ADDIS ABABA SCIENCE AND TECHNOLOGY

UNIVERSITY

nkj,

College of Architecture and Civil Engineering

COTM 5204: CONSTRUCTION MANAGEMENT

Chapter 1
Introduction
YORDANOS M. & TEWODROS A.

February 2020
1
 Introduction

Contents

 Construction Industry

 “Unique” Characteristics of CI

 Major Stakeholders of the CI

2
 Introduction

Outcome

 Express and Discuss the status of Construction Industry

 Differentiat the “Unique” Characteristics of CI

 Identify Major Stakeholders of the CI

 Discuss the role and responsiblity of major stakeholder of the CI

 Explain the major challenge of the domestic construction industry

3
 Construction Industry
Construction con·struc·tion [kən strúkshən]
(plural con·struc·tions) noun
 Act or process of constructing: the building of something, especially a large structure such as a
house, road, or bridge
 BUILDINGS built structure: a structure that has been built
 Creation of something: the creation of something such as a system or concept from a number of
different part
 GRAMMAR combination of words: a group of words governed by particular grammatical rules
 MATHEMATICS geometric shape: a geometric figure drawn accurately in accordance with given
measurements
 GRAPHIC ARTS work of art: a visual work of art that is put together from a variety of different
materials, abstract in design, and usually three-dimensional
con·struc·tion·al, adjective
-con·struc·tion·al·ly, adverb
 Microsoft® Encarta® 2008. © 1993-2007 Microsoft Corporation. All rights reserved.
4
 Construction Industry

What is a project
 A project is a temporary endeavor involving a connected sequence of activities and a range
of resources, which is designed to achieve a specific and unique outcome and which
operates within time, cost and quality constraints and which is often used to introduce
change.

 ‘… A set of activities with a defined start point and a defined end state, which pursues a
defined goal and uses a defined set of resources.’ (Slack et al)

 “a group of activities that have to be performed in a logical sequence to meet pre-set

objectives outlined by client” (Meredith & Mantel)
5
 Construction Industry

Characteristics of a project
 A unique, one-time operational activity or effort

 Requires the completion of a large number of interrelated activities

 Established to achieve specific objective

 Resources, such as time and/or money, are limited

 Typically has its own management structure

6
 Construction Industry

Construction project
 Characteristics of construction project

 Is a temporary activity

 Is a unique activity

 Has a definite start and end point

 Utilizes various resources

 The key activities of Time, Cost, Quality, Scope etc must be managed

7
 Construction Industry

Construction project
 Characteristics of construction project

 Is a temporary activity

 Is a unique activity

 Has a definite start and end point

 Utilizes various resources

 The key activities of Time, Cost, Quality, Scope etc must be managed

8
 Construction Industry

Transportation and
Communication sector The Construction Water and
Industry

Construction Industry (CI) is an industry which is Energy

involved in the planning, execution and evaluation sector
Building and
other physical of all types of civil works.
infrastructures
9
 Construction Industry
Why Construction ?
 Construction is an enormously important industry by which societies create most new
values;

 Creates, defines and maintains the built environment within which most other social and
economic activities take place;

 Most of mankind’s day-to-day activities are dependent on the infrastructure delivered by

the CI

10
 Construction Industry
The History of Construction
 Since ancient times, mankind has erected some huge structures

The 6, 550, 000 t and137 m Pyramids of

Khufu at Giza (2500BC) The 6,400Km long China Wall (Around The 24m and 180 t Axum Obelisk
668 BC) (Before the 4th century)
11
 Construction Industry
The Development of Construction in Ethiopia
 Though some spectacular structures have been erected, Ethiopia’s construction as
industry is very infant.

 Ethiopian modernization started under Menelik II

 The Ethio-Djibouti rail ways is best example

 The road from Addis Ababa to Asmera

 Italy during its invasion (1936-1941) had constructed about 6000 km length road

 The Construction industry is set up in modern form During the Majesty’s era

 Established Ministry of works, BaTCoDA, IHA, etc 12

 Construction Industry
The Current setup in Construction
 Under the current format major players of the construction sector are

 Ministry of Transport

 Ministry of Works and Urban Development

 ERA, IUHDPO, etc

 Ministry of Water Resources

 Ministry of Mining and Energy

 EEPCo
13
 Construction Industry
Status of the Global CI
 Compared to other industries, CI is labeled as ‘conservative’

 Some serious critics about ‘inefficiencies’ in the industry

 Fragmented and Sequential project delivery system

 Known for low profitability, poor returns and slow up take of new technology and
management philosophies

14
 “Unique” Characteristics of CI
Nature of production: [usually] on site
 Place of production :- Is the place where the product is going to be used. Thus

 workers constantly movies from one site to another

 Works in the construction industry is mostly exposed to

 inclement weather

 Seasonal cycle and Disruption.

 Temporary duration

 insecurity of employment

 The incidence of accidents is significantly higher 15

 “Unique” Characteristics of CI
Nature of production: [usually] on site
 Peculiarity regarding the sector’s labor relation

 very often lower wages,

 particular vocational training systems,

 social funds to compensate disadvantages caused by health and safety risks,

 disruption of earnings, and

 fluctuation with negative effects on earnings, vacation, and pensions

16
 “Unique” Characteristics of CI

Nature of product:

 Nature of product: large, heavy, durable, expensive, heterogeneous, and immobile

 Market Demand is localized

17
 “Unique” Characteristics of CI
Demand for the product:
 Demand is usually driven by ‘other’ goods and services; not controlled by industry,

 In the majority of cases, clients define requirements before the industry provides it,

 Time lags b/n demand and supply is long.

