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Batch 14 - Final Report (44113)
Batch 14 - Final Report (44113)
Submitted by
JEYASHREE D (191001019)
BACHELOR OF ENGINEERING
IN
CIVIL ENGINEERING
Department of
Civil Engineering
BONAFIDE CERTIFICATE
Certified further that to the best of my knowledge the work reported herein does not
from part of any thesis or dissertation based on which a degree or award was conferred on
an earlier occasion on this or any other candidate.
SIGNATURE SIGNATURE
ACKNOWLEDGEMENT
We would like to thank and extend our hearty gratitude to Dr. Aswin
Sriram , Assistant Professor of Civil Engineering Department, SSNCollege of
Engineering, Kalavakkam for giving us the opportunity to do this project under
his guide.
We also thank and express our heartfelt and sincere gratitude to Dr. R.
Rajkumar, Associate Professor of Civil Engineering & Department project
coordinator, SSN College of Engineering, Kalavakkam for his constant support
and guidance throughout the project.
We are highly indebted to and record our deep sense of gratitude to Dr. N.
Sivakumar, Head of the Department of Civil Engineering, SSN College of
Engineering, Kalavakkam and our beloved principal Dr. Ve.Annamalai, SSN
College of Engineering, Kalavakkam for their benevolence in having the offered
and provided all the facilities and provisions to bring our project successful.
iv
ABSTRACT
The Time and Cost overrun (CTOs) factors have a colossal consequence on the project.
We have identified the CTO factors for Road Construction projects and devised a
Standard operating procedure for similar projects. For better grasp of the severity of the
issue and listing the components, we have analyzed case studies. It is understandable
and very much likely that one loss factor can end up contributing to other loss factors.
We prepared an estimate on possible risk factors within the scope and location of our
project and allocated cost and time value. We have limited our scope Mahabalipuram-
Marakkanam Stretch for 63kms; however, this operating procedure can be referred for
all Road infrastructure projects. Allocating the time and cost value during the tender
process will increase the probability of profit and minimize the risk allocated with the
project. Formulated Risk Management matrix, which is a simple mechanism to increase
visibility of risks and assist management decision making. We validated our procedure
through GANTTPRO software which can be used as a substitute to MS Projectsoftware.
We created a timeline chart to have better knowledge on the track of project and time
management. Considering the cost implication on our scope of project, 40 crores is
taken as excess budget and can be quoted during the Tender phase.
v
TABLE OF CONTENTS
CHAPTER. TITLE PAGE
NO NO
ABSTRACT
LIST OF TABLES
LIST OF FIGURES
1 INTRODUCTION 1
1.0 GENERAL 1
1.1 CONSTRUCTION ACTIVITY AND ITS 1
NATURE
1.2 PROBLEMS IN SUPPLY AND DEMAND 3
1.3 ISSUES IN FINANCING A PROJECT 3
1.4 ROAD CONSTRUCTION IN INDIA 5
1.5 NEED FOR THE STUDY 6
1.6 OBJECTIVE OF THE PRESENT STUDY 6
2 LITERATURE REVIEW 7
2.0 GENERAL 7
2.1 NATURE OF CONSTRUCTION AND 7
HOW THEMARKET DEPENDS?
