The Construction Contractors In Nigeria Construction Essay

Chapter 2


2.0 Introduction

Hazard is merely the step of the likeliness that you will endure injury from the jeopardy ( G. Tyler Miller, Jr 2006 ) and every human enterprise involves hazard ( Dey and Ogunlana, 2004 ; Poh and Tah, 2006 ) . Take for case, the life clip of developing malignant neoplastic disease of the lung from smoking a battalion of coffin nails per twenty-four hours is 1 in 250, which means that 1 of every 250 people who smoke a battalion of coffin nails per twenty-four hours will develop lung malignant neoplastic disease over a typical life-time. It is of import to separate between possibility and chance because when I say that it is possible that a tobacco user can acquire lung malignant neoplastic disease, I merely intend that the event could go on and the chance gives an estimation of the likeliness of such an event. So the same thing besides happens to the building field because the building industry is more prone to hazard and uncertainness than most other industries ( Flanagan and Norman, 1993 ; Kim and Bajaj, 2000 ; Tah and Car, 2000 ) .

It is of import that the hazard is assessed and managed to avoid farther happening. The figure 2.1 below summarizes how hazard are assessed and managed in building industry

We will write a custom essay sample on
The Construction Contractors In Nigeria Construction Essay
or any similar topic only for you
Order now

Figure 2.1: Hazard appraisal and hazard direction

Hazard Management

Comparative hazard analysis

How does it compare with other hazards?

Hazard decrease

How much should it be reduced?

Hazard decrease scheme

How will the hazard be reduced?

Fiscal committedness

How much money should be spent?

Hazard Appraisal

Hazard Identification

What is the jeopardy?

Probability of hazard

How likely is the event?

Consequences of hazard

What is the likely harm?

2.1 Construction Contractors in Nigeria

Construction contractors are normally categorised by several standards. In Nigeria, the range of operation is a common standard. Research workers use this standard to categorize contractors into either autochthonal or exile ( Edmonds, 1979, Ogunpola, 1984, Olateju, 1991, Samuel, 1999 ; Mayaki, 2003 ) . Idoro ( 2007 ) described autochthonal contractors as those contractors that are to the full owned and managed by Nigerians. He farther described transnational contractors as expatriate contractors who are chiefly private houses that are jointly owned by Nigerians and aliens but entirely managed by exiles. From this description, the major differences between autochthonal and expatriate contractors are concerned with company ownership and direction which are either largely or to the full controlled by exiles. The differences are in other characteristics such as labor, stuffs and equipment, are non every bit pronounced as in these two characteristics. Idoro ( 2004 ) traced the engagement of exile contractors in building in Nigeria to the colonial yearss and opined that building pattern and engineering in Nigeria had witnessed important foreign engagement from the colonial yearss to the present twenty-four hours. Edmonds ( 1979 ) opined that exile contractors were the big building companies and were few in figure but they carried out 90 % of the entire building works in Nigeria. Ogunpola ( 1984 ) supported this averment by keeping that although, the numerical strength of exile contractors was approximately 7 % of the entire figure of contractors nevertheless, and they accounted for a significant proportion of building plants. Olateju ( 1991 ) besides confirmed this averment in a survey which discovered that autochthonal contractors got merely 7 % of the entire value of contracts awarded by the Federal Government and Oyo State Government from 1974 to 1984. Idoro ( 2004 ) maintained that the building industry in Nigeria was so dominated by expatriate contractors and that the job in Nigeria was non that of pulling foreign engagement but instead that of advancing autochthonal engagement

2.2 Hazard and hazard direction in building

Undertaking hazard in the literature are defined in several ways ( e.g, PMI, 2000, IEC, 2001, Baloi ) . The construct of hazard is discussed in greater item and suggestion utilizing the more general construct of uncertainness ( Ward and Chapman, 2003 ) . A formal definition is given in the international criterion IEC 62198 as a combination of the chance of an event occurring and its effects for undertaking aims. Akintoye and MacLeod ( 1997 ) conducted a questionnaire study which shows that the bulk of undertaking histrions perceive hazard as a negative event. Osipova and Apleberger ( 2007 ) presented more elaborate literature reappraisal on hazards in building. Undertaking hazard direction is the designation, appraisal, and prioritization of hazards ( defined in ISO 31000 as the consequence of uncertainness on aims, whether positive or negative ) followed by co-ordinated and economical application of resources to minimise, proctor, and command the chance and/or impact of unfortunate events or to maximise the realisation of chances.

