ABSTRACT

The main purpose of this study is to identify the challenges face by contractors in the local
construction industry of the Sri Lanka and to suggest mitigation measures to identify their effects
and also to minimize effects .This study could be considered as a very timely and needful area of
research in the present context of Sri Lankan construction industry.

In this study, a questionnaire survey will be carried out among contractors, consultants and industry
professionals(administrators, professionals,technicians,supervisors, and similar grades).Mainly two
type of questionnaire surveys are going to be done under the surveying of the field as institutional
survey, individual survey prior to the final survey to get knowledge in the field. A preliminary
survey was conducted in order to get ideas from industry professionals and skilled labour through
face to face interviews.Random sampling is expected to be used in order to select a representative
sample from the population. Analyzing method used in this study will be based on Relative
important index (RII) which can be developed from severity index (SI) and frequency index
(FI).This RII will be adopted to find out influencing or important challenges by ranking the
identified challenges in ascending order.

According to the previous studies some major areas were have been identified and these were used
as a starting point on challenges faced by contractors in construction industry of Sri Lanka. From
the result of this study, some useful suggestions to mitigate and overcome the civil engineering
industrial challenges in the Sri Lankan context will be prescribed which would be helpful to uplift
the industry. Also the results would be helpful in carrying out future researches.

0
CHAPTER ONE

1. INTRODUCTION

The construction sector is one of the components major of the Sri Lankan economy according to
Annual Report of Central Bank 2012 of the Sri Lanka.Construction industry mainly provide for
uplifting of life style and living standards of the people.As it is mentioned in Annual Report
ofCentralBank 2012, construction industry accounted for nearly 7% of GPD for last few years
including 2012.In Sri Lanka, construction is the fourth highest sector after services, Manufacturing
and agriculture. The government has declared its intention to transform Sri Lanka in to Aviation,
naval, commercial, energy and knowledge hub and develop the country into strategically important
economic centre in the Asian region.

Recently, major construction projects consist of infrastructure development,building construction

including power stations and highways.Activities of government sector are mainly concentrated in
infrastructure development projects,including construction of roads, bridge,flyovers etc.But
construction of buildings both government and private sector contribution is very important.

Now construction industry has awakened and expanded to all parts as never seen before in Sri
Lanka.Due to the re-integration of the Northern and Eastern province with the rest of the country,
priority has been given to infrastructure while getting new exposures for the industry by working
together with foreign contractors and consultants. In addition, our construction industry has reached
to offer our technical knowledge to many countries in the Asian region.

Highways construction is the new experience in construction industry while getting huge
knowledge from other developed countries. High rise building construction industry is also a major
component, the Colombo while being the capital city of Sri Lanka, it is undergoing a major change
with new tall buildings of commercial, official and residential nature, In other parts of the country
including the north and east is also experiencing a huge amounts of construction in both building
projects and infrastructure development.

But, it is the time to adopt very effective and efficient construction management practices in our
country to reach as developed country.So it is very important to face coming challenges in effective
manner & pre-identification and forecasting on unforeseen future of construction industry.

1
It has been documented through the past researches and studies which are conducted in this field
that the construction industry of Sri Lanka is facing many problems and challenges .Commonly in
developing countries, these problem are compound alongside a general situation of socio-economic
stress,weakness of institutional and a general inability to meet many restraints and others many
reasons.These problems have become greater in extent and severe in recent years in many
developing countries.

It must be consider the present challenges of the industry to get counter active measure in order to
uplift the industry to meet the future and present challenges which needs immediate attention for the
development of the construction industry in Sri Lanka.
In Sri Lanka,The construction industry is being faced many problems and challenges. These are can
categorise under sections of financial, government policies/practices, technology, management and
coordination, resources,safety, social, Skill and others. A standard civil Engineering project is
expected to meet the requirement of cost, time and quality, which are significant extend related on
performance of involved workforce and professional. Challenges faceby contractor should be
mitigated as soon as possible to get explosions in construction industry to Sri Lanka become as
developed country.

1.1 Significance of the study

Although many researchers have studied on challenges face by contractors which the key elements
are affecting the construction industry, given motivation and solution are not considerably reliable
to corporate with the construction industry. Many issues can be imagine as to why there is a
shortage of studies in this regard. It may be due to the low interest shown by researches mainly due
to inadequate availability of previous research data.

A great effort and time was spent to find out past research on this topic. In addition, there are
logical steps to find out various causes, effects and mitigating measures to the problems are arising
around the construction industry. This research projects laid in foundation in this field.