2.2 INDIAN CONSTRUCTION SECTOR 9
AND THEIMPACT ON SOCIETY
2.3 FACTORS INFLUENCING 9
CONSTRUCTION
2.3.1 Uncertainity of demand 9
2.3.2 Input factors: Conventional Workmen vs 10
Mechanization
2.3.3 Resources 10
2.3.4 Inception of funds 10
2.3.5 Output factors: Keystone generation 11
2.3.6 Gross Revenue 11
2.3.7 Relaiablity during downturn 12
2.3.8 Regulatory Organisation 12
vi
`
LIST OF FIGURES
FIG.NO TITLE PG.NO
1.1 PHASES OF CONSTRUCTION 2
4.1 ICRA REPORT- HALOL SHAMLAJI TOLL WAY 22
LIMITED
4.2 ICRA REPORT – TN DINDUGUL KARUR 23
EXPRESSWAY LIMITED
4.3 COMPONENTS FOR CONSIDERATION – BEFORE 24
CONSTRUCTION PHASE
4.4 COMPONENTS FOR CONSIDERATION – DURING 25
CONSTRUCTION PHASE
4.5 COMPONENTS FOR CONSIDERATION – AFTER 26
CONSTRUCTION PHASE
4.6 RISK MANAGEMENT MATRIX 30
4.7 GANTTPRO WORKBOOK (1) 32
4.8 GANTTPRO WORKBOOK (2) 33
4.9 DELAY SCHEDULE 34
4.10 TIMELINE OF CTOs 39
viii
LIST OF TABLES
CHAPER 1
INTRODUCTION
1.0 GENERAL
Construction business in India is on the boom post covid era. The business which was
at a standstill, started to rise again with necessary precautions and disaster preparedness
for any future outbreaks. Construction projects as such can be categorised with respect
to cost of a project, type of construction, mechanisation involved during construction,
agency that awards the project, purpose of project and materials involved in the
construction. A contractor can design and choose as to which project, he can take up
and how much profit can be generated from the project. The contractor should possess
sufficient skill, technical knowledge, manpower and financial resources to take up and
complete the project with all due aspects thereby handing over it to the client without
any compromise. More often, it can be observed that most of the projects will either get
delayed due to unforeseen conditions while the cost of the project will get overrun
thereby diminishing the profits of the contractor. In these situations, the total cost
incurred will surpass the tender value thus making the project a financial loss for the
contractor.
1.1. CONSTRUCTION ACTIVITY AND ITS NATURE
Construction can be described as incorporation of 3 prong activities namely,
production of building materials, presenting professional services and execution of
physical work on site. In general, the outcome of construction can be categorised into
housing, infrastructure, industrial and commercial buildings, and repair and
maintenance. Though the outcome of a construction work is distinctive, it is eventually
the integration of activities mentioned above irrespective of the nature of the project. In
Addition, Contribution of the construction field to the Nation's economy has been
clearly evident at present. Hence it becomes extremely crucial for a Government of a
Country to invest in these construction projects.
Demand for construction projects corresponds to the business activities of the
goods and services taken up after completion of the project. These demands are however
higher in developing countries like India than developed countries. Some of the issues
2
are in hindsight but the contractor is oblivious and could not predict these issues. Every
project will have its own set of geographical constraints, demographic restraints,
contractual conditions and legislative restrictions.
The factors are unique and dependent on type of construction and the agency that
awards the contract. If the contractor is made aware of different issues that might arise
while executing the project, then the contingency and mitigation measures could be
prepared well in advance. For every issue cropping up during the execution of a project
there is a cost and time associated towards it. Moreover, certain issues like land
availability or location of land might be a legal or geographical issue thereby making it
difficult to even kickstart the project. Similarly, the disbursement of cash funds by the
contract awarding agency might get delayed or the investors and benefactors might back out
of the project at the last minute. This might put contractors at critical risk because
advance cash is required for mobilisation of manpower and equipment.
3
With the increase in demand comes the demand for more workmen. Even with
the increase in demand for workmen, the drawbacks of low job security and mobility
due to fluctuations is still unsorted. These workers are paid in terms of project rather
than permanent salaries. Outsourcing of workmen may result in temporary employment
and also cause insecurity. Although, it is profitable in contractors’ perspective if the
wages of imported Workmen with the transportation costs is lesser than the local
workers. Lack of skilled workmen is another major concern predominantly in
developing countries and may have a direct effect on the quality of construction. One
may opt for mechanising methods, minimising the use of workmen to some extent,
however implementing them in developing countries is still to be addressed. In such a
way reasonable time for an activity can be saved with a catch on cost.
Next comes the cost of resource materials, these resource materials depend on
various factors such as Market forces, Demand and Supply. As a result of these factors,
We are all familiar with the increase in prices of Equipment and Building materials to
a great degree Post Covid. Besides the Market forces, It is the responsibility of a well-
functioning Government to provide subsidies on these resources for the betterment of
the economy. The flow of cash for the procurement of these resources is from client to
contractors which is distributed by contractors to other sub-contractors. As a matter of
fact, for better functionality of the project Lump sum funds are needed at the initial
phase of the project while the funds required at the later phase are stable.
