ubir.bolton.ac.ukubir.bolton.ac.uk/1062/1/Issac Kunkeyani 2015... · Web viewfactors that affect performance of contractors Secondary data was analysed done using survey questionnaire

THE IMPACT OF DEVIATING FROM SET GUIDELINES AND PROCEDURES IN THE IMPLEMENTATION OF ROAD CONSTRUCTION PROJECTS

ROADS AUTHORITY - MALAWI

Name of the author: Isaac Kunkeyani

Submitted in partial fulfilment of the requirements for the degree of

MSC PROJECT MANAGEMENT

University of Bolton, Off Campus Division

The University of Bolton

April, 2015

DECLARATION

I, Isaac Kunkeyani, declare that this dissertation entitled THE IMPACT OF DEVIATING

FROM SET GUIDELINES AND PROCEDURES IN THE IMPLEMENTATION OF ROAD

CONSTRUCTION PROJECTS ROADS AUTHORITY – MALAWI, is my own work. I

have not submitted this work or any part of it for a degree at any other university within

or outside Africa. All sources have been acknowledged by means of reference

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DEDICATION

This work is dedicated to my wife, Hlalapi Kunkeyani and our daughter, Chimwemwe

Kunkeyani for their support and encouragement during the time I pursued my studies. I

thank God for them.

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ACKNOWLEDGEMENT

First I would like to express my heartfelt gratitude to Dr. Easton Simenti-Phiri and Dr.

Peter Ngoma my supervisors for their continuous guidance in the conducting of this

research study.

I appreciate the encouragement Eng. Benjamin C Kapoteza gave me when I needed

support and time to stay away from work.

I thank Pastor Wellington Thawatha for his spiritual support and encouragement when

my feelings were low due to stress

I would like to thank Dr. Ida Mbendela, who helped me to refine my research proposal

when I was lost

4

ABSTRACT

Delay and cost overruns are common in construction projects and road construction

projects in Malawi are not an exception (Yaw Frimpong, 2003). Road construction

projects in Malawi have become a challenging activity to venture into due to uncertainty

of whether payments for work done will be made on time for smooth running of the

project. Public construction projects ought to be lucrative due to their sizes and

availability of funding that they receive. However, in a situation where you have

outstanding payments as huge as US$58,340,766 (Gala, 2014), and in a developing

country, it is only clear that contractors working on these projects must be facing

financial hardships. The aim of the research was to identify difficulties contractors are

facing in view of the existing scenario. This was a quantitative descriptive study.

Convenient sampling was used to obtain the sample size of 220. Self-administered

structured questionnaire was used to collect data. A desk study of relevant secondary

data was also done. The collected data was analysed using excel to obtain frequencies,

percentages and mean.

The respondents included contractors, consultants and clients. Sixty-five percent of

them had between 11 and 20 years of experience in the construction of roads. Only

7.7% (n=17) were registered engineers. The study revealed that 59% (n=144) of the

respondents reported delayed payments as a factor that affected performance

negatively. Eighty three percent (n=183) reported lack of skilled labour force.

Based on the results it is recommended that GoM should stop awarding new contracts

until the arrears are cleared or unless other sources of funding are made available.

GoM should make a deliberate effort to put aside funds for road construction purposes.

Contractors should make deliberate programmes to send their staff for refresher

courses. GoM should enforce observance of road reserves in accordance with Public

Roads Act.

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LIST OF ABBREVIATIONS

ANRP Annual National Roads ProgrammeCEO Chief Executive OfficerESIA Environmental and Social Impact AssessmentEU European UnionEVM Earned Value ManagementFIDIC Internatinal Federation of Consulting EngineersFY Financial YearGDP Gross Domestic ProductGoM Government of MalawiIT Information TechnologyMGDS Malawi Growth Development StrategyMoFEP&D Ministry of Finance, Economic Planning and DevelopmentMoT&PW Ministry of Transport and Public WorksMWK Malawi KwachaNCIC National Construction Industry CouncilODPP Office of the Director of Public ProcurementPAP Project Acffected PeopleQMS Quality Management SystemRA Roads AuthorityRAP Relocation Action PlanRFA Roads Fund Administration

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Table of ContentsDECLARATION..............................................................................................................................................2

DEDICATION................................................................................................................................................3

ACKNOWLEDGEMENT..........................................................................................................................4

ABSTRACT................................................................................................................................................5

LIST OF TABLES...................................................................................................................................10

Table 5.2.1: Contractors project related difficulties..............................................................................10

CHAPTER 1............................................................................................................................................11

1.0 Introduction...............................................................................................................................11

1.1 Background...............................................................................................................................12

1.2 Problem Statement...................................................................................................................12

1.3 Significance of the Study...........................................................................................................13

1.4 Aim of the Study.......................................................................................................................14

Chapter 2.................................................................................................................................................15

2.1 Literature Review.......................................................................................................................15

2.1.1 Introduction......................................................................................................................15

2.1.2 Delays in Project Delivery......................................................................................................15

2.1.3 Risks in Construction Projects................................................................................................16

2.1.4 Contribution to Country Economy by Construction Sector....................................................16

Chapter 3.................................................................................................................................................18

3.0 Methodology.............................................................................................................................18

3.1 Introduction...............................................................................................................................18

3.2 Inclusion Criteria........................................................................................................................18

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3.3 Sampling Method and Sample Size............................................................................................19

3.2.1 Our Problem.....................................................................................................................19

3.2.2 Solution.............................................................................................................................20

3.3 Instrument.................................................................................................................................21

3.4 Validity and Reliability...............................................................................................................21

3.5 Ethical Considerations...............................................................................................................22

3.6 Data Management and Analysis................................................................................................22

Chapter 4.................................................................................................................................................24

4.0 Findings of the Study.................................................................................................................24

4.1. General Information............................................................................................................24

4.2 Consultants’ Responses.............................................................................................................25

4.3 Contractors’ Responses.............................................................................................................29

Table 4.3.1: Contractors project related difficulties..............................................................................29

4.4 Clients’ Responses.....................................................................................................................33

4.5 Combined Responses.................................................................................................................37

Table 4.5.3: Projects experiencing cost growths during implementation................................40

4.6 Secondary Data...........................................................................................................................41

4.6.1 Audit of Public Arrears of the Road Sector In 2010................................................................42

4.6.2 Audit of Public Arrears of the Road Sector In 2014................................................................42

Table 4.5: Procurement methods used for contracting.........................................................................42

Chapter 5.................................................................................................................................................44

5.1 Discussions.................................................................................................................................44

5.2 Conclusions and recommendations...........................................................................................46

5.2.1 Contractors project related difficulties..........................................................................46

5.2.2 Failure to achieve quality expectations in projects.....................................................46

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5.2.3 Projects experiencing cost growths during implementation......................................48

5.2.4 Absence of community ownership of projects.............................................................49

Bibliography...............................................................................................................................................51

APPENDICES.........................................................................................................................................53

APPENDIX A...........................................................................................................................................53

PART I: FOR CONTRACTORS............................................................................................................53

PART II: FOR CLIENTS AND CONSULTANTS.................................................................................54

PART III: FOR ALL RESPONDENTS..................................................................................................56

APPENDIX B...........................................................................................................................................61

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LIST OF TABLES

Table 1.1: Arrears for 2009/2010 to 2013/2014

Table 5.1.1: Contractors project related difficulties

Table 5.1.2: Failure to achieve quality expectations in projects

Table 5.1.3: Projects experiencing cost growth during implementation

Table 5.1.4: Absence of community ownership



Table 5.2.3: Projects experiencing cost growths during implementation

Table 5.2.4: Absence of community ownership of projects









Table 5.5: Procurement methods used for contracting

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CHAPTER 1

1.0 Introduction

The road construction industry has been vibrant over the past ten years in Malawi. A

major criticism facing the Malawi road construction projects is growing rate of delays in

delivery of these projects. The problem of project delay is not unique to Malawi. In

Nigeria, it was revealed that seven out of ten projects surveyed suffered delays in their

execution (Aibinu, 2002). In addition Haseeb, (2011) affirmed that the delay in

completion of construction projects is a worldwide problem.

