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Causes Of Construction Project Failures And Abandonment

(In Nigeria)

5 Chapters
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55 Pages
|
9,668 Words
Building Technology | Business Administration | Civil Engineering

Abstract

Table of Content

Chapter One

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Construction project failures and abandonment can result from a myriad of factors, encompassing financial, managerial, technical, and environmental aspects. Inadequate budget allocation, poor financial management, and unexpected cost overruns often lead to project delays and eventual failure. Miscommunication and ineffective collaboration among project stakeholders, including contractors, architects, and engineers, can hinder progress and result in abandonment. Technical challenges such as design flaws, material shortages, and equipment failures can also contribute significantly to project setbacks. Additionally, regulatory issues, environmental constraints, and unforeseen external factors like natural disasters or economic downturns can further exacerbate project failures and ultimately lead to abandonment.

ABSTRACT

The objective of this study was to identify possible factors that would minimize or contain failure and abandonment of construction projects, evaluate the identified factors in their order of importance. Data on the study variables were collected through structured questionnaire from construction firms located in State of Osun (considering Oshogbo, Ile-Ife and Ilesa) with wealth of experience in failed and abandoned public sector construction projects. Respondents were approached personally to collect the data. A total of three hundred (300) questionnaires were distributed while two hundred and fifty three (253) were retrieved and used for analysis. Various statistical tools such as descriptive statistics, cronbach’s alpha test, as well as relative importance index with the aid of SPSS and Microsoft Excel were applied for data analysis and inference. The results of the study revealed that nine factors were critical in containing failure and abandonment of building construction projects in Nigeria.

The Abstract of “Causes Of Construction Project Failures And Abandonment” ends here.

TABLE OF CONTENT

COVER PAGE
TITLE PAGE
APPROVAL PAGE
DEDICATION
ACKNOWELDGEMENT
ABSTRACT

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE PROJECT
1.2 PROBLEM STATEMENT
1.3 OBJECTIVE OF THE PROJECT
1.4 RESEARCH QUESTION
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE/LIMITATIONS OF THE STUDY
1.7 LIMITATION OF STUDY
1.8 DEFINITION OF TERMS

CHAPTER TWO
LITERATURE REVIEW
2.1 REVIEW OF THE STUDY
2.2 PARTIES INVOLVED IN PROJECT EXECUTION
2.3 CAUSES OF ABANDONED BUILDING PROJECTS
2.4 CAUSES OF ABANDONED BUILDING PROJECT BY THE CLIENT
2.5 CAUSES OF ABANDONED BUILDING PROJECT BY THE CONTRACTOR
2.6 CAUSES OF ABANDONED BUILDING PROJECT BY THE CONSULTANTS
2.7 ABANDONMENT OF PROJECTS CAUSED BY ARCHITECTS
2.8 ABANDONMENT OF PROJECTS CAUSED BY ENGINEERS
2.9 EFFECTS OF ABANDONED BUILDING PROJECTS

CHAPTER THREE
METHODOLOGY
3.1 PREAMBLE
3.2 SAMPLE SELECTION
3.3 POPULATION OF THE STUDY
3.4 SAMPLE SIZE
3.5 ADOPTED SAMPLING TECHNIQUE
3.6 RESEARCH INSTRUMENT
3.7 DATA COLLECTION AND ANALYSIS

CHAPTER FOUR
4.0 RESULTS OF DATA ANALYSIS AND DISCUSSION OF FINDINGS
4.1 PREAMBLE
4.2 GENERAL PARTICULARS OF RESPONDENTS
4.3 CHARACTERISTICS OF PROJECTS SAMPLED
4.4 RESPONSE ON THE CAUSES OF ABANDONED BUILDING PROJECTS
4.5 RESPONSE ON THE EFFECTS OF ABANDONED PROJECTS
4.6 SUMMARY OF FINDINGS

