CHAPTER 1 INTRODUCTION

1.1 INDIAN CONSTRUCTION INDUSTRY Today, India is the second fastest growing economy in the world. The Indian construction industry is an integral part of the economy and a conduit for a substantial part of its development investment, is poised for growth on account of industrialization, urbanization, economic development and people's rising expectations for improved quality of living. In India, construction is the second largest economic activity after agriculture. Construction accounts for nearly 65 per cent of the total investment in infrastructure and is expected to be the biggest beneficiary of the surge in infrastructure investment over the next five years. Investment in construction accounts for nearly 11 per cent of Indias Gross Domestic Product (GDP). 239.68 billion is likely to be invested in the infrastructure sector over the next five to 10 years in power, roads, bridges, city infrastructure, ports, airports, telecommunications, which would provide a huge boost to the construction industry as a whole. Real Estate is a 8 bn (by revenue) Industry in India. The Indian construction industry contributes more than 5 per cent to the countrys GDP and generates more than $30 billion in revenues (Datamonitor, 2006). Growth of the industry has greatly influenced the economic development in India, stimulating significant growth in other sectors. Therefore, improvement in efficiency and productivity in construction sector make significant contribution to the improvement in productivity in other sectors. A construction project is commonly acknowledged as successful, when it is completed on time, within budget, in accordance with the specifications and to stakeholders satisfaction. Functionality, profitability to contractors, absence of claims

and court proceeding and fitness for purpose for occupiers have also been used as measures of project success. 1.2 GENERAL One of the most important problems in the construction project is delays. Delays occur in every construction project and the magnitude of these delays varies considerably from project to project. Some projects are only a few days behind the schedule: some are delayed over a year. So it is essential to define the actual causes of delays in order to minimize and avoid the delays in any construction projects. Delay is a situation when the contractor, consultant, and client jointly or severally contribute to the non-completion of the project within the original or the stipulated or agreed contract period. Delays give rise to disruption of work and loss of productivity, late completion of project, increased time related cost, and third party claims and abandonment or termination of contract. It is important that general management keep track of project progress to minimize the possibility of delay occurrence or identify it at early stages. 1.3 CONSTRUCTION DELAYS Construction delays are common problems in private residential projects. This problem occurs frequently during life time leading to dispute and litigations. Therefore it is essential to study and analyse causes of construction delay. There are a number of definitions for delay: to make something happen later than expected; to cause something to be performed later than planned; or to not act timely. Each of these definitions can describe a delay to an activity of work in a schedule. The construction industry is large, volatile and requires tremendous capital outlays. Delay of a project is a main factor and the major cause of construction claims. There is an acute necessity for detailed investigations to identify the delay factors and choose correct actions to minimize the adverse effect of delay on time, within cost and for high quality. Construction companies are facing delays today. Delays will result in several negative effects like lawsuits between house owners and contractors, exaggerated prices delays are unique one in every of the largest issues, loss of productivity and revenue, and contract termination.

Delays on construction projects are a universal phenomenon. They are almost always accompanied by cost and time overruns. Construction project delays have a debilitating effect on parties (owner, contractor, and consultant) to a contract in terms of a growth in adversarial relationships, distrust, litigation, arbitration, cash-flow problems, and a general feeling of apprehension towards each other. Schedule delay is a commonly occurring in construction projects. In this study identification & analysis of delays in construction projects. To recover the damage caused by delays, both the delays and the parties responsible for them should be identified. However, delay situations are complex in nature because multiple delays can occur concurrently and because they can be caused by more than one party, or by none of the principal parties. One delay may contribute to the formation of other delays. The analysis of these delays involves not only the calculation of the delay time but also the identification of the root causes and the responsibility for delays. Delays happen in most construction projects, whether simple or complex. In construction, delay could be defined as the time overrun either beyond the contract date or beyond the date that the parties agreed upon for delivery of a project. A project consists of a collection of activities. Delays can occur in any or all of these activities, and these delays can concurrently cause delays in the completion of the project. A project delay is the accumulated effect of the delays in the individual activities. Delay analysis is used to determine the cause(s) of the delay in order to ascertain whether an extension of time should be awarded. An extension of time relieves the contractor from the liability for damages. Completing projects on time is an indicator of efficiency, but the construction process is subject to many variables and unpredictable factors, which result from many sources. These sources include the performance of parties, resources availability, environmental conditions, involvement of other parties, and contractual relations. However, it rarely happens that a project is completed within the specified time. The Construction industry is large, volatile, and requires tremendous capital outlays. Typically, the work offers low rates of return in relation to the amount of risk involved. Delays on construction projects are a universal phenomenon.

