challenge in construction works

1. Presenter
Geoffrey Vaughn
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2. The construction sector as define by “Standard
Industrial Classification”, are companies or sub-sectors
that are engaged in the construction of buildings
(residential and commercial), structures (bridges, dams,
sluices etc). Included are those sub-sectors that engage
in demolition works, blasting, soil investigation, drilling,
landfill, and those engaged in infrastructure works
(roads, drains, ports, airport etc).
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3. There are special characteristics which relates to exceptional
relationship between the construction sector and the level of
economic development such as
The level of adaptation of technology by contractors in Guyana.
The level of development of our human resource mainly in
science and technology, construction etc.
The development and level of our infrastructure system in
Guyana.
Contribution of National Funds (Budget allocation) to
infrastructure development.
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4. Guyana continue to experience economic growth the latest
estimates shows that 2013 saw a economic growth of
approximately 5%. This is excellent but how do we sustain
this with all the challenges we are faced with in our critical
construction sector.
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5. Challenges that would be addressed in this presentation are:
Education and Training
Contractors Capacity
Utility Services
Material Shortages and Cost Increases
Quality in Construction
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6. Guyana continues to have a shortfall in this most important asset
our human resource. This asset is needed to meet the demand of
the technological revolution of the twentieth century.
There is an ominous shortage of professionals, sub professionals,
technicians and skilled tradesmen. The weakness is most
noticeable at the level of sub-professionals and supervisory staff
such as chargehands, technicians and foreman. Most times
chargehands and foremen are procured from the ranks of the
skilled (senior) tradesmen (Suite 2001).
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7. An overview of the 2012 2013 CSEC results shows
that much students are not passing the science
base subjects such as Mathematic (30.35%),
Chemistry (52.39), Physics (54.34%) and English
(45.69). This is where the core of our Construction
challenges begin.
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8. In reviewing reports from the University of Guyana
Faculty of Technology for the period 2009 to 2013
shows that two thousand nine hundred students
(2,900) enrolled for the Engineering programme
from a total enrollment of thirty one thousand and
ninety (31,090).
This represents 9.3% for the five year period of the
total University population.
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9. YEARS ENROLLMENT AMOUNT
2013201320132013 ---- 2014201420142014 677677677677
2012201220122012 ---- 2013201320132013 613613613613
2010201020102010 ---- 2011201120112011 640640640640
2011201120112011 ---- 2012201220122012 748748748748
2009200920092009 –––– 2010201020102010 222222222222
TOTALTOTALTOTALTOTAL 2,9002,9002,9002,900
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10. Even our technical Institute saw a decline in its pass
rate for 2012 (76%) and 2013 (58%) a decline of
18%. It must be known that 15% of the student
population drop-out for various reasons.
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11. The issues raised in training gives us an
understanding to the reasons for;
Time overrun
Basic understanding of Bill of Quantity while
tendering
Lack of understanding of the procurement rules
Cost overrun
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12. Assessing the contracts awarded for the last five
years, projects where loans or grants are received
via funding agencies (IDB, EU, World Bank) shows
that only a few National contractors have the
capacity to execute projects funded by these
agencies.
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13. AdvantagesAdvantagesAdvantagesAdvantages DisadvantagesDisadvantagesDisadvantagesDisadvantages
InvolvementInvolvementInvolvementInvolvement ofofofof internationalinternationalinternationalinternational financefinancefinancefinance makesmakesmakesmakes
possiblepossiblepossiblepossible thethethethe implementationimplementationimplementationimplementation ofofofof severalseveralseveralseveral projects,projects,projects,projects,
suchsuchsuchsuch asasasas thosethosethosethose ofofofof majormajormajormajor infrastructureinfrastructureinfrastructureinfrastructure (roads,(roads,(roads,(roads,
bridges,bridges,bridges,bridges, SeaSeaSeaSea DefenceDefenceDefenceDefence etcetcetcetc....))))
NationalNationalNationalNational constructionconstructionconstructionconstruction firmsfirmsfirmsfirms havehavehavehave nononono fundsfundsfundsfunds orororor
expertiseexpertiseexpertiseexpertise totototo participateparticipateparticipateparticipate inininin thethethethe sponsorshipsponsorshipsponsorshipsponsorship ofofofof
privatizedprivatizedprivatizedprivatized projectsprojectsprojectsprojects....
