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THE EFFECTS OF PROJECT PLANNING TECHNIQUES ON CONTRACTORS PROFIT

BACKGROUND OF THE STUDY

Projects are used in all economic and non-economic domains to organize activities with the goal of achieving desired outcomes. Projects, project portfolios, programs, and organizational strategy all have a direct relationship. Projects are used to implement strategies because they are the most common technique of creating and coping with change (Cleland, Gareis, 2006). According to Meskendahl (2010), projects are the essential building element for implementing strategies, hence project performance determines corporate success. A project is a solo or group effort that may include research or design and is meticulously organized, generally by a project team, to attain a specific goal. Time in New York (2009). A project is also temporary because it has a set start, end, and duration.

Construction is also characterized by labor-intensive manufacturing procedures that expose it to project risks and failure, particularly in terms of time and money. In practice, this means that construction project performance is typically poor. Construction projects, in particular, are frequently delayed and overbudget. This is due to issues not only with project scheduling, but also with linked processes.

Laryea and Hughes (2009) investigated how Ghanaian contractors factor financial risk into their bid rates. The study found that, aside from having risk allowances in the form of lump payments or percentage allowances, the method adopted is neither scientific nor evidence-based. According to Ojo (2010), the risks included design revisions, financial losses, and poor specifications.

Another study on this topic was conducted in Nigeria, and it looked at the evaluation of significant risk variables and the steps that could be taken to mitigate their effects on construction projects (Dada, 2010). Despite the fact that financial, political, and physical threats were identified as the most significant in the study, the usage of a contingency fund and insurance coverage was determined to be the most effective means of risk mitigation.

However, no research has been done on the PRM procedures utilized by Nigerian contractors in rebuilding projects, as well as the issues and obstacles that come with them in terms of scoping.

PROBLEM STATEMENT

Contractors’ worldwide lack of use of formal project planning and management methodologies frequently results in project failures, continual requests for changes, massive financial losses, and, in some cases, Contractor bankruptcy (Allan et al, 2007). Due to the inevitability of unforeseen additional work, excessive requirements and scope management challenges, project finance not aligned with project plans, delay, structural failure, cost overrun, and other issues, this condition is particularly typical in redevelopment projects (Naaranoja and Uden, 2007). These issues or uncertainties, among others, raise project risk and necessitate careful management if success is to be achieved.

Julius Berger PLC, the construction firm, has returned to the site to continue the re-building of the N167 billion Lagos-Ibadan expressways, Grand Towers Mall in Abuja (status – Under Construction).

 RESEARCH OBJECTIVES

1. To investigate Julius Berger’s project planning processes at various project levels.

2. To examine Julius Berger’s Abuja office’s awareness and use of formal and informal project planning procedures.

 

3. To assess the success or failure of Julius Berger Contractors’ project planning methodology on the Grand Towers Mall in Abuja (now under construction).

 

4. To assess the influence of the implemented project planning approach on project profitability.

RESEARCH QUESTIONS

1. Does Julius Berger Nigeria Plc, Abuja, have any project planning principles or practices?

2. How do you learn about newer project planning methodologies that you can use in your current projects?

3. How does project planning affect a contractor’s profit?

HYPOTHESIS FORMULATION

The following are some of the study’s hypotheses:

1. Ho: There is no link between excellent project planning and the profit of a contractor.

 

Hi: Effective planning and contractor profit are linked in a substantial way.

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