International Journal of Modern Research in Engineering & Management (IJMREM) ||Volume|| 1||Issue|| 10 ||Pages|| 14-21 || November 2018|| ISSN: 2581-4540
Disputes Impact in Pakistan Construction Industry: A Comprehensive Study of Road Development Projects 1,
Saeed Ahmed, 2, Dr. Nafees Ahmed Memon, 3, Engr. Ali Raza Khoso 4, Syed Abdullah Shah Hashmi, 5, Dr. Aftab Hameed Memon 1,
2,
Student M.E. (Construction Management) Civil Engg. Mehran UET Jamshoro; Professor, Civil Engg. Mehran UET, Jamshoro, 3, Lecturer, Civil Engg. Mehran UET, Jamshoro, 4, Lecturer, Civil Engg. Balochistan UET, Khuzdar, 5, Assistant Professor, QUEST, Nawab Shah
--------------------------------------------------ABSTRACT-------------------------------------------------------The road construction works have tendency to build strong variances among the stakeholder which involved in projects, they can turn quickly into disputes and become difficult to resolve them. All developing countries are increasing their economic growths, Pakistan is one of them which rapidly growing its resources spending on construction projects effectively. Road construction disputes are one the major issues which will affect the successful completion of the projects. This research aim to analyze the causes and impacts of disputes in roads construction projects of Pakistan construction industry. This study is undertaken to identify the causes, impacts and remedial measures/appropriate suggestion to overcome from disputes. The construction claims are considered as one of the most unpleasant and disruptive event of a construction project, which will effects intern of costs overrun, time overrun and dynamic nature of projects. This study is limited to determination of causes and Impacts of disputes as observed by Clients, contractors and consultants working in road construction projects. Get a path way to manage disputes from informed, selection of remedial measures. The data were collected from respondents which are concerned in road construction, after analysis of the data, concluded that incomplete documentation, inappropriate contract system, unrealistic price of tenders, errors in design and overstated claims are the major Causes of disputes in construction projects. Mediation and negotiation were identified the common desired method to manage disputes. INDEX TERMS: Causes and Impacts of disputes, Types of disputes, Roads construction projects, Avoidance Strategies. ----------------------------------------------------------------------------------------------------------------------------- ---------Date of Submission: Date, 10 November 2018 Date of Accepted: 13 November 2018 ----------------------------------------------------------------------------------------------------------------------------- ----------
I.
INTRODUCTION
The improvement of any country no longer simplest rely on technologies however it also rely upon the infrastructure. Construction industries are the strength of a developing as well as for a developed country. These are the many complex industries within the international which contain sort of issues [1]. A construction enterprise is sub-divided into diverse sectors consisting of roads network, building sectors, infrastructure tasks and many others. Each kind has its own complexities which includes disputes, conflicts and claims. Disputes mostly occurs in between client, consultant and contractor due to various issues and these issues always create a cost in various forms like, deviations in the scope of work, typical site condition and delays in work [2]. The construction industry of Pakistan performs as key position within the financial increase of the country, the construction industry becomes the 2nd largest industry after the agriculture which contribute in economic growth national GDP and labor force [3]. For the developing countries the participants have different views, talents and high level of knowledge of the construction process in the highly risky and competitive environment. Being a complex industry, the participants face different problem during a construction project. The stakeholders like Client, Contractor and Engineer have different perception about the construction issues. Therefore which leads to conflicts and disputes then the disagreement about something is inevitable [4]. Dispute is well-defined as a form of conflict which demonstrates itself in pleasing reasonable problems. It involves clash of words over problems able to choice through negotiation, mediation and adjudication. Which means a dispute will most in reality arise best if assert is left out with the useful resource of one participant to the agreements. In similar manner suggested that conflict occur in which there is an unsuitability of interest. Due to the dangers and complexities which might be naturally inherent with construction initiatives in addition to the diverging pastimes of the parties concerned, disputes may be taken into consideration unavoidable effects of the construction processes particularly road construction process [5].
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Disputes Impact in Pakistan Construction Industry‌ II.
