How to manage public sector construction projects successfully in south Asia

Abstract

This real life case study talks about the successful completion of an underpass (tunnel and a cross-over bridge) on the Mall Road in Lahore, Pakistan. It's one of the recent success stories of developmental projects in Pakistan, which is worth pondering upon and sharing. This was an excellent example of achieving the optimum level of triple constraint: cost, performance, and time.

The Chief Minister of Punjab, Chaudhry Pervaiz Elahi, and the Secretary of Communication and Works (C&W), Mr. Sibtain Fazal Halim played a pivotal role during execution and delivery of this project. In his capacity as Secretary C&W, Mr. Sibtain Fazal Halim was responsible for day-to-day monitoring and execution of the project. The project was started on the direction of the Chief Minister Punjab. The objective was to alleviate enormous daily traffic congestion and delays on the Mall Road and Canal intersection in Lahore. The scope of the project was to build an underpass on each side of the canal. The timeline was 90 days and the budget was Rs. 243.5 million (approx. $4.0 million USD). In addition, both underpasses had to meet public safety and quality standards.

The reason this case study is significant is that it was successful on all three counts: cost, performance, and timeline. The project was completed under budget and within the specified timeline of 90 days, as compared to 18 months for the first underpass that was built on Feroze Pur Road in 1998. It also met the quality standards set forth by the construction industry and the Government of Punjab. The project started on August 15, 2003 and was completed on November 11, 2003. The actual cost came out to be Rs. 190 million (approx. $3.16 million USD), which was well below the budgeted amount of Rs. 243.5 million (approx. $4.0 million USD). In the past, most of the public sector projects had failed to manage the triple constraint. And they went over budget, missed their project deadlines, and had quality issues.

This case study highlights some of the key project management techniques that could be helpful for project managers throughout South Asia, if not throughout the world. It talks about the Dos and Donts of project management in developmental projects like construction in South Asia.

Introduction

The intersection of Mall Road (Shara-e-Quaid-e-Azam) and Canal was considered to be quite significant in terms of distribution of traffic. It was taking heavy loads of inter-city and intra-city traffic, and therefore was considered to be the busiest intersections in the city. According to the traffic counts, 250,206 vehicles crossed the intersection daily. The general public was suffering losses in term of traffic delays, accidents, and vehicle operating costs (VOC). Several studies and master plans had been chalked out to resolve this problem, but nothing had been done until the Chief Minister of Punjab, Chaudhry Pervaiz Elahi made the decision to resolve this issue. The Chief Minister decided to build an underpass so that the public could breathe a sigh of relief. Some of the key benefits to the public included significant reduction in traffic congestion and vehicle operating costs, and creation of jobs. The estimated economic benefits ranged from Rs. 35.30 million (approximately $0.58 million USD) in the first year to Rs. 162.22 million (approximately $2.70 million USD) in year 2023. Keeping in mind the difficulties that the public was facing and the potential economic benefits, the Chief Minister Punjab directed the Communications & Works (C&W) Department of the Punjab Government to start the construction of the underpass. The C&W department had the primary responsibility of doing the feasibility study, getting the necessary approvals from various government departments, tendering, contractor selection, coordination, execution, and final delivery of the project.

Getting approval on public sector projects was a big challenge and was a very lengthy and time consuming process. The key steps involved in approval process included approval of the PC-1 (planning commission 1) document, by the provincial development working party (PDWP), the central development working party (CDWP), and Administrative Approval (AA). In addition, all projects that were over Rs. 200 million ($3.3 million USD) required approval from Executive Committee of the National Economic Council (ECNEC). Since this project was over Rs. 200 million, it had to be approved by ECNEC. This in itself was a challenge because ECNEC met only a couple of times a year, but the Secretary C&W with the help of the Chief Minister Punjab was able to get the approval of all departments within one month. Normally the entire process takes about six months, but it was completed in one month for this project. This was all possible due to the commitment of the Chief Minister Punjab and hard work of the Secretary C&W.

On top of all this was a culture of red tape, suboptimum quality, suboptimum performance, budget overruns, and delays. If there was one person who was in favor of the project, there were ten people who were opposed to it. Change management and breaking old habits were among the few challenges that the Chief Minister Punjab and the C&W department faced.

