Complete Pconroceedings

Proceedings of the
First International Conference on
Construction in Developing Countries

Advancing and Integrating Construction Education, Research and Practice
August 4-5, 2008

Karachi, Pakistan
Editors
Sarosh H. Lodi
Syed M. Ahmed
Rizwan U. Farooqi
Muhammad Saqib
Proceedings of the
First International Conference on

Construction in Developing Countries
Advancing and Integrating Construction Education, Research
& Practice
August 4 - 5, 2008
Karachi, Pakistan
Jointly Organized By
Department of Civil Engineering, NED University of Engineering &
Technology, Karachi, Pakistan
Department of Construction Management, Florida International
University, Miami, Florida, USA
Supported By
United States Agency for International Development (USAID)
Higher Education Commission Pakistan (HEC)
National Academy of Sciences (NAS)
Proceedings of First International Conference on Construction in Developing Countries

Advancing and Integrating Construction Education, Research & Practice
Edited By:
Sarosh H. Lodi
Syed M. Ahmed
Rizwan U. Farooqui
Muhammad Saqib
Published By:
Department of Civil Engineering,
NED University of Engineering & Technology,
Karachi, Pakistan.
All rights reserved. No part of this publication may be reproduced in any material form
(including photocopying or storing in any medium by electronic means or whether or not
transiently or incidentally to some other use of this publication) without the written
permission of the copyright holder. Authors of papers in these proceedings are authorized
to use their own material freely. Applications for the copyright holders written
permission to reproduce any part of this publication should be addressed to:
Prof. Sarosh H. Lodi

Department of Civil Engineering
NED University of Engineering & Technology,
Karachi, Pakistan.
Email: civilchr@neduet.edu.pk
ii
Steering Committee
Prof. Dr. Sarosh H. Lodi (Chair)
Syed M. Ahmed (Co-Chair)
Rizwan U. Farooqui (Technical Chair)
Dr. Muhammad M. Rafi
Mr. Muhammad Saqib
Mr. Farhan Saleem
Mr. Farrukh Arif
NED University, Pakistan

Florida International University, USA
Advisory Committee
Prof. Dr. Sahibzada F. A. Rafeeqi
Irtishad U. Ahmad
Yimin Zhu
Dr. Mir S. Ali
Dr. Asad-ur-Rehman Khan
Prof. Faheem Ahsan
Dr. Abdul S. Khan
Dr. Fuad H. Mallick

BRAC University, Bangladesh
International Scientific Committee

Dr. Bambang Trigunarsyah
Dr. Sherif Mohamed
Dr. Jian Li Hao
Dr. Tayyab Maqsood
Dr. Boong Ryoo
Dr. Paul H. K. Ho
Dr. Jyh-Bin Yang
Dr. Jose Faria
Dr. Zhi Ge
Dr. Mohamed N. Darwish
Dr. Aretoulis N. Georgios
Dr. Chang T. Hyun
Dr. Ashutosh Bhardwaj
Dr. Brian Moore
Dr. Vasantha Abeysekera
Dr. Hamimah Adnan
Dr. Emre Bayraktar
Prof. Albert P.C. Chan
Prof. Dongping Fang
Dr. Theodore C. Haupt
Prof. Michael Hein
Dr. Dean Kashiwagi
Dr. Abdul S. Kazi
Queensland University of Technology, Australia

Griffith University, Australia
Hong Kong Polytechnic University, Hong Kong
Royal Melbourne Institute of Technology, Australia
City University of Hong Kong , Hong Kong
Chung-Hua University Hsinchu, Taiwan
North Dakota State University, USA
Alexandria University, Egypt
Aristotle University of Thessaloniki, Greece
University of Seoul, South Korea
Construction Industry Development Council, India
Georgia Southern University, USA
UNITEC, New Zealand
University Teknologi MARA, Malaysia
Hong Kong Polytechnic University, Hong Kong
Tsinghua University, China
Cape Peninsula Uni. of Technology, South Africa
Auburn University, USA
Arizona State University, USA
VTT, Finland
iii
Dr. Mohan Kumaraswamy

Dr. Malik M. A. Khalfan
Dr. Johnny H. Mok
Dr. Abid Nadeem
Dr. Amarjit Singh
Dr. Yimin Zhu
Dr. Zuhair E. Itr
Dr. Khalid Siddiqi
Dr. Ronald A. Baier
Dr. Mehmet E. Bayraktar
Dr. Eugene D. Farmer
Dr. Jose D. Mitrani
University of Hong Kong, Hong Kong

Salford University, UK
Hong Kong College of Technology, Hong Kong
Hong Kong College of Technology, Hong Kong
University of Hawaii, USA
Southern Polytechnich State University, USA
Southern Polytechnich State University, USA
Keynote Speakers
Irtishad U. Ahmad
Prof. Dr. Sahibzada F. A. Rafeeqi

iv
Preface
This volume comprises the abstracts of contributed papers presented at the First International
Conference on Construction in Developing Countries, ICCIDC-I 2008 held on August 4-5
2008, in Karachi, Pakistan.
ICCIDC-I 2008 is jointly organized by Department of Civil Engineering, NED University of
Engineering & Technology, Karachi, Pakistan and Department of Construction Management,
Florida International University, Miami, Florida, USA. This international conference is
arranged as part of a USAID funded research project entitled Developing a Strategic Model
for Improvement of Construction Project Management Education, Research, and Practice in
Pakistan aimed at developing strategic model for improving the construction industry of
Pakistan.
The impact of infrastructure development and construction practices is known to be
significant on the economy of any country. These practices improve the construction project
management of any country. Therefore, this international conference is aspired to promote
construction management practices and create awareness among different industry
professionals. The main aim of this conference is to bring together renowned and qualified
contractors, clients, academics and other professionals from all over the world, for the
presentation and exchange of their thoughts and experiences on concepts, trends and
practices of present-day construction management scenarios.
The conference is aimed at providing a platform for real life case studies contribution and
assessment and evaluation of the current construction engineering, technology, management,
research and education status of the industry in the view of the participants. The conference is
intended to offer a stimulating environment to encourage discussion and exchange of ideas
leading to endorsement of construction engineering, technology and management in
developing countries.
This is a peer reviewed conference and all the papers included in the conference proceedings
have been selected after an intensive review process performed by the international technical
committee.
I would like to extend my appreciation to the Steering Committee, Advisory Committee, and
the International Scientific Committee for the devotion of their precious time, advice and
hard work to prepare for this Conference. Special thanks are due to United States Agency for
International Development (USAID), Higher Education Commission Pakistan (HEC), and
National Academy of Sciences (NAS), who have provided us immense support in organizing
the conference. Appreciation is also due to our local sponsors including M/s ER Solutions,
M/s Amreli Steels (Pvt.) Ltd., M/s Principal Builders, and National Foundation for Resource
Development (NFRD). Last but not the least I would like to acknowledge and give special
appreciation to our keynote speakers for their valuable contribution, our delegates for being
with us and sharing their experiences, and our invitees for participating in ICCIDC-I 2008,
Karachi, Pakistan.
Prof. Sarosh H. Lodi
Conference Chair
TABLE OF CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
Preface
BUILDING CONSTRUCTION TECHNICIANS TRAINING: ITS

RELEVANCE TO THE MODERN CONSTRUCTION INDUSTRY IN
KENYA
Obudho S. Omondi
INTEGRATED TIME AND COST MANAGEMENT SYSTEM FOR

PROJECT MONITORING, EVALUATION AND CONTROL
Edem O. P. Akpan, Ifeoma V. Ihim, Achimba C. Ogbonna and Charles N.
Ononuju
11
THE EFFECT OF MACROECONOMIC POLICIES ON PROJECT

(HOUSING) FINANCE IN EMERGING ECONOMIES
Adeboye Akinwunmi, Rod Gameson, Felix Hammond and Paul
Olomolaiye.
22
FINDING WAYS FOR ENHANCING POSTGRADUATE LEVEL

EDUCATION IN CONSTRUCTION MANAGEMENT IN PAKISTAN
Syed M. K. Huda, Rizwan U. Farooqui and Muhammad Saqib
33
MULTIPLE RESOURCE CONSTRAINT TIME-COST-RESOURCE

OPTIMIZATION USING GENETIC ALGORITHM
Habib Fathi and Abbas Afshar
42
AN IMPROVED LINEAR PROGRAMMING MODEL FOR ONEDIMENSIONAL CUTTING STOCK PROBLEM

Abbas Afshar, Helia Amiri and Ehsan Eshtehardian
51
A FUZZY-BASED MODEL FOR UNBALANCED BIDDING IN

CONSTRUCTION
Abbas Afshar and Helia Amiri
57
APPLYING DELPHI METHOD AND DECISION SUPPORT SYSTEM

FOR BIDDING
Mostafa Khanzadi, Shahin Dabirian and Hossein Heshmatnejad
64
SAFETY PERFORMANCE IN CONSTRUCTION INDUSTRY OF

PAKISTAN
Rizwan U. Farooqui, Farrukh Arif and Sahibzada. F. A. Rafeeqi
74
10. THE TREND OF BUILD OPERATE AND TRANSFER (BOT)

PROJECTS IN PAKISTAN
Ammad Hassan Khan, Misbah Jamil and Mudassar Sattar
vi
88
11. RESOURCE-CONSTRAINED MULTI-PROJECT SCHEDULING WITH

RESOURCE MOVING TIME FOR CONSTRUCTION PROJECTS IN
VIETNAM
Hanh Q. Le
98
12. QUALITY ASSURANCE AND CONTROL IN THE CONSTRUCTION

OF INFRASTRUCTURE SERVICES IN DEVELOPING COUNTRIES
A CASE STUDY OF PAKISTAN
Ammad H. Khan, Salman Azhar and Arshad Mahmood
109
13. BLACKSPOT STUDY AND ACCIDENT PREDICTION MODEL

USING MULTIPLE LINEAR REGRESSION
Fajaruddin Mustakim, Haji I. Yusof, Ismail Rahman, Abdul A. A. Samad
and Nor E. B. M. Salleh
121
14. USE OF TRAFFIC SIMULATION MODEL AS INTELLIGENT

DECISION SUPPORT SYSTEM IN DEVELOPING COUNTRIES
Mir Shabbar Ali and Ammara Ilyas
137
15. ISSUES IN CURRICULUM DEVELOPMENT FOR M. TECH IN

CONSTRUCTION MANAGEMENT IN DEVELOPING COUNTRIES
Tazyeen Ahmad, Amjad Masood, Muhammad. Arif and V.P Mital
148
16. AN ASSESSMENT OF GENERAL TRENDS ADOPTED FOR BIDDING

AND PROCUREMENT IN THE CONSTRUCTION INDUSTRY OF
PAKISTAN
Rizwan U. Farooqui, Muhammad Saqib, Farrukh Arif and Sarosh. H. Lodi
153
17. LINEAR PROGRAMMING FOR OPTIMIZING STRATEGIC

CONSTRUCTION WORKFORCE MANAGEMENT
Alireza Mohammadpour, Mostafa Khanzadi and Ehsanollah Eshtehardian
161
18. A STOCASTIC-SIMULATION MODEL FOR LOWEST BID PRICE

EVALUATION: A CASE STUDY IN ROAD CONSTRUCTION AND
REHABILITATION PROJECTS IN LEBANON
Rola Sammoura and Aziz E. Elsayed
168
19. CONSTRUCTION RISK INSURANCE PRACTICES IN PAKISTAN

Farrukh Arif, Uneb Gazder, Nida Azhar and Rizwan U. Farooqui
177
20. FAILURE OF OVERHEAD WATER TANK IN THE STATE OF UTTAR

PRADESH IN INDIA-A CASE STUDY
Amjad Masood, Tazyeen Ahmad, Muhammad Arif and V.P Mital
185
21. OPTIMIZATION OF UNCERTAIN CONSTRUCTION TIME-COST

TRADE-OFF PROBLEM
Ehsan Eshtehardian, Reza Abbasnia and Abbas Afshar
192
vii
22. UNCERTAIN SCHEDULING BASED ON ACCEPTED RISK LEVEL

AND OPTIMISM OF A PROJECT MANAGER
Ehsan Eshtehardian, Abbas Afshar and Reza Abbasnia
201
23. AGGREGATE CHARACTERIZATION - AN IMPORTANT STEP

TOWARDS ADDRESSING CONSTRUCTION ISSUES IN PAKISTAN
Syeda M. Zaidi, Sahibzada F.A. Rafeeqi, Mir S. Ali and Abid M. Khan
210
24. ASSESSMENT OF CRITICAL SKILLS FOR PROJECT MANAGERS IN

PAKISTANI CONSTRUCTION INDUSTRY
Rizwan U. Farooqui, Muhammad Saqib and Syed M. Ahmed
221
25. APPLICATIONS OF NANOTECHNOLOGY AND NANOMATERIALS

IN CONSTRUCTION
Zhi Ge and Zhili Gao
235
26. NONLINEAR DYNAMIC BEHAVIOR OF COLD-FORMED STEEL

PIPE PIER MODEL USING SHAKING TABLE TEST
Abdul Q. Bhatti and Norimitsu Kishi
241
27. ASSESSMENT OF DEMINGS PHILOSOPHY WITH RESPECT TO ITS

LINK TO THE CURRENT SCENARIO IN PAKISTANI
CONSTRUCTION INDUSTRY
Syed M. K. Huda
247
28. PRODUCTION OF LOW COST SELF COMPACTING CONCRETE

USING RICE HUSK ASH
Shazim A.Memon, Muhammad A. Shaikh and Hassan Akbar
260
29. THE ACPROM MODEL: AN EXPERT SYSTEM FOR EVALUATING

THE CONSTRUCTION PROGRESS
Zubair A. Memon
270
30. ROLE OF CONSTRUCTION SECTOR IN ECONOMIC GROWTH:

EMPIRICAL EVIDENCE FROM PAKISTAN ECONOMY
Raza A. Khan
279
31. RISK IDENTIFICATION FOR INTERNATIONAL JOINT VENTURE

CONSTRUCTION PROJECTS
Misbah Jamil, Nadeem A. Mufti and Ammad H. Khan
291
32. APPLICATION OF PUBLIC PRIVATE PARTNERSHIP (PPP) IN HONG

KONG SPECIAL ADMINISTRATIVE REGION THE CRITICS
PERSPECTIVES
Albert P.C. Chan, Patrick T.I. Lam, Daniel W.M. Chan and Esther Cheung
302
viii
33. MODELING SUBCONTRACTORS COOPERATION IN TIME;

COOPERATIVE GAME THEORY APPROACH
Mohammad S. Asgari and Abbas Afshar
312
34. ANALYSIS OF THE USE OF PERFORMANCE INFORMATION IN

THE CONSTRUCTION INDUSTRY
Kenneth Sullivan, Dean Kashiwagi and Brad Carey
320
35. MOVEMENT OF THE LATEST CUTTING EDGE PROJECT

MANAGEMENT/DELIVERY SYSTEMS TO THE UNIVERSITY OF
BOTSWANA
Dean Kashiwagi, Kenneth Sullivan and Joseph Ssegawa
338
36. PERCEIVED RISK ALLOCATION IN PUBLIC-PRIVATEPARTNERED (PPP) WATER SUPPLY PROJECTS IN INDONESIA
Andreas Wibowo and Sherif Mohamed
349
37. A STRATEGY FOR UPGRADING BRIDGE INFRASTRUCTURE

NETWORK
Bala Muhunthan and Sherif Mohamed
357
38. DEVELOPMENT OF A FUZZY RISK ASSESSMENT AND

CONTRACTUAL ALLOCATION MODEL FOR IRAN'S DAM
Majid P. Jalal, Parviz Ghoddosi and Mojtaba Hosseinalipour
366
39. COMPARISON OF PUBLIC PROCUREMENT OPTIONS UNDER

PPRA-2004 RULES
Attaullah Shah, Ehsan-ul-Haq and Murtaza A. Shah
376
40. THE INVESTIGATION OF DESIGN-BUILD VARIANTS IN

CONSTRUCTION MARKET OF THE PEOPLE REPUBLIC OF CHINA
Xia Bo and Albert. P.C. Chan
384
41. ASSESSMENT OF CRITICAL SUCCESS FACTORS FOR

CONSTRUCTION PROJECTS IN PAKISTAN
Muhammad Saqib, Rizwan U. Farooqui and Sarosh. H. Lodi
392
42. SKILLED LABORER MANAGEMENT IN HANDLING CONCURRING

BUILDING PROJECTS AT MULTIPLE SITES: THE BAR BENDERS
JOB SCHEDULING PROBLEM
Ming Lu, Hoi C. Lam, S. L. Tang
405
43. FINANCIAL MANAGEMENT OF CONSTRUCTION CONTRACTS

(CONSTRUCTABILITY AND ITS RELATION WITH TQM, COST
SHIFTING RISK AND COST/BENEFIT)
Tauqir Haider
415
ix
44. CONSTRUCTION PROCESS COST MODEL (CPCM) APPLIED TO

THE TENDERING PROCESS
Raymond T. Aoieong, S. L. Tang and Ying H. Chuck
425
45. BUILDING INFORMATION MODELING (BIM): A NEW PARADIGM

FOR VISUAL INTERACTIVE MODELING AND SIMULATION FOR
Salman Azhar, Abid Nadeem, Johnny Y. N. Mok and Brian H. Y. Leung
435
46. ROLE OF OPEN AND DISTANCE LEARNING IN THE EDUCATION

OF ENGINEEERS FOR SUSTAINABLE BUILDING DESIGN: A CASE
STUDY OF ALLAMA IQBAL OPEN UNIVERSITY
Attaullah Shah, Ihsan-ul-Haq and Nomana Anjum
447
47. RELIABILITY-BASED MODEL FOR ESTIMATING LONG TERM

PAVEMENT MAINTENANCE CONTRACTS UNDER
PERFORMANCE SPECIFICATIONS
Kamalesh Panthi, Rizwan U. Farooqui and Syed M. Ahmed
456
48. A FRAMEWORK TO ASSESS SUSTAINABILITY OF COMMUNITYBASED WATER PROJECTS USING MULTI-CRITERIA ANALYSIS
Kamalesh Panthi and Shashi Bhattarai
464
49. MALAYSIA IMPROVISED RAPID ALL-WEATHER SHELTER II

(MIRAS II)
Fajaruddin Mustakim, Ismail Rahman, Abdul A. A. Samad, Kamarul A. H.
M. Sari and Syamsul I. Saidin
473
50. ASSESSING THE VIABILITY OF TOTAL QUALITY MANAGEMENT

IMPLEMENTATION IN CONTRACTING FIRMS OF PAKISTANI
CONSTRUCTION INDUSTRY
Rizwan U. Farooqui, Rehan Masood and Junaid Aziz
482
51. COST OVERRUN FACTORS IN CONSTRUCTION INDUSTRY OF

PAKISTAN
Nida Azhar, Rizwan U. Farooqui and Syed M. Ahmed
499
First International Conference on Construction In Developing Countries (ICCIDCI)

August 4-5, 2008, Karachi,, Pakistan
Building Construction Technicians Training: Its Relevance to the Modern

Construction Industry In Kenya
Obudho S. Omondi
PhD Student, Building Environment Science and Technology (BEST) Department, Politecnico di Milano,
Milano Italy
wobudho@yahoo.co.uk
Abstract
Training of Building construction technicians in Kenya is targeted at offering the construction industry a
competent workforce that is able to perform the various tasks bestowed upon it within the construction
industry. This paper discusses the training acquired by these technicians from Technical Vocational
Educational Training (TVET) Institutions vis--vis the requirements of the construction industry. Areas
considered are the technicians performance at work; what they learn and what is required of them; and
the teaching and learning materials used to train them. Data was collected through questionnaires,
interviews and direct observation at construction sites. Respondents were construction site supervisors,
technicians who had undergone the training, and lecturers in TVET institutions. The statistical tools used
for data analysis were chi-square and the Analysis of Variance (ANOVA). Arguably, the findings reveal
that the requirements of the construction industry is not in phase with the technicians performance at
work, more is required of them than what they learn; the teaching and learning materials used need to be
upgraded to simulate what is expected in the construction industry and finally proper collaboration
between the construction industry and TVET institutions in the face of changing technological trends is
recommended.
Key words
Technicians, workforce, training, Building Construction
1. Introduction
The construction industry is one of the highest employers of labour in Kenya with a work force of fewer
than one million and an output of Ksh.3.2 billion per year. About 80% of this is directly related to the
building industry. This industry makes a significant contribution to the socio-economic development
process of the country, by employing a large proportion of the country's labour force and helping in the
improvement and acquisition of skills (ROK, Economic Survey, 2004). What is impacting this industry is
the current technological changes taking place in the world, plants and materials for use by the builder
have kept abreast with the construction industry. This has allowed an increase in production without an
increase in labour (Butler, 1990).
People who have the relevant skills not only make capital equipment more productive but also make
effective use of machines and equipment they work with. This enables firms to invest more on
sophisticated materials and productive machines, but without a workforce that is continually acquiring
skills, it is difficult to reap most of the returns from the current technological progress. Researchers
observe that the workplace has changed and there is a mismatch between available human resources and
the type of employment available in the world of work. The construction firms' skilled labour demand and
the TVET programme graduates capacities are not in phase. Kerre (1997) states that Training Institutions
in most of the developing countries are unable to keep pace with the level of technology in the industry,
and that the level of technology on the other hand determines skill requirement in the industry.
Kenya boasts of a fairly well developed construction industry that is technologically advanced and plays a
crucial role in the development of the economy by creating investment opportunities for individuals; firms
and government; as well as providing basic infrastructure such as roads, housing, water and sewage
facilities required by other sectors.
1.1
Problem Statement
The world of work is in constant change. The development of a global economy and the influences of
new technologies have altered the workplace. Employers want workers with many skills who can handle
a wide range of responsibilities. To thrive in such a dynamic and constantly changing technological world
demands radical restructuring of TVET programmes charged with the responsibility of imparting skills
and knowledge to trainees.
Kerre (2000) observes that one of the challenges facing education and training in Africa is the changing
demands of the workplace. Technological changes occur often with new products and services appearing
in the market. Employment trends, therefore, tend towards flexible and broad specialization. More
emphasis is being laid on adaptive skills to new production environments. Burgess (1986) expresses the
view that young people who have undergone TVET programme acquire knowledge of particular subjects,
but are ill equipped to use the knowledge in ways which are relevant to the world outside the educational
system. This imbalance, he observes, is harmful to the industry and society. A well-balanced educational
programme should, of course, enhance analysis and the acquisition of knowledge relevant to the world of
work.
It is worth noting that given the demand for technical and vocational teachers in all education and training
programmes, the current production is quite insufficient. The lack of qualified teachers and instructors has
contributed to the growing gap between technical training and the world of work (Kerre, 2000). Jobspecific training is most important for creating self-employment as well as meeting new challenges in the
world of work, but TVET programmes have not innovated to accommodate the rapid changing work
environment characterized by new technologies and work organizations that demand adaptive skills, due
to lack of appropriate training equipment and teachers. (Singh, 1998, Kerre, 2000)
The challenge therefore, is to respond to three major issues at stake: devising flexible and continuous
training systems to meet the changing labour market requirements; mobilizing greater investment in
education and training; and ensuring equitable access to training opportunities (Ducci, 1997). These
issues stated above are the huddles that need to be overcome in order to bridge the gap that exists between
training and world of work.
1.2
Study Objectives
The study was guided by the following objectives:

1.
2.
To determine the attitudes of lecturers and supervisors towards the performance of technicians
in the world of work.
To determine if there exists a relationship between what technicians learn in TVET institutions
and what is required of them in the construction industry.
3.
4.
To determine the attitudes of lecturers and trainees towards the available tools, equipment and
materials in TVET institutions.
To suggest ways of improving the performance of technicians in the world of work.
2. Literature reviews
2.1 Training
Training refers to all those activities associated with the instruction and discipline and also as preparing
oneself by performing a set of instructions, so as to draw in a desired manner and bring ones body and
knowledge a high pitch of efficiency. To train a person is to provide him or her with the know-how or the
ability to perform certain actions from a variety of perspectives. (Jones and Hendry, 1994, Barrow and
Milburn 1990). Training as a process entails both the mastery of manual endeavors and the conception
development of the mind in line with the tasks to be performed. In the wider context training is the
preparation of oneself through the performance of a set of instructions, which are later recalled at the
workplace.
The aims of TVET as outlined in this master plan on Education and training 1997-2010 (Republic of
Kenya, 1998:p114) among other things is:
(a)
To inculcate the vocational and entrepreneurial skills necessary for self employment;
(b)
To develop the scientific, technological, practical and attitudinal skills needed for specific jobs
in various trades, vocations and professions;
(c)
To provide avenues for skills improvement and further training in TVET institutions.
The above aims can be achieved through raising the quality and relevance of TVET programs by
developing relevant curricula and examinations; the provision of essential technologies and materials and
the establishment of effective monitoring and management system of the TVET institutions.
2.2 Role of TVET in training provision
TVET programs serve the individual by imparting knowledge, skills and attitudes that will be used to
procure gainful employment (Kerre, 1997). With increasing technological development and liberalized
world markets, any countrys technical and vocational training system will increasingly become decisive
in determining the competitive strength and level of development of its economy. In Kenya today, TVET
is offered in three distinctive ways namely:
(a)
The formal way which comprises of enrollment in TVET subjects at the primary, secondary
school level and post school institutions
(b)
The non-formal comprising of those enrolled in TVET programs in private institutions supported
by Churches, Non-governmental organizations (NGOs) and individual proprietors. These
institutions are temporary.
(c)
The informal way which has gained prominence as many youth take up apprenticeships in the
informal sector (Jua Kali) where they work with the experienced artisans and craftsmen before
venturing into their own self-employment. It is estimated that the informal sector in Kenya
absorbs around 70% of the 0.5 million entrants into the labour force annually (Republic of Kenya,
1996)
2.3 TVET Curriculum in the institutions
TVET at tertiary level is offered to those who have completed secondary school level education and it
comprises a wide range of courses. According to Kerre (1997), the purpose and objectives advanced for
TVET programs in Kenya at this level are as follows:
(a)
To equip learners with relevant productive and entrepreneurial skills that will prepare them for
gainful employment.
(b)
To provide skilled labour to match the demand for human resources in the scientific,
technological and commercial sectors of the nations economy.
(c) Increase scientific and technological literacy and provide a sound foundation in the spirit of
life-long learning.
In Kenya today there is the tendency of moving towards a comprehensive school curriculum where TVET
subjects are offered as part of general education.
2.4 Financing of TVET programmes
The overall costs on education are on the increase. Developing countries are particularly hard hit due to
economic crisis, but still need to compete in an era of rapid economic and technical change (Bolina,
1996). TVET programs are expensive to run compared to general education, as it has been estimated that
the cost of one technical school is equivalent to three schools offering general education (Kerre, 1997).
Governments are therefore getting more concerned about financing of TVET to meet the new and
emerging labour markets requirements. Various financing strategies are practiced in different parts of the
world, and Kenya is no exception. UNEVOC (1996) classifies some of the well known financing
mechanisms as follows:
a)
Public financing.
b)
Enterprise financing.
c)
Private and public sponsored financing.
d)
International donor assistance.
2.4.1 Public Financing

Mostly public financed TVET programs are implemented in schools before employment is taken up. Nonformal training centers, pre-service and in-service training for ministries also receive funding. Public
financing is provided through public revenue (government funds). When the state finances TVET
programme through public funds, it is on the assumption that the ultimate responsibility for development
of human resources for national development lies with the state.
2.4.2 Enterprise financing

The enterprise/company conducts the TVET programme for its labour force directly and bears the entire
costs of training. Sometimes enterprises contribute a small amount of money to a central pool, like to the
Directorate of Industrial Training in Kenya, in form of taxes and these resources are used in different
ways to finance training. But many of the TVET institutions fall under different ministries creating more
bottlenecks and bureaucracies that take long to overcome.
2.4.3 Private and public sponsored financing.

Governments faced with a shortage of resources would like individuals, enterprises, non-governmental
organizations (NGOs) and the general public to share the financial responsibility for TVET. The Kenyan
government introduced a cost-sharing policy in 1988 when it called upon the communities, parents and
beneficiaries of TVET to assist in raising additional funds to accelerate the expansion of training
opportunities to increase access without compromising quality and relevance (Kerre, 1997).
2.4.4 International donor assistance

Donor support plays an important role in developing TVET systems. In many developing countries such
as Kenya, the large amount of international aid has contributed to the setting up of a base of training
capacity (UNEVOC, 1996). Infrastructure and facilities have been created, staff trained and instructional
systems implemented through donor assistance. Most donors provide financial resources for capital costs
which is limited and for short periods (Herschbach, 1993).
2.5 Government contribution

The primary functions of the state according to Kerre (1997), consists of the following: Policy
formulation; Setting the legislative and normative framework of the training system, establishing quality
standards, testing and certification to ensure consistency; Human resource planning to ensure relevant and
adequate data is available to guide training; Securing financing for TVET programs either directly or
indirectly; Ensuring effective delivery of TVET by developing institutional capacity for curriculum
development, training, testing and certification; Evaluating the overall performance of TVET to ensure
proper application of standards and policies; Promoting active participation of partners through
incentives.
Whether in non-formal or informal settings, TVET needs to have the necessary legislative backing to
ensure its successful implementation. It is therefore the responsibility of the state to establish and
maintain a well-functioning national TVET system. Such a system should entail two major functions:
Developing TVET system in line with the countrys development needs and priorities; Delivery of
training.
2.6 The Construction Industry in Kenya
Kenya boasts of a fairly well developed construction industry that plays a crucial role in the development
of the economy by creating investment opportunities for individuals; firms and government; as well as
providing basic infrastructure such as roads, housing, water and sewage facilities that are required by
other sectors. Quality engineering, building and architectural design services are readily available, but a
serious shortage of housing in urban centers due to rapid growth of urban population has brought about an
increase in the demand of dwellings, this is evidenced by the value of approved plans which has been on
the increase and attributed to rural-urban migration. The consumption of cement in Kenya from 2004 to
2006 is shown in figure 1 below.
Figure 1 Cement consumption for the year 2004 -2006 on monthly basis in metric tons
From figure 1 above there is a notable increase in cement consumption during the final quarter of 2006.
This upward cement consumption has created employment opportunities in the building construction
industry. The industry also stimulates other sectors through economic multiplier effects and makes a
significant contribution interms of conserving and generating foreign exchange that is vital for economic
development.
The Governments Ministry of Roads and Public Works is charged with the responsibility of providing
basic infrastructure facilities to the public. These infrastructure facilities include; development,
rehabilitation and maintenance of the road network in the country and maintenance of buildings and other
public works, but are constricted with funding from the treasury. Most of the works they have undertaken
are the completion of stalled projects thus less funds remain to cutter for new projects.
Private sector clients and contractors now predominate in the building construction market. By 1999, the
private sector accounted for more than 90 per cent of building construction output. This is evident in
private residential building investment. The private sector recorded a higher growth than the public sector
over the same period of time. This is an indication that the privately owned construction firms are
carrying out more construction works than that done by the government agencies.
3.0 Research Design and Methodology

The systematic and random sampling techniques were used in the study. The respondents for this study
were given researcher designed questionnaires to respond to, and were drawn from four groups namely:
lecturers in TVET institutions; students in TVET institutions; supervisors in construction firms and
technicians who have undergone TVET training and working within the construction firms. The statistical
tools used for data analysis were chi-square and the analysis of variance (ANOVA) at 0.05 level of
significance (=0.05).
3.1 data analysis and interpretation
The opinions of lecturers in TVET institutions and supervisors in the construction industry were sought
and classified in the following manner with regard to the performance of technicians using the Likert
scale (Kothari, 1985): Strongly Agree (labeled as SA); Agree (labeled as A); Undecided (labeled as U);
Disagree (Labeled as D); Strongly Disagree (labeled as SD).
A strongly agree response reflected a negative attitude; while a positive attitude was graded as strongly
disagree. This was in regard to whether technicians could actually perform within the construction
industry. Other intermediate grades were; agree, undecided, and disagree.
The data was then collected based on the criterion above and tabulated (as shown in table 1). Chi- square
analysis of the data was computed to find out whether the two groups' opinions were similar or differed.
Table 1: Chi-square Analysis of Attitudes of Lecturers and Supervisors towards the Technicians
performance
SA
fo=2
fe=2.4
fo=2
SUPERVISORS
fe=1.6
TOTAL
4
PERCENTAGE
26.67
=0.05, 2obseved =1.6, 2critical (0.05, 4) = 9.49
LECTURERS
A
fo=4
fe=4.2
fo=3
fe=2.8
7
46.67
U
fo=1
fe=0.6
fo=0
fe=0.4
1
6.67
D
fo=1
fe=1.2
fo=1
fe=0.8
2
13.33
SA
fo=1
fe=0.6
fo=0
fe=0.4
1
6.67
TOTAL
9
6
15
100
The null hypothesis tested was that no significant difference existed between the attitudes of lecturers in
TVET institutions and supervisors in the construction industry towards the performance of technicians.
This hypothesis was accepted since 2critical (0.05, 4) was greater than2obseved at =0.05. This shows that both
the lecturers and supervisors have similar opinions with regard to the technicians' performance. 73.34% of
lecturers and supervisors responded in affirmative that technicians were unable to perform as expected the
tasks required of them. Kerre (1995) observes that in the current state of changing needs of societies and
the work place, new knowledge and technologies are altering the skill requirement for production and
maintenance. He therefore suggests that quality assurance be sought by both trainees and employers to
ensure that the current mismatch between technicians and employment opportunities is arrested, if this is
done, it will improve the performance of technicians at their work place. The attitude shared by the
lecturers and supervisors can be attributed to the changing work environment where new technologies and
work organization demand new skills and also that TVET programmes have not innovated to
accommodate such changes.
To determine whether there was any relationship between what technicians learnt and what is required of
them in the construction industry, a two-way analysis of variance (ANOVA) was carried out (shown in
table 2). This was done to determine whether there was any interaction effect between any of the
following aspects considered for job performance: Accuracy; Speed in task completion; Independence;
Innovativeness; Interpersonal relations (Ability to work with others); Machine operation skills; Use of
materials.
Table 2: ANOVA for job performance aspects about what Technicians learn and what is required of them.
SOURCE
Columns (C)
Rows (R)
Interaction (R x C)
Within Cells
Total
SS
188.57
27.45
17.55
150
383.57
df
1
6
6
196
209
ms
188.57
4.575
2.925
0.765
Fobserved (0.05)
246.497
5.980
3.824
Fcritical (0.05)
3.89
2.14
2.14
From table 2, it was noted that Fobserved is greater than Fcritical at 0.05 level of significance for Rows (R),
Columns (C), and interaction (R x C). This therefore meant that there is an interrelationship between what
is learnt in TVET institutions and what is required by the construction industry.
Figure 2 below gives a graphical representation of interaction effects between job aspects. It can be
observed that the requirement of the industry is higher in all job aspects than what is learnt in the TVET
institutions. The interaction effects noted in the graph were: Speed in task completion vis--vis all the
other aspects of job performance; Ability to work with others verses independence in job performance;
Machine operation skills are affected by the accuracy of the individuals; Accuracy and innovativeness are
also affected by ability to work with others.
The result obtained from table 2 indicated that there was a relationship between what technicians learnt
and what the construction firms required of them. The notable difference in tasks considered for job
performance in both groups studied was speed. Technicians in the industry were expected to perform their
tasks faster than how they trained. This can be attributed to the work schedule in the industry where time
is a major constraint.
L-What is learnt in TVET institutions

R-What is required by construction firms
Accuracy
Speed in Task completion
Independence
Innovativeness
Ability to w ork w ith others
Machine operating skills
Use of Materials
9
Mean scores
3
R
L
Groups
Figure 2: A graph showing the interaction effects between job performance aspects
Attitudes of Lecturers and Trainees towards the available tools, equipment, and materials were sought and
their opinions classified in the following manner: Need for more tools, equipment, and materials (labeled
as N); Undecided (labeled as U); No need for tool, equipment and materials (labeled as NN).The
frequencies for each opinion were tabulated as shown in table 3 and a chi-square computed.
Table 3: Chi-square Analysis of Lecturers and Trainees towards the available tools, equipment, and
materials
Respondent
Lecturers
Trainees
Total
Percentage
N
fo=6
fe=4.95
fo=38
fe=39.5
44
55
U
fo=1
fe=1.13
fo=9
fe=8.88
10
12.5
NN
fo=2
fe=2.93
fo=24
fe=23.08
26
32.5
Total
9
71
80
100
=0.05, 2obseved =0.61, 2critical (0.05, 2) =5.99
The result obtained (table 3) indicated that the lecturers and trainees held the same attitudes with regards
to the available tools, equipment and materials for teaching and learning building construction diploma
course in TVET institutions. On the basis of this result the null hypothesis was accepted. Both groups
agreed that the tools and equipment were lacking and many of them (trainees) came across some tools and
equipment during the attachment period and were not comfortable using them. The tools and equipment
available in most TVET institutions were archaic and mostly out of order. Kerre (2001) highlights this
situation that the machinery available in the workshops is quite outdated with few Laboratories without
sufficient learning/teaching materials. The equipment is not sufficiently maintained to cope with the needs
of modern industry, lack of facilities and resources to equip and maintain equipment has in turn adversely
impacted the practical orientation of the TVET programmes.
They therefore suggested that the construction firms donate some of their used tools and equipment to the
TVET institutions, to aid in teaching and learning
4.0 Conclusion
In conclusions it was observed that the lecturers and construction supervisors had negative attitude
towards the performance of technicians, an indication that the respondents are not satisfied with the
training of building construction technicians at diploma level thus its relevance is questionable. Secondly,
the existence of a relationship between what the technicians learnt in TVET institutions and what was
required of them by the construction firms is a good indication that not everything learnt was irrelevant,
however more should be done to enhance this relationship and make it even better through the review of
syllabus. Finally equipping TVET institutions with the relevant machinery/ equipment would enable
trainees gain experience in their operation and use.
4.1 Recommendations
Based on the findings of this study, the following recommendations were arrived at: First, the current
syllabus was seen, as not offering most of the knowledge and skills required by the construction industry.
It is therefore recommended that the subjects that crowd the syllabus should be trimmed and streamlined
so as to meet the construction industry needs.
Secondly, a liaison between the construction industry and TVET institutions should be encouraged. This
can be achieved through seminars, workshops, site visits, attachments, and exhibitions. This will go a
long way in fostering a healthy relationship between learning institutions and the construction industry.
Thirdly, there should be created an attachment placement office within the learning institutions, which
will act as a link between them and the construction industry. This will eliminate the problems trainees
experience when looking for attachment places and the construction firms will also be prepared to receive
them and assist them accordingly during the attachment period.
Another recommendation is the evaluation and review of the course syllabus at specified intervals and
also when need arises so that it is in phase with the technological changes experienced in the construction
industry. This in view of the long time it has taken since the last syllabus review for TVET institutions
was done. The 8th development plan for Kenya (Republic of Kenya, 1997) concurs with this and
recommends the following:
(i)
The need for a review of TVET programmes to make them consistent with the current and future
needs of industrialization.
(ii)
Establishment of a management Information System to co-ordinate TVET programmes.
(iii)
Creation of a monitoring and evaluation system for TVET programmes.
Finally, it is recommended that emphasis of course coverage should be delinked from performance in
examinations on which it is currently pegged. Lecturers should therefore apportion same vigor with which
they teach, to both theory and practical lessons. Examinations should also be carried out in a continuous
manner and not a final one at the end of the course.
5.0 References
Barrow, R. and Milburn, G. (1990) A critical Dictionary of Educational concepts: An Appraisal
of
selected ideas and issues in Educational Theory and Practice. Harvester Wheatsheaf.
Bolina, P. (1996). Financing Technical and Vocational Education: Modalities and Experiences. Berlin:
UNEVOC/UNESCO
Burgess, T. (1986) Education for Capability. London: Nfer-Nelson publishing Co Ltd.
Butler, J. T (1990) Elements of Administration for Building Students. Cheltham: Thorn Publishers Ltd.
Ducci, M. A (1997) "Training for Employability" in Singh, M (ed.): Adult Learning and Changing World
of Work. Hamburg: UNESCO Institute for Education. (43-50)
Herschbach, D. R. (1993). Financing Vocational Education in Developing Countries. Training
Dicussion paper No. 111. Geneva: ILO.
Jones, A. and Hendry, C. (1994). The Learning Organization: British Journal of Management. Vol. 5
(153-162)
Kerre, B. W. (2001) Technical and Vocational Education in Sub-Saharan Africa: A Case Study of
Kenya. UNESCO
Kerre, B. W. (2000) "The Place of Technology Education in the School Curriculum of the 21st Century."
A paper presented in the WOCATE/UNESCO conference, Technical University: Braunsweigh.
Kerre, B. W. (1997) " Technical and Vocational Education in Kenya". Under the Sun or in the Shade?
Jua Kali in African Countries. Berlin: UNEVOC/UNESCO
Kerre, B. W. (1995) "Cooperation in Technical and Vocational Education" in Establishing

Partnership in Technical and Vocational Education. Berlin: UNEVOC/UNESCO
Kothari, R. (1985) Research Methodology. New Delhi: Willey Eastern Ltd.
Republic of Kenya (2004) Economic Survey. Nairobi: Government Printer.
Republic of Kenya (1998) Master Plan on Education and Training 1997 - 2010. Nairobi: Government
Printer.
Republic of Kenya (1997) 8th Development Plan. Nairobi: Government Printer.
Republic of Kenya (1996) Industrial Transformation to the Year 2020, Sessional paper No. 2 of 1996.
Nairobi: Government Printer.
Singh, M. (1998) School Enterprises: Combining Vocational Learning with Production. Berlin:
UNEVOC/UNESCO
UNEVOC (1996) Financing Technical and Vocational Education: Moderlities and Experiences. Berlin
UNESCO
10

Integrated Time and Cost Management System

for Project Monitoring, Evaluation and Control
Edem O. P. Akpan
Professor, University of Uyo, Uyo, Akwa Ibom State, Nigeria
eopakpan@yahoo.com
Ifeoma V. Ihim
MSc Student, Federal University of Technology, Owerri, Imo State, Nigeria
Achimba C. Ogbonna
Senior Lecturer, Federal University of Technology, Owerri, Imo State, Nigeria
Charles N. Ononuju
PhD Student, Dept. of Building, Imo State University, Owerri, Imo State, Nigeria
Abstract
This study presents an integrated time and cost management system for project monitoring, an essential
ingredient for project evaluation and control as improper project monitoring normally leads to time and
cost overruns and sometimes project abandonment. Project monitoring essentially entails matching cost
with time during project implementation. However, there is no clear method of marrying the two as
different methodologies are always employed to deal with these two parameters. An implementation plan
using network scheduling technique is presented on time-phased graphs (Gantt charts), one on top of the
other, the top displaying the actual durations and costs of individual activities during the project
implementation stage while the one below shows the budgeted costs and durations of these activities and
by extension the cumulative costs over a period. A vertical line passing through the two graphs is drawn
at certain intervals or milestones to monitor any variation as to time and cost, and deductions as to the
performance of the model is carried out using two UNDP-sponsored borehole projects in Abia State of
Nigeria based on Earned Value Analysis (EVA), a methodology used in developing Primavera Software
package. Even though the EVA model seems to give impressive results in terms of cost at certain
milestones, it lacks the potential of identifying those activities having those costs. This is where the
beauty of the proposed model lies, matching time with cost with all the associated activities. The model
has helped to curtail the incidence of time and cost overruns and has also proved invaluable in project
cash flow forecasting and monitoring, project cost evaluation and project control in general.
Key words
Network scheduling, Gantt chart, activity-based-costing, earned value analysis, BOQ.
1. Introduction
Project management in general anchors on time and cost and it may be improper to deal exclusively with
one without the other, yet no comprehensive methodology has been designed to deal with this twin
11
problem. Project implementation has rightly been seen by Bobrowski(1989) as a cycle made up of
planning, monitoring and controlling. If project management must succeed according to him, these three
components must be based on the same or at least compatible frameworks or tools of management. This
cannot be said to be the case with most projects in which activity/work planning and monitoring are
usually done using either the traditional bar/Gantt chart or network scheduling technique while the cost
associated with this plan, that is financial monitoring, control and payment are carried out using Bill of
Quantities (BOQ).
The importance of cost and timing in project management cannot be overemphasized. There appears to be
no better summary than the one given by a renowned jurist, Lord Dening as quoted by Knowles (2004)
that cash flow is the life-blood of the construction industry. He noted that it is important to quantify both
the total and minimum capital needs of a project, as the clients major concern is often a matter of timing
of need and use, since project funds are usually allocated in advance. There must therefore be a schedule
to determine the overall cash flow and timing over the entire project duration, as an abrupt sudden
demand of cash will lead to undesirable consequences.
It was in the course of finding an appropriate solution to the above complex problem that led to the birth
of modern scheduling technique, which resulted in the invention of the Gantt chart. It was not long the
chart fell into disrepute due to its inability to easily display the relationship and nature of
interdependencies between project activities. It is also difficult as was then to effectively identify and
isolate those activities generally referred to as critical activities that uniquely control and influence the
project duration. The search for a better tool later led to the emergence of Critical Path Method (CPM)
and Program Evaluation and Review Technique (PERT) between 1958 and 1959 and according to
Suhanic (2001), these techniques are logically elegant and analytically powerful but they are visual
disasters. Due to this shortcoming, practitioners and researchers went back to the old system. Efforts at
incorporating the advantages of the two systems have been encouraged although the wrong approach has
sometimes been undertaken by converting the Gantt chart into PERT/CPM chart whereas the reverse
could have been more appropriate. This later version is adopted by Primavera Project Planner (P3)
Software Version 5.0 (1991) but the exercise concentrates on integrating the activities of cost and
schedule on one chart. This approach has a lot of limitations as it lends itself more to cost to the
disadvantage of schedule especially during the implementation stage. Another shortcoming is its failure to
bring the existing methodologies constrained resource network scheduling, bills of quantities (BOQ),
etc into its ambit to serve the needs of practitioners and researchers. This is what the present study intends
to achieve.
1.1 Earned Value Analysis (EVA)
Over the years, earned value analysis (EVA) has been employed to achieve the above objective but from
observations and practice, this model is rather unsatisfactory. Earned value analysis formally came into
existence in 1967 when the US Department of Defense (DoD) established the Cost/Schedule Control
Systems Criteria (C/SCSC) to standardize contractor requirements for reporting cost and schedule
performance on major contracts. A basic tenet of C/SCSC is the concept of Earned Value Management.
Earned Value Management is a methodology for determining cost and schedule performance of a project
by comparing the planned work with accomplished work in terms of monetary value assigned to the
work. Earned value analysis then became the industry standard method of measuring a projects progress
at any point in time, forecasting its completion date and final cost, and analyzing variances in the
schedule and budget as the project proceeds. It compares the planned amount of work with what has
actually been completed, to determine if the cost, schedule and work accomplished are progressing in
accordance with the plan. In a nutshell, earned value analysis is a method of showing the progress of a
project by comparing the actual result of each activity within the project against the plan (budget and
schedule). Using this data, the earned value creates indicators that show whether or not the project/task is
on schedule and whether or not it is meeting the cost plan. As the work is completed, it is considered
12
earned. Earned value is therefore the missing link between cost reporting and cost control. This depends
on the existence of a sound framework according to Lock (1996). This last stage is what seems to be
lacking when one looks closely at the methods of approach where cost information is used to determine
the schedule performance index (SPI) and schedule variance (SV) using a common graph at time, t. These
according to Payne et al (1999) are given as:
Schedule performance index (SPI) = (BCWP/BCWS)
-----------------(1)
Schedule variance (SV) = ((BCWP BCWS)/BCWS) * 100% ----------------(2)
and
Cost performance index (CPI) = (ACWP/BCWP)
---------------------(3)
Cost Variance (CV) = ((ACWP BCWP)/BCWP * 100% ---------------------(4)
where
ACWP is the actual cost of work performed
BCWP is the budgeted cost of work performed
BCWS is the budgeted cost of work scheduled
and the above information according to this methodology could further be used to forecast the eventual
cost of the project and its duration thus:
Cf = Cs (1 CV)
------------------------------------(5)
Tf = Ts (1 SV)
-------------------------------------(6)
where
Cs and Cf are scheduled and forecasted projected costs and
Ts and Tf are scheduled and forecasted project completion times respectively.
However, PMBoK Guide Exposure Draft (PMI Standard Committee, 1994) adopts the reverse for BCWP
and ACWP in respect of Cost Performance Index (CPI) and Cost Variance (CV). These are:
CPI = BCWP/ACWP and CV = (BCWP ACWP)/BCWP
A negative schedule variance calculated at a given point in time means that the project is behind schedule
while a negative cost variance means the project is over budget. The reverse is the case with those of
Payne et al (1999).
It should also be noted that time has no intrinsic value if it is not related to the number of resources
(labour and other transforming inputs) and/or efficiency in which it is based on. Time as such is stochastic
(Akpan et al (2007)) and has direct bearing on cost even though these two elements are sometimes
assumed to be deterministic for the purpose of tendering and project planning and control. It is therefore
illogical to use cost to determine schedule in any form.
It was in the light of this anomaly of using cost to determine the schedule variance and schedule
performance index that prompted Ibbs and Kwaks (1998) to look at the problem once again and in the
course of their research came out with two indices for the above, CI (Cost Index) and SI (Schedule Index)
in evaluating project schedule performance. They are given as:
Cost Index (CI) = (Actual Project Cost)/ Original Budget
--------------------(7)
Schedule Index (SI) = (Actual Project Duration)/Original Project Duration ---(8)
Equations (7) and (8) however look at the global picture and one may have a problem evaluating the
progress at certain intervals. To appreciate the problem of the Earned Value Analysis methodology, we
have a look at a small project designated as AB-947, a bungalow to be precise which was awarded by the
Federal University of Technology, Owerri at a cost of N10,000,000.00 with a contract period of five
months. At the end of the 3rd month, the different costs were as shown in Table 1.
Periodical costs are the sum of all the costs charged to the project within each period. These costs include
purchased materials, labour, special charges, office expenses and allocated overhead costs. The different
costs of EV analysis are:ACWP = N 4,000,000
BAC (total budgeted project cost) = N 10,000,000
BCWP = N5,000,000
13
BCWS = N 6,000,000
From the above, the
CPI = 0.80 (or 1.25 using PMI model) which signifies a good result.
CV (Cost Variance) = -20% (or 20% according to PMI) indicating a good result too.
SPI = 0.8333 which is less than 1 indicating a bad result and the
SV (Schedule variance) of -20% indicating a bad schedule performance also.
From these results, one could conclude that the contractor was performing well in terms of the cost but
actually behind schedule by 20%. What a mixed result! In most project situations especially in this part of
the world, the concern has always been focused on cost in the form of bills of quantities without
necessarily stating how long each work package in the bill is going to be accomplished. This has given
rise probably to rather unsatisfactory schedule performance as shown above. It must also be noted that the
BCWP is just an estimate based on how far it is assumed the work has been accomplished so also the
BCWS, in this case 60% of the project duration (3months out of 5).
Table 1: ACWP of Project AB-947

Performance Details
1
Project Administration
Periodical Costs
400,000
Cumulative Cost
400,000
Design
Periodical Costs
1,100,000
Cumulative Cost
1,100,000
Drafting
Periodical Costs
Cumulative Cost
Structural Works
Periodical Costs
Cumulative Cost
Roofing/Cladding
&
Ceiling
Periodical Costs
Cumulative Cost
Electrical & Mechanical
Periodical Costs
Cumulative Cost
Painting & Decoration
Periodical Costs
Cumulative Cost
Certificate & Delivery
Periodical Costs
Cumulative Cost
Total Periodical Cost
Cumulative Cost
1,500,000
1,500,000
Periods
3
Totals
4
300,000
700,000
200,000
900,000
900,000
1,200,000
2,300,000
200,000
2,500,000
2,500,000
300,000
300,000
300,000
300,000
300,000
300,000
1,000,000
4,000,000
4,000,000
1,500,000
3,000,000
14
2. Activity-based-costing
Using the above model to forecast the project completion time or future date before completion and the
associated cost may be very misleading as a magnitude of a non-uniform cash flow (depending on the
amount of work occasioned by a number of activities at different levels of project execution) varies from
time to time and this is bound to affect the values of BCWP, BCWS and ACWP at different points too. In
short, these values depend on the network configuration or the work plan.
The use of activity-based-costing (ABC) approach complemented with time-phased graphs may offer
some relief to resolving the problems as cost and schedule variance for a project may or may not reflect
the actual cost and schedule position of the project. Some activities may be completed ahead of schedule
or out of sequence, giving false indication of the project wellbeing. First of all, cost associated with each
activity has to be ascertained based on activity-based-costing (ABC) approach, which basically adopts the
bills of quantities format. All relevant resources (people and machinery) and materials (purchased
components) and raw materials are assigned a cost per unit and they are tracked through the operations in
order to create the end product. In the end, all the costs are summed at each level of product structure or
subassembly, which may likely be at each node. It is assumed that the cost of an activity is consumed
equally throughout the duration of such an activity. If this assumption is followed then the cost and
duration of an activity could be represented, as one horizontal line on the Gantt chart after the project
duration might have been determined using the network scheduling technique. By so doing, the cost is
tied to the schedule, which makes it possible for one to ascertain the cost of the project (both planned and
actual) at any point in time. If the project is carried out using the critical path methodology, a third graph
based on the latest starting time could be incorporated to find out if the project completion time would be
met if some activities are behind schedule which might have been started on the basis of their earliest
starting times. In the case of constrained-resource situation, more resources could be deployed (which
entails extra cost) to buy time to meet the due date (see Akpan(1997)). Where the project duration is
determined using the critical path methodology and the highest resource peak of each resource are taken
as the maximum resource requirement, then one can utilize the time trade/cost trade-off model (see Akpan
(2001)) to accomplish the task at minimum cost. Even with all these scenarios, it would be very simple to
carry out the analysis of variance of the different resource inputs to determine whether it is that of price or
usage with respect to cost or efficiency/inefficiency on the part of the transforming inputs (labour and
equipment) in the case of the schedule.
3. Integrated time and cost model

The methodology follows the basic network scheduling model and the computation of critical path and
other parameters shown in Table 2 such as the Earliest starting time (EST), Earliest finishing time (EFT),
Latest starting time (LST), Latest finishing time (LFT) are as illustrated in Akpan (2001). For the work
presented here, the Activity-on-Arc (A on A) convention is followed which adopts floats. Float is the
difference between the path length and the project duration or to be more precise, the spare time along the
path. However, there is no restriction using slack, a term very much identified with Activity-on-Node (A
on N) which is sometimes used interchangeably as float. The activities are coded for identification
purposes. During the implementation stage, as each activity is carried out, a horizontal bar is drawn to
indicate the extent of completion and this continues until the activity in question is fully executed. To
monitor the extent of work done at any point in time and any deviation, which may arise, a vertical line is
drawn to pass through the two graphs.
3.1 Case studies using the model
The concept was used in the analysis of two borehole projects sponsored by United Nations Development
Programme (UNDP) in Ikwuano Local Government area of Abia State in Nigeria, one (X) in Umuokigbo
15
which started implementation in June, 2002 and the other (Y) at Inyila in September, 2002. As would
later be noticed, there were a lot of improvements in the second project after a lot of experience gained
from the first and also the methodology used. The bills of quantities for the two projects were divided into
four sections, A, B, C, and D comprising of drilling, construction of pump/generator house, pump
installation and construction of overhead tank. The cost of each of the twenty-six activities that make up
the network is shown in Table 2 with their durations. Those figures with negative values represent
unfavourable variances (i.e. higher expenditure than budgeted for) while the positive ones represent
favourable variances. The network diagram is presented in Fig. 1.
Table 2: United Nations Development Programme Assisted Borehole Projects in Abia State, Nigeria
Put in Table 3 here
Put in Fig. 1 here
Fig.1: Network diagram for Projects X and Y (Planned estimate)
The first project was implemented and monitored using EVA methodology, which has given an
impressive result at T32 in terms of cost. The CPI and CV at this point are:CPI = 0.9557 or 95.57% (i.e. 1301414/1361718) and
CV = 0.04429 or 4.43% (i.e. ((1361718 1301414)/1361718)
Although these results appear to be satisfactory but what these indices have not stated are the activities,
which ought to have been carried out at this time according to the plan. This may pose some problems in
future. At this point, activities B19 and C20 are yet to be carried out and this contributed to the cost being
lower than the budgeted.
Put in Fig.2 here
Fig.2: Gantt Chart for Actual Project Performance (Top) with the Planned Project Performance (bottom) for
Project X.
The schedule variance and schedule performance index are unfavourable at this point in time. For proper
analysis, this project was subjected to the concept outlined above. When the project was displayed in the
form of network before transforming it into Bar/Gantt chart for the purpose of clarity during
implementation, the project as a whole was not behind schedule. It is recommended that the monitoring of
the project should be more frequent towards its termination point in order to keep cost down and also
deliver the project within schedule. At T35, the
CPI = 1.2241 or 122.41% (i.e. 1777014/1451718) and
CV = .1830576 or 18.31% ((1451718 1777014)/1777014)
These two indices are rather unsatisfactory three days after an impressive result. One should have
expected the EVA model to predict this unfavourable result as this was what it was meant to accomplish
but what a disappointment! From the records, certain justifications were given as to the unfavourable
outcome, which include among others; that the price of labour and materials increased substantially
during the period of implementation. This is difficult to believe when one looks at Project Y executed and
16
monitored using the new model immediately after the completion of Project X in the same locality.
Before carrying out this analysis, the five-day interval of actual expenditure for Project Y is summarized
in Table 3. This is used alongside the budgeted cost to draw inferences at different milestones similar to
what we have in Fig. 2.
Table 3: Cost of Project Y at different time intervals
Interval
Cumulative
integer) (N)
Cost (N)
5
10
15
20
25
30
35
40
62120.02
154660.70
263864.30
365231.00
107249.10
406650.00
94500.00
155390.00
Cost
(nearest
62120
216781
480645
845876
953125
1359775
1454275
1609665
Judging from the actual cost of N1364275 as against the planned cost of N1361718 at T32, only a slight
difference of N2557 (unfavourable variance) is noticed. This had to do with monitoring the budget hand
in hand with the activities, which this approach has afforded. This is also applicable to another period, T35
where the actual cost is N1454215 as against the planned cost of N1451718, a difference of N2497
(unfavourable variance).
4. Discussion
The proposed model has some similarity with that of Ibbs and Kwaks (1998) with respect to cost. Instead
of looking at the cost at the end of the project, the Cost Index (CI) can be ascertained at ant point in time
by comparing the actual cost with the budgeted similar to what we have in our model. It could be noticed
that CI would continue to change from one point to the other and one should therefore be cautious when
using the CI for predictive purposes even under the EVA methodology. The reason for this variation is
mainly due to network configuration as the expenditure is not uniform throughout the entire project
duration. The issue of schedule performance index and schedule variance seems to be built on the
assumption that all activities must start at their expected times (i.e. earliest starting times). An activity
having float could take advantage of it without experiencing any schedule variance with respect to the
project duration. The analysis of variance on activity basis is simple to undertake with this approach
rather than subjecting the project to the whole exercise with the likelihood of one losing sight of closely
monitoring similar activities in future projects.
The concept outlined above is mainly concerned with the earned value which is quite different from
expenditure incurred in the course of the project which may entail buying and paying for materials in bulk
for future use. This equally applies to plants and equipment. The period of occurrence (i.e. payment) is
very important which may occur at certain nodes of the network. This aspect of the exercise is very useful
for project financial planning and control as improper funding could have disastrous consequences on the
project. The same approach should be adopted but attention should be shifted to when the payment is
made.
17
5: Conclusion
Activity duration and resources vis--vis cost (i.e. as a measure of their usage) are so interwoven in such a
way that the former may be meaningless without the later so also their timing. This has been made
possible by the use of network scheduling technique complemented with the Gantt chart. Without this
integration, project success would be a mirage. Concentrating mainly on cost for the realization of the
project as expounded by EVA model would always lead to a wrong conclusion. With the above concept,
one is able to know what is incurred at any point in time and the components of such costs. The work also
brings into limelight the importance of floats in the realization of the project duration, which seems to be
hidden in the EVA model with its unrealistic schedule variance and schedule performance index.
Finally the model could equally be used for project cash flow forecasting and monitoring which is bound
to curtail the incidence of improper funding with its adverse effect on project performance.
References
Akpan, E. O. P., Ogbonna, A. C. and Ononuju, C. N. (2007). Project Success: Matters Arising.
Advances in Science and Technology Vol.1, No.1, pp. 40-50
Akpan, E. O. P. (2001). Time/cost trade-off computation using implicit elimination procedure.
Technical Transactions of the Journal of the Nigerian Institution of Production Engineers Vol. 6,
No.2, pp. 101-117.
Akpan, E. O. P. (1997).Optimum resource determination for project scheduling. Journal of Production
Planning & Control Vol. 8, No. 5, pp. 462- 468.
Bobrowski, P. M. (1989). Project Management control problems: An information systems focus. Journal
of Project Management Institute (June edition), pp. 2.
Ibbs, C. and Kwak, Y. H. (1998). Benchmarking Project Management Organizations. Project
Management Network, February edition, pp. 49-53.
Knowles, R. J. (2004). Cash is king. The Quantity Surveyor, Vol.46, No.5, pp.15-16.
Lock, D. (2000), Project Management (7th Edition).Gower Press Publishing Ltd, Hampshire, England
Payne, A. C., Chelsom, J. V.and Reavill, L. R. P (1999). Management for Engineers, John Wiley &
Sons, Chichester, England.
Primavera Project Planner (P3) Software Version 5.0 (1991); Primavera Systems, Bala Cynwyd, PA.
Suhanic, G. (2001). Computer-Aided Project Management, Oxford University Press, New York.
18
T32
A1
A2
A3
A4
B13
D21
A5
A6
B14
Activities
D22
A7
B 15
D23
A8
B16
A9
B17
A10
D24
D 25
B1 8
A 11
A12
B19
C 20
D26
35
30
Time
40
19 33904
1777014
25
127851 4
28 7799
20
11996 64
81 091
15
859328
10
55 9532
130141 4
A1
A2
A3
A4
B13
D21
A5
Activities
A6
B14
D22
A7
B15
D23
A8
B16
D24
A9
B17
D25
A10
B18
A11
A 12
B19
C20
954668
35
40
1588548
839886
30
145171 8
25
1361718
20
135721 8
15
48 1638
59887
10
215824
D26
Time
Fig. 2: Gantt chart for Actual Project Performance (Top ) with the Planned
Project Perfor man ce (Bottom) for Project X
19
Table 2: United Nations Development Programme Assisted Borehole Projects in Abia State, Nigeria
S/N
Job Description
Activity
Code
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Total
Clearing of site
Geographical Survey
Access Road & Structures
Mud pits and channels
Foundation for pump/generator
house
Foundation for O/h tank
Dummy
Transportation of materials
Drilling
Block work and lintel
Erection of tank
Logging
Roofing
Ladders and Platforms
Casing
Windows and doors
Water level indicators
Gravel packing
Plastering
Galvanization and bitumen
Grouting
Electrical & wiring installation
Clearing & well development
Pumping test
Painting
Supply & pump installation
Dummy
Pipe connection & leakage test
A1
A2
A3
A4
B13
Path
1-2
2-3
2-4
2-5
2-6
D21
A5
A6
B14
D22
A7
B15
D23
A8
B16
D24
A9
B17
D25
A10
B18
A11
A12
B19
C20
D26
2-7
3-4
4-20
5-8
6-9
7-10
8-11
9-12
10-13
11-14
12-15
13-16
14-17
15-18
16-23
17-19
18-21
19-20
20-21
21-22
21-23
22-23
23-24
Start and Finish Times

(Days)
Floats
Critical
Budgeted
Path
Cost (N)
1515
10000
12244
4000
10428
Duration
EST
EFT
LST
LFT
TF
FF
3
3
7
3
3
0
3
3
3
3
3
6
10
6
6
0
25
21
12
11
3
28
28
15
14
0
22
18
9
8
0
0
0
0
0
5
0
4
10
4
14
1
4
10
2
4
2
1
3
2
1
5
2
2
2
2
0
4
3
6
10
6
6
8
16
10
22
17
14
32
19
18
34
20
21
21
23
26
26
28
36
8
6
14
16
10
22
17
14
32
19
18
34
20
21
36
21
26
23
25
28
28
28
40
3
28
28
15
14
8
25
18
22
26
22
32
28
26
34
29
29
30
32
34
34
36
36
8
28
32
25
18
22
26
22
32
28
26
34
29
29
36
30
34
32
34
36
36
36
40
0
22
18
9
8
0
9
8
0
9
8
0
9
8
0
9
8
9
9
8
8
8
0
0
4
9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
8
8
0
20
96471
4000
44500
26800
255960
6500
139500
22500
217000
34600
10000
9600
5000
160000
3000
21000
20000
30000
6000
381100
56830
1588548
Actual Cost (N)

X
2190
10000
12244
4000
17800
Y
1800
10000
12244
4000
17800
150000
8000
44500
26800
495780
6500
139500
22500
217000
34600
10000
6000
10000
160000
3000
21000
40000
30000
6000
381100
75390
1933904
96471
4000
44500
26800
255960
6500
139500
22500
217000
34600
10000
9600
5000
160000
3000
21000
20000
25000
6000
381000
75390
1609665
Variation in Cost
(N)
X
Y
-675
-285
-7372
-7372
-53529
- 4000
-239820
3600
-5000
-20000
5000
1100
-18560
-345356
-18560
-20117
Actual
Duration
X
Y
3
3
3
3
10 7
3
3
5
4
5
8
13
5
14
1
5
10
2
5
2
1
4
2
1
5
4
3
4
3
4
40
5
5
10
4
14
1
4
10
2
4
2
1
3
2
1
5
2
2
2
2
4
40
22
A5
A1
3
9
B1
5
A4
3
A6
10
A7
8
A8
2
11
A1 0
A9
1
14
17
19
A11
20
A2
A3
7
A1 2
2
21
B13
3
6
B14
4
B15
4
12
B16
4
15
B17
3
B 18
5
18
D21
5
D2
2
D22
14
10
D23
10
13
D24
2
16
Fig. 1: Network Diagram for Projects X and Y (Planned Estimate)
21
23
D26
4
24

The Effect of Macroeconomic Policies on Project (Housing) Finance In

Emerging Economies
Adeboye Akinwunmi
School of Engineering and the Built Environment, University of Wolverhampton,
Wulfruna Street, Wolverhampton WV1 1SB, United Kingdom.
adeboyeakin@yahoo.co.uk
Rod Gameson
Wulfruna Street, Wolverhampton WV1 1SB, United Kingdom
Felix Hammond
Paul Olomolaiye.
Abstract
Most countries in the emerging economies have their financial institutions regulated by government. With
the notion that financial institutions have become less regulated in the developed economies, emerging
economies like China, India, Brazil and Nigeria are gradually adopting deregulation as a pivotal form of
governance. Various macroeconomic policies adopted in these countries using monetary and fiscal
instruments have limited the ability of their financial institutions to provide long term lending in the form
of syndicated loans and bond issuance needed for infrastructural development, project finance and in
particular housing finance. It is obvious that the housing sector is closely connected to the overall
economy, and therefore, macroeconomic instability has a negative effect on the housing market. This
paper examines the impact of various instruments of macroeconomic policies on lending activities by the
financial institutions to the housing sector. It is concluded that there is the need for the countries in the
emerging world to adopt investment friendly and risk averse macroeconomic policies as well as develop
the bond and pension fund markets in order to provide the needed finance for the housing sector.
Keywords
Emerging Economies, Developed Economies, Housing Finance, Infrastructural Development,
Macroeconomic Policies.
22
1. Introduction
The application of wrong macroeconomic policies to solve economic problems being encountered by
millions or even billions of individuals/families in a sovereign country could have a devastating effect on
that economy, whether developed or emerging. These macroeconomic policies are described as captured
impacts of exogenous interventions at the aggregate or economy-wide level (Burda and Wyplosz 1997;
Hammond 2006 and Roy 2007). The macroeconomic policies so adopted might be classified as
Traditional Macroeconomic or Dynamic General Equilibrium Macroeconomic.
Under the Traditional Macroeconomic system tutelaged by Keynes in The General Theory (Keynes
1936), the emphasis was on the short-run behaviour of the economy, why the economy seemed to persist
in a state of disequilibrium and how to bring it back to equilibrium (how to stabilize the
economy).However the central issue in Dynamic General Equilibrium (DGE) is the inter-temporal nature
of decisions: whether to consume today, or to save today in order to consume in future. DGE models are
forward looking and hence inter-temporal. These financial activities could be achieved by holding
financial assets or by borrowing against future income. These decisions could be arrived at, through an
1
E-mail: adeboyeakin@yahoo.co.uk
economy-wide market system and by market prices (Wickens 2008). Economic agents take 3 different
types of decisions. They relate to goods and services, labour and assets: physical assets (the capital stock,
durables and housing) or financial assets (money, bonds and equity) each wit its economy-wide market.
The theory of finance is largely related to pricing of financial assets, and financial assets play a crucial
role in macroeconomics and sometimes substitutes in wealth portfolio. Therefore, for a typical houseowner, the house is a major physical asset in his portfolio and for many household, the purchase of a
house represents the largest (and often only) life long investment and a store of wealth (Goodman 1989;
Malpezzi 1999). To this end, this paper discuss some clarifications, review factors that have contributed
to the cost-efficient nature of housing finance in developed economies and effect of macroeconomic
policies on housing finance in emerging economies. The remainder of the paper is structured as follows:
Development of Bonds and Pension Funds in Emerging Economies as alternative source of funding
housing finance and problems encountered in the growth process of Bonds and Pension Funds in
Emerging Economies.
2. Conceptual Clarification
2.1 Definition of Emerging Economies
The words Emerging and Developing economies are interchangeably used, it is a term coined in 1981
by Antoine W. van Agtmael of International Finance Corporation, a part of World Bank. It is simply
defined as an economy with low-to-middle per capita income. Such countries constitute approximate 80%
of the global population, representing about 20% of the worlds economies (Obadan 2006 and Upadhyay
2007). Developing countries have existed for a long time, and for much of their history, they have
attempted two related tasks- to build their local financial institutions / markets and to attract international
investment. A growth in foreign investment by a country is an indication that the country has been able to
build confidence in its local economy (Upadhyay 2007). As time goes by, the word used to describe these
countries and their markets have undergone considerable change. Between the 1950s and 1960s, it was
common to speak of underdeveloped countries. From 1970s to 1980s, it was changed to more polite
less developed countries and from 1990 upwards, they are referred to as emerging financial market
(EME). The name is a reflection of a worldwide change of ideas, away from state-sponsored development
and toward the opening of free markets bringing a bust of progress and performance (Beim and Calomiris
2001).
23
The definition of emerging economy was given in Luo (2002) as A country in which its national
economy grows rapidly, its industry is structurally changing, its market s promising but volatile, its
regulatory framework favors economic liberalization and the adoption of a free-market system and its
government is reducing bureaucratic and administrative control over business activities.
Luo (2002) however noted that it is misleading to assume that emerging economies are homogenous. Luo
(2002) identified some commonalities and distinctions among them. The common factors identified are
Legal infrastructures are made up of legal system development and enforcement, which are generally
weak; factor market and institutional support needed for economic development and business growth are
weak (factor market such as capital market, labour market, production materials market, foreign exchange
market and information market are generally underdeveloped and still intervened governmental
institutions and departments);emerging markets tend to experience faster economic growth than other
types of economies but this growth is often accompanied with uncertainties and volatilities; emerging
economies are often featured with strong market demand, especially from middle-class customers. The
distinction amongst the different nations of the emerging economies as identified by Biem and Calomiris
(2001) ; Luo (2002) included being not possible to determine by size, while countries like China, India,
Brazil, Russia and Mexico are large, we have other smaller emerging states especially in the Asia-Pacific
Region. While some nations adopt fiscal and monetary policies to oversee their national economies,
countries like India, China and Indonesia manages their national economies by adopting fiscal, monetary
and administrative policies.
2.2 Corporate Finance, Project Finance and Housing Finance
Corporate Finance: Corporate Finance is considered as a way of raising funds for the expansion of an
existing organization. There are two broad ways of raising finance which might be through equity or debt
issuance. Equity finance gives its suppliers the right to the firms residual returns after payment to the
suppliers of debt finance. However, debt finance on the other hand yields a fixed return to its suppliers
(Edward and Fischer 1994; Buckle and Thompson 1998). In some cases, the funding required might be so
large that two or more financial institutions comes together to execute the financing. The process of loan
syndication is however time consuming. The corporate term loans provider has a lien /recourse to the
corporate assets of the organization raising the finance. Retained Earnings constitute a large percentage of
sources of finance (Buckle and Thompson 1998; Tirole 2006).
Project Finance: When funds are being raised to execute a specific project, it is called Project Finance.
Pretorius et al (2008) noted that multinational corporations (MNC) has the widest possible array of
financing options available to finance any feasible chosen projects and identified constraints encountered
in choosing project financing to include:
Corporate consolidated balance sheet constraints
Public sector financing constraints
The Contractual discipline and focus impose on project managers working on contracts being
executed with borrowed funds.
Housing Finance: Housing Finance is a major factor determining the quality and tenure of housing
consumption, the overall financial portfolio of the public and the stability and effectiveness of the
financial system (Diamond and Lea 1992). Struyk and Turner (1986), Stephens (2000) noted that the
housing finance plays an important role in shaping each countrys wider housing system and the
housing system takes important social and economic consequences.
24
3. Factors Affecting Housing Finance in Developed Economies.

In the developed economies, Gyntelberg (2007); Girouard (2007) and CGFS (2006) identified factors that
contribute to the cost-efficient and efficiency of their housing finance system to include: Macroeconomic
Trends and Developments, Advances in Information Technology with financial innovations, Deregulation
/ Financial Liberalization, Broadened Mortgage contracts, Funding sources for lenders and supportive
Government Policies. These factors are briefly discussed below:
3.1 Macroeconomic Trends and Developments

We have three types of macroeconomic issues that have played fundamental roles in the development of
the housing finance markets in both the developed and the emerging economies (Gyntelberg 2007;
Girouard 2007 and CGFS 2006). While they have made positive impacts in the developed economies, the
opposite is the case in most of the emerging economies. Firstly, the level and volatility of inflation and
then interest rates have declined. Secondly, output growth has become more stable. The available
evidence suggests that this decline in nominal interest rates has stimulated both the demand and supply of
mortgage loans. In terms of lower output volatility, the lower frequency and severity of economic
downturns has reduced the volatility of household income and may have contributed to an increased
attractiveness of flexible rate mortgages and a willingness to assume higher debt burdens.
Gyntelberg et al (2007) argued that if lower interest rates are perceived to be permanent, households can
thus afford to borrow more, which tend to push up house prices. Also, rising disposable incomes in the
household sector and faster economic growth and lower output volatility in many countries have aided
house price increases because households can afford to pay more for their homes. Higher incomes
combined with lower interest rates also meant that more households can gain access to the credit market,
thereby helping to boost demand for houses and housing finance. Demographic factors may have also
influenced house price development (CGFS 2006 and Gyntelberg et al 2007). As an example, in the
United Kingdom and Denmark, there are signs that the proportion of first-time buyers in relation to the
total population may have a positive impact on house prices. When a large number of first-time buyers
enter the market, the demand for houses increases, leading to a rise in prices and ultimately an increase in
the demand and supply of housing finance.
3.2 Advances in Information Technology with financial innovations

Improvements in Information Technology Advances in computer programs, database and statistical
computation methods, coupled with financial innovations, have created higher efficiency (CGFS 2006
and Gyntelberg et al 2007). When these improvements are combined with increased competition, it has
helped to reduce credit institutions margins- which are the difference between cost of mobilizing deposit
and the cost of lending, which resulted in the lowering of mortgage rates.
Technological improvements have also aided the enablement of better pricing of risk and return on the
underlying collateral and meant that it is easier for borrowers and lenders to obtain information about
each other. Also, households can now choose between a wide range of mortgage contracts with different
terms and conditions. Despite the fact that the variable-rate contracts stand out as most attractive option,
in some other countries, there is also a growing interest in loans with interest-only payments over a
number of years, or even loans with an initial negative amortization plan (CGFS 2006; Gyntelberg et al
2007).
3.3 Deregulation and Financial Liberalization

Deregulation and Financial Liberalization have made various changes in housing finance markets
attainable in several countries over the past two decades (CGFS 2006; Gyntelberg et al 2007 and Girouard
25
et al 2007). Issues considered as official barriers and credit restrictions have been relaxed or removed as
governments have reassessed the legal and regulatory framework in which financial institutions operate.
Over time, regulatory framework of financial institutions have moved from focus entirely on safety- for
example, consumer protection and prevention of failures towards enhancing efficiency through market
discipline, supervision and risk-based capital guidelines.
3.4 Broadened Mortgage Contracts

In both developed and emerging economies, many countries have embraced wider varieties of mortgage
contracts. Notably, countries that historically relied predominantly on fixed rate mortgages have seen a
growth in the use of variable rate type mortgages. In addition to the increased product choice, many
housing finance markets have had a trend towards higher loan-to-value (LTV) ratios (Jappelli and
Pistafferri 2000; CGFS 2006 and Gyntelberg et al 2007), partly reflecting changing market practice and
regulatory changes, resulting in lower down payments for housing loans.
3.5 Funding Sources for Lenders

There are differences across markets with respect to funding patterns. In Europe, the dominant funding
mechanism remains deposits which consumers place with banks as savings or in current accounts.
However there is a problem with this type of funding for mortgage loans in that short-term liabilities are
being used to fund long-term assets (EMF 2007 and Akinwunmi et al 2007). As at the end of 2006, the
European Mortgage Federation estimated the total value of residential mortgage outstanding in the
European Union being funded as shown in Table 1
Table 1: Sources of Mortgage Funding in the EU
Sources of Funding
Retail Deposits
Mortgage / Covered Bonds
Mortgage-Backed Securities (MBS)
Others
Percentage
66%
15-20%
5%
9-15%
Source: European Mortgage Federation (Feb. 2007)

Deposits have historically been the dominant source of funding, but capital market funding or
securitization is becoming increasingly important (CGFS 2006 and Gyntelberg et al 2007).
A large portion of mortgage loans are held off-balance sheet and funded through securitization in the
United States, but securitization remain relatively costly and capital intensive in Europe. Mortgage /
Covered Bonds continue to be very popular and the second most popular funding instrument in Europe
after retail deposits and there is no centralized issuing institutions (Van Order 2000 and Akinwunmi et al
2007).
In summary, all these attributes have contributed to the cost-effective and improved efficient nature of
their housing finance system with a low-cost of credit intermediation and significant increase in the
availability of funds and range of contract terms.
In the next section, the paper discusses the effect of macroeconomic policies on housing finance in the
emerging economies.
26
4. Effect of Macroeconomic Policies on Housing Finance in Emerging Economies

With the magnitude of housing needs in most of the countries in the emerging economies, Buckley &
Kalarickal (2004) and Hassler (2005) argued that a stable macroeconomic condition is one of the
requirements that emerging economies must embrace and attain. These macroeconomic policies are
impacts of exogenous interventions at the aggregate or economy-wide levels (Burda and Wyplosz 1997;
Hammond 2006 and Roy 2007). Macroeconomic instability and its corollary of high and volatile
domestic interest rates have a disproportionate impact on long-term mortgage finance. Various factors
contributes to greater macroeconomic volatility in emerging markets, the most important is that their
production structure is typically much less diversified than that of developed countries and often
dependent on primary commodities.
The macroeconomic policies might be adopted to affect (decrease / increase) in the nominal interest
rate, or volatility of inflation, which has affected the efficiency of housing finance. In differentiating
between housing affordability and housing finance affordability, Buckley et al (1994) argued that
housing finance affordability arises when inflation makes housing unaffordable at the market rates of
interest. This resulted in indexation as means of addressing the housing finance affordability problem
especially in the Latin America and few African countries like Ghana. Therefore, the objective of
indexation and redesigning mortgage contracts is to eliminate financial constraints that impede the
affordability of housing and provide a financing vehicle so that those who can afford to and so desire,
can purchase homes (Buckley et al 1993).
In most countries of the emerging markets, the financial regulatory bodies (the Central Bank), have
used policies like Cash Reserve Requirement (CRR) and Liquidity Ratio as instrument of monetary
policy and variation of tax rate as instrument of fiscal policy. Cash Reserve Requirement is the
percentage of the banks total deposit liabilities to be kept in an account with the monetary authorities.
This policy is adopted to control volume of funds available for financial institutions in granting loans
and advances. Recently, the Central Banks of both China and India raised the reserve requirement for
banks several times in 2008 to mop excess liquidity with interest rate left unchanged (The Economist
2008). Also, in Nigeria, the CRR was increased from 3% to 4% in June 2008. This 1% increase, when
multiplied with the total deposit liabilities within the Banking system, it has a multiplier effect for credit
creation. However, unlike the Central Banks in the developed economies, Central Banks in the
emerging economies cannot be considered to be independent and urged by their employers (the
government) to hold interest rates so low to boost growth and jobs.
In the emerging economies, the inflation rate is on the upward trend. This might be attributed to surge
in food and energy prices. Food accounts for a bigger slice of spending in poor countries and they have
bigger impact on inflation. Core inflation rates are moving up due to lax in monetary policies, Chinas
official rate of consumer-price inflation is at a 12-year high of 8.5% from 2.2% in early 2007, Russias
have moved from 8% to over 14%, Indias wholesale-price inflation rate (the Reserve Banks Preferred
measure) is 7.8%, a four-year high, Indonesia inflation rate is 9% and likely to hit 12% by June 2008,
when government is expected to raise the price of subsidized fuel by 25-30% (The Economist 2008).
In Nigeria, the inflation rate was 8.2% in April 2008 and interest being increased from 10% to 10.25%
in June 2008.
4.1 Loanable Funds Theory and the rate of interest

The Loanable Funds theory of the rate of interest developed by Knut Wicksell, a Swedish Economist, in
1898 has been central to the theory of interest rates. According to Philbeam (2005) and Nwaoba (2006),
the Loanable Funds approach views the interest rate as being determined by the supply and demand for
loanable funds in the financial market. The theory explains that investments and savings determine the
long-term level of interest rate whereas the financial and monetary conditions in the economy
27
determines the short-term interest rate, while the equilibrium interest rate is such that it clears both the
money market and the loanable funds market. The increase in the supply of loanable funds necessitates
downward trend in the cost of funds and interest rate, all other things being equal. Alternatively, an
increase in the demand for loanable funds exerts pressure on the available loanable funds resulting in a
rise in the cost of funds and interest rate. This position was supported by Turner (2007 & 2002) where it
was argued that the rise in inflation rate, with action not being taken about interest rate resulted in the
virtual elimination of long-term, fixed rate local currency debt in several countries of the emerging
world, which needed long-term investment for infrastructural development.
4.2 House Mortgages and Gross Domestic Product

The Macroeconomic policies adopted in the emerging economies have contributed to the low
investment in their housing sector as shown in Table 2 below:
Table 2: House Mortgages as a Percentage of GDP (2006)
Country
Morrocco
Nigeria
India
Korea
Thailand
Malaysia
Taiwan
Hong Kong
Germany
Singapore
USA
United Kingdom
Denmark
House Mortgages
Percentage of GDP
2%
2%
4%
14%
18%
23%
37%
60%
52%
68%
86%
72%
90%
as a
Source: Saravanan (2007)

Having looked through the part played by macroeconomic policies in housing finance in emerging
economies, a searchlight is to be made towards the bonds and pension funds markets as an alternative
means of funding long-term investment particularly housing finance.
5.0 Bonds and Pension Funds in Emerging Market Economies

The Bank for International Settlement Paper No 11 highlighted the major reasons for developing a bond
market in most countries of emerging economies as predominantly to finance government fiscal
deficits. The fact that they had a highly regulated financial sector before the 1980s, governments in
these countries usually meets their funding requirements by making it mandatory for local banks to hold
government paper as part of reserve requirements. With the progressive liberalization of the financial
systems, adoption of anti-inflationary policies and flexible exchange rate, governments were being
forced to borrow from the domestic markets. Other reasons include:
Making financial markets more complete by generating market interest rates that reflect the
opportunity cost of funds at each maturity.
To avoid concentrating intermediation uniquely on banks.
28
Such markets can help the operation of monetary policy. A well functioning money market is
essential for the smooth transmission of policy as monetary policy relies increasingly on
indirect instruments of control. Again, prices in the long-term bond market give valuable
information about expectations of likely macroeconomic developments and about market
reactions to monetary policy moves.
Blommestein and Horman (2007 p.17) while assessing Debt Management and Bond Markets in Africa
described situation in South Africa as follows: The bonds markets in South Africa are relatively
advanced. There is a well developed market for government securities, and corporate bonds have seen
significant growth in recent years, although the latter still account for only 10% of the bond market. An
issue for South Africa is to ensure that the government does not crowd out the corporate market.
The situation in Nigeria was described as follows: Successful initiatives regarding domestic securities
have included lengthening the maturity structure and smoothening the redemption profile. Much of
domestic issuance is undertaken not to fill a funding gap but, instead, to provide securities to the market
for its development. This statement about Nigeria regarding issuance of debt instrument might not be
correct in all cases. Recently, the Federal Government of Nigeria is raising $400 million form the Capital
Market to finance affordable housing projects, which is a funding gap. Out of about $300 million bond
raised by Federal Mortgage Bank of Nigeria (FMBN) earlier on in 2004/2005, FMBN has disbursed a
total of $94 million through 41 Primary Mortgage Institutions (PMIs) and $188million disbursed to
private estate developers for estate construction as at December 2007 (Onyebuchi 2008).
5.1 Pension Funds in Emerging Market Economies
The pay-as-you-go social security systems in the emerging market economies are being replaced by fully
funded, defined-contribution pension systems (Chan-Lau 2005). With this reformation, asset under
management in the pension fund subsector of these economies are fast growing. Chile, the most cited
example of pension fund development in emerging market economies with her bond market development,
launched a funded pension system in 1981. From that negligible level in 1981, the pension assets grew to
about 60% of GDP in 2003, Bolivia pension assets amounts to 30% of GDP in 2005, six years after the
introduction of pension reforms (BIS 2002; Chan-Lau 2005).
With the removal of government bureaucracy from the savings for retirement process, pension reform has
contributed in raising the savings rate, fostering the growth of institutionally managed assets and
developing a strong domestic investor base. Reisen (2000) and Chan-Lau (2005) noted pension reform
contributed to improvement in savings rate in Chile, Malaysia, Singapore and Korea. While Mackenzie et
al (1997) and Chan-Lau (2005) argued conditions under which pension reform can increase a countrys
savings rate. Chan-Lau (2005) noted that in Asia, retirement income is the sole responsibility of
government through national provident fund. In Malaysia and Singapore, governments sponsor a fully
funded, defined-contribution system for civilian workers but in Korea, the national pension system is
fully funded but offers defined-benefits. However, Asher (2000), Holzmann et al (2000), Chan-Lau
(2005) observed the main challenge to the systems being government intervention in the funds
investment decisions.
In Sub-Saharan Africa, for example in Nigeria, with the introduction of fully funded, defined-contribution
pension systems through the Review of the Pension Reform Act of 2004, the pension fund was valued at
$6.67 billion as at December 2007. Under the Pension Reform Act of 2004, Pension Fund Administrators,
PFAs are given the responsibility of managing pension assets by investing in the following financial
assets:
Equities 30%
Money Market 35%
State Government Bonds 20%
29
Federal Government Bonds 100%

Real Estate Investment Trust/ Mortgage-Backed Sec. 30%
This is an opportunity for the Federal Government to have access to funds when bonds are floated for
long-term investment purposes (Udenze 2006).
5.2 Problems in the Development of the Bond / Pension Fund Markets in Emerging Market
Economies.
The growth process of these markets in the emerging economies has been hindered by the following
factors:
Narrowness of the domestic investor base: In the developed economies, the domestic investor base is
broad and they are made up of banks, pension funds, insurance companies, mutual funds which are all
active participants in the market. In most of the emerging market economies, the main holders of local
currency bonds are domestic banks and public financial institutions (Turner 2007). As it is, most of these
financial institutions have low capital base that they are more interested in meeting their day-to-day
obligations and invest in short-term assets. Even in recent survey by the Asian Development Bank, it was
found that local market-makers in Asian Bond Market had a belief that a diversified investors base was
the most important requirement for improving the liquidity of the local bond markets (ADB 2006). The
expansion of funded pension systems can even create internal non-bank demand for local currency bond.
Issuance dominated by government: Corporate bond markets in Emerging Market Economies remain
underdeveloped and the development of securitization has been poor. Securitization is a way of
transforming long-term assets into trade-able instruments with minimal credit risk. Government in
Emerging Economies seeking to stimulate securitization can learn from German Pfandbrief model which
is well-suited for a bank-centred financial system (Fritsch 2004).
Liquidity of the Markets
These markets are still in the early stages of development and some large investors adopt buy-and-hold
attitudes that limit the liquidity and effective pricing mechanism in the markets. This buy-and-hold
attitude impedes the development of secondary market and contributes to high interest rate.
Conclusion
For an economy to develop, it is important to have its financial system reformed. A reformed and
deregulated financial system that works well would allow both households and firms to borrow against
increase in permanent income. By increasing the marginal propensity to spend permanent income, an
early stimulus to domestic demand would be provided. In most countries of the emerging economies,
especially those with regulated financial systems, the bureaucracy in government circles have slowed
down, if not totally eliminated competition and dynamism within the financial system. The development
of local currency bond markets can improve the macroeconomic and financial stability of a country and
even countries that have not yet establish a low-inflation financial environment can access benefits of
bonds markets by issuing inflation-linked debt to finance their long-term investment, which are hitherto
being reluctantly financed by the commercial banks.
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Oxford and Princeton: Princeton University Press.
32

Finding Ways for Enhancing Postgraduate Level Education in Construction

Management in Pakistan
S. M. Khalid Huda
Deputy Manager, Road Management Unit, Works & Services Department, Govt. of Sindh, Pakistan
Rizwan U. Farooqui
Assistant Professor, Department of Civil Engineering, NED University of Engineering and Technology,
Karachi, Pakistan & Ph.D. Scholar, Department of Construction Management, Florida International
Muhammad Saqib
Assistant Professor, Department of Civil Engineering, NED University of Engineering & Technology,
Karachi, Pakistan
Abstract
The research paper focuses on the postgraduate level education being imparted in the Engineering
Universities in Pakistan and their contribution in the development of local Construction Industry.
The Construction Industry is in its infancy as regards to the application of professional management
practices in Pakistan. The curriculum of the engineering universities is designed to cater to the needs of
the industry but due to the lack of any interaction or feedback from the industry, the universities have not
been able to either lead the industry or to equip the students with the knowledge required to meet the
demands of this dynamic industry. Moreover, graduates working abroad also face problems in adjusting
to fast paced construction management practices and in the use of new technology.
This research paper is basically focused in finding ways for the improvement of the construction industry,
primarily based on the development of the human resources in the form of Engineers and Construction
Managers, who in turn will be trained to face the current and future challenges faced by the industry. A
study has been done to ascertain the students expectations from these courses, before and after their
completion, their improved skills, market demand, etc. An effort has also been made to gauge the
industrys perception and expectations from such types of programs. Recommendations have been given
for the improvement of the construction industry by focusing on the human resource being trained by the
engineering universities.
Keywords
Construction Management, Postgraduate Courses, NED University, Construction Industry, Pakistan
1. Introduction
The construction industry in Pakistan is one of the major employers of skilled and unskilled workforce. It
derives its unskilled force mostly from the rural areas of Pakistan. These people are mostly illiterate and
usually migrate to urban areas in search of employment. The skilled workforce comprises of masons,
33
carpenters, steel fixers, plumbers, electricians, etc who are usually literate, mostly matriculates, and may
be local or migrants from rural areas. On the other hand, the Construction Industry in Pakistan derives its
high skilled workforce i.e Engineers, Construction Managers, Project Managers, Architects, Quantity
Surveyors, etc, from the lot produced by the local engineering universities.
The business and construction industry is becoming increasingly global and the role of the project
management professional now includes many front-end services, which increases the required skill set of
new graduates (Choudhury, 2000; Kay, 2001). Project management is no longer a special-need
management (Arain, 2005a). Alternative contractual delivery systems, collaborative partnerships, new
management initiatives, and global product markets require professionals and students to have a broader
awareness of construction methods and project management issues. Duncan (1996) defined project
management as the application of knowledge skills, tools and techniques to project activities in order to
meet or exceed stakeholder needs and expectations from the project. Project management is rapidly
becoming a standard way of doing business (Arain and Assaf, 2003). An increasing percentage of the
typical firms effort is being devoted to projects. The future promises an increase in the importance and
the role of projects in contributing to the strategic direction of organizations (Arain, 2005b). In the
developed world, many academic disciplines inside and outside of project management education have
successfully used study abroad programs as an effective means of broadening project management
students academic, personal, and professional views of the world (NASFA, 2003). This certainly is the
dawning of the age of Project Management in the developing countries. Duncan (1996) identified
different stages of project management such as project initiation, planning, execution, control and the
closing process. Bryde (2003) discussed different terms which have emerged since the beginning of
1990s to describe the project management approach. These terms include: modern project management,
management-by-projects, projects (project management) culture, and beyond the Gantt chart.
The graduate level syllabus and courses offered by the engineering universities in Pakistan are
generalized i.e specialization or majors in one field or subject is not allowed. In other words, a graduate in
Civil Engineering is exposed to most of the fields of Civil Engineering at the undergraduate level and
he/she may not be able to opt for a degree having majors in, say, Transportation Engineering,
Construction Management, Quantity Surveying, Structures, Water Resources, Environment, etc. The
construction industry thus employs these graduates and has to mould them according to its needs. The
satisfaction level of the industry may be judged indirectly from the employment statistics, market
demand, etc.
In order to keep their employment options open, both in local and foreign markets, the graduates also
prefer a generalized degree in Engineering. On the face of it, this trend might seem to be quite justifiable
and logical but its adverse effects are that the fresh graduates waste considerable time of their initial years
in the industry in discovering their fields of interest. A final year project and internships might pave the
way, but graduates are found switching jobs, changing departments, pursuing other degrees rather than in
Engineering, etc. The main loser in this scenario is the construction industry that finds non serious
graduates who are switching gears. The industry has to pay for these Discovery and Learning
processes.
Lately, there has been considerable interest in the fields of Construction Management and Project
Management in Pakistan. The construction industry has realized its short comings and now emphasis is
on having a professional approach towards the delivery of the end products and services. In order to catch
up with the construction industry and to fulfill its demands, the engineering universities in Pakistan have
started offering post graduate degrees in Construction/Engineering Management. The syllabus is set
keeping in view the demand, the latest trends, technology, management needs, etc. The response from the
students is overwhelming which is evident from the demand for such courses.
34
The postgraduate program in Engineering Management is designed for engineers and scientists moving
toward technical management responsibilities while maintaining identity in their technology. The
programme provides students with a comprehensive knowledge base to meet the needs of engineers and
scientists whose objective is to advance to technical management positions in business, industry, or
government.
This paper primarily focuses on studying the usefulness and applicability of such courses offered by the
engineering universities and in finding ways for their improvement. The scope of the research has been
limited to the M. Engg. program (major in Engineering Management) offered by NED University of
Engineering & Technology, Karachi.
2. Background
NED University has been offering M.Sc. courses in Civil Engineering since 1984, as part of its program
to offer post graduate degrees. The courses were offered both as full time (morning) and part time
(evening) programs. Initially it was a four-semester 32 credit hour program. The students had the option
to opt for an 8 credit hours research course or enroll for two 4 credit hour courses in their final semester.
The full time course was not popular among the students as they had to take time off from their work/job.
The full time course was later abandoned due to its low demand. The part time M.Sc. course was,
however, quite popular. Students had the choice for opting for majors in Structural Engineering,
Transportation Engineering, Soil Engineering and in Environment Engineering.
Over the years, the M.Sc program has been upgraded and refined keeping in view the demand of the
construction industry. Since the year 2004, the department of Civil engineering has been offering M.
Engg. course in Engineering Management. The course is spread over five semesters, comprising of 30
credit hours. 15 credit hours have been allocated for Compulsory courses and 15 credit hours have been
reserved for Optional courses. The compulsory courses specifically relate to Construction and Project
Management. As regards the optional courses, students have the option to either take Construction
Management related courses or opt for courses from any field of their interest or job related. The faculty
comprises of both in house and visiting professional. This benefits the students in the form of exposure in
both theoretical and practical fields. An overwhelming response has been received from the students as
well as from the construction industry. Two batches have successfully completed this course.
Since NED University is a perfect example of the institutions, imparting education in the field of
engineering in Pakistan, the study results may be generalized. The Higher Education Commission (HEC),
is striving to maintain same standards in all the local engineering universities and to uplift the standard of
engineering education at par with foreign universities. The standard of teaching and research is somewhat
the same in all the engineering universities of Pakistan; hence it is safe to assume that the results obtained
may be generalized for the entire construction industry of Pakistan.
The construction industry in Pakistan on the other hand does not have a professional body or organization
which may provide information on the prevailing trends and demands of the industry. No research
organization in the public or private sector is engaged with ascertaining the present and future needs of
the industry. Lack of research and lack of constructive feedback has not let the industry to rise to its full
potential. The demands and needs of the industry are then gauged by questionnaires and personal
interviews that might be misleading as they are based upon a persons personal experiences and vested
interests.
35
3. Objective and Scope

The specific objectives of this paper are to ascertain:
The students expectations before taking admission in M. Engg. Program in Construction
Management at NED University
The students satisfaction level after completion of this course.
The expectations of the construction industry from this course in terms of their employees who
take this course
The expectation of the graduated students from their employers once they have improved their
knowledge base and begin perceiving the industry from a more refined perspective.
4. Methodology
The research methodology consists of following steps.
(a) Studying the syllabi of the postgraduate programme and its need which fulfills the industry
requirement as well as conduct few focused interviews with current and passed out students.
(b) Developing questionnaire survey to elicit information from students who have successfully completed
this program about different courses, reasons for pursuing this postgraduate program, expectations from
the program, and improvements required in the program.
(c) Conducting questionnaire survey through e-mail and personal interviews.
(d) Assessment of feedback from questionnaire survey to identify the major findings and the way forward
to improve the postgraduate level education in construction management in Pakistan.
The questionnaire dealt with the students perspective, such as, regarding reasons for enrolling for this
course; their views regarding the content and design of various courses; their expectations; their
evolvement in terms of managers; increase in knowledge, position, salary; recommendations; etc.
A fairly good response (36 responses) was received from the students as well as from their employers.
Since management students realize the importance of feedback and the need for continuous improvement,
the response was responsible, dutiful and enlightening.
5. Analyses and Discussion:

The results received from the questionnaire survey were divided into two parts as stated above and were
then analyzed. The results and responses received are given in percentages, wherever necessary.
In the questionnaire, 15 different types of questions were asked from the graduating students to assess
their expectations, observations, experiences and their recommendation for the program. The responses
are as follows.
1. Primary reason for pursuing M. Engg. program in Construction Management (limited to one answer
only)
Almost 50% students pursed this program to excel their project management competency and to improve
their skills for their organization while remaining students acquired this degree to remain competitive in
local market, to approach international market, due to employer encouragement, current responsibility
36
demand, and realization of the need of obtaining professional education in construction/ project
management.
2. Views regarding the DESIGN of the program, in general
As far as design of the program is concerned, almost 75% graduated students are satisfied with the design
of the program in terms of number of courses and distribution of compulsory and optional courses.
Around 25% students want the flexibility in design in terms of number of courses selected.
3. Views regarding the CONTENT of the program, in general (not limited to one answer)
According to 20% graduates, the content needs substantial improvement in terms of making the content
up-to-date to current techniques and technologies while approximately 70% graduates are completely
satisfied with the program content and according to them the program provides adequately knowledge and
skills needed for construction/ project management. Approximately 20% graduates are in favor of
improvement in terms of tailoring the content to local industry practices.
4. Views regarding COMPULSORY and OPTIONAL courses (not limited to one answer)
The response is as given in the following table.
Option
They adequately provide the core knowledge and skills
needed for general engineering/PM
Compulsory
Courses
78
Optional
Courses
85
Their content needs substantial improvement

22
15
More courses need to be added
Responses indicate that the compulsory and optional courses are designed after analysis of construction
industry with respect to need and requirement. These courses provide practical knowledge and
improvement in the skills of the graduated students.
5. Views regarding INSTRUCTION OF COURSES in general in this program.
Option
Perceived in Percentage
Major course content is adequately More than 80%
delivered by well versed and competent 60-80%
40-60%
course instructors
20-40%
Less than 20%
Disagree
Percentage
of response
13
74
13
0
0
0
More than 80%

60-80%
40-60%
20-40%
Less than 20%
Disagree
0
0
13
0
13
74
There is general lack of seriousness of More than 80%

60-80%
purpose from the instructors
40-60%
20-40%
Less than 20%
Disagree
20
10
15
55
The course instruction is highly

imbalanced: few highly competent
instructors and others with quite low
competence
37
6. Expectations from M.Engg. program (limited to one answer only)

Approximately 40% graduates are fully satisfied with the expectation of the program and 60% are
partially satisfied. It is because of inadequate deliverance and inadequate course offerings during the
study period.
7. Views regarding the most commendable attribute/feature of the program (limited to one answer only)
The major important attribute of the program is the program content and its credibility. It is stated earlier
that the program is designed to see the need and requirement of the industry.
Option
Program design
Program content
Program instruction/deliverance
Program credibility
Strategic (Long term) nature of the program
Percentage of replies
45
40
15
8. Changes felt in personal views, way of working, life, etc. (limited to one answer only)
Option
Quite substantially
Partially, changes in view only
Partially, changes in view and way of working but unable to change self and
work environment
The program was not suited for Pakistani construction industry
The program was a waste of time
Too early to comment but expect a positive change
Too early to comment but personally do not expect any change
Cant say, no comments
Other
Percentage of
replies
30
40
25
5
-
Majority of the graduates feel that their way of working become partially changed and this is because that
courses offered during the program has mixed blend of engineering and management knowledge which
ultimately improves the technical skills and decision making capabilities of the graduates.
9. Changes felt in students thinking and way of working by the employer and colleagues, after completion
of this course?
Option
Yes
No
Cant say
Too early to comment
Job changed to work in a better and conducive environment
Job changed for other reasons
30
25
12.5
25
12.5
10. Professional growth in terms of developing/improving skills.

Approximately 87.5% graduates indicated that they have professionally developed because of getting a
masters degree in construction management. The improvement level can be measured in terms of
communication level, project management skills, resource management skills, decision making skills etc.
This is shown in the table.
38
Improvements in terms of
More positive approach towards work now
More competent in approaching work now
More structured approach to work/problem solving now
More proactive approach to work/problem solving now
Improved Leadership Skills
Improved Team Building Skills
Improved Team Coordination Skills
Improved Communication Skills
Improved Project Management Skills
Improved Resource Management Skills
Improved Time Management Skills
Improved Negotiation Skills
Improved Decision Making Skills
Improved Ethics And Responsibility Taking
Improved Project Oversight Skills
Improved Technical Skills
70
75
70
70
50
60
55
60
65
70
80
50
60
50
50
70
13. Recommendation of this course to colleagues, students, professionals, etc.

Option
Yes
(the program provides a good platform for improving skills)
May be (the program is just OK)
No
(the program is not worth it)
62.5
25
-
6. Conclusions
The postgraduate programme in Engineering Management at NED University is specially designed for
engineers and scientists moving toward technical management responsibilities and their objective are to
advance to technical management positions in business, industry, or government.
The mix of management concepts and technical focus of the programme prepares working professionals
to thrive in the increasingly complex managerial environment of today's technology-based organizations.
Unlike a graduate degree in a science or engineering specialty, this degree offers the practical business
perspective needed by technical managers. Unlike a traditional MBA program, this programme
emphasizes skills specifically required in technology-based organizations. To achieve this balance, the
curriculum blends business basics, quantitative methods, and behavioral science in a practical, problemsolving framework.
The programme is designed to directly address the needs of local technological-based organizations. It
allows graduates to grow professionally by advancing within and contributing to their current
organization. Students apply their new skills immediately in their workplace environments.
The survey conducted for this research consists of variety of graduates who have vast experiences and
they are belonging to different sectors of construction industry. Some of them were on senior positions
and some of them are working on junior level.
The reason for pursuing this program is to excel the project management competencies and to improve
their technical abilities for their organizations. This degree also helps to remain competitive in local
39
construction industry. The students also try to approach international market to improve their
management skills.
Many students agreed that the program is overall well designed with good number of compulsory and
optional courses. These courses fulfill the demand of industry but some students suggested that the
program should flexible in terms of selecting the course.
Responses show that the content of the program need some improvement in terms of making the content
up-to-date to current technologies and it will only be possible if the program gets continues feed back
from the industry but this provides adequate knowledge and skills needed for construction project
management..
Majority of the respondents agree that the compulsory and optional courses adequately provide the core
knowledge and skills needed for general engineering/ project management. These responses are quite high
and it shows the popularity of the courses.
75% responses show that 60 to 80% major course content is adequately delivered by well versed and
competent course instructors. This is because the instructors are qualified professional experts and they
have a command on their subjects.
The most admirable feature of the program is the credibility and the course design. The popular courses of
the program are Strategic Planning and Decision Making, Accounting and Financial Management, Project
Management and Framework and Tools, Operation Research Public Infrastructure Management and
Technical Entrepreneurship and the Management & Marketing of Construction Services. The course
content of these courses were interesting and provided new learning, the practical application of the
courses provided insights and the courses were adequately delivered.
The program changed the life of 40% students partially but they have not had the chance to make changes
in their work environment. The students were professionally grownup. They feel more competent in
approaching work now, have more structured approach to work and problem solving, they have a more
proactive approach to problem solving, their team coordination skills, communication skills, project
management skills, resource management skills are improved. Due to these factors, students encouraged
their colleagues to improve their skills by taking post graduate education.
7. Reference
Arain F. M. and Assaf S. A. Project design and construction interface dissonances, Journal of Research in
Architecture and Planning, 2003, 3 No. 2, 69-80.
Arain F. M. Potential barriers in management of refurbishment projects, Journal of Independent Studies
and Research, 2005a, 3, No. 1, 22-31.
Arain F. M. Strategic management of variation orders for institutional buildings: Leveraging on
information technology, Project Management Journal, PMI, 2005b, 36, No. 4, 66-77.
Bryde D. J. Project management concepts, methods, and application, International Journal of Operations
and Productions Management, 2003, 26, No. 7, 775-793.
Choudhury I. Cross-cultural training of project personnel for implementation of international construction
projects by US contractors, International Proceedings of the Associated Schools of
Construction, , Purdue University, US, 2000, pp. 87 94.
40
Duncan W. R. The Guide to the Project Management Body of Knowledge, Project Management Institute
Standards Committee, Upper Darby, US, 1996.
Kay D. A survey of the foreign language preparedness of construction students, International
Proceedings of the Associated Schools of Construction, University of Denver, US, 2001, pp. 21 32.
NASFA Association of International Educators: Study Abroad, 2003, Retrieved March 4, 2007,
http://www.nafsa.org .
41

Multiple Resource Constraint Time-Cost-Resource Optimization Using

Genetic Algorithm
Habib Fathi
Construction Engineering and Management Student, Iran University of Science and Technology, Tehran,
Iran
ha_fathi@civileng.iust.ac.ir
Abbas Afshar
Professor of Civil Engineering Department, Iran University of Science and Technology, Tehran, Iran
Abstract
Simultaneous optimization of time, cost, and utilized resources in a construction project is vital. This
paper presents a GA based model for determination of the best combination of the time, cost, and
resources in a multiple resource constraint problem. The proposed model considers both resource
allocation and leveling simultaneously. Since the problem is assumed to be resource constraint, resource
allocations modify the schedules based on multiple resource restrictions. Besides, the basic concept of
resource leveling, minimization of Mx (X-moment of resource histogram) is used to minimize resource
fluctuation. In addition to Mx, the paper uses My (Y-moment of resource histogram) in resource leveling
process because simultaneous application of them improves it to take into consideration the resource
utilization period. The paper uses weighted sum method for handling multi-objective optimization
problem. Performance of the model is illustrated using a simple example project.
Keywords
Time-Cost-Resource Optimization; Genetic Algorithm; Resource Constraint Scheduling; Resource
leveling.
1. Introduction
Critical path method (CPM) is the most common method used for construction project scheduling. It
takes into account time and determines critical activities to minimize project total duration. Due to
surmount different limitations of CPM, several techniques have been proposed to overcome these
shortcomings. Most of these techniques, namely time-cost trade-off analysis, resource leveling, resource
allocation, and resource constraint scheduling, however, deal with distinct sub problems and thus can only
be applied to a project one after the other, rather simultaneously. So, the need for practical and automated
simultaneous optimization of different aspects of projects has increased in recent years, especially as a
result of the application of new and emerging construction contracting and project delivery methods. A
mathematical technique for schedule optimization was presented by Karshenas and Haber (1990)
considering resource constraint, cost of time, and monthly cash flow limit. The other study by Li (1996)
formulated an optimization model considering investment allocation, resource supply, and weather impact
on productivity. Hegazy (1999) presented a GA based algorithm which considered resource leveling and
allocation and minimized the moment of the resource histogram around the horizontal axis (time). Overall
42
Schedule optimization with respect to time, cost, and resource constraints using a spreadsheet model was
developed by Hegazy and Ersahin (2001). In addition, Kandil and El-Rayes (2006) devised a multiobjective automated construction resource optimization system in order to optimize time, cost, and quality
of a project.
The main purpose of this paper is to provide a management support for construction planners to optimally
select the best possible implementation method for each activity with respect to projects overall
performance throughout the planning stage. The model employs GA to minimize the weight summation
of time, cost, and resources distribution indices as the objective function. The paper assumes each activity
has different execution methods accompanied by different time, cost, and multiple resource utilization.
Besides, each kind of resources is supposed to be limited and has a constant limitation during project total
duration.
The paper employs double moment concept which originally was proposed by Hegazy (1999). In this
process, M y (Y-moment of resource histogram) takes into consideration the resource utilization period in
addition to M x that considers the resource fluctuation.
2. Problem Definition and Model Formulation

The problem is defined as a combination of resource leveling under multiple resource constraint and a
time-cost optimization problem. In other words, the project manager may look at the problem as a multiobjective one which simultaneously considers the interrelation between time, cost, and resources
distribution.
Activity sequencing in project management involves identification and documentation of the logical
relationships among scheduled activities. Based on the project schedule, several methods may be
nominated for implementation of an activity. Each implementation method encompasses specific time,
cost, and resources utilization. For example, in earthwork allocation, different fleets can be used with
different productivity accompanied by particular time and cost. So, the project manager must determine a
definite execution method for each activity relating to overall efficiency of the project.
Disregarding the resource utilization and its associated constraints, the total duration of a schedule, Ti
can be determined as:
[1] ES n = Max ( EF p + Lag )

[2] EFn = ES n + Dn
[3] LFn = Min{( LS s Lag )}
[4] LS n = LFn Dn
[5] TFn = ( LS n ES n )
[6] Ti = Max{EFn }
or ( LFn EFn )
n = 1,2,..., k
Where n is the activity number; k is the total number of activities; ES n is the early start of activity n;
EFn is the early finish of activity n; LS n is the late start of activity n; LFn is the late finish of activity n;
TFn is the total float of activity n; p is the number of activities which are predecessor of activity n; s is
the number of activities which are successor of activity n; and Lag is the lag time between activities
which are related to each other by precedence relationship.
43
The initial schedule modification and resource allocation based on resource constraints must be
performed with the aim of calculating the resource constraint schedules total duration ( T ). In resource
allocation process (sometimes referred to as resource-constraint scheduling), a limited number of
resources distributed among different project activities while keeping the unavoidable extension of the
project to minimum. In another word, minimum extension in project duration is considered. To fulfill this
purpose, project activities must be sorted based on early start time. The activity with lower early start time
acquires higher priority. Then, the limited resources have to allocate to each activity based on its rank. If
during the early start and early finish of an activity at least one day is found that a specific resource
utilization exceeds its limitation, the early start of the activity must be shifted to satisfy the resource
constraint. Selected shifting value for an activity has to bring about the satisfaction of limitation of all
kind of resources existing in project scheduling. When the shifting value for an activity is determined, the
shifting value for the activity in next rank must be calculated. The maximum amount of modified early
finish is the total duration of schedule T with respect to multiple resource constraint.
The proposed model considers combination of X and Y moments of resource histogram in resource
leveling process. Harris in 1978 proposed the minimum moment algorithm for resource leveling and
proved that lower value of resource histograms X-moment (X is the time axis) is more desirable.
According to Hegazy (1999), it can be expressed as:
[7] M x =
(1 Re source
i =1 j =1
Demand j ) Re source Demand j

2
i
where R is the total kinds of project resources; and T is the total working days of project.
In a more recent work, Hegazy (1999) proved that while the minimum moment algorithm can be used to
compare among histograms in terms of resource fluctuation, it does not take into consideration the
resource utilization period. The latter is very important to minimize, particularly for equipment resources
that are shared among projects or rented from external sources. Fig. 1 shows two resource histograms
which have the same X-moment whereas their Y-moment is different. Since the first histogram has lower
Y-moment, it is better than the second histogram from resource utilization period perspective. It must be
noted that for better results a simple modification can be used to calculate the moment M y around a
vertical axis that corresponds to the first day the resource is employed in the project. This modification is
illustrated in Fig. 2.
Mx = 87.5
My =202.5
Mx = 87.5
My = 122.5
Fig. 1. Resource histogram and moment calculation

44
The Y-moment of resource histogram can be calculated as (Hegazy 1999):

[8] M y =
[(1 Re source
R
i =1 j =1
Demand j ) ( j 0.5) i
where R is the total kinds of project resources; and T is the total working periods of the project.
Therefore, total amount of moments is represented by:
[9] M = M x + M y
Fig. 2. Vertical axis modification for M y calculation

2.1. Objective Function
Overall evaluation of a specific schedule is necessary in the context of underlying objectives. The paper
considers the time, cost, and X-moment plus Y-moment of resources utilization histograms as three
objectives of the problem. Using weighted sum method, a set of objectives are scalarized into a single
objective by pre-multiplying each objective by a user-supplied weight. The weight of an objective is
usually chosen in proportion to the objectives relative importance in the problem. Setting up an
appropriate weight vector also depends on the scaling of each objective. To normalize the objectives, this
paper uses the modified adaptive weighted approach (MAWA) as:
[10] min
Z = WD
M M min +
C C min +
D Dmin +
+ WM
+ WC
M max M min +
C max C min +
Dmax Dmin +
in which W D , WC ,WM are the weights of time, cost, and total amount of X and Y moment respectively;
D, C , M are the duration, cost, and total moment of a possible schedule respectively;
Dmax , Dmin , C max , C min , M max , M min are the maximal and minimal value of duration, cost, and total
moment in the current population of genetic algorithm respectively; and is a very small positive
number in order to prevent dividing by zero in objective function, and also does not permit objective
45
function to become zero because the model uses the inverse of objective function for reproduction scale in
GA.
It must be noted that because the implementation option of each activity in a specific schedule is definite,
total cost of a schedule is calculated by adding the cost of selected option for each activity of project.
3. Solution Finding Procedure

To search for the best combination of implementation method of each activity in a specific project using
genetic algorithm, five steps must be tracked. Fig. 3 illustrates different stage of this process in a
flowchart. This procedure finds the optimum combination of executing methods for projects activities
which fulfills resource limitation constraint.
The paper uses the inverse of objective function for reproduction scale of each chromosome. Besides,
tournament selection is applied for selection operator. In this operator, tournaments are played between
two solutions and the better solution is chosen and placed in the mating pool.
Start
Initialize Population
Analyzing Initial Schedules

without Resource Constraint
Resource Allocation
Evaluation and Assign Fitness
Reproduction, Selection,
Crossover, and Mutation
No
Termination
Condition?
Yes
Fig. 3. Solution searching process
46
End
4. Example Apllication
A small example project is used to demonstrate the stages and merits of the model presented in this paper.
Table 1 shows the required information about the sequencing of project activities and implementation
options of each activity accompanied by their relative time, cost, and utilized resources.
Table 1. Activities, predecessors, and activity options of example project
Activity
1
2
3
5
6
7
8
9
10
Predecessors
Implementation
Method
1
2
3
1
1
2
1
1
2
3
1
2
2
3
4
1
2
2
1
3
2
1
2,6
2
3
1
5
2
1
3,4,5
2
3
1
7,8,9
2
3
Daily Resource Limits
Duration
(Days)
4
6
8
4
5
5
7
8
1
2
4
5
4
6
2
4
3
4
5
2
3
3
4
5
3
5
6
---
Cost
6000
5000
4000
5000
3000
8000
5000
3000
7000
6000
3000
2000
5000
3000
4000
2000
4000
3000
2000
5000
3000
7000
4000
3000
6000
5000
3000
Resource
Requirements Per
Day
R1
R2
R3
8
7
5
6
4
7
6
4
8
6
5
3
5
4
6
3
6
5
4
4
2
7
4
2
8
5
4
8
10
8
6
8
5
9
7
6
8
7
6
5
8
6
7
6
5
4
3
4
2
6
5
3
8
6
5
10
0
0
0
11
8
9
6
5
10
9
8
7
11
9
7
5
6
5
4
5
3
7
6
4
10
8
7
13
The model was solved with a GA optimizer developed in Visual Basic by the authors. Population size of
20, with crossover and mutation probability of 70 and 1 percent were used respectively. Number of
generation was limited to 50 with W D = 0.4 , WC = 0.3 , and WM = 0.3 as the model parameters.
Results of the solution of the model are shown in Table 2. The solution of model has 28 duration, 49000
unit cost, and 11627 unit total histograms moment.
47
Table 2. Results of example project

1 2 3 4 5 6 7 8 9 10
Activity
Selected Option 1 1 1 2 1 1 2 2 3 1
0 4 8 17 13 19 21 17 20 25
Modified ES
With respect to selected options for implementation method of each activity, the total duration for initial
schedule of project is 20 working days. Therefore, in order to satisfy multiple resource limitation
constraints, the total duration has to be increased by 8 working days (from 20 to 28 days). This increment
is the result of early start time modification.
0.5
Fitness Value
0.45
0.4
0.35
0.3
0.25
0.2
0
100
200
300
400 500 600 700

Function Evaluation
800
900 1000
Fig. 5. Convergence of the model

Rate of convergence of the model to locate a near optimum solution is presented in Fig. 5. Although the
searching process is extended to 1000 number of function evaluation which corresponds to 50
generations, the near optimum solution remained more or less unchanged for the 15th generation (i.e. 300
number of function evaluation).
Fig. 6 represents the rate of resource utilization for each resource type during the project implementation
period. Inclusion of M x and M y in the model has resulted in well leveled resource utilization for
resource type 1 and 2. For resource type 3, With respect to Fig. 6(c), if the modification in vertical axis
does not perform, the total amount of M y will be equal to 3872 unit. Whereas, if M y is calculated
around the vertical axis that corresponds to the first day the resource is employed (day 4), it will be 2896
unit and gives a better perspective of resource utilization period. It implies that the first activity does not
use resource type 3.
48
Resurce Amount
9
8
7
6
5
4
3
2
1
0
0
10
12
14
16
18
20
22
24
26
28
18
20
22
24
26
28
18
20
22
24
26
28
Day
(a) Resource 1
12
Resource Amount
10
8
6
4
2
0
0
10
12
14
16
Day
(b) Resource 2
14
Resource Amount
12
10
8
6
4
2
0
0
10
12
14
16
Day
(c) Resource 3
Fig. 6. Utilized Resource histograms of solution
49
5. Summary and Conclusion

This paper develops a multi-objective optimization model that selects the best combination of
implementation option for each project activity with respect to time, cost, and total moment of resource
histograms around horizontal and vertical axis. The proposed model considers both resource allocation
and leveling. It takes into account M x to decrease resource fluctuation in resource histograms and M y
to consider resource utilization period. The value of M y , as such, gets higher as the resource remains
employed in the project till a later date. It can be used as a good indicator of the resource release date in
the project. Simultaneous employment of M x and M y in optimization procedure brings about better
utilization of available resources and increases the applicability of the model in management of real world
problems. The GAs technique was used to determine the optimal solution. In addition, for handling multiobjective optimization, weighted sum method was utilized.
The results of the model demonstrated that required resources for critical activities were very important in
determination of the modified total duration of project. When the amount of resource utilization for
options of critical activities was high, the model tended to select the option with lower required resources
to decrease the project total duration while it may cause project total cost increases.
6. References
Harris, F., and McCaffer, R. (1978). Worked examples in construction management. Granada.
Hegazy, T. (1999). Optimization of resource allocation and leveling using genetic algorithms. Journal
of Construction Engineering and Management, Vol. 125, No. 3, pp 167-175.
Hegazy, T., and Ersahin, T. (2001). Simplified spreadsheet solutions. II: overall schedule optimization.
Journal of Construction Engineering and Management, Vol. 127, No. 6, pp 469-475.
Kandil, A., and El-Rayes, K. (2006). MACROS: multiobjective automated construction resource
optimization system. Journal of Construction Engineering and Management, Vol. 22, No. 3, pp 126134.
Karshenas, S., and Haber, D. (1990). Economic optimization of construction project scheduling.
Journal of Construction Management and Economics, Vol. 8, No. 2, pp 135-146.
Li, S. (1996). New approach for optimization of overall construction schedule. Journal of Construction
Engineering and Management, Vol. 122, No. 1, pp 7-13.
50

An Improved Linear Programming Model For One-Dimensional Cutting

Stock Problem
Abbas Afshar
Professor, Iran University of Science and Technology, Tehran, Iran
a_afshar@iust.ac.ir
Helia Amiri
Graduate Student, Iran University of Science and Technology, Tehran, Iran
Ehsan Eshtehardian
Ph.D. Candidate, Iran University of Science and Technology, Tehran, Iran
Abstract
High percentage of yearly construction waste belongs to cutting one-dimensional stocks. Cutting onedimensional stocks such as steel bars in order to fulfill demanded project lengths, results in trim losses.
Although steel waste is recyclable, its reduction might increase the companys profitability.
In construction industry, it is possible to use trim losses from larger diameters for satisfying partial
demands in smaller ones. The existing cutting stock models fail to account for this permission. This paper
presents an improved linear programming model for cutting stock problem in which trim losses from
larger diameters are treated as supplementary stocks to substitute the smaller demands. The model
minimizes the total trim loss of the work as an objective function. Performance of the model is illustrated
by its application to a hypothetical case example.
Keywords
cutting stock problem, steel bars, linear programming
1. Introduction
High percentage of yearly construction waste belongs to cutting one-dimensional stocks such as steel
bars. One-dimensional cutting stock problem (1D-CSP) shows how to cut demanded lengths from the
standard length stock with minimum trim losses. The demanded lengths are a fraction of the standard
length therefore waste production is unavoidable in some extent. With a proper cutting pattern, trim loss
may partially be reduced. Although steel materials are recyclable, trim loss reduction (TLR) can help to
reduce the amount of unnecessary purchased materials, unnecessary workmanship, waste and recycling
expenses. Therefore proper usage of materials can help the contractor financially by saving in items
which was just mentioned. Thus the objective is to design a cutting plan in order to minimize trim losses
as possible.
In early days, in order to achieve the goal of (1D-CSP), researchers used different methodologies. The
linear programming based procedure was the first approach which may be traced back to the column
generation procedure proposed by Gilmore and Gomory (1961, 1963). The second one is sequence
heuristic procedure (SHP), first described by Haessler (1971) and the third is a hybrid solution procedure
51
which is a combination of the LP based procedure and SHP or some other procedures (Haessler et al.,
1991).
Recently, Meta-heuristic procedures have been applied to 1D-CSP. A new evolution algorithm (EP),
which is similar to GA but uses only mutation operator as searching operation, was applied by Liang et
al.(2002). Ant colony optimization was applied by Ducatelle and levine (2003). Shahin and Salem (2004)
proposed a genetic algorithm model for solving 1D-CSP. They generated some feasible cutting patterns
adapting the model proposed by Pierce (1964). They used those cutting patterns for their Genetic
Algorithm model in order to minimize the total trim losses. The decision variable was the number of
times each of those pattern was used.
In construction industry, it is possible to use trim losses from larger diameters for satisfying partial
demands in smaller ones. As an example the reinforcement with larger diameter may be used to replace
smaller diameters. This might further help to reduce stock bars and also trim losses. Existing models
failed to account the replacement possibilities. This paper presents an improved linear programming
model for cutting stock problem in which trim losses from larger diameters are treated as supplementary
stocks to substitute the demands with smaller diameters, if the trim losses length is long enough to be
used.
2. Problem Definition
Assuming that the number of stocks are sufficient to fulfill demands in any individual diameter. The
model can be defined as follows:
n
2P
inz = d (k , j) 10 j .................................(1)
k =1 j =1
Subject to:
k and j p :
S
x(k , j, i ) L(i ) + d (k , j ) = h..........................(2)

i =1
k < n and j > p :
if d (k + 1, j p ) h then :
x(k , j, i ) L(i ) + d (k , j ) = d (k + 1, j p )...................................(3)

i =1
k < n and j > p :
if d (k + 1, j p ) = h then :
d (h + 1, j 6 ) = o............................................................................(4)
i and k :
2P
x(k , j, i ) = m(i, k )......................................................................(5)