LITERATURE REVIEW
Road construction project responsibilities are complicated because of the division of obligations and responsibilities between consultants, Clients and contractors. These construction project need the occurrence of several high level of knowledgeable experts at site during construction [6]. The disputes creating due to lack of access in the services, unforeseen condition of construction site, bad weather conditions and contractor’s failure in unbalanced coordination with sub-contractor works at site, mismanagement which could affect the art to others, the factors which leading to disputes which are delays, defects on sites, shortages of 4ms, reworks, time and cost overrun [7]. The author analyzes that past studies in Portugal had recognized eight various types of construction disputes each one of them covered a specific process of documentation, submission, quantification, and settlement, in the scope of the construction legal frame. The results show that the requirements for changes, in particular, direct changes in subtypes, indirect changes, errors and omissions, amounted to 64% of applications filed in the surveyed construction project, and together with deferred claims represent a total frequency of 84%. The ratio is 0.76, taking into account the requested amount and payment [8]. Road construction projects are associated to each other in such a way that lack of communication among participant lead them to failure. Such a failure may create disputes among the stakeholder which are contributing in road construction projects [9]. The problems which creates disputes on road construction project have several factors, including change in design, adverse climate condition, number of involved parties, cost and time overrun the road construction projects are facing problems which are dividing in to six stages. These stages are identification of disputes, notify, to examine, documentation, presentation and disputes negotiation. The results specify that the absence of site staff awareness to proactively discover disputes, isolation or inaccessibility of appropriate documents, and clashes which rises during owner/contractor negotiation are all serious complications related with the procedure of disputes management [10]. In assessment to one-kind of construction responsibilities, highway obligations are performed in a more diverse surroundings with plenty of transferring and lots of converting conditions. This creates tendency to pain of dispute occurrences. In this variation system claims are most effective ultimately formed into a dispute whilst party to whom it is directed rejects the claim [11].
III.
AIMS OF THE RESEARCH STUDY
A critical review to the literature in the construction areas where the causes of disputes occur in road construction projects and the disputes avoidance approaches. By identification of causes of disputes and an effective way to manage disputes in public sector road construction projects of Pakistan
IV.
RESEARCH METHODOLOGY
The research methodology, Reviews the causes of disputes, collecting the data, discusses reasons and suggesting some appropriate measures to avoid disputes during road construction. Road construction industry is across cutting sector in social, political and economic welfare of the country. This industry has to be protected and managed well to avoid arising disputes that may lead to social, political and economic problems in the country. The aim of this research to find out the causes and impacts of disputes in the road construction projects. Its further determining ways of reducing or addressing such disputes, methods and methodologies should be identified clearly how to achieve the main aim of the study. The data collected from the unstructured interviews and questionnaire survey on disputes in road construction sector and analyzed. Further the responses from questionnaire are also discussed. The despondence of the questionnaire concerns in each of categories. A) Causes of disputes. B) Impacts of disputes. C) Appropriate avoidance from disputes.
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Disputes Impact in Pakistan Construction Industry… Using sampling of questionnaire were sent clients’, contractors, and consultants. The total response was at 61.5% which is significant. The most disputes occur to clients’ from contractor during construction phase. Table 1: Shows the despondence rate of returned S/# 1 2 3 4
Respondents Clients’ Contractors’ Consultants’ Total
Sent 20 50 30 100
Returned 13 30 23 66
% of response 43% 60% 77% 66%
Causes of Disputes (Clients’ view point) A). Ranking of dispute causes by clients according to mean rate. 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare Table 2: Shows the causes of disputes by clients S/#
Disputes causes
Mean µ
S / deviation Ꝍ
Co-efficient of variances µ/Ꝍ
1 2
