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Journal of Financial Management of Property and Construction
Analysis of causes of delay in Indian construction projects and mitigation
measures
Prasad K.V., Vasugi V., Venkatesan R., Nikhil Bhat,
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Prasad K.V., Vasugi V., Venkatesan R., Nikhil Bhat, (2019) "Analysis of causes of delay in Indian
construction projects and mitigation measures", Journal of Financial Management of Property and
Construction, https://doi.org/10.1108/JFMPC-04-2018-0020
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Analysis of causes of delay in
Indian construction projects and
mitigation measures
Prasad K.V. and Vasugi V.
School of Mechanical and Building Sciences, VIT University, Chennai, India
Venkatesan R.
National Institute of Construction Management and Research, Pune, India, and
Nikhil Bhat
Central Projects Planning, Hindustan Construction Co Ltd, Mumbai, India
Abstract
Purpose –Construction projects in India continue to suffer excessive delays. Thispaper aims to investigate
the delay causes in India by project sector (transport, power, buildings and water) and carry out a
comparative study of delay causes in design build (DB) projects with that of design bid build (DBB) projects
along with mitigation measures.
Design/methodology/approach –A questionnaire survey was conducted among major clients,
contractors and consultants in India. Importance Index was used for ranking of the delay causes.
Projects were categorized based on the type, and causes of delay in each project type were identified.
Projects were also categorized based on type of contract, and delay causes in DB and DBB projects were
compared. Statistical analysis of responses by Cronbach’s alpha, one-way analysis of variance,
Kruskal–Wallis tests was carried out with Statistical Package for Social Sciences. Semi-structured in-
depth interviews were conducted with senior industry professionals to develop exhaustive mitigation
measures.
Findings –The research findings indicate finance-related causes as the most critical causes of delay in
Indian projects. Delay in settlement of claims, contractor’sfinancial difficulties, delay in payment for
extra work/variations by owner, late payment from contractor to subcontractor or suppliers, variation
orders/changes of scope by owner during construction and changes in design by owner were the highly
ranked delay causes. The research found no significant difference in the delay causes in DB and DBB
projects.
Originality/value –This is the first study wherein delay causes for various project types within a single
country are identified. In addition, the study has identified and compared thedelay causes in DB projects and
DBB projects. Mitigation measures developed in this study will help professionals and project managers not
just in India but other developing countries as well to alleviate delay causes and in improvement of project
timelines.
Keywords Infrastructure projects, India, Construction time, Construction project management,
Construction in developing countries, Delays in project delivery
Paper type Research paper
Introduction
India is among the world’s most rapidly growing economies (ADB, 2013), and demand for
infrastructure development is tremendous. As per India’s Census 2011, 31 per cent of India’s
population, i.e. 377 million, live in urban areas and is expected to increase to 600 million by
2030. It is estimated that about US$650bn investment in India will be required for urban
Causes of
delay
Received 6 April2018
Revised 26 August2018
21 October 2018
20 November 2018
Accepted 30 November2018
Journal of Financial Management
of Property and Construction
© Emerald Publishing Limited
1366-4387
DOI 10.1108/JFMPC-04-2018-0020
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1366-4387.htm
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infrastructure alone over next 20 years (Planning commission, 2013). Growing population,
increasing urbanization and global competition have made it imperative that the
infrastructure is developed rapidly. Accordingly, the investment in infrastructure is planned
to be increased from Indian National Rupees (INR) 23.8tn in the 11th Five Year Plan period
(2007-2012) to INR 56.3tn in the 12th Five Year Plan Period (2012-2017) (Ernst and Young,
2014). This huge demand in infrastructure is to be met by the construction sector.
Construction sector is a catalyst for economic growth as it stimulates development in
other sectors (Ismail, 2007). The influence of the construction sector spans across several
sub-sectors and thus becomes the input for socio economic development. Construction sector
in India has witnessed boom over the decade and is considered one of the most important
industries as it contributes approximately 8 per cent of India’s gross domestic product and is
the second largest employer (Ananthanarayanan, 2011).
Construction project delays are a global phenomenon (Sambasivan and Soon, 2007), and
India is not an exception. Even with an increase in the stimulus and support from the
government, the construction industry in India continues to struggle with delays. Projects in
India are experiencing widespread delays (Scholarly Editions, 2013). As per the project
implementation status report (IPMD, 2018) of Government of India, as on July 2017, out of
total of 1,257 ongoing projects (costing INR 1.5bn and more), 274 projects (22 per cent) are
suffering time overrun. There is a significant shift in the capacity and volume of the
construction sector, which demands the need of a systematic study and assessment of the
reasons of project delays in India along with mitigation measures.
Literature review
Construction projects continue to suffer delays despite the application of advanced
technology and project management techniques (Stumpf, 2000). This is the reason why
construction project delays have attracted researchers over the years. A recent survey
(KPMG, 2015) revealed that only 25 per cent of the projects were completed within their
original deadlines. This research work started with an extensive review of the studies
carried out over the years. The extent of delays as documented by various studies,
summarized in Table I, reveals that the problem of delays is a global epidemic. During this
literature review phase, 53 research studies from 30 countries, with 38 studies in developing
countries and 15 studies in developed countries, were reviewed. From this detailed review,
the authors have presented the salient findings of recent and near recent studies (post 1995)
in the following section of the paper. Delay studies were categorized into studies in
developed countries and developing countries, with the aim of bringing out the distinct
nature of delay causes in the two types of economy. Largely, studies in the past have
adopted questionnaire surveys as the research method for identifying the delay causes and
Relative Importance Index (RII), Importance Index (II) and Relative Importance Weight as
the means to rank the various causes of delay.
