Documente Academic
Documente Profesional
Documente Cultură
MSc DEGREE
IN
MANAGEMENT IN CONSTRUCTION
UCHENNA OKPALAUNEGBU
K0851660
WARRANTY STATEMENT
This is a student project. Therefore, neither the student nor Kingston University makes any
warranty, express or implied, as to the accuracy of the data or conclusion of the work performed
in the project and will not be held responsible for any consequences arising out of any
inaccuracies or omissions therein.
Value Management in Nigerian Construction Industry The Role of
Government. Page 1
DEDICATION PAGE
&
On completion of this Dissertation, I am highly indebted to the LORD GOD Almighty who
showed me and my wife once again, that HE is still the GOD of impossibility.
I take a special delight to appreciate my wife for her wonderful prayers, encouragement and
prodding to go for the programme after series of indecision on the admission since 2009 and
postponement till 2012. Without how GOD used her to galvanise and support me throughout the
duration of the programme and the research, this dissertation wouldn't have been possible.
Moreover, I will want to express my heartfelt gratitude to the Director of the Course, Mr Allan
Ellis who notwithstanding his apparent strict disposition delivered his lectures with wonderful
academic skills mixed with the touch of a Motivational Speaker.
I am deeply grateful to my Supervisor, Mr Grant A Gover, under whose able guidance this work
has been successfully carried out. I am delighted to have him as a supervisor for his keen interest
and numerous suggestions on helpful materials and writing strategy at various stages of this
dissertation research and writing. I am greatly indebted to Mr. Colin Fuller, the Lecturer whose
lectures and suggestions formed the bedrock of this dissertation research.
I highly appreciate all the great people of Kingston University Community for their warm
reception, assistance and goodwill shown to me while I was doing this programme and research.
The same goes to the Pastorate, Workforce and the Members of my Church at Kingston - Grace
Sanctuary for All Nations (RCCG). They were a wonderful family of GOD to me while I was on
this programme & the research work.
Lastly, I thank all the respondents, interviewers who helped to make these work outcomes a
splendid success in my humble estimation. GOD Bless you all in JESUS Name! Amen!!
Nigerian has a forecasted astronomical growth in Construction Industry in the next ten years that
is faster than both USA and China. The irony is that in spite of this growth, the landscape is
regrettably littered with abandoned projects. The dissertation is about applying Value
Management in Nigeria Construction Industry, with special role by the Federal Government,
end-users/other stakeholders to find a lasting solution to the menace of corruption, Abandoned,
and/or White Elephant projects in Nigerian. The literature review is structured under four
chapters (1) Overview of Value Management (2) Value Management Globally, IN UK & USA (3)
Value Management in Nigerian Construction Industry (4) Integrating Value Management & Risk
Management. Questionnaire was mainly consisted of five sections with three questions each
amounting to total of fifteen questions. Four hundred questionnaires were sent out and two
hundred and fifty-eight (64.5%) were returned. Likewise eight professionals and three National
Parliamentarians were interviewed. The survey indicated among other things that only 16.2% of
the respondents know the meaning of the concept, while only 6.3% confirmed that it is practised
in Nigeria, 84.5% agreed that Government have a role to play. Another highpoint of the survey
were that 85.10% of the respondents agreed that introduction of end-users/other stakeholders
have the capacity to address the issue of corruption. The research results reflect the general
thinking of other research works on value management in Nigeria but with great emphasis on the
role of Government as the missing link that had been hindering its growth in Nigeria, which is
the main thrust of this research.
ITEM
DEDICATION 2
ACKNOWLEDGEMENTS 3
EXECUTIVE SUMMARY 4
TABLE OF CONTENTS 5
LIST OF TABLES 9
LIST OF FIGURES 9
CONTENTS
REFERENCES 76
APPENDCES 80
Cover Letter 80
Questionnaire Sample 81
Letter of Introduction to the Ministry of Niger Delta Affairs 84
LIST OF TABLES
NO DESCRIPTIONS PAGES
2.1 Depicts comparisons between value management and engineering 20
2.2 Comparisons between external and internal facilitators 24
7.1 Sector-by-sector distributions of respondents 42
LIST OF FIGURES
1:00 INTRODUCTION
Construction industry all over the world has not been static and the reasons for this include
clients growing demand, complexity of construction projects, advancement in technology and
introduction of new innovations amongst others (Oke, 2004). Demand for value management all
over the world is on the increase as noted by Morrison (1984) and Nigeria will soon be a part of
it as stated by Ayodeji & Ogunsemi (2004). All over the world, especially in North America and
Europe the issue of abandoned, and or white elephant is considerably not a menace as is
obtainable in third world countries. The case of Nigeria is as embarrassing as it had defied all
known Project Management Techniques. At a glance it will seem that non-payment of certificates
generated by the contractors accounted for most of these abandonments. Actually, at the root of
the problem is lack of Value management as applied by the developed world.
They have been an attempt in the time past to introduce this concept in Nigerian it failed
woefully and it will continue to fail unless and when the Federal Government of Nigeria supports
and promotes it. Best practices in Value Management and Engineering have been under
continued research in Nigeria Construction Industry for the past two decades. Yet, very limited or
virtually no research has been done lately into the Role of Nigerian Government in the
application of the philosophy. The application of Value Management in Nigeria and the Role of
the Government will be the main thrust of this research,
The latest 10-year (2009-2020) forecast as released by Global Construction Perspectives &
Oxford Economics (Global Construction 2020, 2013) stated that:
Construction (worth over $60 Billion) growth in Nigerian will be the fastest of all markets that
include USA, CHINA, and INDIA etc.
Only Nigerian and India will enjoy higher growth rates than China, with Nigerian growing by a
whopping 128% from now till 2020.
The irony of Nigerian Construction industry is that in spite of this growth, the landscape is
regrettably littered with abandoned and white elephant projects. Several construction projects
which would have impacted positively on the economic and overall social development of the
nation litters the corners and open spaces of the company (Olabusi, Otunola, 2012).
Ms. Sayeh, IMF Director for Africa expressed the frustration of Nigerians regarding the menace
of not only white elephant but also abandoned projects that spread across the country that such
projects will lead Nigeria nowhere (The Nation Newspaper, 28 October 2012)
Most projects are therefore conceived out of nowhere and lacking in internal coherence and
consistency with other programs." (El-Rufai, 2012). Poor location of infrastructural facilities and
conception of projects out of the blues without the involvement of the End-Users and other
relevant stakeholders are one of the fundamental problems in the Nigerian construction industry.
This research is tailored to achieve its objectives. Hence my study is guided by the following
research questions and is intended to answer them accordingly.
2) To what extent do the construction professionals, Industry players and Government know
about the application of Philosophy of Value management?
3) To what extent will the introduction of end users and other independent stakeholders in the
conception, design, development, commissioning and decommissioning stages of project address
this menace.
4) Specifically, will the innovative introduction of End-Users as watchdogs, who are actually the
owners of these projects in all the stages of the procurement route address the endemic
corruption that is the bane of project delivery in Nigeria.
5) Does the Federal Government of Nigeria have any contributory roles to play in promoting the
application of Value Management and making it a success?
1.30 Hypothesis.
It is my hypothesis that when the end users (as watch dog) who are the ultimate beneficiary of
Governments projects, including the independent stakeholders who are not from the originating
organisation, are introduced into Nigerian Government projects from the conception, design,
development, commissioning and decommissioning stages of project, it will address this menace.
Secondly, Federal Government of Nigeria will have a role to play in promoting the application of
Value Management in the Construction Industry. Otherwise the corruptive tendencies in Nigerian
systems will frustrate it. The absence of clear-cut involvement of Government is the reason why
the past efforts to introduce this philosophy have failed.
1.40 Objectives
Identify and examine other factors that make Value Management philosophy's awareness low in
Nigeria Construction Professionals and Industry
Establish that the innovative introduction of End-Users as watch dogs from the conception,
design, development, commissioning and decommissioning stages of project will address this
menace.
Establish the relationship between Federal Government supports and success of application of
Value Management philosophy.
To achieve these objectives, the research will combine literatures review, question surveys and a
case study of a Nigerian Government Organisation Niger Delta Development Corporation
(NDDC) and Federal Ministry of Housing and Urban Development as a means to conduct the
research.
Stage 4: Discussions
The research was conducted following a programme laid out from the time the proposal was
submitted for approval to the actual research and this dissertation writing. (Please see Appendix
8)
Captured in this chapter are the introduction to the entire research work, it includes the problem
statement, research questions and hypothesis. It concludes with the objectives, significance of
the study, outlines of the research methodology and structure of the Thesis.
This chapter deals with the general overview of the concept of Value management through
literature reviews.
This is another chapter that deals with the literature review but with special emphasis on the
practice of VM in USA, UK and Globally. It captures the origin of Value Management in USA
and UK and development of Value Management in other Countries.
