Abstract Out of 50 Libyan construction companies that received a questionnaire (referenced later in this paper), 34 responded.This paper examines the economic and social status of Libya and in addition analyses the chief causes of delay in construction projects and seeks to find solutions where possible.Of these, the main solutions include an improved payment schedule, more efficient management of materials, and implementation of computer software designed for management, planning and organisation of construction projects.
The main causes of delay, according to various sources and the data gathered from the distributed questionnaire, are problems with finance, materials, and labour.
However, there are also issues that relate to discrepancies in the contract as related to excusable,compensable and non-compensable delays due to unusual climate conditions.Below are the tables and questionnaire, starting with the questionnaire:Tables and ChartsQuestionnaireQuestion 1: Which of the following are most important delays associated with yourongoing project(s)? Please rate the Chance of Occurrence and Responsibility by circling a suitable figure as indicated below:Scale of Chance of Occurrence: 1-Unlikely, 2-As likely as not, 3-Almost Certain, 4-Certain.
Scale of Responsibilities: Own= Owner, Cont= Contractor, Cons= Consultant,Gov=Government.
ABCDelays CausesResponsibilityChance of OccurrenceMaterialShortagesOwn Cont Cons Gov Shared1 2 3 4Change during construction in types and specificationOwn Cont Cons Gov Shared1 2 3 4Slow deliveryOwn Cont Cons Gov Shared1 2 3 4Damaged goodsOwn Cont Cons Gov Shared1 2 3 4QualityOwn Cont Cons Gov Shared1 2 3 4ManpowerLabour skillsOwn Cont Cons Gov Shared1 2 3 4Shortage of skilled labour sOwn Cont Cons Gov Shared1 2 3 4Poor productivityOwn Cont Cons Gov Shared1 2 3 4Shortage of unskilled laboursOwn Cont Cons Gov Shared1 2 3 4EquipmentFailureOwn Cont Cons Gov Shared1 2 3 4ShortageOwn Cont Cons Gov Shared1 2 3 4Unskilled operatorsOwn Cont Cons Gov Shared1 2 3 4Slow maintenanceOwn Cont Cons Gov Shared1 2 3 4Old equipmentOwn Cont Cons Gov Shared1 2 3 4ChangesDesign changeOwn Cont Cons Gov Shared1 2 3 4Design errorsOwn Cont Cons Gov Shared1 2 3 4Errors in constructionOwn Cont Cons Gov Shared1 2 3 4Changing site conditionOwn Cont Cons Gov Shared1 2 3 4FinancingContractor financing problemsOwn Cont Cons Gov Shared1 2 3 4Delay in contractor’s progress paymentOwn Cont Cons Gov Shared1 2 3 4Project managementLack of training in project management skills.Own Cont Cons Gov Shared1 2 3 4Poor judgement inaccurate forecast of proven timesOwn Cont Cons Gov Shared1 2 3 4Health and safety issuesOwn Cont Cons Gov Shared1 2 3 4Ignoring critical tasksOwn Cont Cons Gov Shared1 2 3 4Accidents and illnessOwn Cont Cons Gov Shared1 2 3 4Contractual RelationshipSchedule of subcontractorOwn Cont Cons Gov Shared1 2 3 4Conflict between contractor and consultantOwn Cont Cons Gov Shared1 2 3 4Un cooperative ownerOwn Cont Cons Gov Shared1 2 3 4Owner’s slow decisionsOwn Cont Cons Gov Shared1 2 3 4Difficulty in coordination between different parties.Own Cont Cons Gov Shared1 2 3 4Unavailability of professional construction managementOwn Cont Cons Gov Shared1 2 3 4Controlling of subcontractor by general contractor.Own Cont Cons Gov Shared1 2 3 4Poor communication between owner and designer in the design phaseOwn Cont Cons Gov Shared1 2 3 4 Table 1: Company Statistics50 companies ( 34 respond).
Responding companies according to NationalityNOCompany NationalityNumberPercentage1National2882.35294122Foreign617.647058834100Responding companies according to specialty in excution workNOSpecialty in excution workNumberPercentage1Buildings and concrete1647.05882352Consultant1132.
35294123Water supply network411.76470594Road and bridges38.8235294134100Table 2: Overall Rankings for All Companies Q. NoDelays CausesChance of OccurrenceTotalpersentage43211Materials shortages1317313.
23529480.88235292Change during construction in materials types and specification452322.32352958.08823533Materials slow delivery471762.
26470656.61764714Damaged goods1320101.85294146.32352945materials quality1171152.
41176560.29411766Labour skills1116703.11764777.94117657Shortage of skilled labours1512703.
23529480.88235298labours Poor productivity521712.88235372.05882359Shortage of unskilled labours248201.
64705941.176470610Equipment failure432342.20588255.147058811Equipment shortage272232.
23529455.882352912Unskilled equipment operators188171.79411844.852941213Equipment slow maintenance2420825014Old equipment352422.
26470656.617647115Design change3121812.562.516Design errors2201112.
67647166.911764717Errors in construction2181312.61764765.441176518Changing site condition0161442.
35294158.823529419Contractor financing problems1417303.32352983.088235320Delay in contractor’s progress payment286003.
82352995.588235321Lack of training in project management skills .1613413.29411882.
352941222Poor judgement inaccurate forecast of proven times581922.47058861.764705923Health and safety issues2312171.70588242.
647058824Ignoring critical tasks442332.26470656.617647125Accidents and illness1310201.55882438.
970588226Schedule of subcontractor2319101.91176547.794117627Conflict between contractor and consultant619812.88235372.
058823528Un cooperative owner4181022.70588267.647058829Owner’s slow decisions1513513.23529480.
882352930Difficulty in coordination between different parties.2141442.41176560.294117631Unavailability of professional construction managemen10166237532Controlling of sub contractor by general contractor.
432522.26470656.617647133Poor communication between owner and designer in the design phase562032.38235359.
5588235Table 3Table of delays for buildings and concrete companiesQ. NoDelays CausesChance of OccurrenceTotalpersentage43211Materials shortages77113.2581.252Change during construction in materials types and specification34812.
562564.06253Materials slow delivery33732.37559.3754Damaged goods10961.
7543.755materials quality15732.2556.256Labour skills58303.
12578.1257Shortage of skilled labours86203.37584.3758labours Poor productivity48312.
937573.43759Shortage of unskilled labours11591.62540.62510Equipment failure311022.
312557.812511Equipment shortage231012.37559.37512Unskilled equipment operators16362.
12553.12513Equipment slow maintenance221022.2556.2514Old equipment231012.
37559.37515Design change38502.87571.87516Design errors28512.
687567.187517Errors in construction27612.62565.62518Changing site condition06732.
187554.687519Contractor financing problems96103.587.520Delay in contractor’s progress payment124003.
7593.7521Lack of training in project management skills .68113.187579.
687522Poor judgement inaccurate forecast of proven times43812.62565.62523Health and safety issues22571.937548.
437524Ignoring critical tasks311112.37559.37525Accidents and illness03581.687542.