According to our rough surveys on construction industry, some inter relation between contactor,
client and consultants must be developed furthermore to increase effectiveness and efficient in
construction industry, because the key players in the construction industry are contractors, clients
and consultants. Here cost, time, construction should be manage under very control condition

2
according to the findings which are done professionals of researches to overcome challenges are
arising around the construction industry. But the contractor is main responsible person according to
the previous researches while having better contribution by client, consults beyond their responsible

1.2 Objective of the study

Major objective of the study is to identify problems and challenges faced by contractors in the
constructions industry of Sri Lanka and propose some mitigation measures on the construction
industry.

The specific objectives of this study are listed below

 Identify challenges faced by contractors by previous researches and projects.

 Identify challenges faced by contractors currently the construction industry and also
consultant, client in both private and government sector.

 Identify major contributory factor for challenges arising in construction industry.

 Introduce mitigation measures which are more realistic to construction industry.

1.3 Scope of the study

This study is intended to cover the building and road construction projects carried out by both
private and government sector for examples highways, high rise buildings and bridges.

Data are expected to be collected from around 100construction organizations covering contract size
categorizations from c1 to c5 according to ICTAD classification.

3
CHAPTER TWO

LITERATURE REVIEW

2.1 Type of civil Engineering project

Civil Engineering construction projects include the erection of infrastructure development facilities
and building construction works of the infrastructure development projects like construction of
highways, bridges, flyovers and ports are however connected to government but building
construction industry involved active participation of both government and private sector. The type
of building construction projects can be divided into three parts

1. High-rise building (number of stories greater than 10)

2. Medium scale building (number of stories between 3-10)

3. Small scale building (number of stories less than three)

High-rise buildings are mainly constructed for, commercial and residential purposes. There are
many high-rise building projects completed in the recent years and many projects are under
construction. But these projects are concentrated in cities, in Colombo and suburbs. Most of those
are owned and constructed by the private sector. Since the investment cost is very high, Those
projects generally are carried out by companies having ICTAD grading C2 and above.

Medium scale projects are generally scatted all over the Sri Lanka. Cities and suburbs have a
number of projects, which are currently undergoing and recently completed. These building are
used for offices, commercial activity and residential purpose (Example apartment complex,
shopping complex). These building are commonly owned and constructed by private sectors. Here
too, consultant plays an important role. Considering the cost involved companies having ICTAD
grading of C4 and above can carry out construction of this type buildings.

Small-scale constructions project mainly consist of residential facilities, especially for individual
dwelling units. Generally companies having lesser ICTAD grades are involved in these projects.

2.2 Past literature related this topic

In the Sri Lankan context of building and road construction, at present there are very few previously
completed research related connected to “Challenges faced by contractor in construction industry of
Sri Lanka”. But there are few studies available which superficially touch this area of study.
4
Related Studies conducted in Sri Lanka and in few developing countries indicate the importance of
analysing and mitigating the challenges faced by contractors in construction industry. Some
important points of the above studies are discussed below.

2.2.1 A study carried out on the South African construction industry named “An exploratory
study of problem facing small contractors in the North West province of South Africa, Conducted
by University of Johannesburg, Department of construction management and Quantity
surveying, Johannesburg South Africa.

The main objective of this study was to examine the problems that are facing small contractors in
the North West Province of South Africa. In undertaking the study a comprehensive literature
review was conducted and it was supplemented by primary data gathering. A questionnaire was sent
to over 100 contractors in the North West Province and 57 questionnaires were returned. The major
findings of the research were that the problems facing small contractors were the following;
Government not paying research were that the problems facing small contractors were the
following; Government not paying on time, lack of capital and difficulty in arranging guarantees,
lack of technical skills, lack of business management skills. The importance of small contractors in
South Africa has been recognized by many researchers and policy makers. The contribution of
small contractors to the creation of jobs and to the alleviation of poverty has been recognized by
many Governments in the Developing Countries including the South African Government. The aim
of the study was to examine the problems facing contractors in South Africa focusing on the North
West Province. The study made recommendations for a success small contractor development
programme.

2.2.2 A study by the department of building, National university of Singapore named

“Challenge of construction industry in developing countries; lesson from various countries”.

This paper considers some of the challenges facing the construction industries in developing
countries. The main issues addressed are: construction industry development; globalization; culture;
and the environment. In each case, the issue is analyzed from the perspective of the developing
countries, and the main implications and present challenges highlighted. Lessons are then drawn
mainly from the recent experience of other countries all levels of development, especially
Singapore, to highlight possible ways by which progress can be made in the developing countries.
5
A research agenda is presented and the important role of researchers in the drive to improve the
performance of the construction industries of the developing countries in the light of their resource
constraints and administrative weaknesses is outlined.

2.2.3 “Problem facing small and medium size contractors in Swaziland”. by the Department of
construction management and quantity surveying, University of Johannesburg, Johannesburg
South Africa.