This is another chapter and the third one on literature review of VM but with emphasis on
Nigeria. It details the scenario of Nigerian Construction Industry and the growing demand for
development of value management in Nigeria
This chapter explains the actual and detailed procedures used to conduct the research.
This chapter contains the results obtained from the questionnaires survey, follow up face-to-face
and the telephone interviews conducted. It ends by discussing these analysed results and giving
the summary of findings at the end of the chapter.
This is the Concluding part of the thesis including the limitations of the research considered.
This is the final chapter that gives the general recommendations and suggested areas for future
research.
2:10 Introduction
This chapter will intend to look at the general overview of value management and engineering
through other works written by various authorities. It will look at the differences between the
two concepts.
VM evolved from the manufacturing industry, which initiated Value Analysis(VA) in 1940s, and
was first applied in the construction industry in 1963 (Dell'Isola, 1982)and is now attracting
interest from many sectors of the construction industry across the world(Fong and Shen, 2000).
Value Management is defined by Norton & McElliot (1995) as: "A systematic, multi-disciplinary
effort directed toward analysing the functions of projects for the purpose of achieving the best
value at the lowest overall life cycle cost." Kelly et al, 2004 defined it as "It is also a name given
Value Management is a process where before a construction project is embarked upon, the
Client, customer or the end users and other stakeholders which include but not limited to the
consultants, regulators, contractors etc. working as a group evaluates the project to determine as
follows:
The overall business benefits issue if the proposed project represent the best route to actualise
the need of the client and customers or end users. If it is affirmed in the positive after due
diligent and thorough investigation, then the next is
And how or what system bearing in mind construction excellence, should be employed to most
efficiently and with reduced risk and proper project management construct what has been
established to be constructed to serve the needs of the customers or End-Users.
Value Management (VM) has been recognised within the last decade as an emerging paradigm
that focuses on continuously increasing the value provided to the client and is widely accepted as
an important tool in the successful management of construction projects (Ellis et al., 2005) as
cited Saifulnizam & Coffey [internet] (2013). VM is a structured, organized team approach to
identifying the functions of a projects, product or service with recognized techniques and
providing the necessary functions to meeting the required performance at the lowest overall cost
(SAVE International, 2001
VALUE MANAGEMENT
VALUE PLANNING is the initial technique applied at the first stage of value management
process; this is mostly carried out during the inception phase of the project. The chief aim is to
ensure that the project outcome is properly aligned to the requirements of all the stakeholders
concerned. These requirements are nonetheless prioritised in accordance to its importance as
they are bound to be many requirements.
VALUE ENGINEERING in the other hand is the technique used during the second stage of
value management process and it is normally applied at the design or engineering stage of the
project. It is at this stage that various options available are analysed and appraised in order to
choose the best option for the project that will add maximum possible value.
VALUE ANALYSIS is used at the last and final stage of value management process which is
done at the end of the project with the sole aim in order to appraise the project outcomes and
intended functions. The process of determining at the completion of a project if the intended
functions have been achieved is known as value analysis in the value management process.
CORES ISSUES FOR Project proposal, existing design Existing design only.
CONSIDERATIONS
Table 2.2 depicts the concise comparisons between Value Management and Value
Engineering.
To procure and provide the exact full compliments of the detailed functions of the proposed
project at a much reduced cost.
Or To procure and provide additional benefits to the designed functions of the proposed project
without adding to the contract sum.
Or still to procure and provide additional benefits to the designed functions of the proposed
project without adding to the contract sum but rather reducing it.
There are some factors that distinguish VM from conventional cost reduction methods and other
design review techniques in the construction industry. These factors will help to give a clearer
picture of what is VM
VM is a systematic strategy that has a definite outlay plan of action that has a duration which in
most cases corresponds to the whole lifecycle of a project. It has a defined beginning which is
from initiation and end which is the decommissioning. This is one of the ways it differs from
ordinary cost reduction techniques, which normally is arbitral, unplanned and lacks a definite
system
Value Management does not just attempt to reduce cost but it emphasises not just the need to
keep cost down but defining the functions appropriately and finding alternatives in the design
proposal that will still achieve the same value or exceed it but still at the same cost or even at a
reduced cost
The definition of value is a relationship between time, cost and the variables that determine the
quality the client seeks from the finished project (Kelly et al, 2004). Cost is just one element in a
project requirement definition and quality. In defining value, there must be a balance between
every vital aspect of project engineering design. The intrinsic Value of a project in VM is defined
by what or functions the project does and it is not related to what is the cost of construction or
manufacture. In VM, the essential aim is to improve on the value efficiently and effectively not
just to reduce cost.
The Team composition is not generic but specific to each project and the size of the team is
advisable to be between manageable numbers of six and sixteen.
There are some basic approaches, methods and steps that are involved in order to have an
enviable systematic approach to VM as intended by the founders.
There are four different approaches available to follow in implementing VM in order to achieve
the intended results as outlined by Norton & McElligot (1995) which are as follows:
1. An in-house programme in which all of the team members as well as the VMTC are
employees of the organisation.
3. In-house team members supplemented by experts who cannot be provided by the in-house
organization as well as an external VMTC or facilitator
It is worthy of note that the major difference between the application of VM in US and UK is in
the different approach associated with each country. While approach no 4 is predominantly
practised in US, approach no 3 is widely used in UK. The fundamental issue in choosing any
approach is to consider the appropriate one in each circumstance of projects and countries where
VM is used.
Figure 2.2 Comparison between the use of an internal facilitator and external facilitator (Source:
Bredu-Appiah, 2008)
2. The Workshop
3. Post Workshop
4. Post Study
The duration of the study may differ depending on the circumstances of the specific project. The
VM study may take up to six days to three months or more than from the first meeting to the
presentation of the study. In this study generally it is not always possible to finish without
interruptions.
Information Phase
During this phase participants are very proactive trying to gain good knowledge about the project
in all its ramifications in order to asses what the project is intended to do. This will help them
identify the wanted, unwanted functions or any other issue(s) with the project either with a view
to save cost or add improvements.
Evaluation Phase
In this session, the workshop members will go ahead adopt any method to evaluate subjectively
all the ideas gathered prior to this phase. Different criteria may be adopted to select the ideas
gathered depending on the following or some it: economical, aesthetic, environmental, social,
political considerations.
Development phase The ideas selected as good ones marked for further development at the
evaluation phase are now developed fully using the ideas gathered at the analysis and creative
phase to enhance the project. They are fully developed into full blown and detailed proposals.
Presentation Phase.
It is during this phase that a day is chosen to do a presentation of the final outcomes of the VM
study to the decision makers.
In conclusion, it is generally accepted the earlier this VM study is conducted in the design stage
the better for the project.
The reason why VM is germane was well captured by Norton % McElligot (1995) where they
enumerated the basic reasons to use VM and types of project that benefits most from VM. Some
of these situations are common occurrences in Nigerian among which are itemized below.
When there is lack of coordination between the designer and operation's personnel
Costly projects
Complex projects
CHAPTER THREE
3:10 Introduction
This is a review of literatures on the origin of the concept in United States of America, United
Kingdom and its development in other part of the world.It will go ahead to look at the current
modern construction methods and concepts that define the UK construction excellence scenario.
Value management philosophy originated in USA during the Second World War when GEC in
order to circumvent the issue of shortage of raw material started to look for substitute as
alternative. This effort led them to find out that the alternative in the end also led to reduced cost
The basis of the modern value management was this unplanned and necessary replacement of
materials with another of equal or better benefits by Lawrence D. Miles, an electrical engineer
with GEC during the WW2, who is reputed to be the founder of Value Management, although he
called Value Analysis between the years of 1947 and 1952.The United States Navy was the first
body outside US GEC to apply this concept of Value analysis during the design/engineering
conception phases of their ship building in 1954. This was how the term - Value Engineering as
the steps and techniques used during engineering phases were borne. It was after this time that
other public and private bodies started applying Value Engineering in US until 1958 when SAVE
- Society of Value Engineers, a professional association was put in place to promote the ideals of
Value Engineers.
Although Value Analysis was founded in USA in 1947, it first came to UK after exactly a decade
in 1957. (IVM, 2013). Although the use of Value Engineering was widespread in the United
States, it took another 30 years before the technique was used for the first time in the United
Kingdom, by an American company Xerox on its UK headquarters building in 1983" (Dallas,
2006). "The spread of VE, in Manufacturing and construction sectors, to the UK was largely
through organisations with North American head offices and research activities of UK
academics" (Gronqvist & Male et al, 2007) It is largely believed that what delayed the spread of
VE in UK was the difference between the structure and its application in US and UK.