Some of the notable studies carried out in developed countries include Ahmed et al. (2003)
in Florida, Hwang et al. (2013) in Singapore, Wong and Vimonsatit (2012) in Australia,
Shebob et al. (2012) in the UK, Chen et al. (2017) in China and Larsen et al. (2015) in Denmark.
These studies concluded building permits approval, change order, changes in drawings,
incomplete documents and inspections, site management, skill shortages, labor shortage,
material price changes, extreme weather conditions, onsite labor and material availability,
subcontractor problems, unsettled/lack of project funding, delay or long process times
caused by project authorities, lack of project planning, errors or omissions in construction
work and lack of identification of needs as the major causes of delay.
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There have been many studies in developing countries, such as Odeh and Battaineh (2002)
in Jordan, Frimpong et al. (2003) in Ghana, Alaghbari et al. (2007) in Malaysia, Assaf and Al-
Hejji (2006) in Saudi Arabia, Sweis et al. (2006) in Jordan, Kaming et al. (1997) and Toor and
Ogunlana (2008) in Thailand, Lo et al. (2006) in Hong Kong and Doloi et al. (2012) in India.
Project financing by contractor, interference from owner, contractor’s inadequate
experience, financing of project, labor productivity, shortage of labors, difficulties in
monthly payments, poor contract management, procurement of materials, late supervision
and slowness of decision, slowness in instruction by consultant, lack of materials in market,
ineffective planning and scheduling of project by contractor, poor site management and
supervision, etc. were found to be the major causes of delay in these studies.
While there has been extensive research to identify delay causes, it was important to
understand whether mitigation measures were also identified. The review of literature on
mitigation measures is summarized in Table II.
From the review of literature, it is found that nature of delay causes in developing
countries is significantly different from that in developed countries. In the case of
developing countries, delay causes are originating internally from contractor or client, such
as financial difficulties, cash flow problems, change orders by client and payment delays by
owner (Islam and Trigunarsyah, 2017). In the case of developed countries, external causes
such as weather, prices of materials, permits and labor supply are critical causes. This may
be the case as contractors working in developing economies work under special constraints,
which are not as serious in developed countries (Ogunlana et al., 1996).
Construction projects are unique and share distinct characteristics. The physical and
operational features of the project have a significant impact and contribute hugely to project
success or failure (Kwofieet al.,2014). This is a significant gap in the previous studies as
many previous studies have investigated causes of delays without investigating the delay
Table I.
Extent of delays in
construction projects
in various countries
Study Country Type of projects Time delays documented
Semple et al. (1994) Canada Generic Delays in several cases exceeded
original contract duration by over 100%
Arditi et al. (1985) Turkey Utility projects 34.6% delay in contractor’s projects,
43.6% delay in public projects
Chan and Kumaraswamy
(1995)
Hong Kong Building and Civil
Works
Average delay in excess of 20%, only
40% Government buildings, 25%
private buildings, 35% civil engineering
works completed within schedule
Odeyinka and Yusif (1997) Nigeria Housing Seven out of ten housing projects
suffered delays
Olatunde and Alao (2017) Ghana Buildings Average time overrun in construction of
public university buildings was 62.7%
Eliis and Thomas (2003) USA Highway Time overrun in 150 projects averaged
272 days or 25% of contract duration
Koushki et al. (2005) UAE Residential Buildings Out of 450 buildings, 56% projects
experienced delay
Sambasivan and Soon (2007) Malaysia Government projects 17.3% of the projects experienced
delays of more than 3 months
Ansar et al. (2016) Many
countries
Mixed Average schedule overrun was 42.7%
Causes of
delay
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causes in a specific type of projects (Prasad and Vasugi, 2017). Studies have been mostly
generic, except a few studies investigating delay causes in buildings and roads. Further, it is
also a fact that the construction industry in India has evolved from traditional rate contracts
to lump sum and design build (DB) contracts (Ernst and Young, 2014). None of the previous
studies have drawn a comparison of the delay causes in a different nature of contracts. An
understanding of this can aid in evaluating the lacunae and shortcomings in project
implementation and in improvement of project performance.
Most of the studies, including an earlier study in India (Doloi et al.,2012), have ended up
with the identification of delay causes without corrective steps, practical recommendations
and exhaustive mitigation measures to prevent the causes of delay, which is of relevance
and importance. A previous study (AlSehaimi et al., 2013) concluded that most of the delay
studies have not recommended any solution, and the recommendations do not match with
the findings and have ended up providing recommendations which are non-practical. In
addition, mitigation measures provided by earlier studies (Table II) are cursory and lack the
depth and specifics for control of delay. Professionals and project managers in the industry
will need specific, implementable and practical solutions to overcome problems causing
delay.
With the above identified research gaps, this study intends to:
identify the critical causes of delay in Indian construction projects in various types
of project and analyze the results by each project type (transport, buildings, water
and power);
compare the delay causes in DB and design bid build (DBB) projects in India; and
identify steps and measures of mitigation through the project life cycle from the
contract award phase to executing phase to control critical delay causes.
