This paper has focused on accomplishing two specific objectives, the first was to evaluate the cause of delays in the construction and development projects in Saudi Arabia while the second involved proposing. strategies for improving construction projects in Saudi Arabia. Through the investigation of this study, it was determined that Employee Incompetency, Bribery, Lack of Knowledge and Culture were the prime instigators behind the issue of construction delays within the country. These details were based on the interviews that the researcher had conducted while the surveys showed that project related factors, contractors and labour issues were the perceived reason behind construction delays. The inherent vulnerabilities seen in the Saudi Arabian construction industry make it far too predisposed towards issues related to bribery. This in turn makes it more likely for projects to be embroiled in a variety of mismanagement which results in the proliferation of delays within the industry. It is based on this that this paper attempted to investigate the origin of these issues in order to help the local government create solutions to the problem.
The Current Status of Saudi Arabia
Saudi Arabia is currently undergoing a construction “boom” with up to $195.4 billion being allocated towards the local construction industry for the development of buildings, roads, factories and other types of infrastructure. This “boom” is in line with the statements made by King Abdullah ibn Abdilazīz and Prince Mansour Bin Mutaib Bin Abdulaziz (members of Saudi Arabia’s Royal family) who indicated that with the trend of globalisation and industrial development currently seen in the Middle East, Saudi Arabia must keep up with its neighbours in order to continue to be relevant in the international arena. This is in part due to changes in its domestic policy wherein its overdependence on oil revenue (more than 90% of the country’s revenue is derived from oil) has been questioned with new policies being developed to ensure the continued survival of the state once its source of revenue has dried up.
Perceived Issues with the Country’s Construction Industry
While investing in the development of its commercial and industrial infrastructures should be lauded as a “step in the right direction” so to speak, the country has unfortunately encountered an issue when it comes to its current focus on its construction industry. Projects such as the King Faisal University (estimated cost: $15 billion), the Knowledge Economic City ($1.50 billion) and the Riyadh Metro ($22.54 billion) have all experienced considerable construction delays. These delays are not isolated to these “mega projects”, rather, they are endemic in a vast majority of the country’s construction projects regardless of their scope. For instance, the Abraj Kudai Towers in Makkah, the expansion of the Al Qurayyat Airport and the construction of 1,200 housing units for low income residents in Jeddah have experienced delays amounting to two or three years of added time to the construction deadline.
The inherent problem with these endemic delays in Saudi Arabia’s local market is that it calls into question the viability of the country’s construction industry to support foreign direct investments into the creation of construction projects by international firms with local partners. The main reason why several of the country’s “mega projects” continue to remain viable despite the delays is the fact that they are state sponsored and, as such, the added costs inherent in the delays is absorbed by the Saudi Arabian government. Unfortunately, foreign firms do not have such a luxury; it is due to this that an analysis of the causes of the delays must be determined.
Possible Reasons behind the Identified Issues
Based on an examination of relevant literature on the issue, some of the possible reasons behind the delays can be traced to the inexperience of contractors, lack of sufficient logistics, material issues, quality issues, improper financing, and issues with site management. While these can be considered as being some of the possible causes for the construction delays, they are issues that can be found in most construction sites around the world, however, the delays seen in the case of Saudi Arabia are unique since instead of delays amounting to a few months, which are normally seen in other construction sites that have the aforementioned issues, the delays in Saudi Arabia can reach several years. This is indicative of an issue that has yet to be clearly determined that is at the root cause of the construction delays in the country. The reason why the problem has gone unaddressed for so long is due to the losses being absorbed by the Saudi government when it comes to the country’s “mega projects” due them being connected to the domestic policy agenda of the government in making the country seem like a viable investment location for international investors.
Disparity between Small Scale and Large Scale Project Outcomes
Oddly enough, further examination of the literature reveals that small scale projects within the country are not as affected by the same delays seen in the country’s mega projects. It was noted that small scale developments related to housing projects and mid-rise buildings under local contractors and developers were actually on time and if delays did occur, they lasted for only a few months at most. As such, this is indicative of the massive delays being primarily isolated to large scale and elaborate projects and not necessarily indicative of the state of the entire Saudi construction industry as a whole. What impacts one side of the industry and not the other is one aspect that has yet to be fully determined and definitely has a connection to the root cause behind the massive delays seen in the country’s large scale and elaborate construction endeavours. It is this gap in the literature that will be explored in the dissertation and whether such problems are unique to Saudi Arabia or are endemic to the region as a whole.
Chosen Approach to Examine the Identified Issues
A comparative study is necessary to investigate the current delays surrounding the Saudi Arabian construction industry, what are their causes, whether there are similarities in other regions within the Middle East and what solutions (if any) have been devised by other states to resolve such an issue. It is expected that through such an analysis, an effective solution can be developed in order to resolve the construction delays currently plaguing Saudi Arabia.
Necessity of the Investigation
The necessity behind such an endeavour can be traced to the low levels of foreign direct investments trickling in to the country. An examination of a recent interview featuring Dr. Fahad Al Sultan, the Secretary General of the Council of Saudi Chambers of Commerce and industry reveals that one of the current hindrances to domestic growth is a distinct lack of foreign direct investments within the country from USA based corporations. He mentions that out of the 95 delegates that attended an international business conference in Saudi Arabia only one was from the USA and it was not even someone from a business. Dr. Al Sultan goes on to mention that he finds it strange that corporations from the USA are so unwilling to invest in Saudi Arabia given the century’s old relationship that both countries have enjoyed whereas China, who is positioning itself as a possible major investor within the state, has only had a 30 year relationship with Saudi Arabia. What must be understood is that foreign direct investments as well as the establishment of foreign based businesses within a country are necessary factors towards the continued growth and stability of any globalized economy. The more international investors and foreign business contracts a country has, the better its economic position especially when it comes to the creation of various business opportunities for local entrepreneurs. Dr. Al Sultan further postulates that one of the reasons behind the lacklustre rate of foreign direct investments into the country can be explained by a lack of confidence in the local industries of the country, as exemplified by the severe delays found in the Saudi Arabian construction industry.
Background of Study
The Value of the Local Construction Industry to Saudi Arabia
The construction industry plays a significant role in the development of the Saudi economy. Still, the industry has a big room to develop. Since the Saudi government is expanding its operations with respect to the country’s development, the growth and development of the industry is bringing in revenues and higher profits in the kingdom. Since the country is developing its construction sector and the economy has a large scope of good construction projects. The development of the construction industry has widened the scope of the projects and by maintaining the overall profits for the country. The Saudi projects are expanding the construction projects as well as the overall revenues that shall take part in the development of the country. The construction and development of the several projects in Saudi shall expand the overall revenues as well as the cost of production in Saudi. The country expands the developmental projects and maintains the performance of the country. The overall construction in Saudi will grow the affiliated industries and improve income in Saudi Arabia.
The Issues Impacting the Saudi Construction Industry
However, since the last decade, many projects have failed to meet their completion dates. This has happened because of many factors. These factors are responsible for the development of the industry. Moreover, they can expand the procedures and the policies of the country. Furthermore, they can further develop affiliated industries like hospitality and hotels. The overall management of the company goals affiliate with the performance and the management of resources in Saudi Arabia. The management of labour in Saudi Arabia must understand working issues and task management programs. This way, they would improve the overall profitability and shares of their companies. The company must enforce their values and other cultural aspects that improve them.
As aforementioned, the construction industry is a vital part of the economic growth of a particular society (Wenham 2012). The Kingdom of Saudi Arabia, by virtue of its vast oil deposits, is an economic powerhouse in the Middle East. Consequently, the kingdom’s economy has experienced a boom over the past decades, and enhanced the growth of the construction industry. Notwithstanding the huge financial resources, there are emergent problems that threaten to bring down the industry which come in the form of the various delays that have negatively impacted the impression that foreign firms have on the Saudi Arabian construction industry.
Identified Trends in the Problems Affecting the Local Construction Industry
Carnell (2005) illustrates that the growth of the construction industry in the kingdom has affect almost all facets of the sector. According to Ralph (2000), the industry is characterised by five different types of constructions. They include the erection of commercial buildings, industrial units, institutional setups, residential units, and heavy civil construction (Ralph 2000). The industry covers all of the aforementioned areas. Prevalent problems like delays have the potential of bringing the entire industry to a halt due to lower rates of foreign direct investments being placed into the country based on a lack of trust on the part of foreign firms over the capacity of local construction industry to meet deadlines.
According to Calculated Industries and Kokernak (2006), there are several problems prevalent in the construction industry in general. Lo, Fung and Tung (2006) points out that scarcity of skilled labour and resources are the most common challenges in the industry. In addition, there are certain cases where contractors do not take into account the set standards in the industry when performing their duties. Consequently, the quality of their work is poor. At the same time, projects end up delaying because of the aforementioned challenges. A case in point is the various trends of construction in Saudi Arabia, where the government insists that infrastructure growth is at the core of their decision-making (Carnell 2005). In addition, the Saudi government is keen on solving the housing problem, hence initiating major projects, like the Jeddah project (Carnell 2005). The demand for major infrastructure projects has resulted in high demand for cement; thereby forcing the government to pump SAR3 billion towards setting up cement plants.
The aforementioned trends show the significance of the construction industry to the kingdom’s infrastructure agenda. When the construction industry becomes a vital aspect of a country’s blue print for growth, it is important to address its prevalent challenges (Bansal 2012). Consequently, the delays in this dissertation need to urgent solutions. The same is intervention is only possible once sufficient studies explain their causes. When there are delays in completing a given project, there is a corresponding increase in the overall cost of the project. The ripple effects of such a situation translate to negative impacts on a country’s economy (Abedi, Fathi & Mohammad 2011).
What factors cause delays in the Saudi Construction Industry?
Delays in the construction industry occur because of various factors. The research conducted by Falqi (2004) argues that understanding the causes of the delays requires us to grade them according to various types. The same process makes it easier to determine the exact cause of delay in completing a given project. According to Falqi (2004), the first category is the excusable and non-excusable delay. Such kinds of delays determine the liability of the contractor in a given project. The other category is the independent and concurrent delay. Falqi (2004) illustrates that such delays are subject to the source of their occurrence. Each of the categories mentioned have their respective causes.
Justification behind the Research
The justification behind this research paper is based on the need to address the construction delays that have been plaguing the Saudi Arabian construction industry. If these issues are not addressed, this would result in considerable issues in relation to the declining likelihood of foreign direct investments being allocated to the country due to the lack of trust by international corporations over the capacity of the local construction industry to actually meet deadlines.
Aims and objectives of the study
The aim of this study is to investigate the cause of project delays in the Saudi construction industry
- To evaluate the cause of delays in the construction and development projects in Saudi Arabia
- To propose strategies for improving construction projects in Saudi Arabia
The research questions
What is the main contributing factor behind the delays seen in the Saudi Arabian construction industry?
What methods can be implemented in order to resolve such an issue?
