AN EXAMINATION OF THE CAUSES OF PROJECT DELAY AND ABANDONMENT IN NIGERIA PUBLIC SERVICE, A CASE STUDY OF ABUJA

AN EXAMINATION OF THE CAUSES OF PROJECT DELAY AND ABANDONMENT IN NIGERIA PUBLIC SERVICE, A CASE STUDY OF ABUJA

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Abstract

This research work focused on the tangible dimension of public service projects that resulted in the execution of physical projects which brightens the environment. The research considered the concepts of delay and project abandonment. The causes of project abandonment and its effects on the individuals, public and the government were extensively reviewed. Furthermore, the way forward for public service projects delay and abandonment were also highlighted.

In construction industry, delays had become a norm and global phenomenon which led to many negative effects of lawsuits, claims, loss of productivity and revenue and also contract termination between all parties involved, and Nigeria public service is of no exception. Hence, this research appraised the delay factor of Government project delivery in Nigeria public service through its objectives of identifying the main causes of construction delay, determining the impact of delay factors in the construction project and ranking the delay factors in government project delivery.

A total of 100 questionnaire were distributed and the samples drew from primary source: such as where construction were ongoing - Zuba junction to Sheda village, Abaji village, Kotonkarfe and Lokoja. Interviews conducted with staff of Federal Ministry of Works, staff of other Ministries and Parastatals, Contractors and the general public to ensure effective coverage of the entire population.

Therefore, this study proffered solutions to the causes, effects and methods of minimizing project delay and abandonment in Nigeria Public Service. Data on the study variables were collected through structured questionnaire from stakeholders and from Nigerians with wealth of experience in failed and abandoned public sector construction projects.

Findings from the study revealed that the most contributing factors and categories to delays and abandonment were deficient government policies, depreciation of Nigeria naira against other currencies, ineffective planning and scheduling, failure in making progress payments and ambiguities or mistakes in scope of work, specifications or drawings and difficulties in financing project to mention a few.

This dissertation will serve as a guide to the relevant parties to mitigate and alleviate the delay and abandonment of construction projects particularly in government projects in Nigeria public service.

Chapter One

1.0        Introduction

The construction industry plays a very dominant role in the economy of any nation. A healthy economy usually experience an increase in construction activities, but in a depressed economy, the incidence of project abandonment tends to be more prevalent. The abandonment of development projects is the act of discontinuing any activities or maintenance works on such development project within a time frame of the contract agreement and with no intention of returning back to the development.

Eleven thousand, eight hundred and eighty-six (11,886) abandoned projects that will cost an estimated N7.78 trillion to complete as reported by the Presidential Projects Assessment Committee (PPAC). If the government does not start any new projects, it will take more than five years budgeting about N1.5 trillion annually to complete them all, assuming no cost-over runs or delays (Premium Times, April 11, 2015).

Ordinarily, these figures should compel the government to accelerate the completion of all ongoing projects, or at least focus on high priority ones. Unfortunately, this has not been the case: Government would rather continue the weekly charade of awarding new contracts or re-awarding old ones at higher prices during its weekly Federal Executive Council (FEC) meetings.

As trillions of naira are allocated to public projects, it is important to understand issues like how projects are initiated, bid for, negotiated and awarded and why they get abandoned mid-way. Who and what are really responsible for abandoned projects? Are poor planning, haphazard procurement, and incompetent project management the key causes or is it financial mismanagement? In spite of mobilization fees already paid, why is nobody held accountable when projects are not completed? How far can the Bureau of Public Procurement or other agencies with requisite mandate go to address the root causes of abandoned projects?

