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Causes of
Analysis of causes of delay in delay
Indian construction projects and
mitigation measures
Prasad K.V. and Vasugi V.
School of Mechanical and Building Sciences, VIT University, Chennai, India
Received 6 April 2018
Venkatesan R. Revised 26 August 2018
21 October 2018
National Institute of Construction Management and Research, Pune, India, and 20 November 2018
Accepted 30 November 2018
Nikhil Bhat
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Abstract
Purpose – Construction projects in India continue to suffer excessive delays. This paper aims to investigate
the delay causes in India by project sector (transport, power, buildings and water) and carry out a
comparative study of delay causes in design build (DB) projects with that of design bid build (DBB) projects
along with mitigation measures.
Design/methodology/approach – A questionnaire survey was conducted among major clients,
contractors and consultants in India. Importance Index was used for ranking of the delay causes.
Projects were categorized based on the type, and causes of delay in each project type were identified.
Projects were also categorized based on type of contract, and delay causes in DB and DBB projects were
compared. Statistical analysis of responses by Cronbach’s alpha, one-way analysis of variance,
Kruskal–Wallis tests was carried out with Statistical Package for Social Sciences. Semi-structured in-
depth interviews were conducted with senior industry professionals to develop exhaustive mitigation
measures.
Findings – The research findings indicate finance-related causes as the most critical causes of delay in
Indian projects. Delay in settlement of claims, contractor’s financial difficulties, delay in payment for
extra work/variations by owner, late payment from contractor to subcontractor or suppliers, variation
orders/changes of scope by owner during construction and changes in design by owner were the highly
ranked delay causes. The research found no significant difference in the delay causes in DB and DBB
projects.
Originality/value – This is the first study wherein delay causes for various project types within a single
country are identified. In addition, the study has identified and compared the delay causes in DB projects and
DBB projects. Mitigation measures developed in this study will help professionals and project managers not
just in India but other developing countries as well to alleviate delay causes and in improvement of project
timelines.
Introduction
India is among the world’s most rapidly growing economies (ADB, 2013), and demand for
infrastructure development is tremendous. As per India’s Census 2011, 31 per cent of India’s Journal of Financial Management
of Property and Construction
population, i.e. 377 million, live in urban areas and is expected to increase to 600 million by © Emerald Publishing Limited
1366-4387
2030. It is estimated that about US$650bn investment in India will be required for urban DOI 10.1108/JFMPC-04-2018-0020
JFMPC infrastructure alone over next 20 years (Planning commission, 2013). Growing population,
increasing urbanization and global competition have made it imperative that the
infrastructure is developed rapidly. Accordingly, the investment in infrastructure is planned
to be increased from Indian National Rupees (INR) 23.8tn in the 11th Five Year Plan period
(2007-2012) to INR 56.3tn in the 12th Five Year Plan Period (2012-2017) (Ernst and Young,
2014). This huge demand in infrastructure is to be met by the construction sector.
Construction sector is a catalyst for economic growth as it stimulates development in
other sectors (Ismail, 2007). The influence of the construction sector spans across several
sub-sectors and thus becomes the input for socio economic development. Construction sector
in India has witnessed boom over the decade and is considered one of the most important
industries as it contributes approximately 8 per cent of India’s gross domestic product and is
the second largest employer (Ananthanarayanan, 2011).
Construction project delays are a global phenomenon (Sambasivan and Soon, 2007), and
India is not an exception. Even with an increase in the stimulus and support from the
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government, the construction industry in India continues to struggle with delays. Projects in
India are experiencing widespread delays (Scholarly Editions, 2013). As per the project
implementation status report (IPMD, 2018) of Government of India, as on July 2017, out of
total of 1,257 ongoing projects (costing INR 1.5bn and more), 274 projects (22 per cent) are
suffering time overrun. There is a significant shift in the capacity and volume of the
construction sector, which demands the need of a systematic study and assessment of the
reasons of project delays in India along with mitigation measures.
Literature review
Construction projects continue to suffer delays despite the application of advanced
technology and project management techniques (Stumpf, 2000). This is the reason why
construction project delays have attracted researchers over the years. A recent survey
(KPMG, 2015) revealed that only 25 per cent of the projects were completed within their
original deadlines. This research work started with an extensive review of the studies
carried out over the years. The extent of delays as documented by various studies,
summarized in Table I, reveals that the problem of delays is a global epidemic. During this
literature review phase, 53 research studies from 30 countries, with 38 studies in developing
countries and 15 studies in developed countries, were reviewed. From this detailed review,
the authors have presented the salient findings of recent and near recent studies (post 1995)
in the following section of the paper. Delay studies were categorized into studies in
developed countries and developing countries, with the aim of bringing out the distinct
nature of delay causes in the two types of economy. Largely, studies in the past have
adopted questionnaire surveys as the research method for identifying the delay causes and
Relative Importance Index (RII), Importance Index (II) and Relative Importance Weight as
the means to rank the various causes of delay.