J =1
x(k , j , i ) int eger........................................................................(6 )

x(k , j , i ) o ...................................................................................(7 )
52
d (k , j ) o ......................................................................................(8)
where m(i,k)= required number of demanded item i whose length is L(i) of diameter k, x(k,j,i)= number of
demanded item i of diameter k which cut from the jth stock material (decision variable), d(k,j)= the trim
loss incurred by cutting jth stock of diameter k, s= number of different demanded items, n= number of
existing diameters, h=standard length of stock bars (assumed to be identical), p=number of stock bars in
each diameter (similar for all diameters).
The minimum trim loss will be achieved by selecting the cutting patterns which cuts as few stock bars as
possible. Therefore the term 10^j is used in the objective function (Eq.1) to penalize the solutions which
cut stock bars identified as (j-1) before the jth stock bar is completely processed. The multiplier 10^j
minimizes the number of employed bars from jth stock of diameter k which fulfills demand and
associated constraints. In other words, if the jth stock bar satisfies the constraints and/or the demand, the
( j-1)th stock bar will not used because of exponential penalty. This means that the stock bars with
numbers j=r-p+1 to p will be cut and the ones with numbers j=1 to r will be remain untouched. This term
can also help the model to achieve longer trim losses when j decreases which makes better stock materials
for the smaller diameter.
Eq.2 makes sure that in each diameter for every stock material, total length of the ordered items are to be
cut from that stock bar with length smaller than standard length, if possible.
The model cuts the largest diameter first, and then treats their trim losses as stock materials for the
smaller diameter. These trim losses should be cut prior to the standard stock lengths of that diameter.
According to the structure of the model, all trim losses of larger diameters are treated as supplementary
stock materials in the lower class. Therefore each lower class may include j=1 to 2p stock bars from
which 1 to p bars belong to the supplementary stock materials as defined. As an example, for p=6,
x(k,11,i)=2 means that 2 pieces from the ith demanded item on kth diameter should be cut from the (116)=5th stock material trim loss of (k+1)th diameter which has been treated as supplementary stock
materials.
The purpose of Eq.3 is similar to Eq.2 but used when the trim losses are cut as stock materials. Noticing
that the ones whose lengths equal to h are not trim losses and should not be cut.
In the model trim loss of the stocks which are not cut equal to standard length (h), however it is not trim
loss at all. As the objective is to minimize total trim loss, these unreal trim losses should be omitted in
order to achieve a correct solution. Eq. 4 is applied for this purpose.
Eq.5 makes sure that the ordered list is completely cut.
3. Model Application
Table 1 shows demanded items length and their required numbers. There are three diameters where k=3
denotes the largest one. Lets h=12m, s=3, n=3 and p=6.
Table 1: demanded length
Item(i)
1
2
3
L(i)m
1
6
4
m(i,1)
3
2
1
53
m(i,2)
0
0
5
m(i,3)
6
1
2
Table 2 shows the cutting schedule resulted from solution to the proposed LP model. Item numbers
marked with (*) are demanded items for diameter (k-1) which are cut from trim loss of the larger
diameter. Note that x refers to the number of item i which is cut from jth stock bar.
Table 2: linear programming cutting schedule using trim losses as stock material
k
3
j
6
item(i)
3
1
L(i)m
4
1
x
2
4
2
1
3*
6
1
4
1
2
1
3
2*
1*
4
6
1
1
1
2
3
2
1
4
6
1
1
1
1
xL(i)
d(j,k)
8
4
12
0
6
2
4
12
0
12
12
0
4
6
2
12
0
4
6
1
11
1
total trim loss=1m
Table 2 shows that for k=1 one stock bar, k=2 and k=3 two stock bars should be cut in order to fulfill
projects requirements. The total trim loss of the project is one meter from diameter number 1 which is
the smallest one.
The same example is solved by this model without the permission of using trim losses as stock materials.
The results are summarized in Table 3.
Comparing tables 2 and 3 shows the proposed model reduces total trim loss significantly. Therefore using
trim losses as supplementary stock material may further reduce the total trim loss.
54
Table 3: linear programming cutting schedule without using trim losses as stock material
k
3
j
6
item(i)
2
1
L(i)m
6
1
x
1
6
3
1
4
1
1
3
xL(i)
d(j,k)
6
6
12
0
8
8
4
12
12
0
8
8
4
12
12
0
4
3
7
5
total trim loss=13m
4. Conclusions
Construction waste forms a main proportion of the total waste stream. As one of the most important
construction waste, one-dimensional stock waste was chosen to be the center of this research. None of
existing models take into account treating trim losses as stock bars for smaller diameter which is common
in real world. Considering this issue was one of the advantageous of this model. With an appropriate
scheduling, cutting losses could be reduced.
The model was applied to a hypothetical case example with and without using trim losses as stock
material and the output cutting schedules were compared. The examples showed that the amount of waste
experienced in the one which treats trim losses as stock material is significantly smaller.
The results of this research show the fact that a portion of construction waste can be reduced by a better
planning. Using optimization techniques not only reduces waste materials but also improves financial
performance of the firm by improving the investment level of the stock material. Furthermore an
optimized scheduling of cutting stocks can show the management ability of a company.
5. References
Ducatelle, F., & Levine, J. 2002. Ant colony optimisation for bin packing and cutting stock problem.
http://citeseer.nj.nec.com/506184.html
Gilmore, P. C., & Gomory, R. E. 1961. a linear programming approach to the cutting stock problem.
Operations Research, 9: 849-859.
Gilmore, P. C., & Gomory, R. E. 1963. a linear programming approach to the cutting stock problem-part
II. Operations Research, 11: 863-888.
Haessler, R. W. 1971. a heuristic programming solution to a nonlinear cutting stock problem.
Management Science, 17: 793-802.
55
Haessler, R. W. & Sweeny P.E.1991. Cutting stock problems and solution procedures. Europian Journal
of Operational Research. 54: 141-150.
Liang, K., Yao, X., Newton, C., & Hoffman, D. 2002. a new evolutionary approach to cutting stock
problems with and without contiguity. Computers & operations research, 29: 1641-1659.
Pierce, J. F. 1964. Some large-scale production scheduling problems in the paper industry. Englewood
Cliffs, NJ: Prentice-Hall.
Shahin, A. A. & Salem, O. M. 2004. Using genetic algorithm in solving the one-dimensional cutting stock
problem in the construction industry. Can. J. Civ. Eng. 31 : 321-332.
56

A fuzzy-based model for unbalanced bidding in construction

Abbas Afshar
Professor, Iran University of Science and Technology, Tehran, Iran
a_afshar@iust.ac.ir
Helia Amiri
Graduate Student, Iran University of Science and Technology, Tehran, Iran
Abstract
Existing unbalanced bidding models assume that quantities of work are certain and deterministic.
However in reality some works such as soil and rock excavation cannot be estimated accurately before the
work is completely done. In an unbalanced bid, the contractor must take the responsibility of uncertainties
in quantities of work. It may be difficult to define probability distribution functions for these parameters
due to lack of data and information. This paper presents a fuzzy linear programming (FLP) model of
unbalanced bidding which assigns fuzzy numbers to the quantity of works. The model maximizes the
present value of the profit as an objective function. Model is applied to a hypothetical case example and
compares the results of fuzzy and deterministic models.
Keywords
unbalanced bidding, fuzzy modeling, fuzzy linear programming
1. Introduction
It is usually advantageous for a contractor to use unbalanced bidding strategies in order to benefit from
the uneven distribution of markup among the projects component items. The contractor has to decide on
the unit prices of all the projects activities so that the summation of the projects component items equals
to the tender price. This strategy leads contractor to price some items with a high markup and others with
a low one in order to compensate.
Tendering relatively high unit prices on items scheduled for early completion and proportionately lower
prices for other items is a type of unbalanced bidding. Well managed unbalanced bidding can help to
obtain monies earlier for financing the later stages to improve cash flow of the project.
Contractors may provide their own estimate of the quantities for each items of the contract. If their
estimations differ from those in proposals, another type of unbalanced bidding could be formulated by
overpricing items expected to exceed the proposal estimates while underpricing the ones which appear to
be overestimated. This strategy can help the contractor to submit a lower bid or improve the profitability
of his tender. However, there can be substantial risk.
Several models have been presented for unbalanced bidding. It is believed that Marvin Gates strategy
(1959, 1967) was the first to comment on the practice of unbalanced bidding, Starks model (1968, 1972,
1974) advocated a linear programming solutions for unbalanced bidding, later Diekmanns et al. (1982),
57
Cattells model (1984,1987) and Tong and Lus model (1992) proposed different versions of unbalanced
bidding.
In practice some works such as soil and rock excavation can be measured but cannot be estimated
accurately before the activity is completely done. These uncertainties in quantities can cause additional
risks for the contractor. None of researchers has considered this uncertainty except Diekmann et al.
(1982) who changed Starks original deterministic model by adding a probabilistic formulation to take
into account risk of uncertainties in quantities of work. It is almost impossible to define probability
distribution functions for these work items due to lack of data and information.
Since Bellman and Zadeh presented a decision making process in 1970 in a fuzzy environment, different
(fuzzy linear programming) FLP models have emerged and evolved to incorporate the imprecision of
goals and constraints in an (linear programming) LP model [Chanas and Kuchta (1994), Ramik and
Rimanek (1985) and Tanaka and Asai (1984)]. This paper presents a (FLP) model to deal with the
uncertainty of the parameters in an optimization model of unbalanced bidding. The paper changes Starks
original deterministic model by assuming the quantity of works as fuzzy numbers which make the model
a FLP model with fuzzy coefficients in objective function and crisp constraints.
2. Deterministic unbalanced bidding model, General structure

A linear programming model for unbalanced bidding may be defined as: [Stark,1974]
n
MaxZ =
i =1
j =1
p ij ( X i C i ) Q i
d
j =1
FJ =
AQ
i =1
(1
( X i C i ) F0
Subject to:
n
P X
i =1
=B
(2
Li X i U i
X re X ee 0
(3
(4
In which d = (1 + r ) 1 =discount factor, r=interest rate, n=number of items, t=total number of periods;
pij=percent of item i to be completed in the jth period, such that
t
j =1
pij = 1 , Xi=the unit price of the ith
item (decision variable), Ci=unit cost of the ith item, Qi=quantity of item i (in the bidding documents), Pi
= the quantity of the ith item measured by the owner, Fj=Fixed costs which are overhead and
mobilization cost during period j , Ai =
d
j =1
pij , Fo = d j F j =present worth of the fixed cost

j =1
The maximization of Zo has restrictions, suppose the contractor wishes to submit a total bid, B, the unit
price of each item must be chosen in a way that their sum, when multiplied by the owners quantity
estimates, equals the total bid amount, B. this constraint is presented as Eq.2 .
Eq.3 makes sure that the unit prices fall within specified bounds. This constraint ensures that the unit
prices are relevant to the direct costs as a protection against quantity misestimates or to hide pricing
policies.
In practice, certain unit prices cannot be more or less than the other; e.g., the unit price for rock
excavation, Xre, normally exceeds that of earth excavation, Xee. (Eq.3).
58
As contract payments are based on actual quantities of work, a fuzzy-based model might be more useful
than the deterministic one suggested above.
3. FLP model with fuzzy quantities of work

Considering the problem discussed in previous section with fuzzy quantities of work, one may
formulate the problem as
MaxZ =
i = 1 j =1
t
~
p ij ( X i C i ) Q i d j F J =
j =1
AQ
i =1
( X i C i ) F0
Subject to: Eqs. (2, 3 , 4 and 6)
(5
~
Q = (Q,Q, m, n) L L
(6
~
Where the coefficient Qi defines fuzzy numbers of the type L-L. Q and Q refer to left and right borders
~
of fuzzy number Q corresponding to maximum reliability level (i.e., =1) and m and n are nonnegative
real numbers (Fig.1).
(Q)
0
0
Q8
Figure 1: Typical membership function of a trapezoidal fuzzy number

The problem defined by objective function Eq.(5) and constraints Eqs.(2)-(4) can be associated with a set
of problems, which depend on a parameter (0,1] as follows (Chanas and Kuchta 1994):
n
MaxZ = Ai Qi ( X i Ci ) F0
i =1
Subject to:
Eqs. (2)-(4)
(7
where the quantity of work Qi in the objective function represent the intervals corresponding to the cut
of fuzzy number Q
After some manipulation employing fuzzy algebra, the FLP model of unbalanced bidding with symmetric
triangular fuzzy numbers will be equivalent to [Chanas & Kuchta,1996]:
59
MaxZ
((1 k
(1 )) Q i Ai ( X i C i )) F0
MaxZ = ((1 +k i (1 ))Qi Ai ( X i Ci )) F0
(8
where Z L and Z R =alternative crisp objective functions which represent the lower and upper bounds of
total present value of profit for a certain cut, respectively. In general the objective function can be
defined as:
Z t = [1 + (2t 1)(1 )e]QA( X c) F0
(9
where Z L = Z t =0 , Z R = Z t =1 and t=0.5 results in the objective function of the nonfuzzy unbalanced
bidding model.
The constrained method is employed for dealing with bi-objective programming. The model is solved for
each objective function at different cuts. Lets define XL and XR as the sets of decision variables that
individually optimize ZL and ZR at a certain cut, respectively. Therefore each of the ZL and ZR will
assume two different values for any cut through the single objective solution to the equation (8) and the
subjected constraints [Eqs.2-4]. Two different membership functions may now be constructed for XL and
XR. The plot of ZL and ZR associated with XL and different values of cuts results in the first membership
function. The second one results from plot of ZL and ZR associated with XR and different values of cuts.
For this bi-objective problem nondominated solutions must be found. Therefore, mathematical
presentation of the fuzzy model which trades off between maximum values of ZL and ZR using the linear
membership functions ( Z R ) and ( Z L ) will result as (Karimi et al. 2007):
MAX=T
r
r
r
Z r (x) = ((1 +ki (1 ))Qi Ai ( X i Ci )) F0 Z min
+ T (Z max
Z min
)
l
l
l
Z l ( x) = ((1 ki (1 ))Qi Ai ( X i Ci )) F0 Z min
+ T (Z max
Z min
)
Pi X i = B
i =1
Li X i U i
(10 X 3 X 2
Where 0 T 1 is the trade off between two objective functions which causes highest possible degree of
membership for the two membership functions.
Plot of ZL and ZR, obtained from solution to the model defined by Eq.10, for different values of cut
forms the traded-off membership shape of the objective function.
This results in a set of optimum solutions for certain cuts. Since the decision maker needs to know the
optimum crisp unit prices, those variables must be defuzzified. One of the most common defuzzifying
operators is the centroid defuzzifier. In this approach the value of T=TG must be identified by solving the
set of equation (10) for =G where point G is the centroid of the traded-off membership shape of the
objective function. The value TG is inserted into Eq.(11), in order to obtain the optimum crisp values of
the decision variables.
60
l
tG MaxZ r
, ( Z tG ) MaxZ } ( Z tG ) traded off
MAX ( Z )
T
MIN
r
l
( Z tG ) MaxZ ( Z tG ) MaxZ
=G
T=TG
( Z tG ) traded off =ZG

(ZtG)MaxZ = ((1+ki (2tG 1)(1))Qi Ai (XiR Ci )) F0
R
(Z tG )MinZ = ((1+ki (2tG 1)(1))Qi Ai ( XiL Ci )) F0

L
(ZtG)tradedoff = ((1+ki (2tG 1)(1))Qi Ai (Xi Ci )) F0

n
P X
i =1
=B
Li X i U i
(11
X3 X2
4. Model application
Consider the example which is solved by Diekmann et al. (1982) with probabilistic formulation. A bid for
a foundation work is prepared. In general for a balanced bidding, the contractor determines the total job
cost, adds an 8% markup and prorates the total amount among items of the proposal. The items and their
quantities and preparation of a typical balanced bid are shown in Table 1 and Table 2, respectively.
Table 1: estimated quantity of work
Item
number
1
2
3
4
5
Description
Clear and grub
Earth excavation
Rock excavation
Caissons, 24 in.
diam, installed
Clean-up
Unit
Quantity
lump sum
cubic yard
cubic yard
1
1,000
400
lineal foot
200
lump sum
The contractor thinks that the quantities of earth and rock excavation might be different from those in
proposal. In order to take uncertainties in quantities into account they are assumed as triangular fuzzy
numbers.
Table 2: Typical bid preparations
unit
item cost
unit
item
item
cost, in proposal (estimated) price in
totals,in
number dollars quantity in dollars
dollars
dollars
(1)
(2)
(3)
(4)
(5)
(6)
1
8,000.00
1.00
8,000.00
10,080.00 10,080.00
2
20.00
1,000.00 20,000.00
25.20
25,200.00
3
50.00
200.00
10,000.00
63.00
12,600.00
4
45.00
400.00
18,000.00
56.70
22,680.00
61
4,000.00
1.00
4,000.00
5,040.00
5,040.00
Col. 5=Col. 2 *($75,600/6,000)

Subtotal of Item Costs ($60,000) plus Mobilization/Demobilization
Costs ($10,000) =$70,000 in Direct Costs. Direct Costs plus 8%
Markup ($5,600) =$75,600
Triangular fuzzy quantity values in the objective function with center values equal to the values of crisp
ones is presented in table 1. For second and third items in table 1, 20 and 10 percent fuzziness are
assumed, respectively.
The model was solved for all cuts with maximizing one of the objective functions and the other
objective function was obtained. The two membership shapes of the objective functions are achieved by
plotting ZL and ZR for all cuts while maximizing each objective function. In Fig.1 curves AB and AE are
variations of ZL and ZR for different cuts for decision variables which maximize ZR. Similarly, if they are
plotted based on the solution optimizing ZL, the membership function corresponding to XL will be
obtained (i.e., triangle CAD in Fig. 1). Break points on each curve represent changes in structure of the
optimum solution in that cut.
1.2
A
membership digree
zl(XL )
zr(XL )
0.8
zl(XR)
zr(XR)
0.6
Zl(trade off)
0.4
Zr(tarade off)
0.2
B
0
20
F
25
30
35
C
40
45
50
D
55
60
G
65
70
E
75
80
85
x100
90
present value of profit
Figure: 1. Membership shape of the traded-off objective function

By solving the set of equation (10), the traded off membership shape of the objective function (i.e.,
triangle FAG) and its centroid at G=0.33 is determined which corresponds to ZG=5478.9. The optimum
decision variables as presented in Table 3 are achieved by substituting the model parameters and TG in set
of Eqs. (11). The optimum solutions of both fuzzy and nonfuzzy problems are also compared in Table 3.
The fuzzy model has succeeded to take into account all possible situations with only 0.02% reduction in
profit.
Table 3: results of unbalanced bidding with Fuzzy and Nonfuzzy quantities of work
variable
T
z
q2
data ranges
0-1
0-1
3828.418-7128.538
800-1200
62
Fuzzy
method
0.33
0.574
5478.985
1003.618
nonfuzzy
method
1
1
5480
1000
q3
x1
x2
x3
x4
x5
180-220
8000-12000
20-50
50-70
45-60
4000-6000
200.7236
12000
28.02
50
52.5
4573.825
200
12000
31.6
50
45
4000
6. Conclusion
A FLP model of unbalanced bidding was presented to incorporate the uncertainty of those values and
their consequences in the unbalanced bidding model while maximizing present value of the profit. The
uncertainty in fuzzy quantities of work in the objective function and its effect on decision variables of the
model was considered using the method presented by Chanas and Kuchta (1994).
A case example [Diekmann et al. (1982)], was solved and the results were compared with the crisp ones.
In comparison to the LP method, the presented FLP method incorporates all possible situations which
make it more realistic whereas the present value of the profit reduction was not significant. Employing
this proposed model and its results, the contractors could have a better understanding of the effects of the
unit prices on their overall earning.
7. References
Bellman, R. E., and Zadeh, L. A. (1970). "Decision-making in a fuzzy environment." Manage. Sci., 17(4),
141-146.
Cattell, D. W. (1984). "A model for item price loading by building contractors." Dept. of Quantity
Surveying, Univ. of the Witwatersrand, Johannesburg, south Africa, Unpublished.
Cattel, D.W.(1987)."Item price loading."Proc.,PACE'87 Progress in Architecture,Construction and
engineering,Vol. II,Johannesburg,South Africa, 1-20
Chanas, S., and Kuchta, D. (1994). linear programming problem with fuzzy coefficients in the objective
function. Fuzzy optimization, M. Delgado, J. Kacprzyk, J.-L. Verdegay, and M. A., Vila,
eds.,Physica, Berlin, 148-157.
Diekmann, J.E., Mayer,R.H., Jr., and Stark, r. m. (1982). "Coping with uncertainty in unit price
contracting." J. Constr. Div., 108(3), 379-389.
Gates, M. (1959). "Aspects of competitive bidding." Annual Rep., Connecticut Society of Civil Engineers.
Gates, M. (1967). "Bidding strategies and probabilities." J. Constr. Div., 93(C01), 75-107
Green, S. D. (1989). "Tendering: Optimisation and rationality." Constr .Manage. Econom., 7, 53-63.
Karimi S.,Mousavi J., Kaveh A., Afshar A.(2007). "Fuzzy optimization model for earthwork allocation
with imprecise parameters. " J. Construction engineering and management.,133(2),181-190.
Ramik, J., and Rimanek, J. (1985). "Inequality relation between fuzzy numbers and its use in fuzzy
optimization." Fuzzy Sets Syst., 16(2), 123-138.
Stark. R. M. (1968). "Unbalanced bidding models-Theory." J. Constr. Div., 94(CO2), 197-209.
Stark. R. M. (1972). "Unbalancing of tenders." Proc.-Inst. Civ. Eng., 51, 391-392.
Stark. R. M. (1974). "Unbalanced highway contract tendering." Oper. Res. Q., 25(3), 373-388.
Tanaka, H., and Asai, K. (1984). "Fuzzy linear programming problems with fuzzy numbers." Fuzzy Sets
Syst., 13(1), 1-10.
Tong Y., and Lu, Y. (1992). "Unbalanced bidding on contracts with variation trends in client-provided
quantities." Constr .Manage. Econom., 10, 69-80.
63

Applying Delphi Method and Decision Support System

for Bidding
Mostafa Khanzadi
Assistant Professor of Structural Engineering, Civil Engineering College, Iran University of Science and
Technology, Tehran, Tehran, Iran
khanzadi@iust.ac.ir
Shahin Dabirian
Student of MSc in Construction Engineering and Management, Iran University of Science and
Hossein Heshmatnejad
Student of MSc in Construction Engineering and Management, Iran University of Science and
Abstract
This essay has been presented a Decision Supporting System with an attempt to enhance the Contractors
decision making to participate in tenders based on a logical judgment instead of stochastic decision
making. A survey of 42 local and international authorized Contractors has been conducted, subsequently,
a data base from questionnaire forms has been created according to Delphi Method, and the practical
results established by statistical and expertise analysis.
In account of conformation of all real aspects of the decision making of Contractors and the current
situation of construction with the model, all factors has been identified comprehensively, and the
Linguistic Variable Tables has been demonstrated to be pointed out by the users.
The presented model is capable to evaluate the decision based on the defined factors and linguistic
variable tables and the users are able to evaluate their decision even if they be aware of the value of some
of factors.
Keywords
Decision Support System, Delphi Method, Questionnaire, Threshold Value, Killed Value.
1. Introduction
During all tenders, the contractors are confronting two separate and consecutive processes. The decision
to participate in the tender or not, followed by the process of price suggestion to win the tender. In
surveys performed among contractors, there is no precise line between these two processes. Prior to any
estimation for the reasons that might affect their decision to participate, much attention is devoted to
process of price suggestion to win the tender. Identification of all factors in such decisions and their
effectiveness on each other is too difficult and such performance on the part of the contractors is in need
of courage, experience and conjectures. Based on studies performed on 400 top world contractors [1] in
64
1986, the decision to participate in tenders or not are usually made based on ones feelings with no logical
reasoning. Therefore the presence of a backup system for decision making is extremely necessary. Such
actions affect the short and long term performance of the company and result in adaptation of the
companys movement in line with the pre-assigned goals by the managers. They also prevent financial
and time charges which are the result of the evaluation and selection of the proposed percentage.
Studies in this field go back to mid 1950s, when Fredman[2] (1956) proposed his model. In 1967,
Gates[3] proposed a similar model which basically differs in the way of estimating the possibility of
winning against other competitors. In 1972, Willenbrock[4], for the first time had a technique in his
model to make use of desirability value instead of monetary value. Other models are actually the modified
versions of this model; for example, the public tender model proposed by Carr[5] (1982) was a simplified
version in which the profit, with no attention to the companys ability and performance, was the only
criteria for evaluation, while there are different factors with different values in the way of such decision
making. Considering a multi-criteria technique for decision making was first proposed by Ahmad[6] in
1990. But this strategy for determining the degree of importance of these criteria was not trustworthy.
Making such decision without paying attention to the current situation of the society is definitely
impossible.
In this article and by taking use of Delphi method for identification of the affective factors in decision
making and a measurement in principle for the determination of each of the factors, great steps have been
taken toward achieving a backup system for decision making. This model is conformed to Breeze[7]
decision making technique (1988) and known as the first modified version of Heltezman model[8] (1989),
which is actually the specified process of decision making of the company or non-presence in the tender.
2. Method Theory
The decision to participate in the tender or not is just a yes-no decision. After that proposing the price and
the probability of winning the tender will be important. To make this decision, a certain grade will be
attained to each tender that includes determination of the value of all factors and finally the sum of weight
product for each of the factors. This process is called value evaluation for which the presence of
emotional judgment of the decision maker is necessary. Based on different subjective judgments in
different people, the value structure will also be different, as a result, the below four procedures have to
be taken into consideration:
1. Identification of affective factors and sub factors in the decision making
2. Evaluation of each factor and determining the threshold value
3. Weight measurement for each of the factors
4. Calculation of the final value, total threshold value, comparison and decision making
2.1. Identification of affective factors and sub factors in the decision making
The affective factors in the decision making, opposite to the affective factors in determining the proposed
price, are of definite types. These factors shall include the most important operational goals for the
decision making and shall have value independence. Identification of factors by the help of Delphi
method will be done in 3 stages as below and is actually the technique of interview in combination with a
kind of group discussion:
1- Assignment of goals of the research in the form of questionnaire and consulting a qualified expert for
the purpose of identifying affective factors in the decision to participate or not.
65
2- Preparing a list of opinions and factors discussed by the expert, categorizing those opinions and
providing a general category.
3- These results provided as a list of the factors will be presented in a tree type ranking and sent to the
experts to be informed of other expert opinions. After a second round of opinions by the same three
experts about the provided list, the final opinions will be surveyed and the affective factors will be
assigned. The final categorization results in a tree ranking which assigns the decision maker value
structure.
The affective factors in the contractors decision to participate in the tender or not is divided into four
major categories. Each category has some sub-categories that are mentioned here (Table 1):
Company related factors
Project related factors
Market related factors
Global condition related factors

Table 1: Final output of Delphi method in identification of all effective factors
1- technical power of the company
a) Company related factors
1-1) expert personnel of the technical office

1-2) subcontractors
1-3) administrative power in different levels
2- company vacant capacity

3- familiarity and communication with the suppliers
1- the project location
1-1) the distance to the project location

1-2) geographical and weather conditions
1-3) the availability of experts in the location
1-4) easy access to supplies
1-5) culture of people in the location
2- type of the employer
2-1) employers technical knowledge

2-2) employers truthfulness
2-3) employer's open-mindedness
2-4) employers financial credit
2-5) employers management and persistence
2-6) importance of the project to the employer
3-1) risk of change in projects supervision
3-2) risk of natural disaster
3-3) risk of price changes of the projects major
material
4-1) type of the contract
4-2) price of the contract
4-3) manner of supplying monetary funds
4-4) type of the price
4-5) type of payment
4-6) guarantees and penalties
4-7) bottlenecks and resources according to the terms
of the contract
5-1) consultants technical knowledge
5-2) consultants truthfulness
5-3) consultant's open-mindedness
5-4) consultants management and persistence
b) Project related factors
3- danger and risk factor
4- contract
5- type of consultant
6- the project's profitability

7- placing the projects
technological domain within
companys programs
66
c) Market related factors

d) Global related factors
8- conformity of the project with companys specialty

9- type of tender
10- competitors in the tender
11- condition of the applicable plans
12- being the main or the sub-contractor
13- ease of operations
14- importance of the project in contractors resume
1- presence of resources in the market
2- currency exchange rate
1- status of economic sanctions
2- international policies of the country
2.2. Evaluation of each factor and determining the threshold value

The satisfaction of each identified factor is based on the value allocated to them. In order to have a
suitable system of evaluating factors a language variable table was established (table 2), which changes
the value of the parameter to numerals. Therefore, in such tables, by taking an experts opinion into
consideration, you will find a wide range of different conditions for each factor, and a certain value grade
between 0 to 100 is given to them (0 < Si <100). The spectrum includes the most possible conditions and
will be a great help for measuring the value of non-defined mid conditions. Sometimes there might be
obstacles and circumstances which make the decision maker to withdraw without taking further
conditions into consideration. Such obstacles are called kill value which result in no further surveys and
decision to not participate in the tender.
The decision maker needs some criteria to compare the estimated value for making his decision.
Therefore there must be a boundary between desirable and undesirable which is called threshold value.
The threshold value of each factor is defined based on its limited desirability values. Each company draws
such boundaries based on its conditions within that period of time, and according to the class and courage
of its decision maker. This value shall not be mistaken with the kill value.
Table 2: Sample of language variable table
Row
1
2
3
4
5
Table of evaluation for conditions of the Executive plans

Language variable
The Executive plans are not prepared and there are no guarantees that they will be
delivered to the contractor on time and without any problems
The existing plans are deficient and need numerous modifications which result in
delays
Condition of the Executive plans is not desirable but it is possible to start the project
and do further trouble shootings in the process
The Executive plans do not have many problems and even with some deficiencies,
they guarantee that the problems will be resolved quickly without any damages to the
company
The Executive plans are in a suitable condition and are prepared by an experienced
expert and precisely
Value
0
15
65
85
100
2.3. Weight measurement for each of the factors

It is necessary to be informed of the importance of a factor in order to access its weight and define a
weight function which includes all the parameters. In order to have maximum conformity of this function
to reality and the present conditions for the Iranian contractors decision making, the weights are
measured with the help of a statistical method. In order to fulfill such goal according to the type and the
67
amount of the necessary data, and also the addressees statistic society, postal questionnaires are
conducted.
2.3.1.Sampling
One way to have grouped recognition of people is to gather data from all the members of that group. Such
method is not possible for big groups and includes lots of charges. Another way of gathering data is to use
a specific group of people so that their answers and characteristics are representative of the group from
which they are selected. Such method has priority because of its low cost, faster speed and being much
easier in comparison to the first method. The major point is to have a sample that is representative of the
population.
Sampling is of two major types; probable and improbable. In the first type each member of the population
has the same chance of being selected while in the second type, a group of people has more but uncertain
chances of being selected. Generally, the probable sampling has priority to the improbable sampling as it
is usually representative of the introducer sample and it is possible to check for the accuracy of the
sample.
Probable sample is of four main types: Simple and accidental sampling, Systematic sampling, Stratified
sampling, Multistage cluster sampling.
Selection of each of the sampling methods is related to the nature of the research subject, the presence of
a suitable sampling framework, cost, the level of accuracy of the sample and the method of data
collection. In the present work, the statistical society is consisted of the contractors as to take their
opinions into consideration for the importance of each of the affective factors in the process of
participation or non participation.
The contractors will be graded from 1 to 5 based on the below criteria:
The financial ability, capacity to accept activity, efficient technical and management power,
administrative experience, etc.
Considering the fact that these grades show general conditions of company and also the decision to
participate or not with different grades has different levels of survey, we will take use of stratified
sampling which is a modified version of the simple and systematic sampling and its aim is to access more
detailed and authentic samples.
In this method, the contractors society will firstly divide into three groups of companies with grades 1, 2,
companies with grades 3, 4, and companies with grade 5. By the help of such categorization, it is possible
to take the behaviour of the total society in a similar way. Then by paying attention to the volume of the
total sample which is 42 and all the contractors who have their main office in Tehran, we did a systematic
sampling based on the table of accidental figures.
2.3.2.Providing-questionnaire
In preparing answers to the questions, the Likret style (rating scales) and ranking method are used. In
making a questionnaire [table 3s], emphasis was given to applying all the codes and criteria to have the
maximum amount of care in keeping the importance ratio of each group of factors, and the clarity of the
contents and titles.
In this way we can mention the boxing of each group of the factors in order to compare the factors of
different ranks with each other, providing a guide to fill in the questionnaire, the tree diagram of the
factors in the form of a chart and also applying a kind of structure in the process of arrangement of the
questionnaire for the comparison of the factors with the same rank, explanation for each parameter in
68
addition to the questionnaire and check marking the options. Out of 60 questionnaire sent to the
companies approved by the management and planning organization within different grades, 42 of them
have been received which are the basis of weight measurement and statistical analysis in this paper.
Table 3: Sample questionnaire
First & Last name:
Company name:
Company grade:
BOX 1
Date:
Designation:
Field of activity:
importance ratio
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...

Project related factors
Market related factors
Global related factors
measurement ease
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
Table 3.2: Sample questionnaire

BOX2
Companys technical power
Company vacant capacity
Familiarity and communication with the suppliers
..
importance ratio
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
measurement ease
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
1-...2-...3-...4-...5-...
2.3.3.Questionnaire-analysis:
To explain the questionnaires in order to measure the weight of the factors, we used the weight method.
Based on the contractors opinion, the importance of each factor was obtained. Considering the
importance of each factor in comparison to the importance of other factors within the same rank, we can
access the weight of each factor. The weight of each factor in comparison to the total factors is accessible
by multiplying its weigh by the weight of higher ranks.
The ease of evaluating factors is to check the possibility of use of these factors. In the survey done for the
questionnaires, the factors with low evaluation ease which were difficult to be measured and valued were
deleted. It was preferred to use those factors with the evaluation ease of more than 25% in the decision
making process. As a result, factors such as the risk of change in the projects supervision and the risk of
natural disasters were removed from danger category and risk degree, and also not included in the backup
software. These questionnaires also include raw data with great value that will be discussed in details in
the results of the statistical analysis section.
2.4. Calculation of the final value, total threshold value, comparison and decision making
By obtaining weights from the questionnaire, determining the value of each factor and the threshold value
for all the factors, we can measure the total value and threshold through weight method. On the other
hand by estimating the weight product of the threshold values, total threshold will be determined. This is
the main factor in participating or not participating in the tender. If the value grade is less than the
threshold value, the decision will be non-participation; otherwise, the company will participate in the
tender.
[1] S =
w s
i
69
S: Total value of the tender
wi : Weight of each factor

si : Value of each factor
If the decision is to participate, the definiteness and the risk of the decision will be clear. The definiteness
of the decision is the difference between value grade and the threshold value grade divided by the
difference of the threshold value and 100.
3. Results of the Statistical Analysis

With the help of questionnaires and obtained data, and by considering contractors qualifications,
contractors are divided into three major groups based on their grades:
Companies with grade 1 and 2 (society 1)
Companies with grades 3 and 4 (society 2)
Companies with grade 5 (society 3)
All the mentioned factors have been checked within each of the three societies and finally the degree of
importance for each factor has been displayed by a number between 1 and 5. Also the amount of
deviation of the factor and the degree of importance (percentage) were determined. Using table 4, it is
possible to check the degree of importance for each factor in different societies. Therefore, their
importance will be compared to different societies for the purpose of decision making. The next step is to
show separate graphs for importance degree dispersion and dispersion of the evaluation ease of factors
(Figure1.) so that the contractors' consensus for each factor will be easily accessible. Obviously high
dispersion among opinions on the degree of importance and evaluation ease is a sign disagreement for the
degree of importance and evaluation ease, and vice versa.
Table 4: Output weights of the factors conducted from questionnaires among different contractor
societies
Affective
factors for
participating
or not
participating
Company
related factors
Project related
factors
Market related
factors
Global related
factors
The degree of importance
The degree
of
importance
First society
Second society
Third society
(1-5)
(1-5)
(1-5)
(1-5)
3.6
0.23
3.7
0.26
3.3
0.26
3.6
0.25
4.6
0.29
4.5
0.32
4.3
0.34
4.5
3.9
0.25
3.2
0.23
2.9
0.23
3.8
0.24
2.8
0.20
2.3
0.18
70
Standard
deviation
Evaluation
ease
(1-5)
1.24
4.8
0.32
0.32
1.03
4.7
0.31
3.3
0.23
1.38
3.2
0.21
2.9
0.20
0.89
2.3
0.15
Figure 1: Importance degree dispersion graph
4. Advantages of The Model

In order to increase usability of this model below actions have been taken:
1- Identification of all affective factors for decision making and categorization in the form of a detailed
tree diagram in order to take the ample number of related factors into consideration.
2- Measurement of the threshold value by using the sum of multiplied values by weight of the threshold
values for each individual factor.
3- Determining the weight of each factor based on statistical data collected from the national and
international contractors.
4- Ability to assess and to make decisions based on the number of factors that the user is completely
aware of their values.
5- Providing the percentage of the companys definiteness for participation.
6- Making use of modified weight method in the backup software: if some of the factors have been
deleted as a result of the companys special characteristics, the total sum of the weights wont be 1
anymore. In this software, the difference of the total sum of factors in the decision making is measured
according to 1 and will be added to them proportional to the available factors.
7- Representation of the value graph and threshold of all the factors together.
71
8- The easy application of the backup software.
5. Presenting A Decision Support System

In order to present a decision support system, a program in Microsoft Excel was created that is capable of
determining to participate in a tender or not, calculate the definiteness percentage and the risk in decision
making.
Each company will enter the threshold level for each of the factors based on its managers courage within
that period of time. In any tender, the company will determine the value of the factors from 0 to 100.
There may be a kill value defined for any of the factors in which case the program will determine to not
participate in the tender. (Figure 3)
Figure 2: The method of assigning value within the backup program
Figure 3: Decision support system output

There is a question mark in front of each factor which connects the user to the corresponding language
variable table. After assigning values, the software will automatically provide user with the data below:
1- Comparison of sums of the multiplied values by weight of the values with the total threshold value.
2- Decision to participate or not, and in case the company decides to participate the definiteness or risk of
decision based on percentage.
72
3- Report on the number of factors that have low values (less than 30) for the decision to participate or
not.
4- Report on factors that have less value than the threshold value.
5- Non continuation of the survey and the decision to not participate in case of a kill value.
6- Possibility of deleting some factors and deciding based on those factors which are definite and
acceptable to the decision maker. Therefore there is the chance for contractor to decide to participate
before or after purchasing the tender's documents.
7- In another section of the statistical results, we have the factor's value curve and the curve of the
threshold values. By comparing curve of the value to that of the threshold value we can find the factors
with values less than the threshold, and also the desirable factors (factors with values more than the
threshold) will be determined. Obviously a wider span among factors value and the threshold value
determines a higher desirability of that factor.
6. References
Ahmad, I. and Minkarah, I. The top 400 contractors;. [1]
Ahmad, I. Decision Support System for modeling Bid/no-Bid Decision Problem. J Journal of
Construction Division, ASCE, 116: 595-608, [6]
Breese, J. Review of the books The principles and applications of decision analysis. By Howard, R. and
Matheson, J. and Decision analysis and behavioral research. By Winterfeldet, D. And Edwards,W. [7]
Carr, R.I. General bidding model. Journal of Construction Division, ASCE, 108: 639-650, [5]
De Vaws, D.A. Surveys in Social Research. 3rd edn, Allen & Unwin, London, England 1991. [9]
Friedman, L. A competitive bidding model. Journal of Construction Division, ASCE, 108: 639-650 [2]
Gates, M. Bidding strategies and probabilities. Journal of Construction Division, ASCE, 93: 75-107, [3]
Holtzman, S. Intelligent decision systems. Addison-Wesley Publishing Company, Inc, Reading, Mass. [8]
Willenbrock, J.H. A comparative study of expected monetary value and expected utility value bidding
strategy models. Construction Management Research Series Report No.3,. [4]
73

Safety Performance in Construction Industry of Pakistan

Rizwan U. Farooqui
(Assistant Professor, Department of Civil Engineering, NED University of Engineering and Technology,
Karachi, Pakistan & Ph.D. Scholar, Department of Construction Management,
Florida International University, Miami, Florida, USA)
rfaro001@fiu.edu.pk
Farrukh Arif
(Lecturer, Department of Civil Engineering
NED University of Engineering and Technology, Karachi, Pakistan)

S.F.A. Rafeeqi
(Professor and Dean, Faculty of Civil Engineering & Architecture, NED University of Engineering and
Technology, Karachi, Pakistan)
Abstract
Traditional measures of safety are after-the-fact measures; namely, that safety is measured after injuries
have already occurred. These measures are labeled reactive, trailing, downstream, or lagging indicators
because they rely on retrospective data. Focusing on these measures e.g., accident rates and compensation
costs often means that the success of safety is measured by the levels of system failure. In recent years,
there has been a movement away from safety measures purely based on retrospective data or lagging
indicators, such as accident rates, toward so-called leading indicators such as measurements of safety
climate. In this paper, safety performance measurement of various construction firms as well as the
overall construction industry of Pakistan based on an investigative site survey has been done.
Salient findings of the study are as follows. The top three safety non-performance practices at building
construction work sites are (1) ear defenders not worn (while using noisy equipment); (2) protective
footwear not worn; and (3) face masks not worn (in dusty conditions). Most of the safety nonperformance issues belong to self protection category. This shows that the site workers themselves are
either unaware of the importance of personnel safety practices or they do not want to wear protective
gears and kits as they consider it as a hindrance in their work productivity. Also, it was observed that the
site management seemed non-interested in emphasizing the need of personnel safety practices among
their workers. Overall, most of the companies lie in the range of extremely unsafe to moderately unsafe
range. This shows that the overall level of the industry as regard to site safety needs drastic improvement.
Safety seems to be on the less priority on the agenda even during the execution phase which is not a
healty trend. A mean value of Safety Performance Index of 0.52 was assessed for the building
construction sites, which indicates that even the basic practices required for safety are not present at most
construction sites. Also, the scattered safety performance levels of firms indicates lack of standard safety
management systems.
The major recommendations of the study are as follows. At the industry level, safety rules and regulations
need to be defined, documented and enforced. Hence the need for an administrative body for occupational
safety and health implementation is evident; however, the integrity and effectiveness of such an
74
organization is a major concern in relation to the existing adversarial business environment in the
construction industry of Pakistan, which also need to be addressed. A major need of the industry is to
develop the attitude of project owners towards an active safety management implementation; for the
same, awareness programs need to be developed and implemented. It would also be appropriate to
arrange formal and informal education and training in safety in the form of graduate education and career
development programs.
Keywords
Safety Performance Measurement, Safety Non-Performance Index, Safety Performance Index,
Developing Countries, Construction Industry, Pakistan
1. Introduction
In the developed as well as developing part of the world, construction industry is considered to be one of
the most significant industries in terms of contributing to GDP and also in terms of its impact on health
and safety of the working population. Construction industry is both economically and socially important.
However, the construction industry, at the same time, is also recognized to be the most hazardous (Suazo
and Jaselskis, 1993). Although dramatic improvements have taken place in recent decades, the safety
record in the construction industry continues to be one of the poorest (Huang and Hinze, 2006). Research
shows that the major causes of accidents are related to the unique nature of the industry, human behavior,
difficult work site conditions, and poor safety management, which result in unsafe work methods,
equipment and procedures (Abdelhamid and Everett, 2000). Emphasis in both developing and developed
countries needs to be placed on training and the utilization of comprehensive safety programs (Koehn et
al., 1995).
In developed countries, recent advancement in technology, on one hand, has contributed positively to
industry productivity, but on the other hand, has created a more challenging and unsafe work
environment. Evidently, construction accidents and the associated damage caused to the employees,
property, equipment and morale have generated negative effects on the industry profitability and, to some
extent, the industry productivity. Responding to this increased safety requirement generated by
technology advancement, the industry control environment in developed countries has incorporated safety
as an integral part in the regulatory framework. In the U.S.A., for instance, the workers compensation
rates are a function of the loss experience of a contractor, and each labor hour is affected through the
reflection of those losses in the experience modification rating (EMR). On one hand, a safe contractor can
create a substantial competitive advantage through superior safe experience while, on the other hand, an
unsafe contractor can be liable to pay huge penalties in terms of insurance. Safety, therefore, and the
effects of its absence accidents is now a key cost driver for construction firms in such countries. Safe
work experience is also becoming a business survival issue for them, as more and more owners are
reluctant to permit contractors to bid work without acceptable EMRs. Thus, the most important step in
controlling costs for contractors in these countries is to run safe construction projects. Hence the
contractors are compelled to implement safety as their business strategy, which has led to recent
improvements in global construction safety records.
In contrast, developing countries like Pakistan have yet to respond to recent technological improvements.
Lack of response to technology, however, has not resulted in safer construction sites. In fact, a larger
share of construction work being performed by human resources has led to increased number of site
accidents. (In Pakistan, roughly 6-7% labor is directly attached with the construction industry.) Informal
assessments have identified a few major reasons for safety non-performance which include: lack of
development of construction sector in the shape of mechanization and industrialization; lack of
professional construction management practices which has not only led to unsafe project sites but have
also resulted in construction delays, cost overruns, poor productivity and poor product and process
75
quality; inadequate safety provisions laid by the existing regulatory environment which has failed to
establish safety as a major industry objective; insufficient and incentive-less insurance mechanisms which
have failed to establish safety as a business survival issue; and unfavorable business environment which
has led to adversarial business relationships among stakeholders resulting in controversies, conflicts,
claims and litigation and hence diverting the focus away from issues like safety.
Compared to the past, the current decade is witnessing massive infrastructure growth in Pakistan. There
are numerous infrastructure development projects in progress as well as under planning. All of these
projects have the potential to lead the local Industry to gain glory, status and international recognition but
only when appropriate efforts are extended to achieve the same. With the stage set for a golden era for
development, the challenges are still higher. One of the important areas that require quick and drastic
improvement is safety. It is highly essential that all occupational injuries and illnesses should be given
due attention. There should be an effort to raise the level of awareness between both employees and
employers of the importance of health and safety at worksites.
Prior research done in construction safety indicates the significance of conducting formal assessment
exercises for safety management implementation in the construction industry in general. Such assessment
exercises are particularly important in benchmarking safety performance as well as formulating safety
management policies and strategies appropriate to the particular work environment under study.
Consequently, this research aims to delve into the safety performance measurement of local construction
firms and hence the overall construction industry of Pakistan based on an investigative site survey.
Traditional measures of safety are after-the-fact measures; namely, that safety is measured after injuries
have already occurred. These measures are labeled reactive, trailing, downstream, or lagging indicators
because they rely on retrospective data. Focusing on these measures e.g., accident rates and compensation
costs often means that the success of safety is measured by the levels of system failure (Cohen, 2002).
In recent years, there has been a movement away from safety measures purely based on retrospective data
or lagging indicators, such as accident rates, toward so-called leading indicators such as site
investigation and measurements of safety climate (Flin et al., 2000). In this research, a proactive
investigative approach has been adopted to measure the safety performance of construction firms at their
work sites. Conclusions and recommendations in relation to safety performance of Pakistani contruction
industry have been drawn based on statistical analysis of the data.
2. Construction Safety Performance - Global and Local Scenario

A comparision of construction safety performance scenerio in Pakistan to that of global scenerio has been
presented in this section.
2.1 Global Construction Safety Performance Scenario
In developed countries, recent advancement in technology, on one hand, has contributed positively to
industry productivity, but on the other hand, has created a more challenging and unsafe work environment
(Farooqui et al., 2007). According to research findings, those who spend their working lives on
construction sites have a 1 in 300 chance of being killed at work. The chance of being disabled by injury
or serious illness is much greater than in most other industrial fields. Every construction worker is likely
to be temporarily unfit for work at some time as a result of a minor injury or a health problem after
working on a construction site (Ahmed et al., 2000).
Rowlinson (2003) reported that between 1989 and 1992, 256 people were fatally injured in the Australian
Construction Industry. Statistics revealed that the fatality rate was 10.4 per 100,000 workers, which was
similar to the fatality rate for road accidents. In 2000, a study was conducted in China (Huang et al.
76
2000), which revealed that 3,000 construction workers are killed in work related accidents each year. In
Hong Kong, 275 reportable accidents per 1,000 workers per year were recorded in 1994; this figure stood
at around 150 in 2000 (Rowlinson, 2003). In comparison, 10 construction workers in every 1,000 suffer
an injury in a year in Japan, and the figure is around 50 for the United Kingdom (Rowlinson, 2003). A
study of the Egyptian construction industry concluded that safety programs applied by contractors
operating in Egypt were less formal and the accident insurance costs were fixed irrespective of the
contractors safety performance (Hassanein, 2008).
Table 1 compares the fatality rates in global scenerio of all industries to that of construction industry in
2002. The table clearly indicates the unsafe nature of the construction industry.
Table 1: Fatality rates in selected countries in 2002
(Deaths/100,000 Employees)
Country
Australia
Canada
Hong Kong
Sweden
United Kingdom
All Industry
2.0
6.1
8.6
1.4
0.7
Construction
5.0
20.9
64.2
5.0
4.4
2.2 Construction Safety Performance Scenario in Pakistan

Construction in developing countries, such as Pakistan and India, is more labor intensive than that in the
developed areas of the globe, involving 2.5-10 times as many workers per activity (Koehn and Regmi
1991). Typically workers tend to be unskilled and migrate in a group, with or without their families,
throughout the country in search of employment. In fact, they are usually divided into various factions.
Communication problems related to differences in language, religion and culture tend to inhibit safety on
the work site.
In Pakistan, there is a significant difference between large and small contractors. Most large firms do have
a safety policy, on paper, but employees in general are not aware of its existence. Nevertheless, a number
of major constructors exhibit a concern for safety and have established various safety procedures. They
also provide training for workers and maintain safety personnel on the jobsite. For the majority of
contractors, however, maximizing profit is the prime concern. Unsafe conditions exist on many sites, both
large and small, and laborers are subjected to numerous hazards.
On many sites, no training programs for the staff and workers exist; therefore, no orientation for new staff
or workers is conducted, hazards are not pointed out, and no safety meetings are held. Employees are
required to learn from their own mistakes or experience. In addition, lack of medical facilities, shanty
housing, and substandard sanitation tend to exist on remote projects. Workers undertake a risk while at
work and the following problem areas are common:
1. While excavating in deep trenches (with no proper shoring or bracing), accidents due to cave-ins
often occur.
2. Concreting is done mainly by laborers, and cements burns due to the unavailability of protective
gloves and boots are common.
3. Workers fall from heights due to weak scaffolding and the unavailability of safety belts.
4. Workers sustain injuries on the head, fingers, eyes, feet, and face due to absence of personal
protection equipment.
5. There is improper housekeeping.
77
Lack of understanding of the job and poor equipment maintenance are also major causes of accidents.
Injuries generally are unreported; however, if necessary, a laborer might receive first aid or preliminary
medical care. In most cases, specialized medical treatment or compensation is unavailable. Workers
themselves consider accidents as due to their own negligence, and accept that construction is a dangerous
occupation. Nevertheless, major accidents involving the death of a worker may be reported due to the
financial expenses and litigation that could be involved.
Maintenance and inspection schedules often are not followed, and only after a breakdown is equipment
repaired. This approach leads to loss of time, idle workers, and project delays. It may also cause damage
to property. Breakdown of concrete mixers, vibrators, water pumps, and tractors are common.
Electrocution is also a major hazard, due to use of substandard electrical equipment and underground
cables. Workers, especially young ones, take chances, and often do not follow safety norms or use
personal protective equipment. Also laborers and staff are sometimes are under the influence of alcohol
and drugs. Unfortunately, crew members are not checked for drugs and alcohol before the start of and
during work.
One of the impeding factors that prevent Pakistan from developing a construction safety program is
pervasive corruption, a by-product of the system of bureaucratic controls. As an example, for any accident
that takes place on-site due to lack of safety practices, the particular low-level activity supervisor
(engineer/ technician), not the construction manager, is theoretically held responsible and may, in
exceptional cases, be subject to physical abuse and harm from the victims group of friends. In extreme
circumstances, the supervisor may also be charged with a criminal offence. However, cash payments are
usually accepted in lieu of pressing charges. In addition, because workers are usually non-residents of the
local area and are often unaware of their rights, accidents are often not reported to the proper authorities
or, if reported, are lost in the local bureaucracy.
Owners and consultants do stress safety before work commences, but as the work progresses their
concerns for deadlines becomes a priority and they tend to pay less attention to safety. On large projects,
the owners may provide medical facilities at the site, but ultimately safety is the contractors
responsibility.
According to the survey conducted by Farooqui et al. (2007), the major injuries faced by contracting firms
in Pakistan on their project sites, in descending order of occurrence, were given as follows:
1. Fall injuries
2. Struck-by injuries
3. Injuries by wastage and raw materials
4. Heat stroke
5. Head injuries
6. Eye injuries
7. Burning cases
In the same study, some informal assessments identified a few major reasons for safety non-performance
which included: lack of development of construction sector in the shape of mechanization and
industrialization; lack of professional construction management practices, inadequate safety provisions
laid by the existing regulatory environment which has failed to establish safety as a major industry
objective, insufficient and incentive-less insurance mechanisms which have failed to establish safety as a
business survival issue, and unfavorable business environment which has led to adversarial business
relationships among stakeholders resulting in controversies, conflicts, claims and litigation and hence
diverting the focus away from issues like safety (Farooqui et al., 2007).
78
3. Research Scope & Objectives

Although safety management is a collective effort of all the stakeholders including the owners,
consultants, contractors, subcontractors, suppliers, regulating bodies etc., this research is targeted to
assessing the contractor safety management practices.
Safety is implemented, in essence, by contractors on work sites who indeed need to adopt adequate safety
related systems designed to respond to hazardous and potentially hazardous project conditions as well as
designed to take the process to a safe state when predetermined conditions are violated. This is required
for successful implementation of a safety management mechanism for the provision and control of work
environment systems and human behavior, which together give relative freedom from those conditions
and circumstances, which can cause personal injury, disease or death, or property damage (Samelson and
Levitt, 1982). Hence presence of a safety culture on construction work sites is immensely needed
(Mohamed, 2003).
Hence this research assesses the safety management practices of contractors on construction work sites in
Pakistan with the objective to diagnose the current safety practices among contractors associated with the
construction industry of Pakistan and hence identify the safety performance in the construction industry of
Pakistan.
The objective has been achieved by investigating the extent to which on-site safety precautions have been
adopted at different construction projects currently underway in Pakistan.
The study is specially targeted towards multi-storey buildings where there is abundance of such
construction activities that require extra precautionary measures for safety for both laborers and
equipment. It is expected that the findings of the study will present a true picture of construction safety
performance in Pakistan.
4. Research Significance
The research work reported in this paper is part of an on-going research project under Pakistan-US
Science and Technology Cooperative Program (STCP), with funds provided jointly by the United States
Agency for International Development (USAID), USA and Ministry of Science and Technology (MoST),
Pakistan. The above-mentioned project has four main objectives:
1. To assess the current state of Pakistan construction industry through quantitative research with
specific reference to the status of construction management education, research and practice.
2. To develop a strategic model for the improvement and strengthening of construction management
education, research and practice in Pakistan.
3. To devise a framework to standardize the construction industry practices for achieving improved
performance on cost, time, quality, productivity and safety.
4. To devise measures to build capacity of academia, industry, owners and government in the area
of construction management so as to improve the overall efficiency and productivity of the
construction industry.
Since no accurate information regarding the extent of construction management application in the
Pakistan construction industry was available, the first objective of the research project was set as the
investigation of the adoption and implementation of construction management practices in Pakistan
construction industry.
79
One of the major objectives of the above mentioned research work is to develop a Safety Management
Model for the Pakistan Construction Industry. An earlier paper has been published in this regard, which
was focused on critically evaluating the perceptions and trends of safety in contracting organizations in
Pakistan (Farooqui et. al, 2007). This research endeavors to provide further basis to the model
development by assessing the safety performance of construction contractors on work sites in Pakistan.
It is expected that this study will provide some empirical data on the safety performance of the
construction industry of Pakistan, which will aid in developing appropriate safety management strategies
and hence a safety management model for the Pakistani Construction Industry.
5. Research Methodology
The research methodology consisted of the following steps:
1. Literature review to collect base knowledge essential for survey development
2. Research design to develop a safety investigation Performa to elicit information about
construction safety performance at different work sites.
3. Team development and training to prepare resources to undertake the survey on different work
sites.
4. Survey administration i.e. conducting site observation surveys at selected work sites.
5. Research analysis i.e. assessment of the survey findings to diagnose the safety performance and
develop conclusions and recommendations.
These steps are explained as follows:
In the first step, literature review was done to find out the global and Pakistani scenario in construction
safety performance and also to collect base knowledge to develop observation Performa for survey.
Following the literature review, a safety investigation Performa was developed to elicit information about
construction safety performance at different sites. This Performa was divided in four categories covering
various aspects of site safety measurement. These divisions included: (1) Personnel safety; (2) House
keeping; (3) Scaffolding safety, and (4) Access to height.
In the next step, a survey team was developed and trained for conducting the survey. During training, the
team was theoretically exposed to various aspects of construction site safety, methods of safety
performance measurement, site selection process for safety surveys, and identification of survey
parameters, such as things to be observed on site, appropriate time of survey, suitable days for survey and
preferable weather for survey, etc.
In the fourth step, site observation surveys were conducted on 27 sites. As a preference, building
construction sites constituting scaffolding operations and working on heights operations were selected.
Observations were taken on Mondays and Thursdays. The investigators were instructed to mark the level
of agreement to the safety observation statement on the survey instrument on a scale defining the level of
safety non-performance. Some snapshots were also taken as evidence of the observations and also for
confirming the validity of the observations.
In the final step, findings based on the observations were than used to analyze the site safety performance
of the local construction industry. Some conclusions and reccomendations were drawn based on the
analysis of the data.
80
6. Analysis and Discussion of Findings

A total of twenty seven (21) construction sites were investigated. The data of twenty one sites (almost
78%) was found valid for the analysis.
The safety performance investigation Performa was divided in four different categories covering various
aspects of site safety measurement. These included (1) personnel safety; (2) house keeping; (3)
scaffolding safety, and (4) access to height. Each category had certain statements. Every statement was
also supplemented by various positions and ways to judge the level of safety non-performance of a
particular aspect. The investigator had to mark the level of agreement to the statement on a scale defining
level of safety non-performance with non-performance level increasing from a score of 0 to 10.
6.1 Safety Performance Factor Analysis
A total of twenty five (25) safety performance factors were observed during the site investigation. Based
on the level of safety non-performance, the Factor Non-Performance Index (FNPI) and the Factor
Performance index (FPI) were calculated using the following formulae. The indices for all the factors are
shown in Table 2.
Factor Non-performance Index (FNPI) = (Factor score x No. of sites at a particular score)
(Total no. of responses for a factor x 10)
where 10 in denominator indicates the score at the maximum level of safety non-performance.
Factor Performance Index (FPI) = 1 - FNPI
On the basis of Factor Non-Performance Indices the top ten safety non-performance practices found on
sites are as follows.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Ear defenders not worn (while using noisy equipment)

Protective footwear not worn
Face masks not worn (in dusty conditions)
Guardrails are missing on working scaffold platforms
Safety helmets not worn
Gloves not worn (while handling materials which have sharp edges, hot or could cause skin
problems)
Openings left uncovered or unguarded
Goggles or other items of eye protectors not worn (when using motorized cutting equipment,
welding and cartridge operated tools)
Timbers left lying around, have nails left in
Tools or small machinery not placed or stored properly.
Most of the safety non-performance practices belong to self protection category. This shows that the site
workers themselves are either unaware of the importance of personnel safety practices or they do not want
to wear protective gears and kits as they consider it as a hindrance in their work productivity. Also, it was
observed that the site management seemed non-interested in emphasizing the need of personnel safety
practices among their workers.
81
Table 2: Factor Indices

Safety Performance Measurement Factor
Factor NonPerformance
Index
Factor
Performance
Index
0.65
0.73
0.35
0.27
0.61
0.88
0.39
0.16
0.51
0.73
0.49
0.27
0.51
0.59
0.30
0.50
0.41
0.70
0.43
0.57
0.23
0.49
0.37
0.77
0.52
0.63
0.33
0.36
0.44
0.69
0.33
0.67
0.64
0.56
0.31
0.67
0.36
0.64
0.22
0.33
0.24
0.26
0.28
0.40
0.78
0.67
0.76
0.74
0.72
0.60
Self Protection Category

Safety helmets not worn
Protective footwear not worn
Gloves not worn (while handling materials which have sharp edges,
hot or could cause skin problems)
Ear defenders not worn (while using noisy equipment)
Goggles or other items of eye protectors not worn (when using
motorized cutting equipment, welding and cartridge operated tools)
Face masks not worn (in dusty conditions)
House Keeping Category
Timbers left lying around, have nails left in
Openings left uncovered or unguarded
Stored materials are stacked/ store unsafely
Walkways, access routes and staircases are littered with rubbish/
debris
Proportions of operatives, who are working at heights, have you seen
throwing down objects
Tools or small machinery not placed or stored properly.
Excavations not provided with safety mesh erected all around
Scaffolding Category
Working scaffold platforms missing boards
Scaffold boards placed incorrectly, causing a 'trap'
Toe-boards missing on working scaffold platforms
Guardrails are missing on working scaffold platforms
Scaffolds/ formwork missing base-plates under the standards
Site personnel, who are working at heights, are climbing up or down
the outside of scaffolds
Access to Heights Category
ladders too short for the jobs
ladders used without being tied or secured
ladders used unsafely
Ladders placed with broken or defective rungs
Mobile tower scaffolds used unsafely
Mobile Work Platforms (MWP) being used unsafely
82
6.2 Safety Performance Category Analysis

Based on the factors non-performance and factors performance indices, the category Non-Performance
and category performance indices of the four categories have been calculated with the following
formulae. The indices are shown in Table 3.
Category Non Performance Index (CNPI) = FNPI (of the factors in the category)
No. of Factors in the category
Category Performance Index (CNPI) = FPI (of the factors in the category)
No. of Factors in the category
Table 3: Category Indices
Safety Performance Measurement Category
Self Protection Category
House- Keeping Category
Scaffolding Category
Access To Heights Category
CNPI
0.69
0.42
0.42
0.29
CPI
0.31
0.58
0.58
0.71
Self protection category has got the highest non-performnace index (i.e. 0.69) that again supplements
weakness identified in the self protecting safety practices.
6.3 Safety Performance Index
The safety performance index of the twenty one sites investigated has been calculated. For this, firstly the
safety non-performance score of each site has been calculated by summing up the scores of safety nonperformance of all the factors for a site. Then the safety non-performance index have been calculated
using the following formula.
Safety non-performance Index = (Score of Safety non-performance of all factors for a site)
Maximum Score for a particular site
where, Maximum Score for a particular site = No. of factors investigated x 10
Further, the Safety Performance Index (SPI) has been calculated using following formula:
Safety Performance Index (SPI) = 1 Safety Non-Performance Index
A construction firms safety performance level has been assessed based on percentage safety performance
index (%SPI) using the criteria shown in Table 3.
Table 3: Safety Performance Level
%SPI
0-20%
> 20% - 40%
> 40% - 60%
> 60% - 80%
>80% - 100%
Safety
Performance
Level
Extremely
Unsafe (US)
Unsafe (US)
Moderately
Unsafe (MUS)
Safe (S)
Extremely
Safe (ES)
83
The summarized data for the 21 sites is shown in Table 4.

Table 4: Site Safety Performance Summary
Safety NonSite performance
No. Score
1
17
2
46
3
57
4
64
5
60
6
77
7
82
8
80
9
27
10
84
11
89
12
97
13
33
14
105
15
129
16
142
17
146
18
55
19
138
20
66
21
149
Safety Nonperformance
Index
0.2
0.2
0.3
0.3
0.3
0.4
0.4
0.4
0.4
0.4
0.4
0.5
0.5
0.5
0.6
0.6
0.7
0.7
0.8
0.8
0.8
SPI
0.8
0.8
0.7
0.7
0.7
0.7
0.6
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.2
%SPI
83.0
81.6
71.5
69.5
68.4
65.0
64.3
63.6
61.4
60.0
59.5
53.8
52.9
52.3
38.6
38.3
33.6
31.3
23.3
17.5
17.2
Safety
Performance
Level
ES
ES
S
S
S
S
S
S
S
MUS
MUS
MUS
MUS
MUS
US
US
US
US
US
EUS
EUS
Results indicate that most of the companies lie in the range of extremely unsafe to moderately unsafe
(about 58%) and the rest are in the safer range (42%). This shows that the overall level of the industry as
regard to site safety needs drastic improvement. Safety seems to be on the less priority on the agenda even
during the execution phase that is not a healty trend. Statistical analysis of the safety performance indices
of the twenty one sites is shown in table 5.
Table 5: Statistical Analysis of SPIs
Mean
Standard Error
Median
Standard Deviation
Sample Variance
Kurtosis
Skewness
0.52
0.04
0.59
0.19
0.39
-0.78
-0.44
The mean value of of SPI of 0.52 indicates that the overall safety persormance of building construction
organizations on work sites is only average. This is alarming finding and should be further diagnosed as
to the causes of safety non-performance and improvement measures that can be adopted.
One important highlight from the statistical analysis is that the kurtosis has come out to be a negative
value (i.e. -0.78) which indicates the forming of a platycurtic curve. This indicates that the safety
performance index data is very scattered, which in turn shows that the safety performance levels are not at
84
any standard level but are rather dispersed. A major conclusion from this statistical inference is the lack of
presence of standard system with regards to safety management in the construction industry.
7. Conclusions
The top three safety non-performance practices at building construction work sites are:
1. Ear defenders not worn (while using noisy equipment)
2. Protective footwear not worn
3. Face masks not worn (in dusty conditions)
Most of the safety non-performance issues belong to self protection category. This shows that the site
workers themselves are either unaware of the importance of personnel safety practices or they do not want
to wear protective gears and kits as they consider it as a hindrance in their work productivity. Also, it was
observed that the site management seemed non-interested in emphasizing the need of personnel safety
practices among their workers.
Most of the companies lie in the range of extremely unsafe to moderately unsafe (about 58%). This shows
that the overall level of the industry as regard to site safety needs drastic improvement. Safety seems to be
on the less priority on the agenda even during the execution phase which is not a healty trend.
A mean value of Safety Performance Index of 0.52 indicates that even the basic practices required for
safety are not present at most construction sites. Also, the scattered safety performance levels of firms
indicates lack of standard safety management systems.
8. Recommendations
Analysis shows that there are many barriers due to which safety is not implemented on projects.
Following are some recommendations to overcome these barriers:
1.
2.
3.
4.
5.
In Pakistan, currently there is no regulatory agency or organization for occupational safety

management (for instance, OSHA Occupational Safety and Health Administration in the USA).
Safety regulations need to be defined and enforced. Hence the need for such an administrative body
is evident; however, the integrity and effectiveness of such an organization is a major concern in
relation to the existing adversarial business environment in the construction industry of Pakistan
and need to be addressed. The jurisdiction and authority of this organization also need to be
defined.
There is a need of strong awareness campaign amongst the site workers that could be generated
through many methods like on site safety charts having pictures to explain the safe work habits,
practical demonstrations on site etc.
It would be appropriate to arrange some form of formal and/or informal education and training for
the workers on site. These could be linked with the bonuses and other incentives on completion of
such trainings.
The authors strongly believe that a major need of the industry is to develop the attitude of project
construction firms towards an active on site safety implementation plan. The owners should also
discuss it with the construction firms before giving them the contract. They should give safety some
weighting in the award of the contract.
As a catalyst for maintaining a safe project, contractor top management should formulate strategies
and develop policies that nurture a safe culture. Safety should be emphasized at all times no matter
how fast the construction needs to be completed and under what budget constraints. Contractors
85
should integrate safety training programs with other practices according to their budget. Training
can be provided in many ways: on-site training, safety meetings before the start of any work; large
size contractors may develop separate safety departments. Contractors should encourage their
project managers to develop safety incorporated project plans and schedules.
6. The regulatory bodies like Pakistan Engineering council should design a system to judge the safety
performance levels of the construction firms at the site and should incorporate it with the licensing
requirements of the construction firms. In this regard, the investigation style adopted in this study
can be used as the benchmark or the starting point.
9. Limitations and Future Research Directions

The analysis in this study was focused to multi-storey building construction. Further analysis need
to be done for other sectors of construction such as residential, infrastructure, and industrial.
2. A future study might look into the causes of safety non-performance and improvement measures
that can be adopted for the same.
3. A future research might investigate the safety climate of construction firms, the findings of which
can be connected to the findings of this study and a comprehensive safety performance
measurement model can be developed that can be used to benchmark the safety performance of
Pakistani construction industry.
4. A strategic safety management model adapted for the local construction industry should be the core
objective of the future research done in construction safety in Pakistan.
1.
10. References
Abdelhamid, T. S., and Everett, J. G. (2000). Identifying root causes of construction accidents. J.
Constr. Eng. Manage., 126(1), 52-60.
Ahmed, Syed M., Kwan C., Young W. M. & Pui, C. H. (2000). Site Safety Management in Hong
Kong, Journal of Management in Engineering, ASCE, 16(6), pp. 34-42.
Cohen, J. M. (2002). Measuring safety performance in construction. Occup. Hazards, 64(6), 4144.
Farooqui, R.U., Ahmed, S.M., and Panthi, K. (2007). Developing Safety Culture in Pakistan
Construction Industry An Assessment of Perceptions and Practices among Construction
Contractors. Proceedings of the Fourth International Conference on Construction in the 21st
Century: Accelerating Innovation in Engineering, Management and Technology (CITC IV 2007),
Gold Coast, Australia, pp. 420-437.
Flin, R., Mearns, K., OConnor, P., and Bryden, R. _2000_. Measuring safety climate: Identifying the
common features. Safety Sci., 34(13), 177192.
Hassanein, A. G., and Hanna, R. S. (2008) Safety Performance in the Egyptian Construction Industry J.
Constr. Eng. Manage.,. Vol. 134, No. 6, June 1, 2008, 451-455
Huang, X, and Hinze, J. (2006). Owners role in construction safety. Journal of Construction
Engineering and Management, 132 (2), pp 164-173.
Huang, X., Fang, D., and Li, X. (2000). Construction accident losses: How much an accident costs.
Proc. 2000 Int. Symp. on Safety Science and Technology, Chemical Industry Press, Beijing, 320325.
Koehn, E., Kothari, R.K. and, Pan, C. (1995). Safety in developing countries: professional and
bureaucratic problems. Journal of Construction Engineering and Management 121(3), pp 261-265.
Mohamed, Sherif (2003). Scorecard Approach to Benchmarking Organizational Safety Culture in
Construction J. Constr. Eng. Manage., 129(1), 81-88.
Rowlinson, S. (2003). Hong Kong construction Safety management and the law, Sweet & Maxwell
Asia, Causeway Bay, Hong Kong.
Samelson, N.M., and Levitt, R. E. (1982). Owners guidelines for selecting safe contractors. J. Constr.
Div., ASCE, 108 (4), 617-623.
86
Suazo, G.A., and Jaselskis, E.J. (1993). Comparison of construction safety codes in United States and
Honduras. Journal of Construction Engineering and Management, 119(3), pp 560-572.
87

The Trend of Build Operate and Transfer (BOT) Projects in Pakistan

Ammad Hassan Khan
Assistant Professor, Department of Civil Engineering, University of Engineering and Technology,
Lahore, Punjab, Pakistan
ammadhk@hotmail.com
Misbah Jamil
Lecturer, Department of Architectural Engineering and Design, University of Engineering and
Technology, Lahore, Punjab, Pakistan
Mudassar Sattar
Chief Executive,BEMSOL Pvt. Limited, Lahore, Punjab, Pakistan
Abstract
Build operate and transfer (BOT) term in construction management has been gearing up popularity
tremendously in recent times. In developing countries (i.e. Pakistan), where often the owner do not have
enough finances to carry out the infrastructure development projects, the BOT can provide the unique
opportunity to assist both the financer and the owner. The developing country like Pakistan require
extensive infrastructure to meet the various development challenges of future. The governments in the
developing countries mostly have the budgetary constraints to commence the development projects. The
priorities always remained debatable for the commencement of any government funded infrastructure
development project especially in Pakistan. BOT is an option for financing the infrastructure and boost
the economical growth of the country with out direct utilization of government finances. In private sector
for the owners who have land resources but no finance to make the sufficient development on these lands
BOT can be a precious alternate. The BOT projects have the potential to serve the government and private
sector with equal effectiveness. BOT projects are also offering attractive opportunities to foreign
investors, which in turn can generate substantial foreign exchange for economic growth. Today the
Pakistan construction industry has lot of prospects of BOT projects in the fields of power, irrigation,
transportation, real estate, highways, multistory buildings and urban development, which can gain the
attention of foreign investors. This paper highlight the major BOT projects offered in Pakistan in recent
years. This paper will also discuss the major requirements of the BOT projects.
Keywords
BOT, Infrastructure Projects,Developing countries, Pakistan, Construction Industry.
1. Introduction
In Pakistan, BOT is a relatively innovative approach to infrastructure development, which enables direct
private sector investment in large-scale infrastructure projects. The BOT refer as follows:
Build A private company (or consortium) agrees with a government/private owner to invest in a
infrastructure project.
88
Operate The private developer then owns, maintains and manages the facility for an agreed concession
period and recoups their investment through charges or tolls.
Transfer After the concessionary period the company transfers ownership and operation of the facility
to the government/private owner or relevant state authority.
In a typical BOT infrastructure project, a private sector project company builds a project, operates it long
enough to payback project debt and equity investment, than transfer it to the host government. But if the
same BOT project can be implemented as a turnkey construction contract financed by sovereign
borrowing, the time saved and the great certainty of the project going forward may warrant the more
traditional approach (Augenblick and Custor, 1990).
There are number of stakeholders in any BOT project and all of them have particular reasons to be
involved in the project. The contractual agreements between these stakeholders and the allocation of risks
can be complex. The major stakeholders of a BOT projects usually include:
Government Owner (Government Client)
A government department or statutory authority is a pivotal party. It will:
Grant the sponsor the concession, that is the right to build own and operate the facility.
Grant a long term lease of or sell the site to the sponsor
Often acquire most or all the service provided by the facility.
The governments cooperation is critical in large projects. It may be required to assist in obtaining the
necessary approvals, authorizations and consents for the construction and operation of the project. It may
also be required to provide comfort that the agency acquiring services from the facility will be in a
position to honor its financial obligations. The government agency is normally the primary party. It will
initiate the project, conduct the tendering process and evaluation of tenderers, and will grant the sponsor
the concession, and where necessary, the off take agreement.
Private Owner (Private Client)
A private owner can be a substitute party for the government agency. The owners past reliability, faith
and believe in the trade/market is compulsory. The track record and nature of the services offered by the
owner are the important aspects.
Sponsor
The sponsor is the party, usually a consortium of interested groups (typically including a construction
group, an operator, a financing institution and other various groups) that, in response to the invitation by
the Government Department, prepares the proposal to construct, operate and finance the particular
project. The sponsor may take the form of a company, a partnership, a limited partnership, a unit trust or
an unincorporated joint venture.
Construction Contractor
The construction company may also be one of the sponsors. It will take construction and completion
risks, that is, the risk of completing the project on time, with in budget and to specifications.
Operation and Maintenance Contractor
The operator will be expected to sign a long-term contract with a sponsor for the operation and
maintenance of the facility. Again the operator may also inject equity into the project.
Financers
In the large project there is likely to be a syndicate of banks providing the debt funds to the sponsor. The
banks will require a first security over the infrastructure created. The same or different banks will often
provide a stand-by loan facility for any cost overruns not covered by the construction contract.
Other Parties
Other parties such as insurers, equipment suppliers and engineering and design consultants will also be
involved. Most of the parties too will involve their lawyers and financial and tax advisors.
To address the complexity of BOT projects, innovative project management theories and techniques are
needed like interface management (Weng et al., 2005). Innovation in project management theories and
89
techniques in construction may be specific but not generalized depending on country-to-country and
project-to-project. However, a simple start up model can be categorized as a baseline to start the
provoking of thought. Based on the international success factors of BOT, a model has been formulated as
shown in Figure 1.
Figure 1: BOT Projects Model

This model can be treated as a BOT introduction guideline. The model is also developed based on the fact
to introduce the flow line concept of BOT to various national organizations. Number of engineering
professionals and management individuals working in various organizations are still unaware with BOT.
This model is going to simplify the approach and methodology of BOT in their minds.
2. Objective of Research and Methodology

The build operate and transfer (BOT) approach to develop infrastructure projects and facilities of public
interest such as bridges, airports, power plants, detention facilities, parking facilities etc is an alternative
for a country that lacks the appropriate funds to undertake on its own projects of this scale (Yiannis and
Demos, 2005). The research and development on BOT has proved it as an accepted, recognized and
successful module of infrastructure development. But in Pakistan, the economy is still unable to have any
potential benefit from it. Pakistan even being the member of World Trade Organization (WTO) unlike
China is unable to utilize the available multinational financing opportunities for BOT projects in
infrastructure development (Ammad, 2008).
Thus, the main objective of the research is to review the trend of BOT projects in Pakistan in context of
assessing the implementation and application shortcomings. The methodology includes the review of
international literature, interviews with professionals (bankers, developers, contractors, private owners
and government agencies) involved in BOT projects, journal papers and conference articles on BOT
projects, which are reflecting up to date status, statistics, success, challenges, research and development
on BOT projects. Based on the findings, the BOT projects trend in Pakistan is discussed and a model for
the BOT process is developed.
90
3. Trend of BOT Projects in Pakistan

Globally research and implementation on BOT project delivery system has directed various effective
routes to utilize private sector funds, technology innovation, management skills and operational
efficiencies for the development of public infrastructure. However, many countries and regions lack BOT
expertise and experience. The BOT concept is working well in Hong Kong, with particular reference to
the five tunnels on which it has been applied (Zhang and Kumaraswamy, 2001). Host governments often
provide guarantees in build operate transfer infrastructure projects to attract private sector investors
(Andreas, 2004).
The Government of Pakistan and private owners in last decade in various capacities offered BOT projects.
The induction of BOT concept and launching the projects was very healthy but the implementation,
policies and strategies were lagging. However, the BOT projects trend did not get the success in its
realization and relevance. In last five years, lot of projects has been offered time to time on BOT, but
except one or two most of the projects was not commenced. The multinational financers and ventures
operating in Pakistan (in various capacities and infrastructures development projects) did not show its
expression of interest in offered BOT projects. Thus, Pakistan is among those countries, which has never
been able to exploit the benefits and earn the advantages from the BOT projects.
3.1. BOT Projects Pre-qualification Requirements
In Pakistan, the expression of interest (EOI) invited by the government or private agencies normally
include the following details:
Profile of company and associates showing financial capability of firm/consortium, annual turn
over, financial management, technical capability, available human resources, organization,
present business activities, type of registration (memorandum of association, deeds) and
experience of similar type of project, if any.
Details of credibility/capability to undertake this type of work
Suggested marketing plans and strategy
Vision for making the project viable and its planning, construction, commissioning and managing
the project.
Brief methodology for financing proposed funding arrangements to be lined up for undertaking
the project, both local and foreign financing.
Undertaking regarding blacklisting or default litigation of the firms if any
The submission of above documents usually enables the government or private agency to short list and
pre-qualifies the interested enterprises in the project. The evaluation of EOI is normally carried out on
weightage basis rationally. The documentary evidence must be furnished before the final acceptance of
the pre-qualification.
3.2. Recent BOT Projects Offered in Pakistan
In Pakistan, development of an appropriately cost effective and robust infrastructure is a pre-requisite for
economic growth of the country. Such like development at national level warrants availability of huge
financial outlays involving use of public funds and foreign investments at the cost of other equally
important social sector works. The government often in meeting development targets has drained its
meager financial resources. It is therefore necessary adoption of an indirect approach i.e. BOT.
91
In the last decade, the Government of Pakistan (GOP) has been facing financial limitations, liabilities and
constraints in the development of various infrastructure projects. So the GOP has tried to coup up with the
situation by introducing the BOT. In order to protect its own financial liabilities and to inject the finance
from private sector and foreign countries in the infrastructure development, the GOP launched various
BOT projects in Pakistan. The list of major BOT projects offered recently is shown in Table 1.
Table 1: List of Recent BOT Projects Offered in Pakistan
Sr
1
10
11
Name of The
Project
Faisalabad
Lahore
Motorway
Project (M-3)
Liquid
Cargo
Terminal at Port
Qasim
Electromagnetic
Train Project in
Karachi
Light
Rail
Transit System
in Lahore and
Rawalpindi
Public
Swimiming
Polls/Sports
Entertainment
Areas
Lahore
Sheikhupura
Faisalabad Dual
Carriageway
Naran
Saiful
Malook Cable
Car Project
Employer Agency
Sponsor
Remarks
National
Highway Husnain Cotex Pvt. Commenced, But Later on
Authority, Government Limited.
BOT Contract converted into
of Pakistan
normal item rate contract
Communication
and Works
Department,
Government of Sindh.
City
District Government
Not commenced
Government of Punjab
Not commenced
Parks and Horticulture Authority, Government

of Punjab
Not commenced
Not commenced
Communication
and Frontier
Works Commenced and Completed.
Works
Department, Organization
Government of Punjab (FWO)
Communication
and Works
Department,
Government of NWFP.
Grain Terminal Communication

and
at Port Qasim
Works
Department,
Government of Sindh.
Construction of Pakistan
Railway,
Five Star Hotel Government
of
at Lahore.
Pakistan.
Aviation
Construction of Civil
Authority, Government
Islamabad
of Pakistan
International
Airport,
Islamabad
Neelum Jhelum Water and Power
Hydal
Power Development
Project
of Pakistan.
Not commenced
Not commenced
Not commenced
Not commenced
Frontier
Works Stage of Pre-qualification
Organization
(FWO)
92
12
13
14
Lakpass Tunnel
Project
Near
Quetta
Lahore
Bus
Terminal
at
Thokar
Niaz
Baig
Lahore
Kasur
Dual
Carriageway
National
Highway
of Pakistan.
City
District
government of Punjab
Frontier
Works Commenced
and
Organization
Completion.
(FWO)
Not commenced
Communication
and Works
Department,
Government of Punjab
Near
Not commenced
The most of the projects mentioned above seemed to be potentially strong in business development
perspective. The employers of the projects are also the federal or provincial governments. But the success
or the processing of the projects is very less. Only very few projects has been commenced and completed
or under the completion. It is very interesting to observe that the lead sponsor, construction and
maintenance contractor in all of above commenced projects is Frontier Works Organization (FWO). FWO
has also been involved as sponsor and contractor in the Neelum Jhelum Hydal Power Project prequalification.
3.3. Challenges Faced During the BOT Projects

The key to a successful implementation of a BOT infrastructure project is in depth analysis of all aspects
related to economic, environmental, social, political, legal, and financial feasibility of the project. For
these reasons, the analysis of project feasibility decision needs a technique to include the qualitative
decision factors that have the strong impact on the project (Ahmed et al., 2007). In Pakistan, BOT
contracts may be complicated due to its long-term contractual obligations and multiparty involvement,
moreover legal, economical and technical framework need to be developed on large scale for successful
execution of the project (Mubin and Ghafar, 2007).
There are numerous awkward natures of constraints and risks faced by the various stakeholders during the
BOT projects execution in Pakistan. In most of the projects stated above the constraints and risks become
that much significant that the projects did not proceed after the feasibility analysis. Project planning in
build operate and transfer project is a complicated decision making problem because the model has a
complex financial and organizational structure, which is influenced also by the socio economic
environment in the country (Irem and Talat, 2000). In the recent decade, there is an increasing trend of
private sector involvement in infrastructure development through the BOT approach, which brings about
a redistribution of risks among the project participants (Lam, 1999). Change in law, corruption, delay in
approval, expropriation, reliability and credit worthiness of entities are the major political and force
majeure risks faced by Chinese construction industry (Wang, 2000). Different designs reflect different
risk control strategies for completion time overruns (Ye and Tiong, 2003).
In BOT projects, the sponsors of the project are usually a consortium or a joint venture of construction,
engineering, and venture capital firms. The capital for the project investment may come from commercial
banks or insurance companies. Three of the major challenges facing a prospective sponsor are estimation
of project costs, projection of revenues during the concession period, and the selection of an appropriate
financing strategy (John and Isr, 2003).
The financial commitments would take the form of irrevocable commitment letters such as letter of credit
and are an agreement that equity and debit finance have been committed or will be available in the
amounts required to assure the completion of the project (Tiong, 1997). It is essential that government
support be available, that the risks be properly allocated, and that each party be given meaningful
contractual incentives and guarantees (Tiong, 1990).
93
Based on the experience of commenced projects of BOT in Pakistan, a survey has been conducted among
the leading stakeholders to list down the major challenges faced during BOT projects in Pakistan. Three
top management representatives of the major owner, sponsor, contractor, maintenance contractor and
financers have been contacted. The results of the survey are based on the personal interviewing with the
management of BOT project stakeholders. As the commenced BOT projects in Pakistan are related to
communication and highways, thus the findings of challenges faced can be attributed more towards the
highway projects. Additionally, these challenges can be treated as a guideline for the other kind of
infrastructure projects.
The major constraints faced by the stakeholders include political, economical, ecological, technological,
social, environmental and ecological. In the last twenty years, the political and economical scenario of
Pakistan has been under notable transition. The political and economic instability remained as a serious
hurdle in the formulation of various infrastructure development reforms like BOT. Figure 2 and 3
represent the major political and economical constraints faced by the stakeholders in Pakistan in BOT
projects with respect to the relative impact factor based on the attributed weights obtained from the
analysis of survey and direct interviewing communication response. The attribution critical in the figures
has been referring the consideration level of the constraints before the start of the project. The attribution
effective in the figures has been referring the actual level of the constraint during the cause of the project.
Kidnapping
Legal Aspects
Law and Order Enforcement
Suicide Attack s
Terrorism
Foreign Policies
Tension at Borders
Political Instability
0
2
C ri ti cal
Effe cti ve
Figure 2: Major Political Constraints in BOT Projects in Pakistan
94
Economic Equivalance
Alternate Energy Sources
High Duties and Taxes
Local Companies Share in JV's
Debit Capital
High Interest Rates
In Balance Supply and Demand
Inflation
High Oil Prices
Devaluation of Pakistani Rupee
0
Critical
Effectiveness
Figure 3: Major Economical Constraints in BOT Projects in Pakistan
The rating system used in above figures is narrated in Table 2.

Table 2: Rating System for Criticality of Political and Economical Constraints
Rating Score
0
1
2
3
4
5
Criticality
Not Applicable
Not Critical
Fairly Critical
Critical
Very Critical
Extremely Critical
Effectiveness
Not Applicable
Not Effective
Fairly Effective
Effective
Very Effective
Extremely Effective
It has been observed based on the findings of the analysis that for political constraints the minimum rating
score is in the range of fairly critical and effective. Additionally, in case of economical constraints the
minimum level of rating score is in the range of critical and effective.
4. The Benefits Earned from BOT Projects

Concerted efforts from government and private sectors as well as appropriate political, legal and
economic environments are essential to earn the benefits from BOT projects (Kumarasawamy and Zhang,
2001). Considering the large investments, the technical expertise, and the length of commitment that are
involved, BOT projects present a unique opportunity for the transfer of technology to the developing
countries (Antonio and Miroslaw, 2007).
In Pakistan only two projects has been commenced on the BOT basis. So the expected benefits can be
stated as below.
Technology Transfer
Concession Period
Incentive Scheme
Market and Contract Led Revenue
95
Commercial Freedom
Foreign Exchange
Projects Identification
Entrepreneurship and Leadership
This is only a slight glimpse of a large number of expected benefits associated with BOT projects.
5. Conclusions and Recommendations

This paper has been attempted to present the review of the most relevant literature related to the BOT
projects around the globe with the current trend and status in Pakistan. Much of the research remains to be
done on the link between BOT projects and its effective implementation in Pakistan. Several member (in
the capacity of construction stakeholders) from various government, private and semi government
institutes and organizations has been consulted in the preparation of this paper. It is expected that further
research with in Pakistan and abroad could reveal more prospective information on the existing
mechanisms of BOT projects in Pakistan and the means for improving the implementation and success for
the benefits of stakeholders and general public. Currently Pakistan has lot of potential in launching of
BOT projects especially in the power, housing, infrastructure, communication and irrigation sectors. The
following recommendations can be extracted from the research:
The concept of BOT in Pakistan is still new, so it should be introduced to the construction
industry and organizations in Pakistan through presentations, lectures, seminars etc.
The success factors of BOT projects based on the international case studies and research should
be brought in the information of Employers launching BOT projects.
The pre-qualification mechanism of BOT projects in Pakistan is required to be amended and
research is required to be carried out that why the substantially strong projects offered are unable
to get the attention.
The stakeholders of commenced BOT projects should be referred to others for the sharing of the
success.
The guarantees, bonds, surety consideration are required to be relieved in compliance with
running international criteria to attract more foreign financers.
The benefits earned from the BOT projects should be highlighted in media to gain the attention
of local and foreign investors.
The political and economical constraints are very vital in planning as well as in construction of
BOT projects.
The devaluation of Pakistani rupee, alternate energy sources, high banking interest rates and high
oil prices in Pakistan are the major economical constraints, which provokes thoughts in the
stakeholders policies to participate effectively in the BOT projects.
The suicide attacks and political instability in recent years are the major political constraints
encountered in the decision making of the organizational management structures to finance or
launch its projects in Pakistan.
The way out to mitigate the challenges and risks encountered in BOT projects should be
established.
6. References
Ahmed, F.M.S., Miroslaw, J.S., and Ismail, B. (2007). BOT viability models for large scale
infrastructure projects. Journal of Construction Engineering and Management, pp 50-63, ASCE.
96
Ammad, H.K., (2008). The impact of WTO on the construction industry of Pakistan. The Pakistan
Engineer, Journal of Institution of Engineers Pakistan, Volume P, Number 3, pp.
Andreas, W. (2004). Valuing guarantees in a BOT infrastructure project. Journal of Engineering
Construction and Architectural Management, Volume 11, No. 6, pp. 395-403, Emerald Group
Publishing Limited.
Antonio, L., and Miroslaw, J.S. (2007). Technology transfer in BOT projects. Proceedings of ASCE
Construction Research Congress: The Global Construction Community, May 6-8, 2007, Grand
Bahama Island.
Augenblick, M., and Custer, B.S. (1990). The build operate and transfer approach to infrastructure
projects in developing countries, Policy research and external affairs working papers, Urban
Development Department, The World Bank.
Irem, D.O., and Talat M.B. (2000). A decision support framework for project sponsors in the planning
stage of build-operate-transfer (BOT) projects. Journal of Construction Management and
Economics, Volume 18, pp 343-353, Taylor & Francis Limited.
John, E.S., and Isr, W. (2003). Alternate financing strategies for build operate transfer projects. Journal
of Construction Engineering and Management,pp 205-213, ASCE.
Kumaraswamy, M.M., and Zhang, X.Q. (2001). Governmental role in BOT led infrastructure
development. International Journal of Project Management, pp 195-205, Elsevier Science Limited
and IMPA.
Lam, P.T.I. (1999). A sectoral review of risks associated with major infrastructure projects.
International Journal of Project Management, Volume 17, No. 2, pp 77-87, Elsevier Science Limited
and IMPA.
Mubin, S., and Ghafar, A. (2007). BOT contracts applicability in Pakistan for infrastructure
development. Proceedings of International Conference Management
Tiong, R.L.K., and Alum, J. (1997). Financial commitments for BOT projects. International Journal of
Project Management, Volume 15, No. 2, pp 73-78, Elsevier Science Limited and IMPA.
Tiong, R.L.K., and Alum, J. (1997). Evaluation of proposals for BOT projects. International Journal of
Project Management, Volume 15, No. 2, pp 67-72, Elsevier Science Limited and IMPA.
Tiong, R.L.K. (1996). CSFs in competitive tendering and negotiation model for BOT projects. Journal
of Construction Engineering and Management, pp 205-211, ASCE.
Tiong, R.L.K. (1990) Comparative study of BOT projects. Journal of Management in Engineering,
Volume 6, No. 1, pp 107-122, ASCE.
Ye, S. and Tiong, R.L.K. (2003). The effect of concession period design on completion risk management
of BOT projects. Journal of Construction Management and Economics, Volume 21, pp 471-482,
Taylor & Francis Limited.
Wang, S.Q. et al. (2000). Evaluation and management of political risks in Chinas BOT projects.
Journal of Construction Engineering and Management, pp 242-250, ASCE.
Weng, T.C. et al (2005). Interface management for Chinas build operate transfer projects. Journal of
Construction Engineering and Management, pp 645-655, ASCE.
Yiannis, X., and Demos, A. (2005). The financial risks in build operate and transfer projects. Journal of
Construction Management and Economics, Volume 23, pp 431-441, Taylor & Francis Group
Limited.
Zhang, X.Q., and Kumaraswamy, M.M. (2001). Hong Kong experience in managing BOT projects.
Journal of Construction Engineering and Management, pp 154-162, ASCE.
97

Resource-Constrained Multi-Project Scheduling with Resource Moving Time

for Construction Projects in Vietnam
Hanh Quang Le
Research Assistant, Insitute of Numerical methods and Informatic in Civil Engineering-TU Darmstadt,
Darmstadt, Germany
hanh@iib.tu-darmstadt.de
Abstract
In the construction project scheduling process, the existing heuristic methods assumed the resource
moving time between activities/projects to be negligible. When multiple projects are deployed in different
places and far from each other, this assumption has many shortcomings for properly modeling the realworld constraints. Specially with respect to the Vietnams situation, with a transportation system is still in
a backward and low technical standards. Allocating a resource from one project to another is greatly
constrained, and it always involves extra costs and time loss. The multi-project duration will be
significantly impacted by the resource moving time. This paper proposes a new algorithm named
Resource-Constrained Multi-Project Scheduling with Resource Moving Time (RCMPS-RMT) that aims
to solve the problem of minimizing construction multi-project duration with the moving time and limited
available conditions of renewable resources (labor, machines and equipment). The essence of RCMPSRMT is based on the improvement of the existing heuristic methodpriority rules. In this paper, the
computational experiments are also presented to demonstrate that the resource moving time must be
included in multi-project scheduling process.
Keywords
Resource Moving Time, Resource Constraints, Multi-Project Scheduling
1. Introduction
Construction contractors usually deploy simultaneously multiple projects under limited resources (e.g.
labors and machines) condition. To perform multiple projects, a construction contractor can access two
sources of resources: internal resources, which are under the contractor ownership and external resources
which can be obtained from the open market. The common objective is to create the most efficient
schedule possible to maximize the usage of the contractors internal resources and just use the market to
balance the contractors operation (Shi and Halpin, 2003). Because the project duration is one of the main
factors of competiveness on the difficult construction market, the most important part of a construction
project scheduling is the assignment of resources and the harmonization of their work to minimize the
project duration. These problems can reputedly be solved as the well-known problem in the operation
research: Resource-Constrained Multi-Project Scheduling (RCMPS) (Kurtulus and Davis, 1982).
The scheduling of multiple projects under resource constraints demands extreme difficult computation. In
addition to the precedence constraints (technical relationship) between activities within individual
projects, there are precedence constraints of the activities among multiple projects due to the sharing of
the scarce resources sharing. Therefore, the RCMPS is a hard nonlinear programming problem. There are
98
two fundamental approaches to the resource-constrained project scheduling process: optimization models
and heuristics. Optimization approaches seek the best solutions; however, they are far more limited in
resolving the large and confusing projects and often require unreasonable computation time (Sprecher et
al. 1998). Hence, heuristics are often applied to generate near-optimal schedules for large and highly
constrained projects.
In traditional heuristic methods, most researches have mainly assumed that the resource moving time
(RMT) from one activity/project to another is negligible (Hans et al. 2007). When multiple projects are
deployed in different places and far from each other, this assumption has many shortcomings for properly
modeling the real-world constraints. Specifically in the Vietnam situation with an inconvenient
transportation system, the travel speeds are low and there are unforeseen delays due to traffic density and
quality limitations. Allocating a resource from one project to another is greatly constrained, and it always
involves extra costs and time losses. Hence, the resource moving time noticeably influences the multiproject duration in the multi-project scheduling processes.
The main drawback of existing scheduling methods is the fact that they fail to solve complex practical
problems effectively and do not allow for real world conditions and construction constraints. This paper
presents a new algorithm named Resource-Constrained Multi-Project Scheduling with Resource Moving
Time (RCMPS-RMT) that aims to solve the problem of minimizing construction multi-project duration
with the moving time and limited available conditions of renewable resources (labor, machines and
equipment). The essence of RCMPS-RMT is based on the improvement of the existing heuristic method
priority rules.
2. Improvement of the Heuristic-Priority Rules method

2.1. Heuristic-priority rules method
Heuristics based on priority rule have been one of the most important solution techniques for resourceconstrained multi-project scheduling with renewable resources. Since they are not only easy to understand
and to implement but also fast in terms of computational effort, and obtain acceptable results even for
large sized projects. Furthermore they are often contained in commercial software packages for project
scheduling. The heuristic-priority rules method is made up of two components, a schedule generation
scheme and a priority rule. In the scheduling scheme, two different schemes can be distinguished: serial
scheme and parallel scheme (Kolisch 1996).
2.1.1. Schedule generation schemes
The serial schedule generation is an activity oriented scheme and consists of J stages, where J is the
number of activities to be scheduled. In each stage one activity is selected and scheduled at the earliest
precedence and resource feasible completion time. There are two disjoint activity sets associated with
each stage: the set of activities already scheduled and the set of activities that are eligible for scheduling,
that is, decision activities all of whose predecessors are in the set of activities already scheduled. In each
stage, an activity is selected from the set of decision activities in the order established by a priority rule
and scheduled as soon as possible, taking into account the precedence relationships of the activities and
the availability of the resources. The activity selected is removed from the decision set and added to the
scheduled set. Additionally, the decision set is updated with the immediate successors of the activity just
scheduled whose predecessors have all been scheduled. The serial scheme finishes when all activities are
in the scheduled set.
The parallel schedule generation scheme is a time oriented scheme and consists of N stages. In each
stage a set of activities (which might be empty) is scheduled. Each stage n is associated with a schedule
time tn where tn > tn-1, and three disjoint sets of activities: decision, complete and active sets. Due to the
99
schedule time tn, the set of scheduled activities is divided into subsets: scheduled activities which are
completed up to the schedule time are in the complete set and those which are not completed are in the
active set. Additionally, the decision set that in contrast with the serial method contains all yet
unscheduled activities which are available for scheduling with respect to precedence and resource
constraints. The partial schedule associated with iteration is composed of the complete and the in-process
sets. The schedule time in a stage is the earliest finish time of the activities scheduled during all earlier
stages. Each stage is made up of two steps:
Step 1: The new schedule time is determined and activities with a finish time equal to the new schedule
time are removed from the in-process set and put into the complete set. This may place a number of
activities into the eligible set.
Step 2: One activity from the eligible set is selected with a priority rule and scheduled to start at the
current schedule time taking into account the availability of the resources. Afterwards, this activity is
removed from the eligible set and put into the in-process set. Step 2 is repeated until the eligible set is
empty, i.e., activities were scheduled or are no longer available for scheduling with respect to resource
constraints. The parallel scheme finishes when all activities are in the complete or in-process sets.
Table 1: Most widely used priority rules in heuristic methods
Priority
Rule
(Primary)
SOF
Commentary
Formula
Tie-breaker
(Secondary)
Shortest Operation First
FCFS
MINSLK
Minimum Slack First
SASP
Shortest Activity Shortest

Project
Longest Activity Longest Project
Maximum Operation First
Maximum Slack First
Minimum Total Work Content
Maximum Total Work Content
First Come First Served
Mindij, where dij is the duration of the ith

activity in jth project
MinSLKij, where SLKij = LSTij Max(ESTij)
and terms are defined in standard CPM
MinFij, where Fij = CPi + dij where CPij is the
duration of the critical path of the project jth.
MaxFij, where Fij is determined in SASP
Maxdij, dij is defined in SOF
MaxSLKij, SLKij is defined in MINSLK
MinGij
MaxGij, Gij is defined in MINTWK
MinESij, where ESij is early start time of the
ith activity from the jth project.
LALP
MOF
MAXSLK
MINTWK
MAXTWK
FCFS
FCFS
FCFS
GRES
GRES
GRES
FCFS
FCFS
Random
GRES = Max (
ijk ) ,
rijk denotes the resource k is required by activity ith of project jth.
k =1
G ij =
d r
ij ijk
k =1 j ASi
+ d ij
r
k =1
ijk ; K is the number of renewable resource types k = 1, , K; dij is the
duration of the ith activity in the jth project; rijk is the resource k required by activity i of project j; ASi is the set of
the activities already scheduled of project ith.
2.1.2. Priority rules

Priority rule sorts the set of decision activities in the scheduling process. The sort of activities obtained
with priority rules depends on the approach used and often obtains different schedules. Priority rules can
be based on the basis of the information: activity-based, project-based, and resource-based. Activitybased rules assign high priority to an activity based on a parameter or characteristic of the activity itself,
for instance activitys duration or float. Project-based rules assign priorities to activities based on the
project they belong to, or characteristics of that project, such as the shortest activity from the shortest
100
project (SASP) rule. Resource-based rules assign priority in terms of resource demands in each project or
activity. The priority is usually assigned to activitys resource demand which lead to potential bottleneck
activities. Table 1 present the most widely used multi-project heuristic rules available in the literature.
The primary priority sort (priority rule) pertains to all activities; the secondary priority (tie-breaker) sort
pertains to activities where two activities have the same primary sort.
2.2. Improvement of the heuristic-priority rules method
2.2.1 Resource moving time
In the resource-constrained project scheduling process, if there are enough required resources to schedule
an activity, the activity is scheduled at its earliest possible time according to its technical relations with
precedence activities. However, if there are not enough required resources for scheduling, this activity
should be delayed until it acquires enough available resources. After it is delayed day by day, all or some
amount of resources that caused the delay of the activity should have been released from some other
activities completion. At this time, the required resources are available throughout its whole duration.
Like this, one or more resource links are created between scheduling activity and completed activities and
the commenced date of the scheduling activity will be the delay time plus the transfer time to move the
resource from the finished activity to the scheduling activity. Generally, there are three models of the
resource transfer among activities: a) the resources are transferred from many activities to one activity; b)
the resources are transferred from one activity to many activities; c) the resources are transferred from one
activity to one activity as presented in Figure 1. The improvement of the heuristic-priority rules method to
take the resource moving time into the scheduling process is presented in Figure 2 (the rectangle box with
dot line).
R_u
R_u
A.1
A.1
A.2
A.n
R_u
A.4
R_u
a) Many to One
A.4
Note: R_u: Resource unit

Activity Name
R_u
A.2
R_u
A.n
b) One to Many
A.1
R_u
A.2
c) One to One
Figure 1: Resource Transfer Models

In the multi-project scheduling process, at a point of time there may be many resource types which will be
released from different finished activities. Thus, there is a normal logicality that the scheduling activities
will first take the resources from the nearest activities. Then, there are not enough required resources; it
will continuously consider the resources from further activities. To take this logical analysis to the
scheduling process, this paper proposes a new priority rule: Minimum Resource Moving Time
(MinRMT), which ranks the finished activities follow an order to support the released resources to the
scheduling activity. This priority rule is referred to the well-known algorithm Dijkstras algorithm
(Dijkstra 1959).
2.2.2. Resource flow network
In the contractors construction operation, the resource allocation plan (resource flow network) is one of
the basements of the internal management system. To achieve effective performance and consistent
working cooperation in the project execution, the resource flow network (RFN) will be announced to
every responsible agent such as site managers, workers department managers and machinery pool
managers etc. Therefore a RFN is necessary to identify and to depict the amount of resources that are
transported from the end of one activity to the beginning of another activity, from this project to the other
projects.
101
The resource flow network is generated based on the resource links that are created among activities in
the multi-project scheduling process (see Fig.2 and Fig. 5). This network therefore will be consistently
associated with the multi-project scheduling and the managers can easily assess the effects of the resource
contention on various projects and see the interdependencies among projects and the causal relationships
influencing various projects. Additionally, this network is also extremely useful in the case that some
special activities in emergency situations need to immediately concentrate the resources to accomplish
before the required date. Based on the resource information from the resource flow network, the project
managers can make the resolving decisions more quickly. Besides, in practice the construction contractor
has also to face with a continuing demand to execute new bided projects. Therefore, several times during
the course of a typical business day, the central manager may need to re-control the resource availability
to bid new projects. This problem also needs the information from the resource flow network.
b) The Improved Parallel heuristic algorithm
a) The Improved Serial heuristic algorithm
Figure 2: Improvement of the Generation Scheduling Scheme

2.3. Numerical illustration
To demonstrate the proposed scheduling procedure, an example network consisting of two small projects
with a total of seven actual activities (activity that contains duration and required resources) is used to
depict the RCMPS-RMT processes. Figure 3 presents the detailed data of the example through an activity
on node network. The time to move the resources from project 1 to project 2 are assumed to be one day.
The maximum available resource amount is presented in Table 2. The available resource amounts are
enough to schedule individual projects according to the unconstrained resource conditions. The resource
conflictions among projects occur when the individual projects are scheduled simultaneously as depicted
102
in Figure 4. As we can see in the Figure 4(a) the overload of resources RA, RB and RC concentrate on the
beginning phase of the two-project network. To solve these problems, RCMPS-RMT is applied to
minimize project make-spans under the resource constrained and resource transfer time.
Table 2. The available resource amount
Resource Name
Availability
R
A
3
RB
2
R
C
2
Figure 3: Example of two-project network (Activity-On-Node)

To schedule multi-project in this case, the heuristic parallel method and the priority rule SOF (Shortest
Operation First) are applied. The scheduling process and scheduling results are presented in Table 3 and
Table 4 respectively. The resources utilization profile is represented in Figure 4(b). As depicted in Figure
4(b), all of the required resources after scheduling process are within the available amount. The resource
transfer time is also included into the scheduling process. For example as shown in the Table 3, activity
P2-2 has a resource predecessor - activity P1-1 and the commenced date of activity P2-2 is delayed one
day since the movement of the resources from activity P1-5 to P2-2. Based on the resource predecessors
in Table 4, a resource flow network is created as in Figure 5.
Table 3: Resource-Constrained Multi-Project scheduling process
Scheduling time step Activity R-P
P1-2
T=0
P2-1
P1-1
P1-2
T=4
P2-3
P1-2; P2-1
T=5
P1-3
P1-1
T= 9
P2-2
P1-1; P2-3
T = 11
T = 14
P2-4
P2-2
T = 16
D
4
5
5
5
5
4
4
Start
0
0
4
6
9
12
16
Finish
4
5
9
11
14
16
20
RA
2
1
2
1
1
2
2
Table 4: The scheduling result according to RCMPS-RMT

P
P1
P2
Activity D
1-1
5
1-2
4
S
4
0
1-3
2-1
2-2
5
4
0
1
F
9
4
1
4
5
1
103
A-P
-
R- P
P1-2
-
P1-1; P1-2
P1-1
P2-1
P1-1; P2-
RB
1
1
0
2
0
1
0
RC
1
1
1
1
1
1
1
2
2-3
2-4
1
6
6
1
1
2
0
P2-1
P2-2; P2-3
3
P1-2; P21
P2-2
Resource RC
Resource RB
Resource RA
Whereas: A-P: Activity Predecessor; R-P: Resource-Predecessor; D: Activity Duration.
a) The required resources confliction
b) The resources utilization profiles after scheduling
Figure 4: Resource conflict when scheduling simultaneously
Figure 5: Resource Flow Network
4. Computational Experiments
The main purposes of this section are to evaluate the impact of resource moving time when it is included
into the multi-project scheduling process and the effect of the new secondary priority rule Minimum
Resources Moving Time (MinRMT). Besides, the improved heuristic-priority rules method is also
verified. This paper considers three cases as follows: (1) considering the multi-project scheduling without
104
the resource moving time (RMT). (2) Considering the multi-project scheduling with the RMT, but not
applying the priority rules-MinRMT. (3) Considering the multi-project scheduling with the RMT and
applying the MinRMT.
4.1. Multi-project sample

In the literature, the author could not find any standard example for the resource-constrained multi-project
scheduling problem. Hence, this paper refers to single project examples in PSPLIB (Kolish and Sprecher
1996), and then generating the multi-project examples based on the following rules:
* This paper constructs four multi-project scheduling examples corresponding with four types: J30 set,
J60 set, J90 set and J120 set in PSPLIB. Each multi-project example contains 5 projects that are chosen at
random of different single-project in each set type.
* Activities are subject to finish-start precedence constraints with zero minimum time lags. Each activity
has a single execution mode with fixed integer duration as the examples in the PSPLIB. Activities are
only scheduled when all required resource types are available.
* Resource capacity is calculated by adding the resource capacities of each single-project in the PSPLIB.
4.2. Resource Moving Time
In order to obtain resource moving time among projects that closely cements with real construction
projects in Vietnam. A survey was designed that carried out in one of the largest State Owned
Construction Enterprise (ThangLong Construction Corp.) of Vietnam. The investigation papers were sent
to the project managers as well as the schedulers of all companies in this corporation who have from 5 to
over 20 experience years in construction industry. 40 investigation papers were sent out with 40 papers
returned the response rate is 100%. According to the investigated results, the resource moving time
among projects often falls into a range between one day and five days. Therefore, this paper applies the
resource moving time among projects which are determined as random in a range of 1 day to 5 days.
4.3. Implementation method
According to the researches of Lova and Tormos (2001) and Kolish (1996), the parallel schedule
generation scheme (P-SGS) often outperforms compared to the serial schedule generation scheme.
Therefore, to safe the calculation time, this paper only applies the P-SGS to generate the feasible multiproject scheduling. Besides, to clarify the role of resource moving time in the scheduling process that is
based on the priority rules-heuristic methods; this paper has investigated all nine most widely used
priority rules as presented in Table 1. In order to verify the achieved results, this paper will use two
criteria measurements corresponding to the single project approach and multi-project approach as
presented in Lova and Tormos (2001):
The Mean-Project-Delay (Eq. 2) will be applied to estimate the increase of individual project durations
caused by the resource moving time:
M
DI
Mean-Project-Delay =
i =1
(2)
M
Whereas: M is the number of projects in the multi-project system. DIi is the different time between the resourceconstrained project duration with and without resource moving time.
105
The Multi-Project-Delay (Eq. 3) will be applied to measure the increase of total multi-project duration
results by the resource moving time:
Max (DI i ) Max (DR i )
(3)
Max ( DR i )
Whereas: DRi is the individual project duration under resource constraint condition as traditional calculation.
Multi-Project-Delay =
For simple calculation, this paper only focuses on the time that is used to move resources from a project
to other projects. The time that is used to transfer the resources from the global resource pool (head
office) to individual projects and within a project are assumed to take no time. The proposed heuristicpriority rules method has been coded using the Microsoft C# programming language and Microsoft SQL
Server 2005.
4.4. Results of the computational experience
In order to confirm the correct performance of the proposed RCMPS-RMT process, the authors first
applied it to schedule all four multi-project samples with unconstrained resource conditions. The achieved
results are identical with the original project due dates that are supported in the PSPLIB. That is to say the
proposed RCMPS-RMT is confident to scheduling the projects including resources moving time.
Mean_Project_Delay by RMT
(%)
With Mean-Project-Delay criterion, the average project delays caused by the resource moving time
(RMT) correspond to four multi-project samples (J120, J90, J60 and J30) are presented in Figure 12. All
the heuristic-priority rules generated significant different results between the multi-project scheduling
with and without RMT. The resource moving time has contributed to 29.3% average delay increase of
individual projects.
J120
J60
J90
J30
70
63,4
60
40
55,8
51,7
50
32,8
30
25,4
30,2
20
10,8
8,5
F
SO
29,9
38,6
38
31,6
41,6
34,9
28,8
8,2
9,4
8,9
7,8
7,9
7,0
K
WK
LK
TW
LK FCFS
xS
nS
nT
LP Ma x
Mi
Mi
Ma
LA
Priority Rules
SP
SA
F
MO
28,8
40,7
34,6
32,1 32,1
33
28,9
21,7
6,4
10
42
42,9
42,8 38,8
36,4
33,9
Figure 12. Resource moving time in Mean-project delays

Multi_Project_Delay by RMT
(%)
J120
J60
J90
70
54,6
60
50
40
30
31,6
51,5
50
41,8
41,8
39,4
36,4
30,0
20,0
23,7
35,1
31,0
31,8
27,3
18,4
20
10
J30
60,6
23,7
8,5
3,4
6
0
F
SO
F
MO
SP
SA
6,8
xT
LP
Ma
LA
106
6,8
4,3
45,4
34,5
30,7
30,0
25,5
4,3
3,4
29,8
29,1
25,8
7,7
WK
LK
LK CFS
xS
nT
nS
F
Mi
Ma
Mi
Priority Rules
Figure 13. Resource moving time in Multi-project delay (%)

With Multi-Project-Delay criterion, the achieved results are similar. The multi-project duration
significantly increased to 26.60% average when the RMT is included into the multi-project scheduling
process. The additional average multi-project delays when considering the RMT are presented in Figure
13. These initial achieved results prove that the resource moving time among projects can not be ignored
when multiple projects are deployed far from each others.
Mean_Project_Delay by RMT
(%)
Figure 14 presents the comparison of the multi-project scheduling between the cases which apply and do
not apply the proposed secondary priority rule MinRMT. In the case that the MinRMT is applied, the total
project delays are reduced to 7.34 % average compared with the cases without MinRMT. This result
shows the effective performance of MinRMT in the project scheduling process.
Without MinRMT
with MinRMT
40
35
31,725
34,1
32,875
30,475
24,825
25
20
29,025
27,275
30
25,175
24,45
24,625
20,4
21,425
28,55
19,525
16,55
17,475
15
27,375
20,975
10
5
0
F
SO
F
MO
SP
SA
T
LP Ma x
LA
WK
nT
Mi
WK
xS
Ma
LK
S
LK FCF
nS
Mi
Priority Rules
Figure 14. The reducing time when applying MinRMT (%)
5. Conclusion and Further Research

This paper incorporated the resource moving time among projects to the resource-constrained multiproject scheduling, which has not been considered in previous research. Due to the intractability of the
RCMPS, heuristic rules are the only viable solution procedures for scheduling large scale construction
projects. This paper has proposed a new algorithm - RCMPS-RMT - which based on the improvement of
the heuristic-priority rules method to optimize multi-project duration under resource constraints and
resource moving time conditions. A computational experiment showed that the resource moving time
among projects can not be ignored in the multi-project scheduling process. Though the characteristics of
the multi-project environments in this research are mainly applied in the construction industry in
Vietnam, the developed approach is applicable to other countries, especially to the developing countries
which have a backward transport infrastructure.
Nevertheless, the assumption of heuristic methods is based on a static determined execution environment.
Construction projects are often deployed in an open execution environment, during the execution phase of
construction projects, the initial scheduling always has to be adapted to the reality state due to the
dynamic and incomplete data. Hence, project activities must be subject to considerable uncertainty, which
may lead to numerous schedule disruptions. Further research should focus on finding the solution that to
make the stability for the multi-project scheduling as well as the resource flow network against the
uncertainty.
6. References
Hans,W. Herroelen, R. Leus, G.Wullink. (2007): A hierarchical approach to multi-project planning
under uncertainty. Omega, Vol. 35, pp. 563 577.
107
Kolisch R. (1996). Serial and parallel resource-constrained project scheduling methods revisited: Theory
and computation, European Journal of Operational Research, Vol. 90(2), pp. 320-333.E.W.
Kolisch, R. and A. Sprecher (1996): PSPLIB - A project scheduling library. European Journal of
Operational Research, Vol. 96, pp. 205--216.
Kurtulus I. and Davis E.W. (1982). Multi-project scheduling: Categorization of heuristic rules
performance. Management Science, Vol 28, No 2, pp. 161- 172.
Lova A. and Tormos P. (2001). Analysis of Scheduling Schemes and Heuristic Rules Performance in
Resource-Constrained Multi-project Scheduling. Annals of Operation Research 102, pp. 263-286.
Shi, J. J. and Halpin, D. W. (2003). Enterprise Resource Planning for Construction Business
Management. Journal of Construction Engineering and Management, Vol. 129, No.2, April 1.
Sprecher, A. and Drexl, A. (1998). Multi-mode resource-constrained project scheduling by a simple,
general and powerful sequencing algorithm. European Journal of Operational Research 107 431450.
ThangLong Construction Corporation: http://www.thanglonggroup.com.vn
108

Quality Assurance and Control in the Construction of Infrastructure Services

in Developing Countries A Case Study of Pakistan
Ammad Hassan Khan
Assistant Professor, Department of Civil Engineering, University of Engineering and Technology,
Lahore, Punjab, Pakistan
ammadhk@hotmail.com
Salman Azhar
Assistant Professor,McWhorter School of Building Science, Auburn University, Auburn, Alabama, USA
Arshad Mahmood
Engineer,DESCON-CGGC(JV), Lahore,Punkab, Pakistan
Abstract
Quality is one of the critical factors in the success of construction projects. Quality of construction
projects, as well as project success, can be regarded as the fulfillment of expectations (i.e. the satisfaction)
of the project participants. The construction industry in Pakistan has been struggling with quality issues
for many years. The construction costs can be significantly reduced if the construction industry embraces
the concept of quality assurance and control that has been used with great success by service and
manufacturing industries in Pakistan. However, unlike manufacturing and service industries, where a
standard product is regularly produced, most products of the construction industry are one-offs, specially
designed for a specific purpose. Hence, attainment of a quality level is difficult both to specify and to
monitor. In this paper, a case study of the quality assurance and control during the execution of Taunsa
Barrage Emergency Rehabilitation and Modernization Project contract packages ICB-01 (Sub-weir,
downstream floor of barrage, instrumentation) has been presented. The Taunsa Barrage Project has been
considered as a success story in the construction of infrastructure development projects in developing
countries. The major part of the civil works of the Taunsa Barrage Project has been completed. This paper
is focused on the quality assurance and control using the concept of quality, quality management system
(QMS) and quality management system standards in the civil construction works.
Keywords
Quality, Quality Assurance, Quality Control, Civil Works, Infrastructure Projects
1. Introduction
Quality is a desirable characteristic by all stakeholders in construction. The quality assurance (QA) is a
set of activities whose purpose is to demonstrate that an entity meets all quality requirements (ISO, 2007).
QA activities are carried out in construction projects to inspire the confidence of stakeholders in meeting
the quality requirements. QA provide the stakeholder with adequate confidence that a structure,
component, material or system meets pre-stated quality standards and will perform satisfactory during its
entire service life. Quality control (QC) is the set of activities or techniques whose purpose is to ensure
109
that all quality requirements are being met. In order to achieve QC, processes are monitored and
performance problems are solved (ISO, 2007).
Quality Control (QC) is concerned with actual measurement, testing or supervision of manufacturers
own final product control, either by inspection of each unit or by sample testing. Originally a
manufacturing-industry concern, quality is now acknowledged to be a key issue for the construction
sector whose clients increasingly demand quality certification (Chung, 2007). The objective of
construction QA/QC is to independently assure that the activities of a specific project are being performed
in accordance with all contractual specifications, codes and standards or government regulations. The
QA/QC is verified through checks audits, inspections and witnessing. These audit services are carried out
completely independently of the individual contractors, materials suppliers, manufacturer or sub
contractor as well as the purchaser or final user. Quality Assurance (QA) provides the facility owner with
adequate confidence that a structure, component, material or system meets pre-stated quality standards
and will perform satisfactory during service. QA/QC inspections can be applied to all materials,
structures, components or systems utilized in the construction and operation of complex industrial plants
including nuclear power stations. This service is being provided both on the construction site and at the
facilities of the manufacturers involved. The choice of operations to be performed depends on the
requirements of the assignment.
Project quality management must address both the management of the project and the product of the
project. Failure to meet quality requirements in either dimension can have serious consequences for any
or all the project stakeholders (PMI, 2000). The quality conscious construction stakeholders believe that
the essence of true QA/QC is in constant inspection along with project quality teams having a deep
knowledge of the QA/QC procedures. The verifications and reminders of quality in construction
stakeholders are consistently communicated from upper management to superintendents. In order to
accomplish the expectations from subcontractors, the main contractors must inspect their work on a
regular and consistent basis, with corrections made well before punch list reviews.
A case study of the quality assurance and control during Taunsa Barrage Emergency Rehabilitation and
Modernization Project, the oldest headwork of Southern Punjab, Pakistan has been discussed in this
paper. Taunsa Barrage (as shown in Figure 1) was originally constructed in a period of five years from
1953 to 1958 over the Indus River in the Southwest part of Punjab in Kot Addu Tehsil of Muzaffargarh
District. Soon after it's commissioning, it experienced multiple engineering problems, which aggravated
with the passage of time. Taunsa Barrage facilitates the flow of irrigation water from the Indus River in
three major canals, Muzafar Garh Canal (8,300 cusecs), Dera Ghazi Khan Canal (89,000 cusecs) and
Taunsa Panjnad (T-P) Link Canal (12,000 cusecs) supplying some six million acre feet of irrigation water
to cultivated lands in districts of Muzafagarh, Rajanpur, Rahim Yar Khan and Bahawalpur during Rabi
and Kharif agricultural seasons. The purpose of this rehabilitation project is to prevent the breaking down
of the dilapidated Taunsa Barrage. The project comprises of the restoration of the barrage, floodgates and
its incidental facilities in order to guarantee a water resource to the peripheral area. Samples of surface
water as well as ground water have been collected, tested and analyzed for physical, biological and
chemical elements in order to determine its suitability for aquatic flora and fauna, irrigation purposes as
well as human consumption.
110
Figure 1: Taunsa Barrage

It is important to note that all the barrages operating in Punjab have depreciated primarily due to age. To
adequately address this issue, Government of Punjab has successfully negotiated a loan from the World
Bank towards the cost of rehabilitation and modernization of Punjab barrages (Descon News, 2005). Out
of the entire construction cost of US$150 million, the World Bank is financing US$123 million (approved
in October 2004). Also, the Government of Japan is contributing a grant aid of 5,165 million yen, for the
detailed design of floodgates and these have been executed by JICA. The client of the project is
Government of Punjab through Project Monitoring Organization (PMO) of Irrigation and Power
Department. The design and supervision consultants of the project are Punjab Barrages Consultants (A
Joint Venture of National Drainage Consultants (NDC), National Engineering Services of Pakistan
(NESPAK) and Atkins-UK). The contractors for the ICB-01 package are joint venture between Descon
Engineering Limited and China Gezhauba Water and Power Group Company (CGGC). The Contractors
for ICB-01 package is M/s CCC of China. All the major contractors and consultants of the project are ISO
certified organizations.
2. Quality Assurance and Control at Taunsa Barrage Rehabilitation and Modernization

Project
According to Hendrickson (1999), the quality requirements should be clear and verifiable, so that all
parties in the project can understand them for conformance. In Taunsa barrage project, the Engineers
Quality Assurance Program (EQAP) in compliance with ISO 9000/2000 quality management system
(QMS) has been used. The references for the quality system are as follows:
General conditions of contract part 1 (FIDIC) clause 36 & 37 about materials, plant and
workmanship.
SP-9 Approval of materials and equipment (Source approval and approval on site).
SP-10 Contractors quality assurance plan.
The on and off site QA/QC activities included in the Taunsa barrage rehabilitation and modernization
project are listed in Table 1.
Table 1: Taunsa Barrage Rehabilitation and Modernization Project Quality Management System
Sr.
Description
2
3
4
5
6
On Site QA/QC Tasks
Activity
Audit of the QA programs of the organizations involved in the construction
and/or operation of the facility, including personnel qualifications and QA
manuals.
Review of the specifications, procedures and specified standards utilized on the
construction site.
Monitoring the control of construction materials.
Performance of on-site surveillance covering non-destructive testing, visual
testing, hydrostatic and performance testing of installations and equipment.
Monitoring the storage methods and preventive maintenance system of plant
equipment before and during installation.
Organization and implementation of record retention systems and the
development of accompanying procedures that are practical, logical and meet the
requirements of regulatory agencies.
111
Sr.
Description
5
6
7
8
Off Site QA/QC Tasks
Activity
Assistance in defining the QA program which meets the full intent of all
regulatory requirements. It includes aspects of organization, personnel,
inspection plans and program, and procedures. This is summarized in QA
manual.
Review of the design, specifications, drawings and specified standards to assure
compliance to the applicable regulatory requirements.
Performance of pre-award or pre-qualification surveys including a complete
review of the suppliers QA program to meet governmental or purchasers
requirements.
Inspection, witnessing or verification of any action undertaken during
manufacture to establish the quality of a material, structure or system. These
functions are accomplished in accordance with requirements of QA standards
and government regulations.
Assistance to the purchaser in cases where corrective action is needed due to
non-conformity.
Assistance in public hearings and standard review boards.
Performance of formal audits before and during the manufacture of equipment at
the premises of the architect, constructor, manufacturer or sub-supplier.
Organization of training courses in such fields as QA, reliability, test methods,
equipment and plant systems and related quality areas such as safety, and the
qualification and certification on non-destructive testing / evaluation methods.
The details of the quality management system of Taunsa barrage rehabilitation and modernization project
are shown in Figure 2.
Figure 2: Taunsa Barrage Rehabilitation and Modernization Project Quality Management System)
112
Project Oriented PQMS Data
The project quality management system (QMS) was very comprehensively formulated. However, these
PQMS is not addressing any limits or margins of acceptability in case of onsite and offsite Q.A/Q.C tasks.
The contractor of the project especially remained in excessive pressure due to the unlimited exercise of
the PQMS implementation on the project by Client and Consultant. It has been observed in the project
that excessive strictness in the implementation of the quality sometimes originate various crucial technical
constraints, which seriously affect the scope, schedule and budget. It has also been depicted from the
project case study that in case of excessive experimentation related to the quality in the projects (when the
technical quality related background of the stakeholders is also limited), number of times the project
stakeholders were unable to get any favorable solution. The documentation controlling based on the
project PQMS comprise of following:
Changes in construction processes
Material procurement
Field testing and inspection
Final check out of facility
The process and implementation of the Q.A/Q.C audit procedures always remain difficult to apply in the
developing countries infrastructure projects. The same difficulties have been observed in the subject
project. These difficulties has been arising various questions and doubts in the direction, communication,
integration and outcomes of the quality management system of the project. Thus the development of an
integrated project oriented quality management system for the project is necessary for Client and
important from the ISO9000:2000 perspective. So in the subject project after the implementation
shortcomings of PQMS, an advance version of the PQMS in the form of project oriented quality
management system has been established. This system has provided support and removes the
discrepancies in the quality consequences. The representation procedure of the system is shown below in
Figure 3.
PQMS data for

Client
Client
Sub-Contractor
PQMS Data for

Contractor
Contractor
Consultant
Project Oriented PQMS Data
PQMS data for
Consultant
Figure 3: Project Oriented Quality Management System
113
The various project site activities related to QA/QC are shown in Figure 4.
Figure 4: Site Photographs
114
2.1 Material Sources Approval

The major scope of work in the project includes the reinforced cement concrete (RCC), steel sheet piles
and earthwork. Thus the approved sources in-context with quality management system have been required
for steel, cement, fine aggregates, coarse aggregates, slag, additives, water stops, and steel sheet piles.
The quality management standards adopted for the approval of the sources of material are listed in Table
2. The references for the quality management standards of materials have been mainly adopted from the
American Standards for the Testing of Materials (ASTM, 2007). The Pakistan standards & quality control
authority (PQSA, 2007) guidelines for the selection of material quality and sources have also been
incorporated wherever necessary in this project.
Table 2: Taunsa Barrage Rehabilitation and Modernization Project Materials with Quality
Management Standards, Tests and Approved Sources
Sr
.
Material
Steel
Reinforcement
Cement
Quality
Management
Standards
ASTM-615-81
(a)
ASTM C-204,
109,187,191,
151,BS-12,
PSS232:1983(R)
Quality Tests
Approved Sources
Yield strength, ultimate strength,

percentage elongation, bend test,
diameter, weight and x-area.
Blain air permeability, compressive
strength, normal consistency, initial &
final setting time, soundness, Le-Chatlier
expension, loss of ignition, silicon oxide,
insoluble residue, alumina, iron oxide,
calcium oxide, magnesia, sulphur
trioxide.
Sieve analysis, material passing # 200,
unit weight, specific gravity, absorption,
moisture content, soundness, Loss
Angeles Abrasion, clay lumps and friable
particles, petrography, mortar bar test for
potential alkali reactivity.
Sieve analysis, material passing # 200,
unit weight, specific gravity, absorption,
moisture content, soundness, clay lumps
and friable particles, sand equivalent,
organic impurities, light weight particles,
petrography analysis, mortar bar test fro
potential alkali reactivity.
Silicon oxide, alumina, iron oxide,
calcium oxide magnesia, sulphur trioxide, Blain air permeability, residue, 728 days slag activity index
Chemical and physical properties
Fazal (FSL, 2008) and

Pak Steel (PAK, 2008)
Coarse
Aggregates
ASTM C-136,
117,29,127,
566,81,131,
142,123,295,
227
Fine
Aggregates
ASTM C-136,
117,29,128,56
6,88,142,2419
, 40,123,295,
227
Slag
ASTM C-150
Type IV
Additives
Water
Stops
Sheet Piles
Manufacturer
Specified
Manufacturer
Chemical and physical properties
Specified
ASTM A-857, Mill test, heat analysis and tensile test.
328
115
Askari(Askari, 2008),
Mapple
Leaf(KMLG,2008),
DG Khan(DGK,2008)
and Javedan
(JCL,2008)
Sakhi- Sarwar,
Saanghar and Vehao
Khumbi and Kohar
Attock cement and

Thatta cement
Sika and Fosroc

Decora
Arcelor
The quality control has been achieved through assurance of the specifications, QC manual, monitoring,
inspection, testing, measuring testing equipments, testing, test results, non-conformance reports &
actions, QC records and internal quality audits.
2.2 Testing Frequency for the Major Materials
The testing frequency for the major construction materials is listed in Tables 3(a)-(g).
Table 3(a): Testing Frequency for Soil Materials
Sr.
Test
Designation
Testing Frequency
Grain Size Analysis/Gradation
ASTM C-136 & D-422
1 per 10,000 cft
Hydrometer
ASTM D-442
1 per 50,000 cft
Liquid Limit
ASTM D-4318
1 per 50,000 cft
Plastic Limit
ASTM D-4318
1 per 50,000 cft
Shrinkage Limit
ASTM D-427
1 per 50,000 cft
Specific Gravity
ASTM D-854
1 per 50,000 cft
Moisture Density Relationship
ASTM D-1557
1 per 50,000 cft
Moisture Density Relationship
ASTM D-698
1 per 50,000 cft
Field Density: Compacted Fill
ASTM D-1556
1 per 20,000 cft
10
Field Density: Structural Back fill
ASTM D-1556
1 per 2,000 cft
11
Field Density: Gravel Base
ASTM D-1556
1 per 5,000 cft
12
Relative Dry Density
ASTM D-4253 & 4254
1 per 5,000 cft
Table 3(b): Testing Frequency for Cement

Sr.
1
Designation
ASTM C-348 &
C-349
Initial and Final Setting Time (on ASTM C-191
Pure Past)
Autoclave Expansion
ASTM C-151
Blaines Specific Surface Area
ASTM C-204
Chemical Analysis
ASTM C-114
Test
Compressive Strength
Testing Frequency
1 per 200 tons or 1 per month if
consumption is < 200 tons
1 per 1000 tons or 1 after 3 months
if consumption is < 1000 tons
Table 3(c): Testing Frequency for Steel

Sr.
1
2
3
4
Test
Size and weight
Elongation
Bending test
Tensile strength and yield strength
Designation
ASTM A 615
ASTM A 615
ASTM A 615
ASTM A 615
116
Testing Frequency
As Required
As Required
As Required
As Required
Table 3(d): Testing Frequency for Fine Aggregates

Sr.
1
2
3
4
5
6
7
8
9
10
Test
Sieve Analysis
Materials Passing # 200 Sieve
Unit Weight
Specific Gravity
Absorption
Moisture Content
Soundness
Clay Lumps & Friable Particles
Sand Equivalent
Organic Impurities
Designation
ASTM C-136
ASTM C-117
ASTM C-29
ASTM C-128
ASTM C-128
ASTM C-566
ASTM C-88
ASTM C-142
ASTM C-2419
ASTM C-40
11
12
Light Weight Particles

Petrography Analysis
ASTM C-123
ASTM C-295
13
Mortar Bar Test for Potential Alkali ASTM C-227

Silica Reactivity
Testing Frequency
1 for 5,000 cft
1 for 5,000 cft
1 for 10,000 cft
1 for 10,000cft
1 for 10,000cft
1 for 10,000 cft
1 for 50,000 cft
1 for 20,000 cft
1 for 20,000 cft
5 per source for initial approval. 1
per month after approval per
source or 50,000 cft
1 for 50,000 cft
3 no. per source for initial
approval.
As required by the Engineer.
Table 3(e): Testing Frequency for Coarse Aggregates

Sr.
1
2
3
4
5
6
7
8
9
10
11
Test
Sieve Analysis
Materials Passing # 200 Sieve
Unit Weight
Specific Gravity
Absorption
Moisture Content
Soundness
Clay Lumps & Friable Particles
Los Angeles Abrasion
Light Weight Particles
Petrography Analysis
Designation
ASTM C-136
ASTM C-117
ASTM C-29
ASTM C-127
ASTM C-127
ASTM C-566
ASTM C-88
ASTM C-142
ASTM C-131
ASTM C-123
ASTM C-295
12
Mortar Bar Test for Potential Alkali ASTM C-227

Reactivity
Testing Frequency
1 for 5,000 cft
1 for 5,000 cft
1 for 10,000 cft
1 for 10,000cft
1 for 10,000cft
1 for 5,000 cft
1 for 50,000 cft
1 for 50,000 cft
1 for 20,000 cft
1 for 50,000 cft
3 no. per source for initial
approval.
As required by the Engineer.
Table 3(f): Testing Frequency for Concrete

Sr.
1
2
3
4
5
Test
Compressive Strength
Slump
Air Content
Temperature
Fresh Density
Designation
ASTM C-39
ASTM C-143
ASTM C-231
ASTM C-1064
ASTM C-138
117
Testing Frequency
1 for 2,000 cft per class per batch plant
Table 3(g): Testing Frequency for Admixtures

Sr.
1
2
3
4
Test
Air entrainment
Admixtures (water reducing)
Admixtures plasticizers
Curing compound
Designation
ASTM C-260
ASTM C-494
ASTM C-494
ASTM C-309
Testing Frequency
As Required
As Required
As Required
As Required
2.3 Laboratory and Field Tests Performed and Required

A comparison of the number of laboratory and field tests performed and required at the project site is
shown in Table 4.
Table 4: The Abstract of Quality Control Activities for the Taunsa Barrage Emergency
Rehabilitation and Modernization Project (MPR, 2007)
Sr.
Description of Testing
A. Laboratory Testing
1
Gradation of Coarse Aggregates
2
Gradation of Fine Aggregates
3
Unit Weight of Coarse Aggregates
4
Unit Weight of Fine Aggregates
5
Specific Gravity of Coarse Aggregates
6
Specific Gravity of Fine Aggregates
7
Sand Equivalent
8
Los Angeles Abrasion
9
Absorption of Coarse Aggregates
10 Absorption of Fine Aggregates
11 Brick Testing
12 Cylinder Testing
13 Cylinder Casting
14 Soundness of Coarse Aggregates
15 Soundness of Fine Aggregates
16 Atterberg Limits
B. Field Testing
1
Temperature
2
Slump
3
Cylinder Moulding
4
Field Density Tests
Number of Tests
Performed
Number of Tests
Required
1,124
551
641
411
499
293
330
371
499
293
212
24,129
25,698
58
62
54
950
482
477
286
456
242
289
253
456
242
As Required
23,586
25,242
80
59
As Required
6,821
5,898
26,034
2,189
6,745
5,821
25,242
As Required
3. Concluding Remarks
In construction project due to the involvement of various stakeholders in quality control and assurance,
issues of quality control arise in virtually all the functional areas of construction activities. Within the
organizational structure of the stakeholders in the Taunsa Barrage construction project, a limited number
of quality assurance/quality control (QA/QC) personnel were responsible for an increasingly large
workload involving many more complex practices than found in traditional construction. To ensure the
continued quality of rehabilitation of the barrage facilities, several approaches are being considered,
including automation. The computer-aided technology in particular shows great promise in creating tools
118
to assist QA/QC elements. Past development of QA/QC in Pakistan has shown that the stakeholders must
become involved early in the process to ensure suitable performance. However, in developing some
QA/QC systems, the stakeholder is not known and the system cannot be tailored for a particular level of
domain knowledge. When this situation occurs, it is necessary to provide flexibility in the system to
handle users with differing levels of knowledge about the domain. Incorporating this flexibility into a
computer module is a major problem in current QA/QC development and different approaches have been
tried to deal with the problem.
The experience of quality control and assurance during the construction of Taunsa barrage can lead to
following observations:
The performance specifications for construction operations specifying the required construction
process and specifying the required quality of finished facility remained absent in term of
application and implementation in the project.
The statistical sampling methods (variable and attributes) commonly used for the quality control
has not been used in the project.
Accurate and useful information collection during construction is an important part of
maintaining quality performance.
The capability of the contractors after the pre-qualification has been evaluated and PQMS are
than developed for a specific project.
In developing countries like Pakistan the quality awareness and consciousness limits is required
to be communicated among the stakeholders through seminars, conferences, workshops etc.
As in Pakistan, the PQMS as per ISO for the construction industry is relatively new in
implementation and adaptation, thus project oriented PQMS are prerequisite before the
commencement of the actual construction particularly on mega projects.
4. References
Askari, (2008). Askari cement, http://www.askaricement.com, 01/15/08.
Arcelor, (2007). Arcellormittal commercial RPS sheet piling, http://www.arcelormittal.com/sheetpiling,
12/26/07.
ASTM, (2007). ASTM international standards worldwide, http://www.astm.org/cgibin/SoftCart.exe/index.shtml?E+mystore, 12/26/07.
Chung, H.W. (2007). Understanding quality assurance in construction, Microsoft Readers eBooks,
eBooks Mall Inc, http://www.ebookmall.com/ebook/74105-ebook.htm , 12/12/07.
DECORA, (2007). Water stop product details, http://www.decora.com.pk/index.php?page=waterstops,
12/26/07.
Descon News - Events, (2005). Taunsa barrage rehabilitation and modernization contract,
http://www.descon.com.pk/News/desconNewsJuly2005.aspx , 12/20/07.
DGKC, (2008). DG Khan cement company limited, http://www.dgcement.com ,01/15/08.
FOSPAK, (2007). FOSROC constructive solutions, http://www.fosroc.com/LocationDetails, 12/27/07.
FSL, (2008). Fazal Steel FSL Group, http://www.fazalsteel.com/index1.html, 01/15/08.
Hendrickson, C. (1999). Project Management for Construction, Prentice Hall, ISBN 0-13-731266-0,
PA, USA.
ISO, (2007). International organization for standardization, http://www.iso.org , 12/27/07.
JCL, (2008). Javedan cement limited, http://www.jcl.com.pk/ , 1/15/08.
KMLG, (2008). Kohinoor Mapple Leaf Group Mapple Leaf Cement,
http://www.kmlg.com/kmlg/cement_products_1.php , 01/15/2008.
MPR, (2007). Taunsa barrage emergency rehabilitation and modernization project monthly progress
report April 2007 Abstract of Quality Control Activities, Punjab Barrages Consultants.
119
PMI, (2000). A Guide to Project Management Body of Knowledge PMBOK, Project Management
Institute, Four Campus Boulevard, Newtown Square, PA, USA.
PSQCA, (2007). Pakistan standards & quality control authority. http://www.psqca.com.pk/ ,12/27/07.
PAK, (2008). Pakistan steel mills Corporation private limited, http://www.paksteel.com, 01/15/08.
SIKA Industry, (2007). SIKA industry magazine No. 3, http://www.sika.com/industry.htm ,12/27/07.
120

Blackspot Study and Accident Prediction Model Using Multiple Liner

Regression
Fajaruddin Mustakim
Lecturer, Department of Building and Construction Engineering, Universiti Tun Hussein Onn Malaysia
fajardin@uthm.edu.my
Ismail Yusof
Head of Department, Department of Geotechnical and Transportation Engineering, Universiti Tun
Hussein Onn Malaysia
Ismail Rahman
Deputy Dean, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Abdul Aziz Abdul Samad
Dean, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Nor Esnizah Binti Mohd Salleh
Undergraduated, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Abstract
Factor that affect the risk of increased injury in the event of an automotive accident include reckless
driving, environmental factor and roadway condition. The purpose of this study is to develop an accident
prediction model for Federal Route 50 by using multiple linear regression analysis. The road accident
trend and blackspot ranking were established at Federal Route (FT50) Batu Pahat Ayer Hitam. It
revealed that the percent accident reduction by changing the measures of each variables are, one access
point per kilometer reduction can reduce accidents by 9.32 %, 5 kilometer per hour speed reduction can
reduce accidents by 27.2%, 100 vehicle per hour volume reduction can reduce accidents by 4.33 %
meanwhile an increment of one second in gap will reduce accident by 1.20%.
Keywords
Blackspot ranking, accident prediction model
1. Introduction
Road accidents are one of the major contributors of human deaths in Malaysia. In the year 2006, 341,252
accidents were recorded, resulting in an average 18 deaths from road accidents every single day. Federal
Route 50 from Batu Pahat to Ayer Hitam experienced 5,917 road accidents between the years 2000 and
2006, killing 188 people and injuring 1,330 people. The primary objective of the study is to identify
factors that contribute to the cause of accident and the development of an accident prediction model for
Federal Route 50.
121
Growth in urbanization and in the number of vehicle in many developing countries has led to the increase
in traffic accidents on road networks which were never designed for the volumes and types of traffic
which they are now required to carry. In addition, unplanned urban growth has led to incompatible land
uses, with high levels of pedestrians/vehicle conflicts. The drift from rural areas to urban centre often
result in large numbers of new urban resident unused to such high traffic levels. Many developing
countries continue to repeat the mistakes of the industrialized countries , many still permit linear
development with direct access from frontage properties along major roads even though this is know to
lead to safety problems. It is possible to identify hazardous sections of the road network so that
appropriate remedial measures can be undertaken to reduce the likelihood and severity of accidents at
those locations. This has proven to be one of the most cost-effective ways of improving road safety in
industrialized countries. Accident prediction models have been developed through statistical analysis for
this purpose. An accident model is generally an algorithm pitting a dependent variable against several
independent variables, each of which is assigned a constant. The dependent variable in an accident
prediction model is the number of accidents, while the independent variables may be quantitative
variables such as road cross-section dimensions, horizontal curvature and traffic volume, speed and of
qualitative variable such as type of terrain, road shoulder and median.
There is an extensive literature devoted to analysis of traffic accidents and crash modeling. The majority
of this literature references the studies that deal primarily with analysis of crash involvement and
prediction of crash. Since this research deal with analysis of injury severity and its accident factors, this
review attempts only to present the most relevant work in his area.
Logistic regression (a type of regression where the dependent is a categorical as opposed to a numerical
variable) has been the most popular technique in developing injury severity prediction models. Lui and
McGee (1998) used logistic regression to analyze the probability of fatal outcomes of accidents given that
the crash has occurred. In yet another study a logistic regression approach was used to examine a
contribution of individual variable to the injury severity (Al-Ghamdi, 2002). The study was limited to
560accident obtained from the police records in Riyadh, Saudi Arabia. According to the logistic
regression results, out of nine independent variables used in this study, only two were found to be
statistically significant with respect to the injury severity: location and cause of accident. For example, the
odds of being in a fatal accident at a non-intersection location are 2.64 higher than those at an
intersection, and the odds of severe injury increases on accidents caused by over-speeding and entering
the wrong way traffic. Use of artificial neural network as the modeling approach in analysis of crashrelated injury severity has been relatively scarce. The only related study that was found in the literature
employed artificial neural networks to model the relationship between driver injury severity and crash
factors related to driver, vehicle, roadway, and environment characteristics (Abdelwahab and Abdel-Aty
2001).
Road traffic accident is a rare, random, multi factor event always preceded by a situation in which one or
more road user have failed to cope with their environment, resulting in a collision on the public highway
be recorded by police (Radin, 2005). Transportation is an essential part of modern existence, linking the
various activities in which people participate especially at home, work, school and go to shopping or
recreation. From Royal Malaysian Police (PDRM) data, every year accident in Malaysia constant increase
year by year and Johor is among highest after Wilayah Perseketuan (Figure 1).
122
800,000
709,034
Number of Accident
700,000
600,000
500,000
396,331
400,000
347,838
300,000
240,585
200,000
127,898
124,426
100,000
61,981
251,074
89,900
104,474
102,966
110,383
61,390
9,867
Wilayah Persekutuan
Terengganu
Selangor
Sarawak
Sabah
Pulau Pinang
Perlis
Perak
Pahang
Negeri Sembilan
Melaka
Kelantan
Kedah
Johor
State
Figure 1 : Number of Accident By State,(1997-2006)

Malaysian Police statistic of road accident in Johor, federal road FT 050 among those highest occurred
accident in the accident records. From Figure 2, 994 case of road accidents recorded in the year 2005, 999
case of road accidents recorded in the year 2006 and in year 2007 with 731 case.
Number of Accident at FT 050 (2000-2007)
1200
1115
1000
Number of Accident ..
994
964
999
895
754
800
731
600
400
251
200
0
2000
2001
2002
2003
2004
2005
2006
2007
Year
Figure 2 : Number of accident along FT 050 (2000-2007)

Source : PDRM (2007)
2.0 Methodology
The accident analysis process involves the identification of accident blackspot locations, establishment of
general patterns of accident, analysis of the factor involved, site studies, and development of an accident
prediction model using Multiple Linear Regression.
123
2.1 Data Collection

Accident data were collected from Batu Pahat Traffic Police Station, Batu Pahat Public Work
Department, Bukit Aman Royal Malaysia Police, Road Transport Department, Parit Raja Health Clinic
Center, Universiti Tun Hussein Onn Malaysia (UTHM) and Road Safety Research Center UPM Serdang.
The accident database was obtained from the POL27 and the crash records were collected from the year
2000 to 2007.
2.2 Analysis Of Accident Data
The purpose of preliminary analysis of the traffic accident data is to determine the broad of the accident
problem. At this stage the general patterns and trend of accident are established. Types of accident trend
and statistics for the FT 50 were:
a)
b)
c)
d)
Total number of accident at FT 050 for year 2000 to 2007.