In US the Value Management Team (VMT) are different from members of staff of the
organisation and the in-house members are expected to carry out the proposals of the external
Value Management in Nigerian Construction Industry The Role of
Government. Page 28
VTM. The UK professional objected and resented this arrangement for many reasons including
the fact that it leads to disintegration in the procurement process. "This opened up all sorts of
problem relating to design responsibility and professional rivalry, leading, unsurprisingly, to
strong resistance from incumbent team" (Dallas, 2006) This was the position until they was a
change according to Gronqvist & Male et al, 2007 "However, unlike the USA where the value
process is usually applied by a completely independent project team with no prior connection to
the project, current practice in the UK is to utilise the existing multi-disciplinary project team
when applying Value Management" (Gronqvist & Male et al, 2007)
In the United Kingdom, the professionals through assistance of the office of Ministry of
Technology came together in I966 to form Value Engineering Association. It latter
metamorphosed into Institute of Value Management (IVM) in 1971 to enhance it is outlook,
acceptance and in conformity to the expansion of VM beyond the shores of US. While SAVE -
Society of American Value Engineers was formed in I959.
Risk Management
Asset Management
Lean Manufacturing/Construction
Latham Report
Egan Report
Gateway process
Etc
The implications is that these modernisation construction methods have left the stakeholders in
the UK construction industry with many options to apply in various projects to get value, and
preference to VM in the face of all these competing models have dwindled considerable.The
various efforts to modernisation of construction industry in UK to achieve construction
excellence as sustainability have actually created an enabling environment for the development
of Value Management.
The European SPRINT programme (Strategic Programme for innovation and Technology
Transfer) is a boost to Value Management in other European countries. It publishes and sets
standard, training and qualification standard known as Value for Europe for value management
throughout Europe with it is own governing board."In Europe, there are established VA
associations in the UK, Germany, France, Belgium, Italy, and Netherlands, Portugal and Spain
and VA activity in Denmark, Ireland and Greece." (Norton & McElligot, 1995).
The Value Management is practised fully by the Japanese in their Manufacturing Industries in the
same way they apply other Management techniques founded and developed by the Japanese.
Many other far Easter countries such as Industrialised Korea, China and Asian nations like India
are successful in their use of VM. Middle East countries like Saudi Arabia, Kuwait and Australia
are not left out in the use of VM. Demand for value management all over the world is on the
increase as noted by Morrison (1984). It is only in Africa that the trend is absent except for South
Africa and few other countries where it's application may only be skeletal.
"Value Engineering is widely accepted by its various names in Asia, Europe, and Middle East.
SAVE has formed affiliations with Value engineering organisations in Hungary, India, Japan,
South Korea and Taiwan" (IVM, 2013) It is well known that half of SAVE members are
estimated to be live outside US, while the third of the members live in the middle East.
Saifulnizam & Coffey (internet) reported that, "The VM initiative has been benchmarked by
several countries such as Australia, France, Germany and Hong Kong and this has helped to
Although VM is practised in the majority of the countries outside US and UK, it is with its
attendant modifications to satisfy the peculiarities in the specific environment.
CHAPTER FOUR
4:10 Introduction
This chapter will critically appraise the works written on the Value Management in Nigerian
Construction Industry. It will look at the development of Value Management in Nigerian.
Construction industry all over the world has not been static and the reasons for this include
clients growing demand, complexity of construction projects, advancement in technology and
introduction of new innovations amongst others (Oke, 2004). Although Nigerian Construction
The latest 10-year (2009-2020) forecast as released by Global Construction Perspectives &
Oxford Economics (Global Construction 2020, 2013) stated that:
Construction (worth over $60 Billion) growth in Nigerian will be the fastest of all markets that
include USA, CHINA, and INDIA etc.
Only Nigerian and India will enjoy higher growth rates than China, with Nigerian growing by a
whopping 128% from now till 2020.
The irony of Nigerian Construction industry is that in spite of this growth, the landscape is
regrettably littered with abandoned and white elephant projects. Several construction projects
which would have impacted positively on the economic and overall social development of the
nation litters the corners and open spaces of the company (Olabusi, Otunola, 2012).
Ms. Sayeh, IMF Director for Africa expressed the frustration of Nigerians regarding the menace
of not only white elephant but also abandoned projects that spread across the country that such
projects will lead Nigeria nowhere (The Nation Newspaper, 28 October 2012)
All over the world, especially in North America and Europe the issue of abandoned, and or white
elephant is considerably not a menace as is obtainable in third world countries. The case of
Nigeria is as embarrassing as it had defied all known Project Management Techniques. At a
glance it will seem that non-payment of certificates generated by the contractors accounted for
most of these abandonments.
An estimated 11, 886 federal government projects were abandoned in the past 40 years across the
country, the university don, quoted this from the report of the abandoned Projects Audit
Commission set up by President Goodluck Jonathan in 2011, (Premium Times, 2012)
Eleven thousand, eight hundred and eighty-six (11,886) abandoned projects that will cost an
estimated N7.78 trillion to complete. These alarming figures are from the report of the
Presidential Projects Assessment Committee (PPAC) set up in March 2011 by President
Goodluck Jonathan to look into cases of abandoned federal government projects. If the
The major player in the Nigerian Construction Industry is the public sector comprising the
Federal, State and Local Government who controls the 85% of the project. The Nigerian
construction industry mainly consists of project generated by Local, State and Federal
Governments who are the public sector, both controlling over 85% of the projects. (Trade invest
Nigeria, 2012). The other 15% are been controlled by the private sector led by financial
institutions, Manufacturing conglomerates, Multinationals etc.
Corruption is easily pointed out among other causes as the root cause of project abandonment.
There are many other factors that contribute to this malady, that concentrating on corruption may
beg the question."Inconsistent government policies, lack of accountability, high level of
corruption, incompetent contractors, non-availability of building materials, lack of utilities or
infrastructural facilities, wrong location and so on has been advanced as remote causes of
abandonment of building projects" (Olusegun & Michael 2011)
Notwithstanding the foregoing, strong institutions are what we need in Africa and Nigeria in
particular. The President of US, Barack Obama made allusion to this while addressing the
Ghanaian Parliament 11 July, 2009 when he said inter alia that "Africa doesn't need strongmen, it
needs strong institutions" Adibe (2013) said that "Institutions are crucial in any system because
they help to structure social interaction, allowing for predictability or stable expectations by
imposing form and consistency on human activities" The former Vice-President of Nigeria, Atiku
Abubakar while delivering a Lecture at Geneva School of Diplomacy and International
Relations, Switzerland said that "We need strong institutions, stable and predictable policy
environment, rule of law and enabling environment for sustainable economic growth"
There is preponderance of views that the problem of project abandonment and White elephant
project that dots Nigerian landscape goes beyond corruption. Moreover, if the system is
enhanced for effectively delivering of best value in any project it will make corruptive tendencies
impossible or reduced to insignificance level. Planning, Management and Procurement methods
are mainly the hydra-headed monster in this circumstance.
There is a glowing and sustainable demand across the world for Value Management and other
modern construction methods. Although Nigerian is not yet fully leveraging on these concepts,
there is hope that the concerted efforts of the academia will achieve it in the nearest future.
Demand for value management all over the world is on the increase as noted by Morrison (1984)
and Nigeria will soon be a part of it as stated by Ayodeji & Ogunsemi (2004).
The practise of VM in Nigeria is not as robust as it in UK and other developed world. The
development of VM in Nigeria is been championed by the Academic researchers, institutions of
high learning and some professionals. In recent times in Nigeria, value management has become
part of academic curriculum of quantity surveying in most institutions of higher learning either
as a course or as a topic under cost control or project management. This is mainly to prepare
these students for a new era of value management that is about to be witnessed in the Nigerian
construction industry (Oke & Ogunsemi, 2004) Some Nigerian Universities that run a various
courses related to Construction Management now have VM in their curriculum.
In the literature review not much has been written on VM in Nigerian but there are some
scholarly works on it. Only few Nigerian professionals are aware of the concept. The concept of
value management is also gaining ground among Nigerian construction professionals as stated by
Olarewaju & Khairuddin (2007) where about 36%, 30%, 11%, and 19% of research population
that are familiar with value management are QS, engineers, architects and estate managers
respectively. The fact that few Nigerian professionals who are aware of the concept but do not
know how to use it was collaborated by Olawuyi (2009) in the interviews he conducted with
There are many factors that are the reasons why VM is not yet embraced and practised in
Nigeria. It includes right awareness of the concept and its benefits, support of the government,
lack of technical know-how, absence of the right enabling environments. Oke & Ogunsemi
(2004) got it correct when they reported that "It could be observed that value management
adoption in Nigeria is on the very low level and this is as a result of inadequate knowledge of
value management, government policy, unstable economy, professional incompetence, poor
management"
In conclusion the general recommendation is that there is need for professionals to encourage
Nigerian construction clients (especially governments at all levels) in the adoption of value
management in their projects management.
