Godwin Onajite Jagboro

An evaluation of the impact of risk on project cost overrun in the Nigerian construction industry

One of the major reasons for ineffective project delivery in the Nigerian construction industry is the improper assessment of risk factors. As a result, the industry continues to suffer poor performance with many projects failing to meet time and cost targets. This paper identifies the risk factors inherent in different building procurement methods and assesses their perceived relative importance with a view to evaluating their impact on project cost. The paper reports on a study carried out through a questionnaire survey of professionals within the construction industry in order to asses the relative importance placed on risk factors. Responses from the survey were analysed using relative importance index for the purpose of evaluating the impact of risk on projects cost. Data were collected on selected completed projects and analysed using frequencies, mean values and relative important index. The main risk factors identified are finance and political influence. A model was developed by relating the variation between the initial contract estimate and the actual project cost to the risk variables. From the analysis, the percentages of projects cost overrun due to the impact of risk were established for each procurement method investigated. The paper recommends that contingency additions should be based on the procurement method used.

Benchmarking parties’ obligations in the execution of concession-based PPP projects in Nigeria

Purpose – Demand–supply matrices with adverse consequences has occasioned government response to concession initiatives in infrastructure in Nigeria. However, concession-based projects have been trailed by administrative and legal controversies. While this scenario has negatively impacted the acceptability of a concession contract, there is, nevertheless, a paucity of research effort aimed at developing a sustainable framework. The purpose of this paper is to develop a conceptual framework for the evaluation and allocation of obligations of parties, thereby enhancing the synergy and cooperation between the public and private sector organization. Design/methodology/approach – Data were obtained through a questionnaire administered to professionals in concession-based contracts in southwestern Nigeria, which included architects, estate surveyors, quantity surveyors, engineers and builders, accountants/bankers/economists and lawyers. The respondents were selected using random and respondent driven sampling a...

Factors affecting the performance of private party in concession-based PPP projects in Nigeria

Purpose Notwithstanding the remarkable market potential of the Nigerian economy for private investment, the current sociopolitical characteristics had necessitated a careful assessment to inform decisions in long-term investments. The purpose of this paper is therefore to evaluate the success factors that have a specific influence on private party’s performance in concession contracts in Nigeria. Design/methodology/approach Respondents involved in the study were participants in concession-based contracts in Southwestern Nigeria that included architects, estate surveyors, quantity surveyors, engineers and builders, accountants/bankers/economists and lawyers. These were selected using random and respondent-driven sampling (RDS) approaches. The research instrument adopted was a questionnaire that enlisted questions which were structured to ensure that the respondents have appropriate experience in concession-based projects and hold appropriate positions as decision-makers so as to give credence to collected data. The highest significant factors were identified through the relative significance index (RSI). By exploring factor analysis, the factors were condensed for discussion under appropriate component headings. The value of Kaiser–Meyer–Olkin (KMO, 0.755) measure of sampling adequacy tests carried out showed that the data collected were adequate for the factor analysis, and the Bartlett’s test of sphericity (χ2 = 1,799.339; df = 630; p < 0.001) was highly significant. Findings Factors influencing private party performance clustered under eight components, namely, technical, market maturity, political, legal, finance, procurement, incentive and regulation. However, component items including level of understanding of public–private alliance transactions, stability of exchange rate and provisions for reversion of policies were found to be highly significant. On the other hand, status of domestication and implementation of international laws/codes, predictability in legal regime and enforcement and extent of jurisdictional definition of land usage were least significant. Originality/value Findings would guide private investors in the preparation of robust investment packages that reduce risks and seemingly unavoidable opportunistic tendencies associated with public–private partnership projects in developing economies.

Assessment of causative factors for project abandonment in Nigerian public tertiary educational institutions

Purpose Abandonment of construction projects is still a burning issue in Nigeria. Beside the poor financing of educational infrastructure, abandonment of construction projects remains a significant contributor to the inadequacy of facilities in Nigerian public tertiary educational institutions. The purpose of this paper is, therefore, to assess the causes of abandoned projects specific to public institutions of tertiary education in Nigeria, with a view to providing empirical data that are generalizable to enhancing successful delivery of teaching and research facilities. Design/methodology/approach Primary data used for the study were obtained through questionnaires administered to 47 professionals comprising 8 architects, 12 mechanical and electrical engineers, 15 civil/structural engineers, 4 builders and 8 quantity surveyors who were involved in physical development of construction projects in public tertiary educational institutions in Osun State. The data were analyzed using mean analysis, factor analysis and the Kruskal-Wallis (K-W) test. Findings The factors most significant to abandonment of tertiary educational institutional projects were delayed payments, fund mismanagement, inadequate budgetary allocation, inadequacy of finance, inflation and bankruptcy of the contractor. Findings also showed that not all factors causing abandonment were significant to tertiary institutional projects. The significant factors clustered under stakeholders’ response capacity, poor financial management, inadequate planning and monitoring, and unexpected occurrences. The K-W test showed significant differences among the categories of tertiary institutions on the ranking of the most significant causes of abandoned projects. Research limitations/implications The study was limited to public tertiary educational institutions in Osun State. Further studies could focus on public health institution projects and private tertiary educational projects to improve the body of knowledge on the subject of causative factors for project abandonment. Practical implications The study provided implications for effective contract management of public tertiary educational institutional projects, which is a significant step to improving the available teaching and research facilities in Nigerian tertiary institutions. Originality/value The study provides implications for effective contract management systems of projects for public tertiary educational institutions, thereby improving the available teaching and research facilities.

