1. GROUP PROJECT – DEVELOPING OF FREEHOLD LAND BESIDE
TAYLOR’S UNIVERSITY, SELANGOR.
ANDREW MAH KOON YAN 0318798
HONG KAI YIN 0323361
LAU CHIN SHENG 0317899
NG SENG HE 0323037
PAN LEK VUN 0323164
WELSON LUM WEI JIUNN 0319514
YONG SING YEW 0318776
PROJECT MANAGEMENT MGT60704
DEVELOPMENT ECONOMICS QSB60303
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
TAYLOR’S UNIVERSITY
MARCH 2018 INTAKE
SUBMISSION DATE: 21ST JUNE 2018
2. i
TABLE OF CONTENTS
CHAPTER TITLE PAGE
TABLE OF CONTENTS i – ii
1.0 Project Background 1
2.0 Project Justification 2
2.1 Analysis of Number of Unit 2
2.2 Financial Appraisal 3
2.2.1 Gross Development Value 3
2.2.2 Gross Development Cost 4
2.3 Projected Cash Flow 5
2.3.1 Projected Cash Inflow 5 – 6
2.3.2 Projected Cash Outflow 7 – 8
2.3.3 Projected Quarter Yearly Cash Flow 9 – 10
2.4 Net Present Value 11
2.5 “Build – Then – Sell” Concept 12 – 15
3.0 Project Quality Management 15
3.1 Quality Planning, Quality Assurance, Quality Control 15 – 16
3.2 Project Quality Management Strategy Recommendations 16
3.2.1 QLASSIC 17 – 19
3.2.2 Project Quality Plan (PQP) 19 – 25
3.2.3 Quality Audit. 25 – 26
3.2.4 Quality Video Documentation 27
4.0 Project Risk Analysis 28
4.1 SWOT Analysis 29
4.1.1 Breaking Down SWOT 29
4.1.2 Elements of a SWOT Analysis 30 – 32
4. 1
1.0 Project Background
Our client is one of the most reputable developers in Klang Valley, they have
completed more than 20 projects in the past 30 years with good quality workmanship
and quality. Moreover, they also have very stable financial capacity and also 30 years
business in the development industry. Other than their good reputation, they currently
have multiple projects all across Klang Valley ongoing simultaneously. The team is
also very diligent and responsible in everything that they do, they have already
prepared the necessary documentation such as land conversion, subdivision, planning
and building plans in order to make sure smooth project flow.
Three years ago, they decided to purchase a land in Subang Jaya. They foresee
that area to have high growth potential, both residential and commercial properties. In
addition, they also see this area as a strategic location for development as it is near
major highways with easy accessibility.
This project site is located adjacent to the recently built Taylor’s University
Lakeside Campus, Selangor. The client considers this as an area with high potential
growth because there has yet to be developments surrounding the land. There is only
1 completed landed property housing area about 2km from the site. Moreover, there
are still many surrounding lands that are still not developed.
It is also considered to be a strategic location because of connections to major
highways and easy accessibility. The LDP highway is just beside it, connecting to NPE
and Federal highway. Basic amenities such as schools, universities, hospitals and
shopping malls are all within 5 minutes of driving.
With the current situation, the developer has employed a team to analyse which
type of building is suitable to be built on this piece of land. After the analysis has been
finalized, the team decided that it is best to build a mixed residential and commercial
buildings. The proposed development comprises of 26’ x 80’ double story shop/office
lots, 22’ x 75’ double story terrace houses and 20’ x 60’ double story low cost homes.
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2.4 Net Present Value (NPV) of Projects
PV = 1 / (1+i)^n
Year Quarter Quarterly
Inflow
Quarterly
Outflow
Net Cash Flow PV
Factor
(12%)
NPV
2010
Q1 6,500,000.00 (6,738,187.50) (238,187.50) 0.97 (231,533.83)
Q2 0.00 0.00 - 0.94 -
Q3 0.00 0.00 - 0.92 -
Q4 0.00 0.00 - 0.89 -
2011
Q1 0.00 0.00 - 0.87 -
Q2 0.00 0.00 - 0.84 -
Q3 0.00 0.00 - 0.82 -
Q4 0.00 0.00 - 0.80 -
2012
Q1 0.00 0.00 - 0.77 -
Q2 0.00 0.00 - 0.75 -
Q3 0.00 0.00 - 0.73 -
Q4 0.00 0.00 - 0.71 -
2013
Q1 13,314,400.00 (5,650,322.35) 7,664,077.65 0.69 5,302,752.08
Q2 0.00 (3,014,928.15) (3,014,928.15) 0.67 (2,027,747.56)
Q3 9,212,390.00 (3,179,804.34) 6,032,585.66 0.65 3,943,990.97
Q4 11,194,865.00 (4,988,290.05) 6,206,574.95 0.64 3,944,390.59
2014
Q1 5,110,380.00 (4,182,210.36) 928,169.64 0.62 573,390.86
Q2 11,194,865.00 (3,061,299.57) 8,133,565.43 0.60 4,884,272.24
Q3 2,016,740.00 (2,964,434.81) (947,694.81) 0.58 (553,200.92)
Q4 3,025,110.00 (9,457,221.48) (6,432,111.48) 0.57 (3,649,752.79)
2015
Q1 0.00 (1,888,215.40) (1,888,215,40) 0.55 (1,041,494.35)
Q2 0.00 0.00 - 0.54 -
Q3 0.00 0.00 - 0.52 -
Q4 0.00 0.00 - 0.51 -
2016
Q1 0.00 0.00 - 0.49 -
Q2 0.00 (497,720.00) (497,720.00) 0.48 (238,258.56)
Q3 0.00 0.00 - 0.47 -
Q4 0.00 0.00 - 0.45 -
TOTAL = 15,946,115.99 10,906,808.73
NPV = 10,906,808.73 (Positive Value)
Net Present Value (NPV) help to analysts and decide whether or not a new
projects are financially viable. NPV is calculated by discounting all the expected
income and expenditures of the project in each year to the present value. The NPV of
this particular project was calculated as RM 10,906,808.73 which is a positive value.
This shows that this long-term project has a positive net present value and is expected
to produce more income than what could be gained by earning the discount rate.
Therefore, it can be conclude that this project should be go ahead and it is worthwhile
to be invested.
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2.5 Summary of Project Justification
‘Build- then- Sell’ concept in property market known as a project will only
open for sales after the issuance of Certificate of Completion and Compliance (CCC).