Statement of the Research
Gravetter and Forzano (2011) posit that any research undertaking must have a clearly defined thesis statement. It is based on this that thesis statement of this paper is that the issues experienced by the Saudi Arabian construction industry are due to its inexperience based on its current infancy for large construction projects resulting in the aforementioned delays. It is based on this that this study will focus on the various factors that relate to the construction delays with the concept of its inexperience with large mega projects in mind.
Scope, Limitations, and Delimitations
It is difficult to cover all aspects of a research problem in one study. According to Bryan (2012, p. 41), a researcher is expected to outline the boundaries that will restrict the data collection and interpretation processes. Thus, this study restricts itself to project delays as the challenge facing the construction industry. The focus is on Saudi Arabia. The participants, in this study, are familiar with the KSA construction sector and are actively engaged in the industry. Notwithstanding the availability of other experts, the study sourced its respondents from managers, engineers, foremen and other employees in the construction industry that have direct knowledge of the factors that contribute towards construction delays. In addition, the study focused on the aforementioned problems owing to the threat they pose to the kingdom’s development plans. The findings of this study will help to determine the root causes of project delays in a bid to improve the industry’s standing in the region.
Limitations of the study
The study focused on the Kingdom of Saudi Arabia as opposed to the wider Middle East region. The primary source of data collection was a written questionnaire. Some of the respondents could have given false information. The hypothesis of the study does not include political instability as a potential problem to the construction industry in the Kingdom of Saudi Arabia. The study was selective about the participants who could participate in the study. Construction industry workers outlined the main respondent group. Other professionals, like economists, would have increased the credibility of the study. The study relied on certain secondary materials published before the year 2005.
The Kingdom of Saudi Arabia is a leading member in the Arab League of Nations. Coupled with its economic might, the country is a suitable pick for this case study. Encompassing the entire Middle East would have complicated the study. Since the research participants benefitted from the results of the study, it was in their best interest to be truthful while answering the questionnaires. The Kingdom of Saudi Arabia currently enjoys political stability. There are no riots to indicate instability. When seeking volunteers to participate in the study, many participants came from the construction industry. Two respondents who were from other professions had little knowledge of construction matters. Thus, including them would have reduced the quality of results. We selected the secondary materials in this study based on their relevance. Thus, we excluded materials published earlier than 2005 from the study owing their irrelevance, in terms of present delays and quality of work.
Structure of the Dissertation
A research undertaking is expected to be detailed so that the various points of the discourse are elabourately displayed (Bryan 2012). The structure of this study is in terms of chapters, which respond to the requirements of the dissertation. In total, this dissertation comprised of eight chapters. Each of the chapter acts as a build up to the other, to elaborately discuss the topic and justify the statement of the research. The first chapter is the introduction chapter, which outlines the fundamental aspects of the study. The second chapter is the literature review, in this section, we outline past studies on the subject focus to illustrate the areas that need further research. The third chapter is the research methodology which outlines the methods that will be utilised in data gathering (Bryan 2012). The fourth chapter outlines the results of the data collected. The fifth chapter is a discussion of the results obtained about the actual causes of the delays and poor quality in the Saudi construction industry. According to Bryman (2012), the statement of the research is justified once the results obtained respond to the hypothesis. The same analogy explains this chapter in the discussion section. The sixth chapter contains recommendations to avert future delays in the construction industry. The last chapter summarises the findings and recommends areas of future research.
The construction industry in the Kingdom of Saudi Arabia is under threat due to delays. The background raises the need to determine the causes of the aforementioned problems. The statement of the research is clear, laying the ground for further discussions on the effects of the said delays and work quality. In this chapter, the objectives are clear. The scope, limitations and delimitations are also well structured. The next chapter discusses previous studies that point out to the causes of delays and poor work quality in Saudi Arabia, alongside the general status of the construction industry.
Examining Issues in the Saudi Arabian Construction Industry
Comparing the case of Qatar and Dubai to Saudi Arabia
In this section of the dissertation, what will be examined are the cases of Qatar and Dubai and the various issues they encountered when it comes to their extensive infrastructure projects. The reason behind their examination lies in the fact that both Qatar and Dubai have been engaged in the construction of various mega projects and, as such, have been subjected to similar conditions as Saudi Arabia due to their proximity within the Middle East. In fact, both locations source a large percentage of their construction workforce (ex: Filipinos, Pakistanis, etc.) from the same sources. Similarly, both Qatar and Dubai deal with the same regional construction issues that Saudi Arabia deals with in relation to accessibility to building resources and the unique features of the land (i.e. being in the Middle East). It is due to this that both cases are ideally situated since sufficient information can be inference from their examination to be able to generate significant assumptions that can enable a better understanding of the construction delays currently plaguing the Saudi Arabian construction industry.
Investment of Dubai and Qatar into Real Estate Development
When looking at Dubai and Qatar, it can be seen that both countries have been investing heavily into the creation of mega construction projects. Some examples of this can be seen in the various sports stadiums that are under development within Qatar for the 2020 FIFA World Cup that will be hosted within the country as well as the Palm Island, World Islands and the Burj Al Arab within Dubai. Through the work of Al-Hammad, Hassanain & Juaim (2014), it was noted that the development of mega projects in either of these locations scaled considerably from the start of 2000 to 2014 when many of these developments were finished. In fact, from 2004 to 2008, there was a considerable increase in the development of apartment complexes and office buildings within Dubai that was fuelled by anticipatory projects from local developers regarding the scale of local demand. The pattern can be seen in the case of Qatar wherein from 2007 to 2014, there has been a substantial increase in the amount of apartment buildings constructed in anticipation for the FIFA World Cup as well as due to the domestic policies enacted by the local government that are focusing on turning Qatar into a world class business and tourism attraction.
Construction Issues in Dubai and Qatar
Through the work of Alsulamy, Gupta & Sloan (2014), it was noted that early on both cases had the same problem in relation to poor work quality, substantial delays in construction, unreliability of suppliers/subcontractors as well as the implementation of processes and procedures that hampered rather than helped the construction of several local mega projects. However, it was noted that such issues were resolved in future projects involving the Burj Al Arab, the construction of the World Islands and the newest stadiums within Qatar. This is indicative of the problem being identified and the subsequent solutions being implemented within the respective construction industries within both countries. The work of Gavin (2014) helped to explain that the origin of the various issues that are mentioned had their origin in the lack of experience of local developers in creating mega projects. While it is true that small to medium scale developments were handled adequately with the developments meeting construction deadlines, larger projects involving multi-storey apartment complexes that can reach 75 floors or higher with similarly expansive amenities involving the introduction of shopping complexes, business areas and various indoor amenities were fraught with substantial delays resulting in construction deadlines extending several years. Local developers like the Jumeirah Group, Nakheel and other similar locally well known construction and development companies that specialize in the create of hotels and other luxury establishments were constantly bombarded with complaints regarding their incapability to meet deadlines.
Origin of the Identified Construction Issues
The article Contractors await market revival (2014) helps to explain such incidents by explaining that the rapid expansion and the subsequent influx of wealth into various Middle Eastern countries due to their oil resources did not result in the same rapid development of local engineering or architectural expertise. The previously mentioned article delves deeper into this concept by explaining that in the case of Dubai and Qatar during the early onset development of local real estate infrastructure, local real estate development companies lacked the necessary expertise to be able to handle expansive mega projects. While demand far outstripped supply, it is also important to note that localised demand also far outstripped the capacity for local developers to actually meet the demands placed upon them. The end result was that these companies had to develop their own expertise from scratch in order to stay relevant by meeting the demand for increasingly complex infrastructure projects. It should also be noted that, both in Dubai and Qatar, the local government focused on investing into developing mega projects in order to increase the visibility of the country in order to turn it into a tourism and business destination. Due to such actions, many local developers acquired government contracts and proceeded in their implementation despite their lack of expertise. The article Delays hit Saudi construction (2012) states that this was one of the initial reasons behind the delay in various construction projects within Dubai and Qatar at the time.
How were the issues resolved?
To resolve such an issue, many local developers turned towards hiring the services of international architects, engineers and other experts in their respective fields in order to supplement the inexperience of their workforce. Evidence of this can be seen in the report of Golob, Bastič & Pšunder (2013) which compared the influx of expatriates into Dubai and Qatar with the rise of shops and stores specifically catering to this class of consumer within both countries. With the influx of expatriate engineers, architects, etc. into both countries, this enabled them to receive the necessary expertise to start on the establishment of local best practices when it came to proper development practices. As a result, this influenced aspects related to supply chain management, employee management as well as the standardisation of practices related to the delivery of construction materials, the training and development of construction works and other nuances related to the development of the local construction industry. It was only after these practices were established and the local construction companies developed enough experience that they relied less on expatriate expertise and instead focused on developing the talents of their own staff.
Comparison of Dubai and Qatar to the case of Saudi Arabia
Taking this aspect into consideration and utilising the case of Saudi Arabia, there are several assumptions that can be drawn to help in clarifying the issues currently plaguing its construction industry. Given the fact that Saudi Arabia is in the same region as Qatar and Dubai, gets the same type of workers and is at the cusp of implementing broad infrastructure development projects within the next decade, it can be assumed that it is in roughly the same position that Dubai and Qatar experienced prior to the establishment of proper best practices within their local construction industries. With this in mind, one of the assumptions that can be made is that there are parallels between the situation of Saudi Arabia, Dubai and Qatar wherein the same issues that originally plagued the aforementioned two countries could similarly be affected Saudi Arabia. Based on the work of Westervelt (2005), it was shown that while Saudi Arabia has a moderately successful local construction industry, it is not well known for the creation of any mega structures or extensive construction project, at least prior to 1998. Since Saudi Arabia’s construction industry is only just beginning to develop itself, one of the manifestations of its “youth” is the absence of sufficiently experienced construction companies. This would result in problems when it comes to the proper construction of buildings, the supply chain needed to ensure operations run smoothly as well as other factors related to the creation of mega projects.
Understanding the Origin of the Construction issues that Impacted Dubai and Qatar
Construction projects are more than just the act of putting a building together; instead they involve a network of suppliers for building materials, staffing and an assortment of other services that are necessary to bring different types of operations together. For small scale real estate projects such as homes and mid-rise condominium units then this is possible with a relatively weak set of supporting industries. However, in the case of large construction projects, a relatively robust set of supporting industries must be present in order to support the level of demand mega construction projects require. For instance, in the case of the Burj Al Arab in Dubai, millions of kilos of cement were required to create the building, not mention the tons of steel necessary for the girders and other aspects of the internal supporting structure. All these aspects required a substantial supporting industry which was present in Dubai due to the years of development within the state. However, these developments did not occur overnight and came about as a direct result of increased demand by local consumers.
Correlating the Problems Experienced by Dubai and Qatar to Saudi Arabia
In the case of Saudi Arabia, the delays in the construction of different mega projects could be due to the fact that the necessary supporting industries are still undergoing development and, as such, cannot mobilise the necessary resources to keep up with the timetables that were set. This is not to say that the nascent industries within Saudi Arabia cannot provide the necessary materials at all; rather, it is more accurate to state that they are only capable of providing the necessary material in increments that would result in significant construction delays as the necessary stockpiles would be consumed at a rate far faster than they can be replenished. Combined with the inexperience of local construction companies, it can be assumed that the aforementioned factors that have just been mentioned are part of the reason behind the delays in the local construction industry when it comes to mega projects.
