3.07 6
2.4 Lack of technical skills by consultant’s site staff Frequency 220 10 34 24 32 52 68 3.3 4
2.5 Usage of lowest price tender method of contract procurement Frequency 220 3 20 40 39 55 63 3.42 3
2.6 High levels of corruption Frequency 220 5 32 59 54 42 28 2.82 8
2.7 Mistakes and discrepancies in contract document Frequency 220 0 56 34 38 40 52 2.99 7
2.8 Contract duration too long (≥ 3 years) Frequency 220 0 42 38 39 42 59 3.17 5
2.9 Shortened contract durations Frequency 220 4 90 50 48 24 4 2.05 9
2.10 Scarcity of materials meeting contract specifications (gravel / quarry stone) Frequency 220 0 102 60 38 20 0 1.89 10
Average 3.04
The individual group “mean scores” averages were 2.98 for clients, 3.05 for contractors
and 3.24 for consultants. After combining, the mean score average was calculated as
3.04. Following the explanation given above under first group of factors, it can be
observed that the maximum mean score can only be 5. With the exception of the score
for the consultants, the two average mean scores for clients and contractors are very
close to the combined average mean score. The discrepancy displayed by the results
from the consults can be explained as a result of the small sample of 20 respondents
compared with 100 respondents for the clients and contractors. This also amplifies the
need to have a minimum sample size (Mark Saunders, 2009).
The third groups of factors were related to cost growth during project implementation. A
table with results of the combined groups’ assessment is given below.
39
Table 4.5.3: Projects experiencing cost growths during implementation
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
3.1 High inflation rates Frequency 220 0 0 11 31 49 129 4.35 1
3.2 Unavailability of foreign exchange Frequency 220 0 0 0 37 91 92 4.25 2
3.3 Scarcity of construction materials Frequency 220 0 4 22 37 46 111 4.08 33.4 Changes in scope of works Frequency 220 2 4 17 27 83 87 4.03 4
3.5 Incomplete designs at project commencement Frequency 220 0 11 11 42 57 99 4.01 5
3.6 High labour wages Frequency 220 0 23 25 53 61 58 3.48 7
3.7 Rising costs of construction materials Frequency 220 0 15 22 70 46 67 3.58 6
3.8 Under-estimation of cost of works during tender stage Frequency 220 0 26 57 68 40 29 2.95 9
3.9 Delayed payments by the client Frequency 220 2 23 37 55 48 55 3.31 8
3.10 High transportation costs Frequency 220 0 41 64 55 50 10 2.65 10 Average 3.67
The third group of factors under the individual grouping had an average mean score of
3.56 for clients, 3.73 for contractors and 3.96 for consultants. After combining the
average mean score calculated was 3.67. Actually this is the group of factors that had
the highest scores in any way the mean score was calculated. This signifies the
importance of this group of factors in the construction industry. It is also related to the
research question’s subject of inquiry. There are issues of change of scope of works,
delayed payments for work already done, high inflation rates. While some of the factors
may not be avoided, such as high inflation rates, rising costs of construction materials
and high labour wages, one major factor is avoidable; changes in scope of works.
40
Table 4.5.4: Absence of community ownership
U Minor........................Major
Mea
n Sc
ore
Rank
ing
Factor 0 1 2 3 4 5
4.1 Lack of initial community input at design stage Frequency 220 14 14 15 51 66 60 3.46 1
4.2 No consultation with the community by contractor on site Frequency 220 10 21 47 17 49 76 3.37 3
4.3 Disputes relating to employment of local people Frequency 220 10 24 14 49 62 61 3.42 2
4.4 Negative social impacts brought by the contractor Frequency 220 14 19 37 50 55 45 3.13 4
4.5 Negative environmental impacts on the community Frequency 220 10 23 45 47 53 42 3.07 5
4.6 No formal channels of communication Frequency 220 0 44 46 55 37 38 2.9 7
4.7 Delayed assessment of compensation Frequency 220 0 36 38 70 39 37 3.01 64.8 Delayed payments of compensation Frequency 220 4 42 58 62 27 27 2.67 8
4.9 Under-evaluation of properties to be compensated Frequency 220 4 54 54 52 23 33 2.61 9
4.10 Lack of timely intervention by the local authorities Frequency 220 4 72 69 45 20 10 2.16 10
Average 2.98
Under this group of factors, the individual respondents grouping scores were 2.99 for
the clients, 2.92 for contractors and 3.22 for consultants. The average mean score is
2.98, only deviating much from that of the consultants’ respondents because of the
small sample size.