There is a need to briefly examine how projects are initiated and contracts awarded. The first step ought to be conception of projects that fit within a scheme of national vision, strategy and development programs. Next is to plan and design the project in detail. Assume a road is to be constructed between two locations, the rights-of-way must be

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Gilbert Bolaji Folorunso – WA14076

MBA Thesis

surveyed, levels taken, alignment finalized, road designed, and detailed drawings, bills of quantities and other bidding documents prepared prior to inviting pre-qualified engineering contractors to submit competitive tenders. The design development process can take anything between some months to more than a year, while it takes a minimum of 5 months from advertising invitations for bids to presentation to the FEC or other approving authority. This suggests that design and procurement processes for any project ought to start at least a year or two before being budgeted for. This process is followed in a few public sector agencies MDAs (Premium Times, April 11, 2015)

Typically, nothing happens until the budget is passed and cash backed, then the implementing MDA begins the fire brigade work of compressing this timeline into a few weeks. Most MDAs wait until projects are included in budget or the budget passed before they start project surveys or design or the procurement process. When an MDA spends at least 5 months on procurement, how much time does the contractor have to execute the project and draw down the funds before the financial year runs out? This becomes a big issue as MDAs are required by law to return all unspent funds to the treasury by the year end.

To understand why projects get delayed and abandoned, we must also understand the pervasive lack of continuation in policies as occupiers of political offices change. Whether it is long term development plans or contracts for critical infrastructure, the repeated practice in Nigeria is that once new people are in office, policies or programs of the previous administration are abandoned. This unwillingness to ensure policy continuity is the root cause of nepotism, corruption and impunity, as officials often re-award such contracts to cronies and generous campaign donors at inflated prices.

From Obasanjo’s NEEDS, to Yar’Adua’s Seven-Point agenda, and now, Jonathan’s Transformation Agenda – there has been continuity of policy inconsistency within the same ruling party – and turning projects that would have ordinarily benefited the populace into drain pipes. Critical examples are the N52m Zobe dam in Katsina, commissioned in 1983 by the Shagari regime; not only has several times the original amount been spent on the project, it has not pumped up a single litre of water. And the Ajaokuta Steel Complex which has gulped about N675bn, but still not produced much steel (Premium Times, April 11, 2015).

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Gilbert Bolaji Folorunso – WA14076

MBA Thesis

When projects are abandoned, the usual reason given is lack of funds, though often it is the pre-contract mishaps already alluded to, and project management deficits that are the fundamental causes. How can funding constraints be blamed for project failures? Should one not wonder why a project is approved in the absence of adequate funds? In fact, section 4 (2) (b) of the Public Procurement Act 2007, states plainly that all procurement shall be ‘based only on procurement plans supported by prior budgetary appropriations; and no procurement proceedings shall be formalized until the procuring entity has ensured that funds are available to meet the obligations and has obtained a “Certificate of ‘No Objection’ to Contract Award” from the Bureau’. Simply put, the law requires that no contract should be awarded if funds are not available for it from the onset!

It is intuitive that abandoned projects fuel corruption and reduce public confidence in governance. The excuse of inadequate or delayed funding may sometimes be contrived. Such an inference could be drawn as abandoned projects are more often than not re-awarded at unjustifiably over-bloated sums. The increased costs are subsequently justified by blaming inflation, exchange rates, labour and materials cost increases amongst others.

Should they intend to check the abnormality of abandoned projects, the relevant laws have to be strictly adhered to. Section 63 (1) of the Public Procurement Act which states thus: ‘In addition to any other regulations as may be prescribed by the Bureau, a mobilization fee of no more than 15% for local suppliers and contractors and 10% for foreign suppliers and contractors may be paid to a supplier or contractor …’ must be firmly applied. According to the PPAC, it is not uncommon for contractors to be paid mobilization fees in excess of 50% of the contract sum, often in apparent violation of the law (Premium Times, April 11, 2015)

While the Executive arm of government is largely to be blamed for abandoned projects, it is not alone. The National Assembly (NASS) is liable as well by unlawfully and unconstitutionally inserting new, unplanned projects into appropriation bills expecting them to be implemented. The NASS has joined the executive branch in ignoring the funding needs of existing projects to completion and commissioning.