What this section has shown is that there is a propensity for countries in the Middle East to develop some issues in their nascent construction industries due to a combination of a rushed development cycle (i.e. tackling large projects with insufficient expertise and lacklustre supporting industries), an inexperienced and underdeveloped engineering, management and architectural sector (due to the lack of previous experience in tackling such projects) and a local supply chain that is not used to the demands that such projects place on supplies which results in considerable supply shortages. These instances were observed in Dubai and Qatar and were resolved later on due to their respective construction industries and supporting industries developing the necessary human and material resources to handle large scale construction endeavours. As such, it can be assumed that a similar situation is happening within Saudi Arabia. While such a situation is not unique to the Middle East, since such issues have been noted by Bahadir & Mykhaylova (2014) when it comes to the emergence of other developing economies in South East Asia and East Asia (ex: China, Thailand, the Philippines, etc.), what is unique about the current situation that Saudi Arabia and the other Middle East countries find themselves in is a combination of high purchasing power combined with the desire to portray themselves as valuable locations for investment. Marzouk, El-Dokhmasey & El-Said (2008) state that this led to the creation of a domestic policy agenda that focused on infrastructure development as a means of attracting more foreign direct investments. Unfortunately, while there was the presence of adequate liquid assets to support such growth due to the respective oil wealth that the countries mentioned enjoy (an advantage most developing regions do not have), the fact remains that the pace of the development did not match what the local industries were capable of supporting. The end result, as seen in the case of Dubai and Qatar, was the considerable level of delays during the early phase of their infrastructure development cycle during the early 2000s. It is with this in mind that the next section will examine current literature surrounding the Saudi Arabian construction industry and determine if there are parallels between the two Middle Eastern countries and Saudi Arabia itself. It is expected that through this examination, a sufficient correlation can be created between Dubai, Qatar and Saudi Arabia regarding the causes behind construction delays and through such a correlation, a possible solution could be developed for Saudi Arabia.
Investigating the Causes for Construction Delays in Saudi Arabia
This section of the literature review focuses on the reasons for construction delays in Saudi Arabia as posited by different perspectives on the issue. This entails viewpoints that look at the problem from a financial, operational and management perspective. By combining the viewpoints expressed in this section with the case of Qatar and Dubai, it can be assumed that some form of correlation can be established that will help to create a clearer picture regarding the reason behind construction delays in Saudi Arabia.
The first reason to be tackled focuses on the concept of financial causes behind the delays. Kazaz, Ulubeyli & Tuncbilekli (2012) explain this issue by stating that one of the potential causes behind construction delays is the inherent financing involved in the construction project. Bewley (2008) states that this is especially true in the case of large scale projects where the initial costs associated with the project are underestimated resulting in the need for additional financing options. Aside from this, other construction projects such as residential complexes tend to rely on pre-selling strategies (i.e. selling units within the building before it is even built) in order to gain more liquid assets to support the construction. However, this particular method of asset gain is inherently connected to the level of demand associated with the project itself. As such, low levels of demand would result in lower than expected financing options for a company. In the case of Saudi Arabia, from a total value of $2.5 trillion dollars, $1.2 trillion is in the construction sector. About $600 billion of this figure finances advanced projects. The remainder ($500 billion) finances early-stage construction projects. Contractors spend about $1 trillion on real estate projects for purposes of office, residential, and leisure.
This level of financing is based on government backed construction initiatives to help increase the visibility of the country in the international arena. A government backed initiative in this case involves the government “investing” into the project and expects a rate of return equivalent to the amount spent. The Saudi Arabian government in essence backs certain mega projects in order to help improve the way in which the country is perceived and, as a result, increase the level of foreign direct investments into the country. The advantage of this particular method is that it helps to provide companies with a financing option that alleviates the burden of having to rely on local demand for financing or adherence to strict construction planning in order to stay within budget. Unfortunately, this behaviour creates issues in relation to construction delays, bribery and other forms of negative behaviour. For instance, Mezher & Tawil (1998) state that within Saudi Arabia there is rampant nepotism that occurs which results in various government backed construction contracts being given to companies that have little in the way of sufficient experience in being able to handle them. This is due to the presence of relatives either within the government department or within the company that “won” the bid. The end result is that the contract is given to a company that has little in the way of sufficient internal processes and experience in the construction of large scale projects which results in considerable delays as the company attempts to adhere to deadlines or procedures that are more in line with the operations of larger and more experienced firms. In the case of Saudi Arabia, while such a practice exists and can be considered as one of the reasons behind construction delays, it cannot be considered as one of the main reasons. Palmos (2014) explains that since funds are adequately provisioned, this results in the problem being concentrated more on the operational processes associated with the construction project rather than the financial backing that helps to keep everything in operation. It is based on this that this study relegates the current practice of government contracts for projects as being a contributing issue to cases of bribery and nepotism which cause construction delays due to inexperienced company’s taking up government contracts, however; it is still a secondary reason given the widespread issue of construction delays in multiple large scale infrastructure projects within the country which is indicative of another more pressing contributing factor.
Labour Challenges in Saudi Arabia
The possible second reason behind the delays in Saudi Arabia’s construction industry is related to issues with its worker population. As stated by AL-Kharashi & Skitmore (2009), skilled labour is an essential aspect of any type of production or construction process and influences the resulting outcome. Skilled labour often results in positive outcomes while unskilled labour attempting to accomplish the job of a skilled labour force often creates results that are either lacking or outright disastrous. It is with this in mind that this part of the dissertation tackles the issue of access to skilled labour within Saudi Arabia.
According to Falqi (2004), the construction industry is a vital aspect of a country’s economy. For example, the United States of America (herein referred to as USA) has one of the largest construction industries in the world. In the year 2007, the annual expenditure of the industry was $1.2 trillion (El-Raze, Bassoon & Mubarak 2008). This can be seen in the table below which details the allocation of contracts in the Saudi Arabian construction industry.
Such huge amounts suggest that the industry is a key player in the business landscape. That notwithstanding, there are several challenges which reduce its effectiveness.
Baloyi and Bekker (2011) point out that the cost of skilled labour is increasing and contractors are keen on minimising the cost of construction. Consequently, many contractors seek cheap labour, which is often unskilled. In the Middle East, the habit is common because companies recruit staff from other countries, like India and Bangladesh. Given that such labour is cheap, there is a high possibility that the quality of work is subsequently going to diminish. Baloyi and Bekker (2011) go into greater depth regarding this topic by explaining that a cheaper labour force does not necessarily equate into a more efficient method of construction. While it is true that there are instances where workers are willing to work for less, the sheer rate of construction within the Middle East combined with high demand for labour within Saudi Arabia results in recruitment agencies eschewing proper vetting standards when it comes to examining the type of workers they should be hiring. As a result, this impacts the rate and quality of the finished product. According to Assaf and Al-Hejji (2006), labour is a vital resource in the construction industry. Considering the amount of work that characterises the industry, contractors require a huge labour force. In addition, increased competition dictates that newer designs and techniques of construction require skilled labour. However, a survey of skilled personnel working in the Arabian Peninsula is declining (Assaf & Al-Hejji 2006). Globally, the number of skilled workers is also declining. Falqi (2004) reports that the work force in Europe, aged between 35 years and 45 years, is declining as well. Forecasts suggest that this trend will continue in the near future. Another factor that should be taken into consideration is the fact that quality issues when it comes to large scale construction projects also act as a means of creating project delays in order to rectify the issue. It is due to this that when examining the case of hiring unskilled labour and its potential impact on construction delays within Saudi Arabia, it is the assumption of this study that this is a major contributor to the current issues impacting the local construction industry.
In the construction industry, transporting raw materials is an important element of operations. Poor infrastructures explain why most projects take a long time to complete. The many hours spent in trying to navigate through bad roads increase the cost of the project altogether, forcing contractors to shun areas with poor infrastructure. Taking this into consideration, the table below details the various construction related issues experienced by the Saudi Arabian construction industry.
Construction Related issues
While carrying out a study on the construction industry in Jordan, Sweis, Abu-Hammad and Shboul (2007) said that poor infrastructure reduces project productivity. The three researchers argue that the high cost of poor infrastructure is to blame for high costs of construction in most areas in the Middle East. Countries like Jordan and Qatar are leading in the investment of road infrastructure. The same development helps to reduce the cost of construction by drastically reducing the cost of raw materials.
Aside from this, poor infrastructure also refers to the supporting industries
Inherent within the country in the form of material suppliers, delivery agencies and other aspects related to the supporting industries within a normal construction infrastructure. Sweis et al. (2007) explains that while Saudi Arabia has made significant strides within the past decade when it comes to improving its current supporting infrastructure for large scale industries, the fact remains that these enterprises are still in their infancy and have yet to develop into the necessary large scale enterprises that can support the rate of growth that is currently being promoted by the government. As a result, this creates delays in construction as these supporting industries utilise their current supply chains in order to supply orders that they had no means of being able to successfully fill within the time given by the contractors. This leads to delays in delivery which causes delays in the timeline for construction.
Inadequate experience of contractors
While this has been mentioned in a previous section, it should also be noted that another of the noted issues within Saudi Arabia has been the general inexperience of contractors when it comes to working on large scale projects. The proliferation of government contracts and government backed loans; this has resulted in many contractors attempting to gain a wide assortment of different contracts in order to increase their operations. Unfortunately, their relative inexperience works against them as they strain their resources, management capability and engineering capacity to accomplish projects that they have had no experience in creating in the past. The end result is considerable delays which impact project deadlines.
Most of the strategies highlighted in this section of the dissertation focus on the failure of state authorities to implement existing anti-bribery laws in Saudi Arabia in relation to contractors, as a serious administrative challenge in the anti-bribery fight. In fact, Saudi Arabia trails the list of countries that are striving to fight corruption and bribery among emerging global economies of the world (American International Group 2013). The following graph shows the kingdom’s position in this regard because China, Iraq, Nigeria, India, Mexico, Brazil, Russia, Indonesia, and Argentina (which have a “bribery problem”) have a better record in the anti-bribery fight.
