Construction World August 2015

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WEIGHING HEAVILY ON INDUSTRY

Over half of construction project owners experienced one or more underperforming projects in the previous year, despite confidence in project planning and controls, according to KPMG’s 2015 Global Construction Project Owner’s Survey: Climbing the Curve . Further, project owners said only 31% of their projects came within 10% of budget, and just 25%within 10% of original deadlines, in the past three years. project controls and risk management have been significant, yet there is further work to be done to reduce the number of project failures, and bring more projects in on-time and on-budget. The industry globally has not yet reached a stage of maturity where there is sufficient predictability of project outcomes and the African major projects industry is clearly no different” Greater emphasis on planning and prioritising While rates of underperforming projects are troublesome, KPMG’s survey shows that owners of major capital projects are implementing more mature planning and approval processes, with 84% reporting that their company screens projects using both financial and risk analysis, and 74% of firms requiring formal project delivery and contract strategy analysis, prior to authorisation. Project owners surveyed also expressed confidence in their approach to risk, controls and governance. Sixty-four percent say their management controls are either ‘optimised’ or ‘monitored,’ and almost three-quarters feel comfortable with the accuracy and timeliness of project level reports. More than half also indicate that they are either ‘satisfied’ or ‘mostly satisfied’ with the return on investment in project management tools and training. “Over the past decade, owners have introduced software to improve project controls, with some positive results,” says Shaw. “But at the same time, our research found only half of companies have project management > “As engineering and construction projects get bigger, the complexity grows significantly,” says Jeff Shaw, director, infrastructure and major projects at KPMG.“The improvements by owners in planning,

information systems that raise the quality of decision-making in each phase of the project life cycle – which suggests that there is considerable room for improvement. Lack of robust interfacing between corporate information systems and project management information systems leaves management without the tools to gain full transparency into project status” “And, it’s not just the quality of the controls,” adds Shaw, “you also need to develop the skills of those managing the projects and using the various tools. Across the board, there is a critical need for more skilled talent.” This sentiment is reflected in the survey, with 44% acknowledging a struggle to attract qualified craft labour and 45% citing a lack of planners and project managers. Consequently, the majority – 69% – say their firms hire external resources equivalent to more than five percent of their total project workforce. The shortage of skills in Africa is particularly acute and must be a cause for concern once the market improves. Project owners need to invest in talent management in all project disciples in order to identify, train and retain skills. Push for greater contractor collaboration KPMG’s survey also puts the owner/contractor relationship under the spotlight, revealing a global thirst for closer working ties, with 82% of respondents expecting to see greater collaboration with contractors in the next five years. However, there still appears to be a ‘trust gap,’ with only about a third claiming to have a ‘high level of trust’ in their contractors. Indeed, 69% identify poor contractor performance as the biggest reason for project underperformance. Again the Africanmarket shows similar trends but it would seem that the lack of trust between contractors and public sector owners is of particular concern in our market. Global research into major projects shows that one of the most critical indicators of project success is the quality of leadership in both the contractor and owners teams and integrated teams working towards a common vision of project success is critical. “Project owners should continue to invest in relationships with contrac- tors to raise mutual trust and discuss problems or shortcomings,” says Shaw. Consideration needs to be given to more collaborative forms of contract and the development of mature team members who are able to operate in mixed teams while maintain a focus on long term outcomes. “Improving collaboration, along with continued investment in project management tools and processes together with a focus of talent manage- ment should help pave the way to greater project success.”

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ZAMBIAN WATER AND SANITATION PROJECT UWP Consulting of South Africa has been appointed as the construction supervising engineer for the Lusaka Water Supply, Sanitation and Drainage (LWSSD) project.

submitted the best technical and financial proposal”, he said. “We have high expectations of the quality outputs from UWP Consulting, which will play a critical role in ensuring co-ordination and collab- oration among the different players working on this project.” UWP’s contract will be led by ChristoDudenski, director and head of UWP’s Water Division, as project director, with technical director Tom Rule as project manager. Other key staff will include eight resident engineers, a water supply engineer, a treatment works engineer, a health and safety manager, an environmental manager and a social and gender manager. UWP will have up to 30 full time staff, including technical and administrative support staff, on site over various periods. UWP SA is the lead consultant providing most of the key staff, but will be supported by Allione Consulting of Zambia and Metaferia Consulting of Ethiopia, which will assist and provide some of the key and support staff. Signing the contract are (seated from left): Christo Dudenski, UWP Consulting proj- ect director and Pamela Bwalya, CEO of MCA-Zambia.

The contract was signed recently by UWP SA and the Millennium Challenge Account (MCA) Zambia, a local entity formed by the Zambian Government to manage the project. It is expected to positively impact more than a million Lusaka residents with better access to reliable water supply, sanitation and drainage. UWP tendered against some of the largest companies in the world for this project, which was made possible by a USD355-million grant to Zambia by the US donor funding agency, the Millennium Challenge Corporation. The project includes eight separate water supply, sanitation and drainage developments in and around Lusaka, with a total construction value of approximately USD250-million. Work started on 8 July 2015 and completion is sched- uled for the end of 2018. The contractual value of UWP’s services is around USD9,7-million, making this one of the largest single awards to the firm. >

The scope of the construction supervision contract awarded to UWP involves oversight of the contractor’s activities, including verifying that the work is executed according to the plans and specifications, project schedule and budget, and providing support to MCA-Zambia in managing and implementing the project. MCA-Zambia board member Luke Mbewe is confident that UWP has the experience and expertise to ensure the project is delivered within the stipulated time frame and budget and to the required standard. “UWP was selected through a highly compet- itive and rigorous procurement process and

CONSTRUCTION WORLD AUGUST 2015