Road transport constitutes more than 70% of cargo transported in Malawi in which both

motorised and non-motorised transports are used, (Siwande, 2011). As stipulated in the

Malawi Growth Development Strategy (MGDS), roads are a development catalyst since

they provide means by which goods are transported from one part of a world to another.

In addition, the 2011-2016 Roads Authority Five Years Strategic and Business Plan

states that in medium term, efforts will be made in improving mobility and accessibility of

the population to key road corridors within and out of Malawi. This would facilitate the

improved mobility and accessibility of rural communities to goods and services at low

cost. However, road construction is an investment that requires heavy capital.

The Malawi Roads Authority (RA) is mandated by an Act of Parliament Ch69:07, with

the responsibility of constructing and maintaining the designated road network in

Malawi. It is also guided by other policy documents which include Public Procurement

Act (No. 8 of 2003), Public Audit Act (No. 6 of 2003), Public Finance Management Act

(No. 7 of 2003) and Public Roads Act (Cap. 69.02). The RA uses funds from the Roads

Fund Administration (RFA) for all maintenance works. However, upgrading and new

construction projects are financed by the central treasury of the Government of Malawi

(GoM), which is in two categories; funds provided by development partners through

loans and grants, and funds provided by GoM. Frimpong, et al (2003) recommend that

effective project planning, controlling and monitoring should be established to enhance

11

project performance in order to minimise or avoid delay and cost problems on

construction projects.

1.1 Background

The road network in Malawi continued to deteriorate due to lack of adequate

maintenance during the period beginning mid 1990’s to 2005. However, through Road

Maintenance Initiative study conducted between 1995 and 1997, financed by the

European Union (EU), the National Roads Authority was established under an Act of

Parliament. This organisation was mandated to collect funds for the purpose of road

maintenance, and to use such funds in the implementation of the maintenance

activities. This resulted in realisation of relatively more funds dedicated to road

maintenance than was the case before, and the condition of the road network began to

improve. However, due to the backlog of road maintenance that existed, these funds

were only sufficient for maintenance activities other than upgrading.

In 2005, the government benefited from debt relief, such that all the debts that the

country was servicing were cancelled. This resulted in the realisation of more funds in

the GoM treasury to the extent that several projects could be implemented adequately.

In the roads sector, it was decided that some roads which lead to important facilities

such as hospitals, but were still earth/gravel surfaced should be gradually upgraded to

bituminous surface to make them all season roads. This proved to be a very good

indicator for the performance of the government from the perspective of the

stakeholders. As a result, road projects that were planned to upgrade five kilometres

were extended under political influence to several tens of kilometres, and the durations

of the projects were accordingly extended. Eventually the monthly bill for payment of

such projects escalated to levels where government could not cope.

1.2 Problem Statement

Despite GoM making efforts to reduce arrears which were revealed to stand at MWK

27.42 billion (Gala, 2014), they continued to grow. An Audit conducted in 2010 revealed

a total of MWK 3.65 billion of arrears. During that period, GoM made a ‘Road Map’ on

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how the arrears would be cleared so that contractors and consultants would be able to

perform. Despite measures put in place to reverse the situation, the bill has continued to

rise to MWK27.42 billion by 30th June 2014. This is equivalent to US$58.34 million using

a conversion rate of US$ 1.00 to MWK 470.00 prevailing at the time. This was followed

and the arrears were being reduced gradually. However, since the projects were live,

there was accumulation of amounts to be paid to the contractors and consultants at the

end of each month. Table 1.1 illustrates the situation that prevailed over the years up to

30th June 2014. The Financial Year (FY) in Malawi starts on 1 st July and ends on 30th

June.

Table 1.2: Arrears for 2009/2010 to 2013/2014

Financial Year(July to June)

Amount of Arrears(MWK)

Amount of Arrears(US$)

2009/2010 5,229,247,418 34,402,943

2010/2011 11,469,374,000 38,231,246

2011/2012 10,991,008,000 31,402,880

2012/2013 8,502,442,845 22,673,181

2013/2014 27,420,160,151 58,340,766

It is this trend of affairs that made the author consider researching on the existing

guidelines that are supposed to be followed when implementing road construction

projects; find out the level of adherence to such guidelines, and why the arrears have

continued to rise. Structured questionnaires were used to gather information on why

road construction projects are running for much longer periods than planned and the

respondents are key players in the road construction industry either as client, consultant

or contractors. It is hoped that after the study, the recommendations made will be

adopted by policy makers to avoid such trends continuing in the future.

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1.3 Significance of the Study

The results of this study will assist implementers of road construction projects to

develop more effective strategies to adhere to existing guidelines, so that it facilitates

improved mobility and accessibility of rural communities to goods and services at low

cost. Since there is dearth of information on the impact of deviating from set guidelines

in Malawi the results of this study will provide baseline information for further research

so as to improve mobility and accessibility of the population to areas of importance. It is

hoped that after the study, the recommendations made will be adopted by policy makers

to avoid such trends continuing in the future.

1.4 Aim of the Study

The aim of the research is to explore GoM accumulated huge outstanding bills to be

paid to contractors and consultants engaged in road construction projects over the

period 2007-2014.

1.5 Specific Objectives

The specific objectives were:-

1) To review projects that were implemented or are being implemented by the

Roads Authority since 2007 to 2014, including those that are ongoing.

2) To determine to what extent the implementation of these projects adhered to

laid down guidelines for project implementation at Roads Authority

3) To develop a framework to be used by Roads Authority management for

guiding policy makers in the selection of projects

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Chapter 2

2.1 Literature Review

2.1.1 IntroductionThis section presents a review of studies that have been done in relation to the

construction industry and public institutions performance. The selected literature was

taken because it explains issues that are similar to the study being undertaken

(construction of roads) and the set up of the institution (public institution). Fisher, (2010)

explains that the first step in literature review involves identifying the different fields of

literature that may be appropriate to the study without, at this stage, looking at any of it

in detail. So, this means a collection of books, journals and papers that deal with the

same issues and that respond to each other in the developing debates mapping and

describing the literature about a topic.

2.1.2 Delays in Project Delivery

The problem of delays in the construction industry is a global phenomenon

(Sambasivan & Soon, 2007). The magnitudes vary considerably depending on the

economy of the country and training of the players. In Nigeria, a major criticism to the

construction industry, at least in the early 1990’s, was delays in project delivery, (Aibinu,

2002). In Saudi Arabia, it was found that only 30% of construction projects were

completed within the scheduled completion dates. It was also established that the

average time overrun was between 10% and 30%, (Assaf, 2006). González, (2013)

reported that to stay on top or compete with large organizations, today’s construction

organizations need to run their projects within scope, time and cost in the midst of crises

and uncertainty to achieve their strategic objectives and vision. According to the

author’s observations, in a country where factors that contribute to project delivery

delays; such as delayed payments, incomplete design details and variation orders, it is

unlikely that construction organisations operating under these conditions would prosper.

Delay happens in many construction projects, but the priority of delay causes varies in

different countries as they are governed by environmental effects (Sepasgozar, 2015).

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He argues that delays can lead to considerable effects such as lawsuits between clients

and contractors, loss of productivity and revenue, and contract termination.