The paper explores the problems facing Small and Medium Size Contractors in Swaziland. The
construction sector in Swaziland is not only a significant source of direct employment but also a
sector which contributes, through its wide range of projects and operations. The paper will also look
at the current government initiatives that had been put in place to address the challenges and
problems in order to ensure that contractors are successful. There is a high failure rate among small
and medium size contractors in Swaziland. These contractors fail for a variety of reasons ranging
from lack of adequate capacity to handle the uniqueness, complexity and risks in contracting, lack
of effective management, lack of business management, poor record keeping and inadequate
technical, financial and contract managerial skills. Drawing on research on small and medium size
contractors, the paper used both secondary and primary literature. 100 questionnaires were
distributed to different role players in the construction sector in Swaziland. The response rate was
eighty seven (87) percent. The paper reveals that the most problems facing small and medium size
contractors in Swaziland is lack of access to finance and late payment by government. The paper
closes with recommendations and key lessons for the future.

2.2.4 “Challenges faced by the construction industry in Sri Lanka: perspective of clients and
contractors” the book was published by Nayanthara De Silva, R. W. D. W. C. A. B.
Rajakaruna, K. A. T. N. Bandara, Department of Building Economics, University of
Moratuwa.

This research has focused to identify critical challengers which need immediate attention and
effective mechanisms for development of the construction industry in Sri Lanka. It has been
documented that the construction industry is being faced by many problems and challenges. In
developing countries, these problems are compounded alongside a general situation of socio-
economic stress, chronic resource shortages, institutional weaknesses and a general inability to deal
with the key issues by inadequate investment plans and changing government priorities due to
various sociological, economic and political constraints. In Sri Lanka, the fluctuating construction
6
workload, unfair competition by foreign contractors, skills drain and shortages and high cost of
developing skills were the main identified problems
The research revealed that there are many problems faced by the construction industry in Sri Lanka
as seen by consultants and contractors. They are from ten different areas includingFinancial,
Government Policies, Technology, Management and Co-ordination, Safety, Research and
Development, Resource, Training and Development etc.

2.2.5 “Problem faced by contractors in achieving excellence in the Sri Lanka construction
industry” book was published by B.SC.ENG.C.ENG,MIE(S.L), G.B.N. Wimalasooriya,
university of Moratuwa.

This research was undertaken to identify the most pressing problems faced by small scale
contractors. The research work was done in for phases, identify pressing problems, categories them
into suitable areas, data collection and analysis. The main areas of problems in this research project
are technical, financial, construction equipment, material, social and contract administration

2.3 Methodology and analytical methods adopted in previous research papers.

As mentioned above, few past studies are available related to the current researches. Therefore
methodology adopted in some other studies, which superficially touches the study area of this
research project are analyzed to develop an efficient analytical method for this study. Some of those
are listed below.

2.3.1 “Problem faced by contractors in achieving excellence in the Sri Lanka construction
industry” book was published by B.SC.ENG.C.ENG, MIE (S.L), G.B.N. Wimalasooriya,
university of Moratuwa.

It was identified that formation of a questionnaire to obtain relevant information is one of the
major tasks requiring careful planning and considerable experience on small scale contractors. Thus
formulation of questionnaire was carried out after pilot study executed using the following methods.
1. Discussion with 5 small scale contractors, 8 other experts representing client,
engineers/consultants and some expert from ICTAD and ACCSL.
2. Extracting some detail from a book published by ILO “Guide lines for the Development of
small scale construction enterprise”

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Based on the above information following eight major section were identify to be included in the
questionnaire
The questionnaire was sent to 225 selected contractors covering the entire country. The
contractors were selected both from the National Registry and from those who are registered with
major government organizations without ICTAD registration. As there was poor response,
reminders were sent to 195 contractors after 3 weeks of posting the questionnaire. Out of 225
contractors only 53 responded which almost 24% of the number of questionnaire was posted.
After the data collection through questionnaires and interviews, basically two methods were
adopted to present the data collected for analysis.
1. Presentation of raw data
2. Presentation of summarized data

2.3.2 “Challenges faced by the construction industry in Sri Lanka: perspective of clients and
contractors” the book was published by Nayanthara De Silva, R. W. D. W. C. A. B.
Rajakaruna, K. A. T. N. Bandara, Department of Building Economics, University of
Moratuwa.

2.3.2.1 Research Design

Research was designed to identify its objectives through an industry-wide questionnaire survey.
Since consultants, contractors, suppliers and specialist contactors are the main parties dominating
the construction industry; it was decided to elicit their knowledge as experts views to explore the
research objectives. However, due to the limited time and other several constrains, suppliers and
specialist contracts were omitted. The vacuum in the knowledge extraction due to omission of
suppliers and specialist contracts from the survey was minimized by selecting experts from large
consultant and contractor organizations (eg. Grade 1 to Grade 2), which handles a wide variety of
construction activities.