The above graph shows that Saudi Arabia needs to improve its anti-bribery fight because the kingdom has legislations that prevent bribery and corruption practices. The American International Group (2013) and Transparency International (2014) say that Saudi Arabia is among many Middle Eastern states that have adopted localised approaches of preventing bribery and corruption by subscribing to internationally recognised working practices against bribery practices. For example, Arab countries have subscribed to the United Nations Convention against corruption (American International Group 2013; Transparency International 2014). Although Saudi Arabia is a signatory to this convention, it is not a ratified member. However, its participation is a first step in solving the bribery menace in the country. Implementation is the main problem that affects this fight (American International Group 2013; Transparency International 2014). In this regard, there is a strong need for the Saudi government to improve its implementation efforts to curb the vice. For example, the kingdom needs to strengthen its anti-corruption laws. Furthermore, Saudi construction companies should provide clear guidelines to all their employees about acceptable and unacceptable business practices. Similarly, the companies need to orient their workers with the procedures they should follow when they see a bribery case. Indeed, implementation of existing laws is an important part in the bribery fight. Other countries have proved the volume of success that they can achieve by implementing existing anti-bribery laws, aggressively. For example, the US Department of Justice has reported significant gains in the anti-bribery campaign because the government has given the institution full support to investigate and prosecute bribery cases (K&L Gates 2014). This department acts as a supervisory body for local and foreign companies. Therefore, even if foreign companies want to import their “bribery culture” in the US, they are unable to do so because they risk prosecution (American International Group 2013; K&L Gates 2014). Similarly, if US companies participate in bribery cases abroad, they are liable for their actions domestically. Saudi Arabia needs to show the same commitment when investigating and prosecuting bribery cases in the kingdom. For example, it should show all citizens that nobody is above the law (American International Group 2013; Transparency International 2014). If people suspect a company of bribing other people, the government should undertake proper investigations and arrest the culpable persons. This action should occur, regardless of how well a person is “politically connected,” or not. Furthermore, many countries are willing to collaborate with countries, such as Saudi Arabia, to investigate and prosecute bribery cases (American International Group 2013; Transparency International 2014). The UK is one such country because it has positioned itself as a global anti-bribery jurisdiction (K&L Gates 2014). The UK Bribery Act 2010 outlines its commitment to help other countries investigate and prosecute bribery cases (K&L Gates 2014). This legislative piece has been very instrumental in investigating and prosecuting bribery cases that involve UK companies and other foreign companies that trade in the UK. For example, the Act has made these companies criminally responsible for any bribery, or corruption cases that they participate in, anywhere in the world (American International Group 2013; Transparency International 2014). Prosecutions may occur, regardless of whether the bribery cases have a UK connection, or not (K&L Gates 2014).
Saudi Arabia should collaborate with such countries to improve their effectiveness in prosecuting and investigating bribery and corruption cases in the construction industry. Other developing countries, like Brazil and China (that the kingdom competes with), have made progress by revamping their anti-bribery laws (K&L Gates 2014). For example, Brazil recently introduced new sets of anti-bribery laws to empower law enforcement agencies to investigate and prosecute bribery cases. Similarly, China has improved its anti-bribery campaign by investigating senior company officials for such cases (K&L Gates 2014). For example, it recently prosecuted a former director of GlaxoSmithKline for bribing Chinese state officials (K&L Gates 2014). These examples show that western countries are not the only nations that are committed to fight bribery. Developing countries are also joining the fray and Saudi Arabia needs to do so as well. Therefore, regardless of one’s geographical position, there is a growing resentment towards corruption and bribery, globally (American International Group 2013; Transparency International 2014). Saudi Arabia should join this war by improving its implementation standards.
Many researchers have highlighted the role played by national cultures in defining project outcomes in the construction industry (such as project delays and project quality) (Baumann 2013). For example, Bezelga & Brandon (2006) say, in the Middle East, national cultures lead to project delays and project failures. Some researchers have had deeper analyses of this issue and say, to understand the impact of national culture on Middle East construction projects, it is first important to contextualise our analysis on the East-West divide and establish how the corresponding national cultures affect project outcomes (Baumann 2013). However, to understand the impact of national cultures on the Saudi construction industry, it is, first, important to understand Hofstede’s cultural model, which describes national cultures as high power distance cultures, long-term oriented, avoiding uncertainty, masculine, or individualistic (Paul 2011). Often, different countries associate with one of these cultural models. Saudi Arabia associates with the high power distance model. This is similarly true for many Middle East countries, such as Kuwait, Jordan, and Syria (Baumann 2013). The high power distance model requires people to accept an unequal power distribution in the society.
Zuo & Zillante (2008) used the above framework to understand how British and Chinese national cultures affected project outcomes. He found out that both cultures had many differences. For example, the Chinese culture promoted intra-team relations in the workplace. People worked (almost) like family units. Comparatively, the British people had limited interactions at work because of their individualistic cultural orientation (Zuo & Zillante 2008). While they shared a good relationship at their workplaces, their cooperation did not go beyond the work context. Mainly, this difference highlighted the “individualism vs. collectivist” model that many researchers have used to differentiate Eastern and Western cultures. Zuo & Zillante (2008) also used the same understanding to investigate how the Australian national culture affected the performance of its construction industry. They compared how this national culture compared with the dominant culture in the Chinese construction industry. Their analysis showed that both countries had significant cultural differences. For example, the Australian people associated with low power distance and masculine cultures (Zuo & Zillante 2008). Similarly, unlike their Chinese counterparts, they were individualistic. Based on these cultural attributes, the researchers said that relationship contracting was more conducive to the Australian national culture, compared with the Chinese culture (Zuo & Zillante 2008). Therefore, while many Chinese people work because their passion drives them to pursue different projects, Australians feel motivated by the power of their minds. Zuo & Zillante (2008) investigated how these cultural differences affected project outcomes. They found out that although different cultures had different conceptions of employee relationships, they all valued the importance of having good relationships in the workplace. These relationships affected different aspects of organisational performance, including one’s attitude towards uncertainty, contractor-subcontractor relationships, and project execution modalities.
When understanding the role of national cultures in project outcomes, it is also important to understand that a national culture is subject to a project culture. In fact, the project culture often overrides the interests of national cultures, whenever a conflict arises between the two. This is because the project culture has more influence on employees. Using this analogy, Zuo & Zillante (2008) define project culture as “the shared values, basic assumptions and beliefs that the participants involved in a project hold, which determine how they understand the project and the relationship with one another in the project environment” (p. 1).
The Saudi construction industry has the same challenges highlighted by the above studies (Baumann 2013). In fact, its situation could be worse because the construction industry accommodates people from many cultures. Western countries outline the origin of many foreign workers in the kingdom (Simmons 2013). However, recently, there had been an increase of immigrants from Africa and Southeast Asia. Although there are workers from other Arab countries, they do not have a significant cultural impact on working practices in the construction industry because Arab countries also have a high power distance model. Therefore, the main challenge comes from merging the working practices of workers from Southeast Asia, Africa, and western countries. They do not share the same cultural inclination as workers from the Middle East do. For example, westerners always have an “I did this” attitude, while workers from Southeast Asia have a “we did this” attitude. Moreover, religion has a notable influence on Arab business practices (Baumann 2013). Comparatively, African and Asian employees do not often link their work practices with religion. Furthermore, these three employee groups (Arab, Southeast Asians, and Africans) have different religious inclinations (Simmons 2013). Their different religious backgrounds may create ideological differences in working practices. Furthermore, they may create different expectations when working to meet organisational goals. Therefore, it is difficult to merge such multiple cultural inclinations to create a homogenous organisational synergy.
From a different analytical spectrum, some researchers believe that the Middle East culture could improve project outcomes by improving communication (Baumann 2013). Again, this thinking comes from the collectivist culture that Arab employees have. In other words, individualistic people may not have the same cohesion that most collectivists have. They are more socially isolated than people who identify with the collectivist culture (Paul 2011). This difference may play out in shaping project quality outcomes because it affects teamwork, which also affects project outcomes. Since researchers have affirmed a positive correlation between improved communication, cultural orientations, and positive project outcomes (Paul 2011), it is proper to say that national culture had a significant impact on the perceptions of the employees regarding project quality and project delays.
The link between industry, or organisational performance, and culture stems from literatures that have often perceived companies as “little societies.” Proponents of such views say such organisations have a social system characterised by unique norms (Allaire & Firsirotu 1984). They also believe that since these companies are miniature societies, they should show distinct cultural traits (Allaire & Firsirotu 1984). This analogy spreads to the national level because as people express their individuality through their personalities, countries also express their uniqueness through their national cultures. This framework explains the model that the respondents used to highlight cultural factors as having an effect on project delays and project quality. Different theories explain the same phenomenon. For example, the ecological adaptation theory says systems of socially transmitted behaviours often affect how people view their work practices (Allaire & Firsirotu 1984; Simmons 2013). Employees adapt to these systems because it is the only way to accommodate their ecological surroundings. Dialectic interplays characterise this relationship because it explains how social and cultural systems influence people’s perceptions of success and working practices (Allaire & Firsirotu 1984; Simmons 2013). Reciprocal causality often underlies this relationship. Here, it is important to understand the different contextual meanings of environment and culture because no concept is definitive. However, researchers define each concept in terms of the other (Bezelga & Brandon 2006; Allaire & Firsirotu 1984). This analogy underscores the importance of understanding the environment as a set of contextual factors that shape national cultures, and more. However, it is instrumental in shaping how these cultures evolve (this relationship later influences the environmental characteristics) (Bezelga & Brandon 2006; Allaire & Firsirotu 1984). This school of thought differs from the historical “diffusionist” ideology because the latter considers historical circumstances as having the greatest impact on the working practices of employees (Allaire & Firsirotu 1984). Proponents of such ideologies are mainly concerned with how cultural attributes migrate from one region to another, or from one system to another. Their framework has created the ideological background for the presentation of culture as a system of ideas and processes that influence industry performance (Bezelga & Brandon 2006; Allaire & Firsirotu 1984). To explain this fact, Allaire & Firsirotu (1984) say, “Their ideational components (patterns of shared meanings and values, and systems of knowledge and beliefs) are meshed with the social structure component in a holistic concept of organisations” (p. 199). Such statements mainly underlie the framework that cultural systems use to influence organisational performance. Some of the respondents highlighted in this dissertation acknowledged this relationship by associating poor project outcomes with national cultures (Bezelga & Brandon 2006; Allaire & Firsirotu 1984).. It is from the same basis that in chapter six, this dissertation highlighted Hofstede’s cultural framework to explain the cultural inclination of Arab countries. Using the same model, this dissertation highlighted the negative effects of the high power distance culture that characterises the Saudi construction industry. Evidences from past research studies show that most cultures affect organisational outcomes by influencing people’s attitude towards success and working practices (Piepenburg 2011). Since it evolves over a long time, it is difficult to change existing cultures or introduce new cultures that promote new working practices. Furthermore, it is more difficult to do so on a national scale and get support from people who have had years of cultural programming to accept new models of doing business. However, introducing a new and parallel cultural alignment model, that should change industry practices at an organizational level, is a new solution. The solution involves introducing a new framework of project culture. The project culture model has a greater impact on project outcomes because it defines project goals, project costs, project contexts and other aspects of operations that affect project quality (Bezelga & Brandon 2006; Allaire & Firsirotu 1984). Here, it is important to highlight the advantages of a unified project culture in the construction industry because it can easily improve the working practices of project members, for the benefit of the entire industry (Zuo & Zillante 2008). It is the responsibility of project managers to introduce project culture as a progressive model for improving project outcomes. Mainly, experts encourage them to foster organisational cultures that improve team cohesion and employee morale (Zuo & Zillante 2008). Similarly, they should promote cultures that support quick decision-making processes and eliminate instances of conflict among key professionals in the construction industry, such as contractors, consultants, clients, designers and the likes. An ideal project culture has unique attributes that foster common values of development, such as flexibility, straight talk, collective decision-making, employee commitment, and has no “blame games” (Bezelga & Brandon 2006; Allaire & Firsirotu 1984).
