Analysing delay causes and effects in Ghanaian state housing construction projects

International Journal of Managing Projects in BusinessAnalysing delay causes and effects in Ghanaian state housing constructionprojectsCharles Teye Amoatey Yaa Asabea Ameyaw Ebenezer Adaku Samuel Famiyeh

Article information:To cite this document:Charles Teye Amoatey Yaa Asabea Ameyaw Ebenezer Adaku Samuel Famiyeh , (2015),"Analysingdelay causes and effects in Ghanaian state housing construction projects", International Journal ofManaging Projects in Business, Vol. 8 Iss 1 pp. 198 - 214Permanent link to this document:http://dx.doi.org/10.1108/IJMPB-04-2014-0035

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Analysing delay causes andeffects in Ghanaian state housing

construction projectsCharles Teye Amoatey, Yaa Asabea Ameyaw,

Ebenezer Adaku and Samuel FamiyehGIMPA Business School,

Ghana Institute of Management and Public Administration, Accra, Ghana

AbstractPurpose – The purpose of this paper is to assess the causes and effects of delays in public sectorhousing projects in Ghana.Design/methodology/approach – A purposive sampling approach was used in selecting therespondents for the study. These were experts working on various state housing construction projectsin Ghana.Findings – Results from the study showed that the critical factors that contribute to project delays inGhana are; delay in payment to contractor/supplier, inflation/price fluctuation, price increases inmaterials, inadequate funds from sponsors/clients, variation orders and poor financial/capital market.The critical effects of delays are cost overrun, time overrun, litigation, lack of continuity by client andarbitration.Research limitations/implications – This paper is limited to causes and effects of project delays inGhana based on data collected from only one state institution. Due to geographic constraints theresearchers were unable to sample state institutions across Ghana involved in various housingprojects.Practical implications – This paper has documented the critical state housing construction projectdelay factors in Ghana. The results will help project managers and policymakers appreciate the effectsof these delays on project outcomes.Social implications – Measures aimed at reducing cost of housing projects in Ghana can translateinto significant benefits to the poor and support achievement of government objective of providingaffordable housing to low income citizens.Originality/value – This research focussed on the key factors and best practices that lead to thesuccess of state housing projects within the Ghanaian context.Keywords Ghana, Project management, Causes of delays, Correctional analysis, Effects of delays,State housing construction projects, Project delaysPaper type Research paper

1. IntroductionThe construction industry in Ghana is enormous and considered one of the key driversof the economy. Ofori (2012) observed that the industry is multifaceted, spreadgeographically and cuts across all sectors of the economy including buildings, roads,dams and bridges. In Ghana, the construction industry’s share to overall gross domesticproduct (GDP) grew from 7.6 percent in 1996 to 9.9 percent in 2011 and rose further to12.6 percent in 2013 (Ghana Statistical Service, 2013). Also, the construction sector’scontribution to the overall industrial development grew from 29.8 percent in 1993 to34.3 percent in 2000. The sector enjoyed further improvement and its contributionto industrial sector output was estimated to be 37.4 percent in 2011 (Osei, 2013).

The construction sector in Ghana holds immense potential for stimulating growthand generating employment. Rapid expansion of infrastructure by government and

International Journal of ManagingProjects in BusinessVol. 8 No. 1, 2015pp. 198-214©EmeraldGroup Publishing Limited1753-8378DOI 10.1108/IJMPB-04-2014-0035

Received 24 April 2014Revised 23 July 201426 August 2014Accepted 27 August 2014

The current issue and full text archive of this journal is available on Emerald Insight at:www.emeraldinsight.com/1753-8378.htm

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private sector initiatives have triggered off construction activities and fuelled demandin construction inputs like cement, steel, paints and chemicals, glass, timber and earthmoving equipment and machinery. Osei (2013) posited that the construction sector isa crucial industry having strong backward and forward growth linkages. It deals withall economic activities directed at the creation, renovation, repair or extension of fixedassets in the form of buildings, civil engineering structures, land improvements anddevelopments. Anaman and Osei-Amponsah (2007) conducted a study to analyzethe causality links between the growth in the construction industry and the growthin the macro-economy of Ghana, which is measured by the GDP. They performeda simple Granger causality test on time series data from 1968 to 2004 and realisedthat a growth in the construction industry led to a growth in the GDP of Ghana.Hence, they recommended that the construction industry needs to be considered as oneof the major drivers of economic growth in Ghana.