Accident by hours of the day for year 2003 to 2007.
Accident by type of fault for year 2003 to 2007.
Total number of fatal by fault categories for year 2003 to 2007.
2.3 Identify Blackspot Location

Identification and prioritisation of accident blackspot location were carried out by using the following
methods:
(i) Ranking accident point weightage
(ii) Ranking of the top ten accident sections accident
2.4 Site Investigation
The site investigation is a very important element of any accident investigation. The site investigation
purpose to support the data from analysis, this is can give the best result in the study. For example the
number of junction might give impact to the traffic. The function of site investigation include :
a) To confirm accident causal factors as suspected from the analysis.
b) To correlate analysis findings and additional information with the site, route or area to gain a better
appreciation of the problems.
c) To identify any accident causal factor that were not apparent through the analysis of the data.
d) To observe traffic and road user behaviour.
2.5 Accident Prediction Model
The model consists of several independent or explanatory variables, encompassing elements from road
geometry to traffic condition. For this study, the variables which have considerable effect are 85th
percentile speed, volume study, gap (in second) and number of access points per kilometer. The data were
collected in-field. The study section used for collecting data was about 5 kilometers long, it involves KM
19, KM 20, KM 21, KM 22 and KM 23 of Federal Route 50. By traversing the entire length of the road to
observe the number of access points, the number of major access point per kilometer for every section is
obtained. Traffic volume and spot speed were obtained over 2-hour time periods of field survey at each
section, namely the morning (0700 - 0900 hrs), midday (1200 - 1400 hrs) and evening (1700 - 1900 hrs).
Speed measurements, gap study, and volume study were taken at every section using a Trax Mite which is
124
a traffic counter and classifier. The 85th percentile speeds were determined from spot speed measurement
using SPSS program.
3.0 Result And Data Analysis

3.1
Total Road Accident
Percentage of accidents at federal road FT 050 (km 1 to km 40) from year 2000 to 2007 show in Figure 3.
The highest percentage of accidents is year 2004 and 2007 with 15 %. The second highest is year 2003,
2005 and 2006 with 14 % and followed by year 2002 with 13 %. The lowest percentage of accident is
year 2000 with 4 %. This means the impact of upgrading the route from two-lane road to a four-lane road
can be increase the accident number especially during its construction stage from year 2002 to 2004. The
road was an upgrading of the existing road with cross of two lane two way to four lanes undivided
carriageway on February 15, 2002 and was completed on August 14, 2004.
2007
15%
2000
4%
2001
11%
2002
13%
2006
14%
2005
14%
2003
14%
2004
15%
Figure 3: Analysis percentage number of accidents at FT 050 (2000-2007)

3.2 Accident Data By Hour Of The Day
Figure 4 shows the worst accident by hour of the day from year 2003 to 2007 along FT 050. The highest
number of accident occurred at 1601 to 1800 namely 4.01 pm to 6.00 pm, recorded at 754 accident case.
Second highest was at 1401 to 1600 namely 2.01 pm to 4.00 pm involving 665 accident case and the third
highest at 1201 to 1400 or 12.00 pm to 2.00 pm with 641 case. For the lowest recorded at 0401 to 0600 or
4.01 am to 6.00 am with 69 accident case.
125
Number of Accident by Hour of the Day
800
754
700
641
665
636
N um ber of A ccident. .
600
498
500
484
462
400
437
300
276
200
170
86
100
69
0
00:01- 02:01- 04:01- 06:01- 08:01- 10:01- 12:01- 14:01- 16:01- 18:01- 20:01- 22:0102:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 24:00
Time
Figure 4: Analysis accidents data by hour in the day at FT 050 (2003-2007)

3.3
Accident Data By Type Of Fault
According Batu Pahat Distric Police data accident, many factor contributing to road accident along
federal road FT 050. Table 5 shows the faults data which cause occurred fatal along FT 050 from year
2003 to 2007. From Figure 5 shows the accident by type of faults along FT 050 from year 2003 to 2007.
The highest rank is driving to close with 2749 accident case and followed by accident at junction with
1784 accident case. While, the lowest rank is tired or wear and racing, where both of faults value is 15
case.
3200
N um ber o f A cciden t
2800
2759
2400
1784
2000
1600
982
1200
800
400
169
897
343
568
32
236
176
73
15
142
O u P ed
t o e st r
f c ia n
on
cr
t
o
M rol ( ss in
o r sp
e t ee g
O v h an d in
o g)
e
A c rta k ne la
i
c id n g n e
en ve
h
t
D r a t ju icl e
i
n
v
V i in ct i
si o g t o n
nt oc
o o lo s
e
b
C o sc ur
n t ed
ra
f lo
w
UT r tu r
R e af f i n
ve c li
r s e gh
ve t
T i hi c
re l e
d/ w
e
R a ar
c in
g
Ot
he
r
Type of Fault
Figure 5: Accident data by type of fault (2003-2007)

3.4
Ranking Accident Point Weightage
By using this formula the accident will be classified into four main categories. For fatal it will be multiply
with 6.0, while serious injury multiply with 3.0, slight injury must multiply with 0.8 and damage only
multiply with 0.2. The Accident Point Weightage (APW) and accident ranking at federal road FT 050 can
be shown in Appendix A.
126
3.5 Ranking Of The Top Ten Accident Section (Km)

Table 1 show the top ten accident ranking by weightage and study location among the top ten accident
ranking by weightage, kilometre 20 with 89.20 weighting point and kilometre 21 with 67.80 weighting
point. The analysis was based on data compile over three year starting from January 2004 to 2007.
Table 1: Analysis for Top ten accident ranking by weightage
Km
5
10
2
9
20
24
8
4
6
21
Type of Road
Accident
Jumlah APW ln(APW)
1 2 3
4
9 4 50 119
182
129.80
4.87
8 5 37 105
155
113.60
4.73
4 2 30 210
246
96.00
4.56
5 3 43 100
151
93.40
4.54
8 0 26 102
136
89.20
4.49
6 3 28 85
122
84.40
4.44
6 1 32 96
135
83.80
4.43
2 2 26 172
202
73.20
4.29
3 2 33 104
142
71.20
4.27
2 3 23 142
170
67.80
4.22
Rank
1
2
3
4
5
6
7
8
9
10
1=Fatal, 2=Serious, 3=Slight, 4=Damage, APW=Accident Point Weightage

3.6 Analysis Accident Data At Study Location
The accident history data were collected from Traffic Police Station, Batu Pahat. The analysis accident
data by year 2000 to 2007, where federal road stretch km 1 to km 38.Km 19, km 20, km 21, km 22 and
km 23 were selected as the study location based on the blacksport site on Accident Blackspot Map from
Public Works Department of Batu Pahat (JKR).
3.7 Number of Accident at Study Location by Section (km)
From Figure 6, the highest number of damage only accident is at km 21 with 142 and the lowest number
of damage only accident is at km 19 and km 20 with equal value with 102 accidents. While for the serious
injury categories, the highest is at km 21 with 3 accidents. For serious injury at 19 km, 20 km and 23 km
not occurred. The highest number of fatal is km 20 and the lowest is km 22 and km 23 with 1 accident.
Slight injury always occurred for every study location, from Figure 4.6 show at km 20 is the highest
occurred accident with 26 and km 22 is the lowest number of accident with 22. The highest accident total
from the Figure 4.4 at km 21 with 170 and the lowest at km 19 with 121 case.
127
Number of Accident at Study Location by Section, km

180
170
Number of Accident
160
136
140
121
120
100
102
142
122
142
125
110
102
80
60
40
26
14
20
19
20
23
16
10
3 2
1 1
0
21
22
23
Kilometre
Serious Injury
Fatal
Slight Injury
Damage Only
Total
Figure 6 : Number of accident at study location from year 2004 to 2007

3.8
Independent Variable of the Accident Prediction Model
Independent Variable of the Accident Prediction Model used in the study is Access Point, Speed, Hourly
Traffic Volume and Gap obtained from traffic study.
3.8.1 Speed
Speed is very important for this analysis. It is because from speed, value of 85th Percentile speed can be
obtained. The speed data obtained from the previous study. Table 4.3 shown an average of 85th Percentile
speed from speed data analysis.
Table 2: Average of 85th Percentile
Km
th
85 Percentile
19
20
21
22
23
66.54
78.47
76.51
72.77
73
3.8.2 Traffic Volume Per Hour and Number of Access Point

For data traffic volume per hour (HTV), can be obtained from number of vehicle in speed data analysis.
While Access Point (per km) shown in (Appendix B).
3.8.3 Gap
A gap is normally defined as the amount of time, in second, between the end of one vehicle and the
beginning of the next. From the data, value of gap obtained as Table 3. The maximum average of gap for
vehicle is 3.92 this mean it is lack of adequate gap for the vehicles to make a turning at the site because
the gap needed for the right turning is 4 to 5 seconds.
Table 3: Average of gap
Km
Gap
19
2.81
20
3.37
21
3.17
128
22
3.67
23
3.92
3.9 The Accident Prediction Model

3.9.1 Multiple Linear Regression Method
From the data shown in Appendix B , a regression analysis is performed using Microsoft Excel and the
result of analysis are obtained as shown in Appendix C and Appendix D. Based on the results of the
analysis, the accident prediction model for Federal Route 50 takes the following equation:
In (APW)0.5 = 0.0212( AP ) + 0.0007 (HTV 0.75 + GAP 1.25) + 0.0210 ( 85th PS)
Where,
APW = accident point weightage
AP = number of access points per kilometer
HTV = hourly traffic volume
Gap = amount of time, between the end of one vehicle and the beginning of the next in second.
85th PS = 85th percentile speed
The model has an R-square of 0.9987, which means that 99.87 % of the variation in the number of
accident has been explained the regression line. The T- test also indicates that the model is significant and
can be used for the prediction of the number of accidents (refer to Appendix D). Decrement of vehicle
speed, access point, traffic volume and increment of gap are likely to have an influence effect of reduction
on the road traffic accidents.
4.0 Conclusion
The research determine that number of accidents for study location (km 19, km 20, km 21, km 22, and km
23) at FT 050 always increase according accident data from year 2001 to 2007 have shown the total is
1074 accident with 30 fatalities, 36 serious injury, 204 slight injury and 804 damage only. Based on the
Accident Point Weightage (APW), at kilometre 5 is the highest with 129.8 weighting point. This was
followed by kilometre 10, kilometre 2, kilometre 9, kilometre 20, kilometre 24, kilometre 8, kilometre 4,
kilometre 6 and kilometre 2, which km 20 and km km 21 is the study location .
The highest number of damage only accident is at km 21 with 142 and the lowest number of damage only
accident is at km 19 and km 20 with equal value with 102 accident. While for the serious injury
categories, the highest is at km 21 with 3 accident. For serious injury at 19 km, 20 km and 23 km not
occurred. The highest number of fatal is km 20 and the lowest is km 22 and km 23 with 1 accident. Slight
injury always occurred for every study location, which at km 20 is the highest occurred accident with 26
and km 22 is the lowest number of accident with 22. The highest accident total is at km 21 with 170 and
the lowest at km 19 with 121 case.
4.1 Accident Prediction Model
Further study of the research was to develop predictive models relating traffic accidents with the road
environment and traffic flows. Multiple regression techniques were used to estimate the model
parameters. The regression equation that can be used to predict accident rates as developed from this
study takes the following form:
In (APW)0.5 = 0.0212( AP ) + 0.000704 (HTV 0.75 + GAP 1.25) + 0.0210 ( 85th PS)
Where the range of values applicable to this model are as follows:
Table 4: Range of values applicable to this model
129
Independent Variable
Range of Va lues
Number of access points per kilometer (AP)
6-12
Hourly traffic volume (HTV)
1597-3952 vph
Gap (second)
2.75-3.97
th
85th percentile speed (85 PS)
63.30-82.20 kph
The result of the analyses provide sufficient evidence to support the hypothesis that the existence of a
larger major junction density, an increase in traffic volume and vehicle speed in Federal Route 50 are the
contributors to traffic accidents. Reduction of vehicle speed, access point, traffic volume and gap are
likely to have an influential effect on the road traffic accidents.
The percent accident reduction by changing the measures of each parameters are, one access point per
kilometer reduction can reduce accident by 9.32%, 5 kilometer per hour reduction can reduce accident by
27.2%, and 100 vehicle per hour reduction can reduce accident by 4.33% meanwhile an increment of one
second in gap will reduce accident by 1.20%.
More importantly, the significant accident predictive model developed in this study is applicable in road
safety improvement and could serve as a basis for further research work of Federal Route in Malaysia
especially and developing countries generally.
5.0 Reference
Abdul Kareem (July 2003);Review Of Global Menace of Road Accidents with Special Reference to
Malaysia- A Social Perspective, Malaysia Journal of Medical Science.Vol10. No.2, (31-39).
Al-Masaeid, Hashem R, Suleiman, Ghassan (2004); Relationships between urban planning variables and
traffic crashes in Damascus. Road & Transort Research.
Berhanu, G.(2004); Model relating traffic safety with road environment and traffic flow on arterial roads
in Addis Ababa. Adis Ababa University, pp 697-704.
Cheol Oh, Jun-Seok Oh, Stephen G.Ritchie and Myungsoon Chang (2000); Real-Time Estimation of
freeway Accident likelihood. Institute of Transportation Studies University of California, Irvine,
USA pp 12-15.
Hadayeghi, Shalaby and Persaud (2003); Macro- Level Accident Prediction Models for Evaluating The
Safety of Urban Transportation Systems. Annual Meeting of the Transportaion Research Board,
TRB, Washington D.C
Hadi, Mohammed A., Jacob Aruldhas, Lee-Fang Chow, and Joseph A. Wattleworth (1995); Estimating
Safety of Cross-Section Design for Various Highway Types Using Negative Binomial Regression,
Transportation Research Record, 1500: 169-177.
K.M.Lum, Hendry S.L. Fan, S.H.Lam and P.Olszewski (1998); Speed-Flow Modelling of Arterial Roads
in Singapore, Journal of Transportation Engineering./May/Jun 213-222.
New Strait Times Malaysia (February 6,2006), Monday; page 10
Radin Umar Radin Sohadi and C.J Baguely, The Identification, Prioritising and Analysis Of Accident
Blackspots In Malaysia, REAAA Journal/January 1994.
Radin Umar Radin Sohadi, Chai W.L., Hussain H, Law T.H (2001); Modelling of Traffic Accidents
Along Major Trunk Roads in Malysia, Journal IEM.vol. 62 No. 3 2001.
Transportation Research Laboratory, TRL 421 Report (March 2000); The Effects of Drivers Speed on
the Frequency of Road Accidents.
World Disaster Report (1998); International Faderation of Red Cross and Red Crescent Societies
Transport and Research Laboratory, UK.
130
Appendix A
Ranking Accident Point Weighting Along a Route F050 (KM 1-40) Over a 4 Years Period
(2004-2007)
Km
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Fatal
3
4
1
2
9
3
3
6
5
8
2
3
1
5
4
4
4
5
5
8
2
Type of Road Accident

Serious
Slight
Damage
Injury
Injury
Only
0
24
142
2
30
210
0
27
201
2
26
172
4
50
119
2
33
104
2
28
103
1
32
96
3
43
100
5
37
105
3
14
23
3
9
56
2
20
53
1
14
48
1
3
24
3
14
32
1
5
37
4
15
66
0
14
102
0
26
102
3
23
142
131
Total
APW
In(APW)
Rank
169
246
229
202
182
142
136
135
151
155
42
71
76
68
32
53
47
90
121
136
170
65.60
96.00
67.80
73.20
129.80
71.20
67.00
83.80
93.40
113.60
36.80
45.40
38.60
53.80
34.20
50.60
38.40
67.20
61.60
89.20
67.80
4.18
4.56
4.22
4.29
4.87
4.27
4.20
4.43
4.54
4.73
3.61
3.82
3.65
3.99
3.53
3.92
3.65
4.21
4.12
4.49
4.22
16
3
11
8
1
9
13
7
4
2
27
22
25
20
29
21
26
12
17
5
10
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
1
1
6
1
2
1
4
7
7
4
2
2
1
2
2
1
0
2
0
1
0
3
0
1
0
0
4
2
4
3
1
0
0
0
0
0
0
0
10
16
28
14
7
5
4
6
7
11
17
7
1
4
2
1
0
1
4
110
125
85
36
28
18
46
40
62
83
110
64
52
23
21
13
27
7
21
Appendix B
132
122
142
122
51
38
24
54
57
78
102
132
74
54
29
25
15
27
10
25
39.00
43.80
84.40
24.40
26.20
13.60
36.40
66.80
66.00
61.40
56.60
33.40
17.20
19.80
17.80
9.40
5.40
14.20
7.40
3.66
3.78
4.44
3.19
3.27
2.61
3.59
4.20
4.19
4.12
4.04
3.51
2.84
2.99
2.88
2.24
1.69
2.65
2.00
24
23
6
32
31
37
28
14
15
18
19
30
35
33
34
38
40
36
39
Section
Time
No
7.00 8.00
(km)
19
8.00 9.00
12.00 1.00
ln (APW)0.5
AP
2.0291
(per km)
9
19
2.0291
19
1.00 2.00
5.00 6.00
HTV 0.75 + GAP 1.25
85 PS
256.3
(kph)
67.95
400.28
68.28
2.0291
448.07
67.44
19
2.0291
441.47
68.03
19
2.0291
492.02
63.3
6.00 7.00
19
2.0291
501.98
64.26
7.00 8.00
20
2.1213
329.77
82.2
8.00 9.00
20
2.1213
479.58
82.18
12.00 1.00
20
2.1213
418.78
79.99
1.00 2.00
10
20
2.1213
425.2
77.01
5.00 6.00
11
20
2.1213
319.42
75.79
6.00 7.00
12
20
2.1213
325.91
73.65
7.00 8.00
13
21
2.0534
12
297.02
80.91
8.00 9.00
14
21
2.0534
12
439.07
80.59
12.00 1.00
15
21
2.0534
12
410.96
75.4
1.00 2.00
16
21
2.0534
12
426.45
74.41
5.00 6.00
17
21
2.0534
12
448.44
73.54
6.00 7.00
18
21
2.0534
12
430.23
74.23
7.00 8.00
19
22
1.9141
305.59
71.99
8.00 9.00
20
22
1.9141
446.81
70.99
12.00 1.00
21
22
1.9141
423.1
73.91
1.00 2.00
22
22
1.9141
398.79
71.06
5.00 6.00
23
22
1.9141
416.53
75.62
6.00 7.00
24
22
1.9141
374.44
73.06
7.00 8.00
25
23
1.9441
327.42
72.32
8.00 9.00
26
23
1.9441
476.08
71.22
12.00 1.00
27
23
1.9441
455.08
73.95
1.00 2.00
28
23
1.9441
436.34
71.75
5.00 6.00
29
23
1.9441
444.78
75.52
6.00 7.00
30
23
1.9441
392.51
73.26
Appendix C
133
RESULT S OF THE MULTIPLE LINEAR REGRESSION ANALYSIS
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.998737008
R Square
0.997475612
Adjusted R Square
0.960251583
Standard Error
0.106653138
Observations
Intercept
AP
0.75
HTV
+ GAP 1.25
85th PS
Regression
Residual
Total
df
3
27
30
Coefficients
0
0.021232017
0.000705917
0.021002698
SS
121.3548779
0.307122081
121.662
30
Standard Error
#N/A
0.009533646
0.000273406
0.00178282
ANOVA
MS
40.45162597
0.011374892
Appendix D
134
t Stat
#N/A
2.227061546
2.58193706
11.78060468
F
3556.220702
P-value
#N/A
0.034474931
0.015571332
3.78097E-12
Significance F
4.33145E-34
RESULT OF THE VALIDATION OF THE PREDICTION MODEL

Coefficient of Determinant
Regression Statistics
Multiple R
0.998737
R Square
0.997476
Adjusted R Square
0.960252
Standard Error
0.106653
Observations
30
R-square :
R square
0.5
R2= 0.997
Rating Poor
Perfect
T-Test :
df
3
27
30
Regression
Residual
Total
T=
ANOVA
MS
40.45163
0.011374892
SS
121.3549
0.307122
121.662
(From Microsoft Excel)
F
3556.220702
40.45163
= 59.6340 ; Critical value, t = 1.706
0.0113749
T>t : The model is significant and can be used for prediction

|t Stat|
>or <
Critical value Significance of coefficient
Explanatory
Variable
t-stat
AP
2.227061546
>1.706
Significance
HTV
2.58193706
>1.706
Significance
85th PS
11.78060468
>1.706
(From Microsoft Excel)
Significance
Residual Output
135
Significance F
4.33145E-34
Observation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Predicted ln(APW)0.5
1.799147918
1.907716702
1.923810197
1.931542738
1.867884071
1.895077591
2.129068045
2.234401379
2.145485733
2.08742968
1.987134515
1.946770142
2.16378386
2.257338471
2.128491151
2.118633131
2.115883893
2.117521011
1.876329418
1.955016284
1.999606875
1.922588351
2.030883615
1.947404673
1.877441934
1.959276975
2.001787359
1.942356591
2.027496252
1.943130436
136
Residuals
0.22998983
0.121421046
0.105327551
0.09759501
0.161253677
0.134060157
-0.007794842
-0.113128176
-0.02421253
0.033843523
0.134138688
0.174503061
-0.110347716
-0.203902327
-0.075055007
-0.065196986
-0.062447749
-0.064084866
0.037723873
-0.040962993
-0.085553584
-0.00853506
-0.116830324
-0.033351382
0.066677404
-0.015157637
-0.057668022
0.001762746
-0.083376914
0.000988902

Use of Traffic Simulation Model as Intelligent Decision Support System in

Developing Countries
Mir Shabbar Ali
Chairman Urban and Infrastructure Department, NED University of Engg.&Tech., Karachi,
Sindh,Pakistan
mshabbar@neduet.edu.pk
Ammara Ilyas
Research Assistant, Urban and Infrastructure Department, NED University of Engg.&Tech., Karachi,
Sindh,Pakistan
Abstract
Traffic Simulation Models have their applications as decision support system for management and project
evaluations around the world. For example, the policy makers in Brussels have used simulation models as
a decision support to evaluate the strategies for improving the operational efficiency of inter-modal
transport. Road network infrastructure development and management projects require large amount of
finances for field experiments, which shall prove costlier for developing countries. This paper aims to
discuss the use of simulation tool and its results to support the selection of proposed strategy in the study
area. A methodology for developing countries is presented that supports the decision of selecting a
particular management strategy for improving existing traffic operational conditions. An Intelligent
Transportation System (ITS) based traffic management model requires a number of decision support
systems. Traffic management is not only a costly but also continues over time. It starts with identification
and prioritization of problems and solutions ranked by stakeholders group in the initial stages. With
traffic data of relatively high accuracy being collected from the field using advanced equipments,
simulation models are calibrated for local traffic. Improvements in operational performance require
management strategies to be incorporated into the system. Results obtained from these simulation tools
compare alternate improvement strategies, and solutions thus giving the best possible solution. This paper
presents the development of traffic simulation model for weaving/merging areas validated by applications
in existing scenarios. It concludes that traffic simulation models have potential to be used in development
of a decision support system as a part of traffic management model.
Keywords
Traffic Simulation Models, Decision Support System, Traffic Management.
1. Introduction
Decision Support Systems involve intelligent evaluation of a project using different techniques like
simulation methods, artificial intelligence and human-computer interactions, etc. They use data and
parameters provided by users to assist decision makers in analyzing a situation; they are not necessarily
data intensive (Power, 2002). Simulation refers to analyze the change or variation offered in a virtual
environment with graphical illustrations for public and general understanding.
137
Developing countries invest more finances in infrastructure development as its a principle indicator of
economic progress. According to a World Bank report (Shilling, 2007), currently the public sector in
developing countries is spending 2%-4% of GDP on infrastructure investment. Transportation
infrastructure is not very mature in developing countries and due to this capacity related problems are
observed more frequently. Performance of transportation system is affected by the growing traffic at an
alarming rate through the past few years. Improving the performance of a traffic facility requires many
alternative measures, which need to be determined, and simulation is one way of doing it. Infrastructure
improvements are costly hence any such project must be carefully evaluated for its impact on the traffic.
Computer simulation models can be very valuable in making those evaluations in a cost-effective manner.
The paper aims to discuss the use of simulation results to support the selection of proposed strategy in any
study area.
Traffic problems can be solved by incorporating several management strategies into a traffic system.
Management strategies are generally incorporated into a system to improve the operational conditions of
the traffic. Road network expansion is a part of these strategies that are field experiments and hence prove
to be costlier for developing countries. In developing countries management decisions are based on thumb
rules. With these thumb rule strategies directly implemented in the field sometimes show undesirable
results. Some of the most common problems that often exist in developing countries are institutional
problems and lack of communication, rules implementation and negligence to environmental issues.
Decision support systems in ITS based traffic management model could be helpful in overcoming these
problems and making the decision in a more reliable way. The models and tools used in developed
countries do not incorporate the traffic behaviors like no lane discipline, signal progression which are
very common in traffic of developing countries. Hence, it signifies the need to develop a simulation
model that can replicate the local traffic conditions and behavior.
An ITS-based traffic management model is underway with Karachi as a pilot study. The management
model will use the simulation results obtained from the real data analysis. As an initiative towards the
development of simulation model, gap acceptance model is developed, which is based on the same
methodology as described in the Highway Capacity Manual. The model inputs are taken from real data
collected from the field. Simulation results are also verified from the real conditions in the field.
2. Literature Review
Several management strategies are incorporated into a traffic system to reduce the congestion. Traffic
management strategies provide demand side solutions and supply side solutions. Demand side measures
attempt to modify the travelers trip making behavior. Demand side strategies for resolving congestion
include congestion pricing, parking pricing, restriction on vehicle ownership and use and other incentive
and disincentive policies. Supply side measures add capacity to the system or make the system operate
more efficiency. Supply side strategies include the development of new or expanded infrastructure, smallscale infrastructure efficiency improvements. These infrastructural improvements provide efficient traffic
system at a very high price of field experiment if directly implemented.
The evaluation of the management strategies involves comparison of alternatives based on technological
feasibility, economic feasibility, cost effectiveness and the availability of the resources. Traffic
management strategies are identified and compared based on impact matrices. Usually impacts associated
with each alternative are expressed in terms of applicable measures of performance which differ with
regard to their unit of measurement. Impact of cost is measured in terms of capital and operation &
maintenance cost, mobility in terms of travel time and its cost, and environmental quality of different
alternatives is measured in terms of air and noise pollution. (Papacostas, 2003)
138
Transportation Systems evaluation has two basic steps i.e. quantify by applying model and qualifying by
applying evaluation criteria. Transportation modeling describes the relationships between transportation
system components and their operations. An operational model is required to provide quantitative
predictions about human behavior mathematically. But is also to use/devise tools (e.g., decision support
systems) that allow transportation managers to understand the assumed behavior in the models, study
scenarios of policy actions, and define and explain policy implications to others. There are a variety of
traffic models available for evaluation depending on the need and purpose. (Kutz, 2004)
In Brisbane, the calibrated and validated traffic simulation model was applied to evaluate the impacts of
implementing a number of road infrastructure management scenarios to determine the best utilization of
the additional lane capacity for a commuting corridor undergoing an infrastructure up gradation. The
models calibration and validation results, based on real-world data, provided a good degree of confidence
in the accuracy of the model and its suitability for use in the evaluation. It demonstrated the feasibility of
using computer traffic simulation models to evaluate the impacts of infrastructure management strategies
before their implementation in the field (Stirzaker, 2007). Operational efficiency of inter-modal transport
was improved by developing and implementing a two phase approach, in Brussels. Two phase approach
i.e. optimization and simulation methods was applied to provide a real-time solution for Delay Problem
Management in a timely manner. Simulation tools were able to predict the impact of a certain decision on
the whole transport network and to help choosing among different strategies. (Giovanni, 2005)
Implementation of Intelligent Transportation systems has evolved over time providing solutions to traffic
and congestion related problems. Intelligent Transportation Systems ITS (Transport Canada ITS, 2005)
can be defined as a wide range of diverse advanced technologies and information systems applied to
transportation networks for making the systems safer, more efficient, more reliable and more
environmentally friendly, without necessarily having to physically alter the existing infrastructure. For
example, ITS makes it possible to implement a number of government regulations and processes
(e.g., customs and immigration clearance, transportation safety compliance, road/bridge toll collection)
more economically, and to improve corporate productivity through time savings, reduced operating costs
and energy consumption, and enhanced reliability and safety. World Bank report (Yakota and Weiland,
2004) on ITS system architecture provides the architecture for introduction of ITS in developing
countries, with stakeholders, traffic simulation models and other advanced technologies as the major
components.
ITS- based traffic management model incorporate a number of decision support systems like traffic
simulation models, stakeholders and GIS. Decision makers evaluate management strategies using the
traffic simulation models. Stakeholders prioritize the needs and solution of traffic problems. Traffic
simulation models are helpful in studying the implications of countermeasures taken for congestion, like
improvement, control or strategy in the existing road network without any field experimentation. These
models are more often used in developed countries as it gives the best possible solution in a cost effective
way.
3. Methodology
Existing road networks in urban areas require traffic management for the growing number of vehicles
causing congestion, undesirable delays and degrading air quality. In developing countries, decisions for
project appraisals are made using ad hoc policies. For example, only solution to congestion is not in
increasing the number of lanes. Instead, simulation results can be used before making any decision for
future expansion of road network. Stakeholders perspectives serve as a predecessor before any evaluation
is made for alternate solutions to the traffic issues using simulation results. Stakeholders perspective and
simulation result serve as a decision support system before introducing any management strategy into the
system.
139
To overcome the congestion related problems, an ITS-based traffic management model is underway, with
CBD area of Karachi as a pilot study. It includes participation of stakeholders, real time traffic data
through advanced equipments, development of GIS, traffic simulation, and traffic management strategies.
Stakeholders define the problems that need to be solved as a first priority. This group comprises of people
from various walks of life including the related authorities. The proposed method for project evaluation
decision also incorporates the traffic simulation as an important part to determine the impacts of the
improvements, (figure below).
Traffic
Problem
Stakeholders Perspective
Flow of
Information
Alternative Management Strategies
Evaluating Best Solution using Simulation Model
Figure 1 Finding the Solutions
Prolonged delays, increase in volume and rate of accidents are some of the major traffic problems
very frequently observed. To find solution for these problems the stakeholders prioritize the
urgent need of time and measures that can be accounted later on. Stakeholders group comprising
of government transportation and planning agencies, traffic police, hospitals, industrial and
commercial centers, educational institution and everyday commuters is formed.
Considering the stakeholders perspective towards management and improvements, several steps
are taken. The accurate data are usually unavailable in developing countries. Before taking any
step reliable traffic data is collected from the field. In the absence of accurate and reliable data,
the effort of data collection is undertaken using detectors and surveillance giving the real time
traffic data.
Real time traffic data is then analyzed to model various traffic flow parameters like headways,
speed, and volumes etc. These mathematical models based on real-time traffic data are used in
simulating the traffic flow under different case scenarios. Simulation models are calibrated and
validated before application for comparing alternate measures.
Information obtained from the traffic analysis of the road facility is connected to the geographical
information system. This form GIS with the informational databases. For instance, the traffic
accident analysis and traffic flow analysis databases are thematically presented in GIS. It enables
easy access and can be updated with the data without much effort.
140
Management strategies involve demand side measures and supply side measures. Management
strategies and improvements suggested by the stakeholders are evaluated using simulation tools.
Simulation tools have been found very helpful for evaluating operational performance of the
traffic system and improvement strategies. Simulation results provide the impacts of traffic
management strategy on society like, air quality degradation, accidents rate, and user delay.
There can be many what-if scenarios to improve the level of service. For example, one way to
improve the capacity problem is to increase the number of lanes and the other is to make that
particular section one-way or say optimizing the signal time. All the three alternate measures are
studied through the simulation model. And results obtained from simulation have shown that
increasing the number of lane affects the environment negatively. Making the section one-way
can increase the rate of accident because of wrong direction movement as a result of
implementing this strategy. This may not be the case in developed countries where rules are
followed. Signal timing optimization may not be able to solve the problem of capacity
completely. In this case, the best possible solution can be made with some trade-offs in societal
impacts.
Societal impacts play an important role in the benefit cost analysis of any improvement and
strategy implementation. The societal impacts of the alternate measures are obtained from
simulation runs and compared to give the best possible solution.
The solution obtained from simulation results is implemented communicating with authorities
(stakeholders) to invest in development or strategy. Finances will be invested in an intelligent
way without any field experiment being conducted wasting the large investments. The role of
stakeholder and traffic simulation as the decision support system is discussed below in detail.
4. Stakeholders
Intelligent Transportation System principles include involvement of stakeholders in the initial stages of
the project. The framework is being followed around the world in improving the traffic and congestion
problems. Stakeholders opinions play an important part in prioritizing the needs and requirements for
developing the traffic management plan. Stake holders group was formed to meet and identify, understand
and prioritize current traffic flow problems, unsafe locations with high accidents occurrences, congestion
and resulting public health challenges, mitigation strategies, and future transportation planning needs and
established visions in Karachi metropolitan area.
Questionnaires were designed and analyzed to perceive the member view and opinion about traffic related
issues. Problem opted to be the most important was over speeding; not following traffic rules like
improper lane change and/or traffic control devices like signs/ signals/ pavement markings. Stakeholders
pointed the most urgently needed solutions as prioritizing comprehensive mass transport long-term
planning with government and private resources. The results obtained from the questionnaire were very
valuable in making the decisions for the project. No parking facility in the CBD area was found the cause
of the congestion. Multimodal approach with long term planning to solve traffic problems was found an
effective measure of solving the congestion problem. A lack of communication amongst the various govt.
and private departments was found a main factor for unplanned development.
Similarly, if the stakeholders are involved in various projects directly affecting common people, there can
be sufficient reduction in the complaints from the daily commuters plus the traffic management will also
become easier. The communication barrier between departments will be minimized increasing the
efficiency of the works and services to the people.
141
5. Traffic Simulation
Improvements in operational performance require management strategies to be incorporated into the
system. Traffic Simulation Models have their applications as decision support system for management
and project evaluations around the world. Traffic simulation models assist in studying the formation and
dissipation of congestion on roadways, assess the impacts of control strategies, and compare alternative
geometric configurations.
Traffic Simulation is done on two levels depending on the level of details required in improving the level
of service of existing road section i.e. macroscopic and microscopic level (shown in Figure 2).
Macroscopic simulation models describe the traffic flow in the forms of platoons, and include speedflow-density models. Microscopic level of aggregation describes individual driver behavior to the
surrounding. Microscopic simulation models include the gap acceptance, lane changing, and car
following models. As an initiative towards micro simulation modeling, a decision making model of gap
acceptance was developed for local condition is simulated.
Traffic
Simulation
Microscopic
Models
Car Following
Models
Gap Acceptance
Models
Macroscopic
Models
Lane Changing
Models
Speed-Flow-Density
Models
Figure 2 Traffic Simulation Models
6. Gap Acceptance Model

Gap acceptance models are categorized as decision- making models. The driver decision is based on the
maneuver of vehicle in minor-street whether to accept or reject the gap available to join the major street in
a particular traffic condition. This decision is dependent on many factors including flow, speed and
density and others. The process by which vehicles in two separate traffic streams moving in the same
general direction combine or unite to form a single stream is termed as merging maneuver (Drew, 1968).
However the concept is more often used in unsignalized intersections but it can also be utilized to study
the behavior of vehicle in signalized intersections when right or left turn on red are permitted (Ackelik,
2007).
142
Figure 3 Case under Consideration

To study the simplest gap acceptance case, the merging case defined in HCM 2000 is referred as a
baseline, shown in
Figure 3. The simulation of merging of minor direction vehicle into major direction is taken. The minor
direction was northbound vehicle and major direction being the eastbound vehicles. To describe the gap
acceptance, two commonly used terms are defined i.e. headways and minimum acceptable gap. Headway
is the time of passing through a point in similar direction only while the gap is the time of successive
vehicle passing a point in any other opposing direction. Arrival times of vehicles are determined based on
the headways and their respective distributions.
The conflicting time is the time at which both major and minor vehicles try to pass a point on the road and
one must stop to avoid conflict. Conflicting time determines whether there exists a conflict between the
arrival of vehicle from minor direction and arrival of vehicle from major direction. Conflicting time is
defined as the sum of arrival time and minimum acceptable gap in minor-street. The yes- or no decision
of vehicle to gap is made comparing the conflicting time for minor-street vehicle to the arrival time of
succeeding vehicle of major-street. If the conflicting time of minor is less than the arrival time of the
approaching vehicle from major direction then the gap is accepted and this vehicle of minor-street may
join the traffic stream. Otherwise the vehicle of minor-street will have to wait till it finds the next
available gap to join the major street.
7. Simulation Algorithm
Initially, an algorithm was developed for the gap acceptance simulation based on the methodology
described in the HCM, flowchart given in below:
The arrivals of vehicles are based on the assumption that only 40 percent of the times northbound
vehicles will attempt to join the eastbound vehicles for random vehicle arrivals.
The required inputs to the simulation model are headways of both directions and minimum
acceptable gap with their descriptive statistics and respective mathematical distribution obtained
from real data analysis.
The generation of random variables is dependent on the mathematical distribution obtained from
data analysis of real time headway data.
The headways input data is utilized in generating the random numbers and calculating the Arrival
Times of vehicles in each direction.
143
Arrival time = Hmin + (random variable*(Hmax-Hmin)

Where,
Hmin is the minimum headway, and Hmax is the maximum headway obtained from the headway
data.
Minimum acceptable gap input data is used in generating the random numbers and calculating
minimum acceptable gap each time minor vehicle enter the system.
Min Gap = Gmin+ (random variable*(Gmax-Gmin))
Where,
Gmin and Gmax are the minimum and maximum values of acceptable gap obtained from data.
Conflicting time is calculated using the Arrival time and calculated minimum acceptable gap each
time when a northbound vehicle enters.
Conflicting time = Arrival time + Min Gap
Now the conflicting time of nth vehicle of northbound is less than arrival time of (n+1) th vehicle
of eastbound is the decision making condition.
Conflicting time (n) < Arrival time (n+1)
If the above condition is true then gap will be accepted and northbound vehicle will join the
eastbound traffic stream. Otherwise the gap is rejected and the northbound vehicle will have to
wait till next available gap forming a queue.
Direction, distribution, max and min for minimum
gap and directional arrivals
DN
TAN=TAN+TAN-1
No
DN=DN-1
Yes
TGN
TAN=TAN+TAN-1
CONFLICTING TIME, TC
TC(N)<TA(N+1)
No
NO GAP
(WAIT)
Yes
GAP ACCEPTED
(GO)
Figure 4 Flow Chart of Gap Acceptance Simulation Model
144
Table 1 Input Data
MAX G
MIN G
MAXH
MINH
Type of
Distribution
North
13.3
0.24
13
0.25
East
uniform
uniform
0
0
13
0.07
8. Verification of Simulation
Data Collected on an intersection was used to simulate the gap acceptance from the minor street vehicles
during the off peak hours. Headways and gap data obtained from the analysis are shown in the Table 1.
Statistics of the result shows that headways vary largely from less than 0.5 to 13.3 seconds, which are
different from that in developed countries. The maximum and minimum headways in the major street are
almost same as in the minor street. This is due to the fact that in the off peak time there is almost equal
traffic volume on major street as that on the minor street showing similar statistics.
Hundred vehicles were generated randomly based on the observed traffic volumes on major and minor
street. Gap acceptance model developed on the methodology described in HCM 2000 was used to
simulate these vehicles. Results obtained from 125 simulation runs show that on an average 80 percent of
the vehicles making a merging maneuver from the minor street accept the gap and only 20 percent
vehicles reject the gap, (shown in figure 4). Table 2 shows the statistics of simulation results for the local
observed headways. On an average, 80 percent gaps were accepted while the other 20 percent gaps were
rejected. The observed number of gap rejected under low flow condition was one which is similar to the
mode of simulated rejected gaps. Therefore, simulation results are found satisfactory under low flow
conditions.
Simulation Results
20%
80%
Gaps Accepted
Gaps Rejected
Figure 5 Simulation Results
145
Table 2 Statistics of Simulation Results

Gaps Accepted
Mean
Median
Mode
80
92
99
Gaps Rejected
Mean
Median
Mode
20
8
1
9. Traffic Simulation as Decision Support System

Decision support systems are the tools supporting the selection of a choice. Traffic simulation models
predict the effects of a particular change in the facility on the performance of the traffic system.
Therefore, its necessary for the model to replicate the existing local traffic conditions to obtain the desired
results. Traffic simulation models are complex tools that can provide valuable information on the
performance and potential improvement of transportation systems. Traffic simulation models are found
helpful in describing the traffic behavior under different case scenarios. This technique of evaluating
different what-if scenarios without any field experiment make simulation modeling a better way of
supporting the decision.
There are many traffic simulation tools developed that replicate the different effects of change under local
traffic conditions. Developing countries traffic conditions are very different from that of developed
countries. Therfore, it was needed to study the different traffic behaviors under local traffic conditions. In
order to develop a decision support system, the task of developing a simulation tool based on the local
traffic conditions is undertaken. The component of this simulation tool will consist of various components
describing the different driving behaviors and maneuvers. Decision making model of gap acceptance
model discussed in the paper will be a part of the simulation tool.
10. Conclusion
Methodology for developing countries described in the paper includes the various steps and use of
technology for making a decision. It integrates the stakeholders, simulation results from real data, and
GIS before conducting any field experiment. The methodology of involving the stakeholders in the initial
stages of any facility project is of great importance since it solves one major problem of communication
among the various departments and local commuters. The priority results of stakeholders are utilized in
evaluating the alternate management strategies. These strategies can be further analyzed for impact matrix
using simulation models. Results obtained from these simulation tools compare alternate improvement
strategies, and solutions thus giving the best possible solution. The decisions in developing countries are
supported on thumb rule policies. Since simulation models have been practiced for long in developed
countries, therefore a similar methodology should be used in developing countries as well. It has been
discussed in the paper that simulation models used in developed countries needs modification when
applied to developed countries as the models in developed countries only account for their condition and
behavior.
Traffic simulation models replicate the local traffic conditions therefore gap acceptance is modeled as a
step towards simulation. The results obtained from simulating the gap acceptance using the real time data
is found satisfactorily replicating the driver decision of accepting the gap. The gap acceptance model, a
decision making model based on HCM 2000 methodology has provided satisfactory results under low
traffic volume. It will be further applied to high levels of volumes for effective use under heterogeneous
146
flow conditions. It concludes that traffic simulation models have potential to be used in development of a
decision support system as a part of traffic management model.
Acknowledgement
The research project Development of an ITS-based management model for metropolitan areas of
Pakistan with Karachi as pilot study is funded by HEC and US-AID for capacity building in research
area.
References
Akcelik, R., (2007). A Review of Gap Acceptance Capacity Models, 29th Conference of Australian
Institutes of Transport Research (CAITR 2007), University of South Australia, Adelaide, Revised
in 2008.
Drew, D.R. (1968) Traffic Flow Theory and Control, McGraw-Hill Series in Transportation.
Giovanni, L. D. (2005) Analysis and Optimization of Intermodal Public Transportation Networks in the
Brussels-Capital Region, Prospective Research for Brussels, Activity Report.
Kutz, M., (2004), Handbook of Transportation Engineering, McGraw Hill Publisher.
Papacostas, C.S. and Prevedouros, P.D., (2003). Transportation Engineering and Planning, 3rd Edition,
Prentice Hall, India.
Power, D. J. (2002). Decision Support Systems: Concepts and Resources for Managers. Westport, Conn.,
Quorum Books.
Shilling, J. D., (2007). The Nexus between Infrastructure and Environment. World Bank, Evaluation
Brief 5.
Stirzaker, C. and Dia H., (2007). Evaluation of Transportation Infrastructure Management Strategies
Using Microscopic Traffic Simulation, Journal of Infrastructure Systems, Vol. 13, No. 2.pp.168174.
Transport Canada, ITS (2005): http://www.its-sti.gc.ca/en/what_is_its.htm
TRB (2000). Highway Capacity Manual. Transportation Research Board, National Reseach Council,
Washington, D.C., U.S.A.
Yokota, T., Weiland, R.J., (2004). ITS System Architectures for Developing countries, Technical note
5, World Bank.
147
First International Conference on Construction in Developing Countries (ICCIDC-I)

Advancing and Integrating Construction Educatio, Research& Practice
August 4-5.2008 Karachi,Pakistan
Issues in Curriculum Development for M. Tech in Construction Management

in Developing Countries
Tazyeen Ahmad
Reader, Department of Civil Engineering, ZHCOT, AMU, Aligarh-202 002, U.P, India
tazyeenamu@yahoo.co.in
Amjad Masood
Muhammad Arif
V. P Mital
Professor, Department of Civil Engineering, ZHCOT, AMU, Aligarh-202 002, U.P, India
Abstract
Today if we go through the syllabi of Civil Engineering graduate program, most of the time we discover
that cost and construction aspect are missing or is covered in a very prosaic manner. The area of
construction management has not received its due place in the Civil Engineering program run in
developing countries like India. Since construction activities are carried out mostly at the construction
site, which are usually far flung from main cities, the academician/authors, and the faculty may not be
aware of the practical difficulties and nuances of construction management. These might be the reason
that construction management has not received due place in the institutes, universities, colleges and in
many management books.
Today, due to increased competition and the capital that is scarce, large constructions like metro rail,
high-rise building cannot be handled without the use of modern construction equipment and modern
construction and management techniques to reduce time and to maintain higher standards of construction
quality. It is necessary to use modern machinery and latest construction management tools to optimize the
construction activity and to improve the productivity.
This is high time for the countries of Indian sub-continent to pay due attention to this commercially
valued knowledge, which is directly related to infra structure development, and in turn with national
economy. One-way of introducing subject is to copy the syllabus of any reputed institute. In this paper
various issues related with curriculum development for M Tech in Construction Management has been
discussed. The paper concludes on the theme that such course should be field-oriented and should really
add value to human capital, as opportunity cost of education is very high in developing countries.
Keywords
Construction Management, Curriculum, Costing and Construction
148
Introduction
Like any other knowledge the knowledge of Construction Management is also very vast. Student has to
be given specialized knowledge under the realm of construction management when an individual decides
to acquire any knowledge. He is confronted with three questions
Firstly, which knowledge one will acquire

Secondly, what quantum of knowledge he will acquire
Thirdly the orientation of the knowledge being acquired
Answer to first question is governed by so many factors like opportunity available, aptitude and means
and it depends mostly on the individual decision. The answer of second and third question depends on the
institution he joins. Per-force he has to study the prescribed syllabus of the institution. Since at Post
Graduation level a student is a bit mature and can understand and appreciate the lofty thoughts and
underlying concepts in the theory, he can now appreciate orientation aspect, as he is about to enter in the
material world. Third issue of orientation depends upon the philosophy of the institution e.g. in India,
Indian Institute of Technology is considered as premier institution of engineering, where engineering is
taught like a science subject. However In spite of best theoretical grinding the IIT graduates have been
found to perform poorly at shop floor condition. In this regard there is no substitute for German system of
technical education, wherein every semester has practical apprenticeship courses in their curricula. The
German technology has already proved its superiority in first as well as in Second World War.
This factor invokes the author for suggestion or discussing the various issues involved in curriculum
development of construction management. In the present paper the focus is on producing practicing
construction managers. The topics to be covered in this M.Tech programme can be summarized as under
Project Management in Construction

Cost Management
Cost Optimization Techniques
Management of Real Estate and Fixed Assets
Organizational Behavior
Fundamentals of Management and Management Thoughts
Managerial Economics
Functional Planning, Building Economics and Building Science
System Design and Value Analysis
Marketing of Real Estate
Principles of Materials Management
Project Planning, Implementation and Control
Materials management in Construction Project
Maintenance Engineering and Maintenance Management in Construction
Recent Advances in Construction Materials and Construction Technology
Management of Quality and Safety in Construction
In authors opinion the papers should be tailored to include the following
Fundamentals of Management
The aper should be of six credits so that students can grasp the basic concepts, terminology, principles,
task, responsibilities and issues, which a management practitioner encounters. The students should be
149
equipped with management tools to improve their decision-making skills to solve the problems of
corporate as well as non-profit seeking organization.
Cost Management
Although costing in Civil Engineering is taught at UG level but it is done in a very prosaic manner. At
M.Tech level a thorough concept of cost should be given first and then various types of cost should be
discussed at length. The most important training is the recording of cost at site and calculation of its
variance. In this regard author finds that the study material of various professional bodies of financial
institution are much more useful than the knowledge given in the standard textbooks on cost. Lifecycle
Costing and Social Cost Benefit Analysis should also be covered.
Cost Optimization
Although Structural Optimization is a well-developed area in Structural Engineering but unfortunately the
word constructional and cost aspects involved in the design of the structure is missing in most of the
books. However a great deal on this very topic can be found in the books of Mathematical Optimization.
The aspect of Optimization needed should be managerial. It covers the techniques like cost cutting, cost
reduction and Kaizen approach. The syllabus should be so framed that the student is lost in the deep and
vast ocean of the cost and comes out with a notion of the cost as in Civil Engineering a small % saving
can run into millions of rupees.
Managerial Economics
Of course basic Economics is taught to a student of Engineering at first year or second year level, when
he is barely in his teens. The student at this level does not have feel of economic reality. Before
discussing the managerial economics the students should be given a few lectures on the fundamentals of
economics or asked to go through the study material of foundation course of any institution like Institute
of Chartered Accountancy of India. Author will not hesitate in recommending reviewing the book of
Economics by Samuelson.
Construction, Human Behavior and Sociology

A construction manager deals with varied type of people from laborer to CEO of the companies. For the
success of the project, especially at the project planning level author feels that the Planners and Managers
should have a very clear concept of behavior and social traditions of region where the project will be
implemented. Local sociology and psychology should also be taught in the Construction Management
Program.
Materials Management
Those who practice Civil Engineering, will very well agree, that use of local building material cannot be
ignored in construction work. In the syllabus of Materials Management due significance should be given
to specification and identification of material specified. As we all know that poorly written specification
is a big bone of contention.
150
Heritage management
It is said that in near future service sector will grow. For developing countries, tourism is one of the
developing areas for earning the foreign exchange. The monument or heritage structures are one the
attraction for the tourist in India. Taj Mahal is the glaring example in this regard. The curriculum should
be such that the students must be exposed to the intricacies associated with the Projects related with
heritage: conservation, preservation and restoration. In such projects, selection and procurement of
appropriate material, which should be compatible with old materials in the existing structure is a difficult
task. Availability of the technical skill or craftsman for its application is rather scarce.
Human Resource Management

A lot of text and material on HRM is available in the books and journals. But the knowledge hardly gives
the feel of the subject for construction manager. Tthe students should be educated to train the people on
the lines in accomplishment of phrase If one knows how a job is done, he will get a job and if he knows
why things are done so, he will become the boss. Regarding training lf personnel, the author strongly
feels that Denison Theory of Residual factors should be incorporated in the syllabus
Research Methodology
If we go through any dissertation or thesis of social sciences we find that a separate chapter is devoted to
research methodology. Author feels that a paper of research methodology should also be introduced in the
curriculum, in which types of researches, inductive logic, deductive logic, epistemology of various
subjects, especially epistemology of professional knowledge, technique of hypothesis formulation, curve
plotting, curve reading and fitting and various other analytical tools should be taught. So that the student
becomes familiar with the research world and he does not feel a burden in participating in research
programs, as research is the heart and soul of University Education.
Product Development, Standardization and Entrepreneurship

Author has found that development of new product is complementary to entrepreneurship. The students
should be taught the different stages through which a product passes from inception to reach the level of
saleable commodity. The concept of standardization and familiarity with the process of getting certificate
of standardization has become necessary even for a construction company, in todays competitive world.
Conclusion
The curriculum should be aimed to produce practicing construction managers. The best professional
training is On Job Training (OJT) which is given on the job. The professional knowledge or skill is
never guided by single discipline. The role of educational program for professional course should be
based on imparting field oriented training. Application based knowledge of different discipline should be
taught. The construction manager should be nurtured to assimilate the knowledge of Engineering, Social
Science, Philosophy, Commerce and Arts. In an M.Tech program a student should be trained on science
as well as art of the profession.
151
References
Ahmad, Tazyeen (2004). Cost Optimization Techniques in Construction Industry in India, Ph.D. thesis,
Aligarh Muslim University, Aligarh, India
Samuelson Nordhaus (2005) Economics 18th Edition, Tata Mcgraw-Hill International, New Delhi, India
152

AN ASSESSMENT OF GENERAL TRENDS ADOPTED FOR BIDDING AND

PROCUREMENT IN THE CONSTRUCTION INDUSTRY OF PAKISTAN.
Rizwan U. Farooqui
Assistant Professor, Department of Civil Engineering, NED University of Engineering and
Technology, Karachi, Pakistan & Ph.D. Scholar, Department of Construction Management,
Florida International University, Miami, Florida, USA
Muhammad Saqib
Assistant Professor, Department of Civil Engineering
NED University of Engineering and Technology, Karachi, Pakistan
Farrukh Arif
Lecturer, Department of Civil Engineering
Sarosh H. Lodi
Professor, Department of Civil Engineering
ABSTRACT
The construction industry and its clients are widely associated with Bid and Procurement issues.
These issues are different depending upon nature of construction business activities, processes,
environment and organization. Bid and Procurement is a substantial and integral element of
Construction project management. It has been the issue of attention in the construction world.
Due to time and cost overruns associated with construction projects, so many projects fail to
accomplish their targets and objectives. Unmanaged or unmitigated bidding and procurement
procedures are one of the fundamental causes of these overruns. In Pakistan and other underdeveloped countries, the most common method of awarding the contract is the Low-Bid or Priced
Based method, which has inherent flaws of high competition and minimum performance. On the
other hand, these days, developed countries are using alternate bidding systems such as Best
Value Procurement method for awarding a contract with basic characteristics of high performance
and high competition to meet the main objective of quality of the Construction Industry. The core
objective of presenting the study is to highlight the trends and flaws in the bidding and
procurement practices in construction industry of Pakistan, specifically in government sector
projects. A set of recommendations has been presented based on surveys results and interviews
for improvement of these trends.
KEY WORDS
153
Construction management, Bid, Procurement lowest bid, best value procurement, Pakistan
1. INTRODUCTION
The construction industry and its clients are widely associated with Bid and Procurement issues in
the construction industry. These issues are different depending upon nature of construction
business activities, processes, environment and organization. Bid and Procurement is a substantial
and integral element of Construction project management. It has been the issue of attention in the
construction world. Due to time and cost overruns associated with construction projects, so many
projects fail to accomplish their targets and objectives. Unmanaged or unmitigated bidding and
procurement procedures are one of the fundamental causes of these overruns. These issues can be
managed and controlled by compelling influencing the current and adopting the latest procedures
of bidding and procurement. The paper aims at analyzing the current status of Bid and
Procurement Strategies in the construction industry of Pakistan. In Pakistan and other underdeveloped countries, the most common method of awarding the contract is the Low-Bid or Priced
Based method, which has inherent flaws of high competition and minimum performance. On the
other hand, these days, developed countries are using alternate bidding systems such as Best
Value Procurement method for awarding a contract with basic characteristics of high performance
and high competition to meet the main objective of quality of the Construction Industry.
The role of construction sector in national economy is paramount yet when it is judged by its
performance, it remains far behind the manufacturing and service industries. The construction
industry has long remained plagued with the following major issues: lack of performance, lack of
trained personnel and training programs with an impact on the level of expertise in the
construction industry, and a high level of risk in terms of bonding and contractor business failure
[Tulacz (2002), ENR (2004)]. The traditional methods of design-bid-build and lump sum
contracting have not been responsive to the problems [Uhlik and Eller, 1999). Over the past two
decades the construction industry has tried to identify the cause(s) of the problems in the industry
and reduce the rate of non-performance. Corrective action has been taken to change the delivery
systems (Design-Build, Construction Management at-Risk, Design-Build-Operate, Job Order
Contracting, etc.) in attempts to allocate risk to the party most capable of minimizing the risk.
While these processes have produced some encouraging results [Pocock, 1996], they have not
significantly impacted the quality of construction craftspeople [Garrity (1999), NDU (2005)].
Many reasons have been attributed to the underperformance of the industry and multitudes of
taskforce have been initiated to improve the status of construction industry. Extensive research
[PBSRG, 1991 to date] has found that one of the root causes of underperformance lies in the fact
that many clients still equate price with cost, selecting designers and constructors solely based on
tendered price. This low-bid project procurement system is widely seen as one of the greatest
barriers to improvement. In Pakistan, like many other countries including the U.S., it is mandated
by legislation that construction contracts for public work projects be procured using a competitive
sealed bidding process and awarded using a low-bid system. Under this low-bid system,
contractors submit bids based on plans and specifications prepared by the public agency or a
private engineering firm hired by the agency, and, except under extraordinary circumstances, the
contractor submitting the lowest responsive bid is awarded the construction contract. In all but a
few cases, experience levels of the contractor, quality issues, and other criteria are not taken into
consideration in awarding these contracts.
154
While the low-bid procurement system has a long-standing legal precedence and has promoted
open competition and a fair playing field, a long-standing concern expressed by owners and some
of their industry partners is that a system based strictly on the lowest price provides contractors
with an incentive to concentrate on cutting bid prices to the maximum extent possible (instead of
concentrating on quality enhancing measures), even when a higher cost product would be in the
owners best interest, which makes it less likely that contracts will be awarded to the bestperforming contractors who will deliver the highest quality projects. As a result, the low-bid
system may not result in the best value for money expended or the best performance during and
after construction. Moreover, the traditional low-bid approach tends to promote more adversarial
relationships rather than cooperation or coordination among the contractor, the designer and the
owner, and the owner generally faces increased exposure to contractor claims over design and
constructability issues.
In todays construction climate, public sector owners are finding themselves under increasing
pressure to improve project performance, complete projects faster, and reduce the cost of
administering their construction programs. In response to these pressures, the global construction
industry has experimented with alternative procurement and contracting methods. Many
construction owners in the U.S., for instance, are implementing best-value procurement to
improve project quality and enhance performance. In essence, best-value procurement
incorporates factors other than just price into the selection process to improve performance or
achieve other specific project goals.
The aim of the research presented in this paper is to assess the impact of low-bid environment on
performance of major public work projects (in terms of schedule, cost, quality and safety) in
Pakistani construction industry. The study will form the baseline for developing a proposal for
implementing best-value procurement system for the construction industry of Pakistan.
2. RESEARCH SCOPE
The scope of the study was to identify the practices of bidding and procurement existing in the
construction industry of Pakistan. Also to prepare a set of such recommendations that can help to
improve the bidding and procurement practices. The study was conducted through intense survey
and interviewing exercise through survey. It targeted the key players of construction industry who
are responsible for conceiving and funding the project i.e. public clients and private clients.
3. RESEARCH OBJECTIVES
The core objective to present the study is to highlight the problems associated with the bid
procurement trends in construction industry of Pakistan, specifically in Govt. owned projects and
to analyze the impact of these problems over the life cycle of projects. The information gathered
through surveys and interviews served as the foundation of the study, so that improvement in the
existing practices could be proposed and new better and more useful techniques and models could
be introduced to improve the project performance.
4. RESEARCH METHDOLOGY
155
The questionnaires were developed for survey exercise based on the information acquired from
the literature review and input from various local and international experts. Separate
questionnaires were developed for each target i.e. public clients and private clients according to
their scope of work, responsibilities in a project and engineering background.
After the development of questionnaire and before finalizing the draft, pilot surveys were
conducted. The pilot surveys were conducted for both public and private clients. Based on the
suggestions questionnaires were improved.
The questionnaire were then sent either by fax or dropped in person or through mail. Majority of
the questionnaires were delivered in persons. Interviews were also held along the questionnaires
survey to cross- check the information and obtain any extra knowledge.
The response obtained from questionnaire survey was analyzed statistically to identify the trends
and practices in bid and procurement. The analytic technique adopted for this analysis was
statistical approach. Questionnaire was analyzed separately and then collectively sections as well
as questionnaire wise. Based on the data obtained conclusions were drawn.
5. Analysis and Discussion

5.1 Project Delivery systems
The clients were asked five questions to collect information about the procurement and delivery
system adopted on their project. A summary of the results for all projects is given in Table 1.
Table 1: Projects delivery system profile
Question
No.
1.
2.
3.
4.
5.
Percentage
Projects
Delivered
Project Delivery Method? Traditional (Design-Bid-Build)
100%
Project Procurement Method? Low-Bid
100%
Project Bidding Strategy? Open Competitive Bidding
100%
Type of Contract? Fixed Unit Price
78%
Fixed Lump Sum Price
12%
Fixed Price Plus Escalation
8%
Project Execution Approach? Normal track
68%
Fast Track (Multiple Prime Contracting) 32%
Delivery System Component
The findings of this section indicate that all of the projects surveyed under the research study
were procured using the traditional low-bid open competitive bidding system, while a majority of
the surveyed projects were fixed unit price contracts (without escalation) and were performed
using normal track execution approach.
5.2 Clients Project Experience as Related to Low-Bid Environment
The Clients were asked about negative consequences of lowest bidding they had on the work
environment and team relationships. The responses are summarized in Table 2 (in descending
order of response percentages)
156
Table 2: Negative consequences of low-bid system on work environment and team

relationships
Consequence
Increased No. of Claims
Increased No. of Disputes
Work Suspensions
Increased No. of Change Requests/ Orders
Higher cost of contract administration
Percentage
Projects
Affected
65%
60%
55%
52%
30%
From the responses, it is evident that low-bid environment generated a wide variety of negative
consequences on majority of projects in terms of affecting work environment and team
relationships. This is, in particular, true in terms of increased number of claims, disputes and
changes, and work suspensions.
5.3 Inappropriate Selection of Contractors by Clients
Clients were asked whether the inappropriate selection of the contractors is the consequence of
Low bid practices. It is interesting to note that 82% clients responded affirmatively to this
question, signifying that inappropriate contractor selection is largely a consequence of low-bid
price selection criteria.
5.4 Obstacles to Alternative Procurement strategies
The clients were asked about the major obstacles they face in adopting alternative strategies in
construction projects (such as best value procurement).Most of the clients responded that
lowest price bidding is mandated by government regulations for public projects (response
rate=58%) and lowest price bidding is the traditional form of contracting strategy
(response rate=58%) which require time to be changed to alternative methods as it has
become a culture for construction projects in Pakistan.
On the other hand when they were asked whether they believe that Best Value
Procurement application to Construction Industry will help in improving the construction
processes 50% of the clients responded in affirmation.
5.5 Clients Project Experience as Related to Low-Bid Environment
In this section, seven questions were asked to collect information about the clients experience on
projects as related to low-bid environment. The results are given as follows.
What negative consequences lowest bidding had on the work environment and team
relationships?
157
Table 3. Negative consequences of low-bid system on work environment and team relationships
Percentage
Consequence
Projects
Affected
65%
Increased No. of Claims
60%
Increased No. of Disputes
55%
Work Suspensions
52%
Increased No. of Change Requests/ Orders
30%
Higher cost of contract administration
The responses are summarized in Table 3 (in descending order of response percentages). From
the responses, it is evident that low-bid environment generated a wide variety of negative
consequences on majority of projects in terms of affecting work environment and team
relationships. This is, in particular, true in terms of increased number of claims, disputes and
changes, and work suspensions.
What was your experience regarding the lowest bidder as a contractor on this project?
Table 4. Clients experience regarding lowest bidder as the contractor on the project
Low-Bidder Issue
Unprecedented Claims and disputes
Technical & managerial incompetence
Financial instability
Lack of technical input in form of human resources (employment of third-grade
human resources on the project)
Cost at project completion is substantially more than the contract (bid) cost
Specifications compliance issues
Low productivity issues
Percentage
Projects
Affected
48%
46%
42%
42%
40%
38%
34%
The responses are summarized in Table 4 (in descending order of response percentages). The
results clearly indicate that, as per the experience of major public clients, the low-bidder as the
contractor on a project has mostly mal-performed, particularly in terms of generating
unprecedented claims and disputes, technical and managerial incompetence, financial
incompetence and employment of third-grade human resources on the project.
The clients were asked four questions to establish the relationship between project nonperformance (in terms of performances on schedule, cost, quality and safety) and inappropriate
contractor selection. The results are shown in Table 5.
Results clearly indicate that a majority of public clients approve the fact that inappropriate
contractor selection is a key contributory factor toward project non-performance. The above
responses (Table 5) in conjunction with the responses to the options in previous question
(question no. 7) provide ample evidence as to state that inappropriate contractor selection (lowest
bidder as the contractor on the project) is a major factor contributing to project non-performance.
Table 5. Project Non-Performance as related to Inappropriate Contractor Selection
Question
Percentage
No.
Non-Performance Issue
Clients Agreed
158
8.
9.
10.
11.
Can a major proportion of project delay (more than 80% of the delay)
be attributed to inappropriate contractor selection?
Can a major proportion of project cost overrun (more than 80% of the
cost overrun) be attributed to inappropriate contractor selection?
Can a major proportion of project quality issues be attributed to
inappropriate contractor selection?
Can a major proportion of project safety issues be attributed to
inappropriate contractor selection?
79%
74%
64%
52%
Was Inappropriate Contractor Selection a consequence of Low-Bid Price Selection Criteria?

(Yes/ No/ NA)
It is interesting to note that 82% clients responded affirmatively to this question, signifying that
inappropriate contractor selection is largely a consequence of low-bid price selection criteria.
This is a significant finding as to providing ample evidence to the hypothesis that low-bid
environment is a major contributory factor towards project non-performance.
In summary, the findings of this section indicate that low-bid environment has generated a wide
variety of negative consequences on majority of projects in terms of affecting work environment,
team relationships as well as project performance (schedule, cost, quality and safety). The lowbidder as the contractor on a project has mostly mal-performed, particularly in terms of
generating unprecedented claims and disputes, presenting technical, managerial and financial
incompetence, and employing third-grade human resources on the project. A majority of public
clients acknowledge the fact that inappropriate contractor selection is a key contributory factor
toward project non-performance, which is, as the survey indicates, primarily a consequence of
low-bid price selection criteria.
6. CONCLUSIONS
The root cause of construction non-performance in Pakistani construction industry can be
attributed to the low-bid project procurement system. The traditional low-bid approach has
evidently contributed promoting adversarial relationships rather than cooperation or coordination
among the contractor, the designer and the owner, and the owner generally faces increased
exposure to contractor claims over design and constructability issues.
In summary, the findings indicate that low-bid environment has generated a wide variety of
negative consequences on majority of projects in terms of affecting work environment, team
relationships as well as project performance (schedule, cost, quality and safety). The low-bidder
as the contractor on a project has mostly mal-performed, particularly in terms of generating
unprecedented claims and disputes, presenting technical, managerial and financial incompetence,
and employing third-grade human resources on the project. A majority of public clients
acknowledge the fact that inappropriate contractor selection is a key contributory factor toward
project non-performance, which is, as the survey indicates, primarily a consequence of low-bid
price selection criteria.
159
7. RECOMMENDATIONS
The authors propose the development of a procurement model for Pakistani construction industry
that selects contractors based on best value (performance and price) to replace the existing lowbid model in the industry. This model should utilize leadership/information concepts that transfer
risk, make all parties accountable, and motivate high performance construction. The model
should include educating and training the key players involved in construction process to adopt
best value practices. Since radical changes are not so easy to implement, it is believed that by
involving a select group of people from academia, industry and clients and training and educating
them will disseminate the idea to the rest of the industry. Prototype projects should be identified
for model testing. These test projects will serve as an example to the industry while establishing
the procedure for future projects. It is expected that the core group of people involved in these
selected projects will transfer the technical know-how to other project personnel.
The following basic steps are identified to implementing best-value procurement in the Pakistani
construction industry:
1.
2.
3.
4.
5.
6.
7.
8.
Setup of the best-value procurement system process and education.

Selection of test projects.
Collection of vendor past performance information.
Bidding and analysis of bids.
Selection of the best value contractor.
Managing the pre-award phase.
Construction and the rating of construction.
Analysis of results and system adaptation.
8. References
ENR Staff Writer (2004, Jan 26) Bonding and Insurance Trouble Needs Perspective,
Engineering News Record, vol. 252, no. 4, p. 52.
Garrity, Kathleen (1999) No Easy Solutions to Construction Labor Shortage. Construction and
Equipment, 23, March.
NDU (2005) Government Goals and Rules: Industry studies. The Industrial College of the Armed
Forces, Accessed on http://www.ndu.edu/icaf/industry/2000/construction/construction.htm.
PBSRG (1991 to date). Performance Based Studies Research Group. Accessed on
http://www,pbsrg.org
Pocock, Jim; Laing, Liu (1996) Alternative approaches to projects: better or worse?. Society of
American Military Engineers, vol. 88, no. 578, pp. 57-59, Jun.
Tulacz, Gary J. (2002). The Top 400 Contractors: Planning Hard for Soft Landing. ENR. Volume
248, Number 19, pp 54-56, 59-60, May.
Uhlik, F.T., and Eller, M.D., (1999). "Alternative Delivery Approaches for Military Medical
Construction Projects." Journal of Architectural Engineering, Volume 5, No.4 132-134.
160

Linear Programming for Optimizing Strategic Construction Workforce

Management
Alireza Mohammadpour
Student of MSc in Construction Engineering and Management, Department of Civil Engineering ,Iran
University of Science and Technology,Tehran, Iran
mohammadpourmail@gmail.com
Mostafa Khanzadi
Assistant of professor, Department of Civil Engineering ,Iran University of Science and
Technology,Tehran, Iran
Ehsanollah Eshtehardian
Candidate of Ph.D in Construction Engineering and Management, Department of Civil Engineering
,Iran University of Science and Technology,Tehran, Iran
Abstract
One of the most important factors in construction project management is to provide skilled labor relevant
to the technical project requirements. Major problem in this field is shortage of skilled labor. A key
reason for this problem is the absence of human resource management strategy for construction project.
To choose an optimized strategy for making the best use of available workforce with the intent to reduce
project costs. This paper presents a model to combine training and hiring workforce in different levels of
skills. Linear programming is used for solving this model to achieve optimized solution. The input data to
proposed model consists of certain available labor pool, cost configures for training workforce in different
skills, the cost of hiring workforce, hourly labor wages, and estimates of affinities among the different
considered skills and their levels. Therefore, project manager or decision maker by using this model and
paying attention to condition of training and hiring workforce will be able to make best decision to
minimize project costs.
Keywords
Resource Management, Linear Programming, Training, Hiring.
1. Introduction
Therefore In the most part of the world the construction industry is facing skilled labor shortage. Skilled
labor shortage problem by increasing construction projects, and limit of it has been intensified. This
shortage has been considered in most countries that shows the significance of the issue. Tucker et al.
attribute the problem to other factors such as the generally poor image of the industry, a working
environment that is considered undesirable, the transient nature of the work, and the resulting unclear
career paths in construction. Much of the workforce remains unskilled or under-skilled, therefore training
must be considered as an option when staffing for a project. This study provides an optimization-based
framework for matching supply and demand of construction labor most efficiently through training,
161
recruitment, and allocation. The objective of the model is to minimize labor costs while satisfying project
labor demands.
A more recent study by the Construction User Round Table (CURT 2001) in United States showed that
owner companies considered the shortage of skilled labor as the most critical problem todays
construction industry is facing. Recent statistics published by the Bureau of Labor Statistics of United
States (BLS 2004) indicate that by 2010, there will be a need to replace 1,469,000 construction trade
worker jobs. The recent BLS data indicate that the construction industry is projected to be the largest and
fastest source of employment growth among goods producing industries. The construction industry in the
United Kingdom for example is facing a skilled labor shortage (Mackenzie et al. 2000). The United
Kingdom construction industry must draw from all labor sources irrespective of construction-related
experience, age, gender, ethnic, or social background. A study of infrastructure in South Africa revealed a
shortage of individuals to build and maintain infrastructure in underdeveloped areas (Philips et al. 1995).
A study of railways in Japan linked the reduction in maintenance of the existing lines to the problem of
labor shortages (Tarumi 1994). Several solutions have been used to alleviate the problem of skilled labor
shortages in construction. These include increased wages and other incentives such as guaranteed
overtime, implementation of training incentives, employing foreign labor or even outsourcing
construction work to foreign sources, and reduction of demand through automation and technology
(Pappas 2004). A recent collaboration between the Construction Industry Institute (CII) and the Center for
Construction Industry Studies (CCIS) at the University of Texas at Austin produced a theoretical model
for a revolutionary way to address the issue in a more comprehensive manner. Although the method,
called Tier II, is new and future oriented, it may have a considerable impact on the construction
workforce and industry (Castaneda 2002). The proposed Tier II strategy calls for training workers
possibly in more than one skill, including management and other soft skills. This document focuses on the
implementation of one of the main elements of the Tier II strategy, namely how to improve workers skill
sets. The main objective is to provide a framework for making the best use of the available workforce and
its skills set using an optimization-based approach. The use of optimization techniques is not limited to
the construction industry. Optimization is a concept that has been extensively used in different fields such
as communication, transportation, health care, manufacturing, finance, and others. The need for
mathematical programming techniques to optimize strategic investment in the construction workforce has
been noted in several studies (Gann and Senker 1998; and Gomar et al. 2002). Gomar et al. (2002)
acknowledged this need and developed a model capable of optimizing the labor allocation and assignment
process of a partially multiskilled workforce and a single-skilled workforce with the multiple objectives
of minimizing hires, maximizing employee duration on project, and minimizing reallocation within the
project. In another study which mentions the need for a multiskilled workforce multiskilled employees are
needed increasingly, especially in repair and maintenance work. Srouri (2006) tried to present a model
choosing a better choice between training and hiring that emphasized minimizing costs. This study uses
mathematical modeling techniques to provide a strategy to work within the constraints of the ongoing
construction labor shortage situation. It provides an optimal investment strategy for construction
companies in their workforce.
3. Model Formulation
Before writing a model there are some assumptions to reach the best results from the model. It is
important to mention that for creating the model, Linear Programming is used. This linear model is solved
by Lingo software. The level of training skills is divided into skilled (skilful) and helper, but labor hired
in single or multiskills would do the work at skilled level. In continued it presents decision variables,
objective function, and constraints.
162
3.1 Decision Variables

X ijk : The number of workforce who possess only skill i and will be trained k level from skill j.
Yi
: The number of workforce with only skill i to be hired .

L ijt
: The number of workforce possessing skills i and j in k(skilled) level , working in their primary skill
i during time period t .

N it
: The number of workforce with skill i working during time period t .
Z ij
: The number of workforce possessing skills i and j the skilled level to be hired .
M ijt
: The number of workforce possessing skills i and j in k(skilled) level , working in their secondary
skill i during time period t .

note : k here means the workforce that is skilled level in his occupation .
3.2 Objective Function
The objective function of the linear model is defined as follow :
train cos tijk X ijk
wagei hrsperweek + Lijt Wij hrsperweek + M ijt Wij hrsperweek
it
ijk
+ Yi hire cos ti + Z ij h cos tij +

i
train cos t ijk X ijk
ijk
, The cost that will be incurred to train in k level from skill j, the workforce
already possess skill i.

train cos t
ijk
where
: cost in Rials ( Iranian unit of money) to train workforce who possess skill i in k level
from skill j.
ijk
, skill affinity penalty between skills i and k level from skill j with values ranging between 0 and 1 ;
hire cos t i
where
hire cos ti
: The cost that will be incurred to hire workforce with skill i ,

: hiring cost in Rials of workforce with skill i ;
Z ij h cos t ij
i
where
h cos t ij
: The cost that will be incurred to hire workforce with skill i and j at skilled level,
: hiring cost in Rials of workforce who possess skills i and j at skilled level (k level) ;
nit wagei hrsperweek

i
:The incurred wages on site for workforce who possess only skill i ,
wagei
:hourly wage in Rials of workforce with skill i ; hrsperweek :number of weekly hours of
where
work ; t : time period index ;
ijt
W ij hrsperweek
, The incurred wages on site for workforce who possess skill i and j, at
skilled level, working with skill i during time period t
i
where
W ij
:hourly wage in Rials of workforce with skill i and j at skilled level.
M ijt W ij hrsperweek , The incurred wages on site for the workforce who possess skill i and j,at
i
163
3.3 Constraints
The constraint of the linear model is defined as follow :
3.3.1 Meeting the demand dit t for skill i during time period t using bi-skilled workforce (possessing skills
i and j,both at the k level) and single-skilled workforce (possessing skill i, at k level):
+ M ijt + n it d it
ijt
dit can be obtained from scheduling software. It consists of the daily demand loading as calculatedby
scheduling software based on the project schedule, loading of all project activities with the resource
requirements, and leveling the schedule using these resources.This equation may be interpreted as
follows: the number of workers working with skill i during the time period t must be greater than or equal
to the demand for workers with skill i during the same time period.
3.3.2 Training capacity of k (skilled) level from skill j:
X
i
ijk
traincap jk
The reason for having this set of constraints is that there might be conditions in which there is a limitation
on the number of workforce that can be trained during a short time period.
3. Hiring capacity :
Yi hirecapi
the number of workforce to hire with skill i is limited by a certain number of available workforce
hirecapi .
Z ij hirecapij
the number of workers to hire with skills i and j (bothof them at the k level) is limited by a certain number
of available workforce.
3.3.4 Availability constraints:
nit S i + yi + X ij
j
A set of constraints which makes sure that the model does not use more workforce with skill i during time
period t than the available pool, where Si represents the number of workers with skill i who are already
employed by the company.
L ijt + M ijt X ij + Z ijk + Pij
A set of constraints which makes sure that the model does not use more workforce with skills i and j (both
of them at k level) during time period t than the available pool, and where Pij represents the number of
workforce with skills i and j who are already employed by the company.
4. Evaluation of Case Study

4.1 Input Data
Among the skills used during the project , the skills are considered that have had more effect on the
progress of the project. Such skills have training and certificate aspect. Meanwhile a five period of
duration has been considered. The number of workforce for each skill during the week has been obtained
from the schedule of the project. Selected skills from this project are: welding, electric work, and concrete
finishing. Number of singleskilled workforce needed at the beginning of the project at skills :welding,
electric work, and concrete finishing respectively are : 4, 5, and 8.numberof bi-skilled workforce needed
at the beginning of the project, shown at table 1.
164
Table1: Number of Bi-skilled Workforce at the Beginning of Project

Secondary
Skill Electrician
Primary Skill
Electrician
Concrete Finisher
Welder
0
1
Concrete Finisher
Welder
0
1
1
1
-
Hourly wages of single-skilled workforce for welder, electrician, and concrete finisher in Rials
respectively are : 20000, 17000, and 12000. Hourly wages of bi-skilled shown at table 2 .
Table2: Hourly Wages of Single-skill Workforce in Rials
Secondary
Skill Electrician
Primary Skill
Electrician
Concrete Finisher
Welder
10000
40000
Concrete Finisher
Welder
10000
40000
40000
40000
-
For skills which have less relation or management is not willing between them, it is tried the model by
showing partial view of decision maker not to draw toward unwanted choice. Therefore relevant
parameters for two skills, it is used quantities, that the model doesnt follow such relation. For training
workforce at secondary skill, there are some costs based on held training hours periods their quantities are
shown at table 3.
Table3: Workforce Training Costs in Rials
Secondary
Skill
Primary Skill
Electrician
Concrete Finisher
Welder
Electrician
Concrete Finisher
Welder
150000,200000
50000,100000
150000,200000
100000,200000
50000,100000
100000,200000
-
It is supposed recruiting multiskills for each required skill is at the skilled level. hiring workforce costs
for single-skilled, welder, electrician, and concrete finisher respectively are : 120000, 100000, 80000.
Hiring costs for bi-skilled are shown at table 4.
Table4: Bi-skilled Workforce Hiring Cost in Rials
Secondary
Skill
Primary Skill
Electrician
Concrete Finisher
Welder
Electrician
Concrete Finisher
Welder
200000
1500000
200000
130000
1500000
130000
-
165
It is necessary to know that for hiring single-skilled and bi-skilled based on project condition there are
some limits for capacity of hiring. Maximum number of workforce with single-skilled that can be hire at
welding, electric works, and concrete finishing respectively are: 3, 3, and 5. Maximum number of
workforce with bi-skilled that can be hire are shown at table 5.
Table5: Maximum Number of Workforce With Bi-skilled That Can Be Hired
Secondary
Skill
Electrician
Concrete Finisher
Welder
0
1
0
0
1
0
-
Primary Skill
Electrician
Concrete Finisher
Welder
The number of needed workforce for each week based on project schedule is shown at table 6.
Table6: Number of Workforce for Each Skill During The Five Period
week
skill
Electrician
Concrete
Finisher
Welder
Since there are not same relations among some skills and their levels, coefficient is used to show the
affinities among skills. If there is more affinities among different skills and their levels, more quantities of
is required. The quantities of are shown at table 7.
Table6: Skill Affinity Coefficient for This Study
Skill
Electrician
Concrete Finisher
Welder
Electrician
(skilled, helper)
Concrete Finisher
(skilled, helper)
n/a
0.65,0.85
0.2,0.35
0.65,0.85
n/a
0.55,0.75
Welder
(skilled,
helper)
0.2,0.35
0.55,0.75
n/a
4.2 Results From Case Study

After modeling in modified software and running the model, the following out put has been obtained that
it will be considered after presenting the output:
- Two electricians should be trained in welding at helper level before the beginning of the project and
vice versa.
- One electrician skilled in welding and in his primary skill, electrician, work at first work.
- Two persons at second week and one person at third week work at concrete finishing.
- Three electrician skilled in welding and in secondary skill, welding, work in third week.
- One electrician skilled in welding and in secondary skill, welding, work in fifth week .
- One welder skilled in electric work and in secondary skill, electric work, work in first and fourth week.
At the other quantities belong to decision variables are zero ,it means that reach the minimum cost of this
project shouldnt be accepted any quantities.
166
To consider the quantity and first purpose of training and hiring workforce important results have been
presented .In this project the training skills with little affinity because of higher cost have been omitted ,
instead the model is continued with training related skills to reduce the cost of training .Providing
electrician and welder is the main necessity of the project that is tried as much as possible to overcome
the shortage .The shortage of concrete finisher occurs at the middle weeks of the project.
Therefore, it seems hiring workforce at the skilled level in compared with training workforce who are
working in the project, has less economic justification. Meanwhile, hiring bi-skilled labor with more
affinity between skills for the project helps to reduce the cost of this part, however, there are some biskilled workforce at the beginning of the project.
5. Conclusions
As mentioned one of most important factor at management construction project is providing relevant
skilled workforce in the project requirement .By using linear model presented in this paper, managers will
be able to make better decision for overcoming the shortage of skilled workforce In construction projects.
By using this model a manager will be able to choose one of the solutions whether training available
workforce and hiring out of project, based on costs. Meanwhile, considering the leeling skills, manager
are able to reduce and control training and hiring costs.
6. References
Castaneda, J. C. _2002_. Workers skills and receptiveness to operate under the tier II construction
management strategy. Dissertation, Univ. of Texas at Austin, Austin, Tex.
Gann, D. and Senker, D. (1998) Construction skills training for the next millennium, Construction
Management and Economics, 16, 569-580.
Gomar, J.E., Haas, C.T., and Morton, D.P. (2002) Assignment and allocation optimization of a partially
multiskilled workforce, Journal of Construction Engineering and Management, March-April, 103109.
Mackenzie S., Kilpatrick A.R. and Akintoye A. (2000) UK Construction skills shortage response
strategies and an analysis of industry perceptions. Construction Management and Economics , 18,
853-862.
Pappas, M.P.( 2004) An assessment of iImplementation requirements for the tier II construction
workforce strategy.The University of Texas atAustin, Austin, TX.
Philips, S.D., McCutcheon, R.T., Emery, S.J., Little, R., and Kwesiga, M.B., (1995) Technical Analysis
of Employment Potential of a National Public Works Programme, Journal of the South African
Institution of Civil Engineers, 37(3),18-24.
Tarumi, H. _1994_. Review of research on ballast and roadbed. Quarterly Rep. of RTRI (Railway
Technical Research Institute), Tokyo, 35_1_, 1518.
Tucker, R. L., Haas, C. T., Glover, R. W., Alemany, C., Carey, L. A.,Rodriguez, A., and Shields, D.
(1999). Key workforce challenges facing the American construction industry: An interim assessment.
Rep. No. 3, Center for Construction Industry Studies, Univ. of Texas at Austin, Austin, Tex.
Srouri I.M, Hass C.T. and David P.Morton (2006) Linear programming approach to optimize strategic
investment in the construction workforce. Journal of Construction Engineering and Management,
Volume 132, Issue 11, pp. 1158-1166.
167

A Stocastic-Simulation Model For Lowest Bid Price Evaluation: A Case Study

In Road Construction And Rehabilitation Projects In Lebanon.
Rola Sammoura
Ph.D, Department of Industrial Engineering and Management, Beirut Arab University, Beirut, Lebanon
rsammoura@hotmail.com
Aziz Ezzat Elsayed
Professor, Department of Industrial and Management Engineering, Arab Academy for Science and
Technology (AAST), Alexandria, Egypt
Abstract
Competitive bidding is required by law in all public construction projects in Lebanon. The qualified
contractor submitting the lowest bid price is awarded the contract. Evaluating the lowest bid price at a
pre-contract stage is of a great concern to any contractor working in the Lebanese highly competitive
market. This enables the contractor to make a strategic decision in choosing an appropriate bid price that
will offer a satisfactory profit with a greater probability to win. A stochastic-simulation model for the
lowest bid price evaluation in the bidding process adopted in Lebanon especially in public road
construction and rehabilitation projects is developed in this study. The model, built using Crystal ball
decision-engineering software, considers two main factors influencing bidding behavior, namely the
project size represented by the average bid price and the competition presented by the number of qualified
participating bidders. Historical data of 275 bidding attempts collected from the archived records of the
Council of Development and Reconstruction in Lebanon (CDR) formed the basis of the data analyzed. A
regression relationship between the lowest bid price, the average bid price, and the number of qualified
bidders is also developed and used in building the model. The validity of the model is checked. Results
show a mean deviation of only 2.6% between the actual lowest bid price and the evaluated values. The
proposed model also provides a framework that can be used by a specific contractor to decide on his bid
price with associated certainty levels in a scientific method.
Keywords
Competitive Bidding Process, Simulation, Lowest bid price.
1. Introduction
Contracting projects is the norm in a wide range of business activities. A significant amount of
engineering construction work is let through competitive bidding (Drew et al., 2001). The contractor's
project life cycle begins with a need and an invitation to bid for work, followed by a preliminary
assessment of the bidding opportunity and a decision on which contracts to bid. If opting to bid, the
contractor then determines an appropriate bid price. If the bid is successful, the contractor's project
continues with detailed design work and production scheduling, further allocation of tasks, perhaps via
subcontracting, and subsequently, production activity followed by delivery (Chapman et al., 2000).
In todays highly competitive construction environment, one of the most important decisions that have to
be made by any contractor, competing in the market, is which price to bid for when a serious invitation
168
has been received. This decision is basically related to a considerable issue the probability to win and
the satisfactory profit at the completion of the project as planned. (Egemen and Mohamed, 2007).
However, this strategic decision requires simultaneous assessment of large number of external and
internal factors related to both the bidding environment and the contractors position in the market. The
behavior of contractors as a group (market conditions, number and identity of competitors), individual
contractor behavior (contractor size, work and tenders in hand, availability of staff), behavior toward the
characteristics of the contract (type and size of construction work, bid related factors) are the main factors
influencing the contractors bidding behavior (Drew and Skitmore, 1997).
In Lebanon, competitive bidding is required by law on all public construction projects and the qualified
contractor submitting the lowest bid price is awarded the contract. Thus, any participating contractor in
such competitive bidding process faces the uncertainty concerning the value of the lowest bid price in any
public serious invitation.
Since it is not usually an easy job to describe the bidding process by a realistic mathematical model
interrelating all the above influencing factors, a stochastic-simulation-model for lowest bid price
evaluation in the field of construction engineering and especially in the field of road construction and
rehabilitation in Lebanon is developed. The model considers two main factors influencing bidding
behavior, namely: the project size expressed by the average bid price and the level of competition
presented here by the number of qualified participating bidders. However, all remaining factors affecting
the contractors bidding behavior are controlled in building the model. All selected projects constituting
the data sample are of the same type, awarded according to the same Lebanese formal bidding procedures,
and executed in the same Lebanese market conditions. This control will reduce any extraneous factors
that may distort the study results such as: a mandated minimum period, material and equipment
substitution or equivalency requirements, and labor wage rate, among others (Carr et al., 2005).
In addition, since each contractor in the construction field has his own strategy in bid price decisionmaking that differs from that of his competitors, the proposed model necessitates the selection of a
specific contractor working in the field of road construction and rehabilitation public projects in Lebanon.
2. Tendering Practices of Public Construction Projects in Lebanon

The Council for Development and Construction (CDR) is the only public council in Lebanon involved in
monitoring, tendering and implementing priority reconstruction and development projects in basic
infrastructure, social and productive sectors (CDR website). Tendering procedure and award of contracts
adopted by CDR is according to bidding procedures of the Lebanese Government, taking into
consideration procurement conditions of foreign funding agencies and bilateral governmental agreements.
Competitive bidding is required by law on virtually all construction contracts that involve public works.
This promotes fairness and economic savings in public funds. The usual format of the bidding process is
that competitive bidders are invited to submit a bid price for a specified piece of work during a bidding
period of at least eight days to two weeks before the closing date. Bids are evaluated on the basis of both
technical and economical elements and the qualified contractor submitting the lowest bid is awarded the
contract. Thus, CDR pre-qualifies candidates at the first bidding session where technical envelopes are
opened and only those that meet the qualification criteria are allowed to progress into the next stage of
price consideration. Bids themselves are opened in the second round and the winner is announced based
on the least price offered (Lebanese decree-laws, 1959). Accordingly, qualified bidders as used in this
context are bidders meeting the technical and price consideration criteria for qualification.
169
3. Method of Analysis
The research procedure is categorized into three phases:
1. The first phase reports a statistical description of the selected data sample.
2. The second phase investigates the correlation between the lowest bid price, the average bid price, and
the number of qualified bidders.
3. The third phase consists of building the model, conducting simulation runs to evaluate the lowest bid
price, and checking the validity of the model.
3.1 Phase 1: Data Collection
The data for the study were collected from the archived records of CDR. In order to minimize the
variability in the data sample, all projects selected for inclusion in the study were in the field of road
construction and rehabilitation in Lebanon. They were publicly bid under a relatively uniform and formal
bidding procedure according to the Lebanese tendering law. The data collected from a sample of fortyone awarded projects in the field of road construction and rehabilitation focused on the value of the
lowest bid price for each awarded contract. It also included the number of qualified bidders participating
in the bid process and their corresponding bidding prices covering a time period for the years (19962006). These forty-one awarded projects comprised 275 bidding attempts. The data which attracted in
many instances the same group of bidders formed the basis of the analyzed data. Table 1 shows a
statistical description of the data sample used in analysis.
Table 1: Statistical Description of the Data Sample
Total number of awarded Contracts
Completely executed
In progress
Not executed
Total lowest bids
Total number of bidders
Number of qualified bidders
Maximum lowest bid price
Minimum lowest bid price
41
23
9
9
$342,868,622
275
Mean = 6.71
$29,753,000
$149,955
Std. deviation = 3.939
3.2 Phase 2: Regression Analysis

The relationship between the lowest bid price and the number of qualified bidders is investigated.
In this connection, Carr et al. evaluated public projects using the pre-bid estimate (owner's cost estimate)
as a reference to determine the deviation of the lowest bid. However, in this study, the average bid price
of the bid offers is viewed as a measure of what the group of bidding contractors believes to be the fair
value of the work, or what the bidding group views as the "right price." Rather than using the theoretical
"pre-bid estimate", the actual average bid price is used as a baseline for the analysis (Carr et al.,
2005).This provides an interesting insight into bid competition.
The relationship between the lowest bid price and the number of qualified bidders participating in the
bidding process was observed by plotting the value of the ratio of the lowest to the average bid price
against the number of qualified bidders. Figure 1 shows a scatter plot between the two variables of
interest.
170
1.1
Lbp to Abp ratio
1
0.9
0.8
0.7
0.6
0.5
0.4
0
8 10 12 14 16 18 20 22 24
Figure 1: Scatter Plot of Lbp to Abp ratio against the Number of qualified bidders
Using Excel, a statistically significant linear correlation between the two variables of interest is shown.
The corresponding linear best fit equation is given by:
Lbp
= 0.015 N + 0.968 (1)
Abp
Where,
Lbp: Lowest bid price,

Abp: Average bid price and,
N: Number of qualified bidders
The correlation is negative, with a linear coefficient of correlation R of -0.714. This shows that as the
number of qualified bidders increases, the lowest bid price decreases. The linear relationship also
indicates a decrease by 1.5% in the lowest bid price to the average bid price ratio for each additional
participating bidder.
This developed linear regression relationship will be used in building the proposed stochastic-simulation
model.
3.3 Phase 3: Stochastic-Simulation-Model
3.3.2 Contractor capability index: CCI
When a new opportunity is offered, any contractor willing to participate will have his own capability in
deciding on which price to bid. This capability is based on the contractors expertise, size, work and
tenders in hand, and availability of staff and equipment. It differs from that of his competitors working in
the market. This capability is reflected by the contractors bid price compared to the average bid price of
all participating competitors. In other words, the contractors capability is defined here by the Contractor
Capability Index (CCI) which is the ratio of the contractors bid price to the average bid price of all
participating bidders in any specific bid offer. Thus,
CCI =
Cbp
(2)
Abp
Where, CCI: Contractor Capability Index and,
171
Cbp: Contractor bid price.

The capability index for any contractor can take values greater than one or less than one. Values greater
than one indicate that there are competitors who are able to achieve a bid lower than the contractors bid
price and vice versa.
For any specific contractor, the probability distribution of the CCI is determined by historical records of
previous bids that he had participated in.
3.3.3 Model formulation
The conceptual framework of the model developed in this study is shown in Figure 2.
Figure 2: The Conceptual Framework of the Proposed Model

The developed model aims to evaluate the lowest bid price of a specific proposed road construction and
rehabilitation project based on the size of the project and number of participating bidders.
The model is built using Crystal Ball decision-engineering software (Crystal Ball professional edition
License). Spreadsheet risk analysis on Crystal Ball uses both an Excel-based spreadsheet model and
simulation to analyze the effect of varying inputs on outputs of the modeled system. The type of
spreadsheet simulation implemented by Crystal Ball is Monte Carlo simulation. This randomly generates
values for uncertain variables over and over to simulate a model. Figure 3 describes the procedure of
simulation with Crystal Ball.
172
Figure 3: The Procedure of Simulation with Crystal Ball.

Using Crystal Ball, three types of variables are defined (Table 2):
1. The assumption variables: variables which values are unsure and uncertain (the number of
qualified bidders and the CCI)
2. The decision variables: variables which values are within our control (the contractor bid price)
3. The forecast variables: variables which are unknown (Abp, Lbp).
Table 2: Definition of the Assumption, Decision, and Forecast Variables.
Assumption variables
Contractor's Capability Index (CCI)
Decision variable
Contractor's bid price
Forecast variables
Average bid price
Lowest bid price
5
1
5,142,476.18
5,142,476.18
4,594,802.47
The methodology used to evaluate the above mentioned variables necessitates the selection of a specific
contractor having a historical experience in the field of road construction and rehabilitation projects. A
specific contractor having the greatest bidding participation in the data sample is selected. Seventeen out
of the forty-one awarded projects used in the regression analysis part included the bidding participation of
the selected contractor.
In these seventeen participations, the contractor submits:
173
The lowest bid price in 4 out of 17 participations (a rate of 23.5%)

A price between the lowest and highest submitted bid prices in 9 out of 17 participations (a
rate of 46%)
The highest bid price in 4 out of 17 participations (a rate of 23.5%).
It can be noticed that the contractor has a good capability index in the execution of the proposed works
since 65% of his submitted bid prices are below the average bid price.
3.3.4 Evaluation of the Abp and Lbp
In order to evaluate the Abp and Lbp (forecast variables) using Crystal Ball simulation procedure, two
assumption variables are defined: the number of qualified competitors and the CCI. Due to uncertainty
about their values, both variables are defined with probability distributions.
The number of qualified bidders participating in the bidding process varies from project to project.
According to the historical records in the forty-one collected projects, it is noticed that this number varies
from 2 to 22 with 20% highest participation of four bidders. Using Crystal Ball distribution gallery, the
discrete probability distribution for the number of bidders is constructed.
Using the historical records of the available seventeen participations, the CCI probability distribution
curve of the selected contractor is constructed. The maximum extreme distribution with a mode of 0.88 is
selected to best fit data records of CCI based on Chi-square ranking method.
Figure 4 illustrates the evaluation procedure of the Abp and Lbp using the developed regression
relationship and simulation runs.
Figure 4: Simulation Procedure to evaluate the Abp and Lbp.

Once an opportunity is presented, the selected contractor can decide on his bid price in a usual systematic
method. Deciding on his bid price and using his CCI probability distribution curve, the contractor can
then evaluate the average bid price for the proposed project using Crystal Ball simulation approach. The
average bid price is evaluated using equation (2). After determining the probability distribution chart of
the Abp, the evaluated Abp and the number of qualified bidders are simulated using regression equation
(1) to evaluate the Lbp.
3.3.5 Model validity- sample application
To verify the validity of the developed model, twelve separate bidding projects in the specified field are
randomly selected. The selected projects are neither included in the regression analysis nor in the
determination of the capability index of the selected contractor. These projects are of different sizes
ranging from small to more complex. The selected contractor has participated in the bidding process of
these selected projects. Table 3 provides a description of the twelve tested projects.
174
Table 3: Statistical Description of the Twelve Tested Projects.
Project 1
Project 2
Project 3
Project 4
Project 5
Project 6
Project 7
Project 8
Project 9
Project 10
Project 11
Project 12
Number of
qualified
bidders
8
10
12
14
7
5
7
8
5
9
8
6
Average bid
price($)
Lowest bid
price($)
Contractor bid
price($)
10,703,590.59
5,326,856.01
4,193,881.29
3,583,705.02
3,656,682.20
8,642,149.42
6,902,069.11
12,131,309.71
8,547,079.58
14,861,352.81
2,682,398.84
10,117,539.20
10,151,000.00
4,709,672.00
3,620,574.08
2,727,063.56
2,781,873.50
8,397,855.00
6,355,792.24
11,050,609.45
7,382,262.13
11,780,030.00
1,982,718.15
8,968,451.72
10,614,642.5
5,142,476.18
3,769,733.25
3,160,181.00
3,196,793.32
9,116,041.5
7,250,000.00
11,792,211.6
7,832,365.10
14,019,664.44
2,310,507.00
10,132,795.57
For each project, 2000 simulation runs are conducted to evaluate Abp and Lbp. Referring to Table 4,
results show that the absolute mean deviation of the evaluated mean lowest bid price from the actual
lowest bid price for the twelve tested projects is only 2.6 %.
Table 4: Evaluated Lbp in the Twelve Tested Projects.
Project 1
Project 2
Project 3
Project 4
Project 5
Project 6
Project 7
Project 8
Project 9
Project 10
Project 11
Project 12
Lowest bid price (Lbp)

Actual($)
Evaluated($)
10,151,000.00
9,818,217.27
4,709,672.00
4,743,128.93
3,620,574.08
3,482,939.83
2,727,063.56
2,875,464.43
2,781,873.50
2,853,106.95
8,397,855.00
8,306,394.69
6,355,792.24
6,619,254.52
11,050,609.45
10,888,587.46
7,382,262.13
7,241,999.15
11,780,030.00
12,054,136.49
1,982,718.15
1,978,356.17
8,968,451.72
9,354,095.14
Absolute mean deviation
Sample standard deviation
175
%Deviation
3.28
-0.71
3.80
-5.44
-2.56
1.09
-4.15
1.47
1.90
-2.33
0.22
-4.30
2.6%
1.61
Small deviations from actual data records reflect the validity of the developed model. Under similar input
conditions, the model is able to reproduce past performance and provide a reasonable evaluation of the
Lbp for any presented bidding opportunity under the specified field of study.
Also, a 95% confidence interval shows that the absolute mean deviation between the evaluated and the
actual Lbp is between 1.577% and 3.622%.
4. Conclusion and Future Research

A stochastic-simulation model for lowest bid price evaluation in the field of road construction and
rehabilitation in Lebanon is developed in this study. The model, built using Crystal Ball decisionengineering software, considers two main factors affecting the bidding process, namely the number of
qualified bidders and the size of the project.
A regression relationship between the lowest bid price, the average bid price, and the number of qualified
bidders is also developed and used in building the model. The regression relationship shows that the ratio
of the lowest to the average bid price decreases by 1.5% for each additional bidder. This asserts the
concept that fairness and economic saving in public fund is achieved through competitive bidding.
The validity of the model is tested on twelve separate projects. Results show an absolute mean deviation
of only 2.6% between the actual lowest bid prices and the corresponding evaluated values.
In future research, the proposed model can be developed based on the evaluation of the Lbp at a recontract stage. This will provide a decision-making framework for a specific contractor with a past
historical performance to take a satisfactory decision on his bid price. It will also help the contractor to
assess his probability of winning and his competitiveness in a scientific method.
5. Acknowledgements
The authors would like to thank Mr. Ghassan Kayrallah, Mss. Faten Temsah, and Mss. Faten Adelkader
from CDR for their help in collecting the data sample from the archived records of CDR.
6. References
Carr, P., P.E., and ASCE, M. (2005). Investigation of bid price competition measured through prebid
project estimates, actual bid prices, and number of bidders. Journal of Construction Engineering and
Management, Vol. 131, No. 11, pp 1165-1172.
Chapman, C.B., Ward, S.C., and Bennell, J.A. (2000). Incorporating uncertainty in competitive
bidding. International Journal of Project Management, Vol. 18, No. 5, pp 337-47.
Crystal ball 7 professional Edition- Student- Academic License- 2 Year single User License- version
7.2.2. Available from: https:// www.crystalball.com/downloadcb.html
Council for Development and Reconstruction CDR. (2007).http://www.cdr.gov.lb/Plan/main.htm ;
http://www.cdr.gov.lb/whats.htm. (date accessed)
Drew, D., Skitmore, M., and Po Lo, H. (2001). The effect of client and type and size of construction
work on a contractor's bidding strategy. Building and Environment, Vol. 36, No. 3, pp 393-406.
Drew, D. and Skitmore, M. (1997). The effect of contract type and size on competitiveness in bidding.
Journal of Construction Engineering Management and Economics, Vol. 15, No. 5, pp 469-89.
Egemen, M. and Mohamed, A. (2007). A framework for contractors to reach strategically correct bid/no
bid and mark-up size decisions. Building and Environment, Vol. 42, No. 3, pp 1373-85.
Lebanese decree-laws (1959). General bidding process, Juridical Journal, Eastern Library, Nijmeh
square, Beirut, Lebanon.
176

Construction Risk Insurance Practices In Pakistan

Farrukh Arif
farrukh@neduet.edu.pk
Lecturer, Department of Civil Engineering
Uneb Gazder
Lecturer, Department of Urban & Infrastructure Engineering
Nida Azhar
Lecturer, Department of Urban & Infrastructure Engineering
Rizwan U. Farooqui
University, Miami, Florida, USA)
Abstract
Construction works are hazardous by nature and accidents are frequent and often severe. The
annual toll of deaths, bodily injuries and property damage in construction world is very high. Not
only this but construction works involve large amount of investment especially in public projects.
All of this increases the risk of construction business and makes handling of financial matters
more critical. Insurance and Surety are some of the methods utilized by the contractors and client
as risk controlling mechanisms.
Risk insurance helps the contractor transferring its risk related to unforeseen circumstances which
has a potential risk of damage to life, property, material or equipment. The study aims at
highlighting the current insurance practices of the construction industry of Pakistan. A
distinguishing approach of targeting insurance companies will be used for data collection in this
regard.
The study will be beneficial for developing sets of recommendation for the construction industry
and financial institutions to highlight and improve the shortcomings of the current practices. It
will serve as an initiative to academia for further research.
Key Words
Construction Industry, Risk, Insurance, Risk Transfer
1. Introduction
Construction is recognized by many researchers to be among the riskiest of industries all over the
world, both in terms of safety of the personnel and security of investment. Construction industry
represents a big part of the national investment, which is above 2% of the total GDP i.e. the direct
177
contribution of the industry while it gets above 10% if the contribution of the transport and
communication sector [Federal Bureau of Statistics, Pakistan 2006].
Construction works are characterized by the involvement of man power and the use of equipment
and material as the major resources. There are certain risks involved with either types of the
resources used. Annual toll of deaths, bodily injuries and property damage in construction world
is very high. Not only this but construction works involve large amount of investment especially
in public projects. All of this increases the risk of construction business and makes handling of
financial matters more critical. Insurance and Surety are some of the methods utilized by the
contractors and client through out the developed world as risk controlling against these unwanted
events. Risk insurance helps the contractor transferring its risk related to unforeseen
circumstances which has a potential risk of damage to life, property, material or equipment.
(Richard H. Clough, 1986)
This study aims at highlighting the current insurance practices of the construction industry of
Pakistan. A distinguishing approach of targeting insurance companies has been used for data
collection in this regard.
2. An Overview of Overall Insurance Scenerio in Pakistan

Insurance business in Pakistan was regulated under the Insurance act of 1938 and administered by
Department of Insurance, under the Ministry of Commerce. This act was replaced by Insurance
ordinance 2000 in August 1999, in which an Insurance Division is been established to act in place
of Department of Insurance under the Securities and Exchange Commission of Pakistan. Apart
from establishing the above mentioned autonomous body this ordinance incorporates the
following regulations:
Capital requirements for life and non-life insurance companies.

Setting up minimum solvency margins on time to time basis.
Investigation and issuance of directives for enforcement of Insurance law.
Take care of the policyholders interests and judicial administration of the company by
enforcing penalties for intervention to law.
Registration of the insurers.
Implement disclosure and accounts requirements.
Setting up of committees and tribunals for taking care of above issues.
Division is still in process to take care of some of the above issues [SECP, 2000].
Insurance Association of Pakistan was established in 1948 to work as a forum for the exchange of
knowledge, experience and statistics among member companies. Association has affiliation with
Ministry of Commerce and is a member of Federation of Pakistan Chambers of Commerce and
Industry; it also has its affiliation with international associations. The member companies of the
association consist of 32 General insurance and 4 Life insurance companies including 4 foreign
companies (2 General and 1 life insurance) up till Feb. 2008 [Insurance Association of Pakistan,
2008].
Insurance industry in Pakistan has been on a high with an average increase in gross premiums of
16% from 1972 to 2006. In the recent years this average has been going up with growth rates
above 20%. The Gross premium in 2006 was over Rs. 27.4 billion in which the engineering and
transport sector contribution was Rs. 16.35 million which is more than 50% of the total. This
certainly indicates the awareness in the engineering and in particular construction engineering
178
sector regarding insurance as risk transfer tool. Still, there exists a need to investigate the risk
insurance practices in the construction industry which this study has tried to address.
3. Research Scope & Objectives

The study is intended to highlight the involvement and practices of insurance companies in
construction industry of Pakistan. In this regard general insurance companies from major cities of
Pakistan have been surveyed regarding the construction risk insurance practices. It is anticipated
that the information gathered through the study and recommendations will serve as a positive step
in highlighting improvements in Construction risk insurance practices and will be valuable in the
future.
Firstly, a thorough Literature review has been done to determine the current status of the overall
insurance practices in Pakistan and particularly the construction risk insurance practices in the
developed world. The literature review also helped in developing a questionnaire to investigate
the current construction risk insurance practices.
A questionnaire has been developed that mainly inquired the Construction Risk Insurance
practices and system of the insurance firms.
A survey has been conducted from 21 General Insurance companies through out Pakistan. Out of
21 companies the data provided by 10 companies (response rate 48%) was found valid for the
analysis.
The information gathered through the survey has then been analyzed and some Conclusions and
recommendations have been presented on the basis of this analysis.

