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Author: search.filters.author.Gallage, SStart date: 2023

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Now showing 1 - 4 of 4
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    PublicationOpen Access
    Risk Evaluation of Cost Overruns (COs) in Public Sector Construction Projects: A Fuzzy Synthetic Evaluation
    (MDPI, 2023-04-22) Chadee, A.A; Martin, H.H; Gallage, S; Banerjee, K.S; Roopan, R; Rathnayake, U; Ray, I
    In the Small Island Developing States (SIDS), public sector infrastructure projects (PSIPs) fail to both meet targeted performance metrics and deliver on the intended benefits to society. In terms of the cost performance metric, cost overruns (COs) beyond the initial contract value are more of a norm than a unique occurrence. Therefore, to ensure economic sustainability for SIDS, and value for money on PSIPs, there is a need to investigate and evaluate the risk impacts on COs. The purpose of this research was to identify and evaluate the perceived cost overrun risk factors that are within the primary project stakeholders’ sphere of control, and to reduce the ongoing ambiguities that exist in the prioritization of these risks. This was achieved by extracting critical risk factors from selected comparative studies in developing countries to formulate a closed-ended questionnaire to be administered to construction professionals in Trinidad and Tobago. Thereafter, the process of fuzzy synthetic evaluation (FSE) was used to develop a risk model based on three tiers of risks: 11 critical risk factors, 3 critical risk groupings (CRGs) and an overall risk level (ORL). The results showed that the two highest-ranked critical risks were project funding problems and variations by client. The leading critical risk grouping was client-related risk (5.370), followed by professionalrelated risk (4.815) and physical risk (4.870). The ORL was 5.068. Based on the FSE’s linguistic scaling, the CRGs and the ORL are perceived to be high risks in PSIPs. This research adds to the CO body of knowledge in primarily three ways. Firstly, the study extends the comparative assessment previously undertaken in scholarship into the context of SIDS to build on the generalizability of this context-specific phenomenon. Secondly, the FSE evaluation undertaken provides a practical tool to be promoted for use in SIDS’ construction industry among practitioners to focus and prioritize the critical risks in the planning phases and improve on contemporary risk practices in the execution phases of projects. Finally, this quantitative model approach is recommended to supplement the traditional qualitative risk management practices adopted in SIDS, thus contributing towards the overall improved economic sustainability and viability of PSIPs.
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    PublicationOpen Access
    Reducing Cost Overrun in Public Housing Projects: A Simplified Reference Class Forecast for Small Island Developing States
    (MDPI, 2023-04-10) Chadee, A; Martin, H; Gallage, S; Rathnayake, U
    Inaccuracies in cost estimation on construction projects is a contested topic in praxis. Among the leading explanations for cost overrun (CO), factors accounting for large variances in actual cost are shown to have psychological or political roots. The context of public sector social housing projects (PSSHPs) in Small Island Developing States (SIDS) is positioned with similar CO challenges. This study is the fifth phase of a series of research projects on the vulnerability of PSSHPs to COs, and the need to de-risk cost estimates. The aim of this study is to present a simple and practical application of Reference Class Forecasting (RCF), a promising solution utilizing an “outside view” approach, as an effective control to reduce the variance of forecasted cost inaccuracies. Using a sample set of 82 housing projects, a reference class of 23 projects was selected based on properties such as design-build procurement type and local contractor involvement. A probability distribution was then established for this reference class, and required cost uplifts to be applied were based on the level of risk a housing agency is willing to accept for PSSHPs. Finally, the accuracy of the reference class was tested using a recently completed project. The results showed that the RCF method, based on a 50th percentile risk acceptance of CO, provides a closer estimate to the actual costs of the project as compared to the contracted costs. This empirical study is the first to undertake and implement RCF in the 52 SIDS and presents the first instance of practical RCF in public housing projects worldwide, thus providing a platform for improvement in future PSSHPs’ budget forecasting. The research can be applied to lessen societal and economic welfare losses as well as significant financial risks for governments. The implementation of practical safeguards, such as RCF, together with contemporary standard project controls, provides immediate advantages for enhancing accuracy in present forecasting approaches against financial risks. It allows for improved value derived from social infrastructure projects, improved supply of public housing, and consequently progress for these nations towards achieving their sustainable development goals.
