Done Hari Saw Enim

THE FRAMEWORK FOR MINIMIZING CONSTRUCTION
TIME AND COST OVERRUNS IN PADANG AND PEKANBARU,

INDONESIA
HARISAWENI
A thesis submitted in fulfilment of the

requirements for the award of the degree of
Master of Science (Quantity Surveying)
Faculty of Built Environment

Universiti Teknologi Malaysia
JANUARI 2007
Specially Dedicated to My Lovely:
Husband (Ardiyansyah B. Syahrom, S.T),
Daughter (Naaila Salwa Ardiyansyah).
My Beloved Parent:
Papa (H. M Nasir), and Mama (Dra. Hj. Hernita Rais),
Parent-in-law: Papa (Syahrom), and Mamak (Rosni).
Also My Sweet Sister and Brother:

(Hersi Oliva, S.Si), (M. Fadli Arif),
(Chrisnawati) and family.
ACKNOWLEDGEMENT
Vision, values and courage are the main gift of this thesis. I am grateful for
the inspiration and wisdom of many thoughts that have been instrumental in its
formulation.
First of all, I have readily acknowledged and thank to Allah SWT, the
Omnipotent and Omniscient who created everything and in giving me the ability to
begin and complete this project. I also wish to express my sincere appreciation to
my supervisors PM. Dr. Rosli Abdul Rashid, PM Dr. Razali B. Adul Hamid and PM
Dr. Kherun Nita Bt. Ali, for the guidance, advices, motivations, critics and
friendship. Without their help, this thesis would not have been the same as presented
here.
I am also indebted to Universiti Teknologi Malaysia (UTM) for support in

providing the fellowship scholarship for two semesters.
My sincere appreciation is also extended to Bapak Prof. Ir. Dr. Zainai B.

Mohamed and his wife Ibu Rosnah for help and kindness, so that I can pursue my
study here. Many thanks to my friends in UTM K’Isal and Sarah, I can not forget
about our familiarity and friendship.
Last but certainly not least, I want to thank my husband, papa, mama, my
sweet sister and brother, and all of my big family, for their affection, prayer and
support throughout my study. I love you all.
ABSTRACT
It has been said that Indonesian constructions often suffer serious cost and time
overrun. Kaming et.al., (1997a) and Trigunarsyah (2004) have studied the causes of
these problems. However, their studies focused only on the high rise buildings in
Jakarta and Yogyakarta. Since Indonesia is a large country with more than 3000
islands, it pertinent to ask whether their findings are also applicable to low-rise
constructions in other major cities in the country. It appeared that the low-rise
constructions in Padang and Pekanbaru, the two major cities in Sumatera, are also
facing the problems of time and cost overrun. The issues bring about some related
questions – what are the causes of these problems? Are they similar to the findings
made by Kaming and Trigunarsyah? How do contractors and managers in Padang
and Pekanbaru manage construction cost and time? Are they adhering to the good
practice of project cost and time management? What is considered as the best time
and cost management practice? What is good time and cost management framework
or model like? Generally, the aim of this study is to answer all these questions. But
more specifically, the main objectives are threefold; firstly, to identify the major
causes of project time and cost overrun in low - rise projects in Padang and
Pekanbaru; secondly, to develop and establish the theoretical framework of a good
construction time and cost management practice, and thirdly, to compare the time
and cost management as currently practiced by contractors and consultants in Padang
and Pekanbaru against the “theoretical” framework of the good time and cost
management. The study focused on low-rise projects in Padang and Pekanbaru,
Sumatera which are managed by contractors and consultants in class B and M
respectively. The study looked at both from contractors’ and consultants’
perspectives. Data and information for the study are collected using a combination of
documentary analysis and structured interview techniques. The data were
systematically compiled and analysed using descriptive statistic techniques. The
study shows that the major causes of project time and cost overrun in Padang and
Pekanbaru ranges from lack of labour, lack of equipment to material delivery
problems and frequent design changes. The study also highlighted that there are
several approaches to efficient and effective project time and cost management. They
can be summarized in the form of a framework or model that form the basis for the
study. It is found that, generally contractors and consultants in Padang and
Pekanbaru have adhered to the good time and cost management framework.
However, the main area of concern is their lack of emphasis on the control aspects of
the management. They are found to be lacking in monitoring the difference between
planned and actual time and cost performance and identifying or establishing the
deviation or problems associated with it. The study also pointed out that contractors
and consultants in Padang and Pekanbaru need a clear and systematic project time
and cost management framework that they can use as guidelines or reference for
more efficient management.
vi
ABSTRAK
Kaming et.al., (1997a) dan B. Trigunarsyah (2004) masing-masing telah

melakukan kajian berkenaan kepada permasalahaan kelebihan masa dan kos pada projek
pembinaan di Indonesia. Kajian mereka hanya terfokus kepada bangunan bertingkat-
tingkat banyak di kota-kota besar di Jawa seperti Jakarta dan Yogyakarta. Tetapi,
persoalan sekarang adalah apakah temuan kajian mereka dapat digunakan untuk
bangunan bertingkat rendah di kota-kota lain di Indonesia, khususnya Padang dan
Pekanbaru di Sumatera. Berkaitan dengan isu tersebut, objektif kajian ini adalah untuk
mengenal pasti penyebab-penyebab penting dari kelebihan masa dan kos pada projek
binaan bertingkat rendah di Padang dan Pekanbaru, untuk menubuhkan prosedur kerja
berdasarkan teori untuk sebuah pengurusan masa dan kos konstruksi yang baik, dan
untuk membandingkan pengurusan masa dan kos yang diamalkan oleh perusahaan
konstruksi di Padang dan Pekanbaru terhadap prosedur kerja secara teori dalam
pengurusan masa dan kos. Kajian ini terfokus kepada projek bangunan bertingkat
rendah dan terbatas hanya untuk mengkaji amalan yang digunakan oleh kontraktor dan
konsultan golongan B dan M di dua kota besar di Sumatera – Padang dan Pekanbaru.
Kajian dilakukan berdasarkan survey temu muka langsung dengan menggunakan set
questionnaire yang telah dipersiapkan. Data dikumpulkan dan dianalisa menggunakan
metoda penghitungan purata. Kajian menemukan bahwa projek pembinaan di Padang
dan Pekanbaru memerlukan sebuah metoda atau amalan untuk mengurus projek selama
proses pembinaan sampai dengan sasaran akhir projek dicapai untuk mengurangi
kelebihan masa dan kos. Itu dikarenakan permasalahan kelebihan masa dan kos terjadi
selama proses tersebut yang disebabkan oleh aktivitas lingkungan sekitar projek,
aktivitas peralatan dan pengurusan, aktivitas-aktivitas perubahan, aktivitas material atau
bahan dan aktivitas tenaga kerja atau buruh. Setelah penyebab dari kelebihan masa dan
kos dikenal pasti, sebagai sebuah metoda untuk membantu dalam pengurusan masa dan
waktu di sebuah projek binaan, peneliti telah mencadangkan dan mengembangkan
sebuah prosedur kerja. Prosedur kerja ini akan membantu dalam mengurus masa dan
kos untuk mengurangi permasalahan kelebihan masa dan kos di lokasi projek binaan
karena prosedur kerja tersebut akan memperlihatkan kepada team kerja projek tahapan
prosedur kerja yang mereka harus beri perhatian lebih.
vii
TABLE OF CONTENT
CHAPTER TITLE PAGE
DECLARATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
ABSTRACT v
ABSTRAK vi
TABLE OF CONTENTS vii
LIST OF TABLES xi
LIST OF FIGURES xiv
GLOSSARY xv
LIST OF APPENDICES xvi
1 INTRODUCTION
1.1 Background of the Study 1

1.2 Statement of Issues 3
1.3 Previous Research 6
1.4 Objectives of Research 8
1.5 Research Scope 9
1.6 Thesis Organization 10
viii
2 INDONESIAN CONSTRUCTION INDUSTRY 12
2.1 Introduction 12
2.2 The Indonesian Demography and Economy 12
2.2.1 The Indonesian Construction Industry 13
2.2.2 Construction Industry Performance in Padang 18
and Pekanbaru
2.2.3 The Structure of Indonesian Construction 21
Industry
2.2.4 Performance of construction projects in 27
Indonesian
3 PROJECT TIME AND COST MANAGEMENT 34

3.1 Introduction 34
3.2 Project Time and Cost Management 34
3.2.1 Project Time 35
3.2.2 Project Cost 36
3.2.3 Problems Associated with Project Time and 37
Cost
3.2.4 The Definition of Project Time and Cost 38
Management
3.2.5 Project Management Objectives 43
3.3 Implication of Time and Cost Overrun 44
3.4 Causes of Project Time and Cost Overrun 44
4 PROJECT TIME AND COST MANAGEMENT 51

FRAMEWORK
4.1 Introduction 51
4.2 Definition of Framework 51
4.3 The purpose of Framework 52
ix
4.4 Project Time andi.Cost Management

ii. Framework
Cost Overrun 53
4.4.1 Time and Cost Management in Context of 53
5.2.4 Project
Proposed Framework Design in The Questionnair
Management 113
5.2.5 Summary of
4.4.2 Framework forthe Data
Time andAnalysis
Cost Management 115
60
5.3 Discussions of Framework
4.4.3 Proposed Framework Development
for Management Process 117
71
5.4 Summary 128
5 RESEARCH METHODOLOGY 79
CHAPTER 6 CONCLUTIONS
5.1 Introduction AND RECOMMENDATIONS 130
79
6.1 Conclusions
5.2 Research Process 130
79
6.2 Recommendations
5.3 Data Collection 133
81
REFERENCES
6 THE MAJOR CAUSES OF TIME AND COST 135
100
BIBLIOGRAPHY
OVERRUN 147
APPENDICES6.1 Introduction 150
100
6.2 The Major Causes of Project Time and Cost Overrun 100
in Padang and Pekanbaru
6.2.1 Contractors Perspectives 101
6.2.2 Consultants Perspectives 103
6.2.3 Combination of the Two Perspectives 106
6.3 Conclusions 109
7 TIME AND COST MANAGEMENT: A

COMPARISON BETWEEN THE CURRENT 110
PRACTICE6.2.3.1AND
Consultant’s
THE Perspectives
“THEORETICAL 110
FRAMEWORK” i. Time Overrun 110
7.1 Introduction ii. Cost Overrun 111

110
7.2 The Comparison between Time and Cost Management 110
as Currently Practiced against the Theoretical
Framework
x
7.3 The Detailed Study 116
7.3.1 Time Management 116
7.3.2 Cost Management 124
7.4 Discussions of Framework Development 129
7.5 Conclusion 137
8 CONCLUTIONS AND RECOMMENDATIONS 138

8.1 Conclusions 138
8.2 Findings and Conclusions 139
8.3 Recommendations 140
8.4 Future Study 141
REFERENCES 142
BIBLIOGRAPHY 157
APPENDIX A 160
APPENDIX B 168
APPENDIX C 175
APPENDIX D 189
xi
LIST OF TABLES
No. Title Page
2.1 Indonesian GDP by Industrial Origin (billion rupiahs) and the 14

Percentage of the Growth to the GDP (%), 1997-2004
2.2 Value of Construction Works in Indonesia According to the Type of 16
Construction (billion rupiahs) from 2000 to 2004
2.3 Value of Construction Completed by Province (billion rupiahs), in 17
Indonesian Construction Industry since 2000 to 2004
2.4 Total Number of Companies Register under LPJK, GAPEKSINDO 24
and INKINDO by Province.
2.5 Total Numbers of Big, Medium and Small Companies based on The 25
Organization Registered and the Qualification
2.6 Response rate of project completed on time and within budget 28
2.7 Response rate of project completed 28
2.8 Some Example of projects with time and cost overrun problems in 30
Indonesian Construction Projects (Padang)
2.9 Variables of delays and their importance, frequency, and severity in 31
construction in Indonesia (scale of indices for importance,
frequency and severity ranges from 0 to 1)
2.10 Variables of cost overruns, their importance, frequency, and severity 32
in Indonesian construction projects (scale of indices for importance,
frequency and severity ranges from 0 to 1).
3.1 Comparative ranking of problems that cause time and cost overruns 46
in different countries (Olomolaiye, et, al., 1998)
3.2 Case studies of the common causes of time and cost overrun 49
3.3 Derive from the synthesis of the previous researches (extracted Table 3.2) 50
xii
4.1 The various practices to reduce project time and cost overrun 59
problems
4.2 The perspectives about several frameworks from several researchers. 74
5.1 Total Numbers of Big, Medium and Small Companies based on The 84
Organization Registered and the Qualification.
5.2 Number of questionnaires distributed 85
5.3 Sample of pilot study questions 87
5.4 Results of the pilot study on causes of time and cost overrun 89
5.5 Results of pilot study – The common causes of time and cost overrun 90
problems (extracted from table 5.2)
5.5 Number of questionnaires distributed 93
6.1 Mean value of the major factors that cause of time and cost overrun 101
problems – contractor’s perspectives
6.2 Time and cost overrun major causes and it activity categories based 102
on the importance scale – contractor’s perspectives
6.3 The rank of the causes of time and cost overrun based on the mean 103
values – contractor’s perspectives
6.4 Mean value of the major factors that cause of time and cost overrun 104
problems – consultant’s perspectives
6.5 Time and cost overrun major causes and it activity categories based 105
on the importance scale – consultant’s perspectives
values – consultant’s perspectives
6.7 The major factors that causes of time and cost overrun problems as 107
perceived by contractors and consultants
values as perceived by contractors and consultants
7.1 The current practices of time management by the contractors – 117
in consultant’s perspective
7.2 The current practice of time management by the contractors based on 118
the frequency occurrence scale – consultant’s perspective
xiii
7.3 The current practices of time management by the contractors –

– Contractor’s own perspectives 119
7.4 The current practice of time management by the contractors based
on the frequency occurrence scale – Contractor’s own perspectives 119
7.5 Mean values and the “average” for the current practices in time
management by the contractors as perceived by contractors and
consultants 121
7.6 The rank of the current practices in time management by the
contractors based on mean values “average” as perceived by the
contractors and consultants 122
7.7 The current practices of time management by the contractors based
on the frequency occurrence scale as perceived by the contractors
and consultants 123
7.8 The current practices of cost management by the contractors –
in consultant’s perspective 125
7.9 The current practice of cost management by the contractors based
on the frequency occurrence scale – consultant’s perspective 125
7.10 The current practices of cost management by the contractors –
– Contractor’s own perspectives 126
7.11 he current practice of cost management by the contractors based
on the frequency occurrence scale – Contractor’s own perspectives 127
7.12 Mean values and the “average” for the current practices in time
management by the contractors as perceived by contractors and
consultants 128
7.13 The rank of the current practices in time management by the
contractors based on mean values “average” as perceived by the
contractors and consultants 128
7.14 The current practices of cost management by the contractors based
on the frequency occurrence scale as perceived by the contractors
and consultants 129
xiv
LIST OF FIGURES
No Title Page
2.1
1 The percentage of the growth of the Indonesian construction sectors 15
(%) based on the GDP value
2.2 Several landmark construction projects in Pekanbaru 19
2.3 Several landmark construction projects in Padang 21
4.1 Basic construction project management philosophy (Ritz, 1994) 60
4.2 Time management cycle in construction industry (Clough, et. al., 63
2000)
4.3 Control process to control construction project (Ritz, 1994) 65
4.4 The essence of the contractor’s control function (Ndekugri & 66
McCaffer, 1988)
4.5 The trade-off analysis process in project management (Sunny & Kim, 69
1992)
4.6 The proposed framework for survey which developed based on the 77
theory and the practices
5.1 The research stages 80
7.1 The proposed framework for survey (it was included in the 112
questionnaire) which developed based on the theory and the practices
7.2 The survey results about the proposed framework 114
7.3 The developed framework for construction project in Padang and 132
Pekanbaru based on the responds of the respondents to the proposed
framework which was included in the questionnaire
7.4 The Detail of the developed framework for Construction Project in 133
Padang and Pekanbaru
xv
GLOSSARY
BAPEKIN : Badan Pengawas Konstruksi dan Investasi Nasional

DPU : Dinas Pekerjaan Umum
GAPEKSINDO : Gabungan Pengusaha Konstruksi Indonesia
INKINDO : Ikatan Konsultan Indonesia
Keppres : Keputusan Presiden
LPJK : Lembaga Pengembangan Jasa Konstruksi
LPJKN : Lembaga Pengembangan Jasa Konstruksi Nasional
PP : Peraturan Pemerintah
PPMK : Pusat Penilaian Mutu Konstruksi
REI : Real Estate Indonesia
BPS : Biro Pusat Statistik
xvi
LIST OF APPENDICES
APPENDIX TITLE PAGE
A LIST OF RESPONDENT 160

B PILOT STUDY 168
C QUESTIONNAIRES 175
D RIW CALCULATION 189
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
Indonesia is a nation of 13,500 islands scattered between Asia and Australia.

It has total land area of 1,904,569 km2, with total population in 2004 was around
217.9 millions and become the fourth most populous nation in the world after China,
India and the United States (BPS, 2004).
The growth rate of Indonesian economic showed a better performance. It can

show from the increasing of the annual gross domestic product (GDP) of the
Indonesian for year to year. The annual gross domestic product (GDP) growth of the
Indonesian in 2001 was around 3.83% and it increased sharply became 5.13% in the
year 2004, (BPS, 2004). The rapid economic development and a steady growth of
population have led to a significant increase in demand for housing, commercial and
office buildings, and infrastructure such as roads and highways, airports, seaports, etc
in the country.
Indonesian construction industry experiences rapid changes and development

since the 1950s. It grew rapidly until the economic crisis in 1997 and since that year
until 2004, the construction sector has not shown positive signal to get out of the
crisis. Since 1997, performance decreasing for each quarter of steeper than its
increasing, and also has sharp fluctuation among quarters. It can be prove based on
the annual gross domestic product (GDP) growth based on the industrial origin data.
2
The construction sector growth rate had decreased sharply since 1997, from 6.94%
per-annum during the period of 1997 to 2000 to 5.52% per-annum during 2000 to
2004, (BPS, 2000).
The country’s rapid economic growth can also be seen in two major cities in
the island of Sumatera, namely Padang and Pekanbaru. Padang and Pekanbaru as the
central of West Sumatera and Riau province for the last ten years become the main
choice of the investor to invest especially for construction projects for the Sumatera
areas (Luthfi, 2006). It causes of their location benefit to have a cooperation link
with neighbouring countries Malaysia and Singapore.
Apart from their strategic location, the rapid growth of Padang and Pekanbaru
was also induced by the government’s policy of spreading the country’s economic
and physical growth to other parts of the country. The government realized in the last
25 years the economic development has been concentrated in Java (particularly in
Jakarta) because most of the Indonesia’s population is concentrated in Java (BPS,
2004).
The economic growth of Pekanbaru and Padang itself, from 1998 to 2002
increased to 3.86 % and 2.94% where it was better than other cities in Sumatera
where the average of their economic growth was only 0, 57 %. For the GDP value,
Pekanbaru city had increased around 46.35% from 1999 to 2000, (www. Pekanbaru.
go. id, 2005) and Padang also had increased 35.63% from 1999 to 2002, (www.
Padang. go. id, 2005).
Both cities enjoyed many favourable and physical. This can be seen by the
development of many new buildings and infrastructure projects to support the
increasing commercial and manufacturing activities. In fact, these two cities have
been ranked on number 1 until 4 among other cities in Sumatera in term of total
value of new construction completed and the number of construction companies. It
also has a tendency to increase for year to year (BPS, 2004).
The increase in construction activities in both Padang and Pekanbaru has

contributed towards the growth of the two cities but it has also brought to light some
3
of inherent problems that have been mentioned by Kaming et, al., (1997a) and
Trigunarsyah (2004). They pointed out that many construction projects in Indonesia
suffer the problem of time and cost overrun.
Time and cost are the two major elements in project management, apart from
quality and scope. One of the biggest challenges in the management of construction
project or to one of the project manager is to ensure that the project is completed on
time and within estimated cost. Time and cost are the two elements, which are
become the major concern to most clients/ owners and subject of continuous
discussion and research. As pointed out by many, one of the interesting aspects of
construction that makes it more challenging and sometimes full of surprises is that it
is a very fragmented industry. It involves myriads of interrelated activities that are
carried out by many separate individuals and organisations with different sizes and
expertise that may come from different parts of the country.
Due to the fragmented and complex nature of construction, many problems

could arises everyday during the process of construction cause by factors such as
weather, material delivery delay, labour dispute, equipment breakdowns, job
accidents, change orders, and numerous other conditions. Many things could go
wrong during the whole process of construction. All these problems will have serious
impact on the performance of the projects, particularly on time and cost.
To the clients, may they be the government or property developer, any delay,
cost overrun or both will significantly affect their profit and the viability of the
projects. Therefore it is important to properly manage a project time and cost.
1.2 Statement of Issues
Like other developing countries, the Indonesian construction industry is also

faced with serious time and cost overruns problems and it is become a matter of great
concern to the government, private clients and the Indonesian construction
community themselves.
4
Ir. Trisno Ario Sutanto, (2002) said that many construction projects in
Indonesia suffer delays because many contractors are lacking in managerial
knowledge and skills to manage the projects activities. The Indonesian Country
Procurement Assessment Report (2001) on the other hand pointed out that, the main
problems facing the Indonesian construction projects is time and cost overrun. It
suggested that many firms and companies particular small and medium, lacks
managerial competencies and skilled workers and resources. Then, according to Ir.
Panggardjito (2001), there has not been enough market pressure to make them
improve their capability, capacity and efficiency. These are some of the reasons why
many construction projects in Indonesia cannot achieve an efficient time and cost in
projects performance or have time and cost overrun problems.
According to Kaming et.al., (1997a) delays and cost overrun are common
problem on projects in large project in Indonesia. He identified that 54. 5 % of
project managers completed more than 90% of their projects that they handled on
time, 15. 2% of completed only between 70 – 90% of their projects and 30. 3%
completed less than 70%. It also identifies only 20. 7 % project managers claimed
that 90% of their projects that they handled were completed within budget, 51. 7%
completed between 70 – 90% of their project and 27. 6% completed less than 70%.
Trigunarsyah (2004) identified that only 30% of the projects were completed
within the budget, 34% were less than the budget, and the remaining 36% exceeded
the budget. The study also shows that only 47% of the projects were completed
within the schedule, 15% ahead of schedule, and 38% were behind schedule. Both of
the previous study above shows that, time and cost overrun problems in construction
projects in Indonesia need to be overcome. However, their studies were limited to
project in Java Island only.
A construction project had the time and cost overrun if it was completed
exceeding the time and cost estimated as written in the approval contract (Ali, 1992
and Saldjana, 1998). In the two of previous research above, time and cost overrun
were defined as the extension of time beyond planned completion dates traceable to
the contractors and it means it have use the same concept with Ali, (1992) and
Saldjana, (1998) about when the time and cost overrun occurs.
5
As said above Padang and Pekanbaru as the central of West Sumatera and
Riau province for the last ten years become the main choice of the investor to invest
for the Sumatera areas specifically for construction projects (Luthfi, 2006). Based on
statement above about the time and cost overrun problems that faced of by
Indonesian construction industry, it means include in it were Padang and Pekanbaru
cities. No previous research has been found about the time and cost overrun problem
in Padang and Pekanbaru cities because the two of previous research above
concentrated in Java; Kaming et.al., (1997a) concentrated their research in big cities
Jakarta and Yogyakarta and B. Trigunarsyah (2004) concentrated the research in all
big cities in Java.
Several methods in managing project time and cost have been suggested or
developed by experts; practitioners, and researchers. These methods can be
considered to be the framework for the management of construction time and cost.
Many construction companies, project management firms as well as individual
project managers have adopted these methods in managing their projects.
However, despite having these methods, the Indonesian construction is still

faced with the problems of time and cost overrun, (Ir. Panggardjito, 2001), The
Indonesian Country Procurement Assessment Report and Ir. Trisno Ario Sutanto
(2002).
The description of the issues and the previous research on the subject of time
and cost overrun in Indonesian construction projects highlight some of major issues
which can be summarized as:
1. Many books, journals and dissertation also pointed out the common causes of
projects delays and cost overruns. What about in Indonesia? It becomes
imperative to know what are the major causes that cause the time and cost
overrun occurrence in Indonesia particularly in construction projects in
Padang and Pekanbaru?
2. What is considered as the method for construction time and cost management
as describe by many time and cost management framework?
3. How do the project managers in Padang and Pekanbaru manage the project
time and cost? Do they have or follow or adopt any of the methods
6
management in framework model? If so, to what extent do they adhere to

such a framework model in managing projects? A number of contractors and
project managers claimed that some elements in the management framework
were not carried out or given much attention.
1.3 Previous Research
Based on several previous researches, it is known that time and cost overruns
create a bad image for the construction industry in many countries including
Indonesia. In several previous researches in several developing countries, we can
identify the causes of construction project overrun in terms of time and cost.
The studies relating to project problems that concerns the causes of time
delays/ or cost overruns have been conducted worldwide from developed countries
such USA and UK (Xiao and Proverbs, 2002a and 2002b) to developing countries
such as Kuwait (Kartam et al., 2000), Nigeria (Okpala and Aniekwu, 1988;
Mansfield et al., 1994; Dlakwa and Culpin, 1990; Okpala, 1986), Saudi Arabia
(Assaf et al., 1995), Thailand (Ogunlana, 1996), Hongkong (Chan and
Kumaraswamy, 1997), Malaysia (Wang, 1992) and Jordan (Al-Momani, 2000).
Based on the research results in Thailand construction projects, Ogunlana