They are almost always accompanied by cost and time overruns. Construction project delays have an adverse effect on parties (developer, contractor, and consultant) to a contract in terms of a growth in adversarial relationships, distrust, litigation, arbitration, cash-flow problems, and a general feeling of apprehension towards each other. So, it is essential to define the actual causes of delay in order to minimize and avoid the delays in any construction project. In construction, delay could be defined as the time overrun either beyond completion date specified in a contract or beyond the date that the parties agreed upon for delivery of a project. It is a project slipping over its planned schedule and is considered as common problem in construction projects. To the owner, delay means loss of revenue through lack of production facilities and rentable space or a dependence on present facilities. 1.4 CAUSES OF DELAYS Numerous researchers have also examined and identified the causes of delays in construction project. Assaf, et al. (1995), for example, studied the causes of delays in large building construction projects in Saudi Arabia. They identified that the most important causes of delay included are the approval of shop drawings, delays in payment to contractors and the resulting cash problems during construction, design changes, conflicts in work schedules of subcontractors, slow decision making and executive bureaucracy in owners organizations, design errors, labor shortage and inadequate labor skills. Chan and Kumaraswamy (1996) surveyed and classified the causes of construction delays in Hongkong as seen by clients, contractor and consultants, and examined the factors affecting productivity. The results of their research indicate that the five principal and common causes of delays are: poor site management and supervision; unforeseen ground condition; low speed of decision making involving all projects team; client initiated variations; and necessary variation of works. 1.5 DELAY CLASSIFICATION A Several factors can contribute to delays of a project. Analyzing the causes of delays is an essential task for resolving any conflicts or claims. Although many

researchers emphasize the high cost and the associated risk related to litigating delay claims, few emphasize the responsibility for project delays. To avoid delays that might result in claims and disputes, the link between the actual tasks undertaken, the time required to complete them, and the ultimate cost estimate of the resources involved all need to be examined. According to an earlier work by the author related to project schedule and project delay classification Al-Humaidi (2002) , classification of delay causes can follow different logic and can be classified according to their origin, timing, and compensability. Classification of delays according to origin is when the delay is analyzed based on the party responsible for the delay. The party responsible for the delay can be the owner, the designer, or the contractor. The second classification of delay is based on compensability of delay. Compensable delays are classified further into excusable delays or non-excusable delays. The third classification of delay is based on timing of delay. If two or more delays occur simultaneously, then a concurrent delay takes place. If a single delay takes place at a time, then a non-concurrent delay occurs. Delays can be classified as: 1.5.1 Origin Those over which neither party has control Those over which the owner has control Those over which the designer has control Those over which the contractor has control

1.5.2 Compensability Excusable delays Non-excusable delays

1.5.3 Timing Concurrent delays Non-concurrent

1.6 TYPES OF DELAYS According to Trauner et al. (2009), there are four main groups of construction delays: Non-excusable delays Excusable non-compensable delays Excusable compensable delays Concurrent delays Critical or non critical delays

1.6.1 Critical versus Non-Critical Delays Delays that affect the project completion or in some cases a milestone date are considered as critical delays and delays that do not affect the project completion or a milestone date are non-critical delays. If these activities are delayed, the project completion date or a milestone dater will be delayed. The determining which activities truly control the project completion date depends on the following: The project itself The contractors plan and schedule (particularly the critical path) The requirement of the contract for sequence and phasing The physical constraint of the project, i.e. how to build the job from perspective. 1.6.2 Excusable versus Non-Excusable Delays All delays are either excusable or non-excusable. An excusable delay is a delay that is due to an unforeseeable event beyond the contractors or the subcontractors control. Normally, based on common general provisions in public agency specifications, delays resulting from the following events would be considered excusable: General labour strike Fires Floods Acts of God Owner-directed changes Practical

 Errors and omissions in the plans and specifications Differing site conditions or concealed conditions Unusually severe weather Intervention by outside agencies Lack of action by government bodies, such as building inspection. Non-excusable delays are events that are within the contractors control or that are foreseeable. These are some examples or non-excusable delays: Late performance of sub-contractor Untimely performance by suppliers Faulty workmanship by the contractor or sub-contractors A project-specific labour strike caused by either the contractors unwillingness to meet with labour representative or by unfair labour practices. 1.6.3 Compensable Delays versus Non-Compensable Delays A compensable delay is a delay where the contractor is entitled to a time extension and to additional compensation. Relating back to the excusable and nonexcusable delays, only excusable delays can be compensable. Non-compensable delays mean that although an excusable delay may have occurred, the contractor is not entitled to any added compensation resulting from the excusable delay. Thus, the question of whether a delay is compensable must be answered. Additionally, a non-excusable delay warrants neither additional compensation nor a time extension. Whether or not a delay is compensable depends primarily on the terms of the contract. In the most cases, a contract specifically notes the kinds of delays that are noncompensable, for which the contractor does not receive any additional money but may be allowed a time extension. 1.6.4 Concurrent Delays The concept of concurrent delay has become a very common presentation as art of some analysis of construction delays. The concurrency argument is not just from the standpoint of determining the projects critical delays but also from the standpoint of assigning responsibility for damages associated with delays to the critical path. Owners will often cite concurrent delays by the contractor as a reason or issuing a time
7