Research methodology
Research design
A questionnaire was designed to solicit the responses of major contractors, clients,
consultants and designers in India. In total, 60 causes of delay from literature were adopted
for the questionnaire and were grouped into seven categories. The causes and categories are
listed in Table IV. The questionnaire consisted of five sections. The first section introduced
the problem, objective of the survey; the second section collected personal information of the
respondents, such as name, experience, role and contact details; the third section collected
Table II.
Mitigation measures
identified by
previous research
Mitigation measures Studies
Comprehensive contract documents Abdul-Rahman et al. (2006),Kasimu and Abubakar (2012)
Accurate initial estimates Love et al. (2000),Ng (2007),Chai et al. (2015)
Improve planning and control Assaf and Al-Hejji (2006),Faridi and El Sayegh (2006)
Right resources, right software Zewdu (2016)
Minimize changes in design Abdul-Rahman et al. (2006),Alaghbari et al. (2007)
Accelerate site activities Chai et al. (2015),Abdul-Rahman et al. (2006);
Ensure delivery of materials on time Abdul-Rahman et al. (2006)
Ensure adequate financing Abdul-Rahman et al. (2006),Lo et al. (2006)
Implement new management techniques Mezher and Tawil (1998),Arditi et al. (1985)
Improve communication Mezher and Tawil (1998),Arditi et al. (1985)
Frequent progress meetings Abdul-Rahman et al. (2006),Ng (2007)
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information about the project for which respondents fill the delay causes; and the fourth and
fifth sections were designed to collect the response on the delay causes. The respondents
were asked to rate frequency, with rating of 1 for a cause that never occurs and 5 for most
frequent cause, and degree of severity, with rating of 1 for a cause with no impact and 5 for a
cause with very high impact, on a particular project in which they had worked/had
experience. Combining Likert scales into indexes adds values and variability to the data
(Allen and Seaman, 2007). Survey data resulting from the use of questionnaires are
frequently analyzed using the RII method (Holt, 2014), and this helps in generating an index,
which is then used to rank the delay causes. Accordingly, this method is adopted for
calculating the frequency and severity indexdefined below.
The frequency index (FI) and severity index (SI) of the causes were calculated as:
FI=SI ¼PW
AN
ðÞ
where W is the rating assigned (ranging from 1 to 5) for each cause by the respondents, A is
the maximum rating/score that can be assigned to a cause, which in the present case is 5,
and N denotes the total number of respondents of the survey.
The causes were ranked based onII determined as a product of FI and SI:
II ¼FI SI
Importance Index (II) calculated by the above formula factors the two equally important
dimensions of frequency of occurrence and severity of impact of delay causes and has been
adopted in previous research studies as well.
The values of FI, SI and II ranged from 0.2 to 1. A higher value (closer to 1) of FI meant
that the cause was more frequent, and a higher the value of SI meant that the cause had a
very high impact. Finally, the causes were ranked based on the values of II. Higher the value
of II, higher the ranking and its significance in causing delay in construction projects.
Projects were also categorized based on project sectors, namely, transportation, power,
buildings and water supply/irrigation projects, and delay causes in each project type were
identified and discussed.
To understand the influence and criticality of delay causes in different contract
environments, responses were analyzed by categorizing the projects by type of contract. The
present research work covered projects of two contract types –DB and DBB.
Sampling and questionnaire dissemination
As future projects in India are expected to be in the range of INR 10-15bn (PWC, 2008), the
research work specifically targeted contracting companies, clients and consultants engaged
in operating mega projects with contract value of >INR 10bn in India. A questionnaire was
disseminated to various organizations through the online mode using the Google Forms
platform.
Interviews for identification of mitigation measures. To develop mitigation measures,
present research adopted the methodology of an earlier study –Olawale and Sun (2010).
A series of in-depth semi-structured interviews were held with senior construction
industry professionals. The experts interviewed had a work experience of more than 20
years in Indian construction projects and were from contracting and consulting
organizations. Ten experts were interviewed. The interviewees comprised one head of
planning, three deputy project managers, two project managers, one senior general
Causes of
delay
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manager of engineering, one general manager of contracts, one joint chief operating
officer from a contracting organization and one associate director from a consulting
organization. The interview duration ranged from 30 to 60 min. The interviews were
semi-structured, which allowed unhindered discussion and to inquire further as
necessary during the discussion. For focused interview and discussion, the top six causes
of delay were only considered for this exercise. Mitigation measures were further
categorized into the following three categories:
Preventive: These are measures/steps to be taken as a precaution to prevent the
occurrence of a delay cause.
Organizational: These are measures/steps that will affect all projects of a
company and are not project-specific and would reflect how the wider
organization works.
Corrective: These are measures initiated after the occurrence of a delay cause to
mitigate and prevent the further impacts and bring situation under control.
Results and discussion
The questionnaire was sent to 200 respondents. In all, 130 responses were received (a
response rate of 65 per cent), of which 123 responses were valid. The responses covered
projects from 20 states spread across the length and breadth of India. The median and
average of delay in the 123 projects was 24 and 31 months, respectively. The summary of
responses received, profile of respondents and projects covered are as in Table III. The
survey responses were analyzed using SPSS version 24.