Having analysed the data as above, it was then scrutinised to relate the findings to the
research question. This was done in the next chapter.
4.6 Secondary DataThe above analysed data was collected based on the questions that were raised by the
researcher. However, some pertinent information in this research was obtained from
“secondary data”, implying that reports from the concerned organisations, or those
related, were studied and factual information obtained.
41
4.6.1 Audit of Public Arrears of the Road Sector In 2010
The Audit of Public Arrears of the Road Sector in 2010 established that as of 31 st
January 2010, there were twenty-eight (28) live projects. Out of these, twelve (12) had
outstanding payments amounting to MWK3.650 billion. There were potential claims at
this date amounting to MWK17.8 billion due to extension of time arising from delay in
providing design drawings, additional quantities of works and idle time for the diesel
shortage (Gala, 2014)
4.6.2 Audit of Public Arrears of the Road Sector In 2014
The Audit of Public Arrears of the Road Sector in 2014 also included procurement
processes to establish whether Procurement Act guidelines were followed. It is a
requirement that when contracts are tendered, the award should be made only after the
MoFEP&D and Office of the Director of Public Procurement (ODPP) confirmed
availability of funds for the project and “No Objection” the recommended award. The
table below gives an adjusted presentation of the report on procurement as of 30 th June
2014. The adjustments have been made in taking out percentages of contracts
procured by particular method, and introduction of a column in US$ equivalent of the
figures given in Malawi Kwacha (MWK).
Table 4.5: Procurement methods used for contracting
Procurement method No. of Contracts
Value (MWK) Value (US$)
Open tendering 2 11,240,438,850.82 23,915,827.34
Short listing 0 0 0
Single sourcing 0 0 0
TOTAL 2 11,240,438,850.82 23,915,827.34
Source: (Gala, 2014)
It can be seen from the information that procurement guidelines are followed. Actually
the auditors established these facts after being presented with the appropriate
42
documentation. The question is, if the procedures of procurement are followed, i.e.
getting confirmation of availability of funds for the impending project and seeking “No
Bjection” from ODPP, why could there be a challenge to effect payments to contractors
or consultants? It is the opinion of the author that such contracts are procured hestily
due to pressure. Aware that such procurements would result in the projects facing
similar challenges as those where there is still outstanding amounts, the officers play it
safe by proceeding only after the procedures in the Procurement Guidelines are fulfilled.
However, it is one thing to fulfill thesee procedures which are only paper works, but to
make funds available for the projects may not be guranteed.
As it was indicated in Table 1.1, the outstanding bill is continually accumulating, and
was at MWK27,420,160,151 (US$58,340,767) using the exchange rate of US$1.00
equals MWK 470.00. However, the figure was reported to have risen to MWK 34.0
billion, about US$ 75,555,556. The figure is escalating in Malawi Kwacha values even if
no more certificates were prepared due to interest charges.
43
Chapter 5
5.1 Discussions
This descriptive quantitative study evaluated the perceptions of respondents who were
mostly engineers and technicians involved in road construction with regard to factors
affecting performance of the contractors. The researcher analysed responses with
regard to those factors that directly related to the objective of the study. These factors
were addressing the question of whether set guidelines in the implementation of the
road projects were adhered to. It was the intention of the researcher to touch on issues
of procurement, road design and construction drawings, standard specifications for road
construction, payments to contractors and compensation for project affected people.