187526Schedule of subcontractor23832.2556.2527Conflict between contractor and consultant484037528Un cooperative owner28512.687567.
187529Owner’s slow decisions86203.37584.37530Difficulty in coordination between different parties.27522.
562564.062531Unavailability of professional construction managemen39312.87571.87532Controlling of sub contractor by general contractor.
221112.312557.812533Poor communication between owner and designer in the design phase221022.2556.
25 Table 4Table of delays for consultant companies11Rank orderQ. NoDelays CausesChance of OccurrenceTotalpersentage4321120Delay in contractor’s progress payment92003.81818295.4545455219Contractor financing problems64103.
45454586.3636364321Lack of training in project management skills .54203.27272781.
818181841Materials shortages45203.18181879.545454556Labour skills45203.18181879.
545454567Shortage of skilled labours45203.18181879.5454545729Owner’s slow decisions53213.09090977.
2727273831Unavailability of professional construction managemen3611375916Design errors09202.81818270.45454551027Conflict between contractor and consultant26212.81818270.
4545455118labours Poor productivity17212.72727368.18181821217Errors in construction08302.72727368.
18181821328Un cooperative owner25312.72727368.18181821433Poor communication between owner and designer in the design phase22702.54545563.
6363636155materials quality08122.54545563.63636361618Changing site condition06412.45454561.
36363641732Controlling of sub contractor by general contractor.20902.36363659.0909091182Change during construction in materials types and specification11902.
27272756.81818181915Design change03802.27272756.81818182022Poor judgement inaccurate forecast of proven times12712.
27272756.81818182124Ignoring critical tasks12712.27272756.81818182210Equipment failure101002.
18181854.54545452330Difficulty in coordination between different parties.03712.18181854.
54545452414Old equipment10912.09090952.2727273254Damaged goods0272250263Materials slow delivery11632502711Equipment shortage01821.90909147.
72727272813Equipment slow maintenance00741.63636440.90909092926Schedule of subcontractor00741.63636440.
9090909309Shortage of unskilled labours02271.54545538.63636363112Unskilled equipment operators01461.54545538.
63636363225Accidents and illness10371.54545538.63636363323Health and safety issues01371.45454536.
3636364Table 5Table of delays for national companiesRank orderQ. NoDelays CausesChance of OccurrenceTotalpersentage4321120Delay in contractor’s progress payment235003.14705995.5357143219Contractor financing problems1413102.
85294186.6071429321Lack of training in project management skills .149412.70588282.
142857141Materials shortages1212312.67647181.2557Shortage of skilled labours1111602.61764779.
4642857629Owner’s slow decisions1112412.61764779.464285776Labour skills815502.55882477.
6785714831Unavailability of professional construction managemen813612.47058875927Conflict between contractor and consultant515712.35294171.4285714108labours Poor productivity220512.
32352970.53571431116Design errors217902.26470668.751217Errors in construction1171002.
20588266.96428571328Un cooperative owner3141012.20588266.96428571415Design change2111412.
05882462.51518Changing site condition0151122.02941261.6071429165materials quality017742.
02941261.60714291722Poor judgement inaccurate forecast of proven times371621.97058859.82142861833Poor communication between owner and designer in the design phase451631.
94117658.92857141930Difficulty in coordination between different parties.1101431.91176558.
03571432010Equipment failure422021.88235357.14285712132Controlling of sub contractor by general contractor.332111.
88235357.14285712211Equipment shortage261731.85294156.25232Change during construction in materials types and specification242021.
82352955.35714292424Ignoring critical tasks242021.82352955.3571429253Materials slow delivery261551.
79411854.46428572614Old equipment142121.76470653.57142862713Equipment slow maintenance141761.
64705950284Damaged goods131681.55882447.32142862912Unskilled equipment operators176141.545.
53571433023Health and safety issues2211131.44117643.753126Schedule of subcontractor021791.44117643.
753225Accidents and illness128171.26470638.3928571339Shortage of unskilled labours038171.23529437.
5Table 7Table of delays for road and bridges companies3Rank orderQ. NoDelays CausesChance of OccurrenceTotalpersentage4321120Delay in contractor’s progress payment30004100231Unavailability of professional construction managemen3000410031Materials shortages21003.66666791.6666667421Lack of training in project management skills .
333333367Shortage of skilled labours20103.33333383.3333333729Owner’s slow decisions12003.33333383.
3333333827Conflict between contractor and consultant0300375928Un cooperative owner0300375103Materials slow delivery02102.66666766.6666667115materials quality02102.66666766.
66666671211Equipment shortage02102.66666766.66666671317Errors in construction02102.66666766.
66666671418Changing site condition02102.66666766.66666671519Contractor financing problems02102.66666766.
66666671630Difficulty in coordination between different parties.02102.66666766.66666671714Old equipment01202.
33333358.33333331816Design errors01202.33333358.33333331922Poor judgement inaccurate forecast of proven times01202.
33333358.33333332024Ignoring critical tasks01202.33333358.3333333212Change during construction in materials types and specification0030250228labours Poor productivity0111250234Damaged goods00211.
66666741.66666672410Equipment failure00211.66666741.66666672513Equipment slow maintenance00211.
66666741.66666672615Design change00211.66666741.66666672723Health and safety issues00211.
66666741.66666672832Controlling of sub contractor by general contractor.00211.66666741.
66666672926Schedule of subcontractor00121.33333333.33333333033Poor communication between owner and designer in the design phase00121.33333333.
3333333319Shortage of unskilled labours00031253212Unskilled equipment operators00031253325Accidents and illness0003125Table 8Table of delays for water supply network companies4Rank orderQ. NoDelays CausesChance of OccurrenceTotalPersentage4321120Delay in contractor’s progress payment40004100219Contractor financing problems22003.587.5321Lack of training in project management skills .
30013.2581.2541Materials shortages0400375529Owner’s slow decisions21103.2581.
2566Labour skills040037577Shortage of skilled labours11202.7568.7588labours Poor productivity03102.7568.
75917Errors in construction03102.7568.751031Unavailability of professional construction managemen11202.7568.
75115materials quality02202.562.51216Design errors02202.562.
51318Changing site condition02202.562.51422Poor judgement inaccurate forecast of proven times02202.562.
51527Conflict between contractor and consultant02202.562.51628Un cooperative owner02202.562.
5173Materials slow delivery01302.2556.251811Equipment shortage01302.2556.
251913Equipment slow maintenance02112.2556.252014Old equipment01302.2556.
252115Design change01302.2556.252230Difficulty in coordination between different parties.02112.
2556.252332Controlling of sub contractor by general contractor.01302.2556.
25244Damaged goods01212502510Equipment failure0121250262Change during construction in materials types and specification00311.7543.752712Unskilled equipment operators01121.7543.
752824Ignoring critical tasks00311.7543.75299Shortage of unskilled labours01031.537.
53023Health and safety issues00221.537.53125Accidents and illness00221.537.
53226Schedule of subcontractor00221.537.53333Poor communication between owner and designer in the design phase00221.537.