2.2Questionnaire Design and Questionnaire Survey

The questionnaire was developed into three sections. Several important questions were grouped
under section one to identify the profile of the respondent. Section two was focused to identify
challenges and problems of the construction industry. In this section 61 existing challenges and
problems obtained from the literature were shown under 10 areas including, financial, government
policies /practices, technology, management and coordination, research and development (R&D),

8
resources, safety, training and development, social, and skills . In the third section, 20 motivators to
improve the image of the industry were listed.

2.3 Data Analyzing

T-test was used as a tool to identify the significant challengers, and motivators. Evaluation was
carried out by using “Statistical Package for Social Science” (SPSS) software.
Further, factor analysis was carried out to understand how the significant challengers and
motivators work together. Here, the most effective and leading factors that could change the current
practices in the industry to achieve a good image can be established using factor analysis (FA). In
this analysis, the important factors were established from those whose Eigen values are greater than
or equal to 1, since an Eigen value is a measure of how a standard variable contributes to the
principal components. A component with an Eigen value of less than 1 is considered as less
important and can therefore be ignored and omitted .
2.3.3. S. M. S. Samarakoon, “Causes and Effect in medium scale Building construction in Sri
Lanka – Dissertation submitted to Department of Civil Engineering, University of Moratuwa
in partial fulfillment of the Degree of Master of Business Administration in project
management , 2009. Supervised by Dr. L. L Ekanayake.

In this research study a questionnaire survey was used among the construction industry in Sri
Lanka. The related factors were identified using the finding of previous researches and interviewing
the professionals’ medium scale building construction project. A pilot survey was carried out
among 10 professionals working in related field.
The sample was selected according to snowball sampling method. Snowball sampling method non
probability sampling method which is preferred when it is difficult to get response from sample
selected at random.
The questionnaire was distributed using email and manual means, i.e. by hand and post.
Important and severity of each cases and effect was calculate using the important index and severity
index. By using those two indices, relative important index was calculated. This relative important
index was used to rank the top most causes and effects. This was done separately for responses of
consultant and contractors.
Then the agreements among these groups were checked using Spearman’sRank correlation
coefficient.
The statistical method used to analyze the data using Frequency index, Severity index, Importance
index.

9
CHAPTER THREE

METHODOLOGY

A methodology was developed to conduct the study on challenges faced by contractor of

construction industry in Sri Lanka. Selected analytical method and analysis method are discussed
below.

3.1 Preliminary survey

Using the literature review a questionnaire was developed to identify the most significant
challenges faced by contractors (Questionnaire-Appendix A),A 26 number of challenges covering
major seven areas were included.From that there will be checked whether they are ‘Strongly
affected’, ‘Affected’ ,’Slightly affected’ or ‘Not affected’.Contractor’s ideas and suggestions were
observed by interviewing most related industry challenges. After that, preliminary survey were
expanded up to major 15 areas and increased questionnaires up to 50.
According to our preliminary survey there are 10 major areas and 51 questions. Follows listed
major areas and detail questions. (Questionnaire appendix B).

1). Financial challenges

a). Material price fluctuation
b). Law profit margin.
c). Payment delay by client
d). High transport cost
e).High price of spare part of plant equipment
f). Cash flow difficulties
g).Less flexibility of getting bank credit facility
h). High bank loan interest rate
i).Suppliers reluctant to give loan due to less Guarantee of contractor.

2. Government policies and Practices.

a). Government policies on taxes.
b). Political instability.
c). Law level of government support in construction.

10
3. Technical knowledge
a). Poor English knowledge.
b). Law level of new technology development
c). Inadequate technology knowledge
d). Fresh graduate joint in the field
e). Low level of IT usage

4. Discrepancies between client/ consultant contractor

a). Unnecessary strict quality control and unrealistic standards.
b). Maintain harmonies relationship with client or consultant
c). Instruction given by client not clear or not adequate
d). Most instruction given by client/consultant verbal
e). Difficulties of coordination between consultant, contractor and sub-contractors
f). Insufficient detail provide for drawing by client.
g) Client / consultant reluctant to explain or clarify measurement/bill when necessary
h). Client have not adequate technology knowledge.