Some of the notable studies carried out in developed countries include Ahmed et al. (2003)
in Florida, Hwang et al. (2013) in Singapore, Wong and Vimonsatit (2012) in Australia,
Shebob et al. (2012) in the UK, Chen et al. (2017) in China and Larsen et al. (2015) in Denmark.
These studies concluded building permits approval, change order, changes in drawings,
incomplete documents and inspections, site management, skill shortages, labor shortage,
material price changes, extreme weather conditions, onsite labor and material availability,
subcontractor problems, unsettled/lack of project funding, delay or long process times
caused by project authorities, lack of project planning, errors or omissions in construction
work and lack of identification of needs as the major causes of delay.
Study Country Type of projects Time delays documented
Causes of
delay
Semple et al. (1994) Canada Generic Delays in several cases exceeded
original contract duration by over 100%
Arditi et al. (1985) Turkey Utility projects 34.6% delay in contractor’s projects,
43.6% delay in public projects
Chan and Kumaraswamy Hong Kong Building and Civil Average delay in excess of 20%, only
(1995) Works 40% Government buildings, 25%
private buildings, 35% civil engineering
works completed within schedule
Odeyinka and Yusif (1997) Nigeria Housing Seven out of ten housing projects
suffered delays
Olatunde and Alao (2017) Ghana Buildings Average time overrun in construction of
public university buildings was 62.7%
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Eliis and Thomas (2003) USA Highway Time overrun in 150 projects averaged
272 days or 25% of contract duration
Koushki et al. (2005) UAE Residential Buildings Out of 450 buildings, 56% projects
experienced delay
Sambasivan and Soon (2007) Malaysia Government projects 17.3% of the projects experienced Table I.
delays of more than 3 months Extent of delays in
Ansar et al. (2016) Many Mixed Average schedule overrun was 42.7% construction projects
countries in various countries
There have been many studies in developing countries, such as Odeh and Battaineh (2002)
in Jordan, Frimpong et al. (2003) in Ghana, Alaghbari et al. (2007) in Malaysia, Assaf and Al-
Hejji (2006) in Saudi Arabia, Sweis et al. (2006) in Jordan, Kaming et al. (1997) and Toor and
Ogunlana (2008) in Thailand, Lo et al. (2006) in Hong Kong and Doloi et al. (2012) in India.
Project financing by contractor, interference from owner, contractor’s inadequate
experience, financing of project, labor productivity, shortage of labors, difficulties in
monthly payments, poor contract management, procurement of materials, late supervision
and slowness of decision, slowness in instruction by consultant, lack of materials in market,
ineffective planning and scheduling of project by contractor, poor site management and
supervision, etc. were found to be the major causes of delay in these studies.
While there has been extensive research to identify delay causes, it was important to
understand whether mitigation measures were also identified. The review of literature on
mitigation measures is summarized in Table II.
From the review of literature, it is found that nature of delay causes in developing
countries is significantly different from that in developed countries. In the case of
developing countries, delay causes are originating internally from contractor or client, such
as financial difficulties, cash flow problems, change orders by client and payment delays by
owner (Islam and Trigunarsyah, 2017). In the case of developed countries, external causes
such as weather, prices of materials, permits and labor supply are critical causes. This may
be the case as contractors working in developing economies work under special constraints,
which are not as serious in developed countries (Ogunlana et al., 1996).
Construction projects are unique and share distinct characteristics. The physical and
operational features of the project have a significant impact and contribute hugely to project
success or failure (Kwofie et al., 2014). This is a significant gap in the previous studies as
many previous studies have investigated causes of delays without investigating the delay
JFMPC causes in a specific type of projects (Prasad and Vasugi, 2017). Studies have been mostly
generic, except a few studies investigating delay causes in buildings and roads. Further, it is
also a fact that the construction industry in India has evolved from traditional rate contracts
to lump sum and design build (DB) contracts (Ernst and Young, 2014). None of the previous
studies have drawn a comparison of the delay causes in a different nature of contracts. An
understanding of this can aid in evaluating the lacunae and shortcomings in project
implementation and in improvement of project performance.
