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Causes of Delays and Its Effects in the Construction Industry and Their Relationship with the Economy of the Uae.

Autor:   •  November 7, 2018  •  15,613 Words (63 Pages)  •  4 Views

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We are absolutely focused to keeping to time and keeping within costs because delays cost money. - Tessa Jowell

- Aims and objectives

The overall aim of this study is to conduct a study to investigate, compare and contrast the factors that cause delays in commercial projects in the construction industry of the UAE and to understand the relationship between the construction industry and the economy of the UAE.

The primary objectives of this study are as follows:

- To identify and categorize different types of factors which cause delays in commercial projects.

- To identify the major effects of the recognized causes and its impact.

- To measure the importance of these causes of delays and to rank them accordingly.

- To measure the importance of effects and to rank them accordingly.

The secondary objectives of this study are as follows:

- To analyse the relationship between the construction industry and the economy of UAE.

- Research questions

This research study is based around the following questions and strives to answer these questions by utilizing necessary literature review, interviews and surveys in an appropriate manner.

- What are the factors causing delays in the construction industry of UAE?

- What are the different types of delays involved in the construction industry of UAE?

- How is this research contributing towards bridging the gap between delays of the construction industry and the economy?

- What is the relationship between the construction industry and the economy and how is it measured?

- What is the impact of the construction industry on the economy of UAE?

As the construction industry is so massive, this industry does not only give out structures as products, it also creates millions of jobs worldwide therefore it has an effect on the economy of a nation. Although the construction industry enhances the GDP of a nation massively, there are a few setbacks to the construction industry which have a negative impact on the economy or rather delay the positive impact which is predicted. These setbacks are caused mainly due to a huge investment in a project and then the project turning into a huge failure, there are many reasons for a project failure and a majority of these failures tend to become a burden on the developers or investors involved and also on the economy as a whole because these projects become monetarily expensive, in some cases the budget of a project quadruples the initial predicted budget. Such projects have a huge extension in the planned completion date which delays the monetary returns predicted from that particular source. For instance, the Scottish parliament building is considered one of the biggest failures of the century, although the project took only a 3-year extension to complete compared to the 8-year extension which is predicted for the nuclear power plant in Finland, the budget increased a whopping 700% from the initial estimated budget. As recently as 2014, the Dubai metro project took a huge blow in terms of delays, which took an additional 5-years to complete with an increase of almost 80% of the estimated project cost. In developing countries, where the country’s population is growing vigorously, they can’t afford to invest in projects and convert the project into one of their biggest failures. It is for such reasons; suitable research studies have to be conducted for better understanding of the areas where a project could go into a massive turmoil. One of the chief factors that causes a project failure is delays during the project, there are various causes of delays in a project but only few are suitable and can be related to a particular country.

1.3 Role of Delays and Effects

Delays are expensive and time consuming, they are a very common phenomenon in today’s day and time. Delays play a major role in any project, it defines a project’s success or failure. If these delays are not carefully understood or if proper measures are not taken to avoid specific delays, they will have a huge impact financially and in terms of time. These impacts can have adverse effects depending on the scale of the impact, time extension could not only add on to the costs of the project but also stops the cash flow from the infrastructure and the amount invested would not generate returns without the project completion. Such cases tend to take investments in both financial as well as time, such effects sometimes lead to disputes and legal confrontations or in harsh cases a total abandonment by the contractor or the client terminating the contract. Delays and their effects definitely have a huge impact on the client or the developer, but the question remains about their relationship and their role with the economy of the UAE.

This study focuses on identifying the factors that cause delays through personal interviews with professionals associated with the construction industry and the effects it has on the project and with the help of a survey, a list of ranking is generated with the help of Relative Importance Index(RII) to these factors. The following section will clearly illustrate the necessity of this study and the boundaries of this research.

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2. LITERATURE REVIEW

The following section gathers articles, documents and books regarding the various studies in this field and provides justification as to why the construction industry is important to the UAE, the role of construction industry in the economy. This section also provides evidence about how delays have a drastic effect on a project and on the clients and contractors, it also provides the importance and the need to study the relationship between the delays and the economy. A brief description about the methodology is provided, factors that cause delays and effects have been partially identified through the following literature review.

2.2 Construction industry overview

“Construction industry is regarded as a complex, fragmented and resource driven industry. A successful project is achieved if it is completed on time, within

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