CHAPTER FIVE
5:10 Introduction
This chapter will critically appraise the literatures as it concerns a new concept of integrating
Value &Risk management..
Risk management: is the process of eliminating any uncertainty that may hinder or affect the
delivery of this best value.
Value and Risk management: enables organisations to succeed in the delivery of ambitious
project by defining their desired out-comes and then exercising processes that maximise value
and minimise uncertainty (Dallas, 2006). The core aim of value management is to carry out a
VM study to ensure that the best value for money is obtain in any project.
In his report for modernising construction - Latham Report, Sir M. Latham said "No construction
project is risk free, risk can be managed. Minimised, shared, transferred or accepted. It cannot be
ignored" It follows therefore that to achieve best value for money in any project, that there is an
inherent risk involved which must be countered. It then goes to say that the essence of risk
management is that it will help any organisation to go into any construction project with the
confidence that they will be able to handle potential risk in order to achieve maximum best value
for money. Dallas (2006) stated there is little point in going to great lengths to maximise the
value of a project if significant risks materialise which impair its delivery, thereby destroying
value, and a project in which all risk is avoided is unlikely to maximise value.
Integrating value and risk management activities into a single process in any construction project
will help it to derive both benefits of the two concepts and at the same time reduce the cost of
logistics. It is clearly evident that the two activities are complementary to each other and by
providing the adequate enabling environment for the maximum benefits to be achieved from
each one in a project. Karim & Berawi et al (2007) reported that "The idea of integrating value
management (VM) and risk management (RM) has started more than ten years ago as many
professionals realised that it is impossible to separate between value and risk" While DellIsola
(1997) cited that the opportunity of integrating value management (VM) in conjunction with the
formal risk assessment and analysis started in 1993 when a city port authority required a value
engineering (VE) effort that would be augmented with an application of a risk assessment.
In conclusion it is clearly evident from this appraisal of literatures that VM & RM are widely
accepted as a proven successful project management tools in construction industry.
Value Management in Nigerian Construction Industry The Role of
Government. Page 36
Secondly that they complement each other and the two must be undertaken to mitigate any risks
that may occur which is likely to frustrate the effort to achieve best value for money in any
project.
Thirdly that the two management techniques share the same systems, tools and resources in their
use in project management in construction industry.
Therefore it is save to integrate and combine the two in order to save time, resources and
logistics and achieve better benefits as intended in any project
CHAPTER SIX
6:10 Introduction
This chapter of the thesis will basically deal with the details of the research methodology used in
undertaking this research. It will explain the overall approach adopted in this work and give
information on how the data used in the research was collected, the nature of the population, the
instruments used, the analytical procedures and processes used to arrive at the conclusions and
recommendations.
The research was designed to evaluation the role of Government in promoting the application of
Value Management in Nigeria Construction Industry so as to address the malady of abandoned
and white Elephant project in Nigeria. Consequently, the research was designed to achieve the
objectives I had set out to accomplish.
6:30 Population
The Nigerian construction industry mainly consists of project generated by Local, State and
Federal Governments who are the public sector, both controlling over 85% of the projects
(Tradeinvest Nigeria, 2012). The other 15% are been controlled by the private sector led by
financial institutions, Manufacturing conglomerates, Multinationals etc.
The public sector also includes the Ministries, Government owned agencies, MDAs, etc. The
target population for this study thus includes all the above-mentioned, the National Assembly,
Judiciary in addition to the Nigerian construction professionals and Nigerians in general as the
ultimate End-Users. To achieve these objectives, the research combined literatures review,
question surveys, pilot study and structured interviews.
Prior to the commencement of the actual data collection the researcher collected introductory
letter from the University to the Nigerian Embassy United Kingdom, selected sample institutions
and agencies marked for case study. The copies of the said letters are attached at the appendix.
The letters and subsequent visit to the Nigerian Embassy in United Kingdom to get a further
covering/introductory letter to the selected sample agencies for easy passage and acceptance
didn't yield the response the researcher intended.
This research at the first instance reviewed the literatures that are relevant to the topic of Value
Management in general. The main sources of this information were Primary literature sources:
Academic research journals, Conference papers and dissertation/thesis sourced from the
University Library, internet and other sources and secondary literature sources like: Textbooks,
Trade journals, newspapers, magazines and other reference guides - Dictionaries, Encyclopaedias
etc
A Pilot study was undertaken which entailed a test run on the questionnaire survey to validate its
efficacy in all aspects and ease of its administration. Twenty-five questionnaires were distributed
by hand to P & P Construction Company through their Project Manager. Some additional
questions were added to it seeking the respondents views on the design.
A number of useful comments about clarity of layout and wording were received which resulted
in further for the main survey. All twenty-five pilot study questionnaires were received which
resulted in 100% response rate.
The most important lesson learned from the Pilot Project was that internet usage and accessibility
in Nigeria is very low compared to UK. In order to address this issue and encourage satisfactory
response, the research used project managers, researcher-appointed coordinators in some
agencies and colleagues in the private and public sectors to galvanise the respondents in their
area to distribute and fill questionnaires. Using the contacts provided, these Leaders were
contacted and asked to continue to remind and prod the respondents to remember to fill and
complete the questionnaires by the same specified deadline. This steady contact by telephone
was essential to ensure that co-operation was immediately forthcoming.
6:43 Questionnaire
The researcher collected data by the means of administering questionnaires by hand to hand as
explained above. The newspaper publication that would have assisted the researcher to
circumvent the challenges of travelling to most of these agencies scattered across Nigeria was
not possible due to failure to obtain government approved letter of introduction. The
Value Management in Nigerian Construction Industry The Role of
Government. Page 39
questionnaire used structured questions. Consisting of15 questions into five sections: A, B, C,
and D & E. Each section contained questions seeking to answer each of the five research
questions and test the hypothesis. The nature of the questions varied as some required one to
choose yes/no or agree/disagree or agree, agree strongly or do not agree. See appendix for some
samples of the questionnaire.
The questionnaire is mainly tailored to identify and appreciate the attitudes, working modalities,
processes and systems required in Nigerian Construction Industry to apply Value Management as
panacea for white elephant and or abandoned projects. It consists of fifteen questions covered
under five sections of three questions each.
This form of interview uses 'open' and 'closed-ended' questioning but the questions are not asked
in a specific order and no schedule is used (Naoum, 2013). The part played by semi-structured
interviews within the research project was explained verbally to the interviewee. Initially the
intention was to hold the interviews in person but time constraints and geographical spread
meant that only few could be held in this way. The remainders were carried out by telephone.
Although, the cost of telephone is generally very high in Nigerian, I have to adopt this method in
order to reduce the challenges of travelling.
In order to enhance the data collection from the respondents eleven strategic interviews were
taken in the course of the research. Opportunity was sought and obtained to interview these
stakeholders who are either experts in Nigerian construction industry or high ranking
government officials. See the appendix for the details and profiles of the interviewees.
The responses to the structured close-ended questions will be rated in percentages and analysed
accordingly. The data collected will be finally analysed using the computer software known as
survey monkey tool of analysis.
CHAPTER SEVEN
7:10 Introduction
The primary data used for this research was sourced using two different techniques, which
comprised questionnaires on one hand and personal interviews divided into two; face-to-face and
telephone interviews. Therefore the results and the analysis are divided into two parts in this
Value Management in Nigerian Construction Industry The Role of
Government. Page 41
chapter. The first part shows the results and analysis from the questionnaires returned using
survey monkey and the second part will contain the results and analysis from the follow up
interviews. It ends with the findings and discussions
The survey questionnaires for this research were distributed with the constructional professionals
and other major stakeholders in the construction industry as the target. They included
Civil/Structural Engineers, Electrical/Mechanical Engineers, Quantity Surveyors, Planners,
Architects, Private property developers, and owners across the public and private sectors of the
construction industry.
In order to achieve a fair representation of the targeted population and correct opinion of the
Nigerian Construction Industry, questionnaires were sent to across the sectors within the
Industry. A total of four hundred (400) questionnaires were distributed and two hundred and
fifty-eight were duly returned, imputed/computed and analysed with Surveymonkey. This
represented a 64.5% rate of return and this figure is a pretty much more than half of the sent out
numbers, therefore it represented a fair picture and a good basis for this analysis.
The questionnaire distribution were planned and targeted at the main sectors of the Construction
Industry to get a balanced investigation that will enhance the quality of this research and
analysis.
2. PRIVATE 56 21.71%
The table 7.1 shows the sector-by-sector distribution of the results returned.
