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1 . C O N S T R U CT I O N P R O J E C T S

A project is a temporary endeavor consisting of a sequence of connected activitiesundertaken by limited resources to create a unique product or service that mustbe completed within specified time, within budget, according to specification, andsafely.

Temporary EndeavorTemporary means that every project has a definite beginning and a definite end.The end is reached when the projects objectives have been achieved, or when itbecomes clear that the project objectives will not or cannot be met and the

project is terminated. Temporary does not necessarily mean short in duration(many projects last for years), nor it applies to the product or service created(many projects are undertaken to create lasting results for example, a projectto erect a national monument will create a result expected to last for centuries).

Sequence of Connected ActivitiesA project comprises of a number of activities that must be completed in somespecified order, or sequence. An activity is a defined chunk of work. The sequenceof the activities is based on technical requirements. Activities within a project areinterconnected. To determine the connectedness, it is helpful to think in terms ofinputs and outputs. The output of one activity or set of activities becomes the

input to another activity or set of activities.

Undertaken by limited resourcesProjects have resource limits, such as a limited amount of people, materials orequipment that are dedicated to the project.

Unique Product or ServiceUnique means that the product or service is different in some distinguishing wayfrom all similar products or services. A product or service may be unique even ifthe category it belongs to is large. For example, many thousands of officebuildings have been developed but each individual facility is unique differentlocation, different owner, different design, different contractor, and so on. Thepresence of repetitive elements does not change the fundamental uniqueness ofthe project. For example, a real estate development project may includehundreds of individual units.

Within Specified TimeProjects have a specified completion date. This date can be self-imposed bymanagement or externally specified by a client or government agency.

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Within BudgetProjects have cash inflow constraints. The source of finance may be public funds,

bank loans or private investments.

According to SpecificationThe client expects a certain level of functionality and quality from the project.These expectations can be self-imposed, such as the specification of the projectcompletion date, or client-specified, such as use of wall paper for wall finishing ina bungalow, or law imposed, such as environmental considerations.

SafelyWe would like to get the job done without any accidents.

Hence the term 'construction project' refers to a high-value, time bound, specialconstruction mission with predetermined performance objectives.

2 . P R O J E CT S U C C E S S P A R A M E T E R S Five constraints operate on every project:

Time Cost Resources Quality/ Performance

Scope Safety

TimeThe client specifies a timeframe or deadline date within which the project must becompleted. This may be due to several reasons:

the capital turnover (revenue) forecasted to be realized from early facilitycompletion (e.g. shopping mall, school)

the need of the client to occupy, use or rent the facility on a particulartimeframe (e.g. bungalow).

A public client requiring completion of the project by a particular deadline

so as to open it to service for public (e.g. road, bridge, hospital).

CostCost is the expenditure which the client has agreed to commit for creating thedesired construction facility. Cost is a major consideration throughout the projectmanagement life cycle. It is best thought of as the budget that has beenestablished for the project. This is particularly important for projects that create

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deliverables that are sold either commercially or to an external customer. Cost isa major element in leading the client to a go/ no-go decision.

ResourcesResources are assets, such as people, equipment, physical facilities, or materials,which have limited availabilities, can be scheduled, or can be leased from anoutside party. Resources are central to the scheduling of project activities and theorderly completion of the project in their availability as well as productivity.Productivity, in its broader sense, measures the ratio of planned effort ofresources to produce a unit quantity of work divided by the actual effort ofresources employed to achieve this unit of work.

Quality/ PerformanceTwo types of quality are part of every project. The first is product quality . Thisrefers to the quality of the deliverable from the project. The second type ofquality is process quality , which is the quality of the project management processitself. A sound quality management program not only contributes to customersatisfaction, but also helps organizations use their resources more effectively andefficiently by reducing waste and rework. The payoff is a higher probability ofsuccessfully completing the project in accordance with customer requirements.Quality to be achieved in accomplishing tasks is normally stated in terms ofstandard specifications.

ScopeScope defines the boundaries of the project. Scope definition should include: whatis included in the project as well as what is not included in the project . It iscritical that scope be correctly defined and project proceedings follow the samedirection as identified through scope. Scope can change. Detecting and weighingthat change and deciding how to accommodate it in the project plan are majorchallenges for the project manager.

SafetySafety is usually determined by the number of accidents on a jobsite. Ideally, wewould want our jobsites to be free of any accidents. It is important to know that a

safe jobsite is also able to provide quality work because if a worker is convincedthat company management cares about his safety, he would be more willing andwill put in extra efforts to perform more effectively.

The above parameters are an interdependent set; a change in one can cause achange in another. For instance, with an increase in the repetition of similartasks, there is an improvement in resource productivity due to the experiencegained, which consequently results in reduced overall costs.

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The set of parameters form a system that must remain in balance for the project

to succeed. The job of the project manager at any time would be to optimize theparameters.

3 . C AT EG O R I E S O F C O N S T R U CT I O N P R O J E C T S

Most designers and contractors tend to focus their efforts within specialty areas,focusing on particular types of projects. Hence the construction industry can bedivided into five distinct divisions; these distinct types have evolved becausemajor differences exist in the way the projects are funded, in the technologiesinvolved, and in the manner in which the designers, contractors and ownersinteract. These five divisions are:

Residential Building Construction Non-Residential Building construction (or Commercial Construction) Infrastructure and heavy construction Industrial Construction Special-Purpose Construction

The distribution of total Pakistan construction volume for a representative year isillustrated in Figure 1. Building construction (inclusive of residential andnonresidential building construction) accounts for a majority (81%) of the totalPakistan construction market (see Figure 1).

