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Reasons Why Projects Delay, Cost Overruns In Construction Industry

A recent survey by one of the world’s leading associations for project professionals, Project Management Institute (PMI), has revealed that 70 per cent of construction projects experience scope creep, and 73 per cent of such projects ended over budget.

In an interview of more than 40,000 global Project Management Professional (PMP) certification holders in the construction industry, it also found that 72 per cent of construction projects often experienced project delays.

In another research, titled “Most critical factors responsible for cost overruns in Nigeria building construction industry,” the Federal University of Technology’s Oluyemi-Ayibiowu, B. D., Aiyewalehinmi, O. E and Omolayo, O. J, found that cost overruns are a major problem facing the local construction industry.

They noted that cost overruns led to numerous negative effects such as project delay, abandonment and poor-quality delivery.

Based on their data, the six most severe factors of construction cost overrun were identified as: risk and uncertainty related factors (89.5per cent); lack of financial power by clients (88.5per cent); weak regulation and control (88.2 per cent); project fraud and corruption (82.6 per cent); variation of prices (81.3 per cent) and indiscriminate change in design/works (80.1 per cent).

It is, therefore, not surprising that construction, which contributes 13per cent to the global Gross Domestic Product (GDP) and is the biggest, has not been performing well, having clocked only one per cent yearly growth over the past two decades.

That’s not all; according to PMI’s Pulse of the Profession report, the sector’s wasteful expenditure sits at $127 million for every $1 billion spent on projects. This amounts to over $1.6 trillion wasted yearly due to capital projects not being delivered on time or within budget.

The Federal government’s plans to spend over N3.50 trillion on infrastructure and human capital development in 2022 is a clear indicator of its farsightedness. For the construction industry its work is cut out if it wants to participate meaningfully in these projects – firstly accelerate its rate of technology adoption and secondly focus on upskilling employees, particularly project managers responsible for scoping, scheduling and budgeting.

“Construction is a demanding industry subject to the vagaries of weather, supply chain disruptions, and a host of other often uncontrollable variables. It requires a well-versed project manager to bring the work in on time and within budget,” according to PMI Business Development Lead, Africa, George Asamani.

Meanwhile, the institute has announced a series of seven courses, leading to the Construction Professional in Built Environment Projects (CPBEP) certification to widen skills building and education programmes to meet the new demands on the industry.

Construction
AIHS 2022

It is the institute’s first industry-specific solution tailored for construction professionals. PMI created the certification in collaboration with construction industry leaders and consultations with project managers who face the twin challenges of balancing technology and talent. Both Lean Construction Institute and Construction Industry Institute were integral to developing the certification along with Saudi Aramco, the U.S. Department of Energy, DPR Construction and BHP among others.

The construction industry, like many others, is seeing a rise in new technologies such as drones and artificial intelligence, mobile apps, cloud communication, and data management. Their adoption has meant a need for a separate set of skills to complete projects successfully.

Add a diverse workforce, and a new skills landscape begins to emerge. Companies today need professionals with technical as well as power skills to navigate the changing workplace.

He said: “We see improvement in technology adoption, but technology is just an enabler. It’s still people and their skills that are critical to improving project performance.

“But this doesn’t have to be the industry’s future. With more than 50 years in the project management industry, PMI is uniquely positioned to help equip professionals with the skills needed to transform the surging industry through developing these innovative learning methods and practices,” adds Asamani.

The sector employs seven per cent of the world’s working population. To be eligible for the certification, individuals need three or more years of experience as a project manager, lead or contributor in the construction / built environment. The courses can be taken in any order and present an opportunity for professionals to focus on topics they are most driven to explore. Learners can either complete individual courses and earn specific micro-credentials or complete all courses in preparation for the capstone exam.

Three of the seven courses offer micro-credentials upon completion of a post-course exam. The micro-credentials award a digital badge to show the user’s mastery of the content. Each course explores a specific area of construction project management, such as communication and risk management.

THE GUARDIAN

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