(1996) said that, construction industry problems in developing countries could be
nested in three layers: problems of shortages or inadequacies in industry
infrastructure, problems caused by clients and consultants, and problems caused by
contractor’s incompetence/ inadequacies. Adequate planning at early stages of
project execution is an important factor in reducing delays (time) and cost overrun in
developing countries (Chalabi and Camp 1984). The need for a clear intention and
understanding of the technical specifications could also reduce bottlenecks in the
execution of projects (Jackson, 1990).
Contractors on the other hand, do not honour contract deadlines and use
shortages of materials as an excuse, and these problems can be averted if
7
professionals are more prudent in their design and more knowledgeable about the
availability and usage of materials (Okpala and Aniekwu, 1988). The most
important delay (time) and cost overrun factors according to contractors were
preparation and approval of shop drawings, delays and cost overrun in contractors’
progress, payment by owners and design changes by owner (Assaf, et. al., 1995).
Poor site management and supervision, unforeseen ground conditions, low

speed of decision making involving all project teams, client initiated variations and
necessary variations of works indicated by Chan and Kumaraswamy (1997) as cause
factors for time and cost overruns in Hongkong. Mansfield et al. (1994) investigated
the important factors responsible for delays and cost overruns in highway
construction projects in Nigeria such as poor contract management, material
shortages, inaccurate estimating and overall price fluctuations.
On the other hand as said above, there was also previous research about time
and cost overrun conducted in Indonesia by Kaming et. al., (1997a). This research
identifies the variables that influences construction time and cost overrun group these
variables into factors and analyse the relationship of these factors and to further
enhance understanding of construction delays and cost overruns.
Results of Kaming et. al. (1997a) research reflected the construction

management problems on time and cost overrun factors which are limited to high-
rise projects in Indonesian big cities: Jakarta and Yogyakarta only that are also
common in developing countries.
On the other hand this research reflected the construction management

problems on time and cost overrun in Sumatera particularly in Padang and
Pekanbaru. This research studies the problem that were faced by B (big) and M
(medium) companies classification where most of these companies concentrate on
low-rise projects such as housing, road and others simple buildings because Padang
and Pekanbaru still in developing the city areas concept.
Kaming et. al. (1997b) also investigated five productivity problems that cause
time and cost overruns among seven regions in Indonesia, namely Jakarta,
8
Yogyakarta, West Java, Central Java, East Java, Western and Eastern Indonesia. Five
specific productivity problems are identified, i. e, lack of materials, rework,
absenteeism, lack of equipment and tools and gang interference. Trigunarsyah (2004)
survey results point to the fact that contractor involvement in pre-construction phases
could reduce time and cost problems during site operation.
The studies in other countries also highlighted the appropriate practices or

suggested solution to reduce the overrun problems such as in Japan, USA, UK and
Malaysia construction projects. There are also studies about the process and
procedures, which is provide a framework about time and cost management stages
that can be adopted to reduce overrun problems.
It is good to refer to other practices because it will help in finding a better

way to achieve the best results. It also could say that by adapting these other
countries practices, processes or the procedures could help or assist Indonesian
construction projects avoid being ambushed by unexpected overrun problems
especially on time and cost during the construction process. However, through
literature study that has been reviewed by researcher, there is no published previous
research on this topic in Padang and Pekanbaru even in whole Indonesian
construction projects.
1.4 Objectives of Research
Based upon the global notion of Indonesian construction projects condition in

the issue statements above, in order to reduce time and cost overrun problems in
Indonesian construction projects particularly in Padang and Pekanbaru cities, this
research is undertaken to provide a means:
1. To identify the major causes of project time and cost overrun in low - rise
projects in Padang and Pekanbaru
2. To establish theoretical framework for a good construction time and cost
management
9
3. To compare the time and cost management as currently practiced by

construction companies in Padang and Pekanbaru against the theoretical time
and cost management framework
1.5 Scope of the Research
This research reviewed available literature to give a clear and precise

understanding of the importance of time and cost management in construction
projects performance. It also reviewed factors that cause time and cost overrun and
the practices or suggested solution in order to reduce the time and cost overrun
problems from the previous researches in other countries. Through literature study
that has been reviewed by researcher, there is no published previous research on this
topic in Padang and Pekanbaru construction industry. These findings will be used as
references to support the research survey and the finding results.
The survey was done in Indonesian construction projects with study areas
Padang and Pekanbaru with the reason as stated in the research issues and the
previous research parts above. Although specific in this two cities area, the results
could reflect and assist to other cities in Indonesia which has the same problems in
the construction projects especially for time and cost overrun problems.
The objectives of study are to identify the major causes of time and cost
overrun, to establish the theoretical framework for a good construction time and cost
management that have been synthesized from several previous research and to
compare time and cost management as currently practiced by construction companies
in Padang and Pekanbaru against it. Then, the outcome of this survey that supported
by the reviewed findings will become the basis to reduce the occurrence of the time
and cost overrun problems which describe in framework for Indonesian construction
projects, particularly Padang and Pekanbaru.
Ali, (1992) and Saldjana, (1998) had defined about time and cost overrun and
also Kaming, et. al., (1997a) and Trigunarsyah, (2004). They have same definition
10
about when the time and cost overrun occurs. This study also uses that definition as
one of delimitation of this study.
The sources of data are the class B (big) and M (medium) contractors and
consultants in these two cities (Padang and Pekanbaru) because they have more
experience and active in project activities per-year. The companies that are included
in this classification are companies with vast experiences in managing projects.
However, for Padang and Pekanbaru cities, kind of projects that are executed
are many but most of them include in low-rise buildings such as housing, offices and
others simple projects. Other limitation for this research is the companies selected for
this research must be registered with INKINDO for consultants, GAPEKSINDO for
contractors and LPJK for all companies that are not registered under any of them.
Further limitation about the research sample will discusses in the methodology of the
research.
1.6 Thesis Organization
Chapter 2 reviews Indonesian construction industry, which discusses about

the Indonesian demography and economic, its construction industry as
general and particularly in Padang and Pekanbaru, the structure and the
performance of the construction industry; company qualifications, company
organizations, project procurement system, and the problems and the current
practices of project management in Indonesian construction projects.
Chapter 3 reviews project time and cost management which discusses about
the definition of project time and cost, the definition of project time and cost
management, project management objectives, problems associated with
project time and cost, and the issues in project time and cost management and
its implication to the project performance.
11
Chapter 4 reviews project time and cost management framework which

discusses about what is the framework itself, the purpose of framework, the
framework for project time and cost management, and the proposed
framework for each the project management stages.
Chapter 5 describes the methodology that adopted to conduct this research.
Chapter 6 presents data analysis results on the major causes of project time
and cost overrun based on the survey, discussions and the literature review
findings as an achievement of the first objective of this research.
Chapter 7 presents data analysis results on comparison of the time and cost
management as currently practiced by Indonesian construction projects
particularly in Padang and Pekanbaru as areas of study against the theoretical
framework for a good construction time and cost management which were
described in literature review findings results. From these discussions a
proposed framework would be developed that can be used to reduce time and
cost overrun problems for construction projects in Padang and Pekanbaru.
This chapter shows the achievement of the second and third objective of this
research.
Chapter 8 presents the conclusions of this research and the recommendations

for future research.
CHAPTER 2
INDONESIAN CONSTRUCTION INDUSTRY
2.1 Introduction
Indonesia has experienced rapid economic development for the last 15 years.
It has brought about a significant increase in construction activities that has benefited
the country as a whole, but it also brought to light the problem that many
construction projects suffered time and cost overrun. Before going further into the
issues, it is most appropriate to consider Indonesia as a country; its demography,
economies and construction industry.
2.2 The Indonesian Demography and Economic
The Indonesian people occupy the world's largest archipelago, stretching

more than 3,000 miles from mainland Southeast Asia eastward between Australia
and the Philippines. Lying astride the sea lanes of communication between the
Pacific and Indian oceans, Indonesia consists of over 13,500 islands with total land
area of 1,904,569 km2, (Bresnan, 1997). Total population of Indonesia in 1990 and
2000 was 178.5 millions and 206.3 millions, respectively. While total population in
2004 was around 217.9 millions and it is the fourth most populous nation in the
world after China, India and the United States, (BPS, 2004).
13
For the year 2004, growth rate of Indonesian economic showed a better
performance than 2003. The annual gross domestic product (GDP) of the Indonesian
in 2003 was 2, 045.9 trillion rupiahs and it increased in the year of 2004 become 2,
095.4 trillion rupiahs. Value of GDP on construction sector was 112, 571.3 billion
rupiahs in 2003 and 134, 388.1 billion rupiahs in 2004, (BPS, 2004). Table 2.1 below
will show the annual gross domestic product (GDP) of the Indonesian from 1997-
2004 based on the industrial origin and also the percentage of the growth.
2.2.1 The Indonesian Construction Industry
Indonesian construction industry has under gone changes and development

since the 1950s and grown rapidly until the 1997. The construction sector is very
much depends on Indonesian economic as a whole. The economic crisis between
1997 to 2000 causes the industry to suffer and it is not yet recovers.
Table 2.1 show the GDP of various economic sectors of the Indonesian
Economic. The table shows that the growth of the Indonesian construction industry
has been slow after the down turn in 1997. The growth of Indonesian construction
industry had decreased sharply from 7.44% in 1997 to 6.46% in 1998. It has also
drop considerably from 7.14% in 2000 to 5.30% in 2001. The table also show that
the Indonesian construction industry is yet to fully recover from the impact of the
1996 financial crisis. It describe clearly in Figure 2.1, after the table.
14
Table 2.1 Indonesian GDP by Industrial Origin (billion rupiahs) and the Percentage of the Growth to the GDP (%), 1997-2004
Industrial origin 1997 1998 1999 2000 2001 2002 2003 2004
1. Agriculture, livestock, forestry & fishery 101, 009.4 172, 827.6 216, 913.6 218, 397.6 263, 327.9 298, 876.8 325, 653.7 354, 435.3
Percentage of growth (%) 16.09 18.08 19.54 16.92 15.63 16.04 15.93 15.38
2. Mining and quarrying 55, 561.7 120, 328.6 109,974.1 166, 563.1 182, 007.8 161, 023.8 169, 535.6 196,892.4
3. Manufacturing industry 168, 178.0 238, 897.0 287, 702.6 336, 053.2 506,319.6 553, 746.6 590, 051.3 652, 729.5
4. Electricity, gas and water supply 7, 832.4 11,283.1 13, 429.0 15, 072.4 10, 854.8 15, 392 19, 540.9 22, 855.4
5. construction 46, 678.8 61, 761.6 74, 496.4 92, 175.9 89, 298.9 101, 573.5 112, 571.3 134, 388.1
6. Trade, hotel and restaurant 99, 581.9 146, 740.1 176, 663.7 196, 049.5 267, 656.1 314, 646.7 337, 840.5 372, 340
7. Transport and communication 38, 530.9 51, 937.2 55, 189.6 64, 550.1 77, 187.6 97, 970.3 118, 267.3 140, 604.2
8. Financial, ownership and business services 54, 360.3 69, 891.7 70, 641.8 80, 047.2 135, 369.8 154, 442.2 174, 323.6 194, 542.2
9. Services 55, 962.0 82, 086.8 104, 968.7 121, 775.3 152, 258.0 165, 602.8 198, 069.3 234, 244.4
627, 695.5 955, 753.5 1, 109, 979.5 1, 290,684.2 1,684,280.5 1,863,274.7 2,045,853.5 2,303,031.5
100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %
Source: Statistical Yearbook of Indonesia (BPS, 2000 and BPS, 2004)
14
15
The percentage of the growth of the Indonesian construction sectors

based on the GDP value (%)
8
7
6
5
(%)
4
3
2
1
0
1997 1998 1999 2000 2001 2002 2003 2004
Year
Figure 2.1 The percentage of the growth of the Indonesian construction sectors (%)
based on the GDP value
The growth of the Indonesian construction industry has greatly influenced the
country’s economic development. Construction is considered unique in that it can
stimulate the growth of other industrial sectors. The construction values become the
main component of output structure of construction companies. Total value of
construction that has finished during 2003 was decreased if compared with 2002.
Total of construction value that have finished in 2002 was about 22.2 trillion rupiahs
and in 2003 was about 20.2 trillion rupiahs or decreased about 9.0 percent but in
2004 it was increased 20.3 percent become 24.3 trillion rupiahs (BPS, 2004). Data
about the total value of construction work completed and its value by type in
Indonesian construction industry since 2000 to 2004 can be seeing in Table 2.2 as
follows.
16
Table 2.2. Value of Construction Works in Indonesia According to the Type of

Construction (billion rupiahs) from 2000 to 2004
Description 2000 2001 2002 2003 2004
- Residential 1,232,932 1,412,543 1,595,983 1,372,103 1,695,054
- Non-residential 4,300,840 4,614,605 5,129,961 4,547,594 5,503,004
- Electrical installation 1,062,649 1,227,349 1,427,610 1,167,857 1,443,168
- Water supply installation 126,065 142,327 160,843 153,374 194,151
- Sanitary installation 33,542 34,623 41,455 37,100 45,675
- Foundation 30,332 23,489 26,249 22,839 24,855
- Sound system, AC, lift, etc 30,410 46,158 51,654 41,807 56,771
- Water supply network 283,327 162,447 205,467 183,499 197,478
- Gas pipe installation 105,469 46,550 106,400 86,656 120,923
- Electricity network 358,868 292,507 349,616 313,834 359,596
- Road & bridge works 6,397,989 6,185,981 7,001,463 6,547,822 7,827,454
- Irrigation/ drainage 2,019,787 1,372,300 1,558,438 1,427,471 1,536,090
- Electric power supply 30,314 109,487 130,597 107,473 238,306
- Construction or improvement of 210,706 175,675 716,799 694,054 870,267
airport, harbor, bus station, etc
- Other construction works 721,397 3,240,289 3,674,823 3,450,716 4,228,121
- Total of value 16,944,628 19,086,328 22,177,359 20,154,199 24,340,912
Source: Statistical Yearbook of Indonesian 2004, (BPS, 2004)
Table 2.2 above shows the value of the construction works from 2000 – 2004.
It shows that there is an increase in value but the annual rate of growth is not very
favorable.
Table 2.3 below will shows the performance of the construction industry of
the various provinces in Indonesia. It shows that the value of work of construction in
West Sumatera and Riau province where Padang and Pekanbaru is located be
increase year to year.
17
Table 2.3 Value of Construction Completed by Province (billion rupiahs), in

Indonesian Construction Industry since 2000 to 2004
Year 2000 2001 2002 2003 2004
Sumatera Island
- Nanggroe Aceh Darussalam 328,361 371,310 419,878 446,492 494,865
- North Sumatera 438,030 515,255 996,107 993,748 1,360,81
- West Sumatera 345,371 397,937 458,503 469,008 520,171
- Riau 475,346 529,060 596,692 598,112 668,544
- Jambi 101,042 121,837 146,910 144,242 163,154
- South Sumatera 529,770 620,572 729,811 648,999 856,580
- Bengkulu 147,476 153,153 159,050 124,254 165,174
- Lampung 127,321 136,272 153,555 137,078 168,690
- Kepulauan Bangka Belitung 103,469 113,486 148,913 142,725 160,206
Java Island
- DKI Jakarta 3,070,608 3,303,698 3,554,482 2,958,110 3,824,321
- West Java 1,722,946 2,007,558 2,338,805 1,828,482 2,724,825
- Central Java 1,305,114 1,469,297 1,654,135 1,563,100 1,665,517
- DI Yogyakarta 142,129 168,861 202,763 182,674 242,161
- East Java 1,974,964 2,109,459 2,253,113 2,293,341 2,411,107
- Banten 309,789 366,871 434,401 420,883 468,188
- Bali -Bali Island 401,890 464,625 556,326 473,089 654,648
- West Nusa Tenggara -Lombok Island 635,778 733,752 846,822 928,797 1,054,180
- East Nusa Tenggara -Timor island 566,446 643,540 731,380 692,990 743,834
Kalimantan Island
- West Kalimantan 303,226 348,832 401,980 404,482 446,141
- Central Kalimantan 539,353 584,055 658,815 780,333 883,104
- South Kalimantan 228,132 241,455 255,864 236,803 270,946
- East Kalimantan 911,673 1,135,488 1,459,066 1,119,456 1,230,348
Sulawesi Island
- North Sulawesi 240,215 254,938 269,596 213,946 285,628
- Central Sulawesi 176,116 213,558 263,601 229,965 254,443
- South Sulawesi 853,839 986,952 1,243,376 1,189,102 1,336,575
- South East Sulawesi 143,780 168,635 195,616 199,458 222,894
- Gorontalo 21,371 24,254 27,407 31,864 36,404
- Maluku -Maluku’s Island 64,688 69,474 72,254 70,263 72,257
- North Maluku -Halmahera Island 45,739 50,389 56,839 55,273 58,998
- Papua -Irian Jaya Island 690,646 781,754 891,299 837,131 896,085
Total of value 16,944,628 19,086,328 22,177,359 20,154,199 24,340,912
Source: Statistical Yearbook of Indonesian 2004, (BPS, 2004)
18
2.2.2 Construction Industry Performance in Padang and Pekanbaru
The country economic performance has also influence the economic and
physical growth of many of its major cities. Two of them are Padang and Pekanbaru.
There two cities have experience favorable economic and physical growth that saw
through the growth of the construction sector. For the proper of this study, it is most
appropriate to consider the growth of the economy and the construction of these two
cities.
a) Pekanbaru
Pekanbaru is the capital city of province of Riau and it located in the East of
Sumatera (See in Fig. 2.3 below). In 1988 Riau province had a population of
2.842.955 and in 1999 it had increased to 3,345,467. In 2004, the approximated total
is around 5,000,000 people and half of them settled in Pekanbaru (www. Pekanbaru.
go. id, 2005).
The economic growth of Pekanbaru itself from 1998 to 2002 increased to

3.86 % with a value 504,384 billion rupiahs. At the same time it was better than other
cities in Sumatera where the average of their economic growth was only 0, 57 %. On
the other hand, GDP of Pekanbaru cities had increased 46.35% with values 2,194
million rupiahs in 1999 and 3,212 million rupiahs in 2000. The major income of
Pekanbaru comes from petroleum, palm oil and industrial sectors especially
construction industry (www. Pekanbaru. go. id, 2005).
Although the Indonesian economy is not stable yet, the property business and
the construction activities in Pekanbaru in 2005 are still growing up. According to
Kampriwoto (2004) as Head of Indonesian Real Estate Organization (REI) it can be
proven by the number of the demand for housing projects, school, shops and the
infrastructure buildings.
Kampriwoto (2004) stated that, the highest demand in construction projects

for Pekanbaru is for housing projects. During 2005, all the developers, contractors
and consultants have targeted to build around 4000 housing projects. Start of January
19
until May 2005, around 2500 of the housing projects were completed and sold out.
Till the end of 2005, around 1500 of the housing projects were planned to be built
and have to be completed. Beside the housing projects, other projects that have also
high demand are infrastructure projects especially roads because in recent years
many new cities around Pekanbaru are developed. Its need many new roads and also
the improvement of the old roads to connect Pekanbaru and the new cities. Figure 2.2
below shows several landmark construction projects that have been constructed in
the last five years in Pekanbaru.
“Kelok 9” Fly-over “Koto Panjang” Dam
Renovation of “Simpang 3” Airport

Figure 2.2 Several landmark construction projects in Pekanbaru
20
b) Padang
Padang is the capital city of West Sumatera with a total land area of
42,297.30 km2. Today, the population of West Sumatera in 2000 was 4,400.000 with
density 104/ km2. The economic growth of Padang city from 1998 until 2002 had
increased to 2.94% with value 363,440 billion rupiahs. The GDP value of Padang
city is 2,485 million rupiahs in 1999 and 3,590 million rupiahs in 2002. The major
income of Padang city comes from cement, coalmines and farm (www. Padang. go.
id, 2005).
Same with Pekanbaru, according to Kampriwoto (2004) housing projects also

have high demand in Pekanbaru but not as high as in Pekanbaru. Until end 2005,
only 2500 housing project demanded has yet to be completed. Recently, for the last 5
years, landmark construction projects that have been constructed in Padang are
“Minang” International Airport (MIA) and fly-over to the airport (“Ketaping”/
“Dukuh” fly-over) because its location is at the border of Padang city. Besides that
public roads were built to connect to the entire area around the international airport.
The new international airport also highlighted the need to improve many old roads in
around Padang; make it wider to make the traffic flow smoothly (www. Padang. go.
id, 2005). Figure 2.3 below, shows several landmark projects in Padang that have
been constructed for the last 5 years.
“Minang” International Airport (MIA)

21
“Ketaping’s/ Duku’s” gate and fly – over perspectives
“Siti Nurbaya” Bridge

Figure 2.3 Several landmark construction projects in Padang
2.2.3 The Structure of Indonesian Construction Industry
a) Company Qualifications
The Indonesian construction industry is made up of mainly the contractors,

consultants, government’s agencies, material supplier, and professional firms and
companies. The government and professional bodies have been the key players in
bringing about the change and development of the industry in terms of technology,
work procedures and business practices.
In 2001 the government set up a Construction Development Board (LPJK) to

regulate and oversee the systematic practice of contractors and consultants. These
include certification of the contractor and private consulting company’s status,
proper providing recommendations for them to get government projects. With its
establishment all private or public contracting and consulting firms and companies
22
must now register with LPJK. Before LPJK was established, one of Indonesian
construction companies were registered and followed the procedures of one of many
construction organizations that were exists such as GAPENSI (Association of
Indonesian entrepreneurs), IKADIN (Association of Indonesian Trading), etc, beside
have to register with GAPEKSINDO (Indonesian Contractors Association) for
contractors companies and INKINDO (Indonesian Association of Consultants) for
consultants companies.
Besides setting up the organization and board for construction companies, the
government also set up arrangement procedures or systems for construction industry
and act as controller. In setting up the arrangement procedures or systems,
government published the construction laws and standards relating to technical
procedures of construction industry projects.
As mentioned above, one of LPJK responsibilities as one of the board or the

institution under the government is to oversee the proper certification of the status of
contractor and consultant firms. LPJK have classified the consultant and contractor
firms into the following qualifications (LPJK, 2003):
Consultant qualification:
• K or small qualification
Companies under this class are companies that have the ability to execute
construction projects valued less than 200 million rupiahs.
• M or medium qualification
construction projects valued between 200 million and1 billion rupiahs.
• B or big qualification
construction projects valued at more than 1 billion rupiahs.
Contractor qualification:
• K or small qualification
Companies under this class divided become three groups based on the ability
to execute the construction projects with range values:
23
K3: have the ability to execute construction projects valued less than 100
million rupiahs.
K2: have the ability to execute construction projects more than 100
million rupiahs but less than 400 million rupiahs.
K1: have the ability to execute construction projects more than 400
million rupiahs but less than 1 billion rupiahs.
• M or medium qualification
construction projects valued more than 1 billion but less than 10 billion
rupiahs.
• B or big qualification
construction projects valued more than 10 billion rupiahs.
b) Company Organizations
The Indonesian construction industry is made up of the following

organization or/and agencies:
1. Government bodies; as stated above such as GAPENSI (Association of
Indonesian entrepreneurs), IKADIN (Association of Indonesian Trading),
LPJK (Construction Development Board) and etc.
2. Private organization; GAPEKSINDO (Indonesian Contractors
Association) for contractors companies and INKINDO (Indonesian
Association of Consultants) for consultants companies.
This study only concerns the companies that have registered with LPJK as the
government bodies and with GAPEKSINDO and INKINDO as the private
organization.
Today as stated by head of LPJKN (National Construction Development

Board) Sulistijo (2003) there are a total of 39, 884 companies that have registered
with LPJK, 4, 372 contractors have registered with GAPEKSINDO and 2, 567
consultant firms have registered with INKINDO. Refer to Table 2.4 below.
24
Table 2.4. Total Number of Companies Register under LPJK, GAPEKSINDO

and INKINDO by Province.
No LPJKD LPJK GAPEKSINDO INKINDO JUMLAH

1 Nangroe Aceh Darussalam 1344 318 205 1867
2 Sumatera Utara 792 84 101 977
3 Sumatera Barat 518 110 184 812
4 Riau 646 217 197 1060
5 Jambi 385 25 56 466
6 Sumatera Selatan 464 107 0 571
7 Bengkulu 312 0 49 361
8 Lampung 122 350 74 546
9 Daerah Khusus Ibukota Jakarta 3786 24 364 4174
10 Jawa Barat 522 33 201 756
11 Jawa Tengah 2031 335 85 2451
12 Daerah Istimewa Jogyakarta 1662 0 73 1735
13 Jawa Timur 4797 127 276 5200
14 Kalimantan Barat 946 225 75 1246
15 Kalimantan Tengah 1204 12 58 1274
16 Kalimantan Selatan 1080 81 0 1161
17 Kalimantan Timur 2508 285 20 2813
18 Sulawesi Utara 765 0 46 811
19 Sulawesi Tengah 1443 0 124 1567
20 Sulawesi Selatan 2500 650 0 3150
21 Sulawesi Tenggara 340 126 57 523
22 Bali 670 0 130 800
23 Nusa Tenggara Barat 267 228 59 554
24 Nusa Tenggara Timur 1551 380 79 2010
25 Maluku 0 54 0 54
26 Maluku Utara 0 85 11 96
27 Banten 1156 23 41 1220
28 Gorontalo 422 87 2 511
29 Bangka Belitung 446 106 0 552
30 Papua 0 0 0 0
Total 32679 4072 2567 39318
Source: Construction Development Board Data, (LPJK, 2003)
Table 2.4 above, shows the distribution and registration of each contractors
and consultants companies by each province. LPJK also stated the total number of
companies for each qualification based on data on 2003. For detail it can be see in
Table 2.5 below but its only shows the total number of companies in Pekanbaru and
Padang cities as the areas of study for this research.
25
Table 2.5 Total Numbers of Big, Medium and Small Companies based on The
Areas & Company LPJK GAPEKSINDO INKINDO
(Both) (Contractor) (Consultant)
Pekanbaru:
- K (Small) 144 40 47
- M (Medium) 83 31 10
- B (Big) 5 3 7
Padang
- K (Small) 132 53 37
- M (Medium) 29 6 13
- B (Big) 16 2 5
Source: Construction Development Board Data by Province, (www.LPJK.go.id, LPJK, 2003)
c) Project Procurement Systems
According to LPJK (2003), the financial sources for the construction industry
and the ownership for the construction projects in Indonesia are divided into:
a) Government
Funds are given to government owned construction projects that develop
public facility, civil building, infrastructure, and industry.
b) Private
Funds are usually used for establishing commercials building such as hotels,
condominiums, tourism facilities, and others. An individual or a group or
company controls this fund with interest to help the government in
developing the country as well as for profit.
c) Combined funds from government and private sectors
This fund is used to develop the country’s natural resources such as
petroleum mines and gas mines. This construction project is owned by the
government but organized by the private company.
d) Loan from Overseas
This fund is to develop major infrastructure and loans from another country
that specializes in certain construction such as Japan to build dams.
26
Most of public work projects in Indonesia, including any construction

projects under government authority or under state owned companies, are awarded
on a competitive basis using the traditional approach; professional designers
(consultants) and constructors (contractors) are engaged in separate contracts.
Professional designers referred to consultants have to be responsible about

the construction design based on function and all the stipulation in each construction
process. Consultants also prepared the time and cost estimated as general for owner
tendering document. If all these things have been completed, the projects are ready
for tendering to all the contractors (Petunjuk Teknis Keppres No.18, 2000). For the
contractors, they usually would not be involved until the designs have been
completed. Many private sector projects have also been using the similar approach
(Trigunarsyah, 2004).
According to “Petunjuk Teknis Keppres No.18” (2000) and “Peraturan

Pemerintah (PP) Republik Indonesia No.29” (2000), there are 4 methods of project
tendering or project auction, namely as following:
1. Open/ Public Tendering
The tender project is officially and publicly announced including through
mass media and electronic media. All contractor companies that fulfill the
qualification requirements have equal opportunity to participate the project
tender.
2. Close tendering
The tender project is officially and publicly announced including through
mass media and electronic media but it is only for special projects, which
only followed by companies that have special abilities or technology and also
have to fulfill the qualification requirements.
3. Direct selection
The tender project does by choosing directly one company. This method is
used when there is a special condition and the project has to start as soon as
possible including urgents condition that was caused by nature disaster and
others. Beside that, this methods was also chosen if the project valued less
than 50 million rupiahs, and does not need high technology and have small
risks.
27
4. “Swakelola”
This project tender is by negotiating directly between the owner and
contractor for the price, schedule and technical procedures.
The qualification requirements according to “Petunjuk Teknis Keppres

No.18” (2000) and “Peraturan Pemerintah (PP) Republik Indonesia No.29” (2000)
means here as:
1. The company must have company authorization, certification, and
qualification from government, government board and company organization.
2. Project planning and project supervisor must have skill certification.
3. Engineer who is involved in the project process must have skill certification
in the particular area they are involved.
4. Workers who are hired as supervisor, inspector or special works also must
have skill certification.
For the skill certification, government has given this responsibility to the
company association or organization (GAPEKSINDO for contractors and INKINDO
for consultants) to oversee proper certification gift for the engineer based on their
own regulation. However, the association tries to gives top priority to getting projects
to its members (Indonesia country procurement assessment report, 2001).
2.2.4 Performance of Construction Projects in Indonesia
So far, the discussion has been concentrating on the economic performance of

the country (Indonesia) as a whole, the two provinces (Pekanbaru and Padang) and
the construction sectors. They show a favorable scenario. But what about the
technical and managerial performance of the industry, specifically concerning project
time and cost.
A study by Kaming et. al., (1997a) shows time and cost overrun are a
common problem in projects in Indonesia. Table 2.6 shows that about 54. 5 % of
project managers completed more than 90% of their projects on time, 15. 2%
28
completed only between 70 – 90% and 30. 3% completed less than 70% (suffer
delay). It also identifies only 20. 7 % project managers claimed that 90% of their
projects were completed within budget, 51. 7% completed only between 70 – 90%
and 27. 6 % completed less than 70% (suffer cost overrun).
Table 2.6 Response rate of project completed on time and within budget
Percentage of projects successfully completed

by project managers
Less than 70 % 70 - 90% Over 90 %
- On time (%) 30.3 15.2 54.5
- Within budget (%) 27.6 51.7 20.7
Sources: (Kaming, et., al., 1997a)
A study by Trigunarsyah (2004) shows that only 30% of the projects were
completed within the budget, 34% completed the projects less than the budget, and
the remaining 36% completed the project, exceeded the budget. The study also
shows that only 47% of the projects were completed within the schedule, 15%
completed the projects ahead of schedule, and 38% of the projects were completed
behind schedule. See Table 2.7 below.
Table 2.7 Response rate of project completed