2.1.3 Risks in Construction Projects

A broad range of the project management literature points to early warning signals

through the treatment of risk management as one important part of the field’s toolbox

(Haji-Kazemi, 2013). In addition, Haji-Kazem states that the choice of approach in a

given project will be up to the direction of the project management team, in order to

exploit as many early warning signs as possible and timely enough to be able to take

preventive actions. Sociologists such as Beck and Giddens have argued that in modern

society risk has increasingly become central to all aspects of human affairs; that we live

in a ‘risk society’ where deliberation about social, economic, political and environmental

issues is bound to fail if it does not take risk into account (Flyvbjerg, 2003). An

examination of failed Information Technology (IT) projects reveals that long before the

failure there were significant symptoms or “early warning signs” (Keppelman, 2006).

Another concept found in literature is that of “earned value management” (EVM). The

earned value project management method integrates three critical elements of project

management; thus, scope management, cost management and time management

(Anbari, 2003). If the scope is not managed well, chances are that it will increase to

levels where the cost will increase beyond the budget. In addition it will also entail

increasing the implementation time if acceleration costs may not be allowed. However, if

earned value management is applied it will be possible at any stage to calculate earned

value for individual break down structures by measuring achieved performance against

planned performance. Necessary adjustments can be made based on the values of

earned value calculated.

2.1.4 Contribution to Country Economy by Construction Sector

Construction projects are perceived to have an importance in some economies, such as

Colombian economy, (Petrovic-Lazarevic, 2008). In his article he argues that the

importance of the construction industry to the economy is based on three factors.

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Firstly, it is believed that it contributes significantly to the increase of the gross domestic

product (GDP). Secondly, it uses unskilled labour intensively (in countries where

construction projects are labour intensive), providing a positive effect on employment

rates. Thirdly, it interacts with other industries, thereby fostering economic activity.

According to the author’s observation, in large road construction projects most of the

labour that benefits from their existence are skilled labourers such as artisans, truck

drivers, plant operators and materials technicians. This is so because the projects are

generally equipment intensive. In Malaysia’s the Construction Sector is one of the

important sectors that contribute to its economic growth. The sector accounted for

nearly 3.3% of GDP in the year 2005 and employed about 600,000 workers including

109,000 foreign workers (Sambasivan, 2007)

SummaryMost studies reviewed were done outside the country. Furthermore, most studies have

concentrated on causes and effects of delays. There is inadequate information on

arrears accumulated in construction projects. However, there is paucity of information of

Malawi literature. Therefore it was necessary to conduct this study in Malawi.

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Chapter 3

3.0 Methodology

3.1 Introduction

This chapter describes the study design, sample and sampling method, instrument, data

collection method, data analysis and ethical consideration. This is a quantitative

descriptive study. The aim of the research is to explore GoM accumulated huge

outstanding bills to be paid to contractors and consultants engaged in road construction

projects. The researcher used structured questionnaires to gather information on road

construction projects from the key players in road construction industry as clients,

consultants or contractors. A desk review was also done on documents that had

information on progress of the road construction projects.

3.2 Inclusion Criteria

For the client, members involved directly to a considerable degree in the implementation

of such projects were targeted. These included people from the Roads Authority, Roads

Fund Administration, Ministry of Transport and Public Works (MoT&PW) and Ministry of

Finance, Economic Planning and Development (MoFEP&D). It included engineers,

economists, accountants and administrators.

Respondents from the contractors were mostly technical, although a few were finance

people. The technical respondents included engineers and technicians, those that were

directly involved with the management of construction projects at various levels, and

would give informed opinions on the subject.

Consultants were not included in the pilot survey, but based on comments and

questions raised by the respondents from the contractors, it was considered that

consultants needed to be included in the survey. They were only consulted during the

main survey.

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3.3 Sampling Method and Sample Size

In order to make sure that the research findings may be relied, it is necessary to

calculate a sample size that if used, can represent the population under consideration

and collect data from the smaller size grouping (Mark Saunders, 2009). Accordingly, the

sample size was determined as follows:-

Sample size

Where n is the sample size

Z /2 is half the difference between sample size and confidence level.

E is the standard error and

is the standard deviation

This formula can be used when is known and you want to determine the sample size

necessary to establish, with a confidence of , the mean value to within . You

can still use this formula if you don’t know your population standard deviation and you

have a small sample size. Although it’s unlikely that you know when the population

mean is not known, you may be able to determine from a similar process or from a

pilot test/simulation.

3.2.1 Our Problem

We would like to establish an unknown problem, that of road construction projects which

are started and take too long to finish, with GoM continually accumulating a huge bill of

arrears in payments due to contractors and consultants. However, we want the

confidence level of our survey to be 95 percent sure that the sample mean is within 1

minute of the population mean . Previous survey results show = 6.95 minutes, and

this was adopted as a starting point.

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3.2.2 Solution

We are solving for the sample size .

A 95% degree confidence corresponds to = 0.05. Each of the shaded tails in the

figure below has an area of = 0.025. The region to the left of and to the right of

= 0 is 0.5 – 0.025, or 0.475. In the table of the standard normal ( ) distribution, an area

of 0.475 corresponds to a value of 1.96. The critical value is therefore = 1.96.

Figure 1: Normal Distribution Curve

The margin of error = 1 and the standard deviation = 6.95. Using the formula for

sample size, we can calculate :

So it was established that in this research we needed to sample at least 186 (rounded

up) randomly selected respondents. In this research 100 respondents came from client,

100 from contractors and 20 from consultants giving a total of 220 which is higer than

the required minimum sample size. As explained above, the questionnaire was the

same except for the introductory section where details of the respondent in terms of

employment, training and road construction industry were sought using different

questions.

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3.3 Instrument

The research instrument was developed based on study objective and construction

standard guideline. The construction standard guidelines stipulate standard

specifications to be used, conditions of contract that will be used, construction design

drawings that guide the contractors when tendering and carrying construction work. The

instrument was divided into five parts. Part A obtained general information about the

respondents which included age, personal experience in road construction, gender and

academic & professional qualifications. Part B obtained information about contractor’s

project related difficulties, Part C, Achievement of quality expectations, Part D, Project

experiencing growths during implementation, Part E, absence of community ownership

of projects, Part F, was a request for general comments with regards to interventions

that could improve the implementation of road construction projects in Malawi and Part

G, was request for comments with regard to the barriers in the implementation of road

construction projects in Malawi, (See Appendix A).

3.4 Validity and Reliability

Validity is concerned with the extent to which the instrument reflects the phenomenon

being examined and addresses the appropriateness, meaningfulness, and usefulness of

specific conclusion drawn from instrument scores (Burns & Grove, 2009). In order to

ensure content validity, the research instrument was reviewed by research experts to

establish whether the content being asked was accurate to obtain the desired

information. Reliability refers to the accuracy and consistency of information obtained in

a study (Polit & Beck, 2008).

For reliability of the instrument the researcher adapted from existing check list tools

based on standard road construction specifications, guidelines for procurement of

contractors for road construction projects. A pilot study was conducted on ten (10)

respondents from the client and ten (10) from the contractors. The questionnaire was

refined at the completion of the pre-test.

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3.5 Ethical Considerations

The research instrument was first approved by the research supervisor before it was

used. The respondents were provided with detailed information regarding the research

and their consent was obtained (See Appendix C). Respondents were told that they had

the right to refuse to participate in the study. Their refusal to participate in the study

would not risk their job in anyway. They were free to withdraw from the study at any

point. Respondents were assured of privacy and confidentiality. All data was stored

under lock.

factors that affect performance of contractors Secondary data was analysed done using

survey questionnaire questions and use of secondary data. As the research was

focusing on why GoM had accumulated such a huge arrears bill as shown in Table 1.1,

and what could be done to get out of the deficit pit, secondary data was also considered

to be vital, as it would provide factual information on the ground. The secondary data

consisted of reports obtained from the implementing agency in the road construction

projects and independent reports compiled through a studies conducted with funding

from the EU.