DirectDirectDirectDirect foreignforeignforeignforeign investmentinvestmentinvestmentinvestment inininin projectsprojectsprojectsprojects leadsleadsleadsleads totototo
increaseincreaseincreaseincrease inininin constructionconstructionconstructionconstruction demands,demands,demands,demands, creatingcreatingcreatingcreating workworkworkwork
opportunitiesopportunitiesopportunitiesopportunities forforforfor locallocallocallocal firmsfirmsfirmsfirms....
NationalNationalNationalNational constructionconstructionconstructionconstruction companiescompaniescompaniescompanies lacklacklacklack thethethethe technicaltechnicaltechnicaltechnical
andandandand managerialmanagerialmanagerialmanagerial capabilitycapabilitycapabilitycapability totototo undertakeundertakeundertakeundertake mostmostmostmost ofofofof thethethethe
foreignforeignforeignforeign fundedfundedfundedfunded projectsprojectsprojectsprojects....
CompetitionCompetitionCompetitionCompetition amongamongamongamong foreignforeignforeignforeign firmsfirmsfirmsfirms lowerslowerslowerslowers thethethethe costscostscostscosts
ofofofof projectsprojectsprojectsprojects totototo nationalsnationalsnationalsnationals....
ItItItIt isisisis possiblepossiblepossiblepossible thatthatthatthat NationalNationalNationalNational firmsfirmsfirmsfirms willwillwillwill bebebebe depriveddepriveddepriveddeprived ofofofof
thethethethe opportunityopportunityopportunityopportunity totototo growgrowgrowgrow (Hillebrandt,(Hillebrandt,(Hillebrandt,(Hillebrandt, 1999199919991999))))
PresencePresencePresencePresence ofofofof largelargelargelarge numbersnumbersnumbersnumbers ofofofof internationalinternationalinternationalinternational firmsfirmsfirmsfirms
offersoffersoffersoffers scopescopescopescope forforforfor technologytechnologytechnologytechnology transfertransfertransfertransfer andandandand thethethethe
developmentdevelopmentdevelopmentdevelopment ofofofof nationalnationalnationalnational firmsfirmsfirmsfirms andandandand upgradingupgradingupgradingupgrading ofofofof
thethethethe sectorsectorsectorsector.... TheTheTheThe largelargelargelarge numbernumbernumbernumber ofofofof suchsuchsuchsuch firmsfirmsfirmsfirms alsoalsoalsoalso
meansmeansmeansmeans thatthatthatthat technologytechnologytechnologytechnology transfertransfertransfertransfer cancancancan bebebebe aaaa tooltooltooltool forforforfor
competitioncompetitioncompetitioncompetition
ForeignForeignForeignForeign constructionconstructionconstructionconstruction firmsfirmsfirmsfirms maymaymaymay paypaypaypay liplipliplip serviceserviceserviceservice totototo
technologytechnologytechnologytechnology transfertransfertransfertransfer (carillo,(carillo,(carillo,(carillo, 1994199419941994)))) orororor taketaketaketake
measuresmeasuresmeasuresmeasures totototo avoidavoidavoidavoid itititit.... Moreover,Moreover,Moreover,Moreover, locallocallocallocal companiescompaniescompaniescompanies
maymaymaymay notnotnotnot bebebebe inininin aaaa positionpositionpositionposition totototo benefitbenefitbenefitbenefit fromfromfromfrom
technologytechnologytechnologytechnology transfer,transfer,transfer,transfer, orororor totototo subsequentlysubsequentlysubsequentlysubsequently utilizeutilizeutilizeutilize thethethethe
acquiredacquiredacquiredacquired expertiseexpertiseexpertiseexpertise....
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14. Poor quality in construction results in rework. Poor
quality elements not only do not perform in the
manner for which the structures were designed and
built i.e. they possess reduced capacity, but they
last only a fraction of their design life; this issue
have become one of our major concern in the
construction of our roads bridges and also
buildings.
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15. Frequently we excuse or attempt to justify poor
quality by saying we are working to meet schedules
or deadlines or we are cutting cost of construction.
We have seen instances where poor quality has led
to contract being terminated as per contract
condition. Poor quality construction is all around
us, our roads, buildings, as well as our other
infrastructures and utilities.
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16. In 2013 several projects saw materials being rejects
for not meeting specification. We have had several
contracts within the Ministry terminated for poor
quality works.