In the third group of factors under the individual grouping had an average mean score of
3.56 for clients, 3.73 for contractors and 3.96 for consultants. After combining the
average mean score calculated was 3.67. Actually this is the group of factors that had
the highest scores in any way the mean score was calculated. This signifies the
importance of this group of factors in the construction industry. It is also related to the
research question’s subject of inquiry. There are issues of change of scope of works,
delayed payments for work already done, high inflation rates. While some of the factors
may not be avoided, such as high inflation rates, rising costs of construction materials
and high labour wages, one major factor avoidable is changes in scope of works.
The credibility of research findings depends on the source of data used, and how this
data is processed into information that can be relied upon. The methodology in the
conducting of the research is also critical to the credibility of the research findings
(Saunders, 2009). In line with this the researcher had to calculate the sample size. The
sample size matters, as the significance of the data collected through survey such as
questionnaire varies depending on the size.
The sample size in this research was determined by use of statistical methods by
considering confidence level, normal distribution curve, standard deviation and sample 44
size. The sample size was calculated to be 186. This is not an easy number to get if you
are looking for people with particular backgrounds and occupation. For this reason,
players in the road construction industry from the client point of view, contractors and
consultants were all used so that the requirement of the sample size should be met.
The effects of using sample size smaller than minimum have been appreciated in this
research as observed from the respondents coming from the consultants companies
where the respondents were much less than the required number. However, where the
numbers of respondents were above fifty per cent of the sample size, the results proved
to be closer to the ideal.
The secondary data used in this research has brought out some profound facts about
how road construction projects have been managed over the past ten years in Malawi. If
the trend continues as has been established in this research, GoM is likely to
perpetually be in conflict with contractors. There have been deliberate moves shown on
paper how this situation can be stopped. However, nothing material is being done as
the bills continue to grow.
The budget allocated for road construction projects is only on paper. In the Financial
Year (FY) 2013/2014 the vote for road construction was allocated MWK 12 billion. This
was not adequate considering that at the close of 2012/2013 FY there was an
outstanding bill of MWK8,502,442,845. It may not be surprising that the bill short to
MWK27,420,160,151 by the close of 2013/2014. What is more painful is that the audit
report by Gala, (Gala, 2014) revealed that no payments were made by GoM to
contractors and consultants working on road construction projects between 1st July 2013
and 30th June 2014. This clearly shows that the budget is not adhered to by GoM. If the
amount indicated in the budget documents were disbursed in the year, that would be an
indication of seriousness.
It has been observed by human rights commentators that GoM lacks a system that is
not dependent on party leadership, arguing that party leaders have not put the interest
of the country as a priority.
45
5.2 Conclusions and recommendations
5.2.1 Contractors project related difficulties
The results of the research have demonstrated that contractors’ perception on
difficulties encountered during project implementation is mostly due to the clients’
actions. Delayed payments were rated high on the Likert scale, clearly demonstrating
that they get affected when payments are delayed. Sixty (60) of the one hundred (100)
respondents strongly believe that delayed payments are a challenge. Even the
consultants’ respondents demonstrated likewise as all the twenty (20) respondents
indicated they strongly believed it was significant in impacting on the performance of the
contractors. In general, even the clients’ respondents have affirmed the importance of
making timely payments. This is why the combined analysis has a high mean score of
4.14 out of 5 for this factor.
The researcher recommends the following actions to be taken by GoM:-
a) That government should leave the administration of road construction to the
responsible ministry and the Roads Authority (RA), with Roads Fund
Administration (RFA) handling payments according to budget and Annual
National Roads Programme (ANRP)
b) That there should be no new contracts until all the arrears have been cleared, or
unless grant aid has been identified
c) That budget allocations should be honoured, other than putting figures and
making no payments up to the end of Financial Year (FY) as was the case in the
2013/2014 FY.