Communication and Works (C&W) Department, Government of the Punjab

The C&W department is responsible for all civil works in Punjab. It is headed by a Secretary who is a grade 20 employee of the federal government posted in Punjab. He/She is someone who has gone through a very tough exam and rigorous selection process of Civil Superior Service of Pakistan (CSSP). Typically he/she has 20+ years of experience in various departments of the government. Some of the Secretaries are also engineers and doctors by profession.

It was the personal zeal and enthusiasm of the Secretary C&W, Mr. Sibtain Fazal Halim, that played a significant role in successful execution and delivery of the project. Mr. Halim was given the challenge of completing the underpass in 90 days and within budget by the Chief Minister of Punjab. Not only did he accept the challenge but he delivered it on-time and within budget.

The budget approval for this project was Rs. 243.5 Million (approximately $4.05 million USD) along with a contingency of fifteen percent on top of Rs. 243.5 million. In essence the Secretary had the budgetary approval of Rs. 280 Million (approximately $4.66 million USD). One must understand a little history behind public sector projects in Pakistan. In the past, if someone had the budgetary approval of Rs. 280 million, it was unthinkable to not utilize the entire Rs. 280 million. However, it was Mr. Halim's honesty, hard work, transparency to the entire process, and good governance that delivered the project in Rs. 190 million (approximately $3.16 million USD). The C&W was a department where their scope changes and budget overruns were common practice, but Mr. Halim quickly overcame those challenges and implemented proper monitoring and budgetary controls.

One must also understand that it was a team effort which included the Secretary C&W, Additional Secretary, Deputy Secretary, Engineers, Supervisors, and other staff that made this whole thing possible. There were number of challenges that the project team faced during the execution of this project. First, there was enormous amount of coordination that had to take place among various government departments including:

1.   The Chief Minister of Punjab and his Secretariat.

2.   C & W Department, Government of the Punjab.

3.   Planning & Development (P & D) Department, Government of the Punjab.

4.   The Consultant, NESPAK.

5.   The Contractor, SKB Engineering & Construction Company.

6.   The Lahore District Government.

7.   The Lahore Development Authority and Water & Sanitation Authority (WASA).

8.   Punjab Horticulture Authority (PHA).

9.   General Public.

10. Pakistan Telecommunication Limited (PTCL).

11. Water and Power Development Authority (WAPDA).

12. Sui Northern Gas and Pipelines (SNGPL).

13. Farmers.

The Chief Minister Punjab, Contractor (SKB), C&W Department, and the Consultant (NESPAK)

The Chief Minister Punjab, the contractor (SKB Engineering & Construction Company), the consultant (NESPAK), and the C & W department of the Punjab Government played a crucial role in the entire project. The whole thing was started upon the direction of the Chief Minister of Punjab, Chaudhry Pervaiz Elahi, who directed the C & W department to start the project and ensure all the key stakeholders were involved. It was the C & W department under the supervision of Secretary C &W, Mr. Sibtain Fazal Halim, which took on this gigantic project and worked on all the key tasks including feasibility studies, planning, contractor selection, monitoring, coordination, execution, day-to-day project management, and final delivery of the project. The Chief Minister Punjab empowered Secretary C&W to take all necessary decisions as he deemed appropriate to complete the project on-time, within budget, and according to the specifications outlined in the design of the underpass.

The Chief Minister of Punjab and the C & W department were the project sponsors. They both ensured that all the key stakeholders were involved at every stage of the project from planning-to-design-to-execution-to-completion. They also ensured that the contractor had everything that they needed, including timely payments, to complete the project successfully. The contractor was paid upon completion of each phase of the project. For example, the contractor was paid seventy percent of the cost of the material as soon as the material was delivered to the site. In the past, the contractor had to wait the end of the project to get paid; plus he had to jump through a lot of hoops to get his payments released. The Secretary C&W made sure that contractor was treated fairly and did not have to jump through any hoops to get his payments cleared.

The C&W department worked closely and diligently with all the key stakeholders and was in constant communication with them. The contractor was responsible for the day-to-day project management, performance, and timely delivery of the project. The consultant, National Engineering Services of Pakistan (NESPAK), was responsible for the design, supervision, quality assurance, and payment authorization. The C&W department monitored the performance of both the consultant (NESPAK) and the contractor.