5. Management and coordination

a). Poor cost planning.
b). Poor documentation process
c).Poor communication between client and consultant
d). Lack of progress monitoring
e). Poor storage, Insufficient handling and utilization of construction material

6. Resource
a). Lack of construction material site itself.
b). Unnecessary wastage in construction site
c).Lack of high technical construction equipment

7. Safety challenges.
a). Inadequate safety precaution.
b). Limited fund for safety precaution
c). Limited knowledge in safety precaution
d).Law level of employment of safety officers
e). Improper implementation of safety rule
11
8. Social factors
a). Inadequate health in construction.
b). Law level of facility provide for workers.
c). Poor morale of employee due to family burden or due to remoteness of work place from their
home
e) Bad habit of employee such as drunkenness.
f).High environmental impact

9) Skill of employee
a).Lack of skill laboures.
b). Scarcity of skill availability in the construction site
c). High salary rate for skill labours
d).Inadequate skill development programme.

10). Competition for contract

a).High competition between local contractors.
b).Foreign contractors joint in construction field.
c).Due to high competition for bidding many contract awarded at low estimated rate.

3.2 Detailed survey

It was decided to adopt a postal questionnaire survey with the reply paid envelope for this study. In
addition, few interviews are tobe carried out considering their effective and efficient results if time
permits. The questionnaire will be distributed using manual means by hand and post.
The sample size was selected as 100, and considering response percentage 60% totally 150
questionnaire forms will be sent to industry.
The sample was selected according to Random sampling method which suitable for our scope of the
study.
Two type of questionnaire were expected to be used for data collection.

i). Institutional Questionnaire survey among contractors

ii) Individual Questionnaire survey among Administrators, Engineers, Technicians, Supervisors and
similar grades
For individual questionnaire, the contact details are expected to get from professional bodies like
IESL, NAITA, and Institute of Architects etc.[5]
12
3.3 Analytical method

The frequency and severity of each challenges and effect was calculated frequency index and
severity index. From using those two indexes, Relative importance index was calculated and it
was used to rank the top most challenges faced by contractors in each categories.
To find out more suitable mitigation measure, important index was used to rank the measures. The
statically method used to analyze the data is briefly discussed below. [6]
Frequency of occurrence
1-Rarely
2-Some times
3-often
4-Always

Frequency index (FI) = ∑ ai n i

N

ai= Constant for given by each respond

ni= Frequency of response
N=Total number of response

Above frequency index was used to categorize factors according to Frequency of occurrence
Degree of severity.

1-Little
2-Modarate
3-Great
4-Extream

Severity index (SI) = ∑aini

N

13
ai= Constant for given by each respond
ni= Frequency of response
N=Total number of response

This index was used to categorize factors according to the severity .Finally Relative important index
was calculated to rank the factors ascending order. To analyze this tabular form was used. Using
this tabular form most critical challenges were calculated.

Relative important index (RII) = (FI)*(SI)

FI= Frequency index

SI= Severity Index

For calculation process we have to plan utilize SPSS (Statistical Package for Social Science)
version 16.0

14
CHAPTER FOUR

ANALYSIS OF RESULTS

4.1General
According to our project proposal, we prepared questionnaire including major ten areas covering all
possible challenge in construction industry. The questionnaire is a multiple-choice questionnaire.
But through such questionnaire we would not be able to get real idea regarding the project so we
firstly did industrial preliminary survey before reaching to detail questionnaire survey. in this
chapter we analysis the information which are gathered from the questionnaire survey.

4.2 Questionnaire response rate

A detail questionnaire was prepared and sends to different contractors in the Sri Lanka, survey was
carried out over the period from March 2012 to June 2012 and the response rate is shown in below.

Table No. 4.1Questionnaire response rate

Amount of received
Method of
Amount of send Total Percentage
questionnaire sent Private Government

By hand 21717
65 41 17 58 86.56%
By post 25 3 6 9 36.00%
Total 90 44 23 67 74.44%

4.3 Identification of the major challenges

The frequency index, severity index and relative importance index of major challenges are shown in
below table in each table, sub problems are categorize under major problems based on the
frequency of occurrence and severity of the problem. But we finalized results using Relative
Importance Index (RII).Below indicate analysis results.

15
4.3.1 Major problems - Financial challenges

Under financial challenge law profit margin, Cash flow difficulties, High bank loan interest rate,
High transport cost are major identified problems according to their Relative important index.
Analysis result of financial challenge Law profit margin in construction industry is common
problem in Sri Lankan construction industry. The reason for this is competition between local
contractors due to this competition at the bidding phase many contract accepted law rate so profit is
very small.
Another major problem is cash flow difficulties. In many site which we observed they hadn’t obtain
S-curve for cash flow some times to avoid this problem they had to claimed bank loan but it take
several months to approve this bank loan so contractors discourage to obtain bank loan. Also due to
high bank loan interest rate contractors faced cash flow problem and it affected to reduce interest
rate also.
Table No: 4.2 Analysis result for financial challenge

