Why projects fail around the world? : The Reasons and Concern


By

Mr. Manohar Govind Urkude
Retired D.G.M.
IRCON International
Delhi

Dr. Ashish Manohar Urkude
Professor
Alliance Business School
Bangalore
E-mail: dr_ashish_urkude@yahoo.co.in / ashish.urkude@gmail.com / dr.ashish.urkude@gmail.com
 


USA, Western European Countries, Canada, and Japan build their infrastructure first then their Economy took giant leap. Just see how the Metro Railways are planned; just see the multi terrain but multi-lane highways were planned and built, just experience the fastest trains like TGV from France and Bullet Trains from Japan. In fact, China is supposed to be the over heated Economy due to infrastructure build up and timely completion of the best projects like multiple flyovers and express ways in many cities and the giant projects like three Gorges Dam. Also, nobody can forget the Stadiums and infrastructures that were built to convene the Beijing Olympics 2008.

Similarly, Mexico, Brazil, Vietnam, Indonesia, Malaysia, Thailand, everywhere the infrastructures build up is timely and phenomenal.

However, there are 200 countries around the world, where such Projects add value to their infrastructure.  Also, today, many countries are on the verge of infrastructure collapse due to non execution of well planned projects or if there are few projects then they lack the political-will to complete it. However, it is certain that construction activities are a non stop phenomenon around the world.

Hence we analyzed few projects in different parts of world, successful projects as well as projects those were failures. We observed that many projects in underdeveloped and developing countries were not completed on time. No one realized that by doing so they had wasted time and human efforts and money.

Later on we carried out a proper analysis.

Finally, we came to the conclusion that for starting a Civil Engineering Projects in these countries, following are the basic considerations for its successful completion.

    1. Availability of adequate Capital and supporting Financial Management,

    2. Availability of sufficient Land as per requirement and proper Land Management,

    3. Availability of Raw Materials required for the work in the vicinity and proper Logistic and Supply Chain Management,

    4. Availability of Talent both Skilled and non skilled Man-Power and their Management,

    5. Availability of Energy in the zone and Energy Management,

    6. Availability of Water in close vicinity and better Water Management,

    7. Availability  of latest Technology know-how and the Technology Management,

    8. Availability of viable Roads and non-stop Commutation mediums all around,

    9. Availability of suitable Political support and security provision from the state,

    10. Availability of better Project Management team that keep a track on Project activities,

    11. Availability of the better Governance, the better coordination, the cooperation and the synergy among the governmental and non-governmental parties.

Thus, before planning for any project these factors has to be examined judiciously. Otherwise non fulfillment of any one of the above the project may collapse before the aim is achieved which may result in huge loses. For example, there was an Outer Ring Road that was planned in Nagpur City and huge funds were allocated but unwillingness of political support was major cause of failure and the funds were either diverted to other major projects or expansion of the cities made this project unviable after five years. Then, there are cases in Nigeria, where Shell built the best pipeline for fuel transport, however, after the clashes between two groups, one group used their influence and literally exploded the pipelines and the project was stalled for many months.  The problem here was not considering the security issue. Then there were major project failures in Pakistan, Bangladesh due to similar reasons.

Thus, there are various Real-Time causes of Project failure, some of which we are putting over here.

Incorrect data collection: Generally, before the civil engineering project there is a survey of site. E.g. in three Gorges Dam in China, different teams were conducting the survey of the site, so that the USD 20 Billion Project becomes a huge success for all the organisations involved. There was geological team, there were seismologists, there were chemical analysts, etc. they conducted a through survey to know the details of the site, before and after the dam is build. 

Now if the survey team has been found not exerting to record updated data, the project would fail. In other case if Detailed Project Report (DPR) team depends on very old data recorded somewhere then also the project may fail. Hence latest data has its importance.

Also, Geological and Geographical changes that will be developed due to pressure of Dam water that could lead to Earthquake effects also had its importance. If they are not considered then it may lead to faulty design of the whole structures of the project.

Indian Railways (IR) had a bitter experience in one of its Project where soil investigation data recorded was based on very old record. At the time of designing foundation of major bridge of Railway Track. The old data recorded was found to be wrong as per the present conditions which were due to rapid geological changes in that area. If IR had considered it to be correct the foundation for the major bridge could have been wrong. In fact the bridge would have been down within few months of its construction. The remedy was IR had to go further down for the foundation for safety purpose. This had resulted in loss of time and financial overruns.

Not acquiring whole piece of land required: Some times it happens that construction activities are started only after getting some portion of demarcated land and keeping efforts to get the other important part of the land. After completing lot of construction, some time the other part of land can not be acquired and get delayed very much. This is also a cause of concern for delay and additional financial burden on the client which is not included in the estimate. 

Sudden change/s in pre-planned capacity: In one case, a project was started for a preplanned and approved capacity of 'A' size. All the arrangements were made accordingly. However, after some time under some political pressure it was planned for enhanced capacity 'B' without thinking over pros and cons. The result was inevitable, after 5 years the project was closed, for want of additional resources and time. In short, there was shortage of water, lack of sufficient electrical energy, non availability of raw material in that part of country, land acquisition was a big problem, availability of more skilled man power became a problem, adding fuel were, the non availability of viable roads and advanced technology as the project was not previewed from time to time for this enhanced capacity. It delayed the project and later on it was closed for not being viable option.

Inadequate fund flow: It has been observed that some projects have been started with limited financial resources on some assurance. After investing lot of available cash and loans the further requirement of fund flow could not be fulfilled and the project remained incomplete resulting in total Failure.

Labour Unrest: Valuable working hours are lost due to causeless labour unrest created by some political parties or labour unions or people having vested interest. In almost every country on this earth, every political party has its own labour union or people having support to some ideology. Their demands are never ending.

The major problem among these people is that they should think telescopically than microscopically. They should think that if they are BPL (Below Poverty Line) at present moment then after well planned hard work they could come up as APL (Above Poverty Line). However, ideology and practical never goes hand in hand and thus, due to continuous strikes and intermittent closure of work, the most valuable man days are lost and production is affected. It increases the cost of the production on one hand and on the other hand the workers get fewer wages. The low paid employees thus never recoup and the wages are lost and they remain BPL from generation to generation.

Bad political influence: Many experts claim that even if all the above points are taken care of well in advance in some countries like India, Pakistan, Nigeria, Bangladesh, there is no guarantee of showing political maturity. There are hundreds of examples where the government of "A" political party has sanctioned and started a project for the benefit of public the government of "B" political party coming in power will not allot sufficient funds for that project to be completed in time or will stop it which results in national loss.

Imagine a situation like in Italy where there were 19 governments in 17 years.

Hence, we must state here that, the projects are started in national interest for the benefit of all the citizens. Hence, they should be completed on time, in the larger interest of public. The political leader from a particular party, who comes as an administrator should not have interference in it to spoil or stop but to apply his skill to complete early in a better way to add value in the project and to add in his list of achievements in place of showing his bankruptcy of political maturity. No one shows maturity that other political party started this project and our political party has completed it in the interest of nation.

It is the same story, 1950's through 2010, the on job Project Leaders find all kinds of deficiencies as explained above to complete the project in scheduled target.

Hence this article to alert the government/s and peoples from various nations.
 


Mr. Manohar Govind Urkude
Retired D.G.M.
IRCON International
Delhi

Dr. Ashish Manohar Urkude
Professor
Alliance Business School
Bangalore
E-mail: dr_ashish_urkude@yahoo.co.in / ashish.urkude@gmail.com / dr.ashish.urkude@gmail.com
 

Source: E-mail October 11, 2008

           

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