Besides the challenge of satisfying the triple constraint, the project management faced many other day-to-day challenges. Some of the key challenges faced during the execution of the project included:

  • Physical space and urban constraints restricted the movement of heavy machinery, manpower, equipment, and the construction materials.
  • Massive relocation of public utilities including electricity, telephone, fiber optic, water supply, sewerage, drainage, and sui gas.
  • Diverse activities including earth work, pile work, concrete work, drainage work, road work, tile work, and electrification.
  • Removal and disposal of huge quantity of earth from the site, which was located in an urban area.

The contractor (SKB), C & W department, and the consultant (NESPAK) did an excellent job of coordination, communication, and planning all the activities involved in the project. The successful delivery of the project was made possible by clear scope definition and management, good communication and coordination among various stakeholders, planning, good day-to-day project management, and proper monitoring and control. Project schedule and critical path management (CPM) were the key techniques used to monitor cost, performance, and timeline.

Special attention was paid to the definition and management of the project scope. The Secretary C&W clearly understood the implications of scope creep on the triple constraint: performance, cost, and time. Therefore, he made sure that scope was clearly defined and there was no scope creep during the execution of the project.

Research clearly shows that a poorly defined scope is the most frequently mentioned barrier to project success. A study by Smith and Tucker of a large petroleum refinery plant project found that poor scope definition for major segments of the project had the greatest negative impact on cost and schedule (Smith & Tucker, 1984).

Pinto and Slevin found that a clear mission or scope statement is a predictor of more than 50 percent of project success in the concept, planning, and execution stages of the project (Pinto & Slevin, 1988).

Ashley et al. found that outstanding, successful projects exhibit clear scope and work definitions (Ashley, Lurie & Jaselskis, 1987).

The Secretary C&W attributed the success of the project to a number of factors including firm commitment and support of the Chief Minister Punjab, strong project management, daily monitoring and control, clarity of scope, good communication, leadership, and team effort. He believed that a good project manager ought to have good leadership, negotiation, decision making, motivational, and team building skills in order to deliver a project like the Mall Canal underpass. This was also confirmed by Kendra and Taplin in their article “Project Success: A Cultural Framework” (Kendra & Laplin, 2004).

The project manager is the individual charged with planning and scheduling project tasks and day-to-day management of the project execution. This person receives authority from the sponsor and plays a central role in each phase of the project's life cycle, from design and organization to project closedown and evaluation – and everything in between (Harvard Business Essentials, p. 16).

The Triple Constraint – Performance, Cost, and Time

In project management terminology Triple Constraint means managing cost, performance, and time simultaneously. The goal of any successful project manager should be to accomplish the performance specifications on, or before, the specified time and within the budgeted cost. However, in reality this is one of the most difficult things to do.

Performance

Performance is paramount to all projects, but it is also one of the difficult ones to achieve. There could be number of reasons for projects to fail in terms of performance. It could be due to miscommunication between the contractor and the sponsor or lack of communication between various stakeholders.

In the case of Mall Canal Underpass project, communication among various stakeholders including various government departments was exceptionally well. The C&W department did a good job of informing each department as to what would be done, when it would be done, who it would be done by, and how it would be done. It was a good example of what, when, who, and how.

The C&W department was responsible for communication, coordination, monitoring, execution, and delivery of the project. Quality Assurance (Q/A) was done by an independent consultant (NESPAK). The consultant ensured all the deliverables met the performance specifications. As shown in Exhibits 1 and 2, there were lots of technical details involved in the project. The C&W department along with NESPAK made sure contractor was delivering each phase of the project according to specifications. Carrot and stick policy was adopted towards the contractor. The C&W department was polite but firm with the contractor on performance. In the past, project quality had suffered due to lack of effective monitoring and control systems.

The Executive Engineer was authorized to make the necessary technical decisions as he deemed appropriate. During his site visits, the Secretary C&W used to give workers a pat on the back and talked to them personally. He used to have an Iftar party (breaking the fast during Ramadan) for the workers on-site. This not only boosted the morale of the project team but it also expedited the work and produced high quality results.

Cost

Controlling cost had been one of the biggest challenges in Pakistan. Scope changes and revisions to PC-1 document were considered routine matters. Most, if not all, of the construction projects in Pakistan were plagued by budget overruns, delays, and project revisions. Therefore, this project posed unprecedented challenges for the Chief Minister Punjab and the C&W department.

