Analysis of Relationship between Time and
Cost Overruns in
some Infrastructure Projects
Hariharan S. and P. H. Sawant
Projects undertaken in India have grown in size and large infrastructure
projects are being executed in various parts of the country. Indian construction
industry is expected to grow at 25-30% during 2010-2012. World Bank
estimates suggest that India's urban population will be close to 500
million by 2017, putting massive pressure on civic infrastructure. Risk
Management is gaining significance with increasing number of projects
and project complexities in Indian scenario. Risk level in a project varies
depending on the nature of the project and the parties that are involved
in the project. Impact of risk can be positive or negative and therefore
assessment of risk should be ongoing and dynamic. Previous research
findings related to risk management in Indian construction industry are
referred and significant findings are discussed. Researchers in the past
have identified schedule and cost over run as major problems associated
with Indian construction industry. Data related to schedule over run and
corresponding cost over run in Indian infrastructure projects of the past
20 years have been collected and presented in this paper. The paper
attempts to analyze whether the estimation of project time and cost is
realistic in Indian Infrastructure projects. Particular attention is paid to
schedule and cost over run in projects, associated risks and mitigation
measures. Pearson's correlation coefficient is used in understanding the
correlation between schedule and cost overrun. The result is confirmed
with the test findings using ANNOVA technique. Though there is a
strong correlation between time and cost over run the drivers of time
and cost overrun are not the same. While the time over run is attributed
to scope changes, delay in finalization of tender documents and short
bid submission time, lack of commitment of project participants, poor
coordination etc., cost overrun is attributed to more variations between
quantities estimated and actually executed. The research outcome suggests
that Indian construction industry needs to employ innovative technologies
and better contract management strategies to overcome surprises and
challenges as the project progresses. A shift from the current practices
towards electronic tendering process, online contract bidding document
etc can make the bidding process transparent and evaluation more realistic
in nature.
Importance of Cash Flow Hedging in Projects
from Corporate Sustainability
Hiren Maniar
A cash flow hedge protects from the variability of cash flow of the hedged
item, variables such as a particular risk associated with an asset or liability
(such as interest payments on a variable rate debt) or the effects of profit
or loss, by offsetting such variability with the cash flow of the hedging
instrument. This paper studies the scenario of unrealized cash flow hedge
gains/losses for future profitability and project returns, which ultimately
decides in a longer run corporate sustainability of any project driven
company. An unrealized gain on a cash flow hedge suggests that the price
of the underlying hedged item (i.e. commodity price, foreign currency
exchange rate or interest rate) moved in a direction that negatively affects
the project firm. Based on this inverse relation, it is found that unrealized
cash flow hedge gains/losses are negatively associated with future gross
margin. This association is weaker for project firms that have the ability
to pass input price changes through to customers. Finally, it has been
observed that project companies do not immediately price the information
conveyed by cash flow hedges. Instead, project companies appear surprised
by future realizations of gross margin, consistent with the view that a
lack of transparent disclosure on future hedged transactions leads to a
delay in pricing.
Comparison of Different Priority Rules
for the Resource Constrained
Project Scheduling Problem
S. Diana, L. Ganapathy and Ashok K. Pundir
Project planning and scheduling has become an important management
tool for today's complex business and manufacturing systems. Due to
steadily shortening product life cycles, globalization of markets and
declining profit margins, industrial projects have to be realized facing
tough time and resource constraints. Scheduling of project activities for
successfully completing a project in minimum time is complex when
resource constraints are explicitly considered in the mathematical model.
The Resource-Constrained Project Scheduling Problem (RCPSP) with
makespan minimization as objective is a well established important problem,
both in theory and practice.
Resource Constrains, Priority Rules, Project Scheduling Problem
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Research Articles
Determinants of the Success of
Real Estate Projects:
A Study of Selected Firms in Hyderabad
Ramakrishna Nallathiga , M. Ashwin Kumar , D. Vivek Kumar and G. Arun Kumar
Real Estate sector has been growing at a rapid pace in India during the
last decade and a large number of construction projects have been
completed in India. Much of the commercial construction activity has
been driven by Information Technology (IT) sector, especially in a city
like Hyderabad, where the demand for residential house construction
has also been coming largely from its employees. This IT-led construction
boom has also been experienced in several cities of India. Given such
strong demand, it is important to know how the construction companies
are coping with the pace by successfully completing the projects. The
insight of factors that lead to successful completion of projects is useful
to Project managers in real estate sector. In general, many companies
consider Cost, Time, Quality and Performance as main elements for the
success of a project. There are many other factors, either primary or
secondary, that have a place to play an important role in achieving a
project success. This paper deals with exploring the factors that contribute
to achieving project success. It is confined to residential and commercial
housing sector in Hyderabad. A structured questionnaire is applied to
find the factors determining success in relation to Client, Consultant
and Contractor. This helps in understanding the major factors determining
project success which can be useful to the project managers as they can
be applied to new/ ongoing real estate development projects.
Real estate Development, Construction Projects, Project Success, Determinant
Factors and Project Management.
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Research Articles
Does ISO Quality Management System
Improve Project Performance
in a Construction Project?