5.2.2 Failure to achieve quality expectations in projects
Under this group of factors affecting the performance of contractors the issue of
shortage of skilled labour force was ranked highly at 4.14 out of 5. However, looking at
the pattern of the respondents, the consultants’ respondents mean score for this factor
was 4.4. The clients mean score was 4.31 and that for the contractors was 3.91.
46
Although the consultants’ respondents sample was small at 20 compared to those for
clients and contractors at 100 each, their mean score of 4.4 reflects their perception
which is based on their experiences with the contractors’ personnel at all levels. Going
through monthly reports which are prepared by consultants, almost every report talks
about contractor’s lack of organisation and planning. This makes the consults’ staff on
site develop the perception that the contractors’ site personnel are not experienced or
lack the necessary training.
There might be some truth in the way this issue has come out because all the three
groupings scores highest under this factor. It is the opinion of this author that
contractors must allow their staff to go for refresher courses. Apart from learning from
the facilitators at refresher courses, the participants learn from each other and they
share experiences. Besides that, when you interact with people of your field of training,
you tend to realise how much or little you know. If you discover that you actually know a
lot than you thought, your confidence grows and you are likely to perform better than
before due to the confidence developed. On the other hand, when you realise that you
are lacking in the knowledge of your field, it might be your opportunity to link up with the
people you admired for further development, and this will eventually give confidence as
you work.
It has been observed that contractors in Malawi only allow their staff to go on leave
during the Christmas and New Year Holidays. This implies that many of them get
exhausted, but are still forced to go to work as their staying away from work is
considered a loss by their employers.
Under the same category of factors, it is worth commenting on Usage of lowest price
tender method of contract procurement. The consultants’ respondents had a mean
score of 4.8; contractor had 3.42 while the client had 3.14, and the combined mean
score was 3.42. It should understood that both the contractors and consultants are in
business, and would certainly be happy to be awarded contracts in which their mark up
was high. It is, however fair, to acknowledge that the clients need to have value for
money. As such, evaluations of technical qualifications determine who should have their
47
financial proposal assessed. Thus, whoever passes the threshold mark at technical
evaluation will be considered for awarding the contract. Otherwise if the contract is
awarded to one whose tender price was higher, it will be an audit query, and in this
dispensation of many cases of corruption, this would be perceived to be at the influence
of corruption.
5.2.3 Projects experiencing cost growths during implementation
Under this category the issue of delayed payments reappears. This has already been
discussed and recommendations have been made under 5.2.1.
However, change in scope of works is new and is commented on as follows:-
a) Change in scope of works is allowed in standard contract documents such as
International Federation of Consulting Engineers (FIDIC), but there is a limit as to
how much changes can be made without the contractor revising his rates. If it
involves work that is in the critical path, the contractor would be entitled to
extension of time. This would be a source of increase in contract price. Thus, RA
should make thorough checks in the road designs submitted by consultants to
ascertain completeness. This way, there would not be need to introduce any
changes in scope of work.
b) The challenge has been that policy makers would instruct changes to the scope
of works. This gets out of control and the thresholds mentioned above are
exceeded and contractors normally demand extension of time with time related
costs.
c) As in 5.2.1, the author’s recommendation is that contracts should be awarded
when there is a complete design, funds have been identified without conditions,
and no changes in scope of works should be made when the contract is already
tendered out.
48
5.2.4 Absence of community ownership of projects
Under this category of factors affecting project implementation, the average mean
scores were 3.22 for consultants’ respondents, 2.92 for contractors’ respondents and
2.99 for clients’ respondents. In general, contractors’ and consultants’ respondents
rated this lower than the first one; Contractors project related difficulties. The clients’
respondents however rated it higher. This is a reflection of generally perceived ideas of
each of the respondents groups. The clients are mindful of compensation of project
affected people (PAP), which affects progress on site. Sometimes members of the
community gang up and stop works at some sections, arguing that their compensations
must be paid before works can be carried out.