CHAPTER FIVE
5.1 CONCLUSION
5.2 RECOMMENDATION
5.3 REFERENCES
APPENDIX
QUESTIONNAIRE

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CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF STUDY
Abandoned projects and construction failure including building and other civil engineering infrastructure development project like houses, churches, schools, roads, bridges, dams, tunnels, air port, sea port etc. litter the whole Nigeria. Osemenan (1987) reported that Nigeria has become the “world’s junk-yard of abandoned and failed projects worth billions of naira and it is greatly unthinkable that Nigeria blessed with so great potentials in the building and construction industry can experience such magnitude of project failure and abandonment. According to another report by Kotangora (1993) there are about 4000 uncompleted or abandoned project belonging to the Federal Government of Nigeria with an estimated cost of above N 300 billion which will take 30 years to complete at the present execution capacity of government, also according to him this issue of abandonment and construction project failure is been left without adequate attention for too long which is now having a multiplier effect on the construction industry in particular and the national economy as a whole. The building and construction industry plays a very dominant role in the economy of any nation. A healthy economy usually experience an increase in building and construction activities, but in a depressed economy, the incidence of project abandonment and construction failures tends to be more prevalent. Akindoyeni (1989) qualitatively reasoned that some of the causes of project abandonment and construction failure in Nigeria are deaths of client, inability of client to attract fund and lack of good planning.
The abandonment of development projects is the act of discontinuing any activities or maintenance works on such development project within a time frame of the contract agreement and with no intention of returning back to the development (Spelman, 1993). Similarly, O’Flaherty (1993) while reflecting on property development projects suggest that it is when an owner or developer is ceasing to provide the required maintenance management to a developed property. There could also be construction failure due to improper planning.
However, real property development projects being a capital intensive undertaking should be critically analyzed to ascertain its feasibility and viability before embarking on it. But, on several occasions and as it had been observed, governments, contractors and agencies have abandoned development projects mid-way into construction and completion.
The causes and effects of these development projects abandonments and construction failure are not just peculiar to a particular reason rather cut across several reasons (Ayodele and Alabi, 2011), and as well as creating a total dwindling effects on the values of developed properties located close and within the vicinity. The expected prominence of any earmarked development projects is to be completed, while at the same time, adding values to the built environment aesthetics. Although, development projects are temporary endeavors undertaken to create a unique product and services with a defined beginning and ending date (Gardner, 2005). The accomplishment of such purposes should be realized at all times otherwise needless of such development (Gardner, 2005). The development projects specific in the study framework is infrastructural projects (such as; house, electricity, road, schools, and drainage). However, the study purpose is to investigate and assess the causes and effects of development projects abandonment and construction failure in Nigeria.

1.2 STATEMENT OF THE PROBLEM
The unceasing abandonment and failure of development projects is so shocking in the developing countries such that Nigerian has remained one of the countries in such difficulty (Ayodele and Alabi, 2011; Kotangora, 1993; Osemenan, 1987). Therefore, the significance that the incessant abandonment of projects and construction failure would bring several effects on the aesthetics of the environment, real properties and its values and the economy cannot be overemphasized since some of the development projects provide the basic services that should meet the needs of the people. However, this study will examine the causes of construction project failure and abandonments in Nigeria.

1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
1. To examine the causes of construction project failure and abandonments in Nigeria.
2. To examine the effect of construction project failure and abandonments in Nigeria.
3. To determine the solution to the problem of construction project failure and abandonments in Nigeria.

1.4 RESEARCH QUESTIONS
1. What are the causes of construction project failure and abandonments in Nigeria?
2. What is the effect of construction project failure and abandonments in Nigeria?
3. What is the solution to the problem of construction project failure and abandonments in Nigeria?

1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
1. This study will educate the general public and the experts in the building industry on the causes of construction project failure and abandonments in Nigeria with a view of proffering solution to the problem.
2. This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.

1.7 SCOPE/LIMITATIONS OF THE STUDY
This study on causes of construction project failure and abandonments in Nigeria will cover the issues of abandoned projects, failed project and all other abandoned infrastructural facilities.

1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 DEFINITION OF KEYWORDS
ABANDONMENT is the act of giving up on an idea or stopping an activity with no intention of returning to it (Oxford, 2005).
PROJECT is a unique Endeavour to produce a set of deliverables within a clearly specified time, cost and quality constraints (PMG, 2003). A project is a series of tasks, which has a start, middle and an end. Therefore, the abandonment of building project can be defined as an act of giving up on or stopping a building project with no intention of returning to it.

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Construction projects can be complex undertakings involving multiple stakeholders, significant financial investment, and intricate logistical challenges. Unfortunately, despite careful planning and execution, many construction projects encounter obstacles that lead to failure or even abandonment. Understanding the causes behind these failures is crucial for stakeholders in the construction industry to mitigate risks and improve project outcomes. Below are some common causes of construction project failures and abandonment:

  1. Poor Planning and Design: Inadequate initial planning and design can lead to significant problems downstream. Flaws or oversights in the design phase may result in costly revisions or rework during construction. Insufficient planning can also lead to unrealistic schedules, budget overruns, and conflicts between stakeholders.
  2. Budget Overruns: One of the most common reasons for construction project failure is exceeding the budget. This can occur due to inaccurate cost estimation, unforeseen expenses, changes in project scope, or mismanagement of funds. When a project surpasses its budget, it may become financially unsustainable, leading to its abandonment.
  3. Schedule Delays: Time delays can have a cascading effect on construction projects, causing increased costs, contractual disputes, and damage to the reputation of the project stakeholders. Delays can result from various factors, including inclement weather, labor shortages, material shortages, regulatory hurdles, or conflicts among project team members.
  4. Inadequate Risk Management: Failure to identify, assess, and mitigate risks can lead to unexpected setbacks or project failures. Risks in construction projects can range from safety hazards and regulatory compliance issues to supply chain disruptions and economic downturns. Without a comprehensive risk management plan, projects are vulnerable to costly and time-consuming complications.
  5. Poor Quality Control and Assurance: Construction projects must adhere to strict quality standards to ensure the durability, safety, and functionality of the built environment. Failure to maintain quality control throughout the construction process can result in defects, rework, and legal liabilities. In extreme cases, poor quality workmanship may render a project unusable, leading to its abandonment.
  6. Inadequate Communication and Collaboration: Effective communication and collaboration are essential for the successful execution of construction projects involving multiple stakeholders, including owners, architects, engineers, contractors, subcontractors, and regulatory authorities. Miscommunication, conflicts of interest, and lack of coordination among project participants can derail progress and lead to project failure.
  7. Changes in Regulatory Environment: Construction projects are subject to various regulatory requirements at the local, state, and federal levels. Changes in regulations, zoning laws, environmental policies, or building codes can significantly impact project timelines, costs, and feasibility. Failure to anticipate and adapt to regulatory changes can lead to project delays or abandonment.
  8. Environmental and Geotechnical Challenges: Construction projects in environmentally sensitive areas or geologically unstable regions face unique challenges that can jeopardize their success. Environmental regulations, habitat preservation, soil contamination, and geological hazards such as landslides or sinkholes can disrupt construction activities and escalate project costs beyond expectations.
  9. Legal Disputes and Litigation: Construction projects are susceptible to legal disputes arising from contract disagreements, property disputes, construction defects, or non-compliance with regulations. Litigation can consume valuable time and resources, delaying project completion and increasing costs. In some cases, protracted legal battles may result in project abandonment or bankruptcy.
  10. Financial Instability or Insolvency: Economic downturns, fluctuations in market conditions, or financial mismanagement can lead to the insolvency of project stakeholders, including developers, contractors, or lenders. Financial instability can halt construction activities, trigger defaults on loans or contracts, and ultimately result in project abandonment if adequate funding cannot be secured.
  11. Natural Disasters and Force Majeure Events: Construction projects are vulnerable to natural disasters such as earthquakes, hurricanes, floods, or wildfires, as well as other force majeure events like political unrest or acts of terrorism. These unforeseen events can cause extensive damage to project sites, disrupt supply chains, and compromise worker safety, leading to project delays or abandonment.
  12. Technological Challenges and Innovation: The adoption of new technologies and construction methods can introduce risks and uncertainties into projects. Technical challenges related to the implementation of innovative materials, building systems, or digital tools may exceed the capabilities of project teams or subcontractors, resulting in delays or quality issues.
  13. Market Demand and Economic Viability: Changes in market demand, shifting consumer preferences, or fluctuations in real estate markets can impact the economic viability of construction projects. Projects that fail to attract sufficient buyers, tenants, or investors may struggle to secure financing or achieve profitability, leading to their abandonment or cancellation.
  14. Lack of Stakeholder Alignment: Construction projects often involve diverse stakeholders with different interests, objectives, and priorities. Lack of alignment among stakeholders regarding project goals, timelines, or resource allocation can hinder decision-making, create conflicts, and impede progress. Without consensus and collaboration, projects may falter or fail to meet stakeholders’ expectations.
  15. Inadequate Project Management and Oversight: Effective project management is critical for keeping construction projects on track, within budget, and aligned with stakeholders’ expectations. Poor project management practices, such as insufficient planning, inadequate resource allocation, ineffective communication, or inadequate risk management, can undermine project success and lead to its failure or abandonment.

In conclusion, construction project failures and abandonment can stem from a wide range of factors, including poor planning, budget overruns, schedule delays, inadequate risk management, quality control issues, communication breakdowns, regulatory changes, environmental challenges, legal disputes, financial instability, natural disasters, technological complexities, market dynamics, stakeholder conflicts, and ineffective project management. Addressing these challenges requires proactive risk mitigation strategies, effective collaboration among stakeholders, rigorous quality assurance processes, and robust project management practices to enhance the likelihood of successful project outcomes.