Delay in payment is one complication that might have a serious effect on the
incorporation of any activities associated with the project. And it is evident that major
construction projects are highly capital intensive, and the government provides the
funding in developing countries. Apparently, these projects are essentially public but
often it is under private ownership or control. It is obvious that the construction,
especially at the early development stage, contributes to the Gross National Product
4
Road infrastructure development has been a crucial factor in India's progress for
several years. The nation boasts the second-largest road network globally, with more
than 5.8 million kilometres of highways. The Indian government has introduced
numerous initiatives to maintain and improve the network to encourage social
development and economic growth. The National Highways Authority of India (NHAI)
is responsible for the construction and maintenance of national highways. They have
been actively involved in extending and enhancing the existing highways and
constructing new ones to connect remote parts of the country. The Golden Quadrilateral
project, launched in 2001, aimed to create a four-lane highway connecting Delhi,
Mumbai, Chennai, and Kolkata, spanning 5,846 kilometres. This project finished in
2012 and significantly improved travel time and connectivity. Besides NHAI, various
state government agencies and private businesses are also participating in road
construction in India. The Pradhan Mantri Gram Sadak Yojana (PMGSY) launched in
2000, connects all-weather road connectivity to unconnected rural habitations. The
program has been successful in connecting over 97% of eligible habitations and has
considerably improved accessibility to education, healthcare, and markets.
For a theoretically successful project, the time taken will be either exactly on the day
planned for handing over or before the expected time of completion. Similarly, the cost
of the project shall be below the projected cost during the detailed engineering stage
and inclusive of the overhead profits. There are various factors both direct and direct,
affecting the delay in completion or increase in cost of the project. These are known as
Cost and Time Overrun (CTO) factors. These CTOs tend to erase the profits of the
project thereby bleeding cash while handing over the project. Before quoting for a
project, a contractor or a project management company must be aware of the tentative
CTOs that might be present. The knowledge of CTOs helps in creating a threat
assessment and mitigation plan. A surplus cash for emergency situations can be arranged
beforehand. Project’s tender value can be quoted accordingly while factoring in these
considerations.
CHAPTER 2
LITERATURE REVIEW
2.0 GENERAL
The size and complexity of projects in India's construction industry have changed
dramatically during the past fifty years. The typical objectives of construction projects
are to be completed on schedule, with customary quality, and within the designated
budget. Any nation's economy, commercial, infrastructure, and industrial expansion
depend heavily on the success of construction projects. There will almost always be
delays, and the severity of each delay relies on the project in question, among other
things, such as the project's importance and the nature and design of the building. In
order to complete the project on schedule after a delay, either the delivery date is
extended or the progress is greatly expedited. The former can result in arbitration,
litigation, fines, etc.; the latter can result in additional costs; both can result in financial
loss. In the worst situation, the project's speed will also affect the output standard, which
will jeopardise the client's satisfaction[2]. While there are many challenges with Indian
construction projects, one of the most significant ones is construction delay.
"The time overrun, either on the far side the completion date per a contract or on the
far side the date that the parties prescribed for delivery of a project."
8
Compared to India's other industries, such as IT, textiles, and agriculture, the
construction sector is one of the largest leaders. The engineering construction sector is
one of the most hazardous sectors in the world. The rate of deadly accidents at
construction sites is horrifying, and it has been shown that falls of persons from heights
and openings are the main cause. The Indian industry is currently rather large and
complex, utilising both the most recent technology and labour. Construction projects
today are far more sophisticated. Construction is a method in which disputes are
essentially guaranteed due to the sophisticated, relative, and drawn-out planning,
designing, and building process. Conflicts between the stakeholders also result from the
diverse involvement in the construction process. It appears that conflict and
disagreements are inherent in the infrastructure sector in particular, and the majority of
building projects deal with a great deal of uncertainty. Construction conflicts that are
mostly related to issues with written agreements include discrepancies, payment delays,
technical requirement quality, information availability, administration and supervision,
and unrealistic client expectations and determination. Conflicts may arise as a result of
a lack of resources, such as money, labour, supplies, or equipment.
The real work on the job site that turns materials and designs into finished buildings,
structures, and facilities doesn't begin until much later in the construction process. On
the other hand, construction is thought of as an industry that primarily concentrates on
the actual physical labour done on the construction site during the last stage of the
process. This viewpoint excludes all services, including those related to project
management, planning, and design, as well as the off-site production and provision of
building materials. Construction is sometimes described as an economic activity that
encompasses the full construction process, from the production of raw and
manufactured building materials and components to the provision of expert services like
project management and design to carrying out the actual physical work on the jobsite.