The Interviewees were divided selected and divided into four groups as follows:
4. The Parliamentarians.
The main aim is to determine if the application of Value Management in Nigerian Construction
can help to address the issues associated with abandoned, and or White Elephant projects and if
the Government will have any role to play in promoting it. In all eight respondents were
interviewed with two from each category as abovementioned. Only two of the interviewees were
conducted face-to-face, while the rest were done through telephone which entailed using mobile
phones for the whole duration of the interview.
A total of one hundred and fifty-eight minutes were spent on the telephone interview for the six
respondents, with its attendants high cost. In the other hand eight-five minutes were spent on the
The full results of the questionnaire survey and follow up interviews on the respondents are
presented and discussed in the next section of this chapter
The hypothesis of this research study is mainly anchored on the use of value management tool in
Nigeria to address the menace of abandoned, and or white elephant projects. The surveys carried
out have been designed to that effect. Once the results were analysed and discussed in this
section, it was established that they were many reasons why the concept have not been popular in
Nigeria.
7:41.1 Questions 1
This question was designed to establish the understanding of the stakeholders of what are the
general situations of the Nigerian Construction industry in relation to the threat of abandoned
projects. The 96.9% or 250 numbers of the respondents replied "YES" that they understand what
abandoned projects are; while a mere 3.1% or 8 numbers replied "NO" to the question. It shows
that abandoned project is common in Nigeria.
7:41.2 Questions 2.
This question again like the No.1 question was designed to establish the understanding of the
stakeholders of what are the general situations of the Nigerian Construction industry in relation
to the deplorable level of white elephant projects in Nigeria. Again a far majority numbers of
respondents 225 or 87.2% responded that they understandwhat are white elephant projects, while
a smaller numbers of 33 or 12.8% replied that they do not understand what it meant in Nigerian
Construction industry. Again it depicts that it is a serious problem.
7.41.3 Question 3.
Do you agree that abandoned and white elephant project is a menace in Nigeria?
Lastly on this section A, the No.3 question again like the No.1 and No.2 questions was designed
to establish the understanding of the stakeholders of what are the general situations of the
Nigerian Construction industry, but most importantly to ascertain if actually there is a menace of
abandoned, and/or white elephant projects scattered in the Nigeria Construction landscape.
Similar to the patterns noticeable in questions 1 and 2 majority of the respondents agreed or
tended to agree that abandoned, and/or white elephant project is an established phenomenon in
Nigeria. 46.5% and 37.6% of the respondents agreed or tended to agree respectively, while only
9.7%, 1.9%, 4.3% ticked neither, tend to disagree or disagree respectively. It confirms without
doubts the respondents replies in q1 and q2 that abandoned project are not only issues but a
menace in Nigeria.
In conclusion, results of the three questions in this section have given a conclusive evidence that
the meaning of this phenomenon of abandoned, and/or white elephants project is well understood
among the construction stakeholders in Nigeria and that it is real not a hoax but menace.
7:42.1 Question 4
Do you understand what the meaning of Value Management in Construction Industry is?
The intention of this question is to establish the level of understanding across the Nigerian
professionals of what is Value Management philosophy as applied in Construction industry. A
meagre numbers of 41 respondents out of 258 said they understand the concept, while a
7:42.2 Question 5.
To what extent do you agree that Value Management in Construction is well practised in
Nigerian Construction Industry?
The idea of this question was to establish if VM concept is practised in Nigerian Construction.
53.5% or the respondents tended to disagree, while 30.2% disagreed that it is practised in Nigeria
To what extent do you agree that Value Management in Construction is well practiced
in Nigerian Construction Industry?
Tend
Answer Tend To Rating Response
Agree To Neither Disagree
Options Disagree Average Count
Agree
4 12 26 138 79 1.93 259
answered question 259
skipped question 0
Figure 7.5.1 Result for question
7:42.3 Question 6.
To what extent do you agree that the practise of VM in Nigeria will address the issue of
Abandoned and white elephant project?
This question in the questionnaire helped to investigate among the Industry professional who
although didn't understand the concept before the survey and who believes it is not practised in
Nigeria, but on explanation of VM to state if they think it can address the anomaly of abandoned,
and/or white elephant projects in Nigeria.
To what extent do you agree that the practice of VM in Nigeria will address the issue of
Abandoned and white elephant project?
Tend
Answer Tend To Rating
Agree To Neither Disagree Response Count
Options Disagree Average
Agree
32 192 23 4 8 3.91 259
answered question 259
skipped question 0
Figure 7.6.1 Result for question 6
The results in this section proved that notwithstanding that the results from question 1 and 2
showed that the knowledge and practise of VM is very low, the section proved as answered in
question no.3 that the concept have the capacity to address the menace of abandoned, and/or
white elephant project. This was due to the explanation of the meaning of VM to the respondents
before filling the questionnaires.
7:43.1 Question 7.
This question was tailored to highlight the efficacy or otherwise of the present procurement
systems in the award/supervision of construction contracts in Nigeria. Understandably, only
12.4%, 8.9% and 4.7% agreed, tend to agree or neither agreed/disagreed respectively that there is
existing right procurement system in Nigeria.
On the other hand, good percentages of 51.9 and 22.1% tended to disagree or disagree that there
is a right procurement systems in place.
Do you agree that Nigerian Government have the right procurement systems or method of
award of contract/supervision in place?
Tend
Tend To Rating Response
Answer Options Agree To Neither Disagree
Disagree Average Count
Agree
32 23 12 134 58 2.37 259
answered question 259
skipped question 0
7:43.2 Question 8.
Value Management in Nigerian Construction Industry The Role of
Government. Page 51
If yes do you agree that it needs improvement for better efficiency?
A total of 43 respondents and 200 respondents agreed or tended to agree on the need for
improvement even if there is a good procurement system. This represents 16.7% and 77.5% of
the respondents respectively.
If yes to Q.7, do you agree that it needs improvement for better efficiency?
Answer Tend To Tend To Rating Response
Agree Neither Disagree
Options Agree Disagree Average Count
43 201 11 1 3 4.08 259
answered question 259
skipped question 0
Figure 7.8.1 Result for question 8
7:43.3 Question 9.
To what extent do you agree that introduction of other independent stakeholders/ end-
users in this process from inception to commissioning will make a difference.
The result of this question proved that majority of the respondents agreed or tended to agree that
the novel idea of the introduction will make a positive difference because 54 and 168
respondents agreed or tended to agree, representing 20.9% and 65.1% of the total numbers of the
respondents. Only 15, 5 and 16 respondents neither agreed/disagreed, tended to disagree or
disagreed respectively that it wouldn't make any difference, this represents a partly 5.8%, 1.96%
and 6.2% of the respondents.
To what extent do you agree that introduction of other independent stakeholders/ end-users in this
process from inception to commissioning will make a difference.
Tend To Tend To Disagre Rating Respons
Answer Options Agree Neither
Agree Disagree e Average e Count
55 168 15 5 16 3.93 259
answered question 259
Figure 7:9.1 Results for question 9
In conclusion this section highlighted clearly the fact that there is no good procurement method
in the Nigerian construction systems. It went further to show that construction industry in
Nigerian is seriously fragmented unlike what is obtainable in UK.
Lastly, it confirmed that Value Management will be beneficial to Nigerian Construction as it will
make a positive difference.
Do the end-users currently play any role in the Nigerian Construction Industry?
The essence of this question is to see if the end-users do play any contributory role in the
procurement process in Nigeria.
In the result collected on this question, there was a resounding reply of 85.7% of the respondents
who answered that end-users have never played any role, while a meagre 14.3% answered in
affirmative that they play a role. This represented a total number of 221 and 37 respondents
respectively.
In you view, do you agree that the absence of participation of end-users aids and abates
corruption that leads to the menace in question.
In line with question no. 10, this question no. 11 goes ahead to know if the absence of the
participatory role of end-users has, as of one of its consequential negative effects, the aiding and
promoting of corruption in Nigerian construction industry.
Again the preponderance of the opinions and beliefs of the respondents agreed that it promotes
corruption that is the major bane of Nigerian Construction Industry. This is because 8.5% (22
respondents) and 70.9% (183 respondents) respectively agreed or tended to agree that it aids and
entrenches endemic corruption. While only 9.7%, 1.2% and 9.75% neither agreed/disagreed,
tended to disagree nor disagreed with this assertion in the question.
In you view, do you agree that the absence of participation of end-users aids and abates corruption
that leads to the menace in question
Answer Tend To Tend To Rating
Agree Neither Disagree Response Count
Options Agree Disagree Average
23 183 25 3 25 3.68 259
answered question 259
skipped question 0
Figure 7.11.1 Result for question 11
How will you agree that end-users as watchdogs in the procurement systems will help
effective project delivery that leads to end-user satisfaction?
This question is a follow-up to the question no. 11. It hopes to to probe further if in addition to
the fact that the introduction of end-users will checkmate corruption if it will help better project
delivery and end-user's satisfaction.