The questionnaires were initially prepared for two groups, namely staff from the client’s

side and contractors representatives. Eventually it was considered necessary to include

one to be given to consultants involved in the design and construction supervision of the

road projects, as they might give different opinions from those given by clients and

contractors. The difference in the presentation of these questionnaires was only in the

introductory section; otherwise the pertinent questions were the same; thus obtaining

similar information from all three groups of people.

3.6 Data Management and Analysis

Every completed questionnaire was checked for completeness as it was handed back to

the researcher. This was done to make sure data was consistent and correct for

credible analysis (Polit & Hungler, 1999) 22

Data were entered and analysed using excel spreadsheet. The descriptive statistics

such as frequencies, percentages and mean were calculated to describe the

respondents’ perception of the factors affecting performance of contractors. The results

are presented in tables in the “Findings” section – Chapter 4.

The data collected was enumerated according to frequencies of response to the

questionnaire by simply marking with “ones”, for first four, and the fifth count was shown

by crossing the four “ones” preceding it. This was then given actual numbers by working

out the responses for each question. The results are presented below starting with

consultants, followed by contractors and finally the client.

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Chapter 4

4.0 Findings of the Study

4.1. General InformationTable 4.1: Age Group & Gender

Age Group FrequencyMale % Male Female % Female Total % Total

(21-25) 1 33.33 2 66.67 3 1.36(26-30) 11 64.71 6 35.29 17 7.73(31-35) 26 66.67 13 33.33 39 17.73(35-40) 49 77.78 14 22.22 63 28.64(41-45) 44 77.19 13 22.81 57 25.91(46-50) 27 79.41 7 20.59 34 15.45(>50) 7 100 0 0 7 3.18Total 165 75 55 25 220 100

The respondents comprised of a total of 220 people working in positions related to road

construction projects. 75% (n=165) were male and 25% (n=55) were female. The

majority of the respondents were within the age group of 35-45 years of age and this

represented 54.55% (n=120)

Table 4.2: Years of Experience in Road Construction Industry

Years of Experience in Road Construction Industry (1-5) (6-10) (11-15) (16-20) >20 NFrequency 16 43 91 53 17 220% 7.27 19.55 41.36 24.09 7.73 100

Sixty-five percent (n=144) have 11-20 years of experience. This is in tandem with most

of the requirements in terms of experience as many times for key personnel minimum

years of experience are set at 10 years.

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Table 4.3: Academic and Professional Qualification

Academic and Professional Qualification Cert or Dip Degree Post Grad Pr Eng (R Eng) N

Frequency 145 37 21 17 220% 65.91 16.82 9.55 7.73 100

Only 7.73% (n=17) were registered/professional engineers. These were mostly from the consultants and clients.

4.2 Consultants’ Responses


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5

1.1 Delayed payments by the client Frequency 20 0 0 0 0 0 20 5 11.2 Contractor’s cash flow problems Frequency 20 0 0 0 0 1 19 4.95 31.3 Lack of access to credit facilities Frequency 20 0 0 0 0 1 19 4.95 3

1.4 Shortage of skilled labour force in the market Frequency 20 0 0 0 0 0 20 5 1

1.5 Lack of professional management skills by contractor staff Frequency 20 0 0 0 6 3 11 4.25 7

1.6 Delayed instructions from the consultant Frequency 20 0 1 7 6 6 0 2.85 8

1.7 Incomplete contract documentation Frequency 20 0 13 3 4 0 0 1.55 9

1.8 Unavailability of plant and equipment in the market Frequency 20 0 0 0 0 3 17 4.85 4

1.9 Inclement weather Frequency 20 0 20 0 0 0 0 1 10

1.10 Bureaucracy from government agencies Frequency 20 0 0 0 1 1 18 4.85 4

Average 3.93

In the table above, the consultants’ perception is that the client was supposed to play a

significant role in the smooth running of the project. However, this has not been the

case especially in terms of making payments. There is also a high score on the question

concerning skilled labour force. This is clearly as a result of their daily interaction with

the contractors’ staff on site, where the consultants expect the contractor’s personnel to

25

deal with issues on site professionally, which apparently has not been satisfying to the

site supervision team. This table and all the others to follow were worked in excel for

easy calculation of the mean and average scores based on the pattern of respondents.


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5

2.1 Shortage of skilled labour force in the market Frequency 20 0 0 2 1 4 13 4.4 4

2.2 No quality management systems (QMS) by contractors Frequency 20 0 1 2 1 3 13 4.25 5

2.3 Non standardised specifications Frequency 20 0 17 1 2 0 0 1.25 8

2.4 Lack of technical skills by consultant’s site staff Frequency 20 0 0 0 2 12 6 4.2 6

2.5 Usage of lowest price tender method of contract procurement Frequency 20 0 0 0 1 2 17 4.8 2

2.6 High levels of corruption Frequency 20 0 4 13 3 0 0 1.95 7

2.7 Mistakes and discrepancies in contract document Frequency 20 0 0 0 4 2 14 4.5 3

2.8 Contract duration too long (≥ 3 years) Frequency 20 0 0 0 0 3 17 4.85 1

2.9 Shortened contract durations Frequency 20 0 18 2 0 0 0 1.1 9

2.10 Scarcity of materials meeting contract specifications (gravel / quarry stone) Frequency 20 0 18 2 0 0 0 1.1 9

Average 3.24

In this table, the consultants’ common opinion is that the client’s procurement method in

awarding contracts to the lowest price tender. This could be supported by the

contractors’ own opinion as their questionnaire is analysed. The consultants also

demonstrate that contracts that have long periods of implementation are prone to facing

difficulties. Some authors suggest that projects need to be run in the shortest possible

time. They recommend durations of 18 to 36 months as ideal. In developing countries

whose economies are driven by external forces, long duration projects may end up

costing much more than planned.

26

Table 4.2.3: Projects experiencing cost growth during implementation

U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5

3.1 High inflation rates Frequency 20 0 0 1 3 7 9 4.2 13.2 Unavailability of foreign exchange Frequency 20 0 0 0 3 8 9 4.3 23.3 Scarcity of construction materials Frequency 20 0 0 2 3 4 11 4.2 33.4 Changes in scope of works Frequency 20 0 0 1 3 7 9 4.2 5

3.5 Incomplete designs at project commencement Frequency 20 0 1 1 4 5 9 4 4

3.6 High labour wages Frequency 20 0 3 1 5 5 6 3.5 63.7 Rising costs of construction materials Frequency 20 0 1 2 8 4 5 3.5 7

3.8 Under-estimation of cost of works during tender stage Frequency 20 0 2 5 6 2 5 3.15 8

3.9 Delayed payments by the client Frequency 20 0 0 0 4 4 12 4.4 9

3.1 High transportation costs Frequency 20 0 0 2 3 5 10 4.15 10

Average 3.96

The consultants’ responses in this table seem to be betraying them that they are not

doing a good job on providing designs. However, this is a manifestation of what is

happening in these projects. Sometimes a contract is first awarded to the contractor,

and later on the consultant is engaged. The design may have to begin at that point in

time. This results in consultant providing the designs “late” in the mind of the client and

contractor. Also, the issue of delayed payments has been rated high by the consultant.

This affects the cash flow of the contractor.