Budget Time
Status completed % Completed Status completed % Completed
- Within the budget 30 - Within the schedule 47
- Less than the budget 34 - Ahead of the schedule 15
- Exceeded the budget 36 - Behind the schedule 38
Sources: (Trigunarsyah, 2004)
Both of the previous research above shows the time and cost overrun in
Indonesian construction project but it was different in grouping the response rate.
However, all delays usually create higher cost. There are some examples of project
that had delays and cost overruns as shown in Table 2.8. Time and cost overruns
29
occur as shown in table schedule in “tahun anggaran” columns. The differences

between planning and actual performance can be seen from the table. For example
project no 1; planning for physical work must be completed 21.96 % from total work
with 20 % budget from all of cost estimated in June but in actual percentage the
physical work was completed 5 % with budget 29.6 % from the total estimated.
30
Table 2.8 Some Example of projects with time and cost overrun problems in Indonesian Construction Projects (Padang)
(Source: Laporan Kinerja Proyek Jalan dan Jembatan Dinas Pekerjaan Umum (DPU) Sumbar)
DIP SCHEDULLE TAHUN ANGGARAN 2003
NAMA NILAI KONTRAK No. VOLUME
KONTRAKTOR
NO PAKET TOTAL (Rp) KONTRAK TGL. KONTRAK PJG. EFF SPMK
LOAN KONSULTAN
PROYEK APBN (Rp) ADDENDUM PJG.FUNGS JAN FEB MAR APR MEI JUN JUL AGST
(Rp)
1 2 3 4 5 (3+4) 6 7 8 9 10 11 12 13 14 15 16 17 18 20
Paket
Proyek :
pembangunan
jalan 1,463,086,000.00 4.00 KM Renc 0.00 0.00 0.00 0.00 0.00 21.96 28.68 76.28
indrapura - 01/PKK/W.03- Fisik PT. RAVE
1 Tapan dan Bb.03.23.01/2003 4.00 KM Real 0.00 0.00 0.00 0.00 0.00 5.00 30.12 61.76 KARYA
6-Jun-
Silaut 1,500,000,000.00 1,500,000,000.00 6-Jun-2003 Dev 0.00 0.00 0.00 0.00 0.00 16.96 1.44 14.52 MANDIRI PT.
2003
ADD 1,499,086,000,00 Renc 0.00 0.00 0.00 0.00 0.00 20.00 41.00 75.00 SARANA
MULTI DAYA
Keu Real 0.00 0.00 0.00 0.00 0.00 29.50 33.93 33.93
Dev 0.00 0.00 0.00 0.00 0.00 9.50 7.07 41.07
Pengawasan
Supervisi
Konstruksi :
Paket 8 :
Pengawasan 98,969,750.00 Renc 20.00 40.00 60.00
KU.08.08/P3JJ-SB/SPK-V05 Fisik Real 7.00 27.89 46.48
Teknik PT. RIKA
Berkala Jalan 120,450,000.00 120,450,000.00 13 Mei 2003 4.10 KM Dev 13.00 12.11 13.52 PERKASA
Sepanjang Renc 20.00 40.00 60.00 PRATAMA
4,10 Km Keu Real 22.18 27.89 27.89
Dev 2.18 12.11 32.11
Paket 9 :
Pengawasan 115,827,800.00 Renc 20.00 40.00 60.00
2 KU.08.08/P3JJ-SB/SPK-V06 Fisik Real 7.00 27.64 46.15
Teknik
Berkala Jalan 13 Mei 2003 Dev 13.00 12.36 13.85 CV. INDO
134,900,000.00 134,900,000.00 4.20 KM
Sepanjang Renc 20.00 40.00 60.00 SARANA ENG
4,20 Km Keu Real 21.92 27.64 27.64
Dev 1.92 12.36 32.36
Paket 10 :
Pengawasan 250,018,580.00 Renc 20.00 40.00 60.00
KU.08.08/P3JJ-SB/SPK-V07 Fisik Real 8.88 27.27 43.46
Teknik
Berkala Jalan 13 Mei 2003 Dev 11.12 12.73 16.54 PT. SARANA
265,000,000.00 265,000,000.00 8,50 KM
Sepanjang Renc 20.00 40.00 60.00 MULTI DAYA
8,50 Km Keu Real 18.87 27.27 27.27
Dev 1.13 12.73 32.73
30
31
Overall, cost overruns were found to be more common than delays on high-
rise projects in Indonesia. This research results also by Kaming, et.al., (1997a). It
may give a clearer picture of delayed and cost overrun situations in Indonesia. It is,
however, undesirable that delays and cost overruns do occur in significant
proportions in Indonesia.
The summary of research about variables/ causes of delays and cost overruns
by Kaming, et.al., (1997a) is show in Tables 2.9 and 2.10 below. This study is
limited to high-rise projects only in big cities particularly Jakarta and Yogyakarta,
Indonesia.
Table 2.9 Variables of delays and their importance, frequency, and severity in
construction in Indonesia (scale of indices for importance, frequency and severity
ranges from 0 to 1)
Variables/ causes Importance Frequency Severity

Of delays Index Rank Index Rank Index Rank
Unpredictable Weather 0.60 11 0.39 11 0.24 11

Conditions
Inaccuracy of material 0.88 3 0.56 7 0.51 5
Estimate
Inaccurate Prediction 0.80 5 0.60 5 0.49 6
Craftsmen production
Inaccurate Prediction 0.69 9 0.43 10 0.33 10
Equipment
Material shortage 0.79 6 0.63 3 0.52 4
Equipment shortage 0.68 10 0.45 9 0.33 9
Skilled labor shortage 0.72 7 0.58 6 0.43 7
Location restriction 0.72 8 0.52 8 0.40 8
Inadequate planning 0.88 2 0.61 4 0.55 3
Poor labor productivity 0.87 4 0.74 2 0.65 2
Design changes 0.93 1 0.98 1 0.91 1
Mean 0.78 0.59 0.48

32
Table 2.10 Variables of cost overruns, their importance, frequency, and severity in
Indonesian construction projects (scale of indices for importance, frequency and
severity ranges from 0 to 1).
Variables/ causes Importance Frequency Severity

Of cost overruns Index Rank Index rank Index rank
Unpredictable weather 0.56 6 0.43 6 0.25 6

conditions
Material cost increased 0.78 2 0.68 1 0.54 1
by inflation
Inaccurate quantity 0.80 1 0.63 2 0.49 2
take-off
Labor cost increased 0.71 3 0.52 3 0.37 3
due to environment restriction
Lack of experience 0.65 4 0.46 4 0.35 4
of project location
of project type
of local regulation
Mean 0.66 0.51 0.37
Source: Result of Kaming, et.al., (1997a) research.
Tables 2.9 and 2.10 above have shown the variables and their important
existence where it became the causes of time and cost overruns. In the discussion
above it had been reviewed and identified by the previous research about the
problems and the project management implementation in Indonesian construction
industry performance. It had been identified that one of the problems facing by
Indonesian construction industry is time and cost overrun and it also identified the
causes – So, what is actually that time and cost overrun?
33
Ali (1992) and Saldjana (1998) pointed out that a construction project
experience time and cost overrun if it is completed exceeding the time and cost
stipulated in the contract. Kaming et.al., (1997a) and Trigunarsyah (2004) defined
time and cost overrun were defined as the extension of time and cost beyond planned
completion dates traceable to the contractors. For the purpose of this research,
researcher used the same definition about the project time and cost overrun.
According to “Keputusan Menteri PU No. 10. (1991)” a project is considered

100% completed if the contractor fulfils following requirements:
• The work quantity that was planned was achieved,
• The quality of the complete work fulfill the requirements of the contract and
the customer,
• Management administration already completed,
• The owner has settled all payments to the contractors.
At the end of the time and cost estimates, if the project physical works
complete less that 100% but more than 80%, the contractor could ask the owner to
extend the project and the additional cost handled by them. If the owner agrees with
the contractor’s request, the contractor has to finish the work on time with the
extended time requested. If the contractor still cannot finish the project on time, the
contractor must pay a sum of money referred as a penalty; maximum 5% from the
contract values per-day to the owner (“Keputusan Menteri PU No. 10, 1991).
The discussion above had been reviewed and identified by the previous
research about the problems and the project management implementation in
Indonesian construction industry performance. It had been identified that one of the
problems facing by Indonesian construction industry is time and cost overrun and
also identified the causes. Therefore, it is essential for Indonesia, in its quest for
greater economic development and to be more competitive, to develop proper and
effective strategies for its construction industry; to ensure the project completed on
time, within the budgeted cost and the desired quality of work.
CHAPTER 3
PROJECT TIME AND COST MANAGEMENT
3.1 Introduction
The focus of this study is on construction time and cost. This chapter
discusses the aspect of the construction time and cost, their attributes, and issues. The
discussion also look at the aspects of planning and control of project time and cost
and the related aspects.
3.2 Project Time and Cost Management
Before going into detail about project time and cost management, it is
appropriate to look into the elements of time and cost, how they are defined and
estimated.
35
3.2.1 Project Time
i) What is Project Time?
Project time has been defined as the completion of the project on the date
stated in the contract, or interim completion dates required for phases of the work
(Clough et. al., 2000).
It is also defined as the duration that is needed to complete the work starting
from site processions until finished. “Duration” is the time, usually in days, taken to
complete the entire project, from starting the first task to finishing the last one
(Sunny and Kim Baker, 2003). Estimating the duration of tasks is the most
important. Unfortunately, this is like trying to predict the future. It is only a guess,
but there are better ways to guess than others.
It can be concluded that project time is the duration or time schedule that
needed to complete all the project work.
ii) How to Estimate the Project Time?
To estimate the project time, there are several options that can use to make
the estimates (the guesses) as good as possible. They are as follows:
Based on records of previous project files that are detailed. It is enough to aid
in developing time estimates.
Find a similar task in a completed project plan to see how long it took to get
done. This is called an analogous estimate.
Get an objectives expert’s opinion. Expert’s opinion guided by historical
information should be used whenever possible.
36
3.2.2 Project Cost
i) What is Project Cost?
Project cost has been defined as the amount of commitment in terms of

money that is required to produce a construction product such as building. Project
cost, to the building contractor, represents all those items included under the heading
of the expenditures (Ashworth, 2004). Project cost is quantitative assessments of the
likely costs of the resources (labor, materials, supplies, etc) required to complete all
project activities (Duncan, 1990).
It can be concluded that project cost is the amount of money that is required
to complete all project activities.
ii) How to Estimate the Project Cost?
The cost estimate of the project is often prepared as early as during the
feasibility stages of the project before a complete drawing are produced. A detailed
project cost estimate and cost plan or budgets are normally prepared as soon as the
design has been finalized.
The purpose of cost estimated is to provide an indication of the probable

cost of the project. To estimate the project cost there are two samples of methods,
they are as follows:
Unit method
The unit method of approximate estimating consists of choosing a
standard unit of accommodation and multiplying this by an approximate cost per
unit. This technique is based on the fact that there is usually a close relationship
between the cost of building and the number of functional unit accommodates.
By functional units it means those factors which express the intended use of
building better than any other. For example; school – costs per pupil place,
hospital – cost per bed place, car parks – costs per car space, and etc.
37
Element cost per square meter - GFA method

This is the element cost divided by the gross floor area (GFA). It provides
the elemental cost contribution to the overall rate per square meter GFA for the
project. For example, the area of the upper floors may be calculated as 360m2.
Then, multiply this by the updated element unit rate. Assuming that a current rate
is RM 40 per m2, so, the costs become RM 14,400.
3.2.3 Problem Associated with Project Time and Cost
Due to the fragmented and complex nature of construction project, many

projects suffer from time and cost overruns. Delays and cost increase (overrun) in
construction project are the issues of this research. So, what is project time and cost
overrun?
i) Time Overrun
According to Kaming et.al., (1997a) and Trigunarsyah (2004), time overrun

is the extension of time beyond planned completion dates traceable to the
contractors. Elinwa and Joshua (2001) defined it as the lapse between the agreed
estimation or completion data and the actual data of completion.
Indonesian government regulation through “Keputusan Menteri PU No. 10.

(1991)”, T. H Ali (1992) and Saldjana (1998) mentioned that a construction project
experience time overrun if it was completed exceeding the time estimated as written
in the approval contract. This research used this concept or definition when the time
overrun occurs. But, if the project works complete less that 100% but more than
80%, the contractor could ask the owner to extend the project and the additional cost
handled by them. If the owner agrees with the contractor’s request, the contractor has
to finish the work on time with the extended time requested. If the contractor still
cannot finish the project on time, the contractor must pay a sum of money referred as
38
a penalty, maximum 5% from the contract values per-day to the owner (“Keputusan
Menteri PU No. 10, 1991).
ii) Cost Overrun
Elinwa and Joshua (2001) defined it same with the time overrun as the lapse
between the agreed estimation or completion data and the actual data of completion.
Indonesian government regulation through “Keputusan Menteri PU No. 10. (1991)”,
T. H Ali (1992) and Saldjana (1998) mentioned that a construction project
experience cost overrun if it was completed exceeding the cost estimated as written
in the approval contract.
3.2.4 The Definition of Project Time and Cost Management
Project Management Body of Knowledge (Spinner, 1997; Badiru and Pulat,

1995) identified the function of management in construction projects where nine
major functional areas are including in it, they are: integration management, scope,
quality, time, cost, risks, human resources, contract/ procurement and
communications management.
Project management defined as the application of knowledge, skills, tools and

techniques to ensure the project is completed on time, within cost and fulfills the
quality standard. Architect George T. Hendry in Degoff and Friedman, (1999),
defines management in construction project as a group of management activities and
engineering services related to a program, carried out during the pre-design, design
and construction phase that contributes to the control of time and cost in a new
facility.
39
Construction project sites are generally complex because of the extensive use
of sophisticated plant, equipment, modern methods of construction, multidisciplinary
and multitasked aspects of its project workforce (Evelyn Ai Lin Teo, et.al, 2004).
That is why management in construction project is needed to organize, arranges
every function, actions and everyone involved. Management will help to settle
everything in the right place (Cartin, 1993).
Application of this principle (management in construction project) to

construction has resulted in the development of techniques for management control
of construction cost, time, resources and project finance, treating the entire
construction process as a unified system. So, a comprehensive project management
control will applied from inception to completion of construction operations.
Focus of this research only on time and cost management. So, what is project
time and cost management? Generally, time and cost management in construction
project is define as centralized of time and cost planning, organizing and controlling
in the fieldwork or in the construction sites to meet the goals of schedule, cost and
quality estimation (Ritz, 1994).
i) Project Time management
PMBOK’s (1996) defines project time management as the effective and

efficient use of time to facilitate the execution of project, which starts from planning,
scheduling and controlling the project to achieve the time objectives. Degoff and
Friedman, (1999) defines project time management as the development of a project
time schedule, to manage that schedule, and to ensure the project completes within
the approved time schedule. Therefore, schedule is important to manage time, which
involves defining project activities, sequencing the activities, developing the
schedule, executing the schedule and controlling the plans during project execution.
40
Project time management includes the processes required to ensure timely

completion of the project (Duncan, 1990). Overviews of the major processes in
project time management are as follows:
Activity definition – identifying the specific activities that must be performed

to produce the various project deliverables.
Activity sequencing – identifying and documenting interactivity

dependencies.
Activity duration estimating – estimating the number of works periods which

will be needed to complete individual activities
Schedule development – analyzing activity sequences, activity durations, and

resources requirements to create the project schedule.
Schedule control – controlling changes to the project schedule.
Techniques that are usually used in managing project time are as follow:
Critical Path Methods (CPM); Calculated a single, deterministic early and

late start and finish date for each activity based on specified, sequential
network logic and a single duration estimate. The focus of CPM is on
calculating float in order to determine which activities have the least
scheduling flexibility, (Clough, et. Al., 2000).
Program Evaluation and Review Technique (PERT); uses sequential network
logic and weighted average duration estimate to calculate project duration.
Although there are surface differences, PERT differs from CPM primarily in
that uses the distribution’s mean (expected value) instead of money likely
estimate originally used in CPM, (PMBOK, 1996).
Bar Chart; it’s the simplest project management technique for scheduling,
planning and controlling. It shows graphically or in tabular form the daily
costs and accumulated costs over a designated period. In projects of normal
delivery or stable performance, the general contractor creates the bar chart
once an award is made and each bar represents the beginning, duration and
completion of some designated segment of total project. Together, the bars
41
make up a time schedule for the entire job, (Ritz, 1994 and Degoff &
Friedman, 1999).
ii) Project Cost Management
In PMBOK’s (1996) describes, project cost management is defined as a

requirement for financial control of the project, which is accomplished through
accumulating, organizing and analyzing data and reporting the cost information.
Clough et. al., (2000) defines project cost management as the process of determining
the total cost of the project, to manage that cost, and to ensure that the project is
completed within the approved budget or cost. Keeping within the budget, and
knowing when and where the costs are deviating are the keys to efficient and
effective cost management and profitable operations.
Project cost management includes the processes required to ensure that the
project is completed within the approved budget (Duncan, 1990). Although
management discretion may occasionally dictate otherwise, an effort is usually made
to achieve gains in time with the least possible increase in project cost. If project
management has to make schedule adjustments at an additional cost, it is necessary
to understand how the costs of construction operations vary with time (Clough et. al.,
2000).
Two techniques that are usually used in managing project cost are as follow:
Cash Flow
One of managing cash flow activities is to make sure that there is still enough
money to cover the cost of performing project-employees payment, charges for
material, subcontractor invoices and others suitable with the established estimation.
The key to manage cash flow is to ensure that cash comes in balance with what goes
out. Key effective in cash flow control is aggressively addressing negative cost
variance and cost inefficiencies as soon as they are identified, rather than hoping that
things will get better as the project goes on. Even when projects have only positive
cash flow and cost variances, it is important not to let that flow and variance become
42
worse. A concentrated effort should be made to keep it that way because as stated
above it becomes difficult to get back on track.
Cost Plan
Spinner (1997) and Gido and Clement (1999) mentioned that the cost
planning starts with the proposal for the project. The cost section of a proposal may
consist of tabulations of the contractor’s estimated costs for such elements as labors,
materials, subcontractors, equipment and others. In addition, the proposal might also
include an amount for contingencies, to cover unplanned expenses. It can conclude
that cost plan is the task of allocating sums to the various project activities scheme
from starting the first task to finishing the last one.
According Gido and Clement (1999), allocating total project costs for the
various elements, such as labor, materials and equipment, to the appropriate work
packages in the work breakdown structure (WBS) will establish a total budgeted cost
(TBC) for each work package. Once a total budgeted cost has been established for
each work package, the second step in the project budgeting process is to distribute
each TBC over the duration of its work packages in order to determine how much of
money should be spent at any point in time. This amount is calculated by adding up
the budgeted costs for each time period up to that point in time. This total amount,
known the cumulative budgeted cost (CBC), will be used in analyzing the cost
performance of the project. The CBC for the entire project for each work package
provides a baseline against which actual cost and work performance can be
compared at any time during the project.
Once the project starts, it is necessary to keep track of actual cost and
committed cost so that they can be compared to CBC. After this has been done, the
project cost performance can be analyzed by looking at the total budgeted cost, the
cumulative budgeted cost, the cumulative actual cost and the cumulative earned
value. They are used to determine whether the project is being performed within
budget and whether the value of the work performed is in line with the actual cost.
43
3.2.5 Project Management Objectives
The main objective of a project is that to get the project to be completed on a

certain time, within cost or budget and within the prescribed performance (quality
and function). It could say that project must be complete as listed follows:
P : At the desired performance level
C : Within cost or budget constraints
T : On time
S : While holding the scope of the project constant and while using
resources efficiently and effectively.
The first three of these are referred to as the P, C, and T of the project. They
are also recognized as good, cheap and fast, (P = good; C = cheap; T = fast). The
relationship between four of them (P, C, T, and S) can be written with a general
equation as follows:
C = f (P, T, S)
The equation means, Cost is a function of Performance, Time and Scope.

Generally speaking, the cost of the project will increase as P, T, and S increase,
except in the case of trying to crash the project.
In the description above it has been pointed out that time and cost are the two
of the critical elements influencing the success of the project. It is therefore crucial to
balance them with quality requirements, i.,e., meeting the functionality and
performance expected by the clients. But as pointed out by Clough et. al., (2000)
most of construction projects meet the quality specifications but were seldom
completed within budget and time. According to Sigurdsen (1995), poor time and
cost planning and control causes a project to exceed the pre - determined project cost
and time.
44
3.3 Implication of Time and Cost Overrun
Time and cost overrun have an implication and affection to the construction
project performance and to the client or project owner. Time and cost certainty is
known to be the top priorities of construction clients (Davenport, 1997). Although
affected by many internal and external factors, construction time and cost is
considered a good and measurable indicator of project performance. However, low
cost and speedy project are not always the main concern of clients today; instead
time and cost certainty is becoming increasingly important (Flanagan et al., 1998)
and it is one of the most important contractor performance criteria for clients’
satisfaction (Soetanto et al., 2001 and Construction Industry Board, 1996).
Client satisfaction is an important determinant of contractor performance

evaluation and comparison (Sidwel, 1988) and it is the driving force for continuous
improvement of contractor performance (Ahmed and Kangari, 1995). Companies
differentiate themselves from competitors and maintain a competitive edge by
providing and keeping clients satisfied (Torbica and Stroh, 2001).
Clients’ long term interest to the performance of contractor is in the work

performed. It must be conform to the specifications established for the project. Low
cost and speedy construction should be achieved because it has significant
implication to the client’s interest about the way of contractor work in the project
performance (Xiao and Proverbs, 2001). Beside that, delays (time overrun) and cost
overrun are costly and often result in disputes and claims, impair the feasibility for
project owners, and retard the development of the construction industry (Odeh, A. M
and Battaineh, H. T, 2002).
3.4 Causes of Project Time and Cost Overrun
The serious implication or effect of time and cost overrun to the project
performance and to the client can made it necessary to consider the causes of such
problems. Many researches have highlighted the causes of project cost and time
45
overrun. Arditi et al. (1985), Olakwa and Culpin (1990), Mansfield et al. (1994),
Ogunlana et al. (1996), and Al-Khalil and Al-Ghay (1999), attribute the problems of
cost and time overruns to poor project management practice, government polices,
economic factors and natural environmental issues. Chalabi and Camp's (1984)
review of project delays in developing countries during the planning and construction
stages. They found that delays and cost overruns of construction projects occur
entirely in the very early stages of the project i. e. during the planning stages of
project development.
Frimpong and Oluwoye (2003) found out that the problem of project delays
and cost overrun faced by the construction companies are caused by:
1. Project financing factors: monthly payment difficulties, contractors, financial
difficulties, and fraudulent practice.
2. Natural conditions factors: bad weather and unexpected natural events,
unexpected subsoil and ground conditions, and environmental concern.
3. Materials factors: procurement problems, important materials, late delivery
and difficulties in obtaining materials at official prices.
4. Labour factors: shortages, low skill level and industrial relations (labour and
management relation)
5. Plant/ Equipment factors: frequent breakdowns, shortages, transportation
problems and low efficiency.
6. Project planning and controlling related factors causes of overruns:
deficiencies in planning, scheduling and cost estimate preparation,
insufficient project manager authority and influence, communication among
the various parties and inadequate control procedures.
7. Economics factors: fluctuations in material and plant/ equipment cost and
inflation.
8. External factors: social events, government policies and politics, restrictions
and delays in inspection and testing of completed work.
9. Contractual relationship factors: poor contract management, low bid, slow
decision-making, claims/ disputes, contract negotiation and insurance
problems.
46
However, the ranking of each problem in term of seriousness or magnitude

varies from country to country. Table 3.1 shows an international comparison of the
findings for countries such as USA, Indonesia, UK and Nigeria as conducted by
Olomolaiye, et, al., (1998). He asked the respondent to rank the problems that cause
time and cost overrun. Although the studies are different in their approach and
methodology, and pose some risk in using them for serious comparative analysis, it is
possible to draw some inferences from these figures by using the reported indices as
measures of the importance attached to the problems in the different countries. One
notable similarity is that lack of materials at the workplace is the worse problem in
all four countries.
Table 3.1 Comparative ranking of problems that cause time and cost overruns in
different countries (Olomolaiye, et, al., 1998)
Problem UK Nigeria Indonesia USA
Lack of materials 1 1 1 1
Gang interference 2 6 3 5
Repeat work 3 2 2 3
Supervision 4 4 6 4
Lack of equipment/tools 5 3 5 2
Absenteeism 6 5 4 6
The table shows that, the causes of time and cost overrun in the construction
projects are the same among different projects.
Hutcheson (1990) also carried out the study on construction problems with
the aim of evaluating the problems of cost reduction on series of projects in
developing countries. He found that the most frequent cause of delay in completion
of construction projects in Vietnam was the delivery of materials. Al-Momani (2000)
investigated the causes of delays on 130 public projects in Jordan, and the results
indicated that the main cause of delay in construction of public projects could be
47
associated with designers, user changes, weather, site conditions, late deliveries and
economic conditions.
Another study about time and cost overrun causes was in the UK construction
project. Xiao and Proverbs (2002) stated that changes of design during construction
have been perceived as one of the main problems faced by the UK construction
industry and be the causes of time and cost overrun. The fact that there is more
design variations (change orders) in the UK construction process is both strength and
a weakness of the traditional British system.
A study on time and cost overrun in the Malaysian construction industry has
also been carried out. According to Kharuddin, (2002), the main causes of time and
cost overrun are as follows:
• Client/ government/ regulatory agencies: bureaucratic delays, changes in
regulations.
• Funding/ fiscal: changes in government funding policy, liaison between
several financiers.
• Project organization: authority of the architect or engineer or the S.O.,
involvement of individuals or outside bodies that are not a party to the
contract.
• Design: adequacy to meet the needs, realism of design.
• Construction contractors: experience, financial stability.
• Construction materials: availability of an adequate and timely supply of
materials, excessive wastage, reliability of quality.
• Construction labour: availability of an adequate and timely supply of labour,
industrial relations, foreign workers, etc.
• Construction plant: availability of an adequate and timely supply of plant,
availability of skilled operations.
• Logistic: Access to site.
Another research on time and cost overruns in the Malaysian construction

industry carried out by Wang (1992). He stated that the major factors, among others,
48
that can influence the development of the construction industry and its performance
are as follows. All these factors may be broadly classified under three groupings:
• Resource grouping: Manpower resources, material resources, equipment
resources, financial resources and technical and managerial personnel.
• Industry grouping: Constructors’/ builders’/ contractors’ organization,
capability and capacity, use and application of technology, teamwork
approach in construction and development processes and practices and
tradition of the industry.
• External factor grouping: Education, training and research in construction and
development, laws, regulations and other government controls in connection
with the construction industry and prevailing social, political and economic
conditions.
For the purpose of this study the causes of time and cost overrun are tabulated
and compared. See table 3.2 below.
49
Table 3.2 Case studies of the common causes of time and cost overrun
INDONESIA USA UK MALAYSIA
Conducted by Kaming, et.al., (1997): Conducted by Assaf, et., al., (1995): Conducted by Shammas- Conducted by Wang (1992):
1. Unpredictable weather 1. Materials Tomma et al., (1998): 1. Manpower resources,
conditions 2. Manpower 1. Short-term financial 2. Material resources,
2. Inaccuracy of material estimate 3. Equipment consideration 3. Equipment resources,
3. Inaccurate prediction craftsmen 4. Financing 2. Reflected in uncooperative, 4. Financial resources,
production 5. Environment, antagonistic and suspicious 5. Technical &managerial personnel,
4. Inaccurate prediction equipment 6. Changes relationships with 6. Constructors’/ builders’/ contractors’
5. Material shortage 7. Government regulations accusations, recriminations organization, capability and capacity,
6. Equipment shortage 8. Contractual relationships and blame common 7. Use & application of technology,
7. Skilled labour shortage 9. Scheduling and controlling Proverbs et al., (2000), stated 8. Teamwork approach in construction &
8. Location restriction techniques. that: development processes,
9. Inadequate planning Conducted by Xiao and Proverbs 1. Changes of design during 9. Practices and tradition of the industry,
10. Poor labour productivity (2002): construction 10.Education, training and research in
11. Design changes On construction site lack of care 2. Work on site in the UK construction & development,
12. Material cost increased by Conducted by Frimpong & Oluwoye suffers from a lack of care 11.Laws, regulations & other government
inflation (2003): Harvey and Ashworth in controls in connection with the
13. Inaccurate quantity take-off 1. Project financing factors Xiao and Proverbs (2002): construction industry,
14. Labour cost increased due to 2. Natural conditions factors 1. Poor supervision and 12.Prevailing social, political and economi
environment restriction 3. Materials factors management conditions
15. Lack of experience of project 4. Labour factors 2. Insufficient communication Khairuddin A.R (2002):
location 5. Plant/ Equipment factors 3. Reluctant to investigate
16. Lack of experience of project 6. Project planning and controlling error and feedback
1. Construction labour
type related factors experience
2. Client/ government/ regulatory
17. Lack of experience of local 7. Economics factors 4. Under motivated workforce
agencies
regulation 8. External factors
3. Funding/ fiscal
Conducted by Krishna (2001) 9. Contractual relationship factors
4. Project organization
1. Mis-management
5. Design changes
2. Wrong techniques
6. Construction contractors:
implementation
experience, financial stability
3. Not discipline to the time
7. Construction materials
schedule
8. Construction plan
4. Added work/ design changes
9. Logistic: Access to site.
49
50
Basically, there are some others research but all previous research that have
been discussed above could be representative to illustrate the time and cost overrun
causes. Summary of the synthesis above about the common causes of time and cost
overrun and can be seen in Table3.3 following. It was based on the same opinion (as
shown by bold and italic ones) about the activities that have time and cost overrun
from the previous researcher that was listed in Table 3.2 above.
Table 3.3 Derive from the synthesis of the previous researches (extracted from Table 3.2)
No. The common causes of time and cost overrun:

1 Unpredictable weather conditions
2 Inaccuracy of material estimates
3 Inaccurate prediction of equipments
4 Material shortage
5 Equipment shortage
6 Poor labour productivity
7 Material cost increased by inflation
8 Labour cost increased due to environment restriction
9 Added work/ design changes during construction
10 Natural condition factors
11 Logistic: Access to site
CHAPTER 4
PROJECT TIME AND COST MANAGEMENT FRAMEWORK
4.1 Introduction
One of the objectives of this research is to establish theoretical framework for

a good project time and cost management based on documentary analysis of books
and previous researcher. So, the discussion on this chapter focuses on the project
time and cost management framework and reviews the work of several researchers
and writers about it. Before focusing the discussion on it, it is essential to clarify the
meaning of the word “framework” in context of this research first.
4.2 Definition of Framework
The word of “framework” has been defined in many ways. Some writers
referred to it as a prescriptive set of things to do, while others chose to represent
frameworks in the form of diagrams, graphical representations, flowcharts or
pictures.
Struebing and Klaus (1999) described framework as a sound implementation

plan defining what the organization should do, what it is trying to do and how it is
going to do it, and ensuring that each step builds on the previous one.
52
For the purpose of this research, a framework defines as an implementation