A discussion and analysis of the findings of this study are as follows:
5.1 Types of Insurance Coverages

Companies were asked to identify the insurance coverages offered by them for construction
projects. The different types of coverages offered by the construction firms (with percentages in
brackets) are as follows.
It has been found that most of the companies deal in General liability (90%), Professional liability
(90%), Builders risk (70%), Workers Compensation (80%), Equipment (80%), and Auto
insurance (70%). While Pollution liability (30%) and Umbrella excess (10%) are coverages are
not so common for the construction projects. Reason for fewer companies been interested in
Pollution liability might be the little awareness and less priority of the clients as well as the
construction firms for the environmental factors in construction Projects . No firm offers Wrapup insurance programs for construction projects. Wrap-up and Umbrella insurance basically
cover the overall performance of the projects; reasons for not offering these coverages may be the
high probability of failure of construction projects (in terms of cost and time) and the high risk
rating of the construction industry.
179
5.2 Significant Factors for issuance of Insurance for Construction Projects

Companies were asked to identify significance of different factors on a scale of (1 to 5) with
significance increasing from 1 to 5 for issuing insurance coverages to the construction projects.
The factors are classified among the following classes:
Owner related factors

Key Personnel related factors
Past Project related factors
Companys operation related factors
Current Project related factors
factors Related to Financial position
For all the factors in the above classes a Factor Significance Index (FSI) has been calculated by
the following formula. The results are shown in Table 1
FSI = (no of response at each significance x significance weight)
No. of Responses for Each Factor
Table 1: Factor Significance Indices
Factors
Owners Related Factors
Factors Significance Index
Type of ownership
Other businesses held by owner
Information about spouse
Market reputation of owner
Life insurance payable to the company
Past experience with the insurance company
Factors Related to Key Personnel of Organization
Technical Competencies
Past Experience
Period of Employment
Past Project Information
Scope of past projects
Ratio of successful v/s unsuccessful projects
Size of work handled
Geographical Location
Profitability
Owners and architects of past projects
Employment Contracts
Largest Size of Successful Projects
Factors related to operations of the company
Type of work
Plans of expansion
Operating Policies and procedures
Current Project Information
Hazardous Material
Geographical Location
Terms of Contract
Method of Payment
180
3.8
3.8
1.7
4.1
1.6
4.5
3.8
3.6
3.1
4.0
4.0
3.8
4.0
3.7
3.1
3.2
3.6
3.8
3.8
2.6
4.2
3.7
3.9
3.8
Factors
Percentage of Retention Money
Volume of Subcontracted Work
Technical requirements
Machinery used
Factors Related to Financial Position of Company
Factors Significance Index

3.2
3.7
4.0
3.6
Financial Statements of past years

Financial statement of current year
Bank Credit record
Cost Management Book Keeping System
4.0
4.0
4.2
3.2
The top ten factors that were identified as most significant are given as under in the order of
descending significance:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Past experience with the insurance company (4.5)

Hazardous Material (4.2)
Bank Credit record (4.2)
Market reputation of owner (4.1)
Scope of past projects (4.0)
Ratio of successful v/s unsuccessful projects (4.0)
Geographical Location (4.0)
Financial Statements of past years (4.0)
Financial statement of current year (4.0)
Machinery used (3.6)
The factors identified as the most significant are mostly related to the construction firms past
performance, reputation and on the hazards related to the current project. Personal, management
and contractual information like life insurance, operating policies and procedures, employment
contracts, etc, do not seem to gain much attention in risk insurance assessment of construction
companies.
On the basis of above indices Class Significance index (CSI) has been calculated to compare the
significance given to each class by the following formula. The results are shown in Table 2
CSI= (FSIs for each class)
No. of Factors in each class
Table 2: Class Significance Indices
Class
Owners Related Factors
Factors Related to Key Personnel of Organization
Past Project Information
Factors related to operations of the company
Current Project Information
Factors Related to Financial Position of Company
Class Significance Index

3.25
3.5
3.7
3.4
3.8
3.9
The class significant indices show that financial status and current project Information are of
more concern than other classes of factors. Financial factors are normally used for the risk
181
evaluation of a company by almost all stakeholders because they are easier to establish and
interpret.
5.3 Criteria for Premium Rates

Companies were asked to identify the criteria for setting up the premium rates for different types
of insurance coverages on construction projects. Table 3 shows the percentage of companies that
consider a particular factor as important. From this table we can conclude that Classification of
operations and probable accidents associated with those operations are the most considered
factors for defining the premium rates. Since both these factors are the variables that define level
of risk to a particular job.
Table 3: Criteria for defining premium rates
Insurance
Policies
General
liability
Professional
liability
Builders risk
Workers
compensation
Increases in the
cost of cases
Contractors
pollution
liability
Equipment
Classification
of operations
Factors
The frequency and
Rates of
severity of accidents
pay
in a particular
classification
Attitudes of various
industrial
compensation
commissions
57.14 %
14.29%
71.43%
42.86%
71.43 %
57.14%
57.14%
0.00%
57.14 %
0.00%
57.14%
28.58%
57.14%
71.43%
57.14%
28.58%
14.29%
42.86%
14.29%
14.29%
57.14%
42.86%
42.86%
14.29%
71.43%
14.29%
71.43%
28.57%
The premium rates set by the companies is also based on both the cost of project and time period
of project. The usual premium rates set by the insurance companies based on cost of project are
shown in table 4
Table 4: Premium rates based upon cost of Project
Cost of Project
Less than One million
One to five million
Greater than five million
Premium Rate
1% per annum
0.75% per annum
0.5% per annum
The premium rates set by the insurance companies based upon the duration of project are shown
in table 5
182
Table 5: Premium rates based upon Duration of Project

Duration
>8 months
For 3 months
For 6 months
Premium Rate
1%
0.125%
0.5%
5.4 Workers Compensation Insurance

For Workers Compensation insurance medical and hospitalization allowances are considered but
rehabilitation expenses (which have gained a great importance in USA and Australia) are not
considered at all. These rehabilitation expenses also include disability payments in most cases
which are also not covered by many companies. In most of the cases Workers compensation
does not include professional diseases, this is a concept that is been greatly considered by
developed countries to not only look at the immediate losses but long term losses due to increased
exposure to the field, environment and material. All these factors are considered to be awkward
components of the construction industry which keep on changing from project to project. There is
no preference for premium rating system of Workers Compensation both Retrospective and
guaranteed cost are equally used. In case of injuries or illnesses hospitalization expenses are
covered or predetermined amounts are also given for disability but no income is given for
disablement period which is a part of rehabilitation process. For calculating the premium amount
Payroll and Craft of the employee are considered.
5.5 Reporting Authority

Companies have given a mixed response for the reporting of incidents/accidents indicating the
lack of regulatory framework. Although an Insurance Division is established to regulate the
insurance industry but most respondents have identified local and provincial governments for
reporting of these incidents and insurance related matters.
6. Conclusions
Following are the major conclusions drawn from the findings of the study:
1. The insurance policies provided in Pakistan for construction projects are General liability,
Professional liability, Builders risk, Workers compensation and equipment coverages.
2. The findings of the research have signified that although there is strong existence of
insurance mechanism in Pakistan but insurance practices dont seem to be deep rooted in
the construction industry.
3. The top five Factors that have been found most significant for issuance of insurance for
construction projects are:
a.
b.
c.
d.
e.
Past experience with the insurance company

Hazardous Material
Bank Credit record
Market reputation of owner
Scope of past projects
183
All the above factors are mostly related to past performance of the companies. Since,
there is no mechanism in which past performances of the construction projects are
recorded the measurement of these factors are difficult for the insurance firms.
4. Financial factors seem to have the greatest importance for insurers for issuance of
Policies.
5. Classification of operations and the frequency and severity of associated accidents were
found as the most dominant factors for establishing premium rates for any policy. In turn
these factors also decide about the associated risk for a particular job.
6. No dominant premium rating system exist for any insurance coverage although industry
related factors like severity of past accidents and operations of the company look to be
more rated high than other factors.
7. Premium rates vary a lot from organization to organization but range for the rates for all
policies seem to fall in a small range for particular organizations.
8. Workers compensation is mostly provided for the medical and hospitalization expenses
of accidents or a fixed amount for disability. Issues related to rehabilitation of the worker
are being greatly neglected.
9. No single reporting authority was pointed out by the respondents. Mostly local or
provincial government body has been found as the reporting agency instead of the
Insurance division which is being specifically established insurance regulation.
7. Recommendations
The findings of the research has shown strong existence of insurance practices in Pakistan in
General scenario but still insurance as a risk transfer tool is not at mature stage in Construction
works. There are some weaknesses in the insurance system that are needed to be overcome. There
is a strong need of a mechanism that can measure the past projects performance of construction
firms. The workers compensation should address to the issue of worker rehabilitation. There
should be a single reporting and monitoring authority.
8. References
Federal Bureau of Statistics-National accounts of Pakistan
Insurance association of Pakistan (IAP)-www.iap.net.pk
Kangari & Bakheet (2001) Construction Surety Bonding Journal of Construction Engineering
and Managegment., Volume 127, Issue 3, pp. 232-238
Richard H. Clough (1986) Construction Contracting 5th edition, John Wiley & Sons New
York.
Securities and Exchange Commission of Pakistan (SECP) annual report 2000, Regulation of
Insurance.
184
First International Conference on Construction in Developing Countries (ICCIDC-I)

August 4-5.2008 Karachi, Pakistan
Failure of Overhead Water Tank in the State of Uttar Pradesh in IndiaA Case Study
Amjad Masood
amjadmasood1@rediffmail.com
Tazyeen Ahmad
Muhammad Arif
V. P Mital
Professor, Department of Civil Engineering, ZHCOT, AMU, Aligarh-202 002, U.P, India
Abstract
The state government of Uttar Pradesh had launched the safe drinking water project for rural population
living in remote areas. The job of implementation of the scheme was given to the corporation JAL
NIGAM which deals with the public water management in the state. However the project was a failure.
At last the problem was referred to the department of civil engineering for the remedial measures. After
minute study of the problem, it was observed that various phases of project life cycle were not tested on
the test stone of money, man, material, machine, maintenance and lastly wrong selection of technology
for constructing the tank. In this paper it has been concluded and emphasized that in civil engineering
projects, availability of raw material at site, regular cash flow, availability of suitable human resource,
appropriate technology, availability of sinking fund, local sociology and psychology of the local people
should never be ignored for making the project a success.
Keywords
Project, Water Management, Human Resources and Maintenance
Introduction:
In a world where a child dies every 15 seconds from diseases associated with lack of access to safe
drinking water, inadequate sanitation and poor hygiene, there is an urgent need to attend to this problem.
As we all know villages make up 75% -80% of the total population of India. In the last 60 years they have
contributed enormously to India's economy, yet they are the most neglected people in not having the basic
needs of life, let alone in other areas of development. This has led to migration from rural areas to urban
areas and an increase in urban slums. In general safe drinking water is not available to most of the rural
population. The purpose of providing reinforced concrete water tanks is simply to provide the most basic
daily needs to the villagers. To keep the electoral promise of Safe Drinking Water for All, a scheme
financed by the World Bank, the Uttar Pradesh state government in 1970 decided to construct Overhead
tanks in the villages to provide good quality drinking water. Earlier due to lack of social awareness about
185
the importance of safe drinking water the project did not receive a very warm welcome. The social benefit
envisaged in this project is to provide good health to the people.
Project
The state government of Uttar Pradesh had launched the safe drinking water project for the rural
population in the state. The job of implementation of the scheme was given to the Corporation Jal
Nigam which deals with Public Water Management in the state. The various stages of the project to be
undertaken were not critically examined by the Organization. In particular the project was not tested on
proper utilization of Man, Money, Material, Machinery and Maintenance. And above all the technology
selected for the Construction of the tanks was also not appropriate and this resulted in total failure of the
project.
The project was referred to the Department of Civil Engineering, AMU, Aligarh for suggesting the
remedy. The Department submitted a report highlighting the causes of extreme distress in the water tanks
much earlier than their normal useful life of 50 years. A few tanks surveyed in rural areas of Agra and
Mathura districts showed extreme damages in form of corrosion of reinforcement and spalling of concrete
within a period of 10-15 years (Table-1). It was observed that poor quality of concrete in terms of
durability under the prevailing environmental conditions lead to the distress in water tanks. The
deterioration of the water tanks due to distress is shown in Figures 1 to 3. Jal Nigam had to issue warning
for safety to the locals as shown in Figure 4
Table -1 Condition of Water tanks
S.
No
1
Place and
Year of
Construction
Sonkh,
Mathura 1975
Fathehpur Sikri
Agra 1988
Chhata,
Mathura 1970
Saiya, Agra
1983
Type
Inspected
on
450kL
Column
Staging 15m
01.05.98
150kL
Column
Staging 18m
140kL
Column
Staging 10m
350kL
Column
Staging 18m
17.07.02
14.07.98
18.12.02
186
Status
Staging
Tank
Body
Column
Braces
Stair
Flight
-do-
Column
Wind
Braces
Shaft
Stair
Flights
Remark
Rusting of
Reinforceemnt and
Spalling of
Concrete
-do-
-do-
-do-
Figure 1: View of Carbonated Concrete
Figure 2: Shaft at ground level
187
Figure 3: Shaft at ground level near staircase
Figure 4: View of warning sign of Jal Nigam on the shaft of the tank
188
A water-tight reinforced concrete structure

containing discontinuous cracks, microcracks
and pores
Gradual loss of water-tightness as

cracks, micro cracks and pores become
more interconnected
Environmental action (Stage-1)

(No visible damage)
Weathering effects
Loading effects
Enviromental action (Stage-2)

(Initiation and Propagation of Damage)
Penetration of water
Penetration of O2 and CO2
Penetration of Cl and SO4
Expansion of Concrete caused by

Corrosion of steel
Sulphate attack on cement paste
Alkali attack on aggregated
Cracking, Spalling and Loss

of Mass of Concrete
Figure 5: The holistic model of deterioration of concrete from environmental effects (P.K.
Mehta)
189
The project launched had several shortcomings in the planning phase, which lead to the above failures. It
was further observed that the site selection of the project and location plays a very important role for the
economy, safety and success of the project. The site selected was in the extreme interiors of the village
where the human resources were rather scarce. Even the inflow of material to site was also not proper.
The manpower hired was not trained properly for the mixing of concrete construction and this lead to
poor workmanship and thus leading to poor quality of construction and thus poor structural performance
of overhead water tanks.
The failure of the water tanks can thus be attributed to poor quality of concrete in terms of durability. The
tanks surveyed for damage being in rural areas where it is difficult to maintain the quality of concrete. A
durable concrete is one which does not show the signs of distress during its service life under given
environmental conditions. Further the technology used for the construction was cast-insitu which in case
of overhead water tanks is not suitable for remote areas, as this needs quality control of highest order.
Lack of quality control has caused minor cracks in the water tanks, which lead to the leakage and
deterioration of concrete. The reasons of failure thus are due to the improper selection of material, mix,
placement, compaction, leaking formwork temperature control, curing leading to honeycombed and
porous concrete. The honeycombing of concrete and improper cover to concrete, leads to the corrosion of
reinforcement, because of the environmental attacks due to carbonation, chlorides and sulphate attack.
The sulphate attack causes expansion and disruption of concrete due to formation of calcium sulphoaluminate. Crystallization of sulphate salts in the pores of concrete also account for a considerable
danmage. The holistic model of deterioration of concrete from environmental effects is given in form of
flow chart in Figure 5
Maintenance of the water retaining structures is also a very important factor for which sinking funds are
to be generated. In case of rural projects it was observed that the possibility of creating sinking funds is
almost standoffish. Thus for rural areas pre-engineered technology is better than the cast insitu
technology.
Conclusions
On the basis of the present study following conclusions can be drawn
At project planning level varied human resources with diversified experience and knowledge
should be engaged.
Secondly at planning and implementation level, local factors and psychology of people and their
involvement in the project should not be ignored.
The factor of cost optimization at various stages of the project viz. designs, procurement of
material, project implementation, project startup and the subsequent operations should be done.
Further in formulating a public project the following points during Planning, Design and Construction
phase the following points should also be considered
Life cycle costing of project
Useful life of the project
Duration of the completion of the project
The concrete should be durable protection of reinforcement from corrosion
Further preventive measures can also be taken by using sulphate resisting cement or Ordinary Portland
cement with less tri-calcium aluminoferrite and tri-calcium aluminate to avoid the sulphate attack
190
References
Mital, V.P. (2002). Causes of Distress in Reinforced Concrete Structures,- A report submitted to Jal
Nigam, Uttar Pradesh, India.
Mehta, P.K. Concrete Structure, Properties and Materials, 1986, Prentice Hall Inc., New York
Methods of testing hardened concrete other than strength, BS 1881: Part-5 (1970), British Standard
Institute, London, UK.
Recommendation for measurement of the ultrasonic pulses in concrete, BS 1881: Part-203 (1970), British
Standard Institute, London, UK.
191

Optimization of uncertain construction time-cost trade-off problem

Ehsan Eshtehardian
Ph.D. Candidate of Construction Management, Department of Civil Engineering of IUST, Tehran, Iran
eshtehardian@iust.ac.ir
Reza Abbasnia
Associate Professor, Department of Civil Engineering of IUST, Tehran, Iran
Abbas Afshar
Professor, Department of Civil Engineering of IUST, Tehran, Iran
Abstract
Timecost optimization (TCO) may be defined as a process to identify suitable construction activities for
speeding up, and for deciding by how much so as to attain the best possible savings in both time and
cost. In reality due to different uncertainties, the actual cost and time of each option is not certainly
known for the manager in advance. Therefore, total time and cost of project may differ significantly
because of these uncertainties. In this paper, fuzzy logic theory is employed to consider affecting
uncertainties in total time, direct and indirect cost of a construction project. A multi objective
optimization algorithm based on genetic algorithm (GA), is applied to provide a trade-off between
implementation time and total cost. Project manager can also have different non-dominated solutions or
Pareto solutions which are dependent on his measure of accepted risk through applying -cuts methods in
fuzzy logic theory. The proposed model leads the decision maker to select the desirable Pareto front
solution through acceptable value of -cut.
Keywords
Time-cost, trade off, fuzzy theory, GA, Decision making
1. Introduction
Time and cost as two critical objectives of construction project management, are not independent but
intricately related. Trade-offs between project duration and total cost are extensively discussed in the
project scheduling literature because of its practical relevance. Time cost trade off problem is one of the
highly important issues in project accomplishment and has been ever taken into consideration by project
managers. It is generally realized that when project duration is compressed, the project will call for an
increase in labor and more productive equipment, and require more demanding procurement and
construction management, and then the cost will increase. Timecost optimization may be defined as a
process to identify suitable construction activities for speeding up, and for deciding by how much so as
to attain the best possible savings in both time and cost. Since there is a hidden tradeoff relationship
between project time and cost, it might be difficult to predict whether the total cost (i.e., the direct and
indirect costs) would increase or decrease as a result of the schedule compression. Since different
combinations of possible durations and costs for the activities can be associated with a project, the
192
problem is which of these combinations are the best. Determining the best sets is the goal of time-cost
optimization.
2. Literature reviews
A wide variety of heuristic procedures were used to solve the timecost tradeoff problem (Fondahl 1961;
Siemens 1971; Moselhi 1993). In general, these procedures provided rule-of -thumb guidelines for
crashing activities with least costs but cannot guarantee optimality. Mathematical programming models
constitute another group to tackle the problem. Reda and Carr (1989) applied mixed IP to solve the time
cost tradeoff between related activities. Liu et al. (1995) employed LP/IP hybrid method to locate the
lower bound of the project timecost relationship through linear programming and then find the exact
solution by means of integer programming. Successful development and application of meta heuristic
optimization algorithms for solving single objective optimization problems in recent years has attracted
the attention of researchers to investigate the possibility of their application to solve multi objective
optimization problems.
There exist numerous difficulties and complexities in applying meta heuristic algorithms to solve multi
objective problems and several researchers have engaged in appropriate use of these methods during past
2 decades. In this regards, different versions of GAs have successfully been applied to optimize time cost
problem (Feng et al. 1997, Li and Love 1997, Hegazy 1999, Zheng et al. 2004).
Uncertainties in the problem have received less attention due its complexity. Therefore, most of the
researches have been focused on deterministic problems. In real construction projects however, time and
cost of activities may face significant changes due to existing uncertainties such as inflation, economical
and social stresses, execution errors of contractor, design errors, natural events such as climate changes
and etc. Therefore, total time and cost of project may differ significantly because of these uncertainties.
In this paper, a new approach has been investigated in solving time-cost trade off problem. Fuzzy logic
theory is employed to consider affecting uncertainties in time, total direct and indirect cost of a
construction project. To obtain appropriate solutions, genetic algorithm has been employed as an
optimizer where uncertainties are considered through fuzzy logic representation. Project manager can also
have different non-dominated solutions or pareto solutions which are dependent on his measure of
accepted risk through applying cuts methods in fuzzy logic theory. A case study through which
considerable conclusions is drawn is finally investigated.
3. Basis Concept
3.1. Fuzzy Sets
Fuzzy set theory has been applied to many areas which need to manage uncertain and vague data. Such
areas include approximate reasoning, decision making, optimization and control. Fuzzy numbers are a
special kind of fuzzy set, which are normal and convex. Although these numbers can be described by
using many special methods and shapes, triangular and trapezoidal shapes are widely best used for
solving practical applications. The cut is a commonly used method to connect the principles of fuzzy
sets with a collection of crisp sets, which can in turn be fed into most of the existing systems. The -cut
level set or -level cut of A is the set:
(1) A = {( x, A ( x) ) x X }
[0,1]
where X=range of possible values; and A (x) =membership function taking values from [0,1], specifying
to what degree x belongs to the fuzzy set A.
193
The represents the degree of risk that the managers is prepared to take. Since the value of could
severely influence the non dominated solutions, its choice should be carefully considered by decision
makers. As a result, a general survey which aims at identifying the relationship between the value of
(i.e., 0 to 1) and the corresponding risk level (i.e., no risk to full risk) by collecting the risk attitudes of
managers would be indispensable.
3.2. Genetic Algorithm (GA)
Over the last few years, scientists, engineers and economists have extensively used genetic algorithms
(GA), to solve optimization problems involving single objective functions. During last few years several
researchers have extended GA to solve multi objective problems. The basic operation of a genetic
algorithm is simple. First a population of possible solutions to a problem is developed. Then, the better
solutions are recombined with each other to form some new solutions for the next generation. In each
generation, the fitness of every individual in the population is evaluated, multiple individuals are
stochastically selected from the current population (based on their fitness), and modified (crossover and
possibly mutation) to form a new population. The new population is then used in the next iteration of the
algorithm. Finally the new solutions are used to replace the poorer of the original solutions and the
process is repeated. Commonly, the algorithm terminates when either a maximum number of generations
has been produced, or a satisfactory fitness level has been reached for the population.
4. Suggested Model
In reality due to different uncertainties involved time and cost of each option is not a crisp value. In
another words, the actual time and cost of each option is not certainly known for the manager in advance.
However, after project execution, they will be known. To apply time and cost of each option may be well
considered employing fuzzy set theory. So, the number presented for each activity time and cost is a
fuzzy one.
~
A triangular fuzzy number ( X = (x1, x2, x3)) may be assigned for the time or cost of that activity.
Defining c1, c2 and c3 as optimistic, pessimistic and the most probable time or cost for an activity,
respectively. To solve time-cost trade off problem, some options can be chosen for implementation of
each activity. For example, if there exist 7 activities and 5 options for each activity, then 57 sets of
solutions will exist. Therefore, genetic algorithm is applied to obtain optimal solutions of the problem.
Length of chromosome or number of genes equals to the number of activities and value of each gene is
the option considered for fulfillment of the corresponding activity. New terminology will be introduced,
along with step by step procedure.
Step1- A real value which is smaller than maximum number of each activity options is randomly chosen
for each gene. Values of each gene are then read and choose option of each activity is assigned. So, a time
and a cost value which is in the form of triangular fuzzy number are defined. When reading all the genes
value is terminated, fuzzy time and cost value are assigned to all the project activities. Then reading the
genes of next chromosome starts so that the first generation is finished.
Step2- Project critical path for each chromosome is defined using network bases and equations,
considering the governing concepts of the network and predecessor activities. Summation of fuzzy times
of a set of options in each path may be defined with a fuzzy number. Fuzzy mathematical equations are
employed to add the fuzzy time number. Assume that X 1 and X 2 are two fuzzy number and their cuts
are presented as X1 and X2. The sum of these two numbers would be as follows:
(2) ( X 1 + X 2) = [ x1 + x 2 , x1+ + x 2+ ])
[0,1]
194
In order to address the critical path, the total time of each path associated fuzzy times for different values
of cut must be compared and ranked. To compare fuzzy times, they should be transformed to a crisp
~
value through application of center of gravity defuzzifier. Therefore, if total fuzzy time ( X ) is covered
by membership function A, the center of gravity defuzzifier defines point X* as the center of region
which is covered by A. For =1, value of X* will represent the total time of a path in fully crisp
environment.
(3) X * =
X ( x)dx
( x)dx
A
The time of project termination for each path can be compared with other using fuzzy numbers
comparison method based on center of gravity defuzzifier. This process leads to obtain project
termination time.
Step3- Total direct cost of project is calculated. It is necessary, in this situation, to add costs of project
activities to each other according to the options determined for them. Fuzzy mathematical equation (Eq.2)
is employed to add the fuzzy cost number.
Step4- Model has the ability to easily calculate the total project cost. Total project cost will be obtained
by multiplying daily cost (indirect cost) by project execution time and adding this product to the relevant
direct cost. If the indirect cost is fuzzy number, fuzzy mathematical equations will be employed to
~
~
multiply this number because time and cost are fuzzy numbers. Assume that X 1 and X 2 are fuzzy
numbers, the multiplication of these two numbers would be as follows [13]:
~ ~
~
(4) X = X 1 X 2 = [min( x1 x 2 , x1 x 2+ , x1+ x 2 x1+ x 2+ ),
max( x1 x 2 , x1 x 2+ , x1+ x 2 x1+ x 2+ )]
After multiplying indirect cost to time in a fuzzy manner using above mentioned equations and adding the
indirect cost to direct cost in a fuzzy manner (Eq.2), total cost which is a triangular fuzzy number will be
obtained. Therefore, there is a fuzzy value for total project time and cost.
Step 5- An order pair including time and cost of project termination is formed for each chromosome or
solution of the project. The chromosomes than which no chromosome is formed having lower both time
and cost, are named non-dominated chromosome. Pareto solutions of each population are the nondominate chromosomes. In order to find dominated and non-dominated solutions, it is necessary to make
a comparison between the times and the costs of chromosomes. In this situation, fuzzy numbers
comparison and ranking methods is applied based on center of gravity defuzzifier. The cost and time of
project termination for each alternative solution (chromosome) can be compared with other
(chromosomes) binarily using fuzzy numbers comparison method.
Step 6- Euclidian distance (dE) of each individual (I) from each non-dominate individual (NI) is
calculated according following equation:
(5) I , NI : d E (i, ni ) = (
Ci* Cni* 2
Ti * T ni* 2
)
+
(
)
*
*
*
*
C max
Cmin
Tmax
Tmin
Where C*max = defuzzy maximum cost of population; C*min = defuzzy minimum cost of population; C*i =
defuzzy cost of individual i; C*ni = defuzzy cost of non-dominate individual ni; T*max = defuzzy maximum
time of population; T*min = defuzzy minimum time of population; T*i = defuzzy time of individual i; T*ni =
defuzzy time of non-dominate individual ni.
Step 7- Minimum of Euclidian distances is considered as fitness function for each chromosome.
(6) f i = Min(d E (i, ni ) for all ni )
195
Basically, non-dominate solutions have fitness as equal to zero and the others belong more or less fitness
values in proportion to their distance from non-dominate solution.
Step 8- Because every chromosome which is closer to non-dominated solutions is better, reverse of fitness
function values is considered as reproduction rate of each chromosome.
(7) Pi =
1
f i + 0.0001
To avoid non-dominate solutions fitness values, i.e. zero, to be situated in denominator of fraction, a very
small number is allocated to their fitness values and then population are produced based on reversed
fitness function.
Step 9-To produce population of next generation, non-dominate solutions is kept as optimal solutions for
next generation and so these chromosomes are produced again. In order to obtain other chromosomes of
the next generation, some of reproduced chromosomes are chosen to be used in crossover and mutation
processes and so reproduced offspring constitute other population of next generation.
Step 10- Repeat 2-9 until the pareto front remains the same after a pre-specified number of iterations. The
principal behind the above approach is that for each individual within a generation- the closer to nondominate solution it is, the more fit. Therefore there will be a natural tendency for the new population to
move toward the pareto solution. As new populations are produced, a pareto front will tend to move
toward the coordinate axes. When the pareto front can no longer move closer to the coordinate axis, the
solutions is found. Because, each non-dominate individual will be kept for the next generation, so that the
pareto front always more toward to the coordinate axes.
Advantage of this model in comparison with similar ones lies on the method that, uncertainties in project
time and cost are demonstrated, aggregated and interpreted. Triangular fuzzy values are assumed for any
individual option with total time and cost being presented as a fuzzy number. So, when project manager
chooses his optimum solution, he would face a total time and cost and corresponding membership
function ahead that considerably help him to make appropriate decisions based on his own level of risk
acceptance. The project manager may apply his own risk acceptance level to obtain a new pareto front
with new non-dominated solutions using cuts property. When he dose not want to risk, he would assign
zero for and therefore, times and costs of project activities, direct cost and total time and cost obtained
for the project may be subject to high range of changes. When project manager wants to fully risk (i.e.
100 percent), he sets equal to 1 and so, times and costs of project activities, direct cost and total time
and cost would be transformed from a fuzzy value to a crisp one and problem would enter into a crisp
space from a fuzzy one. In this situation, uncertainties in time and cost estimation would be practically
ignored. Determination of (i.e. accepting different risk percentage), would lead to different pareto
solutions.
5. Case study
To demonstrate the concept and test the performance of the proposed model, a simple case example was
adopted from Mr. Zheng (2004). It consists of 7 activities with different possible options. The time and
cost data reported by Zheng et al (2004) were assumed associate with the most probable condition with
membership of 1; while for the minimum and maximum time and cost for any option time and cost values
were assumed to form the triangular membership functions. Adopted and assumed values for time and
cost of options along with other required data for 7 activity project are presented in table1. Assumed value
for indirect cost is (410, 500, 720) dollars.
196
Table 1-Fuzzy time and cost data for test problem

Activity
number
Predecessor
fuzzy time
and cost
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
Time1
Time2
Time3
Cost1
Cost2
Cost3
12
14
17
20500
23000
26750
12
15
20
2870
3000
3150
10
15
21
4200
4500
4845
10
12
15
43500
45000
47100
16
22
32
18100
20000
23040
12
14
18
38500
40000
42250
7
9
12
28400
30000
32400
17
20
25
16200
18000
20700
13
18
26
2260
2400
2561
20
22
24
3750
4000
4288
12
16
21
33620
35000
36932
20
24
30
15200
17500
21180
15
18
24
30250
32000
34625
13
15
18
22200
24000
26700
2,3
5,6
option
3
19
24
32
11500
12000
12750
15
20
26
1500
1800
2145
28
33
39
2900
3200
3545
17
20
24
28500
30000
32100
23
28
35
13700
15000
16560
20
24
32
16800
18000
19800
15
18
22
21000
22000
23200
23
30
38
1080
1200
1380
54
60
67
500
600
750
25
30
37
8750
10000
12000
The example has been solved for different values of cuts and results have shown in table2.
Table 2- Pareto solution of different cut
cut
Pareto
number
1
2
3
4
5
6
7
Cost
122730
123110
126850
128860
129240
132980
137930
Fuzzy
143000
143500
146500
149000
149500
152500
157000
187765
188385
189765
190965
191585
192965
196805
Time
Defuzzy
151165.0
151665.0
154371.7
156275.0
156775.0
159481.7
163911.7
197
71.0
69.0
63.0
64.0
62.0
56.0
56.0
utilization options
Fuzzy
Defuzzy 1 2 3 4 5 6 7
87 111.0 89.7
3 1 1 3 4 3 3
84 107.0 86.7
3 1 1 3 4 3 2
78 101.0 80.7
3 1 1 3 4 3 1
77 96.0
79.0
1 1 1 2 4 3 3
74 92.0
76.0
1 1 1 3 4 3 2
68 86.0
70.0
1 1 1 3 3 3 1
67 85.0
69.3
1 1 1 3 3 3 1
0.4
0.8
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
11
1
2
3
4
5
6
7
8
9
10
11
12
142230
142500
150830
153730
153640
133072
133492
139072
139492
142612
147482
151654
160552
163192
162822
140224
140664
143704
146124
146564
149604
154194
159418
167884
170064
174288
142998.6
143498.6
146498.6
148998.6
149498.5
152498.6
156998.6
161498.6
162498.5
170998.4
172998.5
173498.4
161500
162500
171000
173000
173500
143000
143500
149000
149500
152500
157000
161500
171000
173000
173500
143000
143500
146500
149000
149500
152500
157000
162500
171000
173000
177500
143000
143500
146500
149000
149500
152500
157000
161500
162500
171000
173000
173500
200917
204097
211930
212350
215405
157607
158607
163407
164407
167227
171463
175862.2
186830
188046
190051
147069
147769
150709
153169
153869
156809
161221
167211.4
175710
177482
182448.4
143002
143502.1
146502.1
149002.1
149502.2
152502.2
157002.1
161502.1
162502.4
171002.4
173002.2
173502.4
168215.7
169699.0
177920.0
179693.3
180848.3
144559.7
145199.7
150493.0
151133.0
154113.0
158648.3
163005.4
172794.0
174746.0
175457.7
143431.0
143977.7
146971.0
149431.0
149977.7
152971.0
157471.7
163043.1
171531.3
173515.3
178078.8
143000.2
143500.2
146500.2
149000.2
149500.2
152500.2
157000.2
161500.2
162500.3
171000.3
173000.3
173500.3
54.0
51.0
51.0
51.0
47.0
74.2
72.0
66.6
64.4
58.4
58.2
56.4
53.2
53.0
49.6
83.8
81.0
75.0
74.4
71.6
65.6
64.8
60.6
59.8
59.0
57.4
87.0
84.0
78.0
77.0
74.0
68.0
67.0
66.0
63.0
62.0
61.0
60.0
66
63
62
61
60
87
84
77
74
68
67
66
62
61
60
87
84
78
77
74
68
67
63
62
61
60
87
84
78
77
74
68
67
66
63
62
61
60
84.0
82.0
79.0
77.0
81.0
106.2
102.4
92.2
88.4
82.4
81.4
80.4
75.6
73.8
76.8
91.8
88.6
82.6
80.8
77.6
71.6
70.6
66.8
65.4
64.2
64.2
87.0
84.0
78.0
77.0
74.0
68.0
67.0
66.0
63.0
62.0
61.0
60.0
68.0
65.3
64.0
63.0
62.7
89.1
86.1
78.6
75.6
69.6
68.9
67.6
63.6
62.6
62.1
87.5
84.5
78.5
77.4
74.4
68.4
67.5
63.5
62.4
61.4
60.5
87.0
84.0
78.0
77.0
74.0
68.0
67.0
66.0
63.0
62.0
61.0
60.0
1
1
1
1
1
3
3
1
1
1
1
1
1
1
1
3
3
3
1
1
1
1
1
1
1
1
3
3
3
1
1
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3
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4
4
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4
4
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2
1
3
2
1
2
1
1
1
1
1
Assuming = 1, disregards uncertainties and solve the model in an absolutely crisp space. In this case, it
is expected to obtain the same solution reported by previous researcher for a fully crisp problem. In fact,
solution to the model was exactly the same solution reported by Zheng et al (2004) for a fully
deterministic solution space. To demonstrate the pareto front in a time-cost coordinate system, fuzzy time
and cost will be transformed to a crisp value through application of center of gravity defuzzifier. Fuzzy
times and costs related to =0, =0.4, =0.8 and =1 have been transformed to crisp values by center
of gravity defuzzifier, and pareto fronts in a time-cost coordinate system are shown in figure 1.
198
190000.0
185000.0
180000.0
175000.0
cost
170000.0
acut 1
acut 0.8
acut 0.4
acut 0
165000.0
160000.0
155000.0
150000.0
145000.0
140000.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
95.0
time
Figure1- Pareto front of different cut

As is clear, when project manager changes his risk acceptance he would face a different pareto front that
considerably help him to make appropriate decisions. The lower the , the higher the total cost for any
given time has been resulted. In another words, pareto front moves upward as it value of approaches to
zero. This issue means that for the lower risk, the higher time and cost would be accrued for project
execution. In this case total time and cost will have smaller range of changes. However, assuming bigger
values for associates with the higher risk acceptance, which results in the lower time and cost with quite
the larger range of changes. This is the major benefit of this model application. The example can be
solved for different values of cuts for direct and indirect cost. It means that, project manager may apply
different risk acceptance level for direct cost and indirect cost separately.
6-Conclusion
Time cost trade off problem is one of the highly important issues in project accomplishment and has been
ever taken into consideration by project managers. In a real construction project, time and cost of each
activity and daily cost change as a result of many uncertainties such as inflation, economical and social
stresses, execution errors of contractor, design errors, natural events. Genetic algorithm is used for
extraction the pareto front. The model adopts fuzzy sets to simulate the degree of uncertainty of the input
data. The incorporation of fuzzy sets theory in time cost trade off problems is therefore a sensible step to
emulate the decision-making process of human experts based on a set of uncertain or incomplete data.
Unlike the traditional models which focus primarily on the deterministic time cost trade off problem, this
model has the ability to adapt to deterministic and uncertain environment by changing the value of .The
project manager can apply his own risk acceptance level to obtain a new pareto front with new nondominated solutions using cuts property. For the lower risk, the higher time and cost would be accrued
199
for project execution. Project manager can apply different risk acceptance level for direct cost and indirect
cost separately.
7. References
Feng, C.W., Liu, L. and Burns, S.A. (1997) "Using genetic algorithms to solve construction time-cost
trade-off problems". Journal Computing in Civil Engineering, Vol. 11, No. 3, pp. 184189.
Fondahl, J.W. (1961) "A non-computer approach to the critical path method for the construction
industry", Technical Report. No.9, Dept. of Civil Engineering, The Construction Institute, Stanford Univ.,
Stanford, Calif.
Hegazy, T. (1999) "Optimization of construction time-cost trade-off analysis: using genetic algorithms",
Canadian Journal of Civil Engineering, Vol. 26, No. 6, pp. 685697.
Li, H., and Love, P. (1997) "Using improved genetic algorithms to facilitate time-cost optimization",
Journal Construction Engineering and Management, Vol.123, No. 3, pp. 233237.
Liu, L., Burns, S. and Feng, C. (1995) "Construction timecost trade-off analysis using LP/IP hybrid
method", Journal Construction Engineering and Management, Vol. 121, No. 4, pp. 446454.
Moselhi, O. (1993) "Schedule compression using the direct stiffness method", Canadian Journal of Civil
Engineering, Vol. 20, pp. 6572.
Reda, RM. and Carr, RI. (1989) "Time cost trade-off among related activities", Journal Construction
Engineering and Management, Vol. 115, No. 3, pp. 475486.
Siemens, N. (1971) "A simple CPM time-cost tradeoff algorithm", Management Science, Vol. 17, No. 6,
pp. 354363.
Zheng, D.X.M., Ng, S.T. and Kumaraswamy, M.M. (2004) "Applying a Genetic Algorithm-based multiobjective approach for timecost optimization", Journal Construction Engineering and Management,
Vol. 130, No. 2, 168176.
200

Uncertain scheduling based on Accepted risk level and optimism of a project

manager
Ehsan Eshtehardian
Ph.D. Candidate of Construction Management, Department of Civil Engineering of IUST, Tehran, Iran
eshtehardian@iust.ac.ir
Abbas Afshar
Professor, Department of Civil Engineering of IUST, Tehran, Iran
Reza Abbasnia
Associate Professor, Department of Civil Engineering of IUST, Tehran, Iran
Abstract
Uncertainties in scheduling are an issue that is addressed in the PERT or GERT to complement CPM.
PERT and GERT are probabilistic approaches that consider variability in the duration of each activity.
For new activities or the lack of statistical data, probability distributions for some activity duration times
may be unknown or just partially known. In this case, probability theory may be replaced by fuzzy set
theory. In this research, a new approach is presented to scheduling, which employs fuzzy sets theory to
considering uncertainties in activities execution times. The model fully embeds fuzzy presentation of the
uncertainties in duration of activities into the model structure. Accepted risk level and optimism of the
project manager in decision making are defined through -cut approach and optimism index ()
respectively. Different values of and leads to different scheduling. In order to test the performance of
the model, an 18 activity problem has been modeled and the results are discussed. Solution to the model
provides the project manager with an implementation time and corresponding membership function,
which may help him in decision modeling process.
Keywords
Scheduling, fuzzy theory, uncertainty, risk acceptance level, optimism.
1. Introduction
Projects are classically defined by the need to complete a task on time, to budget, and with appropriate
technical performance. A vital section specified in the construction project is the performance period or
time of project execution, which is established prior to bidding. An ability to deliver a project quickly is
becoming an increasingly important element in winning a bid. There is an increasing emphasis on
contracts, using prime contractor-ship to pass time-risk onto the contractor, frequently with heavy
liquidated damages for lateness or delay (Terry Williams, 2003). Delay could be defined as the time
overrun either beyond completion date specified in a contract, or beyond the date that the parties agreed
upon for delivery of a project.
These overruns or time extensions are granted for many variables and unpredictable factors, which result
from many sources. These sources include the performance of parties, designer changes or errors,
resources availability, late deliveries, environmental conditions, involvement of other parties, insufficient
201
funding and contractual relations. Therefore, a realistic time for project execution will decrease the
possibility of disputes between owner and the contractors, claims, heavy liquidated damages and
enormous economical losses.
Therefore, Project managers need appropriate tools to aid them in estimating time based on the analysis of
risks and delays, because delays in the completion of construction projects are often an unavoidable
circumstance. Once a delay has been experienced on an activity, the project manager needs to establish
the length of the delay and its effect on the remaining schedule. In many cases, even though the project
manager is aware of the existence of a problem affecting progress on an activity, he or she may not be
able to accurately assess its full extent, its probable consequences, and whether or not it is likely to delay
the project completion date. So scheduling in uncertain environments is too important for project
managers.
Since 1960s, Researchers have studied project scheduling problem in certain or uncertain environments.
The process of planning and scheduling has typically been accomplished using network scheduling
techniques. Critical-path method (CPM) is the simplest method available for modeling the execution of a
project. The critical path method (CPM) has been used to compute project duration in deterministic terms
by analyzing which sequence of activities has least float (OBrien 1969, Moder et al. 1983; Barrie and
Paulson 1992; OBrien 1993; Patrick 2004). Different forms of linear scheduling have been around as
long as network scheduling. The work of Harmelink and Rowings (1998) and Harris and Ioannou (1998)
in determining the critical activities of linear schedules are an important step in obtaining acceptance by
the industry. Uncertainty is an issue that first, was addressed in the Malcolm et al. paper on the program
evaluation and review technique (PERT) method (Malcolm 1959). Several interesting methods have been
issued following this primary paper, and among them, proposing the use of Monte-Carlo simulations
(Van Slyke 1963), also extending the stochastic scheduling problem to branching (the so-called
generalized project-scheduling problem) (Eisner 1962; Elmaghraby 1964; Elmaghraby 1966; Moore and
Clayton 1976; Pritsker 1968). Then, the program evaluation and review technique (PERT) and graphical
evaluation and review technique (GERT) were developed to complement CPM. While CPM is based on
deterministic fixed terms, PERT and GERT are probabilistic and stochastic in that variability is
considered in the duration of each activity. It means PERT and GERT assume that the duration of each
activity is represented by a random variable with a known probability density function (McCrimmon and
Rayvec 1964; Parks and Ramsing 1969, Kotiah and Wallace 1973; Douglas 1978; Ahuja et al. 1994;
Martinez and loannou 1997; Bennet 2001; Deng Hua Zhong 2003). In the other word, the PERT and
GERT extend CPM by introducing the concept of uncertainty in estimating activity durations.
In this paper, a new approach has been investigated in scheduling project in uncertain environments,
based on assuming fuzzy number for activity duration times. Though probability theory has been applied
into project scheduling problem successfully (such as PERT) and the problem with stochastic assumption
has got a great number of applications, sometimes activity duration times cannot be described as random
variables (Hua Ke, and Baoding Liu. 2007). For instance, for new activities or the lack of statistical data,
probability distributions for some activity duration times may be unknown or just partially known. In this
case, probability theory may be replaced by fuzzy set theory introduced by Zadeh (1965). Accepted risk
level and optimism of the project manager are defined through cut approach and index respectively,
for which a critical path has been developed. Use of the model will facilitate the decision making by
selecting specified risk level and employing the critical activity. A case study through which considerable
conclusions is drawn is finally investigated.
202
3. Fuzzy sets
Fuzzy set theory has been applied to many areas which need to manage uncertain and vague data. Such
areas include approximate reasoning, decision making, optimization and control. Fuzzy numbers are a
special kind of fuzzy set, which are normal and convex. Although these numbers can be described by
using many special methods and shapes, triangular and trapezoidal shapes are widely best used for
solving practical applications. A triangular fuzzy number T with the membership function T (t ) , t R
can be denoted by [t1, t2, t3].
The cut is a commonly used method to connect the principle of fuzzy sets with a collection of crisp
sets, which can in turn be fed into most of the existing systems. The cut level set or level cut of A is
the set:
A = {(t , A (t ) ) t T }
[0,1]
Based on the cut concept an uncertain variable represented by a fuzzy number can be transformed into
crisp sets. Therefore the model developed in this paper can be applied to establish the optimal solutions
with different cuts, in which represents the degree of risk that the managers is prepared to accept.
Since the value of could severely influence the critical activity, its choice should be carefully
considered by decision makers.
4. Suggested model
As mentioned before, in reality due to different uncertainties involved, time of each activity is not a crisp
value. On the other hands, due to existence of new activities or a lack of statistical data in construction
project, to apply implementation time may be well considered employing fuzzy set theory. So, the number
presented for each activity time is a fuzzy one.
In the classic CPM analysis, all of the possible paths through project diagram along the arrows from the
first node to the last are found. Then time of all activity in each path is added together, so a total time is
calculated for each path. The critical path is the path that takes the longest. Time of the critical path is
implementation time of project.
Since, in this model the number presented for each activity time is a fuzzy, fuzzy mathematical equation
is employed to add the fuzzy number. The methodology adopted for the summation of fuzzy numbers is
the -cut method and interval analysis. -cut is a discretization technique applied on the continuous
membership function to generate a discrete set of variables in the form of intervals (t1, t3). The
calculation process using -cut method is carried out through the following steps:
1. Select a particular -cut value (0 1) ;
2. Find the corresponding intervals of the selected -cuts;
3. Use the interval operations to calculate the summation; and
4. Repeat the steps for as many -cuts as needed.
Therefore summation of fuzzy times of a set of activities in each path may be defined with a fuzzy
number. To compare a time of each path for finding critical path, associated fuzzy times for different
values of cut must be ranked.
Since 1976, study of fuzzy ranking has begun and over 20 ranking methods for fuzzy numbers have been
proposed. Various techniques are applied to compare the fuzzy numbers. Some investigations defined a
ranking function to map a fuzzy number to a real number and, then, used natural orderings. Other
investigators defined a comparison function that maps two fuzzy numbers to a real number when
203
determining the degree to which one dominates the other. So far, there is no best method is agreed, but
all are based on some type of indices. Therefore, the key issue in devising ranking methods is how to
generate a proper index. This model applies an approximate approach for ranking fuzzy numbers based on
the left and right dominance (Chen, L.H., and LU, H.W. 2001). While comparing two fuzzy numbers Ti
and Tj, Figure 1 illustrates their corresponding left and right spreads at the k level.
(t )
1
Tj
Ti
k
li,k
l j,k
ri , k
r j,k
Figure1- The left and right spreads number of triangular fuzzy number Ti and Tj
The lower and upper limits of the k th cut for the fuzzy number Ti are defined as
li ,k = inf {t T (t ) k },
tR
ri ,k = sup{t T (t ) k },
tR
respectively, where li,k and ri,k are left and right spreads, respectively. The left (right) dominance
DiL, j ( DiR, j ) of Ti over Tj is defined as the average difference of the left (right) spreads at some levels.
They are formulated as
1 n
(li,k l j ,k )
n + 1 k =0
1 n
DiR, j =
(ri,k r j ,k )
n + 1 k =0
where n+1 -cuts are used to calculate the dominance. As n , DiL, j ( DiR, j ) approximates the area
DiL, j =
difference of Ti over Tj according to the membership axis to the left (right) membership functions. In
particular, the total dominance of Ti over Tj with the index of optimism [0,1] can be defined as the
convex combination of DiL, j and DiR, j by
Di , j ( ) = DiR, j + (1 ) DiL, j
The above equation indicates that the total dominance is actually a comparison function. The larger the
index of optimism implies that the right dominance is more important. Herein, the index of optimism is
used to reflect a decision maker's degree of optimism. A more optimistic decision maker generally takes a
larger value of the index, for example, a situation in which = 1(or 0) represents an optimistic
(pessimistic) decision maker's perspectives, and only right (left) dominance is considered. A decision
maker can compare a pair of fuzzy numbers, Ti and Tj, using Di , j ( ) based on the following rules:
204
if Di , j ( ) f 0, then Ti f T j ;
if Di , j ( ) = 0, then Ti = T j ; and
if Di , j ( ) p 0, then Ti p T j .
The proposed model may be superior to most of the previously cited models in expressing uncertainties in
scheduling employing fuzzy sets and final presentation of total time as a fuzzy number. So, when project
manager chooses his level of risk acceptance, he would face an implementation time and corresponding
membership function ahead that considerably help him to make appropriate decisions.
In addition, the project manager may apply his own risk acceptance level to obtain a new critical path
with new critical activity using cuts property. Selection of 1 for cut, (i.e. 100 percent risk acceptance)
leads to a completely crisp space and full ignorance of the uncertainties in the time estimation. Quite
conservative manager with zero risk acceptance level may select zero value for , leading to a very high
range of time variation. On the other hand, project manager can reflect his/her degree of optimism with
choosing different value of . Selection of 1(or 0) for emphasizes on the uncertainties that decrease (or
increase) duration of each activity, respectively. A more optimistic decision maker generally takes a
larger value of . This optimism results in selection of critical path with larger spread in left co-pared to
other paths. Therefore, different values of (i.e. accepting different risk percentage) and (optimism
index), would lead to different scheduling.
5. Case study
To illustrate the concept and determine the effectiveness of the proposed model, a simple project was
adopted. The project consisted of twenty one activities. A simple triangular-shaped form was used to
represent the fuzziness of time of each activity. Adopted and assumed values for time of activities along
with other required data for 21 activity project are presented in table1.
Table 1-Fuzzy time and data for test problem
Activity 1
Predecessor
17
Fuzzy time
20
(days)
29
2 3 4 5
1
29 31 32 22
37 35 40 32
48 43 51 48
6
1
12
17
28
7
5
11
19
31
8
6
25
28
36
9
6
11
15
19
10
2,6
13
15
17
11
2
30
38
53
12
11
28
32
42
13 14 15 16 17 18 19
20
21
7,8 5,9,10 3 4,10 8 15,16 14 13,16,17,1912,18,20
12 27 50 12 29 18 12
7
36
14 31 52 15 33 20 15
9
43
18 39 55 18 40 23 22
12
54
As shown in table2, the project has fifteen implementation paths consist of different activity.
Table 2-Paths of the network and their activities
Number of path
1
2
3
4
5
6
7
8
9
Number of activities in path

2,11,12,21
2,10,14,19,20,21
2,10,16,20,21
2,10,16,18,21
4,16,20,21
4,16,18,21
1,7,13,20,21
1,5,14,19,20,21
1,6,8,17,20,21
205
10
11
12
13
14
15
1,6,8,13,20,21
1,6,9,14,19,20,21
1,6,10,14,19,20,21
1,6,10,16,20,21
1,6,10,16,18,21
3,15,18,21
The example has been solved for different values of cuts and index, and some of the results have
shown in table3 and table 4.
Table 3- Total fuzzy time and number of critical path for =0.5 and different value of
cut
0
0.2
0.4
0.6
0.8
1
Total Fuzzy time

124
150
129.2
150
133.2
150
139.6
150
145.2
150
150
150
201
190.8
181.8
170.4
159.8
150
Critical path
8,11
12
11
12
8,9
1,2,9,15
Table 4- Total fuzzy time and number of critical path for =0.2 and different value of
index
0.1
0.5
0.8
Total Fuzzy time

126.8
150
193.2
129.2
150
190.8
130.8
150
189.2
Critical path
8
12
9
Assuming = 1, disregards uncertainties and solve the model in an absolutely crisp space. In this case,
project has four critical paths and project manager must focus on fifteen critical activities. The developed
model with uncertain activity duration may result in different critical path for different cuts. Therefore,
one may for various cuts, expect different overall project execution time. As is clear in table 3 and
figure 3, when =0.8 is replaced by =0.2, critical path, critical activities and membership function of
time are changed. In this situation, project manager must focus on first, 6th, 10th, 14th, 19th, 20th and 21st
activities and number of critical activities decrease from 9 to 7.
206
11
12
10
2
19
16
9
Start
14
20
Critical path
13
12
10
14
4
9
8
1
5
Critical path
19
16
Start
Critical path for = 0.8
18
11
17
15
21
20
13
15
21
17
18
Figure2- Different critical and activities path for different cut

In addition for the same risk acceptance level, solution to the model will result in different duration time
for optimistic and pessimistic project managers. Figure 4 shows the critical path and membership function
for =0.2 when is changed from 0.1 to 0.8. Since the project manager is an optimistic person, positive
change has decreased the project duration. By choosing larger value of , less attention has been given
to uncertainties which may increase the project duration. It is interesting to note that for different risk
acceptance level () and optimism degree () of project manager the project scheduling, critical path,
critical activities and implementation time of project may change.
207
11
12
10
2
19
16
9
Start
14
20
Critical path
13
12
10
14
4
9
8
1
5
Critical path
19
16
Start
18
11
17
15
21
20
13
15
21
17
18
Figure3- Different critical and activities path for different value of and = 0.2
6. Conclusion
This paper introduced a new approach for scheduling problem, considering uncertainties in activities
execution times. Fuzzy set theory was utilized to solve the problem. cut approach and optimism index
were incorporated into the model to handle risk acceptance level of project manager. It was shown that
the project manager may apply his own risk acceptance level to obtain a critical path with new critical
activities using cuts property. It was also demonstrated that the project manager could reflect his/her
degree of optimism with choosing different value of optimism index.
Application of the model to a 21 activity problem with uncertain scheduling showed that different critical
paths and implementation might be expected for different values of cut and/or optimism index. From
computational point of view, the proposed model was proved to be efficient, since it fully embedded
fuzzy presentation of the uncertainties in duration of the activities into the model structure.
6. References
Ahuja, H., Dozzi, S.P., and AbouRizk, S.M. (1994). Project management techniques in planning and
controlling construction projects, 2nd Ed. Wiley, New York.
208
Barrie, D.S., and Paulson, B.C. (1992). Professional construction management including CM, design-contract,
and general contracting, 3rd Ed. McGrawHill, New York.
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209

Aggregate Characterization - An Important Step towards Addressing

Construction Issues in Pakistan
S. M. Zaidi
Research Assistant, Department of Civil Engineering, NED University of Engineering & Tech., Karachi,
Pakistan
memadiha@neduet.edu.pk
S. F.A. Rafeeqi
Professor & Dean, Faculty of Civil Engineering and Architecture, NED University of Engineering
&Tech., Karachi, Pakistan
M. S. Ali
Professor & Chairman, Department of Urban and Infrastructure Engineering, NED University of
Engineering & Tech., Karachi, Pakistan
A. M. Khan
Professor & Chairman, Department of Petroleum Engineering, NED University of Engineering & Tech.,
Karachi, Pakistan
Abstract
Aggregate is a material vastly used in the construction industry related to concrete structures, asphalt
bases and pavement. To achieve required dimensional stability, durability and strength of structures,
aggregate characteristics and related engineering properties is one of the main issues needed to be
addressed. The city of Karachi is receiving massive quantities of aggregates supplied by several sources
present within and along its periphery, however, no concerted effort has been witnessed to document
aggregate characteristics, leading to all sort of durability problems and threatening service life of
structures. There is a dire need to develop a data-base that contributes to the suitability of material in
asphalt and concrete mix. Aggregate characterization technique is a forefront vision to enhance the
quality of HMA and concrete along side being a pioneering move to select construction materials. It
focuses on quality and performance in roads and buildings and determines suitability of their use in Hot
Mix Asphalt and Concrete Mix Design, thus addressing issues related to applicability in given situation,
strength, durability and maintenance and monitoring and rehabilitation.
This paper aims to present a methodology for aggregate characterization based on their physical
properties, petrography examination and engineering properties. Visits of construction sites in all eighteen
towns of Karachi city revealed that Hub River is the major source of raw material. Based on experimental
design formulated to evaluate the physical properties and engineering behaviour of rocks and crushed
rock respectively, statistical techniques have been applied to ascertain significance of relationships
between various properties governing aggregate characterization. Conclusions are drawn regarding
suitability of characterization of aggregates in relation to their construction application and ability to
address construction related problems. The aggregate characterization model thus developed has the
capacity and potential to be utilized and extended for various scenarios.
210
Keywords
Aggregate Characterization, Engineering Properties, Petrographic Studies.
1. Introduction
Understanding construction material and its behaviour in asphalt and cement applications has always been
a challenge to construction industry. It is of utmost importance to assess and evaluate the properties at
material level and as part of the mix for durability and monitoring point of view.
Aggregate characterization is the first step needed to facilitate construction industry which focuses on
quality and performance issues related to their application in cement concrete, asphalt and other
construction. Being a high seat of learning, NED University has assumed the responsibility to take up the
task of developing a comprehensive mechanism of aggregate characterization which would cover all
aspects of variation in aggregate. These variations include aggregate physical and engineering properties
as well as their chemical and reactivity considerations. All this calls for attempting aggregate
characterization based on source rock, inherent variation, crushing plants limitations and brought down to
laboratory testing of various properties.
Bringing all this into one framework is the major objective of the research reported in this paper. It aims
to provide a methodology for characterization of aggregates which can encompass various construction
issues pertaining to Pakistan. The scope of the current research is limited to coarse aggregate as they
possess major variability as well as they are required in large volume.
This paper dwells upon a conceptual framework which visualizes the aggregate characterization as a
comprehensive endeavour covering all major causes of variation in the aggregate properties. This way the
conceptual framework may be considered as a step towards addressing construction issues including
aggregate availability, aggregate quality and aggregate functionality. The paper provides the details of a
conceptual framework envisaged as part of a comprehensive research agenda. The methodological aspects
of converting concept into applicable targets are identified. The workability of the methodology is
presented by carrying out field and laboratory examination of aggregates collected from Hub, the largest
source supplying aggregates for the construction industry, prevalent in the mega city of Karachi. The
conceptual frame work presented here will eventually lead to mapping out all related sites; crushing plant
as well as quarries across Pakistan.
2. Aggregate Characterization And Understanding Of Construction Issues

2.1 Aggregate Characterization Attempts and Aspects Studied
Documentation of aggregate resource area provides a semi-quantified estimate of construction aggregates
available in the area to satisfy construction needs (Division of Mines and Geology, 2000). Aggregate
characterization is the process of classification of aggregate resources on the basis of its rock source,
properties and performance in various construction applications. It includes the cataloguing of the quarry
and evaluation of its functional properties by laboratory testing so that it can be utilized according to its
required property.
California Geological Survey (CGS) reported general information about the current availability of
Californias permitted aggregate resources on a Map having a scale of 1:1,100,000.All aggregate data and
any reference to aggregate on the map pertain to construction aggregate that meets standard specifications
for use in Portland Cement Concrete (PCC) or Asphalt Concrete (Kohler, 2006). Every potential deposit
211
must be tested to determine how much of the material can meet the specifications for a particular use, and
what processing is needed to work with it. This is of major importance when planning for future
availability of aggregate commodities because of their versatility, value and relative scarcity. The
aggregate resource map of Colorado-Wyoming developed in 1997 predicts the location of potential
source of aggregate with understanding of geology which is utilized for regional planning and land use
management (Langer et al., 1997).
Correlation of textural properties were reported (Liu et al., 2004), which were studied through
microscopic imaging, and mechanical properties, obtained from laboratory tests. The following tests were
conducted, and properties of aggregate affecting the asphalt concrete performance were evaluated. I)
Resistance of an aggregate to fragmentation by Los Angeles test; II) Measurement of rock aggregate
resistance by Aggregate Abrasion Value; III) Determination of the resistance to wear by Aggregate
Impact Value (AIV) test and brittleness test; IV) Determination of aggregate geometry by LengthThickness (LT) index test and flakiness index test and V) Evaluation of the plasticity characteristic of fine
aggregate sand equivalent value.
In view of long term aggregate resource planning, the location and classification of sand, gravel and
bedrock deposits is an essential first step in managing the resources. If one valuable aggregate deposit is
identified in conjunction with other resources value then reserve area can be established for preservation
and future use (Baker et al., 2005). As aggregate demand is increasing day by day, the quarries producing
aggregate are depleting fast and the future production is bound to be decreased if the identification of new
resources is not carried out. To fulfil the continually changing demand of construction aggregate and
satisfaction of target market, exploration of new quarries is imperative.
2.2. Construction Issues
2.2.1 Durability of Aggregates

The preliminary need of the aggregates is its inherent durability against natural and man created
disturbances. The aggregate provide volume, stability, resistance to weathering and other physical
properties to the building and road structures. There are common issues in construction related to
characteristic of material such as; suitable aggregate gradation, shape, density and source. Deterioration of
construction aggregates loses the durability requirement and progressive performance of structure.
Prediction of aggregate characteristic before placement and starting the construction activity can manifest
the un-expected happening and can prevent the post construction material problems. In this regard,
keeping in view other construction requirement, aggregate sampling and testing is needed to make the
construction workable and long-lasting.
2.2.2 Quality assurance
The construction industry needs to move toward material laboratories in order to ensure quality and
establish adequate confidence regarding the material used to satisfy given requirement and quality during
the service life. Quality assurance of materials, therefore, as a first step needs testing of materials on the
basis of specifications that should ensure and increase the confidence regarding fitness for the purpose of
product and services.
2.2.3 Hauling, availability and supply of material
The deposits supplied to the construction sites must be technically and economically effective to be used
for the construction work. The aim of the construction site needs to grasp the quarry where maximum
aggregate quantity is available at required rate of production with lowest possible cost. Aggregates
resource map is a comprehensive and advisory indication to provide the occurrence of rock/aggregates
that can be used in construction industry for various applications.
212
2.3 Research Potential for Pakistan

Literature search reveals that no such attempt has been witnessed in Pakistan which shows the evidence of
aggregate characterization, technique to achieve this target and mapping of aggregate resources (Rafeeqi,
2007). It is, therefore, imperative that a concerted effort should be carried out for characterization of
aggregates serving the construction industry; by integrating all possible sources affecting their
performance in concrete, HMA and other related construction materials. The current study, therefore,
would not only resolve the issue of regional resource planning, tempro-spatial dynamics of the area but
would also possess the potential to resolve major construction issues.
3. Conceptual Framework
Aggregates reaching construction sites possess variability in properties caused at-least at three stages. The
first stage right at the bed rock, as bed rock is formed under natural phenomenon and inherits
mineralogical and chemical properties. Gravel and boulders obtained from these bed rocks become the
second stage where the shape, size and weathering of these stones results in redefining the properties of
aggregates inherited from the bed rocks. The next stage causing variation in aggregate properties is at the
crushing plants as gravels and boulders when turned into crushed aggregates possess further variation in
their properties. The aggregate characterization attempt, therefore, must include variation caused at each
of these stages.
The Conceptual Framework for characterization of aggregates is presented through Figure 1. It comprises
of three stages; stage 1 incorporates the evaluation process in which material is collected from the quarry
and crusher. The sampling of material is to be done according to the prescribed procedure established by
the standards for petrographic studies and carrying out engineering tests. Stage 2 consists of the quality
evaluation of material in the light of standards and specifications for their use in various applications,
such as cement concrete, HMA and others, so as to use it for various purposes. Stage 3 defines the
development of aggregate resource map as a ready reference for the use of material that can be utilized for
the selection and availability of material in relation to the construction site.
4. Methodology
Aggregate characterization is the process of indication of source, evaluation of aggregate properties and
designation of material sources so as to generate a data bank of construction material that can be utilized
for instant reference in construction industry. To achieve this process, as a pilot study, field visits to the
construction sites located in 18 towns were carried out in order to identify the sources of material coming
within the city of Karachi. It has been found that Hub Naddi remains to be the major source supplying
construction aggregates to these areas. The gravel of hub river basin is predominantly limestone inclusive
of minor elements of other rocks which in the presence of water alters the representative characteristic of
the main rock. Further basic contents (carbonate of Ca and Mg) of the material due to the exposure of
water are removed and leads to the higher concentration of alumina, iron oxides, hydroxide and formation
of clay minerals, where as the hot climatic condition disintegrate the rock to weathered condition (West
et al., 1970).
The methodology is primarily focused toward developing a conceptual framework which deals with
aggregate characterization on the basis of physical properties, petrographic examination and engineering
properties, eventually leading to the development of Adaptive Aggregate Characterization Model
(AACM). The study, therefore, comprises of field investigation which includes reconnaissance field
survey and the material collection for aggregates sampling from quarry and crusher plants of Hub Naddi
for characterization (Ali et al., 2008). Further the gravels colleted from Hub Naddi were utilized for
213
petrographic examination while the crushed material was utilized for engineering tests. Correlation charts
have been developed to illustrate the mechanical behaviour of aggregates with the raw gravels and further
the behaviour of aggregates in asphalt and cement was also observed to prioritise its usage in the two
binders. These charts, however, are not made part of this paper.
Quarry
Evaluation
Process
Sampling
(Area, Material, Number)
Cutting
Stage 1
Crushing
Petrographic
Studies
Study of Engineering
Properties
Suitability of Aggregate
Application in
Pavement
Structure
Wearing
Course
Base
Course
Building and
Bridges
Cement
Concrete
Mortar
Other
Railway
Track
Ballast
Filter
Media
Acceptable
Quality
Stage 2
Standards and Specification

Ready
Reference
Aggregate Resource Map

GPS and Area
Geological
Structure and
Tectonic
Features
Conveyor Route to
Construction Sites
Hydrology of
the Area
Sufficient Amount
(Availability and
Storage)
(Hauling Distance)
214
Lithology of
Rock Type
Distribution to
Construction
Sites (Supply to
how many sites)
Stage 3
Figure 1: Conceptual Framework for Aggregate Characterization

4.1. Surveys and Sampling
Initially 18 towns of Karachi were visited to determine the source of aggregates being used. Based on this
information, the survey of the quarries and crushers installed at the Hub Naddi was conducted to collect
the samples from quarries and crushers and distinguished as Hub Naddi gravel and crushed aggregate.
The material was sampled according to the experimental design and estimated numbers of samples were
prepared to perform petrographic examination and engineering properties. Keeping in view the
appearance of material, the gravel were sorted out according to colour in three (03) categories; red, yellow
and grey along with its condition of being either fresh or weathered. The percentages of each colour and
condition were estimated so as to check intensity of each gravel in a representative sample collected from
a quarry (Ali et al., 2008).
According to the sample size four (04) gravels were randomly picked from each colour and condition to
study the physical properties. Each sample was labelled according to its source, location and property.
From the entire Hub Naddi initially two (02) quarries were chosen for the evaluation of properties. The
coarse aggregates from the crushed rock of each quarry were also separated on the basis of colour (red,
yellow, grey) to conduct engineering tests, and samples of each colour with required sizes were separated
and labelled. Figure 2 illustrates the sampling of rock and crushed rock (aggregates).
215
Hub Naddi
Selection of
Quarries on the
basis of Variation
in Material
Quarry1
(Maru Dakka)
Quarry 2
(Hasan Pir Hill)
Rock Samples
Physical
Properties
Petrographic
Studies
Crushing of
Rock
Aggregate
Crushed Rock Samples
Engineering Properties
Figure 2: Study of Engineering and Petrographic Examination of the Sample

4.2.1. Petrographic examination
Petrographic testing is a microscopic examination that evaluate the aggregate material (French, 1991) and
is used to examine the Alkali-Aggregate-Reaction (AAR) risk in carbonate aggregates which remains to
be one of the major cause of damage in concrete (Lopez-Buendia et al., 2006).
The petrographic examination, therefore, included the description and systematic classification of rock
and studying thin sections by means of microscope. The gravels after physical description were cut into
thin slices, trimmed and reduced to 0.03mm thickness and pasted on glass slide to be studied under
microscope and then compiled in the form of designed data table.
4.2.2 Engineering tests
The sets of engineering tests for evaluation of aggregate in relation to its behaviour in asphalt and cement
concrete were identified and conducted according to ASTM and BS standards (Dhir et al., 1971; Akbulut
et al., 2006; Pan et al., 2006 and Brandes et al., 2006). The list of selected tests for the current study were:
a) Flakiness Index; b) Elongation Index; c) LA Abrasion; d) Specific Gravity and Absorption; e) Crushing
Value and f) Impact Value. The samples utilized for conducting these tests, however, remained confined to
crushed aggregates obtained from crushing plants.
216
As said earlier, the coarse aggregates were sorted out on the basis of colours; red, yellow and grey, while
engineering tests were performed to check the mechanical behaviour. The results were then compiled and
the qualitative analysis of the engineering and petrographic studies is presented through Table 1a & 1b.
5. Preliminary Results And Discussion

Table 1 (a & b) show the qualitative analysis of engineering properties of aggregate collected from
crushers and petrographic studies of rock collected from quarries, according to the variation observed
within the aggregates. Table 2 shows the evidence of methodology being adopted for evaluating
engineering properties of aggregates in terms of allowable limits needed for asphalt and cement concrete.
It has been found that both the quarries supplying these aggregates have satisfactory quality and may be
recommended to be utilized for roads and building application.
6. Conclusion
The paper presents a conceptual framework which puts forwarded a vision for aggregates
characterization. It integrates three major facets of characterization viz. the aggregate source, the crushing
plant and the basic properties obtained through physical and engineering testing. The above three facets
are linked with application side where the standards come in place to define suitability of the aggregate
for a given application such as concrete, asphalt etc. The output of the characterization is an aggregate
resource map which can provide geographically referenced database for ready utilization. It may be
concluded that the ongoing study would provide results which would be highly beneficial to the
construction industry in Pakistan.
Table 1 a: Qualitative Analysis of Engineering Properties and Petrographic Studies of Rock

Quarry: Maru Dakka
Crusher: Rais Goth
Sample
RED AGGREGATE
Flakiness Index: High
Elongation Index: Low
Absorption: Low
Crushing Value: Low
Impact Value: Medium
LA. Abrasion: Medium
Sample
YELLOW AGGREGATE
217
Petrographic Studies
Texture: Grain supported
Texture
Sphericity of grains: Medium
Intensity of Fossils: Medium
Texture: Mixed
Sphericity of grains:
Absorption: Low
Crushing Value: Low
LA. Abrasion: Low
Sample
GREY AGGREGATE
Absorption: Low
Crushing Value: Low
LA. Abrasion: Low
Medium
Intensity of Fossils: High
Texture: Mixed
Sphericity of Grains: Low
Table 1 b: Qualitative Analysis of Engineering Properties and Petrographic Studies of Rock

Quarry: Hasan Pir Hill
Crusher: Hasan Pir
Sample
RED AGGREGATE
Flakiness Index: Low
Elongation Index: Medium
Absorption: Low
Crushing Value: Medium
LA. Abrasion: Low
Texture: Matrix Supported
Texture
Sample
YELLOW AGGREGATE
Elongation Index: Medium
Absorption: Low
Impact Value: Low
LA. Abrasion: Low
Texture: Mixed Texture
Intensity of Fossils: Medium
Sample
GREY AGGREGATE
Texture: Grain Supported
Texture

Absorption: Low
Impact Value: Low
LA. Abrasion: Low
218
Table 2 a: Aggregate suitability analysis results
Table 2 b: Aggregate suitability analysis results
219
7. Refrences
Akbulut, H., and Gu rer, C. (2006). Use of Aggregates Produced from Marble Quarry Waste in Asphalt
Pavements. Building and Environment, Vol. 42, pp 1921-1930.
Ali, M.S., Khan, A.M., and Zaidi S.M. (2008), Sampling Techniques for the Characterization of Hub
River Aggregates, Sindh, Balochistan Area, Pakistan. 1st International Conference of Transportation
and Infrastructure, Beijing, China.
Baker, D., and Hendy, B. (2005). Planning for Sustainable Construction Aggregate Resources in
Australia. The Queensland University of Technology Research Week International Conference,
Brisbane, Australia.
Brandes, H.G., and Robinson C.E. (2006). Correlation of Aggregate Test Parameters to Hot Mix Asphalt
Pavement Performance in HAWAII. Journal of Transportation Engineering ASCE, Vol. 132, pp 8695.
Dhir, R. K., Ramasy, D. M., & Balfour, N. (1971). A Study of the Aggregate Impact and Crushing Value
Tests. Journal of the Institute of Highway Engineers, pp 17-27.
Division of Mines and Geology (2000). Guidelines for Classification and Designation of Mineral
Lands. California Surface Mining and Reclamation Policies and Procedures, Special Report 51,
California, US.
French, W.J. (1991). Concrete Petrography. Quarterly Journal of Engineering Geology, Vol. 3, pp 1748.
Kohler, S. (2006). Aggregate Availability in California. Department of Conservation, California
Geological Survey.
Langer, W.H., Green G.N., Knepper, D.H., Lindsey, J.D.A., Moore, D.W., Nealy, L.D., and Reed, J.C.
(1997). Distribution and Quality of Potential Sources of Aggregate Infrastructure Resources Project
Area, Colorado-Wyoming.
Liu, H., Kou, S., and Arne, P. (2004). Microscope Rock Texture Characterization and Simulation of Rock
Aggregate Properties. SGU Project 60-1362.
Lopez-Buendia, A.M., Climent, V., Verdu, P. (2006). Lithological Influence of Aggregate in the AlkaliCarbonate Reaction. Cement and Concrete Research, Elsevier Ltd. Valencia, Spain, Vol. 36.
Pan, T., Tutumluer, E., and Carpenter, S.H. (2006). Effect of Coarse Aggregate Morphology on
Permanent Deformation Behaviour of Hot Mix Asphalt. Journal of Transportation Engineering
ASCE, pp 580-589.
Rafeeqi, S.F.A. (2007). Proceedings of International Workshop on Cement Based Materials and Civil
Infrastructure. Karachi Pakistan, pp 91-102.
West, G., & Dumbleton, M.J. (1970). The Mineralogy of Tropical Weathering Illustrated by Some West
Malaysian Soils. Quarterly Journal of Engineering Geology, Vol. 3, pp 25-40.
220

Assessment of Critical Skills for Project Managers in Pakistani Construction

Industry
Rizwan U. Farooqui
rfaro001@fiu.edu
Muhammad Saqib
Karachi, Pakistan)
Syed M. Ahmed
(Associate Professor & Graduate Program Director,, Department of Construction Management, Florida
International University, Miami, Florida, USA)
Abstract
An effective project manager is the cornerstone in any successful project. The three parties involved in
design and execution (owner - architect/engineer - contractor) are always looking for effective project
managers in order to successfully deliver projects. However, the opinions about the qualitative skills that
are evidenced by successful project managers are subjective. The purpose of this study was to identify the
most important skills of successful project managers as perceived by the major stakeholders in the
Pakistani construction industry. A questionnaire was circulated among owners, developers, general
contractors, subcontractors, architect/ engineers and construction managers wherein they were asked to
give importance rating to twenty skills usually required in a project manager. A secondary objective of
the study was to examine the relative difference in the importance of the skills in relation to various levels
of project complexity. It is expected that the study will allow each sector in the industry to look for
project managers that suit their particular needs i.e. will aid in the selection of the most appropriately
qualified personnel as project managers. Results indicated that except for stakeholders in the high
complexity project arena, all industry agents jointly recognize time management, decision making,
communication, and leadership and motivation as amongst the top five skills. Financial management, risk
taking, and ability to follow up have been assessed as the least important skills required by project
managers. For high level of complexity projects, creativity, organizing and technical knowledge are
considered as the most important skills. It is emphasized that the rankings of the importance of skills can
be a guide in the training of project managers both at the undergraduate or postgraduate levels and postqualification. They can also be used as a yardstick in appointing/selecting a would-be project manager
during interview and final selection.
Keywords
Critical Skills, Project Managers, Construction Industry, Project Complexity, Pakistan
221
1. Introduction
Construction sector, the world over, is considered to be a basic industry on which the development of the
country depends. To a great extent, the growth of a country and its development status is generally
determined by the quality of its construction companies and their capability. Despite being one of the
most neglected sectors in Pakistan, construction participates to increase the GDP and comprises about
14% of employment of total labor force (Labor Force Survey Report-Government of Pakistan, 2005-06).
This industry is labeled as being backward because of its relative lack of use of the latest advances in
technology, management styles and procedures. Indeed it invests very meager amounts in research and
development, which hinders the industrys ability to adopt new technology and processes.
Compared to the past, the current decade is witnessing massive infrastructure growth in Pakistan. There
are numerous infrastructure development projects in progress as well as under planning. All of these
projects have the potential to lead the local Industry to gain glory, status and international recognition but
only when appropriate efforts are extended to achieve the same. With the stage set for a golden era for
development, the challenges are still higher. The boom cycle and corresponding shortage of labor trades
has increased the need for industry participants to adopt and apply project management philosophy, tools
and techniques to help them manage the industry performance and productivity in a sustainable long-term
mode. As such, the role of project managers has become more significant than ever before.
With the strategic aim to devise a model for nurturing the key project management skills in the industry
that can lead the Pakistani construction industry to the success path, this research has been conducted as
the first step towards identifying the qualitative characteristics needed in todays effective project
managers in the Pakistani construction industry as perceived by the significant actors in the industry.
Another major significance of this study is that it examines the relative difference in the importance of the
skills in relation to the complexity of projects. It is expected that this study will also allow each sector in
the industry to look for project managers that suit their particular needs so as to select the most
appropriately qualified personnel as project managers.
Based on the results of the survey, it is anticipated that patterns will emerge regarding the key attributes
of effective project managers. These results could then be used in the identification and development of
effective project managers.
2. Prior Research
Since the time the construction industry started to recognize project management as an important and
integral part of planning and executing construction projects, the key players in the field (owners,
consultants and contractors) have always been looking for the critical skills that would make a project
manager a successful professional. This issue has been an important area of study through the years.
Several studies have been conducted, particularly in the United States, to examine and to get expert
opinions from project owners, contractors and consultants about the skills they seek in professional
construction project managers. Major research on this issue is highlighted in subsequent paragraphs.
Skill can be defined as the learning capacity or talent to carry out pre-determined results often with the
minimum outlay of time, energy, or both. It can also be described as the ability to translate knowledge
into action. Katz (1974) proposed a three-skill approach to understanding the skills of an effective
administrator. The skills are: (1) technical skill; (2) human skill; and (3) conceptual skill. He argues that
the three-skill concept has implications for executive development and he suggests that all managers at all
levels require same competence in each of the three skills.
222
Since Katzs proposition of the three-skill concept, many authors have expanded these basic skills further
to add more. Some of these skills are applicable to the commerce and industry in general, while some are
peculiar to project management generally.
Fryer (1979) cited five important skills for construction managers as judged by a sample of managers in
construction firms. These skills are (1) managing change; (2) recognizing opportunities; (3) handling
problems; (4) decision making; and (5) social skills. From the survey, social skills turned out to be the
most important one and managing change was rated as the least important.
Katz and Thamhain (1983) [cited in Kerzner (1989)] listed ten specific essential skills for program
managers: (1) team building; (2) leadership; (3) conflict resolution; (4) technical; (5) planning; (6)
organization; (7) entrepreneurial; (8) administrative; (9) managerial support building; and (10) allocation
skill. Even though the program manager is mentioned in the description of the skills above, they are all
applicable to project managers as well, especially on construction projects, as their roles are similar.
Goodwin (1993) identified four important skills for an effective project manager: (1) technical; (2)
human; (3) conceptual; and (4) negotiating skills. The last skill was the addition of what Katz (1974)
already stated in his study. According to Goodwin, negotiating skill will assist the project manager in
appreciating the various activities and the resources and facilities required in performing and completing
the activities. It will also assist him to see how, for example, changes in the design or scope of the project
will affect the budget, schedule, and overall performance. Goodwin remarked that, while there is no
compelling necessity for the project manager to be a technical specialist, he/ she should have some degree
of technical skill encompassing the technological discipline in which the project is based.
Gushgari et al. (1997) listed twenty skills they believed were important to what they called long-term
profitability. A survey was assembled and mailed to 500 engineering firms and out of 8.6% firms that
responded, they found that communication was ranked as number one. Listening and project management
were the second and the third in ranking respectively. Risk taking was at the bottom of the list according
to what the project managers conceived.
Odusami (2002) based his study on Gushgari et al. (1997). He took 13 out of the 20 skills they used and
conducted a questionnaire regarding the most important skill of an effective project manager as perceived
from the construction field. In this study, leadership and motivation was ranked as the most important
skill followed by decision making from consultants point of view. Contractors found communication as
the most important skill and clients said that decision making was number one. In the overall analysis,
decision making was found as the most important skill and negotiating the least important skill.
3. Objectives and Scope

1. To assess the current state of Pakistan construction industry through quantitative research with
specific reference to the status of construction management education, research and practice;
2. To develop a strategic model for the improvement and strengthening of construction management
education, research and practice in Pakistan;
3. To devise a framework to standardize the construction industry practices for achieving improved
performance on cost, time, quality, productivity and safety; and
223
4. To build capacity of academia, industry, owners and government in the area of construction
management so as to improve the overall productivity of the construction industry.
The objectives of the current study are:
1. To identify the most important skill of an effective project manager as perceived by the
significant actors in the construction industry (the owners including consultants, and the
contractors);
2. To investigate the collective group perspectives on the relative importance of skills of an effective
project manager of the two principal industry participants, i.e., the owners, and the contractors;
and
3. To investigate the relative difference in the importance of skills of an effective project manager in
relation to level of complexity of projects.
4. Methodology
The research methodology consists of the following steps:
1. Development of a questionnaire to elicit information about key project management skills.
2. Conducting questionnaire survey through postal mail and personal interviews.
3. Assessment of feedback from questionnaire survey to identify the overall perspective, the group
perspective, as well as the relative difference in importance of skills needed by an effective
project manager.
The questionnaire consisted of two parts A and B. Part A consisted of respondents personal
information (e.g. work experience, position in company) and company information (e.g. type of
organization, types of construction works performed, years in business, annual volume of work, number
of employees).
Part B consisted of a project management skill checklist which was prepared after extensive literature
review. The literature review was done through books, conference proceedings, internet, and leading
construction management and engineering journals. Selected from previous works (Katz and Thamhain,
1983 [cited in Kerzner (1989)]; Goodwin, 1993; Gushgar et al., 1997; Wateridge, 1997; Odusami, 2002),
twenty (20) skills for an effective project manager were listed and the respondents were asked to evaluate
the importance of the skills starting with 1 as the least degree of importance and 10 as the highest degree
of importance. For proper understanding of the meaning of some of these skills, their definitions are given
in Table 1.
Few unstructured interviews with selected respondents were also conducted to clarify their responses and
to discuss the survey results. Based on all the gathered information, descriptive analysis was performed
and the results are discussed in the following section.

5.1. Questionnaire Response Rate
The response rate for completed questionnaires is shown in Table 2.
This response rate is considerably good for a construction industry questionnaire survey. In similar type
of surveys, Panthi et al. (2007) received a response rate of 19.4%, Ahmed and Azhar (2004) received
30.4% and Wang et al. (2004) received a response rate of 7.75%. Baker (1998) reported that statistically
reliable conclusion can be obtained from a sample size of 20 or more.
224
Table 1: Glossary of Skills

Skill
Definition
Administration
Communication
Creativity
Decision Making
Delegating
Financial Management
Leadership and motivation
Listening
Negotiation
Organizing
Personal Adaptability
Planning and Goal setting
Problem Solving
Ability to Follow Up
Critical Path Thinking
Quality Management
Result Orientation
Risk Taking
Technical Knowledge
Time Management
Ability to manage and control projects relative to budgetary constrains,

change orders, additional service, and collection of accounts receivable.
Ability to interact effectively with others at all levels within and outside the
organization.
Ability to conceptualize nontraditional solutions to a problem
Ability to take appropriate action under the constraints of limited time,
information and resources.
Ability to effectively distribute tasks to other members of the organization.
Ability to understand financial statements, and financial ratios, and to deal
with accounting firms and financial institutions.
Ability to make correct decisions for the firm and then influence others to
contribute to attaining the firms goal.
Ability to receive and effectively process information provided by others.
Ability to engage in a two way discussion and achieve the interest of the
firm though the decisions of others.
Ability to align resources in such a way as to be most beneficial for the firm.
Ability to alter one's point of view when shown evidence that a change is
necessary.
Ability to assess and set objectives for the firm, then plot a path to achieve
those objectives.
Ability to analyze adverse conditions or conflict, identify root causes,
provide a practical solution, and then implement it.
Ability to convert plans into actions.
Ability to set and execute project priorities consistent with the project critical
path.
Ability to manage the production of goods or services within a clearly
defined set of expectations.
A focus on consistently generating tangible outputs.
Willingness to undertake tasks with a reasonable, but not assured, potential
for success.
An understanding of complex elements required to effectively complete
tasks associated with a given profession.
Ability to successfully manage multiple tasks within given time constrains.
Table 2: Breakdown of Responses

Total
questionnaires
sent
53
Questionnaires
returned
uncompleted
8
Total number
of potential
questionnaires
45
Total valid
responses
received
30
Percentage of
valid
responses
57%
5.2 Respondent Organizations Characteristics

The respondents were divided into two groups regarding their types of organizations. The first group is
''owners'' which represents 56.67% and includes: owners, developers, architect/ engineers and
225
construction managers. The other group is ''contractors'' which represents 43.33% and includes: general
contractors, subcontractors, and design-constructors.
The respondents who participated in the questionnaire survey were professionals drawn from architecture,
civil engineering, mechanical and electrical engineering, and quantity surveying all in Pakistan. The
respondents with respect to their positions were: architects (30%), civil engineers (40%), mechanical and
electrical engineers (17%), and quantity surveyors (13%). Almost all of them had over 15 years of
construction industry experience.
5.3 Project Complexity Profile
In order to assess the ranking of project management skills with respect to project complexity, this study
categorized the type of work that the respondents were involved with into three complexity levels: low
level of complexity (representing 23.33% respondents and including residential construction as type of
work); medium level of complexity (representing 56.67% respondents and including commercial
construction and institutional construction as types of work); and high level of complexity (representing
20% respondents and including heavy engineering/ infrastructure construction and industrial construction
as types of work).
5.4 Skill Analysis
5.4.1. Critical Skills for Effective Project Manager as Perceived by Significant Actors in
Construction
The respondents were requested to evaluate 20 skills for an effective project manager on a ten-point scale
starting with 1 for least degree of importance and 10 for highest degree of importance. The mean level of
significance for each skill (based on the scale rating of responses) was calculated to obtain the importance
index for each skill.
The importance indices are then ranked from the highest to the lowest for overall respondents, owners and
contractors.
5.4.1.1. Critical Skills for Effective Project Manager as Perceived by Owners
Table 3 shows the ranking and the mean level of significance of project management skills as perceived
by the owner group (owners, developers, architect/ engineers and construction managers).
The mean level of significance showed that the most important skills for owners are: communication
(8.29), time management (8.23), and leadership and motivation (8.05). The three least important skills out
of the 20 skills are risk taking (5.58), financial management (5.11) and ability to follow up (4.25).
5.4.1.2. Important Skills for Effective Project Manager as Perceived by Contractors
by the contractor group (general contractors, subcontractors, and design-constructions).
The mean level of significance showed that the most important skills for contractors are: decision making
(8.96), time management (8.61), problem solving (8.46), and communication (8.46). The three least
important skills out of the 20 skills are ability to follow up (6.11), financial management (5.92), and result
orientation (5.46).
by the overall (average) respondents. Overall, when the weighted averages of the two groups are taken,
time management (8.40) comes first followed by communication (8.36) and decision making (8.20). The
three least important skills are financial management (5.60), result orientation (5.46) and ability to follow
up (5.04).
226
Table 3: Owners Ranking of Importance of Skills (Most to Least Critical) of

Effective Project Manager (N=17)
Mean level of significance
Rank
Skill
(on a scale of 10)
1
Communication
8.29
2
Time Management
8.23
3
Leadership and Motivation
8.05
4
Decision Making
7.82
5
Planning and Goal Setting
7.58
6
Problem Solving
7.35
7
Listening
7.29
8
Administration
6.94
9
Technical Knowledge
6.88
9
Creativity
6.88
11
Quality Management
6.82
12
Organizing
6.70
13
6.64
14
6.33
15
Delegating
6.29
16
Negotiation
5.82
17
Result Orientation
5.70
18
Risk Taking
5.58
19
5.11
20
Ability to Follow up
4.25
Table 4: Contractors Ranking of Importance of Skills (Most to Least Critical) of
Rank Skill
(on a scale of 10)
1
Decision Making
8.69
2
Time Management
8.61
3
Communication
8.46
3
Problem Solving
8.46
5
Administration
8.15
6
Technical Knowledge
7.92
7
Organizing
7.84
8
7.69
9
Listening
7.53
9
Quality Management
7.53
11
Negotiation
7.46
12
7.44
13
6.84
14
Delegating
6.76
15
Creativity
6.53
16
6.23
17
Risk Taking
6.15
18
6.11
19
5.92
20
Result Orientation
5.46
227
Table 5: Overall Ranking of Importance of Skills (Most to Least Critical) of

Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

(out of 10)
8.40
8.36
8.20
7.90
7.83
7.46
7.40
7.33
7.26
7.20
7.13
6.80
6.73
6.53
6.50
6.46
5.83
5.60
5.46
5.04
Skill
Time Management
Communication
Decision Making
Problem Solving
Administration
Listening
Technical Knowledge
Organizing
Quality Management
Creativity
Negotiation
Delegating
Risk Taking
Result Orientation
Table 6 collectively shows the importance skill ranking for an effective project manager as perceived by
different groups. From this table, it can be seen that the skill with the highest mean level of significance is
time management. Time management is the ability to successfully manage multiple tasks within given
time constrains. This skill was rated second highest by both the owner group and the contractor group.
Communication skill was rated overall in the second position. Communication is the ability to interact
effectively with others at all levels within and outside the organization. This skill was rated highest by the
owner group and third highest by the contractor group. Decision making skill was ranked third highest
overall. Decision making is the ability to take appropriate action under the constraints of limited
time, information, and resources. This skill was rated fourth highest by the owner group and highest by
the contractor group.
With respect to agreement on the ranking of the importance skills as perceived by owner and contractor
groups, the owner group has put communication and time management in the first two places with a very
small difference between them, which is very close to the overall analysis. The contractor group picked
decision making as the most important skill followed by time management in the second place and
communication and problem solving jointly in the third place, which implies that both groups agree on
their critical project management needs.
5.4.2. Critical Skills for Effective Project Manager in Relation to Project Complexity
Table 7 shows the ranking and the mean level of significance of project management skills for low level
of complexity projects (residential construction).
228
Table 6: Ranking of Importance of Skills of Effective Project Manager by Different Groups
Skill
Time Management
Communication
Decision Making
Problem Solving
Administration
Listening
Technical Knowledge
Organizing
Quality Management
Creativity
Negotiation
Delegating
Risk Taking
Result Orientation
Average
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Ranking
Owners
2
1
4
3
6
8
7
9
5
12
11
14
10
16
15
13
18
19
17
20
Contractors
2
3
1
8
4
5
9
6
13
7
10
12
15
11
14
16
17
19
20
18
Table 7: Ranking of Importance of Skills of Effective Project Manager for

Low Level of Complexity Projects (N=7)
Rank
Skill
(on a scale of 10)
1
Time Management
9.14
2
Decision Making
8.85
3
Administration
7.85
3
Communication
7.85
3
7.85
6
Problem Solving
7.57
7
Quality Management
7.42
8
7.40
9
Organizing
7.28
10
Technical Knowledge
7.13
11
Listening
6.85
11
Risk Taking
6.85
13
Creativity
6.57
14
Delegating
6.28
15
Negotiation
6.00
16
5.85
17
5.71
18
5.71
19
Result Orientation
5.14
20
4.40
229
The mean level of significance of critical skills for project managers showed that the most important
skills, in descending order of significance, for professionals working in low level of complexity
construction (residential) are: time management (9.14), decision making (8.85), administration (7.85),
communication (7.85), and leadership and motivation (7.85). The least important skills are: financial
management (5.71), personal adaptability (5.71), result orientation (5.14) and ability to follow up (4.4).
Table 8 shows the ranking and the mean level of significance of project management skills for medium
level of complexity projects (commercial and institutional construction).
Medium Level of Complexity Projects (N=17)
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Skill
Communication
Time Management
Problem Solving
Decision Making
Listening
Administration
Technical Knowledge
Quality Management
Negotiation
Organizing
Delegating
Creativity
Result Orientation
Risk Taking

(on a scale of 10)
8.88
8.64
8.58
8.52
8.41
8.00
7.94
7.64
7.47
7.35
7.23
7.17
6.82
6.76
6.50
6.17
5.88
5.58
5.47
5.20
The mean level of significance showed that the most important skills for project management
professionals working in medium level of complexity construction are: communication (8.88), time
management (8.64), and leadership and motivation (8.58). The least important skills are: risk taking
(5.58), financial management (5.47) and ability to follow up (5.2).
Table 9 shows the ranking and the mean level of significance of project management skills for high level
of complexity projects (infrastructure and industrial construction).
The mean level of significance showed that the most important skills for professionals working in high
level of complexity construction are: creativity (8.5), communication (7.5), organizing (7.16) and
technical knowledge (7.16). The least important skills are: ability to follow up (5.3), financial
management (5.16) and negotiation (5.16).
230

High Level of Complexity Projects (N=6)
Rank
1
2
3
3
5
5
5
5
9
9
9
12
12
14
15
16
16
18
19
19

(on a scale of 10)
8.50
7.50
7.16
7.16
6.83
6.83
6.83
6.83
6.50
6.50
6.50
6.16
6.16
6.00
5.83
5.33
5.33
5.30
5.16
5.16
Skill
Creativity
Communication
Organizing
Technical Knowledge
Decision Making
Time Management
Listening
Administration
Problem Solving
Quality Management
Delegating
Result Orientation
Risk Taking
Negotiation
Table 10 collectively shows the importance skill ranking for an effective project manager for various
levels of complexity of projects.
With respect to overall (average) analysis, it can be seen from Table 10 that the top two skills time
management and communication, occupy positions amongst top three places for low and medium
complexity construction projects. The third most important skill i.e. decision making also occupies
position amongst the top five places for all the three levels of project complexity. Furthermore, it can be
observed from Table 10 that low and medium complexity projects follow a close analysis pattern between
themselves as well as with the overall analysis. This pattern is more evident for more critical skills
communication, time management, leadership and motivation, and decision making which are the top
skills for both the low and medium complexity level projects. This implies that critical project
management requirements for both levels of complexity are quite similar. However, this is not true for
high level of complexity of construction, which follows quite a different pattern.
For high complexity projects, time management, although still significant, is not as important a skill as for
the low and medium complexity projects. Creativity which doesnt have high degree of importance for
the other two categories is ranked as number one for high level of complexity projects. Moreover, skills
like organizing and technical knowledge that are not important for other two categories are ranked high
(in third place) for complex projects. These findings reflect the level of complexity and the dissimilarity
of this category.
231

Different Levels of Complexity Projects
Ranking
Skill
Time Management
Communication
Decision Making
Leadership and
Motivation
Problem Solving
Administration
Listening
Technical Knowledge
Organizing
Quality Management
Creativity
Negotiation
Delegating
Risk Taking
Result Orientation
Ability to Follow Up
Average
1
2
3
Low Level
Complexity
Projects
1
3
2
Medium Level
Complexity
Projects
2
1
5
High Level
Complexity
Projects
5
2
5
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
3
6
3
11
10
16
9
7
8
13
15
14
18
11
17
19
20
3
4
8
7
9
6
12
10
15
16
11
13
14
18
19
17
20
14
12
9
9
3
5
3
12
5
1
19
15
9
16
19
16
18
6. Conclusions
Except for stakeholders in the high complexity project arena, all industry agents have jointly recognized
time management as the most important project management skill. This reflects the importance of time in
the industry and its connection with money. Furthermore, decision making, communication, and
leadership and motivation have been identified as amongst the top five skills (except for leadership and
motivation in case of high level of complexity analysis). Financial management, risk taking, and ability to
follow up have been assessed as being at the bottom of the ranking in every analysis in this study. This
indicates that such skills are deemed relatively less important for a project manager. One notable
observation is that there is agreement in the perceptions of the owner and contracting organizations as to
the critical skills for project managers.
All the various analyses done in the study have a very similar pattern in the order of the skills except the
high level of complexity analysis where creativity is the most important skill. Organizing and technical
knowledge are both considered as sharing the position of the third most important skill for this sector,
whereas both of these skills have been identified as carrying only average significance for the rest of the
analysis. This is understandable keeping in view the sophisticated nature of construction for infrastructure
and industrial construction, which needs more organization capabilities as well as an in-depth technical
knowledge of construction processes compared to other sectors. The above implies that this sector of the
232
industry has different needs than the rest of the industry and this is very important to notice that a
distinction has to be made when dealing with high level of complexity construction in terms of selection
of appropriately skilled project manager. In order to achieve best results, the fact that different types of
projects sometimes require different skills must be taken into consideration while hiring and training
professionals for each sector.
The challenge facing a would-be effective project manager is the development and successful application
of these important skills to achieve their project objectives. Some of these skills can be acquired in
schools, while others may be acquired on the field. Emphasis will then be laid on those that need to be
acquired in schools, while others will be deferred till after graduation. The rankings of the importance of
skills can be a guide in the training of project managers both at the undergraduate or postgraduate levels
and post-qualification. They can also be used as a yardstick in appointing/selecting a would-be project
manager during interview and final selection.
7. Limitations and Future Research Directions

This is an initial study that can be the base for upcoming studies. Due to the low rate of response, future
studies need to have more participants from several more sectors.
Future studies in the same field need to target a different crowd and for further results the study needs to
be done not only in Pakistan but also acquiring opinions from other major construction industries in
developing countries.
In a future study, testing the needs in a detailed scale in each level of complexity will help identify the
skills that can give the best results. For example, infrastructure projects can be broken down into road
projects, sewerage system projects and bridges. Each part should attempt to inspect the most critical skills
needed for projects managers in that particular division.
Finally, doing this study in a backwards manner is a good potential for a future study. Instead of getting
the opinions from the people, a survey can be conducted on previous successful projects. These projects
could be studied and the analysis may be preformed on the skill set of project managers that have worked
on these successful projects. Knowing their skills and performing questionnaire surveys and interviews
with them would give better and more accurate results.
8. References
Ahmed, S. M., and Azhar, S. (2004). Risk Management in the Florida Construction Industry.
Proceedings of the 2nd Latin American and Caribbean Conference for Engineering and Technology,
Miami, Florida, June 2-4.
Baker, S. W. (1997). Risk Management in Major Projects. Ph.D. Thesis, University of Edinburgh, UK.
Fryer, B. (1979). Management development in the construction industry. Building Technology and
Management, May, 16-18.
Goodwin, R. S. C. (1993). Skills required of effective project managers. J. Mange. Eng., 9(3), 217-226.
Gushgar, S. K., Francis, P. A., and Saklou, J.H. (1997). Skills critical to long-term profitability of
engineering firms. J. Mange. Eng., 13(2), 46-56.
Katz, R. L. (1974). Skills of an effective administrator. Harvard Business Review. September/ October,
90-102.
Kerzner, H. (1989). Project management: a system approach to planning scheduling and controlling, 3rd
Ed., Van Nostrand Reinhold, New York.
Odusami, K. T. (2002). Perception of Construction Professionals Concerning Important Skills of
Effective Project Leaders. J. Mange. Eng., 18(2)
233
Panthi, K.; Ahmed, S.M.; and Azhar, S. (2007). Risk Matrix as a Guide to Develop Risk Response
Strategies. Proceedings of 43rd ASC National Annual Conference, April 12-14, Flagstaff, Arizona.
Wang, S.Q., Dulaimi, M.F., and Aguria, M.Y. (2004). Risk Management Framework for Construction
Projects in Developing Countries. Construction Management & Economics, 22, 237-252.
Wateridge, J. (1997). Training for IS/ IT project managers: a way forward. Int. J. Proj. Manage., 15(5),
283288.
234

Applications of Nanotechnology and Nanomaterials in Construction

Zhi Ge
Assistant Professor, North Dakota State University, Fargo, ND, USA
zhi.ge@ndsu.edu
Zhili Gao
Assistant Professor, North Dakota State University, Fargo, ND, USA
Abstract
Nanotechnology is one of the most active research areas with both novel science and useful applications
that has gradually established itself in the past two decades. Expenditure on nanotechnology research is
significant; however, the research is continuously moving forward motivated by immediate profitable
return generated by high value commercial products. The Architecture, Engineering, and Construction
(A/E/C) industry might accommodate broad applications of nanotechnology and nanaomaterials. It has
been demonstrated that nanotechnology generated products have many unique characteristics, and can
significantly fix current construction problems, and may change the requirement and organization of
construction process.
This paper examines and documents applicable nanotechnology based products that can improve the
overall competitiveness of the construction industry. The areas of applying nanotechnology in
construction will be mainly focused on: (1) lighter and stronger structural composites, (2) low
maintenance coating, (3) better properties of cementitious materials, (4) reducing the thermal transfer rate
of fire retardant and insulation, and (5) construction related nano-sensors.
Keywords
Nanotechnology, Nanomterails, Construction.
1. Introduction
Nanotechnology, introduced almost half century ago, is one of the most active research areas with both
novel science and useful applications that has gradually established itself in the past two decades. The
evolution of technology and instrumentation as well as its related scientific areas such as physics and
chemistry are making the research on nanotechnology aggressive and evolutional. Not surprisingly, it is
observed that expenditure on nanotechnology research is significant. The U.S. National Nanotechnology
Initiative (NNI) expenditures exceed $1 billion each year, with the Presidents 2008 budget for NNI at
$1.5 billion. However, the research is mainly moving forward motivated by immediate profitable return
generated by high value commercial products (Dhir et al., 2005).
According to a study by the Canadian Program on Genomics and Global Health (CPGGH),
nanotechnology in construction ranked 8 of 10 applications that most likely have impact in the developing
world (ARI News, 2005). Although currently behind other areas such as water treatment and remediation,
the Architecture, Engineering, and Construction (A/E/C) industry might accommodate broad applications
235
of nano-products. Nanotechnology products can be used for design and construction processes in many
areas. It is provided to demonstrate that nanotechnology generated products have many unique
characteristics, and can significantly fix current construction problems, and may change the requirement
and organization of construction process. This paper examines and documents applications of
nanotechnology that can improve the overall competitiveness of the construction industry. The data and
information collected is from current literature and researches and focus on nanotechnology basics and
applications of nanotechnology and nonmaterial in construction areas. The purpose is to point out clearcut direction among the nanotechnology development areas where the construction process would
immediately harness nanotechnology, by specifying clear recommendations. The information would be
beneficial to both construction engineering education and research.
2. Nanotechnology Basics
Nanotechnology is the creation of materials and devices by controlling of matter at the levels of atoms,
molecules, and supramolecular (nanoscale) structures (Roco et al., 1999). In other words, it is the use of
very small particles of materials to create new large scale materials (Mann, 2006). Although more
thorough definitions were used by some researchers as well, the key is the size of particles because the
properties of materials are dramatically affected under a scale of the nanometer (nm), 10-9 meter (m). To
better understand the difference among various scales, Table 1 shows the categories of scales and its
related topics (Balaguru, 2005).
Table 1: Scales vs. Topic Areas
Scales
10-12
Relates Topics (not inclusive)

Quantum Mechanics
10-9
Molecular Dynamics
Nanomechanics
Molecular Biology
Biophysics
10-6
Elasticity
Plasticity
Dislocation
10-3
Mechanics of Materials
10-0
Structural Analysis
Actually, nanotechnology is not a new science or technology. It was believed first introduced by Richard
P. Feynman in his lecture at the California Institute of Technology in 1959. However, the research on this
topic has been very active only in recent two decades. This is because the development and application of
nanotechnology are relying on the development of other related science and technology such as physics
and chemistry that are commonly new to break through at that time. Most promising developments of
nanotechnology are fullerene (a new form of carbon, C60) and carbon nanotubes (Sobolev and Gutierrez,
2005). Nanotubes, illustrated by Figure 1 and Figure 2, are a grapheme sheet rolled into a cylinder with
specific alignment of hexagonal rings. (Sobolev and Gutierrez, 2005). Understanding and development
of nanoscale structures change the traditional process of producing and applying construction materials
and elements. The new features of construction materials and elements accordingly change the material
usage and force and resistance calculations of project design and its related field construction operation
and management.
236
Figure 1: Nanotubes (after NASA, 2008)
Figure 2: Graphite sheet of nanotubes (after Nanopedia, 2008)
3. Application of Nanotechnology in Construction

Nanotechnology can be used for design and construction processes in many areas since nanotechnology
generated products have many unique characteristics. These characteristics can, again, significantly fix
current construction problems, and may change the requirement and organization of construction process.
These include products that are for:
Lighter and stronger structural composites
Low maintenance coating
Improving pipe joining materials and techniques.
Better properties of cementitious materials
Reducing the thermal transfer rate of fire retardant and insulation
Increasing the sound absorption of acoustic absorber
237
Increasing the reflectivity of glass

The abbreviated list is not an exhaustive list of applications of nanotechnology in construction. Some of
these applications are examined in detail below.
3.1 Concrete
Concrete is one of the most common and widely used construction materials. Its properties have been
well studied at macro or structural level without fully understanding the properties of the cementitious
materials at the micro level. The rapid development of new experimental techniques makes it possible to
study the properties of cementitious materials at micro/nano-scale. Research has been conducted to study
the hydration process, alkali-silicate reaction (ASR), and fly ash reactivity using nanotechnology
(Balaguru, 2005). The better understanding of the structure and behavior of concrete at micro/nano-scale
could help to improve concrete properties and prevent the illness, such as ASR.
Addition of nanoscale materials into cement could improve its performance. Li (2004) found that nanoSiO2 could significantly increase the compressive for concrete, containing large volume fly ash, at early
age and improve pore size distribution by filling the pores between large fly ash and cement particles at
nanoscale. The dispersion/slurry of amorphous nanosilica is used to improve segregation resistance for
self-compacting concrete (Bigley and Greenwood, 2003). It is also been reported that adding small
amount of carbon nanotube (1%) by weight could increase both compressive and flexural strength (Mann,
2006).
Cracking is a major concern for many structures. University of Illinois Urbana-Champaign is working on
healing polymers, which include a microencapsulated healing agent and a catalytic chemical trigger
(Kuennen, 2004). When the microcapsules are broken by a crack, the healing agent is released into the
crack and contact with the catalyst. The polymerization happens and bond the crack faces. The selfhealing polymer could be especially applicable to fix the microcracking in bridge piers and columns. But
it requires costly epoxy injection.
3.2 Structural Composites
Steel is a major construction material. Its properties, such as strength, corrosion resistance, and weld
ability, are very important for the design and construction. FHWA together with American Iron and Steel
Institute and the U.S. Navy started to develop new, low carbon, high-performance steel(HPS) for bridges
in 1992(Kuennen, 2004). The new steel was developed with higher corrosion-resistance and weld ability
by incorporating copper nanoparticles from at the steel grain boundaries.
Sandvik NanoflexTM is new stainless steel with ultra-high strength, good formability, and a good surface
finish developed by Sandvik Nanoflex Materials Technology. Due to its high performance, Sandvik
NanoflexTM is suitable for application where requires lightweight and rigid designs. For certain
applications, the components could be even thinner and lighter than that made from aluminium and
titanium due to its ultra-high strength and modulus of elasticity. Its good corrosion and wear resistance
can keep life-cycle costs low. Attractive or wear resistant surfaces can be achieved by various treatments
(Sandvik Nanoflex Materials Technology).
MMFX2 is nanostructure-modified steel, produced by MMFX Steel Corp. Compared with the
conventional steel, it has a fundamentally different microstructure- a laminated lath structure resembling
plywood. This unique structure provides MMFX2 steel with amazing strength (three times stronger),
ductility, toughness, and corrosion resistance. Due to the high cost, the stainless steel reinforcement in
concrete structure is limited in high risk environments. The MMFX2 steel could be an alternative because
it has the similar corrosion resistance to that of stainless steel, but at a much lower cost (MMFX Steel
Corp.).
238
3.3 Coating
The coatings incorporating certain nanoparticles or nanolalyers have been developed for certain purpose.
It is one of the major applications of nanotechnology in construction. For example, TiO2 is used to coat
glazing because of its sterilizing and anti-fouling properties. The TiO2 will break down and disintegrate
organic dirt through powerful catalytic reaction. Furthermore, it is hydrophilic, which allow the water to
spread evenly over the surface and wash away dirt previously broken down. Other special coatings also
have been developed, such as anti-fraffiti, thermal control, energy sawing, anti-reflection coating.
3.4 Nanosensors
Nano and microelectrical mechanical systems (MEMS) sensors have been developed and used in
construction to monitor and/or control the environment condition and the materials/structure performance.
One advantage of these sensors is their dimension. Nanosensor ranges from 10-9 m to 10-5m. The micro
sensor ranges from 10-4 to 10-2 m (Liu et al., 2007). These sensors could be embedded into the structure
during the construction process.
Smart aggregate, a low cost piezoceramic-based multi-functional device, has been applied to monitor
early age concrete properties such as moisture, temperature, relative humidity and early age strength
development (Saafi and Romine, 2005; Song and Mo, 2008). The sensors can also be used to monitor
concrete corrosion and cracking.
The smart aggregate can also be used for structure health monitoring. The disclosed system can monitor
internal stresses, cracks and other physical forces in the structures during the structures' life. It is capable
of providing an early indication of the health of the structure before a failure of the structure can occur.
4. Future Challenge and Direction

While nanotechnology based construction products provide many advantages to the design and
construction process, the production of these products, however, require a lot of energy. Also, the
nanotubes might cause a lung problem to construction workers. In other words, it creates an
environmental challenge to the construction industry as well. Sustainability and environmental issues
caused by growing economic development has gained intensive statewide and worldwide attention. Since
the construction industry is heavily involved in the economic development and consumes great amount of
resources and energy, its impact on environment is significant. Therefore, it is necessary and urgent to
regulate the construction and its related performance to sustainable manners. The nanotechnolgy becomes
a double-edge sword to the construction industry. More research and practice efforts are needed with
smart design and planning, construction projects can be made sustainable and therefore save energy,
reduce resource usage, and avoid damages to environment. It is necessary to establish a system to identify
the environmentally friendly and sustainable of construction nanomaterials and to avoid the use of
harmful materials in the future.
5. References
ARI News (2005). Nanotechnology in Construction One of the Top Ten Answers to Worlds Biggest
Problems. www.aggregateresearch.com/article.asp?id=6279 , June 1, 2007.
Balaguru, P. N. (2005), Nanotechnology and Concrete: Background, Opportunities and Challenges.
Proceedings of the International Conference Application of Technology in Concrete Design,
Scotland, UK, p.113-122.
Bigley C. and Greenwood P. (2003). Using Silica to Control Bleed and Segregation in Self-Compacting
Concrete. Concrete, vol. 37, no. 2, p.43-45
239
Dhir, R. K., Newlands, M. D., and Csetenyi, L. J. (2005). Introduction. Proceedings of the
International Conference Application of Technology in Concrete Design, Scotland, UK, p. IV.
Kuennen, K. (2004). Small Science Will Bring Big Changes To Roads. Better Roads
Li, G. (2004). Properties of High-Volume Fly Ash Concrete Incorporating Nano-SiO2. Cement and
Concrete Research, vol.34, p.1043-1049.
Liu, R., Zhang, Z., Zhong, R.; Chen, X.; Li, J.(2007) Nanotechnology Synthesis Study: Research
Report
Mann, S. (2006). Nanotechnology and Construction, Nanoforum Report. www.nanoforum.org, May 30,
2008.
MMFX Steel Corp. http://www.mmfx.com/products.shtml, May 30, 2008.
Nanopedia (2008). Carbon Nanotubes. http://nanopedia.case.edu/image/nanotubes.jpg, January 16,
2008.
NASA (2008). Nanotubes.
http://www.nasa.gov/centers/ames/images/content/137816main_nanotubes.jpg, January 16, 2008.
Roco, M. C., Williams, R. S., and Alivisatos, P. (1999). Nanotechnology Research Directions: IWGN
Research Report. Committee on Technology, Interagency Working Group on Nanoscience,
Engineering and Technology (IWGN), National Science and Technology Council.
Saafi, M. and Romine, P. (2005). Nano- and Microtechnology. Concrete International, Vol. 27 No. 12,
p 28-34.
Sandvik Nanoflex Materials Technology. http://www.smt.sandvik.com/nanoflex, May 30, 2008.
Sobolev, K. and Gutierrez, M. F. (2005). How Nanotechnology can Change the Concrete World,
American Ceramic Society Bulletin, vol. 84, no. 10, p. 14-16.
Song, Gl, Gu, H. and Mo,Y. (2008). Smart Aggregates: Multi-Functional Sensors for Concrete
Structuresa Tutorial and a review. Smart Mater. Struct. vol.17.
240

Nonlinear Dynamic Behavior Of Cold-Formed Steel Pipe Pier Model using

Shaking Table Test
Abdul Qadir Bhatti
Assistant Professor, National University of Sciences & Technology, Risalpur, N.W.F.P. Pakistan,
bhatti-nit@nust.edu.pk
Norimitsu Kishi
Professor, Muroran Institute of Technology, Muroran, Hokkaido, Japan
Abstract
An experimental program comprising static cyclic loading and dynamic loading tests of steel pier models
is undertaken. In order to establish a rational design method of steel bridge piers against severe
earthquakes, the experimental program is aimed to address some fundamental questions concerning the
correlation between the two loading modes with reference to capacity of measuring the dynamic
responses. To that end, the effects of loading modes on strength and ductility of steel pier are examined
on the basis of the experimental results. Some of the results clearly point that the static cyclic loading test
has an inadequate ability to evaluate the seismic performances of steel piers under dynamic loading.
Keywords
Seismic design method; Cyclic loading test; Dynamic loading test; Shaking table test
1. Introduction
In the Kashmir Earthquake of October 2005, many highway bridges and steel piers suffered damage. The
severity of damages sounded an alarm to the engineering profession and demanded further investigations
to ensure improved seismic performance of steel piers.
Experimental studies using static cyclic loading on pier models have attempted to evaluate their dynamic
responses such as : lateral load carrying capacity and ductility (e.g., Koeda et al., 1998). However, since
the results obtained from static cyclic loading test have limited capacity to simulate the dynamic
phenomena of the piers under earthquake load, conclusions based on such results may not be adequate for
estimating the seismic performance of steel piers.
This study investigates the influence of loading modes on the lateral load carrying capacity and ductility
of pipe piers by applying static cyclic loading test and dynamic loading test to small pipe pier models.
The dynamic loading test is conducted by sinusoidal wave excitation, and the elasto-plastic dynamic
behaviors from elastic state to collapse levels of steel-pipe pier models are experimentally investigated.
The results are compared with those obtained from the static cyclic loading tests. The adequacy of the
application of the static cyclic loading test to evaluate seismic performance of steel bridge piers is
specifically discussed.
241
2. Experimental Overview
Table 1 Dimensions of test specimens
Specimen
t10-C, -D
t15-C, -D
t20-C, -D
t22-C, -D
t25-C, -D
L (mm)
631.5
R (mm)
47.75
48.00
48.25
48.35
48.50
t (mm)
1.0
1.5
2.0
2.2
2.5
L/R
R/t
13.2
47.8
32.0
24.1
22.0
19.4
Ten pipe pier models were manufactured from cold-formed steel pipe (JIS G3444 STK400-E-G) whose
material properties are the same as those of generally used actual bridge piers. The configuration and
dimensions of the pier model are shown in Fig. 1 and are listed in Table 1. In this table, nominal name of
each pier model uses two sets of characters symbolizing pipe thickness and testing method, such as, tm is
meant for m/10 mm thickness; and -C and -D are meant for static cyclic loading test and dynamic loading
test, respectively. The notations L, R, and t are the distance between the fixed point to the horizontal
loading point (the center of gravity of lead block), mean radius, and thickness, respectively. The radiusthickness ratio R/t is taken as an experimental variable and is set from 19.4 to 47.8 by varying pipe
thickness from 1.0 to 2.5 mm.
Mechanical properties of the pier model, obtained by conducting tensile test with JIS No.6 test specimens,
are: yield stress y = 384 MPa; tensile strength u = 516 MPa; Young's modulus E = 206 GPa; and
Poisson's ratio = 0.3.
To investigate the influence of loading mode on the maximum lateral load carrying capacity and ductility
of the pier model, two types of loading test are carried out: 1) static cyclic loading test; and 2) dynamic
loading test. The experimental setup and method for the dynamic loading test are described in brief in the
following. Static cyclic loading test is outlined by Koeda et al, 1998. Figure 2 shows the experimental
setup of a simplified shaking table used in this study. The shaking table is set on two linear guide rails. A
1,200 kg lead block is placed on the top of pier models to duplicate the weight of superstructure. Dynamic
responses of pier models are measured by four accelerometers mounted on the shaking table and at the
center of gravity of lead block, and by seven laser-type displacement meters set at shaking table, pier
model, and lead block. The dynamic response waves recorded by analog data-recorder are converted into
Figure 1 Configuration and dimensions of pier model
242
digital data for further processing by engineering workstations.
Table 2 Experimental conditions

Specimen
t10-C, -D
t15-C, -D
t20-C, -D
t22-C, -D
t25-C, -D
Input frequency
i (Hz)
2.5
3.0
3.5
3.7
4.0
Input acceleration
fi (gal)
300
500
600
750
875
Natural frequency
(Hz)
3.56
4.12
4.87
5.19
5.38
Figure 2 Experimental setup

Here, two types of experiments are performed: 1) an experiment for finding the fundamental natural
frequency by letting the actuator suddenly shut down; and 2) an experiment for investigation of elastoplastic dynamic behavior from elastic state to collapse level by base-excitation with predetermined
acceleration amplitude and frequency (Bhatti et. al, 2008). The shaking table is excited with a sinusoidal
wave. However, since an actuator takes a few seconds to reach harmonic vibration, the actuator is
operated for 8 seconds and then is shut down for each experiment. The experimental conditions and
results for the fundamental natural frequency are summarized in Table 2.
3. Experimental Results and Discussions

Figures 3 and 4 show the comparison between the two loading modes. The results of dynamic loading
tests in Figs 3 and 4 show the general patterns of local buckling occurred near the basement, and
hysteretic loop with respect to inertia force and relative displacement of lead block. The inertia force in
the dynamic loading test is converted from the response acceleration of the lead block.
In case of t15-D model with R/t = 32, the hysteretic loop shows that the lead block vibrates gradually
shifting it's center in one direction, and the inertia force decreases with increase in eccentricity. This
suggests that plasticization and softening progresses near the basement. The model collapses at the base
243
as a result of local buckling on the actuator side near the basement and as a result of that area being
crushed (Fig. 3).
(a) t15-C model

10
Static
loading
Inertia force (kN)
Horizontal load (kN)
10
(b) t15-D model
5
0
-5
-10
-40
-20
20
Dynamic loading
5
0
-5
i = 500 gal
fi = 3.0 Hz
-10
-40
40
Displacement (mm)
-20
20
40
60
80
100
Displacement (mm)
(c) t15-C model (static loading)
(d) t15-D model (dynamic loading)
Figure 3 Local buckling near the basement and hysteretic loops (R/t = 32)
For t25-D model with R/t = 19.4, local buckling in form of an elephants foot fairly occurs near the
basement on one side of shaking direction, similarly to the case of static cyclic loading test (Fig. 4).
However, this model does not collapse.
Figure 5 shows the envelope curves of hysteretic loop obtained from the static and dynamic loading
tests for the models with R/t = 32 and 19.4. It is evident in Fig. 5(a) that in case of R/t = 32, the envelope
curve obtained from dynamic loading test is similar to that from static loading test. For R/t = 19.4, the two
envelope curves in Fig. 5(b) have an overlap up to point of the maximum inertia force, and then they start
to diverge. Even though this limited experimental evidence do not justify drawing any general conclusion
but here is a strong indication that the correlation between the static and dynamic loading modes are poor
in the inelastic range.
The seismic performance of steel bridge piers is usually evaluated by the static cyclic loading test.
Specifically, strength and ductility of piers under seismic loading are estimated by the maximum lateral
load Hm and the lateral displacement m corresponding to the Hm on hysteretic loop obtained from the
static cyclic loading test, respectively. The experimental results for the Hm and the m are plotted against
the radius-thickness ratio R/t (Fig. 6). Here, the maximum inertia force of lead block is converted into Hm
for the dynamic loading test. In this figure, it is seen that the Hm in the static loading test more closely
correlates to that in the dynamic loading test, and that the m obtained from dynamic loading test gives a
similar value as long as R/t > 32. The m's are largely different between static and dynamic loading test for
R/t < 32. These results suggest that the ductility of steel piers under seismic loading may not always be
accurately evaluated by using results from static cyclic loading test.
244
(a) t25-C model
(b) t25-D model
20
Dynamic
loading
Inertia force (kN)
Static loading
10
0
-10
-20
-60
-40
-20
20
40
10
0
-10
i = 875 gal
fi = 4.0 Hz
-20
-40
60
-20
Displacement (mm)
20
40
Displacement (mm)
(c) t25-C model (static loading)
(d) t25-D model (dynamic loading)
Figure 4 Local buckling near the basement and hysteretic loops (R/t = 19.4)
20
10
R /t = 32
Horizontal load
or inertia force (kN)
Horizontal load
or inertia force (kN)
6
4
2
0
10
S tatic loading
D ynam ic loading
20
30
40
50
R /t = 19.4
15
10
5
0
S tatic load ing

D ynam ic loading
0
10
D isplacem ent (m m )
30
40
50
(b) R/t = 19.4
Figure 5 Envelopes of hysteretic loops
20
25
20
m (mm)
15
10
5
0
20
D isplacem ent (m m )
(a) R/t = 32
Hm (kN)
Horizontal load (kN)
20
S tatic load ing

D ynam ic load ing
0
10
20
30
15
10
Static load ing
D ynam ic loading
40
50
R /t
10
20
30
40
50
R /t
(b) Relationship between m and R/t
(a) Relationship between Hm and R/t
Figure 6 Comparison of Hm and m between static and dynamic loading

245
4. Conclusions
Following observations are made in this study:
1) The maximum lateral load Hm in the static loading test has a good correlation to that of the dynamic
loading test;
2) In case of smaller radius-thickness ratio, the lateral displacement ms measured from the static and
dynamic loading tests are largely different each other;
3) The ductility of steel-pipe piers under dynamic loading may not be evaluated with sufficient accuracy
by using the results from static cyclic loading test.
5. References
Bhatti A.Q., Kishi N., Mikami H., and Ando, T. (2008). Elasto-Plastic impact response analysis of shearfailure type RC beams with sear rebars. Journal of Material and Design, Elsevier, In Press.
Koeda, H. Ono, S., Kishi, N. and Y. Goto (1998), Elasto-Plastic Behavior of Steel-Pipe Pier Models
under Lateral Cyclic Loading, Proceedings of 2nd International Conference on Thin-Walled
Structures, Singapore, 787-794.
246