‘Build- then Sell’ concept is the new concept introduced by the Government to the
developers. However, developers have their own decision to choose whether to carry
out ‘Build- then Sell’ or ‘Sell- then- Build’ because the cash flow faced by the
developer could be different. There are two types of ‘Build- then- Sell’ which are 100%
‘Build- then- Sell’ with CCC and ‘Build- then- Sell’ 10:90 formula. The figure 5.1
shows the graph 100% ‘Build- then- Sell’ with CCC.
Figure 5.1: Cash Flow of 100% ‘Build- then- Sell’ with CCC
Based on the figure 5.1, the developer do not receive any payment from the
purchasers to fund the construction costs from point A to point C which is the
construction stage. In this case, during the construction stage the developer will face
serious financial problems which is the negative cash flow. The developer has to secure
more bridging loan which is the short-term and long-term loan from the bank to cover
current obligations by providing immediate cash flow due to the zero cash inflows
during the construction stage. At point C, the project has been completed and issuance
by the Certificate of Completion and Compliance (CCC) which allow the purchasers
to buy the property first with the payment of 10% of selling price upon signing the sale
and purchase agreement. However, the break-even point of cash inflow and outflow
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for the developer will not meet at this point yet because the net inflows may need
longer time to move into profit account where the other 90% of the payment from each
purchaser will be paid after3 months from the date of signing sales and purchase
agreement with another 1 month extension. In additional, the developer has to ensure
that all of the property or housing that has been constructed able to sell out as soon as
possible so that they are able to pay the debt to bank to avoid the charge of interest.
Once there are the property or housing weren’t sell out yet then the developer is
consider loss of profits.
The `Build- then- Sell’ with 10:90 formula is where the buyers only required
to pay 10% of the total amount of the selling price to the stakeholder as proposed by
the Housing Buyers Association (HBA). The buyers will not require to make any
payment during the construction stage until the issuance of Certificate of Completion
and Compliance has been issued only the buyers required to pay the remaining 90%
of the selling price of the property. Based on National House Buyer Association (HBA),
developer who wanted to adopt this Build then Sell 10:90 formula will be exempted
from paying Rm200, 000 deposit for a housing development license.
The ‘Build- then –Sell’ concept could bring advantages to the buyers, bank and
developer. The main advantage of `Build- then- Sell’ to the buyers is they can avoid
from buying properties or houses that might be abandoned during the construction
period and property or housing that could not complete at the time as promised and
caused major delay problems. If this situation happened, it could decrease the
reputation of the developer and the the buyers will losses their trusts on the developer
and avoid buying property or housing from the developer.
Next, ‘Build- then- Sell’ concept able for the buyers to view the completed
design and construction of the houses to make sure the final products are able to reach
the satisfaction from the buyers. This is because the design before completion as
advertisement might be different from the actual completion design. Buyers also able
to examine the quality of the housing in term of finishing, specification and etc. and
workmanship during construction the housing project. In financial aspect, buyers only
required to pay after the issuance of Certificate of Completion and Compliance to the
housing which could increase the confidence of the buyers on purchasing the property
or housing.
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The advantage could be found between the developer and buyers where the
developer has the ability to accommodate the specific property or housing that based
on the demands and needs from the buyers. Before the completion or during the
construction of a project, the buyers may want certain finishes, specifications and
design to the property or housing so the developer can conduct a survey to conclude
the decision and meet most of the buyer satisfaction which could highly increase the
demand of the property or housing.
After that, there are advantages for the developer from the government to
encourage and helps in decrease financial burden of the developer to who implement
the ‘Build- then- Sell’ concept. There are four types of incentives by government to
the developer which are:
The banking institution to be given tax exemption on interest income
received from the rescuing contractor or developer.
Developer be given a double deduction on interest paid and all direct
costs incurred in obtaining loans.
Contractor be given stamp duty exemption on all instruments executed
for the purpose of transfer of land or house.
Loan agreements to finance the cost of revival and original house buyer
in abandoned project be given stamp duty exemption on all instruments
executed for the purpose of obtaining additional finance and the
transfer of the house.
Lastly, there are advantages for the bank because there are required of bank
loan by developer to run or develop the property or housing based on ‘Build- then-
Sell’ concept. This allow the bank to gain more interest profits when they released the
high amount of loan to the developer.
In conclusion, the cash flow of ‘Build- then Sell’ seen like not a good sight for
the developer where the developer may faces a lot of financial issues and the developer
may need a sufficient or high amount of capital to kick start a construction. However,
the implement of `Build- then-Sell’ concept able to provide benefits to the developer,
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buyers, banker so it is highly recommend to implement the concept of ‘Build- then-
Sell’ in a country.
3.0 Project Quality Management
3.1 Quality Planning, Quality Assurance, Quality Control
Quality management has three components: quality planning, quality assurance
and quality control. These include procedures, tools and techniques that are used to
ensure that the outputs and benefits meet customer requirements. All of these processes
interact with each other as well as with other knowledge areas. There are a few
advantages to project quality management:
Achievement of Project Scope
This system facilitates a business, to attain the objectives that have been
defined in the organization strategy. It ensures the achievement of stability and
reliability regarding the techniques, equipment, and resources being used in a project.
All project activities are integrated and aligned towards the achievement of quality
products. These efforts commence by identifying the customer needs and expectations,
and culminate in their contentment.
Customer Satisfaction
A fully recognized and implemented quality management system, will ensure
that the customer is satisfied by meeting their requirements, and will thus enhance the
confidence of the customer. Attaining customer satisfaction is a great achievement for
the organization that will assist in capturing the market, or increase the market share.
Consistent Products
Implementing a quality management system can assist to attain more
consistency in the project activities, and enhance the effectiveness by improvement in
the resources and time usage.
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The first component, quality planning, involves the preparation of a quality
management plan that describes the processes and metrics that will be used. The
quality management plan needs to be agreed with relevant stakeholders to ensure that
their expectations for quality are correctly identified. The processes described in the
quality management plan should conform to the processes, culture and values of the
host organisation.
Quality assurance provides confidence to the host organisation that its projects,
programmes and portfolios are being well managed. It validates the consistent use of
procedures and standards, and ensures that staff have the correct knowledge, skills and
attitudes to fulfil their project roles and responsibilities in a competent manner. Quality
assurance must be independent of the project, programme or portfolio to which it
applies.
The next component, quality control, consists of inspection, testing and
measurement. It verifies that the deliverables conform to specification, are fit for
purpose and meet stakeholder expectations.