In 2010, Ghana moved to a middle income status with an associated increase indemand for housing. The UN Human Settlement Program (UNHabitat, 2011, p. 67)estimates that “with the population increasing by 30.4% since 2000 and urbanresidents growing from 43.8% of the overall populace in 2000 to 50% in 2010, Ghanawill need an estimated 2 million new housing units by 2020.” The Ghana InvestmentPromotion Council (Ghana Investment Promotion Council, 2012) estimated annualhousing supply gap of 30,000 units. Ghana’s housing sub-sector has not enjoyed similarperformance as the entire construction sector. For example, in 2010 real estate servicesaccounted for only 1.78 percent of Ghana’s GDP compared with 8.5 percent aggregatecontribution from the construction sector in the same year (Ghana Statistical Service,2013). According to UNHabitat (2011, p. 30), about 90 percent of housing stock in Ghanais provided by the informal sector which is not adequately captured in the growthcalculations.

However, the problem of delays in the housing construction sector is a majorphenomenon in Ghana as in other emerging countries. Sambasivan and Soon (2007)revealed that in 2005 about 17.3 percent of 417 government contract projectsin Malaysia were considered sick (suggesting projects that were either delayedmore than three months or completely abandoned). A study by Social Securityand National Insurance Trust (SSNIT) (2013) revealed that about 4,700 stateshousing projects in Ghana have been stalled or completely abandoned due tovarying reasons. Regardless of the consequences associated with stalled projectsin Ghana, many projects still continue to delay. The main purpose of this studyis to identify the critical causes of project delays and their effects on projects andproject parties.

The remainder of the paper is organized as follows. The second sectiondiscusses previous related studies on causes and effects of delays in projects.The third section presents the methodology of study. The fourth section discussesthe results of the study. The fifth section presents suggested mitigation measuresfor reducing construction project delays. Finally, the sixth section presents theresearch conclusions.

2. Previous studiesSeveral researchers have investigated the causes and effects of project delays in theconstruction industry across the globe. Hence, this section reviews some of the majorcauses of delays in the construction industry in Ghana and in other countries and theeffects of these delays on projects and project parties.

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2.1 Reviews on causes of project delaysChileshe and Yirenkyi-Fianko (2011) examined perceptions of the likelihoodof occurrence and severity of risk in construction projects in Ghana. This studyexplored 25 risk elements by using an opinion survey approach to collect data fromprofessionals (clients, consultants and contractors) in the Ghanaian constructionindustry. They identified construction method; price inflation; exceptional weather;ground conditions and site contamination; and poor communication among the projectteam as critical risks to construction project.

Mansfield (1994) identified 16 major factors that cause delays and cost overrunsin Nigeria. He found that, the causes of delay and cost overruns in the Nigerianconstruction projects were mainly attributable to finance and payment arrangements,poor contract management, shortages in materials, inaccurate estimation and overallprice fluctuations. El-Razek et al. (2008) determined the most important causes of delayin building construction projects in Egypt from the view of the main project parties;namely, contractors, consultants and clients. The study, thus, identified measuresaimed at avoiding or minimizing construction cost overrun.

Motaleb and Kishk (2010) investigated the causes and effects of construction projectdelays in United Arab Emirates (UAE). They revealed that, even though theconstruction industry’s contribution to GDP is estimated to be 14 percent, yet abouthalf of all construction projects in UAE encounter delays. Client factors are seen to bethe most significant causes of delay followed by project manager factors and otherfinancial factors faced by the contractor. Also time and cost overrun were the mostimportant delay effects.

Assaf et al. (1995) identified 56 main causes of delay (and their relative importance)in large building construction projects in Saudi Arabia. Based on the contractorssurveyed, the most important delay factors were: preparation and approval of shopdrawings, delays in contractors’ progress of work, payment by owners and designchanges. From the views of the architects and engineers, the cash flow problems duringconstruction, the relationship between subcontractors and the slow decision-makingprocess of the owners were the main causes of delay. However, the owners agreedthat the design errors, labor shortages and inadequate labor skills were importantdelay factors.