Assessment of Demings Philosophy with Respect to its Link to the Current

Scenario in Pakistani Construction Industry
S. M. Khalid Huda
Deputy Manager, Road Management Unit, Works & Services Department, Govt. of Sindh,
Pakistan
aylahuda@yahoo.com
Abstract
Deming, who is known as the father of Total Quality Management, gave his fourteen points on Quality
Management which are still regarded as milestones in this field. Although it is a management theory but it
can be applied to any industry which deals with the provision of products and services. Deming advocates
a constant improvement in the quality of products and services by effective management and by using
statistical control tools and procedures. In this research paper an effort has been made to link Demings
fourteen points with the Construction Industry in Pakistan and to find ways for the improvement of the
industry both in terms of its image as well as in terms of products and services that it offers. Each point
has been discussed in the context of the Demings Philosophy and the prevailing conditions in the
Construction Industry in Pakistan, the current practices and the management framework. The
methodology adopted for this research paper has been desk study, personal observations and collection of
data from the construction industry in Pakistan. Finally, recommendations have been given based on the
analysis and feedback.
Keywords
Deming, Total Quality Management, Quality Management, Construction Industry, Pakistan
1. Introduction:
The present state of construction industry in Pakistan is currently passing through a transitional phase. On
one hand it is trying to shed the primitive practices en vogue in the construction industry. On the other
hand it is gearing up to meet the challenges faced by it due to the globalization in technology. As clients
are becoming more and more demanding, and foreign construction companies and property developers
invading the local markets, the construction industry in Pakistan is pushing itself hard to keep pace with
the changing scenario.
According to the World Banks report titled Pakistan Infrastructure Implementation Capacity(Feb,
2008), Pakistans construction industry does not have the capacity to deliver Governments planned
infrastructure program. Some of the shortcomings highlighted are poor project planning, insufficient
programming, weak implementation, delays, scarcity of skilled workers, etc. The views expressed in this
report may be debatable but the crux of the matter is that Pakistans construction industry is suffering
from a negative image. Shortcomings in project planning and implementation are visible during the
execution of the project only and are eventually forgotten, but the quality of the project remains a topic of
247
discussion for the entire life of the project. The construction industry needs to focus on improving itself
and also on building its image. Improving quality of construction is the easiest way to achieve this goal.
According to FIDIC policy on Quality of Construction (FIDIC, 2004), a survey was carried out within
Member Associations in 2001, which confirmed that the failure to achieve appropriate Quality of
Construction is a problem worldwide. The problem was found to be serious and was evident in both
developed and developing countries.
This paper primarily focuses on finding ways to improve the image of Pakistans construction industry in
context with the quality of product and services that it offers to its clients. Study of suitability and
applicability of Demings Philosophy for this purpose is the main objective of this paper.
Moreover, (Farooqui et al., 2007) recommended in their study that successful implementation of Total
Quality Management (TQM) in Pakistan construction industry can be achieved through persistence,
positive hands-on leadership, upfront preparation and continuous maintenance of a successful plan. An
effort has been made in this paper to find applicability of this recommendation in terms of Demings
Philosophy.
It is further stated that this research paper includes a preliminary study and the findings need further
justification via future research. This paper aims at doing the groundwork and somewhat ascertaining the
present scenario of Pakistani construction industry.
2. Background
Dr. Deming, who is known as the father of Total Quality Management (TQM), gave his fourteen points
(Deming, 1986) on Quality Management which are still regarded as milestones in this field. Although
Demings Philosophy is management based, initially put forward for the manufacturing industry, it can be
applied to any industry which deals with the provision of products and services. Demings approach to
TQM utilizes a 14 point process to create an organizational environment in which statistical methods will
be effective (Metri, 2006). Deming advocates a constant improvement in quality of products and services
by effective management and by using statistical control tools and procedures.
Demings Philosophy is management-focused and process-oriented. The emphasis is more on quality
improvement by change in organization behavior. According to Deming, the change in organization
culture and long term commitment is the key to the improvement of quality of products and services.
Many organizations who have adopted this philosophy have observed a remarkable change in the quality
of their products and services. Since this is a tried and tested recipe for improvement of quality of
products and services, it may be tried for the construction industry. The efficacy of this theory may be
tested in the framework of Pakistans construction industry.
3. Methodology
The methodology adopted for this research paper was based on:
(a)
Desk Study
(b)
Personal observations
(c)
Questionnaire
(d)
Analyses
(e)
Recommendations
248
This research paper is based on personal observations, on discussions with the people involved in this
profession/industry and on feedback received from the industry.
A questionnaire was also developed to get some feedback. The questions were based on general practices
prevalent in the construction industry in Pakistan, mostly related to quality in construction.
The questionnaire was composed of the following, apart from personal information:
questions based on Demings 14 Points (08 Nos.)
questions based on general trends (quality related) (12 Nos.)
questions based on general perceptions/observations (10 Nos.)
The response was quite encouraging and considerable feedback was received. Out of 25 Nos.
questionnaires circulated among various key players in the industry including engineers, architects,
managers, etc., 17 Nos. replies were received which was quite encouraging considering the time
constraint.
4. Demings Fourteen Points and their Linkage to the Pakistani Construction Industry:
Point 1
Create constancy of purpose for the improvement of product and service.
Point 1 emphasizes that management should not only focus on solving short term problems but should
also have a long term strategy. A long term policy is required if the company wants to stay in business.
Point 1 suggests a new definition of a companys role i.e. from short term profit strategy to long term
planning for sustainable growth in business.
Constancy of purpose can be achieved by means of:
1.
Innovation
2.
Research and Education
3.
Continuous Improvement of Product and Service
4.
Maintenance of equipment, furniture and fixtures and new aids for production in the office
and in the plant.
Construction companies, normally, have a very vague idea regarding their future. They do not have
specific future policies and their plans and policies keep on changing according to the changes in the
construction market. From a business strategy this might seem as the right proposition but what Deming
advocates is to have a long term goal for improvement of the quality of products and services. This can
only be achieved if the construction companies keep themselves abreast with technology, invest in R&D,
focus on constant improvement of products and services, and in continuous maintenance of their
equipments, machinery, furniture and fixtures, etc.
A close look at the construction companies in Pakistan shows that they do invest in innovation and in
Research and Development. According to the feedback received through the questionnaire, 59%
responses were in the affirmative, regarding investment in new technology. However, 76% of the
responses indicated that construction companies in Pakistan do not invest in R&D.
Moreover, the respondents were also asked to state the time frame when they upgrade their construction
machinery, equipments, etc. The replies were as follows:
249
S. No
1.
2.
3.
4.
5.
How often to you upgrade construction machinery,

equipments, etc
0 to 3 years
3 to 8 years
8 to 10 years
Never
Not sure
Percentage replies
18 %
35 %
11 %
18 %
18 %
The results show that the construction machinery, equipments, etc; are generally upgraded but mostly
after a time period of 3 to 8 years, which is considerably the right approach.
A term most often used in Pakistan is acquisition of technology i.e. technology is to be acquired from
developed countries irrespective of their suitability to the Pakistani environment. The result being
expensive equipments, machinery, software, etc are imported with the perception that they will improve
the quality of the product and service without considering their use, availability of backup services, after
sales services availability in Pakistan, etc. Often these technologies are acquired at a later stage when that
technology is nearly out of date in the developing countries. No effort is made nor investments made in
R&D so that technology may be developed for indigenous needs.
Point 2
Adopt the new philosophy
Dr. Deming suggests that management should adopt the philosophy of introducing quality into their
products and services. Management should refuse to allow common levels of delays, mistakes, defects,
poor workmanship, bad materials, handling damages, fearful and uninformed workers, poor training or
none at all, executive job hopping, and inattentive and sullen service. Quality can only be achieved if
there is no allowance for such practices.
The construction industry should try to adopt the new philosophy because in todays world the clients are
more informed and more demanding in terms of quality. According to the survey, 82% respondents
believed that clients in Pakistan have become demanding in terms of quality.
Many construction companies in Pakistan are being quality assured in terms of ISO 9000. The aim is to
get pre qualified and to find access to clients approved contractors lists rather than making an effort to
tread on the quality path. This attitude needs to be changed if the companies are really serious about
improving the quality of their products and services.
Point 3
Cease dependence on mass inspection
Built in quality is what Dr. Deming suggests when he asks the managers to cease dependence on mass
inspection. Mass inspection is at the bottom end of the process when it is too late to rectify the mistake.
Moreover, the product needs to be discarded which results in an increase in the production cost. Built in
quality can be achieved by using statistical methods to improve the supply and production processes.
The cost of the product also decreases by putting quality into the system.
Construction industry is unique in nature as every product and every project is new in terms of planning,
design, construction, maintenance and operation.
250
Concrete is the most widely used material in the construction industry in Pakistan. The industry revolves
around concrete only. Other modes of construction like steel structures, wooden structures, composite
structures, etc. are rarely specified by the designers. Moreover, in situ concrete is preferred over precast
concrete panels. In situ concrete requires high levels of quality standards as it has to be right first time.
In Pakistan, most of the construction activities are in situ and shuttering made of wood are commonly
used. The shuttering is of poor quality with no standard specifications. The end result being deformed
structural panels which are given a face lift by hiding them with cement plaster. Inspection is carried out
at the far end of the casting process.
The questionnaire revealed that 47% of the construction companies in Pakistan had quality control
departments.
As per the questionnaire, results regarding the quality checks were as follows:
S. No
1.
2.
3.
4.
How often is the quality of work checked generally or

by the quality control department (not limited to one
answer)
At every stage
At the end of every process
After completion of work
Before handing over the project to the client
Percentage replies
12 %
47 %
35 %
29 %
Most of the respondents believe that the quality checks are carried out at the end of each process, which is
a good indication and shows that Pakistani construction industry is treading on the right track.
Standardization of structural members and strict control over specifications may further improve the
quality of products substantially.
Point 4
End the practice of awarding business on Price tag alone
Dr. Deming suggests a long term relationship with the suppliers. To achieve that, he advises to award
business to the most reliable and to the best quality supplier. Awarding business on price tag alone leads
to three major drawbacks. First is proliferation of suppliers, secondly it instigates buyers to jump from
supplier to supplier and thirdly it causes a reliance on specifications that become barrier to improvement
of quality.
One of the major obstacles in the improvement of the construction industry is its practice of awarding
tenders on price tags. Similarly suppliers are chosen on price tags alone.
Awarding tenders and contracts to the lowest bidder is the norm in the construction industry in Pakistan.
In Pakistan where the major client is the public sector, the general trend is to award all sorts of contracts
on the basis of lowest bid received. The contractors and suppliers sometimes quote prices which are so
low that it would be impossible to complete the project within that cost, leaving aside their profits. The
end result is use of cheap, substandard and questionable materials.
Moreover, the purchasing departments are usually unaware of the intended use of the materials being
purchased. As per the questionnaire, the results regarding the choice of suppliers, were as follows:
251
S. No
1.
2.
3.
4.
5.
Suppliers are chosen on the basis of: (not limited to

one answer)
New supplier for new project
Supplier who is the cheapest
Supplier who can supply the specified quantity
Supplier who supplies the right quality material
Supplier who is ISO 9000 certified
Percentage replies
nil
23 %
41 %
53 %
12 %
It is evident from above that when it comes to procuring materials, the construction industry in Pakistan is
quality conscious, but when it delivers the end product to its client, the concept of quality is lost
somewhere in the middle.
Deming advocates the end of awarding tenders and contracts to the lowest bidders. He also advises that
people, who are going to use a specific material, must be involved in the purchasing process. According
to the survey, 46% of the respondents agreed that procurement of materials is carried out by people who
do not know their intended use, 31% did not agree while 23% were not sure.
Point 5
Improve constantly and forever the system of production and service
According to Dr. Deming there should be constant improvement in every department in the organization.
Every person in the organization should constantly improve their skills as well as their work processes.
The work processes should be identified, studied, audited and constantly improved. Deming supports a
process-oriented management strategy rather than a result-oriented management strategy.
Construction companies in Pakistan are observed to be following the age old labor intensive construction
techniques. However, some new concepts such as project management, use of ready mix concrete, usage
of tower cranes, etc have been introduced in the urban scenario, but to a limited extent. Projects rarely
complete on specified time. Quality is a buzz word with shallow interpretation. The consultancy
companies are few in number compared to the construction requirements of Pakistan. These consultancy
companies have been in the market for the last 50 to 60 years and now most of them are headed by the
second generation of their founders. Moreover, Contractors and consultants are usually at loggerheads
rather than working as a team. This is evident from the rising number of disputes, court cases, abandoned
works, etc. According to the questionnaire, 100% of the respondents agreed that there is friction between
the consultants and contractors on Pakistani construction projects/sites and that they do not work as a
team.
The construction industry needs to gear itself and evolve as per the requirements of present times and to
face the challenges of the future. Innovation, development of quality culture and constant improvement of
products and services is the key to success. The consultants and contractors need to shed their differences
and need to work as a team. This synergy will lead to the uplift of Pakistani construction industry.
Point 6
Initiate training and retraining
Deming suggests that everybody in the organization should be trained and retrained. Deming is totally
against informal training given by one worker to another or a worker doing his/her job by following
unintelligible printed instructions. Deming believes that training may be given by professionals or experts
in their fields and it must also include training in using statistical tools for process control.
252
In Pakistan, technical education in construction is part of graduate and post graduate syllabi.
Engineers/managers are conscious of continuous career development. Seminars on technical issues have
taken root in Pakistan and are widely attended.
Unfortunately, training institutions imparting training to the workforce (semi skilled and unskilled) in
different trades are non existent. One such institution is being setup at Islamabad, but its main aim is to
train/develop manpower in construction skills to be sent to foreign countries.
Workers are usually trained as apprentices working with their trainers (commonly known as Ustads in
Pakistan) on site. The knowledge and technical expertise of the trainer is questionable as he has also
learned the art from his trainer as an apprentice. If the trainer had learnt it wrong, he will pass on the
wrong version to his apprentice. It is very difficult for the management to correct such
apprentices/unskilled workers. Even if there is a formal training course, the workforce is reluctant to
improve their skills. The level of interest in training, according to the survey, is as follows:
S. No
1.
2.
3.
4.
Key players
Engineers, architects, managers, etc
Skilled workers
Semi skilled workers
Unskilled workers
Level of interest in training

100 %
69 %
23 %
15 %
It is observed from above that the level of interest in acquiring further training or know how is
proportional to the level of skill. Training and re training is an essential component of continuous
improvement and must be imparted at all levels.
Point 7
Institute leadership
According to Deming, management should provide the right leadership to help the workers do a better
job. It is the managements job to provide the working tools, machinery, materials, training, supervision,
accompanied with a proper working environment. The role of a manager may be that of a leader cum
manager.
Leadership is one of the factors missing in Pakistani construction industry, especially on project sites. The
supervisors and engineers do not interact openly with the workforce at site and there is a sort of
communication gap between them. It is often observed that two different teams are working on the site,
one is composed of supervisors and site engineers/managers and the other is composed of the workforce.
Leadership qualities are seldom nourished in the supervisors and site engineers/managers with the result
that they do not understand their role and responsibility. According to the survey, 77 % of the respondents
were of the view that leadership qualities are not developed in the engineers/managers during their formal
graduate and undergraduate education. Interestingly, 77 % believed that leadership qualities are
developed during their on the job trainings. If these skills are developed, then their application is seldom
seen.
Point 8
Drive out fear
Dr. Deming suggests that it is the role of management to drive out any sort of fear which might exist
among the workers. The fear may be based on the threat of losing their jobs, bonuses, raises, promotions.
253
Other psychological factors that inhibit the workers from giving suggestions or reporting faulty materials
or machinery may be based on fears of being harassed, ridiculed, discriminated, side lined, etc.
Although fear is seldom sensed among the workforce at construction sites in Pakistan, however, it is seen
among the engineers and managers as they are not only afraid of losing their jobs but are also worried
about their careers and reputation in the construction industry. These fears are more pronounced during
periods of recession. According to the survey, only 6% believed that they had no fears, whatsoever.
However, engineers/managers who have some sort of fear, the fear description is as follows:
S. No
1.
2.
3.
4.
Fears regarding: (not limited to one answer)

Losing the job
Losing increments, bonuses, perks, etc
Reputation in the industry
Being ridiculed or made fun of (on the job)
Percentage agreed
38 %
54 %
77 %
31 %
It is surprising to note that majority of engineers/managers primarily have fears regarding their reputation.
Fear among the workforce is hardly witnessed on Pakistani construction sites. When things go wrong,
especially when something is damaged or destroyed at site, due to any reason, whether the workforce
might be involved or not, the workforce is not perturbed. As per the survey, 54% of the respondents were
of the view that in such situations, the workforce had no fears and kept on working. Moreover, 46% were
of the view that the workers take the management into confidence in such situations.
The management should try to drive out fear of any sort amongst the engineers, managers, and the
workforce (if any). This can be done by effective communication and counseling.
Point 9
Break down barriers between staff areas
Deming advocates teamwork i.e. getting all the players together who are involved in decision making and
taken on board on all aspects of the project.
In the construction industry, all the key players i.e. the architects, engineers, project managers,
contractors, quantity surveyors, services engineers, specialists contractors, works contractors, etc should
be involved at the early stages of the project. A good team with everyone on board has a better chance of
achieving its goals.
In Pakistani construction industry the new emerging trend is of involving all the key players from the
inception of the project. But it is observed that there is lack of team spirit and enthusiasm. Most senior
engineers/managers do not attend weekly or monthly project meetings, they rather send their junior staff,
as the meetings are not taken seriously and considered a waste of time. According to the survey, 69% of
the respondents agreed that senior managers avoid going to such meetings.
Moreover, it has been observed that on the Pakistani construction sites there is a vast gap between the
engineers/managers and the workforce, which is mostly illiterate. The divide between them is so strong
that they do not communicate with each other. The differences in their lifestyles, cultural and moral
values, are poles apart. Lack of communication and interaction among management and different trades
usually takes toll on the project. The survey revealed that 100% respondents agreed that there is a vast
difference between ways of working, mindset, lifestyles, etc between the management and the workforce
and 92% were of the view that this trend does affect the project.
The management needs to break down barriers and find ways for effective interaction especially on
construction sites.
254
Point 10
Eliminate slogans, exhortations and targets for the workforce
According to Deming, management should eliminate slogans like zero defects, do it right first time,
etc.; as these slogans put undue pressure on the workforce. Low productivity and low quality are due to
the faults in the system and management and lie beyond the power of the workforce.
In Pakistan, the workforce is usually asked to produce quality work without explaining to them what is
expected of them. The workforce is confused and produces products based on their own perceptions.
There are no set standards for quality construction work. Any work which is acceptable by the client is
perceived as quality work. The clients, usually from the public sector, do not even bother to check/inspect
the works. If they do, the work is measured on the basis of the yardstick of minimum specifications.
According to the questionnaire, 77% were of the view that work is measured (for payments) on the basis
of minimum specifications, both by the public and private sector clients.
The specifications for civil works in Pakistan are based on the age old specifications, courtesy legacy of
the British Raj. Centuries old specifications are still recommended and specified for projects. These
specifications, if updated, include references like as per ACI code, as per BS code or as per
AASHTO specifications. The end result is a mixture of British and American specifications
incomprehensive to the workforce as well as for the management. Expecting the workforce to produce
quality work measured on the basis of such specifications is absurd. The Pakistani construction industry
may either do away with such specifications or adopt performance based specifications. An example may
be to ask a contractor to construct a road having International Roughness Index (IRI) of 2.0. The
contractor will then plan, design, estimate, and construct the road accordingly.
Point 11
Eliminate arbitrary numerical targets
Dr. Deming suggests that management should ask for quality rather than quantity. In order to complete a
certain amount of work in a specified time, quality of work is usually compromised. Defective items are
produced which are charged on the project. The client pays in the end for such work produced according
to numerical targets.
At the construction sites in Pakistan, numerical targets in terms of per cubic feet of concreting or per
cubic feet of compaction, etc.; are usually fixed for the workforce based on the construction schedule. The
workforce is expected to deliver quantity without compromising on quality. It is interesting to note that
the workforce in Pakistan does not take any pressure of any sort. On the contrary, it is the management
which is under pressure to deliver quality as well as quantity. The workforce usually exploits the situation
for their own benefits. The result is frequent conflicts witnessed at the construction sites between the
management and the workforce.
Point 12
Remove barriers to pride of workmanship
Deming advocates the removal of barriers that rob workers of their right to pride of workmanship. The
workers may be treated as a vital part of the system and as humans rather than robots. This implies
abolition of merit rating (appraisal of performance) and management by objective.
255
Barriers to pride of workmanship are rarely witnessed on the construction sites in Pakistan. The workers
are usually motivated by the management and their workmanship is praised. However, sometimes the
tradesmen take a negative advantage of this praise and increase their rates, as they are usually hired on
daily wages. The result is that the management usually discourages such practices. The only feedback
they receive is criticism from the management which is also at the completion of the work when it is too
late to rectify any mistake. The end result is that the workforce is found indifferent and aloof. As per the
results received from the questionnaire, 77 % believed that the workforce was given feedback, but only
when things went wrong.
Point 13
Encourage Education
Deming suggests education and self improvement. The management should encourage all its team
members to continuously improve themselves and to keep abreast with the latest trends. What an
organization needs is not just people but people who are improving with education. Deming also
advocates the learning of statistical process control tools that may be prescribed as the basic recipe for
quality improvement.
In Pakistan, acquiring education and improvement in skills is widely encouraged. It is also part of the
Muslim culture predominant in Pakistan. Unfortunately, it is sometimes related with monetary benefits
i.e. acquisition of knowledge/education is for earning more money and getting a better job. High scale of
unemployment among educated youth in Pakistan has provoked people to change their mindsets,
especially among the poor as they have to spend a considerable amount of their income on the education
of their children. Engineers/Managers are on the other hand very career minded in Pakistan. They are
keen to enhance their qualifications and technical skills.
Point 14
Top Management Commitment
Deming cautions that quality cannot be achieved unless the top management is fully committed. Quality
flows from top to bottom of the organizational hierarchy. The above 13 points may be implemented only
if the top management is committed.
Commitment of top management in the field of quality is somewhat lukewarm in the Pakistani
construction industry. According to the survey, 59% were of the view that the top management is
committed towards quality. The top management is seen giving lot of support and lip service to the cause
of improvement of quality of products and services. Most of the companies are getting themselves
certified as per ISO 9000, but this is more of a marketing strategy rather than commitment towards
Quality. Moreover, construction companies do not spend money nor allocate resources for this purpose.
ISO Standards are followed in the head offices only. Their implementations are rarely witnessed at the
construction sites.
The other factor predominant in the Pakistani construction industry is high level of corruption, especially
in the public sector. In order to stay in business, the top management has to oblige the clients. As the
amount to be paid in bribes and kickbacks is charged on the project and that too on the contractors profit,
the first casualty is usually the quality of the project. Sometimes the project finances/allocations are so
tight that the minimum specifications are also not met with.
Commitment of top management is vital for the implementation of quality in construction projects.
256

5.1 Conclusions
From the above discussion and analyses, it may be deduced that Demings Philosophy is pertinent and
applicable to the construction industry. All the points of this philosophy are relevant to the construction
industry in Pakistan which is evident from the feedback received from the industry. Each point has its
own significance, as discussed above, and does not seem alien that might not be incorporated in our
present system. The workforce, professionals, contractors, management, etc; behave in the same way in
Pakistan as in any other country. Readers and researchers might argue that a foreign philosophy is again
being imposed on the Pakistani construction industry. The justification is, that since this philosophy is
management focused and based on human psychology, its application and implications are universal. A
close study of the above points indicates that most of the points are focused on the workforce and that too
on their psychological needs. It is the managements job to fulfill those needs and provide the requisite
leadership. Deming also advocates a long term relationship with the suppliers, based on mutual trust and
cooperation.
The Pakistani construction industry is in its infancy regarding quality, but is treading on the path of total
quality management. This research has shown that some of the positive aspects, prevailing in the industry,
presently upto a limited extent, are:
The top management is committed towards quality.
The Pakistani construction industry is investing in new technology.
The construction machinery and equipments are being upgraded, mostly after 3 to 8 years time.
Most of the construction companies are thinking in terms of being quality assured as per ISO
9000.
Quality checks are being carried out at the end of each process.
Materials are procured from suppliers who provide quality materials
The management, as well as the workforce, is interested in improving its skills, the interest level,
however, varies.
The workforce does not have any fears or inhibitions
Demings Philosophy is a new way of doing things and emphasizes primarily upon changing the mindset
of the management. According to Deming, if the quality of products is questionable, the fault lies within
the management rather than the workforce, materials, tools, machinery, or on the working environment.
Managers/engineers in Pakistan responsible for delivering quality products and services may follow
Demings advice and adopt the philosophy, preferably as a religion. A religion which everyone believes
in and practices on his/her own free will without any compulsion. The guidelines are simple, easy to
follow and easily understood by all.
5.2 Recommendations
A model has been developed to simplify Demings recommendations and to make them practical and
applicable. A graphical representation of the proposed model is given in Figure 1. Demings fourteen
points are management based and primarily focused on the workforce and suppliers for an integrated
approach towards achieving quality.
The model was developed by first classifying the 14 points in three broad categories i.e. management,
workforce and supplier specific points. Point 14 was taken as the prime factor and the whole process of
quality management is based upon the commitment of top management towards achieving quality. If the
top management is not committed then the process may be terminated immediately, as half hearted
approach will bear no fruits. Total commitment and conviction of top management will help them in
257
achieving their goals and lead to implementation of Total Quality Management (TQM) in the company.
Once this commitment level is achieved then the middle as well as junior management may be taken on
board alongwith the two partners i.e. the suppliers and the workforce. A long term relationship is
proposed for the management with the organization as well as that of the workforce and suppliers with the
company. Based on the data collected and its analyses, it is safe to infer that most of Demings
recommendations are presently being implemented but upto a marginal extent in the Pakistani
construction industry scenario. The need of the hour is to enforce them forcefully with full conviction and
commitment. The process of improvement of quality of products and services is continuous and a never
ending exercise.
Figure 1: Proposed Model for Application of Demings Philosophy
258
Demings Philosophy may be linked and applied to the construction industry in Pakistan in its true spirit.
If the top management of the company is committed, the rest of the 13 points will automatically follow
suit. The result will be improvement in the quality of products and services which will not only satisfy the
clients needs but will also help in improving the image of the Pakistani construction industry.
6. References
Deming, W.E. (1986). Out of the Crisis. Cambridge University Press. U.K
Farooqui, R.U, Lodi, S.R, Rafeeqi, S. F. A, and Panthi, K. (2007) Assessing the Quality Culture in
Client
Organizations in Pakistan Construction Industry A Way Forward to Total Quality Management
Implementation in Pakistan. Proceedings of Fourth International Conference on Construction in the
21st
Century (CITC-IV), Gold Coast, Australia. pp. 469-486.
FIDIC (2004), Policy on Quality of Construction. http://www.fidic@fidic.org
Metri, B.A (2006). Total Quality Transportation through Demings Fourteen Points. Journal of Public
Transportation, Vol 9, No. 4, pp 35-46.
World Bank Report (Feb. 2008). Pakistan Infrastructure Implementation Capacity (PIICA).
http://www.worldbank.org/pk.
259

Production of Low Cost Self Compacting Concrete Using Rice Husk Ash
Shazim Ali Memon
Lecturer, National Institute of Technology, National University of Sciences and Technology, Pakistan
shazim_memon@yahoo.com
Muhammad Ali Shaikh
Lecturer, Military College of Engineering, National University of Sciences and Technology, Pakistan
Hassan Akbar
Student, Military College of Engineering, National University of Sciences and Technology, Pakistan
Abstract
Self Compacting Concreteas the name impliesis the concrete requiring a very little or no vibration to
fill the form homogeneously. Self Compacting Concrete (SCC) is defined by two primary properties:
Ability to flow or deform under its own weight (with or without obstructions) and the ability to remain
homogeneous while doing so. Flowability is achieved by utilizing high range water reducing admixtures
and segregation resistance is ensured by introducing a chemical viscosity modifying admixture (VMA) or
increasing the amount of fines in the concrete. The study explores the use of Rice Husk Ash (RHA) to
increase the amount of fines and hence achieve self-compactibility in an economical way, suitable for
Pakistani construction industry.
The study focuses on comparison of fresh properties of SCC containing varying amounts of RHA with
that containing commercially available viscosity modifying admixture. The comparison is done at
different dosages of superplasticizer keeping cement, water, coarse aggregate, and fine aggregate contents
constant.
Test results substantiate the feasibility to develop low cost SCC using RHA. Cost analysis showed that
the cost of ingredients of specific SCC mix is 42.47 percent less than that of control concrete.
Keywords
Self Compacting Concrete, Rice Husk Ash, Flowability, Segregation Resistance
1. Introduction
Owing to all its properties, use of SCC is increasing all over the world. But the adoption has not been as
fast as it should have been. The primary reason is its higher cost per cubic yard of concrete. In Pakistan,
SCC is used very little owing to lack of awareness and the high costs associated with its production.
SCC is defined by two primary properties: Deformability and Segregation resistance. Deformability or
flowability is the ability of SCC to flow or deform under its own weight (with or without obstructions).
Segregation resistance or stability is the ability to remain homogeneous while doing so. High range water
reducing admixtures are utilized to develop sufficient deformability. At the same time, segregation
resistance is ensured, which is accomplished either by introducing a chemical VMA or by increasing the
260
amount of fines in the concrete. These viscosity modifying admixtures are very expensive and the main
cause of increase in the cost of SCC.
About 600 million tonnes of rice paddy was produced all over the world out of which an estimated 5.5
million tonnes was grown in Pakistan in 2005-06. Rice husk is the outer covering of the rice grain (Figure
1) that is removed as a result of milling process on rice kernel. On average 20% of rice paddy is husk
which places the global estimate of the rice husk at 120 million tonnes. This means that in Pakistan alone,
about 1.1 million tonnes of rice husk was generated in year 2005-06 [Bronzeoak Ltd, 2002 and Statistics
Division, Government of Pakistan]. Huge amounts of RHA, obtained after burning of rice husk, probably
has no use at all and getting rid of it is also a problem.
This paper presents the results of research aimed to investigate the suitability of RHA as a viscosity
modifying agent in SCC. The utilization of RHA in SCC mix produced desired results, reduced cost, and
also provided an environment friendly disposal of agro-industry waste product.
Figure 1: Rice Plant Basics (Source: LAROUSSE, modified for explanation)
2. Experimental Investigation
2.1 Materials
Through out the experimental work ordinary portland cement confirming to ASTM C 150 (ASTM, 2004)
was used. The chemical and physical properties of cement are illustrated in Table 1.
The sieve analysis of fine and coarse aggregate was performed in accordance with ASTM C 136 04
(ASTM, 2004). The results of sieve analysis of fine and coarse aggregate as compared with the
requirement of ASTM C33-03 (ASTM, 2004) are tabulated in Table 2 and 3. The physical properties of
fine and coarse aggregate are summarized in Table 4.
To achieve superior workability and placeability, high range water reducing concrete admixture,
Sikament NN was used. The dosage of superplasticizer was varied from 3.5 to 4.5 percent by weight of
binder content. The technical data of Sikament NN is illustrated in Table 5.
For control concretes, Sika Viscocrete-1 was used as viscosity modifying agent. It is a third generation of
superplasticizer and meets the requirements for superplasticizer according to SIA 162 (1989) and prEN
934-2. The dosage of superplasticizer was kept as 2 percent by weight of binder content. The technical
data of Sika Viscocrete-1 is illustrated in Table 5.
For mixes other than control concrete, RHA was used as viscosity modifying agent. The chemical and
physical properties of RHA are tabulated in Table 1.
261
Table 1: Chemical and Physical Properties of Cementitious Materials

Constituents
% by wt of sample
(Cement)
% by wt of sample
(RHA)
SiO2
17.454
77.19
TiO2
0.348
0.379
Al2O3
4.422
6.19
Fe2O3
3.93
3.65
MnO
0.064
0.135
MgO
2.346
1.455
CaO
65.844
2.88
Na2O
0.252
0.00
K2O
1.117
1.815
P2O5
0.068
1.107
SO3
3.979
Cl
0.012
SrO
0.072
LOI (1000oC)
5.429
Physical Property
Specific gravity
3.14
2.4
Table 2: Grading of Fine Aggregate

ASTM
Sieve No.
Percentage
Retained
8
16
30
50
100
Pan
0.0
16
29.4
31.6
20.9
2.2
Sieve Size
19
12.5
9.5
4.75
2.36
Pan
Cumulative
Percentage
Retained
0.0
16
45.3
76.9
97.8
100.0
Cumulative
Percentage
Passing
100
84.0
54.7
23.1
2.2
0.0
ASTM
Range (C 33)
80 to 100
50 to 85
25 to 60
5 to 30
0 to 10
-
Table 3: Grading of Coarse Aggregate

Cumulative Cumulative
ASTM
Percentage
Percentage Percentage
Range (C 33)
Retained
Retained
Passing
0.0
0.0
100
90 to 100
12.5
12.5
87.53
60.9
73.3
26.66
20 to 55
26.3
99.7
0.33
0 to 10
0.3
99.9
0.066
0 to 5
0.1
100.0
0
-
262
Table 4 Physical Properties of Fine and Coarse Aggregate
Fine aggregate
Coarse aggregate
Unit Weight
(Kg/m3)
Bulk Specific Gravity

(SSD)
Absorption
Fineness
Modulus
1953.54
1529.28
2.671
2.678
1.65
1.07
2.62
-
Table 5 Technical Data of Sikament NN and Sika Viscocrete 1
Sikament NN
Sika Viscocrete-1
Type
Naphthalene formaldehyde
sulphonate
Modified
polycarboxylate
Appearance
Dark brown
Green liquid
Density (kg/l)
1.2
1.1
2.2 Mix Design and Mix Proportions

For this study, nine different mixes were prepared. These were subdivided into three groups: Control
Concrete, 5% RHA and 10% RHA. For each group, dosage of superplasticizer was varied from 3.5% to
4.5% with an increment of 0.5%. The mix proportions are given in Table 6 while designation of mixes by
specific names is explained in the Figure 2.
CC 3.5
Denotes
Concrete
Control SP dosage
10 R 4.5
Denotes mix with
10% RHA
SP dosage
Figure 2: Mix Designation

2.3 Testing of Specimens
For each mix, slump flow, L-box and V-funnel test were carried out. Brief explanation and illustration of
Slump flow, L-Box and V-funnel test is given below.
2.3.1 Slump flow test
It is the most commonly used test and gives a good assessment of filling ability. The apparatus is shown
in Figure 3. At first, the inside of slump cone and the smooth leveled surface of floor on which the slump
cone is to be placed are moistened. The slump cone is held down firmly. The cone is then filled with
concrete. No tamping is done. Any surplus concrete is removed from around the base of the concrete.
After this, the cone is raised vertically and the concrete is allowed to flow out freely. The diameter of the
concrete in two perpendicular directions is measured. The average of the two measured diameters is
calculated. This is the slump flow in mm. The higher the slump flow value, the greater its ability to fill
formwork under its own weight. As per EFNARC guide, the range is from 650 mm to 800 mm [6].
263
Table 6: Experimental Matrix
Viscocrete-1
(% by
weight of
binder)
Water/Binder
ratio
Water
Cement
RHA
Fine
Aggregate
CC3.5
CC4
CC4.5
(kg/m3)
200
200
200
(kg/m3)
500
500
500
(kg/m3)
0
0
0
(kg/m3)
875
875
875
(kg/m3)
750
750
750
3.5
4
4.5
2
2
2
0.4
0.4
0.4
5R3.5
5R4
5R4.5
200
200
200
500
500
500
25
25
25
875
875
875
750
750
750
3.5
4
4.5
0.38
0.38
0.38
10R3.5
10R4
10R4.5
200
200
200
500
500
500
50
50
50
875
875
875
750
750
750
3.5
4
4.5
0.36
0.36
0.36
Mix
name
Coarse
Aggregate
Sikament
NN (%
by
weight of
binder)
2.3.2 L box test method

It assesses filling and passing ability of SCC. The apparatus is shown in Figure 4. The vertical section is
filled with concrete, and then gate lifted to let the concrete flow into the horizontal section. When the flow
has stopped, the heights H1 and H2 are measured. Closer to unity value of ratio H2/H1 indicates better
flow of concrete [6].
2.3.3 V-funnel test and V-funnel at T=5 min
The test measures flowability and segregation resistance of concrete. The apparatus is shown in Figure 5.
At first, the test assembly is set firmly on the ground and the inside surfaces are moistened. The trap door
is closed and a bucket is placed underneath. Then the apparatus is completely filled with concrete without
compacting. After filling the concrete, the trap door is opened and the time for the discharge is recorded.
This is taken to be when light is seen from above through the funnel. To measure the flow time at T
5minutes, the trap door is closed and V-funnel is refilled immediately. The trap door is opened after 5
minutes and the time for the discharge is recorded. This is the flow time at T 5minutes. Shorter flow time
indicate greater flowability [6].
264
3. Test Results and Discussions

Properties of freshly mixed concrete were tested for qualifying within the specified EFNARC range of
SCC [6].
3.1 Slump Flow Test
The slump flow for all mixes except 10R3.5 was within the EFNARC range of SCC. The results of slump
flow show that the flow increased with the increase in the quantity of superplasticizer used for
flowability. Proportionally, the flow decreased with the increased quantity of RHA. The experimental
readings achieved in slump flow test were from 595 to 795 mm. Slump flow results are shown in Figures
6-8.
265
3.2 L - Box Test

While testing the concrete for passing ability, majority of the mixes passed through the bars very easily
and without any blockage. The results of L-box test show that the ratio of L-box increased with the
increase in the quantity of superplasticizer used for flowability. Proportionally, the ratio decreased with
the increased quantity of RHA. The experimental readings achieved in the L - box test were from 0 to 1. L
- Box test results are shown in Figures 9-11.
266
3.2 V - Funnel Test

As far as filling ability of the mixes was concerned, most of the results of V - funnel tests remained more
towards the minimum range or even lesser. This showed more filling ability but less viscous mix. But as
the quantity of RHA was increased, the viscosity of the mix started increasing. V - funnel test results are
shown in Figures 12-14.
3.4.
V - Funnel at T5minutes Test
V - Funnel at T5minutes test shows the potential to segregation resistance. The results of this test remained
very encouraging and within the EFNARC range. V - funnel at T5minutes test results are shown in Figures
15-17.
Properties of freshly mixed concrete, which qualified all the four tests range limits, were four in numbers.
Among them were CC3.5, 5R3.5, 10R4 and 10R4.5. The concrete mixes which remained very close to
the EFNARC range were two in numbers. They were CC4 and 5R4. Mix 10R3.5 was totally out of the
range for all four tests.
4. Cost Analysis
Cost analysis of the materials used, has been analyzed as per the purchased price from the market (as of
February 2008). The mixes selected for calculation and analysis were those which could pass maximum
properties of freshly mixed concrete. Keeping these criteria, the mixes selected were CC3.5, among the
control concrete mixes, and 10R4, among the mixes containing RHA. The detailed calculations are
summarized in Table 7. It is clear that the cost of ingredients of specific SCC containing RHA is 42.47
less than the control concrete.
267
268
Table 7: Comparison of the Cost Analysis
Material
Cement (kg)
Coarse aggregate (kg)
Sand (kg)
Superplasticizer
(Sikament NN) (Lit)
Superplasticizer (Sika
viscocrete 1) (Lit)
RHA Hauling Cost*
Total
Rate
per m3
#(PKR)
5
0.613
0.503
Control Concrete
(CC3.5)
Quantity
Amount
(kg)
(PKR)
500
2500
750
460
875
440
SCC with bagasse ash

(10R4)
Quantity
Amount
(kg)
(PKR)
500
2500
750
460
875
440
65
17.5
1137.5
22
1430
325
10
3250
50
50
4480
7787.5
Percent reduction in cost = 42.47
#PKR stands for Pakistani Rupee

* RHA Hauling Cost =Rs. 1000 / metric tonne (assuming 10 km haul)
5. Conclusions
Based on the study, following conclusions can be drawn.
The possibility of developing low cost SCC using RHA is feasible. Low cost SCC can be made, by
incorporating some percentage of RHA along with the main ingredients of concrete (cement, fine
aggregate and coarse aggregate) and superplasticizer for flowability.
In fresh state, some of the mix results values were out of the EFNARC range and therefore before
casting the concrete, the properties of freshly mixed concrete must be checked for SCC.
The utilization of RHA in SCC solves the problem of its disposal thus keeping the environment free
from pollution.
6. References
ASTM. (2004). Standard specification for Portland Cement, C 150 04. Annual Book of ASTM
Standards Cement; Lime; Gypsum, Section 4, Vol. 4.01, pp 150-155.
ASTM. (2004). Standard test method for sieve analysis of fine aggregates, C 136 01. Annual Book of
ASTM Standards Concrete and Aggregates, Section 4, Vol. 4.02, pp 84-88.
ASTM. (2004). Specifications for concrete aggregates, C 33-03. Annual Book of ASTM Standards
Concrete and Aggregates, Section 4, Vol. 4.02, pp 10-20.
Bronzeoak Ltd. (2003). Rice Husk Ash Market Study. Available online at:
www.berr.gov.uk/files/file15138.pdf
EFNARC. (2002). Specifications and Guidelines for Self Compacting Concrete. Available online at:
www.efnarc.org
Statistics Division, Government of Pakistan. Pakistan Statistics, Available online at:
www.statpak.gov.pk
269

The ACPROM Model: An Expert System for Evaluating the Construction Progress
Zubair Ahmed Memon
Associate Professor, Department of Civil Engineering, Mehran University of Engineering and
Technology, Jamshoro, Sindh, Pakistan
zubairahmedmemon@yahoo.com
Abstract
A persistent problem in construction is to documenting changes which occur in the field and preparing the
as-built schedule. In current practice, deviations from planned performance can only be reported after
significant time has elapsed. And manual monitoring on construction sites is costly and error prone.
Availability of advanced portable computing, multimedia and wireless communication allows, even
encourages fundamental changes in many jobsite processes. However a recent investigation indicated that
there is a lack of systematic and automated evaluation and monitoring in construction projects.
Consequently the aim of this study is to identify techniques, which are used in the construction industry
for monitoring and evaluating the actual physical progress, and to establish how the current computer
technology can be used for monitoring the construction physical progress on site. This research presents a
prototype expert system, namely Automated Construction PROject Progress Monitoring (ACPROM)
system, developed for integrating construction drawings, digital images of construction site progress and
construction schedule. Using emerging technologies and information systems ACPROM model suggests
new process or reengineer the traditional AEC field inspection process This system can automatically
interpret the CAD drawing of a building and extract data of its structural components and develop the
data base and simultaneously extract the information from digital images and by simulating these two
databases the percentage of progress will be calculated and actual physical progress bar chart will be
developed automatically. ACPROM provides a bridge for storing structural design information in an
integrated construction relational data-base management system that can be shared by a range of
computer applications. ACPROM model is part of developing the Tele-Construction base site
management system, which retrieves the status of construction work in progress and develop the actual
progress bar-chart of work. The application of ACPROM model in monitoring the progress enables
project management teams to better track and controls the productivity and quality of construction
projects. The use of the ACPROM can help resident engineer, construction manager and site engineer in
monitoring and evaluating project performance. This model will improve decision-making process and
provides better mechanism for advanced project management.
Keywords
As-built schedule AutoCAD, Digital Photographs, Progress Reporting, and Project Monitoring.
1. Introduction
It is widely recognized that construction is an information intensive and complex industry. Traditional
computational techniques have failed our industry because of the shear number of information interfaces
and complex relationships. Effective and systematic monitoring and control of information flow is a
critical ingredient through the life-cycle of construction projects, such a control of information to describe
270
the required work, support decision making and analyzing the physical progress. The main focus of this
research is to study the issues related to project evaluation and monitoring and developing a systematic
model considering the Malaysian construction industrys viewpoint.
The need has long existed for tools to streamline the job of systematic evaluation and monitoring for
management of construction activities. A recent survey of a large-scale project management information
and control systems (monitoring over 1,500 public works projects) showed that the need for data entry at
the project level was the major obstacle to the success of the systems as whole (Futcher, 2001). In fact,
McCullouch (1997) reported that, on average, 30-50% of the time of field supervisory personnel is spent
recording and analyzing site data. This paper addresses, a different class of computer application for
construction management, namely for managing the monitoring and evaluating system for construction
projects and improving progress reporting and control system by incorporating detail information from
site photos and AutoCAD drawings.
Construction managers/general contractors need to keep track of design and construction changes and asbuilt information in order to control and monitor construction progress. The as-built project information
represents how construction is actually performed. Accurate documentation of as-built project
information in daily logs not only supports management task during construction, but also provides the
baseline data in case of claims and disputes. Currently, construction engineers and superintendents rely
mostly on written reports to document site conditions and project progress. Written reports have their
limitations. Writing skills affect the quality and clarity of reports. As a result, many important details are
left out in the writing process and can never be recovered.
A number of systems exist for representing project information and information is created in various
formats throughout the life-cycle of a construction project, from design, through construction to facility
operation and maintenance (O&M). The need to control construction project performance has been
widely discussed. In practice little has been done to address this problem; most of the research efforts in
the field of project control still focus on the development of cost control models. Practical attempts have
been made to automate the process of producing as-built schedule by applying photogrammetry
techniques to photographs. Recent research has focused on using computer vision and digital images
processing as a means of producing of as-built schedule of progress of work. This paper describes the
current status of an ongoing research project which aims to develop an easy to use tool or expert system
to monitor and control the construction progress at the construction stage.
2. Traditional approach for developing as-built schedule

Most construction projects employ scheduling methods to monitor and control the progress of work and
develop progress reports, which involve the recording of construction achievements for detection of
deviations from actual plan and for forecasting project performance. The primary control system used by
project managers to obviate or mitigate time-based claims in construction industry is using construction
schedule. There are a variety of ways in which a construction schedule can be presented. The more
common types of construction schedule are Gantt chart, activity on the arrow diagram, precedence
network and line of balance. Bar charts or Gantt charts are a powerful communication tool and an
extremely useful, visual and graphical medium in construction scheduling and used by project managers
since the early 1900s. Network techniques have been available since the late 1950s.
Conlin and Retik (1997) described the traditional approach for determining the amount of progress by
comparing the contractors planned schedule with as-built schedule that has substituted actual completion
dates for all the activities. This method, however, has many disadvantages. A persistent problem in
construction has been to develop the as-built physical progress schedule of construction scene. The as-
271
built project information represents how construction is actually performed. This research focuses on the
issue related to develop the digitalized actual physical progress bar-chart during the construction stage.
As-built schedules are costly to prepare because it requires the actual dates and considerable judgment.
Since detailed records are not always available and even if they are, work on the site does not necessary
match the planned schedule of a network. Creating an accurate as built schedule from daily site records,
engineers diaries and other documentation is extremely difficult. This is particularly the case if the
sequencing or relationships of the work have changed from the as-planned schedule. Re-establishing the
actual sequence from project record is very difficult. Another, extremely important disadvantage is that
site records, engineers diaries, and general historical project information may be missing or at best
incomplete. This results in considerable time being expended in attempting to reconstruct the projects
history from the above-mentioned documents. If this is the case then a great deal of judgment must be
used to extrapolate key dates and actual progress. This state of affairs leads to the conclusion that
automating control of on-site construction performance is essential in order to enable management to take
corrective measures in real-time (Navon and Goldschmidt 2003).
3. Existing project control systems in construction industry

A great deal of work has been carried out in the area of monitoring and controlling the construction of a
project. This section provides a brief overview of several studies reported in the literature relating to
digitalizing the construction monitoring for construction project. A number of commercial software
packages that relate to this topic are also listed. The sources outlined here provide the basis of the analysis
of project monitoring and the system development presented in the following sections.
Lock (1993) mentioned that the purpose of computer based information system for engineers is to
integrate the collection, processing and transmission of information so that engineering professionals can
gain more systematic insight into the operations and functions they are managing. Syed and Froese (1998)
quoted that the primary function of the computerized information system is to improve the efficiency of
the project manager in retrieving project information from existing records. Russell (1993) described a
computerized approach for collecting the site information, which builds on the traditional
superintendents daily site report
With advancement in computer technologies, particularly in database management system (DBMS), it is
cost effective to develop a computerized database for even small projects and organizations. A database
can be seen as an attempt to overcome some of the limitations imposed by conventional filing systems,
such as uncontrolled redundancy, inconsistency, difficult data sharing, and modification inflexibility.
Mazerolle and Alkass (1993) proposed a DBMS in a project control process to store information on each
delay when it occurs. Hiroshi and Nobuoh (1993) described a filing system of construction pictures and
its integration with a database. Bowler (1994) pointed out the importance of Relational Database
management programs (RDBMS) in the project management. Hamilton (1993) stated that, using a
relational database improves record management process such as tracking the progress and location of
sharp drawings, within a firm, listing present and past projects, maintaining correspondence, calculations,
telephone records, and memoranda.
Virtual Construction (VIRCON) system was developed by Dawood et al, (2002), to support decision
making system for construction planning. The VIRCON database is composed of a core database of
building components which are in turn, integrated with a CAD package (AutoCAD 2000), a Project
Management Package (MS Project), and Graphical user Interfaces. MULTROL, a multimedia project
control and documentation system, was developed by Liu et al, (1994). The retrieval of project
information is assisted by a graphical user interface and user-definable queries to support various needs of
construction management. This system allows the storage and retrieval of project information in the
272
format of text, image, video and sound. A prototype system, CAD Construction Information Management
System (CADCIMS) was developed by Stumpf et al, (1995), using Microsoft ACCESSTM, and relational
database management system in the Microsoft Windows environment. The interfaces had been developed
among the Schedule Generator, the CADD system, and the database.
Wang (2001) presented an expert system ESSCAD (Expert System Integrating Construction Schedule
with CAD drawing) developed for integrating construction scheduling with CAD drawings. As it was
integrated with a CAD drafting system AutoCAD and scheduling software MS-project, it retains the
advanced functions of CAD drafting and network analysis. Abeid et al, (2003) described the development
and implementation of an automated real-time monitoring system for construction project programmed in
a Delphi Environment. This system links time lapse digital movies of construction activities, critical path
method (CPM) and progress control techniques. Abeid (2000) developed PHOTO-NET techniques, a
system that integrates time-lapse photography with a dynamic scheduling and progress control tool.
Streilein (1996) formulated DIPAD software, which combines digital Photogrammetric methods with the
capabilities of a CAD system. The overruling principle of DIPAD is, that the human operator assigns
responsibility for the image understanding part (high level grouping), and the computer for the actual
measurement and the data handling.
The basic task of many Photogrammetric systems is to derive object space coordinates from 2D images.
Ana-log, semi analytical and analytical techniques have been employed for a long period of time in
Photogrammetry to extract ground coordinates of objects from hardcopy images. In recent years, digital
techniques are implemented in Photogrammetric applications. Pappa et al, (2002) implemented the
photogrammetry techniques for Gossamer Spacecraft Structures and he described that the science of
calculating 3D object coordinates form images is a flexible and robust approach for measuring the static
and dynamic characteristics of future ultra-light-weight inflatable space structures. He selected Closerange Photogrammetry, a flexible and robust technology with demonstrated potential for measuring
Gossamer-type structure. Greco (2001) described Photogrammetry is one of techniques for obtaining
reliable measurements from photographs and other type of images. DeChant (2000) mentioned that by
using close-range Photogrammetry instead of taking traditional contact measurements, the photos were
converted into AutoCAD models using Photomodeler pro version software.
From the related research it has been cited that many studies have been conducted to develop the
integration model for a project and the ideas for developing automated real-time monitoring systems are
rapidly growing with the advancement in the information technology. From the literature it has been cited
that very few have given concern to develop the actual physical progress bar-chart by capturing the
information form photograph. The close range photogrammetry is used for converting photographs to 3D
Model with the help of Photomodeler pro version software, which is requirement for accurate
photogrammetry.
4. Objective and scope

The objective of this research is to demonstrate that computer vision can be integrated with 3D CAD to
produce construction as-built schedule. Computer vision defined by Raynar and Smith (1994) was that;
take 2D images or photos as input and produces descriptive information as output. The actual construction
is represented by the digital image of the construction scene. The CAD model represents the original
design drawings of a project. By simulating the digital image with a perspective view of the CAD model,
differences from the CAD model represent the as-built schedule. The scope of the research is to develop a
vision or integrating system for processing images of the construction scene and for making the
comparison to the CAD drawings.
273
Digitalizing the Construction Monitoring is the recent demand of the Malaysian Construction Industry
and for the third world countries. The major object of developing this model is to develop the link
between existing methods of evaluating and monitoring the physical progress of construction scene with
modern technology by developing an Artificial Intelligence to emulate the human brain. The basic object
of developing the ACPROM is to systematize the project monitoring and evaluation system that improves
productivity, reduce the claims, and control the delays or improve the construction management methods
in progress reporting and project control.
5. Structure and components of ACPROM

With the continued development of easy-to-use computer software and improved graphical presentation
media, many of the practical problems associated with formal scheduling mechanics have been overcome.
Some of the function involved in project management, especially those concerned with project monitoring
and evaluation (developing the actual physical progress bar chart) were virtually impossible to execute
with any great speed before computers were used (Levine 1989). The rapid growth in the availability and
power of micro-computers, coupled with their continuously decreasing cost, has made it possible for
construction managers to effectively and efficiently analyze the massive amounts of data necessary to
monitor and control the progress of the many interrelated tasks that go together to make a construction
project. The object model linked the 3D graphical and non-graphical representation of the project to the
CAD drawing base systems.
Taking into account characteristics and functions of ACPROM, it was programmed with knowledgebased system programming method. Being a typical expert system, ACPROM consists of AutoCAD,
Photogrammetry techniques, Database management system, Knowledge base system, ACPROM
simulation to formulate to user interface as shown in Figure 1. ACPROM processes the data as shown in
Figure 2 from which it can be seen that the link between the digital images, CAD drawings and Planned
Bar-chart is established and event-oriented programming (Visual Basic 6.0) is used to integrate the
information from images and drawings to calculate the progress of the work and then integrate that
percentage of progress with Microsoft Project, to show the actual physical progress in the bar-chart
format. The RBDMS stores the mainly two kinds of data i.e. primary from AutoCAD drawing and
secondary from Photomodeler using the Artificial Intelligence. Most of the data in the RDBMS are
organized in rows and columns, which is widely used for effective representation of knowledge of expert
system. The basic theory behind developing the model is to extend the traditional approach to represent
the dynamic and simultaneous construction operations by incorporating interrelationships between
hierarchical processes of evaluating. The objective of developing a Digitalized Construction Monitoring
(ACPROM) model is to systematize the construction monitoring and evaluation of a project. ACPROM is
implemented using object oriented concepts and event driven programming. The object-oriented concepts
were utilized in the graphical user interface of constructing the ACPROM processes. Graphical interfaces
were created in the Photogrammetry and photomodeler environment and then exported into Visual Basic
TM
(event driven programming). Relational Data base was implemented using Micro Soft Access TM
engine to store project related information. The simulation concept of ACPROM model is currently being
used to test and check the validity. The main goal of ACPROM model is to propose an interface process
model between the 2D digital photo and detail design drawings and update the physical progress chart by
integrating the information.
274
Knowledge Base
AutoCAD
Traditional DXF
file of CAD
modelling;
3D CAD drawing;
Detail of Structure
Element;
Relational
Database System;
Photograph
Traditionally
capture
photograph;
Photogrammetry
technique;
3D Model of
photograph;
Database from 3D
Model;
Drawing Interpreting
knowledge
Rules for Elements
editing from CAD
and Photograph to
ACPROM;
Knowledge transfer
from CAD and
photogrammetry to
Database;
Generating Network
Technique;
Knowledge for transfer
ACPROM
Simulation for
Databases;
Automatic
measurement of
progress in
percentage;
Transfer the
percentage and
Develop the Barchart;
of percentage in
Microsoft project
Figure 1.Components of Automated Construction PROject

Monitoring (ACPROM)
6. Progress reporting mechanisms in digitalizing the construction monitoring

Traditionally information about physical project progress is reported based on engineers diaries, daily
site records, and other documentation is extremely difficult. The mechanism for developing the projects
actual physical progress based on digital system which compares the plan schedule of work with actual
achievement on site to forecast the performance. Project drawings designed at the start of the project and
expert system is used to develop the database and is reluctant, as any change order will be corrected in the
database. Secondary data base will be developed as construction work constructed and the source of
information will be using photos. Visual basic will be used to build interfaces between the database
developed from AutoCAD and Photos by using Photomodeler. By simulating both databases, it will
calculate the percentage of progress considering the updating date and will transfer this information to
Microsoft Project to show the actual physical progress in bar chart. If on comparison the actual
coordinates with the planned coordinates then the actual physical progress report will show the percentage
of work completed. Progress reporting mechanism in ACPROM includes comparing the co-ordinates
values of the activities which is performed on site with the coordinate values of original AutoCAD
drawings.
275
Graphical
Interface
Image
Processing
Photogrammetry
Techniques
AutoCAD
Drawings
Calibration
Capture Photograph
Camera
Orientation
Drawings Generated at
Design Stage
Develop the 3D Model Using

Photomodeler
Convert it into 3D
drawings
Identify the Coordinate

values
N
Identify the Coordinate Values
No More
Photographs?
Y
Develop Primary Data
Storage Information
Develop Secondary
Storage Information
Data
Planned
Bar Chart
Design Code in VB
Calculate the Percentage
Integrate with MS Project
Actual Physical Progress Bar chart
Figure 2.Process Flow of ACPROM
7. Conclusions
This paper described a computer model for automatic generation of as-built project schedule. The model
utilizes the photogrammetry techniques and Computer aided design (CAD) capabilities for field data
acquisition and is integrated within a knowledge-based expert system environment. The main focus of
this study is to design a methodology for monitoring and evaluating the construction project and
276
developing a systematic model considering Malaysian construction industrys view point. The objective
of this research is to demonstrate that 3D CAD could be integrated with computer vision to produce asbuilt schedule. The development of ACPROM demonstrate the possibility of combining the pictures and
CAD drawings, allowing the superintendents to systematize the monitoring and evaluation of site
condition/progress more precisely. ACPROM demonstrates the benefits and potentials of applying
knowledge base system to construction project control and documentation.
The application of ACPROM model in daily monitoring the progress enables project management teams
to better track and control the quality of construction projects. Its the authors belief that by
implementing the latest technologies in the field of construction, specially, during the execution phase
could minimize the potential problems and encourages lesson-learned and innovation.
8. References
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monitoring system applied to project management. Automation in construction Volume 12,
Issue 5, pp 603-616.
Abeid, J.N. (2000), PHOTO-NET: An integrated system for controlling the progress of
construction activities. Ph.D. dissertation, Illinois Institute of Technology, Chicago.
Bowler, C.E. (1994). Database use in Engineering office, Computing in Civil Engineering,
Proceedings of the First Congress, Washington, D.C., June 20-22, American Society of Civil
Engineers, Vol. 2, pp. 1874-1879.
Dawood, N. Sriprasert, E., Mallasi, Z. and Hobbs, B., (2002). Development of an Integrated
Information Resource base for 4D/VR construction processes simulation. Automation in
Construction, 12 (2002), p.p. 123-131.
DeChant, L. (2000). CAD models made form photos reduced furnace down-time. Industrial
Heating, June 2000, 67, 6: ABI/Inform Trade and Industry Page. 59.
Futcher, K. (2001) User survey on a WAN Portfolio MIS used for Portfolio / Project
management in Hong Kong. Proceedings of IT in Construction in Africa CIB-Int. Council for
Research and Innovation in Building Construction, Rotterdam, The Netherlands, W78
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Greco, J. (2001), 3D Input with Photomodeler from Eos Systems, 16, 10 Pro-Quest Computing
Oct. 2001 Page.51.
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Hiroshi, N., and Nobuoh, H. (1993). Filing of construction photos linked with database.
Computing in Civil and Building Engineering, Proceeding of the Fifth international
Conference, Anaheim, Calif., June 7-9, American Society of Civil Engineers, Vol. 1. pp.
718-721.
Levine, H. (1989), A Project Management using Micro Computers, McGraw-Hill, United
Kingdom.
Liu, L.Y., Stumpf, A.L., and Kim, S.S. (1994), Applying Multimedia Technology to Project
Control. Proceeding of the First Congress on Computing in Civil Engineering June 20-22,
1994, in Washington, D.C. pp. 608-613.
Lock D. (1993), Handbook of Engineering management. Butterworth-Heinemann, Oxford,
United Kingdom, Chapter. 20 and 27
Mazerolle, M., and Alkass, s. (1993). An integrated system to facilitate the analysis of
construction claims. Computing in Civil and Building Engineering. Proceeding of the Fifth
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Vol. 2 pp. 1509-1517.
McCullouch, B. (1997), Automating field data collection in construction organizations.
Proceeding of 4th ASCE Construction Congress, ASCE, New York pp.957-963.
Navorn, R. and Goldschmidt, E. (2003), Automated data collection for labor inputs control.
Automation in construction (in press).
Pappa, R.S. and Jones, T.W., Black, J.T., Walford, A., Robson, S. and Shortis, M.R., (2002).
Photogrammetry Methodology Development for Goassamer Spacecraft Structures: National
Aeronautics and Space Administration NASA/TM-2002-211739, June 2002.
Raynar K.A. and Smith, G.R. (1994), Overlaying Digital Images with 3-D CAD to Document
As-Built construction. Proceeding of the First Congress on Computing in Civil Engineering
June 20-22, 1994, in Washington, D.C. pp.751-757.
Russell, A. D. (1993). Computerized daily site reporting. ASCE Journal of Construction
Engineering and Management, 19(2): pp. 385-402.
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278

Role of Construction Sector in Economic Growth: Empirical Evidence from

Pakistan Economy.
Raza Ali Khan
Associate Professor, Department of Civil Engineering, NED University of Engineering & Technology,
Karachi, Pakistan
alikhan.raza@gmail.com
Abstract
Construction sector and construction activities are considered to be one of the major sources of economic
growth, development and economic activities. Construction and engineering services industry play an
important role in the economic uplift and development of the country. It can be regarded as a mechanism
of generating the employment and offering job opportunities to millions of unskilled, semi-skilled and
skilled work force. It also plays key role in generating income in both formal and informal sector. It
supplements the foreign exchange earnings derived from trade in construction material and engineering
services.
Unfortunately construction sector is one of the most neglected sectors in Pakistan. Although the
construction sector has only a 2.3 percent share in GDP, its share of the employed labor force was
disproportionately large at 6.1 percent in FY07.
The construction sector is estimated to have grown by 17.2 percent in 2006-07 as against 5.7 percent of last
year. The higher demand for construction workers is also reflected in a continued double-digit rise in their
wages since FY05. Their wages increased by 11.1 percent in FY07.
The purpose of this study is:
To examine the contribution of construction sector in Pakistan economy.
To identify the relationship between construction sector and economic growth in the case of
Pakistan and
To identify whether there is a unidirectional or bidirectional causal relationship.
Keywords:
Construction Sector, GDP, Causal Relationship, Co-integration.
1. Introduction
The construction industry plays an essential role in the socio economic development of a country. The
activities of the industry have great significance to the achievement of national socio-economic
development goals of providing infrastructure, sanctuary and employment. It includes hospitals, schools,
townships, offices, houses and other buildings; urban infrastructure (including water supply, sewerage,
279
drainage); highways, roads, ports, railways, airports; power systems; irrigation and agriculture systems;
telecommunications etc. It deals with all economic activities directed to the creation, renovation, repair or
extension of fixed assets in the form of buildings, land improvements of an engineering nature. Besides,
the construction industry generates substantial employment and provides a growth impetus to other
sectors through backward and forward linkages. It is, essential therefore, that, this vital activity is
nurtured for the healthy growth of the economy. The main purpose of this study is to see whether growth
in construction industry actually caused the economic increase or, alternatively, did economic expansion
strongly contribute to construction growth instead?
1.1 Global Distribution of Construction Output and Employment:

Globally, construction industry is regarded as one of the largest fragmented industry. An estimate of
annual global construction output is probably closer to U.S $ 4.5 trillion in 20041. The construction
industry is also a prime source of employment generation offering job opportunities to millions of
unskilled, semi-skilled and skilled work force. Global picture of construction output and employment in
developing and developed countries can be seen in table -1 below.
It can be seen from the table-1 that total construction output worldwide was estimated at just over $3,000
billion in 1998. Output is heavily concentrated (77 per cent) in the high income countries (Western
Europe, North America, Japan and Australasia). The contribution of low and middle income countries
was only 23 % of total world construction output (ILO Geneva2001).
Table 1 Global contribution of construction output 1998
Number of
Countries
Region
Output $ in Million
Africa
High Income
Countries
-
Low income
countries
20 962
23
America
723 569
243 247
22
Asia
666 556
387831
02
Oceania
46 433
34
Europe
876 546
123 345
90
Total
2312 104
701 755
77
23
% of Total
Total
3013 859
Sources: International Labor Office Geneva Report 2001
The data in employment situation table 2 tells a rather different story so far as employment is concerned.
It can be seen that there was an excess of 111 million construction workers worldwide in 1998 and most
of them were in the low- and middle-income countries.
The distribution of construction employment is, in fact, almost the exact reverse of the distribution of
output. The high-income countries produce 77 per cent of global construction output with 26 per cent of
total employment. The rest of the world (comprising low- and middle-income countries) produces only 23
per cent of output but has 74 per cent of employment (ILO Geneva2001).
-----------------------------------------------1
Source: Engineering News Record, USA
280
Table 2 Global employment situation in construction sector 1998

Number
Region
of
countries
9
Africa
23
Amrica
22
Asia
02
Oceania
34
Europe
90
Total
% of Total
Employment (000s)
High Income Low Income
Total
Countries
Countries
1867
9275
10917
7258
60727
685
11820
8978
29038
82439
111527
26
74
Sources:International Labor Office Geneva Report 2001
1.2 Construction Industry in Pakistan:

The housing and construction sector in Pakistan plays an important role in developing aggregate economy
and reducing unemployment. It provides substantial employment opportunities as it contributes through a
higher multiplier effect with a host of beneficial forward and backward linkage in the economy. The
sector through linkages affects about 40 building material industries, support investment and growth
climate and helps reduce poverty by generating income opportunities for poor household. It provides jobs
to about 5.5 per cent of the total employed labor force or to 2.43 million persons, (2.41 million male and
0.2 million female) during 2003- 04
(Economic Survey 2004-05)
Unfortunately the construction sector is one of the most neglected sectors in Pakistan. It is at low ebb,
which can be judged from the fact that per capita consumption of cement in Pakistan is one of the lowest
among the developing countries i.e. 72 kgs. (Hassan, 2002).
2. Literature Review:
Construction in any country is a complex sector of the economy, which involves a broad range of
stakeholders and has wide ranging linkages with other areas of activity such as manufacturing and the use
of materials, energy, finance, labor and equipment (Hillebrandt, 1985).
The contribution of construction industry in the aggregate economy of a country has been addressed by a
number of researchers and valuable literature available on the linkage between construction sector and
other sectors of the economy. Several researchers conclude that the construction sector has strong
linkages with other sectors of the national economy.
Hirschman (1958) first defined the concept of linkage in his work The Strategy of Economic
Development. He emphasized the significance of unbalanced growth among supporting sectors of the
economy as opposed to a balanced development of all interrelated economic activities (Lean, 2001). Park
(1989) has confirmed that the construction industry generates one of the highest multiplier effects through
its extensive backward and forward linkages with other sectors of the economy. It is stated that the
importance of the construction industry stems from its strong linkages with other sectors of the economy
(World Bank, 1984). However, interdependence between the construction sector and other economic
sectors is not static (Bon, 1988; Bon, 1992). Strout (1958) provided a comparative inter-sectoral analysis
281
of employment effects with an emphasis on the construction. Ball (1965) and Ball (1981) addressed the
employment effects of the construction sector as a whole.
Many studies (Fox, 1976; Bon and Pietroforte, 1993; Pietroforte and Bon, 1995) use the strong direct and
total linkage indicator to explain the leading role of the construction sector in the national economy.
2.1 Construction Industry and National Economy:

Construction activities and its output is an integral part of a countrys national economy and industrial
development. The construction industry is often seen as a driver of economic growth especially in
developing countries. The industry can mobilize and effectively utilize local human and material
resources in the development and maintenance of housing and infrastructure to promote local
employment and improve economic efficiency (Anaman and Amponsah, 2007).
Field and Ofori (1988) stated that the construction makes a noticeable contribution to the economic output
of a country; it generates employment and incomes for the people and therefore the effects of changes in
the construction industry on the economy occur at all levels and in virtually all aspects of life (Chen,
1998; Rameezdeen, 2007). This implies that construction has a strong linkage with many economic
activities (Bon, 1988; Bon and Pietroforte, 1990; Bon et al., 1999; Lean, 2001; Rameezdeen, 2007), and
whatever happens to the industry will directly and indirectly influence other industries and ultimately, the
wealth of a country. Hence, the construction industry is regarded as an essential and highly visible
contributor to the process of growth (Field and Ofori, 1988).
The significant role of the construction industry in the national economy has been highlighted by Turin
(1969). On the basis of cross section of data from a large number of countries at various levels of
development, Turin (1969) argued that there is a positive relationship between construction output and
economic growth. Furthermore, as economies grow construction output grows at a faster rate, assuming a
higher proportion of GDP. (Turin, 1969, Hua, 1995, Wells,1986). In a recent article Drewer (1997)
returns to the construction and development debate. Using data for 1990 similar to that assembled by
Turin for 1970, he shows that global construction output has become increasingly concentrated in the
developed market economies. He goes on to argue that this new evidence does not support Turins
propositions (Drewer, 1997, Wells, 1986).
The issue of concern here is whether the construction sector and the aggregate economy are fragmented or
mutually dependent, and whether construction activity contributes to economic growth and /or vice versa.
Studies have shown that the interdependence between the construction sector and other economic sectors
is not static but changes as the nations economy grows and develops (Bon, 1988, 1992).
2.2 Tools for Measuring Strength of Linkage:

Two analytical tools, which most widely used for measuring the strength of the linkage, sector vise
economic performance and production interdependence and to analyze economic relationships, are:
(i) Leontiefs (1936) Inputoutput analysis and
(ii) The new econometric methodology developed by Engle and Granger
Bon (1988) is one of the few researchers who applied the concept of Leontief input-output matrix to the
construction industry. He considered the inputoutput technique to be ideal, for it provides a framework
with which to study both direct and indirect resource utilization in the construction sector and industrial
interdependence. He also found that the inputoutput tool can be used for studies of the construction
sector in three broad aspects: employment creation potential, role in the economy, and identification of
major suppliers to the construction industry (Lean, 2001). Rameezdeen et al, (2006), also used input-
282
output table to analyze the significance of construction in a developing economy and its relationships with
other sectors of the national economy.
With the popularity of the new econometric methodology presented by Engle and Granger, many
modeling studies related to economic and financial issues have applied this new technique to analyze
economic relationships.
Green (1997) applied the Granger causality test to determine the relationship between GDP and
residential and non-residential investment, using quarterly national income and gross domestic product
data for the period 19591992. His results showed that residential investment causes, but is not caused by
GDP, while non-residential investment does not cause, but is caused by GDP. He concluded that housing
leads and other types of investment lag the business cycle (Lean, 2001). Tse and Ganesan (1997) is also
used the same econometric technique (Granger causality test) to determine the causal relationship
between construction flows and GDP using quarterly Hong Kong data from 1983 to 1989. They found
that the GDP leads the construction flow and not vice versa.
2.3 Research Objective:

The objective of the present paper is to examine the specific lead lag relationships between construction
flow and gross domestic product (GDP). For obtaining this goal we will use annual data for construction
sector and economic GDP of Pakistan from 1950 to 2005.
Granger causality methodology is commonly applied to investigations on the relationships among money
supply, stock prices and inflation, but very few researchers tested the linkages between the construction
sector and the aggregate economy using this method.
Here we will use the same approach to identify whether there is a unidirectional or bidirectional causal
relation between construction sector and economic growth in the case of Pakistan.
In addition, we will use unit root tests to examine the stationarity of both series (construction sector and
GDP) and co integration test will use to find out the existence of long run relationship between these
variables. It is a powerful concept, because it allows us to describe the existence of an equilibrium or
stationary relationship among two or more time series, each of which is individually non- stationary.
3. Methodology:
A simple statistical and econometric analysis will be used to know the general properties of data and to
see the relationship among variables of interest like construction sector (LCNS) and aggregate economy
of Pakistan (LGDP).
This study uses time series annual data (1950 to 2005) to demonstrate the causal relationship between
construction sector and GDP in Pakistan. A time series is a sequence of values or readings ordered by a
time parameter, such as hourly and yearly readings.
When time series data is used for analysis in econometrics, several statistical techniques and steps must
be undertaken. First of all unit root test has been applied to each series individually in order to provide
information about the data being stationary. Non-stationary data contains unit roots. The existences of
unit roots make hypothesis test results unreliable. If the data are non-stationary, then frequently
stationarity can be achieved by first differencing (Granger and Newbold, 1986) that is, obtaining the
differences between the current value and that of the previous period. Once stationarity is determined,
structural modeling of the variables or testing for causality can take place. The causality test aims to
verify whether historical variations of the construction data follow or precede the GDP. To test for the
283
existence of unit roots and to determine the degree of differences in order to obtain the stationary series of
LGDP and LCNS, Augmented Dickey- Fuller Test (ADF) has been applied.
If the time series data of each variable is found to be non-stationary at level, then there may exists a long
run relationship between these variables, LGDP and LCNS. Johansens (1988) co-integration test has
been used in order to know the existence of long run relationship between these variables.
A series is said to be integrated if it accumulates some past effects, such a series is non-stationary because
its future path depends upon all such past influences, and is not tied to some mean to which it must
eventually return. To transform a co-integrated series to achieve stationarity, we must differentiate it at
least once. The number of times the data have to be differenced to become stationary is the order of
integration. If a series is differenced d times to become stationary, it is said to be integrated of order
I(d).However, a linear combination of series may have a lower order of integration than any one of them
has individually. In this case, the variables are said to be co-integrated.
The following section presents the results of the simple descriptive statistical analysis and then unit root
analysis to study the stationarity of GDP and construction flow. Accordingly, we employ Granger
causality methodology to investigate the lead lag relationships between the construction flow and the
GDP.
3.1 Data and Descriptive Statistical Analysis:

The annual data for the period 1950 to 2005 is being used for empirical analysis. Construction industry
flows (LCNS) and Gross Domestic Product (LGDP) data in local currency is employed to analyze the
dynamic relationship between GDP and construction sector. All the variables are expressed in natural
logarithms so that they may be considered elasticity of the relevant variables. We examine the
contemporaneous correlation and check for the evidence of Granger causality between these two
variables. Table-3 presents summery statistic of the data and table- 4 tell us that there is a strong
correlation between construction sector and GDP of Pakistan during 1950 to 2005. Annual observations
of GDP and construction sector are taken from Handbook of Statistics of Pakistan Economy, 2005 and
various issues of Economic Survey of Pakistan.
Table 3 Descriptive statistics
Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis
Jarque-Bera
Probability
Observations
LCNS
8.605299
8.996238
11.87699
4.976734
2.184803
-0.140903
1.651252
4.429918
0.109158
56
LGDP
11.98993
11.90110
15.62865
9.126524
2.082374
0.195506
1.664931
4.515697
0.104575
56
Table 4 Correlation Matrix

LCNS
LGDP
1
0.988453435142
0.988453435142
1
284
3.2 Unit Root Test:

Granger causality tests require the use of stationary time-series data (Granger and Newbold, 1974; Ong,
1994; Huang, 1995). Under current practice the unit root test is conducted to check the stationarity of data
series. This step is very important because if non-stationary variables are not identified and used in the
model, it will lead to a problem of spurious regression (Granger and Newbold, 1974), whereby the results
suggest that there are statistically significant relationships between the variables in the regression model
when in fact all that is evidence of contemporaneous correlation rather than meaningful causal relations
(Granger and Newbold, 1974; Harris, 1995).
The unit root test is also known as augmented Dickey Fuller (ADF) test (Dickey and Fuller, 1981),
typically based on the following mathematical formulation.
n
Yt = 0 + 1T + 2Yt 1 + i Yt i + t
(1)
i =1
Where Yt = Yt Y1 , 0 is a drift term and T is the time trend with the null hypothesis, H 0 : 2 = 0 and
its alternative hypothesis H 1 : 2 0, n is the number of lags necessary to obtain white noise and t is
the error term. The simpler Dickey Fuller (DF) test removes the summation term. However, the implied t
statistic is not the Student t distribution, but instead is generated from Monte Carlo simulations (Engle
and Granger, 1987, 1991). Note that failing to reject H 0 implies the time series is non-stationary.
3.3 Results of Unit Root Test:
Unit-root test are classified into series with and without unit roots, according to their null hypothesis, in
order to conclude whether each variable is stationary. The test results are based upon estimating the
following equations:
n
LGDPt = 0 1T + 2 LGDPt 1 + i LGDPt i + t 1
(2)
LCNS t = 0 1T + 2 LCNS t 1 + i LCNS t i + t 2
(3)
i =1
n
i =1
Table: 5 Unit Root Test

Series
LCNS
LGDP
DF test at level
No
With
trend
trend
-0.85
-1.58
2.22
-3.32*
ADF test in first difference

No trend
Lag
With
Lag
order
trend
order
-4.71***
1
-4.64***
1
-4.64***
1
-5.31***
1
PP test in first difference

No
Lag
With
Lag
trend
order
trend
order
-6.81***
1
-6.83***
1
-6.51***
1
-7.17***
1
*Note: *, ** and *** denote the rejection of unit root at 10 %, 5% and 1% significance level, respectively
Table: 6 Mackinnon critical values for rejection of hypothesis of a unit root

Critical
values
1%
5%
10%
DF test at level
No trend
With trend
-3.55
-4.13
-2.91
-3.49
-2.59
-3.17
ADF test in first difference

No trend
With trend
-3.56
-4.14
-2.92
-3.50
-2.60
-3.18
Source: Mackinnon (1991)
285
PP test in first difference

No trend
With trend
-3.55
-4.13
-2.92
-3.49
-2.60
-3.18
The results of the unit root tests using the augmented Dickey Fuller (ADF), Dickey Fuller (DF) and
Phillips Perron (PP) methods are summarized in Table 5. The null hypothesis of a unit root is performed
at the usual 1%, 5% and 10% significance levels, and the critical values for the tests are presented in
Table- 4.
Table-5 reports the DF and ADF test statistics on the natural logarithm of the LCNS and LGDP in
regression (2) and (3).The results from the DF tests indicate that the two data series (LCNS and LGDP)
are not stationary in their level form, since the null hypothesis of unit root with and without time trend
cannot be rejected at all conventional levels of significance except LGDP series with time trend at 10%
significance level.
The ADF (with one lag) test statistics reject the hypothesis of a unit root at all conventional levels of
significance, suggesting that both series (LCNS and LGDP) appear to be first difference stationary (i.e.
I(1)).
Results from the PP tests strongly support the conclusion that each of the series is stationary after first
differencing at the 1% significance level. This means that only differenced data should be used in the
model. Since both test variables are integrated of the same order I(1), it is possible to apply co integration
tests to determine whether there exists a stable long run relationship between the construction sector
(LCNS) and economic growth (LGDP) in Pakistan.
3.4 Granger Causality Test Result:

The traditional practice in testing the direction of causation between two variables has been to use the
standard Granger framework. The basic concept of the Granger causality tests is that future values cannot
predict past or present values. If past values of construction sector do contribute significantly to the
explanation of GDP, then construction sector is said to Granger-cause GDP. This means that construction
sector is Granger-causing GDP when past values of construction sector have predictive power of the
current value of GDP even if the past values of GDP are taken into consideration. Conversely, if GDP is
Granger-causing construction sector, it would be expected that GDP change would take place before a
change in construction sector.
The Granger causality test is used in the present study, fitted with annual data from 1950 to 2005 to test
whether construction sector stimulates aggregate economy or aggregate economy leads the construction
activity, or if there exist feedback effects between construction sector and the aggregate economy, The
Granger causality test consists of estimating the following equations:
t =1
t =1
LGDPt = 0 + 1i LGDPt i + 2 i LCNS t i + U t

n
t =1
t =1
(4)
LCNS t = o + 1i LCNS t i + 2i LGDPt i + Vt

Where U t
(5)
and Vt are uncorrelated and white noise error term series. Causality may be determined by
n
estimating equation 1 and 2 and testing the null hypothesis that
2i = 0 and
t =1
alternative hypothesis that
t =1
2i
0 and
t =1
2i
t =1
2i
= 0 against the
0 for equation (4) or equation (5) respectively.
286
If the coefficients of 2i are statistically significant, but 2i are not statistically significant, then LGDP is
said to have been caused by LCNS (uni-directional). The reverse causality holds if coefficients of 2i are
statistically significant while 2i are not. But if both 2i and 2i are statistically significant, then causality
runs both ways (Bi-directional).
The result of causality from construction sector (LCNS) to gross domestic product (LGDP) and from
LGDP to construction sector (LCNS) in Pakistan is shown in table-7 below. It shows that construction
activities cause GDP. This means that there is strong causality between construction industry and LGDP,
which is true for lag order one in case of Pakistan. Construction sector leads economic GDP by one year
in Pakistan. This causal linkage can be interpreted as the forward linkage of the construction sector with
aggregate economy.
On the other hand From the F statistics, we are unable to reject the null hypothesis; LGDP does not
Granger Cause LCNS. Our sample is statistically rejected that the causal affect running from economic
GDP to the construction sector in first-differences of the data. GDP does not cause construction sector
means that in case of Pakistan economic growth in GDP does not affect greatly the construction industry.
Table: 7 Granger causality between construction sector and GDP of Pakistan.
Null Hypothesis
LGDP does not Granger Cause LCNS
LCNS does not Granger Cause LGDP
Lag order
1
1
F-Statistics
0.04
5.60
Probability
0.83
0.02
* Note that * and ** indicates significant at the 5% and 1% significance level respectively. The null hypothesis of no
causality is rejected if the F statistics exceed the critical values 4.10 and 2.8 at 1% and 5% significance levels
respectively.
Granger causality indicates that there is uni-directional relationship between construction industry
and aggregate economy of Pakistan.
3.5 Co-integration Test:

The stationary linear combination is called the co-integrating equation and may be interpreted as a longrun equilibrium relationship between variables.
Several co-integration techniques are available for the time series analysis. These tests include the Stock
& Watson (1988) procedure, the Engle Granger (1987) test and Johansens (1988) Co-integration test.
Their common objective is to determine the most stationary linear combination of the time series
variables under consideration. Consequently, Johansens (1988) co-integration technique has been
employed for the investigation of stable long run relationships between construction receipts and gross
domestic product. The following equations were estimated with VAR lag 1 and assume that the series
does not contain deterministic linear trends but the co-integrating relation only includes a constant. The
results are summarized bellow in table- 8 & 9.
Johansens Co-integration Test (consider a VAR of order p)

Yt = 1Yt 1 + ... + p Yt p + X t + t
(6)
287
Where Yt is a K-vector of non-stationary I(1) variables, X t is a d-vector of deterministic variables, and
t is a vector of innovations.
Table: 8 Johansens Co-integration Test
Eigenvalue
Likelihood
5 Percent
1 Percent
Hypothesized
Ratio
Critical Value Critical Value No. of CE(s)
0.364682
24.90475
15.41
20.04
None **
0.007541
0.408754
3.76
6.65
At most 1
* (**) denotes rejection of the hypothesis at 5% (1%) significance level
The LR test rejects the hypothesis of no co-integration. The value of likelihood ratios indicates one cointegrating equation at 5% significance level. The normalized co-integrating relation assuming one cointegrating relation r = 1 is shown in table # 9 below.
Table: 9 Normalized Co-integrating Relation
LCNS
1.000000
Log likelihood
LGDP
-0.870818
((0.06501)
111.5535
The estimated co-integrating equation is:
C
2.898633
(0.61388)
LCNS 0.8708LGDP + 2.8986
4 Conclusions:
This paper carried out empirical tests on the Granger causality as well as regression analysis of the
relationship between the construction sector and the real growth rate of GDP in Pakistan from 1950 to
2005. The aim of this study is to examine the causal relationship between construction sector activities
and economic expansion (GDP) of Pakistan.
Using the concepts and methods of the co-integration and Granger causality test, this study explored the
short term dynamic relations as well as long-run equilibrium conditions. Similar to the results by Tse and
Ganesans (1997) using the data for Hong Kong, a co-integration between construction flow and
economic growth exist in Pakistan.
The results showed that there is strong causal relationship between the aggregate economy and the
construction sector of Pakistan. The construction flow precedes GDP whereas GDP does not precede
construction flow. There is a uni-directional causal relationship between the two variables real growth
rate of GDP and construction flows. It established the causal linkage from the construction sector to the
aggregate economy of Pakistan. Aggregate economy of Pakistan is greatly influenced by the construction
industry.
Considering the significance of the construction sector, it is necessary to identify the major issues
affecting the efficiency of the sector and take corrective action for increase in economic growth and
development of Pakistan.
288
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290

Risk Identification for International Joint Venture Construction Projects

Misbah Jamil
Lecturer,Department of Architectural Engineering and Design, University of Engineering and
misbah_ae01@yahoo.com
Nadeem Ahmad Mufti
Professor, Department of Industrial and Manufacturing Engineering, University of Engineering and
Ammad Hassan Khan
Assistant Professor,Department of Civil Engineering, University of Engineering and Technology, Lahore,
Punjab, Pakistan
Abstract
Risk identification is very important for all construction projects and its importance become significant on
international level especially in multicultural environment. It includes identification of risks and probable
impact of these identified risks in construction projects. It plays a vital role for successful project delivery
and increase efficiency and profitability of construction projects. New opportunities are continuously
emerging as a result of globalization in construction sector to have projects internationally. Joint venture
construction projects are now very common which results in increased organizational exposure to
worldwide business market.
Risks in international construction projects are more critical as compared to domestic projects. And they
become more critical when developing countries like Pakistan involved in international joint venture
construction projects. Thats why it is desirable for construction firms in Pakistan to identify the risks and
find probable impact of these risks as early as possible, so that suitable strategies are made before actual
execution of project on international level. Objective of this paper is to identify risks and find the impact
of these risks in international construction joint ventures. This paper presents the findings of survey
conducted through questionnaire, to identify the risks significant for international construction projects
and impact of these risks as perceived by stakeholders involved including; clients, consultants and
contractors. In addition it includes meaningful recommendations and conclusions.
Keywords
Risk identification, globalization, construction projects, cross cultures, joint ventures.
1. Introduction
Construction industry unlike other industries is more complex and difficult to manage because it needs
special skills and techniques. Thats why construction project subjected to more risks as compared to
other business activities (Ozorhon et al., 2007). Risk management is important to manage construction
291
projects to ensure timely completion with specified budget. In case of construction industry formalized
process for management of risks started in the past few decades and reason described by Baker et al.
(1999) is rapid technological advancements, which emphasized on management of risks. A high level of
uncertainty is involved in international construction projects because participants from different cultural,
political and economical backgrounds are involved. Organizations in construction sector can explore the
world business markets and take competitive advantage by forming international joint ventures. But these
international collaborations are difficult to manage because IJVs subjected to different cultural, political,
economical and environmental conditions. Less-developed and developing countries like Pakistan can get
the benefit from this international collaboration with developed countries. As construction industry is
complex and multinational in nature, so major construction projects are often carried out as joint ventures
with firms in construction industry from developed countries (Chan and Tse, 2003). Clearly defined
Project objectives are required in order to get benefit from this collaboration of different partners in IJVs.
International construction projects have more chances of risk occurrence as compared to domestic
construction projects. By careful selection of risk management tools and techniques could allow
improvements in efficiency and profitability of international construction projects. The objective of this
research is to identify risks critical for construction industry of Pakistan in international joint ventures and
to assess the impact of these identified risks. Survey was conducted through a specially designed
questionnaire to get the perceptions of stakeholders involved including Clients, Consultants and
Contractors.
2. Risk Management for Construction Projects

There has been an increase in research on risk management in construction industry because ultimate
purpose of development of risk management techniques to increase efficiency of construction projects
and adds value to project delivery systems (Tang et al., 2007). Risk is defined as; The exposure to the
chance of occurrences of events adversely or favorably affecting project objectives as a consequence of
uncertainty (Al-Bahar and Crandall, 1990). Risk management is a formal and orderly process of
systematically identifying, analyzing, and responding to risks throughout the life-cycle of a project to
obtain the optimum degree of risk elimination, mitigation and control(Wang et al., 2004). Participants
involved in construction projects are exposed to high degree of risks because of complex and dynamic
nature of construction business (Bing et al., 1999). Due to the introduction of new procurement methods
construction projects are becoming more dynamic and complex in nature, contractors have to change the
tools and techniques used for treatment of risks in projects as well as within organizations (Tah and Carr,
2001).
The objective of risk management process is to develop a framework which provides assistance for
decision makers so that they can effectively and efficiently manage risks which are more significant for
construction projects. It is important to develop a methodology which helps to facilitate effective risk
management. According to Kangari (1995) management of risks is important for construction projects in
decision making process because these risks can affect performance, quality, budget and productivity of
construction projects. Because significant risks are involved in international joint venture construction
projects, firms need to spend more efforts in development of strategies for proper management of risks in
their joint venture businesses (Shen et al., 2001). Wang et al. (2004) suggests that risk management is
important in international construction projects in order to complete projects successfully and for
profitability particularly in developing countries.
2.1. Globalization and construction industry
Joint venture construction projects are now becoming popular which results in increased exposure of
organizations to worldwide business market. New opportunities are constantly emerging as a result of
292
globalization for organizations in construction sector to compete and take advantage of these
opportunities. In order to get benefit in global competition, construction firms should have to plan for its
survival and growth (Gunhan and Arditi, 2005). Globalization allows local firms to enter into
international construction markets to compete internationally (Han et al., 2005). Technology transfer and
economic cooperation are common with increasing trend towards globalization (Chan and Tse, 2003).
2.2. International joint venture construction projects
Joint ventures (JVs) becoming popular because of its importance in global competition (Ozorhon et al.,
2007). Joint venture is defined as, The commercial agreement between two or more companies in order
to allow greater ease of work and cooperation towards achieving a common aim, through the
manipulation of the appropriate resources (Norwood and Mansfield, 1990). International joint venture is
a joint venture involving two organizations contributing their equity and resources and at least one partner
having headquarter outside the country where joint venture operates (Ozorhon et al., 2007).
According to Ozorhon et al. (2007) failure rate in IJVs is higher than as compared to domestic joint
ventures because of greater challenges involved. Reasons identified by Han et al. (2005) for failure in
international joint ventures are (i) inadequate business plan development (ii) during initial stages of
venture lack of commitment of top management (iii) inadequate development of strategies for
international market (iv) inadequate recognition of demands in a cross cultural environment (v) failures in
weighing foreign requirements with respect to their political, social, and legal and government
procedures. Ozorhon et al. (2008) suggests that 6 factors contribute greatly towards achieving good
relations between partners involved in IJVs are; commitment, communication, cooperation, previous
operation, conflict resolution and trust.
2.3. Cultural impacts on international joint venture construction projects
International joint venture construction projects are difficult to manage and complicated in the sense that
it involves stakeholders from different cultures. Because no two cultures have the same values, thats why
cultural impact is critical for success of construction projects in a cross-cultural environment. Ozorhon(1)
et al. (2008) examined the effect of similarities/differences in cultures of partners involved in construction
projects and suggests that different cultural backgrounds of the partners have significant impact thats
why international joint ventures are difficult to manage. Before taking construction projects in foreign
countries, construction firms should have clear understanding about cross-cultural environment for
completion of projects effectively and efficiently (Gunhan and Arditi, 2005). In order to receive
supportive treatment and to win the trust of local population, compliance with traditional values plays an
important role (Ling and Hoi, 2006). Staff deputed must be capable to handle problems associated with
cultural differences.
3. Objectives of Research
The core objective of the study presented in this paper is to identify the risks significant for construction
industry of Pakistan in international joint venture construction projects and to access the impact of these
identified risks as perceived by stakeholders involved including clients, consultants and contractors. This
research work also aims to study differences in perceptions of three major parties involved in IJV
construction projects.
293
Research work begins with literature review for compilation of list of risks for construction projects and
then questionnaire developed in order to conduct survey. A questionnaire was designed for identification
and to find the impact of risks for international joint venture construction projects. Questionnaire sent in
hardcopy as well as softcopy by email to professionals in construction industry. Stakeholders who
participated in survey belong to construction industry of Pakistan working in International joint venture
construction projects with international firms in Pakistan as well as outside Pakistan. A total of 35
questionnaires were returned for further data analysis. Respondents were required to rank the 35 risks
identified and to assess the impact of these risks on construction projects in IJVs. Respondents including
clients, consultants and contractors then asked to identify these risks significant for international
construction projects on a 0-4 point Likert scale with 0=not important and 4=extremely important.
Data collected from respondents analyzed by an empirical formula to determine Relative Importance
Index (RII) of each risk. RII has been used to rank the risks as identified by respondents in order of their
importance and to cross-compare the relative importance of these risks as perceived by clients,
consultants and contractors. This ranking can be helpful in setting the priority and extent of planning to
minimize the risk consequences.
RII = W/AxN
Where;
W = weightage given to each factor by respondents ranging from 0-4
A = highest weightage (as 4 in this particular case)
N = total number of respondents
5. Findings from Survey

A total of 35 completed questionnaires were received for data analysis from stakeholders (clients,
consultants and contractors) involved in international construction projects. Out of these 35 responses, 7
responses received from clients, 12 responses received from consultants and 16 responses received from
contractors.
Figure 1: Percentage of responses received from stakeholders

1= Clients, 2= Consultants, 3= Contractors
To determine the ranking of risks associated with international joint venture construction projects from
point of view of stakeholders involved including clients, consultants and contractors, Relative importance
index (RII) was computed. Then according to these indices risks were ranked and results represented in
tabular and graphical forms. Table 1 summarizes the responses as perceived by stakeholders involved.
294
Table 1: Relative Importance Indices (RIIs) and ranking of risks (overall)

Risks
Percentage(%) of Respondents scoring
Financial risks due to delays in payments
0
0.00
1
8.57
2
8.57
3
20
4
62.86
Foreign currency fluctuation
0.00
2.86
8.57
40
48.57
RII
Rank
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0.00
20
42.86
Incompatibility of local policies with

international practice
0.00
37.14
Pollution and safety rules

Changes in laws and regulations
Design problems
Inflation and cost overrun
Delays in approvals and permits from
government
Inadequate technical specifications in
tender documents
Site access/right of way
Labor availability
Inadequate terms and conditions in
tender documents
Termination of joint venture
Quality assurance and quality control
Government influence on disputes
Inappropriate risk allocation
Disagreement over some contract
conditions
Political instability
Poor definition of scope
Change in scope due to government
influence
Material availability
Inadequate use of project management
tools and techniques
Third party delays
Misunderstandings and poor working
relationships between stakeholders
Equipment/technology availability
Labor disputes and strikes
Incompetence of local subcontractors and
suppliers
Damage to material and equipment in
0.00
0.00
0.00
5.71
0.00
2.86
0.00
2.86
2.86
5.71
22.86
25.71
22.86
5.71
25.71
31.43
40
42.85
54.29
28.58
42.85
34.29
31.43
31.43
40
0.786
0.771
0.767
0.761
0.757
4
5
6
7
8
0.00
2.86
22.86
51.42
22.86
0.736
0.00
0.00
0.00
11.43
8.57
8.58
22.86
31.43
17.14
34.28
25.71
57.14
31.43
34.29
17.14
0.725
0.714
0.707
10
11
12
5.71
2.86
2.86
0.00
0.00
5.71
0.00
2.86
5.71
2.86
17.15
34.29
31.43
37.15
34.29
45.72
42.85
48.57
40
54.28
25.71
20
14.28
17.14
8.57
0.7
0.693
0.681
0.679
0.671
13
14
15
16
17
2.86
0.00
2.86
8.57
8.57
11.43
28.57
40
31.43
45.71
37.14
37.14
14.29
14.29
17.14
0.65
0.643
0.636
18
19
20
0.00
2.86
11.43
5.71
37.14
42.86
40
34.29
11.43
14.28
0.629
0.625
21
22
0.00
0.00
2.86
14.29
60
31.43
22.85
45.71
14.29
8.57
0.623
0.621
23
24
2.86
2.86
2.86
14.29
5.71
2.86
37.14
48.57
48.56
31.43
34.29
42.86
14.28
8.57
2.86
0.615
0.609
0.601
25
26
27
0.00
17.14
51.43
14.29
17.14
0.579
28
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nay ngon lam
com
295
transit
Different cultural, social and religious
background
Unforseen site conditions
Cultural clash among stakeholders
involved in project
Equipment failure and theft
Force majeur (flood, earthquake etc)
Problems in technology implementation
Shortage in supply of water, gas and
electricity
5.71
14.29
34.29
37.14
8.57
0.571
29
0.00
0.00
22.86
28.57
45.71
25.71
14.29
42.86
17.14
2.86
0.564
0.551
30
31
2.86
5.71
0.00
5.71
25.71
28.57
28.57
31.43
34.29
34.29
37.14
48.57
28.57
14.29
34.29
0.00
8.57
17.14
0.00
14.29
0.536
0.521
0.514
0.464
32
33
34
35
The ten most important risks as perceived by stakeholders (clients, consultants and contractors) are, (1)
Financial risks due to delays in payments (2) Foreign currency fluctuation (3) Incompatibility of local
policies with international practice (4) Pollution and safety rules (5) Changes in laws and regulations (6)
Design problems (7) Inflation and cost overrun (8) Delays in approvals and permits from government (9)
Inadequate technical specifications in tender documents (10) Site access/right of way. These ten risks are
most important risks associated with international joint venture construction projects as perceived by
clients, consultants and contractors as in Table 1.
Table 2: Relative Importance Indices (RIIs) and cross comparison of risks ranking by clients,
consultants and contractors
Risks
Financial risks due to delays in payments
Foreign currency fluctuation
Incompatibility of local policies with
international practice
Pollution and safety rules
Changes in laws and regulations
Design problems
Inflation and cost overrun
Delays in approvals and permits from
government
Inadequate technical specifications in
tender documents
Site access/right of way
Labor availability
Inadequate terms and conditions in tender
documents
Termination of joint venture
Quality assurance and quality control
Government influence on disputes
Inappropriate risk allocation
Disagreement over some contract
conditions
Political instability
Poor definition of scope
Change in scope due to government
influence
Material availability
Inadequate use of project management
tools and techniques
Third party delays
Misunderstandings and poor working
relationships between stakeholders
Equipment/technology availability
Labor disputes and strikes
Overall
RII
Rank
0.843
1
0.836
2
0.793
3
Clients
RII
Rank
0.751
6
0.719
8
0.775
5
Consultants
RII
Rank
0.722
8
0.791
1
0.752
3
Contractors
RII
Rank
0.969
1
0.922
2
0.828
5
0.786
0.771
0.767
0.761
0.757
4
5
6
7
8
0.786
0.857
0.893
0.724
0.821
4
2
1
7
3
0.731
0.701
0.708
0.726
0.646
5
10
9
7
14
0.838
0.789
0.744
0.797
0.812
4
12
15
11
8
0.736
0.555
18
0.729
0.821
0.725
0.714
0.707
10
11
12
0.474
0.471
0.627
26
27
14
0.739
0.759
0.668
4
2
12
0.819
0.809
0.781
7
9
13
0.7
0.693
0.681
0.679
0.671
13
14
15
16
17
0.607
0.642
0.631
0.671
0.535
15
12
13
11
23
0.542
0.589
0.585
0.583
0.688
26
21
22
23
11
0.859
0.799
0.752
0.734
0.712
3
10
14
16
20
0.65
0.643
0.636
18
19
20
0.714
0.539
0.679
9
21
10
0.524
0.614
0.504
27
16
31
0.728
0.719
0.721
17
19
18
0.629
0.625
21
22
0.511
0.541
24
20
0.625
0.592
15
20
0.695
0.703
22
21
0.623
0.621
23
24
0.571
0.452
16
31
0.609
0.666
17
13
0.659
0.651
27
28
0.615
0.609
25
26
0.469
0.565
28
17
0.594
0.562
19
25
0.672
0.669
25
26
296
Incompetence of local subcontractors and

suppliers
Damage to material and equipment in
transit
Different cultural, social and religious
background
Unforseen site conditions
Cultural clash among stakeholders
involved in project
Equipment failure and theft
Force majeure (flood, earthquake etc)
Problems in technology implementation
0.601
27
0.537
22
0.577
24
0.648
29
0.579
28
0.467
29
0.511
29
0.689
23
0.571
29
0.444
32
0.472
33
0.681
24
0.564
0.551
30
31
0.381
0.546
34
19
0.604
0.479
18
32
0.609
0.619
33
32
0.536
0.521
0.514
32
33
34
0.393
0.461
0.508
33
30
25
0.516
0.509
0.437
28
30
34
0.625
0.562
0.578
31
35
34
Shortage in supply of water, gas and

electricity
0.464
35
0.357
35
0.291
35
0.641
30
Table 2 presents the cross comparison of ranking of risks on overall basis and as perceived by clients,
consultants and contractors separately. It is evident that there are differences in perceptions of
stakeholders involved in IJV construction projects in a cross cultural environment.
Figures 2-6 showing percentage (%) of respondents scoring for top five most important risks.
Figure 2: Percentage (%) of Respondents scoring for risk rank as 1 (Financial risks due to delays in
payments)
Figure 3: Percentage (%) of Respondents scoring for risk rank as 2 (Foreign currency fluctuation)
297
Figure 4: Percentage (%) of Respondents scoring for risk rank as 3 (Incompatibility of local policies
with international practice)
Figure 5: Percentage (%) of Respondents scoring for risk rank as 4 (Pollution and safety rules)
Figure 6: Percentage (%) of Respondents scoring for risk rank as 5 (Changes in laws and
regulations)
5.1. Perceptions of Clients
Based on the ranking of risks associated with IJV construction projects, the five most important risks as
perceived by clients are, (1) Design problems (2) Changes in laws and regulations (3) Delays in approvals
and permits from government (4) Pollution and safety rules (5) Incompatibility of local policies with
international practice.
5.2. Perceptions of Consultants
perceived by consultants are, (1) Foreign currency fluctuation (2) Labor availability (3) Incompatibility of
local policies with international practice (4) Site access/right of way (5) Pollution and safety rules.
5.3. Perceptions of Contractors
perceived by consultants are, (1) Financial risks due to delays in payments (2) Foreign currency
fluctuation (3) Termination of joint venture (4) Pollution and safety rules (5) Incompatibility of local
policies with international practice.
298
Figure 2: Comparison of Relative importance indices (RIIs) of ten most important risks
(1) Financial risks due to delays in payments (2) Foreign currency fluctuation (3) Incompatibility of local
policies with international practice (4) Pollution and safety rules (5) Changes in laws and regulations
(6) Design problems (7) Inflation and cost overrun (8) Delays in approvals and permits from government
(9) Inadequate technical specifications in tender documents (10) Site access/right of way

New opportunities are continuously emerging as a result of globalization in construction sector to have
projects on international level. Construction firms in developing countries are now having trend of
forming joint ventures with international firms in order to widen their exposure and to compete
internationally. Risks are present in every construction project. Identification of risks is important for all
construction projects and its importance become significant in IJV construction projects. Risks in
international construction projects are more critical as compared to domestic projects especially when
developing countries involved. Thats why it is desirable for construction firms in Pakistan to identify the
risks as early as possible, so that suitable strategies are made before the actual execution of projects on
international level.
This research work identified risks critical for international construction projects as perceived by
stakeholders. Relative importance indices (RIIs) are computed for risks and rankings of these risks
established based on indices as perceived by all parties involved which help in cross-comparison. Three
most important risks identified in this study are; (1) Financial risks due to delays in payments (2) Foreign
currency fluctuation (3) Incompatibility of local policies with international practice.
Financial risks are ranked as most important by participants and could have a substantial impact on
successful completion of projects. In order to minimize such risks suitable strategies can be made and
procedures for payments have to be streamlined. In addition reduction in number of steps involved and
setting deadlines for file work and approvals from client can help in this regard. Overall economic
conditions and stability in foreign currency rate is always necessary for preparing long term stable
policies for projects therefore its importance cannot be denied. Fluctuations in rates directly impact those
projects which have a significant component of imports but all remaining types of projects also get
affected to some extent. If possible, cost plus strategy could be more suitable to safeguard the interest
of contractor and consultant. Thorough knowledge and understanding of international policies and
strategies to make them compatible can help to minimize incompatibility of local policies with
international practice before signing projects in IJV.
299
It is believed that results of this study can be of immense help for practitioners (clients, consultants and
contractors) in developing countries. Risk consequences in construction projects may reach an
unacceptable level because of scarce resources and lack of advancements in technologies, therefore a
thorough awareness and identification of risks is essential to prepare suitable strategies. The arguments
and findings presented in this study provides guidelines for decision makers involved in international
joint venture construction projects for proper management of risks which would arise and effect the
successful completion of projects in a multicultural environment.
Risk rankings presented in this study can help clients, consultants and contractors to consider all these
risks and plan strategies accordingly. They can train their employees keeping in viewing all risks
significant for IJV so that they would better be able to tackle and effectively minimize the adverse effects
of these identified risks.
7. Recommendations for Future Work

Similar study in future can be performed to identify the risks significant for a specific types of
construction projects such as high rise construction projects, highway projects etc. A research can be
carried out to evaluate the present status of awareness and implementation of risk management tools and
techniques in construction firms of Pakistan. In addition, these identified risks can be further explored to
the extent of assessment of risk consequences with respect to time, cost and quality.
8. References
Al-Bahar, J.F., and Crandall, K.C. (1990). Systematic risk management approach for construction
projects. Journal of Construction Engineering and Management, Vol.116, No.3, pp 533-546.
Baker, S., Ponniah, D., and Smith, S. (1999). Survey of risk management in major U.K.
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301

Application of Public Private Partnership (PPP) in Hong Kong Special

Administrative Region the Critics Perspectives
Albert P.C. Chan
(Professor and Associate Head, Department of Building and Real Estate, The Hong Kong Polytechnic
University, Hung Hom, Kowloon, Hong Kong, PR China)
bsesther@polyu.edu.hk
Patrick T.I. Lam
(Associate Professor, Department of Building and Real Estate, The Hong Kong Polytechnic University,
Hung Hom, Kowloon, Hong Kong, PR China)
Daniel W.M. Chan
(Assistant Professor, Department of Building and Real Estate, The Hong Kong Polytechnic University,
Esther Cheung*
(Research Associate, Department of Building and Real Estate, The Hong Kong Polytechnic University,
Abstract
The term Public Private Partnership (PPP) indicates the two main parties who are involved in the process.
Although the views from the public and private sectors are important, it is also interesting to realise the
critics perspective on conducting PPP projects in the Hong Kong Special Administrative Region
(referred to as Hong Kong from here onwards). Therefore as part of a comprehensive research study
looking at implementing PPPs in Hong Kong, face-to-face interviews with experienced local industrial
practitioners were conducted. Amongst these interviews, three were launched with experts from outside
the public or private sectors. These interviewees included an academic and two legislative councillors
from Hong Kong. This paper presents the analysis of these interviews which helps to fill in the gaps
unrealised by the public and private sectors. The academic view is that further research was needed on
how to decide on the concessionary period of the projects. Also, relational contracting could be
considered in PPP projects. A regulation system for projects was necessary and a public sector
comparator should be adopted. Projects with fewer competitors would be appropriate for PPP such as
infrastructure, power transmission or network, and water and gas supply. In addition, due to the high
costs involved in PPP projects those with a larger project sum would be considered to provide a better
business case for the private sector. The legislative councilors suggested that the most ideal projects
would be those that were task specific, and where the timeline and milestones would be foreseeable. The
project nature itself would not be important. Critical success factors identified by the academic included:
Government to leave more flexibility rather than prescribing specification; Clear legal structure and
regulation mechanism; Business case; Technical and financial capability of concessionaire; and Fair
handling of risks. The legislative councilors also suggested that PPP must have Clear objectives;
Transparent approach; Adequate public consultation; Clear output specification and timeframe; Political
environment; and Administration / financial services lead. Other problems related to PPP projects raised
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by one of the legislative councilors included the tendency in Hong Kong for projects to be labeled as
PPP when actually they are not of the same nature.
Keywords
Public Private Partnerships (PPP), Procurement, Infrastructure Projects, Hong Kong.
1. Introduction
Hong Kong being the international gateway to China and possibly even Asia represents a huge business
market filled with opportunities and attractions. As a result of the profits foreseeable Hong Kong has the
potential to draw companies from across the world. Money coming in from outside is beneficial to the
local Government. The local Government having seen the success stories experienced by others is keen
to bring innovation and efficiency into their public works projects. In recent years the Efficiency Unit of
the Hong Kong Special Administrative Region Government has been heavily involved in PPP research.
The Governments interest in utilizing PPP is obvious. The approaches that they have taken mainly
involve gaining international experience from particularly Europe and Australia. One of the early
documents produced by the Efficiency Unit on private sector involvement was a guideline to help
governmental bureaux and departments to familiarize with private sector engagement (Efficiency Unit,
2001). These guidelines were published in 2001 and showed the governments interest in adopting the
idea of PPP. Only two years later they also produced a comprehensive introductory guide to PPP
(Efficiency Unit, 2003). This guide was aimed for the use of the civil service but is also made available
for the publics interest to understand the governments approach. After the publication of this report
much interest was drawn from the public due to the possibility of the increased business opportunities
available. More recently, the Efficiency Unit published two more guidelines on PPP (Efficiency Unit,
2007; 2008). The first publication shows how more knowledge on the issues of PPP have been learnt, it
also identifies areas of concern to local practitioners as well as civil servants, and it tries to provide some
insights into these areas. The second publication is much more specific on how to establish a PPP project.
The guideline is aimed at coaching civil servants on how to conduct a PPP project by looking at the
business case, dealing with the private sector, managing the risks, funding and payment issues, managing
performance etc.
2. Obstacles in conducting PPP projects

There is no one best procurement method which can be applied to deliver all types of projects (Chan et al.,
2001) and PPP is no exception. As part of this study the authors carried out a comprehensive literature
review to identify the potential obstacles of PPP. Six key obstacle groups were determined by Chan et al.
(2008) as follows:
1) Misallocation of risks
The impact of risks to project objectives in completing a PPP project is usually significant, and these risks
arise from multiple sources including the political, social, technical, economic and environmental factors,
due mainly to the complexity and nature of the disciplines, public agencies and stakeholders involved.
Both the private and public sectors need to have a better understanding of these risks in order to achieve
an equitable risk allocation and enable the project to generate better outcomes (Chan et al., 2006; ETWB,
2004; Gunnigan and Eaton 2006; Koppenjan 2005; Li 2003; Merna and Owen 1998; Mustafa 1999; Ng
and Wong 2006; Satpathy and Das 2007; Xenidis and Angelides 2005; Zhang 2001; Zhang and AbouRisk
2006). In fact, a fair and reasonable allocation of various risks is vital to PPP success. If risks are
inequitably or wrongly allocated beyond the capacity of the parties concerned, PPP projects would fail
(e.g. demand risk resulting from town planning falling on private consortia).
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2) Private Sector Failure

PPP projects may fall apart due to failure on the part of the private sector participants. In contracting out
the PPP projects, the government should ensure that the parties in the private sector consortium are
sufficiently competent and financially capable of taking up the projects. Due to a lack of relevant skills
and experience of project partners, PPP projects are more complex to procure and implement (e.g.
London Underground). The operating company of the British National Railway after privatization,
Railtrack, had allowed the skills and experience in engineering services and infrastructure operation vital
to its success to fall into the hands of its suppliers, making it insolvent in 2001, and causing its
replacement by the Network Rail (Higton 2005).
3) High Transaction Costs and Lengthy Lead Time
PPP project arrangements are complex and involve many parties with conflicting objectives and interests.
Hence, PPP projects often require extensive expertise input and high costs and take lengthy time in deal
negotiation. The high transaction costs and lengthy time may not represent good value to all parties and
as a result the deal may not materialize in the beginning or may falter in the end. PPP projects may incur
higher transaction costs than those under the conventional public sector procurement. The legal and other
advisory fees would be included as lawyers are involved in all stages of a PPP project, as well as the cost
of private sector finance, and the price premium for single point responsibility arrangement. The
potential high transaction costs may have a negative impact on the objective of securing the best value
(Corbett and Smith 2006; ETWB 2004; Grimsey and Lewis 2004; Li 2003; Li et al. 2005; Merna and
Owen 1998; Zhang 2001; Zhang and AbouRisk 2006). Complex PPP projects require inputs from many
parties of different expertise. Therefore, the projects should be economically viable to cover such costs.
One common problem encountered in PPP projects is the high bidding costs, which is owing to increasing
project complexity and protracted procurement process. The private sector incurs high bidding costs
partly due to the consideration of the clients and their financiers objectives. Lengthy negotiations and
especially the cost of professional services may increase the bidding costs further (Chan et al. 2006;
Corbett and Smith 2006; ETWB 2004; Li 2003; Li et al. 2005; Mustafa 1999; Xenidis and Angelides
2005; Zhang 2001).
The PPP bidding process is also regarded as lengthy and complicated. For example, bidders are required
to prepare tender proposals attached with a bundle of additional materials. Such a process may take three
to four months. Besides, another several lengthy negotiations will be required for the formation of the
contract. Clearly, setting up a complicated agreement framework for successful PPP implementation can
slow down the bidding process (Chan et al. 2006; ETWB. 2004; Grimsey and Lewis 2004; Li 2003; Li et
al. 2005; Merna and Owen 1998; Mustafa 1999; Zhang 2001).
4) Political/Social Obstacles
One other reason for failure is the stakeholders opposition and public opposition. Whether the proposed
project is consonant with the interest of the public is important as public opposition can adversely affect
the funding for the project from the public sector (El-Gohary et al. 2006; Grimsey and Lewis 2004; Zhang
and AbouRisk 2006). PPP in public projects typically incur political and social issues like land
resumption, town planning, employment, heritage and environmental protection. These could result in
public opposition, over-blown costs and delays to the projects.
Another common complaint by the public is the high tariff charged for the services provided. More often,
the private sector would face political uphill in raising tariff to a level sufficient to cover its costs and earn
reasonable profits and returns on investment. The participation of the private sector to provide public
304
service will undoubtedly bring innovations and efficiencies in the operation, but may produce a fear of
downsizing in the public sector. To a certain extent, there would be fewer employment opportunities if
no regulatory measures were implemented (Li 2003; Li et al. 2005; Zhang and AbouRisk 2006).
5) Lack of Well-established Legal Framework
The introduction of PPP exerts unprecedent pressure on the legal framework as it plays an important role
in economic development, regeneration and mechanism for developing infrastructure. Still, some
countries do not have a well established legal framework for PPP projects and the current legal
framework is only supposed to deal with the traditional command and control model. Although PPP
involves a great deal of legal structuring and documentation to deal with potential disputes amongst PPP
parties, a water-tight legal framework is still lacking (e.g. protection of public interests vs legitimate
rights of private sector). Without a well-established legal framework, disputes are inevitable (Grimsey
and Lewis 2004; Li et al 2005; Satpathy and Das 2007).
6) Non-conducive Financial Market
Private sector investors bear financial risks in funding of the investment. Seeking financially strong
partners in a PPP project is regarded as difficult. In most PPP arrangements, the debt is limited-recourse
or non-recourse, where financiers need to bear risks. In fact, most stakeholders are not willing to accept
excessive risks. The lack of mature financial engineering techniques on the part of the host countries can
also be another problem (Grimsey and Lewis 2004; Zhang 2001). Unattractive financial market (e.g.
politically unstable or high interest rate) is often an obstacle to PPP success. Therefore, a conducive
financial market is important for the private parties to drive PPP projects.
3. The Research Framework

The findings presented in this paper are part of an on-going research project looking at developing a best
practice framework for implementing PPPs in Hong Kong. As part of the data collection, interviews were
conducted with PPP critics, which included two legislative councilors and one academic in Hong Kong.
3.1
Design of Interview Questions
Utilizing in-depth literature findings, interview questions linking up to the project objectives were derived.
The following questions were derived for the legislative councilors interviewed:
1.
2.
3.
4.
5.
What should be the main criteria for PPP proposal assessment?

What are the reasons behind success/failure of PPP projects in Hong Kong?
How does PPP affect the public?
Which type of project do you feel would best benefit the public by using PPP?
In general, what do you think are the critical success factors leading to successful PPP projects?
And the following questions were derived for the academic interviewed:
4. Have you conducted any research looking at local case studies? And if so, could you share your
insights?
4. How would you compare PPP with traditional procurement methods?
4. Which type of project do you feel is best suited to use PPP?
4. What do you feel are the key performance indicators in a PPP project?
4. In general, what do you think are the critical success factors leading to successful PPP projects?
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3.2
Selecting Respondents
The target respondents of the interviews were practitioners with experience in PPP who neither belonged
to nor acted for the public or private sectors. Amongst the three interviewees, two were members of the
legislative council in Hong Kong (one with a law background and the other with an engineering
background). The third interviewee was an academic and researcher in PPP from a local university.
Table 1 shows details of these interviewees.
Table 1: List of Interviewees from the Public sector in Hong Kong
No.
C1
C2
C3
Position of Interviewee
Member of Legislative Council (Legal
background)
Member of Legislative Council
(Engineering background)
Professor
Organization of Interviewee
Legislative Council
Legislative Council
Local University
4. The Critics Perspective on PPP

4.1
Interviews with Legislative Councilors
1. What should be the main criteria for PPP proposal assessment?

Interviewee C1 is a member of the Legislative Council of Hong Kong. At the same time he is a legal
practitioner and has been working closely on the Western Kowloon Cultural District (WKCD) project in
Hong Kong. He described that:
There is no general guideline for all projects. The Efficiency Unit PPP guide is quite comprehensive, so
to follow their logistical steps should be sufficient.
Interviewee C2 who is also a member of the Legislative Council of Hong Kong has an engineering
background. He believed that the local government has been reluctant to adopt PPPs:
Legislative councilors have suggested this to the government many times, but they have ignored us.
Maybe it would be better for the academia to bring this suggestion up.
He further added that:
If the financial services sector takes a lead then other bureaux will follow.
2. What are the reasons behind success/failure of PPP projects in Hong Kong?
Interviewee C1 explained that PPP projects in Hong Kong are normally unsuccessful as they are not
proper PPPs. He further explained how PPPs are defined by a PPP expert invited to Hong Kong by the
WKCD project working group:
Looking back at the Cyber Port and the WKCD the policy objectives were not clear. WKCD has just
literally been thrown to the private sector to develop, which should not be the case. According to this
expert all PPP projects in U.K. have a clear target to what they want delivered. The society knows
exactly why the government cannot deliver themselves. Therefore the result is a project in name a PPP
but not in substance which is the reason for WKCDs failure.
Interviewee C2 shared similar views that the WKCD project was not a success:
306
For WKCD the case is not successful. As it will be developed by one consortium, there has been much
criticism.
Interviewee C2 also described how another PPP project had faced problems:
Shatin water treatment plant is an example where not only the general public but even the existing 4000
staff in the Department was not given any details of the transfer to PPP arrangement. These 4000
employees just wanted to know about their future, but they were made to wait seven months before the
government secretary was willing to speak to them. This showed that the government did not know how
to handle the situation and did not consult the general public before finalizing their plans.
3. How does PPP affect the public?
Interviewee C1 discussed how real PPP projects will actually provide positive affects:
The advantage is that the government will receive a facility. If a PPP project is done well there should
be no disadvantages.
In addition, Interviewee C2 explained that:
It is a partnering arrangement so there must be more consultations between the government and the
general public The best way to inform the public is by public forums and open meetings.
4. Which type of project do you feel would best benefit the public by using PPP?
Interviewee C1 did not mention the best type of project suitable procured by PPP, but instead he
suggested that the project:
must be task specific, the project itself is unimportant If the task is very specific
and articulated there should be no major problems for most PPPs the timeline and milestones
should be foreseeable.
Interviewee C2 believed that PPPs are not limited to specific types of projects:
It is not a problem which type of PPP is adopted. But the type of arrangement must be agreed on before
the start of a project. After the arrangement has been fixed the government must inform the general
public the reasons and benefits for adopting this arrangement. In addition, throughout the process the
general public must be informed of the progress, achievements and social benefits For each
type of PPP the suitability criteria will be different.
Interviewee C1 believed that he was not in the position to answer this question, but instead:
Should ask people who have participated in PPP projects for many years.
On the other hand, Interviewee C2 suggested:
a transparent process and consultation with the public to keep them fully informed of details and
arising events of the projects are essential to foster success.
4.2
Interview with Academic
1. Have you conducted any research looking at local case studies? And if so, could you share your
insights?
Interviewee C3 is an active researcher in the PPP field. His research was also based on the practice of
PPPs in Hong Kong, Mainland China and the U.K. He explained the scope of his study:
307
The five Hong Kong tunnel projects were studied. In Mainland China they were interested in expanding
the use of BOT during the early 90s.
From his study there were three main recommendations:
For future studies we can consider developing a methodology to decide on the length of the
concessionary period.
The raise of toll differs for each tunnel. These factors show that Hong Kong requires a coordinated
system for all the tunnels. The toll adjustment mechanism should be coordinated amongst various
tunnels.
Another observation is that each of the five tunnels has a separate ordinance, they are similar but with
slight variations. These projects should use the same ordinance and hence regulation is necessary.
Other findings derived from his study included:
Evaluating criteria and measures were identified for PPP projects. A scoring system was derived, and
based on the multiple of criteria the projects could be compared and evaluated by a score.
2. How would you compare PPP with traditional procurement methods?
Interviewee C3 explained in much detail the differences between PPP and traditional procurement
methods:
For PPP there is only one concessionaire comprising of the financier, designer, contractor and
operator. Conflict is eliminated. Projects are more likely to be completed on time. PPP projects are
based on revenue which can be affected if the market changes from good to bad. PPP involves large
construction costs and if the project is delayed more interest is normally paid. In terms of procedure
there is little difference but a concessionaire needs to be constituted for a PPP project. Traditional
procurement method involves lots of separate parties but excluding maintenance personnel, resulting in a
lack of co-operation and low level of buildability In a traditional procurement the government
will pay for the project so the risk is not high for the private sector. For PPP projects there is little risk
for the government as it is transferred to the private sector The main purpose for adopting
PPP is to save on the overall cost as the private sector can complete a project at a lower operational cost.
But transaction costs for a PPP project are much higher as there are many parties involved such as
lawyers. Also, it is much more expensive for the private sector to borrow money. The government
normally borrows money 3% lower than the private sector Also, it is easy to encourage the
private sector to use innovative measures to reduce the construction cost the construction
period included in the concessionaire period gives the consortium a large driving force to complete ontime or even earlier.
3. Which type of project do you feel is best suited to use PPP?
Interviewee C3 believed:
Normally consider PPP projects as involving construction and long term operation Projects
which are suited include infrastructure projects, power transmission or network, and water and gas
supply. These types of projects are more suited as there are fewer competitors. If there are too many
competitors the risk is higher PPP is also suitable when the government lacks money to
provide public facilities or services while enhancing the operational efficiency by the private sector. It
also depends on market trends and needs.
4. What do you feel are the key performance indicators in a PPP project?
308
Interviewee C3 believed:
Depends on different projects but quality, time and cost are the most important criteria.
Interviewee C3 suggested:
A clear legal structure and regulation mechanism There needs to be a market in order for
the initial investment to be recovered from the revenue as well as for the private sector to have
reasonable profit margins The technical capability and financial capability of the
concessionaire are also important.
Also, the results of a questionnaire study he had conducted found that the financial aspect was the most
important:
The financial strength was the most important constituting approximately 40%, followed by technical
and managerial competence each approximately 20% and environment, safety and health approximately
15%.
5. Conclusions
This paper has presented the findings of three interviews conducted with PPP critics in Hong Kong. It
was found that projects in Hong Kong have failed due to unclear objectives, criticism that projects are
handed over to one consortium and because of unclear procedures related to the dealing of staffing issues.
The legislative councilors felt that PPP projects do not have to be limited to certain types, but the
academic believed that the projects need to be long-term services with little competitors. Critical success
factors include: a transparent procurement process; sufficient public consultation; a clear legal structure
and regulation mechanism; available market; and capability of concessionaire in terms of financially,
technically and managerially. Also, the academic suggested many differences between PPP and
traditional methods, in particular for PPP projects: more parties are involved; more likely to be completed
on time; economic projects are heavily based on the market; a concessionaire is developed; the
construction costs tend to be higher; maintenance is considered; transactions costs are much higher; the
private sector tends to be more innovative; and there is more drive from the private sector to speed up the
project. Lastly the academic provided several suggestions towards PPP, these included: develop a method
for deciding on the concessionary period; a coordinated toll adjustment mechanism for PPP tunnel
projects in Hong Kong; and develop PPP legislation.
A follow-up empirical questionnaire survey to solicit various opinions on the key issues regarding the
application of PPP model had also been launched in both Hong Kong and Mainland China. The major
survey findings will be collated and disseminated towards the research community and the practitioners
through subsequent refereed publications in the form of journal articles and conference presentations.
6. Acknowledgements
The work described in this paper was fully supported by a grant from the Research Grants Council of the
Hong Kong Special Administrative Region, China (RGC Project No. PolyU 5114/05E). Sincere thanks
goes to those industrial practitioners, who have kindly participated in the interviews reported in this paper.
309
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311

Modeling Subcontractors Cooperation in Time; Cooperative Game Theory

Approach
Mohammad Sadegh Asgari
Student, Iran University of Sciemce & Technology, Tehran, Tehran, Iran
asgari@civileng.iust.ac.ir
Abbas Afshar
Professor, Iran University of Sciemce & Technology, , Tehran, Tehran, Iran
Abstract
Time, as one of most important factors in a successful construction project, can be traded between
subcontractors in sequential projects. In optimal case for trading time, subcontractors have reasonable
incentive to cooperate. In this paper we introduce a new problem in field of subcontractors cooperating
and then we propose a model to solve it. Finally, a case study is represented to more comprehensively
illustrate the problem. Results from utilization of the propossed model show that while optimizing total
cost, all subcontractors can negotiate to fairly distribute benefits from cooperation in core space. The
Shapley value and the nucleolus concepts can be suggested as well.
Keywords
construction management, subcontractor, cooperative game theory, cost allocation
1. Introduction
Application of game theory in construction industry is still in the begigning of its practical applications
though, when decision makers are assumed to have rational behavior, the game theory may be efficiently
employed to analyze conditions for the best beneficial decisions. Most of the modeling applications of
game theory in construction management, although limited in number, have employed non-cooperative
static and dynamic environment to solve the problems. Ho modeled a bid compensation decision process
as a non-cooperative static game (Ho, 2005). This model aims to study the impacts of bid compensation
and to develop appropriate bid compensation strategies. In a recent works, construction claims and
financial renegotiation in PPP projects were approached as a dynamic non-cooperative game (Ho and Liu,
2004 and Ho, 2006). Construction claims decision model provides the rationale for recent innovations to
manage disputes. So, to analyze negotiations between participants, game theory is applied for allocation
of risks in transport public private partnerships as final offer arbitration game (Medda, 2007) and
allocation of negotiating concession period for BOT-Type Contract as a non-cooperative bargaining game
(Shen et al, 2007). Studies in cooperative game are limited in collaborating formwork subcontractor that
indicated a subcontractor may earn even more profit if it collaborates with others in a coalition (YengHorng Perng et al, 2005).
In construction industry, cooperative behavior may undoubtedly result in more benefits for decision
makers in many situations. If decision makers get more benefits by cooperative strategy then they can
negotiate to how distribute resulted benefits. In many fields, subcontractors can cooperate in issues like
312
time trading, work volume, resource trading. Application of cooperative game theory in construction
industry is limited to the work of Yeng-Horng Perng et al (2005) on collaborating formwork
subcontractors.
In this paper we introduce a new application of cooperative game for subcontractor's collaboration on
time trading. Time, as one of most important factors in a successful construction project, can be traded in
sequential projects. First, a cooperative game model is developed for efficient and beneficial use of
available time in sequential projects with different subcontractors and its performance is illustrated with a
case example.
2. Cooperative game theory

Game Theory is the study of mathematical modeling of strategic behavior of players in situations where
one players decision may affect the other players. There are two main branches of game theory: 1- Noncooperative game theory where players see only their own strategic objectives and try to maximize
their benefits. 2- Cooperative game theory where players cooperate to get more benefits and fairly
allocate cooperative gains.
Definition: An n-person cooperative game in the characteristic function form is an ordered pair G=
(N,v) where N= {1, 2,...,n} is a finite set with n elements.
Cooperative game has two classes: TU-game that utility can be transferred and NTU-game that utility
cannot be transferred. Cooperative game theory attempts answer questions such as which coalitions can
be formed? And how can the coalitional gains be divided in order to secure a sustainable agreement? For
allocating profits, some concepts solutions refer to a range of values that fulfill certain conditions like
The Core and some concepts solutions suggest a unique point like The Shapley value and the nucleolus.
The Core:
This concept suggests a subset solution that satisfies efficiency, individual and group rationality.
Definition: Let v G(N) . A Core element of a game v is an allocation x R n such that:
x(i) = x(N)
(efficiency)
x(i) v(S )
(individual & group rationality )
(1)
iN
(2)
iS
The Shapley value:

The Shapley value is the expected marginal amount contributed by a player to a coalition. Shapley
proposed to consider a mapping : G ( N ) R n , satisfying efficiency, the Dummy player property,
anonymity and additivity:
i (v ) =
s!(n s 1)!
(v( S i ) v( S ))
n!
S N \i
(3)
In order to better understand this concept, consider a situation with n players agreeing to meet in a certain
room; imagine the n players entering one at a time into that room in a random order (specified by the
permutation , that is all possible arrival orderings are equally probable) and that each player, as soon as
he enters and reaches the coalition S created by the players arrived before him, receives a reward equal to
v( S {i}) v( S ) , that is his marginal contribution. The Shapley value is the mean marginal
contribution, averaged on all of the n! permutations .
The nucleolus:
The nucleolus concept is based on the idea of the excess. Let excess be:
313
e( S , x) = v( S ) x(i )
(4)
The nucleolus minimizes the maximum excess of any coalition, S, lexicographically (Schmeidler, 1969)
so:
Min : e
(5)
S .T :
e( S , x ) e
x(i) = v( N )
S N
( 6)
(7 )
iN
If the Core is non-empty, then it can be proved that the Nucleolus lies in the Core.
Subcontractors Cooperation in Time Trading; Problem definition
Time, along with the cost and quality, is one of the most crucial factors in a successful construction
project. An important challenge in project scheduling is subcontractors efficiency in all of project
activities. Obviously, each subcontractor tends to have more time and efficiency in his activities to more
reliably decrease his costs. Many factors like; weather condition, material, equipments or labor shortage,
or price fluctuations, inclination to completion of project in shorter time to catch the acceleration award or
to dispatch the equipments to other projects and etc can affect time and total cost of the project. These
factors make some periods of time more valuable for subcontractors because of higher efficiencies and
lower costs in these periods. In lower efficiency, cost for subcontractor increases for execution of a
specified volume of anticipated work. This worthy time period differs from case to case based on
specialty of subcontractor. For example rainy days have lowest value for earth working subcontractors but
they dont differ with other days for equipment subcontractors.
In sequential projects, it is possible for subsequent subcontractors to trade time and decrease their total
cost. This trading scheme can be performed according to subcontractors' time-cost and time-efficiency
functions and finally may lead to an efficient schedule for all of subcontractors.
Sequential projects are kind of projects that are delivered to subcontractors in the form of several subprojects. Nature of sequential projects requires every subcontractor to begin his activities right at the due
time and to deliver completed stage to subsequent subcontractor at the end of contract time for
implementation of the rest of the project activities.
Based on information and experiences that each subcontractor has, he can specify his time-cost and timeefficiency functions individually. Hereby, a negotiation space can be developed between subcontractors at
the beginning of the project. The negotiation space in such problems presents the coalition space in
cooperative game theory. For systematic and fair allocation of benefits resulted from cooperation,
individual and group rationality are considered to make subcontractors come into cooperation in more
benefit. In Coalition space, the players (subcontractors) decide to optimize benefits or cost of coalition
without any restriction based on primary contracts. At the end of negotiation process, if the players come
to new agreements, new contracts are signed between them and the excess benefits due to cooperation are
allocated fairly.
3. Modeling Approach
Two different versions of model have been formulated. In the first version, the objective function is
formulated based on time-cost relation of the activities for each subcontractor. The second version
accounts for time-efficiency function to each activity. This function specifies daily, weekly or monthly
work efficiency in any period of time for each subcontractor. In a scientific definition, efficiency is the
314
ratio of the work done by a work group to the work that can be done potentially by the same group.
According to this definition, the efficiency always has a value between 0 and 1.
It is necessary to consider the effect of anticipated efficiency throughout the project for estimation of total
cost. In other words, excess cost due to efficiency decline in some periods of time, should be considered
in modeling process. It is proposed daily average cost and daily real cost is calculated:
C (T )
(9)
T
1
c( j ) =
c'
R( j )
c' =
(10)
Where:
c': daily average cost.
C(T): cost of project in time of T by time-cost function.
T: time of project (day).
c(j): daily real cost
j: index of day.
R(j): efficiency in day of j.
Now real cost of project can be calculated considering time-cost and time-efficiency functions by
integrating daily real costs:
F
C R (T ) = c( j ) =
S
T = F S
C (T ) F 1
T S Ri ( j )
(11)
(12)
Where:
CR(T): real cost of all activities for a subcontractor project.
S: start date of subcontractor project.
F: Finish date of subcontractor project.
3.1. Coalition
In coalition status, subsequent subcontractors can trade time and decrease their total real cost. The model
allows the subsequent subcontractors to choose the best start and finish date ignoring primary contracts
restrictions. Decision variable of the model is start and finish time of each subcontractors in coalition.
1
C R ( S ) = Min {Ci (Ti )
Ti
iS
Ti = Fi S i
Fi S i +1
i S
i S
Fi
R ( j )}
Si
(13)
(14)
(15)
To solve simple problems, it is possible to use total search method while in complicated problems, the
metaheuristic methods may be used. After time trading between subcontractors, it is necessary to assign
new contracts and subcontractors have to accept all risks of new contracts.
315
4. Illustrative Example
An illustrative example is presented to illustrate the process and performance of the proposal approach.
Time-cost and Time-efficiency functions for activities of subcontractors are represented in table 1, 2, 3 &
4. The model is solved in two cases:
1- Ignoring time-efficiency function
2- Considering time-efficiency function
Using equations (13, 14 and 15), total real costs are calculated for all coalitions formed by subcontractors
{1}, {2} and {3} that are represented in table 5 and 6.
Subcontractor 1: TN= 67 days,
CN=157000$, CNR= 211677$

CN=102320$, CNR= 112712$

CN=107500$, CNR= 133686$
TN= normal time for implementation subproject.