Only a small percentages of 10.1%, 2.7% and 8.1% of the respondents respectively neither
disagreed/agreed, tended to disagree or disagreed that the coming of end-users will help and
enhance project delivery and end-user's satisfaction. The big leap was noticed in the number of
respondents who agreed or tended to agree as a total numbers of 26 and 178 respondents agreed
or tended to agree, this depicted a 10.1% and 69% respectively.
How will you agree that end-users as watchdogs in the procurement systems will help
effective project delivery that leads to end-user satisfaction?
Tend
Answer Tend To Rating Response
Agree To Neither Disagree
Options Disagree Average Count
Agree
27 178 26 7 21 3.71 259
answered question 259
skipped question 0
Figure 7.12.1 Result for question 12
In conclusion, the responses of the respondents are encouraging and positive as it agreed that
incorporating the end-users in the procurement route is a novel idea. Moreover, the agreement is
that it will reduce corruption, helps better project delivery and end-user's satisfaction. This is one
of the aims of Value Management concept.
Would agree with the statement that because in most of the cases Government is just client
and not end-user of the project they initiate therefore they can't be a position to really define
the end-user's requirements.
It is glaring evident that higher numbers of 37 and 146 respondents agreed or tended to agree that
Government is not a position to define the end-users requirement for them to initiate and execute
projects without them and other stakeholders. These are greater percentages of 14.3% and 56.6%
of the total respondents. While a lower numbers of 32, 9 and 34 respondents neither
disagreed/agreed, tended to disagree or disagreed the statement. This represents a partly 12.4%,
3.5% and 13.2% of the respondents.
Would you agree with the statement that in most cases Government is just the client and not the
end-user of the project they initiate therefore they can't be in a position to really define the end-
user's requirements
Tend To Neithe Tend To Rating Response
Answer Options Agree Disagree
Agree r Disagree Average Count
38 146 32 9 34 3.56 259
answered question 259
skipped question 0
Figure 7.13.1 Result for question 13
Based on your knowledge of the Nigerian system do you agree that Government
intervention is a key factor in promoting any philosophy or strategy that is needed to
advance the course of the citizenry.
This question is designed with the aims to ascertain the thinking among the professionals across
the industry if Government's intervention is needed to promote and sustain the policies that will
be beneficial to the citizenry.
It is noteworthy to observe from the results on the question that a total of 34 and 186 respondents
respectively affirmed that it will be needful for Government to intervene by either agreeing or
tending to agree that it is a key-factor. This is a 13.2% and 72.1% representation of the total
number of respondents. Only 23 zero and 15 respondents neither disagreed/agreed, tended to
disagree or disagreed with the statement.
Based on your knowledge of the Nigerian system do you agree that Government intervention
is a key factor in promoting any philosophy or strategy that is needed to advance the course of
the citizenry
Answer Tend To Neithe Tend To Rating Response
Agree Disagree
Options Agree r Disagree Average Count
35 186 23 0 15 3.87 259
answered question 259
skipped question 0
Figure 7.14.1 Result for question 14
Do you perceive Government of Nigeria have any role to play in the promotion of Value
Management in the Construction Industry?
Finally, this last question intends to assert if there are general perception and agreement that the
Federal Government have any role to play specifically to encourage and promote the application
of Value Management in Nigeria. When the respondents returned the questionnaires it was
observed that their majority perception is in the affirmative as 84.5% representing a total number
of 219 respondents answered "YES" on this question. Only a less percentage of 15.1% answered
"NO" to the question which is a total number of 39 respondents.
Figur 7.15.
e 1 Result question 15
In conclusion, this section showed that the general stakeholders agreed that although
Government intervention is needed in promoting and sustaining Value Management in Nigeria,
this interventional does not include initiating projects for the end-users without involving them
as the ultimate beneficiaries.
7:51 IntervieweeNo.1:
The first interviewee was a former chairman of National Planning Commission, Special Adviser
to the President on Economic Matters and most importantly the immediate past CBN Governor.
On the scenario of Nigerian Construction Industry and his take on it, he said that there's a wide
gap between the situation in CBN when he was there and the general construction industry. He
Expectedly the former CBN Governor didn't know neither does he understands the principle.
Surprisingly when it was explained to him he insisted that it was exactly what was fully
obtainable while he was at helm in control of CBN. He agreed that the absence of involvement of
end-users in the procurement process generally is one of the contributory factors to problems in
Nigeria Construction. He quickly added that the CBN was always the end-user in all the high
profile projects they do and maybe this may have accounted for the success associated with
project delivery when he was there.
The researcher believes that CBN is a good example to use where the end user is also the client
and it confirms one of the hypotheses of this research.
The second interviewee is a serving Chairman or Mayor of a Local Government Council for the
past five years. He expectedly said he has no knowledge of Value Management. He said their
procurement system revolves around what is decided at the Finance & General Purpose
committee of the council, where he sits as the Chairman. The award of the contract to the
selected contractors through their internal mechanism are finally approved and awarded at the F
& G.P.C meeting.
He said that Value Management although is a laudable concept when it was explained to him
may be difficult to introduce at the Local Council Area's because of the quality of professionals
available and the training it may require.
He is of the opinion that as the Local Council Areas in the recent times does most of their project
by the Direct Labour and may not be the ideal institution to apply it. He agrees that if Federal
Government enacts a Law or an act of the National Assembly that they will not have any choice
In order to gain an in-depth knowledge about the current scenario of Nigerian Construction, a
major stakeholder from the private sector, Prince C.N. Ukachukwu (Chairman SNECOU
GROUP) was interviewed.
He believes that the Nigerian construction organisations have not developed the needed value
culture. Value is still seen and understood as higher profit without considering good quality,
functions and customer satisfaction.
He believes that sub-contracting of the work is one of the reasons for poor performance noticed
in the industry. The client which is usually the government has no control over these sub-
contractors because they are engaged by the main contractors. This inadvertently leads to poor
quality work, delays and over runs.
He highlighted what has been a general phenomenon in Nigeria as a cause of these sub-letting
culture, whereby governments awards contracts to foreign companies at a higher rate to what he
awards to the indigenous ones. This most of the times forces them to cut corners by sub-letting
the contracts at a cheaper rate.
He said that government have a lot to do in improving the quality of construction in Nigerian.
Although he is not aware of Value management philosophy, when it was explained to him he
agrees that it can only work if government is serious in making to succeeded.
Engineer Paul Ebidom said that the level of professionalism in Architecture, Civil Engineering,
M/E Engineering professionals, other Consultants and Contractors is worrisome. He also
expressed dissatisfaction for poor co-ordination, disconnection and high rate of rivalry and
confrontations among them.
According to him some of the professionals are parochial in their objective and so committed to
it to think about the end-users and durability of the functions of the project. He believes the
introduction of Value Management may not be the magic wand but attitudinal changes are more
than required among the professionals in the public and private sectors.
He agreed that unless Government introduces and enforces it strictly it will not bring the desired
result as traditional procurement methods are more attractive to government and very popular
contract award method in Nigeria.
The fifth interviewee was Engineer Emeka Nwankwor a Director, Highways of the Federal
Ministry of Works. He has thirty-one years cognitive experience. Although he claimed to be
aware of VM as he defined it as economic analysis and cost benefits of a project. He also added
that the environmental impact assessment undertaken before a conception and design stages of a
project takes care of end-users involvement. It was when VM was explained to him that he
accepted lack of knowledge about the concept He pointed out three basic problems in Nigeria
Construction industry. The interview lasted for twenty-five minutes.
Firstly, he said that only small numbers of Client and Contractor Organisations involve all the
required Stakeholders before taking the initial or any decisions about the project planning or
execution. He believes that it is the biggest reason for poor quality work, cost and time overrun
in the industry. He believes that the contractors do not possess all the needed expertise and tools
to continue to deliver good projects; hence they need certain level of assistance.
Value Management in Nigerian Construction Industry The Role of
Government. Page 64
Secondly, he thought that Nigerian Construction organisations do not have controlling tools and
techniques which will not only assist them to Carry out assessment and measurement of the
value of a project but will also help them in planning future work and any remedial measures.
Moreover, he added that in most small or medium size projects people are more worried about
cost and time taken to complete the work than control over quality and functional outcomes of
the project.
Lastly, Engr Nwankwor said that not even the Clients especially the governments are often
taking forensic interest in performing their fundamental roles of ensuring successful completion
of project. The most disturbing and surprising is that they are not even sure and confident about
their end-user requirement and often as is always the case, they keep changing their mind about
the projects. This leads to changes in designs, variation and increase in cost which delays the
project or it may even be abandoned. Therefore, he thinks that there is a need to introduce and
educate the Stakeholders in the industry of any model that may address this malady and bring the
overall awareness in construction industry.