Cronbach’s alpha is a measure of the internal consistency or average correlation of the
items in a survey instrument. The test is most commonly used on Likert scale questions in a
survey and determines the reliability of the scale (Santos, 1999). The test results returned
values of 0.955, 0.975 and 0.980 for frequency responses, severity responses and overall
questionnaire, respectively. A value of alpha greater than 0.7 implies that the instrument is
acceptable and the results confirm that the questionnaire is reliable.
A one-way ANOVA test was conducted to analyze and examine for any significant
differences in the perceptions of the three different groups of respondents –contractors,
clients and consultants. Results are summarized in Table IV, and out of a total of 120
possible cases for frequency and severity put together, 87 cases (73 per cent) were found to
have no significant difference statistically, which meant that the three groups of
respondents largely agree.
Delay causes in Indian projects (overall)
Results of the survey with top ten causes of delay in Indian construction projects are
presented in Table V. Delay in settlement of contractor claims by the owner, contractor’s
financial difficulties, delay in payment for extra work/variations by owner, late payment
from contractor to subcontractor or suppliers, variation orders/changes of scope by owner
during construction, changes in design by owner or his agent during construction, shortage
of labor, failure to provide construction site by owner, delay by owner in revision and
approval of design documents and owner’s slow decision-making process are found to be the
top ten causes of delay. The results indicate financial causes as the most critical in Indian
projects. Top six causes of delay, which were ranked high in all the project types (results
presented in next section), are discussed.
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Top two causes of delay identified in this study, namely, delay in settlement of contractor
claims and contractor’sfinancial difficulties, are explained by the fact that an estimate as
high as INR 700bn is tied up in arbitration and the average settlement time of these claims is
more than seven years (PIB, 2016). Government of India has recognized the gravity of this
problem and has come up with some relief measures (PIB, 2016).
Table III.
Summary of
responses and profile
of respondents
Characteristics Frequency % of total
Role
Clients 18 15
Contractors 96 78
Consultants 9 7
Total 123
Education
Diploma 2 2
Graduate 38 31
Post Graduate 82 67
PhD 1 1
Total 123
Experience
<5 Years 27 22
5-10 Years 47 38
10-15 Years 19 15
>15 Years 30 24
Total 123
Job profile
Site Engineering/works 10 8
Engineering/methodology 8 7
Planning/Project management 61 50
Project control/PMO 20 16
Contracts/Quantity survey 16 13
Others 8 7
Total 123
Occupational level
Non executive 33 27
Executive 49 40
Middle management 31 25
Senior management 10 8
Total 123
Contract type
DB 72 58
DBB 51 42
Total 123
Project profile
Transportation 45 37
Buildings 30 24
Water supply/Irrigation 17 14
Power 22 18
Marine 7 6
Others 2 2
Total 123
Causes of
delay
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Category Cause of delay
ANOVA (Sigma)
Frequency Severity
Planning, Design and
Engineering
Poor scope definition by contractor 0.384 0.187
Inadequate early planning of project 0.022* 0.070
Ineffective project planning and scheduling 0.409 0.066
Improper technical study by contractor during bidding 0.654 0.073
Inaccurate estimate of materials 0.635 0.192
Improper or inaccurate cost estimation by contractor 0.616 0.226
Exceptionally low bids by contractor 0.176 0.135
Inadequate integration on project interfaces 0.723 0.493
Mistakes/changes in design criteria provided by the
employer
0.175 0.032*
Unclear and inadequate details in drawings 0.092 0.013*
Changes in design by owner or his agent during construction 0.001* 0.004*
Errors and omissions in design made by designers 0.650 0.195
Delays in producing design documents by contractor 0.481 0.179
Poor design with constructability problems 0.614 0.441
Delay by owner in revision and approval of design
documents
0.002* 0.017*
Procurement Difficulties in obtaining construction materials from market 0.335 0.972
Shortages of materials 0.747 0.835
Shortage of equipment 0.962 0.947
Delay in delivery of imported materials and plant items 0.605 0.313
Financial Delay in monthly payments from owners 0.194 0.929
Gap between construction costs and stage payments 0.005* 0.042*
Contractor’sfinancial difficulties 0.635 0.717
Late payment from contractor to subcontractors or suppliers 0.778 0.728
Delay in payment for extra work/variations by owner 0.000* 0.000*
Delay in settlement of contractor claims by owner 0.000* 0.004*
Human resource Poor labor productivity 0.166 0.049*
Shortage of labor 0.870 0.750
Lack of skilled operators for specialized equipment 0.777 0.898
Poor skills and experience of labor 0.717 0.301
Lack of experience/incompetence of contractor’s key staff 0.993 0.833
Project execution Failure to provide required construction site by owner 0.001* 0.038*
Delay in mobilization by the contractor 0.130 0.133
Poor site management and supervision 0.897 0.793
Lack of contractor’s experience and control over project 0.051 0.948
Equipment breakdown and maintenance problem 0.185 0.411
Owner’s slow decision-making process 0.002* 0.027*
Poor monitoring and control 0.352 0.347
Inappropriate or obsolete construction methods 0.226 0.290
Rework due to errors during construction 0.433 0.193
Works in conflict with existing utilities 0.365 0.208
Site accidents due to negligence and lack of safety measures 0.748 0.843
Non-performance of subcontractors and nominated suppliers 0.372 0.609
Delay in inspection and testing of completed work 0.002* 0.115
(continued)
Table IV.