“plan” of what needs to be done are and how to carry them out to achieve the project
objective. Plan in here describes as process and procedures. So, project time and cost
management framework defines as an implementation of process and procedures of
what needs to be done and how to carry them out for good time and cost project
management in order to achieve the project objective.
4.3 The Purpose of Framework
According to Dale (1995), the purpose of a framework is to provide

guidelines to organizations in introducing the various elements to fit the
organizational rules.
Dale (1995) stated that by having a “framework”, project team members will
know their role, and responsibility or what they have to do and could monitor the
progress of the assigned tasks (their responsibility) and regularly provide data on
progress including schedule and cost implementation. All of these will be reported at
regular project review meetings. If actual progress falls behind planned progress or
unexpected events occur, the project manager takes immediate action. He or she
obtains input and advice from team members regarding appropriate corrective action
and how to replant those parts of project.
On the other hand, Aalbregtse et., al., (1991) have his own way to show the
need of a framework by provide some reasons why a framework is needed. These are
follows:
• Most importantly it supports the implementation of management standard and
improves the chances that management standard adoption will be successful.
• With a framework, the organization becomes more aware and is able to adopt
it in much more comprehensive, controlled and timely manner.
53
Najmi, Kehoe, and Dennis, (2000) described the main characteristics of a

framework are as follows:
• Acts as a guideline.
• Result oriented.
• Literary and empirically supported.
• Time dependent.
• Continuous improvement oriented.
Based on description above, it can be conclude that the purpose of framework

is to provide guidelines for the project team members to make they know their role,
and what they have to do and could monitor the progress of the assigned tasks (their
responsibility) and regularly provide data on progress.
4.4 Project Time and Cost Management Framework
4.4.1 Time and Cost Management in Context of Project Management
The discussions so far highlight the definition of framework and the purpose
of the framework. Beside that, in the previous chapter it were highlighted the
definition, the major process and the techniques that usually use in project time and
cost management. Therefore, this sub chapter discusses more detail about project
time and cost management as theoretical. It also discusses about the practices based
on previous research in carry out the project time and cost management that could
help to reduce the time and cost overrun problems, so, then all the project work could
be completed on time and within budget.
According to Clough, et al., (2000), the basis for project time management is
a current operational plan and time schedules that are consonant with established
project time schedule. Gido and Clement (2003) pointed out that time schedule is
used for an effective early warning device for detecting when and where the project
may be falling behind the time schedule. It is useful for checking and analyzing the
54
progress of the work and to take whatever action maybe required, either to bring the
work back on schedule or to modify the schedule to reflect changed job conditions. If
it shows that corrective actions are necessary to bring the work back on schedule or
to modify the schedule to reflect the changed job conditions, it must be made
regarding how to revise it.
The project cost management, it is based on pre-contract estimate and cost

plan. In the project cost estimate it involves in identifying required resources,
estimating the cost of those resources, developing a project baseline, comparing
progress against the baseline and controlling costs it self. Besides these it also
involves in implementing a cost control system, publishing cost status report,
analyzing cost performance, determining changes to the cost baseline, managing the
changes and taking corrective action.
Clough, et al., (2000) also stated that in an environment of constant change,

the established time and cost goals of construction project must be met because job
activities seldom start and finish exactly as scheduled or within cost. No project plan
can ever be perfect. Deviations will inevitably develop as the project progresses.
Consequently, the network must be corrected as needed, and calculations must be
updated occasionally so that the current job schedule and the cost expenditure will
reflect actual job experience to date. The latest updated schedule and the cost
expenditures (cash flow) reflects the actual present job condition and constitutes the
current basis for project time and cost control.
Clough, et al., (2000) and Gido and Clement (2003) have highlighted that, the
basis of time management is scheduling. Scheduling in one of project time is the
process of converting sequenced project task into an achievable timetable. A project
time schedules described here provide time-phased plans that permit portions of the
work to be organized, sequenced, and controlled so that the entire project is
completed in an organized and efficient manner (Spinner, 1997).
Before a project time schedule gets the final approval and distribution, the
project team will review it for any changes and revisions because a complete
schedule for complex project should go through at least a couple of rounds of
55
reviews before it is finalized to get the perfect time scheduling. A project time
schedule based on realistic estimates will also provide a superior guideline for
guiding the project towards a cost effective and timely completion. However, the
project time estimates will affect the project cost estimates because in the project
time estimates it includes planned start and expected finish dates for the project
elements that cost will be allocated too.
Pierce, Gardner and Dunham (2002) suggested that a good effective project
time and cost management should include the following:
1. Planning of work to be performed to complete project.
2. Good estimation of time, labour and cost.
3. Clear communication of scope and request task.
4. Timely accounting of physical progress and cost expenditures.
5. Periodic, re-estimation of time and cost to completion.
6. Frequent, periodic comparison of actual progress and expenditures to
schedules and budget, both at the time of comparison and at project
completion.
Based on description above it can conclude that, a project time and cost
management here means to provide time and cost plans that permit portions of the
work to be organized, sequenced, and controlled so that the entire project is
completed in an organized and efficient manner.
So far the discussion above has been focused on the general aspects of project
time and cost and their management. Next discussion will focuses on the practices as
suggested by several researches and writers to carry out project time and cost
management to reduce the time and cost overrun problems, so, then all the project
work could be completed on time and within budget.
It is good to refer to other practices because it will help in finding a better

way or develop new ways to achieve the best results. Otto von Bismarck once said,
“Fools you are… to say you learn by your experiences…. I prefer to profit by others
mistakes and avoid the price of my own.” This is a pragmatic approach to adopt
practices by others, who have achieved better performance.
56
Strictly on the practices of project time and cost management research that
have been carried out by Bennet et al., (1987), Morton (1994), and Flanagan (1998)
on Japan construction projects, Assaf et al., (1995) and Xiao and Proverbs (2002) on
USA construction projects, Evans (1995), Construction Industry Board (1996), Egan
(1998), and Xiao and Proverbs (2002) on UK construction projects and Wang (1992)
and Khairuddin, (2002) on Malaysia construction projects have carried out similar
study. They are all highlighted process and procedure of good time and cost
management practices where can be considered as the practices that could help to
reduce time and cost overrun problems on construction project and completed all the
project work on time and within cost.
Unlike western culture, which is based on competition, Japanese culture is

based on cooperation, coordination, communication, and long-term partnerships
(Haley, 1994). One example of the implementation of that system in Japanese
construction companies was that it was found that over 90% of Japanese contractors
had planning and monitoring meetings (which can function as means of problem
solving, planning, and as a channel for enquiring about assignment, information
collection and coordination) in their companies twice a week or more and over 80%
of them even did so daily (Xiao and Proverbs, 2002). Xiao and Proverbs (2002) also
stated this is in contrast with USA works on construction sites. In USA construction
sites it was lack of care; 84 per cent respectively had planning and monitoring
meetings between the teamwork on only once a week or less.
It has also been found that in the Japanese construction sites, the team work
closely with projects through good coordination and communication team works
(Agile Construction Initiative, 1998). Contractors need to embrace their team and
develop closer working relationships of mutual benefit as a “win-win” situation
favored by all in managing the works on construction sites. It will improve the
teamwork performance and help to achieve the common goals of the company to
achieve profit by reducing time and cost overrun. In the Japanese management
construction practices there also exists an across-the-board commitment to quality
work and every individual feels responsible for that. Workers are encouraged to
suggest and practice ways to improve their operations (Levy, 1990).
57
Construction projects in USA try to achieve time and cost savings by relying
on prefabrication and greater levels of factory production to provide anything and
hopefully saving time and cost from it. From that they can achieve higher degree of
standardization and improve efficiency with mass production. Prefabrication can
improve quality, safety and efficiency, and mechanization can help reduce time and
labour on site (Evans, 1995; Construction Industry Board, 1996; Egan, 1998).
The UK construction industry attempts to reduce the time and cost overrun by
using prefabrication and greater levels of factory production because this requires
less labour work time. This is also due to the easy access to superior technology or
expertise that will accelerate the completion of the activity (Evans, 1995;
Construction Industry Board, 1996; Egan, 1998 in Xiao and Proverbs 2002).
Wang (1992) pointed out there are several strategic steps and program that
can be taken in order to help to reduce time and cost overrun risk in Malaysian
construction are as follows:
1. Continuity of work to maintain continuous manpower employment, material
consumption and equipment use and deployment,
2. Sufficiency in supply of skilled, semi-skilled and unskilled workers,
3. Sufficiency in supply of construction material and component parts,
4. Sufficiency in supply of construction tools, equipment, plants and
transportation vehicles,
5. Provision of adequate and timely finance,
6. Appropriate education and training of workers, supervisory personnel,
technicians, technologists and managers in construction,
7. Appropriate education and training of consultants and personnel who
supervise and administer contracts,
8. Adoption of teamwork approach by parties involved in the industry to reduce
confrontational attitude which cause friction and results in in-efficiency and
poor productivity,
9. Improvement in application of technical management techniques & systems,
10. Adoption of a set of code of practice to regulate the conduct of professional
practitioners and to take disciplinary action against errant parties,
58
11. Adoption of a set of code of behavior to regulate the conduct of constructors/

builders/ contractors and to take disciplinary action against errant parties.
However, to make the construction industries effective and efficient the

construction teamwork must extend well beyond the production function to other
closely related functions including upgrading their technological and managerial
capacity and increase their implementation capability. In fact, what should be
emphasized is the necessity of making each person involving in the team be aware of
the fact that he/ she is a member of team and that his/ her work/ efforts is important
to the team as a whole. In the event he/ she fail to perform his/ her part of the work, it
will affect the work of others and may even critically obstruct the smooth progress of
the project as a whole (Wang, 1992).
Table 4.1 below compares the practices that are suggested by the different
writers and research in term to achieve efficient and effective project time and cost
management or to reduce the time and cost overrun problems in construction projects
and completed the project work on time and within cost.
59
Table 4.1 The various practices to reduce project time and cost overrun problems
JAPAN USA & UK MALAYSIA
Levy, (1990) stated that: Evans, (1995); Construction Industry Board, (1996); Wang (1992) stated that:
On Japanese construction sites, there exist an across-the- Egan, (1998) in Xiao and Proverbs (2002). stated that: 1. Continuity of work to maintain continuous
board commitment to the quality works and every Almost the same with construction in USA, UK manpower employment, material consumption and
individual feels responsible for that. Workers are construction industry try to achieve time and cost saving equipment use and deployment,
encouraged, suggest and practice ways to improve their by relies on prefabrication and greater levels of factory 2. Sufficiency in supply of skilled, semi-skilled and
operations. production to provide anything and hopefully saving time unskilled workers,
Agile Construction Initiative, (1998) stated that: and cost from it. 3. Sufficiency in supply of construction material and
The teamwork to be closely associated with projects component parts,
through good coordination and communication in managing From that they have the higher degree of standardization, 4. Sufficiency in supply of construction tools,
the construction works. which involves mass production and can improve equipment, plants and transportation,
Haley, (1994) support by Xiao and Proverbs, (2002) efficiency, prefabrication that can improve quality, safety 5. Provision of adequate and timely finance,
stated that: and efficiency, and mechanization. 6. Appropriate education and training of workers,
Japanese culture is based on cooperation, coordination, supervisory personnel, technicians, technologists
communication, and long-term partnerships are That is help to reduce time and labor on site. Due to that and managers in construction,
commonplace. One sample of the implementation of that they used it because by using prefabrication and greater 7. Appropriate education and training of consultants
system in Japanese construction companies was it has been levels of factory production means requires less time, and personnel who supervise and administer
found that over 90% of Japanese contractors had planning labor and may access to superior technology or expertise contracts,
and monitoring meetings (which can function as a way of that will accelerate the completion of the activity. 8. Adoption of teamwork approach by parties involved
problem solving, planning, and as a channel for assignment, in the industry to reduce confrontational attitude
information collection and coordination) in their companies which cause friction and results in inefficiency and
twice a week or more and over 80% of them even did so poor productivity,
daily. 9. Improvement in application of technical and
Agile Construction Initiative, (1998) stated that: The management techniques and systems,
teamwork to be closely associated with projects through 10. Adoption of a set of code practice to regulate the
good coordination and communication in managing the conduct of professional practitioners and to take
works. disciplinary actions against errant parties,
11. Adoption of a set of code behavior to regulate the
conduct of constructors/ builders/ contractors and to
take disciplinary actions against errant parties.
59
60
The practices that were reviewed will be used as references to help in

proposing a solution for Indonesian construction projects particularly for
construction projects in Padang and Pekanbaru in term to reduce the time and cost
overrun. Adoptioning other countries practices could assist construction projects in
Padang and Pekanbaru avoid being ambushed by unexpected overrun problems
during the construction process. Basically, there are some others research but all
previous research that have been discussed above could be representative to illustrate
the practices that could help to reduce the time and cost overrun problems.
4.4.2 Framework for Project Time and Cost Management
As pointed earlier, framework is all about process and procedure of doing

something to achieve a particular results objective. In establishing the framework for
time and cost management it is pertinent to analyze the theoretical concept of time
and cost management.
Perspective of effective framework for management of construction process

was provided by Ritz (1994). He divides it into three main components: Planning,
Organizing, and Controlling as shown in Figure 4.1 below.
Plan Organize Control
Fig. 4.1 Basic construction project management philosophy (Ritz, 1994)
i) Planning
Planning is the master plan for executing the field work, from bidding to
completion and turnover to the owner. The master plan must operate within the
61
restrains of overall project financing, strategic schedules dates, allocation of project

resources, and contracting procedures.
For the contractor, construction planning also involves the determination of

construction strategy for the project. According to Lewis (1995) construction
planning at the contractor level includes:
1. The determination of what has to be done. This involves the assessment of
work content for each work task or project activity involved in the
construction plan.
2. The prescription of how each work task is to be performed. This involves the
selection of construction methods and related support and management
procedures.
3. The enumeration of required resources as a result of decisions relating to the
selection, level and extent of resources availabilities to the project.
4. The order in which things are to be done. This involves an understanding of
the technological process involved in the construction methods.
5. Decisions as to when things are to be done. Although planning is essential to
management, the implementation and control of plan is far more difficult and
demanding on managerial skill because of the many complex factors and
events that enter into the execution of a plan. Consequently, project control is
concerned with ensuring that.
6. The proper resources (materials, equipment and labour) are available at the
right place and the right time.
7. The relevant field decision makers and agents are properly briefed as to what
has to be done, when and how.
8. Resources are used effectively.
9. The resulting work output meets all contractual and quality control
requirements.
ii) Organizing Stages
The activities in the organizational activities area cover deployment of the

human resources and systems required to meet the master plan and the project
schedule. In this area the management must:
62
1. Prepare organization charts and personnel loading curves,

2. Write key position descriptions,
3. Issue site operating procedures,
4. Mobilize and motivate the field staff,
5. Arrange site facilities and system,
6. Issue and start control procedures: plan the field organization based on the
scope of work and the personnel plan. Issue detailed construction procedures
promptly to instruct and guide the new organization. Mobilize the staff and
suitable facilities to kick off the project on schedule. Start the cost controls
immediately, as it will help saving cost.
iii) Controlling Stages
The project is monitored, controlled, and adjusted as necessary until

completed (Sunny and Kim, 1992). Control in construction project is an important
and necessary part of performing the project. Control itself is the process of
assigning and modifying work, cost, time and objectives in order to complete the
project successfully. A good and effective control process will highlight the things
that do not proceed as planned.
The control functions are to monitor all phases of the work to meet the
universal goal of the construction as specified; be completed on a certain time, within
cost or budget and within the prescribed performance. Otherwise, as mentioned
earlier, time and cost are the two of the critical elements that could influence the
success of the project. So, the project control has to assure that a construction project
can be completed within time and cost planned. Time was monitored by check the
physical progress against the project schedule. Cost is monitored through a cost
control system based on the project budget. Project control prevents a schedule
(time) and cost from expanding out of control (overrun).
Figure 4.2 below shows a model of time management cycle as suggested by

Clough et. al (2000). It shows that field operations are subjected to periodic cycles of
the time management sequence. Considering the process and procedure involve it
can be assumed that this model can also be need for cost management.
63
Establish Operational
Measure & Report progress
Compare Actual Achievement with Planned
Determine effect on Completion Date
Plan & Implement Corrective Action
Update Operational Schedule
Figure 4.2 Time management cycle in construction industry (Clough, et. al., 2000)
The project control process continues throughout the project because there
could be some situations in which time, performance and cost are affected. Badiru
and Pulat (1995) suggested that some of the important factors that could affect the
project and thus need to be considered when controlling a construction projects are:
1. Factors affecting time: supply delays, delays of key tasks, change in customer
specifications, unreliable time estimates, time consuming technical problems,
and new regulation that need time to implementation.
1. Factors affecting performance: poor design, poor quality, maintenance
problems, complicated technology, change in statement of work, conflicting
objectives, employee morale, and poor retention of experienced workforce.
2. Factors affecting cost: inflation, incorrect bids, high labour cost, budget
revision, high overhead costs, inadequate budget, and increase scope of work.
As basically, in managing time and cost, management in project execution

requires a control process, which consists of the following four steps (Gray and
Larson, 2000):
64
1. Setting a baseline plan

The baseline plan provides the elements for measuring performance during
project process. In addition, there is a work package that defines the work,
duration (time), and cost.
2. Measuring progress and performance
3. Comparing plan against actual because plans seldom materialize as expected.
It becomes imperative to measure deviation from the plan to determine if
action is necessary. Periodic monitoring and measuring the status of the
project allow for comparisons of actual versus expected plans. It is crucial
that the timing of status reports be frequent enough to allow for early
detection of variations from the plan and early corrections of causes. Status
reports should take place several times in order to be useful for proactive
correction.
4. Taking action
If deviations from the plans are significant, corrective actions will be needed
to bring the project back in line with the original or the revised plan. In some
cases, condition or scope can change, which in turn, will require a change in
the baseline plan to recognize the new information.
Badiru and Pulat (1995) also recommended the project control process steps
but it as general, they are as following on be:
1. Determine the criterion for control. This means that the specific aspects that
will be measured should be specific.
2. Set practices standards. Standards maybe based on industry practice,
prevailing project agreements, work analysis, forecasting, and etc.
3. Measure actual performance. Quantitative and non-quantitative factors may
require different measurement approaches. This step also requires reliable
project tracking and reporting tools. Project status, no matter how
unfavourable, must be reported.
4. Compare actual performance with the specified standard. The comparison
should be objective and consistent based on the specified control criteria.
Meet periodically to determine what has been achieved and remains to be
done.
5. Identify unacceptable variance from expectation.
65
6. Determine the expected impact of the variance on overall project

performance.
7. Investigate the source of the poor performance.
8. Determine the appropriate control actions needed to overcome the variance
observed.
9. Implement the control actions with total dedication.
10. Ensure the poor performance does not recur elsewhere in the project.
Then, Ritz, (1994) has also developed a model for the process of control in
construction project. This can be shown in Figure 4.3 below:
Identification of Comparison of Measurement Actual

Deviation Actual Against of Actual Performance
Program of Implementation of Desired

Analysis Causes
Corrective Correction Performance
of Deviation
Action
Fig. 4.3 Control process to control construction project (Ritz, 1994)
However, to control a project process, one must be able to measure the

performance. The ability to measure accurately is a crucial aspect of control.
Measurements are taken on each of the three components of project constraints: time,
performance and cost. This process must occur regularly throughout the project and
regular reporting period should be established to compare actual progress with
planned progress. Reporting can be; daily, weekly, or monthly, depending on the
complexity or overall duration of the project. If the project is expected to have an
overall duration of a month, the reporting period might be as short as a day.
As pointed by Gido and Clements (1999), during each reporting period, there
are two kinds of data or information that need to be collected:
66
1. Data of the actual performance which includes:

• The actual time that activities start and finish.
• The actual costs expended and committed.
2. Information on any change to the project scope, schedule and budget.
Ndekugri and McCaffer (1988) also illustrated all the contractor’s endeavors
in controlling the construction project process, as shown in Figure 4.4 below. It only
describes the monitoring, evaluating and remedying phases of control loop.
C. MONITOR
Measure performance in
A. PLAN B. EXECUTE term of:
1. Establish a Implement in accordance 1. Quantities of work
schedule with the budget & schedule items completed
2. Establish a budget 2. Resources expended
3. Cost incurred
4. Elapse time
D. EVALUATE
E. TAKE REMEDIAL 1 Which operations are not
ACTION being performed
1. Modify plan satisfactorily?
2. Supervise more effectively 2. For a problematic operation:
3. Increase skill - What has gone wrong:
4. Use more efficient plant • Labour?
5. Submit claims • Plant?
• Materials?
• Subcontractors?
• Overhead?
F. UPDATE HISTORICAL - Who is responsible?
DATA FOR FUTURE - What is the trend?
• Estimating - How much longer it will take?
• Accounting - What will the final cost be?
• Justification & qualification of 3. What will the final cost of the
claims project be?
CONTROL
Fig. 4.4 The essence of the contractor’s control function (Ndekugri & McCaffer,
1988)
67
According to PMBOK guide books (1996), there are several output by doing
time controlling, they are as follow:
Schedule updates.
Schedule update is any modification to the schedule information which is
used to manage the project. Appropriate schedule updates require adjustment
to other aspect of the overall project plan. Revisions are a special category of
schedule updates. Revisions are changes to the scheduled start and finish
dates in the approved project time schedule.
Corrective action.
Corrective action is anything done to bring expected future project time
schedule performance into line with the project plan. Corrective action in the
area of project time management often involves expediting: special action
taken to ensure completion of an activity on time or with the possible delay.
Lesson learned or historical database.

The causes of variances, the reasoning behind the corrective action chosen,
and any other types of lessons learned from schedule control should be
documented so that they become part of the historical database for this
project or and other projects of the performing organization.
For cost control the output are as follow:

Revised cost estimates.
Revised cost estimates are modifications to the cost information used to
manage the project and appropriate stakeholders must be notified as needed.
Budget Updates.
Budget updates are changes to an approved cost baseline.
Corrective Action.
Corrective action is anything done to bring expected future project time
schedule performance into line with the project plan.
Estimate at completion.
It is forecast of total project costs based on project performance.
Lesson Learned.
68
After analyzing and synthesizing the various project control framework it can
be concluded that even after careful planning, organizing, controlling and obtaining
consensus from the project team, the project process may still require significant
changes to the original plan. In spite of the countless reasons for making changes,
there are only four factors that can affect a project plan (Sunny and Kim 1992);
1. Changes in goals (objectives).
2. Staffing levels: a change in staff is likely to affect the time schedule and
perhaps the budget.
3. Budget allocations: a change in budget may affect the objectives that can be
accomplished, and this will affect everything else in the plan in some way.
4. Time schedule: a change in time schedule may affect the budget and others.
A project is an interrelated system where there is no a change in one part of

the system without affecting the others. Time and cost management is concerned
very much with this changes i.e. change in any one project construction element
mostly affect the two of this things. The following steps in Figure 4.5 by Kettering in
Sunny and Kim (1992), summarize an easy to follow method for analyzing project
changes and to plan the corrective actions.
69
Gather Information on
the Problem
Review Goals and

Objectives
o Time
Establish Priorities o Cost
o Performance
Review Status of
Project
o Time
List Alternatives o Cost
o Performance
Analyze Alternatives
Make Decisions and

Revise the Plan
Fig. 4.5. The trade-off analysis process in project management (Sunny & Kim, 1992)
A step-by-step methodology is helpful to understand the trade offs in making

the project changes. Understanding the trade offs in a project change is always a
matter of understanding the impact a change to one parameter has on the others.
Implementing the changes in a project is not always as simple as changing the plan.
Changes to project plan must be communicated effectively, understood by the people
affected, and accepted as necessary and appropriate with the established estimation i.
e. time and cost estimation. To implement it Sunny and Kim, (1992), described some
tactics for dealing with resistance to project changes. They are as follows:
• Hold the performance for the project constant. In this option, the goals and
objectives are kept constant. This may require additional resources to make
the original date, and thus increase the cost for the project as well, in case the
schedule may be lengthened or otherwise modified to maintain performance
without adding additional resources.
70
• Add equipment. Additions or changes in equipment may solve performance

and schedule problems in production oriented projects, but sometimes have a
significant impact on the budget.
• Change operating and administrative procedures. Sometimes excessive
reporting or unnecessary administrative procedures can bog a project down.
Simple changes in reports, meetings or other procedures can often free up
time that would be better spent on completing project tasks, thus minimizing
the requirement for schedule changes.
• Scrap part or the entire project. This reduces cost and time requirements and
affects performance criteria. If the project goals and objectives are changed
radically, a completely new project plan is in order or if the project is
scrapped because of new corporate priorities or environmental changes, then
the current project must be terminated, etc.
As a sample, Gido and Clement, (1999) described the following steps of

corrective actions that are used at the contractors level.
1. Identify potential causes of problem.
2. Gather data and verify the most likely causes.
Whether it is through asking question, interviewing people, running test,
reading reports, or analyzing data, it takes time. However, it must be done to
focus on the rest of the corrective action process.
3. Identify possible solutions.
4. Evaluate the alternative solutions.
5. Determine the best solution.
6. Revise the project plan. When the best solution has been selected, it is
necessary to prepare a plan for implementing that solution. Specific tasks
need to be identified, along with their estimated costs and durations. The
resources and persons needed for each task must also be identified. The
project team members who are responsible for this implementation should
control it. The effect of control actions to the overall project plan must be
checked in the first place to determine the possible impact of the solution.
7. Implement the solution. Once, when the best solution has been chosen,
everyone in the project should go ahead and perform his or her respective
tasks.
71
8. Determine whether the problem has been solved. Once the solution has been
implemented, it is important to determine whether the problem has indeed
been solved. Here is where the team goes back to compare the results of
implementing the solution to the problem.
According to Serpell and Alarcon (1998) in order to ensure the effectiveness

of activities in the construction sites when it changes happen, it is necessary to use a
structured flexible framework that serves as a guideline for these efforts. All these
efforts have been directed to construction performance improvement through the
reduction of waste activities. The methodology represents a systematic attempt to
organize the implementation of performance process during the changes in
construction projects. However, this framework should be flexible and adaptable to
the specific needs of each construction project situation.
4.4.3 Proposed Framework for Project Management Process
Reviews above had described the needs of framework in each of construction

projects stages: planning, organizing and controlling and also illustrated the existing
framework. It illustrated in basic construction philosophy by Ritz, (1994) as shown
in Figure 4.1.
The framework has been developed from repeated experiences of supporting

construction companies’ projects in their performance effort. The use of a structured
framework provide systematic information gathering about the construction process
and a sequence of logical steps based on a general problem solving approach that
increase the potential of a successful improvement project. Within the framework it
is very important to select the appropriate tools and methods to carry out the
improvement activities process during the construction process (Serpell and Alarcon,
1996).
72
For managing time and cost in one of construction projects, there are three
kinds of existing framework that can be use for controlling and two kinds for project
changes activities.
In controlling step as general they are: (1) is time and management cycle in
construction industry designed by Clough et. al., (2000) as shown in Figure 4.2, (2)
is control process to control construction project designed by Ritz, (1994) as shown
in Figure 4.3, and (3) is the essence of the contractor’s control function framework
designed by Ndekugri and Mc Caffer, (1998) as shown in Figure 4.4.
The first framework designed by Clough et. al., (2000) as shown in Figure
4.2 above has described time and cost that need to be checked and analyzed, the
progress of job, and possible actions required; either to bring the job back on
schedule or to modify the schedule to reflect changed job condition. To that end, the
field operations are subjected to periodic cycles of the time and cost management as
shown above. This periodic cycle is used for the day-to-day time and cost control of
the project during the process not only in the planning stages.
The second framework designed by Ritz, (1994) as shown in Fig.4.3 above

has described the basic mechanism of the control function that keeps the work of the
project on target to meet the goals. Project control has to assure that a construction
project can be completed within time and cost. Badiru and Pulat (1999) supported it
by recommended project control process steps. But a definition of control that Ritz
(1994) thinks is particularly appropriate for project work is the work of constraining,
coordinating and regulating action in accordance with plans to meet specific
objectives.
Planning and organizing are certainly important in leading towards meeting

the project goals, but effective project control is absolutely essential. It might be a
little off target on planning and organizing, but it cannot fail even with little bit in
control and come out whole. This framework was described of Ritz (1994) definition
in the key function of the project management system as shown in Figure 4.3 above
in controlling part. If the cost and time control system has to be effective based on
73
framework control above, it must be based on estimated cost and time planning. A
detailed input part and time and cost cycle in project must be shown.
The third framework designed by Ndekugri and McCaffer, (1988) as shown

in Figure 4.4 above described the essence of the contractor’s control function
framework. This framework described what has to be done in the monitoring
(controlling), evaluating and remedying phases of the control loop and also gives
detailed descriptions of the possible action that contractors should take in each step.
The basic approach is comparing the actual or anticipated final time and cost of work
items against predetermined standards.
Those frameworks designed by Clough et. al., (2000), Ritz, (1994) and
Ndekugri and McCaffer, (1998) have the same purpose: controlling the project and
the same cycling steps. Ndekugri and McCaffer, (1988) proposed a more concise
framework description than Ritz, (1994) because it gives detailed descriptions of the
possible actions that contractors should take in each step. On the other hand there are
existing frameworks for project changes, which designed by Sunny and Kim, (1992)
as shown in Fig. 4.5.
The framework designed by Sunny and Kim (1992) described a step by step
framework that project team should do if faced with the changes in their project plan
before the best decision or a revised the project plan can be made. It is important to
verify the causes of the changes so that when the changes are required the rest of the
project plan can be adjusted to complete the project as planned. Changes in the
project plan must be effectively understood and accepted by the people affected in
the project team because otherwise the changes will not be effectively implemented.
Basically, this framework models almost the same with Ritz’s, (1994) framework in
Figure 4.3 above.
Another aim of this stage is to assure the maintenance of the implemented

changes, and to assure the short and long term benefits expected from them. In
addition according to the Serpell and Alorcon (1998) the frameworks that will be
used for improvement during the changes have same requirements necessary for
achieving good results. One of them is obtaining commitment of all the people
74
involved in any improvement effort during the changes. Without their support and
participation it is not possible to achieve improvements. A second important
requirement is to carefully plan the implementation of improvement actions during
the project changes. This stage is by far the most difficult and complex one.
The explanations above have gives illustration about the existence of

framework in each stage of construction project process. These processes have been
organized into several steps as illustrated in several frameworks above. Table 4.2
below will shows the overviews or perspectives about several frameworks above.
Table 4.2 The perspectives about several frameworks from several researchers.
Researcher Perspectives about his/ her framework
1. Ritz, (1994) It described of Ritz (1994) definition in the key function of the
- Figure 3.3 project management system but a detailed input part and time
and cost cycle in project that must be shown was not described.
2. Clough et. al.,(2000) This periodic cycle is used for the day-to-day time and cost
- Figure 3.4 control of the project during the process not only in the planning
stages. It described in the generally stages.
3. Ritz, (1994) It is described of the basic mechanism of the control function