Ogunlana and Promkuntong (1996) examined critical challenges faced by constructionindustry in Thailand. They identified shortages in industry infrastructure, problemscaused by clients and consultants; and contractor’s incompetence/inadequacies asprincipal delay factors. They recommended that there should be concerted effort byeconomy managers and construction industry associations to provide the necessaryinfrastructure for efficient project management. Chan and Kumaraswamy (1997)evaluated the relative importance of the significant factors causing delays in Hong Kongconstruction projects. Their results indicated that, poor site management and supervision,unforeseen ground conditions, low speed of decision making involving all project teams,client initiated variations and necessary variations of works were the main causes ofdelays in construction projects. Also, Odeyinka and Yusif (1997) classified the causesof delay in Nigerian’s building projects under project participants’ factors and extraneousfactors. Client-related delays included variation in orders, slow decision-making and cashflow problems.

Afshari et al. (2011) pinpointed 20 top causes of non-excusable delays inconstruction projects and define non-excusable delays as those not accepted by theclient and lead to liquidated and ascertained damages. They concluded that, not

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selecting competent subcontractors, poor management of the project changes and lackof mechanism for recording and analyzing project lessons learned were the top causesof non-excusable delays in construction projects. Nonetheless, they suggested thateffective management and control and paying special attention to procurement willimprove time performance of projects thereby decreasing these causes and theircorresponding effects on project performance.

Frimpong et al. (2003) conducted a survey to identify and evaluate the relativeimportance of significant factors contributing to delay and cost overruns ingroundwater construction projects in Ghana between 1970 and 1999. The studyshowed that there are about five main connected delays factors – with attendant costoverruns – associated with groundwater construction projects which are: monthlypayment difficulties from agencies, poor contractor management, material procurementdifficulties, poor technical performances and escalation of material prices.

Al-Momani conducted a quantitative analysis of construction delays in Jordan andidentified eight main causes of delay in construction of public projects. His study and itfindings were in line with Odeh and Battaineh (2002) who conducted a survey whichidentified the most important causes of delays in construction projects with traditionaltype of contracts from the viewpoint of construction contractors and consultants.Result of their study classified seven important causes of delays in constructionprojects (see Odeh and Battaineh, 2002 for more details). In Australia, Walker (1995)surveyed 33 projects constructed during the boom-bust cycle of 1987-1993 withcontract values ranging between Australian $4 million and $45 million.The construction team manager was interviewed in each case study projectby means of a structured questionnaire and it was realised that the constructionmanagement team performance plays a pivotal role in determining construction timeperformance. The study also revealed an important relationship between sound client’srepresentative management effectiveness and good construction time performance.

In the USA, a study by Ahmed et al. (2002) identified some critical causes of delay inFlorida as building permits approval, change order, changes in drawings, incompletedocuments, inspections, changes in specifications, decision during development stageand shop drawings and approval. Besides, Sullivan and Harris (1986) conducteda study where interviews were conducted on and questionnaires sent to contractors,clients and consultants in the UK on the causes of delays in large construction projects.The study identified 19 causes of delays in large construction projects in UK withthe most critical ones being waiting times for information from the client or hisrepresentatives, variation orders, unforeseen ground problems, bad weather, designcomplexity, mechanical and electrical procurement and construction delays andmaterials procurement difficulties.

In summary, the literature review has shown that construction delays are commonissues across both developing and advanced economies. Furthermore the causes andeffects relate to all project parties (such as clients, contractors, consultants, amongothers). However, it was observed that delays in payment to contractors and frequentprice changes are factors common in developing countries.

2.2 Reviews on effects of delays in projectsAibinu and Jagboro (2001) investigated the effects of project delays in the Nigerianconstruction industry. They identified time overrun, cost overrun, dispute, arbitrationand litigation and total abandonment as the six main effects of construction delays.According to Kikwasi (2012), prolonged period of disruptions impacts negatively on

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construction programs. He emphasized that, disruptions and delays are among thecritical challenges faced in the course of executing construction projects and aresources of potential risks. Kikwasi (2012) again identified 20 causes and 14 effectsof delays and disruptions in construction projects in Tanzania (see Kikwasi, 2012 formore details). He concluded that, these causes of delays and disruptions have effectswhich put construction projects at great risk; and therefore recommended adequateconstruction budget, timely issuing of information, finalization of design and projectmanagement skills in project procurement as risks management measures.