According to this theory, the economic activity of construction spans all three economic
sectors: the primary sector, which entails the extraction of natural resources; the
secondary sector, which entails the production of building materials and components and
the transformation of these materials into finished buildings; and the tertiary sector,
which entails the provision of consultancy services like project management, design,
and structural engineering (Gruneberg, 1997).
The need for Workers is directly proportional to the demand for construction.
However, fluctuations cause concerns for Workmen force namely low job security and
mobility. These workers are paid in terms of project rather than permanent salaries.
Outsourcing of workmen may result in temporary employment and also cause
insecurity. Although, it is profitable in contractors’ perspective if the wages of imported
Workmen with the transportation costs is lesser than the local workers. The Workmen
market is characterized by lack of skilled labours, predominantly in developing
countries. The productivity and quality of construction to a major extent is affected by
the inability of the industry to attract workers and to invest in training them. Improving
vocational training and mechanizing the methods are two solutions for the problem,
however implementation of these in developing countries is still a major concern.
Another approach is mechanization of methods. Intensity of equipment used depends
on the technology of construction. Using mechanized method, time is saved. Using
conventional manual workmen, cost is saved. Choice of approach is adapted based on
the prevailing prices of labour and equipment. Improvement in managerial and technical
aspects of labour-intensive method could easily compete with the mechanized method.
2.3.3. Resources
Cost of resource materials corresponds to the cost of construction product. In
addition, the cost of resource materials depends on market forces, demand and supply.
Besides the market forces, Government can fix the prices and provide subsidies for
materials used in public sectors.
Apparently these projects are essentially public but often it is under private ownership
or control. In addition, for the effective performance of projects there are various types
of contractual agreements offered by the government.
Construction industry acts an aid for a great deal of multitudinous industries. Provision
of several building materials and diverse equipment are more than mandatory for
fruitful completion of project. It is certain that purchase of these will directly contribute
to the overall economy to a considerable amount. Although for better progress in
economy through direct contribution, importing the raw materials must be minimized.
The expanse of indirect contribution can be noteworthy since, the demand for
12
construction is due to the demand for other economic sectors. These contributions can
result in reduction in costs and increase in productivity of resources. In addition, they
upswing international trade and foreign direct investments. However, overestimation of
demand might result in unproductive circumstances.
Every organisation aspires to have an advantage over its rivals in today's fiercely
competitive market in order to become established and successful (Dobni et al., 2022;
Sulistyo & Siyamtinah, 2016). The most popular strategy to establish a solid presence
in the corporate world is to integrate smart technology into the production process,
which boosts efficiency and productivity (Moradi et al., 2021). Smart technology can
13
significantly reduce the inherent hazards linked to the production process (Lin &
Cheung, 2020).This not only boosts profits but also helps to monitor environmental
risks and produce more superior goods, both in terms of quality and quantity (Kim et
al., 2017; Kolberg & Zühlke, 2015). Industry 4.0 has demonstrated tremendous
potential in the development of a smart infrastructure that helps in establishing a
framework that addresses the three P's of the Triple Bottom Line (TBL) approach in
industries, i.e. people, profit, and the planet (Chen, 2022). This is due to the urgent need
to integrate automation and smart technology in the production process. As a result,
implementing Industry 4.0 in organisations can result in production processes that are
efficient, socially responsible, and environmentally friendly (Arpaci, 2019).
Industry 4.0 is a carefully planned step towards creating smart factories where
various technologies like robotics, cloud computing, artificial intelligence, internet of
things (IoT), communications technology, big data analytics, and virtual reality are
integrated to encourage interaction between people and equipment, thereby making the
system more efficient. Industry 4.0 was originally developed as part of a high-tech
project in Germany with a primary focus on computerization in manufacturing. The
term "industry 4.0" often refers to automation and data interchange in manufacturing
technologies. At the heart of its concepts are cyber-physical systems (CPS).
According to Forbes (2019; Yoon et al., 2020), a "smart factory" is a situation in
which the equipment is linked to the internet, which is then connected to a system that
can monitor the entire manufacturing process and make decisions on its own. The fourth
industrial revolution, also known as Industry 4.0, is the period of time when many new,
closely related technologies from every field—physical, digital, and biological—
appear. Every field, economy, and industry are impacted by this link between the
technologies. By regenerating natural resources through improved asset management,
Industry 4.0 has the capacity to stop and reverse the environmental calamities that the
last three revolutions inflicted.