Quality control activities determine whether acceptance criteria have, or have
not, been met. For this to be effective, specifications must be under strict configuration
control. It is possible that, once agreed, the specification may need to be modified.
Commonly this is to accommodate change requests or issues, while maintaining
acceptable time and cost constraints. Any consequent changes to acceptance criteria
should be approved and communicated.
3.2 Project Quality Management Strategy Recommendations
Below are the project quality management strategy recommendations that are
suitable for our projects. We have listed QLASSIC, Project Quality Plan (PQP),
Quality Audit, and Quality Video Documentation as the strategy that will ensure the
quality is maintained high.
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3.2.1 QLASSIC
Quality Assessment System In Construction, also known as QLASSIC has
been in the construction industry of Malaysia since 2006 as developed by the
Construction Industry Development Board (CIDB) Malaysia. It is a system to measure
and evaluate the workmanship quality of workmanship and finishes of a building
construction based on the Construction Industry Standard (CIS), through a scoring
system. This system enables the quality to be compared between local construction
projects.
QLASSIC assesses the building through inspection and field testing at the
construction site. The score will be obtained during the first inspection. If there are any
problems found after the first inspection, the assessment will not be re-scored even
after rectification works has conducted. This practices the contractor to “do things right
the first time and everytime”.
Objectives of QLASSIC are to elevate the level of quality in the construction
industry, to have a standard quality assessment system as a benchmark for quality of
construction works, to assist contractors to achieve defect-free when carrying out
construction works, and to be used as a criteria to evaluate the performance of
contractors based on quality of workmanship.
Table 1: Allocation of weightage for components of building construction works
according to building category
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Each category of a building comprises as following:
I. Category A (Landed housing) – Detached, semi-detached, terrace and cluster
houses
II. Category B (Stratified housing) – Flats, apartments, condominiums, service
apartments, small office home office (SOHO) and townhouses
III. Category C (Public/commercial/industrial buildings without centralised
cooling system) – Office buildings, schools, factories, warehouses, workshops,
hangers, small office flexible office (SOFO), small office virtual office
(SOVO), religious buildings, stadiums, community halls, hospitals, airports,
universities, colleges, police stations, etc
IV. Category D (Public/commercial/industrial buildings with centralised cooling
system) – Office buildings, schools, factories, warehouses, workshops, hangers,
small office flexible office (SOFO), small office virtual office (SOVO),
religious buildings, stadiums, community halls, hospitals, airports, universities,
colleges, police stations, etc
Based on our project, we will be under ‘Category A and C’ as our project fits the
requirements of being landed houses and landed office shoplot.
For our project to succeed in implementation of QLASSIC, its details will need
to be conveyed to the contractors through tender documents and contract documents.
The relevant documents must specify that we require a minimum of 70% QLASSIC
score for our buildings. This together with the contractor firm details submitted will
help to ensure that the contractors tendering for the project are competent enough to
achieve this quality standard.
The reason for implementing QLASSIC into the project is to ensure that our
project will achieve a high level of quality in terms of the workmanship, as it will
certainly satisfy the client’s requirements. Even if the requirements are not stated, it
will be logical to indicate that quality of the works would need to be on par with
industry’s standards in order for the development to serve its purpose.
Besides that, QLASSIC can serve as a benchmark for quality that should be
taken into consideration when constructing the building, as within the scoring system
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there are criteria for every elemental product to have certain level of quality. For
example, for tiled floorings, the joints should be aligned with skirting tiles or wall tiles
and also aligned between tiles and consistent in size, the assessment method for this
section would be visual image of the assessor on site.
Other than that, with the implementation of QLASSIC in our project, the
contractors will have to be careful and serious on the work quality as there would not
be second chances due to the nature of QLASSIC which does not allow rescore. Hence,
the possibility of defect and rework in project can be reduced since contractors must
perform the work correctly the first time.
Furthermore, QLASSIC is an independent method to measure and evaluate the
quality of workmanship. It offers impartial and unbiased assessment of a project. The
QLASSIC assessor is an independent individual that has no personal interest in any
aspect of the project, therefore the assessment will be fair and the results will be be
accurate.
With implementation of QLASSIC, parties would be able to adopt this
assessment method that are already complete with quality criteria which benefit both
the clients and contractors. Contractors should not find it a hassle to understand and
implement the criteria necessary to evaluate their work for ensuring the quality
requirements of the client are met.
3.2.2 Project Quality Plan (PQP)
Project Quality Plan is a document that incorporates an outline of all planned
actions needed to meet the quality and customer requirements of a specific project.
This plan describes the unique requirements of this project and its application
throughout the project lifecycle. This plan will also be the prescribed mechanism for
the quality compliance benchmark throughout the project. With the implementation of
PQP, should provide the solid ground for successful, timely and quality
implementation of the project activities.
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Ensuring compliance with all relevant rules and provisions is very complex and
comprehensive task. It requires identification of all quality requirements as well as
detailed and concise definition of adequate measures necessary to meet these
requirements. Having this in mind, the Project Quality Plan will:
define the quality expectations and goals;
assign roles and responsibilities to management structures and define their
participation in the quality control process;
define project policy and standards, and define compliance criteria;
identify a set of procedures and metrics to be used to determine performance
quality levels.
Once the PQP is adopted, it will be used in daily and overall project management
and quality control by all project partners, responsible for preparing and producing
deliverables.
In the PQP, there will be clear roles and responsibilities. It clearly defines the roles
and responsibilities of site management, subcontractors, and all workers on the project.
There would be minimal miscommunication even when problem arises as the duties
and responsibilities of each personnel is listed.
An example of how roles and responsibilities would be like is according to the
sample below.
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Figure 6: Example of roles and responsibilities of a company during a project.
A method statement is details of the way a work task or process is to be
completed. It should outline the hazards involved and include a step by step guide on
how to do the job safely. It must also include details which controlled measures have
been introduced to ensure the safety of anyone who is affected by the task or process.
Method Statements will be requested as part of a tender process which allows the client
to gain an insight into the contractor’s organisation and the way it operates. This
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ensures that the contractor understands the whole process of construction and quality
of the work can be of high level.
Regular inspection should also be conducted on a weekly basis. Inspection can
be in the form of report submitted to relevant parties of clients or consultants or visual
confirmation. Inspections can be conducted for quality of works and safety of works
as it’ll help prevent defects and injuries respectively. The reason for this is to ensure
that the work done is in compliance with the required materials and technique of
construction.
Another thing would be the project documentation. Templates will be made for
documenting the contemporary records of the project as good bookkeeping.