Delay causes,
categories and
results of one-way
ANOVA test
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The third cause of delay, i.e. delays in payment for extra work, is one of the most frequent
problems faced by Indian contractors (Al-Quershi and Kishore, 2017). During the course of
project execution, depending upon the project’s requirements, owners may instruct
contractors to execute items which were not part of the original contract bill of quantities.
As this being a new item, rates need to be finalized. Contractors are expected to carry out
these extra work without finalization of rates, burdening the finances of contractor and
affecting time performance.
Late payment to suppliers/subcontractors is a resultant of payment delays from owners.
Governments and private owners implementing large projects are delaying payments, and
in the challenge of managing stressed cash flow, contractors are forced to delay payments to
vendors (Livemint, 2015).
Variation orders/scope changes is one of the most important phenomena in the
construction projects. Change orders issued during construction are major causes of time
and cost overruns (Alnuaimi et al.,2010). Frequent changes require contractors to augment/
allocate resources for these changes and also re-sequence the work. While this has a direct
cost impact for additional resources, frequent changes also lead to loss of productivity (Ibbs
and Vaughan, 2015), leading to time delays.
Changes in design can occur at any stage of the project. However, the earlier a design
change occurs, the lesser will be the impact on the project than a change at later phases of
the project (Braganca et al.,2014). Design changes increase the cost and time of construction
projects substantially (Chang et al., 2011).
Category Cause of delay
ANOVA (Sigma)
Frequency Severity
Contract management Unrealistic contract duration imposed by owner 0.001* 0.011*
Ambiguity in specifications and conflicting interpretation by
parties
0.003* 0.054
Errors or inconsistencies in project documents 0.141 0.084
Variation orders/changes of scope by owner during
construction
0.000* 0.017*
Noncompliance with conditions of contract 0.384 0.187
Unrealistic inspection and testing methods proposed in
contract
0.022* 0.070
Unreasonable risk allocation in contract 0.409 0.066
Lack of process for comprehensive dispute resolution 0.654 0.073
External Government tendering system requirement of selecting the
lowest bidder
0.034* 0.032*
High inflation, insurance and interest rates 0.012* 0.001*
Adverse weather conditions 0.035* 0.612
Public interruptions 0.006* 0.071
Differing or unforeseen site/subsurface conditions 0.034* 0.008*
Issues regarding permissions/ approvals from other
stakeholders
0.148 0.280
Changes in government regulations and laws 0.059 0.297
Force majeure: war, revolution, riot, strike, earthquake, etc. 0.144 0.836
Project fraud and corruption 0.718 0.656
Note: *Indicates difference in perception of contractors, clients and consultants is significant at 0.05
level Table IV.
Causes of
delay
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Sectoral analysis of delay causes
The distribution of sample of projects by category is given in Table III. Although marine
projects were part of the study, as the sample size was too small, these were excluded from
the analysis and comparison. The delay causes arranged by the rank of the causes are
provided in Table V.
Results indicate that finance-related causes are critical in all project sectors.
Transport sector projects are delayed by land acquisition delays and works in conflict
with utilities. Land acquisition is found to be one of biggest roadblocks because of poor and
unsystematic land records in India coupled with undervaluation and lengthy acquisition
process (Development Management, 2017). Utility shifting is one of the critical causes of
delay in Indian road and bridge construction projects (Vilventhan and Kalidindi, 2016). The
gap in construction costs and stage payments can be attributed to the fact that in India, road
construction projects are being largely implemented on engineering procurement and
Table V.
Top ten causes of
delay by project type
Overall Transport Power Buildings
Water/
irrigation
Delay causes II Rank II Rank II Rank II Rank II Rank
Delay in settlement of contractor claims 0.608 1 0.620 1 0.662 2 0.574 2 0.663 1
Failure to provide required construction
site by owner 0.453 8 0.581 2 0.365 40 0.366 26 0.583 4
Delay in payment of extra work/variations 0.535 3 0.573 3 0.602 4 0.505 6 0.483 11
Contractor’sfinancial difficulties 0.550 2 0.517 4 0.677 1 0.535 4 0.490 9
Variation orders/change of scope by owner 0.494 5 0.493 5 0.475 14 0.461 11 0.530 7
Late payment from contractor to
subcontractor or suppliers 0.511 4 0.487 6 0.531 5 0.535 3 0.441 19
Exceptionally low bids by contractor 0.425 17 0.457 7 0.456 20 0.425 15 0.400 25
Owner’s slow decision-making process 0.447 10 0.454 8 0.490 11 0.366 27 0.469 15
Works in conflict with existing utilities 0.397 20 0.446 9 0.331 48 0.392 20 0.460 16
Gap between construction costs and stage
payments stipulated in contract 0.429 15 0.435 10 0.419 26 0.425 16 0.470 14
Changes in design by owner during
construction 0.475 6 0.429 11 0.489 12 0.598 1 0.367 31
Delay by owner in revision and approval of
design documents 0.452 9 0.425 13 0.463 16 0.453 12 0.489 10
High inflation, insurance and interest rates 0.398 19 0.422 14 0.496 10 0.341 38 0.441 20
Issues regarding permissions from
stakeholders 0.433 13 0.419 15 0.407 27 0.475 10 0.595 3
Unrealistic contract duration imposed by
owner 0.441 12 0.413 16 0.523 6 0.379 23 0.541 5
Mistakes/changes in the design criteria
provided by employer 0.442 11 0.409 17 0.457 17 0.512 5 0.404 23
Public interruptions 0.432 14 0.406 18 0.610 3 0.309 46 0.606 2
Lack of process for comprehensive dispute
resolution 0.394 21 0.393 20 0.349 45 0.453 13 0.531 6
Shortage of labor 0.455 7 0.390 21 0.497 9 0.482 9 0.451 17
Poor labor productivity 0.413 18 0.387 22 0.503 7 0.377 24 0.422 21
Improper or inaccurate cost estimation by
contractor 0.375 26 0.364 26 0.503 8 0.373 25 0.408 22
Unclear and inadequate details in
drawings 0.382 22 0.342 33 0.438 24 0.497 7 0.294 50
Errors and omissions in design made by
designers 0.348 34 0.305 45 0.352 44 0.482 8 0.269 55
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construction basis with lump sum milestone/stage payments. Till the achievement of
milestone, a contractor continues to incur costs for the input materials and needs to fund the
expenses, which can create financial woes to the contractor, resulting in delays
(Infrastructure today, 2011).