Ivan W. H. Fung , Vivian W. Y. Tam and Tommy Y. Lo
Quality Management System (QMS) has received high level of attention
in the construction industry over past decades. However, the effect of
quality improvement in the construction projects is questionable. Clients
have to clearly define their requirements to minimize the deviation between
their expectations and outcomes that they desire. This paper examines
quality performance of clients and consultant services in implementing
QMS and its impacts on contractors and project management. Questionnaire
survey and structured interview discussions were conducted to achieve the
objective in this paper. The results show that quality performance of
clients and consultant services in implementing QMS are generally high
except the aspects of "less revisions of working drawings" and "high
buildability and constructability of the design". It is also found that the
implementation of ISO 9000 QMS will result in increase of the overall
construction cost up to 25% and increase of workload in dealing with
the required paperwork; however, no significant improvement is found
on the construction progress. Results of this study provide valuable
insight to the construction professionals on quality management and
reinforced ISO 9000 as basis for laying a foundation for developing total
quality management in the construction industry.
Construction Project Management, Quality Management System, Project
Performance, ISO 9000, Total Quality Management
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Research Articles
Evaluating Tower Crane Safety Factors
for a Housing Project through AHP
Debasis Sarkar and Shreya Shah
Tower cranes have become one of the most important construction
equipments with rapid growth of real estate projects. Due to their
application flexibility, tower cranes can be used in complex construction
projects with ease. Use of this equipment increases the safety risk on
sites. This paper is an attempt to implement Analytical Hierarchy Process
(AHP) tool to elicit knowledge from experts and formalize it into a set
of weighted safety factors. Evaluation of the safety factors and their
quantitative measurement would help in improving safety standards on
site. The case study addressed is a housing project site in Ahmedabad
developed by a renowned private developer. According to the analysis
by AHP for evaluation of safety factors for tower crane operations
environmental factors appears to be the most important factor affecting
the tower crane operations followed by safety management conditions,
human factors, and project conditions.
Tower Cranes, Safety, Analytical Hierarchy Process (AHP), Housing Project
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Research Articles
Legislative and Policy Frameworks in the
Housing Co-Operatives in South Africa
Jimoh Richard and J.J. Van WYK
The environment in which housing co-operatives operate in South Africa
varies between being enabling or restrictive. While studies have shown
that South Africa has the necessary legislative and policy frameworks in
housing and other sectors that could have contributed to the development
of co-operative housing approach, little is done to promote it. The extent
to which the approach is pursued within these frameworks is limited.
In view of this, the legislative and policy frameworks within the cooperative
housing from the perspective of the chairpersons' were examined.
The study revealed that the Housing Act 107 of 1997 and the 2009
Housing Code do not support the growth of housing co-operatives. Also,
the chairpersons' were of the view that the National Government through
her agencies lacked commitment to develop the co-operative housing
subsector. The need to carry the beneficiaries of co-operative housing
approach along is imperative as the input of such people will make the
policy or legislation more robust because the people know where the
problem lies.
Co-operative Housing; Policy; Legislation; Housing; South Africa
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Research Articles
Analysis and Identification of Critical Factors
of Delay in Construction Projects
M.P.Venkatesh , C.Umarani , S. M. Renuga and Balasubramanian Malathi
Delay is a global phenomenon and it is no exception in Indian construction
industry. The main objective of this study is to identify the critical factors
influencing delay and their impact on project completion. In this study
has more concentrated in resource related delay in construction industry.
The results presented are based on a study carried out at various ongoing
and completed construction projects in Indian context. A structured
questionnaire survey was used to solicit the causes from various construction
professionals in various firms. About eighty four respondents were participated
in this survey. A statistical analysis of the respondents was carried out
and the influence of various critical factors as in shown. The critical
factors have been analyzed to rank the causes of delays based on the
Relative Importance Index (RII).
Delay, Critical Factors, Construction Projects, Statistical Analysis
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Research Articles
Effect of Subsurface Drainage on
Performance of Flexible Pavements
Siddhartha Rokade , P. K. Agarwal and Rajnish Shrivastava
Subsurface drainage is a key element in the design of pavement systems.
Indiscriminate exclusion of this element will assuredly lead to the premature
failure of pavement systems, thereby resulting in high life-cycle costs.
Water accumulating excessively in pavement layers contributes to problems
which may cause premature failure of the structure, and unsafe operating
conditions for motorized traffic. Prompt removal of such accumulations
is essential to avoid roadway surfaces which are hazardous to traffic due
to increased skid potential and weakening of the structural integrity of
the pavement. Subsurface drainage is required when conditions exist that
can cause prolonged exposure of the pavement structure to excess moisture,
resulting in accelerated pavement deterioration under existing levels of
traffic loading. Installation of subsurface drainage systems is of immense
benefit to the life and performance of a pavement. This paper presents
an overview of pavement subsurface drainage and its potential benefits
to the life and performance of the flexible highway pavements. The paper
focuses on the purpose and need of subsurface drainage systems, and
their design, construction and maintenance. The economics of incorporation
of subsurface drainage in flexible highway pavements is dealt in brief.
Research & Publications Department 