To make clear what goes in the minds of the clients, this explanation will help. Monthly
productions at a site during dry season when all plants and materials are in place can
be in the region of MWK250 million to MWK350 million. This translates to production
rates of MWK8.33 million to MWK 11.66 million a day. Compensations are paid by RFA
after they have been given funding by the MoFEP&D. The compensation money in
question at the particular section might add up to MWK20 million. However, the
contractor may be stopped from working for a whole week. Even if the lower estimate of
daily production is assumed, the loss claims that the contractor would lodge could be at
MWK 58.31 million for the week. So for the clients this section also has factors that can
impact negatively on the performance of the project.
The author’s recommendations on this set of factors that relate to stakeholders are:-
a) Compensation assessment must be done by the help of the design consultant
who will pick property in their geographical position. It is also possible to work out
values of such compensations through conducting Environmental and Social
Impact Assessment (ESIA), Relocation Action Plan (RAP) of project affected
people (PAP). The legitimate compensations assessed must be paid before
project commences.
49
b) GoM through the Police Service should help in enforcing observance of road
reserves for designated public roads so that there should be nobody who would
claim a property within the road reserve. This would reduce the bills that GoM
pays in lieu of property compensations which were in the road reserve.
50
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52
APPENDICES
APPENDIX A
PART I: FOR CONTRACTORS
1. General InformationPlease tick your answers in the appropriate box provided.
1.1Please state the name of your organisation …………………………………………
1.2Please state your organization’s registration category with the National
Construction Industry Council of Malawi (NCIC).
100 million 200 million 500 million Unlimited
1.3Please state the length of your organization’s experience in the road construction
Industry.
1-5 years 6-10 years 11-15 years 16-20 years > 20 years
1.4Please state your average annual turnover of construction work (in million of
Malawi kwacha) in the last 5 years?
50-100m 100-200m 200-300m 300-500m >500m
53
1.5Please state your gender?
Male Female
1.6 Please state the length of your personal experience in the road construction industry?
1-5 years 5-10 years 10-15 years 15-20 years > 20 years
1.7Please state your highest academic qualification.
MSCE Tradesman Cert or Dip Degree Post Grad
NoteMSCE= Malawi School Certificate of Education or equivalent high school
qualification
Tradesman= Trade test certificate from Technical college
Cert or Dip= City and Guilds Certificate or University Diploma
PART II: FOR CLIENTS AND CONSULTANTS
2. General InformationPlease tick your answers in the appropriate box provided.
1.8Please state your name......................... ………………………………………………
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1.9Name of organisation……………………………………………………………………
1.10 Please state your gender
Male Female
1.11 Please state your current position in the organisation (e.g. CEO, Director,
etc)
………………………………………………………………………………………
1.12 Please state the length of your experience with your current employer.
1-5 years 6-10 years 11-15 years 16-20 years > 20 years
1.13 Please state the length of your personal experience in the road
construction industry.