27


U Minor........................Major

Mea

n Sc

ore

Ran

king

Factor 0 1 2 3 4 5

4.1 Lack of initial community input at design stage Frequency 20 0 0 3 4 7 6 3.8 4

4.2 No consultation with the community by contractor on site Frequency 20 0 7 4 3 6 0 2.4 9

4.3 Disputes relating to employment of local people Frequency 20 0 2 4 11 2 1 2.8 6

4.4 Negative social impacts brought by the contractor Frequency 20 0 9 3 0 5 3 2.5 8

4.5 Negative environmental impacts on the community Frequency 20 0 3 5 7 5 0 2.7 7

4.6 No formal channels of communication Frequency 20 0 6 4 3 3 4 2.75 5

4.7 Delayed assessment of compensation Frequency 20 0 0 0 4 3 13 4.45 1

4.8 Delayed payments of compensation Frequency 20 0 0 0 4 3 13 4.45 1

4.9 Under-evaluation of properties to be compensated Frequency 20 0 0 0 4 3 13 4.45 1

4.10 Lack of timely intervention by the local authorities Frequency 20 0 10 3 7 0 0 1.85 10

Average 3.22

Road construction projects have a lot of stakeholders. Owing to the nature of these

projects, every person in the country is an interested member of the project, either as an

expected user or project affected people (PAP). Compensations on road construction

projects are unique in comparison with what happens in the neighbouring countries.

Both due to fast growing population in Malawi and lack of enforcement by authorities,

the road reserves are not observed, such that encroachers are paid compensations to

relocate from the road reserve. This adds to the bill that government has to settle apart

from the certified work bills.

28

4.3 Contractors’ Responses


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5


1.2 Contractor’s cash flow problems Frequency 100 5 11 17 17 19 31 3.27 3

1.3 Lack of access to credit facilities Frequency 100 2 2 8 22 30 36 3.84 2






1.9 Inclement weather Frequency 100 25 29 20 20 4 2 1.55 10


Average 2.93 The contractors have a high rating for delayed payments, 60% of the respondents

strongly felt that delayed payments were a major factor affecting contractors’

performance. Unfortunately credit facilities are not conducive either as they attract high

interest rates.

29


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5











Average 3.05

The contractors agree with the consultants that there are not adequate numbers of

skilled labour on the market. This has been ranked the highest factor in this category

coupled with lack of skilled consultancy staff. As a country, there is need to address this

area by providing training to people that can effectively work on road construction

projects. The National Construction Industry Council (NCIC) has been in existence for a

long over fifteen (15) years. It is expected that they will offer the necessary training.

Probably there is confusion as to which organisation should be offering such trainings.

Currently the Polytechnic offers several courses that would help alleviate such

shortfalls. There are several Technical Colleges offering technician courses that are

30

desired in the construction industry. If these can be enhanced with appropriate material,

the problem of shortage of skilled labour may be alleviated.


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5

3.1 High inflation rates Frequency 100 0 0 5 14 21 60 4.36 1

3.2 Unavailability of foreign exchange Frequency 100 0 0 0 17 38 45 4.28 23.3 Scarcity of construction materials Frequency 100 0 2 10 17 21 50 4.07 33.4 Changes in scope of works Frequency 100 0 2 8 12 38 40 4.06 43.5 Incomplete designs at project commencement Frequency 100 0 5 5 19 26 45 4.01 53.6 High labour wages Frequency 100 0 10 12 24 28 26 3.48 83.7 Rising costs of construction materials Frequency 100 0 7 10 24 21 38 3.73 6




Average 3.73

From the table above, the perception of contractors is that high inflation rates, lack of

foreign exchange, scarcity of construction materials, incomplete designs at project

commencement, rising costs of construction materials and delayed payments are all

significant factors that influence growing costs of projects during implementation. This is

understandable as they all relate to finances that are required for procurement of

resources.

31

Table 4.3.4: Absence of community ownership of projects

U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5


4.2 No consultation with the community by contractor on site Frequency 100

5 7 24 7 19 383.42 1



4.5 Negative environmental impacts on the community Frequency 100

5 10 26 14 24 213.05 5


4.7 Delayed assessment of compensation Frequency 100 0 24 19 33 12 12 2.69 7

4.8 Delayed payments of compensation Frequency 100 2 21 24 34 12 7 2.54 8

4.9 Under-evaluation of properties to be compensated Frequency 100

2 35 19 24 10 102.35 9

4.10 Lack of timely intervention by the local authorities Frequency 100

2 31 33 19 10 52.19 10

Average 2.92

The rating in this table indicates that contractors have challenges with consultations with

the community on site, demands for employment from local people who may not

necessarily be preferred by the contractors as they would spend time training them

before they can be reasonably productive.

32

4.4 Clients’ Responses


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5




14 Shortage of skilled labour force in the market Frequency 100 15 12 8 24 19 22 2.86 4







Average 2.66

The clients’ respondents seem to agree that delayed payments by the client contribute

to difficulties encountered by contractors during project implementation. Fifty percent of

the clients’ respondents acknowledged that delayed payments do impact negatively on

the contractors’ performance. This can be a good footing to start from if the problems

are to be eliminated or alleviated where even the clients’ staff perceives delayed

payments as an issue requiring to be dealt with. Even on the contractors’ cash flow

problems is acknowledged to be a significant factor in influencing poor performance by

contractors. However, the clients’ average of the mean scores is the lowest in this

category when compared with that obtained from consultants and contractors

corresponding section.

33


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5











Average 2.98

According to clients’ perception, shortage of skilled labour force in the market is

significant factor that contributes to poor quality of work done by contractors. It must be

pointed out here that where it has been observed that the work produced is not meeting

the required standard specifications the contractors are asked to remedy such defects

at their own cost. Thus, shortage of skilled labour force may result in delays (as some

work has to be reworked), higher expenditures by the contractors and lengthened

period of project delivery.

34


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5


3.2 Unavailability of foreign exchange Frequency 100 0 0 0 17 45 38 4.21 2

3.3 Scarcity of construction materials Frequency 100 0 2 10 17 21 50 4.07 3

3.4 Changes in scope of works Frequency 100 2 2 8 12 38 38 3.96 5

3.5 Incomplete designs at project commencement Frequency 100 0 5 5 19 26 45 4.01 4

3.6 High labour wages Frequency 100 0 10 12 24 28 26 3.48 6

3.7 Rising costs of construction materials Frequency 100 0 7 10 38 21 24 3.45 7




Average 3.56

Sixty percent of the respondents view high inflation rates as seen from the high

frequency at the peak of the Likert scale. This is probably because they observe the

escalating project costs as inflation rates rise. Normally there is a formula for calculating

how contractors should be compensated for meeting costs of inflation effects, in what

International Federation of Consulting Engineers (FIDIC) conditions of contract refer to

as price escalation formula. The effect of this formula is that at base rate, i.e. when

contractors tender for contracts, a date is fixed as the date for base rates. Using

appropriate indices for materials, labour and plant; and with the use of weighting pre-

determined at tender (which must add to 1) current indices for the month are obtained

and the amount of inflation is calculated. At the base rate, price escalation factor is

calculated as one, since everything has remained the same. However, when these

35

prices vary from their original values either upwards or downwards, the calculated price

escalation factor is less than one or greater than one.


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5






4.6 No formal channels of communication Frequency 100 0 19 21 26 24 10 2.85 74.7 Delayed assessment of compensation Frequency 100 0 12 19 33 24 12 3.05 64.8 Delayed payments of compensation Frequency 100 2 21 34 24 12 7 2.44 9



Average 2.99

The clients perceive community ownership of road construction projects as an important

factor in enhancing its performance. Probably this is because vandalise parts of the

road infrastructure. During the month of January 2015, several roads had some sections

washed away. On following up to repair the damages, it was found that metal pipe

culverts had been stolen during the dry season. When the rain came, the fill under the

bituminous paved road collapsed. Such cases make the clients staff view lack of

ownership of the roads by the communities where this occurs. There is also

encroachment into the road reserve by way of cultivating crops; right in the side drains

of the roads.