5Table 9 Overall Ratings Bar Graph Introduction Construction management may be regarded as a success, according to the unspoken axiom, if the building is completed on time, within budget, and is of the desiredquality. However, although two out of those three can oftenbe achieved, all three cannot (Birkby and Brough, 2002), because of thecomplexities involved in a construction contract, and in particular the many differenttrades and professions that are commonly involved.Realistic construction time is now increasingly of the essence because it often servesas a crucial benchmark for assessing the performance of a project and the efficiencyof the project organisation.The project period or time is a fundamental specification of the construction contractof project execution, which is established prior to bidding.
The successful executionof construction projects and keeping them within estimated cost and prescribedschedules depend on a methodology that requires sound engineering judgement(Hancher, 1981).Project completion for the owner means that use can be made of new assets ontime by habitation, renting, or selling. Any delay in project completion will disturbplans. The client will not be able to make use of the property, and theirbusiness will be affected in almost all areas, especially finance.
The contractor will have to deal with issues stemming from delay as well, such as indirect overhead expenses andadditional payments to the project staff and workforce. It also means that compensation claims are a possibility. Any pending projects might be cancelled asa result of delays in the present project, and loss of future opportunities will be more likely by damage to reputation and credibility. The consultants and all otherparties involved will also lose if the project is delayed: they will at least lose time,which may mean losing money.
Despite the great effort that has been put into the evolution of construction projectplanning and control during the last four decades, delay is still a very common featureof construction projects, and most experience extensive delays. These often result inadversarial relationships between construction stake holders (clients, contractors,consultants, etc.): distrust, litigation, arbitration, cash-flow problems, and a generalfeeling of apprehension towards each other.Delays in the completion of projects produce a harmful effect upon all areas ofprojects and on all parties involved in these projects.
The negative effects of delaysare reflected in the cost of developments, the revenue from projects and the quality ofthose projects. The more time is taken to complete the job, the higher the cost ofconstruction, because delay means more members of staff, more hours worked, moreequipment, more direct and indirect overheads, potential claims between theowner and the contractor and more interest payable to financing institutions. Inaddition, rental or sale revenues will be lost for the duration of the delay. Otherconsequences are delays in starting new projects and loss of reputation and credibility.
Delays may also affect the quality of the work, because attempting to push the projectactivities forward to overcome delays can lead to quality being neglected.The construction industry has a poor record as related to thecompletion of projects on time (NEDO, 1983). Since it is clear that the majority ofconstruction projects suffer delays, many authors have striven to identify the causes ofdelay in construction projects, in order to put forward effective solutions; theseinclude Ogunalana (1996), Kumaraswamy (1998), Mansfield (1994), Assaf (1995),Mezher (1998), Battaineh (1999), Almomani (2000), Jonathan (2001), Alkass,Mazerolle & Harris (1996), and New South Wales (1992). There has also beenconsiderable interest in the effects of construction delays.
The information available isdiverse and widespread, but almost all the available literature concerns publicprojects. Another critical point is that almost all studies of the causes of delay inconstruction projects either consider a specific country or city, or recognise the causesof construction delay in general, but no research has been carried out into the reasonsbehind the different causes of delays in different countries. In other words, there hasbeen no comparative study examining the causes of delay in two or more regions,except the one conducted by Chan (1998), whose comparison is based on previousstudies by different authors for different purposes, using different techniques andmeasurements. Moreover, many studies have limited the causes which are included tothose for which contractors are entitled to a time extension.
The analysis does notcover causes of delay for which the contractor is responsible, such as those related tolabour and equipment, planning and site management, construction methods, or theadequacy and capability of the contractor. Other conclusions are based on the numberof time extensions, not on the extent of delay attributed to the different causes ofdelay. In addition, almost all surveys are drawn from records of public buildingprojects, and may therefore deal with causes which are not valid for other types ofconstruction such as industrial facilities, commercial construction projects or housing.This research was carried out to address these points and put them in the right placeby using the appropriate method.
Literature Review2. Review of Literature and Related WorksConstruction delays have always accompanied almost projects undertaken in the developing countries. Many authors have ventured to explore the different facets of this problem.Construction delays have become a major concern to all contracting parties (owners, construction managers, contractors).
The management of delay involves preventing analysing, taking into consideration, and protecting the contractor’s program of work from further delays.Odeh and Battaneh (2001) wrote that operational factors such as labour productivity, construction methods, site management, and equipment availability and failure were more important to contractors than to consultants. Contractors were also more concerned with factors related to contract clauses that may alter their contractual obligations and rights. These factors include changed orders, mistakes and discrepancies in contract documents and major disputes and negotiations.
However, factors dealing with subcontracting, planning, organizing and communicating were more important to consultants than to contractors. Delays are costly and often result in disputes and claims, impair the feasibility for project owners, and retard the development of the construction industry. To improve the situation, the findings of this research must be addressed by a joint effort of all participants in the construction industry.Ahuia (1984) notes that time and cost parameters are considered to be of paramount importance in the management of construction projects.
The relationship that exists between time and cost has been investigated by a number of researchers using different methods (Fulkerson, 1961). Traditionally construction management objectives concentrated around the three fundamental aspects of time, cost and functional performance (Meredith and Mantel, 1989).Bosch and Philips (2002) note the significant cost of construction delays to projects “causes builders to be more willing to succumb to union demands than their counterparts in other industries”. Further the authors note that problems of staffing construction projects are primary reasons for many costly construction delays as is adequate funding for construction projects.
Training is also a key issue for the construction labour force, with inadequate training resulting in failures in the market and expensive construction delays (Bosch and Philips, 2002).Antill and Woodhead (1982) noted that delays anticipated in the conventional contracts are divided into three main categories: firstly those under control of the contractor, secondly those under control of the client, and thirdly those under control of neither one. The delays are often confused with the problem of disruption because delay to the construction completion is usually the result of disruption. Disruption is an interruption in the contractor’s planned work flow, especially the work or productivity of its labour forces, Bramble and Donofrio (1990).
Dadfar and Gustavsson (1992) noted that construction projects are the focal institute in an organisation set, and that cultural factors may impact construction processes and delays when acknowledged as part of the internal forces that affect construction delivery. Their studies suggest that it is important to review culture particularly in the context of international construction projects in order to gain insight regarding construction delays in a multicultural environment.Kaming (1997) noted that many variables have an impact upon construction time and cost overruns. The variables identified were ranked according to their perceived importance and frequencies of occurrence.
Inflationary increases in material cost, inaccurate material estimating and project complexity are the main causes of cost overruns. The predominant causes of delay as found by his study are design changes, poor labour productivity and inadequate planning. Using factor analysis techniques, delay and cost overrun variables were grouped into factors, and their relationships analysed. Although Indonesia specific, the results reflect construction management problems common to developing countries.
Kraiem & Diekman (1987) classified delays into three categories: comspensable, excusable and non-excusable. Delay is compensable to the contractor when the fault is is or caused by the owner. Excusable delays occur when the contractor is delayed by occurrence that are not attributable to either by the contractor or owner. Non-excusable delays are caused by the contractors own action and/or inaction.