- Figure 3.5 that keeps the work of the project on target & accordance with
plans to meet the goals and it have to be developed.
4. Ndekugri & McCaffer, This framework described what has to be done in the monitoring
(1988) (controlling), evaluating and remedying phases of the control
- Figure 3.6 loop and also gives detailed descriptions of the possible action
that contractors should take in each step. The basic approach this
framework is comparing the actual or anticipated final time and
cost of work items against predetermined standards.
5. Sunny & Kim, (1992) It is only described a step by step methodology that project team
- Figure 3.7 should do if faced with the changes in their project plan before
the best decision or a revised the project plan can be made.
Summary: Those frameworks which has designed by six researchers above shows that the
cycling steps in each framework almost the same and it also have the same purpose; to
control the project. But it can shows that Ndekugri and McCaffer, (1988) proposed a more
concise framework description than others because it gives detailed descriptions of the
possible actions and the endeavours that contractors should take in each step to make that
each steps implementations more effective.
To provide an overview of the existing practices in Indonesian construction

process especially in term of time and cost overrun problems based on summary in
75
Table 4.2 above, Ndekugri and McCaffer (1988) contractor’s endeavours framework
in controlling the construction project process is the suitable mode to propose. This
because of Ndekugri and McCaffer (1988) framework describes clearly each phases
of control loop what contractors as project executor should do in term of controlling
the project process. On the other hand, others framework describes the methodology
to organize the implementation of construction performance process as general.
In term of the issues in Indonesian construction industry about time and cost
overrun, this framework will be describes about time and cost overrun problems
during the construction process because time and cost overrun were occur or happen
in this stage. Due to Ndekugri and McCaffer (1988) framework mode, a propose
framework will be more developing and concentrating in monitoring or controlling
stages until take the remedial action stages especially for the time and cost
management.
Based on Ndekugri and McCaffer, (1988) framework, in monitoring or

controlling stages it could be identifying the problem and do evaluating about the
problems. Through evaluating it could know which operations or activities are not
being performed satisfactorily, what has gone wrong or the causes and from all of
that it could plan the remedial action that should do to reduce or avoid the problems.
When the problems and the causes had been identified, the project manager
have to check the chance to take remedial actions by gathering information on that
problems, list the alternatives solution, evaluate or analyze it and make decision to
have the corrective actions and the revise plans while an opportunity still exists to
address problem areas.
The remedial actions could do such as by modify the plan, supervise more
effectively, increase skill and productivity, use more efficient plan, determine who is
will be responsible and many others things that could do. Once a decision on which
revision actions to take, they must be incorporated into the time schedule and cost
estimated. If the planned corrective measures result in acceptable time schedule and
cost estimated, the construction project process can be continued (Gido and Clement,
1999 and Clough et. al., 2000).
76
Refer to Indonesian construction management it had been identify that,

mostly, construction companies in Indonesia still did not follow the managerial
practices such as the implementation of INKINDO framework by the consultant
company within companies by various reasons, (Wisnuhadi, 2000).
In general each company uses the past experience as a basis for managing the
construction projects to avoid or reduce problems during the execution process.
Even, in fact there is several companies in Indonesian construction industry managed
their project according to the process and the procedure that produce by the
association or the government. But, sometimes several process or procedure not
carried out efficiently and effectively. Figure 4.6 below will describe the propose
framework that developed based on the theory and the others practices which is get
from the literatures findings. In this research survey it will be try to identify the way
of the implementation and get the respondent perspectives about the project
management stages to manage and control the project process through the proposed
framework.
77
YES
Compare Actual Identification
ORGANIZE CONTROL Achieving with Feedback Goals
PLAN Deviations/Problems
Planning Achievement
Major Activities
Identification Identify: - Schedule Check Through The Analyze cause of - Efficiency
Things That Have - Job Description - Activities Report: Deviations - Effectiveness Sub Activities
Related With - Activities - Cost/Account - Schedule Activities - On Time
Time & Cost - Resources - Qualities - Equipment - Within Budget
- Time Schedule - Document - Work progress - Qualitative/As
- Cost/Budget - Resource - Change Order/Work Planning of Specified/Standard
- Equipment - Accounting Corrective
a. Identify: Actions
- Activities
- Purchasing - Team Works
- Suitable/ Match Instrument/Tools: Analyze It
- Equipment
With Planning - Software
- Others Implementation of
- CPM
- Bar Chart Corrective Actions
- Identification Problem
- S Curve
- Some Correction
b. Group in :
- Categories
- Department Project Report:
- Item - Daily
- Resources - Weekly *
- Monthly
* As specified/Standard
Fig. 4.6 The proposed framework for survey which developed based on the theory and the practices
77
78
However, by have this proposed framework as a fit guidance, the project

manager and the team members could monitor the progress of the assigned tasks
(their responsibility). Thus, have the line as guidance’s that could be followed if they
are also faced the time and cost overrun problems with the same causes. This
proposed framework would develop again based on the survey results and supported
by the literature review findings through the previous research.
CHAPTER 5
RESEARCH METHODOLOGY
5.1 Introduction
This chapter discusses the methods used in this research to achieve its objectives.
It can be divided into three parts. The first part explains the research stages. The second
part looks more closely at data collection methods and the last part is explains how the
approach of developing a framework.
5.2 Research Process
A number of representations of the research process as general have been

collected in Figure 5.1 below.
80
Preliminary Research Stage 1
Literature Reviews Stage 2
Determine research areas Identify issues/ problems
Research Design Stage 3
Determine the types Determine Determine the Determine the

of data required the sample method/ technique data analysis
& its size of data collection methods
Data Collection Stage 4
Questionnaires Literature review findings
Data Analysis
Stage 5
Writing Stage 6
Figure 5.1 The research stages
a. Stage 1: preliminary research to find out:

Research rough idea.
b. Stage 2: Literature review
Determine research areas
Identify issues/ problems; which includes about:
81
- Project management, the structure and the practices in Indonesian

construction industry; includes in it are Padang and Pekanbaru.
- The basic concept of project time and cost in theory.
- The issues in project time and cost in Indonesian construction projects
and in several countries based on previous research that have been done.
- The basic concept of management for project time and cost in theory.
- The practices for project time and cost management based on previous
research in several countries.
- Framework in project time and cost management as theoretical.
c. Stage 3: Research design; which includes about:
Determine types of data required
Determine the method/ technique of data collection
Determine the survey sample and its size
Determine data analysis methods
d. Stage 4: Data collection. The objectives of data collection refer to the research
issues and the objective. The way of data collection, survey sample and its size
refers to research design.
e. Stage 5: Survey analysis. The survey data was analysed by calculating the mean
value from the data.
f. Stage 6: Last stage of research. In this stage writing up will be done to present
the research results.
5.3 Data Collection
This part discusses how the data collection was carried out such as the survey, to
whom and how the survey was done, the sample size, and how the survey data was
analyzed.
82
a). The Techniques
The research uses face to face survey using a set of prepared detailed
questionnaires to collect of data. It was sent to the selected respondent. The method is
considered appropriate for this type of research because it:
• Ideally examines the perception of the sample
• Is less time consuming and cheaper
• Is better able to reach a wider respondent
The questionnaire also offers some level of confidentiality and allows

respondents to give true opinions on issues asked.
b). Sample / Respondent
The sample of this research as stated in the scope/ delimitation of this research
are the contractor and consultant which includes in B and M classification in Padang and
Pekanbaru who have registered with INKINDO (Ikatan Konsultan Indonesia) for
consultants, GAPEKSINDO (Gabungan Pengusaha Konstruksi Indonesia) for
contractors or LPJK for all companies that did not register with either of these.
They were choosing because they have more experience and active in project
activities per-year. Refer to company qualification in chapter 2, M or medium
qualification for Consultant Company are companies that have the ability to execute
construction projects valued between 200 million and 1 billion rupiahs and B or big
qualification are companies that have the ability to execute construction projects valued
at more than 1 billion rupiahs. For the contractor company M or medium qualification is
companies that have the ability to execute construction projects valued more than 1
billion but less than 10 billion rupiahs and B or big qualification are companies that have
the ability to execute construction projects valued more than 10 billion rupiahs.
However, kind of projects that are executed by company B and M qualification in
83
Padang and Pekanbaru cities are many but for most of them include in low-rise buildings
such as housing, offices and others simple projects.
Before distributing the questionnaires as the methods that was used to collect the
data for this research, the sample size has to be estimated from the population; for
example, the proportion of the total number of companies where the questionnaires were
to be distribute.
According to Bailey (1978), it is not possible to study the entire population and
therefore a sample must be determined. We can define a sample as a subset or
proportion of the total population. A 100 (hundred) percent sample would be the entire
population; a one percent sample would consist of only 1 one out of every 100 entities in
the population. On the other hand with reference to Simon (1978), samples in research at
the Master and doctoral level are likely to be closer to a pretest range of 25 to 100
sample size. The sample size ought to depend on the proportions of the sample that have
the characteristics the researcher is interested in, the purpose of the study, the value of
the information and the cost.
Another factor in determining sample size is the degree precision needed on the
desired final result (Slonim, 1969). Blalock (1960) indicates that in terms of just
statistics an n of 50 is a minimum size. Champion (1970) in Adams and Schvaneveldt
(1985) for the same reason suggests that 30 is the very minimum and still calls for
considerably larger samples if one is to control for certain variables and lay claim that
the sample accurately “mirrors” the population. Cohen and Manion (1985) also stated
the same, a sample size of 30 is held by many to be the minimum number of cases if the
researcher plans to use some form of statistical analysis to the data, though techniques
are available for the analysis of samples below 30. Baker (1999) also stated that the
sample size where the population is under 1000, it is generally thought that a sample size
of 30% is good. For populations of 10,000 or more a sample size of 10% may be
adequate.
84
Through references to all theory above, there are five statements; Blalock (1960),
Champion (1970), Simon (1978), Cohen and Manion (1985) and Baker (1999) said that
30 to 50 are the minimum for sample size for one research. So, for this research, based
on the theory above, a sample size of 50 as minimum was taken, where from all the
company registered under INKINDO, GAPEKSINDO and LPJK.
For this research, total of questionnaire that distributed was 55 with detail 30 to
class B and M contractors and consultants’ in Pekanbaru and 25 in Padang. Table 2.5
which reproduced in Table 5.1 below, show the number of big and medium companies
in Pekanbaru and Padang that registered with their organization GAPEKSINDO (for
contractor), INKINDO (for consultant) and LPJK as board for construction companies
for both (for consultant and contractor).
Table 5.1 Total Numbers of Big, Medium and Small Companies based on The
Areas & Company LPJK GAPEKSINDO INKINDO
(Both) (Contractor) (Consultant)
Pekanbaru:
- K (Small) 144 40 47
- M (Medium) 83 31 10
- B (Big) 5 3 7
Padang
- K (Small) 132 53 37
- M (Medium) 29 6 13
- B (Big) 16 2 5
Source: Construction Development Board Data by Province, (www.LPJK.go.id, LPJK, 2003)
The total number of questionnaires collected or received are; 22 from contractors

and consultants in Pekanbaru and 16 from those in Padang. So, totally the numbers of
questionnaires collected or received from both of those cities are 38 questionnaires. It is
because some respondents have said that they are not interested to fill out the
85
questionnaires form with so many reasons such as it is better to interview them than ask
them to fill out questionnaires. So, some respondent did not respond. Table 5.2 below
will describe all the description above.
Table 5.2 Number of questionnaires distributed

Respondent Padang Pekanbaru
Distributed Received Distributed Received

(Number) (Number) (Number) (Number)
1. Consultant 10 6 10 6
- INKINDO 3 2 4 2
- LPJK 7 4 6 4
2. Contractor 15 10 20 16
- GAPEKSINDO 4 6 9 7
- LPJK 11 4 11 9
∑ 25 16 30 22
The respondent that have participated to fill out and reply the questionnaires with
background civil engineering are 10 people is project manager, 5 people main supervisor
of project, 12 people field supervisor of project and 11 people are architect.
c). The Questionnaire
The questionnaire was developing based on the pilot study that carried out in the
early part of research. Previous research about time and cost management in several
countries, the best practices or approach and existed framework, which described in
literature review findings, used as references to do the pilot study.
To identify the major causes of time and cost overrun in Indonesian (particularly
Padang and Pekanbaru) construction projects through the pilot study, the causes that had
been listed will be given to the respondents (Refer to Table 3.2 in previous chapter).
Table 3.2 shows the summary of the causes of time and cost overrun in construction
projects in various countries. The table was prepared to propose the synthesizing of the
86
common causes among the various countries. The table was listed all the time and cost
overrun causes and classified it into some categories.
The pilot study for identifying the current practices of time and cost
management in Indonesia construction industries particularly Padang and Pekanbaru
also based on others previous research, they listed all the various practices to minimize
project time and cost overrun problems (Refer to Table 4.1 in previous chapter). Table
4.1 shows the summary of the various practices to minimize project time and cost
overrun problems in various countries. The table was prepared to propose the
synthesizing of the various practices among the various countries.
Sample of the pilot study that shows the common causes of time and cost
overrun like the one elaborated in Table 5.3 below. The complete questions of pilot
study are shown in appendix. For the activities categories it was based on the same
opinion (as shown by bold and italic ones) about the activities that have time and cost
overrun from the previous researcher that was listed in Table 3.2. For the causes it will
take all from the listed. Respondents were asked to choose the causes and classify it
based on the activity categories.
87
Table 5.3 Sample of pilot study questions

ACTIVITY CATEGORIES THE CAUSES
(1) Materials, - Shortages of materials
- Material changes
- Late delivery
- Damage, and poor quality manufacturing of materials
- Others : -
-
-
(2) Manpower, - Shortages of labour
- Labour skill
- Nationalities of labourers
- Others : -
-
-
(3) Equipment, - Equipment failure
- Shortages and late delivery of the equipment
- Low productivity or skill of operator of the equipment
- Others : -
-
-
(4) Environment, - Climatic conditions
- Social and cultural impact
- Geological problems
- Others : -
-
-
(5) Changes, - Result of omissions, errors, and change of scope by owners
- Others : -
-
-
(6) Scheduling and controlling - Poor planning and scheduling practices
techniques - Lack of management expertise in project control
- Poor record keeping and maintenance
- Others : -
-
-
88
In this pilot study, respondents were asked to choose the causes and classify it
based on the activity categories. Results of the pilot study are shown in Table 5.4 below.
Then, based on the pilot study results in the questionnaires those factors were grouped
by the researcher into five major categories; preparation project activities, construction
activities, material supply, labour and additional work due to design changes. That result
will be shows in Table 5.5 where actually it was extracted from results in Table 5.4. That
results show that some of the causes that were classified before had been changed to
other categories based on the respondent’s suggestion. Based on that pilot study results,
the questionnaires were design. All the causes for the time and cost overrun are based on
the respondent answer or respond in the pilot study above.
Sets of questionnaires were distributed and collected from the two types of
respondents: contractors and consultants. In the questionnaires, respondents (contractors
and consultants) were only asked to rank it based on the importance scale and the
occurrence frequency in their company. Based on the rank, mean were calculated to
show what activities and which causes had much influence on project performance and
cause time and cost overrun in many Indonesian construction projects particularly
Padang and Pekanbaru.
Mean value between contractors and consultants were calculated separately to

describe the activities and factors that cause time and cost overrun as reported by
consultants and contractors. This is because their positions in construction projects are
different: one acts as a planner and the other as an executor of the project. But, at the
end, the results were combined too, to shows which factors or causes had much
influence on project performance and cause time and cost overrun in many Indonesian
construction projects based on the responds from both of them.
89
Table 5.4 Results of the pilot study on causes of time and cost overrun
ACTIVITY CATEGORIES THE CAUSES %
(1) Materials, - Shortages of materials 0%
- Material changes 0%
- Late delivery 70 %
- Damage, and poor quality manufacturing of materials 0%
- Others : - Limited stocks 20 %
- Transportation problem in delivery 10 %
(2) Manpower, - Shortages of labour (lack of labour) 30 %

- Labour skill (limited) 70 %
- Nationalities of labourers 0%
- Others : -
(3) Equipment, - Equipment failure 0%

- Shortages and late delivery of the equipment 0%
- Low productivity or skill of operator of the equipment 0%
- Others : - Lack of equipment 100 %
(4) Environment, - Climatic conditions (weather) 50 %

- Social and cultural impact 10 %
- Geological problems 0%
- Others : - Site condition out of plan 20 %
- Location in the middle of public facility 20 %
(5) Changes, - Result of omissions, errors, and change of scope by 0%

owners
- Others : - Design changes 50 %
- Over estimation 20 %
- Delayed activities 30 %
(6) Scheduling and - Poor planning and scheduling practices 0%

controlling techniques - Poor management in project control 0%
- Poor record keeping and maintenance 0%
- Others : - Poor management 100 %
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Table 5.5 Results of pilot study – The common causes of time and cost overrun
problems (extracted from table 5.4)

(1) Materials, - Late delivery
- Limited stocks
- Transportations problem in delivery
(2) Manpower/ Labour, - Shortages of labour (lack of labour)

- Labour skill (limited)
(3) Equipment & management - Over estimation

- Lack of equipment
- Delayed equipment activities
- Poor management
- Climatic conditions (weather)
(4) Environment, - Social and cultural impact

- Site condition out of plan
- Location in the middle of public facility
(5) Changes, - Design changes
The main objectives of the questionnaire were to achieve the research objectives.
It also to obtain the respondents comments or opinions about proposed framework which
was also included in the questionnaire. Details about the questionnaires are described as
follows.
This questionnaire contains five parts:

Part 1
Company information in general.
91
Part 2
Question on the perspectives about management in general. This part contains
three questions with scale important model. The respondents were asked to rank based
on scale of importance; 1 (one) for very important, 2 (two) for important, 3 (three) fairly
important, 4 (four) not too important and 5 (five) least important.
Part 3
The objectives of this part are: to find out in which activities time and cost
overrun problems come out and its major causes in each companies where the
questionnaire be distributed.
Part 4
The objectives of this part are: to find out time management implementation or
current practices in the companies; the time management factors that get less attention to
do by the contractor where in fact, it could be help or should become a solution for the
contractors to reduce the time overrun problems. This part involves two kinds of
question models; first, choosing one accurate answer model and second, making a rank
model based on frequency of occurrence in their company.
Part 5
Objectives of this part are: to find out cost management implementation or
current practices in the companies; the cost management factors that get less attention to
do by the contractor where in fact, it could be help or should become a solution for the
contractors to reduce the cost overrun problems. Beside that in this part the respondents
also ask to give their opinion about the proposed framework that has been design by
researcher based on the theory and the practices in time and cost management from
previous research. So, in this part also involves two kinds of question models; choosing
the accurate answer mode and making a rank mode based on frequency scale of
occurrence in the company.
92
d). Questionnaires Distributions
As stated above in the research sample, the questionnaires were distributed to the
companies identified. Questionnaires were disseminated to:
(i) Class B and M contractors
(ii) Class B and M consultants
Refer to the sample size theory above, a total sample size of 50 as minimum was
taken, where from all the companies registered with INKINDO, GAPEKSINDO and
LPJK. They were chosen randomly where they have to fulfil the certain specification;
for B and M class based on the company’s experience, project value per-year and how
active they are in the project activities for the last year until the present time.
Researcher comes to Padang and Pekanbaru GAPEKSINDO’s office (contractor

organization), INKINDO’s office (consultant organization) and LPJK’s office to ask
about list of company that were included in B and M qualification. Then, researcher
chose randomly the company. Mostly, researcher chose the company that still executing
the project at that time or just finished their project.
The questionnaires were distributed directly by researcher or self administered to

all of the class B and M contractors and consultants in Padang and Pekanbaru. The main
advantage of this method is the researcher can collect all the completed responses within
a short period of time compared with if the questionnaires were sent through mail. Any
doubts that the respondents might have regarding any questions could be clarified
immediately by the researcher. Moreover the researcher could motivate the respondents
to give their honest answers to the questions.
93
e). The Analysis of Data
Data from the questionnaire was analyzed to determine the condition of

Indonesian construction industry in terms of factors that influence time and cost and the
causes of time and cost overruns according to the contractors and consultants.
In this research, the main data was collected or obtained through questionnaire.
The responses in the questionnaires were analyzed by calculate the mean value. Mean
value was used to determine the various factors responsible or be the causes for project
delays and cost overrun. It also was used to determine the various perspectives about the
factors that get less attention to do by the contractor where in fact those factors could be
help or should become a solution to minimize the time and cost overrun problems by the
contractor itself and the consultant.
According to Kennedy and Neville (1986) The Arithmetic Mean is the common
type of average, often referred to simply as the average or mean. The mean is thus the
sum of the observations divided by their number. The mean of a set of empirical data
may be designated as the “point of balance” of the sample data analogous to the centre
in mechanics. The true mean of population is usually denoted by µ. The mean of a
sample is written as x. The values of x and µ become identical when the sample is, in
fact, the total finite population; in such a case either symbol may be used. A simple
example will be given to illustrate some computation.
The Mean is written as :

n
∑ fi . xi
i=1
X = n
∑ fx
j=1
94
Where:
fi = the frequency of any value xi
xi = factors that want to compute
n = the sum of factors
X = The Arithmetic Mean
Where: fx = the sum of the frequency of any value xi
Szulc (1965) refers to this as Weighted Arithmetic Mean. The general equation
for this average is written as follows:
n
∑ wi . xi
I=1
X=
n
∑ xn
j=1
w1 x1 + w2 x2 + w3 x3 + …… + wn xn
X=
x1 + x2 + x3 + …….. + xn
Where:
xi = the particular values of variable or factors
wi = the numbers by which multiply these values. This number called weights.
i = number of factors
n = the sum of the factor
Where: xn = the sum of the particular values of variable or factors
It can be said that The Weighted Arithmetic Mean of variable x is equal to the
sum of the separate values of the variable multiplied by the corresponding weights and
divided by the sum of the weights multiplied by the number of factors. The equation for
Weighted Mean according to Watson et., al., (1993), is the same with Szulc’s (1965)
equation. When we compute the simple arithmetic mean of a set of numbers, we assume
95
that all the observed values are of equal importance, and we give them equal weight in
our calculation. In situations where the numbers are not equally important, we can assign
to each a weight that is proportional to its relative importance and calculate The
Weighted Mean (Watson et., al., 1993). The equation that we used in calculating The
Weighted Mean can be used for calculating frequency weighted. It is basically the same
with the equation above; where it only changes the factors values (xi) with the frequency
values (fi).
From the description above we can conclude that basically the equation of The
Arithmetic Mean from Kennedy and Neville, (1986), Weighted Arithmetic Mean (Szulc,
1965; Sachs, 1984), and The Weighted Mean (Watson, et., al., 1993) are the same; the
differences between them are only in the names and the symbols used in each equation.
There are possible advantages as well as disadvantages to using the arithmetic

mean or often referred to simply as the average or mean equation above (Kennedy and
Neville, 1986).
Some of the advantages are:

¾ The calculations are simpler. The sample statistic is very easy to compute. Most
of the work is in ranking the observations and this can be made easier with
shortcut techniques.
¾ The assumptions are few and not very restrictive. The form of the distributions
needs to be known.
¾ The data may be in ordinal form only.
¾ Real differences in location parameters may be more easily detected. This is
particularly true when the populations’ deviate considerably from normality or
the location parameters are not means.
Some of the disadvantages are:

¾ There may be loss in efficiency. Some information may be sacrificed when the
quantitative nature of the data is replaced by ranks
96
The Mean values for all the delay and cost overrun causes factors were
calculated using mean equation. There are two kinds of rank data model that were
analyzed with this mean equation. First, rank data based on scale of importance. It was
used to determine the various factors responsible or be the causes for project delays
(time) and cost overrun. Secondly, rank data based on scale of frequency occurrence in
the company. It was used to determine the various perspectives about the factors that get
less attention to do by the contractor which also could be the causes for project time and
cost overrun. In fact, those factors could be help or should be a solution to minimize the
time and cost overrun problems by the contractor itself and the consultant.
The mean value between contractors and consultants were calculated separately.
This is because their positions in construction projects are different: one acts as a
planner and the other as an executor of the project. But, at the end, the results were
combined too, to shows the responds from both of them. After mean values is got, each
factor can be put into each grouping which based on the scale that has determined. The
scales as be shown below.
1. Scale for rank data based on scale of importance
Very important/ Important/ Fairly important/ Least important/

Very significant Significant Not too significant Not significant
1 2 3 4 5
2. Scale for rank data based on scale of frequency occurrence

Scale for frequency occurrence with rank data start from 1 (one) to 7 (seven). It
was used to identify the cost management current practices.
Very high occurrence Medium/fairly occurrence Least/ Seldom occurrence
1 2 3 4 5 6 7
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Scale for frequency occurrence with rank data start from 1 (one) to 10 (ten). It
was used to identify the time management current practices.
Very high occurrence High occurrence Fairly occurrence Least occurrence None
1 2 3 4 5 6 7 8 9 10
Analysis results based on the scale grouping in point 1 (one) were interpreted as
the major to the minor causes of time and cost overrun problems. The major to the minor
causes of time and cost overrun were interpreted based on the mean values rank. The
mean values would be rank from the lowest until the highest ones where the lowest
mean value interpreted as the major causes and the highest mean values become the
minor one. To make it clear the scale shows above is to represent the following:
1 – 2 : Very important/ very significant; to indicate that the activities are the major/
very significant causes of the time and cost overrun so, the project manager
have to take care or carried out very well to this factors to avoid its occurred
and cause time and cost overrun problems.
2 – 3 : Important/ significant; to indicate that the activities are the significant causes
of the time and cost overrun and the project manager still have to take care
to this factors occurred and cause time and cost overrun problems.
3 – 4 : Fairly important/ not too significant; to indicate that the activities are include
as the causes of the time and cost overrun but not too significant but the
project manager still have to take care to avoid this causes occurred and
cause the overrun problems.
4 – 5 : Least important/ not significant; to indicate that the activities are also include
as the causes of the time and cost overrun but not significant but the project
manager still have to take care to avoid this causes occurred.
The scale grouping in point (two) were interpreted as the major to the minor
frequency occurrence of the practices that actually should be done by the contractors in
order to minimize the time and cost overrun problems. The major to the minor frequency
occurrence of the practices were interpreted based on the mean values rank. The mean
98
values would be rank from the lowest until the highest ones where the lowest mean
value interpreted as the major or very high occurrence and the highest mean values
become the minor one.
The frequency occurrence scale divide to two parts; firstly, with rank 1 (one) to
10 (ten) for the time management practices and secondly, with rank 1 (one) to 7 (seven)
for the cost management practices. To make it clear the scale shows above is to
represent the following:
¾ Scale for frequency occurrence with rank data start from 1 (one) to 10 (seven) which
was used to identify the time management current practices.
1 – 3 : Very high occurrence; to indicate that the particular activities are most of the
time being carried out well by the contractors.
3 – 5 : High occurrence; to indicate that the particular activities are often being
carried out well by the contractors.
5 – 7 : Fairly occurrence; to indicate that the particular activities are usually being
7 – 9 : Least occurrence; to indicate that the particular activities are seldom being
9 – 10 : Non-occurrence; to indicate that the particular activities are not carried out at
all by the contractors.
¾ Scale for frequency occurrence with rank data start from 1 (one) to 7 (seven) which
was used to identify the cost management current practices.
1 – 3 : Very high occurrence; to indicate that the activities are often being carried out
well by the contractors.
3 – 5 : Fairly occurrence; to indicate that the activities are usually being carried out
5 – 7 : Least occurrence; to indicate that the activities are seldom being carried out
99
Based on those analysis results, the researcher also proposed a framework for
conducting activities in order to reduce time and cost overrun problems as implemented.
Besides the scale grouping, this data analysis also used statistic descriptive methods.
This method gives explanation or description of data for each factor shown by
tabulation, how much mean value and so on.
Results of this survey data analysis means had been helped researcher in
achieving half of the objectives of this research. Another half of objective was achieved
through the literature reviews or theories synthesizing where in this research it was be
the second objective.
f). Discussion of Analysis Results
This part, discusses the analysis results that were achieved from this research.
Refer to objectives of this survey, the researcher found out about the current practices of
time and cost management and the causes of the time and cost overruns problems. Then,
researcher would do comparison between the current practices of time and cost
management in construction projects in Padang and Pekanbaru against “the theoretical
framework”. “The theoretical framework” was produced based on the theories and other
countries practices to minimize problems of time and cost overrun (refer to chapter 4).
Refer to the comparison results, researcher will come out with a new framework
(developed framework) that will be used in managing time and cost in construction
projects in Padang and Pekanbaru where this framework could help in order to minimize
time and cost overruns problems.
CHAPTER 6
THE MAJOR CAUSES OF TIME AND COST OVERRUN
6.1 Introduction
One of objectives of this study is to identify the major causes of time and cost
overrun in low - rise projects in Padang and Pekanbaru. This chapter discusses the
analysis considers the issues from 3 (three) perspectives; contractor’s, consultant’s
and combined.
6.2 The Major Causes of Project Time and Cost Overrun in Padang and
Pekanbaru
As highlighted earlier one of objectives of this study is to ascertain the major

causes of time and cost overrun in projects in Padang and Pekanbaru. The survey
requires the respondent to give them perspectives on the significant of the causes of
cost and time overrun according to liker scale 1 – 5. The scales represent the
significance of each cause of time and cost overrun.
The mean value between contractors and consultants were calculated

separately (refer to the research methodology in Chapter 5) to describe the activities
and factors that cause time and cost overrun as reported by consultants and
contractors. This is because their positions in construction projects are different: one
acts as a planner and the other as an executor of the project. But, at the end, the
101
results were combined too, to shows which factors or causes exactly that had much
influence on project performance and cause time and cost overrun in many
Indonesian construction projects based on the responds from both of them.
The mean values for each factors that have got, will be rank from the lowest
until the highest ones. Then, those factors will be put into each grouping based on
the importance scale that has determined (refer to methodology part). The
importance scale to the activities and factors that cause time and cost overrun as
reported by consultants and contractors will be ranking from 1 (one) to 5 (five)
importance scale. The scales as be shown below.
Very important/ Important/ Fairly important/ Least important/