The sixth interviewee was Engineer Jackson Emoh, a Chief Engineer with Ministry of Lands,
Housing and Urban Development. He has twenty-six years of experience. He gladly accepted to
be interviewed but was very wary and cautious of not been asked a question that may expose his
ignorance in the profession.
He accepted that he has never heard about Value Management as a philosophy neither does he
understands it. He said that the traditional method of award of contract in Nigeria have moved
from lowest bidder to the very best and reasonable bidder.
When the concept of VM was introduced to him, he insisted that their ministry have always
applied them but he was told that it must have all the components of VM for it to be Value
management. He accepted that there are fragmented practices of some element of VM in Nigeria.
Engineer Emoh finally said that the introduction of Value Management in Nigeria will most
likely address the challenges of abandoned, and/or white elephant projects. He concluded that the
Value Management in Nigerian Construction Industry The Role of
Government. Page 65
partnering concept which VM practices may be difficult to implement in Nigeria unless
government insists on it.
He admits that any Law that will improve the Contract award system in Nigeria today to stave
off the endemic corruption in Nigeria will be gladly and speedily looked into and given every
seriousness it deserves in the National Assembly. He agreed that what the Nation loses in the
inflated contracts is mind boggling.
He gave an example of what have been achieved in the Petroleum Industry with the enactment of
Nigerian Oil and Gas Industry Content Development Act of 2010. He opined that on April 22,
2010, Nigerian President Jonathan gave assent to this Act generally referred to as "The Local
Content Act".
The Honourable believes strongly that it will be a welcome idea for the Parliament to study and
formulate Laws that will enhance the procurement system because it is in dire need of
improvement. He believes that it is within the purview Executive & Legislative arms of Federal
Government to play innovative roles that will put the Construction at par with the international
best practices. He sees the Value Management concept as having the potentials to improve the
sector if properly articulated and implemented.
She quickly delved into how the World Bank Country Procurement Assessment report 1999 on
Nigeria proved that there is a relationship between poor/weak public procurement procedures
and corruption, especially its dire consequences and drawbacks in the Nation's attempt to
develop her infrastructure. She added that the same report showed that the Nation loses N60,000
to underhand deals out of every N1.00 spent which results to the total loss of US $10 Billion
annually. The researcher was overwhelmed by this revelation that he enquired on how the
Honourable could authenticate this assertion. He was consequently directed to the website of
BPP & World Bank.
She added enthusiastically that it was this damning report that galvanised the Government to
start Public Procurement Reform that led to the setting up of Budget Monitoring and Price
Intelligent Unit, which is today popularly known as Due Process in 2001. A Public Procurement
bill was prepared and presented to the National Assembly by BMPIU in 2003/2004. It was
passed by the same National Assembly on 30th of May, 2007 and signed into Law on 4th of
June, 2007 and is today know as Public Procurement Act 2007.
She concluded by saying that it is on record that before the year 2007, Nigerian Procurement
systems both public and private had no Law guiding or regulating or governing it at the Federal,
State or Local Council levels. She said that Nigeria will be much better off with the introduction
of Value Management and a Law passed by the National Assembly to give it a Legal back.
8:10 INTRODUCTION
The main objective of this research work was to investigate if Government of Nigeria have any
role to play in promoting the application of Value Management in Nigeria. Secondly to establish
how the introduction of VM will help to address the menace of abandoned, and/or white elephant
project and its associated corruption in Nigeria. In this chapter, the overall conclusion of the
dissertation research and writing is presented with the limitations of this research accordingly.
The data collection procedure adopted and its analysis have assisted the researcher to achieve the
objectives of this research work as enumerated in the first chapter of this work. Moreover, the
pattern of this conclusion will follow the guidelines of Naoum (2013).Therefore the conclusions
are discussed according to these objectives.
1 Identify and examine other factors that make Value Management philosophy's awareness low
in Nigeria Construction Professionals and Industry
It was established from the literature reviews that the awareness of the Value management in
Nigeria is low in because of the lack of knowledge of the principles. It is only in the tertiary
institutions that course is been taught. The results of the interview conducted showed that the
professionals do not understand the principle.
The data analysis conducted on the responses of the respondents on chapter seven showed that
the majority of the professionals in the sectors of the industry do not know about Value
management. The lack of Government policies as indicated by the literature review, interviews
and questionnaire survey also contributed to the factors hampering the application of VM in
Nigeria.Finally, while the literature reviews showed that many countries where the VM is
practised have a local value management implementation guidelines and VM professional
bodies, there are none in Nigeria. This is a critical factor that militates against the awareness of
VM in Nigeria.
2 Establish how the introduction and application of Value Management in Nigerian Construction
Industry will help to address the menace of Abandoned, and or white Elephant Projects in
Nigeria.
Generally, the literatures review; interview and questionnaire survey conducted indicated that
Nigerian's procurement system is highly fragmented resulting in distortions of project objectives
Value management from the literature reviews helps in bringing coordination and clear alignment
of project objectives/outcomes. Research showed that VM helps to define the project
requirements, functions and values from client and end-users considerations. It entails that Value
management can be applied to deal with the distortions in project objectives and outcomes that
leads to project abandonment.The result and analysis of part C of the questionnaire showed that
Nigerian Construction do not enjoy the benefits of VM hence the preponderance of this menace.
3 Establish that the innovative introduction of End-Users as watch dogs from the conception,
design, development, commissioning and decommissioning stages of project will address this
menace.
The literature reviews have also revealed that the innovative core aims of Value Management and
its end-User perspective as captured in chapter two will help to address this menace, likewise the
questionnaire surveys. It is ironical that end User Input is minimal or non-existent in Nigeria as
revealed by the research. A successful and usable solution is much more likely if they are part of
the project at key points rather just at the time of request and at the time of deployment (Egeland,
2009)
The literature review from the chapter 2 of this research have indicated that VM among other
things revealed that Value Management (VM) has been recognised within the last decade as an
emerging paradigm that focuses on continuously increasing the value provided to the client and
is widely accepted as an important tool in the successful management of construction projects
(Ellis et al., 2005) as cited Saifulnizam & Coffey [internet] (2013).Therefore, it is possible to
achieve and sustain End-User's satisfaction through Value Management in Nigeria as shown from
literature and responses of the respondents.
The literature review have proved that the success of Value Management and other Construction
Modernisation methods in US, UK and globally is anchored on favourable policies of the
Government. The interviews and questionnaire survey were clearly unanimous that Government
favourable policies and regulations are needed to institutionalise the concept in
Nigeria.Therefore, Nigerian Government as confirmed by the research is greatly needed to
promote the application of Value Management in Nigeria.
It is my opinion that this research have proved clearly the two hypothesis of this research which
are as follows;To prove that when the end users (as watch dog) who are the ultimate beneficiary
of Governments projects, including the independent stakeholders who are not from the
originating organisation, are introduced into Nigerian Government projects from the conception,
design, development, commissioning and decommissioning stages of project, it will address this
menace.
Secondly, that the Federal Government have a role to play in promoting the application of Value
Management in the Construction Industry. Otherwise the corruptive tendencies in Nigerian
systems will frustrate it. The absence of clear-cut involvement of Government is the reason why
the past efforts to introduce this philosophy have failed. The data analysis from the literature
review, interviews and questionnaires surveys have proved these two hypotheses.
In the overall conclusion, Value management has the main capability to satisfy the general aim of
this research in Nigeria which is as follows:
1. To find a lasting solution to the menace of Abandoned, and or White Elephant Projects in
Nigerian?
2. To improve the understanding of Value Management in Nigerian Construction Industry.
3. To generally contribute towards improving the development of Project management culture
and philosophy in Nigeria
4. To facilitate rapid development of infrastructure as a means of facilitating economic growth
and social development in Nigerian
The limitations of the methodology used for this project are highlighted below and although
considerable efforts were made to minimise their impact on the overall validity of the research, it
is of course impossible to do this completely. However, it is the intention of the researcher that
these methodological shortfalls are borne in mind when assessing the results of the research, as
considerable effort was made to make sure that it does not affect the reliability of the results of
this research.
In the section four of this chapter six (6:40), the research gave details of the strenuous efforts he
made to collect official letter of introduction from Nigerian Embassy in UK and how it failed.
This intended letter of introduction to three government agencies would have enabled the
research to carry out in-depth analytical case studies on them to supplement the results from
other sources.
Perhaps the most serious limitation was the researcher himself. The active twenty-one years
experience of the researcher in Nigerian Construction industry, could not help but create a certain
mind-set that needed to be both accepted and understood. It was possible to overcome this
limitation, by taking a very deliberate, open-minded stance combined with greater criticality.
The researcher had planned to do a Newspaper publication of the questionnaire on one the
National Newspapers but the inability of the researcher to obtain a letter of approval from the
Embassy has as well truncated that intention.