This can be the fault of the contractor, or his subcontractors, materials, workforce or suppliers.Major causes in the USA were the result of weather, labour supply and subcontractors.In developing countries delays were caused during the pre-planning process and construction stages. Workers are skilled.
Productivity.Inherent delays such as planning and control problems.Yates(1993) developed a decision support system for construction delay analysis called the delay analysis system(DAS). Main categories of delays in the DAS system include engineering, equipment, external delays, labour, management, materials, owner, subcontractor and weather.
Assaf, et al.(1993) studied the causes of delay in large building construction projects in Saudi Arabia. If the schedule changes it will affect the money or product whether the contractor is compensated for it or not. Inexcusable delays have a built-in contractor penalty in the form of increased costs in general conditions.
Because of this it is important for the contractor to understand the nature of delays to protect the right to compensation and extensions of time. Proper notification and claims are the contractor’s bag of tools in protecting these rights when there are changes from the original contract baseline. There are three types of delays on a construction project:Nonexcusable. The contractor gets no time or money.
Excusable. The contractor gets time, but no money.Compensable. The contractor gets both time and money.
Froese (1997) analysed different computer software designed to aid and streamline the management process, focusing mainly on Total Project Systems (TOPS). These are computer tools to support construction management with the defining characteristics of comprehensiveness, integration, and flexibility. They are an attempt to push computer tools past the point of “critical mass” where broadly-applicable computational models become the primary vehicle for practicing construction management. TOPS development is described and demonstrated as it is in the conceptual stage, showing that the approach builds upon previous research into integrated construction systems.
It extends project management scope and links closely to international data standards efforts. The underlying data model is shown, and methodology of developing the functional requirements and the data topics addressed by TOPS. It also shows how these extend the core modeling efforts of international standards, and outlines the scope of a TOPS project management application model. Finally, the paper discusses computer-assisted construction planning in TOPS.
The approach carries out planning by refining project plans according to aggregation and specialisation hierarchies of process types.Ogunlana et al.(1996) studied the delays in building project in Thailand, as an example of developing economies. They concluded that the problems of the construction industry in developing economies can be nested in three layers: (1) problem of shortages or inadequacies in industry infrastructure, mainly supply of resources; (2) problems caused by clients and consultants; and (3) problems caused by incompetence of contractors.
Mezher et al. (1998) conducted a survey of the causes of delays in the construction industry in Lebanon from the viewpoint of owners, contractors and architectural/engineering firms. It was found that owners had more concerns with regard to financial issues, contractors regarded contractual relationships the most important, while consultants considered project management issues to be the most important causes of delays.Falqi (2004) compared construction in the UK and Saudi Arabia, focusing mainly on the reasons for the delays as related to the construction industry’s history and background in those two nations.
This comparison showed that as a rule, developing countries tend to suffer more delays than countirs that already are developed.;Research Design, Methodology and ObjectivesTo achieve the aims and objectives of this project the researcher will carry out a review of literature and conduct interviews of professional practitioners from various construction professions including: architects, civil engineers and quantity surveyors to identify overall causes of delays in construction processes in Libya.The researcher will design a questionnaire for completion by construction managers working in construction companies within Libya. The questionnaire will consist of a number of semi-structured questions focusing on the causes of construction delays and their perceived effects on the construction process.
Fifty (50) questionnaires, containing a number of questions, based on the causes of delays will be distributed to construction companies in Libya. Evaluation and analysis of the results and come out with recommendations for minimizing delays in the Libyan construction public sector.The researcher will design a questionnaire for completion by construction managers working in construction companies within Libya. The questionnaire will consist of a number of semi-structured questions focusing on the causes of construction delays and their perceived effects on the construction process.
Fifty (50) questionnaires, containing a number of questions, based on the causes of delays will be distributed to construction companies in Libya.A stratified random sampling technique will be employed in the choice of respondents;There will be four groups representing various specialty in execution work, namely:;1. Bridges and Concrete2. Consultant3.
Water Supply Network4. Road and Bridges;Of the 50 projected sample companies, 34, responded. Below is breakdown of;actual respondents:;;Specialty in execution work No. Percentage;1.
Bridges and Concrete 16 47.05882352. Consultant 11 32.35294123.
Water Supply Network 4 11.76470594. Road and Bridges 3 8.82352941Total 34 100.
00;To gain insights whether the are similarities or differences in the causes of;construction delay between foreign and national companies, the questionnaires;were distributed to both. The responding companies according to nationality is shown;below:;Reponding Companies According to Nationality;No. Company Nationality Number Percentage;1 National 28 82.35294122 Foreign 6 17.
6470588Total 34 100.00;;The study is to be carried out in four phases, namely:;;- Phase 1 – Carry out a review of literature;- Phase 2 – Conduct interviews of professional practitioners from various;construction professionals including:architects, civil engineers and quantity surveyors to;identifiy overall causes of delay in construction processes in Libya;- Phase 3 – Questionnaire; devise a questionnaire for completion by;construction managers in construction companies working in Libya.;- Phase 4 – Analysis of the results, and development of best practice;guide for minimising delays in the Libyan construction public sector. A cross tabulation;of results among the four types of respondents will be undertaken to determine whether;there are significant similarities or differences in the causes of delay across all types of;respondents.
;1. Overall aim.The aim of this research is to identify, investigate, analyse and evaluate the major causes of delays in construction projects in Libya particularly to the public endeavours, and to provide and usual practices in other counties.2.
Project recommendations and possible alternative solutions. It will also investigate how to minimise these causes and the possible ways of eradication by the identification and application of current ways and objectives:3. 1. Identify over all causes of delays in construction processes in Libya.
3.2. Investigate a sample of construction companies in Libya in order to rank these variables according to their probability as a cause of delay, and the percentage of responsibility for each party (owner, contractor, consultant and government).3.
3. Analyse and evaluate the causes of delay and to investigate and recommend appropriate solutions.3.4.
Investigate examples of best practice (UK,USA) to consider how solutions can be applied at an industry and national level to Libyan construction processes.3.5. Produce guidance and recommendations at an industry and national level enhance the development of the management of construction processes in Libya.
;Major Findings and AnalysisLibya Background Demographic InformationLibya is located in Northern Africa, bordering the Mediterranean Sea, between Egypt and Tunisia. It has a total land area of 1,759,540 sq km, slightly larger than Alaska. It is bordered by Algeria (982 km), Chad (1,055 km), Egypt (1,115 km), Niger (354 km), Sudan (383 km) and Tunisia (459 km)The climate is Mediterranean along the coast whereas the interior is dry and extreme desert. It is also mostly barren with flat to undulating plains, plateaus and depressionsThe lowest point is Sabkhat Ghuzayyil at -47 m and thehighest point: Bikku Bitti 2,267 mLibya has ample reserves of petroleum, natural gas and gypsum.
1.03% of the land is arable, with permanent crops 0.19%Desertification is an issue, and there are very limited natural fresh water resources; the Great Manmade River Project, the largest water development scheme in the world, is being built to bring water from large aquifers under the Sahara to coastal cities.The population is 5,900,754, which includes 166,510 non-nationals.