Although this dissertation encourages construction companies to introduce project cultures that promote organisational development, they should not lose sight of the impact that national cultures would have on this strategy. Based on this fact, they need to devise a framework that blends aspects of the project and national cultures. Researchers have tried this approach before. For example, Zuo & Zillante (2008) investigated how construction companies can merge aspects of the project and national cultures to boost their organisational performance. They found that the project culture should build on different subcultures that involve several aspects of the national subculture, industry, and company ownership (Zuo & Zillante 2008). They also said that these subcultures should further build on operational subcultures that include several aspects of safety culture, learning culture, and quality culture (Zuo & Zillante 2008). Types of members in the business, types of tasks to be undertaken, ethnic factors, social status, religion and similar factors are other attributes that should form part of the project culture. Zuo & Zillante (2008) used the following conceptual framework to explain how project managers could realise organisational synergy by merging Chinese and Australian sub-cultures.
Saudi Arabian construction companies should borrow the structure of the above model to formulate their project cultures. Stated differently, managers should substitute the Chinese and Australian national cultures, with organisational cultures and the Saudi national culture. Their difference should explain how project members behave and outline the cultural differences that underlie both cultures. The project culture should also merge this difference by influencing how project team members behave (Zuo & Zillante 2008).
Although this dissertation has highlighted the effects of national culture on project quality and project delays, existing literatures that have investigated the same phenomenon take an indirect approach to understand the impact of national cultures on the leadership practices of construction companies (Bezelga & Brandon 2006; Allaire & Firsirotu 1984). Similarly, they have extended the scope of cultural influence on construction projects by merging national and construction projects alike. They affirm the findings of the respondents by saying that these cultures affect project outcomes. Relative to this discussion, Dikbas & Scherer (2004) paid a close attention to the Turkish construction industry and said its national culture influenced state-business relations. Families own most construction companies in the country. Similarly, family members characterise the management boards of such companies (Dikbas & Scherer 2004). This framework increases the vulnerability of such organisations to bribery and other underhand dealings that occur in the sector. Moreover, the lack of transparency in such organisations keeps some employees “out of the loop” regarding what is going on in the industry and in the company. At an operational level, the Turkish construction industry could also suffer from poor quality labour because companies do not promote workers because of their merit. Overall, these intrigues show the cultural influence on organisational performance. Therefore, managers need to introduce new subcultures that override the negative effects of the national culture.
This section has so far shown the various issues that have been identified as being the minor and major causes for construction delays within the country as perceived by the literature review. However, it cannot be stated that this is an absolute accurate representation of all possible nuances involved in the construction delays impacting the Saudi Arabian construction industry. It is based on this that the next section will deal with the methodological approach that will be applied in order to examine the issue from respondents who are directly involved in the construction industry within Saudi Arabia.
Introduction to Methodology
This section aims to provide information on how the study was conducted and the rationale behind employing the discussed methodologies and techniques toward augmenting the study’s validity. In addition to describing the research design and the population and sample size that will be used in this study, this section will also elaborate on instrumentation and data-collection techniques, validity and reliability, data analysis, and pertinent ethical issues that may emerge in the course of undertaking this study.
The research will combine the qualitative and the quantitative methods of research. It will take in the questionnaire for the study. Several professional groups participated in the study. The methodology of the study also depended on the various attributes of the study plans and the interview designs.
The next section of this study will consist of examining the responses gained from the managers, employees, etc. from the Saudi construction industry that will be recruited for this study. There are some challenges may be present in collecting data involving infrastructure programs and current construction industry practices that are to be utilised in this study. These come in the form of contacting the correct people, establishing a proper time to conduct the interviews as well as interpret the results that were given. It must be noted that the time constraint for this particular study only allows structured questionnaire with an unrepresentative number of people, and also a limited amount of flexibility when conducting the interview
The main weakness of this study is in its reliance on interview results as the primary source of data in order to determine the general opinion of employees regarding the causes for delays in the Saudi construction industry. Issues such as having to contact the proper individuals and determining their capacity to actually contribute towards the study has the potential to create considerable delays during the date collection procedure.
Addressing Objective # 1: Evaluate the cause of delays in the construction and development projects in Saudi Arabia
This section of the methodology focuses on the methods utilized to examine the causes of delays in the development projects in Saudi Arabia. It was determined that the best way to do so would be through questionnaires as well as interviews with personnel in the construction industry that have direct knowledge of the various issues that contribute towards construction delays within the country.
Justifying the use of Questionnaires
The justification for choosing a questionnaire approach for this particular study is grounded by the fact that the researcher will be able to collect the necessary data that pertains to which specific problems continue to plague the industry (based on the data from the literature review) and the prevalence of such issues in the Saudi Arabian construction industry. This would enable the researcher to immediately determine the origin of the issues and utilize the information garnered from the literature review to create relevant conclusions.
Creswell (2008) points out that, questionnaires are prone to errors, like obtaining false information. To overcome such errors, respondents were selected for the study based on their perceived importance. The participants were professionals from various construction companies within Saudi Arabia who were directly involved in the daily management, planning and construction of various mega projects within the country with at least 10 years experience.
Utilising the questionnaires, the researcher will gather the opinions of up to 27 respondents in order to determine whether the current processes utilised by the Saudi construction industry are sufficient or have issues which result in the considerable amount of delays. The low number of respondents was due to the inherent time constraints of the study as well as the fact that further attempts by the researcher to contact more local interviewees within the country from construction companies did not result in anymore respondents willing to participate.
Deciding on the Questions to be used in the Questionnaire
The questions for the questionnaire (refer to Appendix for the questionnaire) were based on an evaluation of the research questions and the data and arguments presented in the literature-review section. The aim was to develop the questions in such a way that they build up on the material utilised in the literature review. Thus, the questions place a heavy emphasis on confirming the data in the literature review, reveal the current state of the Saudi Arabian construction sector from the perspective of site managers and members of the local financial sector and determine what factors influence the delays in the construction industry.
The primary sources of data for this study came from a questionnaire administered to 33 participants. According to Walkman (2010), a questionnaire should contain the details of the participants and the actual questions touching on the study. Thus, the questionnaire adopted for this study contained three sections. The first section required the participants to list their contact information and their familiarity with the construction industry in the Kingdom of Saudi Arabia. The participants were mostly engineering students, contractors and consultants in the industry. The second section of the questionnaire contained a raft of items, which explained the problems to delays in the construction industry. Sever (2001) suggests that most of the delays can be categorised into groups. The questionnaire considered the facts by clustering the causes into nine groups as listed in the Appendix page.
The questionnaire asked the respondents two questions. The first question determined the frequency of the factor’s occurrence. The second question sought to determine the extent to which the delay affects the project. It is important to mention that the frequency of occurrence and the severity of the delay as listed below:
In the same respect, the severity of occurrence depended on four parameters. They included:
The third section of the questionnaire seeks to determine the instances of poor work delays. Thus, several reasons emerged. The participants responded to the reasons by marking alongside the proposed causes. I graded their responses based on the same four parameters, as was the case in the causes of delays. In point form, the reasons listed as instances of poor work quality included:
- Unfinished projects
- Structural errors
- Construction technique
- Use of substandard material
- Unskilled labour
The fourth section of the questionnaire sought to determine the causes of the poor work quality, as evidenced by the instances illustrated above. Consequently, it provided four main variables, which allowed the participant to select one. Similar to the frequency and severity grading system, the section had a four-point option, which allowed a respondent to pick one. The four parameters under consideration included:
- Material quality
The fifth section of the questionnaire contained the potential solutions. The participants had to select from a raft of proposals their opinions of the solution to the delays and the poor work quality. The questionnaire also provided severity and frequency indexes. In point form, the following are the options proposed as solutions in both of the cases:
- Government regulation of the industry
- Continuous education on total quality management
- Review of tender policy
- The creation of a database for contractors
- The formation of an in house body to regulate contractors
The final section of the questionnaire sought to determine the personal opinion of the respondents regarding whether delays and poor work quality posed a threat to the construction industry. The participants responded with a “yes” or “no” response, depending on their views. The questionnaire also incorporated severity and frequency parameters in this section. According to Walkman (2010), a random distribution of questionnaires is beneficial. Furthermore, the author recommends that at least 75% of the respondents respond to at least 80% of the questions (Walkman 2010). In the study, all the participants responded to the all questions.
Justifying the use of Interviews
The use of interviews in this case is based on the need to examine the issue of delays from people that are directly involved in the day to day operations of the construction industry. Through their experience, they would be able to be able to give onsite feedback regarding the issues that they have personally encountered which would help to better understand how constructions delays in this sector start and what precipitating factors ensure their continued presence despite the need to have them resolved.
Role of the Researcher
The role of researcher in this particular study is primarily that of a recruiter and aggregator of data. This takes the form of the researcher being the primary point of contact when it comes to contacting the necessary companies, government agencies, etc., in order to obtain the necessary amount of subject data from the various individuals within the areas where recruitment will occur. During each individual questionnaire distribution and interview session, the researcher will communicate with the research subjects to give an overview regarding what is expected of the respondent.
Though it can be expected that some problems will occur involving the language barriers and subsequent translation of what the research subject meant when describing particular events and situations, it is expected that through communication and collaboration with the various organisations contacted that some relevant means of effective data recording can be accomplished.
It must also be noted that prior to the start of the data-collection process via questionnaires, the researcher will also need to play the role of a “teacher,” so to speak, in order to properly coach the interpreter regarding the purpose of the study and the various terminologies that will be utilised. This particular aspect of the data-collection process is absolutely necessary because of the potential that the translated data may not properly conform to the appropriate levels expected of the thesis. As such, by ensuring that the research subjects are properly informed, this reduces the instances where problems may arise related to collected data that have very little relevant information that can be utilised within the study.
The research subjects that will be used for this dissertation consisted of various individuals that will be recruited from local construction companies in Saudi Arabia. Prior to the start of this research dissertation, the researcher will ask the permission of the company administrators in order to conduct the study. All participants will be given a consent form encompassing what the study entails as well as assuring them that all responses will be kept strictly confidential and will observe proper research ethics in terms of ensuring that the data will not be leaked to the general public. Once the research subject has consented to be part of the questionnaire, they will be given the questionnaire in order for them to fill out.
Demographics of the Study
This section of the study depicts the demographics of the participants that were part of the study. The demographic survey shows the professions, ages, nationality, gender, experience, and educational levels of the participants. Its findings appear below
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Distribution of Sample Respondents According to Professions
The table above shows that project consultants were the majority respondents who participated in the survey. Civil engineers were the second highest group of professionals, followed by contractors and project managers who had only three representatives each. The least number of professionals was quality engineers, project engineers, information technology managers, inspectors, and engineers who had only one representative each. The total number of professionals who participated in the study was 27.