So far, the data has been analysed in accordance with particular grouping. However,

none of these groups satisfies the sample size requirements for the research findings to

36

be worth relying upon. Thus, the three sets of respondents were again merged, giving a

total sample size of 220 which is higher than the calculated sample size of 186.

4.5 Combined Responses

The first group of factors to be assessed related to difficulties contractors encounter as

they execute construction projects.


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5





1.5 Lack of professional management skills by

contractor staffFrequency 220 10 26 54 60 41 29 2.83 5



1.8 Unavailability of plant and equipment in the

marketFrequency 220 26 30 39 48 42 35 2.7 6



Average 2.9

The average “mean score” for the individual grouping were 2.66 for clients, 2.93 for

contractors and 3.93 for consultants. In the excel spreadsheet where these figures were

computed, for each factor, the mean score is calculated using the formula:-

37

µ = Sum of all Likert scale value multiplied by frequency of respondents under that entry

divided by the total sample number for all the six entries, rounded to two decimal

places.

Mathematically presented, taking value on Likert scale as A1, A2 up to A6, sample size N

and the frequency entered under particular Likert scale rating F1, F2 up to F6, this can be

presented as below:-

µ = ROUND(Sum(A1xF1/N + A2xF2/N + A3xF3/N + A4xF4/N + A5xF5/N + A6xF6/N),2)

This was done on every factor. The unsure respondents of course had a total of zero as

their numbers were multiplied by zero on the Likert scale. The Likert scale was chosen

because it was observed to be used in a number of literatures where questionnaire

surveys were used, and was considered to be authentically acceptable. The group

factors average was calculated by dividing the sum of mean scores for that group by ten

(10) as there were ten factors per grouping.

Second group of factors related quality of work produced in which contractors are

supposed to adhere to contract quality standards.

38


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5











Average 3.04

The individual group “mean scores” averages were 2.98 for clients, 3.05 for contractors

and 3.24 for consultants. After combining, the mean score average was calculated as

3.04. Following the explanation given above under first group of factors, it can be

observed that the maximum mean score can only be 5. With the exception of the score

for the consultants, the two average mean scores for clients and contractors are very

close to the combined average mean score. The discrepancy displayed by the results

from the consults can be explained as a result of the small sample of 20 respondents

compared with 100 respondents for the clients and contractors. This also amplifies the

need to have a minimum sample size (Mark Saunders, 2009).

The third groups of factors were related to cost growth during project implementation. A

table with results of the combined groups’ assessment is given below.

39


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5


3.2 Unavailability of foreign exchange Frequency 220 0 0 0 37 91 92 4.25 2

3.3 Scarcity of construction materials Frequency 220 0 4 22 37 46 111 4.08 33.4 Changes in scope of works Frequency 220 2 4 17 27 83 87 4.03 4

3.5 Incomplete designs at project commencement Frequency 220 0 11 11 42 57 99 4.01 5

3.6 High labour wages Frequency 220 0 23 25 53 61 58 3.48 7

3.7 Rising costs of construction materials Frequency 220 0 15 22 70 46 67 3.58 6



3.10 High transportation costs Frequency 220 0 41 64 55 50 10 2.65 10 Average 3.67

The third group of factors under the individual grouping had an average mean score of

3.56 for clients, 3.73 for contractors and 3.96 for consultants. After combining the

average mean score calculated was 3.67. Actually this is the group of factors that had

the highest scores in any way the mean score was calculated. This signifies the

importance of this group of factors in the construction industry. It is also related to the

research question’s subject of inquiry. There are issues of change of scope of works,

delayed payments for work already done, high inflation rates. While some of the factors

may not be avoided, such as high inflation rates, rising costs of construction materials

and high labour wages, one major factor is avoidable; changes in scope of works.

40


U Minor........................Major

Mea

n Sc

ore

Rank

ing

Factor 0 1 2 3 4 5







4.7 Delayed assessment of compensation Frequency 220 0 36 38 70 39 37 3.01 64.8 Delayed payments of compensation Frequency 220 4 42 58 62 27 27 2.67 8



Average 2.98

Under this group of factors, the individual respondents grouping scores were 2.99 for

the clients, 2.92 for contractors and 3.22 for consultants. The average mean score is

2.98, only deviating much from that of the consultants’ respondents because of the

small sample size.

Having analysed the data as above, it was then scrutinised to relate the findings to the

research question. This was done in the next chapter.

4.6 Secondary DataThe above analysed data was collected based on the questions that were raised by the

researcher. However, some pertinent information in this research was obtained from

“secondary data”, implying that reports from the concerned organisations, or those

related, were studied and factual information obtained.

41

4.6.1 Audit of Public Arrears of the Road Sector In 2010

The Audit of Public Arrears of the Road Sector in 2010 established that as of 31 st

January 2010, there were twenty-eight (28) live projects. Out of these, twelve (12) had

outstanding payments amounting to MWK3.650 billion. There were potential claims at

this date amounting to MWK17.8 billion due to extension of time arising from delay in

providing design drawings, additional quantities of works and idle time for the diesel

shortage (Gala, 2014)

4.6.2 Audit of Public Arrears of the Road Sector In 2014

The Audit of Public Arrears of the Road Sector in 2014 also included procurement

processes to establish whether Procurement Act guidelines were followed. It is a

requirement that when contracts are tendered, the award should be made only after the

MoFEP&D and Office of the Director of Public Procurement (ODPP) confirmed

availability of funds for the project and “No Objection” the recommended award. The

table below gives an adjusted presentation of the report on procurement as of 30 th June

2014. The adjustments have been made in taking out percentages of contracts

procured by particular method, and introduction of a column in US$ equivalent of the

figures given in Malawi Kwacha (MWK).

Table 4.5: Procurement methods used for contracting

Procurement method No. of Contracts

Value (MWK) Value (US$)

Open tendering 2 11,240,438,850.82 23,915,827.34

Short listing 0 0 0

Single sourcing 0 0 0

TOTAL 2 11,240,438,850.82 23,915,827.34

Source: (Gala, 2014)

It can be seen from the information that procurement guidelines are followed. Actually

the auditors established these facts after being presented with the appropriate

42

documentation. The question is, if the procedures of procurement are followed, i.e.

getting confirmation of availability of funds for the impending project and seeking “No

Bjection” from ODPP, why could there be a challenge to effect payments to contractors

or consultants? It is the opinion of the author that such contracts are procured hestily

due to pressure. Aware that such procurements would result in the projects facing

similar challenges as those where there is still outstanding amounts, the officers play it

safe by proceeding only after the procedures in the Procurement Guidelines are fulfilled.

However, it is one thing to fulfill thesee procedures which are only paper works, but to

make funds available for the projects may not be guranteed.

As it was indicated in Table 1.1, the outstanding bill is continually accumulating, and

was at MWK27,420,160,151 (US$58,340,767) using the exchange rate of US$1.00

equals MWK 470.00. However, the figure was reported to have risen to MWK 34.0

billion, about US$ 75,555,556. The figure is escalating in Malawi Kwacha values even if

no more certificates were prepared due to interest charges.

43

Chapter 5

5.1 Discussions

This descriptive quantitative study evaluated the perceptions of respondents who were

mostly engineers and technicians involved in road construction with regard to factors

affecting performance of the contractors. The researcher analysed responses with

regard to those factors that directly related to the objective of the study. These factors

were addressing the question of whether set guidelines in the implementation of the

road projects were adhered to. It was the intention of the researcher to touch on issues

of procurement, road design and construction drawings, standard specifications for road

construction, payments to contractors and compensation for project affected people.