Documentation will also be used for project reporting and monitoring. Example of
documentations are documents of permits, receipts of products, contractors and
subcontractors’ company financial statement, organisational structure, past project
records; site notice, site diary, report for results of test. Quality can be ensured by
keeping track of the minor details of the project. It will also increase the chance of
winning if disputes arises in terms of quality and payment as documentation are
evidence of works done and products delivered.
Process flow chart should also be included to understand the causes and effects
of the project. As construction is a multiple stage process which things can proceed
simultaneously. It may affect the next work of different areas in the project. An
example of process flow chart would be the critical path method. It determines what
is the most important item in the whole process of the project, so it will highlight the
item that might cause a delay and quality degradation.
Test plan should be included in PQP as well. Results of test are needed to determine
the quality of work that were needed for the project’s requirements. An example of
test results are load testing, impact testing, tensile testing, exposure site testing,
strength testing, weatherability, durability, settlement test. The test results should be
submitted for analysis and confirmation that the work is done in accordance to the
specifications.
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The use of diagrams, charts, and analysis may be used to further improve the
quality control as tools and techniques. By using these tools and techniques, clients
will be able to determine and analyse the results to determine trends and major factors
affecting quality.
An example of diagram would be the Pareto diagram. A Pareto diagram is a
statistical decision-making technique that identifies a limited number of input factors
as having a greater impact on outcomes, whether they are positive or negative. It is
based on the Pareto Principle, popularly known as the ‘80/20 rule’, that stipulates that
80% of the outputs result from 20% of the inputs. Following is an example of paint
defects from an automotive assembly plant:
Figure 7: Example of a Pareto diagram showing the paint defect frequency.
The Pareto diagram shows the relative frequency of defects in rank-order, and
thus provides a prioritization tool so that process improvement activities can be
organized to "get the most bang for the buck", or "pick the low-hanging fruit".
Then comes the Quality Control Chart. These charts are graphical
representations that display the result of a process over time and are used to determine
if the process is “in control”. When in control the process should not be adjusted,
however it may be changed in order to provide improvements. Control charts may be
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used to monitor any type of output variable. A control chart always has a central line
for the average, an upper line for the upper control limit and a lower line for the lower
control limit. These lines are determined from historical data. By comparing current
data to these lines, we can draw conclusions about whether the process variation is
consistent (in control) or is unpredictable (out of control, affected by special causes of
variation).
Figure 8: Example of a control chart.
Another one would be trend analysis. The trend analysis involves the use of
mathematical techniques to forecast future outcomes based on historical results it is
often used to monitor technical performance and cost and schedule performance in a
project.
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Figure 9: Example of a trend analysis.
Lastly, the requirements, regulations, and standard should be known by clients
and contractors. An example of requirements, regulations, and standard would be
QLASSIC, Uniform Building By-Laws 1984 (UBBL), BOMBA (Fire and Rescue
Department of Malaysia), Selangor Water Works Department (SYABAS), local
planning authority (Selangor Town and Planning Department). The team must make
sure that the project complies with all the given regulations by authorities. Knowing
this will ensure that the project is a smooth sail, quality will not be affected
tremendously, and help achieve a good final product.
3.2.3 Quality Audit.
An auditing program consists of:
Preparation of control schedules
Reconcile project expenditures
Direct labor analysis
Labor burden analysis
Change order analysis and pricing analysis
Subcontract analysis
Material purchases
Verification of contracted scope
Equipment rental analysis
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Bonds and insurance analysis
Quality assurance and quality control
Quality auditing is one of the basic elements of an effective quality control plan.
A quality audit is a review of how well (if at all) the key areas of your project quality
plan are being followed. Hiring a 3rd party to review the quality management strategies
and project quality plan is deemed one of the effective way to understand is the
project’s quality plan going in the right direction.
How it’ll work is by hiring an independent professional that is specialised in
checking and evaluating the project quality plan (quality planning, quality assurance,
quality control) and quality management system to ensure the process of works are of
high standards. By having professionals involved, more successful outcome will be
produced.
Quality assurance and quality control review minutes from various meetings,
contractor’s daily logs, engineering field test reports and any other correspondence
files. It obtain and review the contract with materials testing and quality control/quality
assurance firms and obtain and review contractor and/or subcontractor submittals,
shop drawings and cut sheets.
The source of the problem may lie with company personnel, subcontractors, or
suppliers. On the other hand, it may result from an error of management, poor
leadership or faulty communication. Finally, on occasion the quality plan itself may
be unrealistic or inappropriate in its approach to the specific circumstances and
problems of the project and require amendment. Depending on which of these are true,
remedial action may consist of:
Additional training for personnel in correct procedures to follow and/or
disciplinary action.
Communication with superintendents and other employees to deal with
problems that haven’t been properly addressed.
Reconsideration of some element or elements of the quality plan to make it
more appropriate to the project being undertaken.
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3.2.4 Quality Video Documentation
Quality video Documentation is designed to have recordings of the
construction site at a few important areas of the site that will be able to monitor the
process of the construction.
How it’ll work is by having cameras for recording that will be placed on
designated places around the site/in the building which will provide wide angle of view.
For example, a camera place on a tall stick that is able to record the process of
excavation, piling, and ground beam.
Cameras will start recorded everyday during working hours of the site, which
is usually eight hours. Footages captured will be stored in an electronic storage devices,
usually a hard disk drive and will be reviewed by a designated worker on a weekly
basis as proof that the work is done in accordance with the specifications and high
quality can be achieved through this.
An alternative to this would be to hire an independent professional that has
experience with reviewing video footages as stated. Hiring a 3rd party will allow a
clear thorough check due to their specialised responsibilities with unbiased and
impartial work.
This will prevent fraud or negligence from the clerk of work or contractor
because the whole process of the construction is recorded and reviewed instead of how
traditional assessment is done, which is by assessing the end product only. With this
implemented, the project will have high quality of workmanship throughout the whole
project.
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4.0 Project Risk Analysis
Risk management is the identification, evaluation of risks followed by
coordinator and economical application of resources to minimize and control the
probability or impact of unfortunate events. In essence, it is also to maximize the
realization of opportunities. One of the objectives of risk management is to assure
uncertainty does not deflect the endeavour from the project goals.
Risk management in construction is designed to plan, monitor and control
those measures needed to prevent exposure to risk. To do this it is necessary to identify
the hazard, assess the extent of the risk, provide measures to control the risk and
manage any residual risks.
Following the initial risk identification phase, the project manager should have
a working list of risks that have been identified as potentially affecting the project.