Distribution of the Respondents According to Experience
According to the diagram above, the respondent with the least experience worked in the construction industry for only two years. The most experienced respondent had worked for 30 years. Therefore, all the respondents had averagely worked for 13.53 years in the Saudi construction industry.
Through this section, it can be seen that this study focused on gaining as diverse a pool of respondents as possible from various areas of the Saudi Arabian construction industry. This enabled the researcher to gain multiple viewpoints which helped to better discern the current state of the industry and what factors contribute to the present day delays that it is currently experiencing.
The data-collection process will actually be quite straightforward; several weeks prior to leaving for the construction companies, the researcher will utilise the internet in order to find businesses, government institutions, and a variety of other appropriate establishments that appear to be effective locations where the appropriate type of data can be located. The researcher will compose an introduction letter in both English and the local dialect of the selected region (i.e. Arabic) in order to inform the organization of the researcher’s intent and whether it would be possible to conduct a series of questionnaire based on an attached questionnaire in order to examine the causes for delays in the Saudi construction industry. By asking permission prior to the data-collection procedure, this ensures the researcher will not waste time in having to contact the necessary organisations upon arriving and can immediately proceed in collecting the needed data. The questionnaire will be given out individually to ensure their alignment with the aforementioned anonymity of the study results.
It will also be necessary to assure the participants of the safe storage of information before the interview begins to encourage them to give genuine answers. The researcher determined that responses will be more favourable if the questionnaires are given privately. After collecting and analyzing data, the final report, together with recommendations, will be presented to the study participants via e-mail in order to show the impact of their opinions and ensure that responses were utilised in such a way that it complies with views that the participants intended to give out and are completely anonymous, thus preventing any possible victimisation from occurring.
The primary method of data analysis in the case of this study involves an individual review. The individual review will primarily be the researcher examining the collected response data from the employees that were part of the study and comparing it to the data obtained from the literature review. The researcher will then review these main themes and use this information to assist in establishing the key findings of the study. This method of data analysis is appropriate for a qualitative design.
One potential concern that should be taken into consideration is the potential that the responses given by the study participants are in fact inaccurate or outright false. While the researcher is giving the employees the benefit of the doubt, the fact remains that there is still the potential that the information being given has been crafted in such a way that it was made to ensure that it is false. Unfortunately, there is no way for the researcher to verify the information since only 10 research subjects are being interviewed. This methodology exposes the participant to an assortment of risks that need to be taken into consideration during the research process. The main risk the participants will encounter is if any of the answers that criticise or indicate dissatisfaction with carriers leaks. This may have consequences on the attitude and opinion of company officials towards them and can result in victimisation. To eliminate this risk, the responses will be kept in an anonymous location. This way, the only way to access the information will be through a procedure that involves the researcher. The project thus observes research ethics in sampling as well as during data collection process.
This concept refers to the worthiness of the research information. Validation occurred by using credible research information, such as journal articles, periodicals and other credible research information.
This study obtained data from reliable sources of information. These pieces of information discussed the various attribute of the research. We used the SPSS data analysis method to come up with reliable findings.
E-mails will be sent to the individual institutions, agencies, businesses, etc., explaining the main objective of the study and requesting their consent for participation. Further communication will proceed via e-mail between those who agree to take part in the questionnaire and the researcher to ensure that all individuals understand the requirements for the study. The researcher will also take time to elaborate the rights of participants during the study process, including the right to informed consent and the right to confidentiality. By addressing these concerns through guidelines on proper ethics and research, it is expected that few ethical concerns will need to be addressed.
Addressing Objective #2: Propose strategies for improving construction projects in Saudi Arabia
The second objective will be addressed after all the relevant data has been collected and interpreted by the researcher. Recommendations will be developed based on the research outcomes.
This chapter shows the findings derived from the interviews and questionnaires (surveys). It shows the respondents’ views about the main causes of project delays and poor quality project outcomes in Saudi Arabia. The structure of this chapter accommodates two sets of findings. The first set of findings shows the survey responses of 27 respondents, while the second set of findings shows the interview responses of company managers.
In this section of the study, interview results are presented which occurred after the questionnaires were given out. Ten top-level managers who had substantial experience on the research topic were interviewed in order to get a better idea regarding the current state of the industry outside of the parameters set in the questionnaires. They came from the public and private sectors. The following sub-sections of this dissertation show their views on the possible causes of project delays. After examining the notes taken during the interview, it was determined by the researcher that the following factors were the most prevalent reasons for construction delays based on what the interviewees stated: Employee Incompetency, Bribery, Lack of Knowledge and Culture
The first aspect that was delved into during the interview involved the concept of employee incompetency and its impact on construction deadlines. The private sector managers said that employee incompetency was the main cause of delays and poor quality construction in the sector. They added that the quest for employees (especially low-skilled employees) to earn a living was their main impediment to offer quality labour. In fact, one manager said, “they just come to get the money, no matter what the work entails.” To mitigate this problem, one company vice president said they had formed a group of about ten companies whose main objective was to petition the government to allow them to form an educational institution to train these employees. They believe that this way, only employees who have passed a test (offered by the school) should work at the construction sites. It should be noted though that these views reflect the statements made earlier on within the literature review which explained that with the sheer amount of construction projects currently in effect within the Middle East, demand for workers has reached a considerably high level to the extent that quality standards when it comes to hiring workers is somewhat lax. The end result, as seen in the account of the managers, has been the creation of unreliable standards when it comes to workforce management where construction sites are subjected to a mismatch of competent workers with those that lack experience and simply applied for the jobs hoping to gain sufficient experience along the way. This is indicative of a failure on the part of the recruitment agencies whose purpose is to prevent such a situation from happening in the first place. Inexperienced workers lack the same level of efficiency and competency of experienced workers with the end result being a distinct decline in the capacity of the construction sites to meet deadlines. This was seen in the case of Saudi Arabia and is indicative of the fact that more stringent measures of recruitment screening need to be implemented in order to ensure that construction delays are avoided due to employee incompetency. The next section of this chapter deals with allegations of bribery and how they interfere with construction deadlines.
Some of the interviewees said that bribery was another issue that affected the delays seen in the sector. To support this assertion, one respondent said, “Whoever is responsible for certain projects, from the government side, will try not to issue certificates for payment until he gets some money under the table from the contractor.” However, bribery was more common in the public sector than in the private sector. Such practices complicate the construction processes and make it harder to meet organisational goals. One respondent said, in such circumstances, the wishes of the contractor often precede public, or client, interests. For example, a contractor would finish a project early and bribe the officials to approve their work, even when they have not met the quality standard. Alternatively, some contractors often bribe officials to simplify a project. This way they would finish the project early and receive payments. Aside from this, the interviewees also mentioned that another of the disreputable practices involving bribery comes in the form of local contractors bribing government officials for particular construction contracts. This can entail either the construction of roads, housing developments or even multi-story buildings. The inherent issue behind this practice is that not only does this make the normal bidding process for government contracts effective defunct, it results in companies gaining contracts despite their apparent inexperience. The end result of this process is that when the project actually begins, it is immediately subject to an assortment of compounding delays when it comes to supply chain management, construction planning and an assortment of other similar issues that hinder the project’s completion. The interviewees also stated that with different mega projects within Saudi Arabia being broken down into distinct brackets (ex: sections of a highway), delays in one section results in delays in other sectors which causes a cascading level of interruptions which further hinder the capacity of construction companies to meet deadlines. It should also be noted that the interviewees noted a distinct lack of overarching supervision on the part of the government when it comes to examining the reasons behind construction delays. Delays are attributed to the entirety of the construction process instead of on the specific contractors that cause the delay in the first place. Practices related to proper accountability and the implementation of penalties to ensure proper compliance to deadlines need to be implemented yet are insufficiently implemented within the country. This is in part due to the issue of bribery as well as nepotism that exist that enable the practice to continue despite the fact that it reflects badly on not only the government but the construction industry of Saudi Arabia as a whole.
Lack of Knowledge
Some of the respondents sampled in the interviews said that their clients (mostly the government) lack knowledge about the construction industry. Contractors exploit this gap and tender for contracts with poor quality materials and unrealistic time schedules. Surprisingly, they win such contracts. The outcome is poor quality and project delays. Aside from this, the interviewees also noted that when such contracts are awarded, the contractors also happen to lack sufficient knowledge on how to properly manage complex projects based on set deadlines. This was explained as being due to the inherent complexities when it comes to large government projects that often require substantial previous experience or the hiring of proper managers in order to properly execute the requirements of the project. Unfortunately, the execution of the project was mostly done in-house by these contractors resulting in costly delays due to negligent practices, lack of experience and the inability to properly schedule their work in conjunction with other firms working on the same project. The end result, as stated by the individuals that were interviewed, was the creation of numerous project delays due to errors occurring during the project construction stage which needed to be rectified resulting in even more delays. Another aspect to take note of is that some of the large scale projects that are being commissioned by the Saudi Arabian government are inherently more complex and demand more supplies than what most local contractors are used to. The interviewees stated that the contractors that bribed government officials to get these contracts found themselves unable to properly execute them as their in-house engineering and architectural departments simply lacked the knowledge to properly implement the project. This resulted in the need to bring in outside experts in order to resolve the issue; yet, the span of time in between getting the necessary expertise to resolve the issue and the time in which the contract was awarded still resulted in considerable delays for the construction projects. It is based on this that when the interviewees were asked what was one of the main contributing factors towards project delays within the country, they often stated that aspects related to bribery, employee incompetency as well as allowing inexperienced contractors to take up projects were all manifestations of issues with the organizational culture of the local government which allowed such practices to develop to such an extent that it tarnishes the reputation of one of the country’s industries.
Some of the respondents highlighted the role of poor organisational and national cultures as causes of project delays and poor project quality. For example, one respondent said the failure of clients to appreciate quality projects often makes it “acceptable” for some contractors to provide poor quality work. Similarly, since many people are not sensitive about time, project delays are equally “acceptable.” To affirm this assertion, one respondent said, “You see, Saudi Arabia is not like the western world where people are conscious of the time. Here, we take things slowly. However, we still get things done.” Aside from this, the interviewees noted that the organizational culture within the government agencies was also a contributing facilitator towards the implementation of undesirable practices. Nepotism and favouritism is blatantly present within the government which enables the assigning of contracts to family members or individuals connected to the families of employees. The interviewees mentioned that as a result the bidding process was “rigged” to a certain extent which resulted in the need for companies to bribe government officials in order to obtain contracts. Aside from this, there was a supposed lack of an adequate checks and balances system within the government wherein the assigning of contracts as well as supervising their implementation is relatively benign within the government. Those interviewed stated that there was a distinct lack of legislative and judicial powers assigned to inspectors when it comes to inspecting construction sites resulting in a laissez faire policy being implemented. This contributed directly towards a lax attitude towards adhering to construction deadlines especially when taking into consideration the opinions of the interviewees who stated that bribing site inspectors was also rampant within the local construction industry.