Public interruptions, poor labor productivity, shortage of labor and unrealistic contract
durations are found to be the critical causes of delay in power sector projects. The sample of
power projects in this research work included nuclear and hydro power projects.
Construction of a nuclear building requires about 3,500 skilled workers at peak (NEI, 2012).
Shortage of labor and shortage of skills lower the productivity, resulting in schedule delays.
Hydro power plants cause population displacement, and the affected families need
rehabilitation with employment. Inadequate resettlement results in resistance, political
tensions and entails project delays (World Bank, 1997).
Successful completion of a building project requires close coordination and cooperation
between the owner, designer and contractor. Lack of proper interfacing and clarity in the
concept stage may lead to a gap in the design and construction phases. Changes in design is
a common phenomenon in building projects (Mohamad et al.,2012) and is evident from the
results of this study, which has design changes by owner, mistakes in design, unclear and
inadequate detail in drawings, design errors andomissions as the critical causes.
Unlike other projects, water projects are least affected by finance-related causes and are
impacted by land acquisition, public interruptions and permission from other stakeholders.
Table VI.
Top ten causes of
delay in DB projects
in India
Cause
Frequency
index (FI)
Severity
index (SI)
Importance
index (II)
Delay in settlement of contractor claims by owner 0.772 0.738 0.570
Contractor’sfinancial difficulties 0.715 0.758 0.542
Late payment from contractor to subcontractors or suppliers 0.715 0.718 0.514
Variation orders/change of scope by owner during construction 0.704 0.713 0.502
Failure to provide required construction site by owner 0.693 0.685 0.474
Delay in the settlement of contractor claims by owner 0.693 0.682 0.472
Shortage of labor 0.679 0.662 0.449
Changes in design by owner during construction 0.676 0.662 0.448
Differing or unforeseen site/subsurface conditions 0.673 0.659 0.444
Owner’s slow decision-making process 0.651 0.673 0.438
Table VII.
Top ten causes of
delay in DBB
projects in India
Cause
Frequency
index (FI)
Severity
index (SI)
Importance
index (II)
Delay in settlement of contractor claims by owner 0.777 0.777 0.604
Delay in payment for extra work/variations by owner 0.765 0.773 0.592
Contractor’sfinancial difficulties 0.704 0.762 0.536
Shortage of labor 0.696 0.708 0.493
Late payment from contractor to subcontractors or suppliers 0.692 0.712 0.493
Changes in design by owner during construction 0.673 0.719 0.484
Delay by owner in revision and approval of design documents 0.658 0.700 0.460
Variation orders/change of scope by owner during construction 0.677 0.677 0.458
Poor labor productivity 0.669 0.669 0.448
Mistakes/changes in the design criteria provided by the employer 0.685 0.650 0.445
Causes of
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Table VIII.
Kruskal–Wallis Test
on median of delay
cause categories in
DB and DBB Projects
Delay cause category PDE* Procurement Financial
Human
resource
Project
execution
Contract
management External
Frequency
Kruskal–Wallis H 0.048 0.294 0.305 0.521 0.082 0.380 1.143
Df 1 1 1 1 1 1 1
Asymp. Sigma 0.827 0.588 0.580 0.470 0.774 0.538 0.285
Severity
Kruskal–Wallis H 0.104 0.310 1.048 1.048 0.062 0.187 0.145
Df 1 1 1 1 1 1 1
Asymp. Sigma 0.747 0.578 0.306 0.306 0.803 0.665 0.703
Note: *PDE: Planning, Design and Engineering
Table IX.
