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CONSTRUCTION WORLD
AUGUST
2015
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.
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MARKETPLACE
“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,
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
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.”
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.
WEIGHING HEAVILY ON INDUSTRY
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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.
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
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.
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