However, all definitions agree that the purpose of undertaking hazard direction is to maximize chances and understate the effects of a hazard event in the building undertaking. The procedure is defined otherwise in research literature ( e.g. Flanagan and Norman and Chapman and Ward, 2003 ) . The Guide to the Project Management Body of Knowledge ( PMI, 2000 ) identifies four chief stairss in the hazard direction procedure: hazard designation, hazard appraisal, development of hazard response and direction of hazard response.

Harmonizing to the standard ISO 31000, the procedure of hazard direction consists of several stairss as follows:

Designation of hazard in a selected sphere of involvement.

Planning, the balance of the procedure.

Maping out the followers:

the societal range of hazard direction

the individuality and aims of stakeholders

the footing upon which hazards will be evaluated, restraints.

Specifying a model for the activity and an docket for designation.

Developing an analysis of hazards involved in the procedure.

Extenuation or Solution of hazards utilizing available technological, human and organisational resources.

SHAMPU ( Shape, Harness, and Manage Project Uncertainty ) theoretical account is introduced by Chapman and Ward ( 2003 ) , which consists of nine stages. Generic undertaking hazard direction procedure of 11 stages, which can be used in big and complex undertakings are presented by Del Cano and de la Cruz ( 2002 ) . For the intent of this research I use a simplified hazard direction procedure of three chief stairss: hazard designation, hazard appraisal and hazard response. The ground for the simplification is that this theoretical account is well-known for the undertaking histrions and often used in pattern. The end of the hazard designation procedure is to make up one’s mind on possible hazards that may impact the undertaking. In sorting undertaking hazards and hazard beginnings several attacks can be used ( Leung et al. , 1998 ; Tah and Carr, 2000 ; Baloi and Price, 2003 ; Li et al. , 2005 ) . The chief classs are fiscal, economic, managerial, legal, building, design and environmental hazards. During the hazard assessment the identified hazards are evaluated and ranked. The end is to prioritize hazards for direction. Baccarini and Archer ( 2001 ) depict a methodological analysis for the hazard ranking of undertakings, which allows for an effectual and efficient allotment of the resources for direction of undertaking hazards. The JRAP theoretical account proposed by A-ztas and A-kmen ( 2005 ) is a pessimistic hazard analysis methodological analysis, which is effectual in unsure conditions in building undertakings. The hazard response procedure is directed to placing a manner of covering with the undertaking risks. Several studies conducted among the building industry histrions ( Akintoye and MacLeod, 1997 ; Uher and Toakley, 1999 ; Lyons and Skitmore, 2004 ) show that checklists and brainstorming are the most useable techniques in hazard designation ; subjective judgement, intuition and experience are used largely in hazard appraisal ; and reassign, decrease and turning away are the most applied methods for hazard response.