From this list, the project manager should differentiate those that seem minor and do
not require further attention from those that require follow-up, qualitative analysis,
quantitative analysis, and active mitigation and management. This process requires
some qualitative assessment of the magnitude and seriousness of each identified risk.
Various methods that have been developed to assess failures in physical equipment
and systems have also been applied in one form or another to project risks.
Next, we will analyse the associated risk along with the consequences. We will
do this by conducting a SWOT analysis. This helps to paint a clearer picture of the
company’s strengths and weaknesses, both internally and externally. In addition, we
would provide constructive measures to improve on the shortcomings of the company,
which will be beneficial for the project as a whole. Furthermore, as project managers
we want to present our analysis both through quantitative and qualitative. We will rank
them using Risk Matrix for the quantitative measures and SWOT Analysis for
qualitative measures.
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4.1 SWOT Analysis
Figure 10: SWOT Analysis table.
SWOT analysis is a framework used to evaluate a company's competitive
position by identifying its strengths, weaknesses, opportunities and threats.
Specifically, SWOT analysis is a foundational assessment model that measures what
an organization can and cannot do, and its potential opportunities and threats.
4.1.1 Breaking Down SWOT
SWOT analysis is a basic, analytical framework that assesses what an entity —
usually a business, though it can be a place, industry or product — can and cannot do,
for factors both internal and external. Using environmental data to evaluate the
position of a company, a SWOT analysis determines what assists the firm in
accomplishing its objectives, and what obstacles it must overcome or minimize to
achieve desired results: where the organization is today, and where it may go.
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4.1.2 Elements of a SWOT Analysis
When using SWOT analysis, an organization needs to be realistic about its
good and bad points. The organization needs to keep the analysis specific by avoiding
gray areas and analysing in relation to real-life contexts. For example, how do the
organization’s products and services compare to those of competing firms? SWOT
analysis should be short and simple, and should avoid complexity and over-analysis
because much of the information is subjective. Thus, companies should use it as a
guide and not a prescription.
Strengths describe what an organization excels at and separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique
technology and so on. For example, a firm has a reputation of good workmanship over
the course of many years in all of their projects.
Weaknesses stop an organization from performing at its optimum level. They
are areas where the business needs to improve to remain competitive: higher-than-
industry-average turnover, high levels of debt, an inadequate supply chain or lack of
capital.
Opportunities refer to favourable external factors that an organization can use
to give it a competitive advantage. For example, a car manufacturer can export its cars
into a new market, increasing sales and market share, if a country cuts tariffs.
Threats refer to factors that have the potential to harm an organization. For
example, a drought is a threat to a wheat-producing company, as it may destroy or
reduce the crop yield. Other common threats include things like rising costs for inputs,
increasing competition, tight labour supply and so on.
SWOT analysis is a great way to guide business-strategy meetings. It's
powerful to have everyone in the room to discuss the company's core strengths and
weaknesses and then move from there to defining the opportunities and threats, and
finally to brainstorming ideas. Oftentimes, the SWOT analysis you envision before the
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session changes throughout to reflect factors you were unaware of and would never
have captured if not for the group’s input.
A company can use a SWOT for overall business-strategy sessions or for a
specific segment like marketing, production or sales. This way, you can see how the
overall strategy developed off the SWOT analysis will filter down to the segments
below before committing to it. You can also work in reverse with segment-specific
SWOT analysis that feeds into an overall SWOT analysis.
Table 2: Our company’s SWOT Analysis
Strength
- High financial capacity
- Experienced in the
construction industry
- Good management team
- Quality workmanship
- Timely completion
Weakness
- Too many projects ongoing in the
company
- High staff turnover in the
company
- Lack of marketing expertise
- Underestimation leading to cost
overrun
- Vertical hierarchy system leading
to slow response
Opportunity
- High profit margin
- Availability of advanced
construction technology and
method
- Strategic location
- New public transportation to
be built
- Economics of scale
Threat
- Competition among other housing
developments
- Risk of project not selling out
- Market fluctuation
- Sudden change in effective
demand
- Need to consider stakeholder
consensus
Our client strive to be the best in the industry, hence we conducted a SWOT
analysis, breaking them down into detailed points to provide them a thorough analysis.
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For every strength and opportunity, we formulate the best strategy for the client to
fully leverage on it. For instance, current the client has a very strategic location, it is
best to build buildings that allow more than just condominiums and apartments, they
can build office or commercial buildings as well in the area. As for the weaknesses
and threats, we try our best to advice the client on the things to avoid. For example,
one of the threats is that the market fluctuation may cause the project to experience
huge cost overrun, we can sort this out with buying specific insurances that help
mitigate this risk.
There are some sources of risk that is prevalent in the construction industry,
mainly government related risks, stakeholder risks, design risks and construction risks
such as delays, cost overrun, site safety etc. After identifying the sources of risk, we
rank them using risk matrix and analyse them. Next, we propose solutions and
mitigations for the risks based on the level of severity and likelihood.
4.2 Risk Identification
With the sources of risks in our project determined, a discussion is carried out
to identify potential risks that will threaten the project. From the discussion, a total of
23 risks from different sources are established. They are listed and explained below.
i. Client / Government / Regulatory / Stakeholder
Implementation of new policy
New government policy by the government may cause substantial changes in
construction requirements, which in turn may have negative effects on our project. The
new policies may force us to make huge variations to comply with them, or even in
some serious cases force the termination of project. They can also affect the
profitability of project.
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Not in accordance to authority requirements/regulations
There are many authority requirements and regulations that must be complied with
in development projects to ensure the building is safe and comfortable for residents.
Some examples are Uniform Building By-Laws (UBBL), BOMBA and SYABAS
requirements. Non-compliance with them will cause disruption in the work by
authorities and incur variation in the late stage of project, leading to delays and
additional cost.
Change in client’s requirements
During construction, client sometimes wants to change some aspects of the
project such as design, materials and quality. The change may be huge or minimal
depending on the circumstances. Some reasons for this are influence by the market
trend and other similar projects. It can also be due to the client’s original intention and
requirements are not clearly conveyed in the early stage of development, resulting in
variations in later stages of the work. These changes disrupt the work progress and are
hard to implement during construction stage.
Lack of stakeholder consensus
Stakeholder consensus is an important consideration for the development.
Some major stakeholders in our case are Taylor’s University, the university students
as well as the surrounding buildings’ occupants and owners. Their approval of the
project is important for smooth project completion and operation. However,
stakeholders may object our development due to multiple factors, including potential
pollution, traffic obstruction, reduced profitability and others. Their objections can
cause the project to fail to achieve its objectives.
