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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Project governance is the management framework within which project decisions are made. Project governance is a critical element of any project since while the accountabilities and responsibilities associated with an organization’s business as usual activities are laid down in their organizational governance arrangements, seldom does an equivalent framework exist to govern the development of its capital investments (projects). For instance, the organization chart provides a good indication of who in the organization is responsible for any particular operational activity the organization conducts. But unless an organization has specifically developed a project governance policy, no such chart is likely to exist for project development activity. Therefore, the role of project governance is to provide a decision making framework that is logical, robust and repeatable to govern an organization’s capital investments. In this way, an organization will have a structured approach to conducting both its project activities.
Many definitions had been given to project by different authors, due to the fact that project is a multidisciplinary word that has different meaning from different perspective and orientations. Engineers, Architects, Managers and so on, have their definitions coined out from their experiences as far as their professions are concerned. Project according to Project Management Institute, PMI, (2000) cited in Pinto (2007) “is a temporary activity or endeavour undertaken purposely to create a unique output (product or service) within budget, time and standards. Turner and Muller (2003) in their own words defined project as “an organization of human materials and financial resources in a novel way, to undertake a unique scope of work, of given specification, within constraints of cost and time, defined by quantitative and qualitative objectives so as to achieve a beneficial change”. The uniqueness of project is pointing to its genuine nature in the sense that there may not be a pre-existing blue print for the project’s execution and there may not be a need to repeat the project once completed. Its goal characteristics may be well perceive as achieving stated objectives or solve a particular problem, while its temporary nature signifies a discrete, definable commencement and conclusion.
Effective project governance structures are important to ensure successful project performance. A poor strategy as well as incorrect budget or schedule forecasting can easily turn an expected profit into loss. This is especially true for the construction industry where projects have a relatively short life cycle and the project activities are non-repetitive with rather complex interrelationships, so that there is little opportunity to improve on a wrongly chosen or adopted strategy. The appointment of the best project team will better ensure the success of the project, but the best project team must be led by a good governance structure.
Studies have confirmed that application of modern project governance structures has a great effect on public sector projects. Arnaboldi et al (2004) observed that application of project governance strategy in public sector was as a result of pressure on governments to abandon bureaucratic organization in favour of leaner structures. In their study White & Fortune (2002) examined the current project governance practice in public sector in UK and determined effectiveness of the project governance methods, tools, and techniques they had used on the project success. In Nigeria, the implementation of modern project governance tools, methods and techniques in public sector is largely unstructured at states level notwithstanding the structured regime operated by the federal government. This has resulted in failure of public institutions and projects as numerous construction projects in budget, specifications and deadlines performance criteria. Studies have recognized social and political systems, cultural blocks and lack of financial support as barriers to successful project planning and execution in Nigerian public sector (Idoro&Patunola-Ajayi, 2009). This study therefore seeks to examine the how inherent project governance structure affects the performance of public works delivery in Imo State.
1.2 Statement of the Research Problem
The need to comply with public laws, including the public procurement regulations, thus, public laws places constraints on public construction project governance activities in Imo State which constitutes to the poor implementation of project governance structure on public construction performance. Despite the advancements in the project governance structure, the traditional management system where the project coordinator performs the managerial functions in addition to their core or technical duties is still the norm in Imo State Nigeria (Bamisile 2003; Sobotie 2004). Wallace et al. (2004) emphasized that, the root cause of project failure originates from governance structure used especially here in Owerri, Imo State Nigeria were the study focused. This approach to governance is typical of the non-executive project governance structure (Waterhouse, 1992). Heniszetal (2012) also observed that mega projects are confronted with governance challenges that could marred the project objectives. The research carried out by various proponents in this field has shown that the nonexecutive PM structure widely adopted in Nigeria is not effective (Onwusonye 2005; Odusami and Ameh 2006; Okereke 2008). In addition, most of the problems in the Nigerian construction industry have been attributed to the traditional management approach (Andawei and King 2001; Odusami et al. 2003). Yet, the industry has not considered other project governance approach (Okereke 2007; Ogunsemiet al.2008). Most public construction projects have been abandoned due to lack of good project governance structures, especially in Imo state. This study therefore determines the impact of project governance structure used on public construction performance in Imo state in order to achieve effectiveness in construction project delivery.
1.3 Research Questions
1. What are the factors affecting project governance of public construction projects?
2. Are project governance essential complied with in the implementation of public projects in Imo State?
3. Is there a relationship between level of compliance to project governance and public project performance in Imo State?
4. What framework is suitable for effective public construction project governance?
1.4 Aim and Objectives of the Study
The aim of this study is to evaluate the impact of project governance structure on the performance of public buildings construction in Imo state with a view to develop an appropriate framework for achieving efficiency. To the aim of the study, the specific objectives of the study include to:
Ø Examine factors affecting project governance in public construction projects
Ø Assess level of use of project governance essential in the implementation of public projects in Imo State
Ø Evaluate impact of project governance on public construction performance
Ø Develop a framework for public construction governance in the study
1.5 Research Hypothesis
Based on the key research objective, one focal research hypothesis was postulated and tested in the study as seen below:
Ho: There is no significant positive relationship between project governance structure and public buildings performance in Imo state.
H1: There is a significant positive relationship between project governance structure and performance of public building performance in Imo state.
1.6 Significance of the Study
There is need to conduct an investigation on the impact of project governance structure used on public construction performance in Imo state to minimize delays and abandonment of public project in the state. By examining the factors affecting project governance in public construction projects, the result will contribute adequately in minimizing and putting to an end the factors affecting project governance which will increase the performance of the construction industry and as well as the adoption of project governance structure in executing public construction project in the state. Thus, by evaluating impact of project governance on public construction performance, the outcome will add adequately in increasing the efficiency as well as the level of understanding of project governance in the construction industry and also the adoption of project governance structure in executing public construction projects here in Owerri Imo State. Also by developing a framework for public construction project governance in the study, the result will contribute to the understanding of the various stages of project governance structure as well as how to utilize it in caring out public construction projects here in the state. The outcome of this study will help managers of public sector projects to recognize the importance of project governance in enhancing the construction of public sector projects in Owerri Imo State.
1.7 Scope of the Study
The study focused on the impact of project governance structure used in public construction performance in Imo state building projects executed in Owerri senatorial district in the state. The construction projects covered were mainly building projects. The respondents include construction professionals mainly in the public sector employment and those actively practicing in Owerri Municipal. The impact of project governance on public project performance is limited to the implications of ineffective governance on pre-contract project management outcomes only.
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