2.3 The functions of the undertaking ‘s different stages in hazard direction

Traditionally, a building procedure is divided into four chief stages: programme, planning, procurance and production. In the programme phase the client has an thought about the undertaking and analyses conditions for its executing. During the planning stage the designers produce building drawings harmonizing to the client ‘s demands. In the procurance stage the parties sign the contract. Finally, the contractor executes the occupation in the production stage. Since it is impossible to anticipate all undertaking hazards in the programme stage and due to the inclination of the identified hazards to alter during undertaking execution, joint and consistent hazard direction is required throughout all undertaking ‘s stages ( Rahman and Kumaraswamy, 2004 ) . Motawa et Al. ( 2006 ) suggest a theoretical account, which helps in finding possible alterations in the undertaking based on available information in the early phases of the undertaking. Baccarini and Archer ( 2001 ) present a methodological analysis for a hazard evaluation procedure in the procurance stage, which allows the effectual and efficient allotment of resources for undertaking hazard direction. Several writers highlighted the importance of the early stages in undertaking hazard direction since the determinations taken in these stages frequently have a important impact on the concluding consequence ( Kahkonen, 2001 ) . However, harmonizing to Uher and Toakley ( 1999 ) , the existent use of hazard direction techniques in the early stage is really low. Lyons and Skitmore ( 2004 ) conducted a study where one of the facets was the usage of hazard direction in each of the undertaking phases. The consequences showed that hazard direction in the planning and production stages was higher than in the programme stage. Risk designation and hazard appraisal were more frequently performed in the hazard direction processes than hazard response.

2.4 Construction undertakings

Harmonizing to Turner ( 1992 ) , a undertaking is an enterprise in which human, stuff and fiscal resources are organised in a fresh manner ; to set about a alone range of work of given specification, within restraints of cost and clip, so as to accomplish unitary, good alteration, through the bringing of quantified and qualitative aims. The definition suggests three cardinal marks of the undertaking, i.e. clip, cost and quality, which are to be in focal point when set abouting the undertaking. It besides highlights the importance of efficient administration of available resources in order to accomplish a good concluding consequence. Flanagan and Norman ( 1993 ) stress two facets of any building undertaking: the procedure, i.e. undertaking phases, and the administration, i.e. undertaking histrions. From the procedure position, any building undertaking comprises a figure of consecutive stages. Different writers suggest a different figure of undertaking stages ( Chapman and Ward 2003, Flanagan and Norman 1993, Harris et Al. 2006, PMI 2000, Smith et Al. 2006 ) . The simplest attack identifies two chief stages – undertaking development and undertaking execution. These two can be farther elaborate and developed into a larger figure of stages, e.g. feasibleness, design, procurance, building, commissioning, and operation. The theoretical account adopted in this research comprises four stages – programme, design, procurance and production. The care stage was excluded from the survey because no hazard direction activities are to be found in this stage. In the programme phase the client has an thought about the undertaking and analyses conditions for its executing. During the design stage the designers and applied scientists produce building drawings harmonizing to the client ‘s demands. In the procurance stage the client appoints the contractor to transport out the undertaking. Finally, the contractor executes the occupation in the production stage. Figure 2.2 below overviews the different theoretical accounts presented in the literature and the theoretical account used in the thesis.

Figure 2.2: Construction undertaking phases. Beginning: A ( PMI 2000 ) , B ( Harris et al. 2006 ) , C ( Flanagan and Norman 1993 ) , D ( Chapman and Ward 2003 ) . Model E is used in this thesis.


2.5 Hazards in projectw4.jpg

Several of these definitions have a common characteristic: they define hazard in footings of unsure events and their impact on a undertaking ‘s aims. The international criterion “ Project hazard direction – Application guidelines ” uses the footings chance and effect and defines hazard as a combination of the chance of an event occurring and its effects for undertaking aims ( IEC 2001 ) . As this research discusses hazards in the undertaking context, a formal definition from “ A Guide to the Project Management Body of Knowledge ” is used ( PMI 2000 ) defines hazard as “ an unsure event or status that, if it occurs, has a positive or negative consequence on a undertaking ‘s aims ” . Ward and Chapman ( 2003 ) discourse the construct of hazard in greater item and suggest utilizing a more general construct of uncertainness. It ‘s argued that the term ‘risk ‘ is frequently associated with hardship and concentrate on menaces, non chances. The questionnaire study conducted by Akintoye and MacLeod ( 1997 ) strengthens the statement, demoing that the bulk of respondents perceive hazard as a negative event. Harmonizing to Smith et Al. ( 2006 ) all undertaking hazards can be divided into three chief classs: known hazards, known terra incognitas and unknown terra incognitas. The difference between the classs is the diminishing ability to foretell or anticipate the hazards. Taking into history the chance of the happening and the effect for undertaking aims, those events that have high chance and high impact are capable to put on the line direction in Figure 2.3 below.