Factors influencing the scope of private party’s obligations in concession-based PPP projects in Nigeria

Purpose – Little success had been recorded on concession-based public private partnership contracts in Nigeria for reasons attributable in part to poor assessment of the socio-cultural and economic factors that contribute to the parties’ costs while preparing contract packages. The purpose of this paper is to assess the factors which significantly influence the private party’s obligations and costs in a concession-based contract thereby enhancing the robust assessment of contract packages when bidding by private investors. Design/methodology/approach – The assessment was based on primary data obtained through questionnaire survey. Structured questionnaire was administered on professionals comprising architects, estate surveyors, quantity surveyors, engineers and builders, accountants/bankers/economists and lawyers who had been involved in concession-based contracts in the Southwestern Nigeria, selected using respondent-driven sampling approach. Factors evaluated were those identified through in-depth literature review and brainstorming of those pertinent to concession transaction in Nigeria. Data collected were analysed using descriptive statistics including mean, relative significance index, impact weighting and factor analysis. Findings – Significant factors that influence private party’s cost were found to be political interference, delay in land acquisition, variation to the contract and non-availability of supportive infrastructure. Originality/value – Findings provided information for structuring concession contract for effective management of country-specific characteristics in concession contract. The understanding of the factors that affect private party’s obligations and costs would guide effective assessment of concession contract in developing economies by foreign investors. Moreover, the study provided implication for the understating of country-specific factors affecting concession contract in Nigeria which would contribute to robust assessment of contract packages when bidding by private investors.

Compensation mechanisms for minimizing private party risks in concession-based public-private partnership contracts

Purpose The purpose of this paper is to develop compensation mechanisms against risks factors that impact private party’s costs in concession-based projects as a basis for minimizing failure rate of concession contracts. Design/methodology/approach The study extended earlier work on the factors that impact private party’s costs in concession-based projects by developing compensation mechanisms against the risks factors. It commenced with semi-structured face-to-face interviews which were launched with different stakeholders organizations that had been involved in PPP contracts in the Southwestern Nigeria. Responses from the interview were analyzed using interpretative phenomenal analysis via ATLAS.ti6/7. The mechanisms identified from literature review were assessed through structured questionnaire which were administered on professionals selected from governmental-based organizations (ministries, agencies, corporations/parastatals, etc.), private developers/concessionaires, law firms, banks among others, using the respondent-driven sampling technique. The robustness of the quantitative data was achieved by including the initial respondents to the interview in the questionnaire survey. The quantitative data were analyzed using percentile for better understanding of the flexibility between “most” and “more” preferred mechanisms. The criterion for the selection of appropriate mechanism(s) for the factors was based on minimum average of 20.0 percent (the ratio of maximum percentage (100 percent) of the respondents to total number of variables) suggesting the five identified mechanisms. The results in both cases of qualitative and quantitative assessments were compared. Based on the convergences of the findings, preferred compensation mechanisms were developed against concession contract risk factors. Findings Options of mechanisms were developed against specific investment risks that are consequent to the defaults of the public party in PPP contracts. The findings indicate that the mechanisms in extant literature with respect to administration of traditional models are relevant for PPPs. The study, however, identified new concepts, including “compensative” “zero compensation,” “equitable sharing” and “adjustment of concession period,” which are suitable in specific cases of PPP contracts. Practical implications The study contributes to the body of knowledge on mechanisms for improving PPP project performance. Moreover, insights were provided on mechanisms that satisfy private investor in case of specific risk factors investigated. The findings are therefore expected to guide private party in the preparation of concession contract package that minimizes investments risks and thereby attracting more private investors both from local and international environments. The findings of the study would also contribute to the body of information for documenting standard conditions of concession contract in Nigeria. Originality/value Studies on critical performance factors on PPP were extended by developing compensation mechanisms against the investment risks that impact private party’s cost.