14
data available for use in real-time supply chains in the real-time economy, greater
business continuity through advanced maintenance and continuous monitoring, and
providing higher quality products as a result of real-time monitoring, IoT and IoS
enabled processes, and quality control, Industry 4.0 shows great potential for
revitalising the Indian Construction Industry. By using "smart city" ideas, Industry 4.0
has the potential to transform the way operations are conducted in the construction
industry. According to the concept of the "smart city," operations are optimised to spur
economic growth while enhancing quality of life (Yigitcanlar et al., 2021). The
foundation of smart cities is the acceptance and implementation of mobile computing
through data management networks including IoT, big data, and cloud computing
technologies (Kirimtat et al., 2020). The use of smart technology is frequently regarded
as the greatest way to address issues with waste management, transportation, and
environmental protection (Laufs et al., 2020). Industry 4.0 adoption is still viewed with
scepticism. The majority of this can be attributable to the significant financial outlay
required to create the framework and acquire the skills required for efficient and
effective operation.
2.6. INFORMATION INVESTMENT AND CREDIT AGENCY’S RATING
SYSTEM FOR COST OVERRUN PROJECTS
The major goal of GanttPRO is to deliver useful value by concentrating on the most
crucial functionality while keeping the interface simple. In addition, it is flexible and
adaptable, allowing anyone to get the most out of it regardless of the team's size, field,
or level of project management skill. Accurate planning will be possible thanks to the
ability to construct task lists with a work breakdown structure, establish dependencies
between jobs, and set milestones. While clearly defined project and personal schedules
will aid in accurately evaluating the allocation of effort. We may quickly and easily get
a clear picture of our project or collection of projects, including tasks, dates, deadlines,
dependencies, and assignees, with the help of a visually appealing Gantt chart.
17
Everything we need to know about the assignment will be in a grid view with standard
and custom fields. Additionally, a board view will enable us to manage our tasks as
cards and instantly observe the status of each work in relation to the column it is placed
in. We will be able to monitor the project's status at all times and foresee obstacles and
poor choices thanks to tools like critical path, baselines, and historical changes, among
others. Numerous task configurations and automated processes have been planned for
by GanttPRO to assist us in accomplishing tasks on schedule and in accordance with
the project and plan.
Features of GANTTPRO:
Project management
Task management
• Custom fields: to track and measure as many crucial aspects of the plan as
possible.
• Custom colors: to differentiate tasks visually.
Time management
CHAPTER 3
MATERIALS AND METHODS
For a construction project, various parameters and factors influence the outcome of the
project. Predominantly, the governmental contracts carry a tag of non-uniform cash
flow and legal complications. After the incorporation of an environmental impact
assessment by the Ministry of Environment and Forestry (MOEF) all the projects must
be analysed for their impact towards society and technology. The project must also be
assessed for their Strength-Weakness-Opportunity-Threat (SWOT) which gives an
eagle eye perspective of how a project could shape up for both the client and the
contractor at every stage. These assessments carry a certain cost and time value. A
project can be quoted for its executional cost-plus overhead profits. Those are strengths
and opportunities (SO). If the project is getting delayed due to various conditions, then,
the project gets escalated by cost and time. These are weaknesses and threats (WT).
Typically, every contractor aspiring to be L1 in a tender quotation, quotes for
L1 Quote = Value |SO|
It can be observed that a project might be affected due to various factors and these
factors even though look common for every construction project, it is, as a matter of
fact, different with respect to each and every project. To analyse the CTOs of the entire
20
construction sector, credible information and data sets are required to pinpoint the cause
and effect.
In the present project, two previously constructed road projects are studied, and cost
overrun factors are delineated. These factors carry a cost and time value. They are
ranked based on their criticality and impact in presents to the contract. Subsequently, a
proposed road construction project is taken and estimated for all the civil quantities.
These CTOs are incorporated into this project and the escalation amount is derived.
GANTTPRO software is used for the critical path timeline computation.
21
CHAPTER 4
RESULTS AND DISCUSSION
1. In order to understand the CTOs for a construction sector, few road projects are
taken up and studied. It can be understood from the case studies that cost
implication is most crucial factor contributing to time overrun and time overrun
is most crucial for cost implications. Besides, each project has its own
components that has to be considered prior to quoting of project.