Age demographic is below:0-14 years: 33.6% (male 1,012,748/female 969,978)15-64 years: 62.2% (male 1,891,643/female 1,778,621)65 years and over: 4.2% (male 121,566/female 126,198) (2006 est.
)The median age is 23 yearsLibya’s ethnicity is rather homogenoues, with Berber and Arab groups comprising 97% of the population with Greeks, Maltese, Italians, Egyptians, Pakistanis, Turks, Indians, Tunisians comprising the other 3%.Arabic, Italian, English are all spoken and widely understood in the major citiesEconomic OverviewThe Libyan economy is primarily dependent upon revenues from the oil sector, which contribute about 95% of export earnings, about one-quarter of GDP, and 60% of public sector wages. Revenues from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa, but little of this income flows down to the lower orders of society.Libyan officials in the past four years have made progress on economic reforms as part of a broader campaign to reintegrate the country into the international fold.
This effort picked up steam after UN sanctions were lifted in September 2003 and as Libya announced that it would abandon programs to build weapons of mass destruction in December 2003. Almost all US unilateral sanctions against Libya were removed in April 2004, helping Libya attract more foreign direct investment, mostly in the energy sector. Libya faces a long road ahead in liberalizing the socialist-oriented economy, but initial steps – including applying for WTO membership, reducing some subsidies, and announcing plans for privatization – are laying the groundwork for a transition to a more market-based economy. The non-oil manufacturing and construction sectors, which account for about 20% of GDP, have expanded from processing mostly agricultural products to include the production of petrochemicals, iron, steel, and aluminium.
Climatic conditions and poor soils severely limit agricultural output, and Libya imports about 75% of its food.;Analysis and Findings5. Major Findings and AnalysisMajor Findings:;1 All companies short-listed 33 variables as probable causes of delay in the construction;industry in Libya were experienced by all respondents. The study revealed that;regardless of specialty in execution work in the fields of: a) Buildings and Concrete; b);Consultant: c) Water Supply Network; and, d) Roads and Bridges, the same causes of;delay plague the construction industry in the country.
Table ——– Rank Order of Causes of Delay for All 34 Companies) 2. Regardless of respondent category, the delay in contractor’s progress payment is consistent as the number one cause of delay. (Tables 2– Table of Delays per Group of Respondents) 3 The primary survey revealed the following 10 Major causes of delay across all 4 respondents, ranked according to occurrence and severity, with rank 1 as the most common: a. Delay in contractors’ progress payment b.
Contractor financing problems c. Lack of training in project management skills d. Materials shortages e. Shortage of skilled labours f.
Owner’s slow decisions g. Labour skills h. Unavailability of professional construction management i. Labours’ poor productivity j.
Conflict between contractor and consultant 4. The second major cause of delay as perceived by all respondents is Contractor financing problem. This can be viewed as a direct result of the major cause of delay, which pertains to collection problems among contractors. 5.
The cross tabulation analysis of the 10 major causes of delay across the four groups of respondents showed that while the three other groups identified conflict between contractor and consultant as common cause of delay, this did not affect the group engaged in water supply network. The following findings were further gleaned from the results of the study: k. Health and safety issues ranked no. 2 among those engaged in road and bridges, while the rest of the respondents consider it as a lesser concern.
l. Only the respondents engaged in buildings and concrete identified design change as among the 10 major causes of delay. m. Only the group engaged in water supply identified errors in construction as among their leading causes of delay.
n. Only the roads and bridges group identified materials slow delivery as a major cause of delay. o. Damaged goods were identified among the 10 leading causes of delay by those engaged in roads and bridges only.
5 The survey revealed the following causes of construction delay according to their Rank Order. Table A Rank Order for all 34 companies Rank orderCauses of Delay1Delay in contractor’s progress payment2Contractor financing problems3Lack of training in project management skills.4Materials shortages5Shortage of skilled Labourers6Owner’s slow decisions7Labour’s Labour skills8Unavailability of professional construction management9Labour’s Poor productivity10Conflict between contractor and consultant11Uncooperative owner12Design errors13Errors in construction14Design change15Poor judgment inaccurate forecast of proven times16Materials quality17Difficulty in coordination between different parties.18Poor communication between owner and designer in the design phase19Changing site condition20Change during construction in materials types and specification21Ignoring critical tasks22Materials slow delivery23Old equipment24Controlling of sub contractor by general contractor.
25Equipment shortage26Equipment failure27Equipment slow maintenance28Schedule of subcontractor29Damaged goods30Unskilled equipment operators31Health and safety issues32Shortage of unskilled labours33Accidents and illness6 The least cause of delay as revealed by the survey is accidents/illness. 7 A comparative analysis between foreign companies and national companies revealed practically the same leading causes of delay, though they vary in rank order. The only difference is, that while on the one hand, foreign companies identified uncooperative owner as a cause of delay, on the other hand, national companies did not identify it. Instead, national companies experienced contractor-financing problem as a major cause.
Similarly, while national companies identified this as a cause of the delay, the foreign companies do not have problems on contractor financing. Thus, this was not among their primary concern in the construction industry in Libya. As regarding responsibility of delays, about 65% of the responsibility of the delays was attributed to the Contractor; 13% to the Owner; 13% to the Government; and, 9 % to the Consultants. Majority of the causes of delay that were attributed to the contractor involve materials, labour and equipment; while those of the owner concerns decisions on changes of design and materials while the work is in progress.
Delays due to government were more on the availability of skilled labour; change in material prices during construction; and, unavailability of professional construction management. These reasons are reflective of the government’s policies, priorities and thrusts. On the part of the consultant, it takes responsibility in design errors; difficulty in coordination between different parties; poor communication between owner and designer in the design phase; and, change during construction in materials types and specification. Following is a brief explanation and elaboration of several causes of delay.
WeatherConstruction is often exposed to climatic extremes, which vary with the geographical location of the project.Temperature during the working day for the entire year can vary between 30 and 35°C. Hot weather is by no means free of difficulty, as indicated by Mountjoy (1975).a hot climate is not conducive to mental and physical energy; they do not favour muscular activity, which generates body heat and subsequentdiscomfort.
As a result, operatives’ output in hot climates is certainly lower. (Kaming et al, 1997)However, there have been many examples of litigation due to delas of weather because the contract failed to be speficic about the excusable and/or compensable delays.Clauses granting time extensions for weather delays should be written with more specific language with respect to excusable delays due to weather. The concept of awarding a time extension for “unusually severe weather” is vague and has led to substantialamounts of litigation.
Properly drafted contract documents should assign responsibilities and risks and reduce or eliminate uncertainties. To address this a specification could be provided that does the following (Finke 1990):1. Defines the daily severity of weather at which an impact on the work may be reasonable. One such threshold of severity could be given to apply to the entire project or separate levels could be assigned to different portions.
As an example of thesecond option, daily severities could be tailored to the materials or type of work involved. The specifications should provide precise standards for such activities.2. Define the number of days per month that each level of severityis foreseeable.