Mitigation measures
for delay in
settlement of claims
Responsibility
Mitigation measures Category CO
a
CL
b
EN
c
Agreement on records, software required, methodology of assessing
delays, evidence of claims and compensation mechanism Preventive
Contract documentation: Unambiguous, clear, fair allocation of risks
in the contract, free of errors and omissions Preventive
Review of scope of work, bid quantities coordinated with drawings,
specifications, equipment, methods, schedule feasibility, payment
mechanisms, quality control requirements Preventive
Detailed site investigation to cover surface, subsurface conditions,
local labor availability, logistics, access to site, existing hindrances Preventive
Review of project schedule for adequacy, feasibility considering site
constraints, existing encumbrances, for logic, sequence, resources,
intermediate milestones, site access dates, timeline for drawings
approval etc. Preventive
Hindrance register indicating the hindrances for work, extent of
delay and party responsible to be mandatorily reviewed signed off
periodically Preventive
Panel for Dispute Adjudication, Dispute Resolution and Arbitration
to be pre-defined Preventive
A thorough and detailed contract risk analysis to cover performance
criteria, completion schedules, payment terms, penalties,
legislations, change order, dispute resolution procedures etc. Organizational
Documentation of changes, instruction for change, notification of
change, impact of change on time and cost, records of costs and
man-hours for changed work Corrective
Analysis of the contractor claim, impact, contractual provisions,
records, certification of changed work, payment on pro-rata basis for
changed work, appointment of panels in case of non-resolution Corrective
Payment for contractor’s claim immediately on upon third party
adjudication against security bonds Corrective
Notes:
a
Contractors;
b
Clients;
c
Engineer
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Delay causes in design build and design bid build projects.
The top ten causes of delay in DB and DBB projects are presented in Tables VI and VII. The
key conclusions from the comparison are as follows:
Financial causes are rated high in both DB and DBB projects.
Shortage of labor exists in both the types of contracts in Indian projects.
Design-related causes play a major role in delay of DBB projects, which is
evident as three out of top ten causes are related to design, namely, design
changes, delay in revision and approval of design documents and mistakes in
design criteria.
The ranking of all the causes in DB and DBB projects was assessed, and Spearman’s rank
correlation coefficient was determined. The result of the test was 0.81, indicating that there
were no significant differences in the importance of the causes in DB and DBB projects in
India.
The results were further closely examined by computing the median of delay categories
in DB and DBB projects and subjecting to Kruskal–Wallis Test at 95 per cent confidence
level. The values of sigma for all delay categories were greater than 0.05, proving that there
Table X.
Mitigation measures
for contractor’s
financial difficulties
Responsibility
Mitigation measures Category CO
a
CL
b
EN
c
A thorough and detailed risk analysis before bid decision to cover
payment clauses, stage and milestone related payments, forex
currency forecast and fluctuations, cash flow based project plan Organizational
Assess the financial strength, working capital levels, contractors’
organization market liability, contract performance record, credit
rating Preventive
To adopt market price-based escalation formulae than indices based,
to prevent mismatch between price rise and escalation compensation Organizational
To adopt project based funding mechanism, i.e. cash generated from
project to be used for the sole purpose of that project only Organizational
Owners to pay against mobilization of pre-defined equipment and
clear mobilization targets, to prevent diversion of fund by the
contractors Preventive
To maintain due records of pour cards, RFIs, QA/QC clearances.
Invoice to owners in a timely manner, maintain minimum inventory
and tie agreements with vendors, suppliers, subcontractors in line with
owner’s payment conditions Preventive
To pre define and set aside a contingency sum based on the type of the
contract, and risks involved, to be used for financial related risk events Preventive
Align payment milestones to be in sync with contractor’s vendor
payment terms. Allow flexibilities within the original contract
payment schedule to support the working capital requirements of
contractor
Preventive-
Corrective
To do away with the tradition of retaining a fixed percentage sum of
usually 5% to 10% of cash from contractor bills Organizational
Notes:
a
Contractors;
b
Clients;
c
Engineer
Causes of
delay
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was no significant difference in the delay causes of DB and DBB projects. The results are
shown in Table VIII.
Comparison of results with earlier studies
Results of this research were compared with top delay causes of earlier studies in developing
countries. Cash flow problems, delay in payment by contractor to subcontractors, delay of
payments by owners, design and material changes, poor labor productivity, slowness in
owner’s decisions and variation orders were found to be the top causes of delay as
documented by earlier studies (Shehu et al.,2014;Kazaz et al.,2012;Mansfield et al.,1994;Al-
Khalil and Al-Ghafly(1999),Pourrostam and Ismail (2012),Marzouk and El-Rasas (2014),
Kaming et al.,1997). This comparison reflects a common pattern and characteristic in
developing countries as summarized in literature review. The results of present study are in
close agreement with that of earlier studies in developing countries. Projects are delayed
mostly due to payment-related problems from the owner to contractor and from contractor to
subcontractors, cash flow and finance-related difficulties of the contractor.
Mitigation measures
As indicated and detailed in the research methodology, semi-structured interviews
were conducted to develop mitigation measures. Responsibility matrix among
Table XI.