CN= cost in normal time without considering efficiency.
CNR= real cost in normal time.
Figure 1: Subcontractor position in project
Table 1: Time-cost function for subcontractor {1} (Hegazy. 1999)

Time
Cost
60
61
62
63
66
67
68
74
77
78
84
87
173500 173000 171000 162500 161500 157000 152500 149500 149000 146500 143500 143000
Table 2: Time-cost function for subcontractor {2} (Feng. 1997)
Time
Cost
100
101
102
100
104
105
106
107
108
109
110
111
133320 128320 128070 127820 120320 120070 119820 118770 117270 110020 106270 106020
112
114
115
116
118
119
120
121
122
124
125
126
105770 105270 105020 104770 104470 104220 103970 103820 103570 103070 102820 102570
128
131
132
133
134
137
138
139
140
142
143
145
102320 102170 101970 101820 101570 101510 101470 101170 100970 100870 100770 100570
148
151
154
156
158
159
161
169
100270 100070 100010 99950 99900 99870 99820 99740
Table 3: Time-cost function for subcontractor {3} (Feng. 2000)

Time
Cost
60
61
62
63
65
66
67
68
71
73
74
77
147500 142500 140000 131000 130400 128500 123500 118500 117900 117300 112500 110500
78
80
81
83
84
87
90
92
94
102
105
107500 107500 106900 105500 101500 99500 98900 98300 97800 97200 96400
316
Table 4: Time-efficiency function for subcontractors in each period of project duration

0-10
Date (days)
Subcontractor 1 0.5
Subcontractor 2
Subcontractor 3
11-20
0.5
-
21-30
0.75
-
31-50
1
-
51-70
1
0.5
-
71-100
1
0.75
-
101-195 195-254 255-275

1
1
1
1
1
0.5
Table 5: Cost and duration for each coalition when time-efficiency function was disregarded
Coalition
Cost
{1}
{2}
{3}
211677 112712 133686
Start-Finish
0-67
Duration
67
{1,2}
249520
{1,3}
264500
{2,3}
202820
67-195 195-273 0-84,84-195 0-67,195-275 67-182,82-275

128
78
84,111
67,80
115,93
{1,2,3}
352020
0-78,78-189,189275
78,111,86
Table 6: Cost and duration for each coalition considering time-efficiency function
Coalition
Cost
{1}
{2}
{3}
211677 112712 133686
Start-Finish
0-67
Duration
67
{1,2}
277804
{1,3}
345363
{2,3}
227666
{1,2,3}
409117
19-87,87-197,19767-195 195-273 17-85,85-195 0-67,195-273 67-177,177-260
275
128
78
68,110
67,78
110,83
68,110,78
For coalition {1,2,3} and in the case of ignoring time-efficiency function, total real cost is decreased from
366820$ to 352020$ (Table 5). This saving can be allocated to the subcontractors in the coalition
according to one of available approaches (i.e. the shapely value, the nucleolus and etc). Considering timeefficiency, it is evident that the entire project time is not necessarily utilized. For example, subcontractor
{1} initiates his sub-project on day 19 where in previous days he had anticipated very low efficiency.
Using various solution concepts in cooperative game theory, the total real cost of grand coalition, {1,2,3},
could be allocated between its players. The results are indicated in tables 7 and 8.
(14800, 0, 0)
x(3)5000
x(1)7800
Negotiation Space
(0 ,0, 14800)
(0, 14800, 0)
Figure 2: Space of the core when time-efficiency function was disregarded
317
Table 7. Cost allocation when time-efficiency function was disregarded

Subcontractor
1
Subcontractor
2
Subcontractor
3
Cost allocated by The Shapley

value
Benefit by The Shapley value
Benefit (%) by The Shapley
value
Cost allocated by The Nucleolus
152767
94587
104667
4233
7733
2833
2.70%
7.56%
2.64%
154500
92520
105000
Benefit by The Nucleolus
2500
9800
2500
Benefit (%) by The Nucleolus
1.59%
9.58%
2.33%
solution concept
(48958, 0, 0)
x(3)2373
x(1)30226
(0 ,0, 48958)
(0, 48958, 0)
Figure 3: Space of the core in case of considering time-efficiency function

Table 8. Cost allocation considering time-efficiency function
solution concept
Cost allocated by The Shapley
value
Benefit by The Shapley value
Benefit (%) by The Shapley
value
Subcontractor
1
Subcontractor
2
Subcontractor
3
193838
85507
129773
17840
27206
3913
8.43%
24.14%
2.93%
318
Cost allocated by The Nucleolus
210491
66127
132500
Benefit by The Nucleolus
1187
46585
1187
Benefit (%) by The Nucleolus
0.56%
41.33%
0.89%
Because of subcontractor {2} key role in all beneficial coalitions, he should earn more benefit than others.
Therefore all solution concepts have assigned the most shares to subcontractor {2}. Additionally, this
game for subcontractor {1} is more beneficial than {3} because coalition {1, 2} is more beneficial than
coalition {1, 3}.
5. Conclusion
Most common construction projects include many sequential subprojects which are implanted by different
subcontractor. The allocated time to subcontractors according to primary contract cannot be the optimal
time because of some restrictions which subcontractors are involved in. These restrictions affect work
efficiency and real cost of subcontractors. In coalition status, subcontractors may estimate optimal time
that consequently decreases total real cost. Results show that ignoring time-efficiency function,
subprojects duration is decision variable of model and entire project time is used by subcontractors. On
the other hand, considering time-efficiency function, start and finish time of subproject affect total real
cost. By distributing benefits of coalition fairly, all subcontractors have a good reason to contribute.
6. References
Feng, C., Liu, L., and Burns, S. (1997). Using genetic algorithms to solve construction timecost tradeoff problems. J. Comput. Civ. Eng., 11(3), 184189.
Feng, C., Liu, L., and Burns, S. (2000). Stochastic construction time cost trade-off analysis. J. Comput.
Civ. Eng., 14(2), 117126.
Gillies, D.B. (1953). Some theorems on n-person games, PhD dissertation, Princeton University Press.
Hegazy, T. (1999). Optimization of construction timecost trade-off analysis using genetic algorithms.
Can. J. Civ. Eng., 26(6), 685697.
Ho, S. P., and Liu, L. Y. (2004). Analytical model for analyzing construction claims and opportunistic
bidding. J. Constr. Eng. Manage., 130_1_, 94104.
Ho, S. P. (2005). Bid compensation decision model for projects with costly bid preparation. J. Constr.
Eng. Manage., 131_2_, 151159.
Ho, S. P. (2007). Model for Financial Renegotiation in Public-Private Partnership Projects and Its Policy
Implications: Game Theoretic View. J. Constr. Eng. Manage., 132_7_, 678688.
Medda, Francesca.(2007).A game theory approach for the allocation of risks in transport public private
partnerships International Journal of Project Management 25 (2007) 213218.
Perng,Yeng-Horng , Chen, Shu-Ju and Lu, Hui-Jung.(2005). Potential benefits for collaborating
formwork subcontractors based on co-operative game theory. Building and Environment 40 (2005)
239244.
Schmeidler, D. (1969). The nucleolus of a characteristic function game, SIAM J on applied
mathematics, 17, pp. 1163-1170.
Shapley LS. (1953). A value for n-person games. Annals of Mathematics Studies;28:30717.
Shen, L. Y , Bao, H. J , Wu,Y. Z and Lu,W. S.(2007). Using Bargaining-Game Theory for Negotiating
Concession Period for BOT-Type Contract J. Constr. Eng. Manage., 133_5_, 385392.
319

Analysis of the Use of Performance Information in the Construction Industry

Kenneth Sullivan
Assistant Professor, Arizona State University, Tempe, AZ, USA
Dean Kashiwagi
Professor, Arizona State University, Tempe, AZ, USA
Dean.Kashiwagi@asu.edu
Brad Carey
Graduate Student, Arizona State University, Tempe, AZ, USA
Abstract
In 2006, the CIB commissioned the formation of Task Group 61, which was charged with capturing the
use and impact of performance information in the construction industry around the world. This paper
documents what the initial efforts of the group and a literature review have discovered and presents a
model for a living literature database that is linked directly to a new CIB journal in performance
information. The key findings of the research focused on identifying where performance information is
used with the express objective to change the expected behavior and performance of the contractor on
specific construction projects. There are three main groups of research which chronicle the use of
performance information in construction: 1) Research that identifies a need for performance information
to be used in the industry, 2) Research that propose a system or method for gathering and using
performance information and ran a case study or test, and 3) Research that chronicles a system whose
users are continuously implementing performance information to increase performance within the
industry. A search of over 3 million articles, with 4,500 of those reviewed in detail, revealed that over the
past 15 years, only 16 research articles have been published that chronicle a performance information
system that has sustained usage and results. There is a need for performance information research in
construction
Keywords
Performance Information, Performance Measurements, Benchmarking, Contractor Performance
1. Introduction
The objective of performance information is to impact and improve construction performance (Kashiwagi
2008). Performance information has been defined as the set of metrics used to quantify both the
efficiency and effectiveness of actions (Neely 1995). In construction, the key metrics of performance
information correspond to cost, schedule, and customer satisfaction metrics. However, simply
quantifying the effectiveness of a contractor or project is not effective until the data that is collected and
measured is used to affect change in either the client organization, the contractor, or in the project itself.
Furthermore, the data itself must be such that it is clear, dominate, simple, timely, and accurate or it is of
no use and actually detracts from the efficiency and success of a project. In construction the perception
exists that, though some performance information is collected, it is lacking substance in its application
and affect. Seeing this concern, the International Council for Research and Innovation in Building and
320
Construction (CIB), one of the largest construction research organizations in the world, took action to
confirm the perceptions of performance information across the industry and, if confirmed, to remedy the
situation.
In 2006, the CIB commissioned the formation of Task Group 61 (TG61), which was charged with
capturing the use and impact of performance information in the construction industry around the world.
In response during their first year, TG61 leaders visited numerous countries and held over 20 meeting to
receive the input of academic researchers and industry participants. Meetings were held in the United
States, Canada, the United Kingdom, Norway, Finland, Netherlands, Germany, South Africa, Australia,
New Zealand, Malaysia, and China. A strategic plan was crafted with the major tasks to compile the
following information (CIB TG 61 2007):
1. List of experts in the area of performance information usage.
2. Documents pertaining to the use of performance information.
3. Documentation of major advancement/impact to the construction industry using performance
information.
4. Creation of a journal which identified the latest concepts/uses of performance information in the
various countries around the world.
However, after a year of effort and meetings, the following results were obtained:
1.
2.
3.
4.
5.
The level of expertise worldwide was very limited.

The experts did not collaborate with each other but were in fragmented efforts.
Coming to a consensus was impossible.
No one expert knew more than five other experts in the world and their major contribution.
Even though the industry had talked about using performance information for many years, the
number of documents with case studies, hypothesis testing of performance information in
systems, and impact to the industry, was limited.
6. There were publications with significant discussion on what performance information should be,
but very little hypothesis testing on the proposed performance information to determine a
potential impact to the industry.
7. Journal submittals on performance information, which did not identify previous significant work
(repeated hypothesis testing) done by other research groups in other countries, were being
approved.
8. Some of these journal submittals were approved in journals of significant ratings of academic
value and prestige even though the work was not new, and did not offer significant contribution.
These findings quickly aligned the purpose of TG61 to the following (CIB TG 61 2008):
1. To create a database of knowledge would be a living and growing database.
2. Form a group of very active researchers and industry participants whose main focus was in the
use of performance information.
3. Form an initial database compiled from the knowledge of the TG61 experts and an extensive
literature search of journals, conferences, and industry documents.
4. Apply to be a Working Commission (WC) and continue to maintain, grow, and analyze the
database to make it more user-friendly.
5. Create a living database to be used by experts to impact the industry and assist in the
improvement of industry performance.
This paper focuses on objectives 1 and 3 of the above list, showing what a detailed search and literature
review have discovered and presents a model for a living literature database that is linked directly to a
new CIB journal in performance information.
321
2. Definition of Terms
The terms performance information, performance measurements, performance metrics, and benchmarking
are often used interchangeably in various literature sources. As previously defined, performance
information, or performance measurement, is The set of metrics used to quantify both the efficiency and
effectiveness of actions (Neely 1995). The term benchmarking has often been used in place of the term
performance information and according to the Construction Task Force benchmarking can be used as
reference points to measure change (Martin 2004). The Construction Task Force also uses the term in a
management sense of, the continuous process of measuring products, services and practices against those
recognized as industry leaders to promote the improvement of performance (Martin 2004). For the
purposes of this paper, performance information is taken as any information that can be collected and
utilized to measure and establish the performance of a contractor or construction projects
3. The Literature Review

One of the initial efforts of TG61 in understanding performance information was to conduct an exhaustive
literature search across the construction industry. For the literature search, criteria were put in place for
the content of articles desired. The criteria were simple. If any of the following bulleted points applied to
either the construction industry, facilities management, procurement of construction, or construction
design and engineering the research article was indexed:
Any research that identified the need for performance information to be used within the industry.
Any research that proposed a system or metrics for measuring performance.
Any research that had tracked performance measurements.
Any research that had actually implemented the use of performance information to increase
performance within the industry.
3.1 The Search for Literature

In order to obtain relevant literature on the use of performance information in construction, several
academic and non-academic search engines were employed. Upon the completion of the search all
articles were reviewed for their relevance. Articles that discussed, proposed, or employed the collection
and use of performance information were cataloged and put into a database. Once the search engines had
been exhausted a search was performed for any articles that were referenced in the previously located
articles.
There were three main academic search engines employed for this task. Those search engines were: EI
Compendex Web, Emerald Journals (MCB University Press), and ABI/Inform ProQuest. EI Compendex
is a database and search engine with over 10 million records from more than 5,600 scholarly journals,
trade magazines and conference proceedings. The EI Compendex spans from 1969 to the present. Over
5,600 journals and conference proceedings are indexed each year, with over 650,000 records added
annually as well. The database covers 190 different engineering disciplines and catalogs articles from 55
different countries. The database is updated weekly.
Emerald Journals provides a database and search engine of more than 190 separate academic journals.
The journals contained in the database have a management focus and span several different industries.
Many relevant industries to this literature review such as facilities management, property management,
engineering management, and construction management are covered in Emerald Journals database.
322
ABI/Inform covers articles from over 1,100 English-language publications worldwide covering business,
management, and related areas. Some of the publications indexed by this search engine include the
Journal of Facilities Management, ENR, Journal of Construction Engineering and Management, Cost
Engineering, AACE International Transactions IT.05, International Journal of Project Management, and
Engineering, Construction, and Architectural Management.
Upon the exhaustion of the previously mentioned resources an in depth search took place in order to
locate any relevant articles that were referenced in the collection of articles returned by the search
engines. In order to locate the referenced articles the same three search engines were employed along
with several other search engines. The other search engines used included Illiad interlibrary service,
ProQuest, ScienceDirect, ASCE Library, Scholar.Google and Informaworld. On top of the search
engines, direct searches for the referenced articles were conducted. The direct searches consisted of going
directly to the source publications of the articles referenced and conducting a search for the articles by the
issue and volume that applied to said articles. The process of locating any referenced articles was
repeated for all new articles that were located and added to the database. This process continued until all
new articles only provided references to articles currently in the database.
The terms searched in the search engines on the initial search are logged in Table 1.
Table 1: Key Word Search Log
Follow up searches were conducted on various key words identified by the original search. Key words
and acronyms identified were searched in combination with any or all of the following terms (dependant
on whether or not the key word applied to that industry): construction, procurement, facility
management, design, architecture, or engineering. Some of the example key words searched
include:
1.
2.
3.
4.
5.
PQI: Process Quality Indicators

QPMS: Quality Performance Mgmt. Sys.
PSI: Project Success Index
PMS: Performance Measurement System
SPM: Stakeholder Perspective Measurement
6. BPM: Basic Performance Measurement

7. EVM: Earned Value Management
8. KPI: Key Performance Indicators
9. Balanced Scorecard
323
10. Total Quality Management

Reengineering Construction
11. Revaluing Construction
12. The Performance Prism

13. CBPP: Construction Best Practices Program.
3.2 Limitations of the Literature Review

There are two major constraints that the literature review faced. The first constraint was the language
barrier that was experienced by those conducting the search. The only language that this search was
conducted in was English. This allowed for the finding of literature that was originally presented in
English or had been translated to English from another language. This is one reason why there was
collaboration with the members of CIB Task Group 61. The group consists of members from Africa,
Asia, Australia, Europe, and North America. An invitation was sent out to all members to submit any
literature for review, suggestions of experts to review, or programs to research. Articles and authors were
received, reviewed, searched for, and added to the database. The second constraint that literature review
faced was the ability to access all articles. Due to the researchers lack of affiliation with certain archival
services they were prevented from accessing several articles. A list of such articles is provided in
Appendix A. (The researchers openly invite any of the authors listed in Appendix A to submit a copy of
their work, so that they can be identified as an expert in the use of performance information). The final
limitation was a focus on articles that were written within the past fifteen years; however, articles of
extreme relevance dated older are included in the results of the review.
4. Findings of the Literature Review

After reviewing all of the information it is clear that there are many different proposed systems for the
measurement of performance within the construction and related industries, yet there is no general
consensus as to whether or not these systems are based on appropriate metrics or are capable of being
implemented on a broad scale.
There were vastly different systems proposed by various authors and organizations in order to utilize
performance information. The difference in the articles typically revolved around the types of metrics
that would be used to measure performance. Most of the articles proposed a plethora of metrics which
were difficult to track or accurately measure. The detailed nature of the metrics proposed in most of the
reviewed literature prohibit them ever being utilized. As noted in the International Review of
Benchmarking in Construction Experience shows that it is better to concentrate on a relatively few, welldefined [metrics] than to attempt to produce a large set which may only confuse the user (Bakens 2005).
In an industry that is slow to change and limited by resources it would be difficult to institute a
performance measurement system in which contractors or owners were forced to track hundreds of
metrics.
Common metrics that were proposed in the reviewed literature included: cost measurements, safety,
schedule, customer satisfaction, and productivity. Even though metrics involving these elements were
often proposed, there was no consensus to how the individual elements such as cost or schedule is best
measured.
4.1 Authors
The list of authors in the database is very broad in terms of countries and organizations represented. There
are several authors, whose work is in the database on multiple occasions, showing that there are those
who are focusing some of their research efforts in this field. As seen in Table 2 there was a total of 168
authors that authored or coauthored one article that were included in the database. Table 2 also shows
324
that there were 26 authors with two articles authored or coauthored and a total of 26 authors with three or
more articles authored or coauthored.
Table 2: Summary of Authors

Number of
Articles:
1
2
>3
Number of
Authors:
168
26
26
4.2 Articles
Search engine results returned more than three million hits during the literature search. Of those three
million articles 4,500 articles were reviewed with either a reading of the article or a reading of the
abstract. Within the 4,500 articles reviewed, 138 fit the criteria to be included in the database and sorted
into the three groups shown in Figure 1.
Figure 1: Reviewed article classification.
4.2.1 Group One

The literature review returned 80 articles which identified the need for performance information or
proposed a system for measuring performance within the construction, facilities management, or design
industry. These articles establish that in order for the performance of the construction industry to
improve, performance information will need to be used to create a performance baseline that can be used
to measure performance.
4.2.2 Group Two
Beyond the 80 articles which identified the need for performance information or proposed a system for
measuring performance there were 42 articles identified that had tested a proposed system and/or
collected performance information. These 42 case studies typically proposed further research to
determine the effect that the proposed metrics or system could have on the industry. With more research
and/or the implementation of pilot programs, these systems could potentially be used to drive
performance within the industry.
4.2.3 Group Three
As the result of this literature review it was revealed that there are several systems that use performance
information in order to increase performance. These systems had documented results which showed
performance gains and traced the performance gains back to the use of performance information. The
results of the literature search provided three different systems and a total of 16 articles which
documented performance increases due to the use of performance information. The first successful
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system that will be discussed is performance measurement system used in Fort Worth, Texas by the citys
Equipment Services Department. The second that will be discussed is the PASS system which is utilized
by the Hong Kong Housing Authority. The third system that was identified was the PIPS program
developed and run by Dr. Dean Kashiwagi and his research group PBSRG (Performance Based Systems
Research Group).
4.2.3.1 Fort Worth ESD Successful systems were not limited to the construction industry alone, the
literature review located a facilities management organization that has been using performance
information to increase performance since 2001. The city of Fort Worth, Texas implemented a
performance measurement system into the citys Equipment Services Department. The Equipment
Services Department is responsible for the fleet services of 36 different city departments including the
water, police, and fire departments. Vehicle availability and labor utilization were lagging and the
department was over budget, thus it was determined that a paradigm shift was necessary. The assistant
equipment services director Rudy Payton stated, We changed from a culture where we were considered
successful by our adherence to rules to a culture where every person, right down to the shop floor, is
responsible and accountable for the organizations results (Stewart 2005). The shift was made when
performance measurements were instituted. The department began measuring how long a technician
spent on each work order, allowing them to measure each individuals daily output. The performance
measurements served as incentive to high performers while also exposing low performing individuals.
Armed with performance information the department was able to decide on a path of action and has
increased vehicle availability by 15 percent. An additional side effect of the performance measurement
system was that when low performers were removed not only did work order response time decrease, but
the number of work orders decreased from 58,000 in 2002 to 39,000 in 2004. The decrease of 19,000
work orders can be attributed to removal of low performers. With high performing individuals
performing all of the work, repairs are being done correctly the first time. Thus, the need for rework was
eliminated (Stewart 2005).
4.2.3.2 PASS In the construction industry a documented system that has improved construction
performance is PASS (Performance Assessment Scoring System) system. PASS was created by the Hong
Kong Housing Authority in 1990 as a means to facilitate the ultimate target of continuous quality
improvement in managing the list of building contractors (HKHA 1994). The system measures
performance output directly against defined standards. The performance assessment is conducted using
yes or no answers where work is judged in terms of its compliance with pre-defined standards. A
construction firms PASS score is used for the consideration of future tender opportunities (Tam 2000).
Thus, low performing contractors eliminate themselves from obtaining future contracts by receiving low
PASS scores. In the past three years alone the average PASS score has increased 4.5%. PASS also
measures safety on the jobsite by recording injuries. Since the implementation of PASS there has been a
95% increase in safety performance (Fung 2007).
4.2.3.3 PIPS The final system, which was identified as using performance information to increase
performance, was PIPS (Performance Information Procurement System). This system was the most
documented system. PIPS was developed as a procurement process to assist owners in identifying the
best value contractor for their projects. In the 14 years since the creation of PIPS it has evolved into a
project management model. The procurement model incorporates the use of past performance
information (PPI) as part of the decision making criteria. PIPS uses eight simple criteria on which
contractors are rated on a 1-10 scale. These ratings are completed by a contractors past clients in order to
create a performance line. A performance line is created for each separate firm proposing on a given
project. Contractors are forced to perform in this system due to the fact that the contractor is rated by that
owner at the end of the project and that rating will count for 50% of that contractors future performance
line. If a contractor performs poorly and receives a poor rating, that that will greatly reduce their chances
of obtaining work with that owner in the future. Some documented results include that 61% of those using
PIPS say that it requires less effort than traditional procurement methods and 91% rate PIPS better than
326
previous methods of procurement (Kashiwagi 1999). Throughout the 14 year history of PIPS owners
employing the system have been surveyed to identify their satisfaction with the PIPS system. When
asked to rate their satisfaction with their current procurement process owners indicated their level of
satisfaction with performance was three on a scale of 1-10 with 10 being high. Those same owners rating
of the PIPS process was a 9 on the same scale (www.pbsrg.com). Other documented results of the PIPS
system include a 98% on time on budget rate as compared with a 60-70% on time on budget rate within
the rest of the construction industry (Kashiwagi 2005).
5. Survey of Industry Experts

A survey was conducted in addition to the literature search. The survey was sent out to all 91 members of
CIB Task Group 61. The survey asked these experts to identify any researchers and research reports or
articles that document the successful and sustained implementation of performance information in
construction in their region of the world. The surveys provided very little information regarding
researchers in the field of performance information in construction. Recipients of the survey were asked
to identify leading researchers in their region (of the globe), in the area of performance metrics, risk
minimization, and/or efficient construction. No single survey identified more than five individuals and
most identified zero to two researchers. Of the researchers identified by the surveys most were already
included in the database. Those researchers/authors identified that were not in the database were searched
and had their articles added to the database. It was also asked whether or not those taking the survey
know of any other use of performance information, metrics, or measurements that are being or have been
successfully used in construction. Again, the responses this question provided little information. The fact
that those who are considered experts in the area of performance information could not identify more than
a five researchers who are researching the use of performance information indicates that there is not a
collaborative effort within the industry or amongst researchers to use performance information in order to
increase performance.
As part of the survey, those completing it were asked to qualitatively rate statements relating to the use of
performance information in the construction industry, as seen in Table 3. The rating scale was from one
to ten. A rating of one (1) was designated as fully disagreeing with the statement and a rating of ten (10)
meant that the person being surveyed was in total agreement with the statement.
Table 3: Survey Results
Statement
Performance Information is used widely in the construction industry
Performance information should be used much more in the construction industry
Average
3.75
9.31
6. Responding to the Need: A Platform and a Living Database

The results of the qualitative ratings that were returned confirm the quantitative results obtained from the
literature review, indicating that performance information is not widely used within the construction
industry. While there was a consensus that performance information is not widely used in the
construction industry, there was also a consensus that performance information should be used much
more within the construction industry. In order for performance information to be more widely used
within the construction industry there needs to be a platform from which all related studies can be
presented. To serve as the platform, the authors created The Journal for the Advancement of Performance
Information and Value, a publication devoted to the use, implementation, and documentation of
performance information in the built environment. The Journal for the Advancement of Performance
Information and Value would differ from traditional journals in the following ways:
327
1. Peer review will be done by both academics and industry personnel.

2. Peer review will be refereed by the editorial board. Contrary reviews will have to be supported
by expertise and documentation, or the review will be overturned.
3. Peer reviewers will be responsible to be accurate and have supporting documentation.
4. Submittal, peer review, and publication will be done in less than six months.
5. Publication standard is to add significant knowledge or impact to the industry in the area of use or
documentation of the use of performance information. Peer review will not be to judge the
theoretical content for correctness, but rather to judge if hypothesis is supported by information,
and the hypothesis testing was done correctly.
6. If the proposing author submits references within their paper, the paper must either be in the
TG61 database, or the author must show how the referenced individual is in a position to make
the referenced statements.
Each accepted journal article will be entered into a living database, tied directly to the journal itself. The
combination of the CIB Journal and database will be attempting to open a new operating procedure for
journals and give new researchers a tremendous research tool. It will be a single location for information
on the use and impact of performance information in the construction/services industries. It will have the
following characteristics:
1. It will encourage the documentation of all uses of performance information.
2. It will not only have academic research results, but industry results captured by credible sources
such as the Engineering News Record (ENR) in the United States.
3. It will minimize personal bias, by ensuring the expertise of the peer reviewers.
4. All peer reviewers will have their vitas posted in the accompanying database of information.
5. It will maintain integrity of the peer reviews by forcing reviewers to document any criticism of
authors assumptions and hypothesis with references that are in the accompanying database.
6. The peer review itself will be reviewed by the editors to maintain fairness.
7. All major references in the journal papers will either be in the database of performance
information kept by TG61 or require the supporting information from the reference.
8. Papers will be reviewed and published within six months.
9. Access to journal papers and performance information database will be by over 1,000
construction clients, contractors, and designers within the US, and by researchers worldwide who
are subscribers of the TG61 journal.
6.1 The Database
The database classifies articles into one of three categories mentioned previously. Group one includes
those articles that identify a need for performance information to be used in the industry or propose a
performance measurement system. Group two are those articles that ran a case study and collected
performance information, but did not use that information to drive performance within the construction
industry. Group three are those articles that chronicle a system whose users are using performance
information to increase performance within the industry.
The database will be updated in two ways. The first way in which the database will be updated will be
via new submissions. As articles are submitted they will be reviewed for relevance and acceptance for
publication. If an article is deemed to be relevant it will be classified into one of the three groups. The
references for any paper submitted will also be checked for relevance and be reviewed for inclusion in the
database.
The second way in which the database will be updated is by biannual literature searches. The biannual
literature searches will be conducted in the same manner as the original search. Those responsible for the
328
updating will perform journal searches and employ academic search engines. Figure 2 illustrates the
process of updating and maintaining the database.
Figure 2: Article Review Process
7. Conclusion
There is lack of performance information in the construction industry:
1.
2.
3.
4.
There is a scarcity of information available.

There is no conformity in the information.
There are few tested and proven methods for how performance information should be used.
There is little documentation on the impact from tested applications.
An initial literature search on the use of performance information during the past 15 years in the
construction industry produced only 16 academic articles in which performance information is used to
increase the performance of construction and its contractors. Within those 16 articles there were only
three separate systems that were proposed. Beyond those 16 articles there were only 42 articles which
had performed a case study and taken measurements that could possibly be used to drive performance
within the industry. While these 42 articles took performance measurements, they failed to use the
information that had been collected in order to document and increase the performance of the construction
industry. Of the articles that were accessible by the author, there are more articles calling for the use of
performance information within the construction industry or that are proposing a system for use with no
case studies than there are articles that perform an actual case study. Of the accessible articles there are
very few scenarios in which performance information is currently being used to increase performance. At
the same time, a survey of experts overwhelmingly identified that performance information should be
used much more within the construction industry.
With the results of the literature search and the confirmatory survey of industry experts, the TG61 has
created The Journal for the Advancement of Performance Information and Value to serve as a platform
for future research in performance information that can address the needs of the construction profession.
The journal will be unique in that it will coincide with a database designed to house all of the articles
published within the journal as well as all of the articles referenced within the journal. This will be the
first time all of the available information in a particular field of research will be housed in one location.
Performance information is a powerful tool that can be used to motivate and impact change, if properly
applied. Construction is an industry that can greatly benefit from correct principles and usage of
performance information. It is now the task of TG61 and all interested academics to discover the optimal
path for the future.
329
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Xaio, H., Proverbs, D.G. and Holt, G. (2001), "A new paradigm for international contractor performance
assessment", Journal of Construction Research.
Xaio, H., Proverbs, D.G., Holt, G., and Shaw, T. (2000), "A new approach to comparing the performance of
contractors internationally", paper presented at ARCOM Sixteenth Annual Conference 2000, Glasgow
Caledonian University, Glasgow, pp. 117-25.
333
Appendix B
Part 1
AUTHOR:
ARTICLE:
Abdel-Razek, R.
Abudayyeh, Osama
Ahmed, S. and Kangari, R.
Ahrens, D., Cox, R., Issa, R.
Akhlaghi, F. and Tranfield, D.
Alacron, L. and Mourgues, C.
Alarcon, L., Caldas, C., Costa, D.,
Formoso, C., Kagioglou, M.
Alarcon, Lewis and Ashley, David
Alarcon, Lewis and Serpal, Alfredo
Alarcon, L.; Grillo, A.; Friere, J. and
Diethelm, S.
Chan, A.P.C. and Chan, D.W.M.,
Al-Ghassani, A.; Anumba, C.; Carrillo, P.;
Robinson, H.
Alvarado, Carlos; Silverman Robert and
Wilson, David
Amaratunga, D., and Baldry, D.
Amaratunga,D., Baldry,D., and Marjan,S.
Amaratunga, Dilanthi
Amaratunga, Dilanthi and Baldry, David
How Const. Mgrs Would Like Their Performance to be Evaluated

Audio/visual information in construction project control
Analysis of client satisfaction factors in construction industry
Management's Perception of Key Perf. Indicators for Construction
Performance measures relating facilities to business indicators
Performance Modeling for Contractor Selection
Benchmarking Initiatives in the Construction Industry: Lessons Learned
and Improvement Opportunities
Modeling Project Performance for Decision Making
Perf. measuring benchmarking, and modeling of construction projects
Learning from collaborative benchmarking in the construction industry
Amaratunga, Dilanthi; Haigh, Richard;

Kulatunga, Udayangani
Anumba, C.; Beatham, S.; Hedges, I.;
Thorpe, T.
Anumba, C.; Beatham, S.; Hedges, I.;
Thorpe, T.
Arunachalam, S.; Gunasekaran, A.;
Lenny Koh, S.C.
Bakens, W.; Vires, O. and Courtney, R.
Bassioni, H. A.; Price, A.D.F. and
Hassan, T.M.
Belle, R.
Bon, R.; Carder, P.; McMahan, J.
Bryde, D. and Joby, R.
Chan, A., Lam, E., and Scott, D.
Chan, Ada; Chan, Albert; Scott, David
Chan, Albert; Chan, Ada; Lam, Edmond
Chan,K., Tam,C., Vivian,T., and Zeng,S.
Chang, A.S.T
Costa, Dayana and Formoso, Carlos
Costa, Dayana; Lima, Heleneze and
Formoso, Carlos
Courtney, Roger and Winch, Graham
Brydea, D., and Robinson, L.
Dissanayake, M. and Fayek, A.
Developing a benchmark model for project const. time perf. in Hong Kong
Business performance measurement practices in construction
engineering organizations
Assessing the performance of construction projects: Implementing
earned value management at the General Services Administration
Assessment of FM performance in higher education properties
Assessment of facilities management performance - what next?
Assessment of facilities management performance
Moving from performance measurement to performance management
A conceptual framework to measure facilities management performance
Performance measurement in facilities management and its relationships
with management theory and motivation
Performance measurement in the construction research and
development
KPI's: a critical appraisal of their use in construction
An integrated business improvement system (IBIS) for construction
Measuring performance within the supply chain of a large scale project
International Review of Benchmarking in Construction
Performance Measurement in Construction
Benchmarking and Enhancing Best Practices in the Engineering and
Construction Sector
Property perf. measurement: from theory to management practice
Incentivizing project performance in the construction of new facilities:
Utilizing the earned value-based method
Framework of Success Criteria for Design/Build Projects
Factors Affecting the Success of a Construction Project
Benchmarking the performance of design-build projects
Environmental performance measurement indicators in construction
Defining Cost/Schedule Perf. Indices and Their Ranges for Design
Projects
Guidelines for conception implementation and use of performance
measurements systems in construction companies
Performance Measurement Systems for Benchmarking in the Brazilian
Construction Industry
Re-engineering construction: the role of research and implementation
Client versus contractor perspectives on project success criteria
A Soft Computing Approach to Const. Perf. Prediction and Diagnosis
334
AUTHOR:
ARTICLE:
Ekendahl,
Per;
Ekevarn,
Petter;
Samuelsson, Peter
Fernie, S.; Leiringer, R.; Thorpe, T.
Georgy, M.; Chang, L. and Zhang, L.
Geraedts, Rob and Wamelink Hans
Strategic or operational perspectives on performance: what is prioritized

in a large construction company?
Change in construction: a critical perspective
Engineering Performance in the US Industrial Construction Sector
Distinction Through Perf.: A measurement Instrument For Assessing the
Process Quality of Contractors Based on Past Delivered Performance
Evaluating Best Value Contract Proposals
Construction business performance measurement: the SPM alternative
Measuring Project Success in the Construction Industry
Best Value IT Procurement for Construction Organizations
Impact of Management Approach on Project Interaction and Performance
Measuring performance in facility management
Selection matters in construction supply chain optimization
Gransberg, Douglas
Holt, Gary and Love, Peter
Hughes, S.; Tippett, D. and Thomas, W.
Karunasena, Gayani and Perera, Srinath
Kim, Michael and Pocock, James
Kincaid, D.
Kumaraswamy, Mohan; Palaneeswaren,
Ekambarem and Humphreys, Paul
Kumaraswamy, Mohan; Palaneeswaren,
Ekambarem and Ng, Thomas;
Lam, E.; Chan, A. and Chan, D.
Lee, A.; Rachel, C. and Aouad, G.
Lutzkendorf, T. and Speer, T.
Maas, Ger and Van Gassel, Frans
Maloney, William
Menches, C. and Hanna, A.
Mohamed, S.
Mohamed, Sherif
Mohamed, Sherif and Stewart, Rodney
Ng,
Thomas;
Palaneeswaren,
Ekambarem and Kumaraswamy, Mohan
Nitithamyong, P. and Skibniewski, M.
Padavano, Kurt
Palaneeswaran,
Ekambaram
and
Kumaraswamy, Mohan
Picard, Hans
Pocock, Jake; Liu, Liang; Hyun, Chang
and Kim, Michael
Proverbs, David and Xiao, Hong
Rankin, Jeff; Fayek, Aminah; Meade,
Gerry and Haas Carl
Cox, R.; Issa, R.R.A. and Ahrens, D.
Robertson, H. and Sommerville, J.
Shohet, Igal
Stewart, Rodney; Sherif Mohamed
Straub, Ad
The KPI Working Group
Tuchman, Janice
Van de Rijt, Jerorn and Santema, Sicco
Varcoe, B.
Varcoe, B.
Wegelius-Lehtonen, Tutu
Wu Wei-qian and Cong, LI
Targeting optimum value in public sector projects through best value

focused contractor selection
Benchmarking Design-Build Procurement Systems in Construction
A Methodology for designing for designing performance measures for the
UK Construction Industry
Alleviating asymmetric information in property markets: building
performance and product quality as signals for consumers
The influence of automation and robotics on the perf. construction
Framework for analysis of performance
Quantitative Measurement of Successful Performance from the Project
Manager's Perspective
Scorecard Approach to Benchmarking Organizational Safety Culture in
Construction
Benchmarking and improving construction productivity
Utilizing the balanced scorecard for IT/IS performance evaluation in
construction
A dynamic e-Reporting system for contractors performance appraisal
Success/Failure Factors and Performance Measures of Web-Based
Construction Project Management
Benchmarking: Strategies for guaging operational performance
Knowledge Mining of Information Sources for Research in Construction
Management
Construction Performance Benchmarking Measurement
Relationship between project interaction and performance indicators
Factors Influencing contractor performance: an international investigation
Initial Metrics and Pilot Program Results for Measuring the Performance
of the Canadian Construction Industry
Mgmt.s Perception of Key Performance Indicators for Construction
A scorecard approach to benchmarking for total quality construction
Key Perf. Indicators for Strategic Healthcare Facilities Maintenance
Evaluating web-based project information management in construction:
capturing the long-term value creation process
Performance-based maintenance partnering: a promising concept
KPI Report for the Minister of Construction
Productivity Benchmarking Effort Produces Results
The Dutch Construction Industry
Facilities performance measurement
Business-driven facilities benchmarking
Performance measurement in construction logistics
Performance measurement system of information supportive platform for
manufacturing internationalization
335
Part 2
AUTHOR:
Abbot, J., Culp, G., and Smith, A.
Alarcon, L., Knights, P., and
Ramirez, R.
Albadvi, A.; Keramati, A.; Razmi,
J.;
Al-Ghassani, A.; Anumba, C.;
Carrillo, P.; Robinson, H.
Amaratunga, D.; Baldry, D.; Haigh,
R.; Sarshar, M.;
Arlahomi, S; Alkass, S; Price; A
Bassioni, H. A.; Price, A.D.F. and
Hassan, T.M.
Chan, Albert and Chan, Ada
Chan, D. and Kumaraswamy, M.
Cheng,J.; Oduoza,C.; Proverbs,D.
Chua, D.K.H., Jaseleskis, EJ and
Loh, P.K.
Col Debella, David and Ries,
Robert
Construction Industry Institute
Costa, D. and Formoso, C.
Davis,S.; Marosszeky,M.; Karim,K.
Ellicott, M. and Gransberg, D.
Mohammad, E.; Minchin, R. and
O'Brien, W.
O'Brien, W.
O'Brien, W.
Fisher, D.; Miertshen, S. and
Pollack, D.
Gransberg, D. and Villarreal, M.
Graves, Andrew and Holt, Robin
Griffith, A., Gibson, G., Hamilton,
M., Tortora, A., Wilson, C.
Hao,J.; Chi-ho,M.; Shen,L.; Yao,H.
Haupt, T.C. and Ugwu, O.O.
Hinks, J. and McNay, P.
Kashiwagi, D.; Sullivan, K.; Chong,
N.; and Pauli, M.
Kog, AC; Chua, DKH; and
Jaselskis, EJ
Ledbetter, W.B.
Lee, S., Thomas, S., Tucker, R.
Li, H.; Love, P.E.D.; Smith, J
Martin, Joe
Ng, T.; Palaneeswaren, E. and
Kumaraswamy, M.
Nudurupati, S.; Arshad, T.; and
Turner, T.
Park, H., Thomas, S., Tucker, R.
ARTICLE:
Implementing TQM in Consulting Engineering Firm
Benchmarking System for Evaluating Management Practices in the
Construction Industry
Assessing the impact of information technology on firm performance
considering the role of intervening variables: organizational infrastructures and
business processes reengineering
Review and implementation of performance management models in
construction engineering organizations
Application of the balanced score card concept to develop a conceptual
framework to measure facility management performance within NHS facilities
Improving Construction Performance in the Commercial Building Sector in The
United Emirates
Building a conceptual framework for measuring business performance in
construction: an empirical evaluation
Key performance indicators for measuring construction success: Key
Performance Indicators
Forecasting durations for public housing projects: a Hong Kong perspective
The satisfaction levels of UK construction clients based on the performance of
consultants
Neural Networks for Construction Project Success
Construction Delivery Systems: A Comparative Analysis of Their Performance
within School Districts
http://www.construction-institute.org/scriptcontent/bmm.cfm?section=bmm
Evaluating Performance Measurement Systems for Construction Companies
Managing subcontractor supply chain for quality in construction
Best Value Contracting: Breaking the Low-Bid Paradigm
Management of construction firm performance using benchmarking
Firm Performance and Information Technology Utilization in the Construction
Industry
Construction Firm Performance and IT Utilization
Benchmarking in Construction Industry
Construction Project Performance Metrics
Benchmarking UK Government Procurement Perf. In Construction Projects
Project Success Index For Capital Facility Construction Projects
A fuzzy analysis-based method for measuring contractors' environmental perf.
Key performance indicators and assessment methods for infrastructure
sustainability - a South African construction industry perspective
The creation of a management-by-variance tool for facility management
performance assessment
The 'A' Team Environment
Key determinants for construction schedule performance
Quality Performance on Successful Project
Web-Based Benchmarking System for the Construction Industry
The propagation of rework benchmark metrics for construction
Performance measurement in the UK Construction Industry
Client satisfaction and quality management systems in contractor organizations
Performance measurement in the construction industry: An action case
investigating manufacturing methodologies
Benchmarking of Construction Productivity
336
AUTHOR:
Proverbs, David and Xiao, Hong
Rogers, Paul A.
Salmikivi,
T.;
Sullivan,
Kashiwagi, D. and Kiiras, J.
Stewart, Rodney
K.;
Stroh, R. and Torbica, Z.

Willis, T. and Willis, William
Yean Yng Ling, Florence and Min,
Liu
Yu, I.; Kim, K.; Jung, Y.; Chin, S.
ARTICLE:
The performance of contractors in Japan, the UK, and the USA
Performance Matters: How the high performance business unit leverages
facilities management effectiveness
Minimizing Specifications by Performance Based Selection of Specialty
Contractors
IT enhanced project information management in construction: Pathways to
improved performance and strategic competitiveness
Customer Satisfaction in Home Building
A quality performance management system for industrial construction
engineering projects
Using neural network to predict performance of design-build projects in
Singapore
Comparable performance measurement system for construction companies
Part 3
AUTHOR:
Kashiwagi, Dean and Byfield, Richard
Kashiwagi, Dean and Halmrast, Chad
Kashiwagi, Dean
Kashiwagi, Dean and Slater, Cliff
Kashiwagi, Dean and Byfield, Richard
Kashiwagi, Dean and Al-Sharmani
Kashiwagi, Dean and Moore, William
Kashiwagi, Dean and Savicky, John
Kashiwagi, Dean and Savicky, John
Kashiwagi, D.; Sullivan, K.; Greenwood,
D.; Kovell, J. and Egbu, C.
Deng, Z.M.; Ho, C.S.; Tam, C.M.; Zeng,
S.X.
Kasiwagi, Dean and Savicky, John
Stewart, Larry
Kashiwagi, Dean and Mayo, Richard
Fung, Ada Y S
Fung, Ada Y S
ARTICLE:
State of Utah Performance Information Procurement System Tests
Construction regulated by performance information
The construction delivery system of the information age
Impact of Information Concepts on Construction Performance
Testing of Minimization of Subjectivity in Best Value Procurement by
Using Artificial Intelligence Systems in State of Utah Procurement
A Performance-Based Procurement Sys.Used by the State of Wyoming
Application of Backward Chaining, "Fuzzy Logic" and the Management of
Information to Procurement of Facility Systems/Services
Analysis of Best Value Pricing
Identifying The True Value of Construction
Source of Construction Industry Instability and Performance Problems
Performance assessment scoring system of public housing construction
for quality improvement in Hong Kong
The cost of 'best value' construction
Performance Measures Motivate Change
State of Hawaii Selects "Best Value" By Artificial Intelligence
Pass Presentation
The Housing Authority's Experience: Changing Contractors' Culture
through Performance Assessment
337

Movement of the Latest Cutting Edge Project Management/Delivery Systems

to the University of Botswana
Dean Kashiwagi
Professor, Arizona State University, Tempe, AZ, USA
Dean.Kashiwagi@asu.edu
Kenneth Sullivan
PBSRG, Arizona State University, Tempe, AZ, USA
Joseph Ssegawa
Department of Civil Engineering, University of Botswana, Botswana
Abstract
A new project management (PM) model for construction and other services delivery, the Performance
Information Procurement System (PIPS), has been developed at Arizona State University. The leadership
based model varies from traditional management by using principles of simplicity, logic, efficiency,
alignment, accountability, and preplanning. The new PM model minimizes many of the issues of more
developed construction industries, and has the capability to assist less developed countries in avoiding
ineffective, management based practices. The hypothesis being proposed is that a country without years
of experience and mature project management programs can utilize the simplicity and logic of the new
process that minimizes the need for very experienced construction/project management and motivates the
less mature construction industry to more quickly and efficiently build its construction workforce. The
PBSRG group also hypothesizes that the new PM model may be easier to implement in a developing
industry rather than in a well developed industry, which has years of implementing the traditional PM
model. The Fulbright program is sponsoring the movement of the new PM model into the African
continent.
Keywords
New PM model, leadership based PM model, technology transfer
Introduction
Project management (PM) in more mature countries, such as the United States, has not produced high
performing results (Construction 2005, Georgy et. al 2005, Condon and Hartman 2004). Despite the
historical statistics, these inefficient PM models are being copied and implemented in less developed
countries (Ziwei 2006; Ssegawa 2008). A new PM model that is efficient, increases performance, and
results in a sustainable and high performance workforce has been developed. Resistance to this new PM
model has come from parties who have an agenda to continue their services in an inefficient environment.
The hypothesis of this paper is that this newly developed PM model may be:
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1. Quicker to implement in an underdeveloped industry.

2. Assist an underdeveloped industry minimize the pitfalls learned by more mature industries.
3. Assist an underdeveloped industry develop a more sustainable workforce structure.
PM models in the more mature construction industries (United States and UK/Europe) are in a
client/buyer, PM directed, management and control model. This is manifested by the importance of client
construction management, a price based system that uses specifications based on minimums, major issues
in training, safety, and diminishing skilled workforce, and litigation (Russell 1991, Hoff 2003, NDU
2005, ENR 1995, Ichniowski and Grogan 2007, Abi-Karam 2006). This management/control based
approach has created an industry of consultants, professionals who direct/inspect contractors. The
management based approach is price based, and makes the procurement and legal representatives more
important than the contractors or the professionals. Edward Deming (1982) identified these issues twenty
years ago stating:
1. It would be a mistake to export American management to a friendly country.
2. With the storehouse of skills and knowledge contained in its millions of unemployed, and with
the even more appalling underuse, misuse, and abuse of skills and knowledge in the army of
employed people in all ranks in all industries, the United States may be today the most
underdeveloped nation in the world.
A new project management (PM) delivery structure has been developed in the United States. The new
model, Performance Information Procurement System (PIPS), is different from existing systems in the
following ways:
1. Proposes to minimize the amount of client construction/project management risk functions.
2. Minimizes the amount of information flow between project participants forcing contractors to
manage and control their own project.
3. Forces the construction industry to train its workforce.
4. Is based on alignment of resources instead of client/buyer PM control, influence, and
expectations.
5. Identifies the client and the clients delivery system as the major source of problems in the
construction industry, minimizing the issues of nonperformance caused by price based awards,
minimum standards, and change orders/rework that is prevalent in the more mature construction
industries.
6. Forces the use of a best value procurement model which emphasizes value, preplanning, and
performance measurements which includes safety.
7. Measures the performance of every participant in the delivery of construction, giving the industry
a way to continuously improve.
The best value Performance Information Procurement System (PIPS) is a leadership based model which
has been tested for the last 14 years in one of the longest and in-depth construction research. It has the
following characteristics that establish it as a potential mechanism to move a countrys industry from the
price based environment to a best value environment (www.pbsrg.com) (Kashiwagi and Sullivan 2005,
Kashiwagi et al. 2006a, Kashiwagi et al. 2006b, Sullivan and Kashiwagi 2007, Kashiwagi et al. 2008,
Kashiwagi 2008):
1.
2.
3.
4.
5.
Years of testing and sustainability of concept: 14 years

Research funding: $7M
Number of construction services tests: 530
Amount of construction services procured in tests: $738M
Number of private sector/public sector clients: 26/16
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6. Longest running tests: University of Minnesota (3 years) (Sullivan et al. 2008) and State of
Hawaii (4 years) (2002)
7. Minimization of client construction management results: up to 90%
8. Increase contractor profit: 4.5-5%
9. Increase in project cost: no evidence, awarded to lowest price 50% of the time, evidence of lower
price over a period of time where systems costs can be proven
10. Awards: 2002 Tech Pono award, State of Hawaii, 2005 Corenet Global Innovation of the Year
award, and 2007 Construction Owner of America Association Gold award
11. Highlighted in ENR in 2006 and 2008, recognizing the validity of performance measurements,
efficiency, and the transfer of risk and control of the best value PIPS system (Kashiwagi and
Sullivan 2008)
12. Reshaping the architectural/engineering (AE) design service paradigm
13. Adopted by the Arizona State University procurement department and tested in the nonconstruction areas of food services, sports marketing services, IT/networking, commodities, and
consulting services (Michael et al. 2007, Michael et al. 2008)
14. Being licensed by Arizona State University as a leadership based structure, as a new supply chain
management and contracting technology
15. Is being tested at the US federal, state, and city levels (Kashiwagi and Byfield 2002, Kashiwagi
and Savicky 2003, Kashiwagi and Al-Sharmani 1997, Kashiwagi and Mayo 2001, Chong et al.
2007)
16. Is being tested in Finland and the Netherlands
17. Is the core conception and foundation of the CIB (International Council for Research and
Innovations in Building and Construction) Task Group 61, the Benchmarking of Performance
Information (CIB TG61 2007, 2008)
Characteristics of the new best value PIPS technology have been long espoused by major supply chain
management experts (Deming 1982). However due to the investment, bias, agenda of the current
management based environment, the change of paradigm is a threat to many of the participants, thereby
slowing down the implementation. These characteristics not only change the paradigm, they may change
the functions and definitions of professionalism of the workforce. The characteristics include:
1. Simplicity (minimized decision making, clear lines of accountability) instead of complexity.
2. Efficiency (less work to do the same job.)
3. Minimized communications (reducing communications between the clients, designers, and
contractors) instead of maximized transfer of data which then needs to be interpreted and
decisions made.
4. Accountability through the transfer of risk and control to the contractor (forcing quality control)
and performance measurement minimizing the need of client inspection, regulation, and
management.
5. Alignment of decision making and expertise to the designers and contractors. This results in
minimizing the importance/impact of the procurement/contract personnel, and the legal
representatives.
6. Preplanning instead of reacting, and minimizing decision making instead of increased decision
making by clients representatives.
7. Delegation; allowing the high performance vendor to control their own project.
The concepts of the new PM model are simple: preplan instead of reacting, outsource, hire contractors
who have highly trained personnel who can see the project before they do it, and minimize the risk that
they do not control as well as the risk they control, and document the performance in terms of on time, on
budget, and customer satisfaction. Efficiency is defined as doing more work with less people.
Management is a sign of inefficiency. The more management that is required, the less the workforce
understands, and the more the system is inefficient (Dahlgaard and Dahlgaard 2001). The simplicity of
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the approach may be threatening to professionals who justify their job based on perceived risk,
complexity, control, and experience to minimize the risk. If the new PM structure minimizes the risk, this
group may be forced to add value in a different way.
The new technology is being driven by the need for efficiency, increasing requirements and diminishing
resources, and the need to motivate the industry to train/educate their workforce. It is being resisted by
the parties who have an interest in maintaining the current status quo of management and inspection
(LePatner 2007, Hamel 2007).
More theoretical concepts that are utilized in the PIPS model, have not been well accepted by the
industry/academic researchers, but now are being researched in depth at PBSRG, include:
1. Influence and control by clients professional representatives is ineffective and inefficient in
increasing value and performance.
2. Leadership based structures minimize the need to manage, allow one person to increase their
workload, and brings results that usually require leaders to produce.
3. Leadership based structure changes the alignment and function of the participants and not their
capabilities.
4. Using logic and dominant measurements instead of making decisions and using ones own
experience.
5. Decision making is minimized, meaning that the value of ones own experience is also
minimized. Therefore relatively logical and inexperienced professionals can add more value than
more experienced personnel.
Hypothesis: Potential Benefits to an Underdeveloped Construction industry/Country

Underdeveloped construction industries lack the experience of the advanced countries. However, that
experience includes both the good experience and the bad experience. The more mature industries now
have identified in their lessons learned that many of their concepts have been inefficient and ineffective
(Adibi 2007, Wennerstrom 2004). The authors hypothesize that the PIPS can assist an underdeveloped
nation use the lessons learned from the more mature countries to avoid many of the mistakes in delivering
construction. The authors propose that the underdeveloped nations can build a more stable construction
industry that recognizes the value of construction performance, that can outsource, that can use more
efficient information systems to identify risk and manage by exception, and can force the training and the
creation of professional careers of industry workforce. These practices will increase the professionalism
and sustainability of the construction industry. The authors also hypothesize that the only way the
technology can be transferred is by nonconventional methodology to a university which is willing to step
outside the box to develop and proliferate the technology to assist the construction industry.
Methodology to Transfer the Technology

The methodology/requirements to develop the PIPS includes:
1. Creative funding model. PBSRG has not received any government research funding. This has
forced PBSRG to shorten its research cycle of basic research, prototype testing, and
implementation to deliver results quickly to research partners who needed to solve their problems
quickly and economically.
2. Committed research partners. The only research partners PBSRG worked with were partners who
were committed and understood the theoretical foundation of the new model. The private
funding model forced a filtering of research partners. The filtering minimized the number of
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uncontrollable risk factors and unknowns, and allowed the research objectives to be accomplished
faster and easier than traditional methods.
3. Logic, dominant information, and simplistic non-technical concepts which were well accepted in
many different areas were used instead of construction based technical concepts. The new model
was not based on previous construction experience and best practices (partnering, long term
relationships, construction management, decision making, and trust), but rather on deductive
logic.
This type of out of the box, atypical research is not easily transferred. It requires different
methodologies, different structures, and different goals to produce different results which will impact
projects. Based on the out of the box methodologies, PBSRG has run more controlled tests than any
other research organization. The results have validated the methodology. The education/research of the
new PM model, delivery system, and measurement system have been requested by three other universities
in the US and by universities in China, Australia, Indonesia, New Zealand, Netherlands, Finland, UK,
Canada, and now Africa.
The methodology/requirements for the transfer of technology include:
1. Creative funding that does not govern the methodology.
2. Creative implementation. The research is the core of the graduate education. The research has to
be aligned to the implementation of the new PM model. The education includes how to improve
the research, the new PM model concepts, and the research results.
3. Identify innovative research units that are looking to implement the concepts of new PM
model. The new PM model is broader in scope than a construction project management model.
4. The implementation requires a visionary or counterpart at the new unit. By definition, the
visionary is out of the box and looking for change.
5. Graduate students become almost as valuable as the professors in this environment. Because the
major requirement is logic and not experience, a visionary graduate student can become as
valuable as a professor who may be mired in the status quo best practices of the industry.
6. Results of hypothesis testing are more important than published papers. Without dominant
results, the traditional professor/educator/researcher becomes more important, and change will
not be implemented.
7. The transfer must incorporate education, research, and industry participation simultaneously in
the research. Otherwise the university trying to import the technology will get educated, but will
be unable to proliferate the education and research.
8. Mentoring by an expert is required over a period of time.
Fulbright Grant to PBSRG to Move the Technology to the University of Botswana

PBSRG was given an opportunity to test their hypothesis in 2008. After a review of PM management
expertise in the worldwide construction industry, the University of Botswana requested the PIPS
technology in March 2008 through the United States State department sponsored Fulbright program.
Their objective was to bring in the new PM model as one of the elements in creating a cutting edge
project management education/research program in Africa.
The Fulbright grant is not the traditional 10 month grant which exposes a foreign university to leading
edge expertise, builds a mutual understanding of cultures, and a future relationship between the professor
and the university. The goal is to transfer the education / research program of the new PM technology,
create a duplicate of the non-traditional PBSRG at the University of Botswana, setup presentations and
conferences for the industry and other universities, and start the research with local research partners in
four different visits of approximately one month each.
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This is not easily done as shown by the rather unsustainable attempts at three major U.S. universities.
The following were lessons learned:
1. A counterpart who participated in the research would have to be identified and work closely with
the mentor.
2. The counterpart would have to be a prolific writer and publish papers with the mentor.
3. The counterpart would have to work directly with the mentor, and would have to be able to work
on their masters or doctorate at the same time.
4. The sponsoring school would have to provide all facilities required.
5. The counterpart and/or the professor would have to accompany the mentor whenever the mentor
was at the university, and keep in constant contact with the mentor.
6. The university to have a strategic and a tactical plan with committed resources.
7. The counterpart would have to coordinate and setup industry meetings, presentations, and
education.
8. The counterpart must be able to convince industry research partners to test/implement the
technology. This is the most critical element of the research program.
9. A minimum of two visionaries are required, a PhD student or professor, and a PhD student and a
Masters student with the support of a professor.
Technology Transfer Problems

PBSRG has tried to transfer the technology to the Central Connecticut University, the Florida
International University, and the Glasgow Caledonian University. The technology transfer tests have yet
to show sustainability. Potential problems with transferring the technology to university units could
include:
1. The unit needs to be able to accommodate an entrepreneurial educational/research group that
doesnt fit the traditional university research structure.
2. If the unit is traditional and bureaucratic, it will not treat the counterpart (if they are a graduate
student) as an equal. The counterpart cannot battle the traditional university system, the
traditional thinking of the faculty, and implement an out of the box research concept at the
same time. At one university, a PhD student with two full years funded by the mentor ($50K)
discontinued the program due to administrative issues and lack of a well coordinated strategic
plan.
3. The university must understand the technology impact/value. It does not require the normal
consensus or funding of existing research systems, but due to the simplicity of the technology,
applications can be validated in ways that traditional research cannot be validated.
4. The unit is undermanned, and cannot provide the time required to learn the new research
methodology, technology.
5. The counterpart does not have the communication, marketing, and people skills to build the
research program.
6. The unit does not have an integrated strategic and tactical plan to teach and perform research in
the new technology.
7. The unit attempts to modify the program, research, and the implementation without thoroughly
understanding the new PM concepts.
8. The unit is focused on government grants, and is uncomfortable with running hypothesis testing
which places them at risk. Units that are more focused on measuring the number and amount of
government grants instead of measuring results with dominant impact, will not have the
capability to do innovative research using the new PM model.
- 343
Ironically, university settings, which should be on the leading edge of technology and futuristic thinking,
is often a setting where they teach and develop existing industry practices or what they perceive as
acceptable to the industry. The new PIPS technology is not only not easily accepted by the slow changing
industry, it does not fit the traditional university model of waiting for industry acceptance, getting
consensus from peer reviewers (who may be traditionalist), and taking a long period to test and validate
the concepts. This makes the implementation of such different research concepts and related research
models very difficult. When the new PM research was proposed to the National Science Foundation
(NSF) as a grant proposal, the following peer summaries were identified in the denial of funding (2003):
1. This proposal seems very poorly constructed, and of dubious value to NSF. I do not recommend
funding it
2. The emphasis is on assessment of the tool while retraining Harvard personnel employing the
"information worker conceptI don't know if this will result in a substantial improvement in
Harvard's construction choices
3. This proposal simply does not present a research plan that meets minimal scientific standards
4. Why is NSF being asked to support this? Not relevant
When learning of the NSF rejection of the grant proposal, Harvard University funded the entire project.
Research testing in 2003/2004 led to dominant test results (6 midsize construction tests, lower cost, higher
performance, minimized PM functions when compared to the existing Harvard construction management
results) that resulted in Harvard University winning the 2005 Corenet Global Innovation of the Year
award (Faigenbaum 2005). Follow on tests at the University of Minnesota showed that University of
Minnesota PM functions were minimized by as much as 90% (Sullivan et al. 2008).
Transfer of Best Value PIPS Model to the University of Botswana

The transfer of this technology to the University of Botswana is scheduled for the 08/09 academic year.
The positive points about this attempt include:
1. It is being funded by the Fulbright program, but being controlled by PBSRG/ASU and the
University of Botswana.
2. The mentor and founder of the technology will spend a minimum of 12 weeks at the University of
Botswana (this is twice the amount of time as at any previous location.)
3. The University of Botswana project management program is one of the most sought after
programs at the University.
4. This is the first time that the requesting unit has a strategic plan for implementation, a program
developed for leading edge project management concepts, and a potential Centre that will do
research based on the PM concepts.
The following are elements of the strategic and tactical plan:
1. Teaching courses in the areas of Project Risk Management and Project Quality Management. Both
classes will emphasize how to measure and minimize risk, and measure quality, value, and
performance.
2. Evaluate the MPM programme to determine how to incorporate the new PM model. The program
will be evaluated in terms of research, publications, funding, and cutting edge potential. The
objective is to create a MPM curriculum/research program which is the best in Africa, superseding
program content currently being offered in the more developed construction industry and
education/research institutes.
3. Putting on seminars that students, non-students, industry personnel, and clients/buyers can attend.
- 344
4. Devising and advising the university on the best delivery methods for the programme. Implementing
a strategic plan to mirror the performance of PBSRG.
5. Implementing the concepts of vision, clarity, simplicity, innovation and efficiency into the
dissertations and theses. The research methodology is as important as the research content.
6. Establishing a permanent PM research link with Arizona (ASU).
7. Set up an annual conference between industry and academia to be held in Botswana.
8. Creating a local research programme resulting in publications showing a blend of
Botswana/Africa/USA. This is the major objective, to put into place a program, that all of Africa can
come to for the latest in PM, alternate delivery services, contracting, contract administration, best
value practices, and leadership based structures.
9. Giving the construction department the capability to present a cross disciplinary seminar on PM. The
new PM model is not specific to the construction industry. It applies to supply chain management,
leadership, contracting, performance measurement, outsourcing, and best business practices.
Recently, the contracting/procurement office at Arizona State University adopted the technology to
deliver and manage the outsourced services in food services, IT/networking, furniture supply, and
sports marketing services. The best value PIPS PM system is transforming the way the largest
university in the US is doing their business. This technology can be used across the spectrum for the
interface between any two organizations or in an organization, implementing the latest techniques of
alignment, measurement, and self regulation.
10. Provide seminars on project innovation, best value alignment, contracting of construction services,
continuous improvement and leadership based structures.
11. The development of the best value PIPS research/education technology is dependent on the industry
using the technology and the department becoming an integral part of the industry.
12. Effort will bring the proven experience of PBSRG to structure the organization of the African Project
Management Centre. This is the strategic objective of the program. The Centre will enable the
research program to implement the new PM model, the research results will be incorporated into the
masters education program, and the new PM model / industry practices will continually be optimized
by the researchers. The Centre will integrate the industry and the university research program, with
the research program able to continually lead the industry into the future and motivate continuous
improvement/change.
Conclusion
A new project management model has been created which aligns the transfer of risk, efficiency,
measurement, delegation, outsourcing, supply chain thinking, accountability, and risk
minimization. The new PM model is a leadership based structure which minimizes the need for
technical expertise and experience, but uses logic and minimized decision making. This new PM
model may be well suited for countries with less mature construction industries, as they shape
the structure of their industries to ensure efficiency and effectiveness. It will also motivate a
trained workforce who participates in continuous improvement. Instead of following in the more
mature construction industries footsteps of a management based industry which has led to low
price practices and diminished supply of trained workforce, the new project management model
may avoid the lessons learned and leapfrog the less developed industries into a stable, trained
industry structure. The transfer of the technology into the University of Botswana is a test of the
hypothesis. Over the next year, the hypothesis will be measured against the program objectives.
- 345
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August 4-5, 2008, Karachi, Pakistan
Perceived Risk Allocation in Public-Private-Partnered (PPP)

Water Supply Projects in Indonesia
Andreas Wibowo
Senior Researcher, Research Institute for Human Settlements, Ministry of Public Works, Indonesia
Sherif Mohamed
Professor, Centre for Infrastructure Engineering and Management Griffith University, Australia
s.mohamed@griffith.edu.au
Abstract
A Public-Private-Partnership (PPP) water supply project typically involves a plethora of risks. Because a
PPP is nothing other than a transfer of project risks traditionally borne by the government to the private
sector, proper risk identification and allocation is a key to successful PPP project implementation. This
paper presents and discusses the industrys perception of the optimal risk allocation in the context of
Indonesian PPP water supply projects. The paper has identified a total of 39 project risks, classified them
into six categories. Qualitative assessments of individual risks were elicited from an industry survey of
respondents opinions via a mail-based questionnaire. The central tendency of risk allocation as measured
by the mode value confirms the intuition and theory that risk must better rest with the party who has
control or better manage it. However, the findings also suggest that balancing project risks remain elusive,
which is indicated by a high disagreement level amongst respondents.
Keywords
Indonesia, public/private/partnership, water supply projects, risk allocation.
1. Introduction
1.1 Background
Driven by acute fiscal problem and growing disenchantment with the performance of state-provided
infrastructure services, more and more governments around the world are turning to private solutions for
financing and providing telecommunications, energy, transport, and water services (Dailami and Klein,
1997). Ever since the mid-1990s, no discussion of urban infrastructure finance could be complete without
discussing private participation in infrastructure (Annez, 2006).
Despite current debates about the validity of arguments (see, for example, Quiggin, 2004), the private
service provision is still believed to be able to deliver a higher value-for-money than that of public
provision. In this context, a number of empirical studies have attempted to quantify the efficiency gains
derived from utilizing the private sector. A study by Arthur Andersen and Enterprise LSE (2000), for
instance, claimed that the average percentage estimated savings against a public sector comparator
(benchmarking tool of most efficient public procurement) was 17% for Private Finance Initiative (PFI)implemented projects sampled.
349
Another study concluded that the total gain in the water sector privatization for the Asian and Pacific
would be around US$85 million per year, or every new concession would be on average of around
US$1.8 million per year (Estache and Rossi, 1999). With these empirical findings in mind, a total of 120
developing countries carried out 7,860 transactions between 1990 and 2003, generating close to $410
billion in privatization proceeds, or 0.5 percent of a total developing country GDP during that period
(Kikeri and Kolo, 2005).
In the broader context, private participation is often manifested in the form in public-private-partnership
(PPP) to signify the pivotal role played by both public and private sectors, and to avoid misperception of
the term of privatization. In some countries, the public tends to strongly oppose infrastructure
privatization. The underlying coherent reason for this attitude is that the public is frequently burdened
with additional payments, above what they currently pay. Such objections arise especially when the
public have long enjoyed government subsidies for access to facilities that are managed and operated by
the private sector. A PPP scheme can translate into various contracts, depending on the scope of defined
tasks and responsibilities. The most popular PPP contract is the Build, Operate, Transfer (BOT) which
also has a number of variants.
Water supply projects are typically characterized by large and lumpy increment capacity, high initial
fixed cost and low marginal costs of supply, high sunk costs, and risk of assets stranding as conditions
change, diverse users of services, and externalities not reflected in service charges, long lead times for
installing new capacity due to scale and regulatory hurdle rates (Clough et al., 2004). These
characteristics could lead water supply projects to a plethora of risks which can result in substantial
project cost escalation if eventuated.
Technically, a PPP is nothing other than a long-term arrangement of transfer of risks which are
traditionally borne by the public sector to the private sector for which the latter is financially compensated
for the willingness to bear the risks. PPP is an effective approach to enhance project productivity by
bringing in management efficiency and creative skills from business practice, and reducing governmental
involvement by using private sectors in the provision of public services (Shen et al., 2006). A PPP
contract apportions the project-associated risks mainly to public and private sector. Best practice suggests
an optimal rather than a maximum risk transfer from the public to private sector. A problem may,
however, occur if risk is inappropriately transferred; the government may pay a premium higher than
necessary or jeopardize the long term sustainability of a PPP arrangement or is merely gaining the illusion
of risk transfer, since it is likely that the risk will be transferred back to the government in the form of
higher risks, risk premiums, and project problems (Partnerships Victoria, 2001; Ng and Loosemore,
2006). The issue of balancing project risks is more exuberated in the context of water supply projects
where the potential for competition is much more limited than it is in other sectors (Clarke et al., 2004).
The present paper deals with the perceived optimal risk allocation in Indonesias PPP water supply
projects. The paper has identified a total of 39 risk factors to be shared between principal stakeholders. As
with other governments, the government of Indonesia has also proactively encouraged PPP-fashioned
public infrastructure development for years. However, empirical evidence suggests that these investments
are growing at a very slow pace despite ample opportunities available, including those in the water supply
sector. Understanding a proper risk allocation will certainly help the government to manage the project
risks effectively to avoid the so-called illusion of risk transfer in the quest for more efficient service
provision to the public.
1.2 Indonesias Water Supply Sector
Water supply services have long been being dominated by local-government operated companies
(Perusahaan Daerah Air Minum or PDAMs). However, the quality of services is far from being
satisfactory. While the service level is considerably low, non-revenue water (NRW) rates are still
350
averaging at 35% (Ministry of Public Works, 2005). Such high rates mean consumers are paying for
inefficiencies, water scarce resource and investment wasting (Asian Development Bank, 2006). The
situation was exacerbated with the poor financial condition for most PDAMs. Without government
bailout, many PDAMS would have financially collapsed.
The governments policy is to change this situation. In the frame of the Millennium Development Goals
(MDGs), the government has set a target to improve water service level from 39% to 69% with a total of
150 million populations served, and to expand the connection from seven to twenty-five millions and
double the production capacity level from 94 to 180 m3/sec by 2015. The anticipated total investments are
in the order of IDR 43 trillion (approximately USD 4.6 million) from 2005 to 2015.
While the fiscal constraint only allows the government to manage to provide IDR 5 trillion, the
government calls for private financing to make up the financial gap. At the time of writing this paper, the
government is preparing a sizeable number of water supply projects in 40 cities to be concessioned under
the BOT model with a total worth of IDR 4.84 trillion (Ministry of Public Works, 2005). In the meantime,
the government initiates a restructuring program to help PDAMS out of financial troubles.
2.
Research Methodology
The authors conducted an industry survey via questionnaires mailed out to selected respondents working
with water services-related companies, including legal and management consultants, rating agencies,
technical departments and water operators. The primary source of prospective respondent information
was obtained from the Indonesian Drinking Water Companies Association or PERPAMSIs website
(www.perpamsi.org). The sample for water operators was not a random one; only city-based operators
with more than 10,000 connections were selected.
The survey was primarily aimed at soliciting industry opinions on who best retains a particular risk. The
survey allowed the respondents to opt for more than one party to assume risk in case they believed that
this was the best solution in handling the risk under investigation.
As recommended by Ramirez and Loney (1993), only one questionnaire was sent per organization to
avoid receiving multiple responses from the same organization. The survey took place in July 2007. A
total of 143 sets of questionnaire were mailed out. Each set had included self-addressed stamped
envelope. Out of 143, a total of 34 valid responses were returned, representing a low but acceptable
response rate of around 25%.
Fig. 1: Distribution of Respondents by

Experience
Fig. 2: Distribution of Respondents by

Position
Figs. 1 and 2 present the distribution of respondents by experience and position, respectively. As shown,
more than 75% of the respondents have industry experience for more than 10 years and the majority of
351
respondents (82%) hold managerial positions. These figures should enhance the validity of the responses
concerning the issues raised in the questionnaire. Table 1 presents the cross tabulation of the respondents
organizations by their type and ownership. The limitation of this survey was the very limited number of
collected industry data from the private sector (3). It is worth noting though that all water operators
(despite their association with the public sector) are expected to operate as if they were private entities.
The local water industry continues to move steadily towards privatization, PDAMs will need to rely less
and less on government support, improve their technical capabilities, and most importantly be capable of
managing the risks not being retained by the public sectors.
Table 1: Respondents Organizations by Type and Ownership
Ownership
(1)
Private
Public
Total
3.
Engineering
/management
consultant
(2)
1
0
1
Type of Organization
Technical
Operator
Ministry
(3)
0
13
13
(4)
2
17
19
Total
Rating
Agency
(5)
0
1
1
(6)
3
31
34
Project Risk Identification
The developed questionnaire comprised 39 key risks inherent to water supply projects in Indonesia,
gathered through reviewing the extant literature. The identified risks coded as R1 through to R39 were
classified into six categories; namely, political risk, macroeconomic risk, production-related risk, force
majeure risk, project-related risk, and business risk. Fig. 3 depicts the fishbone or cause-effect diagram of
structured project risks.
Fig.3: Cause-Effect Diagram of PPP Water Supply Project Risks
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3.1 Perceived Optimal Risk Allocation

The term risk allocation refers to the determination of which party or parties should bear the
consequence(s) of events identified as project risks. An optimal risk allocation dictates that a particular
risk to be retained by the party who: a) is best able to assess, control, and manage the risk; or b) has the
best access to hedging instruments, or c) has the greatest ability to diversify the risk, or d) assumes the
risk at lowest cost (Kerf et al. 1998). However, the issue is not as simple as it appears, as will be
demonstrated by this research studys findings.
Table 2 presents the relative frequency of responses for four stakeholders in PPP projects (government,
operator, consumer, and insurance firm) to assume a particular risk. In this table, the central tendency is
best measured with the mode value given in bold. As shown, overall mode values occur for either
government or private operator and with the only exception of three risk factors (R19, R36, and R38).
Table 2: Survey Results of Risk Allocation
Risk
Code
Description
(1)
(2)
Political Risk
Nationalization/expropriation
Non availability of FX
Transferabilty restriction of FX
Exchangeability restriction of FX
Breach of contract by Government
Premature termination by Govt
General changes in legislation
Discriminatory changes in legislation
Specific changes in legislation
Macroeconomic Risk
Inflation fluctuation
FX fluctuation
Interest rate fluctuation
Production-Related Risk
OM cost escalation
Equipment defect-caused interruption
Nonavailability of raw water
Technical leakage during distribution
Electricity blackout
Envt protests causing interruption
Water meter manipulation
Low quality of raw water
Force-Majeur Risk
Natural disaster
Manmade disaster
Declared war
Riots
Terrorism attack
Labor strike
Project-Related Risk
I
R9
R10
R11
R12
R13
R14
R6
R7
R8
II
R23
R24
R25
III
R29
R30
R31
R33
R34
R35
R36
R39
IV
R18
R19
R20
R21
R22
R32
V
Best Party to Retain

Risk*
1
(3)
2
(4)
3
(5)
51.7
42.9
35.1
40.0
51.4
48.9
46.5
60.5
62.5
31.0
48.6
54.1
42.9
32.4
35.6
23.3
15.8
20.0
10.3 6.9
5.7 2.9
2.7 8.1
5.7 11.4
0.0 16.2
4.4 11.1
23.3 7.0
21.1 2.6
17.5 0.0
40.0 44.4
35.7 50.0
43.9 43.9
8.9
7.1
9.8
4
(6)
Level of
Agreement
Measure
VR
ID
(7)
(8)
0.48
0.51
0.46
0.57
0.49
0.51
0.53
0.39
0.38
0.62
0.58
0.58
0.64
0.60
0.62
0.67
0.56
0.54
6.7
7.1
2.4
0.56
0.50
0.56
0.63
0.61
0.60
32.4
20.9
65.8
27.9
29.5
46.0
16.7
44.1
40.5
51.2
18.4
51.2
40.9
34.0
33.3
32.4
27.0 0.0
14.0 14.0
15.8 0.0
18.6 2.3
25.0 4.5
20.0 0.0
50.0 0.0
23.5 0.0
0.59
0.49
0.34
0.49
0.59
0.54
0.50
0.56
0.66
0.66
0.51
0.63
0.68
0.63
0.61
0.65
40.7
30.8
57.8
46.2
49.0
35.4
18.6
19.2
8.9
15.4
14.3
41.7
8.5
11.5
11.1
13.5
12.2
18.8
0.59
0.62
0.42
0.54
0.51
0.58
0.69
0.71
0.60
0.68
0.66
0.66
353
32.2
38.5
22.2
25.0
24.5
4.2
Risk
Code
Description
Best Party to Retain

Risk*
1
39.5
48.7
20.5
47.6
2
42.1
41.0
59.0
40.5
R1 Construction cost escalation

R2 Land cost escalation
R3 Construction time overrun
R4 Protracted negotiation on land price
VI
Business Risk
R5 Tariff uncertainty
48.8 30.2
R15 Breach of contract by operator
11.9 69.0
R16 Premature termination by operator
22.2 57.8
R17 Abuse of power by Govt officials
71.4 17.1
R26 Failure in financial closure
17.6 73.5
R27 Failure in refinancing
10.8 78.4
R28 Demand uncertainty
34.1 41.5
R37 Entry of new competitor
38.9 47.2
R38 Unpaid bills by consumers
20.5 38.5
*Note: 1=government, 2= operator, 3=consumer, 4=insurance
3
4
5.3 13.2
2.6 7.7
7.7 12.8
4.8 7.1
20.9 0.0
7.1 11.9
8.9 11.1
11.4 0.0
0.0 8.8
8.1 2.7
22.0 2.4
8.3 5.6
41.0 0.0
Level of
Agreement
Measure
VR
ID
0.58
0.65
0.51
0.59
0.41
0.59
0.52
0.60
0.51
0.31
0.42
0.29
0.26
0.22
0.59
0.53
0.59
0.63
0.49
0.60
0.45
0.42
0.37
0.66
0.62
0.64
Overall, both regulators and operators equally share 36 out of 39 mode-based risk factors. The
respondents, however, believe that risk associated with under-hand practices by the consumer needs to be
borne by the consumer. In practice, the risk assumption might be reflected in cost charged to the
consumer; or in other words, the operator is simply willing to assume the risk at the consumers expense.
Mode-based party seems to confirm intuition and theory; that is, a party who better manages a particular
risk is advocated to bear that risk. For example, land cost escalation risk and protracted negotiation on
land price risk which can lead to project delays are considered best resting with the government, whereas
construction cost- and time-overrun risks resting with the private operator who can at least mitigate these
risks by entering into agreement with experienced construction contractors.
Under the business risk category, risks of tariff uncertainty and abuse of power by government officials
are best borne by the government, with the remaining risks assumed by the operators. This situation is
almost similar to those risks listed under the production-related risk category where the government
retains only three risks; namely, non-availability and low quality of raw water and environmental issue
which can interrupt the utility operation. Best practice also suggests that macro-economic risk to be
retained by the private operators because dealing with the risk should have been integral to undertaking
commercial business, not just specific to PPP water projects. It has been well accepted that every
government reserves the political right to nationalize/expropriate private assets in the name of protecting
national interests. Because the government has full control over this risk, the government is advocated to
retain it. What is somewhat counterintuitive is the preference of respondents to opt for the private sector
to retain foreign exchange FX-related risk. The respondents appear to believe that the private sector can
deal with the risk although the government has control over it.
3.2 Unanimities among Respondents
The statistical mode reflects the central tendency of respondents preferences. Nevertheless, the meaning
is less clear if the responses tend to equally scatter among available options. In this case, a consensus
among respondents occurs whenever the majority respondents decide on a single party to bear a certain
type of risk. To measure agreements, the authors employed additional statistics; namely, variation ratio
(VR) and index of diversity (ID). VR is the proportion of responses which are not the statistical mode. It is
a measure of how descriptive the modal category is of the data (Weisberg, 1992); it is also an appropriate
354
measure of the spread of ordinal data (Mohamed, 2005). Thus, VR could be equated to the extent of
consensus in opinions (Thiagarajan and Zairi, 1998). It is simply calculated by subtracting the relative
frequency of the mode value from one, or, mathematically:
VRi = 1 wim
(1)
where VRi = VR for project risk Ri, and wim = relative frequency of mode value of risk Ri.
Given the four categories, VR value will fall within the range of 0 and 75%. A VR value of zero and a
75% mean reflect a perfect agreement and a perfect disagreement amongst respondents, respectively.
Mohamed (2005) defined the majority consensus as the ratio equal or less than 50% and no majority
consensus as the ratio greater than 50%. Given this definition, a total of 17 risk factors are successful in
reaching majority consensus (see column 7 of Table 2).
The ID concept measures a dispersion based on the proportion in each category (Weisberg, 2002).
Mathematically, it can be written as:
IDi = 1 (wij )
n
(2)
j =1
where, IDi = ID for project risk Ri, wij=relative frequency of category j for project risk Ri. Mohamed
(2005) argued that the index is a surrogate measure of agreement amongst respondents concerning the
response distribution. A lower ID means a higher level of agreement and a higher ID means a higher level
of disagreement. As with VR, the index is also confined at the interval [0%, 75%]. Column 8 of Table 2
provides ID values of individual risk. Given that the majority consensus is achieved for ID value less or
equal than 50%, the 17 risk factors were filtered to only four namely; R15, R17, R26, and R27. This
might further indicate that balancing risk properly between the two parties is a non-trivial task.
Our survey results also give insights into inter-group agreement confirming the normal practice of
allocating certain project risks to the government. These include: traditional and quasi-commercial
political risks, force majeure risks, and poor quality and/or quantity of raw water risks. However, even
though both main groups of respondents (regulators and operators) appear to concur on some project
risks, there exists the unresolved problem of allocating the remaining ones. The latter can be considered
as grey areas that require careful negotiations between the two parties before their allocation can be
decided.
4.
Concluding Remarks
As with other governments, the government of Indonesia strongly encourages participation in the water
supply development projects, especially due to fiscal austerities. Under the PPP scheme, the projectassociated risks are transferred from the government to the private sector. The central issue to address is
who best bears what risk. Efficient risk allocation dictates that risk must rest with the most able party to
retain. If the principle is violated, the government may face higher risk premium than necessary or
illusion of risk transfer. This paper deals with the optimal risk allocation based on collected industry data.
A total of 39 risk factors classified into six categories had been identified. Mode-based examination
suggests that the risk allocation perceived by respondents seems to confirm intuition and theory; that is,
risk rests with the party who has a control over or better manages it. Nevertheless, the issue of proper risk
allocation remains elusive, which is indicated by a high disagreement level amongst respondents.
355
Acknowledgement
The authors wish to acknowledge the Australia-Indonesia Governance Research Partnership (AIGRP), an
Australia Government Initiative, for the full financial support of this research. Any views expressed in
this paper are those of the authors and do not necessarily represent the policy of the AIGRP and the
institutions the authors are affiliated with.
5.
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356

A Strategy for Upgrading Bridge Infrastructure Network

Bala Muhunthan
Managing Director, Neilly Davies & Partners Pty. Ltd.,Sydney, Australia, and
Post graduate research student Griffith University, Queensland, Australia
Sherif Mohamed
Professor, Centre for Infrastructure Engineering and Management Griffith University, Australia
s.mohamed@griffith.edu.au
Abstract
Bridges are important links in the road network. Over the years, bridges have been designed to
various standards as they were built in different periods. The road infrastructure grew as the
country developed and the population spread out. The technology also has significantly developed
resulting in better understanding of bridge structures and their behaviour. As funds availability is
tightened, road authorities are facing challenges related to the implementation of optimal bridge
management programs based on lifecycle cost, remaining life and bridge capacity considerations.
In this context, this paper presents the Australian experience in managing bridges, and proposes a
strategy to upgrade bridges on sub-networks in a proactive way in anticipation of new operational
loads or legal limits being imposed. The paper also provides an example illustrating the
applicability of proposed strategy.
Keywords
Bridges, Capacity, Infrastructure, Lifecycle costing, Road network
1. Introduction
The road network in any country originated with roads connecting the capital city with regional
centres. Next, the rural towns were connected with villages and regional centres. The road
network grew as the population grew and settled in various parts of the country. Bridges are
relatively more expensive to construct than road pavement, and are therefore designed for a
longer service life. In Australia as in many parts of the world, if a new operational or legal load is
to be introduced, or if the bridges in the network are to be upgraded to a most recent load standard
using available funds, a clear strategy is not available to road authorities for implementation. In
the past, bridge information such as details of construction drawings and basic bridge inventory
data were recorded manually. A physical file was created with construction information and
photographs of the final structure. Bridge inspection information and any major repairs or
improvements carried out were filed. Many road authorities have attempted to update and
maintain their records but could not keep up with it owing to lack of experienced staff, lack of
resources allocated to the task, and underestimation of the importance of the task.
357
Throughout the world, it is a common practice in the construction industry to develop design
standards to accommodate future requirements. The design standards are regularly revised or
completely replaced by new ones owing to research and development into new materials and
technology. The situation is the same with bridges; bridges have been designed in the past to
various different design standards as they became effective, and these design standards were
revised as the transport industry demand grew. Australia is no exception; different design
standards were used in the past, and it has not been possible to upgrade all of the bridges to the
newly introduced design standard owing to obvious economic reasons. Additionally, there is
considerable pressure from the transport industry to make the road authorities allow heavier loads
on the roads. The heavy vehicle technology has developed to a level where large and long heavy
vehicles can manoeuvre without any difficulties. But many of the existing bridge structures do not
have adequate load capacity to carry these loads. Against this background, this paper reports on a
research study aiming at developing and testing a strategy to upgrade bridges, on sub-networks, in
a proactive way in anticipation of new operational loads.
2. Bridge Structural Capacities and Loading Scenarios

The advancement of human society around the globe is very much dependent on infrastructure
development. As the human population grew, the infrastructure also grew. The lifestyle changed
as the economies of certain regions grew. The capacity of the existing infrastructure could not
cope with the change in lifestyle, the advancement in technology, and the demand for better and
improved infrastructure. This has led to infrastructure problems that have compounded over
recent decades for the following reasons (Hudson et al., 1997): 1) under-investment in public
works programs; 2) lack of good management systems for infrastructure; 3) failure to recognise
the importance to the future economy of maintaining a sound physical infrastructure; 4) cutbacks
that have slashed public works budgets; 5) failure to replace the infrastructure as fast as it wears
out; 6) failure to realise that the lack of infrastructure seriously impacts on the services that the
government can provide; 7) tendency by national, state and local officials to defer maintenance,
and 8) increased costs to taxpayers to repair and rebuild the obsolescent infrastructure.
In light of the above, it is clear that there is a need for a well-planned proactive process to achieve
sound asset management objectives such as suitable levels of service at minimum life cycle cost.
Ideally, a bridge maintenance management system should consist of several modules that may be
used for the effective management of bridge assets either corporately or at the network level.
These modules can be used for developing strategies for different aspects of bridge management
such as widening, strengthening, replacement, and/or simply repainting of bridges. The design
standards that have been used in Australia reflecting the changes of standard design loads over the
years. Up until 1977, every state and territory had different allowable mass limits. Only in 1988,
the legal mass limits for heavy vehicles were made uniform across Australia when the 42.5 tonne
gross mass limit was adopted across the country (NAASRA, 1985). The service level of a bridge
depends mainly on its load carrying capacity that is controlled by the design standard used at the
time when the bridge was designed. This has resulted in bridges on the same road having different
design standards and hence having different load capacities. The types of vehicles have also
changed over the recent past reflecting continual increase of operational loads. Table 1 lists
current and proposed operational loads in Australia and their corresponding bridge service levels.
358
Table 1: Current and Proposed Operational Loads

Service Level
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Operational Load
Legal Loads 42.5t
B-Double 55.5t
B-Double 62.5t
B-Double 68t
Road train 85t
MLR 45.5t
Remarks
Current legal load
Currently used on approved routes
Proposed industry requirement
Recommended legal load
To achieve a higher service level, it is therefore necessary to analyse the network for what is
available in terms of structural capacity, and how best the operational vehicles can be categorised
and manoeuvred, utilising the available capacity creating specific purpose routes and areas by
differentiating road network standards between those of primary and volume routes and those of
general access routes. The differentiated standards would be to support terminal to terminal
operations including access to ports, rail terminals etc. (AUSTROADS, 1994). In this way, the
road authorities can invest in bridge replacement and upgrading to accommodate higher load
capacity for only the primary routes. This is to avoid being burdened with the responsibility of
finding funds for upgrading all bridges.
3. Cost Implications
In a study titled Roads 2020 that was carried out to make forecasts at a strategic level for
expenditure needs for investment and maintenance between 1998 and 2005 and 2005 and 2020,
the authors have selected three scenarios for bridges. Bridges from a selected database were
assessed for their capacity to withstand loads under the following three scenarios (BTCE, 1997):
Scenario 1: Gross mass increase from the current 42.5t to 45.5t with no further increases;
Scenario 2: Gross mass increase to 45.5t in 1997 and further increase to 52.0t in 2010 with no
further increases; Scenario 3: As for 2 above but with a further increase to 58t in 2020.The
analysis shows that an immediate expenditure of AUD$24M is needed on the National Highway
System (NHS) and increasing from AUD$47.3M for Scenario 1 to AUD$321.2M for Scenario 3
for the period 2021 to 2030 based on 1997 estimates.
Owing to heavy public scrutiny of government expenditure for value for money on infrastructure
development and capital, it is common practice to cost various options for bridge upgrading or
replacement. When a bridge is proposed to be replaced or upgraded, an option study is initially
carried out. A Cost Benefit Assessment (CBA) is carried out to rank the options, see Fig. 1. As
part of this CBA, a Life Cycle Costing (LCC) is undertaken for each option to include all the
recurring and maintenance costs over the assumed operational life, and a recommendation is then
made. Major LCC cost components are: i) construction cost; ii) maintenance cost; iii) disposal,
replacement or upgrade costs, and iv) salvage costs. The most significant and least readily
appreciated variable is the need to determine appropriate LCC periods for each bridge considered
for replacement or construction and they depend on: 1) Physical; 2) Economic; 3) Functional; 4)
Technological; 5) Social; and 6) Legal issues (Ballesty and Orlovic, 2004). Discounting is the
common technique used to adjust for the time effects by recognising a preference for events that
occur in the far future (Langston, 2005). Rates as set out by government guidelines for economic
appraisal of capital works are: 4% p.a. as the rate with a sensitivity analysis of 7% and 10%.
359
C ost B en efit A s s es m en t
C os t
B en efit
E valu ation of B rid g e C ap ac ity
In c reas ed H au lag e
E s tim ate b en efits u s in g
L in ear P rog ram m in g in term s of tran s p ort
volu m e an d c os t
Id en tify B rid g e for U p g rad in g
R ed u c ed Tra n s p ort C os t
B rid g e R ep air O p tion s

for each b rid g e
C os t of c on stru c tion
M ain ten an c e C ost
C os t of D is p os al
S alvag e C os t
R ed u c ed M ain ten an c e C os t
L ife C yc le C os tin g of R ep air O p tion s

R ed u ced R ep lac em en t C os t
O verall c os tin g of rou tes for u p g rad in g

to d ifferen t s ervic e levels for c om p aris on
S elec t M os t E c on om ic al O p tion
Fig. 1: Cost Benefit Assessment
4. Strategy Development
Currently the bridges on any road network are checked for capacity when there is a proposal to
allow new operational vehicles. This also happens when a single operator wants to introduce a
truck with new axle configuration that will have much commercial benefit to their company
resulting from greater haulage. As a first step, this paper proposes isolating a section of the
network, say a particular route to see the type and load capacities of the bridges on that route, and
determine the suitability of that route for each of the selected operational loads representing a
service level. This is followed by conducting an economic analysis to determine the cost
associated with upgrading any load-deficient bridges to allow them to carry each of these
operational loads. Finally, develop the economic options to upgrade that route from one service
level to the other where each operational load defines a service level.
The methodology is best demonstrated by selecting a hypothetical sub-network with a total of 23
bridges having different capacities. Fig. 2 illustrates the sub-network with three possible routes,
namely ADB, ACDB and ACEB. To simplify the analysis, there are 10 bridges on each selected
route. The structural capacity of each bridge is indicated in terms of a service level in Column 2
of Tables 2 through to 4 where equivalent load capacities have been assumed in terms of
operational load-based service levels.
360
BRN 01
BRN 02
BRN 03
BRN 19
BRN 04
BRN 06
BRN 07
BRN 10
BRN 05
BRN 18
BRN 09
BRN 23
BRN 22
BRN 21
BRN 08
BRN 17
BRN 20
BRN 15
BRN 11
BRN 14
BRN 16
BRN 12
BRN 13
Fig. 2: Hypothetical Sub-network

The requirements for upgrading these bridges to the next service level are also indicated in
Columns 3 through to 6, based on which a service level is proposed for the route. The suitability
of each route for assigning appropriate service levels has been tested based on the assumed
capacity of the bridges on the route. Finally, the number of bridges that require upgrading for
each route is also determined and a recommendation is made based on this information. For each
route, Table 5 illustrates the number of bridges that require upgrading in response to the
recommended service level. So, it can be seen that it is economical to assign a service level (SL)
of 2 for Route ACEB by upgrading two bridges only; assign service levels of 2 and 3 by
upgrading 1 or 3 bridges; and assign a service level of 3, 4 or even 5 by upgrading 4 bridges. This
is a simple analysis to demonstrate how economies can be gained using this methodology. Now
the individual upgrading requirements will have to be looked into in detail to estimate the costs
involved so that the route options can be closely compared before assigning the appropriate
service level. The individual upgrading requirements for each bridge can be analysed only when
more details are available on each bridge.
Section sizes that have been used in construction are usually recorded in Work-As-Executed
(WAE) drawings. The actual capacity of bridges is calculated based on the WAE drawings. As
such, these capacities are generally more than what a design load requires in analysis. The load
effects of the operational loads are calculated independently for the same bridges according to
their span configuration. These load effects are then compared with the actual capacities of these
bridges to see whether they have adequate capacity to carry these operational loads. An
appropriate load factor is also applied when comparing the load capacity with the load effects.
Therefore, the cost and method of upgrading a particular bridge is based on which operational
load is going to be used, the assigned service level and the available capacities of the bridges on
that particular route. It can be seen from the envelope in Fig. 3 that all the loads have similar
effects in span range of 5-15m. The maximum moments start to increase between 20m and 25m
spans and vast differences can be seen beyond 25m. This demonstrates that as the spans increase
above 20m the chances of bridges requiring upgrades can be higher and hence the cost of
upgrading can be much higher.
361
Table 2: Details of Route 1 Via ADB

Bridge Equivalent
No
Capacity
01
Level 1
02
Level 2
03
Level 3
04
Level 4
05
Level 5
06
Level 3
07
Level 3
08
Level 4
09
Level 5
10
Level 2
Number of bridges
require upgrading
Suitability
for SL2
Upgrade
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Suitability
for SL3
Upgrade
Upgrade
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Suitability
for SL4
Upgrade
Upgrade
Upgrade
Adequate
Adequate
Upgrade
Upgrade
Adequate
Adequate
Upgrade
Suitability
for SL5
Upgrade
Upgrade
Upgrade
Upgrade
Adequate
Upgrade
Upgrade
Upgrade
Adequate
Upgrade
Table 3: Details of Route 2 Via ACEB

Bridge Equivalent
No
Capacity
10
Level 2
11
Level 3
12
Level 5
13
Level 2
14
Level 2
15
Level 1
16
Level 4
17
Level 2
18
Level 5
19
Level 2
01
Level 1
Number of bridges
require upgrading
Suitability
for SL2
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Adequate
Adequate
Adequate
Adequate
Upgrade
Suitability
for SL3
Upgrade
Adequate
Adequate
Upgrade
Upgrade
Upgrade
Adequate
Upgrade
Adequate
Upgrade
Upgrade
Suitability
for SL4
Upgrade
Upgrade
Adequate
Upgrade
Upgrade
Upgrade
Adequate
Upgrade
Adequate
Upgrade
Upgrade
Suitability
for SL5
Upgrade
Upgrade
Adequate
Upgrade
Upgrade
Upgrade
Upgrade
Upgrade
Adequate
Upgrade
Upgrade
Table 4: Details of Route 3 Via ACDB

Bridge Equivalent
No
Capacity
10
Level 2
09
Level 5
20
Level 5
21
Level 5
22
Level 5
23
Level 5
17
Level 2
18
Level 5
19
Level 2
01
Level 1
Number of bridges
require upgrading
Suitability
For SL2
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Suitability
for SL3
Upgrade
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Adequate
Upgrade
Upgrade
Suitability
for SL4
Upgrade
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Adequate
Upgrade
Upgrade
Suitability
for SL5
Upgrade
Adequate
Adequate
Adequate
Adequate
Adequate
Upgrade
Adequate
Upgrade
Upgrade
362
Table 5: Comparison of All Three Routes

Suitability
Route
for SL2
Description
ADB
Upgrade 1
ACEB
Upgrade 2
ACDB
Upgrade 1
Suitability
for SL3
Upgrade 3
Upgrade 7
Upgrade 4
Suitability
for SL4
Upgrade 6
Upgrade 8
Upgrade 4
Suitability
for SL5
Upgrade 8
Upgrade 9
Upgrade 4
Recommend
SL 2 & 3
SL 2
SL 3, 4 & 5
M ax M oment Envelope
1000
900
Max Moment in kNm
800
Legal Load L42.5
700
Legal Load 45.5t
600
19m -BD-55.5t
500
19m -BD-62.5t
400
25m -BD-62.5t
300
25m -BD-65t
200
25m -BD-68t
100
Road Train-85t
10
15
20
25
30
35
40
45
50
Spans 5 - 50m in Steps of 5m
Fig. 3: Maximum Moment Envelope
The Linear Programming (LP) technique can be used to compare the benefits in increased freight
volume owing to upgrading service levels for any route, or to identify constraints and limitations
in haulage owing to reduced capacity of some bridges along the route. The Minimum Cost
Network Flow Models (MCNFM) can be used to balance the network flow of freight volume of
any sub-network or a complete network. A sensitivity analysis also could be performed using this
method before deciding to assign a service level. The purpose of the application of LP here is
mainly to estimate the benefits of route upgrading in terms of improved haulage and hence the
unit cost of upgrade. The improved haulage is due to the increased capacity of the route from the
upgrade from one service level to the other.
The overall decision-making process is illustrated in Fig. 4. The process facilitates the preparation
of funding strategies to implement any upgrading programs to assist bridge planners in
developing their strategies to upgrade bridge infrastructure networks in order to satisfy the
transport industry demand. Bridge maintenance planners can then assess, plan, budget, program
and implement bridge network upgrading in an affordable and efficient way.
363
Decision Making process
Select Subnetwork for Route Assesment
List bridges in sub routes

Deficient width?
Evaluate bridge capacities
Identify bridges with deficient capacities
Overhead Restrictions?
Estimate additional
cost
Apply Methodology
Cost Options using
Lifecycle costing
Estimate Overall cost for

each route for different service Levels
Determine Service Level

for each route
Estimate benefits using

Linear Programming
Present Route Strategy
Fig. 4: Proposed Decision-making Process
There is considerable pressure from the transport industry to make road authorities allow heavier
loads on the roads. Heavy vehicle technology has developed to a level where large and long
heavy vehicles can operate without any difficulties in manoeuvring. But many of the existing
bridge structures do not have adequate load capacity to carry these loads. This paper proposed a
methodology to identify routes for use by commercial vehicles and to determine the appropriate
service level for these routes. The developed methodology includes steps to upgrade a route from
one service level to another that is higher.
364
If the bridge infrastructure network is to be efficiently used, the transport industry should have the
flexibility to move its goods in the most efficient way by reducing the unit cost of transport. This
can only be achieved by upgrading the existing network to allow the operational loads that are
very commonly used by transport operators. To achieve this, the network will have to be analysed
for the variation in structural capacity of bridges in each sub-network and upgrade the subnetwork to a required standard to allow a particular, or a few, operational vehicles.
It is concluded that a proper strategy is needed for bridge infrastructure management taking into
consideration existing bridge capacities based on cost of upgrading alternative routes to assigned
service levels. The proposed methodology allows bridge planners and strategists to evaluate
existing heavy vehicle routes for upgrading to different service levels and simplifies the decisionmaking process using appropriate tools, thus bringing huge savings in bridge replacement and
upgrading costs.
6. References
AUSTROADS (1994). Review of Axle Spacing/Mass Schedule for General Access
Vehicles, AUSTROADS Incorporated, Publication No AP-113/94, Sydney, Australia.
Ballesty, S. and Orlovic, M. (2004). Lifecycle costing and facility management, Facility
Management Magazine Vol. 12, No. 2, 28-32.
Bureau of Transport and Communications Economics (1997). Roads 2020 - Working
Paper 35, Department of Transport and Regional Development, Canberra, Australia.
Hudson, R., Ralph H., and Waheed U. (1997). Infrastructure Management: Integrating
Design, Construction, Maintenance, Rehabilitation, and Renovation, McGraw-Hill,
New York.
Langston, C. (2005). Life-cost Approach to Building Evaluation, UNSW Press, Sydney,
NSW, Australia.
NAASRA (1985). Review of Road Vehicle Limits Study (RoRVL), National Association
for Australian State Road Authorities.
365

Development of a Fuzzy Risk Assessment and Contractual Allocation Model

for Iran's Dam Construction Projects
Majid Parchami Jalal
Ph.DCcandidate of Construction Management, Department of Civil Engineering, IUST, Iran
parchami@iust.ac.ir
Parviz Ghoddosi
Assistatnt Professor, Department of Civil Engineering, IUST, Iran
Mojtaba Hosseinalipour
Assistatnt Professor, Department of Urban and Architecture, Building Eng and Management Section,
Shahid Beheshti University, Tehran, Iran
Abstract
On-time completion and conformity with assigned costs of every project or plan is one of the most
important factors in success of that project or plan. No completion or overrun cost leads to not meeting
the employer's requirements need or goals of the plan or the project. This issue is of greater importance in
large and national projects in which the period of execution is long even in normal conditions and takes
more than 6 years averagely.
Dam construction projects are of especial importance regarding on-time completion and assigned funds
because of their importance in operation size, great investment, complicated nature and many
uncertainties in them like underground conditions, natural disasters, and high cost of construction. So,
inspection, identification and evaluation of causes of cost and time overrun and representations of
solutions for obviating them have great benefits for economy of the country. Besides in most cases
precise and sufficient information is not available for this purpose and opinions of experts and
professionals in this project (in fuzzy theory framework) should be used. This study presents schedule
delay analysis methodology based on fuzzy theory and represents contractual allocation of risk based on
type of contracts in dam construction projects. For analysis purpose the data collected from nine dams in
Iran.
Keywords
time and cost overrun; fuzzy Risk assessment; Risk Allocation; delays; dam construction projects
Introduction
Although nowadays there are great efforts for accomplishing projects on-time by people in charge,
projects are accomplished with delays and costs that are higher than estimated. Cost and time overrun is
sometimes higher than the value of contract more than 100% (Peter 1987; Morris 1990; Flyvbjerg 1995;
Office of Government Commerce1995; Pillai 2001; and Said 2005). Considerable studies are performed
about the delays in projects and the causes which can be classified in two categories:
366
Part 1: delays and methods represented to analyze it : Delay is an action or event which prolongs the time
schedule of the contract, in other words, delays is the time between preplanned time and actual time of
project activities (David, and Mark 1995).
Project delays can be divided into categories on the basis of one of the criteria of project main parts
(Owner-Caused Delays(OCD), Contractor or Consulting-Caused Delays(CCD) and Third party-Caused
Delays (TPCD)), occurrence time state (independent delays, Serial delays and concurrent delays) and
compensability (impermissible delays and permissible).( Kartam1999; Stumpf 2000). For identifying
complete procedure of events in project and calculating quantity of delays and specifying location of
occurring delays, base time schedule, base time schedule with delays in one of the elements of the project,
actual time and anticipated time schedule can be used (Arditi 1989; Abdulaziz1998; Michael1999;
Terry2003). Methods for analyzing delays included: methods of comparing planned time schedule and
actual time, increase in base time schedule and analyzing time intervals delay(Schuma cher 1995; Stumpf
1989; Michael 1999).
Part 2: Precedent studies about causes of delay: Major Project Association researching for analyzing super
projects classifies time and cost overrun into 2 categories: strategic decisions which are made by highrank manager of organization (e.g. selecting the project delivery system, the way of selecting involving
people, etc.) before concluding the contract and operational causes which are produced during the
execution of the project (e.g. lack of material, incompetence of the contractor, etc) (Peter 1987).
world Commission on Dams (WCD), through a complete research about 99 projects, represents that only
half of the projects are accomplished on-time and 30% of the project with 1 to 2 years of delay and 4
projects with more than 10 years of delay. The main causes of these delays in projects are financial
problems, incompetence of contractor and construction management, unreal time schedule, dissatisfaction
of workforce, legal and constitutional objects and challenges (WCD 2000).
2-Fuzzy Sets and Fuzzy Numbers

A fuzzy set approach, pioneered by Zadeh (1965), is useful for uncertainty analysis where a probabilistic
data base is not available and/or when (interval) values of input variables are uncertain. The fuzzy set
approach has been widely applied to represent the uncertainties of real-life situations (Bogardi and
Bardossy 1983; Anandalingam and Westfall 1988; Paeket al. 1992).
Fuzziness or uncertainty represents situations where membership in sets cannot be defined on a yes/no
basis because the boundaries of the sets are vague. The central concept of fuzzy set theory is the
membership function, which represents numerically the degree to which an element belongs to a set. In a
classical set, a sharp or unambiguous distinction exists between the members and nonmembers of the set.
In other words, the value of the membership function of each element in the classical set is either 1 for
members (those that certainly belong to the set) or 0 for nonmembers (those that certainly do not).
However, it is sometimes difficult to make a sharp or precise distinction between the members and
nonmembers of a set. For example, the boundaries of the sets of very risky words, nice houses, or
numbers much greater than 1.0 are fuzzy. Since the transition from member to nonmember appears
gradual rather than abrupt, the fuzzy set introduces vagueness (with the aim of reducing complexity) by
eliminating the sharp boundary dividing members of the set from nonmembers (Klir and Folger 1988).
Thus, if an element is a member of a fuzzy set to some degree, the value of its membership function can
be between 0 and 1. When the membership function of an element can only have values 0 or 1, the fuzzy
set theory reverts to the classical set theory. A special class of fuzzy sets is described by fuzzy members,
which are values that belong to a given set with a certain degree of membership only. As an example of
fuzzy members, let Q be a fuzzy number and its membership function be denoted by (Fig. 1).
(Q ) = 1
(Q q ) ,
(Q ) = 1
....
367
(q Q ) ,
q Q q
(1a)
q Q q +
(1b)
otherwise....................................... ..
(Q ) = 0,
(1c)
Where q=the center value of the fuzzy number Q, and (>0) and (>0) represent the left and right
fuzziness from the center value q. when the values of and are equal to zero, Q=a nonfuzzy number by
convention. As the values of and increase, Q becomes fuzzier and fuzzier. Among the common
membership functions in studies, we can mention triangle (Fig. 1) and trapezoid (Fig. 2) shapes.
FIG. 1. Membership Function of Fuzzy Number Q

In this paper, 39 reasons, which are categorized in 5 groups, are identified as causes of time and cost
overrun in Iran dam construction projects and the value of effectiveness of each reason and each group is
calculated and presented by using fuzzy logic and triangular and trapezoidal membership functions on the
basis of opinions of experts. For calculating and representing value of effectiveness of each reason (part
1-3-3) triangular membership function and for each group (part 2-3-3) trapezoidal is used. Also in
evaluation of cost and time overrun in 9 dam construction projects (part 1-3), trapezoidal membership
function is used.
In the following, the method of using triangular and trapezoidal membership functions is described.
2-1 trapezoidal membership functions and related calculations

As mentioned in part 2, in section of fuzzy evaluation, the value of effectiveness of each group of causes
with consideration of abundance of opinions in especial zone (the most likely zone) and iteration of them
in this zone trapezoidal membership functions are used as shown in figure 2.
FIG. 2. Membership Function for the value of effectiveness of each group of causes
368
In the above figure, the distance between A and B is the largest zone of experts' opinions which are
located in the vicinity of A and B have the lowest level of membership to this set and the opinions located
in the most likely zone have the highest level of membership. In calculations of section 3-1 this issue has
been described more. In this case, the fuzzy number Z should be transferred into a crisp value that
represents the fuzzy number Z. In this paper, a ranking method is used to transfer the fuzzy number Z into
the crisp value RC, making the ranking value of the fuzzy number Z equal to that of the crisp value RC.
Using the ranking method developed by Chen (1985), the crisp value RC can be expressed as:
RC =
V1 + V 2
............................................................................................(2)
2(W 1 + W 2)
Where
V 1 = B 3 (B + 3 3 A) B 2 (4A + A + B ).......................................................(2a)
V 2 = A3 (3B 3 A) + A 2 (4 B + B + ).....................................................(2b)
W 1 = B 2 (2 B 7 A + 2 ) + 3( AB)( )...................................................... (2c)
W 2 = A 2 (7 B 2 A 2 + ) ( )(B A).........................................................(2d)
In above formulas RC is the crisp value and other letters are the largest number, larger than medium
number, less than medium and the lowest number, respectively.
2-2 triangular membership function

In this paper, in order to show the opinions of experts (interviewees) about the value of each cause,
triangular membership functions are used. For example experts' opinion (interviewees) about the
effectiveness of cause No 32 in accordance with figure 3. According to the above figure, the minimum
value among participants (interviewees) is parameter 1, the medium value is 6.1 and the maximum is 15.
Minimum, maximum and medium of opinions for each parameter is calculated in section 3-2 from the
perspective of involved people in the project and the opinion of all experts.
FIG. 3. Value of effectiveness of cause No. 32 on Time overrun
3- Identification and Fuzzy evaluation of time and cost overrun Causes in Iran dam
construction project
3-1 Underway studies of project and time and cost overrun in them
In order to analyze the rate of occurrence of time and cost overrun in dam construction industry and
analyze the causes, 9 large and medium projects of dam construction which have been accomplished were
selected and scrutinized and been accomplished. The results of these studies are represented in two
sections (section 3-1 and 3-2).
369
The basis for calculating cost and time overrun in these projects is the information included in agreement
of preliminary contract, final statement, and time of Taking Over of the Works. Results of these
calculations are represented in table 1 and figure 3 in simple form and also in fuzzy form with trapezoidal
membership function. Method of fuzzy analysis of results and calculations and conversion of fuzzy
results to crisp numbers are presented in section 2.
RC
W2
W1
V2
V1
Average
Max(B)
Min (A)
Dam 9
Dam 8
Dam 7
Dam 6
Dam 5
Dam 4
Dam 3
Dam 2
Dam 1
-506396 -3.5E5
28.9E5 40.5E5
591.5E5 506.6E5
11.8E8
195
122
130
311
40
106
195
114
311
106
122
100
40
73
Time
8.1E8
161
115
166
292
48
292
115
161
241
62
98
282
48
199
Cost
153.7
Over
rune
166.4
larger than
medium
Less Than
medium
Table. 1. The rate of Time and Cost overrun in 9 dam Project and Fuzzy evaluation
With consideration of results of the above table, the value of the diagram of trapezoidal membership
function, delay in dam construction projects is in accordance with figure 4. Actually figure 4 represents
that dams of country trace the following function during construction from the perspective of delays, in a
way that a project undergoes less than 40% or more than 311% of delay is equal to zero. And the most
likely delay is between 122% and 199% (most likely). And if it is supposed to represent one Number as
the value of delays in dam construction industry of country, the number resulted from converting the
following membership function to crisp number is equal to 166.6%.This number is larger than the
Average number(130) calculated in the table 1.
FIG 4. The rate of Time overrun in 9 dams Project
3-2- Identification and Fuzzy evaluation of time and cost overrun causes
In this research, identification of causes of cost and time overrun in country's dam construction projects
and the value of effectiveness of each element from the viewpoint of experts have been done in two stages
Stage 1- performing preliminary studies and designing questionnaire : In this stage, for the purpose of
designing the appropriate questionnaire, in addition to the aforementioned projects, some of the underway
370
or about-to-end projects which have undergone cost and time overrun are selected and studied completely
in these projects which had increase in cost were fundamentally identified and scrutinized.
Reports about time overrun of these projects were studied and inspected and superficial causes of cost and
time overrun in theses projects are identified. With reference to involved managers and experts in these
projects, a preliminary and comprehensive list (about 100 items) of causes of time and cost overrun is
identified and collected. With further study, it was understood that some of the causes have something in
common and can be deleted and also some of them can be incorporated with each other. Thus, with final
concluding of 39 as causes of cost and time overrun in dam construction projects are selected for starting
consulting and a questionnaire is designed for taking opinions.
Stage 2- Collecting opinions of people in projects: In this stage, managers and some informed and experts
who are involved in these projects in various parts (employer, consultant and contractor) were selected
and questionnaire was sent to them and in some cases the form delivered to them in person while
explaining and discussing about selected items. In this stage, the number of statistical society was in
accordance with table 2 and 90 questionnaires were delivered to the statistical society. After follow-ups,
about 50% of questionnaires were collected and analyzed as in table 2.
Table 2. The statistical society
Questionnaires
Employer
Consultant
Contractor
Sum
were sent or delivered
30
30
30
90
were collected
15
15
14
44
3-3 Fuzzy effect of each cause:

First, calculations related to value effect of each cause have been done with consideration of expert's
opinions and the results are presented in table 3 for the purpose of being presented as triangular
membership function with containing 3 numbers of minimum, maximum and medium
Table 3. Fuzzy effect of each cause
Consultant
Employer
Regulation
Causes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Opinions Of Consultant
Min
Medium
Max
Opinions Of Contractor
Min
Medium
Max
Opinions Of Employer
Min
Medium
Max
Min
0.0
0.0
1.0
0.0
0.0
1.0
0.0
0.0
0.0
0.5
0.5
1.3
0.8
0.0
0.0
0.5
0.4
0.0
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.0
0.0
0.0
1.0
0.0
0.0
0.0
0.5
0.5
1.3
0.8
0.0
0.0
0.5
0.4
0.0
0.4
0.0
0.0
0.0
0.0
0.0
1.0
2.0
0.0
0.0
0.5
0.0
0.0
0.5
0.5
0.3
0.9
2.0
0.0
0.5
0.0
0.5
0.5
0.0
1.3
1.3
1.0
0.0
0.0
2.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
1.0
0.0
0.0
0.0
0.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.7
3.5
3.1
1.8
2.6
4.3
3.1
1.5
2.4
2.6
2.1
4.0
2.6
3.8
1.5
2.0
1.6
1.5
1.4
1.7
1.5
1.5
1.7
1.7
9.0
10.0
7.5
4.2
15.0
7.5
8.0
3.6
5.0
7.0
5.0
12.0
8.0
15.0
3.5
5.0
3.0
4.0
4.0
6.0
2.5
6.0
6.0
10.0
3.3
2.3
2.5
0.8
2.6
3.6
3.3
2.4
2.9
2.5
2.8
4.1
1.9
2.9
1.1
2.4
2.0
2.2
1.9
3.8
2.4
2.0
2.5
3.2
9.0
6.3
7.5
2.3
7.0
12.0
9.0
7.0
8.8
6.0
6.0
12.0
5.3
5.3
3.5
5.0
5.0
6.0
4.0
10.0
10.0
5.0
5.0
12.0
371
5.3
4.3
1.5
1.7
4.4
2.6
1.6
1.8
1.9
2.5
1.9
4.4
1.4
2.0
1.0
2.0
1.8
1.4
3.6
3.0
2.3
1.3
1.8
2.6
16.0
12.5
3.0
5.0
20.0
5.3
3.0
3.0
3.8
9.8
3.0
9.8
3.0
5.0
3.0
4.0
2.7
2.5
11.0
7.7
4.0
2.5
4.3
5.0
Total Opinions
Medium
Max
4.5
3.9
2.7
1.5
3.6
4.0
3.0
2.0
2.5
2.6
2.3
4.6
2.2
3.5
1.2
2.1
1.8
1.7
2.4
2.9
2.1
1.6
2.1
2.7
30.0
30.0
10.0
5.0
30.0
15.0
10.0
10.0
8.8
9.8
6.0
25.0
8.0
20.0
3.5
5.0
5.0
6.0
15.0
15.0
10.0
6.0
10.0
20.0
Contractor
Others
25
26
27
28
29
30
31
32
33
34
35
36
37
38
0.0
0.4
0.0
0.0
0.0
0.0
0.0
1.0
1.0
1.0
1.0
1.0
0.5
0.5
1.2
1.3
1.1
1.3
0.7
1.5
0.8
6.4
4.9
3.5
4.7
5.1
2.4
4.0
2.1
2.1
2.4
2.4
2.0
7.2
2.4
15.0
10.7
10.4
12.5
11.3
12.5
8.0
0.0
0.4
0.0
0.0
0.0
0.0
0.0
1.0
1.0
1.0
1.0
1.0
0.5
0.5
2.0
2.3
1.2
1.4
1.7
2.2
1.2
4.9
2.4
2.6
2.9
3.2
4.2
4.2
5.0
5.0
2.0
3.0
4.0
8.0
2.5
10.0
5.0
6.3
6.3
7.5
18.0
15.0
0.0
1.1
0.0
0.0
0.0
0.5
0.0
2.0
2.0
1.5
2.0
3.0
1.0
2.0
1.5
2.1
1.6
1.1
1.5
1.9
1.1
6.5
3.6
3.6
4.2
5.5
2.1
3.7
3.0
3.0
3.0
3.0
3.0
4.0
2.5
15.0
5.3
6.9
8.8
10.5
3.0
7.0
0.0
0.4
0.0
0.0
0.0
0.0
0.0
1.0
1.0
0.0
0.0
1.0
0.0
0.0
1.5
1.9
1.3
1.3
1.2
1.8
0.9
6.1
4.0
3.5
4.3
4.9
3.4
4.5
5.0
10.0
5.0
3.0
4.0
8.0
2.5
15.0
10.7
15.0
15.0
15.0
25.0
30.0
39
0.6
3.9
15.0
0.6
2.5
6.0
1.0
3.3
6.0
0.6
4.3
45.0
with having these 3 aforementioned numbers for each cause of triangular membership function. The value
of effect of that cause in cost and time overrun in dam construction projects (e.g. according to figure 3)
can be drawn In table 3, the value of 3 numbers of minimum, maximum and medium is calculated and
represented separately and by using the opinions of involved people (employer, consultant, and
contractor) and also with consideration of total opinions of 49 answer sheet.
Referring to table 3 and analyzing the results related to medium column, it is understood that the cause
included in row 32 " giving priority to taking the project rather than execution and as a result bidding
lower price in tender" has the greatest effect in cost and time overrun in projects in opinion of involved
people. Triangular membership function of this parameter with consideration of total opinion of
interviewees is represented in figure 3.
4-contractual allocation of each cause or risk on cost and time overrun

4-1- Risk allocation model
It is necessary that each of 39 causes of cost and time overrun specified in table 3 are allocated to
involving parties in the contract (client, consultant, contractor) so that the responsibility of each party can
be examined. For this purpose, general role of contractual allocation of risks and their causes should be
clarified. So, the risk allocation model by WANG[31] is used in this study. According to this model, all
risks or their causes are divided into two categories of inside and outside contract on the first level, and
into seven categories on the lowest level.
372
Fig. 1. Risk allocation by contract clauses
Definitions of terms in figure 1 are as follows:

1. Type A: The contract clauses definitely stipulate that the owner should take certain risks.
2. Type B-1a: The contract clauses definitely stipulate that the contractor should take certain risks, and the
contractor have no objection to such allocation.
3. Type B-1b: The contract clauses definitely stipulate that the contractor should take certain risks, but the
contractor is unwilling to accept such allocation, transgressing the principle of good faith and fair dealing.
4. Type B-2: The contract have some sketchy stipulations about certain risks, and for this reason the risk
allocation remains unconfirmed.
5. Type C-1: Although there exist no clauses in the contract to allocate certain risks, the two contracting
parties have consensus that the owner should take the risks.
6. Type C-2: Although there exist no clauses in the contract to allocate certain risks, the two contracting
parties have consensus that the contractor should take the risks.
7. Type D: There exist no clauses in the contract to allocate certain risks, and the two contracting parties
have no consensus as to risk responsibilities.
4-2 Allocation of causes and risks of cost and time overrun

Based upon the classification in section 4-1 for causes and risks, all causes and risks of cost and time
overrun are categorized in table 4 and are allocated to main parties of contract (client and contractor) in
accordance with FIDIC General Conditions of Contract in traditional contracts(DBB), Design Build
contracts (DB) and EPC\turnkey contracts.
Table4- contractual allocation of risks on the basis of the type of contract
Causes
Average
impact of
each risk
1
2
3
4
5
6
2.54
2.23
1.89
4.2
3.9
3.22
Allocation of risks in
(traditional contracts (DBB
Allocation of risks in Design

Build contracts (DB)
Kind Owner contractor Kind Owner contractor

C1
C1
C1
A
C1
C1
2.54
2.23
1.89
4.2
3.9
3.22
0
0
0
0
0
0
C1
C1
C1
C1
C1
C1
373
2.54
2.23
1.89
4.2
3.9
3.22
0
0
0
0
0
0
Allocation of risks in EPC

contract (EPC)
Kind
C1
C2
C2
C1
C2
C2
Owner contractor
2.54
0
0
4.2
0
0
0
2.22
1.89
0
3.9
3.22
3.2
2.91
3.33
1.44
4.1
2.36
1.86
2.66
2.54
1.96
2.36
2.87
0.99
1.79
1.68
1.59
1.58
2.33
2.13
2.05
2.83
2.49
1.97
1.88
1.3
1.28
1.28
1.85
3.9
3.6
3.21
5.9
4.6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
SUM
C1
A
C1
C1
C1
C1
C1
C1
C1
A
C1
C1
C1
C1
C1
B-2
C1
B-2
C1
B-1
B-1
B-2
C1
C1
C1
C1
C1
C1
B1-a
B1-b
B1-b
B-2
B-2
DBB
3.2
2.91
3.33
1.44
4.1
2.36
1.86
2.66
2.54
1.96
2.36
2.87
0.99
1.79
1.68
0
1.58
0
2.13
0
0
0
1.97
1.88
1.3
1.28
1.28
1.85
0
0
0
0
0
67
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1.59
0
2.33
0
2.05
2.83
2.49
0
0
0
0
0
0
3.9
3.6
3.21
5.9
4.6
32.5
A
A
C1
C1
C1
C1
C1
A
C1
A
C1
C1
C1
B-1b
D
B-1b
B-1b
B-1b
C1
B-1b
B-1b
B-2
B-1b
B-1b
B-1b
B-1b
C1
C1
B-1a
B-1a
B-1a
B-1a
B-1a
DB
3.2
2.91
3.33
1.44
4.1
2.36
1.86
2.66
2.54
1.96
2.36
2.87
0.99
0
0.89
0
0
0
2.13
0
0
0
0
0
0
0
1.28
1.85
0
0
0
0
0
56.7
0
0
0
0
0
0
0
0
0
0
0
0
0
1.79
0.89
1.59
1.58
2.33
0
2.05
2.83
2.49
1.97
1.88
1.3
1.28
0
0
3.9
3.6
3.21
5.9
4.6
43.19
B-1a
A
C1
C2
C2
C2
C2
B-1a
C1
A
C2
C2
C1
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
C1
B-1a
B-1a
B-1a
B-1a
B-1a
B-1a
EPC
0
2.91
3.33
0
0
0
0
0
2.54
1.96
0
0
0.99
0
0
0
0
0
0
0
0
0
0
0
0
0
1.28
0
0
0
0
0
0
19.8
3.2
0
0
1.44
4.1
2.36
1.86
2.66
0
0
2.36
2.87
0
1.79
1.68
1.59
1.58
2.33
2.13
2.05
2.83
2.49
1.97
1.88
1.3
1.28
0
1.85
3.9
3.6
3.21
5.9
4.6
80.04
Based upon table 4, in the first place, the nature of each 39 cost and time overrun causes in dam
construction projects will be determined with respect to conformity with seven form classification of risks
presented in section 4-1. Then, these risks will be attributed to one of the main parties of the contract
(contactor or client).
In accordance with table 4, the amount of risks that is allocated to contactor is as follows: 32.5% in
traditional contracts, 43.19% in DB contracts and 80.04% in EPC contacts.
In other words, although the major part of causes or risks of cost and time overrun is not related to the
contractor, he is in charge in accordance with general terms and conditions of contracts.
5-Conclusion
With consideration of aforementioned issues, it can be concluded that the allocation of risks and causes of
cost and time overrun is not proportionate to their origin and faulty party and this fact is not considered in
terms and conditions of these contracts. In these types of contracts, most risks are attributed to the client
and the consultant is not responsible for any risk. Major risks for which the consultant is actually in
374
charge will be undertaken by the client. This issue causes damages to the public who are the main client
in projects with governmental client.
6-References
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Arditi and Robinson., 1995. Concurrent Delays in Construction Litigation. J . Cost Engineering,
37(7),1995
Arditi and Patel BK., 1989. Impact analysis of owner-directed acceleration. Journal of Construction
Engineering and Management1989; 115:144-57.
Abdulaziz A. Bubshait and Michael J. Cunningham.,1998. Comparison of Delay Analysis Methodologies,
J. Constr. Engrg. and Mgmt. July/August 1998: Volume 124, Issue 4, pp. 245-341.
AlBent Flyvbjerg, Mette K. Skamris Holm and Seren L. Buhl.1995, How Common And How Large Are
Cost Overruns In Transport Infrastructure Projects, TRANSPORT REVIEWS, 2003, VOL. 23, NO. 1,
7188
Bogardi, I., and Bardossy, A., 1983. Regional management of an aquifer for mining under fuzzy
environmental objectives. Water Resour. Res., 19(6), 1394-1402.
Chen, S. H., 1985. Ranking fuzzy numbers with maximizing set and minimizing set. Fuzzy Sets Syst.,
17(2), 113-129.
Klir, G. J., and Folger, T. A., 1988. Fuzzy sets, uncertainty, and information. Prentice Hall, Englewood
Cliffs, N.J.755
Ming-Teh Wang, M.ASCE,1 and Hui-Yu Chou2, Risk Allocation and Risk Handling of Highway Projects
in Taiwan, Journal of Management in Engineering, Vol. 19, No.
Michael R. Finke.,1999. Window Analyses of Compensable Delays, J. Constr. Engrg. and Mgmt. 125, 96
(1999).
Monthly reports, Contracts and Agreements and other documents in mahabghodss engineering
consultant Co.
Office of Government Commerce. ,1990, Cost And Time Overruns In Public Sector Construction
Projects, Economic and Political Weekly, Nov.24, 1990, Vol. XXV, No.47,pp.M-154 to M-168
Pillai and Kannan , Time And Cost Overruns Of The Power Projects In Kerala,2001.
Peter W.G.Morris And George H.Hough (1987), The Anatomy of Major Projects.
Questionnaires were collected from sabir, sepasad, jeyan, tabliyeh, mahabghodss, jahad nasr, abniro. Co
in Iran, 2007
Saied Kartam.,1999.Generic Methodology for Analyzing Delay Claims, J. Constr. Engrg. and Mgmt. 125,
409 (1999).
Said Boukendour.,2005. A New Approach of Project Cost Overrun and Contingency Management, OCRI
Partnership Conferences Series Process and Project Management Ottawa March 22, 2005
Stumpf.,2000. Delay Analysis, Cost Engineering 42.no 7 July 2000.
Schuma cher. , 1995. Quantifying and Apportioning Delay on Construction project, Cost Engineering 37,
no 2 (February-1995).
Sebastian Morris.,1990. Cost And Time Overruns In Public Sector Projects, Economic and Political
Weekly, Vol. 25, No. 47, pp.M154-M168, November 24.
Terry Williams. , 2003. Assessing Extension of Time delays on major projects, International Journal of
Project Management, Volume 21, Issue 1, January 2003, Pages 19-26.
The report of the world commission on Dams(WCD).,2000. Dams and Development, Earthscan
publications L+d, London and sterling, VA.November
WANG, LI-XIN (1997). A Course in Fuzzy Systems and Control
Zadeb, L. A., 1965. Fuzzy sets. Information and Control, 8(3), 338-353.
375
First International Conference on Construction in Developing Countries (ICCIDCI)

Comparison of Public Procurement Options under PPRA-2004 Rules

Attaullah Shah
Director Projects, Allama Iqbal Open University-Islamabad, Pakistan
attaullahshah01@gmail.com
Ehsan-ul-Haq
Director Capital Development Authority-Islamabad, Pakistan
Murtaza Ali Shah
Director Resource Development Instititute-Rawalpindi-Pakistan
Abstract:
Public Procurement Regulatory Authority (PPRA), has been constituted thorough an Act of Parliament of
Pakistan in 2004. The major objective of PPRA-2004 rules is to ensure transparent and cost effective
procurement of quality goods and services in the public departments. The rules provide various
procurement options, which can be applied to the construction and infrastructure projects as well. In this
paper, different procurement options have been analyzed in terms of their strengths and weaknesses for
construction project in Pakistan. It has been observed that if these rules are carefully followed, with
professional knowledge, technical skills and ethical integrity, the procurement process can be made more
effective and results oriented.
Keywords
PPRA, Pakistan, Procurement, Goods, Services.
1. Introduction:
Procurement Management is one of the basic nine knowledge areas of Project Management as defined by
the PMBoK (Project Management Book of Knowledge). In past the term purchasing has been used for
the process of acquisition of goods and services in limited way, but procurement is relatively broader
term, which encompasses a complete cycle comprised of the following major stages;
i. Plan Purchases and Acquisitions Determining the nature, quantity and quality of goods and services
required to be procured or acquired, the appropriate time scale and the procedure to be adopted for the
same.
In public sector organizations, procurement can be planned either on the basis of quarterly releases of the
project funds or budgetary allocations. The quality of products/services and their specifications are
usually based on the quality scope defined in the approved documents like PC-1 etc. However the
approved specification provides the minimum acceptable standards and the procurements should achieve
or exceed the given specification. In ICT projects, the specification change very rapidly due to innovation
in the information technology. Hence latest version and speciation must be followed in developing the
procurement documents.
376
The procurement procedures and related guidelines are provided by the PPRA-Rules, 2004.
ii. Plan Contracting Developing documentation for the products & services, bidding documents and
identifying potential sellers, thorough wide dissemination in the press, organization website and PPRA
website (www.ppra.org.pk).
For construction projects and Electrical & Mechanical works, PEC bidding documents are used.
According to Planning Commission notification, dated 2004, tenders for Public Sector Development
Program (PSDP) are required to be invited on PEC bidding documents, invariably.
iii. Request Seller Responses This involves, opening of tenders, collecting quotations, bids, offers, or
proposals, as appropriate based on the nature of goods and services. The process needs to be transparent
and objective to generate healthy competition amongst the prospective bidders. The bids are required to
be opened in the presence of the contractors or their representatives and in-house committee for
procurement, on the same day, when tenders are received. Many departments collect the bids and open
these at some future date at the convenience of the concerned committee, which is against the true spirit
of transparency.
iv. Select Sellers Analyzing, evaluating and reviewing offers. Choosing among potential sellers/bidders
and negotiating a written contract with each seller.
The evaluation criteria must be reflected in the bidding documents and bids received must be strictly
evaluated on the given criteria. Any change in the evaluation criteria after opening of the bids is not
admissible as it makes the procurement process biased and partial.
v. Contract Administration After award of the work to the lowest evaluated and technically
responsive bids, contract are executed. Contract administration involves, contract execution, managing
the contract and relationship between the buyer and seller, reviewing and documenting how a seller is
performing or has performed to establish required corrective actions and provide a basis for future
relationships with the seller, managing contract-related changes and, when appropriate, managing the
contractual relationship with the outside buyer of the project.
v. Contract Closure When the project has been completed a project termination strategy is required to
be devised , which must include completing and settling each contract, including the resolution of any
open items, and closing each contract applicable to the project or a project phase.
In this paper various options for procurement of goods and services under PPRA-2004 have been
discussed. The main objective of the paper is to educate the Engineering practitioners and project
managers about the procurement procedures allowed by the PPRA to ensure that cost effective and high
quality solutions are explored for the procurement of goods and services. PPRA Rules-2004 gives
competitive advantage to Engineers to employ their technical skills and knowledge for screening the
technically non responsive bidders. The low bidders dilemma, which is a major impediment to the
success of projects in third world countries can be avoided, while using the appropriate option for the
procurement.
2. Procurement procedures under PPRA-Rules, 2004.