3. Establish the source for actual weather records and site conditionsfor lingering effects and the required content of such records (National Weather Service, etc.)4. Define and specify an allowable number of additional workdays to which may be requested by the owner to make up forlost time due to weather.
The implementation of the above recommendations should assistin developing an objective procedure by which weather delayclaims could be handled by the parties without the need forlitigation. Resource shortagesResource management has been extensively studied in many developed countries (Illingworth and Thain, 1988; Harris and McCaffer, 1989; Tavakoli andKakalia, 1993), but less so in developing countries (Abdullah, 1985; Olomolaiye, 1988; Abdulrahman and Alidrisyi, 1994). Materials planning embraces quantifying,ordering, and scheduling. Productivity will suffer if the materials planning process is not executed properly.
Another issue (which is sometimes beyondmanagement control) is materials shortages. For example, yearly cement shortages have long been a topic of debate within the construction industry (Kwik, 1994; Wibisono, 1994). Cement shortage escalates the cost of other materials, being a constituent of many. Because materials account for some 65% of the overall cost of high-rise construction (Kaming et al.
, 1995), their impact on cost overruns can be very high. ExperienceA lack of contractor experience with regard to particular types of project is typical in Indonesia. The subsequent lack of technological knowledge causes delaysand cost overruns. Furthermore, lack of environmental data with regard to geographical problems (such as soil types and groundwater levels) creates delays and additional costs.
Design ChangesThe construction of nearly all civil engineering and building projects will witness a number of changes in volume, nature, and order or duration of work to beperformed, after the contract has commenced. The magnitude of these changes depends upon a number of variables, not least important of which are: the thoroughnessof the pre-design site investigation; the completeness of working drawings available at the time of estimate or proposal; and unpredictable circumstancesduring construction. Design changes inevitably lead to variation in original cost/time programmes. Labour ProductivityLabour is part of, but distinct from, other resources, because it has special characteristics.
The production output of labour is a function of skill and motivation(Olomolaiye, 1988). Poor labour productivity has been investigated intensively in developing countries and problems have been identified (Olomolaiye et al.,1987).They are often recruited through friends or relatives (typically the foremen), and are low skilled, earn low wages, and are hence less productive.
Contractors’ and Consultants’ IssuesPutting together a workable schedule that satisfies all constraints is not an easy task.After contractors have evaluated the work to be performed and the most logical andcost-effective sequence of performing that work, further analysis toproduce a workable and efficient construction schedule must be completed. Often, contractors find that labour, equipment, or materials are in short supply. Shortages of these essentialresources can significantly affect the initiation, performance and completion ofactivities on the schedule and can cause the project to be extended beyond thescheduled duration (Callahan et al, 1992).
The contractor’s ability to complete the construction project within the planned timeis rooted in his capabilities, which include managerial competence and availableresources. These resources include manpower, money, materials, and equipment. Acontractor has two sources of manpower: direct hire and sub-contract. In most typesof contracts, if a sub-contractor causes a delay, the owner should and will look to thecontractor for its resolution.
Therefore, it is necessary for the contractor tocontinuously oversee his sub-contractors’ performance. Contractors have a dualproblem, balancing their interests between owners and sub-contractors.Many factors related to contractors may lead to project delay, and these factors aresubdivided into five major categories as follows:MaterialsEquipmentManpowerProject management performanceProject financeA. MaterialsMaterials are an important element in any construction project, representing a majorexpense.
The managing of construction materials by the contractor is not just a concern during onsite construction; decisions about material procurement may also be required during the initial planning and scheduling stages. In some case, more expensive suppliersmay be employed to save time.Materials may be delayed in delivery, deteriorate during storage or be stolen, unlessspecial care is taken. In addition, delays and extra expenses may be incurred ifmaterials required for particular activities are not available.
Accordingly, ensuring atimely flow of materials is an important concern of the contractor.A rise in the price of materials may sometimes cause the client to wait, hoping thatthe price will decrease. This is especially true for large projects which require a large amount of materials, and where a rise in price makes a significant difference. Waiting for price changes results in delay to some activities, which might be critical, leading to delays in project completion.
In some cases, changes of project specification take place due to mistakes in design,or to improve the quality. These changes more often than not require a change inmaterial types. The materials required might take time to be delivered because of theprice negotiation process or waiting for approval by the owner.In summary, delays related to materials can be ascribed to four factors: shortage,delay in delivery, change in materials specifications, and changes in materials prices.
B. EquipmentConstruction equipment is mainly used to perform essentially repetitive operations,and can be broadly classified according to two basic functions: operators such ascranes and graders, which stay within the confines of the construction site, and haulerssuch as dump trucks and ready mixed concrete trucks, which transport materials toand from the site.Contractors may purchase or hire equipment, or both. However, most contractors owntheir standard equipment as an economical solution, since they use it regularly.
Ineither case, “hire or ownership is subject to a rate for its hire” (Kwakye, 1997).The selection of the appropriate type and sise of construction equipmentalso often affects the required amount of time and effort and in turn the job-site productivityof a project. It is therefore important for a contractor to be familiar with thecharacteristics of the major types of equipment most commonly used in construction.Selecting the appropriate type of equipment, delivering it to the site on time, ensuringit is maintained and not subject to breakdown, are major duties of the contractor.
Anyfailure to do one of these will almost inevitably slow down the progress of work and lead to a delay in project completion. Shortage or unavailability of the required equipment thus has animpact on the project time, so the contractor should select appropriate equipmentprocurement and establish an effective plan in order to control it and avoid additionalcosts and time.C. ManpowerIn the construction industry, many operations and processes are labour intensive.
Efficient management of labour or human resources can be the key to a successfulconstruction project.“Productivity in construction is often broadly defined as output per labour hour”(Hendrickson, 1998). Manpower consists of three types with respect to skill levels:skilled, semi-skilled, and unskilled. These include foremen, technicians, siteengineers, civil, mechanical, and electrical engineers and inspectors.
Contractorsshould establish a manpower plan, which involves identifying and assigning projectroles, responsibility and reporting relationships. Roles and responsibilities may beassigned to individuals or groups. “Failure in selecting the correct number andcategory of the labour force will severely affect the quality, the cost and the progressof the works and may result in complete failure of the project” (Drewin, 1982).Planning should therefore take a place at an early stage of the project.
Additionally,control processes must be established to ensure that labourers are working as plannedand to take the necessary action during the project’s progress.In Saudi Arabia, for example, most construction manpower is foreign. Generally, contracting companies are owned by Saudis, but most of the employees, from the top level to labour level, are imported from abroad.In terms of time, this may cause some problems in construction projects, since importing labour requires complicated processes (interviewing, testing, visas, travel, accommodation, health insurance, etc.
) which are beyond the control of the contractor and therefore time-consuming. Other problems may arise from culture gaps (different languages and different methods and systems of work), since there are many nationalities involved in the project. These gaps can slow down the project’s progress, as communication and coordination between the workers is slower than for a monolingual workforce. Conversely, the vast majority of people at all levels of manpower in British contracting companies are English-speaking UK citizens.