Contractor insolvency and incompetency
One of the risk in the development is the insolvency and incompetency of
contractor. If the contractor’s financial capacity is not strong enough or he suffers huge
losses, he may become insolvent, making him unable to continue carrying out the work.
Besides that, the contractor procured may be inexperienced and does not possess
enough expertise or knowledge, resulting in poor site management and workmanship.
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These two kinds of contractors will cause additional costs, project delay and poor
quality of works.
Contractual disputes
With the construction industry being adversarial in nature, contractual disputes
is a common occurrence in projects. The disputes are mostly on payment issue and
contractual claims for time and damages. They arise because clients and contractors
are not familiar with the contract provisions, in addition to the incompetency of
employed Quantity Surveyor as a consultant on contractual matters. As a result, the
construction work may be delayed and the client can suffer huge potential losses if he
is the losing party in disputes.
ii. Design
Obsolete design
The design of buildings in our development may be obsolete if the architect
does not have sufficient knowledge and expertise or he does not keep up with the
current design trends. An obsolete design is one that is old fashioned, thus it is
unattractive to the public. This will reduce the sales of property, resulting in lower
profitability for the project.
Poor buildability
Poor buildability is a risk that can arise in design. This kind of design is hard
and uneconomical to build. It mainly happens due to the incompetency of Architect
where he fails to consider the difficulty and viability of construction for a particular
design during design stage. Design with poor buildability can lead to extra cost and
time required for construction.
iii. Construction
Construction delays
Construction delays is a common issue in construction projects. The delays
caused the project to be completed after the expected completion date, causing
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financial losses to the client since the property cannot be sold and occupied early.
There are many causes of delay from both contractor and client. Some common ones
are providing late site possession to contractor, variations in the work, late issuing of
drawings and specifications, poor site management by contractor and insufficient
contractor’s labour or plants.
Cost overrun
Another important risk in development is cost overrun. Client in construction
projects normally have a tight budget that must not be exceeded to ensure the project
is affordable and viable for acquiring profit. If there is cost overrun during construction,
the client will find it hard to sustain the project and may even need to terminate the
project in extreme cases. This problem may arise due to incompetent Quantity
Surveyors producing wrong Bills of Quantities, inaccurate cost estimates or failure to
monitor and control the actual construction cost.
Force Majeure
Force Majeure refers to unforeseen and uncontrollable circumstances that
prevents the completion of the project. It includes war, riot, strike and natural disasters
such as flood and earthquake. While its impact to the development is very significant,
it is almost impossible to avoid it. Luckily, these kinds of events rarely happen in our
project location.
Damage to surrounding building and property
Since our project is located nearby Taylor’s University and some residential
areas, there is a risk of damage to surrounding building and property. This is mostly
due to the vibrations produced from construction which can cause cracks in the
structures of nearby buildings. If there is actual damage done, the residents or owners
of these properties may claim compensation from us to repair them, resulting in losses
of client.
Poor quality and workmanship
It is possible that the buildings constructed have poor quality and workmanship
which does not meet the quality standard required by the client. The risk can arise from
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the usage of poor quality materials or the inexperience of contractor. A property with
poor quality is uncomfortable, unattractive and dangerous for residents, therefore it
will affect the sales and reduce client’s profit. Additional cost can also be incurred for
repairing the defects.
iv. Construction Materials
Lack of materials
Lack of materials may occur in a development in which there is a shortage of
construction material supply for the project. This can just take place in a particular
location or across the whole country. It may be due to major construction projects in
Malaysia or other nearby nations taking most of the supply since those projects have a
high demand of materials. The material shortage will make it difficult to successfully
complete the project.
Price fluctuation of materials
This risk is related to the previous risk as the lack of materials will cause the
price of materials to fluctuate and increase, although this is not always the reason. The
price trend of materials can be affected by many other factors such as government
policies, interest rate and production costs. In any case, if there is a sudden increase in
material price, the project’s profitability will reduce. The project may also become too
costly for the client to afford.
v. Construction Site
Poor site safety
The construction site of a development may have poor site safety. The workers
may have no knowledge on safety requirements and matters or simply just do not
follow them. This will increase the probability of accidents and injuries happening at
the site. Furthermore, if the authorities determined a site is not safe during their
inspection, the work will be disrupted to fix it immediately. All of these outcomes are
not favourable to the client as they incur damages, lower site productivity and tarnish
client’s company image, even if it is not his fault.
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Serious sound and air pollution
Sound and air pollution is inherent in construction work. However, if the
pollution reach a high level, it will affect the environment and nearby occupants.
Extensive use of machinery and plants for long hours is one of the main reasons for
this risk. With our site located near many properties and buildings, this can be a serious
problem which will force the building owners, occupiers and even the authorities to
take action against us, leading to client’s losses.
Existing underground services and problems
Due to our site being near to university and residential properties, we can
expect existing underground services at the site. If care is not taken in handling these
services and other ground issues such as contamination and poor bearing capacity, it
can result in damages, delays and even project failure. Although the client had already
carried out surveys of site to identify these issues and effective solutions suggested in
the building plans had been approved, the strategies proposed may not be followed
with care during construction. It is also possible that the contractor is not aware of or
does not understand these problems to tackle them.
vi. Logistics
Traffic obstructions for public
As our site’s location is in a populated area, it may cause obstructions to the
surrounding traffic. With plants moving in and out of the site, together with potential
works on nearby roads, they can lead to heavy congestion and traffic jam around the
site. Bad traffic flow will stir public dissatisfaction with our project, leading to actions
taken against us that will disrupt work.
Transportation issues for materials
There is a risk that problems related to material transportation occur in our
project. With the high traffic flow near our site due to residences and university,
material and component transportation to site may be difficult. It is also possible that
the items are delivered late or damaged during delivery. While it is the contractor’s
duty to ensure good delivery of his materials, the client need to ensure there are no
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issues in transportations of materials ordered by himself. These issues may incur extra
costs, poor quality and delays in construction.
Poor Accessibility to site
With high traffic flow and many buildings nearby, the accessibility to our site
may be poor. It can be hard for contractor’s plants to access the site without being
obstructed by public vehicles, especially if the plant is large in size. If this problem is
not considered before construction starts, it may lower productivity at the site and
cause delays, which are not desired by both the client and contractor since there will
be possible loss of profit for them.
vii. Property Market
Lack of marketing expertise
Through SWOT, we have identified that the client’s company have a lack of
marketing expertise. One of the reason is the high staff turnover in our company, so
our current employees are inexperienced in marketing. The client also has multiple
projects ongoing at the same time, which will spread out the marketing workforce for
this particular project. Therefore, this issue can make it difficult to promote our project
and sell out units, lowering project profitability.