Based on what has been presented in this section, it can be seen that Employee Incompetency, Bribery, Lack of Knowledge and Culture are the main reasons that the interviewed participants have come up with when it comes to delays within the construction industry in Saudi Arabia. After going over the presented data, it does seem plausible that such issues could be the reason behind the delays. In order to backup the veracity of the presented observations, the next section will detail the questionnaire responses that were garnered from the other study participants and will focus on determining what contributing factors towards construction delays are the most prevalent when it comes to Saudi Arabia.
The table below shows how different respondents ranked possible factors of project delay. The results of the analysis involving the questionnaires showed that the project respondents believed that project related factors, labour, and contractors were among the primary reasons behind the delays experienced by the Saudi Arabian construction industry. This information mirrors aspects seen in the earlier part of this study that conducted an interview of several individuals in order to obtain their input regarding the current issues that impact Saudi Arabia and the causes behind the construction delays.
Factors that Contribute towards Project Delays
Understanding why Contractors Contributed towards Project Delays
One of the main assertions developed after examining the survey and the interview results was that one of the reasons behind construction delays was due to projects being assigned to contractors that lacked sufficient experience to actually implement them. One of the ways in which this has gone about has been through the use of the role of bribery. In fact, Transparency International (2014) says bribery “damages companies, resulting in tendering uncertainty, wasted tender expenses, increased project costs, economic damage, reduced project opportunities, extortion and blackmail, criminal prosecutions, fines, blacklisting, and reputational risk” (p. 1). A 2013 European Commission report (cited in K&L Gates 2014) shows that this problem is widespread because more than 50% of all stakeholders in this sector believe that bribery is a significant problem in the sector. The respondents from the interviews said that the lack of strict enforcement standards, absent anti-bribery laws, the lack of personnel training about anti-bribery and fraud policies, lack of anti-bribery policies, long supply chains, economic reasons, and cultural reasons were the main causes of bribery and corruption in the construction industry (Chartered Institute of Building 2013).
Many factors predispose the Saudi construction industry to bribery. For example, before contractors get a job, they must undergo a lengthy tendering process that is prone to bribery (Mitra & Wee-Kwan-Tan 2012). Similarly, donors, the government, and public-private partnerships (PPP) fund many projects in the kingdom. Their activities often involve intense interactions with public institutions and corrupt government officials. Relying on third parties (sub-contracting) is also a prevalent practice in the construction industry (Mitra & Wee-Kwan-Tan 2012). Some of these parties may often solicit for bribes, thereby affecting project quality, or cause project delays, through compromised quality standards.
The prevalence of joint ventures in the construction industry also promotes bribery because the Saudi law requires foreign companies to collaborate with local companies to undertake construction projects in the kingdom (Mitra & Wee-Kwan-Tan 2012). Such requirements give way to intense opportunities for negotiations between interested parties. Some people may use this opportunity to leverage their financial positions for more commercial gains. Furthermore, third party involvement in the negotiation process may provide more loopholes for bribery to occur (Mitra & Wee-Kwan-Tan 2012). Massive construction projects in Saudi Arabia also leave the decision-making process to only a few individuals (managers) who have political connections with authorities. Their engagements often lack public scrutiny, or public involvement, thereby creating opportunities for bribery to occur.
Mitra & Wee-Kwan-Tan (2012) affirm that some contractors lack the knowledge needed to undertake massive construction projects, thereby causing significant project delays and poor quality project outcomes. For example, improperly scheduling construction projects show the lack of knowledge by some contractors to undertake massive construction projects. The views of the AWWA Staff (2011) closely align with the above ideology because they also draw our attention to the contractor-related issues as a major cause of project delays and poor project quality. The main reason for this observation is an imbalance between economic growth and adequate skilled personnel to conduct duties that are equal to such economic progress. Researchers have affirmed the same cause (contractor inefficiencies) in the 1990s (Al-Kharashi & Skitmore 2009). In fact, researchers who have investigated this matter say that most contractors have often failed to finance their projects on time, even when they have the money to do so (Mitra & Wee-Kwan-Tan 2012). Many companies have suffered damage to their reputation in this regard. In fact, because of the unprofessionalism of some contractors, the Saudi government stopped paying contractors in advance (Mitra & Wee-Kwan-Tan 2012).
Based on what was mentioned in this section, it can be seen that the inexperience of contractors combined with rampant bribery in order to get said contractors contracts for mega projects contributes significantly towards delays in the construction industry. This assumption by the study is backed not only by the information from the interviews but is further substantiated from the surveys that were utilized in order to gauge the opinions of professionals in the field regarding the causes for delays in the industry.
Understanding why Labour Contributed towards Project Delays
Another of the main assertions developed after examining the survey and the interview results was that one of the main reasons behind construction delays was due to labour issues within Saudi Arabia. The study respondents from the interviews have shared their opinions about how the labour shortage in Saudi Arabia affects different aspects of its economic development (Simmons 2013). Some of them have focused on the construction industry by saying that many contractors have to employ unskilled labourers, because they have to devise ways of managing this problem without stalling their projects (Mitra & Wee-Kwan-Tan 2012; Al-Kharashi & Skitmore 2009). Therefore, they employ unskilled labour to meet their labour shortages.
However, contractors have had to contend with poor quality job outcomes and increased conflicts with their clients (for the same reason) since these labourers do not have the skills needed to do a high quality job. For example, the Oxford Business Group (2007) says unskilled labourers are often illiterate and unable to communicate effectively. Therefore, they have problems communicating with their employers, thereby inhibiting their ability to complete projects on time. Similarly, poor communication skills inhibit their ability to communicate among themselves (Oxford Business Group 2007). Their lack of training also makes them unsuitable candidates for undertaking the massive and complicated construction projects we see in Saudi Arabia today (Mitra & Wee-Kwan-Tan 2012; Al-Kharashi & Skitmore 2009).
Often, these workers do substandard projects, which force the contractor to redo. This process takes time and since they are often unscheduled, they lead to project delays. Often, many contractors who find themselves in this situation have to pay liquidated damages to their clients for failing to complete the projects on time (Oxford Business Group 2007).
Employing unskilled labour to work on construction projects also lead to project delays and poor quality project outcomes because project managers are unable to focus on time management, cost controls, and total quality management (Mitra & Wee-Kwan-Tan 2012; Al-Kharashi & Skitmore 2009). For example, the Oxford Business Group (2007) says that many contractors who fail to get skilled labour spend a lot of time looking for the skilled labourers, thereby spending little time on the ground. Their absence makes it difficult for them to control project quality. Similarly, this problem inhibits them from making sure that the project follows a specific time outlay. A 2009 survey showed that construction projects, which experience time delays because of unskilled labour could complete their projects six months after their scheduled completion time (Mitra & Wee-Kwan-Tan 2012; Al-Kharashi & Skitmore 2009). Similarly, because of poor communication with employees, contractors are unable to manage employee activities well, in a way that they can meet their client’s expectations. Contractors who want to work with the employees spend a lot of time trying to establish a working relationship with them, thereby affecting their productivity (Mitra & Wee-Kwan-Tan 2012; Al-Kharashi & Skitmore 2009).
Based on what was mentioned in this section, it can be seen that unskilled labour contributes significantly towards delays in the construction industry. This assumption by the study is backed not only by the information from the interviews but is further substantiated from the surveys that were utilized in order to gauge the opinions of professionals in the field regarding the causes for delays in the industry.
Understanding why Project Related Factors Contributed towards Project Delays
Another of the assertions developed after examining the survey and the interview results was that project related factors contributed towards project delays within the Saudi Arabian construction industry. Based on the experience of the interviewees it was noted that since contractors get contracts to undertake massive construction projects in the public sector, government agencies are uncomfortable paying for the projects up-front because they are unfamiliar with the industry (Al-Kharashi & Skitmore 2009). Although Mitra & Wee-Kwan-Tan (2012) agree with the above findings, they add that contractor issues also affect project delays. Particularly, they draw our attention to conflicts among contractors as a major cause of project delays. This was mentioned within the interview results wherein it was stated that improper cooperative practices between different contractors resulted in scheduling conflicts which caused cumulative delays for joint construction projects that had multiple contractors. This was evident in cases where contractors had to wait for contractors that were working on sections ahead of them to finish. The end result was a cascading level of delays wherein delays from those who began on the initial sections of a construction site impacted future contractors that came after. This particular issue highlights the role of confusion among contractors, in the project management process, as a possible cause of project delays. Other researchers have highlighted the same problem as part of contractor-related issues that lead to poor project outcomes.
Understanding why Culture Contributed towards the Project Delays
Based on the presented data, it can be seen that the internal organisational culture within the Saudi Arabian government contributes to the problem of construction delays. If an organisation culture is developed within that eschews aspects related to nepotism and bribery, it would be more likely that contractors that have no business in attempting large scale projects would get contracts that would only cause considerable delays. It is based on this that the next section will delve into the recommended strategies that have been devised by this dissertation that focus on resolving the identified issues. It is hoped that through such recommendations, better practices can be implemented that should help to resolve the delays in Saudi Arabia’s construction industry.
The results showed that while there were issues related to building equipment, construction equipment and project proprietors, the responses were more inclined to show that the reason behind construction delays was primarily due to issues with labour, contractors and project related factors. It is the assumption of this study that one of the reasons why the responses were oriented this way is due to the potential that the issues related to equipment, building materials and proprietors are all manifestations of project mismanagement due to a combination of inexperience, lack of knowledge as well as actions related to bribery that caused complex projects to be assigned to companies that had little in the way of sufficient experience to actually undertake them in the first place.
Results of Recommended Solutions Survey
In this section of the study, potential solutions were presented to the respondents and they selected the solutions that they believed would help the most when it came to addressing the issue of delays in the construction industry. Based on the findings, it was determined that having an in-house body for the regulation of contractors would be the best solution while government regulation comes up as a distant second. It is based on this table that the following section delves into why the regulation of contractors was chosen as the best option by the local professionals in the Saudi Arabian construction industry.
Solutions to Resolving the Issue
Understanding the Choice behind the In-House body for the regulation of contractors
After examining the earlier surveys and interview results, it was noted that contractors were at the heart of the construction delays seen in Saudi Arabia and this was due to the fact that large scale projects were assigned to contractors who had little experience in actually accomplishing them. Some respondents sampled in this study said that a lack of knowledge about construction practices contributed to project delays. Respondents said that the poor qualification of technical staff of contractors often led to poor quality projects and cost overruns. They also attributed the same cause to project delays. Part of this problem stemmed from inadequate skilled labour that the contractors hired. In fact, contractors have always experienced a challenge where many Saudi nationals shun jobs in the construction sector for more prestigious work in the society. To address this problem, contractors employ many immigrant workers who are often unskilled and incompetent (Al-Kharashi & Skitmore 2009). However, this approach has not always worked in their favour because these workers do substandard jobs. This problem closely relates with the views of project managers (in the interview results) who said most of the workers, who look for a job in the construction industry, seek “quick money.”