Manavazhia and Adhikarib (2002) survey sought to investigate material andequipment procurement delays in highway projects in Nepal. Four main causesof material and equipment procurement delays were identified. Delay in the delivery ofmaterials and equipment to construction sites was found to be contributory causesto cost overruns in construction projects in developing countries.

Chan and Kumaraswamy (1997) further explored strategies of compressingconstruction durations of various types of building projects on the basis of the lessonslearned from Hong Kong. Based on the factors identified, specific technologicaland managerial strategies for reducing construction periods in particular buildingsub-sectors were proposed to improve the construction time performance of Hong Kongbuilding projects.

Finally, Sambasivan and Soon (2007), Faridi and El-sayegh (2006), Kaliba et al. (2009)who also analyzed construction delay effects, identified cost overrun as one of the mostimportant effects of delay.

Whereas studies on causes and effects of construction delays abound, there isdearth of findings on mitigation measures to address these delay causes and effects.Mahamid (2011), investigated factors affecting time delay in road construction projectsand recommended training programs to improve managerial skills of project parties.Sambasivan and Soon (2007) made specific, delay mitigation prescriptions for contractors,consultants and clients.

3. MethodologyThe following research methodology was used in analysing the perception of causesand effects of state housing construction projects in Ghana.

3.1 Research designThe study was fact-finding in nature which used a survey approach for data gatheringto obtain the needed information for the study.

3.2 Sampling techniqueA purposive sampling approach was used in determining the sample for the study.The sample comprised experts working in the State Housing Construction sector in Ghana.

3.3 Sample characteristicsThe respondents were Architect, Quantity Surveyors, Structural Engineers, CivilEngineers, Mechanical Engineers, Site Managers, Land Economist and Project Managers,representing various construction experts in the country. Purposive sampling techniquewas used to select respondents with experience in project management and in-depthappreciation of the causes and effects of state housing construction project delays in

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the public sector of Ghana. The sampling was limited to experts involved in projectsmanaged by only one state agency in Ghana.

3.4 Sample sizeA total of 50 questionnaires were administered mainly to personnel from thebeneficiary state institution, as well as contractor and consultant firms involvedin these housing projects. The population size is about 60. Out of a total of50 questionnaires sent to the different target groups in the state agency underconsideration, 31 responded, signifying a satisfactory response rate of a little over50 percent according to the norm responsive rate in the construction industry(Akintoye, 2000; Dulami et al., 2003).

3.5 Questionnaire structureThe survey questionnaire consisted of three main parts. The first part elicited fromrespondents standard demographic or background information: Job title, years inindustry, and value of contracts among others. The second part of the surveyasked fairly detailed questions which required respondent to rate the frequency ofoccurrence and impact of a set of causes of construction delay which have beensummarized from existing literature (Odeh and Battaineh, 2002; El-Razek et al., 2008;Motaleb and Kishk, 2010). The 37 listed causes of delay grouped under ten categoriesare as follows:

(1) Financial: delay in payment to contractor/supplier, poor pre-financing by contractor.

(2) Resource: productivity of labor and plant, price increases in materials, defectivematerials and material shortage.

(3) Technical: necessary design changes by consultant/owner, variation orders,inappropriate construction methods, out of date technology.

(4) Economic: poor financial/capital market, inflation/price fluctuation, inadequatefunds from sponsor/client.

(5) Environmental: bad weather conditions, ground conditions and contaminants,site condition, lack of proper scoping.

(6) Operational: competence of consultants and contractors, quality andperformance control, excessive bureaucracy in operations.

(7) Government and political: change of government, change in governmentpolicy, commitment of government.

(8) Relationship: poor communication among project team, lack of unity of purposeand direction, organization, coordination and control by consultant, poorindustrial relations/strikes.

(9) Security/safety: accidents and injuries, theft on site, vandalism, inadequatesafety and security.