Very significant Significant Not too significant Not significant
1 2 3 4 5
6.2.1 Contractor’s Perspectives
The result of the survey is tabulated as shown in Table 6.1.
Table 6.1 Mean value of the major factors that cause of time and cost overrun
problems – contractor’s perspectives
No. Activity Categories The causes Mean Mean
1 Environment Site condition out of plan 4.3269
Social condition 2.1635
Location in the middle of public facilities 2.1635
2.8846
2 Equipment and Management Over estimation 4.6703
Lack of equipment 2.3352
Delayed activities 2.3352
Weather 4.6703
Poor management 2.3352
3.2692
3 Material Late in delivery 4.0055
Limited stocks 2.6703
Transportation problem in delivery 2.6703
3.1154
4 Manpower/ Labour Limited skilled labour 2.4615
Lack of labour 1.2308
1.8462
5 Changes Design changes 3.8846 3.8846
102
Table 6.1 shows the significance of each cause of time and cost overrun for
construction projects. It shows that the mean value of the level of significance ranges
from 1.2308 to 4.6703. Table 6.2 shows the breakdown of the causes of time and cost
overrun according to the level significance.
Table 6.2 Time and cost overrun major causes and it activity categories based on the
importance scale – contractor’s perspectives
Very Important Fairly Least important
important important
Labour Environment Changes Environment
- Lack of labour - Social condition - Design changes - Site condition out of
- Location in the middle of public plan
facilities Equipment management
Equipment & management - Over estimation
- Lack of equipment - Weather
- Delayed activities Material
- Poor management - Late in delivery
Material
- Limited stocks
- Transportation problem in delivery
Labour
- Limited skilled labour
Analysis results based on the mean values and the importance scale grouping
above were interpreted as the major to the minor causes of time and cost overrun
problems. The mean values would be rank from the lowest until the highest ones
where the lowest mean value interpreted as the major causes and the highest mean
values become the minor one. The rank is as shown in Table 6.3.
103
Table 6.3 The rank of the causes of time and cost overrun based on the mean values
– contractor’s perspectives
The causes of time & cost overrun The mean values
1. Lack of labour 1.2308

2. Social condition 2.1635
3. Location in the middle of public facilities 2.1635
4. Lack of equipment 2.3352
5. Delayed activities 2.3352
6. Poor management 2.3352
7. Limited skilled labour 2.4615
8. Limited stocks 2.6703
9. Transportation problem in delivery 2.6703
10. Design changes 3.8846
11. Late in delivery 4.0055
12. Site condition out of plan 4.3269
13. Over estimation 4.6703
14. Weather 4.6703
Table 6.3 above shows that the mean values of each cause do not different
much and most of them are in the important scale. It means that in the contractor’s
perspectives all those causes are truly as the causes of time and cost overrun
problems. It also indicated that most of the activities are the important/ significant
causes that cause the time and cost overrun problems and the project manager still
have to take care and avoid to this factors occurrence. Like has been stated before the
results based on the mean values and the importance scale grouping above were
interpreted as the major to the minor causes of time and cost overrun problems.
6.2.2 From Consultant’s Perspectives
The result of the survey according to consultant’s perspectives is tabulated as

shown in Table 6.4.
104
Table 6.4 Mean value of the major factors that cause of time and cost overrun
problems – consultant’s perspectives
The Mean per-
No. Activity Categories The Causes Causes Activities
Mean Categories
1 Environment Site condition out of plan 2.0667
Social condition 2.0667
Location in the middle of public facility -
2.0667
2 Equipment and Management Over estimation 1.3429
Lack of equipment 1.3429
Delayed activities 1.3429
Weather -
Poor management 1.3429
1.3429
3 Material Late in delivery 1.1622
Limited stocks 1.1622
Transportation problem in delivery 1.1622
1.1622
4 Manpower/ Labour Limited skilled labour -
Lack of labour 1.375
1.375
5 Changes Design changes 1.2727 1.2727
Results in Table 6.4 show the activity categories and its causes mean values
according to consultant’s perspectives. Then, based on that mean values those
factors/ causes will be put into each grouping based on the importance scale that has
been determined before. The complete results of the factors that cause of time and
cost overrun and its activity categories based on the importance scale will show in
Table 6.5.
105
Table 6.5 Time and cost overrun major causes and it activity categories based on the
importance scale – consultant’s perspectives
Very important Important Fairly Least
important important
Labour Environment - -
- Lack of labour - Site condition out of plan
- Limited skilled labour - Social condition
Equipment & management - Location in the middle of public
- Over estimated facilities
- Lack of equipment
- Delayed activities
- Weather
- Poor management
Material
- Late in delivery
- Limited stocks
- Transportation problem in delivery
Changes
- Design changes
The importance scale grouping based on the mean values above were
interpreted as the major to the minor causes of time and cost overrun problems. The
mean values would be rank from the lowest until the highest ones where the lowest
mean value interpreted as the major causes and the highest mean values become the
minor one. The mean values rank for each causes that cause time and cost overrun in
contractor’s perspectives shown in Table 6.6.
– consultant’s perspectives
The causes of time & cost overrun The mean values

11. Site condition out of plan 2.0667
12. Location in the middle of public facility -
13. Weather -
14. Limited skilled labour -
106
Results in Table 6.6 above show the major to the minor factors that cause the
time and cost overrun based on the mean values ranking according to consultant’s
perspectives. It can show that the mean values of each cause do not different much
and most of them are in the very important scale. It means that in the consultant’s
perspectives all those causes are truly as the causes of time and cost overrun
problems. It also indicated that most of the activities are in the very important/ very
significant causes that cause the time and cost overrun problems and the project
manager have to take care and avoid to this factors occurrence. For the factors that
did not have the mean values it means that in the consultant’s perspectives those
factors are not be the cause of time and cost overrun.
6.2.3 Combination of the Two Perspectives
In achieving the objectives of this research to identify the major causes of the
time and cost overrun, the mean values were calculated from the individual time and
cost overrun causes. Therefore, the mean values from both of the respondents were
combined and then do calculation for the mean “average”. Based on the mean
“average” values, each cause would be rank from the lowest or the very important to
the lowest or the least one. This ranking also made it possible to cross-compare the
importance of the variable as seen by the different groups.
Table 6.7 will shows the summarized mean values for each cause, and its
mean “averages” as perceived by contractors and consultants.
107
Table 6.7 The major factors that causes of time and cost overrun problems as
perceived by contractors and consultants
Contractors Consultant “Average”
Factors Categories Mean Mean Mean
Environment
Location condition out of estimated 4.3269 2.0667 3.1968
Social condition 2.1635 2.0667 2.1151
Location in the middle of public facility 2.1635 - -
Equipment and management
Over estimation 4.6703 1.3429 3.0066
Lack of equipment 2.3352 1.3429 1.8391
Delayed activities 2.3352 1.3429 1.8391
Weather 4.6703 - -
Poor management 2.3352 1.3429 1.8391
Material
Late in delivery 4.0055 1.1622 2.5839
Limited stocks 2.6703 1.1622 1.9163
Transportation problem in delivery 2.6703 1.1622 1.9163
Manpower/ Labour
Limited skilled labour 2.4615 - -
Lack of labour 1.2308 1.3750 1.3029
Additional works
Design changes 3.8846 1.2727 2.5787
The interpretation about the major or the very significant to the minor or not
significant causes of the time and cost overrun based on the mean values rank as
perceived by contractor’s and consultant’s perspectives will describe in Table 6.8
below. The lowest mean value interpreted as the major causes and the highest mean
value becomes the minor one.
108
as perceived by contractors and consultants
Causes categories “Average” Mean
11. Location condition out of estimated 3.1968
12. Location in the middle of public facility -
13. Weather -
14. Limited skilled labour -
Table 6.8 above has shown that the smallest to the highest mean values for
the very important to the least important causes of time and cost overrun. The rank
shows which factors or causes that had much influence until the minor one on project
performance and it cause time and cost overrun in many construction projects in
Padang and Pekanbaru.
It also show that the mean values of each cause do not different much and
most of them are in the very important and important scale. It indicated that most of
the activities are in the very important/ very significant causes that cause the time
and cost overrun problems and the project manager have to take care and avoid to
this factors occurrence. It means that from both groups of respondent’s perspectives
all those causes are truly as the causes of time and cost overrun problems. For the
factors that did not have the mean values it means that in their (contractors and
consultants) or only from one of them perspectives those factors are not be the cause
of time and cost overrun.
To support the result on time and cost overrun cause, the reasons were
identified for all the factors from both groups of respondents (contractors and
consultants) and it is almost the same. They are as follows:
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• In project field preparation, most of the problems come from the community
around the project location that did not support the project performance and
project location exists in the middle of public facility.
• Design did not match with field situation. When design changes happen, there is
an additional/ addendum work; extra work means extra time.
• Material supply depends on weather condition, inadequate stock of material in
the market and transportation problem to bring material to market location. This
results in delaying the supply of material and delaying project performance.
• Technical problems in construction activities such as equipment problem, labour
job description and the scheduled works.
6.3 Conclusions
Based on the survey on the condition of Padang and Pekanbaru construction

projects, a good method/ practices is needed to manage the project from estimating
phase, during construction process or performance until project goals are achieved in
order to minimize the time and cost overruns. It can be seen from the descriptions in
Table 6.1 to Table 6.8 where time and cost overrun occur because of the environment
activities, equipment and management activities, changes activities, material
activities and manpower/ labour with all the causes for each activity during
construction process in achieving the goals. Those tables also reveal that the causes
of time and cost overrun between contractors and consultants are almost the same,
and in fact it occurs more with contractors as project executor.
CHAPTER 7
TIME AND COST MANAGEMENT:

A COMPARISON BETWEEN THE “THEORETICAL FRAMEWORK”
7.1 Introduction
We have already identified the major causes of time and cost overrun in
construction projects in Padang and Pekanbaru. This chapter discusses the third
objective of this research i. e comparing the theoretical framework of time and cost
management with that current practice by contractors and consultants in Padang and
Pekanbaru.
The discussion is divided into two parts; firstly, it looks into the overall
practice of project management based on the framework developed in chapter 4. The
second part, considers the performance of the various remedial activities in the
construction time and cost management.
7.2 The Comparison between the Current Practice and the Theoretical
Framework
In order to achieve the third objective of this study, a survey was carried out
to establish the current time and cost management as practiced by the contractors and
consultants in Padang and Pekanbaru. The survey was based on the management
111
framework developed in chapter 4 (see Figure 4.6). The result of the survey is then
compared to the management model or framewok. It is to establish the differences
between the framework that adopted by the contractors and consultants in Padang
and Pekanbaru and the “theoretical best management” practice.
The time and cost management framework as shown by Figure 4.6 was
produced by reviewing and synthesizing the work of several researchers and experts
on this subject. The proposed framework reproduced here in Figure 7.1 forms the
basis for this survey. That framework shows that, the entire step almost the same
with the other existing theoretically framework (refer to Fig. 4.2, Fig. 4.3, Fig. 4.4
and Fig. 4.5 in Chapter 4), which was reviewed but sometimes several process or
procedure, not carried out efficiently and effectively.
112
Compare Actual Identification Goals

PLAN ORGANIZE CONTROL Feedback
Achieving with Deviation/ Problems Achievement
Planning
Major Activities
Identification things Identify: - Schedule Check through the Analyze cause of - Efficiency
that have related - Job Description - Activities report: Deviations - Effectiveness Sub Activities
with time and cost - Activities - Cost/Account - Schedule Activities - On Time
management - Resources - Qualities - Equipment - Within Budget
- Activities
- Purchasing Organize:
- Team Works Instrument/Tools: Analyze It
- Equipment
- Suitable/ Match - Software
with planning - CPM
- S Curve
b. Group in :
- Categories
- Item - Daily
- Monthly
Fig. 7.1 The proposed framework for survey (it was included in the questionnaire) which developed based on the theory and the practices
112
113
The survey indicated that most contractors and the consultants adhere or
follow most of the steps shown on the framework but there are several processes or
procedures that are not carried out efficiently and effectively. The responds of the
respondent’s is shown in Figure 7.2 below. It shows the activities that are not carried
out or not implemented in very comprehensive manner.
Most of the respondents pointed out that sometimes facts in the project site do
not suit with the estimated time and cost and having a fixed framework will not solve
the problems. Therefore, the framework should be appropriate with the project site
condition because nowadays most of the project executor still uses the past
experience as a basis to avoid or reduce problems on the project site i.e. to avoid or
reduce time and cost overrun. The contractors and the consultants acknowledged that
they have their own way to solve the overrun problems.
Compare Actual
PLAN CONTROL Achieving with Identification Feedback Goals
ORGANIZE
planning Deviations/Problems Achievement
Major Activities
Identification things Identify: - Schedule Check through the Analyze cause of - Efficiency
that have related - Job Description - Activities report: - Effectiveness Sub Activities
with time and cost Deviations
- Activities - Cost/Account - Schedule Activities - On Time
management - Resources - Qualities - Equipment - Within Budget
- Activities
- Purchasing Organize:
- Team Works Instrument/Tools:
- Equipment Analyze It
With Planning - CPM
- S Curve
b. Group in :
- Categories
Group of activities that have not been
- Item - Daily
implemented in comprehensive manner by
the contractors according to both of
- Monthly
respondents (contractors and consultants)
Fig. 7.2 The survey results about the proposed framework
114
115
The survey shows that majority of respondent i. e contractors and consultants

have failed to properly carried out activities under two headings; (1) compare actual
achievement with planning and (2) identification of deviations/ problems. This
happen because most of the project executor uses past experience as a basis to avoid
or reduce problems at this stage.
The survey also revealed that the source of the problem of time and cost
overrun is in the two main activities. Therefore, it is important to give for them
emphasis on the two stage i. e compare actual achievement with planning and
identification deviations/ problems until the remedial action stages.
For this purpose, a detaile study was carried out to establish the extent of the
performance of the activities under the two headings. It is based on the following
components or activities.
TIME MANAGEMENT:
- To make sure all of the activities appropriate with the time schedule
- To determine activity strategy/ work program
- To discipline to the time schedule
- To plan & control work time
- To determine the causes of delay
- To analyze the causes of delay
- To coordinate the persons who involved and to reschedule the project performance
- To analyze all of the work has appropriated with the time schedule
- To plan the solution to overcome the delay
- To do coordination about planning, scheduling and projecting progress in regular
time
COST MANAGEMENT:
- Finding the alternative solutions to overcome the cost overrun
- Analyzing project financial
- Determining the potential activities to reduce the cost overrun risks
- Controlling budget in all of activities and make the correction soon if there is a
problem
116
- Making sure the financial budget appropriate with the cost estimated
- Analyzing the activity that always suffers by cost overrun
- Controlling for project budget
7.3 The Extent of Performance of Activities for Time and Cost Management
7.3.1 Time Management
The survey on the performance of activities associated with time management

was carried out based on the following scale:
Very high occurrence High occurrence Fairly occurrence Least occurrence None
1 2 3 4 5 6 7 8 9 10
The study looks into the performance of these activities from three perspectives:
a). Consultant’s perspectives
b). Contractor’s perspectives
c). Combination of the two perspectives (Consultant’s and contractor’s
perspectives)
a). Consultant’s Perspectives
The results of the survey based on consultant’s perspectives tabulated in

Table 7.1. The table shows the mean value for each component of the questionnaires.
117
Table 7.1 The current practices of time management by the contractors –

Mean
No. Factors value
1 Determine activity strategy/ work program 8.6667
2 Plan & control work time 6.8333
3 Determine the causes of delay 5.1667
4 Analyze the causes of delay 4.8333
5 Plan the solution to overcome the delay 4.1667
6 Make sure all of the activities are appropriate with the time schedule 5.1667
7 Analyze all of the work is appropriated with the time schedule 4.6667
8 Coordinate planning, scheduling and projecting progress in regular time 5.25
9 Coordinate the people involved, to reschedule the schedule of project field 4.25
10 Keep to the time schedule 6
The mean values in Table 7.1 shows that the smallest to the highest or the
very high occurrence to non-occurrence practices based on the mean values. It shows
that the mean value of the level of occurrence ranges from 4.1667 to 8.6667. Table
7.2 shows the breakdown of the current practices of time management by the
contractors according to the consultant’s perspective according to the level of
frequency occurrences.
Table 7.2 The current practice of time management by the contractors based on the
frequency occurrence scale – consultant’s perspective
Very high High occurrence Fairly occurrence Least occurrence None
occurrence
- - Plan the solution to - Determine the causes of Determine activity -
overcome the delay delay strategy/ work
- Coordinate the people - Make sure all of the program
involved, to reschedule the activities are appropriate
schedule of project field with the time schedule
- Analyze all of the work is - Coordinate planning,
appropriated with the time scheduling and projecting
schedule progress in regular time
- Analyze the causes of - Keep to the time schedule
delay - Plan & control work time
118
Refer to the results in Table 7.2 above, it show that most of the time
management current practices by the contractors are in the high occurrence and the
fairly occurrence scale. The high occurrence means that the particular activities are
often being carried out well by the contractors and the fairly occurrence means that
the particular activities are usually being carried out well by the contractors. Only
one the time management current practices that include into the least occurrence
scale where it means the particular activities are seldom being carried out well by the
project manager. There is no factors was in very high occurrence and the non-
occurrence scale. In the consultant’s perspectives the contractors actually are
expected to consider all of these practices in order to minimize the time overrun
causes, so, all the factors should be are in the level very high occurrence.
b). Contractor’s Perspectives
The same questions and the way of analysis on the time management as
currently practiced by the contractors above were also given to the contractors as a
comparison and validation of the consultant’s opinion about them. The mean values
were also calculated too from theirs own perspectives. The results are described in
table 7.3 below:
Table 7.3 The current practices of time management by the contractors –

– Contractor’s own perspectives
No. Factors Mean
Value
1. Determine activity strategy/ work program 4.4333
2. Plan & control work time 3.4167
3. Determine the causes of delay 2.5833
4. Analyze the causes of delay 2.4167
5. Plan the solution to overcome the delay 2.0833
6. Make sure all of the activities appropriate with the time schedule 2.5833
7. Analyze all of the work has appropriated with the time schedule 2.3333
8. Coordinate planning, scheduling and projecting progress in regular time 2.625
9. Coordinate the people involved and to reschedule the project site 2.125
10. Keep to the time schedule 3.0
119
That result highlights the contractor’s own perspectives on time management

current practices. It shows that the mean value of the level of occurrence ranges from
2.0833 to 4.4333. Table 7.4 below will shows the complete results of the breakdown
of the current practices of time management by the contractors according to their
own perspectives based on the level of frequency occurrences.
Table 7.4 The current practice of time management by the contractors based on the
frequency occurrence scale – Contractor’s own perspectives
Very high occurrence High occurrence Fairly Least None
occurrence occurrence
- Plan the solution to overcome the delay - Keep to the time - - -
- Coordinate the people involved, to schedule
reschedule the schedule of project - Plan & control work
- Analyze all of the work is appropriated time
with the time schedule - Determine activity
- Analyze the causes of delay strategy/ work
- Determine the causes of delay program
- Make sure all of the activities are
appropriate with the time schedule
- Coordinate planning, scheduling and
projecting progress in regular time
Refer to the results in Table 7.4 above, it show that most of the time
management current practices by the contractors according to their own perspectives
are in the very high occurrence and some in the high occurrence scale. The very high
occurrence means that the particular activities most of the time being carried out well
by them and the high occurrence means that the particular activities are often being
carried out well by them. There is no factors was fairly occurrence, least occurrence
and the non-occurrence scale. So, based on the contractors own perspectives they
already consider and carried out most of the practices in the properly way as
theoretically and the consultant’s perspectives about them could said not fully valid.
120
c). Combination of the Consultant’s and Contractor’s Perspectives
The mean values above have gave a clear description of the current practices
of time management by the contractors based on consultants and contractor’s own
perspective.
In order to identify the current practices for the time management, same as
with the way of analysis to identify the causes time and cost overrun, the mean
values of each of the perspective’s categories was calculated from the “average” of
the individual perspectives. Therefore, the mean values from both of the respondents
were combined and then do calculation for the “average”. Based on the “average”
values, the rank was given for each perspective from the lowest to the highest one.
This ranking also made it possible to cross-compare the relative importance of the
variable as seen by the different groups. Table 7.5 below will shows the summarized
mean values and the mean “averages” for those factors as perceived by contractors
and consultants.
121
Table 7.5 Mean values and the “average” for the current practices in time
management by the contractors as perceived by contractors and consultants
Contractor Consultant Mean
Factors Mean Mean “Average”
Values Values
To determine activity strategy/ work 4.3333 8.6667 6.5
program
To plan & control work time 3.4167 6.833 5.1249
To determine the causes of delay 2.5833 5.1667 3.875
To analyze the causes of delay 2.4167 4.8333 3.625
To plan the solution to overcome the delay 2.0833 4.1667 3.125
To make sure all the activities appropriate 2.5833 5.1667 3.875

with the time schedule
To analyze all the work is appropriated 2.3333 4.6667 3.5

with the time schedule
To coordinate planning, scheduling and 2.625 5.25 3.9375

projecting progress in regular time
To coordinate the people involved and to 2.125 4.25 3.1875

reschedule the project performance
To keep to the time schedule 3.0 6.0 4.5
The mean values rank from the lowest to the highest as perceived by the
contractor’s and consultant’s perspectives above will show in Table 7.6.
122
Table 7.6 The rank of the current practices in time management by the contractors
based on mean values “average” as perceived by the contractors and consultants
Mean Values
Factors
“Average”
1. To plan the solution to overcome the delay 3.125
2. To coordinate the people involved and to reschedule the project performance 3.1875
3. To analyze all the work is appropriated with the time schedule 3.5
4. To analyze the causes of delay 3.625
5. To determine activity strategy/ work program 3.875
6. To make sure all the activities appropriate with the time schedule 3.875
7. To coordinate planning, scheduling and projecting progress in regular time 3.9375
8. To keep to the time schedule 4.5
9. To plan & control work time 5.1249
10. To determine activity strategy/ work program 6.5
Based on the mean values “average” as perceived by contractors and

consultants for the current practices of time management by the contractors above,
Table 7.7 below will shows the complete results of those factors grouping based on
the frequency occurrences scale.
123
Table 7.7 The current practices of time management by the contractors based on the
frequency occurrence scale as perceived by the contractors and consultants
Very high High occurrence Fairly occurrence Least None
- - To plan the solution to overcome the - To plan & control - -
delay work time

- To coordinate the people involved and - To determine activity
to reschedule the project performance strategy/ work
- To analyze all the work is program
appropriated with the time schedule

- To analyze the causes of delay
- To determine activity strategy/ work
program
- To make sure all the activities
appropriate with the time schedule
- To coordinate planning, scheduling
and projecting progress in regular
time
- To keep to the time schedule
Refer to the results in Table 7.7 above, it shows that most of the time
management as currently practiced by the contractors as perceived by the contractors
own perspectives and consultants perspectives are in the high occurrence scale. The
high occurrence means that the particular activities are often being carried out well
by the contractors. There is no factors was in very high occurrence, the least
occurrence scale and the non-occurrence scale. So, it appears that most of the
contractors still have low consideration and ability to consider and give attention to
all of these practices. It shows through the mean values of each practice do not
different much and it also because of all of the factors are in the high occurrences
scale and not in the very high scale.
124
7.3.2 Cost Management
The survey on the performance of activities associated with cost management

was carried out based on the following scale:
Very high occurrence Medium/fairly occurrence Least/ Seldom occurrence
1 2 3 4 5 6 7
The study looks into the performance of these activities from three
perspectives:
a). Consultant’s perspectives
b). Contractor’s perspectives
c). Combination of the two perspectives (Consultant’s and contractor’s
perspectives)
a). Consultant’s Perspectives
The result of the survey by calculating the mean values for the cost
management as currently practices by the contractors according to the consultant’s
perspectives shows in Table 7.8.
Table 7.8 The current practices of cost management by the contractors –

No Factors Mean
Value
1. Controlling project budget 3.9167
2. Controlling budget in all activities and make the correction as soon as there is 4.4167
a problem
3. Analyze project finance 4.25
4. Make sure the financial budget is appropriate with the cost estimated 3.75
5. Analyze the activity that always suffers due to cost overrun 4.0
6. Find the alternative solutions to overcome the cost overrun 3.5833
7. Determine the potential activities to reduce the cost overrun risks 4.0833
125
Table 7.8 above have shown the smallest to the highest mean values for the
current practices of cost management by the contractors according to the consultant’s
perspectives. It shows that the mean value of the level of occurrence ranges from
3.5833 to 4.4167. That mean values would help in determining the frequency
occurrences scale for each practice. Table 7.9 below will show the complete results
of it.
Table 7.9 The current practice of cost management by the contractors based on the
frequency occurrence scale – consultant’s perspective
Very high Fairly occurrence Least occurrence
occurrence
- - Find the alternative solutions to overcome the cost overrun -
- Make sure the financial budget is appropriate with the cost estimated
- Controlling project budget
- Analyze the activity that always suffers due to cost overrun
- Determine the potential activities to reduce the cost overrun risks
- Controlling budget in all activities and make the correction as soon as
there is a problem
- Analyze project finance
Refer to the results in Table 7.9 above, it show that all of the cost
management current practices by the contractors are in the fairly occurrence scale.
The fairly occurrence means that the activity are usually being carried out well by
them. There is no factors was in very high occurrence and the least occurrence scale.
It means, those practices according to the consultant’s perspectives are not being
b). Contractor’s Perspectives
The same questions and analysis on cost management as currently practiced by

the contractors were also posed to the contractors as a comparison and validation of
the consultant’s opinion about them. Table 7.10 below shows the results.
Table 7.10 The current practices of cost management by the contractors –