In the third group of factors under the individual grouping had an average mean score of

3.56 for clients, 3.73 for contractors and 3.96 for consultants. After combining the

average mean score calculated was 3.67. Actually this is the group of factors that had

the highest scores in any way the mean score was calculated. This signifies the

importance of this group of factors in the construction industry. It is also related to the

research question’s subject of inquiry. There are issues of change of scope of works,

delayed payments for work already done, high inflation rates. While some of the factors

may not be avoided, such as high inflation rates, rising costs of construction materials

and high labour wages, one major factor avoidable is changes in scope of works.

The credibility of research findings depends on the source of data used, and how this

data is processed into information that can be relied upon. The methodology in the

conducting of the research is also critical to the credibility of the research findings

(Saunders, 2009). In line with this the researcher had to calculate the sample size. The

sample size matters, as the significance of the data collected through survey such as

questionnaire varies depending on the size.

The sample size in this research was determined by use of statistical methods by

considering confidence level, normal distribution curve, standard deviation and sample 44

size. The sample size was calculated to be 186. This is not an easy number to get if you

are looking for people with particular backgrounds and occupation. For this reason,

players in the road construction industry from the client point of view, contractors and

consultants were all used so that the requirement of the sample size should be met.

The effects of using sample size smaller than minimum have been appreciated in this

research as observed from the respondents coming from the consultants companies

where the respondents were much less than the required number. However, where the

numbers of respondents were above fifty per cent of the sample size, the results proved

to be closer to the ideal.

The secondary data used in this research has brought out some profound facts about

how road construction projects have been managed over the past ten years in Malawi. If

the trend continues as has been established in this research, GoM is likely to

perpetually be in conflict with contractors. There have been deliberate moves shown on

paper how this situation can be stopped. However, nothing material is being done as

the bills continue to grow.

The budget allocated for road construction projects is only on paper. In the Financial

Year (FY) 2013/2014 the vote for road construction was allocated MWK 12 billion. This

was not adequate considering that at the close of 2012/2013 FY there was an

outstanding bill of MWK8,502,442,845. It may not be surprising that the bill short to

MWK27,420,160,151 by the close of 2013/2014. What is more painful is that the audit

report by Gala, (Gala, 2014) revealed that no payments were made by GoM to

contractors and consultants working on road construction projects between 1st July 2013

and 30th June 2014. This clearly shows that the budget is not adhered to by GoM. If the

amount indicated in the budget documents were disbursed in the year, that would be an

indication of seriousness.

It has been observed by human rights commentators that GoM lacks a system that is

not dependent on party leadership, arguing that party leaders have not put the interest

of the country as a priority.

45

5.2 Conclusions and recommendations

5.2.1 Contractors project related difficulties

The results of the research have demonstrated that contractors’ perception on

difficulties encountered during project implementation is mostly due to the clients’

actions. Delayed payments were rated high on the Likert scale, clearly demonstrating

that they get affected when payments are delayed. Sixty (60) of the one hundred (100)

respondents strongly believe that delayed payments are a challenge. Even the

consultants’ respondents demonstrated likewise as all the twenty (20) respondents

indicated they strongly believed it was significant in impacting on the performance of the

contractors. In general, even the clients’ respondents have affirmed the importance of

making timely payments. This is why the combined analysis has a high mean score of

4.14 out of 5 for this factor.

The researcher recommends the following actions to be taken by GoM:-

a) That government should leave the administration of road construction to the

responsible ministry and the Roads Authority (RA), with Roads Fund

Administration (RFA) handling payments according to budget and Annual

National Roads Programme (ANRP)

b) That there should be no new contracts until all the arrears have been cleared, or

unless grant aid has been identified

c) That budget allocations should be honoured, other than putting figures and

making no payments up to the end of Financial Year (FY) as was the case in the

2013/2014 FY.

5.2.2 Failure to achieve quality expectations in projects

Under this group of factors affecting the performance of contractors the issue of

shortage of skilled labour force was ranked highly at 4.14 out of 5. However, looking at

the pattern of the respondents, the consultants’ respondents mean score for this factor

was 4.4. The clients mean score was 4.31 and that for the contractors was 3.91.

46

Although the consultants’ respondents sample was small at 20 compared to those for

clients and contractors at 100 each, their mean score of 4.4 reflects their perception

which is based on their experiences with the contractors’ personnel at all levels. Going

through monthly reports which are prepared by consultants, almost every report talks

about contractor’s lack of organisation and planning. This makes the consults’ staff on

site develop the perception that the contractors’ site personnel are not experienced or

lack the necessary training.

There might be some truth in the way this issue has come out because all the three

groupings scores highest under this factor. It is the opinion of this author that

contractors must allow their staff to go for refresher courses. Apart from learning from

the facilitators at refresher courses, the participants learn from each other and they

share experiences. Besides that, when you interact with people of your field of training,

you tend to realise how much or little you know. If you discover that you actually know a

lot than you thought, your confidence grows and you are likely to perform better than

before due to the confidence developed. On the other hand, when you realise that you

are lacking in the knowledge of your field, it might be your opportunity to link up with the

people you admired for further development, and this will eventually give confidence as

you work.

It has been observed that contractors in Malawi only allow their staff to go on leave

during the Christmas and New Year Holidays. This implies that many of them get

exhausted, but are still forced to go to work as their staying away from work is

considered a loss by their employers.

Under the same category of factors, it is worth commenting on Usage of lowest price

tender method of contract procurement. The consultants’ respondents had a mean

score of 4.8; contractor had 3.42 while the client had 3.14, and the combined mean

score was 3.42. It should understood that both the contractors and consultants are in

business, and would certainly be happy to be awarded contracts in which their mark up

was high. It is, however fair, to acknowledge that the clients need to have value for

money. As such, evaluations of technical qualifications determine who should have their

47

financial proposal assessed. Thus, whoever passes the threshold mark at technical

evaluation will be considered for awarding the contract. Otherwise if the contract is

awarded to one whose tender price was higher, it will be an audit query, and in this

dispensation of many cases of corruption, this would be perceived to be at the influence

of corruption.

5.2.3 Projects experiencing cost growths during implementation

Under this category the issue of delayed payments reappears. This has already been

discussed and recommendations have been made under 5.2.1.

However, change in scope of works is new and is commented on as follows:-

a) Change in scope of works is allowed in standard contract documents such as

International Federation of Consulting Engineers (FIDIC), but there is a limit as to

how much changes can be made without the contractor revising his rates. If it

involves work that is in the critical path, the contractor would be entitled to

extension of time. This would be a source of increase in contract price. Thus, RA

should make thorough checks in the road designs submitted by consultants to

ascertain completeness. This way, there would not be need to introduce any

changes in scope of work.

b) The challenge has been that policy makers would instruct changes to the scope

of works. This gets out of control and the thresholds mentioned above are

exceeded and contractors normally demand extension of time with time related

costs.

c) As in 5.2.1, the author’s recommendation is that contracts should be awarded

when there is a complete design, funds have been identified without conditions,

and no changes in scope of works should be made when the contract is already

tendered out.

48

5.2.4 Absence of community ownership of projects

Under this category of factors affecting project implementation, the average mean

scores were 3.22 for consultants’ respondents, 2.92 for contractors’ respondents and

2.99 for clients’ respondents. In general, contractors’ and consultants’ respondents

rated this lower than the first one; Contractors project related difficulties. The clients’

respondents however rated it higher. This is a reflection of generally perceived ideas of

each of the respondents groups. The clients are mindful of compensation of project

affected people (PAP), which affects progress on site. Sometimes members of the

community gang up and stop works at some sections, arguing that their compensations

must be paid before works can be carried out.