This enables them to operate at an elevated speed of communication and coordination, which in turn has a positive impact on the overall duration of projects, compared to those in SA.Project management performanceThere is no one environment for project management; it is a changing environment. Ithas never been simple, and as with any evolutionary process, it is becoming ever morecomplex. Before examining project management performance, it is necessary to understand what project management means.
The Project Management Institute (1996) identifies project management as “the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project”. Successful project management requires team leadership and coordination, diligent project planning and effective oversight of the delivery process.But there are obstacles preventing contractors from performing successfully. The National Audit Office (2001) identifies five major barriers to improving construction performance related to contractors:1) Limited project management skills with a stronger emphasis on crisismanagement2) Limited identification and management of risk3) Reliance on contracts to resolve problems with adversarialrelationships4) Late payment to subcontractors and suppliers5) Limited understanding of the true cost of construction components andprocesses.
Contractors’ responsibilities involve many tasks that contribute to projectmanagement performance. Planning and scheduling the project, communication andcoordination with project parties, controlling suppliers and sub-contractors are themain issues that impact on project duration.“As in many other walks of life, if we start off by doing things wrong, one badpractice leads to another, and we end up in a vicious downward spiral” (Horner andDuff, 2001). Planning is a vital issue in any project, and success or failure ofconstruction projects can be primarily ascribed to the planning.
Planning for acontractor begins with the selection of the most appropriate procurement method forthe project; the final, detailed plan demonstrates what each one has to do, when, andhow, and comprises all major decisions necessary. “The plan becomes a vehicle forcommunication with all project participants and is a prerequisite for detailedscheduling of the work and for the preparation of a definitive cost estimate”(Kimmosons and Loweree, 1989). Scheduling is a vital part of planning; it develops atimetable for the implementation dates of the plan. The lack of an appropriate projectplan usually results in poor project implementation.
Project planning must obviouslytake place at an early stage of the project, but there should be a planning revision atany appropriate time during the project because of the changes that commonly happenin construction.In order to handle the project and ensure that all things are under control, contractorsshould build coordination and communication routes with all parties involved: subcontractors,suppliers, owners, the administration team, the local authority, etc.Regular meeting between parties involved can create an effective atmosphere forsolving all difficulties that result from the interface of the different parties in a project.Project quality control can also affect the duration of a project.
Completing workwithout achieving the desired quality standards may lead to having to do it again. Toavoid such costly mistakes, quality control is required, to ensure that the project willsatisfy the needs for which it was undertaken, which involves proceeding in threestages. Once the client has identified the desired quality standard, the contractor needsto determine how to achieve it. Secondly, he must carry on the process of qualityassurance, which involves evaluating overall project performance on a regular basis toprovide confidence that the project will satisfy the desired quality.
Finally, he mustmonitor specific project results to determine if they comply with the desired qualityand identify ways to eliminate causes of unsatisfactory performance.Contractors should consider that each project has its own requirements; they shouldselect an appropriate labour force (in terms of qualifications and numbers) that canaddress the needs of the specific project. Motivating and training the labour force alsoincreases their productivity. Conversely, inadequate selection, motivation and trainingmay lead to poor productivity, which in turn contributes to delays.
Managerial issueswithin the contracting company will play a significant role in handling the projectprocess. Kungari (1988) states that “weakness in the company may disturb the flow ofproject operations […]. Among the many bad practices of the company that affect thesmooth performance of the job we can list changing key personnel, managementincompetence, shortage of professional and administrative staff [and] lack of technicaland/or managerial experience.” Incompetent human resources can lead to aninaccurate study of the project at the tender stage, the choice of inefficientprocurement methods, ineffectual planning, imprecise estimations for projectduration, and the loss of control of parties standing below the contractor in thehierarchy of the project organisation, such as suppliers and sub-contractors.
E. Project financeThe methods used to finance building and construction projects is one of the mostdynamic and complex areas in the modem industry. Where clients used to pay forwork done, today it is increasingly common for the construction contractor orconsortium to arrange the finance necessary for the projects they are responsible for.These methods, first employed on infrastructure projects in the transport and energyindustries, are now being applied to building work (Best and de Valence, 2002).
Thus,not only owners but also contractors may face problems in financing the project.Difficulties that may be faced are delay or inability to pay the direct and indirectcosts. Direct costs include materials, labour, and subcontract expenditures, whileindirect costs are the expenditures that support the direct activities, such assupervision and warehousing. Also, the complexity of construction cash flow,disputes with suppliers with regard to payment, and other problems common inconstruction projects, all may contribute to delays in completion.
The contractorshould make sure that he has sufficient capital to enable the undertaking of a specificproject, and put all financing processes under control by adopting an effective projectfinancing method.Lack of training on project management skills and shortage of skilled labour, which are among the top five causes of delay, ,can be the result of the colonial rule, where the colonial power focused on infrastructure development, without regard to the subsequent transfer of technology to the Libyans. Likewise, it can also be attributed to the government restrictions on the hiring of foreign nationals. When Libya encouraged the influx of foreign workers, the government restricted limited expatriates to work in Libya.
This is further aggravated by unavailability of professional construction management and labour’s poor productivity, which are in effect interrelated to the earlier identified causes of delay. Various systems and tools for physical and financial reporting have been designed primarily to avert delays in progress billings. These were developed by analysts and practitioners to guide and simplify the process for efficient project management. 5.
Comparisons of Construction Delays in the UK and LibyaUK Construction IndustryThe UK construction industry contributes around 8% of GDP and employs about 2million people. UK construction output is 12% of total European output, the thirdlargest construction output in Europe and the fifth largest in the world. Exports are ofthe order of £10 billion, whilst domestically, the construction industry is a majordeliverer of key government programmes such as housing, hospitals and infrastructure. It is an extremely diverse industry composed of contractors, consultantsand producers of building materials and products.
Most of the contracting andconsulting companies operating internationally have offices in London and the SouthEast of England. Both the contracting and material/products sectors, particularly thelatter, have experienced takeovers by overseas companies. Consolidation of thecontracting sector is likely to continue. UK consultants operate in almost everycountry throughout the world.
The contractors’ and consultants’ overseas work has moved towards design, projectmanagement and value-added services. The UK construction industry enjoys a highreputation in these areas as well as being experienced in innovative procurementmethods. Many of the landmark projects worldwide have a UK influence, either indesign, management or construction. Fosters were responsible for the design of theBerlin Reichstag building and the highest skyscraper in SA, the Alfaisaliah Tower;Halcrow were involved in the man-made river project in Africa; and Ove Arup areundertaking the Denver Millennium Bridge project.
Furthermore, following theSeptember 11th tragedy in the USA, UK-based Bovis Lend Lease and Amec are twoof the four companies commissioned by the City of New York to engage in thereclamation work at the World Trade Centre site. This is evidence of the recognitionin the world market of UK technical skills. British Standards and Codes are alsorecognised worldwide and they form the basis of governance in many constructionindustries all over the world. Libya Construction IndustryGrowth in the Libyan industrial capacity began in force only after 1969.