Most of the studies, including an earlier study in India (Doloi et al., 2012), have ended up
with the identification of delay causes without corrective steps, practical recommendations
and exhaustive mitigation measures to prevent the causes of delay, which is of relevance
and importance. A previous study (AlSehaimi et al., 2013) concluded that most of the delay
studies have not recommended any solution, and the recommendations do not match with
the findings and have ended up providing recommendations which are non-practical. In
addition, mitigation measures provided by earlier studies (Table II) are cursory and lack the
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depth and specifics for control of delay. Professionals and project managers in the industry
will need specific, implementable and practical solutions to overcome problems causing
delay.
With the above identified research gaps, this study intends to:
identify the critical causes of delay in Indian construction projects in various types
of project and analyze the results by each project type (transport, buildings, water
and power);
compare the delay causes in DB and design bid build (DBB) projects in India; and
identify steps and measures of mitigation through the project life cycle from the
contract award phase to executing phase to control critical delay causes.
Research methodology
Research design
A questionnaire was designed to solicit the responses of major contractors, clients,
consultants and designers in India. In total, 60 causes of delay from literature were adopted
for the questionnaire and were grouped into seven categories. The causes and categories are
listed in Table IV. The questionnaire consisted of five sections. The first section introduced
the problem, objective of the survey; the second section collected personal information of the
respondents, such as name, experience, role and contact details; the third section collected
Comprehensive contract documents Abdul-Rahman et al. (2006), Kasimu and Abubakar (2012)
Accurate initial estimates Love et al. (2000), Ng (2007), Chai et al. (2015)
Improve planning and control Assaf and Al-Hejji (2006), Faridi and El Sayegh (2006)
Right resources, right software Zewdu (2016)
Minimize changes in design Abdul-Rahman et al. (2006), Alaghbari et al. (2007)
Accelerate site activities Chai et al. (2015), Abdul-Rahman et al. (2006);
Ensure delivery of materials on time Abdul-Rahman et al. (2006)
Table II. Ensure adequate financing Abdul-Rahman et al. (2006), Lo et al. (2006)
Mitigation measures Implement new management techniques Mezher and Tawil (1998), Arditi et al. (1985)
identified by Improve communication Mezher and Tawil (1998), Arditi et al. (1985)
previous research Frequent progress meetings Abdul-Rahman et al. (2006), Ng (2007)
information about the project for which respondents fill the delay causes; and the fourth and Causes of
fifth sections were designed to collect the response on the delay causes. The respondents delay
were asked to rate frequency, with rating of 1 for a cause that never occurs and 5 for most
frequent cause, and degree of severity, with rating of 1 for a cause with no impact and 5 for a
cause with very high impact, on a particular project in which they had worked/had
experience. Combining Likert scales into indexes adds values and variability to the data
(Allen and Seaman, 2007). Survey data resulting from the use of questionnaires are
frequently analyzed using the RII method (Holt, 2014), and this helps in generating an index,
which is then used to rank the delay causes. Accordingly, this method is adopted for
calculating the frequency and severity index defined below.
The frequency index (FI) and severity index (SI) of the causes were calculated as:
P
W
FI=SI ¼
ðA N Þ
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where W is the rating assigned (ranging from 1 to 5) for each cause by the respondents, A is
the maximum rating/score that can be assigned to a cause, which in the present case is 5,
and N denotes the total number of respondents of the survey.
The causes were ranked based on II determined as a product of FI and SI:
II ¼ FI SI
Importance Index (II) calculated by the above formula factors the two equally important
dimensions of frequency of occurrence and severity of impact of delay causes and has been
adopted in previous research studies as well.
The values of FI, SI and II ranged from 0.2 to 1. A higher value (closer to 1) of FI meant
that the cause was more frequent, and a higher the value of SI meant that the cause had a
very high impact. Finally, the causes were ranked based on the values of II. Higher the value
of II, higher the ranking and its significance in causing delay in construction projects.
Projects were also categorized based on project sectors, namely, transportation, power,
buildings and water supply/irrigation projects, and delay causes in each project type were
identified and discussed.
To understand the influence and criticality of delay causes in different contract
environments, responses were analyzed by categorizing the projects by type of contract. The
present research work covered projects of two contract types – DB and DBB.
mitigate and prevent the further impacts and bring situation under control.