Figure 1: Distribution of Pakistan new construction volume.

i. Residential Building Construction

Residential Building construction projects include the construction of individualhomes as well as condominium and apartment building complexes. These projectstend to be privately funded by individual owners for their own use or bydevelopers for profit. Such projects are typically designed by architects, but in

PrivateBuilding

71%

PrivateNonbuilding

7%

PublicBuilding

10%

PublicNonbuilding12%

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some cases a single home may be designed by the individual home owner orbuilder.

This industry tends towards the use of fairly low technologies and requires littleinvestment to enter. For these reasons the industry is characterized by largenumbers of small designers and contractors and suppliers. When the economy isstrong these small companies do well, but when times are tough many of thesecompanies go out of business. Interest rates and government policy towardshousing investment also influence the health of this industry. About 30 to 35percent of construction spending is on residential construction.

ii. Non-Residential Building Construction

Examples of non-residential building construction projects would be officebuildings, shopping malls, theaters, commercial complexes, educational andrecreational facilities, hospitals, hotels, warehouses and marketing facilities. Interms of annual construction expenditures this project category is the largest.Projects such as these are designed by architects with engineering support andare generally built by general contractors. Most of these projects are privatelyfunded, though some projects like schools, courthouses, and city offices arepublicly funded. The technical sophistication of building construction projects isgreater than residential construction as is the investment necessary to enter.These factors provide for fewer players than in residential construction. This

sector typically accounts for 35 to 40 percent of the construction market.

iii. Infrastructure and Heavy Engineering ConstructionThough accounting only for some 15 to 20 percent of the market, infrastructureand heavy engineering construction includes many of the structures for which theindustry is best known. Dams and tunnels provide hydroelectric power, floodcontrol, and irrigation; bridges range from footpaths to internationally famouslandmarks such as that spanning San Francisco's Golden Gate; othertransportation structures include railways, airports, highways, and urban rapidtransit systems; ports and harbor structures fall into this category, as do many ofthose in the deep open sea. Pipelines are included here, as are some of our more

utilitarian structures, such as water treatment and distribution systems, sewageand storm water collection, treatment and disposal systems, power lines, andcommunication networks.

These are capital intensive and heavy-equipment oriented works, characterizedby fleets of large earthmovers, cranes, and trucks, working with massivequantities of basic materials like earth, steel, concrete and pipe. These projectsare designed principally by specialist civil engineers and built by heavy

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construction contractors having engineering backgrounds or support. Theseprojects are usually publicly funded and therefore are sensitive to governmental

policy. These projects tend to be long in duration and thereby less sensitive to theups and downs of the economy, and they involve the heavy use of equipment.

iv. Industrial ConstructionIndustrial construction represents only about 5 to 10 percent of the market, but ithas some of the largest projects and is dominated by some of the largestengineering and construction firms. These projects include petroleum refineriesand petrochemical plants; synthetic fuel plants; fossil-fuel and nuclear powerplants; mine developments, smelters, steel mills, and aluminum plants; largeheavy-manufacturing plants; and other facilities essential to our utilities and basicindustries.These works involve heavy investment and are highly specialized. Both designand construction require the highest levels of engineering expertise, from notonly civil, but also chemical, electrical, mechanical, and other disciplines, andtypically all phases of the project are handled by the same firm on a negotiateddesign-construct or "turnkey" contractual arrangement, with considerable overlapbetween design, procurement, and construction. The design-constructors must beintimately familiar with the technology and operations of the facility from theowner's point of view, and often they hold some of the key patents for advancedprocess technologies needed therein. Quality and time are extremely important inthese projects. Most of these facilities may be publicly funded.

In contrast with the basic materials characteristic of heavy engineeringconstruction, the major factors in industrial construction generally consist of largeamounts of highly complex mechanical, electrical, process piping, andinstrumentation work. This work tends to be much more labor-intensive, thoughsome of the largest hoisting and materials-handling equipment is also required.

v. Special-purpose projects

These include environmental works, emergencies, remedial works, installationand commissioning of equipment, and complex key operations. These works arehighly specialized. Only a few specialty designers and specialty contractors arequalified for any one type of project. Depending on the nature and scope of work,heavy amounts of investments and technological complexities may be involved aswell as complex interaction issues amongst the designers, contractors and clientsmay develop.

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4 . M A I N C A U S E S O F P R O J E C T F A I L U R E

It is not uncommon to see a project failing to achieve its goal within the specified

cost and time. Hardly few projects get completed in time and within originalcosts. According to a survey conducted in the 1990s, out of 351 major projects,the observations were as follows:

56% had cost overruns (totaling 20% cost)49% faced a time overrun from 1 to 157 months

The major factors contributing to these overruns are outlined below:

Inadequate project formulation Poor field investigation, inadequateproject information, bad cost estimates, lack of experience, inadequate projectanalyses, poor investment decisions.

Poor planning for implementation Inadequate time plan, inadequateresource plan, inadequate equipment supply plan, inter-linking not anticipated,poor organization, poor cash flow planning.

Lack of proper contract planning and management Improper pre-contract actions, poor post award contract management.

Lack of project management during execution Inefficient and ineffectiveworking, delays, changes in scope of work and location, law. There can beendless reasons for non-fulfillment of project objectives. Failures can be due tounforeseen natural calamities like earthquakes, floods and natural disasters.Failures can also result from deliberate attempts made by manipulators duringthe feasibility stage by incorporating inaccurate time and cost estimates with aview to secure business or start a project. These in-built intentional inaccuraciescan lead to unrealistic objectives and thus create problems during theimplementation stage. But, the main causes of such failures can be attributed tothe cost estimation failure and management failure.