(10) Legal: insufficient details in contract documents, lack of clear understanding ofcontract documents by all stakeholders, contract flaws, legal jurisdiction ofsettlement of disputes, prolonged court cases, absence of alternative disputeresolution (ADR) clauses in the contract and prolonged ADR processes.

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The final set of questions, drew from respondents their opinions on the effects of theabove construction delays. Ten critical delay effects were summarized from the worksof Aapaoja (2013), Ambituuni (2011), Memon et al. (2011). Most of these studies arequite recent and have dealt with effects of delays from developing countries’ context.The ten factors are:

(1) litigation;

(2) time overrun;

(3) total abandonment of project;

(4) arbitration;

(5) contractor in financial crisis;

(6) cost overrun;

(7) increased portfolio of “non-performing” projects;

(8) termination of contract;

(9) difficulties with payment; and

(10) lack of continuity by client.

The above delay effect factors were subsequently scored and ranked by respondentsduring the survey.

3.6 Data collection and analysisData were analyzed using Microsoft Excel to produce the summaries of the variousresponses. The relative importance index (RII) for each factor on delay cause and effectwas calculated using the frequency data for each response category generated fromMicrosoft Excel in a similar manner as El-Razek et al. (2008) and as shown in theequation below:

RII ¼X4

i¼1

ai�xiN

where RII is the importance index; ai the weight of the ith response; xi the frequency ofthe ith response; and i the response category index; and N the number of respondents.For this study N¼31.

A response of “very high” was given a weight of “4,” “high” was given a weightof “3,” “low” was given a weight of “2,” and “very low” was given a weight of “1.”An example is as follows:

RII ¼ 3�6þ2�13þ1�10þ2�031

¼ 2:7

The Statistical Package for the Social Sciences (SPSS) was used to conduct Spearman’scorrection analysis of the data.

To perform ranking of delays factors, respondents were clustered into threecategories, namely; clients, consultants and contractors. This was to ensure that anacross-board view was obtained from all project parties concerned in the execution ofprojects in the construction industry.

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The first section of the demographic information shown in Table I classifiedrespondents based on employing parties. A breakdown of the respondents is as follows:65 percent were clients, 16 percent consultants and 19 percent contractors. The clientgroup which is the largest is mostly made up of the sponsors and professional staff ofthe state institution.

Section 2 provides the professional background of respondents. Majority of therespondent are quantity surveyors (37 percent), followed by architects (23 percent) andcivil/structural engineers (22 percent). Again, it was observed that respondents werevery familiar with the technical terms used as they were involved in the management ofprojects at the operational and strategic levels.

As shown in Section 3, all respondents had at least six year of experience workingon state housing project, with 26 percent having more than 15 years of experience inthe industry.

Again, as can be observed in Table I, over 70 percent of the housing projects arevalued in excess of GHC 1 million (equivalent of US$3,30,000), indicating the sector isvery capital-intensive and any savings in costs through improvement in project timemanagement could translate into significant benefits for the State.

4. Discussion of results4.1 Analysis of likelihood of occurrence and severity of impact delay factorsThis section examines the perceptions of project parties on the frequency of occurrenceand degree of impact of the 37 listed causes of state housing construction projects delayin Ghana. The RII was calculated for each cause and ranked as shown in Table II.Based on the ranking for each delay cause (in terms of frequency of occurrence anddegree of impact), the most critical delay factors were identified.

Section Demographic table Frequency %

1st Profiles of respondents according to employing partyClient 20 65Consultant 5 16Contractor 6 19

2nd Professional background of respondentsArchitect 7 23Quantity surveyor 11 35Civil/structural engineer 7 22Others 6 18

3rd Working experience of respondentsLess than a year 0 01-5 0 06-10 18 5811-15 5 16More than 15 8 26

4th Average contract suma

Less than Gh¢500,000 (US$165,000) 3 10Gh¢500,000 – Gh¢999,999 (US$165,000 – US$330,000) 6 19Gh¢1,000,000 – Gh¢2,000,000 (US$330,000 – US$659,000) 6 19More than Gh¢2,000,000 (US$659,000) 16 52

Note: aGhana Cedi – US Dollar conversion based on Bank of Ghana daily interbank forex rates as ofJuly 16, 2014