Figure 2.3: Categorization of hazard events ( Smith et al. 2006 ) .


2.6 Procedures in hazard direction

Risk direction is a systematic procedure of identifying, measuring and reacting to project hazard ( PMI 2000 ) . The overall end of the hazard direction procedure is to maximize the chances and minimise the effects of a hazard event. A assortment of hazard direction theoretical accounts with different Numberss of phases can be found in the literature. Undertaking hazard direction offers a theoretical account with five stairss: hazard planning, hazard designation, hazard appraisal, hazard response program, and hazard reappraisal and maintain check on risk.. PMBOK ‘s theoretical account ( PMI 2000 ) is similar but divides risk appraisal into two procedures of qualitative hazard analysis and quantitative hazard analysis. SHAMPU model which involves nine phases: specify the undertaking, concentrate the undertaking, place the issues, construction the issues, clear up ownership, estimation variableness, evaluate deduction, tackle the programs, and pull off execution was presented by Chapman and Ward ( 2003 ) . Integrated methodological analysis for undertaking hazard direction in big and complex building undertakings was proposed by Del Cano and de la Cruz ( 2002 ) . The SHAMPU theoretical account is divided into four procedure stages: induction, reconciliation, care and acquisition. Each stage consists of several phases, which, in bend, are divided into different activities. Despite the assortment of theoretical accounts, hazard designation, appraisal and response form the nucleus of undertaking hazard direction. Therefore, a theoretical account dwelling of these three phases is used in this survey in Figure 2.4 below.

Figure 2.4: Hazard direction procedure adopted in the survey.


Beginnings:, 2009.

Risk direction procedure involves some stairss and hazard designation is the first measure and it focuses on finding those hazards that may impact the undertaking. It is suggested that every bit many undertaking stakeholders as possible should take part in the hazard designation procedure ( PMBOK, PMI 2000 ) . Tools and techniques for placing the undertaking hazards are legion ( IEC 2001 ) which includes brainstorming, adept sentiment, structured interviews, questionnaires, checklists, historical informations, old experience, proving and mold, rating of other undertakings. Risk direction pattern surveies through empirical observation show that checklists and brainstorming are the most useable techniques in hazard designation ( Akintoye and MacLeod 1997, Lyons and Skitmore 2004 ) . Hazard designation sometimes depends on single judgements of the undertaking participants mentioned a recent survey in this context that suggests that the function of experience in hazard designation is less important than is normally assumed. During the hazard designation process the possible hazards autumn in the different groups. In general, the beginnings of hazard in building undertakings may be divided into three groups:

Internal or governable hazards ( e.g. design, building, direction and relationships ) ;

External or unmanageable hazards ( e.g. fiscal, economic, political, legal and environmental ) ;

Force majeure hazards.

Several surveies contributed to knowledge by placing unique, specific and country-related hazards ( Andi 2006, Ling and Hoi 2006, Zou et Al. 2007 ) . In hazard appraisal, hazards identified are evaluated and ranked. The end is to prioritize hazards for direction. The JRAP ( Judgemental hazard analysis procedure ) theoretical account proposed by A-ztas and A-kmen ( 2005 ) is a pessimistic hazard analysis methodological analysis, which is effectual in unsure conditions within building undertakings. Zeng et Al. ( 2007 ) suggest a hazard appraisal methodological analysis based on fuzzed concluding techniques and aimed at covering with hazards in complex undertakings.

The hazard response is an appropriate stairss taken or processs implemented upon find of an intolerably high grade of exposure to one or more hazards. Besides called hazard intervention and it consist of four hazard schemes: hazard turning away, hazard decrease, hazard transportation and hazard keeping. Hazard turning away trades with the hazards by altering the undertaking program or happening methods to extinguish the hazards. Risk decrease purposes at cut downing the chance and/or effects of a hazard event. Those hazards that remain in the undertaking after hazard turning away and decrease may be transferred to another party either inside or outside the undertaking. Risk keeping or credence indicates that the hazard remains present in the undertaking.