27 22
5-10 Years 47 38
10-15 Years 19 15
>15 Years 30 24
Total 123
Job profile
Site Engineering/works 10 8
Engineering/methodology 8 7
Planning/Project management 61 50
Project control/PMO 20 16
Contracts/Quantity survey 16 13
Others 8 7
Total 123
Occupational level
Non executive 33 27
Executive 49 40
Middle management 31 25
Senior management 10 8
Total 123
Contract type
DB 72 58
DBB 51 42
Total 123
Project profile
Transportation 45 37
Buildings 30 24
Water supply/Irrigation 17 14
Power 22 18 Table III.
Marine 7 6 Summary of
Others 2 2 responses and profile
Total 123 of respondents
Top two causes of delay identified in this study, namely, delay in settlement of contractor
claims and contractor’s financial difficulties, are explained by the fact that an estimate as
high as INR 700bn is tied up in arbitration and the average settlement time of these claims is
more than seven years (PIB, 2016). Government of India has recognized the gravity of this
problem and has come up with some relief measures (PIB, 2016).
JFMPC
ANOVA (Sigma)
Category Cause of delay Frequency Severity
lowest bidder
High inflation, insurance and interest rates 0.012* 0.001*
Adverse weather conditions 0.035* 0.612
Public interruptions 0.006* 0.071
Differing or unforeseen site/subsurface conditions 0.034* 0.008*
Issues regarding permissions/ approvals from other 0.148 0.280
stakeholders
Changes in government regulations and laws 0.059 0.297
Force majeure: war, revolution, riot, strike, earthquake, etc. 0.144 0.836
Project fraud and corruption 0.718 0.656
Note: *Indicates difference in perception of contractors, clients and consultants is significant at 0.05
level Table IV.
The third cause of delay, i.e. delays in payment for extra work, is one of the most frequent
problems faced by Indian contractors (Al-Quershi and Kishore, 2017). During the course of
project execution, depending upon the project’s requirements, owners may instruct
contractors to execute items which were not part of the original contract bill of quantities.
As this being a new item, rates need to be finalized. Contractors are expected to carry out
these extra work without finalization of rates, burdening the finances of contractor and
affecting time performance.
Late payment to suppliers/subcontractors is a resultant of payment delays from owners.
Governments and private owners implementing large projects are delaying payments, and
in the challenge of managing stressed cash flow, contractors are forced to delay payments to
vendors (Livemint, 2015).
Variation orders/scope changes is one of the most important phenomena in the
construction projects. Change orders issued during construction are major causes of time
and cost overruns (Alnuaimi et al., 2010). Frequent changes require contractors to augment/
allocate resources for these changes and also re-sequence the work. While this has a direct
cost impact for additional resources, frequent changes also lead to loss of productivity (Ibbs
and Vaughan, 2015), leading to time delays.
Changes in design can occur at any stage of the project. However, the earlier a design
change occurs, the lesser will be the impact on the project than a change at later phases of
the project (Braganca et al., 2014). Design changes increase the cost and time of construction
projects substantially (Chang et al., 2011).
JFMPC Water/
Overall Transport Power Buildings irrigation
Delay causes II Rank II Rank II Rank II Rank II Rank
concept stage may lead to a gap in the design and construction phases. Changes in design is
a common phenomenon in building projects (Mohamad et al., 2012) and is evident from the
results of this study, which has design changes by owner, mistakes in design, unclear and
inadequate detail in drawings, design errors and omissions as the critical causes.
Unlike other projects, water projects are least affected by finance-related causes and are
impacted by land acquisition, public interruptions and permission from other stakeholders.
Frequency
Kruskal–Wallis H 0.048 0.294 0.305 0.521 0.082 0.380 1.143
Df 1 1 1 1 1 1 1
Asymp. Sigma 0.827 0.588 0.580 0.470 0.774 0.538 0.285
Responsibility
Mitigation measures Category COa CLb ENc
The ranking of all the causes in DB and DBB projects was assessed, and Spearman’s rank
correlation coefficient was determined. The result of the test was 0.81, indicating that there
were no significant differences in the importance of the causes in DB and DBB projects in
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India.
The results were further closely examined by computing the median of delay categories
in DB and DBB projects and subjecting to Kruskal–Wallis Test at 95 per cent confidence
level. The values of sigma for all delay categories were greater than 0.05, proving that there
Responsibility
Mitigation measures Category COa CLb ENc
mostly due to payment-related problems from the owner to contractor and from contractor to
subcontractors, cash flow and finance-related difficulties of the contractor.