Case 1: Halol Shamlaji Toll way Limited
The project was to construct a 173km road from Halol to Shamlaji in the state of
Gujarat, the total Project cost is around 1305 crores with 261 crores equity. L&T
was awarded the contract. The Cost overrun was found to be 61%
Major Reasons for failure:
o Inaccurate Prior Survey
o Economic recessions - Industrial Growth was less than projected due to
withdrawal of tax incentives
Case 2: TN Dindugul Karur Expressway Limited
The project was to construct 78 kms of road from Karur to Dindigul in the state of
Tamil Nadu. The Project cost was found to be 327.20 crores and Madhucon Infra
was awarded with the contract. The Cost overrun was found to be 25%
Major Reasons for failure:
o Continued delays in repayment of debt obligations
o Toll collections have been significantly below expectations on account of
continued weak traffic flow
o Toll rates were revised downwards due to negative WPI
o Maintenance reserve could not be created ( MM got delayed by 53months)
TNDK would be required to raise additional debt for major maintenance which
falls due in the current financial year.
22
Fig 4.1 ICRA Report - Halol Shamlaji Toll way Limited
Fig 4.2. ICRA Report - TN Dindugul Karur Expressway Limited
23
24
2. From the case studies it is very much evident that the Identification of
Components for consideration in road infrastructure projects is crucial and
different corresponding to uniqueness of the project. Hence it becomes
necessary to formulate a check list that is standard for similar projects. We have
created standard operating checklist that can be used for every road
construction project and sorted them into phases of construction.
To be
Finance
accounted
Loss of habitat
1cr
Saving in Time
2 hrs
28
2% of Project
Inception of Funds (PLF)
Cost
2% of Project
Change in Ground conditions
Cost
Road Maintenance
80lkhs/per year
Market Shift
1cr
4. Formulated a Risk Management Matrix that helps us visualize the probability vs.
the severity of a potential risk. Land Acquisition and resettlement, Extrapolation
and Forecasting, Availability of Conventional Workmen force and Advanced
Mechanization, Alteration of design specifications and change of orders,
Inception of funds must be given at most priority as these factors may contribute
to the most loss. While, factors such as exempted vehicles usage, road
maintenance and Market shift may not affect a project severely.
30
Fig 4.6 : Risk Management Matrix
31
34
35
7. Road Estimation
Depending on the length of the finished roadway, building a road is a hard
process that could take many years to complete. It requires careful planning,
numerous assessments, and a range of assessments, including examinations of
the environment and the structure, as well as numerous construction teams and
plant machinery. Before a road may be used by vehicles, several steps must be
taken after construction has begun. The road estimated is a 63 km road , from
Mahabaligapurama to Markkanam.
• The estimation of the road was done in accordance with the IRC code for Design
of Flexible Pavement for National Highway.
• The road we are considering is a three-lane road .
• The things to be considered for the material estimation of roads are.
removing and disposing of top organic soil not exceeding 150 mm in thickness if
necessary and in accordance with relevant Section-200 clauses, uprooting rank
vegetation, grass, bushes, shrubs, saplings, and trees with girths up to 300 mm,removing
the stumps of trees cut earlier, and stacking serviceable materials to be used or auctioned
up to a lead of 1000 metres.
Subgrade
Flexible pavement generally consists of three layers , Surface course , the Base course
and the Subbase course. Additionally, subgrade, which comes after subbase and is
significant, exists. Not always is subbase used. The entire structural component, which
includes the subbase, base, and surface course, is strongly incorporated into the design
of flexible pavement. The flexible pavement transfers and spreads the loading outward
36
and downward as it is loaded. Because of this, the base course, subbase course, and
subgrade all need to be tightly compacted and able to support the added weight. All
layers, but especially the subgrade, are essential to the resilience of flexible pavement.
Laying, spreading, and compacting clean, crushed, well-graded aggregate and granular
material on a prepared and authorised granular sub-base are the steps in the wet mix
macadam process. Water must be blended and thoroughly prepared with the materials
required for Wet Mix Macadam. The next step is to roll the wet mix macadam into a
thick mass.
• The cost of wet mix macadam per cubic metre in India is roughly 2800 Rupees.
The cost analysis varies from location to location because it depends on
numerous variables like labour cost, material cost, etc.
Prime Coat
To prepare a granular base for the application of an asphalt mixture, a prime coat is
often applied over it. A prime coat serves a number of crucial purposes. covers and fuses
stray material particles on the base's surface. toughens or hardens the base's surface.