– Contractor’s own perspectives
126
No Factors Mean
Value
2. Controlling budget in all activities and make the correction as soon as there is 3.606
a problem
4. Make sure the financial budget is appropriate with the cost estimated 3.02
The frequency occurrences scale complete results for each factor based on the
mean values above will show in Table 7.11.
Table 7.11 The current practice of cost management by the contractors based on the
frequency occurrence scale – Contractor’s own perspectives
Very high Fairly occurrence Least
- - Make sure the financial budget is appropriate with the cost estimated -
- Find the alternative solutions to overcome the cost overrun
- Controlling budget in all activities and make the correction as soon as there is a
problem
Refer to the results in Table 7.11 above, it show that all of the cost
management current practices by the contractors according to their own perspectives
are in the fairly occurrence scale. The fairly occurrence means that the activity are
usually being carried out well by them. There is no factors was in very high
occurrence and the least/ seldom occurrence scale. So, it appears that in contractor’s
own perspective, they realize that most of them still have low consideration and
ability to consider and give attention to all of these practices. It also appears that the
consultant’s perspectives about them could say fully valid because the survey and
127
analysis results are the same; all of the factors are in the fairly occurrences scale and
not in the very high scale.
c). Combination of the Consultant’s and Contractor’s Perspectives
The identification and the analysis of the current practices of cost

management as perceived by the two respondents were also done in the same way as
the current practices of time management. The values for the contractors as well as
the consultants were combined. Table 7.12 below shows the summarized of the mean
values and the mean “Averages” as perceived by contractors and consultants.
Table 7.12 Mean values and the “average” for the current practices in time
management by the contractors as perceived by contractors and consultants.
Contractor Consultant
Factors Mean “Average”
Mean Values Mean Values
1. Controlling project budget 4.3515 3.9167 4.1341
2. Control budget in all activities and

make the correction as soon as 3.606 4.4167 4.0114
there is a problem
3. Analyze project finance 4.6235 4.25 4.4368
4. Make sure the financial budget

appropriate with the cost 3.02 3.75 3.3850
estimated
5. Analyze the activity that always 3.903 4.0 3.9515

suffers due to cost overrun
6. Find the alternative solutions to 3.067 3.5833 3.3252

overcome the cost overrun
7. Determine the potential activities

to reduce the cost overrun risks 3.365 4.0833 3.7242
The mean values rank from the lowest to the highest as perceived by
contractor’s and consultant’s perspectives above will show in Table 7.13 below.
128
Table 7.13 The rank of the current practices in time management by the contractors
based on mean values “average” as perceived by the contractors and consultants.
Mean Values
Factors
“Average”
2. Make sure the financial budget appropriate with the cost estimated 3.3850
5. Control budget in all activities and make the correction as soon as there is a problem 4.0114
Based on the mean values “average” as perceived by contractors and

consultants for the current practices of cost management by the contractors above,
Table 7.14 below will shows the complete results of those factors grouping based on
the frequency occurrences scale.
Table 7.14 The current practices of cost management by the contractors based on the
frequency occurrence scale as perceived by the contractors and consultants
Very high Fairly occurrence Least
- - Make sure the financial budget is appropriate with the cost estimated -
- Find the alternative solutions to overcome the cost overrun
- Controlling budget in all activities and make the correction as soon as there is a
problem
Refer to the results in Table 7.14 above, it shows that all of the cost
management as currently practiced by the contractors as perceived by the contractors
own perspectives and consultants perspectives are in the fairly occurrence scale. The
fairly occurrence means that the activity are usually being carried out well by them
129
by the contractors. There is no factors was in very high occurrence and the least/
seldom occurrence scale. So, as perceived by the two of respondent perspectives
(contractors and consultants), it appears that most of the contractors still have low
consideration and ability to carried out these practices because as stated before all of
the factors are in the fairly occurrences scale and not in the very high scale.
7.4 Discussions of Framework Development
Based on the literature review and the survey results on the condition of
construction projects current practices in Padang and Pekanbaru, a framework is
needed to manage the project from estimation phase, during construction process or
performance until project goals are achieved in order to minimize the time and cost
overruns. It can be seen from the descriptions in the previous analysis (refer to
chapter 6) where time and cost overrun problems occur in preparation activities,
construction activities, additional work, material stocks activities and labour during
construction process and additional works (during construction process in achieving
the goals). The analysis also reveals that the causes of time and cost overrun between
contractors and consultants are almost the same, and in fact it occurs more with
contractors as project executor.
The proposed management framework which included in the questionnaires

also received some comments from the respondents. Most of the respondents agree to
develop a framework for construction projects in Padang and Pekanbaru in order to
help in coordinating and communicating with members in the construction process.
By developing the proposed management framework a guideline or stages that have
to be followed according to their responsibility in managing time and cost can be
developed.
The statement above was also supported by previous research in Singapore

and Hong Kong, conducted by Saram and Ahmed (2001). The research indicated that
identifying strategic activities and potential delays and ensuring the timeliness of all
works are the most important activities. Conducting regular meetings and project
130
reviews and analyzing the project performance, detecting variances and dealing with
their effects appear to be the most time-consuming activities. But, all of those things
have to be done in order to reduce time and cost overrun problems in construction
projects.
Based on the survey results and the literature reviews related to this research,
a framework for managing time and cost in term to minimize the time and cost
overrun was developed.
Basically, the development of the proposed framework was based on the

respondent responds about the proposed framework through questionnaires as shown
in Figure 7.2 above. The respondent’s responds about the time and cost overrun
causes as shown by the analysis results in chapter 6 would be used as reference in the
development of the proposed framework in order to minimize the time and cost
overrun. The consultants’ and the contractors’ perspectives about time and cost
management current practices in Padang and Pekanbaru were used as reference in
developing the framework as an alternative solution in remedy activities to minimize
time and cost overrun problems in the construction projects. These perspectives
supported by the practices in several countries such as in Japanese construction
projects, which was reviewed from the previous research (refer to chapter 4). Figure
7.3 and 7.4 below will illustrate the development of that proposed framework for
construction projects in Padang and Pekanbaru.
131
Compare Actual
CONTROL Achieving with Identification Feedback Goals
PLAN ORGANIZE
Deviations/Problems Achievement
Planning
Major Activities
Identification things Identify: - Schedule Check through the report: Analyze cause of - Efficiency
that have related with - Job Description - Activities - Schedule Activities - Effectiveness Sub Activities
Deviations
time and cost - Activities - Cost/Account - Equipment - On Time
management - Resources - Qualities - Work progress - Within Budget
- Time Schedule - Document - Change Order/Work - Qualitative/As
- Cost/Budget - Resource - Accounting Plan of the Specified/Standard
- Equipment Corrective
- Activities
- Purchasing Organize: Analyze It
- Team Works Instrument/Tools:
- Equipment
With Planning - CPM
- S Curve
b. Group in :
- Categories
- Item - Daily
- Resources - Weekly * Describe clearly in
- Monthly Figure 7.4 below
Fig. 7.3 The developed framework for construction project in Padang and Pekanbaru based on the responds of the respondents to the proposed
framework which was included in the questionnaire
132
132
Plan of the
Identification Analyze cause of Corrective Implementation of
Deviations Actions Corrective Actions
Deviations/Problems
a. Which phase are b. What are the causes?

mostly happen time Time Overrun:
and cost overrun? Cost Overrun :
- To make sure all of the activities - Finding the alternative solutions
- The things that exceeded appropriate with the time to overcome the cost overrun
the estimated schedule - Analyzing project financial
- Lack of equipment - To determine activity strategy/ - Determining the potential
Construction activities work program
- Delayed activities activities to reduce the cost
- Weather - To discipline to the time overrun risks
- Poor management schedule - Controlling budget in all of
Preparation activities - To plan & control work time activities and make the
- To determine the causes of delay correction soon if there is a
- Condition out of - To analyze the causes of delay problem
Additional works estimated - To coordinate the persons who - Making sure the financial budget
- Social condition involved and to reschedule the appropriate with the cost
Material stocks - Location in the middle of project performance estimated
activities public facility - To analyze all of the work has - Analyzing the activity that
appropriated with the time always suffers by cost overrun
schedule - Controlling for project budget
Labour - To plan the solution to overcome
- Changes design
the delay
- To do coordination about
- Late in delivery planning, scheduling and
- Limited stocks projecting progress in regular
- Transportation problem time
in delivery
- Limited skilled labour

- Lack of labour
Fig. 7.4 The Detail of the developed framework for Construction Project in Padang and Pekanbaru
133
134
As said before, the proposed framework is developed based on the survey

results (through questionnaires responds), they are; the factors that causes the time
and cost overrun, the proposed management framework itself which was used to
capture the respondents’ opinion about the need of the framework in managing time
and cost, and consultant’s and contractor’s perspective as an input for the solutions in
remedy activities to reduce time and cost overrun problems in the construction
projects.
The following explanations are about the detailed of the development of the
framework as illustrated in Figure 7.4 above. It will explain about several practices
for the corrective actions in order to minimize the time and cost overrun causes. This
explanation will combine with the findings about the practices in other countries
based on previous research by several researcher and the literature review findings
from books and journal in the previous chapter. The explanations are as follows:
1. Suggested solutions for construction activities
a. The items that are over estimated; delayed activities; and poor management.
In general the trade off analysis process in project management system step
by Sunny and Kim (1992) is adopted to solve the over estimated, delayed
activities and poor management problem. Alternative solutions for this
problem are more to evaluate the organization management strategy by
having good communication and coordination between the project team
personnel like Japanese construction practices in identifying problems and
solving them. Besides the organization management strategy minimizes the
lost production time by increasing the productivity of labour, equipment and
resource. This also helps in reducing the time-overrun risks (delayed). Those
alternative solutions identified are based on the practices through the
literature reviews findings and the survey results.
b. Lack of equipment.
When an equipment conflict does occur during construction process such as
lack of equipment and it causes delay (time overruns) for the project finishing
time, this can be solved by adding a precedence constraint to show that one of
the activities involved must be followed by the other, scheduling multiple
shifts, and adding an estimated number of days lost (calculate and arrange the
135
time schedule of work) to the overall project duration. All these things
actually increase the equipment productivity and minimize the lost production
time (Clough and Sears, 2000).
c. Weather.
It is important that the probable effect of adverse weather be reflected in the
final project time schedule. The usual basis for making time estimate is on the
assumption that construction will proceed on every working day. In similar
fashion the weather can substantially affect the times required to do certain
types of construction work. As a result, the first time the number of days is
lost because of the weather has to be estimated and added to the overall
project duration. Therefore, when this occurs during the construction process,
there is still time to extend and finish the job delayed because of the weather.
Another solution is to find other works that are not influenced by weather in
the process and increase labour productivity to minimize the lost production
time (Clough and Sears, 2000).
2. Preparation Activities
In general the preparation project stages follow the trade off analysis process
in project management system steps by Sunny and Kim (1992). On the other
hand, the alternatives to solve several problems in preparation activities relates to
improvement in methodology suggested by Serpell and Alarcon (1998) which is
adapted from Ghio et. al.,(1996). They said to ensure the effectiveness of
improvement activities it is necessary to use a structured yet flexible
methodology that serves as a guideline for these efforts. All of these efforts have
been directed to construction performance improvement through the reduction of
waste and the elimination of non-value adding activities beginning from the first
time the construction project was started: It begins by diagnostics of current
situation of problem until the corrective actions and maintenance of changes.
Before embarking on the preparation activities it is necessary to study the

project site and job site organization, the construction process and management
and to inform community near the project location about the project. This
alternative solution was identified from the literature review findings.
136
3. Additional Work
The steps summarized and described by Sunny and Kim (1992), is an easy
method to follow for analyzing project changes. A step-by-step methodology will
be helpful to understand the trade off in making the project changes. The
methodology is further complemented by several other solutions identified in the
survey results.
During each of step in the trade off analysis it is important to get the project
team, managers, consultant and owner involved to determine their views
regarding the impact of the problems and the changes. The engineer from the
consultants should make the changes because one of their responsibilities is on
design phase. However this still needs approval from other teams in the
implementation (Patrick, 2004). Implementing the changes in a project is not as
simple as changing the plan or design. The changes must be communicated
effectively, understood by people affected and adapted as necessary and
appropriate if they are implemented effectively the project goals will be achieved
on time and on budget.
4. Material stocks activities

Material control is concerned with ensuring that the materials are at the site as
needed. Apart from standard procedures, managerial control of job materials is
directed primarily towards achieving their timely delivery to the project site
(Clough and Sears, 1993). If the material problems come during the construction
process it must be issued to the project manager, supervisory and material
stockiest department to solve it. Materials should be ordered early enough to
ensure that they will arrive when needed, plus some lead time as a safety
precaution (Schexnayder & Mayo, 2004). There are also several alternatives that
could solve the material problem during construction process based on the
survey.
By applying the alternative steps in the developing framework above, it could

assist in reducing the time and cost overrun risks in the construction projects site.
Revision or improvisation of the project time and cost estimation are commonly
137
required, if this is done, then the rest of the project plan can be adjusted to fit new
plan requirements.
5. Labour
It is the project labour superintendent’s responsibility to control the labour
and coordinate with the field supervisor to make sure that labour work
productivity is used as planned. This should be done during the project process.
7.5 Conclusion
This chapter presented the discussions of the research analysis and results. It
describes the research’s essential features beginning from the literature review
findings, collecting data or survey, the analysis and the expected findings and
developing a framework in managing time and cost for construction projects in
Padang and Pekanbaru after the causes and the current practices were identified.
The analysis in this chapter also used the consultants’ and the contractors’
perspectives about time and cost management as currently practiced in Padang and
Pekanbaru. Their perspectives were used as reference in developing the framework
as an alternative solution in remedy activities to reduce time and cost overrun
problems in the construction projects. These perspectives supported by the practices
in several countries such as in Japanese construction projects, which was reviewed
from the previous research.
All the survey results were described in the developed framework. This
framework will act as a guideline to show what the stages are that have to be
followed in term to reduce the time and cost overrun problems. Has developed a
framework it means all the objectives of this research have been achieved
CHAPTER 8
CONCLUSIONS AND RECOMMENDATIONS
8.1 Introduction
This research is concerned with the problems of time and cost overruns in
Indonesia construction industry, focusing in Padang and Pekanbaru, Sumatera. It is
partly a continuation of the research carried out by Kaming et. al., in 1997. The
research by Kaming et. al. (1997a) focused on the causes of time and cost overrun
for high-rise buildings in two large Indonesian cities, namely Jakarta and
Yogyakarta. This research is more concerned with the causes of time and cost
overrun of low rise projects in Padang and Pekanbaru, Sumatera such as housing,
office blocks and urban roads. It is also a study on the aspects of construction cost
and time management with particular attention given to current practice adopted by
the large (B) and medium (M) sized project management and contracting companies
in Padang and Pekanbaru as compared to the “theoretical framework” which was
produced based on theory and reviews the work of several researchers and writers
about it.
This research has three main objectives: (1) To identify the major causes of
project time and cost overrun in low - rise projects in Padang and Pekanbaru, (2) To
establish theoretical framework for a good construction time and cost management
(3) To compare the time and cost management as currently practiced by construction
companies in Padang and Pekanbaru against the theoretical time and cost
management framework. The study formed a basis for the development of a
139
framework of time and cost management for project managers and contractors in
Indonesia, particularly in Padang and Pekanbaru.
8.2 Findings and Conclusions
This research found that, the major causes of time and cost overruns for
prjects in Pekabaru and Padang as perceived by the two of the respondents
(contractors and consultants) are: (1) In construction activities that were caused by
the things that come out of estimated, lack of equipment, delayed activities, weather
and poor management, (2) in preparation activities that were caused by location
condition that out of estimated, social condition and location of project in the middle
of public facility, (3) In additional works that were caused by design changes, (4) In
material stock activities that were caused by late in delivery, limited stocks and
transportation problems in delivering the stocks, and lastly labour problems that were
caused by limited skilled labour and lack of labour. The Research results also
indicate that the causes of time and cost overrun between contractors and consultant
are almost the same and in fact it was experienced more by contractor as project
executor.
This study is also concerned with looking at the construction time and cost
management practices that could be representative to illustrate the practices that
could help to minimize the time and cost overrun problems by reviews the work of
several researchers in several countries such as, USA, UK, Japan and Malaysia. They
are all highlighted process and procedure of good time and cost management
practices. The practices which reviewed will utilize as component of references for
assisting in reserving a solutions for project of constructions in Indonesia especially
project of constructions in Padang and Pekanbaru in the case of minimize the
happening of time and cost overrun.
The documentary studies from books, dissertations and journals are also done
to reviews and synthesis works of several researchers and writers about management
framework for project management practices. It was utilized to propose a
140
management framework as theoretically for project management practices like the

one as seen at Figure 4.6 on page 77. It including activities and tasks start from
estimates phases, construction process until project have ready and reached final
purpose.
Study results found that management project and construction companies in

Indonesia in fact manage time and cost of project followed the practices like the one
seen at frameworks as theoretically. But most of them did not place due attention to
compare the actual achievement with planning and identify the deviations/ problems
as a continuation from controlling activities as such many of the sub-activities are
either not carried out at all or carried out casually. These include sub-activities such
as check and analyze the report and also analyze the cause of deviation; plan the
corrective action and how to implement it. That has contributed to the time and cost
overrun of a project. This is shown by the study results on the causes of time and cost
overrun in Chapter 6.
Based on the description above, through this research, the researcher had
achieved the objectives of this research and also proposes a framework to minimize
time and cost overrun problems in Indonesian construction projects with study areas
in Padang and Pekanbaru. Although research was done specifically in Padang and
Pekanbaru, these two cities could representatives to reflect time and cost overrun
problems in other cities in Indonesia. It is important for every construction company
in Indonesia to be aware of how to minimize time and cost overrun risks on them and
be ready to face the competition with Construction Companies from other countries
in the international competitive market.
8.3 Recommendation
Although this research has achieved all the objective of this research and
ultimately could proposed a framework for managing factors that cause time and cost
overruns, there is a factor that the researcher recommends others to conduct a survey
research particularly in disseminates questionnaires. It as follows:
141
- During the survey, in order to save time it is better to deliver the questionnaires
direct to the respondents and collect them personally because most of the
respondents are not interested to fill out the questionnaires form. Some
respondents noted that it is better to interview rather than asking them to fill out
questionnaires. The advantages of this are: not much time is needed to wait for
the replies from the respondents and able to get additional information through
interviews while disseminating the questionnaires direct to respondents.
However, the disadvantage of this is: it is costly to conduct the survey as the
researcher has to go to many places to disseminate the questionnaires directly to
the respondents.
8.4 Future Study
a. Further study can be done to determine the causes of time and cost overrun at
a construction project by doing study from another side of a management
construction such as study on the causes of time and cost overrun from side
of owner of project or client. Client or owner of project also can become one
of reason that causing the happening of problems of time and cost overrun at
construction projects.
b. Further study can be done to determine time and cost overrun causes which
because of too many formal procedures to be being passed before starting a
project such as tender procedures, contract negotiation and governmental
bureaucracy.
c. Further study can be done to determine the causes of time and cost overrun
by focused to one problem like more focus to worker/ labour productivity at
small and medium - rise projects, at problems of material, facilities and
equipments, unexpected and many other factors.
142
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Design Quality Management Activities. Journal of Profeessional Issues in
Engineering Education and Practice, 122 (3).
Byrkit, D. R. (1985). Elements of Statistics: An Introduction to Probability and

Statistical Inference 3rd Edition. D. Van Nostrand Company.
Chini A. R., and Valdez. H. E. (2003). ISO 9000 and U.S. Construction
Industry. Journal of Management in Engineering, ASCE.
Collier, Keith. (1974). Fundamentals of Construction Estimating and Cost

Accounting. Prentice-Hall, Inc., Englewood Cliffs, N.J.
158
Cooke, B. (1995). European Procedures and Technique. England.
Halpin, D. W., and Woodhead, R. W. (1980). Construction Management. John

Wiley and Sons.
Hamilton, Albert. (2001). Managing Project for Success: A Trilogy. Thomas

Telford.
Ho, S. (1999). Change for the Better via ISO 9000 and TQM. Management
Decision, Vol. 37, No.4, pp. 13-18.
Hradesky, J. L. (1994). Total Quality Management. Mc.Graw- Hill, New York.
Kent, C. J. (2002). Project Management Maturity Model. Marcel Dekker,

Inc.New York
Kwak, Young Hoon, and Ibbs, W. C. (2002). Project Management Process

Maturity (PM)2 Model. Journal of Management in Engineering, ASCE,
18(3).
Lam, S. Y. W., and Tang, C. H. W. (2002). Role of Surveyor under ISO 9000
in the Construction Industry. Journal of Surveying Engineering, ASCE,
128(4).
Maloney, W. F. (2002). Construction Product/Service and Customer

Satisfaction. Journal of Construction Engineering and Management,
ASCE., 128(6),522-529
Maloney, W. F., and Jones, T. W. (1984). Labor-Management Cooperation and

Customer Satisfaction. Journal of Construction Engineering and
Management., ASCE.,110(2),205-221.
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Min-Yuan Cheng, Cheng-Wei Su, Horng-Yuh You. (2003). Optimal Project

Organizational Structure for Construction Organization. Journal of
Construction Engineering and Management, ASCE., 129(1).
Oakland, J. S. (1995). Total Quality Management: Text with Cases.

Butterworth-Heinemannnn, Oxford.
Rea, P., Ph. D., and Kerzner, H., Ph. D. (1997). Strategic Planning for
Practical Guide. John Willey and Sons, Inc., Canada.
Tucker, R. L. (1986). Management of Construction Productivity. Journal

Management in Engineering., ASCE, 2 (3), 148-156
APPENDIX A
160
LIST KONTRAKTOR PROYEK DI PEKANBARU 2002/ 2003

(GAPEKSINDO)
TA 2002/ 2003
NO NAMA ALAMAT KUALIFIKASI KET.
KONTRAKTOR
1 2 3 4 5
1 PT. WASKITA KARYA Jl. Dr. Sutomo 70, Pekanbaru B -

2 CV PRIMA UTAMA Jl. Tg. Datuk, Pekanbaru B -
3 PT. DALEMA PRATAMA INDAH Jl. Pasar Bawah Pekanbaru B -
4 BINA CIPTA REKAYASA Jl. Sei Masang 24 Pekanbaru B -
5 PT. ADHI KARYA (PERSERO) Jl. Sudirman 20B Pekanbaru B -
6 PT. PANCA SERAYA PERMAI Jl. Sumatera 50 Pekanbaru M -
Jl. Potong Lembu Gg. Merpati
7 PT GRAHA RUPAT PERSADA B -
Lrg. M 85, T. Pinang
Pelab. Penyeberangan Telaga
8 PT. ASDP CAB. BATAM - -
Pungkur, Batam
9 PT DHARMA ABDI PRIMAJU Jl. Ikhlas 1B Sukajadi Pekanbaru M -
161
LIST KONTRAKTOR PROYEK DI PEKANBARU 2002/ 2003

(LPJK)
TA 2002/ 2003
KONTRAKTOR
1 2 3 4 5
1 PT INTRACO PENTA - M -
2 PT KURNIA SUBUR - M -
3 PT PACIFIC INDO PERKASA - M -
4 PT MULYA BANGUN - M -
5 PT SURYA MANDIRI PRATAMA - M -
6 PT BUMI PANGGITA HANDITAMA - M -
7 PT SURYATINDO PERKASA - M -
8 PT ARIAN PRIMATAMA - M -
9 PT BANGAUMAS PERKASA - M -
10 CV ASTAKORA - M -
11 PT. CIPTA BANGUN ABADI - B -
12 CV TIANG ARAS - M -
13 PT. CITRA HOKIANA TRIUTAMA - B -
14 PT SINAR ARENGKA SETIA MAJU - B -
15 PT SINAR DELI PRATAMA - B -
16 PT SURYA MULIA GITAGRAHA - B -
17 SYAM PAYUNG SEKAKI - B -
18 PT RIAU RUNGGO ABADI - M -
19 PT ASTA DWI TOPANG - M -
162
LIST KONSULTAN PROYEK DI PEKANBARU 2002/ 2003

(INKINDO)
TA
2002/
2003
KONSULTAN
1 2 3 4 5
1 PT. YODYA KARYA - M -

2 CV. ASYIDAH CONSULTANT Jl. Cemara No.59 Pekanbaru M -
3 CV. KARYA CONSULTAN Jl. Melur 50, Pekanbaru M -
4 CV. KUSNAN ENGINEERING Jl. Riau 24, Pekanbaru M -
163
LIST KONSULTAN PROYEK DI PEKANBARU 2002/ 2003

(LPJK)
TA 2002/ 2003
KONSULTAN
1 2 3 4 5
PT MEGA STRUKTURINDO
1 - M -
CONSULTANT
2 CV MISI KEMAJUAN RIAU - M -
MASSA SARANA KOTA
3 - M -
CONSULTANT ENGINEERING
4 MULTI KHARISMA KONSULTAN - M -
CV PERSADA NUSANTARA
5 - M -
CONSULTANT
6 CV TRACE ENG. CONS - M -
7 BINA RIAU JAYA - B -
8 PT SHRIKURNIA - M -
NUANSA CIPTA SELARAS
9 - M -
CONSULTANT ENGINEERING
10 PIRAMID RIAU PERKASA - B -
11 SINAR ARENGKA SETIA MAJU - B -
164
LIST KONTRAKTOR PROYEK DI PADANG 2002/ 2003

(GAPEKSINDO)
TA
2002/
2003
KONTRAKTOR
1 2 3 4 5
1 PT. SANGKURIANG Wisma Indah I Padang M -

2 CV SARANA MITRA KONSTRUKSI Padang Panjang M -
3 CV. KALI BRANTAS Jl.Kali Brantas 8 Pabatim-Padang M -
4 CV. ANDRICO Jl.Kali kecil 5 Muara PAdang M -
5 CV. GRAFOS Jl. Jend.Sudirman 34 Padang B -
6 PT PEMBANGUNAN PERUMAHAN Jl. Khatib Sulaiman 58 Padang B -
7 PT. RAVE KARYA ABADI - M -
8 PT. HUTAMA KARYA Jl.Ahmad Yani 15 Padang B -
9 PT. WASKITA KARYA - B -
PT. PERENCANA&PERANCANG
10 - M -
PEMBANGUNAN
11 PT. JASA KONSTRUKSI&ARSITEK JL.Jakarta 5 Ulak karang Padang M -
165
LIST KONTRAKTOR PROYEK DI PADANG 2002/ 2003

(LPJK)
TA 2002/ 2003
KONTRAKTOR
1 2 3 4 5
1 PT KONCO KARYA - M -
CITRA KARISMA GRAHA
2 - B -
NUSANTARA
3 STATIKA MITRASARANA - B -
4 CV SAPTA BERSAUDARA - M -
5 PT SURYATINDO PERKASA - M -
6 PT BARETTAMUDA PRATAMA - B -
7 PT EKSEKUTIF PUTRA UTAMA - M -
166
LIST KONSULTAN PROYEK DI PADANG 2002/ 2003

(INKINDO)
TA
2002/
2003
KUALIFIKAS
NO NAMA ALAMAT KET.
I
KONSULTAN
1 2 3 4 5
1 SARANA CONSULTANT PK - B -
2 SARANA ENGINEERING JL. Sumba Blok M. No.7 Pdg M -
RISKA ENGINEERING
3 - M -
CONSULTANT
167
LIST KONSULTAN PROYEK DI PADANG 2002/ 2003

(LPJK)
TA 2002/ 2003
KONSULTAN
1 2 3 4 5
PT AMARSIDI ENGINEERING
1 - M -
CONSULTANT
2 PT IGASAR - B -
3 CV HASTA KARYA - M -
PT KONSULINDO PRIMAKARYA
4 - M -
ABADI
5 PT NAN TEMBO CONSULTANT - M -
6 GURANO PRIMAKARSA - M -
7 PT PINCURAN TUJUH - M -
8 PT ASPALINDO INTI SAKATO - M -
9 PT DIMENSI ENGINEERING - M -
10 PT BRATA YUDA - M -
11 PT BARATA - M -
PT REKACIPTA KONSULINDO
12 - M -
PRIMA
APPENDIX B
168
Pilot Study Form
In construction as in any business, time is money. In the construction activity

by managing time and cost, one of construction organization can achieves many
profits such as cost saving, good quality of work and do all of the project activity
with efficiency and effectiveness. To get that it is need a guideline. It is important
that members of the construction industry be aware of how the guidelines are
implementations and what guidelines are good to adopted to face international
competitive market. This research will identify the practices of managing time and
cost in Indonesian construction projects and establish a framework as a guideline to
manage it refer to others countries practices and previous research. Through this
research it will know which is the practices and framework that is suitable to
implement in Indonesian construction projects especially to reduce time and cost
overrun problems.
Because of that I need your help to fill this pilot study form to get the
preliminary data to support my research. The information that I get from your
company will use just for this research only if you have any question and problem
with this pilot study form you can contact me at:
Harisaweni
Kolej Tun Fatimah Blok H21
Side A Room 201
Skudai Johor Bahru
Telp. +60127530310/ +62 (0751) 50003/ +6281363300050
Email : weni_mahadewi@yahoo.com
BAHAGIAN I : Informasi Umum

( Part I : General Information )
1.1 Jenis Perusahaan : Kontraktor/ Konsultan

Kind of Company : Contractor/ Consultant
1.2 Klasifikasi (Classification) : B/ M/ K (Big/ Medium/ Small)
1.3 Jabatan : Manager proyek (Project manager)
Position Arsitek/ Perencana (Architect)
Pengawas utama (Main supervisor)
Pengawas lapangan (Field supervisor)
Lain – lain (nyatakan)……………………….
Others (Please state it)………………………
169
BAHAGIAN 2 : Informasi Umum Tentang Manajemen

Part 2 : General Information about Management
Bahagian berikut ini berisikan pertanyaan tentang manajemen secara umum. Untuk
semua pertanyaan sila jawab berdasarkan skala 1 (satu) – 5 (lima) dimana:
This part consists about management as general. For all of the questions, please
answer it by make it the rank with scale 1 (one) - 5 (five) where:
1 = sangat penting (very important)
2 = penting (important)
3 = tidak begitu penting (not too important)
4 = tidak penting (not important)
5 = tidak tahu (no comment)
Silakan jawab pertanyaan berikut berdasrkan skala di atas (please answer the
following question based on scale above):
Pertanyaan 1 2 3 4 5
1. Adanya suatu aturan managemen di perusahaan
The existing of management role in company
2. Aturan tersebut berdasarkan inernational standard
That role refer to international standard
3. Mempunyai satu divisi untuk mengawasi penerapan
management di dalam perusahaan
Have one division to supervise the implementation of
the management role
BAHAGIAN 3: Manajemen waktu dan biaya