To make clear what goes in the minds of the clients, this explanation will help. Monthly

productions at a site during dry season when all plants and materials are in place can

be in the region of MWK250 million to MWK350 million. This translates to production

rates of MWK8.33 million to MWK 11.66 million a day. Compensations are paid by RFA

after they have been given funding by the MoFEP&D. The compensation money in

question at the particular section might add up to MWK20 million. However, the

contractor may be stopped from working for a whole week. Even if the lower estimate of

daily production is assumed, the loss claims that the contractor would lodge could be at

MWK 58.31 million for the week. So for the clients this section also has factors that can

impact negatively on the performance of the project.

The author’s recommendations on this set of factors that relate to stakeholders are:-

a) Compensation assessment must be done by the help of the design consultant

who will pick property in their geographical position. It is also possible to work out

values of such compensations through conducting Environmental and Social

Impact Assessment (ESIA), Relocation Action Plan (RAP) of project affected

people (PAP). The legitimate compensations assessed must be paid before

project commences.

49

b) GoM through the Police Service should help in enforcing observance of road

reserves for designated public roads so that there should be nobody who would

claim a property within the road reserve. This would reduce the bills that GoM

pays in lieu of property compensations which were in the road reserve.

50

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APPENDICES

APPENDIX A

PART I: FOR CONTRACTORS

1. General InformationPlease tick your answers in the appropriate box provided.

1.1Please state the name of your organisation …………………………………………

1.2Please state your organization’s registration category with the National

Construction Industry Council of Malawi (NCIC).

100 million 200 million 500 million Unlimited

1.3Please state the length of your organization’s experience in the road construction

Industry.

1-5 years 6-10 years 11-15 years 16-20 years > 20 years

1.4Please state your average annual turnover of construction work (in million of

Malawi kwacha) in the last 5 years?

50-100m 100-200m 200-300m 300-500m >500m

53

1.5Please state your gender?

Male Female

1.6 Please state the length of your personal experience in the road construction industry?


1.7Please state your highest academic qualification.

MSCE Tradesman Cert or Dip Degree Post Grad

NoteMSCE= Malawi School Certificate of Education or equivalent high school

qualification

Tradesman= Trade test certificate from Technical college

Cert or Dip= City and Guilds Certificate or University Diploma

PART II: FOR CLIENTS AND CONSULTANTS

2. General InformationPlease tick your answers in the appropriate box provided.

1.8Please state your name......................... ………………………………………………

54

1.9Name of organisation……………………………………………………………………

1.10 Please state your gender

Male Female

1.11 Please state your current position in the organisation (e.g. CEO, Director,

etc)

………………………………………………………………………………………

1.12 Please state the length of your experience with your current employer.


1.13 Please state the length of your personal experience in the road

construction industry.


1.14 Please state your highest qualifications.

Cert or Dip Degree Post Grad Pr Eng(R Eng)

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PART III: FOR ALL RESPONDENTS

2 Contractors project related difficulties

On a scale of 1(minor) to 5 (major) or Unsure (U), to what extent do the following

factors affect the performance of contractors during project implementation

[please circle your choice]

Factor U Minor............................Major2.1 Delayed payments by the client U 1 2 3 4 5

2.2 Contractor’s cash flow problems U 1 2 3 4 5

2.3 Lack of access to credit facilities U 1 2 3 4 5

2.4 Shortage of skilled labour force in the

market

U 1 2 3 4 5

2.5 Lack of professional management

skills by contractor staff

U 1 2 3 4 5

2.6 Delayed instructions from the

consultant

U 1 2 3 4 5

2.7 Incomplete contract documentation U 1 2 3 4 5

2.8 Unavailability of plant and equipment

in the market

U 1 2 3 4 5

2.9 Inclement weather U 1 2 3 4 5

2.10 Bureaucracy from government

agencies

U 1 2 3 4 5

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3 Failure to achieve quality expectations in projects

On a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following

factors contribute towards failure to achieve quality standards during project

implementation [please circle your choice]

Factor U Minor............................Major3.1 Shortage of skilled labour force in the

market

U 1 2 3 4 5

3.2 No quality management systems

(QMS) by contractors

U 1 2 3 4 5

3.3 Non standardised specifications U 1 2 3 4 5

3.4 Lack of technical skills by consultant’s

site staff

U 1 2 3 4 5

3.5 Usage of lowest price tender method

of contract procurement

U 1 2 3 4 5

3.6 High levels of corruption U 1 2 3 4 5

3.7 Mistakes and discrepancies in

contract document

U 1 2 3 4 5

3.8 Contract duration too long (≥ 3 years) U 1 2 3 4 5

3.9 Shortened contract durations U 1 2 3 4 5

3.10 Scarcity of required materials

(gravel / quarry stone)

U 1 2 3 4 5

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4 Projects experiencing cost growths during implementationOn a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following

factors contribute towards cost increase of contracts during project


Factor U Minor............................Major4.1 High inflation rates U 1 2 3 4 5

4.2 Unavailability of foreign exchange U 1 2 3 4 5

4.3 Scarcity of construction materials U 1 2 3 4 5

4.4 Changes in scope of works U 1 2 3 4 5

4.5 Incomplete designs at project

commencement

U 1 2 3 4 5

4.6 High labour wages U 1 2 3 4 5

4.7 Rising costs of construction materials U 1 2 3 4 5

4.8 Under-estimation of cost of works at

tender stage

U 1 2 3 4 5

4.9 Delayed payments by the client U 1 2 3 4 5

4.10 High transportation costs U 1 2 3 4 5

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5 Absence of community ownership of projectsOn a scale of 1 (minor) to 5 (major) or Unsure (U), to what extent do the following

factors contribute towards the lack of community ownership during project


Factor U Minor............................Major5.1 Lack of initial community input at

design stage

U 1 2 3 4 5

5.2 No consultation with the community

by contractor on site

U 1 2 3 4 5

5.3 Disputes relating to employment of

local people

U 1 2 3 4 5

5.4 Negative social impacts brought by

the contractor

U 1 2 3 4 5

5.5 Negative environmental impacts on

the community

U 1 2 3 4 5

5.6 No formal channels of communication U 1 2 3 4 5

5.7 Delayed assessment of

compensation

U 1 2 3 4 5

5.8 Delayed payments of compensation U 1 2 3 4 5

5.9 Under-evaluation of properties to be

compensated

U 1 2 3 4 5

5.10 Lack of timely intervention by the

local authorities

U 1 2 3 4 5

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6 Do you have any general comments with regards to the interventions that could improve the implementation of road construction projects in Malawi

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………7 Do you have any general comments with regards to the Barriers in the

implementation of road construction projects in Malawi………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Thank you very much for your participation

60

APPENDIX B

Malawi Institute of Management

P.O. Box 30801

Lilongwe 3

Ref. No.: UOB/MIM/MSCD/001 18th November 2014

TO WHOM IT MAY CONCERN

Dear Sir/Madam,

THE IMPACT OF THE LEVEL OF ADHERENCE TO SET GUIDELINES IN THE IMPLEMENTATION OF ROAD CONSTRUCTION PROJECTS IN MALAWI

As a student studying at Master of Science level in Project Management, it is required that one conducts a research in a topic related to the field of study and write a dissertation for submission to the University senate. I, under the supervision of Dr. Easton Simenti-Phiri of University of Bolton and Dr. Peter Ngoma of Malawi Institute of Management, am conducting a research on “The impact of deviating from set guidelines in the selection of road construction projects and procurement of contractors and consultants in the road construction industry in Malawi and the impact of the level of adherence”.

In carrying out the research, I request that you provide information through a questionnaire which is attached. The information will be used solely for the purpose of the research, and will not in any case be used for something contrary to this purpose.

Yours faithfully,

61

Isaac Kunkeyani

Student

62

Documents

ubir.bolton.ac.ukubir.bolton.ac.uk/1062/1/Issac Kunkeyani 2015... · Web viewfactors that affect performance of contractors Secondary data was analysed done using survey questionnaire