World Construction Symposium

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Browsing World Construction Symposium by Author "Abeysekera, V"

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    A conceptual framework for client financed construction and non-traditional approaches for financing construction work
    (2012-06) Abeysekera, V; Senaratne, S; Sandanayake, YG
    The basic premise of the client-financed-construction philosophy is that those who commission service providers must not only pay for their services for the cost of their labour, materials, plant and equipment but do so in a manner that adds value to all parties. A new framework for proposing, evaluating and implementing such systems has been conceived which is used for evaluating three nontraditional approaches for financing construction work, and thereby validating the framework. The three approaches, namely, ‘rolling advance payment’, ‘rolling material price advance’, and ‘direct financing’ have been described and analysed with the ‘rolling advance payment’ approach being described as a revolutionary approach for solving problems connected with financing contractors and as an approach that has much potential to add value to all parties. The two systems are particularly useful as a crisis management system in projects saddled with cash flow problems bringing ‘life’ to almost ‘dead’ projects with potential benefits to all parties. The paper calls for good construction project management as an essential condition for implementing these schemes with particular attention given to risk management and local construction culture.
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    Monetary retentions for subcontract work: a risk-based approach
    (2012-06) Abeysekera, V; Soysa, M; Senaratne, S; Sandanayake, YG
    The subcontracting culture in New Zealand is such that the same retention regime imposed on contractors is imposed on subcontractors by and large. This paradoxically fair contractual practice of back-to-back terms results in high retention rates (10%) and long defects liability periods set from contractor’s practical completion which has caused concerns for subcontractors with no rational basis for resolving such concerns. This study investigates this phenomenon from a risk based perspective to understand the link between risk and retentions particularly in relation to current practice. Accordingly, it is found that current retention rates do not show an association with overall risk computed as a product of likelihood and consequence based on contractors’ perceptions. However, when risk is viewed through these two components, it is seen that trades with high default risks for either likelihood or consequence results in high retention rates. Additionally, it is also seen that high risk is associated with subcontractor-harsh retention regimes with some exceptions lowering the strength of this association suggesting the need to investigate such trades to understand whether there are other overwhelming reasons for such exceptions. Thus, it is concluded that risk and retention regimes are linked to this extent although for a given level of risk, subcontractor friendly or unfriendly regimes could be achieved by a mix of different retention rates and release mechanisms. In this regard, it is seen that contractors seem to prefer high retention rates than longer defects liability periods for trades which have high risk levels. A further understanding about this relationship could be developed by undertaking a study on perceived overall risk levels and perceived retention regimes.
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    Motivating the construction academic: a conceptual study
    (2012-06) Abeysekera, A; Abeysekera, V; Senaratne, S; Sandanayake, YG
    The main purpose of this study is to understand factors that motivate and demotivate a construction academic based on existing literature. An extensive examination of published literature failed to reveal any studies on motivation or demotivation of construction academics but for a few studies on motivation of academics in general. These studies revealed over 25 intrinsic and extrinsic factors which were differentiated between factors cited in conceptual and empirical studies. A further distinction was made between factors cited in studies focussed directly on motivation of academics, and factors cited in studies investigating a different topic. Factors so identified, provide a broad base for understanding ‘what’ factors affect motivation and demotivation of academics However, these studies have not taken into account discipline specific, job level, and other contextual issues or prioritised factors based on importance. Moreover, ‘how’ these factors could be used for improving organisational performance focussing on different disciplines and roles within these disciplines have not been studied either. Nevertheless, an examination of these factors revealed that most fall within the control of the university management. As such, there is a need for understanding what management styles could be used for increasing motivation and minimising demotivation, and this is an area that needs investigation focussing on construction specific issues vis-à-vis context and job roles.
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    Resolving retention polarity: the perceptions of structural steel subcontractors
    (2012-06) Abeysekera, V; Senaratne, S; Sandanayake, YG
    This study aims to understand the perceived polarity between main contractors and subcontractors with a view to resolving problems connected with retentions in an environment where a sliding-retention regime is utilised with a retention rate of 10% for work below NZ$ 200,000. Eight structural steel subcontractors operating in Auckland were interviewed. Contrary to popular belief, subcontractors are not averse to retentions with most taking a middle ground. Nevertheless, the apparently fair practice of using back-to-back contract terms is not seen as fair and reasonable. Most solutions acceptable to subcontractors impact negatively on contractors’ cash flow highlighting the need for some form of reciprocity from subcontractors (price discounts, improved performance, etc.) to induce contractors to offer favourable retention regimes. This highlights the need for a theory on ‘retention reciprocity’ to supplement the five theories on retentions. However, given that not all contractors can be expected to display reciprocity fairness, an interventionist approach may be necessary in order to neutralise any imbalances in power between the contracting parties possibly through amendments to the Construction Contracts Act, and when doing so, there is a need to exercise much caution as the outcome of chaotic systems could be quite unpredictable.