Low sales
This risk is related to the previous risk, though they are not the same. The lack
of marketing expertise is one of the reason for low sales, but there are other reasons
too. It can be due to the project team not aware of the current trend of property market,
overprice of units, high interest rates and new government policies. In our project,
there will be high competition since there are many residential properties nearby.
Hence, this risk is an important consideration for this development. Low sales that do
not meet the targeted sales projection will result in the project becoming unprofitable
for client and unable to achieve its goals.
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4.3 Risk Projection and Analysis
After the possible risks of the development are identified, risk projection is
performed by analysing each risk and determining the probability of the risk happening
along with its severity if the risk occurs. The risk rating then can derived for each risk
based on these 2 aspects and the most impactful risks can be established by using the
risk matrix. This is to allow prioritization of risks for effective risk management, due
to the limited resources available to address all of the risks. The severity, likelihood
and risk rating of the risk are shown in the following table. The categories which the
risk belong to according to the risk matrix are also provided in the table.
Table 3: Risk Projection Table
Sources of
Risks
Potential Risks Severity Likelihood
Risk
Rating
Category
Client /
Government /
Regulatory /
Stakeholder
Implementation of new
policy
3 2 6 Acceptable
Not in accordance to
authority
requirements/regulations
4 2 8 Undesirable
Change in client’s
requirements
4 2 8 Undesirable
Lack of stakeholder
consensus
4 2 8 Undesirable
Contractor insolvency and
incompetency
3 2 6 Acceptable
Contractual disputes 3 3 9 Undesirable
Design
Obsolete design 3 2 6 Acceptable
Poor buildability 3 3 9 Undesirable
Construction
Construction delays 3 5 15 Unacceptable
Cost overrun 3 4 12 Undesirable
Force Majeure 5 1 5 Acceptable
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Poor quality and
workmanship
2 4 8 Undesirable
Damage to surrounding
building and property
3 3 9 Undesirable
Construction
Materials
Lack of materials 4 2 8 Undesirable
Price fluctuation of
materials
4 2 8 Undesirable
Construction
Site
Poor site safety 4 3 12 Undesirable
Serious sound and air
pollution
3 4 12 Undesirable
Existing underground
services and problems
3 3 9 Undesirable
Logistics
Traffic obstructions for
public
3 4 12 Undesirable
Transportation issues for
materials
3 3 9 Undesirable
Poor accessibility to site 2 2 4 Acceptable
Property
Market
Lack of marketing
expertise
3 4 12 Undesirable
Low sales 4 3 12 Undesirable
Figure 6: Risk Matrix
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From the table, it is clear that which risks are acceptable, undesirable and
unacceptable. Different strategies and measures have to be taken to prevent and
mitigate risks of different categories, as their impact to the project are vastly distinct
from each other.
4.4 Risk Monitoring, Mitigation and Contingency Planning
To handle the potential risks to the development, there are three aspects of risk
management, which are risk monitoring, risk mitigation and risk contingency planning.
Risk monitoring is a process where the factors or causes of risks are monitored. It is
used to predict whether a risk is becoming more likely to occur, so suitable measures
can be prepared for it.
Risk mitigation is the primary strategy of risk management. It involves plans
and policies developed to prevent and mitigate the risks. Risk contingency planning is
a process to devise measures to handle situations where the risks have happened so
their negative effects on the development can be reduced to a minimum.
While all three aspects of risk management can be applied to each risk,
different aspects are more effective or suitable for different risks depending on whether
they are acceptable, undesirable or unacceptable. For example, risk contingency
planning are particularly effective for severe risks which are likely to occur. In this
report, we will focus on developing strategies to address the undesirable and
unacceptable risks as they are more important risks requiring prioritization. However,
the acceptable risks should be constantly monitored too to minimize the chances of it
happening and ensure it does not become a serious risk.
A. Undesirable Risks
1. Not in accordance to authority requirements/regulations
The client and project team must be aware of the current government
requirements or regulations that will affect the development. During the regular project
meetings, they should analyse and discuss the progressive work done at the site to
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ensure its design and specifications are in line with the authorities’ requirements. The
conflicting items found should be immediately removed or changed. The work
constructed may not comply with the regulations, hence it is important to have regular
inspections on the work. Besides that, if there are any changes to the project, the
changes should be submitted to relevant authorities for approval. This will ensure that
the project can be completed and occupied without much problems.
2. Change in client’s requirements
To ensure there will not be a major change of project requirements, it is crucial
to plan ahead before construction starts. There should be a meeting between the client,
consultants and contractor to ensure the client’s needs and wants are thoroughly
understood before entering into a contract. The communication between these parties
must be clear and concise. Any discovered issues and conflicting items should be
resolved before starting work to reduce variations and rework required during
construction stage, which in turn reduce the possibility of cost overrun and delays.
3. Lack of stakeholder consensus
Before starting the work, stakeholder consensus should be obtained by
negotiating terms regarding construction with the stakeholders, especially the
surrounding property owners and occupants. Survey can be conducted on the
stakeholders to collect useful data and understand their demands concerning the
project. We should try to meet their reasonable demands such as those about work
hours and noise control to ensure their satisfaction and allow smooth completion of
project. This may even provide future partnership opportunities.
4. Contractual disputes
To minimize contractual disputes, the client and contractor should have a
meeting before signing the contract to discuss about the contract provisions. Both
parties must understand clearly their rights, obligations and liabilities stated in the
contract clauses. The Quantity Surveyor hired must also be ensured to be competent
by checking on his background, company info, past project data and other relevant
documents. In addition, claim consultants can be employed to advise the client in
contractual matters as they are experts in this area.
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5. Poor buildability
Before work commencement, there must not be poor buildability in the project
design. The architect must possess sufficient knowledge and be competent in his duties
to avoid this issue. Besides that, it can be avoided by hiring third party consultants to
review the design. Different procurement methods can also be adopted to allow
contractors to check on the design before construction to identify poor buildability
through their experience. Any buildability problems found in design must be resolved
to avoid incurring future delays and extra costs.