1-5 years 6-10 years 11-15 years 16-20 years > 20 years
1.14 Please state your highest qualifications.
Cert or Dip Degree Post Grad Pr Eng(R Eng)
55
PART III: FOR ALL RESPONDENTS
2 Contractors project related difficulties
On a scale of 1(minor) to 5 (major) or Unsure (U), to what extent do the following
factors affect the performance of contractors during project implementation
[please circle your choice]
Factor U Minor............................Major2.1 Delayed payments by the client U 1 2 3 4 5
2.2 Contractor’s cash flow problems U 1 2 3 4 5
2.3 Lack of access to credit facilities U 1 2 3 4 5
2.4 Shortage of skilled labour force in the
market
U 1 2 3 4 5
2.5 Lack of professional management
skills by contractor staff
U 1 2 3 4 5
2.6 Delayed instructions from the
consultant
U 1 2 3 4 5
2.7 Incomplete contract documentation U 1 2 3 4 5
2.8 Unavailability of plant and equipment
in the market
U 1 2 3 4 5
2.9 Inclement weather U 1 2 3 4 5
2.10 Bureaucracy from government
agencies
U 1 2 3 4 5
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3 Failure to achieve quality expectations in projects
On a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following
factors contribute towards failure to achieve quality standards during project
implementation [please circle your choice]
Factor U Minor............................Major3.1 Shortage of skilled labour force in the
market
U 1 2 3 4 5
3.2 No quality management systems
(QMS) by contractors
U 1 2 3 4 5
3.3 Non standardised specifications U 1 2 3 4 5
3.4 Lack of technical skills by consultant’s
site staff
U 1 2 3 4 5
3.5 Usage of lowest price tender method
of contract procurement
U 1 2 3 4 5
3.6 High levels of corruption U 1 2 3 4 5
3.7 Mistakes and discrepancies in
contract document
U 1 2 3 4 5
3.8 Contract duration too long (≥ 3 years) U 1 2 3 4 5
3.9 Shortened contract durations U 1 2 3 4 5
3.10 Scarcity of required materials
(gravel / quarry stone)
U 1 2 3 4 5
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4 Projects experiencing cost growths during implementationOn a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following
factors contribute towards cost increase of contracts during project
implementation [please circle your choice]
Factor U Minor............................Major4.1 High inflation rates U 1 2 3 4 5
4.2 Unavailability of foreign exchange U 1 2 3 4 5
4.3 Scarcity of construction materials U 1 2 3 4 5
4.4 Changes in scope of works U 1 2 3 4 5
4.5 Incomplete designs at project
commencement
U 1 2 3 4 5
4.6 High labour wages U 1 2 3 4 5
4.7 Rising costs of construction materials U 1 2 3 4 5
4.8 Under-estimation of cost of works at
tender stage
U 1 2 3 4 5
4.9 Delayed payments by the client U 1 2 3 4 5
4.10 High transportation costs U 1 2 3 4 5
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5 Absence of community ownership of projectsOn a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following
factors contribute towards the lack of community ownership during project
implementation [please circle your choice]
Factor U Minor............................Major5.1 Lack of initial community input at
design stage
U 1 2 3 4 5
5.2 No consultation with the community
by contractor on site
U 1 2 3 4 5
5.3 Disputes relating to employment of
local people
U 1 2 3 4 5
5.4 Negative social impacts brought by
the contractor
U 1 2 3 4 5
5.5 Negative environmental impacts on
the community
U 1 2 3 4 5
5.6 No formal channels of communication U 1 2 3 4 5
5.7 Delayed assessment of
compensation
U 1 2 3 4 5
5.8 Delayed payments of compensation U 1 2 3 4 5
5.9 Under-evaluation of properties to be
compensated
U 1 2 3 4 5
5.10 Lack of timely intervention by the
local authorities
U 1 2 3 4 5
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6 Do you have any general comments with regards to the interventions that could improve the implementation of road construction projects in Malawi
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………7 Do you have any general comments with regards to the Barriers in the
implementation of road construction projects in Malawi………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Thank you very much for your participation
60
APPENDIX B
Malawi Institute of Management
P.O. Box 30801
Lilongwe 3
Ref. No.: UOB/MIM/MSCD/001 18th November 2014
TO WHOM IT MAY CONCERN
Dear Sir/Madam,
THE IMPACT OF THE LEVEL OF ADHERENCE TO SET GUIDELINES IN THE IMPLEMENTATION OF ROAD CONSTRUCTION PROJECTS IN MALAWI
As a student studying at Master of Science level in Project Management, it is required that one conducts a research in a topic related to the field of study and write a dissertation for submission to the University senate. I, under the supervision of Dr. Easton Simenti-Phiri of University of Bolton and Dr. Peter Ngoma of Malawi Institute of Management, am conducting a research on “The impact of deviating from set guidelines in the selection of road construction projects and procurement of contractors and consultants in the road construction industry in Malawi and the impact of the level of adherence”.
In carrying out the research, I request that you provide information through a questionnaire which is attached. The information will be used solely for the purpose of the research, and will not in any case be used for something contrary to this purpose.
Yours faithfully,
61
Isaac Kunkeyani
Student
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