All the information obtained by interviewing the respondents would have been richer if all the
proposed interviewee had accepted to be interviewed. Some of the respondents declined to be
interviewed on the excuse that they were not sure of the aims of the interview.
Value Management in Nigerian Construction Industry The Role of
Government. Page 73
5. Time and Cost of Telephone charges.
The time and the associated cost of the telephone interview didn't allow the researcher to spend
the intended duration on the interview as the researcher only dwelt on the necessary and punchy
questions based on the background of the interviewee only in orders to reduce costs to the barest
minimum.
In conclusion, it is worthy to note that this research would have achieved a betterresult if a
greater in-depth scope of research within the Construction Industry and among a wider scope of
stakeholders was undertaken, which must be conducted in a couple of years and months. The
truth is that this would necessitate the deployment of a bigger level of resources and timescale
obtainable in a PhD dissertation research which is beyond the scope of this MSc work.
CHAPTER NINE
9:10 INTRODUCTION
9.20 RECOMMENDATIONS
1. The Federal Government will need to encourage and promote the use of value Management in
the construction industry in Nigeria.
2. The Federal Government should as a matter of expediency, initiate and sponsors bills to the
National Assembly. This will lead to an Act of the parliament that will introduce value
management as one of Construction modernisations methods in Nigeria.
3. The Federal Government of Nigeria should in addition to the above formulate policies to
introduce and establish Partnering concept in Nigeria construction industry that will help the
application of Value Management in Nigeria. Partnering is a one of the modern construction
methods that will is not practised in Nigeria.
4. The end-users and all the stakeholders who have never been part of the procurement systems
should be incorporated to help to address the hydra-headed menace of corruption in the industry.
5. The application of Value Management in Nigeria should be integrated with Risk Management
to derive the maximum from the concept.
6. The private sector, professional bodies and associations in Nigeria should be encouraged to
collaborate with the Government to promote the philosophy in Nigeria. Moreover, a professional
body for Value Management specialists should be incorporated like other professional by Act of
National Assembly. This body should help to promote the application of VM in Nigeria by
organising seminars and other educational trainings to educate their members and other
associated members of other professional association's members and other stakeholders in the
Industry.
7. Nigerian version of the guidelines for the practice of value management should be formulated
Value Management in Nigerian Construction Industry The Role of
Government. Page 75
by the government in conjunction with the relevant bodies.
There are areas of study outside the scope of this dissertation research that can be researched
further to increase the effective of Value Management in Nigeria.
A future research can be carried on how to develop other construction modernisation methods in
Nigeria, especially Partnering Contract. This philosophy is the framework that should drive the
improvement of procurement system in Nigeria.
Secondly, a further study on how to develop local Value management guidelines that is purely
adaptable to Nigeria Construction industry. This guidelines and modalities should have a local
content that will take cognisance of the peculiarities of the industry
REFERENCES
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(Accessed 8th March, 2013)
Cumming, R. Modern Method of Construction and the impact on UK. Project report Submitted
for MSc. Kinston University, 2008.
Dallas, M.F. (2006) Value & Risk Management. A guide to best practice. Blackwell Publishing
Dell'Isola, A. J. (1982). Value engineering in the construction industry 3rd edition. Van Norstrand
Reinhold Company
Editorial (2012) White Elephant Projects. The Nation's Editorial. 28 October, Editorial page.
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consultants. Construction Management & Economics 23 (5):483-493
Fong, S. W. & Q. P. Shen (2000). Is the Hong Kong construction industry ready for value
management. International Journal of Project Management 18:317-326
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Dissertation), Dept. of Civil and Construction Engineering, UMIST
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abandoned-across-nigeria.html November 24, 2012 [Accessed on 7th, July 2013].
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www.tradeinvestnigeria.com/news/1141421.htm (Accessed 16th March 2013)
Dear Sir/Madam,
DISSERTATION RESEARCH WRITING QUESTIONNAIRE
RE: COVERING LETTER.
2. Establish how the introduction and application of Value Management in Nigerian Construction
Industry will help to address the menace of Abandoned, and or white Elephant Projects in
Nigeria.
3. Establish that the innovative introduction of end users as watch dogs from the conception,
design, and development, commissioning and decommissioning stages of project will address
this menace.
5. Establish the relation between Federal Government unalloyed and National Assembly
supports/promotion and success of application of Value Management philosophy.
CONFIDENTIALITY.
Your answers will be kept strictly confidential and the informations contained therein will be
used solely for the essence of this thesis only. No respondent's name or that of the organization
will be shown in the dissertation.
FEEDBACK TO RESPONDENTS
If you feel my research topic will be of any assistance to you, I would be happy to send to the
dissertation research findings accordingly.
Questions or enquiries concerning the research can be directed to the author the email at
grnigerian@gmail.com
I thank you most sincerely for your very valuable contribution to the research.
UchennaOkpalaunegbu
MSc. Construction Management
School of Civil Engineering
QUESTIONNAIRE
RESPONDENT'S PROFILE
Name:
Organisation:
Position:
Address:
Contact Telephone No:
SECTION A
Are Project abandonment, and or white elephant projects a common feature and menace in
Nigerian Construction landscape?
3 Do you agree that abandoned and white elephant project is a menace in Nigeria?
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
SECTION B
To what extent do the construction professionals, Industry players and Government know
about the application of Philosophy of Value management?
5 To what extent do you agree that Value Management in Construction is well practised in
Nigerian Construction Industry?
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
6 To what extent do you agree that the practise of VM in Nigeria will address the issue of
Abandoned and white elephant project?
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
SECTION C
To what extent will the introduction of end users and other independent stakeholders in the
conception, design, development, commissioning and decommissioning stages of project
address this menace.
7 Do you agree that Nigerian Government have the right procurement systems or method
of award of contract/supervision in place?
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
8 If yes do you agree that it needs improvement for better efficiency?
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
9 To what extent do you agree that introduction of other independent stakeholders/ end-
users in this process from inception to commissioning will make a difference.
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
SECTION D
SECTION E
Does the Federal Government of Nigeria have any contributory role to play in promoting
the application of Value Management and making it a success?
13 Would agree with the statement that because in most of the cases Government is just
client and not end-user of the project they initiate therefore they can't be a position to
really define the end-user's requirements.
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
14 Based on your knowledge of the Nigerian system do you agree that Government
intervention is a key factor in promoting any philosophy or strategy that is needed to
advance the course of the citizenry.
Agree ( ) Strongly Agree ( ) Disagree ( ) Strongly Disagree ( ) Neither Agree nor
Disagree ( )
15 Do you perceive Government of Nigeria have any role to play in the promotion of Value
Management in the Construction Industry.
Yes ( ) or No ( )
I am fully aware that are extremely busy with tight schedule, in spite of which you still found out
time to complete this questionnaire. I want to sincerely thank you for this your kind gesture
Appendix 3
1. Prof Chukwuma Soludo, CFR (former Governor Nigerian Central Bank & Chairman Board of
Directors: Nigerian Security Printing & Minting Plc.).
He was the immediate former CBN Governor and Chairman NSPM, who as the chief Executive
and Chairman supervised the award and administration of high profile projects for the CBN and
NSPM respectively running into mega sums and scattered almost into all the thirty-six States of
Nigeria. The Consultancy firm owned by the researcher participated in one of these projects as a
Principal Consultant
He is the Mayor of Chairman Aguata Local Government Council in the Anambra State of South
Eastern Nigeria.
All the interviews were mainly and majorly based on the issues and problems associated with
Project Management, Construction in Nigeria. It also touched on the envisaged interventional
role of the Government in promoting and encouraging the application of VM in Nigeria.
The interviewee was Owelle (Prince) C.N. Ukachukwu, MHR, MFR., he is Chairman of
SNECOU Group Ltd, a giant player in Nigerian Construction and owner and constructors of
Prince &Princess Estate, Abuja that happens to be the largest estate in Nigeria with five
thousands housing units. Present SNECOU Group won the contract for the construction of over
thirty thousands house for the Federal Government/Nigerian Labour Congress Mass Housing
programme.
The interviewee is the Chief Executive Officer/ Managing Director of PAUL-B Nigerian Plc., he
is a Civil Engineer with over twenty-five years cognitive experience in the industry. PAUL-B
He is a Civil Engineer and a Director of Federal Highways in the Federal Ministry of Works,
Abuja. His schedule of duties with his thirty years experience made him invaluable for this
research.
He is a third time Member of House of Representatives since the year 2003 and sits a House
Committee Chairman. He is representing Orumba North/South federal Constituency. An astute
Law maker par excellence.
She was a one time speaker of Anambra State House of Assembly in the South-Eastern Nigeria
and Presently a Member of the House of Representatives of the National Assembly. She is
representing Aguata Federal Constituency