18
 “Unique” Characteristics of CI
Structure of industry:
 Fragmented industry

19
 “Unique” Characteristics of CI
Uniqueness of construction industry:
 Long production cycle;

 Large uncertainty;

 Transient organization nature;

 Unpredictable work load; and

 Subject to environmental impact

20
 Roles of Construction Industry
 Construction Industry is the most important enabler for social, economic and political
development of countries.
 It provides the basis upon which other sectors can grow by constructing the physical
facilities required for the production and distribution of goods and services.

 Specifically this fact is true for least developing countries like Ethiopia because projects
are
 Inter- sectorial ;

 Source of employment; and

 Demands huge capital budget

21
 Major Stakeholders of the CI
 Definition

 Are individuals or groups who has a vested interest in the project or its product.

 Are parties who could have a telling effect on the success or failure of the project

22
 Major Stakeholders of the CI
 Classification
 Positive Vs Négative

 Direct Vs Indirect (Internal Vs External)

23
 Major Stakeholders of the CI
Indirect stakeholders’ boundary

Users
(Beneficiaries)

Contractors
Regulatory/Statutory
bodies Suppliers
Client
W o r k e r s
Direct stakeholders’ boundary
Trade Unions Financers/
Financing
Consultants institutions

The general public

24
 Major Stakeholders of the CI
 Client: is the party (public or private) under whose guidance the
project is executed
 Comes up with the investment needs Pr. Idea

Land Capital

25
 Major Stakeholders of the CI
 Client:
 [Usually] provides the infrastructure needed

 Takes care of some of the legal constraints & permits

 Pays for the project’s execution

Major public clients in Ethiopia;

 Roads (ERA & its regional counterparts)

 Housing (IUHDPO, MoE, MoH, etc)

 Energy (EEPCo)

 Water sector (MoWR)

26
 Major Stakeholders of the CI
 Consultants: are professional bodies who design the project
 Change the clients project idea into economic and construct able artifact

 Make sure that design satisfies requirements

 [Usually] prepare BoQ and contract documents

 If assigned to supervise:

 Look after proper execution of project

 Certify payment certificates

 Issue provisional and final acceptance certificate

27
 Major Stakeholders of the CI
 Contactors: is the party that changes the drawings and specification made
by the A/E into a physical structure
 Provides the resources needed to execute the project

 Executes the project according to plan

 Monitors project execution

 Rectifies defects

28
 Major Stakeholders of the CI
 Statutory bodies: are government bodies that looks after the project’s
compliance with the general public’s interest
 Prepare a general development scheme and make sure that the project satisfies that

 Look after the safety, legal, commercial etc issues associated with the project

 Look into the environmental, cultural, social etc effect that the project induces

The major regulatory bodies in the sector are

 MoWUD, Municipalities, The ERA, The MoWR

29
 Major Stakeholders of the CI
 Suppliers: are parties that supply the varies materials, equipments and services needed
for the project

 Financers/Financial institutions: are institutions like banks, insurances, pension agencies

etc who could provide loan services for the project

 Works in the industry: are professionals, occupational or unskilled laborers who earn their
living from working in the industry or its supply chain.

 Trade (labor) unions: are unions of the working class that look after unfair treatment of
workers (like payment issues, firing issues) as well as issues related to occupational
health and safety 30
 Major Stakeholders of the CI
 Project product users: are parties who may be using the end product of the project

 The general public: are communities of the locality, the general society of a country or
even the globe who may have a vested interest in the project

 Other sectors: are sectors which could have interest in the process or product on the
construction project

31
 Importance of construction
 Construction constitutes about 10% GDP of many economics; about 30% of developing
countries

 111 million employment worldwide

 Defines, develops and maintains that built environment where other activities take place

 Provides the second largest work opportunity (next to Agriculture)

32
 Major works in construction

Construction

Buildings and
Infrastructure
related
works
works

Water Resource
Civil work in
Transportation Energy & Mining Development
Communication
works

33
 Major works in construction
Sector Major outputs
Road sector (RSDPI &II) Upgrading, maintaining (of existing) and
1995-2005 construction of new roads.

Power sector The electrification program based on generation

(Power SDP) and transmission of power, Built huge hydropower
projects to move the nation from rationed power
supply to the verge of power exporter

Water works sector Many irrigation, sanitation &water supply projects

across the country
Housing/building sector Huge number of housing units and institutional
(IUHDP) (such as UCBP) buildings being build

Private sector Vibrant private involvement with many real estates

and buildings (residence, commercial, factories,
etc) 34
 Major challenges of the industry: Ethiopia
 Failed to delivered on time, on budget and to the standard and quality required
 Reasons:

 Incapable industry (capacity and competency) as seen from quite various aspects

 Various unprofessional (particularly in terms of systems and managerial) and non

ethical practices

 Effect on the industry

 Lost opportunity to improve and grow

 Huge impact on the country’s already constrained resource

 Necessity to maintain infrastructure before their due period etc

35
The End !

36