Ambiguities in contract documents 4.46 0.65 0.16 Poor communication among 3.38 0.76 0.21 participants 3 Improper supervision for 3.78 0.84 0.24 constructability, clarity and completeness of work 4 Lack of responses in timely manner 4.07 0.94 0.23 5 Insufficient management, 4.02 0.92 0.24 coordination and supervision on site 6 Lowest contract award system for 2.99 1.01 0.27 contractor and designer 7 Lack of appointment of an expert 4.01 1.02 0.26 overall project manager 8 Inadequate tracing mechanism for 3.68 1.04 0.29 RFIS 9 lack of team spirit among the 2.32 0.86 0.38 stakeholder Founding the results from the above Table No 2. Disagreements / ambiguities in contract documentation was considered to be the most significant with Co-efficient of Variance (COV) of 0.16. B). Ranking impacts of disputes by client according to mean rate. 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare Table 3: Shows the impacts of disputes S/#
1 2 3
Disputes causes
Clients reputation losses Loss of profitability and possibly occupational viability Time delays and cost overrun
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Mean µ
S / deviation Ꝍ
Co-efficient of variances µ/Ꝍ
4.37 4.24
0.50 0.61
0.117 0.143
4.37
0.64
0.147
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Disputes Impact in Pakistan Construction Industry… 4
Decrease of respect b/w parties weakening of relationship and breakdown in cooperation Losses in professional reputation
4.32
0.65
0.149
4.29
0.65
0.153
Supplementary outlays in decisionmaking and direction Highly tendering price
4.24
0.73
0.171
3.01
0.75
0.262
8 9
Possibilities of litigation Compensation for relocation of equipment’s, labor and material
3.10 2.99
0.74 0.94
0.289 0.280
10
More complex award process and Extended of work
4.02
1.07
0.321
5 6 7
Table: 3 indicate that the losses of company reputation, cost overrun and time schedule delays were found as significant one by the respondents with the lowest co-efficient of variances 0.117. C). Types of disputes Table 4: Shows the types of disputes S/#
Types of Respondents Mean Standard Dev: disputes 1 Payments 8 0.53 0.518 2 Changed 7 0.45 0.517 condition 3 Delays 12 0.84 0.377 4 Contract time 13 0.86 0.378 5 Others 6 0.45 0.516 Shows the types of disputes which are ranked as highest and lowest impact level which are change condition 44.2%.
Percentage 54.80 45.20 85.60 86.60 44.20 delays 86.60% and
D). Methods of Dispute Resolutions: In client’s perspective the respondents mostly favored negotiation and mediation as an effective methods of disputes avoidance on road construction projects. The graphical representation of these results is shown in graph # 1 below.
AxiMethods of disputes aviodance
Dispute Resolution method Others Litegation Expert determination Arbitration Adjudication Negotiation Mediation Concilliation 0
2
4
6
8
10
12
Number of respondants
Fig 1: Shows the for most specific method of resolution Causes of Disputes (Consultant view point) A). Ranking of dispute causes by consultants according to mean rate 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare
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Disputes Impact in Pakistan Construction Industry… Table 5: shows causes of disputes by consultant S/#
Late specification issued & cumbersome approach to RFIs Over – design and factual communication Inadequate open and factual communication
4.01
0.65
Co-efficient of variances µ/Ꝍ 0.163
3.14
0.64
0.282
4.03
0.87
0.219
4
Incompleteness of drawing and specification
3.03
0.72
0.235
5
Lack of understanding responsibilities under designing team Design, specification, oversight and errors or omissions resulting from un-coordinated of Structural, mechanical and electrical designs.
3.20
0.65
0.248
4.02
0.95
0.252
1
2 3
6
Disputes causes
Mean µ
S / deviation Ꝍ
Table 5 indicate that the late information putout and unwieldy and access to the RFIs the highly significant reason of disputes with VOV worth 0.163, and least COV worth is 0.252 of the mechanical and electrical design. B). Ranking impacts of disputes by consultant according to mean rate. 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare Table 6: shows the Impact of disputes S/#
1
Loss of profitability and perhaps business viability
3.99
0.52
Co-efficient of variances µ/Ꝍ 0.113
2 3
Time delays and cost Additional expenses in managerial and Administration Company reputations lessees Professional’s reputation losses Compensation for relocation of equipment’s, labor and material
4.58 4.53
0.59 0.52
0.128 0.114
3.98 3.98 4.28
0.57 0.67 0.57
0.114 0.145 0.175
Decrease of respect b/w parties weakening of relationship and breakdown in cooperation Chances of litigation Higher tender services Extended and / or more complex award process
3.42
0.74
0.212
3.10 2.97 3.03
0.66 0.78 1.04
0.246 0.261 0.338
4 5 6 7
8 9 10
Disputes causes
Mean µ
S / deviation Ꝍ
Table: # 6 shows that the impact of disputes regarding to consultant viewpoint the highly impact factor COV value is 0.338 and the lowest COV value is 0.113 respectively.