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    PublicationOpen Access
    Modelling the Implications of Delayed Payments on Contractors’ Cashflows on Infrastructure Projects
    (Salehan Institute of Higher Education, 2023-01-01) Chadee, A; Ali, H; Gallage, S; Rathnayake, U
    The consideration of payments to contractors is not only a legal obligation but a necessity for assuring the continuity and completion of a construction project. However, consistent payments to facilitate project cash flows are uncommon in the construction industry. Within the context of a small island developing state, this paper aims to uncover leading risks factors contributing to implications of delayed payments, on contractors’ cash flows and uncover causalities and effects on relationships among these factors. A two-tiered quantitative approach was adopted. Firstly, a compiled list of delay factors was collated from the literature review. Semi-structured interviews were conducted with experienced construction professionals to determine the factors’ relevance and applicability in Trinidad and Tobago. A closed-ended survey questionnaire was subsequently developed and administered to primary construction stakeholders. Secondly, the responses obtained were collated, validated, and ranked using the relative importance index. A confirmatory factor analysis (CFA) was carried out using SPSS, and thereafter, SPSS Amos was used to determine the best-fit Structural Equation Model (SEM). The results strongly indicate that the issue of delayed payments is very prevalent within public sector projects. Unstable political climates and the delay in employers’ issuance of variation orders were found to be the main causes of delayed payments within the industry. Delays in sub-contractor and supplier payments as well as an increase in the contractor’s debt were the leading effects of delayed payments on the contractor’s cash flows. Based on these findings, a risk response framework was outlined to assist small to medium-contracting enterprises to cope with payment delays, both locally and internationally. This research contributes to the advancement of construction management knowledge by informing construction professionals and policy makers of the implications of delaying approved payments, the consequential causes and effects, and a risk response technique to mitigate the negative effects on contractors’ cash flows.
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    PublicationOpen Access
    Minimizing Liability of the COVID-19 Pandemic on Construction Contracts—A Structural Equation Model for Risk Mitigation of Force Majeure Impacts
    (MDPI, 2023-01) Chadee, A. A; Gallage, S; Martin, H. H; Rathnayake, U; Ray, I; Kumar, B; Sihag, P
    A pandemic is a force majeure event, and contracting parties can invoke conditions under force majeure to minimize liability for unforeseen, uncontrollable, and unavoidable circumstances. This study develops a conceptual model to assist in the management of delays and cost overruns due to force majeure events arising from the construction sector in Small Island Developing States (SIDS). A critical case study analysis of past epidemics and pandemics was conducted to develop a survey questionnaire for administration to construction professionals in Trinidad and Tobago. Based on the empirical data of 65 construction professionals, the structural equation model shows that there are strong causal effects from the implications of COVID-19 and force majeure events, which in turn have a dire impact on the construction industry. The leading implication of COVID-19 is the drastic increases in the cost of materials. Also, granting an extension of time to contractors was the main risk variable under the force majeure conditions. From the results, the measurement model verifies that events under force majeure and its perceived implications strongly influence the construction industry, and proposes that force majeure contractual clauses require explicit treatment of the periodic reoccurrence of pandemics to avoid conflicts among contracting parties. This research explores and builds on new avenues from the latest COVID-19 scholarship to better understand existing impacts on the construction industry, and consequently add to the novel body of knowledge on the implications of pandemics on construction contracts. Overall, this research provides a risk-guidance framework for construction professionals and academia to mitigate unforeseen, uncontrollable, and unavoidable risks on construction projects