Mitigation measures
As indicated and detailed in the research methodology, semi-structured interviews
were conducted to develop mitigation measures. Responsibility matrix among
Responsibility
Mitigation measures Category COa CLb ENc
Ensure the contract clauses define mechanism related to price for extra
work, time extension eligibility and limit of extra work Preventive
Distinctly define the procedure for evaluation of rates for Extra work
and substituted items, provision of escalation money payable on the
extra work and substituted items Preventive
Review of scope of work, bid quantities coordinated with drawings,
construction methods, resource productivities etc. Preventive
Thorough, detailed site investigations to cover surface, subsurface
conditions, local labor availability, logistics, access to site, existing
hindrances and obstructions, records of levels and benchmarks,
records of meeting with client’s representatives at site Preventive
Ensure instructions for extra work and variations are provided in
writing only. Define a timeline for finalizing the rates for new items,
not later than a month before the start of extra work Corrective
Owners to ensure to get appropriate funding sanctions from the
project investors/ministries to cater for the increase in the work and
contract value Preventive
Seek all instructions in writing, submit the impact of extra work/
variations on the project schedule and cost Corrective
Table XI. Records of changes, instruction for change, notification of change,
impact of change on time and cost, records of costs and man-hours for
Mitigation measures
changed work Corrective
for delay in
settlement of Commence work on extra items after finalization of rates/agreement
on payment mechanism Corrective
variations and
a b c
changes in scope Notes: Contractors; Clients; Engineer
Responsibility
Causes of
Mitigation measures Category COa CLb ENc delay
Prescribe limit for outsourcing of works by main contractor to
subcontractor either in terms of value or as a % of contract Preventive
Maintain a database of pre-qualified suppliers and subcontractors as
in the case of contractors and ensure multiple sources/agencies are
specified in the contract Organizational
Assess the subcontractors, suppliers based on the performance record,
financial health who have the bandwidth to carry out work, in case of
disruptions in payments (if any) Preventive
Major subcontracts to be finalized with due clearance from client’s
mandatory clearances Preventive
Finalize agreements with subcontractors on the same payment terms
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as that of main contract to ensure no cash flow gap and burden Preventive
Flexibility to break up the payment schedules in case of lump sum
contracts into intermediate stages than all payments at end of work Corrective
Material supply against secured bonds/guarantees, which can be
encashed by subcontractors in case of undue delay in payments by
main contractor Organizational
Owners to initiate payments toward major subcontractors and
suppliers directly against the bills of the main contractor/bonds/bank
guarantees in the event contractor fails Corrective
Table XII.
Payment conditions of subcontractors and suppliers to include Mitigation measures
provisions of interest on delayed and withheld payments without for late payment to
justifications Preventive
suppliers and
Notes: aContractors; bClients; cEngineer subcontractors
Conclusions
(1) The study has investigated the causes of delay in India and found finance-
related causes to be the most critical causes resulting in delay of projects in
India. Comparison of the results of this study with other developing countries
indicated that finance-related causes were found to be the most critical causes
in other developing countries as well.
(2) The delay causes in India on different types of projects were identified, and the
study established that the delay causes and the criticality vary from one project
type to another. This study identified.
(3) Land acquisition and utility-related delays were main reasons in transport projects
(4) Public interruptions, labor shortage and poor productivity were main delay causes
in power projects.
(5) Design-related causes were found critical in buildings.
JFMPC Responsibility
Mitigation measures Category COa CLb ENc
(6) Water projects were delayed by land acquisition and public interruptions.
(7) This study identified the delay causes in DB and DBB projects, and a comparison
was drawn between delay causes in both contract types. Statistically, there were
no significant differences observed in the delay causes of DB and DBB projects.
However, design-related causes were found to be critical in the case of DBB
projects.
(8) Unlike many studies of the past which ended without conclusive and definitive
mitigation measures, this study has developed exhaustive measures for the critical
causes of delay. These detailed mitigation measures can act as a checklist of best
practices and help construction industry professionals not only in India but also in other
developing countries to control delay causes and contribute to improvement in project
delivery.
Future scope of work Causes of
Further specific research should investigate the causes for disputes, delays in claim delay
settlements, causes for payment delays and change orders in construction projects
can be taken up.
Studies investigating delay causes in different phases of projects – project initiation/
mobilization, planning and design and execution phases – may provide further
deeper insights and appropriate steps for mitigation.
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Corresponding author
Vasugi V. can be contacted at: vasugi.v@vit.ac.in
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