Upon the direction of the Chief Minister Punjab, the Secretary C&W ran a very tight ship. He implemented monitoring and control systems, which were quite useful in the execution of the project. Special attention was given to the cost of the project. The Secretary C&W could have easily spent Rs. 280 million (approximately $4.66 million USD) and not get questioned by anyone because it was within the budgetary approval and contingency limits. Instead, he completed the project in Rs. 190 million. He made sure that the contractor did not overcharge the government for any of the phases. The contractor was paid according to the amount of material he used and the amount of work he completed during each phase of the project. For example, first few piles were done at 25 meters and later on the pile tests revealed that 23 meter piles would be acceptable. The contractor was asked to do 23 meter piles and he got paid for 23 meter piles. In the old times, the contractor would have done 23 meter piles and would have gotten paid for 25 meter piles. Material rate schedules were updated on a weekly or monthly basis. Some material rates changed on a weekly or monthly basis. The C&W department checked the market rates on a daily basis and paid the contractor for the materials according to the market rate. This was a win-win situation for both C&W and the contractor.

Time

The Chief Minister of Punjab set a very aggressive timeline of 90 days for the project. He wanted the project team to complete the project in 90 days and set a new record of completing underpasses in 90 days. The Secretary C&W and the contractor accepted Chief Minister's challenge of finishing the project in 90 days. Completing an underpass in 90 days was unprecedented and posed a huge challenge considering the red tape, non-transparency, and lengthy approval process of public sector projects.

The key to on-time delivery was daily monitoring of the project. Project schedule and critical path management (CPM) were used to monitor cost, performance, and timeline. The Secretary C&W used to visit the site multiple times a day. The work was going on 24 hours a day. Sometimes the Secretary C&W visited the site at 2 O‘clock in the morning to make sure that work was going on at a steady pace. Plus he was there to resolve any issues that might come up in the late hours of the day or night. For example, one time there was a shortage of labor and there was not enough staff to run the third shift. The Secretary C&W made a decision right on the spot and asked the contractor to run two 12-hour shifts, and he also paid overtime to all the workers.

In some respects, the manager is analogous to the thermostat that monitors and controls the temperature in your house. Think for just a moment about how that thermostat functions. It is constantly sensing the temperature inside the building (Harvard Business Essentials, p. 130).

Not only was the Secretary C&W used to working long hours but his entire office staff worked out a schedule so there was 24-hour coverage and administrative support for the project. For example, there was a point where the contractor ran out of bricks and they were not available anywhere in Lahore. The Secretary C&W called up his office and asked them to contact someone in another city, 150 Kilometers away, and arrange bricks for the contractor. This was a good gesture to show that client was willing to help the contractor and be part of the project team. It was also a good example of timely decision making, which was made possible by daily monitoring.

There were times when the work was not progressing as fast as it should have been due to the slow response of some other department. The Secretary C&W either picked up the phone and called the head of that department and asked to expedite the work or he had the Chief Minister Punjab call the head of the department and expedite the work. The C&W department did not wait for a paper response. Instead, personal phone calls were made to ensure timely completion of work.

The Chief Minister Punjab also ensured that there was a reward system in place for getting the job well done. All the key members of the C&W department got a performance bonus as a token of appreciation by the Chief Minister Punjab.

img

Exhibit 1

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Exhibit 2

Ashley D.B., Lurie, C. S. & Jaselskis, E.J. (1987, June) “Determinants of Construction Project Success,” Project Management Journal, 18(2), p.72

Kendra K. & Taplin L. J., (2004, April), “Project Success: A Cultural Framework,” Project Management Journal, 35, (1) p. 31

Harvard Business Essentials (2004) Managing Projects Large and Small, The Fundamentals Skills for Delivering on Budget and on Time, Boston, Massachusetts: Harvard Business School Press,

Pinto J. K. & Slevin D. P., (1988 , June) “Critical Success Factors across the Project Life Cycle,” Project Management Journal,19 (3), p. 72.

Smith A. & Tucker R. L., (1984) “Early Project Problem – Assessment of Impact and Cause,” 1984 Proceedings Newton Square, PA: Project Management Institute, p. 226.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2005, Rizwan Amin Sheikh and Khalid Ahmad Khan
Originally published as a part of 2005 PMI Global Congress Proceedings – Singapore

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