extension without additional compensation. Contractors will often cite concurrent delays by the owner as a reason why liquidated damages should not be assessed for its delays. Unfortunately, few contract specifications include a definition of concurrent delay and how concurrent delays affect a contractors entitlement to additional compensation for time extension or responsibility for liquidated damages. In analyzed concurrent delays, each delay is assessed separately and its impact another activities and the project duration is calculated. There are some guidelines for concurrent delays classification. Firstly, if excusable and non-excusable delays occur concurrently, only a time extension is granted to the contractor. Next, if excusable with compensation and excusable without compensation delays occur concurrently, the contractor is entitled to time extension, but not to damages. Lastly, if two excusable with compensation delays occur concurrently, the contractor is entitled to both time extension and damages. 1.7 CAUSES OF DELAY There are many factors that contributed to causes of delays in construction projects. These range from factors inherent in the technology and its management, to those resulting from the physical, social, and financial environment. There are in total of seven groups of causes for delay in construction project Labour, Materials, Design, Contractor, Consultant, Equipment, External factors. The effects of delays are as fallows. 1.8 EFFECTS OF DELAY The effects of construction delays on project delivery in Nigerian construction industry. The six effects of delay that were identified includes: time overrun, cost overrun, dispute, arbitration, total abandonment and litigation concluded that time and cost overrun was the impact of the material selection time, their availability in the local market and the presence of the supervising engineer. It is important to improve the estimated activity duration according to the actual skills levels, unexpected events, efficiency of work time, mistakes and misunderstanding. Delays influence negatively on the contractors performance and contribute to adverse impacts in construction projects such as contract disputes, low productivity and increase in construction costs that will also influence on the pre determined of construction project objectives.

1.9 DELAY ANALYSIS TECHNIQUES Delay analysis is an analytical process in which the critical path method is employed together with a review of project documentation and site records in order to evaluate and apportion the effects of delays and events that have an impact on the project schedule. Several methods are available for delay analysis; the selection of the proper method depends upon a variety of factors including the value of the dispute, the time available, the records available, and the funds and effort allocated to the analysis. The four methods are described briefly in the following subsections. 1.9.1 The As-Planned Versus As-Built Comparison Comparing the as-planned with the as-built schedule is the simplest method of analysing schedule delays. The majority of the researchers do not recommend using this method because it simply determines a net impact of all delay events as a whole rather than studying each individual delay event separately. 1.9.2 The Impacted As-Planned Method (What-If approach) The impacted as-planned method adopts the as-planned schedule as its baseline. The delays caused by either the contractor or the owner are added to the as-planned schedule, and the impact on the project duration is calculated. 1.9.3 The Collapsed As-Built Method (but-for method) The collapsed as-built method is used by the contractors to demonstrate a schedule that they could have achieved but for the actions of the owner. This method adopts the as-built schedule as its baseline. The delays attributable to the owner are subtracted from the as-built schedule. The compensable delay is the difference between the as-built schedule and the but-for schedule. 1.9.4 The Contemporaneous Period Analysis Method (window analysis) The windows method breaks the construction period into discrete time increments and examines the effects of the delays attributable to each of the project participants as the delays occur. It adopts the as-planned schedule as its baseline, but the as-planned schedule is periodically updated at the end of each planned time period.
9

Ideally, the windows method schedule analysis can be followed during the course of construction. 1.9.5 Improved But-for Analysis The traditional but-for method considers only one partys point of view and does not distinguish between critical, non-critical and concurrent delays. Mbabazi et al. (2005) proposed three improvements to the existing but-for delay analysis method, including new representation of disruption of an activity, new representation of possible interactions among concurrent critical delays, and a new delay analysis method that reconsiders and reconciles the points of views of all parties. Through the manipulation of the features of Microsoft project software, an activity is split into two activities at the delay date, and then a new activity is inserted between the two parts to represent the delay. These are different types of delay analysis techniques. 1.10 OBJECTIVE The study is to determine how different degrees of uncertainty impact the construction project, Analyzing delays, effect of delay and methods of minimizing delays in construction project, and Conduct the questioner survey on various parameters finding reasons for schedule delay in construction projects in Indian Construction Industry. To identify affects of delays in construction projects. To identify the methods of minimizing construction delay in construction projects. Analysis the results and giving recommendations to overcome delay in construction projects. 1.11 SCOPE This study is to identity what the factors affects delays in construction projects are in Indian context. The questionnaire survey would be designed based on the causes of construction delays, effects of construction delays and methods of rectification of the construction delays.

10