Table I.Demographic

characteristics ofrespondents

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Frequencyof

occurrence

Degreeof

impact

RII

Rank

RII

Rank

Category

Delay

causefactors

Max

¼4

Max

¼37

Max

¼4

Max

¼37

Financial

Delay

inpaym

entto

contractor/sup

plier

3.71

13.77

1Po

orpre-fin

ancing

bycontractor

2.74

133.10

7Resource

Productiv

ityof

laborandplant

2.32

182.68

16Priceincreasesin

materials

3.23

33.26

3Defectiv

ematerialsandmaterialshortage

2.30

192.43

19Techn

ical

Necessary

design

changesby

projectparties

2.84

83.06

8Variatio

norders

3.17

53.17

4Inappropriateconstructio

nmethods

2.26

212.30

21Out

ofdate

technology

1.94

301.97

30Economic

Poor

financial/capita

lmarket

3.10

63.16

6Infla

tion/priceflu

ctuatio

n3.37

23.43

2Inadequate

fund

ingfrom

sponsor/client

3.19

43.19

4Env

ironmental

Bad

weather

cond

itions

1.94

301.97

30Groun

dcond

itionsandcontam

inants

1.94

301.94

32Site

cond

ition

2.17

232.20

23La

ckof

proper

scoping

2.29

202.29

22Operatio

nal

Competenceof

consultantsandcontractors

2.77

102.77

12Qualityandperformance

control

2.70

152.70

15Excessive

bureaucracyin

operations

2.93

72.93

9Governm

entandpolitical

Change

ofgovernment

2.77

102.77

12Ch

ange

ingovernmentpolicy

2.73

142.73

14Co

mmitm

entof

government

2.48

162.62

17Relationship

Poor

commun

icationam

ongprojectteam

2.77

102.87

10La

ckof

unity

ofpu

rposeanddirection

2.42

172.52

18Organization,

coordinatio

nandcontrolb

yconsultant

2.80

92.80

11Po

orindu

strial

relatio

ns/strikes

1.71

351.81

35

(con

tinued)

Table II.Listed causes of timeoverrun factorsranked according todegree of occurrence

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Frequencyof

occurrence

Degreeof

impact

RII

Rank

RII

Rank

Category

Delay

causefactors

Max

¼4

Max

¼37

Max

¼4

Max

¼37

Security/safety

Accidents

andinjuries

1.68

361.74

36Thefton

site

2.10

252.10

27Vandalism

1.45

371.52

37Inadequate

safety

andsecurity

1.97

292.06

29Legal

Insufficient

details

incontract

document

2.03

262.10

27La

ckof

clearun

derstand

ingof

contract

documents

byallstakeholders

2.03

262.13

25Co

ntract

flaws

2.03

262.13

25Legaljurisdictionof

settlementof

disputes

2.13

242.16

24Prolongedcourtcases

2.26

212.32

20Absence

ofADRclausesin

thecontract

1.83

341.83

34ProlongedADRprocesses

1.93

331.93

33

Table II.

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Again, according to the RII rankings, top causes of state housing construction delaysare shown in Table III, for both frequency of occurrence and degree of impact of thedelay factors.

The analysis show that the six most critical factors of delay in the Ghanaian statehousing construction industry (in terms of both frequency of occurrence and degree ofimpact) are: delay in payment to contractor/supplier, inflation/price fluctuation, priceincreases in materials, funding from sponsor/client, variation orders, poor financial/capital market.

Delay in payment to contractor/supplier is ranked as the most important causeof delay in Ghana especially because the Government is the main financier of mostpublic sector projects. Disbursements of budgetary allocations to governmentinstitutions are often irregular. However, this delay factor is ranked second byKikwasi (2012) amongst seven highly ranked causes and is one of the ten mostimportant causes by El-Razek et al. (2008) – confirming similar results of causes ofdelay across the continent.

Further, inflation/price fluctuation was identified as the second major cause of projectdelay in Ghana. Inflation rate in Ghana is high resulting in constant price increases.Inflation is ranked 7th by Motaleb and Kishk (2010) among 15 top delay factors.