Article 4 of the PPRA-2004 regulations provides the basic principle for procurement, which states as:
Procuring agencies should ensure that procurements are conducted in: A fair & transparent manner.
377
Process is efficient and economical.

Object of procurement brings value for money.
The various procedures proposed under PPRA 2004 are aimed at creating transparency, efficiency,
economy and best opportunity cost of the investment.
The following procedures have been recommended under PPRA Rules 2004.
2.1 One Envelop procedure:
Each bid shall comprise one single envelope containing, separately, financial proposal and technical
proposal (if required). Single stage one envelop bidding procedure is adopted in the main open
competitive bidding procedure used for most of the procurement. One envelop procedure is followed in
projects, where the scope and technical specification of the procurements are very clear and unambiguous.
In Construction projects one envelope procedure is usually used for projects of repetitive nature and
where a pool of registered contractors with the departments is available. In this procurement mode, the
financially lowest bid is generally selected. However such procurements become victim of low bidder
dilemma as the bidding firms, in their attempt to quote the lowest price, compromise many essential
project costs and overheads. The procedure may bring financial savings but the history of successful
procurements by this procedure is very poor. The procurement procedure may give better results in case
of maintenance projects and small projects with cost not exceeding 20 million. One envelop procedure is
adopted by the Project Directorate of AIOU, in the following types of projects;
Improvement and enhancement projects not exceeding 10 Million

New projects, where the project cost is within 20 million, however a quick shorlisting process is
required to select technically sound firms.
Routine maintenance and preventive maintenance projects of buildings, ICT and equipment.
This fact has been dully endorsed by the PPRA and alternative procurement procedures have been
proposed, which shall be discussed in the later sections of the paper. However the success of these
procurement options depends on the professional soundness and ethical integrity of the procurement
officers.
2.2 Single Stage Two Envelop Procedure.
Single stage two envelope bidding procedure is used where the bids are to be evaluated on technical and
financial grounds and price is taken into account after technical evaluation: The following steps are
included;
i)
ii)
iii)
iv)
vi)
vi)
v)
The bid shall comprise a single package containing two separate envelopes. Each envelope shall
contain separately the financial proposal and the technical proposal.
The envelopes shall be marked as FINANCIAL PROPOSAL and TECHNICLA PROPOSAL
in bold and legible letters to avoid confusion.
Initially, only the envelope marked TECHNICAL PROPOSAL shall be opened.
The envelope marked as FINANCIAL PROPOSAL shall be retained in the custody of the
procuring agency without being opened.
During the technical evaluation no amendment in the technical proposal shall be permitted.
The financial proposals of bids shall be opened publicly at a time, date and venue announced and
communicated to the bidders in advance.
The procuring agency shall evaluate the technical proposal without reference to the price and
reject any proposal which does not conform to the specified requirement.
378
vi)
vii)
viii)
The financial proposals of bids shall be opened publicly at a time, date and venue announced and
communicated to the bidders in advance.
After the evaluation and approval of the technical proposal the procuring agency shall at a time
within the bid validity period, publicly open the financial proposals of the technically accepted
bids only. The financial proposal of bids found technically non-responsive shall be returned unopened to the respective bidders.
The bid found to be the lowest evaluated bid shall be accepted.
The procedure is normally adopted for the projects of technical nature, where the detailed analysis of the
firms capacity to deal with the complexity of the project is critical to the successful implementation of
the project. The scaling of technical and financial score depends on the nature of the project and relevant
importance of the of each major criteria. However the ratios can typical range from 50:50 to 70:30 for
tehnnical: financial respectively. For IT projects, where the technical expertise, global partnership and
relevant experience of the firm are of paramount importance, the technical part can be given a score of 70
or even 80.
Typical score assigned to various analysis criterions for the technical evaluation of the firms for one of
the mega ICT project at AIOU has been shown below:
Crite
ria
Nature of Firm
( 10)
Offices
and
Outreac
h
( 10)
Methodol
ogy and
approach
( 20)
Experience
of
similar works
Referen
ces.
In
Comple
(
10)
hand
ted
(25)
( 15)
Financial
soundnes
s
and
bank
reference
s
( 10)
Key
personne
l for the
project
( 10)
Total
Marks
( 100)
Obtain
Team
For Min Nationa
For
Islamab
Max
ed.
leader:
l: 05
Balance
four
Min
ad
Individual
Intnl; 5 sheets: 05 05
works:
two
office:
firm: 02
Core
Income
similar 05
05
Partnership:
team
Stat:03
works: Add 01
Other:
03
members
Bank
marks
10
01
Company:
reference: : 10
Add 2 for add
marks
05
02
marks work
per
Add 1 mark
per
office
per year since
work.
max: 05
establishment
Max 5 marks
The basic parameters for evaluation may change from project to project, however the experience of the
firms with similar works and references of the clients are important parameters and normally included in
all projects.
Mark
s
The financial score is worked out in relation to the lowest quoted financial bid as
Financial score of Firm X = (Bid quoted by lowest firm/Bid quoted by Firm X)
x score assigned to financial proposal
For example if the lowest quoted bid is Rs 50 Million and Firm X has quoted 58 Million, then for a total
score of 30, firm X will get the score: (50/58) 30 = 26
Example: One stage two envelop procedure was adopted for the selection of project Management
Consultants for Mega IT project at Allama Iqbal Open University. In response to the RFP (Request for
proposal), 11 firms submitted their technical and financial proposals. 70% score was assigned to the
379
technical evaluation. Only 5 firms qualified and the bids of these firms were opened. A score of 30% was
assigned to the financial bids. The bidders getting maximum cumulative score was selected. Thus the two
envelop procedure helped in selecting the technically responsive and financially viable solution.
2.3: Two Stage Bidding Procedure
At times, the nature and complexity of the procurement may require deliberations by both the perspective
bidders and procuring agency. Hence during technical evaluation, many questions are raised about the
scope of project, approved specification and standards, procurement conditions etc, hence fair opportunity
must be provided to all the bidders to better understand the problem and proposed best possible solution.
Two stage bidding procedure are adopted in large and complex contracts where technically unequal
proposals are likely to be encountered.
The two stage procedure is comprised of the following steps:
First Stage (Tech Proposal)

i.
The bidders shall submit, according to the required specifications, a technical proposal
without price,
ii.
The technical proposal shall be evaluated in accordance with the specified evaluation
criteria and may be discussed with the bidders regarding any deficiencies and
unsatisfactory technical features,
iii.
After such discussions, all the bidders shall be permitted to revise their respective
technical proposals to meet the requirements of the procuring agency;
iv.
The procuring agency may delete, modify or add any aspect of the technical requirements
or evaluation criteria, or it may add new requirements or criteria not inconsistent with
these rules.
v.
Such revisions, deletions, modifications or additions are communicated to all the bidders
equally at the time of invitation to submit final bids, and that sufficient time is allowed to
the bidders to prepare their revised bids:
vi.
Such allowance of time shall not be less than fifteen days in the case of national
competitive bidding and thirty days in the case of international competitive bidding;
vii.
Those bidders not willing to conform their respective bids to the procuring agencys
technical requirements may be allowed to withdraw from the bidding without forfeiture
of their bid security.
Second Stage:
i)
The bidders, whose technical proposals or bids have not been rejected and who are willing, to
conform their bids to the revised technical requirements shall be invited to submit a revised
technical proposal along with the financial proposal.
ii)
The revised technical proposal and the financial proposal shall be opened at a time date and
venue announced and communicated to the bidders in advance; and
iii)
The revised technical proposal and the financial proposal shall be evaluated in the manner
prescribed above. The bid found to be the lowest evaluated bid shall be accepted.
For soliciting the technical proposals from the bidders, normally Request For Proposal
(RFP) is
published in the news papers, which includes the scope of the project, problem statement and other
broader technical and financial parameters.
In construction project of large volume, i.e. more than 20 Million, pre-qualification of the contractors is
the common procedure for short listing of the firms. The process generates a panel of potential bidders
having the minimum requisite human and non human resources and expertise to deal with the proposed
project. The minimum number of pre-qualified bidders for a construction project is a critical decision as
380
too few bidders may create monopolistic trend and pooling whereas too many may lead to low bidder
dilemma. Experience shows that a 15-20 number is a reasonable figure. However this also depends on the
nature of project and prevailing environment in the construction industry. In one of the mega construction
project at AIOU of cost 200 Million, out of a panel of 28 pre-qualified contractors, only 5 bidders issued
the tender documents and only two bids were received back, due to prevailing political uncertainty and
unprecedented increase in the input prices. The lowest bid was found technically and financially sound
and was referred to PPRA for guidance. The PPRA authorities clarified that they are not vetting or
verifying authorities and for all procurements, PPRA Rules 2004 must be strictly followed. They further
clarified that there is no bar of minimum 3 number of bidders required for any procurement and even one
bid can be accepted if it is found reasonable and the PPRA rules are followed in true spirit. This
explanation has removed the earlier notion of minimum three bids.
Example: The two stage procedure is best suited for Large Civil Works projects, where the technical
competency of the firm is critical to the success of the projects. The first stage is normally called Prequalification of the contractors, in which a panel of potential contractor possessing the minimum human
and non human resources to deal with the project in question is short listed on the given evaluation
criteria. In second stage the tender documents are issued to these pre-qualified contractors and the final
selection is based on the lowest financial bid.
2.4 Two Stage Two envelope bidding procedure:
During procurement of goods and services, the minimum specification and overall scope of work are
normally given in the tender documents and the bidders are required to quoted their technical and
financial proposals for the same. However at times, once the technical proposals are received, there may
be some confusion on the scope and technical performance/specification. A pre-bid meeting is normally
arranged to clarify many technical and financial matters. Some times the technical performance and scope
is revised based on the discussions and feedback from the perspective bidders. This revision and
enhancement in the scope of work may bring additional cost. Hence two stage two envelop procedure
provides an opportunity to better understand the scope and technical parameters of the procurement.
This procedure is comprised of the following steps;
First Stage.
i)
The bid shall comprise a single package containing two separate envelopes containing separately
the financial proposal and the technical proposal;
i)
The envelopes shall be marked as FINANCIAL PROPOSAL and TECHNICAL PROPOSAL
in bold and legible letters to avoid confusion;
ii)
initially, only the envelope marked TECHNICAL PROPOSAL shall be opened;
iii)
The envelope marked as FINANCIAL PROPOSAL shall be retained in the custody of the
procuring agency without being opened.
iv)
The technical proposal shall be discussed with the bidders with reference to the procuring
agencys technical requirements.
v)
After agreement between the procuring agency and the bidders on the technical requirements,
bidders who are willing to conform to the revised technical specifications and whose bids have
not already been rejected shall submit a revised technical proposal and supplementary financial
proposal, according to the technical requirement.
Second Stage:
i). After agreement between the procuring agency and the bidders on the technical requirements,
bidders who are willing to conform to the revised technical specifications and whose bids have
not already been rejected shall submit a revised technical proposal and supplementary financial
proposal, according to the technical requirement;
381
ii)
ii)
The revised technical proposal along with original financial proposal and supplementary
financial proposal shall be opened at a date time and venue announced in advance by the
procuring agency:
The procuring agency shall evaluate the whole proposal in accordance with the evaluation
criteria and the bid found to be the lowest evaluated bid shall be accepted.
Two stage two envelopes procedure is used for procurement where alternative technical proposals are
possible, such as certain type of machinery or equipment or manufacturing plant. However in construction
projects, some discussions in the pre-bid meeting may lead to change in the terms and conditions or scope
of work, hence revised financial bids may be solicited for the same.
During procurement of the building project Construction of Bookware House at AIOU, the following
issues were raised in the pre-bid meeting;
-
Payments for price adjustments in the contract prices due to increase in the wages of labor
Submissions of the bank guarantee instead of pay order as bid security.
Submission of bank guarantee as performance security instead of deductions from the interim
payments.
The terms were accordingly revised as PPRA rules cover the same and revised bids were solicited
from the pre-qualified bidders. The earlier financial bids were returned back without opening.
2.5: Limitations on the negotiations in the bidding;
PPRA-2004 has clearly banned the negotiations with the bidders in normal circumstances, as it may lead
to personal bias, temptations and tendency for kick backs and corruption. Earlier, negotiation with the
bidders was allowed to secure financially reasonable bid. However, there were clear policy guidelines,
that the lowest bidder must be involved in the negotiation process.
The limitation on the negotiation by PPRA Rules-2004 has provided paved way for general increase in
the bids, pooling of the contractors, wherein a higher prices is mutually decided by the contractors, for the
procurement. The PPRA needs to revise this clause of the provisions, as through effective and transparent
negotiation process, most reasonable bid can be secured.
Conclusion:
i)
PPRA rules 2004 provide a broad spectrum of procurement procedures, which can be adopted for
the projects based on their nature, technical complexity, and stakeholder needs and expectations.
ii)
These rules and procedures if carefully followed with due diligence and professional ethics can
lead to better returns on the investment in projects.
iii)
The two envelop procedure comprising of technical and financial evaluation was adopted for the
selection of the IT constantans, Engineering design consultants and construction firms of large
projects at Allama Iqbal Open University have helped in selection of the relatively competent
and capable agencies for execution of the projects.
iv)
The low bidder dilemma, which is one of the biggest impediments to the successful management
of projects, can be avoided through better technical evaluation of the proposals. There is general
tendency that technically weak firms opt for low bids in order to secure the procurement. Hence a
rational, objective and focused technical evaluation can filter such unqualified firms from the
382
bidding process. However the basic principles of transparency, cost effectiveness and quality
soundness must be ensured in all decisions.
References.
Cleland I,C., Ireland ( 2000) Project Management -Strategic Design and
Implementation- 4th
Edition McGraw-Hill publications-New York.
Krezner.H (2006); PROJECT management- A system Approach to Planning, Scheduling and
Controlling Seventh Edition.
Mansoor PMBoK and Pakistan IT industry-Applicable or just wishful thinking
http://greenwhite.org/2008/05/21/pmbok-and-pakistan-it-industry-applicable-or-just-wishful-thinking/
Pakistan Public Procurement Rules (2004). ( www. ppra.org.pk)

Pakistan Engineering Council Standard Bidding Documents for Procurement of Civil projects (
www.pec.org.pk) .
PMBoK (Project Management Book of Knowledge)- Project Management Institute USA.
383

The Investigation of Design-Build Variants in Construction Market of the

People Republic of China
Xia Bo
Ph.D. Ccandidate, The Hong Kong Polytechnic University, Hong Kong, China
Albert. P.C. Chan
Associate Head of Department of Building and Real Estate, The Hong Kong Polytechnic University,
Hong Kong, China
Abstract
Design-Build (DB) system has been widely adopted overseas but it has not received the same popularity
yet in the Peoples Republic of China. The selection of design-build variant is regarded as one of the
critical obstacles to the application of this alternative. This paper investigates categories of design-build
variants in the construction market of China. The develop-and-construction, enhanced-design-build,
traditional-design-build and engineering-procurement-construction (EPC) are the four current designbuild variants adopted by clients. Each of them is developed to meet a varying set of circumstances and
has its own advantages and disadvantages. The develop-and-construction is mostly used in large, complex
projects in housing industry and it will guarantee clients great control over the project while still leave
some design room for the contractor. The traditional-design-build and enhanced-design-build systems are
mostly applied in projects that are comparatively simple, small-scale, and the DB contractors will have
greater control of the projects. The EPC is the extension of pure design-build method and is widely
adopted in the petrochemical, metallurgical and electronic fields because of the high-technique requirements
and the necessity for one entity to control the design, construction, procurement and commissioning etc. Four
corresponding design-build projects are also presented in this paper in order to better illustrate the
operational process and provide the insight for understanding the design-build variants in Mainland
China.
Keywords
Design-Build, variants, case study, China
1. Introduction
The design-build (DB) delivery system has been widely used and gained its popularity overseas. There is
ample evidence that an increasing number of clients are adopting the design-build procurement method in
preference to others (Anumba and Evbuomwan, 1997). According to the Design-Build Institute of
America (DBIA), about 40-percent of all nonresidential construction projects in both public and private
sectors in U.S now use this approach, in contrast to less than 10-percent two decades ago. The designbuild market share will increase further in the future.
The DB system also develops rapidly in construction market of the Peoples Republic of China (P.R.C).
Broad consensus on advantages of design-build system has been reached among owners and government
officials. The DB delivery system will be widely adopted considering the prosperous construction
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industry and strong promotion by the government. It is estimated that there are about 30-percent of the
projects are suitable or partially suitable for design-build or engineering-procurement-construction
contract (China Construction Industry Association, CCIA, 2006).
However it has not received the same popularity yet in construction industry especially in the housebuilding field that is dominated by the traditional design-bid-build procurement system. Up to now, only
less than 10-percent of construction projects are delivered in Design-build method (CCIA, 2006). The
total value of the DB contract takes up less than 5-percent of the total output of construction industry.
Among all the factors attributing to the sharp contrast between the domestic and international designbuild market, the selection of design-build variants has been overlooked for a long time. However it poses
great challenge to clients when implementing the design-build method. This paper investigates the current
categories of design-build variants in construction market of China and provides insights for the better
understanding of each variant.
2. Literature Review--The Design-Build Variants

The design-build variants are the operational variations of design-build system. In order to meet a varying
set of circumstances, certain modification to the basic design-build system has been developed (CIOB
1988). As a result, there are many design-build variants within design-build system such as the developand-construction, enhanced-design-build, turnkey, etc. These variants are similar to, and yet different
from each other. When an owner decides to employ the design-build method, an important next step is to
determine which design-build variant is the most appropriate one to meet the owners need (Beard et al,
2001).
Selecting different design-build variants means different requirements and works to the owner especially
the design work, which can vary significantly. This often poses more difficult than other issues, especially
to an inexperienced employer (Janssens, 1991). At one extreme, there could simply be a requirement for a
final productsuch as the turnkey contract, which then requires the contractor to supply a complete
design and construct. At the other extreme, the requirement could be asking the contractor to complete a
already fully designed and specified buildingsuch as the develop-and-construction contract, leaving not
much room for the contractor to do the design work. A typical DB variant contract will lie between the
two extremes, wherein the design work will be developed adequate as a vehicle for tendering and
beginning to procure the project (Harris and Mccaffer 1995).
In order to facilitate the selection of design-build variant, the operational process of each variant should
be fully understood. This paper aims to investigate the different categories of design-build projects
currently conducted in construction market of China. Through the close examination of each project, the
advantages and disadvantages of each variant will be obtained.
This paper applies the case study approach to illustrate and compare the different design-build variants,
because there are currently not enough data available in each category of DB project to conduct a largescale statistical comparison. The cases for this research were selected from different geographic locations
and different industry sections. At last, this paper summarizes four different case study comparisons of
design-build variants. The selected projects (1) are all key construction projects in local areas, (2) have
been successfully conducted, and (3) have detailed information available online. A description of the
projects is offered in Table 1.
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Table 1 Description of Case Study Projects
Project name
Location
Design-build category
Project type
Jin Mao Tower
Shanghai
Develop-and-construction
High-rise building
North District Hospital
Hong Kong
Enhanced-design-build
Hospital
Shuangchong Bridge
Guangxi
Traditional-design-build
Bridge
Engineering-procurementconstruction (EPC)
Oil-tanking
DayaBay Oil Storage

Guangdong
project
4. The Investigation of Design-Build Variants in China

In Mainland China, the design-build (DB) system is defined as one of general contract systems under
which the contractor performs both design and construction practices and take responsibility of project
quality, safety, schedule, and cost under one single contract (Ministry of Construction of the P.R.CHINA,
2003[30]). The design practice, however, can be divided into several stages. Therefore, according to the
different design stages the design-builder undertakes, the design-build projects can be classified into
different variations.
The procedure of project implementation can be divided into a number of key work stages. The Chinese
construction government formulates the project construction into following sequent stages as shown in
Table 2.
Table2. The work stages of the project implementation
Project stages
Key project stages in Mainland China

Project proposal
Project definition
Feasibility study
Design Brief
Preliminary design
Design
Concept/Schematic design
Design development
Working drawing
Construction preparation
Construction
Construction
Inspection and acceptance
Post-construction
Operation and Post-evaluation
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Design-build is an alternative project delivery method that encompasses both design and construction
under one contract. The design stages can be generally divided into preliminary design and working
drawing stages in China. The preliminary design can be further divided into concept design/schematic
design and design development. According to design-builders different responsibilities in design
performance, the current design-build projects in the construction market can be divided into following
categories: develop-and-construction, enhanced-design-build, traditional-design-build, and engineeringprocurement-construction (EPC). Fig 1 represents the classification of design-build projects and serves as
an outline for the discussion of design-build variants.
Fig 1 classifies four categories of design-build projects in current domestic construction market. In
develop-and-construct project, the clients have or engage their design consultants to do the project
definition, preliminary design and design development. The successful design-build contractor is then
responsible for the working drawing and construction work.
In traditional-design-build project the client leaves all the preliminary design, working drawing and
construction work to the design-builder. The client and his design staff only do the project definition and
prepare the enquiry or design brief. Considering the preliminary design can be further divided into
schematic design and design development, the enhanced-design-build therefore evolved as another
design-build variant. The word enhanced signifies that the client develop the schematic design using his
own team of consultant, and require tenders to submit a conforming bid based on the design (Chan, 2000).
However, this category of design-build project is only adopted in Hong Kong construction market.
In EPC project, the client leaves not only all the design work but also the project definition and some/all
post-construction works to the contractor. The client reaches out immediately to the total facility provider
or EPC firm to develop the project study. The EPC pattern is especially widely used in metallurgical,
chemical and electronic industry in China where most of the construction projects has complex technical
process and high-technique requirements.
Project
definition
Preliminary Design
Concept
Design
Design
development
Working drawing
Construction
Postconstruction
Develop and construction
Enhanced design-build
Traditional design-build
Engineering-procurement-construction (EPC)
Fig 1 the classification of design-build projects in Mainland China

4.1 Develop-and-Construction Project
Develop-and-construction is shorthand for develop the detail from the employers design and construct
the works (Janssens 1991). The owner or his consultants will do the design work to design development
stage (about 50 percent of the design work) and design almost the whole building. This method may
preclude the design-build team from any significant creativity and innovation, since basic solutions and
concepts are determined before the design-build team begins, and the design-builder selection tends to be
387
price oriented (Quatman 2001). However many owners take it as a hybrid system to take advantage of
design-build and traditional delivery method.
The Jin Mao Tower is a typical project of develop-and-construction. It is an 88-story landmark skyscraper
in Lujiazui area of the Pudong district of Shanghai, the Peoples Republic of China. Until 2007 it was the
tallest building in the PRC, the fifth tallest in the world by roof height and the seventh tallest by pinnacle
height. In the construction of Jin Mao Tower, the owner China Shanghai Foreign Trade Center Co., Ltd
employed the Skidmore, Owings & Merrill (SOM) based on its concept design through international open
bidding. The SOM then developed the design work to design development stage. The sucessful designbuild contractor, Shanghai Construction Group, was contractually responsible for the remainning working
drawing and construction work.
This contract arrangement gave the owner greater control of the project while still preserving the time
saving advantages of design-build system. The time saving mainly stems from the contractors control
over the design&build process, allowing him to carry out design and construction activities in parallel. In
addtion, the constructability of the construction document which was developed by Shanghai
Construction Group (the design-builder) to his own techinique advantage, greatly faciliated the
construction process.
The develop-and-construction system is particularly advantageous for large and complicated public
buildings in housing industry in China. Although the design-build is wiedely used and demonstrats its
advantages overseas, most of the domestic civil buildings are delivered in traditional design-bid-build
method. Many clients concern about their unfamiliarity with this alternative system and worry about
losing control of projects. When the traditonal system no long fit for complicated modern buildings, the
develop-and-construction system can be regarded as an optimal alternative for clients, which will enable
them to take advantage of design-build sytem but still keep much control of the projects. Furthermore,
considering that many of the contracotrs in Mainland China lack the ablity to integrate the design and
construction adequately, it is quite a suitable alternatvie before the DB contractors step further in the
project work process.
4.2 Traditional-Design-Build and Enhanced-Design-Build Projects
The traditional-design-build or the pure design-build represents the original design-build in which the
design-builder takes full responsibility of design and construction. The word traditional is especially
designated to this variant to distinguish with the design-build which now embraces the whole variants
spectrums. In traditional-design-build project, the client prepare the project definition and enquiry by
himself or under the assistance of consultants, and then leaves the preliminary design, working drawing
and construction work to the successful design-builder.
Liuzhou Shuangchong Bridge in Guangxi, Southwest China is constructed under traditional-design-build
system. The bridge is 4.1-kilometer long and 32-meter wide with six traffic lanes and it is one of the key
construction projects proposed by Guangxi Government. After completing the feasibility study assisted
by a design consultant company, the client held the nationwide competitive bidding for the design-build
contractors who should be responsible for the design and construction. The potential tenders were
required to complete the preliminary design in their confirming bid for evaluation. At last the consortium
composed of China Railway Engineering Corporation (CREC) and China Zhongtie Major Bridge
Reconnaissance & Design Institute Co., Ltd (BRDI) got the design-build contract for this project.
The owner chooses the pure design-build because he can place most of facility requirements and
management needs under a single legal agreement. The traditional-design-build projects will allow the
owner and especially its design-builder to have maximum input at the early stage to influence the time,
cost and quality.
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The main disadvantage of this method however, is that the owner may not be guaranteed that all his
interest and requirements are fully satisfied. Sufficient specification and plans have to be prepared for the
bidding job because it can be very costly if the information provided by the owner to the contractor is in
error at the outset of the design-build process (Mogibel, 1999). Also there is less flexibility for making
changes after the award of the contract. Therefore the traditional-design-build system is mostly applied in
the comparatively simple, low risky projects in current construction market.
As the preliminary design can still be divided into concept/schematic design and design development, the
enhanced-design-build system evolved as another design-build variant wherein the DB contractor
performs the design development, work drawing and construction. Chan (2000) introduce an enhanced
design-build project in HKthe North District Hospital. The Hospital Authority first prepared a
comprehensive functional brief. Its own consultant team was appointed to prepare the schematic design in
1:200 scale drawings, performance standard and technical specification. The remaining design
development and production of documents required for construction were carried out by the design-build
contractor, who employed his own consultants to complete the remaining design.
The enhanced design-build has the advantages such as the fast track delivery process, the conformance of
basic design, better buildability etc. However, there are few such projects in Mainland China. The clients
normally do not tend to separate the schematic design from the preliminary design stage. It may cause the
discontinuity of design work, and increased dispute due to the incomplete documentation. In addition,
there is so much overlapping between schematic design and design development that the client may find it
difficult to decide when to hand the preliminary design over to the contractor.
4.3 Engineering-Procurement-Construction (EPC) project
In engineering-procurement-construction (EPC) or turnkey projects, the contractors take the responsibility
of engineering, procurement, construction and the commission and/or handover. All that remained for the
client to do is simply turn the key to open the door. In China, the EPC delivery system was first
introduced in Petroleum and Chemistry industry in 1980s and then spread to other industries such as
metallurgical industry, electronic industry etc. In the petrochemical, metallurgical and electronic fields,
most of the DB projects are delivered in EPC contract because of the high-technique requirements and the
necessity for one entity to control the design, construction, procurement and commissioning etc.
According to the statistics by China Exploration & Design Association, nearly 50 percent of the DB
contracts are EPC pattern in these industries.
The following oil storage project, located in Guangdong province, is delivered in EPC system. The
contractor Chengda Engineering Corporation Of China is an international engineering company in
Mainland China. It has undertaken more than thirty EPC projects since 1985. It ranked 28 among the list
of 200 largest international engineering companies according to Engineering News Record 2006. This
project is owned by Oiltanking Daya Bay Co., Ltd, a high quality service provider for liquid bulk storage
and logistics. The Chengda company, as the EPC contractor, took the preliminary design, detailed design,
facility procurement and construction for the owner. Besides the oil storage system, the contractor was
also responsible for designing, procuring and constructing other public conveyance system and accessory
production facility such as working office, power supply system, laboratory, warehouse and interior road
etc.
EPC system is mainly used in the industrial projects that have large scale, long duration and technique
complexity. The clients can leave all the project planning, design, material and facility procurement,
construction, commissioning and operation to the EPC contractor. Therefore it is very popular in the
petrochemical, metallurgical and electronic industry. Furthermore, in these industrial projects most of the
clients are the end-users of the facilities, and they concern much more about the economic performance of
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the projects rather than the construction process. Therefore the clients are inclined to purchase the whole
facility from the EPC companies.
5. Conclusions and Practical Applications

The selection of the design-build variants constitutes obstacles for the wide application of design-build
system in China. In order to facilitate the selection of appropriate variant for clients, this paper
investigates the current categories of design-build projects in construction market. A case study approach
is conducted for close examination of their operational procedures.
The case study provides insights to how design-build delivery system is conducted in various ways. The
conclusion of this research is that there are four main design-build variants in the construction market of
China, and each has its own application environment, advantages and disadvantages.
The develop-and-construction is mostly used in large, complex projects in housing industry. In such
projects, owners employ the design consultants, usually the international ones to do the preliminary
design and design development, then leaving the work drawing and construction performance to the
design-build contractor. This variant will guarantee the clients great control over the project while still
leave some design room for the contractor. Although the develop-and-construction may preclude the
design-build team from significant creativity and innovation, both clients and DB contractors find it
suitable in current construction market in China. It is mainly because the unfamiliarity of the clients to the
design-build system and the contractors lack of ability to combine the design and construction
adequately. The develop-and-construction system can be regarded as the bridge between the traditional
delivery system and the hybrid integrated design-build system.
In the traditional-design-build and enhanced-design-build projects, the DB contractors will take the
responsibility of preliminary design drawing and thus have great control of the project. The contractor
will provide the basic solutions and concepts in the early stage. However the pure design-build method is
not favored by clients especially the public sector owner in China. It is because, firstly, the bid evaluation
based on the concept design will poses great difficulties to the clients; and secondly, the clients may have
the concern that their interests may not be guaranteed. As a result, the traditional-design-build system is
mostly applied in the projects that are comparatively simple, small-scale and less risky. The enhanceddesign-build, wherein the owner first develops the concept design before handing the project over to the
DB contractor may serve as the compromise between the owner and contractor. It will give the client
greater control, while still allowing the contractor to carry out design and construction activities in
parallel.
The EPC is the extension of pure design-build method. The EPC contractor can get involved in the project
as early as project plan/proposal and take the responsibility of commissioning, operating and handover
after the construction work. The EPC contract is widely adopted in the industrial projects, which have
complicated technological process and high-technique requirements. The DB projects in Metallurgic,
petrochemical and electronic industries are mostly delivered in EPC contract.
The investigation of design-build variants provides insight for better understanding the conduction of
design-build system in construction market of China. While, more research is required on the selection of
DB variants. Choosing the appropriate DB variants poses great challenge to clients. An employer and
advisors should not go too far with the design, which may incur unnecessary fees and deny the
creativity of contractors to the design process. Also, the employer should not provide too little
information in the enquiry, for the tenders he obtains may not include any satisfactory design solutions,
and the owner will also put much needless expense to the potential contractors.
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6. References
Aumba, C. J. and Evbuomwan, N. F. O. (1997). Concurrent engineering in design-build project.
Construction Management and Economics (1997) 15, 271-281
Beard, J.L and Loulakis SR. M. C., and Wundram E.C. (2001) Design-BuildPlanning through
Development, McGraw-Hill, U.S. 2001
China Construction Industry Association (CCIA) (2006) http://www.zgjzy.org
Chan, A.P.C (2000). Evaluation of enhanced design and build system-a case study of hospital project.
CIOB (1988) Code of Estimating Practice, Supplement No.2: Design and Build. The Gresham Press.
Harris, F and Mccaffer, R (1995), Modern Construction Management, BSP Professional Books, Oxford,
1995
Janssens, D.E.L. (1991) Design-Build Explained, Macmillan Education Ltd, London.1991
Ministry of Construction of the Peoples Republic of China (2003), http://www.cin.gov.cn
Mogibel, H. (1999) Project delivery system of Mining project, CEM 600 Master of Engineering Report,
King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia, 1999
Quatman, G. W (2001), Design-Build for the Design Professional, Aspen Law & Business, Geithersburg,
2001
391

Assessment of Critical Success Factors for Construction Projects in Pakistan

Muhammad Saqib
Assistant Professor, Department of Civil Engineering, NED University of Engineering & Technology,
Karachi, Pakistan
msaqibm@neduet.edu.pk
Rizwan U. Farooqui
Sarosh. H. Lodi
Professor and Chair, Department of Civil Engineering, NED University of engineering & Technology,
Karachi, Sind, Pakistan
Abstract
The construction industry is dynamic in nature due to the increasing uncertainties in technology, budgets,
and development processes. Nowadays, building projects are becoming much more complex and difficult.
The project team is facing unprecedented changes. The study of project success and the critical success
factors (CSFs) are considered to be a means to improve the effectiveness of project. However the concept
of project success has remained ambiguously defined in the mind of the construction professionals.
Consequently, this research is conducted in order to make an attempt to identify which variables influence
the success of project implementation. Based on the results of the survey, we anticipate that patterns will
emerge regarding the key performance indicators for measuring project success. These results could then
be used in effecting successful projects. This study has chosen seventy seven (77) factors categorized in
seven (7) groups that the questionnaire respondents were asked to rank and score. A criticality score and
a criticality index were used to identify the CSFs which, in descending order of importance, were found to
be: Decision making effectiveness, Project Managers experience, Contractors cash flow, Contractor
experience, Timely decision by owner/ owners representative, Site management, Supervision, Planning
effort, Prior project management experience, Clients ability to make decision. Further study on the key
performance indicators (KPIs) is needed to identify the causal relationships between CSFs and KPIs. The
causal relationships, once identified, will be a useful piece of information to implement a project
successfully.
Keywords
Critical Success Factors, Construction Projects, Pakistan, Key Performance Indicators
1. Introduction
A construction project is completed as a result of a combination of many events and interactions, planned
or unplanned, over the life of a facility, with changing participants and processes in a constantly changing
environment. Certain factors are more critical to project success than others. These factors are called
critical success factors (CSFs). The term "critical success factors," in the context of projects and the
392
management of projects, was first used by Rockart (1982) and is defined as those factors predicting
success on projects (Sanvido et al. 1992). The topic has since become a prolific research area.
Furthermore, because the pursuit of excellence in project delivery systems is not new, this new research
direction could thrive upon a rich legacy of many previous investigators. However the concept of project
success has remained ambiguously defined in the mind of the construction professionals. Consequently,
this research is conducted in order to make an attempt to identify which variables influence the success of
project implementation. The research is focused to the construction industry of Pakistan. Based on the
results of the survey, it is anticipated that patterns will emerge regarding the key performance indicators
for measuring project success in Pakistani construction industry. These results could then be used in
effecting successful projects.

1. Assess the current state of Pakistan construction industry through quantitative research with specific
reference to the status of construction management education, research and practice.
2. Develop a strategic model for the improvement and strengthening of construction management
3. Devise a framework to standardize the construction industry practices for achieving improved
4. Capacity building of academia, industry, owners and government in the area of construction
management so as to improve the overall efficiency and productivity of the construction industry.
The objective of the research presented in this paper is to define the critical factors that lead to project
success in the Pakistani construction industry and to provide a forecasting tool to enable parties to rapidly
assess the possibility of a successful project from their viewpoint.
If project participants can predict probability of success better, they can take steps to: (1) Avoid
unsuccessful projects; (2) identify good projects worth pursuing; and (3) identify problems on current
projects and take corrective action.
The general objectives were met through accomplishment of several specific tasks.
3. Research Tasks
The following research tasks were completed.
1. Define the project success criteria
2. Identify the factors affecting construction project success
3. Develop structured questionnaire
4. Collect data
5. Analyze data
6. Develop guidelines for CSFs
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4. Project Success Criteria

Success criteria or a person's definition of success as it relates to a building often changes from project to
project depending on participants, scope of services, project size, sophistication of the owner related to
the design of facilities, technological implications, and a variety of other factors. On the other hand,
common threads relating to success criteria often develop not only with an individual project but across
the industry as we relate success to the perceptions and expectations of the owner, designer, or contractor.
Differences in a person's definition of success are often very evident.
To orient the researchers, lists of typical success criteria for the owner, designer, and contractor were
developed. Each list was developed by the writers' reviewing the literature and then brainstorming and
discussing success criteria for the owners, designers, and contractors represented on the project team. An
unprioritized summary of these success criteria follows.
Owner's criteria for measuring success: on schedule; on budget; function for intended use (satisfy users
and customers); end result as envisioned; quality (workmanship, products); aesthetically pleasing; return
on investment (responsiveness to audiences); building must be marketable (image and financial); and
minimize aggravation in producing a building.
Designer's criteria for measuring success: satisfied client (obtain or develop the potential to obtain repeat
work); quality architectural product; met design fee and profit goal; professional staff fulfillment (gain
experience, learn new skills); met project budget and schedule; marketable product/ process (selling tool,
reputation with peers and clients); minimal construction problems (easy to operate, constructible design);
no "ghosts," liability, claims (building functions as intended); socially accepted (community response);
client pays (reliability); and well defined scope of work (contract and scope and compensation match).
Contractor's criteria for measuring success: meet schedule (preconstruction, construction, design); profit;
under budget (savings obtained for owner and/or contractor); quality specification met or exceeded; no
claims (owners, subcontractors); safety; client satisfaction (personal relationships); good subcontractor
buy out; good direct communication (expectations of all parties clearly defined); and minimal or no
surprises during the project.
4.1. Common Criteria
While many criteria items or viewpoints are similar, there are several distinctions that relate directly to
the parties involved and the type of business services they provide. For example, a priority item and one
that appears in all three lists (designer, owner, and contractor) in some form is the financial reality of
doing business. The owner wants the project completed on time and on budget, and the designer and
contractor both expect to meet certain profit or fee goals. All three viewpoints also recognize the absence
of any legal claims or proceedings on a project as a desirable outcome. In other words, this is a major
criteria for measuring success. Another common thread among the three groups involves meeting an
appropriate schedule as a way of measuring or determining if a project was successful.
4.2. Unique Criteria
It is also evident that there are some unique factors associated with each of the three groups. The designer
for instance is looking for a project that will increase the level of professional development and
professional satisfaction among his employees. Safety is a high-priority issue for the contractor that
would not normally be an issue with the other two groups, because their employees are at much less risk
during the design or operation of a building than the contractor's workers are during the construction of a
building. An owner is extremely interested in knowing that the building project functions properly for the
intended use and is free from long-term defects or lingering maintenance problems.
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As one would suspect, there is some variability even within the same firm on the same project. The
factors of importance range from meeting internal budgets to professional satisfaction and on to
producing a job that will help the firm obtain repeat business or serve as a marketing tool for similar
projects with different clients. For example, two designers working on the same project may view success
differently. An experienced designer serving as a project engineer may be concerned about meeting
internal budget criteria as well as meeting the client's needs. A less-experienced designer working at a
lower level of responsibility may consider the opportunity to gain valuable design experience as a success
criteria and be less concerned about meeting the internal budget.
No single list will ever be totally comprehensive when it comes to a definition of success for a project.
The criteria developed for use with the CPSF project does give a general overall impression of each of the
three groups viewpoints. It determines the "envelope" of ideas that are used to evaluate success.
5. Factors Affecting Project Success

A number of variables influencing the success of project implementation were identified following a
thorough literature review. A careful study of previous literature suggests that CSFs can be grouped under
seven main categories. These include: (1) Project Management Factors; (2) Procurement-related Factors;
(3) Client-related Factors; (4) Design team-related Factors; (5) Contractor-related factors; (6) Project
Manager-related Factors; and (7) Business and Work Environment-related Factors.
5.1. Project Management Factors
Project management action is a key for project success (Hubbard 1990). Jaselskis and Ashley (1991)
suggested that by using the management tools, the project managers would be able to plan and execute
their construction projects to maximize the projects chances of success. Then, the variables in project
management include adequate communication, control mechanisms, feedback capabilities,
troubleshooting, coordination effectiveness, decision making effectiveness, monitoring, project
organization structure, plan and schedule followed, and related previous management experience (Belout
1998; Chua et al. 1999; Walker and Vines 2000). A number of attributes will affect this factor, including
the communication system, control mechanism, feedback capabilities, planning effort, organization
structure, safety and quality assurance program, control of subcontractors works, and finally the overall
managerial actions.
5.2. Procurement-related Factors
A number of researchers identified the importance of procurement factors (Pocock et al. 1997a, 1997b;
Walker 1997; Kumaraswamy and Chan 1999; Walker and Vines 2000). Dissanayaka and Kumaraswamy
(1999) defined the scope of procurement as the framework within which construction is brought about,
acquired or obtained. Therefore, two attributes are used to measure this factor; they are procurement
method (selection of the organization for the design and construction of the project) and tendering method
(procedures adopted for the selection of the project team and in particular the main contractor).
5.3. Client-related Factors
Chua et al. (1999) defined project participants as the key players, including project manager, client,
contractor, consultants, subcontractor, supplier, and manufacturers. Walker (1995) considered influence
of client and clients representative as a significant factor on construction time performance. The clientrelated factors concerned with client characteristics, client type and experience, knowledge of
construction project organization, project financing, client confidence in the construction team, owners
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construction sophistication, well-defined scope, owners risk aversion, client project management (Chan
and Kumaraswamy 1997; Songer and Molenaar 1997; Dissanayaka and Kumaraswamy 1999).
5.4. Design team-related Factors
Designers play a vital role as their work involves from inception to completion on a project. Chan and
Kumaraswamy (1997) considered that design team-related factors consist of design team experience,
project design complexity, and mistakes/delays in producing design documents.
5.5. Contractor-related Factors
The main contractor and subcontractors start their main duties when the project reaches the construction
stage. The variables include contractor experience, site management, supervision and involvement of
subcontracting, contractors cash flow, effectiveness of cost control system, and speed of information
flow (Chan and Kumaraswamy 1997; Dissanayaka and Kumaraswamy 1999).
5.6. Project Manager-related Factors
The project manager is another key stakeholder in a construction project and his competence is a critical
factor affecting project planning, scheduling, and communication (Belassi and Tukel 1996). Variables
under this factor consist of the skills and characteristics of project managers, their commitment,
competence, experience, and authority (Chua et al. 1999).
A construction project requires team spirit, therefore team building is important among different parties.
Team effort by all parties to a contractowner, architect, construction manager, contractor, and
subcontractorsis a crucial ingredient for the successful completion of a project (Hassan 1995).
5.7. Business and Work Environment-related Factors
Various researchers support environment as a factor affecting the project success (Akinsola et al.
1997; Kaming et al. 1997; Songer and Molenaar 1997; Chua et al. 1999; Walker and Vines 2000).
Akinsola et al. (1997) further described environment as all external influences on the construction
process, including social, political, and technical systems.
The attributes used to measure this factor are economic environment, social environment, political
environment, physical environment, industrial relation environment, and level of technology advanced.
1. Development of a questionnaire to elicit information about critical success factors for
construction projects of Pakistan as perceived by construction contracting organizations.
2. Conducting questionnaire survey through postal mail and personal interviews.
3. Assessment of feedback from questionnaire survey to identify the major success factors for
construction projects of Pakistan.
The steps are explained as follows.
A questionnaire was developed to facilitate data collection by the researchers and to ensure consistency in
the elements examined. The questionnaire consisted of two parts A and B. Part A consisted of
requesting respondents personal information (e.g. work experience, position in company) and company
396
information (e.g. types of construction works performed, years in business, annual volume of work,
number of employees).
Part B consisted of checklist which was prepared after extensive literature review. The literature review
was done through books, conference proceedings, internet, and leading construction management and
engineering journals. Through literature review, all the critical factors were identified. In total, 77 factors
were categorized as follows:
1. Project Management Factors
2. Procurement-related Factors
3. Client-related Factors
4. Design team-related Factors
5. Contractor-related factors
6. Project Manager-related Factors
7. Business and Work Environment-related Factors
The questionnaire was used to conduct personal interviews with representatives from 37 major
contracting organizations working in major cities of Pakistan so as to get their feedback on critical
success factors. The respondents were asked to rank and score the listed factors for their level of
criticality towards projects success. Almost all of the firms approached were large size organizations
(based on their annual volume of work and number of employees). The questionnaires were completed by
their project management who were involved in the project planning, executing, procurement and
decision making processes. Almost all of them (more than 90%) had over 10 years of construction
experience. On the basis of their position, education, work experience and professional background, it can
be inferred that the respondents had adequate knowledge of the project management activities in their
organizations.
The survey response is analyzed in the following section.
7. Analyses and Discussion:

This section deals with the analysis of the information gathered from the questionnaire survey and
includes the identification of the critical success factors based on the factors checklist. The analysis and
discussion about the questionnaire survey is organized in seven factors categories as identified in section
6 above.
7.1 Identification of Critical Success Factors
The critical success factors are presented in Tables 2 8. Each table organizes each category of factors
(Project Management Factors, Procurement-related Factors, Client-related Factors, Design team-related
Factors, Contractor-related factors, Project Manager-related Factors, Business and Work Environmentrelated Factors) rated on a scale of 1 to 10. The importance rating for each factor was scored on a scale of
1 to 10 with 1 having the lowest importance and 10 the highest.
The numbers in the filled cells for importance rating indicate the mean (average) and modal values of
responses for that option.
To identify the criticality index for each factor, the factor criticality was defined as in Table 1.
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Table 1: Criticality Assessment Criteria

Mean
Factor Score
Range
1.0 2.5
>2.5 5.0
>5.0 7.5
Criticality
Index
1
2
3
>7.5 10.0
Criticality Level
Least significant towards project success
Mildly significant towards project success
Moderately significant towards project
success
Most significant towards project success
Table 2. Critical Success Factors Project Management Related

S.
No.
I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Project Success Factors
Mean
Mode
Criticality
Index1
7.83
7.11
7.17
7.11
9.05
8.76
9.44
8.94
7.78
7.71
8.06
8.13
9.00
7.88
6.81
7.50
7.61
6.84
8.61
8
8
8
7
10
10
10
10
10
7
9
8
9
8
9
8
8
8
10
4
3
3
3
4
4
4
4
4
4
4
4
4
4
3
4
4
3
4
Project Management Factors

Communication system
Control mechanism
Feedback capabilities
Troubleshooting
Planning effort
Coordination effectiveness
Decision making effectiveness
Project monitoring
Developing an appropriate organization structure
Implementing an effective safety program
Implementing an effective quality assurance program
Control of sub-contractors work
Prior project management experience
Risk identification and allocation
Formal dispute resolution process
Motivation/ Incentives
Constructability program
Training the HR in the skill demanded by project
Overall managerial actions
1
for least significant factor=1, for mildly significant factor=2, for moderately significant factor=3,
for most significant factor = 3
398
Table 3. Critical Success Factors Procurement Related

S.
No.
II
20
21
22

Procurement Related Factors
Project delivery system (e.g. design-bid-build, designbuild)
Project bidding method (e.g. price based competitive
bidding, negotiated bidding, best value bidding)
Project contract mechanism (e.g. lump sum, unit price,
cost plus, etc.)
Mean
Mode
Criticality
Index1
8.41
10
8.56
8.21
Table 4. Critical Success Factors Client Related

S.
No.
III
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39

Client Related Factors
Influence of client/ clients representative
Clients experience
Nature of client (privately funded vs. publicly funded)
Size of clients organization
Clients knowledge of construction project organization
Clients confidence in construction team
Owners construction sophistication
Owners clear and precise definition of project scope &
objectives
Timely decision by owner/ owners representative
Owners risk attitude (willingness to take risk)
Clients emphasis on low construction cost
Clients emphasis on high quality of construction
Clients emphasis of quick construction
Clients project management
Clients ability to brief
Clients ability to make decision
Clients ability to define roles
1
Mean
Mode
Criticality
Index1
8.24
6.89
7.59
7.00
7.56
8.28
7.18
8.50
10
8
8
8
8
10
8
10
4
3
3
3
3
4
3
4
9.17
6.65
6.67
7.53
8.18
7.29
7.06
9.00
7.31
10
8
9
7
8
10
9
10
7
4
3
3
3
4
3
3
4
3
399
Table 5. Critical Success Factors Design Team Related

S.
No.
IV
40
41
42
43
44

Design Team-Related Factors
Design team experience
Project design complexity
Mistakes/ delays in producing design documents
Design teams contribution to construction
(constructability review, value engineering, etc.)
Adequacy of plans and specifications
Mean
Mode
Criticality
Index1
8.88
7.65
7.71
7.89
10
8
10
8
4
4
4
4
9.00
10
Table 6. Critical Success Factors Contractor Related

S.
No.
V
45
46
47
48
49
50
51

Contractor-Related Factors
Contractor experience
Site management
Supervision
Extent (Involvement) of Subcontracting
Contractors cash flow
Effectiveness of cost control system
Speed of information flow
Mean
Mode
Criticality
Index1
9.22
9.11
9.06
8.33
9.32
8.50
8.81
10
10
10
8
10
8
9
4
4
4
4
4
4
4
Table 7. Critical Success Factors Project Manager Related

S.
No.
VI
52
53
54
55
56
57
58
59
60

Project Manager Related Factors
Project Managers competence
Project Managers experience
Project Managers authority to take day-to-day
decisions
Project Managers authority to take financial decision,
selecting key team members, etc.
Technical capability of project manager
Leadership skills of project manager
Organizing skills of project manager
Coordinating ability and rapport of project manager
with contractors/ subcontractors
Coordinating ability and rapport of project manager
with owner/ owner representatives
400
Criticality
Index1
Mean
Mode
9.00
9.33
10
8.94
4
4
4
8.78
8.83
10
9.00
10
8.89
10
8.78
4
4
4
4
8.61
61
62
63
64
65
66
Motivating skills of project manager

Project managers commitment to meet quality, cost &
time
Project managers early & continued involvement in
project
Project managers adaptability to changes in project
plan
Project managers ability to delegate authority
Construction control meetings
8.06
8.94
10
4
4
7.89
8.06
7.65
7.72
4
4
Table 8. Critical Success Factors Business and Work Environment Related

S.
No.
VII
67
68
69
70
71
72
73
74
75
76
77

Business and Work Environment Related Factors
Economic environment
Social environment
Political environment
Physical work environment
Industrial relations environment
Administrative approvals environment
Commitment of all parties to the project
Adequacy of funding
Technology availability
Human Skill availability
X-Factor (fraudulent practices, corruption, favoritism,
lack of ethics, etc.)
Mean
Mode
Criticality
Index1
8.28
6.78
6.72
8.21
7.33
7.72
8.37
8.56
7.61
8.41
6.41
10
8
9
10
8
10
10
10
9
9
9
4
3
3
4
3
4
4
4
4
4
3
7.2 Critical Success Factors and Critical Success Categories

After analyzing Tables 2 through 8, the top 10 critical success factors (with respect to their mean
criticality indices), ranked in descending order of criticality, are shown in Table 9. Table 9 also provides
category and criticality ranking for these CSFs.
Table 9. Critical Success Factors Various Categories

Decision making effectiveness
Project Managers experience
Contractors cash flow
Contractor experience
Category
Project Manager-related
Factors
Contractor-related Factors
401
Factor
Criticality
Ranking
4
4
4
4
Timely decision by owner/

owners representative
Site management
Supervision
Planning effort
Prior project management
experience
Clients ability to make decision
Client-related Factors
4
4
4
4
Client-related Factors
Further assessment of Tables 2 to 8 to identify success factor criticality ranking of various categories of
factors (based on a value of mean criticality index for each category) results in Table 10. The table has
been arranged in descending order of criticality.
Table 10. Success Factor Criticality Ranking - Various Categories
Category of Critical Success Factors

Contractor-Related Factors
Project Manager Related Factors
Procurement Related Factors
Design Team-Related Factors
Business and Work Environment Related Factors
Client Related Factors
Mean
Criticality
Index1
8.91
8.57
8.39
8.22
7.97
7.67
7.65
Criticality
Ranking
1
2
3
4
5
6
7
Mean criticality index for a category = sum of mean of factors in each category/ total number of factors
in each category
8. Conclusions
The initial objectives of this research were to define the critical factors that lead to project success and
provide a forecasting tool to enable parties to rapidly assess the possibility of a successful project from
their viewpoint. These, general objectives were met through the accomplishments of the research. More
importantly, a list of specific factors were identified as critical to the success of projects.
The top five (5) CSF categories are:
1. Contractor-Related Factors
2. Project Manager Related Factors
3. Procurement Related Factors
4. Design Team-Related Factors
5. Project Management Factors
This is to say that factors in above categories share a major average (mean) position of importance, while
other categories do not have the same average (mean) impact on project success.
The top ten (10) CSFs (across the seven categories given above) are shown below. Their mean criticality
scores (maximum 10) are given in parenthesis.
1. Decision making effectiveness (9.44)
2. Project Managers experience (9.33)
402
3.
4.
5.
6.
7.
8.
9.
10.
Contractors cash flow (9.32)

Contractor experience (9.22)
Timely decision by owner/ owners representative (9.17)
Site management (9.11)
Supervision (9.06)
Planning effort (9.05)
Prior project management experience (9.00)
Clients ability to make decision (9.00)
This paper focuses on the CSFs and not on the measurement of project success, i.e., the key performance
indicators (KPIs). Further study should be directed to identify the KPIs, so that the causal relationships
between CSFs and KPIs can be identified. The causal relationships, once identified, will be a useful piece
of information to implement a project successfully. It can help in selecting project team members,
identifying the development needs of the project team members, and most important for forecasting the
performance level of a construction project before it commences.
7. References
Akinsola, A. O., Potts, K. F., Ndekugri, I., and Harris, F. C. (1997). Identification and evaluation of
factors influencing variations on building projects. Int. J. Proj. Manage., 15(4), 263267.
Belassi, W., and Tukel, O. I. (1996). A new framework for determining critical success/failure factors in
projects. Int. J. Proj. Manage., 14(3), 141151.
Belout, A. (1998). Effects of human resource management on project effectiveness and success: toward
a new conceptual framework. Int. J. Proj. Manage., 16(1), 2126.
Chan, D. W. M., and Kumaraswamy, M. M. (1997). A comparative study of causes of time overruns in
Hong Kong construction projects. Int. J. Proj. Manage., 15(1), 5563.
Chua, D. K. H., Kog, Y. C., and Loh, P. K. (1999). Critical success factors for different project
objectives. J. Constr. Eng. Manage., 125(3), 142150.
Dissanayaka, S. M., and Kumaraswamy, M. M. (1999). Evaluation of factors affecting time and cost
performance in Hong Kong building projects. Eng., Constr. Archit. Manage., 6(3), 287298.
Hassan, A. Q. (1995). Dont burn that bridge. J. Manage. Eng., 11(6),22.
Hubbard, D. G. (1990). Successful utility project management from lessons learned. Proj. Manage. J.,
21(3), 1923.
Jaselskis, E. J., and Ashley, D. B. (1991). Optimal allocation of project management resources for
achieving success. J. Constr. Eng. Manage., 117(2), 321340.
Kaming, P. F., Olomolaiye, P. O., Holt, G. D., and Harris, F. C. (1997). Factors influencing construction
time and cost overruns on high-rise projects in Indonesia. Constr. Manage. Econom., 15(1), 8394.
Kumaraswamy, M. M., and Chan, D. W. M. (1999). Factors facilitating faster construction. J. Constr.
Procure., 5(2), 8898.
Pocock, J. B., Liu, L. Y., and Kim, M. K. (1997b). Impact of management approach on project
interaction and performance. J. Constr. Eng. Manage., 123(4), 411418.
403
Pocock, J. B., Liu, L. Y., and Tang, W. H. (1997a). Prediction of project performance based on degree
of interaction. J. Manage. Eng., 13(2), 6376.
Rockart, J. F. (1982). "The changing role of the information systems executive: A critical success factors
perspective." Sloan Mgmt. Review, 24(1), 3-13.
Sanvido, V., Grobler, F., Pariff, K., Guvents, M., and Coyle, M. (1992). Critical success factors for
construction projects. J. Constr. Eng. Manage., 118(1), 94 111.
404

Skilled Laborer Management in Handling Concurring Building Projects at

Multiple Sites: the Bar Benders Job Scheduling Problem
Ming Lu
Associate Professor, The Hong Kong Polytechnic University, Hong Kong, China
Hoi-Ching Lam
Research Associate, The Hong Kong Polytechnic University, Hong Kong, China
S. L. Tang
Associate Professor, The Hong Kong Polytechnic University, Hong Kong, China
cesltang@inet.polyu.edu.hk
Abstract
The purpose of this study is to address the challenges in single-skilled labor resource management and
scheduling under the functional organization structure. The problem of skilled laborer scheduling in a
multi-project context is elucidated through a case study of allocating bar-bender resources to three
concurring sites. Factoring in technological constraints, repetitive building cycles, alternative method
options, limited quantity of skilled laborers, and labor work calendars, we resort to computer power
(including simulation and optimization algorithms resulting from recent research) in search of the best
combination of construction methods at individual sites and the optimum size of labor force that would
lead to the shortest duration of completing the jobs at all site. The resulting substantial reduction in the
job's duration comes solely from improvements in the efficient use of time and budget. That would
deliver cost savings to the subcontractor and justify a pay raise increase for the laborers.
Keywords
Project Scheduling, Resource Allocation, Optimization Analysis
1. Introduction
1.1 Project Organization Structure
Traditionally, to execute a project, a building contractor would hire his own manpower resources and
organize different kinds of specialty crews by a project organization (or line organization) structure
(Pilcher 1992). The project team is typically based on a single project site, following clear duty reporting
lines as shown in Figure 1. However, repetitive job nature and precedence constraints inherent in building
technology inevitably result in high waste in resource usage this is one drawback of the project (line)
organization structure, as identified by Tang et al. (2003). For instance, in concreting construction, the
rebar fixing laborers have to wait until the formwork crew completes installing all the formwork on the
current building floor; while the formwork crew can not start to work on the next floor until the
concreting crew finishes the current floor. Tang (1999) attempted to use a mixed integer linear
programming model to schedule three worker gangs of three different trades (carpenters, steel fixers and
concretors) to work on three different jobs. The drawback of this model is that only one cycle of
405
construction for each job can be considered, otherwise the linear programming model would become too
complicated.
General Contractor
Concreting Crew
Reinforcement Crew
Formwork Crew
Site Foreman
Figure 1: Example of a Project Organization

On the other hand, a multi-skilled laborer who is specially trained to acquire more than one trade skill,
is able to perform various specialty construction tasks. Aiming to increase resource utilization and shorten
project duration, Hegazy et al. (2000) introduced a heuristic technique for combining less utilized multiskilled resources to substitute for those insufficient resources during their shortage period. Gomar et al.
(2002) investigated the mechanics of allocating a partially multi-skilled workforce and further developed
a linear programming model to optimize the multi-skilled workforce assignment and allocation.
Nonetheless, fundamental socioeconomic issues should be cautiously addressed at a regional level before
the potential benefits of using the multi-skilled resources are fully realized (Hegazy et al. 2000), including
changing union regulations, updating labor training schemes, assessing the impact on the unemployment
rate. Hence, training and employment of single-skilled laborers still remain the industry norm in many
places such as Hong Kong.
1.2 Functional Organization Structure
In an attempt to lower construction cost and improve resource-use efficiency in building sites, a general
contractor relies on subletting specialty construction tasks to specialist subcontractors. Accordingly, a
specialist subcontractor manages a single-skilled workforce to provide service to multiple ongoing
projects by a functional organization structure (Tang et al. 2003). For example, a reinforcement
subcontractor hires a team of bar benders and provides reinforcement-related contracting services to
multiple site clients. Construction technology requires that bar benders work be done after the formwork
is completed but before concrete pour starts. It is common practice for a bar bending subcontractor to take
multiple jobs at different sites over one time period. On any particular day, an individual steel laborer
could do his specialty task at Site A, and he would be kept busy at Site B the next few days, and then
switch back again to Site A once the formwork on a new building cycle at Site A is completed.
1.3 Research Motivation and Overview
Nonetheless, the flexibility and efficiency of the functional organization structure also comes along with
further complexities in scheduling the allocation of labor resources in a multi-project, multi-site setting.
During August 2007, the union of bar benders put up a strike in Hong Kong in demand for pay raise and
work condition improvement. The strike brought many construction sites to a halt for over a month and
406
affected the whole of society. The labor-management dispute was eventually resolved through
painstaking negotiations and government mediation.
To a certain extent, the bar benders dissent against subcontractors originated from high idling rate and
lack of job security, which could be partly attributable to managers lack of effective decision support
means in tackling the mind-boggling puzzle of scheduling jobs at multiple sites for the labor force. In
practice, it is unrealistic to implement a rotation door policy in managing skilled construction laborers,
which entails hiring people only when they are needed and removing them from payroll on those days
when they have no or inadequate work to do. As such, one objective in construction project planning is to
level out the labor resource requirement profile over the project period. The ideal situation is to retain a
stable project team from project start to project end while making full use of labor resources available to
achieve project time and cost goals.
The purpose of this study is to address the challenges in single-skilled labor resource management and
scheduling under the functional organization structure. The problem of skilled laborer scheduling in a
multi-project context (Figure 2) is elucidated through a case study of allocating bar-bender resources to
three concurring sites. Factoring in technological constraints, repetitive building cycles, alternative
method options, limited quantity of skilled laborers, and labor work calendars, we resort to computer
power (including simulation and optimization algorithms resulting from recent research) in search of the
best combination of construction methods at individual sites and the optimum size of labor force that
would lead to the shortest duration of completing the jobs at all site. The resulting substantial reduction in
the job's duration comes solely from improvements in the efficient use of time and budget. That would
deliver cost savings to the subcontractor and justify a pay raise increase for the laborers. Before problem
formulation, related literature on resource-constrained scheduling is briefly reviewed first.
Formwork
Sub-contractor
Rebar
Sub-contractor
Concrete
Sub-contractor
Site 1
Site 2
Bar-bender
Site 3
Figure 2: Case Study Example of a Functional Organization
2.1 Overview of Project Scheduling
In project scheduling, critical path method (CPM) is the most popular scheduling method. The resulting
network schedule facilitates tracking project time and cost, contributing significantly to planning, control,
and performance monitoring of construction projects. Despite CPM may require a large number of
activities to represent the project in a network diagram, the resource-loaded CPM provides the flexibility
to model the precedence and resource constraints in our problem definition.
Existing CPM scheduling software systems largely run on precedence diagram method and adopt
heuristic rule on resource leveling. These scheduling systems cause potential float mistakes with the
constraints of resource availability and activity interruptions and do not provide any optimization
functionality of resource-constrained scheduling (Kim and Garza 2005, Lam and Lu 2006). As it does not
guarantee shortest project time under a resource-supply-and-demand scenario, it is rare to evaluate
407
alternative resource demand and supply options, aiming at finding the optimum in terms of time, cost, or
time-cost tradeoff.
2.2 Optimization Techniques
Compared with conventional mathematical programming techniques and heuristic methods, evolutionary
algorithms hold the potential to provide a useful decision-support tool in tackling the complicated,
stochastic problem of project scheduling with resources constraints. Evolutionary algorithms follow a
stochastic search strategy on a population of individuals, each representing a possible solution to the
problem.
Genetic Algorithm (GA), which is conceptualized by John Holland in the 1970s, is the most popular
evolutionary algorithm in research related to the optimization of construction scheduling (Hegazy 1999,
Feng et al. 2000, Chan and Hu 2002). Particle Swarm Optimizer (PSO) is another evolutionary
optimization technique proposed by Kennedy and Eberhart in 1995. The basic idea of PSO was inspired
by natural flocking and swarm behavior of birds and insects. PSO shares the ability of GA to optimize
arbitrary nonlinear functions, but boasts a much simpler implementation mechanism. While PSO requires
less computational bookkeeping and generally only a few lines of code, it clearly demonstrates good
possibilities for widespread use in electromagnetic optimization (Boeringer and Werner 2004). One recent
research is that Zhang et al. (2006a and 2006b) introduced PSO technique in solving resource-constrained
project scheduling problems.
Note resource allocation is an attempt to reschedule the project tasks so that a limited number of resources
can be efficiently utilized while keeping the unavoidable extension of project to a minimum. On the other
hand, the basic idea behind the time/cost tradeoff analysis is to find the most cost efficient option for
carrying out activities so as to complete a project within an optimal time period. Apart from the single
objective optimization, a multi-objective optimization analysis integrating resource allocation with
time/cost tradeoff is justifiable before the implementation of construction works. Several multicriteria
optimized models to search the optimal combination of construction durations, resource amount, and
minimum project costs have been introduced (Leu and Yang 1999, Leu and Hung 2002).
In this research, a model for organizing and scheduling limited skilled labor resources of a specialist
subcontractor is proposed. This paper also introduces a computer system called Simplified Simulationbased Scheduling (S3) resulting from Lam (2007) and Lu et al. (2008) to solve the problem of skilled
laborer scheduling in a multi-project context. The typical bar benders job scheduling was chosen in the
case study. PSO works as the searching engine underlying S3 (Lu et al. 2008). Figure 3 shows how PSO
interplays with the CPM network analysis during optimization. The optimization approach follows a
stochastic search strategy on a population of individuals, each representing a possible solution to the
problem. Once all the members of the population are assigned with fitness values (i.e. project duration), a
selection process is carried out where better individuals (higher fitness value) stand a greater chance to be
selected for further evolution. The whole process is repeated with this new population until some
termination criteria is satisfied. The problem formulation and optimum solution consider (1) limited
resources available (as in resource allocation) and (2) alternative method options (at activity level as in
time-cost tradeoff.)
408
CPM network analysis under resource constraints

B
A
D
C
Particle Evaluation
i ty
t iv it y
Ac rior
p
M
op etho
tio d
n
Particle Encoded
Particle Evolution
Project
duration
PSO Algorithms
Global Best vs. Local Best
Resource
limit
Figure 3: Optimization Approach of S3
3. The Bar Benders Job Scheduling Problem

The problem of labor resource management and scheduling under the matrix organization structure
identified above can be formulated as a resource-constrained scheduling problem, factoring in the
following constraints:
3.1 Technological Sequence
The technological sequence is defined by precedence relationships between construction activities.
Constructing different reinforced concrete components (i.e. foundation, slab or column) requires different
technological sequence. For example, the general sequence of erecting column is fixing rebars, succeeded
by installing formwork, then by concreting. For concrete slab or beam construction, the sequence of
installing formwork, succeeded by fixing rebars, then by placing concrete needs to be followed on one
building cycle. When the site is handed over from one specialist subcontractor to another, the main
contractor or the client would not like to see any stoppage to progress at a building site. Thus, it is
important to maintain site work continuity and reduce chances of having idle days at one site due to labor
resources being tied up at another. On the subcontractors side, good job planning should ensure the site
will not come to a halt due to shortage of laborers.
3.2 Repetitive Building Cycles
Repetitive building cycles at each site necessitate allocation of certain skilled labor resources to handle
specialty tasks on a periodic basis. For instance, the number of repetitive building floors in constructing
the superstructure of a high-rise at one site. Ideal scheduling will coordinate building cycles at multiple
concurring sites, so as to make full use of specialist labor forces under subcontractors.
An activity-on-node diagram is given in Figure 4 to depict both technological sequence constraints and
repetitive building cycles at three concurring sites. The quantities of building cycles at three sites are
denoted with n, m, and p respectively. Task identification code represent activity ID (F short for
formwork, R short for reinforcement, C short for concrete), site ID, and cycle ID in sequence.
409
ST
F 1-1
R 1-1
C 1-1
F 1-i
R 1-i
C 1-i
F 1-n
R 1-n
C 1-n
F 2-1
R 2-1
C 2-1
F 2-i
R 2-i
C 2-i
F 2-m
R 2-m
C 2-m
F 3-1
R 3-1
C 3-1
F 3-i
R 3-i
C 3-i
F 3-p
R 3-p
C 3-p
FN
Figure 4: The Repetitive Building Cycles on Three Concurring Sites
3.3 Alternative Method Options

Alternative method options for tasking a building cycle at a specific site have different labor use
requirement and time requirement. Identification of those options depends on site space available,
experience and competency of laborers, and other factors relating to job conditions. For example, given
the same work content on one floor at a building site, it may take one bar bender five work days or two
bar benders three days to finish. At the job planning stage, the subcontractor needs to determine the best
combination of options at each site such that his resource utilization across all sites is enhanced and his
overall time/cost performances are improved.
3.4 Quantity of Skilled Laborers
The number of skilled laborers the subcontractor needs to hire constitutes the resource limit in his job
planning. Hiring fewer laborers will cause resource shortage, resulting in site progress stoppage due to
unavailability of laborers. Hiring more laborers will possibly lead to shorter project duration while
increasing the total direct cost, particularly, the non-productive labor cost due to resource idling. This is a
critical planning decision that should be weighed against the resource utilization and overall time/cost
performances.
4. Case Study
A reinforcement subcontractor has three building sites, and each site has a number of building cycles, or
floors, each with its own sequence of tasks. In general, the duty of bar bender includes cutting, bending
and fixing reinforcement steel bars according to drawings and bending schedules. For demonstration, the
case study is applied for constructing slabs in buildings. Construction technology requires that the
reinforcement task be done after the formwork is completed but before the concrete pour starts. For
example, reinforcement for the first floor slabs commences after erecting the first floor slab formwork. In
Table 1, the site start time represents the time when the main contractor hands over the site for
subcontractors to commence repetitive building floors at each site. The number of floors (working cycles)
at each site is also known. In addition, the Formwork cycle duration and Concreting cycle duration at
each site are estimated by the formwork subcontractor and the concrete subcontractor respectively. The
cycle durations result from job planning decisions and represent commitment by corresponding
subcontractors.
Table 1: Activity Duration of Construction Sites in Case Study
Site
Site start
time
1
2
3
0
0
3
No. of
working
cycles
5
3
3
410
Formwork
cycle
duration
3
6
6
Concreting
cycle
duration
4
5
3
The reinforcement sub-contractor considers possible alternatives for getting the job done at each site: e.g.
for one floor cycle at site 1, he could use 1 laborer for 4 working days or 2 laborers for 2 working days.
Decision on alternative options depends on work content, work space available, labor resources available,
and experience and competency of laborers. In general, the larger amount of manpower, the shorter is the
activity duration (reinforcement). In this case study, we assume there are two alternatives for each
construction site as given in Table 2.
Table 2: Alternatives Summary of Three Construction Sties
Site
1
2
3
Alternative
ID
1A
1B
2A
2B
3A
3B
Rebar Cycle
duration (d)
Laborers
required
4
2
8
6
5
3
1
2
2
3
1
2
Imagine that the subcontractor has hired three bar-bending laborers on a relatively permanent basis and he
pays a bar-bender HK $900/day (7.8 HK$ equal to 1 US$). The labor cost is calculated to include the
labors productive time and non-productive time over the total job period. The project daily indirect cost
is assumed as $1000. A laborers productive time is distinguished from his non-productive time over the
total job period. Note, laborers could do nothing on some days, because of the formwork or concreting
activities being undertaken at sites. It is important to point out, however, that this waste in the use of
resources is not caused by the laborers being intentionally idle. Rather, it is down to the subcontractors
inefficiency in scheduling the work. Thus, the scheduling system should allow the contractor to see the
economic impact of different combinations of alternatives on the resource allocation plan.
4.1 Fixed Quantity of Laborers
Fixing the quantity of laborers deployed to be three, [i.e. the subcontractor hires three laborers only], the
computer-produced solution suggests that the minimum shortest project duration of 57 working days
occurs when method combination (1B-2B-3A) is applied, meaning the 2 laborers do one cycle for 2 days
at site 1; 3 laborers do one cycle for 6 days at site 2; and 1 laborer completes one cycle for 5 days at site 3.
And, the corresponding project cost is $126,000. The detailed laborer allocation schedule is shown in
Figure 5, which could be followed by the subcontractor to assign his labor force to different sites on a
day-by-day basis.
Figure 5: Repetitive Bar Chart of Bar Bender for Scenario 1 (Fixed Quantity of Laborers)
The above optimum solution is based on the notion that any method option is feasible. In case practical
job conditions restrict method combination at each site as 1A-2B-3B, the shortest project duration
possible extends to 70 work days by employing three bar benders and the corresponding total cost also
increases to $ 139,500.
411
4.2 Flexible Quantity of Laborers

From the standpoint of subcontractors, completing task on schedule is paramount to their reputation and
competitiveness. If the subcontractor could hire more laborers (say 3, 4, or 5), he wonders whether he
could get all jobs in shorter time. The computer solution suggests that it is possible to cut the project time
by 6 working days (i.e. 51 days total project time), given 5 laborers are hired and the method combination
of 1B-2B-3B is implemented at individual sites. So this could be the crash solution if the subcontractor
is under pressure to reduce the project time. Since 2 extra laborers are employed to accelerate the working
progress, the project cost also increases to $185,400. The detailed laborer allocation schedule is shown in
Figure 6, which could be followed by the subcontractor to assign his labor force to different sites. Upon
assessing these different scenarios, the subcontractor can adopt the best strategy to his own advantage.
Figure 6: Repetitive Bar Chart of Bar Bender for Scenario 2 (Flexible Quantity of Laborers)
4.3 Resource Calendars imposed for Execution
The above time-cost-resource analysis simply runs on work days in order to simplify scheduling
calculation. In reality, the project manager has to consider the calendar constraint since the laborer
resource can have its own calendar specifying work vs. non-work days (i.e. laborers work on six workday weeks, taking Sunday off; 1st October is the public holiday). To facilitate the implementation of the
job plan, calendars constraints are added to translate the schedule into a realistic, actionable plan. The job
planning should be able to aggregate the non-work days of multiple resources involved in an activity and
delaying the early finish time of the activity accordingly. The basic ideas of imposing resource calendars
on a resource-loaded schedule are elaborated by Lu and Chan (2004) and Lam and Lu (2006). After
loading calendars to the 51-day and 5-laborer optimum schedule, project duration becomes 63 calendar
days, as given in Figure 7
412
Figure 7: Resource Bar Chart of Bar Bender for Scenario 3 (Considering Resource Calendars)
5. Conclusion
To improve resource utilization and lower project cost, skilled laborer management in handling
concurring building projects is an important issue for project managers. In this paper, a novel approach is
presented to address in the challenging problem of single-skilled labor resource management and
scheduling in multiple construction sites. This paper also introducess the use of a computer system to
carry out resource, time and cost-integrated project scheduling analysis under resource-availability and
activity-interruption constraints. The problem of skilled laborer scheduling in a multi-project context is
elucidated with a case study which allocated bar-bender resources to three concurring sites. The schedule
results obtained indicate that the computer tool is capable of producing optimum project schedule outputs
under different combination of method options at each site. The computer scheduling tool is capable of
assisting a project manager in configuring least costly, most productive labor force in meeting given
demands at a number of construction sites. In conclusion, the computer-based resource planning approach
can lend effective support to analyze and predict the performance of complicated skilled laborer
management planning.
ACKNOWLEDGMENTS
The research presented in this paper was substantially funded by an internal research grant of the Faculty
of Construction and Land Use, Hong Kong Polytechnic University for promoting cooperation with the
University of Maryland. We especially express thanks to Dr. M. Skibniewski, the University of Maryland,
for his efforts in facilitating research exchange in construction engineering and management between
Hong Kong and US.
413
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414
First International Conference on Construction in Developing Countries (ICCIDC-1)

Advancing and Integrating Costruction Education, Research & Practice
August 4-5 2008, Karachi, Pakistan
Financial Management of Construction Contracts (Constructability and its

Relation with TQM, Cost Shifting Risk And Cost/Benefit)
Tauqir Haider
Consultant & Faculty Member, LUMS.UCP.UMT & PU, Lahore, Punjab, Pakistan
tauqirhaider890@hotmail.com
Abstract
Financial Management, Book Keeping and Recognition of Construction contracts is now considered as a
unique professional job due to its recognition by IASB (International Accounting Standard Board)
through IAS (International Accounting Standard) 11. IAS 11 specifically deals with Construction
Contracts. This very standard has provided the basis for Constructability. Constructability has received
considerable attention from researchers and practicing engineers and other professionals. This is a fact
that Constructability has been associated with Total Quality Management (TQM) and Value Engineering.
This paper attempts to conceptually describe Cost shifting Risk, Cost/Benefit analysis as well as the
evolution of constructability in relation to IAS 11.In addition, the paper presents a framework to measure
recognition of Cost and revenues related to Construction Contracts.By providing professionals with this
framework, the parameters will be visible and defined, thus removing skepticism as to the financial
management as well as enable more consistent and uniform results to be obtained. Additionally, this
paper will provide Framework for the Preparation and Presentation of Financial Statements to determine
when contract revenue and expenses in the income statement.
Key Words
Financial Management, Construction Contracts, Constructibility
Introduction
A Construction Contract is a contract specifically negotiated for the construction of an asset or a
combination of Assets that are closely interrelated or interdependent in terms of their design, technology
and function or their ultimate purpose or use (Construction Contract: IAS 11 19951) . Managing the
activities of Construction contract in a productive way produces the concept of Constructability.
Constructability has been defined as the optimum use of construction knowledge and experience in
planning, design, procurement, and field operations to achieve overall project objectives
("Constructability: A Primer" 1986). As a result of constructability, the quality of a constructed facility
can be improved by better communication among major project participants such as design engineers and
construction professionals. Communication among these participants reduces the chance of project
failure and other related performance problems.
IAS 11 specifically deals with the management, Accounting and recognition of Construction contracts.
Construction contracts are given a specific identification through IAS 11.
415
Cost shifting2 is an accidental or deliberate misstatement in a contractors job cost system that can have a
substantial impact on the contractors balance sheet and income statement. Both contractors and their
auditors should be aware of the potential impact of shifts in job costs from one contract to another. The
contractor should have a reliable job cost system in place to record contract costs accurately. The auditor
should always test contract costs and look for unusual contract costing trends.
There is considerable discussion among industry professionals as to how constructability is related to
Total Quality Management (TQM) and value engineering. This paper attempts to conceptually describe
these interrelations. It also presents a framework to measure costs and benefits related to constructability.
Significant attention has been given to the topic of Construction Contract (IAS-11), The Construction
Management 1991, "Constructability: A Primer" 1986, Audit of Contract: A Practical Guide 2005,
Constructability: An Article of Tauqir Haider in The NEWS , Total Quality Management in
Construction Contracts: By James. Santee 2006, Value Engineering and Cost Benefit: Costing
Techniques By Houston & jordeen 2003.
Evolution of Construction Contract Management

Construction contract may be negotiated for the construction of a single asset such as a bridge, building,
dam, pipeline, road, ship or tunnel. A construction contract may also deal with the construction of a
number of assets which are closely interrelated or interdependent in terms of their design, technology and
function or their ultimate purpose or use; examples of such contracts include those for the construction of
refineries and other complex pieces of plant or equipment.
Construction contract include contracts for the rendering of services which are directly related to the
construction of the asset, for example, those for the service of project managers and architects; and
contracts for the destruction or restoration of assets, and the restoration of the environment following the
demolition of assets.
Construction contracts are formulated in various ways such as fixed price
contracts3 and Cost plus contracts4.
Construction Contracts Financial Management

When a contract covers a number of assets, the construction of each asset shall be treated as a separate
construction contract when:
a. Separate proposals have been submitted for each asset.
b. Each asset has been subject to separate negotiation and the contractor and customer have been
able to accept or reject that part of the contract relating to each asset.
c. The cost and revenue of each asset can be identified.
A group of contracts whether with a single customer or with several customers, shall be treated as a single
contract when:
a. The group of projects are negotiated as a single package
b. The contracts are so closely interrelated that they are, in effect, part of a single project with an
overall profit margin
c. The contracts are performed concurrently or in a continuous sequence.
2
Cost shifting is an illegal practice that can change results and outcomes seriously.
A fixed price contract is a construction contract in which the contractor agrees to a fixed contract price, or fixed
rate per unit of output, which in some cases is subject to cost escalation clauses.
4 A cost plus contract is a construction contract in which the contractor is reimbursed for allowable or otherwise
defined costs, plus a percentage of these costs or a fixed fee.
3
416
A contract may provide for the construction of an additional asset at the option of the customer or may be
amended to include the construction of an additional asset. The construction of the additional asset shall
be treated as a separate construction contract when:
a. The asset differs significantly in design, technology or function from the asset or assets
covered by the original contract.
b. The price of the asset is negotiated without regard to the original contract price.
Cost & Revenue Recognition

Contract Revenue5 is measured at a fair value of the consideration received or receivable. The
measurement of the contract revenue is effected by a variety of uncertainties that depend on the outcome
of the future events. The estimates often need to be revised as events occur and uncertainties are resolved.
Therefore, the amount of contract revenue may increase or decrease from one period to the next. For
example:
a. A contractor and a customer may agree variations or claims that increase or decrease contract
revenue in a period subsequent to that in which the contract was initially agreed.
b. The amount of revenue agreed in a fixed price contract may increase as a result of cost
escalation clauses.
c. The amount of contract revenue may decrease a result of penalties arising from delays caused by
the contractor in the completion of the contract.
d. When a fixed price contract involves a fixed price per unit of output, contract revenue increases
as the number of units is increased.
A variation is an instruction by the customer for a change in the scope of the work to be performed under
the contract. A variation may lead to an increase or decrease in the contract revenue. In addition to
incentive payments are additional amounts paid to the contractor if the specified performance standards
are met or exceeded.
Contract Cost 6 include site labor costs inclusive of supervision costs, cost of material used in contract,
depreciation of plant & equipment used on the contract, cost of moving plant, equipment and material to
and from the contract site, cost of hiring plant & equipment, cost of design and technical assistance,
estimated cost of rectification and claims from third party. Contract cost however can be reduced by the
incidental income. Attributable costs may include insurance, cost of design and technical assistance and
construction overheads. Non attributable costs are general admin costs for which reimbursement is not
specified in the contract or selling costs.
When the outcome of the construction contract can be estimated reliably, contract revenue and contract
costs associated with the construction contract shall be recognized as revenue and expenses respectively
by the reference to the stage of completion of the contract activity at the Balance Sheet.
Practically in Financial Management of Construction contracts PC7-I is devised as a measure which
works as a base for all estimations and variations. As per PC-1 cost of the total construction contract is
phased along with its targeted completion stages.
5
Contract revenue is the initial amount of revenue agreed or variation in contract and claim or reliable
measurement.
6 Contract cost directly relates to the specific contract, costs are attributable to the contract activity in general and
other costs specifically chargeable to the customer under the terms of the contract.
7
417
Out of the total Construction cost there is a division for direct cost and indirect cost, Civil works and
phase wise cost associated with it. Mobilization advance8 is paid at the start of the project to the
contractor so that he can mobilize the job to be done in future and this is subject to adjustment in the
Running Bills9. Through these Bills a certain position is calculated along with its financial impact and the
payment is made on the work which is certified by the concerned professionals. Some advance payment
cans also be availed on the availability of material stock which is again adjusted in future. In the Final Bill
all adjustments are done to close the matter however Bank guarantee remains in custody up till the end of
the specified period of satisfactory work.
1. Cost Shifting
It is now a day in routine to find out many corporations improperly booking assets related to uncompleted
construction contracts. To the public, it seems improbable that a qualified auditor could simply overlook
the improper capitalization of significant assets. However, traditional audit procedures designed without
construction accounting in mind can fail to detect the improper booking of assets related to uncompleted
construction contracts. Significant cost shifting can quickly cause a material misstatement to a
contractors financial statement and leave the contractor and the auditor open to serious charges.
Cost shifting is an accidental or deliberate misstatement in a contractors job cost system that can have a
substantial impact on the contractors balance sheet and income statement. The most dangerous type of
cost shifting involves moving or misdirecting job costs from an unprofitable job to a profitable job. Cash
and accounts payable balances are unaffected. Accounts receivable and expense account balances are
also unaffected. In many cases, however, cost shifting can have a balance sheet and income statement
impact larger than the amount of the costs that have been shifted.
1.1 What is the Effect of Cost Shifting?
At first glance, the movement of costs from one contract to another would seem to have little or no overall
financial statement impact. It seems improbable that a substantial misstatement of profits could occur
without affecting any expense accounts. It also seems improbable that profits could swing without
booking any additional billings. However, many contractors and their auditors have discovered the
dramatic impact that cost shifting can have on a companys financial statement. The example below
shows the substantial gross profit impact of a $200,000 cost shifting entry:
Contract A
Contract B
Completed
Uncompleted
Contract
Contract
Before Cost Shifting
Contract Amount
$1,200,000
$1,500,000
Estimated Job Costs
( 1,300,000)
( 1,200,000)
Estimated Profit
($ 100,000)
$ 300,000
Billings to date
Overbilling (Liability)
Revenue to date
Costs to date
$1,200,000
1,200,000
( 1,300,000)
$ 600,000
100,000)
500,000
( 400,000)
8 Mobilization advance is normally a certain percentage (usually 10%) of the total contract that is paid as advance to
start work on it against bank guarantee.
9 Running Bill is a periodic basis Bill which is submitted along with stage of completion for payment.
418
Gross Profit to date

Job percentage complete
($ 100,000)
$ 100,000
100%
33%
After Cost Shifting

($200,000 of costs are shifted from Contract A to Contract B)
Contract Amount
Estimated Job Costs
Estimated Profit
$1,200,000
( 1,100,000)
$ 100,000
$1,500,000
( 1,200,000)
$ 300,000
Billings to date
Underbilling (Asset)
Revenue to date
Costs to date
Gross Profit to date
$1,200,000
1,200,000
( 1,100,000)
$ 100,000
$ 600,000
150,000
750,000
( 600,000)
$ 150,000
Job percentage complete

Increase in gross profit
100%
$ 200,000
50%
$
50,000
In this example, Completed Contract A improves by $200,000 due to the costs shifted off the job.
However, Uncompleted Contract B also improves because the contract is now 50% complete rather than
33% complete. Because Contract B is incomplete, gross profit is recognized on the percentage of
completion basis. Therefore, Contract B recognizes 50% of the estimated gross profit for the entire job
($150,000) rather than 33% of the gross profit for the entire job ($100,000). The $200,000 cost shifting
entry improved the books of the contractor by a total of $250,000.
In this example, Uncompleted Contract B received $200,000 of costs which did not belong to that job.
When Contract B is completed, it will either finish $200,000 over budget or another cost shifting entry
will occur.
1.2 Who Benefits from Cost Shifting?
Although the big corporate cases grab the headlines, most cost shifting does not occur when a corporation
tries to manipulate its balance sheet. Cost shifting occurs most frequently when field level managers
attempt to manipulate contract profitability. Cost shifting can also happen accidentally although the
consequences usually are not as severe.
Contractors often pay bonuses to their field managers and estimators based on the profitability of
completed contracts. In the above example, the estimator of Contract A might receive a bonus based on
the false assumption that the contract was profitable. Or, the superintendent of Contracts A and B might
deliberately miscode invoices from one job to another to hide losses that occurred under his supervision.
1.3 How to Spot Cost Shifting
The only way the contractors balance sheet changes when cost shifting occurs is that under billings (an
asset) increase and over billings (a liability) decrease. Under billings should be rare, especially in
contracts over 50% complete. Auditors and other users of contractors financial statements should look at
under billings skeptically and investigate each under billing carefully.
419
Many users of contractors financial statements prepare fade schedules. A fade schedule measures a
contractors job profit forecasts versus the final profit on a job. At a minimum, significant contract fades
can indicate poor job profitability forecasting. At worst, contract fades can indicate cost shifting has
occurred.
Traditional audit procedures designed for non-contractors will not detect cost shifting. Tests designed to
search for unrecorded liabilities or to detect improper cutoff of expenses will only reflect that all costs
have been reported in the proper period. Tests designed to find improperly booked billings or receivables
will find no exceptions. Audit test work for cost shifting must focus on the accuracy of job costing
procedures.
1.4 Controls and Audit Steps Designed to Detect Cost Shifting
Intentional cost shifting constitutes fraud by some member of a contractors management. While audits
are not specifically designed to detect fraud, an auditor must test contract costs and internal control
systems. The following steps are designed to prevent or detect cost shifting:
1.4.1
1.4.2
1.4.3
1.4.4
1.4.5
1.4.6
1.4.7
1.4.8
Strong internal controls for job cost coding Project managers should not have free reign to code
job cost invoices without accounting review.
Test Job costs for accuracy At a minimum, every audit of a contractor must include random
testing of contract costs and the related cost coding. The most significant components of the
contractors job costs should receive the heaviest scrutiny.
Compare job costs against bid documents Every contractor should estimate contracts in the
same manner in which they record job costs. An auditor should test job costs for significant
contracts by comparing each line item of job cost against the original forecast. Any overruns
should be explained and, preferably, documented with a change order.
Test revised profitability estimates against bid documents Very often, cost shifting is
accompanied by an upward revision in contract profitability. This actually makes the financial
impact of the cost shift even more drastic. An auditor should test revised profitability estimates
against original bid estimates in the same manner in which job costs are compared against bid
documents. Cost shifting by field personnel can also involve directing a subcontractor to invoice
the wrong contract. Comparison of subcontract costs on particular line items versus the original
bid amount can help spot this type of cost shifting.
Analytically test job cost components Contractors who perform similar types of work should
have comparable costs from job to job. For instance, a grading contractor whose overall direct
costs are 40% equipment related should have about the same percentage of equipment costs on
each job.
Review allocations of indirect job costs Cost shifting is often hidden in the allocation of indirect
costs such as internally-owned equipment costs, shop costs, insurance, and labor burden.
Periodic tests should be performed to ensure that each job is being charged its fair share of
indirect costs.
Perform a fade analysis The best contractors tend to finish jobs at the same profit levels at
which they were forecast. Two fade schedules should be prepared. The first measures each jobs
prior period profitability forecasts against current forecasts or actual results. The second schedule
should restate prior period uncompleted contract schedules using revised profitability figures.
Each of these schedules helps an auditor determine which contracts have had unusual fluctuations
in profits.
Examine bid spreads Examining bid results can help an auditor determine whether a contractor
has been awarded a job at an unusually low price. The auditor should compare the contractors
bid price versus the second place bidder and versus the average bid price of all the contractors
competitors bidding for each job. If a contractor is more than 5% to 10% low on a job, the
420
1.4.9
contractor will likely make little or no profit on that job. Such a job is a prime target for cost
shifting.
Compare profitability estimates against historical results A contractor may attempt to hide cost
shifting by increasing profit estimates on uncompleted jobs. When this occurs, the gross profit
percentages on uncompleted jobs will often exceed the contractors historical results. Another
test for this would be to compare uncompleted contract gross profit percentages with completed
contract percentages.
1.5 An Ongoing Process

Both contractors and their auditors should be aware of the potential impact of shifts in job costs from one
contract to another. The contractor should have a reliable job cost system in place to record contract costs
accurately. The auditor should be careful always to test contract costs and look for unusual contract
costing trends.
Constructability
Since the formalization of constructability, constructability has been an evolving work process. Years
ago, construction and design activities were integrated within the master builder's organization. Master
builders were responsible for all project activities required to plan, design, and construct a facility.
During the planning and design phases, the master builder focused on the entire project and considered
the impact early decisions had on the construction process. In a sense, the level of design and
construction integration achieved within these organizations serves today as the model for modern
constructability programs.
Total Quality Management & Constructability

TQM10 requirements may be defined separately for a particular organization or may be in adherence to
established standards, such as the International Organization for Standardization's ISO 9000 series. TQM
can be applied to any type of organization; it originated in the manufacturing sector and has since been
adapted for use in almost every type of organization imaginable, including schools, highway maintenance,
hotel management, and churches.
During recent years, the use of TQM has spread beyond the manufacturing industry to construction.
Organizations embracing TQM are adopting a management philosophy that makes quality a strategic
objective for the organization. Successful application of TQM to constructor has increased its recognition
as an effective method to improve quality and productivity.
TQM has two principal objectives: (1) customer satisfaction and (2) continuous improvement. Within the
construction industry, each party involved on a project, including the owner, constructor, and designer,
plays the role of customer and supplier of services. The owner supplies the requirements to the designer,
the designer supplies the plans and specifications to the constructor, and the constructor supplies the built
facility to the owner. A principal focus of TQM is for each supplier of services to identify and satisfy or
exceed their customer's needs in terms of cost, quality, and time.
10
Total Quality Management (TQM) is a comprehensive and structured approach to organizational

management that seeks to improve the quality of products and services through ongoing refinements in
response to continuous feedback
421
Continuous improvement not only involves problem solving on projects but also a proactive search for
methods of completing a task more efficiently. The first step of the process is problem avoidance. That
is, looking and accounting for areas that may later cause problems. In the construction industry, this
means making a formal effort to recognize problems during the planning and design phases instead of
discovering problems during construction. The second step in continuous improvement is identifying
methods that increase productivity including technological innovations.
Both steps towards continuous improvement create progress toward more productive and higher quality
construction. However, these steps must be accompanied by a method of measuring the progress and cost
effectiveness of the TQM program. This assures that quality and productivity are not only increased but
also maintained. Measurement of cost effectiveness may also be used to increase corporate awareness
and commitment by showing the financial benefits accrued as a result of the TQM process.
A constructability system can enhance customer satisfaction by facilitating teamwork among owner,
designer, and constructor representatives as early as the planning phase of a project. By so doing, it
provides more resources, including construction knowledge and experience, for planning and designing a
quality project that maximizes construction productivity.
Constructability is a means of continuous improvement in several respects. Maintaining a lessons-learned
database allows communication of positive and negative activities and experiences from one project to
future projects. Thus, improvements and innovations can be implemented in future designs. Also,
construction personnel may be more aware of innovations in equipment or construction techniques that
may play a key role in improving designs.
Measurement of program effectiveness is also a key aspect of both a TQM and constructability program.
This includes tabulating quantitative costs and benefits stemming from constructability and TQM such as
dollar and schedule savings, as well as recognizing qualitative effects such as higher quality and increased
customer satisfaction.
TQM and constructability both stress commitment from all personnel. This commitment must be
established from the executive level to the construction craftsmen on the site. This is a proactive process
requiring teamwork, recognition of the need for education regarding the program, and a self-assessment
regarding capabilities and resources available to achieve the desired goals.
Value Engineering
Implementation of value engineering11 involves six steps:
a. information,
b. functional analysis,
c. creative,
d. evaluation,
e. planning/proposal, and
f. implementation/follow-up
11 Value Engineering (VE) has been defined as "the systematic effort directed at analyzing the functional
requirements of systems, equipment, facilities, procedures, and supplies for the purpose of achieving the
essential function at the lowest total (life-cycle) cost, consistent with meeting needed performance,
reliability, quality, maintainability, aesthetics, safety, and fire resistance" ( Kavanagh )
422
The creative step involves a brainstorming session where life-cycle cost alternatives for design
components are considered.
Value engineering may be performed in two ways:
(1) proactively or
(2) reactively.
A proactive approach uses value engineering to collect ideas starting at the beginning of design. Thus,
multiple design alternatives are considered and the most cost effective selected on a continual basis
throughout the design phase. A reactive approach gathers cost effective alternatives through design
reviews by other project personnel such as constructors and other designer engineers. This is performed
after the entire design or specific component of design is complete. Thus, suggestions for improvement
require design rework.
In the building sector, often the term V.E. is synonymous with "The project is over budget and we need to
cut X Rupees from the project's scope." Some designers view V.E. as an attack on their design.
The primary objective of value engineering is to reduce the total life-cycle cost of a facility, whereas
constructability focuses upon optimization of the entire construction process. In most cases of industry
implementation, value engineering is normally performed during the design phase of the facility delivery
process. An effective formal constructability program ideally begins during the conceptual planning
phase and continues through construction.
Constructability and value engineering differ in terms of the criteria discussed above. However, this does
not mean that they are mutually exclusive. Rather, activities within the two work processes may
complement each other in achieving their goals. This may result in construction optimization while, at
the same time, achieving lowest life-cycle cost. Constructability implementation can act as a precursor to
value engineering, providing information through constructor input and lessons learned from past projects
such that value engineering may be more effective.
Cost Effectiveness
As with TQM, improvements of a constructability program depend upon accurate and consistent
measurements of its effectiveness. Inconsistent means of cost/benefit measurement may incorrectly
reflect the effectiveness of constructability on a project in comparison to other projects or programs in
industry. Thus, a need exists for standardized cost effective parameters so that constructability
performance may be documented and compared among projects and organizations. This section describes
a simplified framework for identifying and quantifying the costs and benefits stemming from
implementing constructability at the project-level.
Cost Factors
To quantify the costs of implementing constructability at the project-level, a cost estimation framework is
necessary. Cost parameters primarily consist of personnel and miscellaneous cost items. Personnel from
many organizations including the owner, constructability consultant, constructor, design engineer, and
when appropriate vendors and major subcontractors.
A common concern among parties that procure construction input is the difficulty of accurately estimating
its value or benefit. Benefits accrued through implementing constructability are often difficult to
quantify. They are typically measured through documented benefits from constructability ideas
implemented. It is relatively simple to track the cost of design, construction labor, and materials used to
423
complete a given design alternative. Constructability, however, involves generating ideas that optimize
the construction process. Thus, the question, how do you estimate the value of such ideas?
Conclusion
In Developing Countries there is an immense need of actual application of COST & MANAGEMENT
Accountants to find out the ways to improve the construction quality and its financial impacts so that we
can handle the natural disasters and other problems leading to causalities and loss of precious lives.
Summing up Total Quality Management, value engineering, and constructability are not mutually
exclusive. Instead, value engineering and constructability are complementary work processes that may be
used as key elements in achieving total quality. A coordinated effort with the application of available
standards the Financial Management Aspect as well as cost shifting can be evaluated. A practical
approach towards implementation of standards can yield desired results
References
Cost Shifting Analysis by Norton Cannons (2007)
International Accounting Standard IAS(11) Published in 2005
J.J e- Brown (2007), Value Analysis in Design and Construction,
J.S & J.G, "Benefits and Costs of Constructability: Four Case Studies,"
J.S & J.G , "A Comparison of Two Corporate Constructability Programs,"
James, "Constructability for drilled shafts,"
James, "A model for design/construction integration during the initial phases of design for building
construction projects,"
"Manual for special project management." (2006).
O'Brien, J.J. (1976). Value Analysis in Design and Construction, McGraw Hill, Inc., New York, NY.
O'Connor, J.T. and Tucker, R.L. (1986). "Industrial project constructability improvement," Journal of
Construction Engineering and Management, ASCE, 112(1), 69-82.
Radtke, M.W. (1992). "Model Constructability Implementation Procedures," thesis presented to
University of Wisconsin, at Madison, Wisconsin, in partial fulfillment of the requirements for the
degree of Master of Science in Civil and Environmental Engineering.
Rowings, J.E. and Kaspar, S.L. (1991). "Constructability of cable-stayed bridges," Journal of
Construction Engineering and Management, ASCE, 117(2), 259-278.
Russell, J.S. and Gugel, J.G. (1992). "A Comparison of Two Corporate Constructability Programs,"
accepted for publication in the ASCE Journal of Construction Engineering and Management.
Snodgrass, T.J. and Kasi, M. (1986). Function Analysis: The Stepping Stones to Good Value, The
Department of Engineering Professional Development, University of Wisconsin, Madison, WI, pp. 13.
"Total Quality Management: The Competitive Edge." (1990).
"Total Quality Management: The Competitive Edge." (1990). Publication 10-4, Construction
Industry Institute, Univ. of Texas at Austin, Austin, TX.
Tucker, R.L. (1986). "Management of Construction Productivity," Journal of Management in
Engineering, ASCE, 2(3), 148-156.
Turner, J.P. (1992). "Constructability for drilled shafts," Journal of Construction Engineering and
Management, ASCE, 118(1), 77-93.
www.wikipidea.com
www.comanag.com
www.ocmi.com
www.wisegeek.com
424

Construction Process Cost Model (CPCM) applied to

the Tendering Process
Raymond T. Aoieong
Assistant Professor, University of Macau, Macau SAR, China
S. L. Tang
Associate Professor, The Hong Kong Polytechnic University, Hong Kong SAR, China
cesltang@inet.polyu.edu.hk
Ying Ho Chuck
The Hong Kong Polytechnic University, Hong Kong SAR, China
Abstract
Continually improving the quality of a project has always been one of the major concerns to construction
companies. Quality improvement of a project helps construction companies to avoid unnecessary
construction expenses and lengthy delay. A Construction Process Cost Model (CPCM), based on Part 1
of the British Standard BS 6143 Process cost model (PCM), has been introduced in previous studies as
one of the tools to measure quality improvement of construction processes. Users of the model could
choose particular process(es) in a construction project for monitoring and therefore resources could be
more effectively utilized. Previous researches in the application of CPCM to non-construction/nontechnological processes such as planning, design and staff training have been successfully conducted. It
can be shown that the application of CPCM is not only feasible in construction processes but also in nonconstruction/non-technological processes. As a further work of the previous studies, this paper discusses
a case study on using CPCM to monitor the quality of another non-construction/non-technological
process the tendering process of a construction project in Hong Kong. The case study verifies that
CPCM is both applicable and practical. It can also be used as a tool to monitor the process continual
improvement, a requirement stated in the latest (year 2000) version of the ISO 9000 quality management
system.
Keywords
Construction Process Cost Model, CPCM, tendering, quality cost, quality management, Hong Kong.
1. Introduction
Quality cost has been one of the effective tools used in the manufacturing industry to measure quality for
decades. However, due to the uniqueness of construction projects, straight application of the tool might
not be feasible. Though research works in construction quality costs such as Davis et al.s (1989), AbdulRahmans (1993, 1995, 1996), Low & Yeos (1998), Barber et al.s (2000), and Hall & Tomkins (2001)
were reported, the prevention-appraisal-failure (PAF) model adopted by these researchers in capturing
quality costs might not be practical (Aoieong, et al., 2002). Since the PAF model focuses on measuring
the quality costs of an entire production line, the resource so required will be enormous when the same
425
model is applied to construction projects. In view of this difficulty in application, a new approach called
Construction Process Cost Model (CPCM) has been developed by Aoieong et al. (2002).
CPCM is the name given for the Process Cost Model (PCM) when it is applied to construction processes.
CPCM is used for capturing quality costs of a particular process in a construction project. According to
Part 1 of the British Standard BS 6143 (BSI, 1992), the quality costs are called process costs, which are
the sum of the costs of conformance (COC) and the costs of non-conformance (CONC) of a process.
Its applications on concreting process and design process have been reported by Tang et al. (2005). It is
found that CPCM is feasible and practical. It is also possible to use CPCM to achieve process continual
improvement by referring to the change of the process costs over time for a particular construction
process. Based on Part 1 of the British Standard BS 6143 (BSI, 1992), a generic process cost model for a
construction process is presented in Figure 1.
Material
Standards
Drawings
Standards &
Specifications
Work Schedules
& Procedures
Products
Materials
Construction
Process
Defects
Wastage
Reports
Labour
Equipment
Figure 1: Typical Construction Process Cost Model

Process approach is one of the eight quality management principles incorporated in the ISO 9000:2000
quality standard. The Standard also emphasizes the importance of continual improvement of processes.
Since there are various processes in the daily operation of a construction or consulting company,
processes chosen for improvement should not be restricted to construction related processes. Tang et al.
(2006) used the planning process of a construction project in Hong Kong as a case study and concluded
that the versatility and practicability of CPCM have made it a promising and necessary tool in measuring
continual improvement in the construction industry. In order to survive in the highly competitive
construction industry, success in the tendering process should always be the main focus of any
contractors head office. In extending the application of CPCM, this paper studies and measures quality
improvement of the tendering process of a construction project.
426
2. Case study: Tendering process of a project in Hong Kong

Tendering process is a commercial function consisting of estimating the net cost of a project with
adequate profit and risk added to make an offer. Typical stages of the process are the assessment of the
estimate and evaluation of adjustments, the assessment of general overheads, the assessment of risk and
profit allowances and the writing up of the bill of quantities (BQ) for submission. The case study
involved the construction of roads and bridges with contract value of approximately HK$2.09 billion. A
reputable and leading contractor in Hong Kong is responsible for the tendering process of this project, and
it is ISO 9000:2000 certified. The Construction Process Cost Model for the tendering process is
presented in Figure 2. Readers should realize that Figure 2 is a particular case of the general case as
shown in Figure 1.
Site
Limitation
Tendering
Period
Requirements of
Specifications
Tendering Conditions
Imposed by the Clients
Method
Statements
Bill of Quantities
Documents
Supplied by
Consultants
Tendering Process
Construction
Programme
Cash Flow
Forecast
Materials,
Standards
Engineers,
Estimators
Computers
Mark-up
Figure 2: CPCM flow chart for tendering process
3. Findings
Cost of conformance (COC)
Cost of conformance, in this case study, is the cost of providing the tendering service by a contractor
within a specific time frame. Major cost items related to the tendering process is salary. Specific
resources utilized by engineers and estimators are standards and references. Typical data required for the
estimation of COC of a particular day are the daily man-hours allocated in the preparation of a tender and
the hourly wage rates. The engineers and estimators involved in the tendering process were requested to
provide the above data. The period of the tendering process was defined to begin with tender preparation
and to end with tender completion.
Typical activities involved included establishment of method statements, preparation of bill of quantities,
cash flow forecast and construction programme. The COC of a particular day is shown in Table 1 and the
total COC of the entire data collection period are summarized in Table 2.
427
Table 1: COC on a particular day (31 January)

Estimator
Man-hour
Rate
(hour)
($/hr.)
5
130
3
130
3
130
130
1.5
35
Planning engineer
Man-hour
Rate
(hour)
($/hr.)
5
130
130
130
2
130
2
35
Cost*
($)
Establishment of method statements
1300
Preparation of bill of quantities
390
Preparation of cash flow forecast
390
Preparation of construction programme
260
Computer usage**
122.5
Total cost of conformance (COC)
2462.5
* Based on an hourly wage rate of $130; all $ are in Hong Kong dollars (US$1 = 7.8 Hong Kong dollars)
** Based on an hourly rate of $35 per hour, approximately 25% of the wage rate
Table 2: COC of the tendering process
Date
Day
Jan-10
Jan-11
Jan-12
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-30
Jan-31
Feb-01
Feb-02
Feb-06
Feb-07
Feb-12
Feb-14
Feb-20
Feb-23
Feb-28
Mar-01
Mar-02
Mar-05
Mar-06
Mar-07
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Establishment
of method
statements
($)
Total
130
520
390
195
520
910
975
780
1300
1170
910
260
1040
1315
1690
1690
1560
1690
1625
1220
1430
1560
1300
24180
Preparation
of bill of
quantities
Preparation
of cash flow
forecast
Preparation of
construction
programme
Computer
Usage
($)
($)
($)
($)
($)
260
130
65
65
65
65
130
65
35
35
140
105
52.5
122.5
140
70
70
122.5
210
192.5
52.5
140
455
210
175
105
175
455
490
175
210
425.0
360.0
920.0
690.0
507.5
1162.5
1765.0
1240.0
850.0
2462.5
2030.0
1492.5
832.5
1440.0
2160.0
2160.0
2255.0
1925.0
2255.0
2340.0
2620.0
1950.0
1995.0
1510.0
3937.5
37347.5
260
390
65
260
65
130
195
325
195
390
260
390
130
520
130
195
130
130
260
325
3380
260
260
390
195
260
130
260
130
260
130
325
260
130
260
260
130
2795
3055
Total COC for the period of study
COC
37347.5
428
Cost of non-conformance (CONC)

Establishment of method statements
Method statement outlines the sequence and method of construction upon which the estimate is based
(Tang et al., 2003). It gives how the major sections of works will be handled and indicates areas where
different methods will be adopted. The CONC for establishment of method statements included those
costs incurred due to defects occurring on planning of construction method and method statement
preparation. Typical defects were careless mistakes made on method statement preparation and
inadequate planning of construction method made by engineers. As a result, engineers required extra
time to rework. The number of occurrence of this type of defects was recorded. Once the time for rework
was estimated, the CONC could be estimated based on the current staffs wage rate. The CONC
contributed to the defects in the establishment of method statements is shown in Table 3.
Preparation of bill of quantities and cash flow forecast
A bill of quantities is in the form of a systematic and recognized list of items of work and represents the
breakdown of all materials, labourers and plans required for the completion of the project (Tang et al.,
2003). It provides each contractor with the same information when pricing the tendered work. During
tendering, cash flow forecast is an essential element because it will be used as a tool for financial
planning and control. It also allows the re-pricing of items so as to minimize the finance required. The
CONC contributed to the preparation of bill of quantities and cash flow forecast is often due to faults
made by estimators. Since estimators usually handle more than one tender during a working day, a large
amount of works generated from different tenders has to be processed simultaneously. Careless mistakes
made in the calculation, incorrect quotation of unit rates and misinterpretation of unit description were the
typical causes of errors made during the preparation of bill of quantities and cash flow forecast. Hence,
estimators had to spend additional time in reworking. Once the number of occurrences of each type of
faults was recorded, the extra time and cost required for the amendments were then estimated based on
current staffs wage rate. The CONC contributed to the faults in the preparation of bill of quantities and
cash flow forecast is shown in Table 4.
Table 3: CONC in the establishment of method statements on a particular day (31 January)
Causes of reworks
Time for reworks

(hour)
2
2
0.5
Wrong planning in construction method

Mistakes made on method statement preparation
Amendments made by engineers
Missing pages of documents
Total
*Based on an hourly wage rate of $130
Cost*
($)
260
260
65
585
Table 4: CONC in the preparation of bill of quantities and cash flow forecast on a particular day
(31 January)
Causes of reworks
Time for reworks

(hour)
1
0.5
0.5
Careless mistakes in calculation

Incorrect unit rates
Misinterpretation of the unit description
Missing pages of documents
Total
Cost*
($)
130
65
65
260
429
*Based on an hourly wage rate of $130
Table 5: CONC in the preparation of construction progamme on a particular day (31 January)
Causes of reworks
Wrong input to computer
Incorrect estimation of activities duration
Computer usage**
Total
* Based on an hourly wage rate of $130
** Based on 25% of the time for reworks
Time for reworks

(hour)
2
Cost*
($)
260
0.5
17.5
277.5
Preparation of construction programme

Construction programme sets an overall time frame for the execution of different phases of a project such
as design and mobilization, substructure, independent structures, superstructure, etc. The CONC for
preparation of construction programme consisted of costs related to the wrong input of data to computers
and the wrong estimation of activities duration. Engineers had to spend extra time to correct those
defects. Once the number of occurrences of reworks on construction programme was recorded, the extra
time and cost required for the rework were then estimated based on current staffs wage rate. The CONC
contributed to the defects in the preparation of construction programme is given in Table 5. The total
CONC of the tendering process, which is a summation of all the subcomponents, are presented in Table 6.
Table 6: Total CONC of the tendering process
Date
Jan-10
Jan-11
Jan-12
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-30
Jan-31
Feb-01
Feb-02
Feb-06
Feb-07
Feb-12
Feb-14
Feb-20
Feb-23
Feb-28
Mar-01
Mar-02
Day
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Establishment of
method statements
Preparation of bill of
quantities and cash
flow forecast
Preparation of
construction
programme
($)
105
120
($)
($)
65
65
147.5
180
130
195
130
Missing pages of
documents
CONC
($)
260
82.5
260
585
555
130
147.5
520
65
412.5
165
350
345
260
165
277.5
147.5
195
135
82.5
197.5
175
260
260
180
35
195
430
130
($)
105
250
147.5
570
0.0
407.5
260.0
0.0
0.0
1122.5
720.0
277.5
0.0
147.5
850.0
147.5
785.0
0.0
460.0
610.0
850
Mar-05
Mar-06
Mar-07
22
23
24
Total
280
280
65
65
65
65
4220
1820
1430
650
Total CONC for the tendering process
8120
8120
Process cost
The daily process cost (COC+CONC) of the tendering process captured in the period of study is
summarized in Table 7. The average CONC, expressed as a percentage of the daily process cost in the
tendering process, was found to be 17.86%. A process cost report containing all the COC and CONC
data in the period of study is shown in Table 8.
Figure 3 shows the plotting of points for the daily CONC expressed as a percentage of the daily total
process cost using the data from Table 7. The slope of the linear regression line of these points is found
to be negative. (The regression equation is: y = 0.5585x + 22.961). This means that the CONC, when
expressed as a percentage of the daily total process cost, is decreasing with time. This is a good
phenomenon because the tendering process is continually improving. The process cost therefore can
serve as a tool for the indication of continual improvement. By referencing the process costs, the
contractor may know whether or not his own effort put in the work is sufficient and, hence, may develop
adequate strategies for achieving continual improvement.
Table 7: Summary of daily COC, CONC and Process Cost (COC+CONC) for tendering process
Date
Jan-10
Jan-11
Jan-12
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-30
Jan-31
Feb-01
Feb-02
Feb-06
Feb-07
Feb-12
Feb-14
Feb-20
Feb-23
Day
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Daily Cost of Conformance Daily Cost of Non-Conformance

COC ($)
425
360
920
690
508
1163
1765
1240
850
2463
2030
1493
833
1440
2160
2160
2255
1925
% of total
80.19
59.02
86.18
54.76
100.00
74.04
87.16
100.00
100.00
68.69
73.82
84.32
100.00
90.71
71.76
93.61
74.18
100.00
CONC ($)
105
250
147.5
570
0
407.5
260
0
0
1122.5
720
277.5
0
147.5
850
147.5
785
0
431
% of total
19.81
40.98
13.82
45.24
0.00
25.96
12.84
0.00
0.00
31.31
26.18
15.68
0.00
9.29
28.24
6.39
25.82
0.00
Daily Process
Cost ($)
530
610
1068
1260
508
1570
2025
1240
850
3586
2750
1770
833
1588
3010
2308
3040
1925
19
20
21
22
23
24
2255
2340
2620
1950
1995
1510
37348
83.06
79.32
75.50
87.44
96.84
95.87
460
610
850
280
65
65
8120
16.94
20.68
24.50
12.56
3.16
4.13
2715
2950
3470
2230
2060
1575
45468
1556
82.16
338
17.86
1894
50.00
45.00
40.00
35.00
30.00
y = -0.5585x + 22.961
25.00
20.00
15.00
10.00
5.00
23
21
19
17
15
13
11
0.00
CONC (% of Daily Process Cost)
Average
Feb-28
Mar-01
Mar-02
Mar-05
Mar-06
Mar-07
Total
Day
Figure 3: Linear regression of CONC vs. time for tendering process

(Slope of regression line = -0.5585)
Table 8: Process cost report for the tendering process during the period studied
Process cost report
Process name:
Tendering
Boundary:
From the preparation of tender to the completion of tender
Period of study:
Process owner:
Process
Conformance
Activity:
Resources
required:
Engineer
Standard
Results:
Establishment
of method
Main Contractor
Cost (HK$)
Act.
Est.
Process
Owner
Main
Contractor
24180
Process NonConformance
Cost (HK$)
Act. Est.
Main
Contractor
Activity:
Wrong planning in
construction method
Mistakes made on
method statement
preparation
432
Process
Owner
4220
statements
Activity:
Resources
required:
Estimator
Reference
Results:
Bill of
Quantities
Cash flow
forecast
Activity:
Resources
required:
Engineer
Computer
Results:
Construction
programme
Others:
Computer usage
Total process
conformance cost
Amendments made by
engineers
Main
Contractor
Careless mistakes
in calculation
Incorrect unit rates
Misinterpretation of
the unit description
3380
Main
Contractor
Activity:
1820
2795
Main
Contractor
3055
Main
Contractor
3938
37348
Main
Contractor
Activity:
Wrong input to
computer
Wrong estimation
of activities duration
1430
Others:
Missing pages of
documents
650
Total process nonconformance cost
Main
Contractor
8120
4. Discussion and Conclusion

High percentage of non-conformance cost
According to the analysis, the average daily cost of non-conformance was nearly 18% of the total daily
process cost. One of the reasons for such a high percentage was that the estimators and engineers were
required to handle more than one tender in the period of study. As a result, information from different
tenders was often mixed up or misused and numerous amendments were made. The estimation procedure
and construction scheduling also had to be reworked.
Completeness of conformance and non-conformance data
Tendering process usually involves the participation of personnel other than estimators and planning
engineers. If the structural aspect of the project is complex, such as large scale structural steelwork,
special formwork or falsework, advice from structural engineers and other departments is required. On
the other hand, if the project has substantial amount of building service systems installation, building
service engineers involvement might also be required in the tendering process. Since the case study was
a large scale civil project, involvement of engineers from other disciplines in preparing the tender were
necessary. However, these engineers would only get involved upon request, i.e. on a part-time basis. The
conformance and non-conformance data contributed by them were not recorded. As a result, both
conformance and non-conformance data acquired in the case study might be slightly underestimated.
433
Construction Process Cost Model (CPCM) was tested with the tendering process of a construction project.
It is successfully implemented and data so obtained has shown that the process was continually
improving as a result of reducing non-conformance cost. In order to prove the versatility and
practicability of CPCM, more construction processes including those in the technical and non-technical
areas should be selected for testing. Management processes such as project monitoring, procurement,
resource allocation and site safety are also worthy of investigation. They can help to extend the capability
of CPCM in capturing quality costs and monitoring the continual process improvement of processes.
The versatility and practicability of CPCM makes it a promising and essential tool in measuring
improvement in the construction industry.
6. References
Abdul-Rahman, H. (1993). Capturing the cost of quality failures in civil engineering, International
Journal of Quality & Reliability Management, 10(3), pp. 20-32.
Abdul-Rahman, H. (1995). The cost of non-conformance during a highway project: a case study.
Construction Management and Economics, 13(1), pp. 23-32.
Abdul-Rahman, H. (1996). Capturing the cost of non-conformance on construction sites. International
Journal of Quality & Reliability Management, 13(1), pp. 48-60.
Aoieong, Raymond T., Tang, S.L. and Ahmed, S.M. (2002). A process approach in measuring quality
costs of construction projects: model development. Construction Management and Economics, Vol. 20,
No. 2, pp. 179-192.
Barber, P., Graves, A., Hall, M., Sheath, D. and Tomkins, C. (2000). Quality failure costs in civil
engineering projects. International Journal of Quality & Reliability Management, 17(4/5), pp. 479-492.
BSI (British Standards Institution), (1992), BS 6143: Part 1 Guide to the economics of quality Process
cost model, British Standards Publishing Limited, London, UK.
Davis, K., Ledbetter, W.B. and Burati Jr., J.L. (1989). Measuring design and construction quality costs.
ASCE Journal of Construction Engineering and Management, 115(3), pp. 385-440.
Hall, M. and Tomkins, C. (2001). A cost of quality analysis of a building project: towards a complete
methodology for design and build. Construction Management and Economics, 19(5), pp. 727-745.
Low, S.P. and Yeo, K.C., (1998), A construction quality costs quantifying system for the building
industry, International Journal of Quality & Reliability Management, 15(3), pp. 329-349.
Tang, S.L., Poon, S.W., Ahmed, S.M., Wong, K.W. Francis (2003). Modern Construction Project
Management, 2nd edition, Hong Kong University Press, Hong Kong
Tang, S.L., Ahmed, S.M., Aoieong, Raymond T. and Poon, S.W. (2005). Construction Quality
Management. Hong Kong University Press, Hong Kong. Chapter 11.
Tang, S.L., Aoieong, Raymond T. and Mak, K.T. (2006). Construction Process cost model (CPCM)
Applied to the Planning Process for Capturing Quality Costs in Construction and Professional Practices,
Proceedings of the EASEC-10 Conference, Bangkok, Thailand, August, 2006, pp. 9-16.
434

Building Information Modeling (BIM): A New Paradigm for Visual

Interactive Modeling and Simulation for Construction Projects
Salman Azhar
McWhorter School of Building Science, Auburn University, Auburn, Alabama, USA
sza0001@auburn.edu
Abid Nadeem
Hong Kong College of Technology International, Kowloon, Hong Kong
Johnny Y. N. Mok
Brian H. Y. Leung
Abstract
The Architecture, Engineering and Construction (AEC) industries have long sought techniques to
decrease project cost, increase productivity and quality, and reduce project delivery time. Building
Information Modeling (BIM) offers the potential to achieve these objectives. BIM represents the
development and use of computer-generated n-dimensional (n-D) models to simulate the planning,
design, construction and operation of a facility. It helps architects, engineers and constructors to visualize
what is to be built in simulated environment and to identify potential design, construction or operational
issues. BIM represents a new paradigm within AEC, one that encourages integration of the roles of all
stakeholders on a project. It has the potential to bring about great efficiency as well as harmony among
players who all too often in the past saw themselves as adversaries. In this paper, the benefits of Building
Information Modeling (BIM) for the AEC industries are discussed with the help of two case studies.
These case studies illustrate the various tangible and intangible benefits achieved by all stakeholders by
implementing BIM in their projects. At the end, light is thrown on various BIM related risks and future
challenges for the AEC industries.
Keywords
Building Information Modeling (BIM), Virtual Design and Construction (VDC), n-Dimensional
Modeling, Parametric Modeling, Facilities Management (FM)
1. Introduction
Building Information Modeling (BIM) is one of the most promising developments in the Architecture,
Engineering and Construction (AEC) industries. BIM simulates the construction project in a virtual
environment. With BIM technology, an accurate virtual model of a building is digitally constructed.
When completed, the computer-generated model contains precise geometry and relevant data needed to
support the construction, fabrication and procurement activities required to realize the building as shown
in Figure 1 (Eastman et al., 2008).
435
A Building Information Model, is a data-rich, object-oriented, intelligent and parametric digital

representation of the facility, from which views and data appropriate to various users needs can be
extracted and analyzed to generate information that can be used to make decisions and to improve the
process of delivering the facility (AGC, 2005).
The principal difference between BIM and conventional 3D CAD is that the latter describes a building by
independent 3D views such as plans, sections and elevations. Editing one of these views requires that all
other views must be checked and updated, an error-prone process that is one of the major causes of poor
documentation. In addition, data in these 3D drawings are graphical entities only, such as lines, arcs and
circles, in contrast to the intelligent contextual semantic of BIM models, where objects are defined in
terms of building elements and systems such as spaces, walls, beams and columns. A building
information model carries all information related to the building, including its physical and functional
characteristics and project life cycle information, in a series of smart objects. For example, an air
conditioning unit within a BIM would also contain data about its supplier, operation and maintenance
procedures, flow rates and clearance requirements (CRC Construction Innovation, 2007). Figure 2 shows
a comparison between the conventional CAD and the new BIM approach.
(a) Architectural Model
(b) Structural Model
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(c) Plumbing Model
(d) 4D Phasing Model (i.e 3D Model + Schedule)

Figure 1: Building Information Modeling for Hilton Aquarium, Atlanta, Georgia, USA
(Courtesy of: Holder Construction, Atlanta, Georgia, USA)
437

Figure 2: A Comparison between Conventional CAD and new BIM Approach
It is important to note that a building information model characterizes the geometry, spatial relationships,
geographic information, quantities and properties of building elements, cost estimates, material
inventories and project schedule. This model can be used to demonstrate the entire building life cycle
(Bazjanac, 2006). As a result, quantities and shared properties of materials can be readily extracted.
Scopes of work can be easily isolated and defined. Systems, assemblies, and sequences can be shown in a
relative scale with the entire facility or group of facilities. The construction documents such as the
drawings, procurement details, submittal processes and other specifications can be easily interrelated.
A building information model can be used for the following purposes:
Visualization: 3D renderings can be easily generated in-house with little additional effort.
Fabrication/shop drawings: it is easy to generate shop drawings for various building systems, e.g, the
sheet metal ductwork shop drawing can be quickly produced once the model is complete.
Code reviews: fire departments and other officials may use these models for building projects review.
Forensic analysis: a building information model can easily be adapted to graphically illustrate
potential failures, leaks, evacuation plans, etc.
Facilities management: facilities management departments can use BIM for renovations, space
planning, and maintenance operations.
Cost estimating: BIM software(s) have built-in cost estimating features. Material quantities are
automatically extracted and changed when any changes are made in the model.
Construction sequencing: a building information model can be effectively used to create material
ordering, fabrication, and delivery schedules for all building components.
Conflict, interference and collision detection: because BIM models are created, to scale, in 3D space,
all major systems can be visually checked for interferences. This process can verify that piping does
not intersect with steel beams, ducts or walls as shown in Figure 3.
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Figure 3: An Illustration of Clash Detections via Building Information Modeling

(Courtesy of: PCL Construction Services, Orlando, Florida, USA)
2. Building Information Modeling (BIM) Benefits

The key benefit of BIM is its accurate geometrical representation of the parts of a building in an
integrated data environment (CRC Construction Innovation, 2007). Other related benefits are:
Faster and more effective processes information is more easily shared, can be value-added and
reused.
Better design building proposals can be rigorously analyzed, simulations can be performed quickly
and performance benchmarked, enabling improved and innovative solutions.
Controlled whole-life costs and environmental data environmental performance is more predictable,
lifecycle costs are better understood.
Automated assembly digital product data can be exploited in downstream processes and be used for
manufacturing/assembling of structural systems.
Better customer service proposals are better understood through accurate visualization.
Lifecycle data requirements, design, construction and operational information can be used in
facilities management.
Stanford University Center for Integrated Facilities Engineering (CIFE) figures based on 32 major
projects using BIM indicates benefits such as (CIFE, 2007):
Up to 40% elimination of unbudgeted change.