Table 4.4 : Details according to IRC Code for Design of flexible pavement for
National Highway
Earthern Shoulder 1 1
Bituminous
0.025 0.025 0.025
Concrete
8. Worked out Timeline of the Cost and Time Overrun (CTOs) factors for better
understanding of the time of occurrence of a risk factor. The Risk factor starts
from Land acquisition and lasts till miscreants
Fig 4.10 : Time line of CTOs
39
40
• A total of Rs. 125 crores are taken as potential budget of road laying.
• A total of Rs 40 crores is potential loss factors involved towards the
project.
• So total cost to be quoted for the project is 165 crores.
41
CHAPTER 5
CONCLUSION
It is understood that there are various factors, both direct and indirect, affecting
the delay in completion or increase in cost of the project. These Time and Cost overrun
(CTOs) factors have a colossal consequence on the project. Every Contractor wants the
project to be wrapped up within the stipulated time and budget, But it is undeniable fact
that most infrastructure projects fail due to numerous factors. We have included couple
of case studies to disclose the seriousness of the issue. Halol Shamlaji Toll way Limited
is one of the case studies that is a classic example of failed infrastructure projects that
might never end in positive note even on increasing the toll rates to 200%.
Our Work is just a steppingstone to address the prevailing issue on the CTOs in
Construction Projects. We identified different components that should be considered for a
construction project. However, we observed that these components are exclusive for
different outcomes of the construction project. So we narrowed our research to road
infrastructure projects and shifted our focus to formulate a standard operating procedure
for road infrastructure projects.
The issue with addressing these risk factors is that we cannot define a particular
time and cost overrun for such an event occurrence. It may happen that some events
considered might not happen and some events considered may extend more than the
assumed time and cost overrun. Besides, it is very much likely that the event end up
contributing to other loss factors. One way to work out these issues is to prepare an
estimate on possible risk factors on the scope and location of project and allocating cost
and time value for it during tender period itself. In this way, we can mitigate the risk on
time and cost and our probability and the margin of profit increases.
fact, NHAI has planned to realign the road at Odaiyur wetland in Cheyyur taluk of
Chengalpattu district in ECR expansion project. Realigning the roads will result in utter
different scenarios for contractors to execute if the decision had been taken after the
tender issue.
One of the most critical issues with any development projects, especially in
developing countries like India is Land acquisition. Even if the Government bear
acquisition and resettlement costs, the delay in procuring and issuing the land will leave
the contractors in an unbearable situation as the industry cannot respond
instantaneously. Considering the financial implication, We have compiled all the issues
and associated a cost value towards it and it is found to be 40 crores. As a rough estimate, A
total of Rs. 125 crores are taken as potential budget of road laying between
Mahabalipuram-Marakkanam Stretch. Construction Industry is like a turtle that is on
the race, whatever might be the issue, it cannot respond instantaneously but eventually.
Hence, it is advised to be precautious to avoid the sudden occurrence of an issue and
smooth conduct of execution. If 165 crores are quoted instead of 125 crores the
contractor will be at a better place to decode the issues related to cost overrun.
The components considered might all contribute to the potential risk, to have an
idea on extent on contribution we included a severity analysis and criticality analysis
between those components. To define the level of risk by considering the category of
component, we formulated a risk management matrix. As mentioned above Land
acquisition and resettlement was found to be the almost certain issue that may end up a
catastrophic effect if not treated properly while there are events like Bad weather that is
probable and might have an minor effect on the project.
The critical path of our project is validated through GANTTPRO and we have
created a project plan, allocated material and human resources, minimized risks and
understanded the critical events that are essential for project completion. We have also
included the timeline of CTO factors in the order of their occurrence for reference and
better functionality. Delay schedule for the components considered is mentioned, these
delay for threat areas is calculated at 44 days in total if they occur in parallel sequence.
43
If the delays occur in precedence factor and occur one after the other, it is very likely
that the project may even have a time overrun of 7 years.
Quoting a value more than the project budget looks very much over cautious and
it is a safe decision that will give up a high profit margin as every issue considered may
not happen. However, as the tender is allotted to the one with the minimum bid this
method may have its own restrictions. The entire paper to a great extent is restricted to
road construction projects. Investigating these methods to other outcomes of
construction is a topic to work on.
44
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