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Gilbert Bolaji Folorunso – WA14076

MBA Thesis

The Public Procurement Act 2007 established the Bureau of Public Procurement (BPP) with the National Council on Public Procurement (NCPP), as the regulatory authorities saddled with the oversight functions of monitoring procurement and implementation of federal projects across the country. These statutory functions have been hampered by lots of challenges, including the late passage of the annual appropriation acts by NASS and abandonment of the procurement processes by the relevant MDAs if favoured bidders turn out to be unsuccessful.

If properly sustained, the due process and certification mechanism started by the Budget Monitoring and Price Intelligence Unit under the former Minister Oby Ezekwesili, would have been one of the many benefits of the legislation. This has however not been the case because of policy discontinuities and the cravings of politicians to have unfettered discretion in awarding contracts (Premium Times, April 11, 2015)

1.0.1   Problem Statement

It has been observed that in spite of the effort put forward by government to bring to actualization the conception of its projects, public projects are still massively abandoned at different stages of construction.

What are the factors responsible for the delay and abandonment of public projects? This study is therefore geared towards examining the factors that caused delay and abandonment of public sector development especially Federal Ministry of Works’ projects.

1.0.2    Objectives of the Study

i.              To determine the major causes that hinders success of capital projects in Nigeria public service.

ii.            To proffer solution to arresting the trend in the future with a view to addressing the decay in Nigeria public service project implementation and to suggest methods of minimizing the effects of delayed and project abandonment in Nigeria Public Service.

i.              What are the possible causes of delay and abandonment of public service projects in Nigeria?

ii.            What are the possible effects of delay and abandonment of public service projects in Nigeria?

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Gilbert Bolaji Folorunso – WA14076

MBA Thesis

iii.           What are the possible methods of minimizing delay and abandonment of public service projects in Nigeria?

1.0.4  Justification

In the light of the stated objectives of which this study is set to achieve, the following are the significance of the study:

a) It would help to evaluate the adoption of process for zero tolerance of projects delay and abandonment in Nigeria public service.

b)  It would also justify and proffer solution to the decay in Nigeria public service project implementation.

c) It would contribute to existing literature by identifying the major and root causes to project delay and abandonment in Nigeria Public Service

d) It would also be an invaluable tool for students, academic, institutions and individuals that might want to know more about the effects of delays and project abandonment in Nigeria Public Service.

1.0.5  Chapter Organization

The organisation of the thesis is in the following order: Chapter one lightens up the write up with the background of delay and abandonment of public service projects in Nigeria, it further analysed the general overview of project management, its definitions, major phases of project management and techniques including a general overview of project delays and abandonment in the current context. While chapter two dissected three articles of literature and were analysed and reviewed in the following format: objectives of study, method, findings and analysis of the author's cum reviewer’s position. Chapter three discusses the profile of Federal Ministry of Works plus its project management policies and practices including the challenges of the policy implementation on delay and abandoned projects of the Ministry and how those challenges were being taken care of in relation to the Abuja-Lokoja road project which was used as the case study. The research design methods were amply described in chapter four, the processed data plus results obtained and the findings were analysed and the results discussed. While chapter five offers vivid recommendations based on the aforementioned results. Lastly, chapter six covers the thesis explicit summary and conclusion.

1.1Introduction to Project Management

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Gilbert Bolaji Folorunso – WA14076

MBA Thesis

Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria (Nokes, Sebastian 2007).

More specifically, what is a project? It's a temporary endeavour undertaken to create a unique product, service or result (©2016 Project Management Institute, Inc). A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies. The development of software for an improved business process, the construction of a building or bridge, the relief effort after a natural disaster, the expansion of sales into a new geographical market — all are projects. And all must be expertly managed to deliver the on-time, on-budget results, learning and integration that organizations need.

Project management, then, is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. It has always been practiced informally, but began to emerge as a distinct profession in the mid-20th century (©2016 Project Management Institute, Inc).

Project management processes fall into five groups:

Initiating Planning Executing

Monitoring and Controlling Closing

Project management knowledge draws on ten areas:

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Integration

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Scope

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Time

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Cost

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Quality

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Procurement


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