problem total of total of

problem response FI SI RII
No frequency severity

material price
1 148 149 67 2.21 2.22 4.91
fluctuation
2 law profit margin. 181 158 67 2.70 2.36 6.37
payment delay by
3 143 119 67 2.13 1.78 3.79
client
4 high transport cost 153 134 67 2.28 2.00 4.57
Difficulties of
operation and
maintain of plant
5 157 134 67 2.34 2.00 4.69
equipment due to
high prices of spare
part.
Unfair duration of
payments for part
6 162 157 67 2.42 2.34 5.67
payment bills & it
affect to cash flow.
Less feasibility of
7 getting bank credit 124 115 67 1.85 1.72 3.18
facility
High bank load
8 134 153 67 2.00 2.28 4.57
interest rate
Suppliers reluctant to
give loan due to less
9 153 162 67 2.28 2.42 5.52
guarantee of
contractor
16
 7.00

6.00
Relative importan index

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3 4 5 6 7 8 9
Problem no

Fig No: 4.1 RII for Financial challenges

4.3.2 Major problems -Government policies and Practices.

Specialty of this problem area is only for government, below responses observed by government
contractors. All sub problems are shown below have similarity of occurrence and severity in the
construction industry.

Table 4.3 Analysis result of Government policies and Practices

Problem Total of Total of

Problem Response FI SI RII
No frequency severity

Government policies on
1 32 29 23 1.40 1.27 1.78
taxes
2 Political instability 32 35 23 1.40 1.52 2.14
Law level of government
3 35 32 23 1.54 1.40 2.16
support on construction
Corruption &favourism
4 32 35 23 1.40 1.54 2.16
of government officers
17
 2.50

2.00
Relative Important Index

1.50

1.00

0.50

0.00
1 2 3 4
Problem no:

Fig No 4.2RII for Government policies and Practices challenges

4.3.3 Major problems - Technical knowledge.

Inadequate technology knowledge, Poor English knowledge are major problems in this area. This
problems can easily eliminated by motivators (eg: introducing Conducting awareness
program/workshops, Encourage engineers to take extra knowledge) for construction industry to Sri
Lanka.
Table 4.4 Analysis result of Technical knowledge
Problem Total of Total of
Problem Response FI SI RII
No frequency severity
1 Poor English knowledge 143 162 67 2.13 2.42 5.16
Low level of new
2 124 124 67 1.85 1.85 3.43
technology development
Inadequate technology
3 147 161 67 2.19 2.40 5.27
knowledge
Fresh graduates joint in
4 107 107 67 1.60 1.60 2.55
the field.
5 Low level usage of IT 129 129 67 1.93 1.93 3.71

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 6.00

5.00
Relative Important Index

4.00

3.00

2.00

1.00

0.00
1 2 Problem No 3 4

Fig No 4.3RII for Technical knowledge

4.3.4 Major problems - Discrepancies between client/ consultant contractor.

Due toClient have not adequate technical knowledge, Maintain harmonies relationship with
client/consultant are major discrepancies under this problem category.

19
 Table 4.5 Analysis result of Discrepancies between client/ consultant contractor.
Problem Total of Total of Response
Problem FI SI RII
No frequency severity
1 Unnecessary strict quality 139 139 67 2.07 2.07 4.30
control and unrealistic
standards
2 Maintain harmonies 156 147 67 2.33 2.19 5.11
relationship with
client/consultant
3 Instruction given by client 152 143 67 2.27 2.13 4.84
not clear or adequate
4 Most of instruction given 143 143 67 2.13 2.13 4.56
by client/contractor are
verbal
5 Difficulties of 143 134 67 2.13 2.00 4.27
coordination between
consultant, contractor and
sub-contractor
6 Insufficient detail provide 143 125 67 2.13 1.86 3.98
for drawing by client.
7 Client/consultant reluctant 124 129 67 1.85 1.93 3.56
to explain or clarify
Measurement/bill when
necessary
8 Client have not adequate 151 170 67 2.25 2.54 5.72
technical knowledge

20
 7.00

6.00

5.00
Relative Important Index

4.00

3.00

2.00

1.00

0.00
1 2 3 4 5 6 7 8
Problem No

Fig No 4.4RII forDiscrepancies between client/ consultant contractor.

4.3.5 Major problems – Management and coordination

Poor storage, insufficient handling and utilization of construction material, Lack of progress
monitoring are major management problem according to our questionnaire survey. Due to these
problems unnecessary wastage and many managerial problems had been arisen. Using good quality
management, these problems can avoid.