6. Cost overrun
To prevent cost overrun, the Bills of Quantities can be reviewed by a third party
cost consultant to ensure the quantity, specifications and cost are accurate and
reasonable for the specific project. In addition, the Quantity Surveyor (QS) should
develop suitable cost plans and estimates during different project stages. They should
diligently perform cost monitoring and cost control by regularly cross-checking the
actual construction cost with the cost budget set and taking required steps to ensure
the budget is not exceeded. There must also be a monthly report to the client so he can
have a clear understanding of his project’s financial situation.
7. Poor quality and workmanship
To ensure good quality and workmanship that meet the client’s requirements,
quality management must be done which involves many steps and measures.
QLASSIC is chosen as the quality standard to evaluate the quality of the project,
whereby a minimum score of 70 must be achieved. The detailed strategies and process
used in quality management are explained in the corresponding section of this report.
8. Damage to surrounding building and property
Appropriate measures should be taken to minimize damage to surrounding
buildings arising from construction. A condition survey can be carried out to assess
the potential damage so suitable preparation and strategies can be made. There must
be a strict inspection and tight monitoring on the construction process and methods to
ensure minimal damage. Besides that, the conditions of surrounding buildings should
be checked before construction to determine existing damage, with photos and records
38. 44
taken for evidence. It allows us to clearly distinguish the actual damage caused by our
project and defend against allegation from residents involved.
9. Lack of materials
For addressing the potential lack of materials, it is best to have contact with
multiple suppliers across the country. This is to ensure that when there is a lack of
material, supply may be obtained from them to mitigate the issue. Therefore, the client
should start to build up his relationship and reputation with these suppliers.
Furthermore, the project team must keep up with the current construction material
supply data to monitor and predict material shortage. If it is found to be imminent,
mitigation can be made by stocking up construction materials early for contractor
usage, which is possible due to the client’s strong financial power.
10. Price fluctuation of materials
The strategies for this risk is similar to the ones for the previous risk of material
shortage since these risks are related in nature. The project team must be aware of the
current price trend of material and major construction projects that might affect
material price and supply in the country so suitable preparations can be made. This can
be achieved through research and study. Like the strategies for material shortage,
construction materials can be stocked up during the early stage to avoid the need to
buy them periodically, mitigating fluctuation of material price.
11. Poor site safety
The site must be ensured to comply with the safety requirements and standard.
All site personnel must understand clearly the requirements and follow them strictly.
Besides that, a safety briefing should be carried out for the personnel before work
commences. A standardized process involving records can also be enforced to serve
as a proof of site safety. Other than that, there should be regular spot checks made by
the clerk of work to ensure constant compliance of safety rules. Third party safety
consultants can also be employed to conduct safety inspection and provide
professional advices on this matter.
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12. Serious sound and air pollution
Effective strategies should be developed to prevent significant sound and air
pollution. Reasonable cost should be allocated for implementing the necessary
technology and methods. Some examples of measures that can be taken are only
working during hours approved by local authorities. In addition, machinery usage
should also be more efficient to reduce pollution. The number of plants and machinery
on site should also be limited to necessary numbers only. The pollution level to
surroundings must be continuously monitored to ensure they are acceptable.
13. Existing underground services and problems
While the proposed solutions for existing underground issues and services
identified were already approved in the building plans submitted, effort must be made
to ensure these solutions are implemented in the project. The contractor must be
briefed on these underground problems so he understands them clearly and can prepare
to resolve them. Furthermore, the clerk of work must also inspect and monitor the
contractor’s work carefully to ensure he complies strictly with the approved strategies
to effectively address the issues and avoid damage to the existing services.
14. Traffic obstructions for public
Resources should be invested to prevent or mitigate public traffic obstructions.
For example, workers can be employed to divert traffic. More temporary diversions
and roads can also be prepared as necessary to ensure smooth traffic flow around the
site. Furthermore, entry and exit to site must be minimized during peak hours. Nearby
roads must not be obstructed during this period too. The measures made should be
supervised and inspected to ensure they are effective and complied with by site
personnel. If needed, traffic report can be made regularly to assess the effects of
construction on traffic and monitor them.
15. Transportation issues for materials
Temporary roads and diversions can be made to enable smooth transportation
to site without much disruption. The department or company handling logistics must
be checked on their background, past project details and other relevant info to ensure
they are competent in handling deliveries so there will not be delays, broken items and
other issues. After each delivery, the condition of items delivered and the delivery date
40. 46
must be checked and recorded to serve as contemporary records. They can become
evidence for claiming damages if required.
16. Lack of marketing expertise
To mitigate the risk of lacking marketing expertise, marketing training can be
conducted for the staff. The marketing department should also be restructured based
on advice from professionals to improve the marketing ability of the client’s company.
This will not only help to promote the current project and increase its sales, but also
benefit the client in his future projects, providing higher potential profit. If the
department cannot be reorganized, another option is to employ third party marketing
companies to help us in this matter.
17. Low sales
The strategies for this risk is similar to the strategies for the previous risk.
Property agent and promoters can be hired to provide advice on this issue and help us
to increase the sales of property. Resources should also be invested in advertising
across multiple platforms such as newspaper, social media and bulletin. To prevent
low sales, the Quantity Surveyor should be aware of the current market trend and other
factors affecting property demand. These factors can be analysed and presented in a
report to the client to help him understand the potential sales and project profitability,
subsequently useful strategies can be devised.
B. Unacceptable Risks
1. Construction delays
Since delays can be caused by client and contractor, it is crucial to ensure both
parties understand what actions can lead to delay. The contract must be clear on the
scope of works, the completion date and the extension of time (EOT) clauses. As
delays are not wanted by both parties, they should try to follow the procedures stated
in the contract and reduce disruptive actions to the project as much as possible.
Quantity Surveyor has an important role in this because he has to give useful advice
and guidance to both parties.
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Before construction, the contractor must submit a complete work programme
that shows clearly the time period for each construction activity and it should be
reviewed by the client and consultants. After the programme is improved and approved,
it will act as a guideline for contractor to achieve timely completion. Therefore, the
work programme must be constantly updated as the construction progresses. Critical
path method can be adopted to help the contractor in managing his time. If required,
the work can also be rescheduled to save time. In addition, the consultants have to
monitor the work progress according to the work programme and remind the contractor
if he appears to be behind schedule.
If delays are imminent, the consultants must make sure the contractor has taken
the necessary steps to mitigate the delay. The client may choose to allocate more
resources to contractor for speeding up the work. This is viable option due to the
client’s strong financial capacity. If the contractor is eligible for EOT, the delays
should be carefully assessed and a suitable extension should be given to the contractor
to reassure him and motivate him to finish the work by the new completion date.
5.0 Project Summary