Cost estimation accuracy within 3%.
Up to 80% reduction in time taken to generate a cost estimate.
A savings of up to 10% of the contract value through clash detections.
Up to 7% reduction in project time.
3. How to Develop a Building Information Model?

There are a number of BIM software applications available in the market. The top three softwares are as
follows:
439
Autodesk Revit
Graphisoft Constructor
Bentley Architecture
After discussion with different AEC companies, vendors and some self-testing, the authors picked
Autodesk Revit as their first choice. The Revit software package includes three software
applications: Revit Architecture, Revit MEP, and Revit Structure. Revit Architecture has the 2D capabilities of AutoCAD, as well as the 3-D modeling design functions. AutoCAD files can be
imported to produce models. For estimating functions, information can be exported to other estimating
programs which have been designed to work with Revit Architecture. Revit MEP is used for the
design and modeling of mechanical/electrical/plumbing systems. Revit Structure is a modeling and
drafting program that can model all types of materials and structural systems. All of the Revit programs
use a centralized database so all changes are updated universally.
4. Case Studies
The purpose of the case studies is to illustrate various tangible and intangible benefits achieved by
developing and using building information models for actual construction projects. The data for these
case studies is provided by the Holder Construction Company, Atlanta, Georgia.
4a. Case Study 1: Hilton Aquarium, Atlanta, Georgia
Project name: Hilton Aquarium, Atlanta, Georgia
Project scope: $46M, 484,000 SF hotel and parking structure
Delivery method: Construction manager at risk
Contract type: Guaranteed maximum price
Design assist: GC and subcontractors on board at design definition phase
BIM scope: Design coordination, clash detection, and work sequencing
A building information model is created comprising of the architectural, structural and MEP systems of
the proposed building as shown in Figures 1a, 1b and 1c. The model was created during the design
development phase using detail level information from subcontractors based on drawings from the
designers. Using this model, the project team achieved the following benefits.
Proactively identified 590 conflicts between structural and MEP components and resolved them prior
to field installations
Design coordination enhanced
Additional cost increases avoided
Enabled Owner scope revisions without issuing change orders
Accommodated design changes
As show in Figure 4, through frequent coordination sessions, the project team was able to quickly identify
and resolve system conflicts, saving an estimated $200,000 in extras and avoiding months of potential
delays
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(a) An Example of Design Conflict Log
(b) A Pre-Construction Meeting to Resolve Design Conflicts

Figure 4: Virtual Examination of the Construction Models and Pre-construction Planning
(Courtesy of: Holder Construction, Atlanta, Georgia, USA)
4b. Case Study 2: One Island East Project, Hong Kong
This case study documents the implementation of BIM to manage the functional and financial
relationships between design, construction, and facility management on a large, complex project by an
owner-developer. The owner identified the potential of BIM to manage information more efficiently and
save time and cost over the project life cycle. The brief project data is as follows:
441
Project name: One Island East, Hong Kong, China

Project scope: $300M, 1,517,711 SF commercial building
Structure: Reinforced concrete
Exterior: Aluminum curtain wall
Owner: Swire Properties Limited
Contractor: Gammon Construction Limited
BIM scope: Design coordination, clash detection, and work sequencing
The One Island East (OIE) is a large commercial office building with seventy floors. Figure 5 shows a
building information model of this facility.
Figure 5: Building Information Model of One Island East (OIE) Project

(Courtesy of: Gammon Construction Limited, Hong Kong)
Almost all coordination issues were managed using BIM. As shown in Figures 6-9, through BIM, over
2000 clashes and errors were identified prior to bidding and construction, which means that a substantial
cost savings was achieved, compared to the incomplete design information inherent in a traditional 2D
process.
Figure 6: Automated Clash Detections in OIE Project (Gammon Construction Ltd, HK)
442
Figure 7: Interactive Coordination Process: Virtual Building Team Walked Through Three Times
a Week
Figure 8: Preparation of Automated Estimates (Gammon Construction Ltd, HK)
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Figure 9: Construction Sequencing Model (Gammon Construction Ltd, HK)
5. Legal and Technical Risks Associated with Building Information Modeling

The first legal risk to determine is ownership of the BIM data and how to protect it through copyright
laws. For example, if the owner is paying for the design, then the owner may feel entitled to own it, but if
team members are providing proprietary information for use on the project, their propriety information
needs to be protected as well. Thus, there is no simple answer to the question of data ownership; it
requires a unique response to every project depending on the participants' needs. The goal is to avoid
inhibitions that discourage participants from fully realizing the model's potential (Thompson, 2001).
Another issue to address is who will control the entry of data into the model and be responsible for any
inaccuracies in it. Taking responsibility for updating BIM data and ensuring its accuracy entails a great
deal of risk. Requests for complicated indemnities by BIM users and the offer of limited warranties and
disclaimers of liability by designers will be essential negotiation points that need to be resolved before
BIM technology is utilized. It also requires more time spent imputing and reviewing BIM data, which is a
new cost in the design and project administration process. Although these new costs may be more than
offset by efficiency and schedule gains, they are still a cost that someone on the project team will have to
bear. Thus, before BIM technology can be fully utilized, the risks of its use must not only be identified
and allocated, but the cost of its implementation must be paid for as well (Thompson and Miner, 2007).
The integrated concept of BIM blurs the level of responsibility so much that risk and liability will likely
be enhanced. Consider the scenario where the owner of the building files suit over a perceived design
error. The architect, engineers and other contributors of the BIM process look to each other in an effort to
try to determine who had responsibility for the matter raised. If disagreement ensues, the lead professional
will not only be responsible as a matter of law to the claimant but may have difficulty proving fault with
others such as the engineers (Rosenburg, 2007).
6. Future Challenges
The productivity and economic benefits of BIM to the AEC industry are widely acknowledged and
increasingly well understood. Further, the technology to implement BIM is readily available and rapidly
maturing. Yet, BIM adoption is much slower than anticipated (Fischer and Kunz, 2006). There are two
main reasons, technical and managerial.
444
The technical reasons can be broadly classified into three categories (Bernstein and Pittman, 2005):
1. the need for well-defined transactional construction process models to eliminate data interoperability
issues,
2. the requirements that digital design data be computable, and
3. the need for well-developed practical strategies for the purposeful exchange and integration of
meaningful information among the BIM model components.
The management issues cluster around the implementation and use of BIM. Right now, there is no clear
consensus as how to implement or use BIM. Unlike many other construction practices, there is no single
document or treatise on BIM that instructs on its application or usage (AGC, 2005). Several software
firms are cashing in on the buzz of BIM, and have programs to address certain quantitative aspects of it,
but they do not treat the process as a whole. There is a need to standardize the BIM process and to define
the guidelines for its implementation. Another contentious issue among the AEC industry stakeholders
(i.e. owners, designers and constructors) is who should develop and operate the building information
models and how should the developmental and operational costs be distributed?
The researchers and practitioners have to develop suitable solutions to overcome these challenges and
other associated risks. As a number of researchers, practitioners, software vendors and professional
organizations are working hard to resolve these challenges, it is expected that the use of BIM will
continue to increase in the AEC industry (Azhar et al., 2008).
Building Information Modeling (BIM) has emerged as an innovative way to manage projects. Many
researchers and practitioners have indicated that the BIM technology is set to become as indispensable to
building design and construction as the proverbial tee square or hammer and nail. As the use of BIM
accelerates, collaboration within project teams should increase, which will lead to improved profitability,
reduced costs, better time management and improved customer/client relationships. On the other hand,
teams implementing BIM should be very careful about the legal pitfalls such as data ownership and
associated propriety issues and risk sharing. Such issues must be addressed upfront in the contract
documents.
8. References
Associated General Contractors of America. (2005). The Contractors Guide to BIM, 1st ed. AGC
Research Foundation, Las Vegas, NV.
Azhar, S.; Hein, M; and Sketo, B. (2008). Building Information Modeling: Benefits, Risks and
Challenges, Proceedings of the 44th ASC National Conference, Auburn, Alabama, USA.
Bazjanac, V. (October 23, 2006). Virtual Building Environments (VBE) Applying Information Modeling
to Buildings [WWW document]. URL http://repositories.cdlib.org/lbnl/LBNL-56072
Bernstein, P.G., and Pittman, J.H. (2005). Barriers to the Adoption of Building Information Modeling in
the Building Industry. Autodesk Building Solutions Whitepaper, Autodesk Inc., CA.
CIFE. (November 22, 2007). CIFE Technical Reports [WWW document] URL
http://cife.stanford.edu/Publications/index.html
CRC Construction Innovation. (2007). Adopting BIM for Facilities Management: Solutions for Managing
the Sydney Opera House, Cooperative Research Center for Construction Innovation, Brisbane,
Australia.
445
Eastman, C; Teicholz, P.; Sacks, R; and Liston, K. (2008). BIM Handbook: A Guide to Building
Information Modeling for Owners, Managers, Designers, Engineers and Contractors, John Wiley
and Sons, NY, 2008.
Fischer, M., and Kunz, J. (November 12, 2006). The Scope and Role of Information Technology in
Construction [WWW document]. URL http://cife.stanford.edu/online.publications/TR156.pdf
Khemlani, L. (November 22, 2007). Top Criteria for BIM Solutions, AECbytes, October issue [WWW
document] URL http://www.aecbytes.com.
Rosenburg, T.L. (2007). Building Information Modeling. [WWW document] URL
http://www.ralaw.com/resources/documents/Building%20Information%20Modeling%20%20Rosenberg.pdf
Thompson, D.,B. (2001). e-Construction: Dont Get Soaked by the Next wave. The Construction Law
Briefing Paper [WWW document] URL http://www.minnlaw.com/Articles/68553.pdf
Thompson, D.B., and Miner, R.G. (November 23, 2007). Building Information Modeling - BIM:
Contractual
Risks
are
Changing
with
Technology
[WWW
document]
URL
http://www.aepronet.org/ge/no35.html
446

Role of Open and Distance Learning in the Education of Engineeers for

Sustainable Building Design - A Case study of Allama Iqbal Open University
Attaullah Shah
Project Director and PhD Scholar , Allama Iqbal Open University, Islamabad Pakistan
attaullahshah01@gmail.com
Ihsan-ul-Haq
Director CDA, and Part time faculty member Allama Iqbal Open University, Islamabad Pakistan
Nomana Anjum
Assocaite Professor , Allama Iqbal Open University, Islamabad Pakistan
Abstract
Open and Distance Learning ( ODL) provides a unique opprtunity to prefessionals for their continuing
education and capacity building. Allama Iqbal Open University ( AIOU) Pakistan has been a succesful
enterprise with an objective to addresses the education needs of masses in the country. Continuing
education of Civil Engineers in Pakistan is the most neglected part of our education System. AIOU in
collboration with British Council of Paksitan, tailored a post graduate degree and diploma program in
Environmental Design for engineers, archeticts, town planners and interior designers in 2003, which
presents a number of futuristic strategies that can be used in the process of design to improve the harmony
between the user, the building and the environment in which it is placed. In this paper, the effectiveness
of the post graduate program in the environmental design has been studied through questionnaire survey
from the graduates and students, to evaluate the effectiveness of the program. Most of the respondents
have found the program useful for their career and jobs. The study further revealed that there are potential
prospects for continuing education in the fields of construction and project management through ODL,
which needs to be explored.
Keywords
Open and Distance Learning, continuing education, environmental design.
1. Introduction
The potential of Open and Distance learning (ODL) for sustainable learning and development is based on
the following advantages [1]
- Flexibility
- Adaptability - Accessibility:
Sustainable Development is defined as development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. [2]
447
The sustainable building design is based on three major concepts namely Resource Conservation, Life
Cycle Design and Humane Design. These concepts involve the following major considerations
These concepts involve the following major considerations;
Resource Conservation: - Energy Conservation Water conservations Material Conservation
Life Cycle Design: - Pre-building phase Building Phase and Post building phase.
Human Design: Preservation of natural environment Urban design and site planning
Design for Human comfort.
The engineering education in Pakistan has very little focus on the sustainable design in the built
environment. The concepts like green material, green buildings, recycling and re-use of waste material are
relatively newer and have not been covered under the exiting syllabi of engineering education in Pakistan.
The continuing education of engineers like other professional is therefore an essential component for the
capacity building of engineers to bridge the knowledge gap [3].
Open and Distance Learning provides a unique opportunity to those who cannot afford formal university
education due to their socio-economic, socio-cultural and demographic conditions. [4]. Pakistan is a
developing country with per capita income less than US$1000 and majority of the 160 million
populations belongs to lower middle and poor class. A great majority of these people are placed in the
rural areas, where access of education cannot be ascertained through formal education system.
Allama Iqbal Open University was thus established in 1974 at the model of UK Open University [5]. The
University during last 30 years has been recognized as a mega national institution providing education to
700,000 students in science, social science and humanities. Presently the University offers about 1000
courses and 120 programs from elementary to doctoral levels. The faculty wise students enrolment and
growth trend is given in Table 1 and Fig. 1 respectively.
Table 1. Faculty wise Student enrolment (2006)
Faculties
Departments ( Academics)
Research Centers and institutes
Programs offered
Courses offered and produced
Students undergraduate
Students ( Bachelor and Masters)
Students ( M.Phil, PhD)
Others ( Diploma and Certificates)
Total Students Enrolment
04
35
03
135
1200
221621
363854
896
118331
704702
Student Enrollment
0.8
0.704
0.7
0.625
0.6
0.514
0.5
0.357
0.335
0.4
2000-01
2001-02
2002-03
0.4
0.3
0.2
0.1
0
2003-04
2004-05
2005-06
Fig.1. Students Enrolment trend and growth in AIOU
2. Post Graduate program in Environmental design at AIOU on ODL mode:

M.Sc. Environmental design program is a research based value added degree aimed at upgrading
professional practice of engineers, planners and designers and also to provide better job prospects at home
448
and abroad. Presently, the programme is supported by a project entitled Enabling Sustainable Design
Practices Focusing on Built Environment under the HEC-BC Joint Higher Education Links Programmes
[6]
Since commencement in 2003, the Programme is offered in three regions: Karachi, Lahore and
Islamabad. The study centers are established at regional campus AIOU in Karachi, NCA Lahore and
Main Campus AIOU, Islamabad and the services of experienced practicing Engineers, designers and
environmentalists have been hired on part time basis. It is an interdisciplinary approach, fusing technical
and scientific knowledge with philosophical and ethical issues to address environmental problems in built
environment particularly schools, homes, workplaces, hospitals, parks and industrial areas.
The post graduate degree program of Environmental design at AIOU, is spread over four semesters and
15 courses of three credits each and research thesis are required to be completed for award of the degree.
The details of courses offered in various semesters are given below:
SEMESTER-I
Introduction to Environmental Design
Environmental planning & practice (Global and
Pakistan Perspective)
Environmental psychology
Research methodology
SEMESTER-III
Ecological design: Cities, Landscape and transport
Dimensions of Sustainability
Building evaluation techniques
Workplace Design: Physical & Psychological
considerations or
Health care design considerations for patients and
medical staff
Environmental considerations in house and housing
design
Design for children or
Sustaining culture and design
SEMESTER-II
Evaluation of built Environment for physical
sustainability
Environmental Aesthetics
Women and Environment
Appropriate Technologies for building and services
(energy water supply)
Environmental Impact Assessment.
SEMESTER-IV
Statistical methods in environmental health
Research thesis.
In the last five years more than 400 students have been admitted to the program, in which 25% have
completed their degree and diplomas in MSc Environmental design. The geographic distribution of the
Baluchistan 1%
NWFP 6%
Others , 1%
Sind 18%
Punjab 55%
Fig 2. Province-wise Distribution of Environmental Design Program

students at AIOU
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students of program is given as follows;
3. Evalaution of the Environemnt Design program:

A survery questionoaire was developed to get the feedback from the completing students, continuuing
students and discontinuing students of the program. A four pages questinnaire was developed which
comprised of the following sections;
( The questinaire sample is annaexed as Appendix A)
- Personal data
- Study goals and objectives
- Reasons for joining the program
- Effects on career after compeltion of the studies
- Effects on knowledge and skills.
- Commnets on the course contents, delivery and assessment process
Recommendations for improvement of the prgram
The questionaire was sent to 50 students randomly slected from the list through e-mail and post-mail and
about 70% reponses were received. Hence the non respoence error is about 30% which is reasonable. Due
to limitation of space the questionaire can not be produced here.
4. Findings of the Survey of the students:

The responses under each set of main section of questionaire were analayzed on the basis of modal results
and the response having maximimum frequency was placed at the top, followed by the next highest
frequency and so on.
Based on the responses from the sample students, the following findings are made.
4.1 Reasons for joining the continuing education system of AIOU, in the oder of priority in the
descendiung order, based on the modal results . The response at the top having maximum
frequency.
i. The flexibility of tutorial system and program.
ii. The convinience of provding education after office hours.
iii. Due to low expenses and charges.
4.2 Study goals in order of descending priority:
i.
ii.
iii.
iv.
Imporving knowledge and Skills towards sustainable design.

For higher education and career planning.
For availing better opprtunities
For changing your carrer.
4.3 Course Curriculm, Delivery and Assessment:

The qualitative responses were also ranked on the basis of modal analysis, where the reponses
with the highest frequency was placed at the top.
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4.3.1 Course contents:

i.
ii.
iii.
Relevance of course to job:

Very good
Course outline and syllabus:
Good
Books and their subject matter: Satisfactory
4.3.2: Delivery
i.
ii.
iii.
iv.
Class room enviroenemnt:

Relevance of assignments:
Tutor knowledge:
Study gudlines:
Very Good
Good
Good
Satisfactory.
4.3.3 Assessment:
i. Assignemnt Marking:
ii. Workshops reelevance to job
iii. Examination and Evalaution
Very good
Good
Good
In general comments the respondents have emphasized on including the concepts of sustianable
design in the undergraduate level engineering programs as well. Many students feel that Open and
Distance learning is an effctive tool for continuing education of the engineers, designers and
architects. The ODL may also be employed for the constrcution and project management as well.
5. Conclusion:
On the basis of the results and findings of the study, the following conclusins are drawn.
1. The flexibility of the tutorial and teaching system of Open and Distance Learning has attaracted
most of the students, followed by the convinience of teaching time and low charges of the course.
2. Most of the respondents feel that course has improved their knwledge towards sustaianable
design, negelected priority in the engineering education.
3. The themes of the course of environemntal design have been found mostly relevant to the job by
mots of the respondents.
4. Some students have availed the environmental design program for chaning their career path.
5. The students generally feel satisfied with the assessement system through ODL.
6. The ODL may also be employed for teaching of the construction and project management.
6. References
Askar, P. (2005) Distance education in Turkey, in: C. Howard, J. Boettcher, L. Justice, K. Shenk,
P. L. Rogers & G. A. Berg (Eds) Encyclopedia of distance learning: Vol 2 (Hershey, PA, Idea
Group Inc.), 635640.
451
Continuing Education of Engineers Panel on Continuing Education, Committee on the Education and
Utilization of the Engineer, National Research Council ISBN: 0-309-58161-3, 104 pages, (1985).
Daniel, J. S. (1996) Mega-universities and knowledge media: technology strategies for higher
Education (London, Kogan).
Kirby. O, Keefe, P, and Meadowcroft, The earth scans reader in sustainable development.
Earthscan Publications (1995).
Vice Chancellor report Allama Iqbal Open University ( www.aiou.edu.pk)
http://www.aiou.edu.pk/Programmes.asp?PID=192
ALLAMA IQBAL OPEN UNIVERSITY- ISLAMABAD.

Subject: Tracer Survey for AIOU MSc. Environmental Design
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452
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Reliability-based Model for Estimating Long Term Pavement Maintenance

Contracts Under Performance Specifications
Kamalesh Panthi
Ph.D. Candidate, Florida International University ,Miami, Florida, USA
kpant003@fiu.edu
Rizwan U. Farooqui
Syed M. Ahmed
Associate Professor & Graduate Program Director, Department of Construction Management, Florida
International University, USA
Abstract
This paper presents a model through which the cost associated with pavement warranty in performance
based maintenance contracts are analyzed and quantified. Performance based maintenance contracts are
eventually getting popular among the Highway agencies.These are long term pavement warranty
contracts where the contractors are responsible for maintaining the pavement condition upto a certain
specified level over the period of warranty. The trend now is to award the maintenance contracts for a
longer period of time, generally upto ten years or even more in some cases unlike the short warranty
contracts. With the evolution of these new form of contracts, the challenge is to estimate the cost
associated with these contracts for a specified performance period. Unlike the deterministic approach of
cost estimation for new products, the maintenance contracts have probabilistic cost estimation approach.
Since maintenance action is required when the performance threshold is exceeded, the time to failure of
the product (when the performance threshold level is exceeded) is a random variable. This necessiates a
different cost estimation approach for maintenance contracts of product (pavement) which is presented in
this paper. The developed model can be used by the Highway Agencies as well as the contractors to
estimate the cost of performing such long term pavement performance contracts based on stipulated
performance criteria.
Keywords
Performance, Contract, Pavement, Warranty, Specification
1. Introduction
Studies made by the World Bank have shown that contracting out road maintenance to the private sector
can reduce maintenance cost by between 30 and 50% (Queiroz, 1999). Some of the benefits of
outsourcing maintenance include external expertise, improvement in monitoring and flexible use of labor
and equipments. In the international arena, countries such as Argentina (1990), Uruguay (1995), Australia
456
(1996), New Zealand (1998), Brazil, Chile, and Colombia pioneered this contracting scheme as part of
their strategies to preserve the roadway and highway system (Pinero, 2003).
Performance specified maintenance contracts use performance and life cycle cost models to specify the
desired materials and construction quality and measure the acceptability of the as-constructed product. A
framework for performance-related specifications (PRS) has been established and sufficient research has
been completed (Ozbek, 2004). Although considerable research has been conducted in the area of life
cycle cost modeling of the infrastructure, there is however very limited literature related to modeling cost
in Performance-based environments. Virtually, no research has been completed till date to the knowledge
of this author that comprehensively deals with the product performance risk faced by the contractors
under the Pavement Specified Maintenance Contract (PSMC). This research will fulfill this vacuum by
developing a model that considers risk of achieving multiple performance indicators under different
contract conditions. The major party that would benefit from this research would be the contractors that
are new to the performance based contracting environment in pavement maintenance business.
Experience confirms that the only credible means of managing pavement performance is through the use
of pavement modeling techniques like the pavement deterioration models (Parkman et al., 2003).
However, many of the existing pavement deterioration models are mechanistic and do not take into
uncertainty associated with the input variables in their modeling process. A comprehensive list of
controllable variables and uncontrollable factors that impact on the performance of the road has been
listed by Ozbek for developing a framework for measuring the efficiency of highway maintenance
strategies (Ozbek, 2007) but there has been no attempt to quantify the effect of these risks on the total cost
of these maintenance projects. Since the agencies specify multiple performance indicators (such as
cracking, rutting etc) rather than a single performance measure such as roughness index for the pavement,
it is essential to predict the failure probabilities and expected number of failures due to various distress
indicators within the maintenance contract period. Given the discussion above, there is therefore a need to
develop and implement a comprehensive product risk assessment model that can take into account the
risk of achieving multiple performance criteria as specified in the contract.
2. Performance Specifications/Warranty Specifications

A warranty is either an implied or an expressed (written or oral) agreement made by the seller to the
buyer to provide satisfactory or expected performance during a given period of time after the purchase
(Thomas & Rao, 1999). This concept of warranty in manufacturing industry is finding its application in
the construction industry in the warranty based contracts. In products warranty, a warranty policy is
defined mainly by two elements: (1) the period of coverage, and (2) the terms of payment or
compensation to the buyer. This policy is analogous to the one applied in pavement warranty contracts
where the agencies contract the maintenance work for certain period of time, known as the warranty
period. If the pavement fails within this warranty period, the contractor has to repair or rehabilitate the
pavement section and may also have to pay penalty for the failure of the pavement. Reliability of products
is an important concept in manufacturing industry in order to predict the time to failure of products so that
suitable premium for this risk is taken into account in product pricing. In a similar manner, in the
warranty based contracts in the pavement maintenance, this risk premium needs to be estimated by the
contractors before they bid for the job. Warranty specifications/ performance specifications are therefore
very important to be defined well as what defines failure in these contracts is the inability of the
performance indicators of the pavement to achieve the stated level of performance standard. Some of
these performance specifications as mentioned in many papers and texts are potholes, cracking, rutting,
ravelling, roughness (Zietlow & Bull, 1999; Pradhan, 2001; Attoh-Okine, 2001). However, depending on
the risks that the highway agencies want to assume, performance criteria and their target levels vary
accordingly. In that case, it becomes the burden of the contractor to model their risk premium based on
the target level of these performance specifications. It is felt during this preliminary literature search that
457
such mechanism of allocating risk premium based on the level of performance standard demanded is very
scarcely covered.
Warranty Analysis represents a new development in the Construction and Management of transportation
infrastructure facilities. There are no published studies for determining the optimal schedule of
rehabilitation during the warranty period. Most of the pertinent literature deals with the life cycle costing
of pavements in the viewpoint of state highway agencies. However, with the changing roles of the
contractor assuming more maintenance work in the performance based environment, a need has been
created to estimate the value of these maintenance contracts in the viewpoint of the contractors.
3. Quantification of risk in Performance-based maintenance contracts

Performance-based maintenance contracts are different from the asset management contracts in a sense
that when modeling for Performance-based maintenance contract the objective is to determine how much
funding is required to meet the target conditions as opposed to how much can be achieved with the
available funding in asset management. For tendering purpose, it has become necessary to modify the
typical modeling methodology to meet the tender requirements. For this reason the task of modeling for
the tendering process tends to be more complicated and requires a greater understanding of modeling
principles than if modeling for asset management purpose (Hatcher, 2001). Moreover, since the input
variables in determining service life of the pavement is stochastic rather than deterministic, modeling cost
of Performance-based pavement maintenance is a complex process and requires greater understanding.
Probability theory has been used for assessing life-cycle costs for infrastructures. Piyatrapoomi et al. note
that there are several researches done in this area (Kong and Frangopol; Zayed et al.; Kong and
Frangopol; Liu and Frangopol; Noortwijk and Frangopol; and Novick, as cited in Piyatrapoomi, 2004).
However it is evident from the literature that there is very limited information on the methodology that
uses the stochastic characteristics of asset condition data for assessing costs for pavement maintenance.
Salem et al. (2003) have used a risk-based approach using probability theory and data input modeling to
predict probabilities of occurrence of different life cycle costs associated with the
construction/rehabilitation of an infrastructure unit. Markovian Decision Process has been a popular tool
among various researchers modeling asset management decision problems because of its ability to include
stochastic nature of pavement deterioration (Golabi et al., 1982; Kostuk, 2003). It has been widely
accepted now that pavement deterioration must be represented probabilistically and not deterministically
because of the following reasons as outlined by Kostuk (2003).
The mechanistic causes of pavement distress are not well known; one can model stress, strain, and
deflection but not fatigue, cracking, rutting and other pavement characteristics. Pavement is under a
continuous influence of random variables such as traffic loads, utilization and weather conditions.
Pavement being a heterogeneous material performs differently at different sections.
Most of these pavement management models are based on the concept of asset management where the
objective is to find how much of maintenance work can be done with the available budget by the
agencies. However, if the same work has to be performed by the private parties, the objective of the
modeling would be to find how much investment is required by them in order to execute the work in the
Performance-based contracts. Not only this, equally important is the influence of key performance
measures or level of service on the quantum and quality of maintenance work that the contractors have to
achieve within the contract period.
458
4. Proposed Approach
In the light of the discussions in the preceding paragraphs, it is evident that there is a lack of literature that
deals with the quantification of risks faced by contractors in determining the total cost of the performance
specified maintenance contracts. It is proposed in this research that quantification of long term warranty is
modeled using the system approach. System components in the performance specified maintenance
contracts are the highway agencies, contractors and the external variables that influence the critical
factors that describe the system behavior. While highway agencies define performance specifications,
contractors control the schedule and the type of preventive maintenance and rehabilitation work. Equally
important in the system is the influence of external factor that determines the pavement behavior and thus
risk associated with pavement maintenance activities. So the effect of all these factors on the pricing of
the contracts is proposed to be modeled using the system approach as to be discussed in the following
chapter.
4.1 Performance Cost Estimation Methodology
An overview of the approach to performance cost analysis is shown in Figure 1. In order to estimate and
predict performance costs, a cost model is required. Analysis of the model will provide the estimates.
Proper formulation of the model requires an understanding of the warranty process. This begins with an
appropriate system characterization. Each aspect of the methodology is described in the following
sections.
System
Characterization
Data
Mathematical Model
Mathematical
Formulations
Analysis
Techniques
Expected Pavement
Maintenance Cost
Figure 1: Performance Cost Estimation Methodology

4.1.1 System characterization
In analyzing cost related to long term warranties in performance based maintenance contracts, the
appropriate framework for system characterization is a stochastic framework with time treated as a
continuum. In order to calculate the costs associated with warranty, it is necessary to model the random
elements underlying the warranty process. Here, warranty process is considered the system. An
appropriate characterization of the warranty process is required which means that characterization of each
element in Figure 2 is needed in order to formulate a working cost model. From Figure 2 it can be seen
that the direct cost of warranty is primarily a result of two key determinants: i) the structure of the
warranty policy (performance based maintenance specifications) and ii) the failure pattern of the
459
pavement. Each of these is a function of many factors but the cost models that will be discussed in this
chapter require precisely these two inputs.
Highway Agency
Performance Policy
Contractor
Pavement Reliability
Pavement Usage
Pavement
Performance
Performance Cost
Figure 2: System Characterization

4.1.2 Modeling
The cost model will be considered from the contractors point of view. As noted, cost models for
warranty analysis depend on the type of warranty offered and the failure distribution of the product under
warranty which in this case is the pavement. The type of warranty affects the cost in that it specifies the
terms of rectification, that is, the type of maintenance action to be taken in case of failure under warranty,
the preventive measures and their schedule. For example, the performance specifications will mention
what distress indicators of the pavement need to be considered and what actions (both preventive and
reactive) are required to bring the pavement to a required level of performance. A number of probability
distributions are used to model the failure distribution of items. These range from quite simple to quite
complex. Based on the actual plots of the failure data obtained from the pavement management systems,
the type of distribution, whether it is normal, lognormal, and exponential or weibull is determined and
appropriate mathematical expression for each of these failure distributions is determined.
Repair costs are uncertain, as they depend on the type of repair being done. The repair cost is therefore a
random variable and needs to be modeled by a suitable distribution function. In general, it is very difficult
to obtain the distribution function for the warranty cost for unit product, even for the simplest model
formulations, because of mathematical intractability. Hence, expressions for the expected value of this
cost will be used instead.
Data Structure and Analysis
The basic data on pavement performance in the US are usually available through the Pavement
Management System. Long Term Pavement Performance (LTPP) is a 20-year research program
developed by the Federal Highway Agency (FHWA) as part of the Strategic Highway Research Program
460
(SHRP). LTPP is a collection of information on pavement performance such as rut depth, transverse
crack, longitudinal crack, alligator crack, potholes and many other distress indicators and their influencing
factors. LTPP has been monitoring more than 2400 pavement test sections across the United States and
Canada since 1987 (FHWA, 2004). For performance-based contracts or warranty specifications, various
distress indicators, their threshold levels and the remedial actions are usually agreed upon while drafting
the contract document. Different modes of failure in asphalt pavement are as follows (WisDOT, 2001):
1. Alligator Cracking
2. Block Cracking
3. Edge Reveling
4. Flushing
5. Longitudinal Cracking
6. Longitudinal Distortion
7. Rutting
8. Surface Raveling
9. Transverse Cracking
10. Transverse Distortion
11. Patching
12. Potholes, Slippage areas and other disintegrated areas.
Probability-failure distributions for all these failure modes are plotted. These graphs are nothing but the
plot of probability of failure on the y-axis and the time to failure on the x-axis. Different forms of failure
distribution curves that can be plotted are: Normal, Lognormal, Exponential and Weibull. Goodness-of-fit
tests can be applied to check which of the failure distribution plots are most applicable to the data at hand.
Once it is determined which failure distribution curves are the best fit for the available LTPP data,
parameters such as mean time to failure (MTTF), standard deviation of MTTF, shape parameters can be
estimated for each failure mode.
Estimation of Warranty Costs
As discussed previously, reliability analysis approaches are used for estimating the probability of
pavement failures caused by different distress failures. We assume here that the condition of the pavement
after corrective repair is as good as new. We can then apply an ordinary renewal process to model the cost
associated with warranty based on the pavement performance specifications. This ordinary renewal
process has been used in warranty cost estimation of several manufacturing products such as aircraft
windshields (Blischke and Murthy, 2000).
For the manufacturing products, expected cost of warranty for the product is given by Expression (1).
E[C(W)] = C + CrM(W)
(1)
Where,
E[C(W)] is the Expected Cost of Warranty
C= Cost of the product
Cr= Cost of repairing the product
M(W)= Renewal function of the product.
Slight modification of the Expression (1) is required to apply it to maintenance of pavement (which can
be viewed as a product) by removing the cost of the product from the Expression (1).
Expression (1) is reduced to:
E[C(W)] = CrM(W)
(2)
For the normal distribution probability of failure, the renewal function is evaluated by using the
expression,
461
M(W)=
(n)
(W )
(3)
n =1
Where F(n)( ) is the n-fold convolution of F( )with itself, i.e., is the distribution of the sum of n random
variables. Since the distribution of the sum of n random variables is normal with mean n and variance
n2, the sum in Expression (2) is easily calculated. For the Weibull distribution, numerical methods and
tables are required. A detailed mathematical derivation of the renewal function is explained in Blishchke
and Murthy (1994).
Cost factor, Cr is available to the contractors for different types of corrective actions for different modes
of pavement failures. For different warranty or performance period W, the expected cost of pavement
maintenance is obtained by multiplying the cost factor Cr with the renewal function, M(W) as in
Expression (2). Contractors usually have a record of cost per unit repair for different repair actions based
on their past projects. The final cost associated with long term warranties is thus estimated based on the
mathematical model proposed. However, when the pavement fails due to several modes at the same time,
a single repair action may rectify several failure modes. In this case it is not necessary to calculate the
repair cost for all the failed distress indicators. A best course of repair action that can bring the distress
indicators to the acceptable level of performance is decided by the estimator and an estimate is based on
this action taken.
5. Conclusion
In this paper, a mathematical model is developed to estimate the pavement maintenance cost for long term
pavement maintenance contracts using reliability concept. Reliability is nothing but the measure of how
long a product or a system would last without failing. Reliability concept is a backbone of warranty cost
calculation in manufacturing products. Manufacturing industries maintain a long tern record of the failure
data of the products that they manufacture. Similarly, Highway Agencies also have started to maintain a
performance record of the pavements that they construct and maintain. When pavement maintenance
contracts are awarded to the contractors based on performance specifications for certain time, reliability
concept can be used for estimating the cost associated with the pavement maintenance. When we assume
that the pavement returns to as good as new condition after the corrective repair, pavement failures can
be viewed as an ordinary renewal process, similar to what is done for an industrial product. The renewal
function is derived from the pavement failure distributions. The mathematical formulae to calculate the
warranty cost associated with any product can be used in the case of maintaining a pavement over a
warranty period with slight modification as explained in section 4. Considering pavement as a form of
product, the mathematical expressions developed for industrial product are adapted in this paper so as to
apply it to estimate the cost of long term warranties of pavement maintenance. In the next phase of the
research, the plan is apply this concept to a real pavement obtained from LTPP data base.
6. References
Attoh-Okine, N.O. (2001). Grouping Pavement Condition Variables for Performance Modeling Using
Self-Organizing Maps. ComputerAided Civil and Infrastructure Engineering, Vol. 16, 112-125.
Golabi, K., Kulkarni, R., and Way, G. (1982). A Statewide Pavement Management System. Interfaces,
12, pp.5-21.
Blischke, W.R., and Murthy,P.D.N. (1994). Warranty Cost Analysis,New York: Marcel Dekker, Inc.
Blischke, W.R., and Murthy, P.D.N. (2000). Reliability: Modeling, Prediction, and Optimization. New
York: John Wiley & Sons, Inc.
462
Federal Highway Administration. (2004). Asphalt pavement warranties technology and practice in
Europe.Report FHWA-PL-04-002,FHWA, Washington, D.C.
Hatcher, W. (2001). The Use of Predictive Modeling for Tendering Long-Term Maintenance Contracts.
TRIS Online Record. www.rims.org.nz/NR/rdonlyres/D72CD92C-2F39-4A09-A3A9AFB3664B195B/0/Hatcher5thICMPdTIMSuseinPMSMC.pdf
Kostuk, K.J. (2003). Quantifying the Uncertainty Associated with Long Term Maintenance Contracts.
Ph.D. Dissertation, University of Saskatchewan, Saskatoon, Canada.
Owen, M. (2000). Managing the Risk in a New Performance-based Environment. Technical Report.
Transit New Zealand. Wellington, New Zealand. http://www.transit.govt.nz.
Ozbek, M.E. (2004). Development of Performance Warranties for Performance-based Road
Maintenance Contracts. Masters Thesis, Virginia Polytechnic Institute and State University,
Blacksburg.
Ozbek, M.E. (2007). Development of a Comprehensive Framework for the Efficiency Measurement of
Road Maintenance Strategies using Data Envelopment Analysis. Ph.D. Dissertation, Virginia
Polytechnic Institute and State University, Blacksburg.
Parkman, C., Hallet, J., Henning, T., and Tapper, M. (2003). Pavement Deterioration Modelling in Long
Term Performance-based Contracts: How Far Does it Mitigate the Risk for Client and Contractor?
Twenty First ARRB and REAAA Conference, Cairns, New Zealand.
http://www.transit.govt.nz/content_files/news/ConferencePaper34_PDFFile.pdf
Pinero, J.C. 2003. A Framework for Monitoring Performance-Based Road Maintenance. PhD
Dissertation, Virginia Polytechnic Institute and State University, Blacksburg.
Piyatrapoomi, N., Kumar, A., Robertson, N., and Weligamage, J. (2004). Review of the Literature:
Maintenance and Rehabilitation Costs for Roads (Risk-based Analysis). Report prepared for
Cooperative Research Center for Construction Innovation.
http://www.construction-innovation.info/images/pdfs/Research_library/
researchLibraryC/Literature_Review/Review_of_the_Literature.pdf
Pradhan, N. (2001). Evaluating the Sensitivity of Parameters in Predictive Pavement Deterioration
Modeling: Draft Final Report. Transfund New Zealand Research Report 212.
http://www.lpcb.org/lpcb-downloads/other_pdwe/
2001_pradhan_sensitivity_pavement_deterioration_parameters.pdf
Queiroz, C. (1999). Contractual Procedures to Involve the Private Sector in Road Maintenance and
Rehabilitation. Transportation Sector Familiarization Program.
http://www.worldbank.org/transport/roads/c&m_docs/ts_499.pdf
Salem, O., AbouRizk, S., and Ariaratnam, S. (2003). Risk-based Life-cycle of Infrastructure
Rehabilitation and Construction Alternatives. Journal of Infrastructure Systems, ASCE, Vol. 9(1),
6-15.
Thomas, M.U. and Rao, S.S. (1999). Warranty Economic Decision Models: A Summary and Some
Suggested Directions for Future Research. Operations Research, 47(6), 807-820.
Wisconsin Department of Transportation. (2001). Asphaltic Pavement Warranties. Five Year Progress
Report.
463

A Framework to Assess Sustainability of Community-based Water Projects

Using Multi-Criteria Analysis
Kamalesh Panthi
Ph.D. Candidate, Florida International University, Miami, FL, USA
kpant003@fiu.edu
Shashi Bhattarai
C.E.O., Development Dynamic, Kathmandu, Nepal
Abstract
The application of Monitoring and Evaluation systems to assess water facility projects has provided
decision makers to plan for the sustanability of the future projects based on the performance of the
existing projects. There are many subjective and objective opinions while determing the effectiveness of
these projects. For the communitybased projects, sustainability is a major cause of concern to all the
stakeholders. Inorder to monitor and evaluate the sustainability of these projects, different indicators are
identified for measuring their effectivenes. A framework for an integrated evaluation system is developed
in this study using analytical hierarchy process for multiple-criteria decision making. There is much
subjective information that needs to be quantified inorder to remove any bias in evaluators assesment of
qualitative measures. A framework developed in this study in this study is then applied to assess the
sustainability of the sixteen chosen water facility projects in Nepal. The results have shown that there is
significant value of such framework in providing information and input for different decision-making
levels.
Keywords
AHP, Sustainability, Evaluation, Monitoring, Multi-Criteria Analysis
1. Introduction
Poverty assessment research has conistently showed that improvements in water services are a core
element in most strategies deisgned to alleviate poverty. It was until recently that these water utility
projects were considered to be one time investment by the government and there was little participation
from the community. These projects suffered from poor maintenance and disuse. This has led to a demand
for more community involvement so that the long term sustainability of such projects are ensured.
Development that meets the needs of the present without compromising the ability of future generations
to meet their own needs is the general definition of sustainability (WCED, 1987). Based on objectives set
by the stakeholders of the project, there may be different views of looking at the sustainability aspect of
the project. In this study, sustainabilty of the project is viewed as an amalgam of Technical,
Social/Environmental, Financial, and Institutional criterias as shown in Figure 1. Projects are evaluated
based on these multiple criterias for their sustainabilty.
464
Technical
Sustainable
Social /
Environmental
Projects
Financial
Institutional
Figure 1: Components of a Sustainable Project

Multi Criteria Analysis (MCA) is a process of integrated assessment of projects, alternatives or options
for ranking or selecting, priority setting among the finite set of projects, alternatives or options. MCA is a
structured approach to determine overall preference among alternatives, where the alternatives
accomplish several objectives. The advantage of the MCA processes is that it enables an integrated
assessment of subjective and objective information with stakeholders values in a single framework.
Different MCA or Multi-Criteria Decision Making (MCDM) methods have been widely used in the area
of environmental resources planning and management. Recico et al. (1999) developed a system for water
evaluation and monitoring that was applied to an aquifer in Spain. Raju et al. (2000) used MCDM
analysis for a case study of an irrigation area to rank different alternatives using economic, environmental
and social factors as criterias. Of all the MCDM tools, Analytical Hierarcy Process (AHP) is being used
widely because of the nature of the problem and the structure of the relevant criteria (Karamouz et al.,
2002).
The Analytical Hierarchy Process (AHP) based multiple criteria analysis deals with the relative priority of
importance of each factor by pairwise comparison of all factors with respect to a certain criteria. A
hierarchical structure of these factors is formed by grouping them into different levels. The application of
the hierarchical structure allows the factors to be broken down into details. AHP based multiple criteria
analysis starts from building tree like structure with criteria at higher level and factors and sub-factors are
at the lower level. Objective of evaluation lies at the top and the options or alternatives to be evaluated are
placed at the lowest level of the hierarchy. The AHP simplifies the process of identifcation and
assessment of criteria, factors and sub-factors related to a problem. The importance or weight of the
factors can either be directly applied or could be generated by making pair-wise judgment between the
various factors. Performance of project is applied at the lowest level of the hierarchy. Criteria are the
highest level of sustainability monitoring indicators, where as sub-factors are at the lower level.
465
2. Methodology
This sustainability monitoring study process is broadly divided into two parts. The first part is to design
the monitoring framework and the second part is to utilize the designed framework for the selected
projects sustainability monitoring.
2.1 Monitoring Framework
The monitoring framework task consists of study of indicators and scoring system. The framework is the
basis of sustainability monitoring and generating sustainability score by analytic hierarchy process (AHP)
method.
The sustainability monitoring framework consists of four criteria, thirteen factors and twenty six subfactors for water facility. The framework constitutes sets of sustainability monitoring indicators. The
information generated in isolation is to be integrated with the scoring system, making it comparatively
easy to judge whether the project under consideration is sustainable or not. Further, each score is
classified as one of the three situations; sustained, partially sustained and not sustaining. A high end MCA
tool based on AHP has been utilized to generate sustainability score of each individual or group of
projects. Figure 2 presents a hierarchial structure that is formed by grouping factors into different level.
On the top of the hierarcy is the goal. The goal of this framework is to assess the sustainability of the
projects. On the next lower level are the major criterias which are used to evaluate the sustainaility of the
projects. In Figure 2, A1 A4 are criteria and A11 A43 are factors; sub-factors are below the factor
level. Factors and sub-factors in Figure 2 are represented by a letter and numeral. Please refer to Table 1
for their complete meaning. Sub-factors are measured or judged or rated for each project, while
monitoring sustainability in the field. Criteria are sub-divided into factors and factors are further subdivided into sub-factors. For example, technical, socio-environmental, financial and institutional aspects
are the criteria looked in this study. The technical criterion is divided into four factors for water supply
project monitoring, namely source, physical condition of system, water point functioning and meeting
demand. The factor "Water Point (WP) Functioning" is further divided into three sub-factors, namely
maintaining design flow, water quality and surrounding condition. The sub-factors are the indicators
under each criterion or factors are measured/judged or rated at project site while conducting sustainability
monitoring. Indicator may be a single sub-factor or factor consisting of more than one sub-factor. Each of
these sub-factors at the lowest level of the hierarcy are rated for each individual project on a five point
scale of excellent (80-100%), very good (70-79%), good (50-69%), fair (30-49%) and poor (<30%).
Based on the weights of the factors and sub-factors obtained from pairwise comparison from AHP are
multiplied with the respective ratings for sub-factors, total score is obtained for the particular project that
indicates its sustainability. Projects are then ranked according to their sustainability score.Sustainability
sensitivity analysis conducted with the weights to factors and sub-factors using AHP based software, to
get more insights on the sustainability status of projects, to identify most sensitive factor good or bad
governing the sustainability.
466
Table 1: Components of Sustainability Assessment Criteria, Factors and Sub-factors
A4:
Institutional
A3:
Financial
A2: Social/
Environmental
A1:
Technical
Criteria
Factors
A11: Source Yield & Quality
Sub factors
A111: Reliability, adequacy, depletion
A112: Water quality at source
A113: Accessibility, chance of contamination &
Conflict
A12: Physical Condition of

System
A121: Design adequacy, site & technology

A122: Condition & functionality of system
A123: Natural threat to physical system
AS13: Water point functioning
A131: Maintaining Design Flow

A132: Water quality
A133: Surrounding condition/Drainage system
A14: Meeting Demand
A141: Water fetching time

A142: Status of meeting additional demand
A21: Use of water facility
A211: Status of use by targeted population
A22: Community participation
A221: Decision making and O&M
A23: Environmental
A231: Mitigation measure & Drainage
A24: Social Inclusion &

Equity
A241: Inclusion (ethnic group)

A242: Equity (men, women, reach & poor)
A31: Availability of fund
A311: Establishment of O&M fund & saving

A312: Regularity & transparency
A32: Use of fund
A321: Use of saving / surplus fund
A41: Users committee
A411: Existence, functioning & meetings

A412: Ownership & activities
A413: Representation on UC
A42: Maintenance committee / A421: Existence

Care taker
A422: Functioning
A43: Coordination and
Linkage
A431: With local authority & other agencies

A432: Training & external support
467
Goal
Criteria
Factors
Sub-factors
Sustainability
Score
A111(0.054)
A11(0.1)
A112(0.023)
A113(0.023)
A121(0.008)
A12(0.1)
A122(0.054)
A123(0.038)
A1:Technical
(0.5)
A131(0.12)
A13(0.2)
A132(0.04)
A133(0.04)
A141(0.07)
A14(0.1)
A2: Social
/Environmental
(0.25)
Goal
(Project
Sustainability
Assessment)
A142(0.03)
A21(0.1)
A211(0.1)
A22(0.05)
A221(0.05)
A23(0.05)
A24(0.05)
A231(0.05)
A241(0.031)
A242(0.019)
A31(0.01)
A3: Financial
(0.05)
Not
Sustainable
(<30%)
Partially
Sustainable
(30-70%)
A311(0.025)
A312(0.015)
A32(0.01)
A321(0.01)
A411(0.054)
A41(0.5)
Sustainable
(70-100%)
A412(0.023)
A413(0.023)
A4:Institutional
(0.2)
A42(0.25)
A421(0.025)
A422(0.025)
A43(0.25)
A431(0.025)
A432(0.025)
Figure 2: Hierarchical Structure of Criteria, Factors and Sub-factors and their Weights
468
2.2 Application of the framework

A multi criterion approach of sustainability assessment study is undertaken whose objective is to monitor
the sustainability status of a range of completed projects which have completed three years of operation.
This was carried out by reviewing the physical functionality and usage of hardware in projects, by
appraising the effectiveness of institutional, operational and maintenance systems. A total of 16 projects
were selected for sustainability monitoring, taking care to balance the project selection process by
topography, technology, extended facility type, rural, urban etc. The objective of the sampling of projects
is not only to generalize the sustainability outcome, but to capture all possible cases of projects in the
sustainability monitoring framework, ensuring the applicability of the sustainability framework to all the
existing project types.
Systematic Secondary Information Collection and Analysis (SSICA) approach was used to collect and
analyze all documented information on sustainability monitoring. SSICA was conducted also to
understand the different aspects of integrated sustainability, specially for sustainability monitoring
framework development, the first part of the study. The study team identified the tools to be used to
solicit information from the project site. In this context, various participatory tools were evaluated against
the information to be collected to arrive at the best combination of methodological tools to utilize during
the fieldwork. The participatory tools assessed include observation (infrastructure and document); focus
group discussions; key informant interviews; and photo capture among others. Summary of activities
involved in second part of the study is presented in Figure 3.
Arrival at Project Service Area

Planning & Arrangement for Assessment
Transact Village Walk

With senior community / UC
members
Key points Observation, Photo

Capture and Sample Survey
On the spot interviews with
HH Owners / Students / Locals
passing by
Discussion & Meetings with
Beneficiaries & UC Members
Completion of Field Judgment and

Assessment
Figure 3: Systematic Field Assessment

The fieldwork consisted of random water point inspection (sample surveys), focus group discussions, key
informant interviews; transact walks, observations and photo capture. The field team provided input to
sustainability assessment sheets from the field interviews, focus group discussions and key informant
469
interview. Village walks were guided by the monitoring indicators on the sample survey matrix (SSM)
and field assessment sheets. The field team appraised the project beneficiaries and their impression of the
project and benefit rendered were collected.
Based on the f information collected for all the projects, each of the sub-factors are given a rating. For
example, if the reliability, adequacy, depletion of the source yield of the water facility is found to be
excellent, the score for this sub-factor would probably range from 80-100%. If the score given was, say
90%, then this score is multiplied with the relative weight of the Reliability, adequacy, depletion subfactor which in this case is 0.054. The score for this sub-factor for this project is therefore, product of
90% and 0.054, which is 4.86%. Similarly, score for all the other sub-factors are determined in a similar
manner and finally all the individual scores are added to get the total score for that particular project. If
the total score lies within 70-100%, then the project is considered sustainable. This methodology is
followed for other projects and finally the ranking of the projects based on the total sustainability score is
obtained as shown in Table 3.
3. Results
Analysis of the information was conducted for each project to generate the sustainability scores. The
range of score utilized to demarcate the sustainability status is presented in Table 2.
Table 2: Cut-off Score for Sustainability Status Determination
Typical five point Score Distribution for different grading
grading nomenclature Five point
Four point
Three point
Excellent
80-100%
70-100%
70-100%
Very Good
70-79%
Good
50-69%
50-69%
30-69%
Fair
30-49%
30-49%
Poor
<30%
<30%
<30%
Sustainability
status
Sustained
Partially
sustained
Not sustained
Based on the scores obtained by utilizing the above methodology, projects are categorized as to whether
they are sustainable, partially sustainable or not-sustainable as shown in Table 3.
Table 3: Sustainability Score for Projects
Project
Name
Suntalachour
Chapdanda
Belbhanjyang
Lamachour
Neupanegaun
Aptari
Region
Age
Composite Sustainability Status
Hill/Tarai/Urban (Years) (Score)
District
WDR Hill
6
Sustainable (82.0)
Baglung
WDR Hill
6
Partially Sustainable (66.6)
Syangja
CDR Hill
6
Sustainable (87.0)
Dhading
CDR Hill
7
Sustainable (84.3)
Nuwakot
CDR Hill
7
Sustainable (82.2)
Dhading
EDR Hill
6
Sustainable (87.0)
Bhojpur
470
Jagretar
Dhauri
Sakaura
Kawachit
Lyaku
Kapan
Tadhoka
Ghoghanpur
Taragana
Jandol
Jitpur
EDR Hill
Udayapur
EDR Hill
Udayapur
WDR Hill
Tanahu
Urban
Bhakthapur
Urban
Kathmandu
Urban
Lalitpur
EDR Tarai
Saptari
EDR Tarai
Siraha
EDR Tarai
Saptari
CDR Tarai
Chitwan
Sustainable (71.8)
Sustainable (76.1)
Sustainable (71.9)
Sustainable (83.5)
Sustainable (77.0)
4. Conclusion
The study developed a framework for the sustainability monitoring and evaluation of projects. The
framework results sustainability status of projects based on their performance with various indicators
included in the framework. Since the sustainability status of project is dependent on the indicators used
and weight and score distribution to the various indicators, the first and the foremost thing is that there
should be consensus on indicators and weight distribution in the framework among all the concerned
agencies that are using the framework in future.
From the result of the study, it can be seen that most of the selected projects are in the sustainable range
and the remaining are partially sustainable. For the partially sustainable projects, effort should be put to
those causes (sub-factors) that have lower score but have higher weights (importance). The utility of the
framework can be improved by carrying out the sensitivity analysis to see the effects of changes in
weights of different sub-factors to the overall sustainability score. This is recommended for the future
studies.
5. References
Karamouz, M., Kerachian, R., Zahraie, B., and Nejhad, S.A.(2002). Monitoring and Evaluation Scheme
using the Multiple-Criteria-Decision-Making Technique: Application to Irrigation Projects. Journal
of Irrigation and Drainage Engineering, Vol. 128, No. 6, pp 341-350.
Raju, K. S., Dukstein, L., and Arondel, C. (2000). Multi-criterion analysis for sustainable water
resources planning: A case study in Spain. Water Resources Management, Vol. 14, No. 6, pp 435
456.
Recio, B., Rubio, F., Lomban, J., and Ibaiiez, J. (1999). An econometric irrigated crop allocation model
for analyzing the impact of water restriction policies. Journal of Agriculture Water Management,
Vol. 42, No.16, pp 4763.
471
WAN (2007). Multi-Criterion Approach to Sustainability Monitoring. Summary Report- Long Term
Sustainability Monitoring Study. Water Aid Nepal, Kathmandu.
World Commission on Environment and Development, Earth Summit, Rio De Janeiro, Brazil, 1987.
472

Malaysia Improvised Rapid All-Weather Shelter Ii (Miras Ii)

Fajaruddin Mustakim
fajardin@uthm.edu.my
Ismail Rahman
Deputy Dean, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Abdul Aziz Abdul Samad
Dean, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Kamarul Aini bte Hj Mohd Sari
Syamsul Izwan Saidin
Undergraduated, Faculty of Civil and Enviromental Engineering, Universiti Tun Hussein Onn Malaysia
Abstract.
The destruction due to earthquake in certain parts of the world had created problem of shelter to the
survivors. Countries likes Indonesia, China, Japan, Iran and Pakistan which are prone to earthquake have
severe weather condition. The people need immediate shelter to protect from this weather. Under these
circumstances rapid shelter all weather is the best option to help the survivors. This paper presents a
model of rapid shelter known as Malaysia Improvised Rapid All-Weather Shelter or MIRAS. It discusses
the construction aspect of the model and proposed MIRAS kit that is easily mobile and measurement of
thermal comfort. The measurements showed that the indoor environment of the shelter suitable to protect
from severe outside weather. The study revealed that the reduction of the high temperature was 17.7%
between outdoor and indoor heat meanwhile the reading of relative humidity is 61.2%.
Keywords:
Malaysia improvised rapid all-weather shelter
1. Introduction
The need for emergency aid due natural and man-made disasters has been visibly emphasized throughout
the world in recent history. The most needed aid after food is shelter. Shelter can come in many forms
either as the canvas tent, the mud hut on open plain, or the wood-framed box with a backyard and a white
picket fence. World Health Organization (WHO) states that the disaster victims/survivors are suffering
neither insufficient amount of food and shelter for winter. Other source The Times reported that the
numbers of survivors die increased during winter. Some of the available temporary shelters cannot protect
victims against extreme cold. Besides, the shelters cant stand on heavy load of snow and also easily
blown away during harsh wind. One of the best ways to shield against fire, flood and storm is to use
natural elements likes earth. The equilibrium of the natural elements is that it acts as a universal
473
balancing. The strongest structure shapes in nature are arches, domes and vault forms. The forms are in
tune with gravity, friction, minimum exposure and maximum compression, (Cal-Earth Institute, 1992).
Based on the matters above, researchers recognized that the earthquake survivors need an express shelter
that is strong to face extreme weather condition. The idea of developing MIRAS is to help the survivors
for having a good shelter and to give a little comfortable to live. It is designed for the earthquake victims
who have been turn into homeless and have to fight the chilliness of winter. As an alternative shelter,
MIRAS provide temporary shelter which is practical to make using local available materials, effective
cost and earthquake resistance.
2. MIRAS
MIRAS is introduced as the alternative shelter based on the idea of Improvised Rapid All-Weather
Shelter (IRAS) that has been specially designed by Hammad Husain (architect) with Umar Iqbal
from Pakistan. The physical appearance and material has been changed to suite the Malaysia
environment and climate. The improvement has been made in term of floor size, high of the
structure, material (sandbag, window, door) and additional of insulation, batten and plaster.
MIRAS is the temporary shelters that can quickly and cheaply distributed and built. This type of shelter
is designed to meets all requirements for emergency shelter. Beside that it can be integrated into longer
life structure. MIRAS construction is based on guidelines of temporary shelter. The guideline states that
the shelter should be quick and easy to build by community members, safe against extreme weather and
earthquakes, inexpensive, easily transported to remote area by foot, construct locally and culturally with
familiar materials and methods of construction, and requiring no special tools or equipment.
The materials used include earth bags, filled with sand or soil to construct the walls. These replace brick
and stone. Barbed wire is used as a binder instead of cement mortar to give the structure a monolithic
design and contributes to earthquake resistance. The roof is made of corrugated galvanised iron sheets
with internal support due to the barrel vault roof design. This Model is a transitional shelter, which can
last between one to five years depending on how well owners protect the structure either by using mortar
or cement plaster.
2.1 MIRAS Specification
The floor area of MIRAS is 68 square feet (7.5x 9). The dimensions of the MIRAS are as shown in
Figure 1. The number of sandbag or polypropylene bag needed to build the wall was about 350 bags.
Two strands of four point barbed wire were laid in between every row of bags. A total of six number of
the barbed wire half roll was used. Plastic door size (3 x 6) and seven sheet of corrugated galvanised
iron dimension of (12 x 3) were used. The wood lintel size (12 x 1) and nine numbers of bettens
(2x3) were used to support the roofing.
474
Figure 1: MIRAS Dimension

2.2 Construction Process.
The construction of MIRAS will take about one to three days depend on the weather condition, resource
management and the number of member involved in the construction. The cost estimated for this model is
about RM 1,500 per unit. It will be cheaper if locally available materials are used. The construction
steps/processes are as follow:
a.
b.
c.
d.
e.
f.
g.
Setting-up base
Stacking sand bags
Setting-up door and windows
Roofing
Plastering
Insulation
Flooring
The first procedure of constructing MIRAS is to establish a baseline. Since our ground is water logged
than we need to spread the crusher run within the parameter of the base. The position of this line must be
clearly marked on-site so that it can be re-established at any time. The equipment used for setting up is
measuring steel tape and a typical builder square. Next step is to fill the sandbag with the sand and tie it
up. After that the sandbags is lay like the sculpted masonry appearance (brick bonding). Strand of four
point barbed wires are laid in between every row of bags. The barbed wire acts as the hook and mortar
provide tensile strength inhibits the walls from being pulled apart. Window material can be used from
waste material available. Six windows are placed in the building where each two windows are situated on
the back wall, and two at both sides of the building. For our case we used 8 inch diameter PVC pipe for
the windows. The purpose of the window is to improve the ventilation of the building and thus gives
comfort to the occupants. We used corrugated galvanised iron (zinc) as the roofing for the MIRAS and
supported by battens. It provides a covering that will exclude the rain. After the construction of MIRAS
completed, than the plastering work starts and followed by concreting work on the MIRAS floor. We also
475
installed aluminium foil as insulation (see figure 4). Figure 2 shows the proposed MIRAS in three
dimensions (3D) view.
Figure 2: The 3D of MIRAS.
Pictures show steps involved in building the MIRAS model:-
1) Setting-up MIRAS base
5) door frames are attached first.
2) Sand is scattered on the string to mark the base

wire
6) Lay the sandbag and attach the barbed
476
3) The plastic bags are tied firmly.
7) 8 diameter PVC pipe is used as the vent hole
4) The base layer of the MIRAS Model is done
9) Place the battens on the top of sand bag.
8) The side walls will be build up to
12) Plastering work on the outer wall of the MIRAS
10) Attach the zincs on the batten as the roof.
13) Concrete works on the MIRAS floor
477
11) Construction complete
14) After plastered the MIRAS wall.
Figure 4: Picture of MIRAS Construction Process.
3. Weather Performance
MIRAS is designed to withstand severe weather condition. The weather parameters/variables that are
known to have impact on MIRAS are extreme temperature, heavy rainfall or snows, earthquake, fire and
winds. For this study, only temperature and humidity were considered. The data for both variables were
taken from inside and outside of MIRAS for a period of seven days. The data collected from 8am until
8pm with an interval of one hour. The equipment used to gather the data was Hydro Thermo-anemometer
(Meter Kit). The purpose of collecting the data is study a simple relation between outside and inside
temperature and relative humidity.
3.1 Temperature Analysis
Figure 5 shows that the maximum temperature different is spotted at the sixth day at 12pm where the
outside temperature reading is 38.4C and inside temperature of MIRAS is 32.8C. The percentage of
reduction at the high time was 17.7%. From the comparison, it shows that MIRAS could reduce heat
during high temperature situation and increase the temperature during morning and night. The implication
of this finding is that MIRAS can help occupants to stabilize their body temperature and thus make life
more comfortable in MIRAS.
478
graph temperature vs time

40
36
temperature ( C)
38
34
32
30
28
26
time
Outdoor temperature
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
8am
10am
12pm
2pm
4pm
6pm
8pm
24
Indoor temperature
Figure 5: Temperature Comparison Between Indoor and Outdoor of MIRAS.

3.2 Humidity Analysis.
Figure 6 shows relative humidity profile for four days data. From the graph, the maximum
outdoor relative humidity is 90.4%, which was gathered from first and second day at 8am. The
maximum indoor relative humidity value is 89.0% at 8am. The minimum outdoor relative
humidity is 58.1% recorded on the third day and the minimum indoor relative humidity is 57.9%.
Both data recorded on the third day at 3pm. The outdoor relative humidity of MIRAS fell in the
range of value 90.4% to 58.1% and indoor relative humidity is in the range of 89.0% to 57.9%. It
can be concluded that there is no significant different between outdoor and indoor for relative
humidity as compared to temperature.
479
Figure 6: Relative humidity Comparison Between Indoor and Outdoor of MIRAS
5. Conclusion.
From our work, MIRAS has the potential to be an emergency shelter for short and long terms. It
can be built using locally available material and the methods of construction are simple and
straight forward. MIRAS has the prospect to regulate the indoor temperature to an acceptable
human comfort. This is reflected by a reduction of 17.7 % in temperature during peak period. By
this percentage of reduction it can help occupants to stabilize under extreme temperature.
MIRAS is not only quick and easy to build but it is also safe against extreme weather and
movable for immediate distribution. Therefore MIRAS meet all the requirements of suitable
emergency shelter. Further study on MIRAS is to develop the model in kit form for the
emergency shelter relief (see figure-7). The proposed body kit is made from of thick plywood
and has a roller at the bottom of it. All the material needed to construct the model will be placed
in the kit such as sandbags, barbed wire, exclude door, lintel, and battens and corrugated
galvanised iron.
480
Figure 7: MIRAS kit
References
Abdullah AbdHalid, et al. Field study on indoor thermal environment in an atrium in tropical
Building and Environment (2008), doi:10.1016/j.buidenv.2008.02.011
climates.
Hakan Arslan. (2005) Re-design, re-use and recycle of temporary houses. Science Direct: Building and
Environment, University of Abant Izzet Baysal, Turkey.
Lynne Elizabeth and Cassandra Adams. (2000) Alternative Construction: Contemporary Natural Building
Methods, John Wiley & Sons Inc, United State of America.
N. M. Bradford and R. Sen. (2005) Multiparameter Assessment Guide for Emergency Shelters: Disaster
Relief Applications. Journal of Performance of Constructed Facilities.
Fan Wang. (2006) Modelling Sheltering Effects of Trees on Reducing Space Heating in Office Buildings
in a Windy City, Science Direct : Energy and Buildings, Heriot-Watt University, Scotland.
Piyush Tiwari. (2003) Sustainable Practicesto Meet Shelter Needs in India, Journal of Urban Planning
and Development, ASCE.
K.C.K Vijaykumar, P.S.S Srinivasan and S. Dhandapani (2006) A Performance of Hollow Clay Tile
(HCT) Laid Reinforced Cement Concrete (RCC) Roof for Tropical Summer Climates Science Direct:
Energy and Buildings, Tamil Nadu, India.
481

Assessing the Viability of Total Quality Management Implementation in

Contracting firms of Pakistani Construction industry
Rizwan U. Farooqui
Rehan Masood
(Site Engineer, Paragon Constructors (Pvt) Ltd.,Karachi, Pakistan)
Junaid Aziz
(QC Engineer, Izhar (Pvt) Ltd, Karachi, Pakistan)
Abstract
This paper aims at analyzing the significance and willingness of contracting firms regarding
implementation of Total Quality Management (TQM) to Pakistani construction industry; the problems
and conclusions are weighed and assessed respectively. An in-depth analysis and statistical sorting of data
were based on extensive industry surveys via questionnaires and one-to-one interviews with key
contractors of the existing market. The current practices infer the average attitude of the contractors
towards the importance of adopting TQM. The aspects that were targeted such as quality in the
organization employee training, and organizational culture, seem to be slightly appreciable. Also
partnering is known by almost everyone in the industry but they show a low response in this regard.
Lacking of having a concise and exact definition of quality was also observed. The fragmented nature of
the industry is a big hurdle in TQM application. Lack of education is also one of the reasons why TQM
would fail. In addition, corruption, negligence and irresponsibility are also critical issues. Contractors are
apprehensive in adopting TQM philosophy as they have a myopic view and are unable to realize its long
term benefit. Implementing TQM requires a major organizational change that would transform the
culture, process, strategic priorities and belief of an organization. Apart from commitment top
management must educate its employees on the need of TQM so that it will help to reduce the amount of
work for employees if they no longer need to attend the customer complaints and defect problems.
Key Words
Total Quality Management, Employee Training, Organizational Culture, Strategic priorities, Pakistan
1.Introduction
The main emphasis of this study is to assess the current status of the contracting firms of Pakistan
Construction Industry regarding the implementation of TQM and the implementation of quality
management approach in prevailing culture of contracting firms of Pakistani construction industry. More
over the response of client firms has been discussed earlier under same issues to investigate the
acceptance for TQM and found partial opinions. The approach to adoption of TQM for both client and
contracting firms is comprised of different trends and objectives. Total Quality Management (TQM),
which comprises of a continuous improvement philosophy, its appropriateness and adequacy towards
482
implementation in Pakistan Construction Industry is evaluated and assessed with respect to

implementation hurdles.
In developing a total quality culture in construction, one important step is to develop a construction team
of a main contractor, subcontractors and suppliers who would commit to the quality process and develop
a true quality attitude (Low and Peh 1996). Chase (1998) concluded, in the construction industry,
application of TQM to the jobsite has been proven to speed-up projects while increasing profitability
(Steven McCabe, 1996). When time and money are premium then TQM implementation will be
confrontational and adversarial because mostly contractors cannot afford to improve (Todd et. al, 2003).
The contractors varied in their definition or perception of quality by indicating: price (value),
compliments, management commitment, measurement and improvements, repeat business, and finishing
on schedule (Alfred & Patrick, 1999) The supply chain context is especially salient in the quality
assurance of construction projects as a general contractor often outsources most of the construction work
to other members in the supply chain, i.e. its suppliers and subcontractors (Gunaydin, 1995). In
construction phase, extent teamwork of parties participating in the construction process was found to be
very important and ranked 2nd by constructors and 4th by construction managers (David & Murat, 1997).
Product quality in the construction industry may refer to achieving quality in the materials, equipment
and technology that go into the building of a structure, whereas process quality may refer to achieving
quality in the way the project is organized and managed in three phases pf planning and design,
construction, and operation and maintenance (David & Murat, 1997). In the construction industry,
contractors are selected by owner on a competitive basis. Even though the bid is considered to be the
major criterion of selection, especially private owners also consider the contractors safety record,
technical support, equipment capabilities, and especially reputation regarding the quality of the work
performed. Contractors with a bad reputation are not likely to be awarded many projects in the existing
competitive marketplace. It therefore pays for contractors to invest in measures to achieve high work
quality in order to increase chances of winning contracts (Low & Hui, 1992). Quality is also the
cornerstone of competitive strategies for contractors seeking to widen as well as secure their clients. The
global competitive arena has compelled contractors to constantly think of new ways to gain a competitive
edge. (Bubshait and Al-Musaid, 1992) concluded that clients involvement in the construction phase is
essential to project quality though they share Lomabrds view that the contractors role is vital and look
for a much closer liaison between the clients and contractors. Willenbrock and Shepard (1980) concluded
that the contractor or designer should maintain a quality control group, whose duty should be limited only
to quality control, and who must be insulated from cost and schedule pressures. Finally, there are those
who argue that the choices of quality control program and who should initiate it must depend on the
particular characteristics of the project(Hester, 1979) .(Peter, Heng, Zahir & Olusegun, 1998) Both
contractors and design consultants to be quality focused and to be committed to on-going learning
process. (Peter, Zahir, Eddie & Heng, 2002) The alliance between a contractor and sub-contractor may
lead to competition in both learning of new skills and refining of organizational capabilities in their
products and processes.
This study will therefore explore the current status of adoption of quality culture in Pakistan construction
industry with respect to acceptability and suitability towards implementing TQM in the near future.
Contracting firms are chosen for this study since they, as identified above, has vital position to encourage
practical implementation of TQM in the construction sector.
2. Pakistani Construction Industry

Construction sector, the world over, is considered to be a basic industry on which the development of the
country depends. To a great extent, the growth of a country and its development status is generally
determined by the quality of its construction companies and their capability. In spite of being one of the
most neglected sectors in Pakistan, construction participates to increase the GDP and comprises about
483
14% of employment of total labor force (Labor Force Survey Report-Government of Pakistan, 2005-06).
The industry is more labor intensive, with moderately less use of mechanization. Therefore, compared
with other industries in Pakistan (like the manufacturing industry) this industry is labeled as being
backward because of its relative lack of use of the latest advances in technology, management styles and
procedures. Indeed it invests very meager amounts in research and development, which hinders the
industrys ability to adopt new technology and processes.
Considering that quality is the most significant factor of competitive advantage, the industry is creating a
healthy atmosphere to work in and also the involvement of the foreign parties, agencies and funds, the
industry is demanding so because of increasing numbers of construction projects.
Advancement of technologies is unavoidable in such a fast-growing working environment. Traditional
way of works, i.e. human or labor driven practices involved with the incorporation of the advanced
technologies is leading Pakistani Construction Industry towards a developed country. Improvisation of the
practices and processes will enable the industry to create an internal well established culture. Respecting
the traditional and cultural values, mingled with the levels set internally may provide a step towards the
viability of the same.

1. Assess the current state of Pakistan construction industry through quantitative research with
specific reference to the status of construction management education, research and practice.
2. Develop a strategic model for the improvement and strengthening of construction management
3. Devise a framework to standardize the construction industry practices for achieving improved
4. Capacity building of academia, industry, owners and government in the area of construction
management so as to improve the overall efficiency and productivity of the construction industry.
Since no accurate information regarding the extent of construction management application in the
Pakistan construction industry was available, the first objective of the research project was set as the
investigation of the adoption and implementation of construction management practices in Pakistan
construction industry. While this paper will focus only on the assessment of the quality culture in
contracting firms in Pakistan construction industry as a way forward to TQM implementation in Pakistan,
the remaining research work will be reported in further papers.
4. Methodology
1. Development of a questionnaire to elicit information about quality management practices of
contractors.
2. Conducting questionnaire survey through personal interviews.
3. Assessment of feedback from questionnaire survey to identify the current state of quality
management practices in contracting firms
484
The steps are explained as follows.

A questionnaire was developed initiating with request of personal information (e.g. work experience,
position in company) and company information (e.g. types of construction works performed, number of
employees). After that thirty one (31) questions laid out in eight (08) key areas:
1.
2.
3.
4.
5.
6.
7.
8.
Perception of quality (2 questions)

Quality in your organization (10 questions)
Employee training (2 questions),
Culture within the organization (3 questions)
Practices in the organization (7 questions)
Data acquisition methods (3 questions)
Partnering (1 questions),
Implementation of TQM (3 questions)
The questionnaire was used to conduct personal interviews with representatives from total of 31 major
contractors working in major cities of Pakistan so as to get their feedback on the prevailing culture in their
organizations with respect to quality implementation. Almost all of the firms approached were large size
organizations (based on their annual volume of work and number of employees). The questionnaires were
completed by their top management who were involved in the quality management programs. Almost all
of them (more than 90%) had over 10 years of construction experience. On the basis of their position,
education, work experience and professional background, it can be inferred that the respondents had
adequate knowledge of the quality management activities in their organizations. The survey response is
analyzed in the following section.

The analysis and discussion about the questionnaire survey is organized in nine key areas identified in
section 4 above. In line with the format of the questionnaire, the results are reported in seven sections.
Due to the small sample size, the respondents responses are indicated in numbers. Percentage values are
reported only when they represent more meaningful results.
5.1 Perception of quality
In this section, two questions were asked to evaluate the contractors firms perception of quality.
1. What is your perception of quality? (Prioritize)
Priority Criterion
Customer satisfaction
1
2
3
4
5
Minimization of
reworks
Scope achievement
Minimization of cost
Response
50%
13%
10%
13%
0%
Others
485
Required priorities have been set to analyze the responses and according to the results average percent of
contracting firms (50%) have realized the importance of customer satisfaction and have kept customer
satisfaction as their first priority. But afterwards most of them deviate from set priorities as minimization
of rework and cost complies at equal level i.e. 13% and seems not to have clear concept of quality, in
addition few firms respond to scope achievement (10%) because completion of work in time is becoming
criterion of general contract conditions.
2. How would you rate Customer Satisfaction?
A majority of the contracting firms surveyed (48%) placed customer satisfaction as the prime factor on
which project success depends. This ensures repeat business for the contracting firm and hence better
projects and financial gains. Almost one quarter of contractors (23%) think that customer satisfaction
dictates companys quality standards. This means there is potential to develop internal quality system.
Summary
According to the contractors, their perception of quality is meeting client / customer demand. This shows
lack of standardization as whatever client specifies is tried to be met, however low in quality that demand
may be. On the other hand, it also shows a desire to succeed and willingness on the part of contractors to
improve their organizations to better meet client needs.
5.2 Quality in your organization
In this section, ten questions were asked to evaluate the practices regarding quality in contracting firms.
3. Has you organization developed a clear quality policy?
About 65% of respondents have clear concept of quality policy but the definition and implementation has
not been coincided as observed during visits to the firms because now general trend is to attract
customers by representing the setup up to the standards which has weaken the foundation of quality
concern and may cause of conflicts later in project execution phase.
4. Is a separate standard operating procedures manual prepared for each project before starting
execution or handing it over to sub-contractor?
About 52% of contracting firms are presently in a practice of preparing a SOP manual for every project
undertaken, before handing it on to the subcontracting firms. This process is project specific rather than a
generalized system.
5. How does your organization perceive Quality? (Prioritize)
Priorit
y
1
Criterion
Satisfaction at all ends of the project
Respons
e
27%
Competitive advantage
7%
Quality Manuals are referred to if

required
10%
7%
4
Inspection & Corrective actions
13%
5
Value for Money
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7%
6
Continuous Improvement
3%
7
Whatever client specifies is quality
10%
8
Inexpensive alternatives
A majority of the contracting firms (27%) believe that continuous improvement and satisfaction at all
ends of the project are the true meanings of quality stating at first priority. Analyzing the remaining set
priorities the results are scattered and reveal as competitive advantage is at initial phase to accept new
technology, availability of quality manuals may support to perform the procedures in better way only if
customer demands, very few percent go for inspection and corrective actions because mostly this is liable
to consultant/client, value of money is second well responded priority because issue of finance deal with
the profitability, most of the firms use their experience to improve their procedures and it is continuum
project to project, very few firms has not characterizing quality as client specification because mostly
client are concerned to progress and may also corrupt and at last healthy percent of professional firms
(10%) likely to adopt the inexpensive alternatives to perform quality work.
6. What determine the quality of your projects?
Options
Client demand
Standards
set
organization
Response
45%
by
the
32%
23%
Current market standards
16%
International standards
The quality of projects is gauged in terms of standards that are developed in house; client demands (45%)
also dictated the quality assessment on projects. As for the market trends and international standards there
is no clear priority.
7. Does your organization set its quality goals to the level of?
Options
Leading company
Competition
general
Response
32%
in
Level set internally
23%
26%
1%
Other
Market competition is a very big incentive towards quality establishment. Most firms feel that in order to
gain popularity and a competitive edge over other contemporaries they needed to establish a benchmark,
and work towards the achievement of this goal. Mostly firms (32%) standardize the leading company and
487
strive to adopt their procedures but due to unstable market conditions many firms (23%) follow the
general competition to get projects, and with due to induction of professional firms (26%) set their
quality goals internally.
8. Your organizations quality improvement program can be defines as:
Most of the contracting firms surveyed were of the opinion that there is continuous monitoring (42%) of
their processes, which results in a continuous improvement in quality. A significant number of
contracting firms either have a formal program underway (35%) or rely on periodic or motivational
programs (17%).
9. What type of quality improvement system(s) do you have?
Some contracting firms claim to have incorporated TQM as their quality improvement system (i.e. 10%).
Majority of the firms however focus on quality control/ quality assurance (i.e. 30%).
10. To increase productivity would you compromise quality?
There is a great deal of contingency involved with the timely completion of projects. If there is a quality
and productivity trade off, most contractors are likely to choose productivity (50%) in order to complete
the project of time.
11. Your organizations quality performance has originated from:
Options
Deep rooted quality consciousness
Close
working
subcontractors
Response
29%
relationships
with
30%
26%
Fully developed quality management system
15%
Quality assurance certification
There is a difference in opinion regarding the origins of organizational quality performance among
contractors. By a very small margin, cordial relationships with subcontractors (30%) are cited as the main
reason for organizational quality performance. Most professional firms (26%) have quality system and
few of them (15%) rely only on quality assurance certification for organization quality performance.
12. How does your organization measure quality?
Options
Profit Margins
Timely
Projects
No. of Responses
4
Completion
of
12
4
Increased productivity
5
Optimum Resource Usage
16
488
Customer Satisfaction
Timely completion of projects (12%) and Customer satisfaction (16%) are rated as the most popular
means of gauging an organizations quality measure which are reason of contract conditions and stay in
business respectively. Few firms go for optimum resource usage (5%) which shows that they want to feed
as many projects with same resource pool which depend on good management that how to utilize the
resources but it is essential part of new era and not said to be measuring tool. Very few firms has equal
percent (4%) to measure quality according to profit margin and increased productivity because measuring
is next to implementing to quality system and that is under process.
Summary
Organizational perception of quality varies from that of personal perception at the highest level. At the
organizational level, satisfaction at all ends and not just the clients end is deemed as quality. A
contradictory answer generated in this head is that quality of projects is gauged in terms of standards that
are developed in house. This is given more preference to client demand while higher management
perception is that quality is customer satisfaction. Standards are not given much importance by the
contractors. Contractors tend to strive to be the best in their field of expertise and focus on quality control
/ quality assurance. Contractors are willing to sacrifice quality in order to increase productivity. This
reflects two things: firstly, confusion regarding their priorities and secondly, clients willingness to let
quality be compromised in order to achieve increased productivity and thus reduced time period.
Contractors say that their first priority is quality but they measure quality with respect to time period and
customer satisfaction.
5.3 Employee Training
In this section, respondents were asked four questions to explore about TQM related training programs
designed for the employees.
13. Percentage of managerial/supervisory staff who have undergone quality management training:
Range
0% - 25%
Technical
0
Non Technical
5
25% - 50%
50% - 75%
10
75% -100%
Other
Employee training plays a vital role in any organization/companys quality building efforts. The current
trend in the industry leans toward maximized training of employees (50% - 75%) especially those related
with technical/ specialized works because it accelerate the organization performance. Mostly technical
staff is permanent so training will be investment to gain competitive advantage but as far as non technical
staff is concerned it is observed that even though in spite of their casual status most of the organization
posses interest (25% - 75%) to train them which gains staff understanding towards procedures and hence
this can be utilize to get most advantage.
14. How do you train your employee for quality?
489
Response
(%age)
Options
On site training
65%
Trainings/Seminars/Workshops
Improvement
on
Quality
19%
19%
In-house sessions for quality
16%
Impart training on individual basis
0%
Other
An overwhelming majority (65%), of those surveyed, believes in on-job training so that the employees
gain first hand experience of the technicalities involved in the construction process. On-job employee
training is given special preference by contractors.
5.4 Culture within the organization

In this section, three questions were asked to explore the culture within the organization.
15. Which code of ethics do you follow within your organization?
Response
(%age)
Options
Code of ethics provided by
P.E.C
We have our own code of
ethics
37%
37%
15%
No formal code being followed

11%
Other
Majorities of Contractors either use the P.E.C. code of ethics (37%) in their organizational dealings or
prefer to modify the P.E.C. code of ethics (or any other applicable code of ethics i.e. 37%) according to
their own needs. It is positive element to gain systematic approach to follow the standard procedures.
16. What is the involvement of employee in your quality building effort?
There exists a difference in opinion among contractors regarding involvement of employees in company
policy. About 32% contractors implement upper management decisions but in similar way for the same
percent of contractors when there are more technical staff, their suggestion are incorporated..
17. What is your labour insurance policy in case of a fatal accident or severe injury to a labourer?
490
No. of
Responses
Options
No such issue faced
Investigative
compensation
10
action
and
10
4
W.C.I
No action
The table clearly shows that majority of the contractors either insure their labors or provide compensation
in case of fatal accidents to employees (10%). In major projects organization insured their resources to
minimize the risk factor and compensate through insured money.
Summary
Contracting organizations tend to give importance to their employees. They value the opinions forwarded
by their employees. They are also in the practice of providing for the safety of their employees and labor
insurance is common within contracting organizations. Various facilities are also provided to employees.
5.5 Quality practices in the organizations
In this section, seven questions were asked to explore the culture within the organization.
18. For continuous improvement in the construction process, what practice(s) have you adopted in your
organization:
Almost 67% of those surveyed believe in organized team effort to bring about continuous improvement in
the construction processes. A team with similar quality perceptions is likely to achieve their quality goals
more efficiently.
19. Before the start of the project, do you obtain client commitment to quality?
Result shows 79% of contractors go for client commitment to quality which ensures the contractor that
the client will not try to force the contractor to use substandard material and practices.
20. What testing procedures do you follow?
All material testing is prevalent among contractors (almost 52%) to ensure high quality standards of
construction. Substandard material can lead to reworks and an unsatisfied end user, resulting in project
failure.
21. What percent of your projects done so far you found large amount of remedial work to do.
No. of
Response
Range
491
0% - 25%
14
25% - 50%
50% - 75%
75% -100%
Almost all of the sample population show minimal amount of remedial work on their projects. Minimum
reworks in most cases suggest that project under consideration passed quality checks. Since most
contractors surveyed had a minimum quality benchmark, minimal rework means that material and labor
effort put in during the time of construction abides with standards.
22. Do you ask for a change order if the client objects about the quality of work?
The most contractors about 70% are working for client satisfaction while following the proper
procedures. This also shows that contractors do not take lightly to objections regarding their quality of
work.
23. How do you comply with specification requirements?
Most Contractors about 65% believe that by performing work as per specifications, they are providing the
best quality to the clients. A few, however, recognize their responsibility to forward better suggestions to
the clients. This shows that majority of the contractors are not motivated enough to propose better
alternatives and thus settle for following specifications.
24. Do you encourage your engineer/project manager to keep a checklist for better quality assurance?
Above 80% of the contractors make it compulsory for their project managers to keep checklists so that
quality assurance is better implemented. This shows the commitment to quality of such contractors.
Summary
Contractors emphasize on team work. They believe it is the only way a learning curve will develop &
continuous improvement will occur. Contractors also obtain client commitment to quality but theyre
willing to sacrifice quality for increased productivity and time saving.
5.6 Data acquisition & analysis methodology
In this section, three questions were asked to evaluate the performance of the organization.
25. What data acquisition methodology do you follow within your organization?
Priorit
y
1
Criterion
Maintenance of
Database
Respons
e
26%
13%
2
3
Employee feedback
forms
3%
Intranet
3%
492
Progress reports
0%
Others
Generally contracting firms (26%) relay on maintain a database for continuous monitoring, but later on in
second priority employee feedback (13%) considerable percent shows management shows trust on
employee for progress. In addition, essential criterion has been set to monitor projects by Progress reports
(3%) to assess project status as well as organizational status. The use of intranet (3%) is not a common
means of data acquisition. Conventional technology is the preferred tool for data acquisition.
26. When working on a new project how do you incorporate learning from your previous projects?
While undertaking new projects, contractors do not usually revise their adopted methodology before
analyzing their previous works for mistakes and implementing their learning from them. They prefer to
find solutions by learning from their mistakes i.e. 59% of contractors behavior.
27. How do you evaluate end user feedback?
Priorit
y
1
Criterion
Respons
e
30%
Returning clients
Feedback forms & analysis
10%
End User feedback is rarely

evaluated
7%
7%
4
By number of claims
0%
Contractors usually
measure end user
Others
feedback in terms of
returning
clients
(30%) because they want to stay in business but considerable percent i.e. 10% go for feedback forms
because to maintain database and evaluate business strategies. Few of firms rarely evaluated end user
feedback (7%) because of lack of resources and also some entertain claims (7%) which are low level
priority.
5
Summary
Contractors focus on data acquisition from their projects and on finding solutions to the problems
encountered on projects. In this way they enhance their learning.
5.7 Partnering and Teamwork

In this section, four questions were asked to find out to what extent the contracting firms use partnering
and teamwork approaches in their projects, if any.
28. What type of partnering approach(s) do you practice?
Response
(%age)
Options
493
Ownership pf Process
Partnering
contractors
19%
with
other
27%
Partnering with suppliers
8%
Internal partnering
12%
Partnering is not practiced
35%
Contractors in general are not familiar with partnering in its real sense; they usually perceive it to be a
form of joint venture. A majority of the contractors like to work with suppliers with whom they have a
past history of cordial and professional relations. A considerable percent (35%) do not practiced
partnering because of lack of resources.
5.8 Implementation of Total Quality Management
In this section, respondents were asked three questions to explore facts about quality management and
improvement strategies in their organizations.
29. Which of the following factors might motivate you to implement TQM?
Options
Self
motivation
improvement
Response(%age)
towards
continuous
39%
Competitive pressure
9%
Customer demand
21%
Market trend
6%
Cost reduction needs
12%
Last resort
6%
TQM is already being implemented
15%
Self-motivation for improvement (39%), so that clients can be delighted (21%) and cost reduction needs
(12%) are the major reasons cited by contractors for implementation of TQM in their organizations. TQM
philosophy has many facets; generally it has been observed that most contractors are implementing some
elements of TQM if not all.
30. Are you aware of the relationship between ISO-90000 and TQM?
Options
Response(%age)
494
ISO-90000 is the first step towards

TQM
39%
17%
They are similar to each other
22%
ISO-9000 is a part of TQM
22%
They are different from each other
The construction industry, contractors in particular, are not aware of the true relationship between ISO
and TQM. ISO and TQM both direct an organization towards improved quality but their approaches are
very different. An appreciable percent (39%) of contractors present some understanding towards TQM
and ISO relationship due to induction of international clients.
31. What obstacles do you foresee in the implementing of TQM?
Options
Response(%age)
Resistance to change
33%
Resistance from top Management
15%
Policies
Documented,
Implemented
Not
18%
Silo Approach
9%
Consumption of time & money
18%
Other
6%
Contractors generally believe that unwillingness to change (33%) and non keen attitude (15%) towards
implementation of policies (18%) are the major hurdles in the path of TQM implementation to Pakistan
Construction industry. Most of the contractors feel that there is much finance spend (18%) but there is no
surety of success. Nearly all the contractors interviewed, believe that there is a vast majority, among
contractors themselves, which believes in silo approach (9%) and this is what may lead to unwillingness
to change.
Summary
Majority of the contractors are unsure as to why they would implement TQM. Majority are unsure as to
the relationship between ISO and TQM. Nearly all the contractors interviewed, believe that there is a vast
majority, among contractors themselves, which believes in silo approach and this is what may lead to
unwillingness to change.
It is observed that contractors generally focus on Quality, Project practices and data acquisition &
learning. Practices in an organization reflect the true factual happenings that take place on projects.
Partnering is not understood in its true sense by Pakistani Contractors. They believe it to be a modified
form of joint ventures; hence the emphasis placed on it as shown in graph is not a true representation of
actual industry perception. Quality in the organization portrays the in house quality setup. It in turns
reflects upon the projects undertaken by the organization. The bar chart shows the importance given by
Contractors to employee training as it in turn reflects upon the technical capability of the organization.
495
6. Conclusions & Recommendations

6.1. Conclusions:
1. It is evident that contractors give only average importance to important issues related to TQM
such as quality in the organization, employee training and organizational culture. Contractors
usually focus on organizational practices however; these do not tend to reflect in their efforts as
the people in key positions do not have a concise and exact definition of quality. In contrary client
firms has learnt the importance of TQM but only for cost estimating, warranty claims and project
economy. A wide gap has been observed between both stakeholders only because of level of
knowledge and awareness about TQM.
2.
In addition the interviews conducted with higher officials of the contractors reflect that not
necessarily in Pakistan Construction Industry, this is primarily due to the cost associated with
TQM being passed on the consumer base, whom is not interested in bearing the extra financial
burden associated with price hikes etc. otherwise TQM is totally progressive and allows genuine
construction specialist to thrive and improve the overall infrastructure of the country in a positive
manner. The same constraints of lack of financial resources for implement TQM revealed by
client firms but QA/QC is preferred because it fulfills their objectives.
3. Contractors dominate the construction industry being the major players and decision makers. The
practices adopted by them determine the direction and trends followed by the construction
industry. But client firms seem to bind them to implement TQM through contract/agreements or
assigned certain amount of project for it.
4. Resistance to change shown by most of the contractors reflects their lack of interest in adopting
new technologies as they do not want to break away from the established norms. Also majority of
the contractors currently operating within the industry are not there for long time, but enter for a
short duration with the objective of maximization of profits only.
6.2. Recommendations:
1. Construction contractors need to improve their worker relations and show faith in their
employees. Employees should be allowed to make decisions regarding their work and should be
encouraged to propose solutions related to work problems. Through effective communication and
improved project coordination, workers must be motivated to improve their work.
2. Contractors must move away from their obsession with the bottom line. They need to bind all
parties together including subcontractors by mutually set and internalized goals. This may prove
to be instrumental in minimizing re-works as well as improvement of the overall level of quality.
3. Motivation, training and retention of good employees must be enhanced by the human resource
developers of the organization, combined with the support of the unions and employees about the
concept of TQM.
4. In order to improve over all performance, contractors need to focus on aspects of time,
performance, maintenance of a stable and well-trained workforce, and establishing long-term
partnerships with their subcontractors.
496
7. Obstacles in Implementing TQM Program:

Analysis of the questionnaires shows significant bottlenecks regarding the implementation of TQM. The
key factors that are needed to be taken into consideration reflecting from the analysis of the sections of
the questionnaires as well as the hurdles regarding the implementation of TQM in organizations are listed
below
1. Profit Maximization
2. Resistance to change
3. Lack of resources and time
4. Perception of TQM (Contractors assume customer satisfaction as TQM)
5. Lack of employee training
6. Rigid ness shown by the upper management
7. Lack of employee empowerment
8. Employees suggestions are not appreciated (due to vertical hierarchy)
9. Lack of standardization
10. Unawareness of TQM Program/Philosophy
8. References
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David Arditi and H Murat Gunaydin. (1997). Total quality management in the construction process.
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Kanji, G. and Wong, A. (1998). Quality Culture in the Construction Industry. Total Quality
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construction. The TQM Magazine, 8(5), 3946.
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M.K.Areola (1997). Constuction Industry: A sector suffering from funding constraints and
irregularities. http://www.pakistaneconomist.com/database2/cover/c97-15.asp.
Peter E.D. Love, Heng Li, Zahir Irani and Olusegun Faniran (2000). Total quality management and the
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Economics , Vol. 18, pp. 321-331.
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Peter E.D. Love, Heng Li, Zahir Irani and Eddie Cheng (2002). A model for supporting interorhanizational relations in the supply chain. Engineering Construction and Architecture
Management,, Vol. 9, No.1, pp. 2-15.
Steven McCabe. (1996). Case studie: Creating excellence in construction companies: UK contractors
experience quality initiatives. The TQM Magazine, Vol. 08, No. 6, pp. 14-19.
Todd W., Peter Hoonakker, Pascal Carayon, Michael J. and E.Andrew. (2003). Safety and Quality
Management systems in construction: some insight from Contractors. Center for Quality and
Productivity Improvement (CQPI).
Zantanidis, S. and Tsiotras, G. (1998), Quality management: a new challenge for the Greek construction
industry, Total Quality Management, Vol. 9 No. 7, pp. 619-32.
498

Cost Overrun Factors In Construction Industry of Pakistan

Nida Azhar
Lecturer, Department of Urban and Infrastructure Engineering, NED University of Engineering and
Technology, Karachi, Pakistan
nazhar@neduet.edu.pk
Rizwan U. Farooqui
Syed M. Ahmed
Associate Professor & Graduate Program Director, Department of Construction Management, Florida
International University, USA
Abstract
Cost is among the major considerations throughout the project management life cycle and can be regarded
as one of the most important parameters of a project and the driving force of project success. Despite its
proven importance it is not uncommon to see a construction project failing to achieve its objectives within
the specified cost. Cost overrun is a very frequent phenomenon and is almost associated with nearly all
projects in the construction industry. This trend is more severe in developing countries where these
overruns sometimes exceed 100% of the anticipated cost of the project.
In Pakistan, construction sector is an important sector although not working to its fullest potential but still
of prime significance to the country. Growth in this sector is critical for growth in national income as it is
among the largest sectors that generates employment within the country as well as a key driver for
economic development of Pakistan. Like many other developing countries, Pakistan is also facing critical
project management related issues among which cost overrun is quite prominent. There are several factors
that are responsible for these cost overruns.
This paper attempts to identify the major cost overrun factors in the construction sector of Pakistan, which
can serve as the way forward for future work in coping with these overruns. A thorough literature review
was done and also expert opinions from developing countries were taken, through which a number of cost
overrun causes were identified in global construction industry scenario. In total forty two (42) factors
were short-listed to be made part of the survey questionnaire and the survey was conducted with
representatives from local general contracting firms.
Results indicated that the majority of cost overrun factors (88%) lie in medium severity impact zone (with
a rating between 5 to 7.5 out of 10), signifying that major attention needs to be given to these factors as
they collectively cause considerable cost overrun. It is evident from the findings that both internal and
external aspects of business setting are present as the prime contributors to cost overruns. The top ten cost
overrun factors found were: fluctuation in prices of raw materials, unstable cost of manufactured
materials, high cost of machineries, lowest bidding procurement procedures, poor project (site)
499
management/ poor cost control, delays between design and procurement phases, incorrect/ inappropriate
methods of cost estimation, additional work, improper planning, and unsupportive government policies.
An additional finding is that medium sized construction firms experience a greater percentage of cost
overruns owing to their tendency to assume greater risk for the purpose of business development. Major
recommendations include: stabilizing cost of materials, increasing supply of materials and machinery,
more involved cost estimation processes, vigilant project planning, close observance and documentation
of cost variation trends in the sector and the country, adoption of alternative procurement strategies such
as design-build contracts, and best value procurement.
Keywords
Cost Overrun, Macro Economic Factors, Management Factors, Business and Regulatory Environment
Factors, Pakistan.
1. Introduction
Cost has its proven importance as the prime factor for project success. Most of the significant factors
affecting project costs are qualitative such as client priority on construction time, contractors planning
capability, procurement methods and market conditions including the level of construction activity
(Elchaig et al, 2005). A project otherwise completed may not be regarded as a successful endeavor until
and unless it satisfies the cost limitations applied to it.
In spite of its proven importance it is not uncommon to see a construction project failing to achieve its
goal within the specified cost. Cost overrun is a very frequent phenomenon and is almost associated with
all projects of construction industry. Cost overrun can be simply defined as when the final cost of the
project exceeds the original estimates (Avots, 1983). According to one very comprehensive research
made on cost overruns in global construction (Flyvbjerg, 2002), it was found that 9 out of 10 projects had
overrun; overruns of 50 to 100 percent were common; overrun was found in each of the 20 nations and
five continents covered by the study; and overrun had been constant for the 70 years for which data were
available. It is believed that construction projects experience an increase in cost of about 33% on average
(Hartley and Okamoto 1997).
Angelo and Reina (2002) state that the problem of cost overruns is critical and needs to be studied more
to alleviate this issue in the future. They also point out that cost overruns are a major problem in both
developing and developed countries (Angelo & Reina, 2002). The trend is more severe in developing
countries where these overruns sometimes exceeds 100% of the anticipated cost of the project. Low
quality materials cause higher construction cost than expected because of the loss of materials during
construction. This results from a lack of standards for materials and management systems (Thungphanich,
1997). Lack of ability to prevent cost overruns or to control construction costs causes many Thai
construction companies to fail (Sriprasert, 2000).
In Pakistan, construction sector is an important sector. Although not working to its fullest potential, it still
is of prime interest to the country. Growth in this sector is critical for growth in national income as it is
among the largest sectors that generates employment within the country as well as a key indicator of the
economy of Pakistan. As many other developing country, Pakistan is facing also cost related issues
among which cost overrun is quite prominent.
There are several factors that are responsible for these cost overruns. This paper attempts to identify the
major factors of cost overrun in construction sector of Pakistan and can serve as the way forward for
future work in coping with these overruns.
500
2. Research Scope and Objectives

The study has been conducted to identify the issues involved in cost overruns in construction projects in
Pakistan. In this regard certain factors have been identified through the study and their importance and
impacts have been discussed. The factors have been identified through a survey from construction firms.
Furthermore, some recommendations and mitigation measures have been suggested to strategically cope
up with these factors.
The methodology of the study is follows:
1. A thorough literature review was done and also the expert opinions from industry experts were taken,
through which a number of cost overrun causes were identified in the local construction industry
scenario. In total forty two (42) factors were finalized to made part of the survey questionnaire.
2. Questionnaire consisting of two parts A and B was developed. In Part A personal Information of the
respondent (for e.g. work experience, organization, annual volume of construction work) was asked.
Part B was aimed to obtain information about causes of cost overrun in Pakistan construction
industry, it was asked to rate those initially identified forty two (42) factors according to their severity
level on the given scale, information regarding maximum, average and minimum cost overrun ranges
experienced over large projects and average overruns over small projects were asked.
3. A survey was conducted through postal mail and personal interviews in which respondents were
asked to rank and score these factors according to their experience. Thirty one (31) construction firms
were approached for these surveys out of which twenty five (25) responses were received with the
response rate of 80.64%.
4. Assessment of feedback from questionnaire survey was made. One response was cast off on the basis
of insufficient information and analysis was made out of twenty four (24) responses to identify the
major cost overrun contributing factors. Analysis is discussed in detail in the following section, on the
basis of which recommendations to construction industry of Pakistan were made.
4. Analysis
The analysis of the survey conducted is made in two sections. In the first part, analysis of cost overrun
factors is made on the basis of which major factors have been identified and their causes and impacts
discussed. In the second section, the current trend of cost overrun for the local industry has been analyzed
and discussed.
4.1. Respondent Organizations
The construction firms surveyed were involved with all types of construction work, with majority of
respondents (67%) involved in heavy Engineering/ infrastructure construction, commercial building
construction (54%) and industrial construction (50%).
Majority of respondents (71%) fall in medium range construction firms with their annual volume of
works ranging from 100 M to 1000M rupees.
501
4.2. Cost Overrun Factor Analysis

Before providing the list of factors, respondents were asked to enumerate the five major cost overrun
factors according to their perspective. It was found that the consequently identified factors were already in
the list and were not providing any additional input to the comprehensive list.
In conjunction to this a list of 42 factors was given to the respondents to rank and score them according to
the severity on the scale of 1 to 10 and were instructed to rate score 1 to the factors which they find least
contributing towards the cost overrun and a score of 10 to those factors they regard as most significant
towards generating project cost overruns and rating of in between to mark the severity of factor ranging
from low, medium to high. Impact of each factor was then calculated by simple calculation
Impact = ( fi * i)
n
where: i is the severity score from 1 to 10
fi is the frequency of factor getting score i
n = number of responses
Figure 1 gives the resultant impact ranking of the cost overrun factors as depicted by the survey analysis,
impact ranges were divided into three regions, range of 0 to 2.5 (on severity impact axis) is neglected
from the analysis due its insignificance and ranges are developed for severity impact as low, medium and
high. Low severity range (with impact score of 2.5 to 5), medium severity range (impact score of 5 to 7.5)
and high severity range (ranges from 7.5 to 10).Results represents that very few (3) factors were rated as
low severe, majority of the scores lies in the high medium severity range and two (2) factors were
highlighted as having high severity impact on the cost overruns.
From the initial analysis top ten factors of cost overrun, on the basis of severity impact scoring received,
were selected for the further in depth analysis. Table 1 presents the resultant top ten factors. It is evident
that both internal and external aspects of business setting are present as the prime contributors to cost
overruns. Chan and Park (2005) state that cost is affected by a large numbers of factors because of the
fact that construction is a multidisciplinary industry and its work involve many parties such as the owner
and various professionals, contractors and suppliers. For the purpose of analysis the identified top ten cost
Overrun factors have been arranged into three (3) broad categories viz.;
1. Macro Economic Factors
2. Management Factors
3. Business and Regulatory Environment
This is useful towards assessing the treatment measures that can be applied to improve the scenario.
4.2.1 Macro Economic Factors
The cost of construction is basically the cost of money, the cost of material, the cost of labor and the cost
of management. Top three factors identified by the survey results i.e. Fluctuation in prices of raw
materials, Unstable cost of manufactured materials, High cost of machineries are markets related
problems. Unlike a manufactured commodity, construction industry is mainly market driven. Prices can,
and sometimes do, changes on an almost daily basis. These rapid changes in many cases cause problems
for vendors to commit to one fix price.
502
1-
21
30
29
3
31
38
15
41
12
33
16
39
27
11
34
10
28
40
17
4
26
37
22
7
13
21
18
25
36
20
19
35
14
32
42
9
24
23
6
422.5 Low Severity
5.0
Medium Severity
7.5
High Severity
10.0
Factor Severity Range

( Factor ID)
Factor IDs and Description

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Fluctuation in prices of raw materials

Unstable cost of manufactured materials
Fraudulent practices, kickbacks, corruption
Mode of financing and payment for completed
work
High cost of machineries
Improper planning
High interest rates charged by bankers on loans
received by contractors
Frequent design changes
Long period between design and time of bidding/
tendering
Lack of coordination between design team and
general contractor
Lack of coordination between general contractor
and subcontractors
High machineries maintenance costs
High cost of skilled labor
High transportation costs
Domination of construction industry by foreign
firms and aids
Contract management
Inadequate duration of contract period
Inappropriate government policies
Inadequate production of raw materials in the
country
Poor financial control on site
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
Absence of construction cost data

Inappropriate contractual procedure
Additional work
Wrong method of cost estimation
Inaccurate cost estimation
Poor relationship between management and labor
Stealing and waste on site
Inadequate labor/ skill availability
Disputes on site
Adverse effect of weather
Bureaucracy in bidding/ tendering method
Lowest bidding procurement method
Litigation
Numerous construction activities going on at the
same time
Scope changes occasioned by inadequate precontract study
Scope changes arising from redesign and
extensive variation occasioned by change in brief
Inadequate site investigation
Inadequate preconstruction study
Work suspensions owing to conflicts
Inadequate quality/ Ambiguity of contract
documents
Inappropriate contractor policies
Poor project (site) management/ Poor cost contro
Figure 1: Severity Ranking of Cost Overrun Factors
503
Table 1: Top Ten Cost Overrun Factors

Rank
Factor ID
Factor Description
Impact
Fluctuation in prices of raw materials
8.9
Unstable cost of manufactured materials
7.6
High cost of machineries
7.0
32
Lowest bidding procurement method
6.9
42
Poor project (site) management/ Poor cost control
6.9
Long period between design and time of bidding/

tendering
6.9
24
Wrong method of cost estimation
6.9
8
9
23
6
Additional work
Improper planning
6.8
6.8
10
18
Inappropriate government policies
6.6
Category
Macro Economic
Factors
Macro Economic
Factors
Macro Economic
Factors
Business and
Regulatory
Environment
Management Factors
Business and
Regulatory
Environment
Business and
Regulatory
Environment
Management Factors
Management Factors
Business and
Regulatory
Environment
Some of the factors which contribute to dramatic price fluctuations include:
World commodity prices for basic materials

the current state of the local economy
the quality of materials and workmanship required
simple supply and demand
The basic reason of cost overruns is that most contractors quote prices based on their projected estimates
unfortunately, the prices change so quickly that the initial budget figures becomes completely unrealistic.
Costs related to the construction industry have been volatile in recent years. Some of the volatility may
be related to higher energy prices. Prices for iron and steel, cement, and concrete, commodities used
heavily in the construction projects rose sharply within in last few years, and shortages have been
reported. Need is there to calculate that how such price fluctuations may affect the cost or pace of new
development in the construction industry with more certainty.
4.2.2 Management Factors
Some cost overruns are unavoidable because they cannot be reasonably prevented, such as those due to
unanticipated events, however overruns due to design plan or project management problems are avoidable
because they could have reasonably been foreseen and prevented. The project control procedure can help
management identify its current position related to a future position (Wilson, 1983).
Sriprasert (2000) points out that cost overrun problems are caused by ineffective construction
management and poorly established cost control systems Factors that are dependent upon individual
organizations discrete can be regarded as in-house factors, as indicated in the survey reasons such as Poor
504
project (site) management/ Poor cost control, Additional work and improper planning are the mere
negligence by the constructors and project managers and can be controlled considerably with little
attention Management needs to modify the project schedule and estimates because of changes or
discrepancies that may occur during the construction period (Civil and Environmental Engineering,
2004).
Gould (2002) states that the schedule is the primary control tool. Efficient management is essential to
managing a productive and cost efficient site. Scope changes are due largely to inadequate planning and
feasibility studies. If importance is paid at the right time scope changes and additional works can be
considerably reduced. Another cause is poor scheduling i.e. not having the right materials, the right tools,
the right information, the right training, and the right people all at the right place at the right time. Such
improper planning is the major cause of time delays as well as cost overruns. . In order to control the
project effectively, the project manager must monitor the schedule to avoid construction delays and
additional costs because the building cannot be occupied as planned (Civil and Environmental
Engineering, 2004). All of these responsibilities are those of management, and within the ruling factors of
cost overruns these in-house factors, being internal factors, are in greater control of the individual
organizations as compared to Macro Economic Factors and Business and Regulatory environment
4.2.3 Business and Regulatory Environment
Majority of constructors are small players who have weak financial positions, out-dated labour-intensive
technology and poor organizational structures and vision for growth and development. They are highly
vulnerable to government policies and changes in government policies
Leading factor of cost overrun related to Business and Regulatory environment, which encourages corner
cutting and unsound construction methods is the prevailing practice of the government to implement its
lowest bid price method, which has various inbuilt problems and cannot produce the best value. The
lowest bid price is often less than 50% of the estimated total cost. The major shortcoming of the low-bid
method, frequently used for competitive bidding, is the likelihood of awarding a construction contract to a
contractor that submits, either unintentionally or on purpose, an unrealistically low bid price. Often, such
an occurrence works to the owner's and contractor's harm by creating disputes, cost overruns, and
schedule delays
Methods used for cost estimation during the project cost scheduling are not adequate enough to cover all
aspects of cost of projects in result various cost items necessary for the project remain unidentified at the
estimation stage and appears as cost overruns later. Extensive experience and decision are needed to
develop a reasonable approximate estimate for the project cost, since the estimator has to modify the unit
costs for quantities of materials, labor, location, and construction contingencies (Roachanakanan,
2005).Cost estimation techniques utilized locally dont carry out the in depth analysis, assumptions and
forecasting on cost rates are done on experience without incorporating price index.
Most popular method of cost estimation is based on the bill of quantities which cumulates the anticipated
cost estimate quite lesser than the scheduled cost in result imparts cost overruns to the project. One major
problem that forces contractors to stick to this method is that if estimated otherwise they might end up
having cost estimates more than others in competition and they may not remain competent to win
contracts especially when lowest bidding method is adopted for bidding.
4.3. Existing Cost Overrun Scenario
To judge the existing cost overrun scenario in the local industry respondents were asked in the
questionnaire about the minimum, average and maximum ranges of cost overrun, as percentage of the
initial estimated cost, experienced by the organizations on large scale projects. Firms with relatively
smaller Annual volume of work are observed to attain higher overruns as compared to large firms. This
505
trend supports the hypothesis that small firms having low management skills have weak cost and budget
control mechanism in their projects. Figure 2 between annual volume and percentage cost overrun is
reflecting the current trend of cost overruns for the respondents depending upon the size of organization.
Top most trend line in Figure 2 is representing the fashion of maximum cost overruns experienced by the
contractors in their project trend. Even the large firms experience nearly about 40 % overruns which is the
least among the volume ranges, this percentage increases up to overruns nearly about 60 % for the
medium size firms (on the basis of annual volume of work). In comparison to the trend line for average
and minimum percentage cost overruns ranges for maximum cost overruns are quite high.
Mid trend line is indicating the drift of average cost overrun against the annual volume of work ranges;
pattern adopted by the trend line is such that for the medium size firms (on the basis of annual volume of
work) the cost overrun range increases as compared to small size firms and then there is a declination in
cost overruns as it moves towards large firms. The reason for which might be that in attempt to get more
business these firms falls for projects and situations more prone to cost overruns.
Last trend line in Figure 2 is symbolizing the trend for minimum cost overrun within the local set up, it is
evident that even the minimum range of cost overrun experienced is near around the 10 % of the total cost
of the project. Again it is to be noted that medium size firms experiences somewhat greater percentage of
cost overruns due to their tendency to take greater risk.
100
90
Percent Overrun Range
80
70
60
50
40
30
20
10
0
0
100 M to 1
500 M
2 M
500 M to 1000
3
1000 M to 5000
M
4 M
More than 5000
Annual Volume of Work (In Millions )

P o ly. (M inimum Co st Overruns)
P o ly. (A verage Co st Overruns)
Figure 2: Current Cost Overrun Trends
506
P o ly. (M aximum Co st Overrun)
5.
Conclusions
The following major conclusions have been derived:

1. The survey results indicated that the majority of cost overrun factors (88%) lie in medium severity
impact range. Attention should be paid to these factors as they cause considerable increase in the
cost of the project initially estimated.
2. Findings reveal that both internal and external aspects of business setting contribute to cost
overruns.
3. Macro economical factors affect the cost of the construction project most severely.
4. Among all factors leading to cost overruns, management related factors are those which can be
controlled and prevented most easily as they are the in-house factors.
5. Business and regulatory environment is dysfunctional and need drastic changes, more
scientifically proven methods, tools and techniques may be adopted instead of the orthodox
practices
6. Almost every project in the local industry faces cost overruns when executed. Minimum range of
cost overrun in percentage of the estimated cost is at least 10 %.
7. Medium sized firms are more prone to cost overruns in comparison with small and large firms,
main reason for which being that they are in the transitional phase where they need to take more
risk to get more business and establish them.
6. Recommendations
On the basis of the analysis few recommendations can be made to the local industry for improving its
current situation. These recommendations are grouped for improvements under the same three
classifications identified earlier in the paper.
6.1. Macro Economic Factors
Fluctuation in prices of raw materials and cost of manufactured materials are severe when these elements
are in short supply, to stabilize the cost of materials, increase of supply of materials can be useful to break
the monopoly of few suppliers controlling the supply chain of the market.
6.2. Management Factors
Thorough estimation process for project costs calculations, with vigilant planning, keeping in view trends
of inflation and depreciation factors, cost variations trends in sector and country with lead to smoother
implementation and achievement of desired cost control.
6.3. Business and Regulatory Environment Factors
The government should think of adopting, not just the conventional contracts but also the design-build
contracts, direct negotiation contracts and other types of contracts. Alternative procurement strategies
such as best value procurement should also be adopted in the projects undertaken by government, semigovernment bodies and agencies.
507
One type of competitive bid can be the average-bid method, in which the winner on is the contractor
whose bid satisfies a certain relationship with the average of all bid prices. The basic advantage of the
average-bid method, from an owner's perspective, is that it safeguards against signing a construction
contract for an unrealistically low bid price that almost certainly will lead to adversarial relationships
during construction (Grogan 1992). On the other hand also safeguard contractors to fall for their mistaken
low amount bids.
7. Future Research
Current research has highlighted many factors that are responsible for creating cost overruns but their
frequency of occurrence is not known to us. An exercise can be conducted to find out the impact of these
factors in relation to their occurrence pattern and their severity impact.
Remedial measures can also be researched to cope up with these factors and to bring them down to some
acceptable limits if they cannot be eradicated completely.
Current study has focused on contractors. Other stakeholders especially construction managers can also
be surveyed for their perspective as to these cost overrun factors and their patterns. Their input can be
useful to have a holistic picture of cost overrun on construction projects in Pakistan.
8. References
Angelo, W. J., & Reina, P. (2002). Megaprojects Need More Study Up Front to Avoid Cost Overruns.
Avots, I. (1983). Cost-Relevance Analysis for Overrun Control. International Journal of Project
Management, Vol.1 No.3, 142-148.
Chan, S. and Park, M. (2005) Project coast estimation using principal component regression,
Civil and Environmental Engineering, Carnegie Mellon University. (2004). Cost Control, Monitoring and
Accounting
Elchaig, T., Boussabinaine A., and Ballal T. (2005) Critical determinants of construction tendering
costs: Quantity surveyors standpoint, International Journal of Project Management.
Gould, F. E. (2002). Managing the Construction Process: Estimating, Scheduling, and Project Control.
Upper Saddle River, NJ: Prentice Hall.
Grogan T. 1992. Low bids raise hidden costs. Engineering News-Record 228(13): 30-31.
Hartley, J. R., and Okamoto, S. (1997). Concurrent engineering: Shortening lead times, raising quality,
and lowering costs, Productivity Press, Shelton, Conn.
Kwanchai Roachanakanan, A Case Study Of Cost Overruns In A Thai Condominium Project,

(2005)
Photios G. Ioannou and Sou-Sen LeuJ. Constr. Engrg. Mgmt. 119, 131 (1993))
Richard E. Mayo and Gong Liu Reform Agenda of Chinese Construction Industry, Journal of
Construction Engineering and Management,
Sriprasert, E. (2000). Assessment of Cost Control System: A Case Study of Thai Construction
Organizations. M.S. thesis, Bangkok: Asian Institute of Technology.
Wilson, R.M.S. (1983). Cost Control Handbook. Essex: Gower.
508
Department of Civil Engineering

NED University of Engineering & Technology
Karachi, Pakistan
Telephone +92 21 9261261 Ext. 2205
Fax +92 21 9261255
Department of Construction Management

College of Engineering & Computing
Florida International University (FIU)
Miami, Florida, U.S.A
Telephone +1 (305) 348-3172
Fax +1 (305) 348-6255

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Proceedings of the

First International Conference on

Construction in Developing Countries

August 4-5, 2008

First International Conference on

Proceedings of First International Conference on Construction in Developing Countries

Prof. Sarosh H. Lodi

NED University, Pakistan

NED University, Pakistan

International Scientific Committee

Queensland University of Technology, Australia

Dr. Mohan Kumaraswamy

University of Hong Kong, Hong Kong

Florida International University, USA

BUILDING CONSTRUCTION TECHNICIANS TRAINING: ITS

INTEGRATED TIME AND COST MANAGEMENT SYSTEM FOR

THE EFFECT OF MACROECONOMIC POLICIES ON PROJECT

FINDING WAYS FOR ENHANCING POSTGRADUATE LEVEL

MULTIPLE RESOURCE CONSTRAINT TIME-COST-RESOURCE

AN IMPROVED LINEAR PROGRAMMING MODEL FOR ONEDIMENSIONAL CUTTING STOCK PROBLEM

A FUZZY-BASED MODEL FOR UNBALANCED BIDDING IN

APPLYING DELPHI METHOD AND DECISION SUPPORT SYSTEM

SAFETY PERFORMANCE IN CONSTRUCTION INDUSTRY OF

10. THE TREND OF BUILD OPERATE AND TRANSFER (BOT)

11. RESOURCE-CONSTRAINED MULTI-PROJECT SCHEDULING WITH

12. QUALITY ASSURANCE AND CONTROL IN THE CONSTRUCTION

13. BLACKSPOT STUDY AND ACCIDENT PREDICTION MODEL

14. USE OF TRAFFIC SIMULATION MODEL AS INTELLIGENT

15. ISSUES IN CURRICULUM DEVELOPMENT FOR M. TECH IN

16. AN ASSESSMENT OF GENERAL TRENDS ADOPTED FOR BIDDING

17. LINEAR PROGRAMMING FOR OPTIMIZING STRATEGIC

18. A STOCASTIC-SIMULATION MODEL FOR LOWEST BID PRICE

19. CONSTRUCTION RISK INSURANCE PRACTICES IN PAKISTAN

20. FAILURE OF OVERHEAD WATER TANK IN THE STATE OF UTTAR

21. OPTIMIZATION OF UNCERTAIN CONSTRUCTION TIME-COST

22. UNCERTAIN SCHEDULING BASED ON ACCEPTED RISK LEVEL

23. AGGREGATE CHARACTERIZATION - AN IMPORTANT STEP

24. ASSESSMENT OF CRITICAL SKILLS FOR PROJECT MANAGERS IN

25. APPLICATIONS OF NANOTECHNOLOGY AND NANOMATERIALS

26. NONLINEAR DYNAMIC BEHAVIOR OF COLD-FORMED STEEL

27. ASSESSMENT OF DEMINGS PHILOSOPHY WITH RESPECT TO ITS

28. PRODUCTION OF LOW COST SELF COMPACTING CONCRETE

29. THE ACPROM MODEL: AN EXPERT SYSTEM FOR EVALUATING

30. ROLE OF CONSTRUCTION SECTOR IN ECONOMIC GROWTH:

31. RISK IDENTIFICATION FOR INTERNATIONAL JOINT VENTURE

32. APPLICATION OF PUBLIC PRIVATE PARTNERSHIP (PPP) IN HONG

33. MODELING SUBCONTRACTORS COOPERATION IN TIME;

34. ANALYSIS OF THE USE OF PERFORMANCE INFORMATION IN

35. MOVEMENT OF THE LATEST CUTTING EDGE PROJECT

37. A STRATEGY FOR UPGRADING BRIDGE INFRASTRUCTURE

38. DEVELOPMENT OF A FUZZY RISK ASSESSMENT AND

39. COMPARISON OF PUBLIC PROCUREMENT OPTIONS UNDER

40. THE INVESTIGATION OF DESIGN-BUILD VARIANTS IN

41. ASSESSMENT OF CRITICAL SUCCESS FACTORS FOR

42. SKILLED LABORER MANAGEMENT IN HANDLING CONCURRING

43. FINANCIAL MANAGEMENT OF CONSTRUCTION CONTRACTS

44. CONSTRUCTION PROCESS COST MODEL (CPCM) APPLIED TO

45. BUILDING INFORMATION MODELING (BIM): A NEW PARADIGM

46. ROLE OF OPEN AND DISTANCE LEARNING IN THE EDUCATION

47. RELIABILITY-BASED MODEL FOR ESTIMATING LONG TERM

49. MALAYSIA IMPROVISED RAPID ALL-WEATHER SHELTER II

50. ASSESSING THE VIABILITY OF TOTAL QUALITY MANAGEMENT

51. COST OVERRUN FACTORS IN CONSTRUCTION INDUSTRY OF

First International Conference on Construction In Developing Countries (ICCIDCI)