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Disputes Impact in Pakistan Construction Industry… C). Types of disputes Table 7: shows the Types of disputes S/# 1 2 3 4 5
Types of disputes Payments Changed condition Delays Contract time Others
Percentage 65.30% 75.10% 84.60% 89.60% 20.50%
Table # 7 shows the most significant types of disputes with the respondent rates 89.60 % the highly rates and the 20.50% is the lowest rate. D). Methods of Dispute Resolutions: In the consultant perspective the respondents mostly favored negotiation and mediation as an effective methods of disputes avoidance on road construction projects. The graphical representation of these results is shown in graph # 2 below.
AxiMethods of disputes aviodance
Dispute Resolution method Others Litegation Expert determination Arbitration Adjudication Negotiation Mediation Concilliation 0
2
4
6
8
10
12
14
16
18
20
Number of respondants
Fig 2: Shows the for most specific method of resolution Causes of Disputes (Contractor viewpoint). A). Ranking of dispute causes by contractor according to mean rate. 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare Table 8: shows causes of disputes by contractor S/#
1 2 4
5
6 7
Disputes causes
Inadequate contract system, supervision and coordination Reluctance to seek clarification Lack of plans, specification to execute the work and change scope of work. Lack of CPM Scheduling and improper updating new requirements Delay or suspension of work of works Inappropriate practice of BOQ
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Mean µ 3.99
0.84
Co-efficient of variances µ/Ꝍ 0.203
4.21 4.23
0.88 1.02
0.213 0.586
4.32
0.98
0.582
3.98
1.14
0.286
3.01
0.87
0.423
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Disputes Impact in Pakistan Construction Industry… Table: 8 indicate that the late information putout and unwieldy and access to the RFIs the highly significant reason of disputes with COV worth 0.203, and least COV worth is 0.423 of the mechanical and electrical design. B). Ranking impacts of disputes by contractor according to mean rate. 5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare Table 9: shows the Impact of disputes S/#
1
Company reputations lessees
3.98
0.65
Co-efficient of variances µ/Ꝍ 0.117
2
Additional expenses in managerial and Administration Loss of invested principal amount
4.22
0.62
0.148
3.89
0.98
0.241
Decrease of respect b/w parties weakening of relationship and breakdown in cooperation Professional’s reputation losses Cost and time overrun Compensation for relocation of equipment’s, labor and material Chances of litigation
3.78
0.75
0.145
3.89 3.98 4.01
0.65 0.85 0.65
0.169 0.981 0.350
1.99
0.97
0.352
3 4
5 6 7 8
Disputes causes
Mean µ
S / deviation Ꝍ
Table. # 9 shows that the impact of disputes regarding to contractor viewpoint the highly impact factor COV value is 0.435 and the lowest COV value is 0.128 respectively. C). Types of disputes Table 9: Shows the types of disputes S/# Types of disputes Percentage 1 Payments 95.50% 2 Changed condition 80.75% 3 Delays 84.60% 4 Contract time 89.60% 5 Others 15.20% Table # 7 shows the most significant types of disputes with the respondent highest rates 95.50 % and the 15.20% is the lowest rate. D). Methods of Dispute Resolutions: In the contractors perspective the respondents mostly favored negotiation and mediation as an effective methods of disputes avoidance on road construction projects. The graphical representation of these results is shown in graph # 3 below.
AxiMethods of disputes aviodance
Dispute Resolution method Litegation Arbitration Negotiation Concilliation 0
5
10
15
20
25
30
Number of respondants
Fig 2: Shows the for most specific method of resolution
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Disputes Impact in Pakistan Construction Industry… V.
CONCLUSIONS
In this research study a deeply review of the literature is carried out to identified the general area of causes of disputes in road construction sector and disputes remedial measures approaches, in Pakistan construction industry. As in the analysis of results indicated the key causes of disputes in road construction projects. Therefore these are ranked as in the viewpoint of Clients, Contractor, and consultant, these are the most important stakeholder in any projects which have been successfully completed. Furthermore the most significant causes of disputes and their impact were found in road construction sector. The current practices of dispute are describe in Pakistan construction industry, to avoid/ addressed or resolve disputes. Mediation and negotiation is measured the most significant one which represented 85.5% and 85.32% of the respondent’s responses. In this research study the most significant causes of disputes and their impact have been recognized after by using all parties concerned in the road construction projects, further this study will help in identification and prevention of disputes during road construction sectors.
IX. ACKNOWLEDGEMNTS Authors are thankful to Mehran University of Engineering & Technology Jamshoro for providing necessary resources for carrying this research work.
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