Eight delay causes had the same ranking for both occurrence and impact; these are:delay in payment to contractor/supplier, inflation/price fluctuation, price increasesin materials, funding from sponsor/client, variation orders, poor financial/capitalmarket, design changes by consultant/owner and poor communication among projectteam – consultant, client, contractor.

On degree of occurrence; organization, coordination and control by consultant(ranked ninth), competence of consultants and contractors – (ranked tenth) and changeof government – (ranked tenth) were all ranked two steps below on impact as 11th, 12thand 12th respectively – thus signifying a relatively lower impact on project outcome.Surprisingly, financing by contractor – ranked 13th on frequency of occurrence andnot part of the top ten causes was ranked seventh on degree of impact – indicating thatit has a higher impact on project outcome though it occurs less frequently as a causeof delay.

Frequency ofoccurrence

Degree ofimpact

Cause factors RII Rank RII Rank

Delay in payment to contractor/supplier 3.71 1 3.77 1Inflation/price fluctuation 3.37 2 3.43 2Price increases in materials 3.23 3 3.26 3Funding from sponsor/client 3.19 4 3.19 4Variation orders 3.17 5 3.17 5Poor financial/capital market 3.10 6 3.16 6Excessive bureaucracy in operations 2.93 7 2.93 9Design changes by consultant/owner 2.84 8 3.06 8Organization, coordination and control by consultant 2.80 9 2.80 11Competence of consultants and contractors 2.77 10 2.77 12Change of government 2.77 10 2.77 12Poor communication among project team consultant, client, contractor 2.77 10 2.87 10Financing by contractor 2.74 13 3.10 7

Table III.Top listed causesof delays (factorsranked accordingto degree ofoccurrences)

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4.2 Analysis of effects of delayIn order to rank the effects of delays, the RII was also calculated for each effect factor.Table IV shows ranking of the ten listed effects of state housing construction delays.

The above results show that the five highest effects of delay are:

(1) cost overrun;

(2) time overrun;

(3) litigation;

(4) lack of continuity by client; and

(5) arbitration.

4.2.1 Cost overrun. Cost overrun is simply defined as exceeding of planned budget orcost for a project and is considered the most important effect of project delays in Ghana.The common reasons for project cost overruns include inaccuracy of cost estimates,unrealistic project design, poor planning relating to assigned duration to project tasksand scope changes.

4.2.2 Time overrun. Time overrun is the second most important effect of projecttime overrun. Factors such as inadequate planning by the contractors, inappropriatesite supervision by the contractors, inadequate project handling experience ofcontractors, and delay in the payments for the work completed directly affect thecompletion of the project and cause time overrun.

4.2.3 Litigation. Litigation is considered the third most import effect of delay.Sometimes parties involved in projects use litigation as a last resort to settle disputes(Sambasivan and Soon, 2007). Litigation is often caused by absence of ADR clauses in thecontract or prolonged ADR processes. Clients are becoming more demanding, morediscerning, and less willing to accept risk without proper recompense. They do not wantsurprises, and are more likely to engage in litigation when things go wrong.

4.2.4 Lack of continuity by client. Lack of continuity by clients was evaluated as the4th most important effect of project delays in Ghana. MALBEX (2005) also identifiedlack of project continuity as a major effect of delays. In Ghana there, is evidenceof stalled projects in the public sector due to poor cash flow from government. SSNIT(2013) revealed that 4,700 government affordable housing units across the countrywere stalled due to lack of funds.

RII RankEffects (Max¼ 4) (Max¼ 10)

Cost overrun 3.87 1Time overrun 3.80 2Litigation 3.66 3Lack of continuity by client 3.24 4Arbitration 3.18 5Termination of contract 3.14 6Increased portfolio of “non-performing” projects 2.96 7Contractor in financial crisis 2.83 8Difficulties with payment 2.53 9Total abandonment of project 1.43 10

Table IV.Effects of the causes

of delay rankedby respondents

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4.2.5 Arbitration. Arbitration involves the use a third-party to settle project disputesamicably without going to the courts. Arbitration is mostly necessitated by factorssuch as unclear contract document, lack of clear understanding of contract documentsby all stakeholders and contract flaws. According to Sambasivan and Soon (2007),arbitrations in client, consultant, labor and contract-related issues contribute to theabandonment of projects.