21
 Table 4.6 Analysis result of Management and coordination.
Problem Total of Total of
Problem Response FI SI RII
No frequency severity
1 Poor cost planning. 143 116 67 2.13 1.73 3.70
2 Poor documentation process 116 120 67 1.73 1.79 3.10
Poor communication
3 124 125 67 1.85 1.87 3.45
between client/consultant
4 Lack of progress monitoring 138 142 67 2.06 2.12 4.37
Poor storage ,insufficient
5 handling and utilization of 156 170 67 2.33 2.54 5.91
construction material

7.00

6.00
Relative Important Index

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3 4 5
Problem No

Fig No 4.5RII for Management and coordination challenges

4.3.6 Major problems – Resource

Unnecessary wastage is considerable problem under this problem category keeping quality storage
method and proper handling of construction material can be avoid this problem. Lack of
construction material in site also big issue for under this problem category transport cost increase
due to this problem.

22
 Table No4.7 Analysis result of Resource challenge
Problem total of total of
Problem Response FI SI RII
No frequency severity
1 Lack of 152 149 67 2.27 2.22 5.05
construction
material site itself
2 Unnecessary 165 169 67 2.46 2.52 6.21
wastage in
construction site
3 Lack of high 127 125 67 1.90 1.87 3.54
technical
construction
equipment

7.00

6.00
Relative Important Index

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3
Problem No

Fig No 4.6RII for Resource challenges

23
4.3.7 Major problems – Safety challenges

In many construction sites that we were visited, there was not allocate fund for safety precaution.
Unfortunately, some sites there was not at least a first aid box and not adequate safety equipment
like helmet, boot. So if there happen an injury or an accident the victim person have to face much
inconvenience. In many sites there were not safety officers so this is big problem in construction
industry of Sri Lanka .Allocation fund for safety and awareness all relevant parties about safety can
be avoid these challenge.

Table No4.8 Analysis result of Safety challenges

Problem total of total of

Problem Response FI SI RII
No frequency severity
Inadequate safety
1 148 143 67 2.21 2.13 4.71
precaution
Limited fund for safety
2 186 168 67 2.78 2.51 6.96
precaution.
Limited knowledge in
3 143 148 67 2.13 2.21 4.71
safety precaution
Improper implementation
4 186 162 67 2.78 2.42 6.71
of safety rules

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 8.00

7.00

6.00
Relative Important Index

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3 4
Problem No

Fig No 4.7RII for Safety challenges

4.3.8 Major problems –Social factors

Law level of facility provided for workers, Bad habit of employee such as drunkenness, Poor
morale of employee due to family burden or due to remoteness of work place from their home are
major problem under this problem category. Due to these reason employee efficiency and their
work quality reduce these problems can be reduce increasing salary ,wages and providing facility
for employee but some problems are very complicated .

25
 Table No4.9 Analysis result of Social factors
Problem Total of Total of
Problem Response FI SI RII
No frequency severity
Inadequate health in
1 139 124 67 2.07 1.85 3.84
construction
Low level of facility
2 191 177 67 2.85 2.64 7.53
provided for workers.
Poor morale of
employee due to
3 family burden or due 168 153 67 2.51 2.28 5.73
to remoteness of work
place from their home
Bad habit of employee
4 196 158 67 2.93 2.36 6.90
such as drunkenness
High environmental
5 139 134 67 2.07 2.00 4.15
impact

8.00

7.00
Relative Importance Index

6.00

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3 4 5
Problem No

Fig No 4.8RII for Social factors

26
4.3.9 Major problems –Skill of employee

Scarcity of skill availability in the construction site and inadequate skill development program are
major problems under this problem category. Consider Sri Lanka there are very few institute for
skill development or technical knowledge developmentnow with the government involvement
National Apprentice and Industrial Training Authority (NAITA), ICTAD, and a few other technical
training institutes are conducting training and developing programs

Table No4.10 Analysis result of Skill of employee

Problem total of total of
Problem Response FI SI RII
No frequency severity
1 Lack of skill labours 134 143 67 2.00 2.13 4.27
Scarcity of skill
2 availability in the 177 153 67 2.64 2.28 6.03
construction site
High salary rate for
3 134 136 67 2.00 2.03 4.06
skill labour
Inadequate skill
4 179 157 67 2.67 2.34 6.26
development program

7.00

6.00
Relative Important index

5.00

4.00

3.00

2.00

1.00

0.00
1 2 3 4
Problem No

Fig No 4.9 RII for Skill of employee

27
4.3.10 Major problems –Competition for contract
Due to high, competitive for bidding many contract awarded at an unrealistically low estimate of
cost and High competition between local contractors are major problems under this problem
category. In present day ,day by day construction industry expand so competition also increase.