Earlier manufacturing efforts were concentrated mainly on processing domestic crops, livestock products and on handicraft products. Before the revolution, 90 percent of Libya’s manufacturing establishments were located in Benghazi or Tripoli, and 75 to 80 percent of these were owned by Italians. Nearly 90 percent of the manufacturing establishments were private, and most employed fewer than 20 workers.The situation began to change after 1969.
After waiting for almost a year, the new government opted for a restricted industrial policy resembling the policies of Egypt and Algeria. In the late 1970s, the industrial sector (including manufacturing) was planned by the government, which had assumed control over those aspects of industrial production that were deemed too sensitive or too large for the domestic private sector. The new policy leaned heavily on freeing industry, including manufacturing, from dependence on foreign ownership or control. In what appeared to be in part at least a function of its new policy, the government required local companies that engaged in trade to be Libyan and nationalised the properties of Italians, who represented the bulk of the country’s entrepreneurship and private sector.
Before 1980 the government concentrated on developing light processing and petrochemical industries. Processing of food continued to remain a high priority, and the largest number of plants built during the 1970s were in this area. Other major manufacturing projects during the decade included textile complexes, a new oil refinery, two petrochemical plants, a fertiliser factory, and an electrical cable plant. Gains in value added from manufacturing over this period were impressive.
In constant 1980 dollars, value added in manufacturing rose from US$196 million to US$760 million in 1983. Still, in terms of contribution to GDP, in 1983 manufacturing contributed only 4 percent of the total. In that year, an estimated 80,500 people worked in the manufacturing sector, about 7 percent of the total labour force. Light industries–mainly food processing–continued to comprise the largest share of total manufacturing capacity by the early 1980s.
Encouraging the development of heavy industry became a high priority for the government in the 1980s. The 1981-85 development plan called for the allocation of LD2.725 billion to heavy industry–15 percent of the total development plan allocation and second only to agriculture at 17 percent. However, as indicated earlier, because expenditure under the development budget was highly dependent on oil revenues, actual expenditures often failed to reach planned levels.
Thus, the government’s drive to build heavy industrial capacity in the 1980s has been hampered by declining revenues, and many projects were running behind schedule.Key heavy industrial developments under construction in the 1981-85 plan included an expansion of the ammonium/urea plant at Marsa al Burayqah, a new ethylene unit at Ras al Unuf, and the large iron and steel complex at Misratah. The Ras al Unuf ethylene plant was completed in 1986, and the other two projects were nearing completion in early 1987.Projects in the early stages of development in 1987 included a fertiliser complex at Surt, an aluminum smelter at Zuwarah, and a further expansion of the Ras al Unuf petrochemical plant.
However, all these projects were in serious jeopardy, as a result of the 1986 decline in oil prices, and Libyan planners were re-evaluating the impact of industrial projects on the balance of payments .During the period of high oil prices before 1981, the development of import-dependent heavy industry seemed feasible. Libya enjoyed cheap energy costs in comparison to Europe and possessed the foreign exchange to pay for raw material imports. The 1980s decline in oil prices has reduced Libya’s advantage in terms of energy costs and greatly cut into its supply of foreign exchange.
Whereas in 1979 it may have been possible for the government both to import industrial raw materials and subsidise food imports, by 1987 it was becoming increasingly clear that the available foreign exchange was insufficient to accommodate both programs.This problem was obvious in existing industry during the mid1980s , when production and productive capacity ratios for selected manufacturers varied substantially from year to year, depending on whether imported raw materials were available. To cite a dramatic example, in 1983 Libya had a productive capacity of 18,000 washing machine units but produced only 4,533. As a result of cutbacks in foreign exchange allocations in 1984, only 289 machines were produced (productive capacity remained unchanged); thus, used capacity decreased from about 25 percent to under 2 percent.
Used capacity in other manufacturing industries varied widely. In 1984 oil refining operated at 36 percent of capacity, methanol production at 84 percent, ammonia at 91 percent, and tractor production at 67 percent. The country’s unused manufacturing capacity could be traced not only to the scarcity of foreign exchange but also to Libya’s general shortage of labour.The construction industry has played a prominent role in economic development, as one would expect in a country largely devoid of infrastructure before the mid-1960s.
The construction industry got its start as a result of foreign oil company investment during the 1960s, but since 1969 it has grown in accordance with the government construction projects called for in the successive five-year plans.In 1975 the government began to reorganise the construction industry to make it more efficient. At that time, there were about 2,000 contractors, many of them small proprietorships or partnerships. The minister of housing was given the authority to merge contracting firms into a smaller number of larger firms capable of carrying out large construction projects.
Firms with capital in excess of LD30,000 were converted into corporations, and the majority shares were sold to the public or the government. Previously, the government had set up several state-owned construction companies to build factories and to carry out civil engineering projects. Among the firms were the National Industrial Contracting Company, the General Corporation for the Construction and Maintenance of Roads, and the General Corporation for Civil Works.The many government-sponsored construction projects of the 1970s created a booming industry, so much so that by the end of the decade Libya had become the world’s leading per capita consumer of cement.
This was a significant economic achievement, particularly because the 1978 housing law effectively had eliminated private residential construction. In 1986 construction supplied about 11 percent of GDP, second only to public services in the nonpetroleum sector.The construction industry, however, was damaged more than any other sector by the severe cutback in the number of foreign workers in Libya in the mid-1980s. Between mid-1983 and mid-1984, the number of construction workers dropped from 371,000 to 197,000, mainly because of the departure of foreign workers.
Nonetheless, construction remained the number one employer during 1984.The cutbacks in development spending, together with the foreign worker exodus, led to a decline in overall construction. As an illustration, in 1985 the cement industry, which had been expanded during the building boom, was capable of producing 6 million tons a year, but domestic demand had dwindled to only 4.5 million tons.
In addition to the construction decline, there has been a rapid decline in another economic area, that of traditional handicrafts. Rural artisans have taken up more lucrative employment, and utilitarian handmade products have been replaced by factory-made goods. In an effort to provide continuous employment for those artisans who desire to continue their trades, the government has set up several training centers and provided subsidies for raw materials. Most artisan production is purchased by the government for resale or export.
The more popular craft items are carpets, pottery, leather goods, fabrics, and copperware. 6. ConclusionDelays are costly and often result in disputes and claims, impair the feasibility for project owners, and retard the development of the construction industry. To improve the situation, the findings of this research must be addressed by a joint effort of all participants in the construction industry.
This calls for: enforcing liquidated damage clauses and offering incentives for early completion, developing human resources in the construction industry through proper training and classifying of craftsmen. This calls for providing incentives such as offering a tax deduction on money spent on training, and for authorizing trade unions or other agencies to regulate, follow-up on training, and classify trades. Developing human resources also applies to construction engineers who usually lack adequate managerial skills. There is an urgent need for offering training courses in scheduling, time and cost control, information systems, and management of human resources, adopting a new approach to contract award procedure by giving less weight to prices and more weight to the capabilities and past performance of contractors, and adopting new approaches to contracting, such as design-build and construction management (CM) types of contracts.
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Cite this Libya
Libya. (2017, Mar 21). Retrieved from https://graduateway.com/libya/