2.7 Hazard allotment through building contracts

In building undertaking, it is impossible to wholly take all hazard. Therefore, an appropriate allotment of hazards among project histrions is really of import. Hazard allotment influences the behavior of undertaking histrions and, hence, has a important impact on the undertaking public presentation in footings of the entire cost. A undertaking hazard that is unclearly allocated leads to differences between the client and the contractor. One of the jobs identified in the literature is the histrions ‘ different perceptual experiences of to whom a specific hazard or group of hazards should be allocated. Normally, contractors indicate that they have to bear the bulk of undertaking hazards and monetary value these hazards through adding a eventuality to the command monetary value ( Andi 2006 ) . Using eventuality financess has been identified by the research workers and practicians as a important beginning of the undertaking ‘s cost addition ( Zaghloul and Hartman 2003 ) . Evaluation and witting allotment of hazards to the appropriate histrion under the contract allows cut downing the command monetary value by diminishing eventuality financess and, hence, leads to take down entire cost ( Zack 1996 ) . A figure of theoretical accounts supplying a model for hazard allotment determinations can be found in the literature ( Lam et al. 2007, Li et Al. 2005, Olsen and Osmundsen 2005 ) . Smith et Al. ( 2006 ) highlight the importance of sing the undermentioned issues when doing hazard allotment determination:

who has the best ability to command hazard events ;

who has the best conditions to pull off hazards ;

who should transport the hazards that can non be controlled ;

how much does it be to reassign the hazards.

Hazard allotment scheme in building undertakings is defined through the contractual agreements. The contract is a written understanding between a client and a contractor where the liabilities and duties of each party are assigned. The contract can besides be defined as a tradeoff between the contractor ‘s monetary value for put to deathing the undertaking and his willingness to take the hazards ( Flanagan and Norman 1993 ) . There are different contract schemes available in figure 6 below. The aim of clients is to take the scheme that ensures accomplishment of the undertaking objectives in the most efficient manner. Two contract schemes that are largely used in Nigeria are separated ( design-bid-build ) contracts and incorporate design-build contracts. The collaborative signifier of partnering has become popular in Nigeria during the last decennary. In contrast with the UK, partnering does non hold the position of a contractual signifier in Nigeria. As a signifier of undertaking execution, partnering is intended to make effectual coaction between the undertaking ‘s histrions.

Figure 2.5: Classs of building contract ( derived from Harris et Al. 2006 ) .


2.7.1 Design-bid-build

Separated contracts are characterised by a traditional separate assignment of a design squad and a building house. First, the client appoints an designer or applied scientist to bring forth design paperss ( Design ) and so procures ( Bid ) the contractor to put to death ( Build ) the undertaking. Thus the client is responsible for the planning, design and map of a building and the contractor is responsible for the occupation executing. The DBB procurance is the most widely used scheme in many states, e.g. the UK, USA and Singapore ( Ling et al. 2004 ) . Within this contract scheme, two chief administration options are possible: divided contracts and general contracts. Schematically their administration constructions are shown in Figure 2.6 below.

Figure 2.6: Administration construction in design-bid-build contracts.


2.8 Collaborative relationships in building undertakings

Adversarial and timeserving behavior is common in the building industry ( Cox and Thompson 1997, Zaghloul and Hartman 2003 ) . It means that the histrions are focused on the short- term relationship and economic consequences instead than on long-run cooperation. In response to this behavior, many research workers try to happen the constructs for more collaborative relationship between the undertaking histrions. Two constructs are of particular involvement in this research: relational catching and joint hazard direction. Both focal point on betterment of contractual relationships, better hazard allotment, and, hence, on more effectual hazard direction.


Hi there, would you like to get such a paper? How about receiving a customized one? Check it out