It should also be noted that through the implementation of an in-house regulatory body for contractors, the end result would be the need for these companies to involve governments and policy makers in making laws that require practitioners to inform clients about design, safety laws, and other construction-related issues that the customer may need to know. This initiative should come from the contractor because the customer would not know what to do about construction matters. Using a legal framework, contractors should (legally) inform their clients about all the important steps and issues that concern their construction needs (Delgado-Hernandez & Aspinwall 2008; Joyce 2001). Joyce (2001) says some countries have adopted this strategy successfully. For example, the UK law deems it an offence for a contractor to fail to inform a client about existing construction laws if they are aware that the client does not know such laws (Joyce 2001). Since some contractors may say they informed a customer of existing laws (without proof), the law demands that there should be written communications between contractors and clients, always. Besides existing regulations, clients also need to understand the types of materials and technology used in the construction process. The law should force contractors to disclose such details before undertaking the construction project. Therefore, when the project starts, the contractors and the clients should have common sets of knowledge about its details. Without an existing law to moderate such contractor-client relationships, exploitation may occur. Such an eventuality would tarnish the name of the profession (construction contracting) and limit the possibilities of contractors and clients conducting future business (Delgado-Hernandez & Aspinwall 2008; Joyce 2001). Based on this model, Saudi Arabia should introduce new legislations that bind contractors to disclose all information regarding a project. Furthermore, they should be legally bound to explain to their clients all the materials and technologies they use in their construction projects. Therefore, when a project is complete, the client should not be surprised with its outcome.
This section delves into the various strategies that contractors can implement in order to resolve the various issues that have been identified by this study. The basis behind this section lies in the fact that contractors have been identified as not only being one of the main issues behind project delays but also the most pertinent issue to be resolved first as seen in the survey results.
Local contractors can help to resolve the aforementioned issues by undertaking domesticated strategies that focuses on their resolution. Indeed, as K&L Gates (2014) says, different levels of the construction process may attract corrupt people. This dissertation has already identified the tendering process as a notable “den” of bribery. However, the vice may also thrive in the procurement process, supply stage, and construction stage. These vulnerable stages highlight the need to conduct a risk analysis at the company level and the transaction level. Their findings will provide enough materials for creating an anti-bribery compliance program. Such a program would be beneficial for construction companies because it will reduce their vulnerability to bribery and corruption cases (K&L Gates 2014). Furthermore, such a program strengthens a company’s defence for bribery and corruption cases, if they occur. After investigating the efficacy of such anti-bribery programs in the Middle East, K&L Gates (2014) says, “The gold standard is an individualised bespoke risk profile risk assessment as the basis for a compliance program” (p. 2).
Seeking permits and licensing is a notable risk area that many researchers have not only identified in the Middle East, but other parts of the world as well (American International Group 2013; Transparency International 2014). Indeed, many researchers have documented incidences where state officials require bribes to issue construction licenses (K&L Gates 2014). A highly regulated business environment and a stringent set of policy requirements often encourage contractors to pay these bribes (American International Group 2013; Transparency International 2014). While some types of personal payments may be “acceptable” (legally), it is important for Saudi companies to see the licensing process as a risk area that requires immediate attention. Kickbacks to contractors and their subcontractors, cutting the cost of building materials, unlawful subcontracting, corrupt joint ventures and cartel behaviours are other areas that need special consideration in the risk assessment phase (K&L Gates 2014). Overall, Transparency International (2014) affirms the efficacy of the above interventions because it believes that the best way for eliminating bribery in the construction sector is if all players in the sector increase cooperation. Particularly, it draws our attention to the need to address the demand and supply sides of corruption (Transparency International 2014).
Clarify the Tendering Process
Authorities also need to clarify the tender process to eliminate possibilities of ambiguities that may create bribery cases. For example, authorities need to conduct an effective due diligence process to make sure that the company, which wins the tender, is up to the task (American International Group 2013; Transparency International 2014). This measure could easily help company owners manage quality problems because most of the quality issues that arise in the construction process stem from the improper allocation of construction projects to companies that cannot do a good job (American International Group 2013; Transparency International 2014).
Set the Tone from the Top
If Saudi companies want to eliminate bribery and improve the efficiency of their operations, they need to involve senior managers of such organisations in the anti-bribery fight. These managers need to demonstrate their intolerance to corruption by setting the tone from the top (American International Group 2013; Transparency International 2014). This strategy would eliminate bribery by lower-level employees, as they would understand that the vice is intolerable in the organisation. Managers can adopt different strategies for meeting this goal. For example, they can review, or introduce, training programs for educating employees about the demerits of corruption and bribery (American International Group 2013; Transparency International 2014). This strategy would help them cement a desired corporate culture for fighting bribery. Delgado-Hernandez & Aspinwall (2008) say that some organisations have such programs, but few employees are aware of them. The 12th annual fraud survey, conducted by Ernst and Young (cited in Delgado-Hernandez & Aspinwall 2008), showed that more than 55% of company employees are unaware of such programs. Therefore, alongside setting the tone of anti-bribery practices, managers need to sensitise their employees about the benefits of having a “bribery-free” organisation (American International Group 2013; Transparency International 2014).
This dissertation highlights the need for companies (especially foreign ones) to conduct due diligence before they collabourate with local Saudi companies. This process would help them identify “rogue” contractors and subcontractors who do not want to “play fair” (Delgado-Hernandez & Aspinwall 2008; Transparency International 2014). They should avoid such companies and do business with credible organisations that have a good business record. This way, they would avoid the potential problems of working with untrustworthy contractors. Similarly, they would also protect the quality of the products or services they offer (Delgado-Hernandez & Aspinwall 2008; Transparency International 2014).
Involve the Expertise of Third Parties (Quantity Surveyors)
To mitigate this problem, clients should use quantity surveyors, whose main role is to minimise project costs and make sure that all clients get value for their money (Delgado-Hernandez & Aspinwall 2008; Joyce 2001). Furthermore, although quantity surveyors work in different economic sectors, they are often knowledgeable about the construction industry. Therefore, they can advise their clients about the issues they have about construction projects (Delgado-Hernandez & Aspinwall 2008; Joyce 2001). To make this intervention effective, it is important to anchor this requirement in law. In other words, the law should require clients to seek the report of a quantity surveyor before they can sign contractual agreements with a client. Since, it may be difficult to implement such a strategy in the private sector, the public sector should lead the way in this regard. The government could protect many public funds using this strategy because the contractors would do business with someone who understands the industry. Consequently, the quality of construction projects would increase. This model would also cause a decline in the number of project delays (Delgado-Hernandez & Aspinwall 2008; Joyce 2001).
This paper has focused on accomplishing two specific objectives, the first was to evaluate the cause of delays in the construction and development projects in Saudi Arabia while the second involved proposing. strategies for improving construction projects in Saudi Arabia. Through the investigation of this study, it was determined that Employee Incompetency, Bribery, Lack of Knowledge and Culture were the prime instigators behind the issue of construction delays within the country. These details were based on the interviews that the researcher had conducted while the surveys showed that project related factors, contractors and labour issues were the perceived reason behind construction delays. As it can be seen, there is a significant overlap between the two aspects that detail the source of project delays since factors related to incompetency, bribery, and lack of knowledge can be traced back to the contractors that cause the delays to occur in the first place. This paper has helped to contribute towards the greater whole of literature on the construction industry in Saudi Arabia by tracing the problem of construction delays to the contractors and giving sufficient evidence both through surveys and interviews that confirm the origin of the problem. This paper has also helped to determine what specific resolution professionals in the construction business in Saudi Arabia would recommend when it comes to resolving the issue which comes in the form of creating an in-house regulatory body that would help to curb aspects related to bribery, corruption and the assigning of contracts to contractors that simply cannot handle the workload. Overall, this paper should help decision makers in the government come to terms with the current source of the issue that is causing construction delays in the country and implement some form of stopgap measure as recommended by this paper in order to resolve the issue.
Recommendations for Future Studies
This study sought the views of contractors, consultants, designers and other professionals who directly work in the construction industry. However, most of these professionals mentioned the client as another party that plays a role in shaping project outcomes. For example, the respondents linked the lack of knowledge, as a cause of project delay, to the client. Many researchers, who have undertaken similar studies, have also highlighted the client’s role in shaping project outcomes. For example, Joyce (2001) found out that client approval affected project outcomes in the construction industry. This reason mainly concerned using new materials (that the client did not approve) in the construction process. Slow decision-making (by some clients) is also another reason highlighted by some contractors for project delays (Joyce 2001). This dissertation did not seek the views of clients on the research questions. They could have provided vital information regarding their expectations about the desired project outcomes and their views about how their relationship with contractors and other stakeholders affect the project outcomes. Future research should not ignore their contributions in this regard. Furthermore, they should analyse how their views compare with the views of other knowledgeable professionals in the industry.
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My name is Fahad, I am a graduate student at University of Leeds. For my final project, I am examining The Causes of Delays and Poor Quality of Construction in the Kingdom of Saudi Arabia. Because you have familiarity of the KSA’s construction sector or are actively engaged in construction I am inviting you to participate in this research study by completing the attached surveys.
The following questionnaire will require approximately 5 minutes to complete. There is no compensation for responding nor is there any known risk. In order to ensure that all information will remain confidential, please do not include your name. Copies of the project will be provided to my university of Leeds supervisor, and Saudi Cultural Bureau supervisor. If you choose to participate in this project, please answer all questions as honestly as possible. Participation is strictly voluntary and you may refuse to participate at any time.
Thank you for taking the time to assist me in my educational endeavors. The data collected will provide useful information regarding my primary data collection. If you would like a summary copy of this study please complete and detach the Request for Information Form and return it to me.
Completion and return of the questionnaire will indicate your willingness to participate in this study.
If you require additional information or have questions, please contact me at one of the details listed below.
(This request for information form is an optional part of the cover letter and is not required for IRB approval.)
Request for Information
Please send a copy of the study results to the address listed below.
Section 1: Personal Data
Education level: ________________________________________
(To answer the following questions, tick the appropriate box that best represents your rating)
Section 2: Delays
What do you think is the cause for delays in the construction industry in the Kingdom of Saudi Arabia?
Section 3: Solutions
What do you think is the solution for delays and poor work quality in the construction industry?
Section 4: Personal Opinion
Do you think that the delays and poor work quality are a threat the construction industry in Saudi Arabia?
|Causes of delays||Strongly disagree||Disagree||Neutral||Agree||Strongly agree|
|Client related causes||Finance and payments of completed work|
|Slow decision making|
|Unrealistic contract duration and requirements imposed|
|Contractor related causes||Subcontractors|
|Mistakes during construction stage|
|Inadequate experience of contractors|
|Consultant related causes||Contract management|
|Preparation and approval of drawings|
|Quality assurance / control|
|Waiting time for approval of test and inspection|
|Material related causes||Quality of material|
|Shortage of material|
|Labour and equipment category causes||Labour supply|
|Equipment availability and failure|
|Contract related causes||Change orders|
|Mistakes and discrepancies in contract document|
|Contract relationships related causes||Major disputes and negotiations|
|Inappropriate overall organizational structure linking to project|
|Lack of communication between the parties|
|External causes||Climate conditions|
|Problem with neighbors|
|Unforeseen site conditions|
- Ethics approval form
- Raw data of the interviews