4.3 Relationship between cause of categories and causes of effectsThis analysis was aimed at establishing a possible relationship between the causesand the effects. The analysis was based on the (RII) average values for both cause ofdelay categories and effects. The correlation analysis in Table V shows existence of anempirical relationship between the cause of delay categories and effects. The Spearman’sρ ( ρ¼ 0.700) correlation test indicates that, there is a strong relationship between thenamed cases (i.e. causes of categories and effects of delays). The results show thatchanges in cause category strongly correlate with changes in cause effects. In addition, atsignificance (two-tailed)¼ 0.188, there is statistical significant association between thetwo parameters. That means, increases or decreases in cause of categories, significantlyrelate to increases or decreases in the effects of delay.

5. Suggested mitigation measures for project delaysAny measures to address the problem of state housing construction time overrunsshould be targeted at the six identified major causes of delays, namely; delay in paymentto contractor/supplier, inflation/price fluctuation, price increases in materials, fundingfrom sponsor/client, variation orders and poor financial/capital market (Table VI).

6. Limitation of studyIt is important to state that the findings of this study cannot be generalized due to itslimited scope. Though the study covered projects across the country, the findings arebased on analysis of data collected from only one state housing institution. Again thestudy is based on self-reported perception of causes and effects of delays by projectparties (namely; contractors, consultants and clients) which tends to vary and may notalways be reliable. Furthermore, the study did not distinguish between ranking byindividual project parties. However, the findings are consistent with similar studiesassessing the causes and effects of construction project delays.

7. ConclusionThis paper has presented the perceptions of project parties on the frequency ofoccurrence and degree of impact of various causes of delay and their effects on projectsand project parties in Ghana. This was done through literature review and questionnaire

Category Effects

Spearman’s ρ Category Correlation coefficient 1.000 0.700Sig. (two-tailed) 0.188n 10 5

Effects Correlation coefficient 0.700 1.000Sig. (two-tailed) 0.188n 5 5

Table V.Spearman’s rankcorrelation coefficient

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survey administered to project parties working on state housing construction projects inGhana. RII was calculated for 37 listed causes of projects delay and 10 effects of delays.The causes and effects of delay factors were then ranked based on their RII values. Basedon both frequency of occurrence and degree of impact rankings, the six most criticalfactors of delay in the Ghanaian state housing construction industry are: delay inpayment to contractor/supplier, inflation/price fluctuation, price increases in materials,funding from sponsor/client, variation orders and poor financial/capital market. Again,the paper identified the following as the five most important effects of state housingconstruction delays in Ghana; cost overrun, time overrun, litigation, lack of continuity byclient, and arbitration. The findings were similar to delay factors identified by Kikiwasiand Motaleb and Kishk (2010) and effects of delays identified by Memon et al. (2011).Finally, correlation analysis showed existence of an empirical relationship betweenthe cause categories and effects of delay. The results will help project managers andpolicymakers appreciate the effects of these delays on project outcomes and hopefullyimprove the efficiency of project management in Ghana. It will also provide academiciansin Ghana and other developing countries with another case on causes of state housingconstruction delays from a developing country’s context.

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Delay in payment tocontractor/supplier

Client must ensure that funds for projects are fullysecured and payment to contract made on time

Frimpong et al. (2003),Sambasivan and Soon(2007)

Inflation/pricefluctuations

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Poor financial/capital market

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Further readingAmponsah, R. (2010), Improving Project Management Practice in Ghana With Focus on

Agriculture, Banking and Construction Sectors of the Ghanaian Economy, School ofProperty, Construction and Project Management, RMIT University, available at: http://researchbank.rmit.edu.au/view/rmit:10389 (accessed July 30, 2013).

Accra Metropolitan Assembly (2006), “Industrial sector”, available at: http://ama.ghanadistricts.gov.gh/?arrow¼atd&_¼3&sa¼1150 (accessed July 24, 2013).

Corresponding authorDr Charles Teye Amoatey can be contacted at: [email protected]

For instructions on how to order reprints of this article, please visit our website:www.emeraldgrouppublishing.com/licensing/reprints.htmOr contact us for further details: [email protected]

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