Mitigation measures
for delay in
settlement of
variations and
changes in scope
Responsibility
Mitigation measures Category CO
a
CL
b
EN
c
Ensure the contract clauses define mechanism related to price for extra
work, time extension eligibility and limit of extra work Preventive
Distinctly define the procedure for evaluation of rates for Extra work
and substituted items, provision of escalation money payable on the
extra work and substituted items Preventive
Review of scope of work, bid quantities coordinated with drawings,
construction methods, resource productivities etc. Preventive
Thorough, detailed site investigations to cover surface, subsurface
conditions, local labor availability, logistics, access to site, existing
hindrances and obstructions, records of levels and benchmarks,
records of meeting with client’s representatives at site Preventive
Ensure instructions for extra work and variations are provided in
writing only. Define a timeline for finalizing the rates for new items,
not later than a month before the start of extra work Corrective
Owners to ensure to get appropriate funding sanctions from the
project investors/ministries to cater for the increase in the work and
contract value Preventive
Seek all instructions in writing, submit the impact of extra work/
variations on the project schedule and cost Corrective
Records of changes, instruction for change, notification of change,
impact of change on time and cost, records of costs and man-hours for
changed work Corrective
Commence work on extra items after finalization of rates/agreement
on payment mechanism Corrective
Notes:
a
Contractors;
b
Clients;
c
Engineer
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contractors, clients and consultants/engineer was prepared. Mitigation measures for
delay in settlement of extra work/variations and variation orders/changes of scope by
owner were combined as the measures are common for both the causes. Mitigation
measures are shown in Tables IX-XIII.
Conclusions
(1) The study has investigated the causes of delay in India and found finance-
related causes to be the most critical causes resulting in delay of projects in
India. Comparison of the results of this study with other developing countries
indicated that finance-related causes were found to be the most critical causes
in other developing countries as well.
(2) The delay causes in India on different types of projects were identified, and the
study established that the delay causes and the criticality vary from one project
type to another. This study identified.
(3) Land acquisition and utility-related delays were main reasons in transport projects
(4) Public interruptions, labor shortage and poor productivity were main delay causes
in power projects.
(5) Design-related causes were found critical in buildings.
Table XII.
Mitigation measures
for late payment to
suppliers and
subcontractors
Responsibility
Mitigation measures Category CO
a
CL
b
EN
c
Prescribe limit for outsourcing of works by main contractor to
subcontractor either in terms of value or as a % of contract Preventive
Maintain a database of pre-qualified suppliers and subcontractors as
in the case of contractors and ensure multiple sources/agencies are
specified in the contract Organizational
Assess the subcontractors, suppliers based on the performance record,
financial health who have the bandwidth to carry out work, in case of
disruptions in payments (if any) Preventive
Major subcontracts to be finalized with due clearance from client’s
mandatory clearances Preventive
Finalize agreements with subcontractors on the same payment terms
as that of main contract to ensure no cash flow gap and burden Preventive
Flexibility to break up the payment schedules in case of lump sum
contracts into intermediate stages than all payments at end of work Corrective
Material supply against secured bonds/guarantees, which can be
encashed by subcontractors in case of undue delay in payments by
main contractor Organizational
Owners to initiate payments toward major subcontractors and
suppliers directly against the bills of the main contractor/bonds/bank
guarantees in the event contractor fails Corrective
Payment conditions of subcontractors and suppliers to include
provisions of interest on delayed and withheld payments without
justifications Preventive
Notes:
a
Contractors;
b
Clients;
c
Engineer
Causes of
delay
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(6) Water projects were delayed by land acquisition and public interruptions.
(7) This study identified the delay causes in DB and DBB projects, and a comparison
was drawn between delay causes in both contract types. Statistically, there were
no significant differences observed in the delay causes of DB and DBB projects.
However, design-related causes were found to be critical in the case of DBB
projects.
(8) Unlike many studies of the past which ended without conclusive and definitive
mitigation measures, this study has developed exhaustive measures for the critical
causes of delay. These detailed mitigation measures can act as a checklist of best
practices and help construction industry professionals not only in India but also in other
developing countries to control delay causes and contribute to improvement in project
delivery.
Table XIII.
Mitigation measures
for changes in design
Responsibility
Mitigation measures Category CO
a
CL
b
EN
c
Pre-tender evaluation of scope of work, quantities to be detailed and
not rushed through Organizational
Review of project scope, assumptions, design criteria, constructability
with design consultants at pre tender stage Organizational
Contract to define the design philosophy, design criteria, codal
requirements, performance criteria and tests of acceptance Preventive
Site visit before the bid submission to inspect and validate contract
data and assess possible risks Organizational
Tender documents to provide all pertinent site investigation data,
design consultant’s analysis and proposal, calculations Organizational
Define the process of design change management with clear
authorities for initiating the change Organizational
Timelines for finalization of Designs and Issue of Good For
Construction (GFC) drawings to be defined Preventive
Ensure the design evaluation and changes (if any) are initiated at the
early “Planning and Design”stages rather than late in the contract Corrective
Designs shall be duly considering the constructability aspects, and
ensure standardization of various components and material Preventive
Evaluate the possible changes in the designs and the impact of design
changes Preventive
Use of advanced technology such as BIM and integration across all
project participants Organizational
Evaluation of the root cause of the design changes Corrective
Assess the impact of design changes on the project schedule and
overall costs and margins and formal submission Corrective
Augmentation of resources to cope up with the changed designs Corrective
Formal change orders with agreement on schedule and cost impact,
before start of work as per changed design Organizational
Communication of change in design to all project participants and
stakeholders Organizational
Notes:
a
Contractors;
b
Clients;
c
Engineer
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Future scope of work
Further specific research should investigate the causes for disputes, delays in claim
settlements, causes for payment delays and change orders in construction projects
can be taken up.
Studies investigating delay causes in different phases of projects –project initiation/
mobilization, planning and design and execution phases –may provide further
deeper insights and appropriate steps for mitigation.
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Corresponding author
Vasugi V. can be contacted at: vasugi.v@vit.ac.in
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