Part 3: Time and Cost management
Silahkan pilih satu berdasarkan pengalaman perusahaan anda:
(Please choose one based on your company experience):
1. Yang mengontrol waktu selama pengerjaan proyek

Who is controlling the project during the project execution?
Pengawas lapangan (field supervisor)
Koordinasi antara pengawas lapangan dengan pengawas utama
(Coordination between field supervisor with main supervisor)
Koordinasi antara pengawas utama dengan konsultan/perencana
(Coordination between main supervisor with consultant)
Manager proyek (Project manager)
Lainnya / Others (Nyatakan/ State it) ………………………..……………
2. Apakah Metoda yang digunakan untuk mengatur waktu?
What is the method that is used for managing time?
Kurva S (S-Curves)
Critical Path Methods (CPM)
Diagram Batang (bart Chart)
Lainnya/ Others (Nyatakan/ State it)………………………………………
3. Silahkan pilih penyebab-penyebab terjadinya kelebihan waktu dan biaya pada
table dibawah berdasarkan pengalaman perusahaan anda.
Please choose the causes of time and cost overrun in table below based on the
occurrences happened in your company.
170

(1) Materials, - Shortages of materials
- Material changes
- Late delivery
- Damage, and poor quality manufacturing of materials
- Others : -
-
-
(2) Manpower/ Labour, - Shortages of labour
- Labour skill
- Nationalities of labourers
- Others : -
-
-
(3) Equipment, - Equipment failure
- Shortages and late delivery of the equipment
- Low productivity or skill of operator of the equipment
- Others : -
-
-
(4) Environment, - Climatic conditions
- Social and cultural impact
- Geological problems
- Others : -
-
-
(5) Changes, - Result of omissions, errors, and change of scope by owners
- Others : -
-
-
(6) Scheduling and controlling - Poor planning and scheduling practices
techniques - Lack of management expertise in project control
- Poor record keeping and maintenance
- Others : -
-
-
171
4. Berdasarkan pertanyaan No.3 diatas, efek yang timbul pada pelaksanaan

pekerjaan adalah terjadinya penundaan pekerjaan. Silahkan urutkan solusi yang
perusahaan anda lakukan untuk mengatasinya.
Based on question No.4 (four) and the reason on question No.5 (five) above, the
effect to the activity execution is delays. Please make it in rank what is your
solution to overcome that problem.
Menambah jam kerja/lembur (Added work time/ overtime)
Menambah pekerja dengan menggunakan pekerja paruh waktu (Added
labour by hired part time labour)
Menambah pekerjaan dengan menggunakan perkerja dari bagian lain telah
selesai (Added work with use labour from others activity that has been
finished)
Lainnya/ Others (Nyatakan/ Notify it)………………………………………
BAHAGIAN 4: Manajemen waktu

Part 4: Time management
1 Apakah hal yang kurang diperhatikan oleh kontraktor pada manajemen waktu
menurut pengamatan anda? Silahkan urutkan menurut skala kekerapan yang
sering terjadi menurut pengamatan anda
According to you, what is the factor in time management that gets less
consideration from the contractor? Please make it in rank based on the frequency
occurs according to your observation:
Menentukan strategi kegiatan/program kerja (Determining activity strategy/
work program)
Perencanaan&pengontrolan waktu kerja (Planning&controlling work time)
Menentukan penyebab terjadinya penundaan suatu pekerjaan (Determining
the causes of delay)
Menganalisa penyebab terjadinya suatu penundaan pekerjaan (Analyzing
Merancang solusi untuk mengatasi penundaan pekerjaan (Planning the
solution to overcome the delay)
Memastikan semua pekerjaan sesuai dengan perencanaan waktu (Making
sure all of the activities appropriate with the time schedule)
Menganalisa semua pekerjaan telah sesuai dengan perencanaan waktu
(Analyzing all of the work has appropriated with the time schedule)
Koordinasi tentang perencanaan, jadwal, dan kemajuan proyek pada
rentang waktu yang ditentukan (Do coordination about planning,
scheduling and projecting progress in regular time)
Koordinasi antar personnel dalam menjadwal ulang urutan pekerjaan
dilapangan (Coordinating the persons who involved, to schedule the
scheduled of project field)
Menegakkan disiplin terhadap perencanaan waktu (time schedule)
(Discipline to the time schedule)
172
BAHAGIAN 5 : Manajemen Biaya dan Usulan Kerangka Kerja

Part 5 : Cost Management and The Proposed Fraamework
(i) Silahkan urutkan berdasarkan pengalaman perusaan anda:
Please make it in rank based on your company experience:
1. Apa usaha yang dilakukan untuk menghemat biaya (effort to saving cost)?
What is your effort to achieve cost saving?
(…..) Meningkatkan produktivitas pekerja (Increase the labour
productivity)
(…..) Mengurangi pekerja dan meningkatkan penggunaan alat/mesin
(Reduce the labour but increase to use machine)
(…..) Mengurangi kualitas material tetapi tidak mempengaruhi kualitas
produk secara signifikan (Change the quality of material but it is not
effect to product quality in significant)
Lainnya/ Others (Nyatakan/ Notify it)……………………………………....
2. Hal apakah yang kurang diperhatikan oleh kontraktor menurut pengamatan
anda pada manajemen biaya? Silahkan urutkan menurut skala kekerapan
yang terjadi menurut pengamatan anda
What is the factor that gets less consideration from the contractor in cost
management based on your observation? Please make it in rank based on
your observation
Mengontrol keuangan proyek (Controlling for project budget)
Mengontrol keuangan pada semua aktivitas dan melakukan kegiatan
perbaikan apabila ada permasalahan (Controlling budget in all of
activities and make the correction soon if there’s a problem)
Menganalisa keuangan proyek (Analyzing project financial)
Memastikan keuangan proyek sesuai dengan rencana anggaran biaya
(Making sure the financial budget appropriate with the cost
estimated)
Menganalisa aktivitas yang selalu mengalami pembengkakan biaya
(Analyzing the activity that always suffers by cost overrun)
Mencari alternative solusi untuk mengatasi pembengkakan biaya
(Finding the alternative solutions to overcome the cost overrun)
Menentukan aktivitas potensial untuk mengalami pengurangan biaya
(Determining the potential activities to reduce the cost overrun risks)
(ii) Silahkan jawab pertanyaan berikut ini berdasarkan pengalaman perusaan

anda:
Please answer the questions below based on your company experiences:
1. Siapa yang mengontrol keuangan project selama pelaksanaan proyek?
Who is controlling the project budget during the project execution?
(…..) Manager proyek (Project manager)
(…..) Manager lapangan (Field manager)
(…..) Pengawas lapangan (Field supervisor)
2. Apa teknik yang anda gunakan untuk mengontrol keuangan project?
What is the technique that usually used to controlling the project financial?
(…..) Diagram batang (Bart chart)
(…..) Critical Path Method (CPM)
(…..) Aliran tunai (Cash flow)
173
Lainnya/ Others (Nyatakan/ Notify it).……………………………………....

3. Apakah perusahaan anda mempunyai suatu kerangka untuk mengatur waktu
dan biaya proyek?
Do you have a framework to manage time and cost in your company?
………………………………………………………………………………
………………………………………………………………………………
………………………………………………………………………………
4. Bagaimana pendapat anda tentang kerangka pada lampiran, apakah cocok
diterapkan di perusahaan anda? Sertakan alasannya!
What do you think about the framework at the last part, is it appropriate to
implement in your company? Gives the reason!
………………………………………………………………………………
………………………………………………………………………………
………………………………………………………………………………
5. Jika ada bagian yang menurut anda tidak begitu penting silahkan coret dan
lakukan perbaikan bagaimana harusnya pada kerangka tersebut menurut
anda
If there is useless things in that framework please make a mark and give
your suggestion to repair it.
Saya mengaku bahwa jawaban pada pilot study ini adalah benar dan
bukan suatu rekayasa oleh peneliti.
I acknowledge all of the answer of this pilot study is true and did not
invent by the researcher
Tandatangan & Stempel Perusahaan

Signature & Company Cop
(……………………………………)
Terima kasih atas kerjasama anda

Thank you for your co-operation
174
THE PROPOSED FRAMEWORK
YES
PLAN ORGANIZE CONTROL Achieving with Feedback Goals
Planning Deviations/Problems Achievement
Major Activities
Identification Identify: - Schedule Check through the Analyze cause of - Efficiency
things that have - Job Description - Activities Report: Deviations - Effectiveness Sub Activities
related with time - Activities - Cost/Account - Schedule Activities - On Time
and cost overrun - Resources - Qualities - Equipment - Within Budget
- Activities
- Equipment
- CPM
- S Curve
- Some Correction
b. Group in :
- Categories
- Item - Daily
- Monthly
APPENDIX C
175
Questionnaire Form
Developing Framework for Managing Time and Cost to Increase Quality

Works in Indonesian Construction Projects

by managing time one of construction organization can achieves many profits such
as cost saving, good quality of work and do all of the project activity with efficiency
and effectiveness. To get that it is need a guideline. It is important that members of
the construction industry be aware of how the guidelines are implementations and
what guidelines are good to adopted to face international competitive market. This
research will identify the practices of managing time and cost in Indonesian
construction projects and establish a framework to manage it refer to others countries
best practices and previous research. Through this research it will know which is the
best practices and framework and suitable to implement in Indonesian construction
projects especially to reduce time and cost management problems.
Because of that I need your help to fill this questionnaire to get the data for
my research. The information that I get from your company will use just for this
research only if you have any question and problem with this questionnaire you can
contact me at:
Harisaweni
Side A Room 201
Skudai Johor Bahru
Telp. +60127530310/ +62 (0751) 50003/ +6281363300050

1.1 Jenis Perusahaan : Kontraktor

Kind of Company : Contractor
1.3 Jabatan : ‫ ٱ‬Manager proyek (Project manager)
Position ‫ ٱ‬Arsitek/ Perencana (Architect)
‫ ٱ‬Pengawas utama (Main supervisor)
‫ ٱ‬Pengawas lapangan (Field supervisor)
‫ ٱ‬Lain – lain (nyatakan)……………………….
176

Bahagian berikut ini berisikan pertanyaan tentang manajemen secara umum. Untuk
semua pertanyaan sila jawab berdasarkan skala 1 (satu) – 5 (lima) dimana:
Have one division to supervise the implementation of the
management role
BAHAGIAN 3: Manajemen waktu dan biaya

Part 3: Time and Cost management

What is the method that is used for managingtime?
Kurva S (S-Curves)
3. Pada aktivitas manakah permasalahan waktu (juga biaya) sering timbul dan
memberikan pengaruh besar terhadap perencaan awal waktu proyek? (Tolong
diurutkan)
In what activity the time problems (also cost) usually come out and give big
influence to the time estimated? Please make it in rank based on frequency occur
in your company (Please give it rank, 1-5)
177
Aktivitas sekitar lingkungan lokasi proyek (environment activities around

project location)
Aktivitas penyedian peralatan dan managementnya (Equipment and
management activity)
Pada aktivitas material (In materials activity)
Penyediaan tenaga kerja (Labour/ manpower activity)
Pada activitas perubahan – perubahan (The changes activity)
4. Berdasarkan pertanyaan No.3, silahkan anda nyatakan alasannya:
Based on question No.3 (three), please notify the reason:
project location)
…… Kondisi proyek di luar perencanaan (Site condition out of plan)
…… Kondisi Sosial (Social condition)
…… Lokasi proyek berada ditengah – tengah fasilitas umum (Location in the
middle of public facility)
Aktivitas penyedian peralatan dan managemen-nya (Equipment and
…… Pelaksanaan melebihi apa yang telah diperkirakan (The things over
estimated)
…… Kekurangan peralatan (Lack of equipment)
…… Terjadinya penundaan kgiatan (Delayed activities)
…… Cuaca (Weather)
…… Managemen yang lemah (Poor management)
…… Keterlambatan dalam pengiriman (Late in delivery)
……Stok terbatas (Limited stocks)
…… Permasalahan pengangkutan dalam pengiriman (Transportation problem in
delivery)
…… Keterbatasan buruh ahli (Limited skilled labour)
…… Kekurangan buruh (Lack of labour)
…… Perubahan perencanaan/ desain (Design changes)

work program)
178

2 Berdasarkan pertanyaan No.4 (Bahagian 3) dan pertanyaan No.1 (Bahagian 4)

diatas, efek yang timbul pada pelaksanaan pekerjaan adalah terjadinya
penundaan pekerjaan. Silahkan urutkan solusi yang perusahaan anda lakukan
untuk mengatasinya.
Based on question No.4 (in part 3) and question No.1 (in part 4) above, the effect
to the activity execution is delays. Please make it in rank what is your solution to
overcome that problem.
a. Menambah jam kerja/lembur (Added work time/ overtime)
b. Menambah pekerja dengan menggunakan pekerja paruh waktu (Added
c. Menambah pekerjaan dengan menggunakan perkerja dari bagian lain telah
finished)
d. Lainnya/ Others (Nyatakan/ Notify it)………………………………………

Part 5 : Cost Management and The Proposed Framework

1. Apa usaha yang dilakukan untuk menghemat biaya (effort to saving cost)?
What is your effort to achieve cost saving?
(…..) Meningkatkan produktivitas pekerja (Increase the labour
productivity)
(…..) Mengurangi pekerja dan meningkatkan penggunaan alat/mesin
(Reduce the labour but increase to use machine)
(…..) Mengurangi kualitas material tetapi tidak mempengaruhi kualitas
produk secara signifikan (Change the quality of material but it is not
effect to product quality in significant)
179

anda pada manajemen biaya? Silahkan urutkan menurut skala kekerapan
yang terjadi menurut pengamatan anda
management based on your observation? Please make it in rank based on
your observation
perbaikan apabila ada permasalahan (Controlling budget in all of
activities and make the correction soon if there’s a problem)
(Making sure the financial budget appropriate with the cost
estimated)
Menentukan aktivitas potensial untuk mengalami pengurangan biaya
(ii) Silahkan jawab pertanyaan berikut ini berdasarkan pengalaman

perusaan anda:
3. Apakah perusahaan anda mempunyai suatu kerangka untuk mengatur
waktu dan biaya proyek?
………………………………………………………………………………
………………………………………………………………………………
………………………………………………………………………………
diterapkan di perusahaan anda? Sertakan alasannya!
What do you think about the framework at the last part, is it appropriate to
implement in your company? Gives the reason!
………………………………………………………………………………
………………………………………………………………………………
………………………………………………………………………………
………………………………………………………………………………
180
5. Jika ada bagian yang menurut anda tidak begitu penting silahkan coret dan
lakukan perbaikan bagaimana harusnya pada kerangka tersebut menurut
anda
If there is useless things in that framework please make a mark and gives
your suggestion to repair it.
Saya mengaku bahwa jawaban pada questionnaire ini adalah benar

dan bukan suatu rekayasa oleh peneliti.
I acknowledge all of the answer of this questionnaire is true and did
not invent by the researcher
Tandatangan & Stempel Perusahaan

(……………………………………)

Thank you for your co-operation
181
YES
PLAN ORGANIZE CONTROL Achieving with Feedback Goals
Deviations/Problems Achievement
Planning
Major Activities
- Activities
- Equipment
- CPM
- S Curve
- Some Correction
b. Group in :
- Categories
- Item - Daily
- Monthly
182
Questionnaire Form
Developing Framework for Managing Time and Cost to Increase Quality

Works in Indonesian Construction Projects

by managing time one of construction organization can achieves many profits such
as cost saving, good quality of work and do all of the project activity with efficiency
and effectiveness. To get that it is need a guideline. It is important that members of
the construction industry be aware of how the guidelines are implementations and
what guidelines are good to adopted to face international competitive market. This
research will identify the practices of managing time and cost in Indonesian
construction projects and establish a framework to manage it refer to others countries
best practices and previous research. Through this research it will know which is the
best practices and framework and suitable to implement in Indonesian construction
projects especially to reduce time and cost management problems.
Because of that I need your help to fill this questionnaire to get the data for
my research. The information that I get from your company will use just for this
research only if you have any question and problem with this questionnaire you can
contact me at:
Harisaweni
Side A Room 201
Skudai Johor Bahru
Telp. +60127530310/ +62 (0751) 50003/ +6281363300050

1.1 Jenis Perusahaan : Konsultan

Kind of Company : Consultant
1.3 Jabatan : ‫ ٱ‬Manager proyek (Project manager)
Position ‫ ٱ‬Arsitek/ Perencana (Architect)
‫ ٱ‬Pengawas utama (Main supervisor)
‫ ٱ‬Pengawas lapangan (Field supervisor)
‫ ٱ‬Lain – lain (nyatakan)……………………….
183

Bahagian berikut ini berisikan pertanyaan tentang manajemen secara umum.

Untuk semua pertanyaan sila jawab berdasarkan skala 1 (satu) – 5 (lima)
dimana:
Have one division to supervise the implementation of the
management role


What is the method that is used for managing cost?
Kurva S (S-Curves)
3. Pada aktivitas manakah permasalahan waktu (juga biaya) sering timbul dan
memberikan pengaruh besar terhadap perencaan awal waktu (also cost) proyek?
(Tolong diurutkan)
In what activity the time problems usually come out and give big influence to the
time estimated? (Make it in rank)
184

project location)
Aktivitas penyedian peralatan dan managemen-nya (Equipment and
4. Berdasarkan pernyataan No.3, silahkan anda nyatakan alasannya :
Based on question No.3 (three), please notify the reason:
project location)
…… Kondisi proyek di luar perencanaan (Site condition out of plan)
…… Kondisi Sosial (Social condition)
…… Lokasi proyek berada ditengah – tengah fasilitas umum (Location in the
middle of public facility)
Aktivitas penyedian peralatan dan managementnya (Equipment and
…… Pelaksanaan melebihi apa yang telah diperkirakan (The things over
estimated)
…… Kekurangan peralatan (Lack of equipment)
…… Terjadinya penundaan kgiatan (Delayed activities)
…… Cuaca (Weather)
…… Managemen yang lemah (Poor management)
…… Keterlambatan dalam pengiriman (Late in delivery)
……Stok terbatas (Limited stocks)
…… Permasalahan pengangkutan dalam pengiriman (Transportation problem in
delivery)
…… Keterbatasan buruh ahli (Limited skilled labour)
…… Kekurangan buruh (Lack of labour)
…… Perubahan perencanaan/ desain (Design changes)

work program)
185

2. Berdasarkan pertanyaan No.4 (Bahagian 3) dan pertanyaan No.1 (Bahagian 4)
diatas, efek yang timbul pada pelaksanaan pekerjaan adalah terjadinya
penundaan pekerjaan. Silahkan urutkan solusi yang perusahaan anda lakukan
untuk mengatasinya.
Based on question No.4 (in part 3) and question No.1 (in part 4) above, the effect
to the activity execution is delays. Please make it in rank what is your solution to
overcome that problem.
a. Menambah jam kerja/lembur (Added work time/ overtime)
b. Menambah pekerja dengan menggunakan pekerja paruh waktu (Added
c. Menambah pekerjaan dengan menggunakan perkerja dari bagian lain telah
finished)
d. Lainnya/ Others (Nyatakan/ Notify it)………………………………………

Part 5 : Cost Management and The Proposed Framework

anda pada manajemen biaya? Silahkan urutkan menurut skala kekerapan yang
terjadi menurut pengamatan anda
management based on your observation? Please make it in rank based on your
observation
perbaikan apabila ada permasalahan (Controlling budget in all of activities
and make the correction soon if there’s a problem)
186

(Making sure the financial budget appropriate with the cost estimated)
Menentukan aktivitas potensial untuk pengurangan kelebihan biaya
(ii) Silahkan jawab pertanyaan berikut ini berdasarkan pengalaman

perusahaan anda:
3. Apakah perusahaan anda mempunyai suatu kerangka untuk mengatur waktu
dan biaya proyek?
…………………………………………………………………………………
…………………………………………………………………………………
………………………………………………………………………………...
diterapkan di perusahaan anda dan sertakan alasannya!
What is your opinion about framework at the last part is it appropriate to
implement in your company? Gives your reason!
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
………………………………………………………………………
5. Jika ada bagian yang menurut anda tidak begitu penting untuk diterapkan oleh
kontraktor silahkan coret dan lakukan perbaikan bagaimana harusnya pada
kerangka tersebut menurut anda
If there is useless things in that framework please make a mark and give your
suggestion to repair it.
187
Saya mengaku bahwa jawaban pada questionnaire ini adalah benar dan bukan
suatu rekayasa oleh peneliti.
I acknowledge all of the answer of this questionnaire is true and did not invent
by the researcher.
Tanda tangan & Stempel Perusahaan

(……………………………….)

Thank you for your cooperation
188
YES
ORGANIZE CONTROL Achieving with Feedback Goals
PLAN Deviations/Problems
Planning Achievement
Major Activities
- Activities
- Equipment
- CPM
- S Curve
- Some Correction
b. Group in :
- Categories
- Item - Daily
- Monthly
APPENDIX D
Mean values for major causes time and cost overruns according to contractors
5 4 3 2 1
5 4 3 2 1 Total
5 3 5 10 3 26 25 12 15 20 3 75 2.8846
5 5 10 4 2 26 25 20 30 8 2 85 3.2696
4 4 9 9 0 26 20 16 27 18 0 81 3.1154
3 3 0 1 19 26 15 12 0 2 19 48 1.8462
9 11 2 2 2 26 45 44 6 4 2 101 3.8846
26 26 26 26 26
Mean values for the each cause

Environment 2.8846
Site condition out of plan 2 4.3269
Social condition 1 2.1635
Location in the middle of public facilities 1 2.1635
Equipment an Management 3.2692
The things that over estimated 2 4.6703
Lack of equipment 1 2.3352
Delayed activities 2 4.6703
Weather 1 2.3352
Poor management 1 2.3352
Material Stocks Activities 3.1154
Late in deliveries 3 4.0555
Limited stocks 2 2.6703
Transportation problems in deliveries 2 2.6703
Manpower/ Labour 1.8462
Limited skilled labour 2 2.4615
Lack of labour 1 1.2308
Changes 3.8846
Design changes 5 3.8846
26
Mean values for major causes time and cost overruns according to consultants
6 5 4 3 2 1 6 5 4 3 2 1 Total
5 4 2 1 0 1 12 30 20 8 3 0 1 62 2.0667
2 2 2 2 3 5 12 12 10 8 6 6 5 47 1.3429
1 3 1 3 4 1 12 6 15 4 9 8 1 43 1.1622
2 1 2 4 2 3 12 12 5 8 12 4 3 44 1.3750
2 2 5 2 3 2 12 12 10 20 6 6 2 56 1.2727
12 12 12 12 12 12
Mean values for each cause

Environment 2.0667
Site condition out of plan 1 2.0677
Social condition 1 2.0667
Location in the middle of public facilities -
Equipment and Management 1.3429
The things that over estimated 1 1.3429
Lack of equipment 1 1.3429
Delayed activities - -
Weather 1 1.3429
Poor management 1 1.3429
Material Stocks Activities 1.1622
Late in deliveries 1 1.1622
Limited stocks 1 1.1622
Transportation problems in deliveries 1 1.1622
Manpower/ Labour 1.3750
Limited skilled labour - -
Lack of labour 1 1.3750
Changes 1.2727
Design changes 2 1.2727
12
Mean values for time management activities that get less attentionby contractor according to consultants
10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 Total
8 1 1 0 0 1 0 0 1 0 12 80 9 8 0 0 5 0 0 2 0 104 8.6667
0 3 3 2 2 0 1 0 0 1 12 0 27 24 14 12 0 4 0 0 1 82 6.8333
1 0 2 1 1 2 2 1 0 2 12 10 0 16 7 6 10 8 3 0 2 62 5.1667
0 0 0 4 2 1 1 1 3 0 12 0 0 0 28 12 5 4 3 6 0 58 4.8333
0 0 1 0 3 1 2 2 2 1 12 0 0 8 0 18 5 8 6 4 1 50 4.1667
0 1 0 1 2 4 2 2 0 0 12 0 9 0 7 12 20 8 6 0 0 62 5.1667
1 0 1 1 0 2 4 1 0 2 12 10 0 8 7 0 10 16 3 0 2 56 4.6667
1 2 1 0 2 0 0 3 3 0 12 10 18 8 0 12 0 0 9 6 0 63 5.2500
1 0 3 0 0 1 0 1 3 3 12 10 0 24 0 0 5 0 3 6 3 51 4.2500
0 5 0 3 0 0 0 1 0 3 12 0 45 0 21 0 0 0 3 0 3 72 6.0000
12 12 12 12 12 12 12 12 12 12
Mean values for cost management activities that get less attention by contractor according to consultants
7 6 5 4 3 2 1 1 2 3 4 5 6 7 Total
4 1 0 1 0 3 3 12 28 6 0 4 0 6 3 47 3.9167
2 3 2 1 1 1 2 12 14 18 10 4 3 2 2 53 4.4167
0 3 3 2 2 2 0 12 0 18 15 8 6 4 0 51 4.2500
1 1 1 4 3 0 2 12 7 6 5 16 9 0 2 45 3.7500
2 1 2 0 5 1 1 12 14 6 10 0 15 2 1 48 4.0000
0 2 2 3 0 4 1 12 0 12 10 12 0 8 1 43 3.5833
3 1 2 1 1 1 3 12 21 6 10 4 3 2 3 49 4.0833
12 12 12 12 12 12 12

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THE FRAMEWORK FOR MINIMIZING CONSTRUCTION

TIME AND COST OVERRUNS IN PADANG AND PEKANBARU,

A thesis submitted in fulfilment of the

Faculty of Built Environment

Also My Sweet Sister and Brother:

I am also indebted to Universiti Teknologi Malaysia (UTM) for support in

My sincere appreciation is also extended to Bapak Prof. Ir. Dr. Zainai B.

Kaming et.al., (1997a) dan B. Trigunarsyah (2004) masing-masing telah

CHAPTER TITLE PAGE

1.1 Background of the Study 1

3 PROJECT TIME AND COST MANAGEMENT 34

4 PROJECT TIME AND COST MANAGEMENT 51

4.4 Project Time andi.Cost Management

7 TIME AND COST MANAGEMENT: A

FRAMEWORK” i. Time Overrun 110

7.1 Introduction ii. Cost Overrun 111

8 CONCLUTIONS AND RECOMMENDATIONS 138

No. Title Page

2.1 Indonesian GDP by Industrial Origin (billion rupiahs) and the 14

7.3 The current practices of time management by the contractors –

BAPEKIN : Badan Pengawas Konstruksi dan Investasi Nasional

APPENDIX TITLE PAGE

A LIST OF RESPONDENT 160

1.1 Background of the Study

Indonesia is a nation of 13,500 islands scattered between Asia and Australia.

The growth rate of Indonesian economic showed a better performance. It can

Indonesian construction industry experiences rapid changes and development

The increase in construction activities in both Padang and Pekanbaru has

Due to the fragmented and complex nature of construction, many problems

1.2 Statement of Issues

Like other developing countries, the Indonesian construction industry is also

However, despite having these methods, the Indonesian construction is still

management in framework model? If so, to what extent do they adhere to

1.3 Previous Research

Based on the research results in Thailand construction projects, Ogunlana

Poor site management and supervision, unforeseen ground conditions, low

Results of Kaming et. al. (1997a) research reflected the construction

On the other hand this research reflected the construction management

The studies in other countries also highlighted the appropriate practices or

It is good to refer to other practices because it will help in finding a better

1.4 Objectives of Research

Based upon the global notion of Indonesian construction projects condition in

3. To compare the time and cost management as currently practiced by

1.5 Scope of the Research

This research reviewed available literature to give a clear and precise

1.6 Thesis Organization

Chapter 2 reviews Indonesian construction industry, which discusses about

Chapter 4 reviews project time and cost management framework which

Chapter 5 describes the methodology that adopted to conduct this research.

Chapter 8 presents the conclusions of this research and the recommendations

INDONESIAN CONSTRUCTION INDUSTRY

2.2 The Indonesian Demography and Economic

The Indonesian people occupy the world's largest archipelago, stretching

2.2.1 The Indonesian Construction Industry

Indonesian construction industry has under gone changes and development

The percentage of the growth of the Indonesian construction sectors

Table 2.2. Value of Construction Works in Indonesia According to the Type of

Table 2.3 Value of Construction Completed by Province (billion rupiahs), in

2.2.2 Construction Industry Performance in Padang and Pekanbaru

The economic growth of Pekanbaru itself from 1998 to 2002 increased to

Kampriwoto (2004) stated that, the highest demand in construction projects

“Kelok 9” Fly-over “Koto Panjang” Dam

Renovation of “Simpang 3” Airport

Same with Pekanbaru, according to Kampriwoto (2004) housing projects also

Element cost per square meter - GFA method

Activity definition – identifying the specific activities that must be performed

Activity sequencing – identifying and documenting interactivity

Activity duration estimating – estimating the number of works periods which

Schedule development – analyzing activity sequences, activity durations, and

Schedule control – controlling changes to the project schedule.

Critical Path Methods (CPM); Calculated a single, deterministic early and