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17. The issue of quality is closely related to training and
development, they are shortages of clerk of works
and technicians whom on most projects has the
responsibility of ensuring quality and standards as
per contract specifications.
Poor quality of construction means that there will be
a high percentage of rework which we have seen
over the last five years.
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18. The shortage of construction materials continues to
be a major concern to the construction sector. The
sector has seen a significant growth with increase
construction in the housing, roads, sea defences,
bridges and other infrastructure. This increase has
caused a increase demand for certain construction
materials such as:
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19. Stone
Cement
Steel sheet piles
These are three materials which are constantly
needed by contractors for the execution of works.
There were several projects delayed due to the
shortage of these materials.
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20. Projects within the sea defence unit and the National
Drainage and Irrigation Authority required sheet
piles which was difficult to access due to the
reduction in production by the Chinese company
because of Environmental Issues. Both entity saw
delays in the projects works for almost 1year.
In some cases alternative material was considered
but with some amount of reluctant.
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21. 2011 to 2013 saw a shortage of aggregate for the
construction sector. Ministry of Public Works CPTU
was tasked with the assignment to determine the
effects of aggregate shortage in the sector. Below
is a table of the findings;
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22. We must not forget the challenges that we faced in
2005 – 2007 during our preparation for World
Cup cricket. During this period steel prices went
up, there was a shortage of cement and even a
shortage of our critical human resources.
These challenges are not new therefore we have to
find ways to deal with it and the time is now.
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23. DetailsDetailsDetailsDetails Amounts/TonsAmounts/TonsAmounts/TonsAmounts/Tons
BaracaraBaracaraBaracaraBaracara QuarriesQuarriesQuarriesQuarries 114,457114,457114,457114,457
ToolsieToolsieToolsieToolsie PersaudPersaudPersaudPersaud LtdLtdLtdLtd 84,96584,96584,96584,965
BK Quarries Inc.BK Quarries Inc.BK Quarries Inc.BK Quarries Inc. 464,043464,043464,043464,043
Metallica CC QuarriesMetallica CC QuarriesMetallica CC QuarriesMetallica CC Quarries 7,4427,4427,4427,442
Durban QuarriesDurban QuarriesDurban QuarriesDurban Quarries 9,2909,2909,2909,290
TotalTotalTotalTotal 680,197680,197680,197680,197
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24. DescriptionDescriptionDescriptionDescription DemandDemandDemandDemand SupplySupplySupplySupply Deficit/SurplusDeficit/SurplusDeficit/SurplusDeficit/Surplus
BouldersBouldersBouldersBoulders 788,560 110,950 677,610
Under LayersUnder LayersUnder LayersUnder Layers 85,943 56,687 29,256
3/4 “ stones3/4 “ stones3/4 “ stones3/4 “ stones 416,337 85,263.24 331,073
3/8” stones3/8” stones3/8” stones3/8” stones 9,673 4,351 5,322
CrusherCrusherCrusherCrusher run (1run (1run (1run (1stststst andandandand
2222ndndndnd GradeGradeGradeGrade
139,290.32 166,997 27,706
½” Stones½” Stones½” Stones½” Stones 7,500 50,915 43,415
Other AggregatesOther AggregatesOther AggregatesOther Aggregates 0 205,034 205,034
TotalsTotalsTotalsTotals 1,447,3031,447,3031,447,3031,447,303 680,197680,197680,197680,197 767,106767,106767,106767,106
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25. In this presentation of these critical issues one
does not claim that the list is all inclusive. It seeks
to briefly address the more critical
issues/challenges.
These issues/challenges explained are our
expectations for a collective discussion that will
serve to achieve a higher level of efficiency within
the sector.
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26. The Government and the Private Sector need
to work together so as reduce these
challenges. There is need for more Public
Private Partner projects which will reduce the
impact faced in the sector.
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27. Sinnott, Lewis and Pineda (December, 2005, p17) stated
“every“every“every“every oneoneoneone dollardollardollardollar spentspentspentspent onononon constructionconstructionconstructionconstruction generallygenerallygenerallygenerally
generatesgeneratesgeneratesgenerates upupupup totototo fivefivefivefive ((((5555)))) extraextraextraextra dollarsdollarsdollarsdollars ofofofof GDP”GDP”GDP”GDP”....
The capital spending on construction services may
stimulate the economy by creating employment and
boost the GDP but one of the major factor other than
the those mentioned, is that it provides built
infrastructure which is essential for the service and
manufacturing sector.
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