Table No4.11 Analysis result Competition for contract

Problem Total of total of
Problem Response FI SI RII
No frequency severity
Due to high,
competitive for
bidding many
1 contractawarded at 161 175 67 2.40 2.61 6.28
an unrealistically
low estimate of
cost.
Foreign contractors
2 63 76 67 0.94 1.13 1.07
get many jobs
High competition
3 between local 161 160 67 2.40 2.39 5.74
contractors

28
 7.00

6.00

5.00
Relative Important Index

4.00

3.00

2.00

1.00

0.00
1 2 3
problem No

Fig No 4.10 RII for Competition for contract4.3.11 Major identified problem

Table No4.12 Analysis major industry challenge

Major challenge area Major problem

Financial law profit margin

Government and policies Law level of government support on
construction
Construction knowledge Inadequate technology knowledge
Discrepancies between Client & Contractor Client have not adequate technical knowledge
Management and coordination Poor storage ,insufficient handling and
utilization of construction material
Resources Unnecessary wastage in construction site
Safety Limited fund for safety precaution.
Social Low level of facility provided for workers
Skill of employee Inadequate skill development program
Competition of contract Due to high, competitive for bidding many
contract awarded at an unrealistically low
estimate of cost.

29
CHAPTER FIVE
MOTIVATION FACTORS

5.1 Industry Motivators

The project revealed that currently, there are many problems faced by the construction industry
In Sri Lanka as seen by consultants and contractors, some motivators are required to motives
construction industry, which are more affect to Sri Lankan economy to overcome such aspects from
the consultants and contractors perspectives. Some motivators, which are abstracted from previous
studies related construction industry of Sri Lanka, related to challenges what we found in survey.
However, those motivators should improve to become more coincidence with new challenges
describing below.

1) Enhancing Skills and Efficiency

To improve skills of officers in construction industry and to prevent wastage of construction

material and working hours in our construction industry, some motivators should be motivated (etc:
upgrading at best time, introducing bonus).

2) Improving Professionalism

That professionalism can improve through enhancing professional practices, relationships and
knowledge, that the improving knowledge of professionalism can be started at the primary
education level and continuously carried out up to the practitioner level. At school and institutional
education, several modules can be included to their curriculums, where, as at the practitioner level,
individuals can convert their knowledge into practice. Further, certain guidance can be given
through codes of conduct and exposures through making various relationships between different
parties in the industry. Also sub motivators under Improving Professionalism can be introduced to
reduce impact of challenges of construction industry as shown below.
 Encourage officers to gain extra knowledge
 Conducting awareness programme

3) Improve salary/wages

This motivator is best factor can improve quality of construction industry but the problem is
compatibility of this motivation factor with developing country like Sri Lanka. It will create another
problem in economy of country with huge variation of salary scale with other industry of country.
30
 4) Improving Procurement Strategies

Improving procurement strategies was observed. In Sri Lanka most of the contracts are based on
traditional procurement method. Other procurement systems like joint-ventures, partnering, etc., are
still at a very low profile. However, respondents felt that if these new strategies are developed, it
will lead the industry towards the international market.

5) Imposing Quality Practices

The quality of the construction works can be enhanced through improving quality of woks,
employees, and quality standards. Pre-defined quality standards of a construction work can be
easily achieved if the work is well defined which, in turn, reduces the errors. The construction
errors can be minimized or eliminated, adopting highly buildable designs. In order to raise the build
ability, there should be closer cooperation among designers, contractors, specialist contractors,
material suppliers and component manufacturers during the design and construction stages. Quality
standards play a great role in guiding the construction team to achieve the pre-defined quality of the
final product. Therefore, existing quality standards should be reviewed, maintained and improved
yearly. The strategies like total quality management mechanisms can be implemented. Further, that
the career development of the construction team would help to improve the quality. For instance,
career development programs can improve employees’ carrier achieving quality outputs. Further,
organizations can identify individuals’ career paths
and help them to develop their careers to motivate them to retain in the same organization which in-
turn raise the performance levels of the organization.

31
CHAPTER SIX

CONCLUSION

In this project, our objective was to investigate and analyse of major problems in construction
industry in Sri Lanka and giving motivation factors to reduce the problems arising in construction
industry. Through our preliminary survey, we identified 10 major problem areas of construction
industry, which helped to improve our detail questionnaire.

So we selected Building and Road projects in constructing by both private and government sector in
Sri Lanka to collect data for our analysis. But to collect fair details in construction industry of Sri
Lanka, we However, while collecting data we had to face some problems which are affected to
correctly of data and effectiveness of data due to some habits of construction industry in Sri Lanka
.To prevent that issues, we neglected data of some questionnaire which are shown more deviation
from common sense.

According to our questionnaire, we presented ten major areas to construction industry by using
their knowledge and experience to evaluation .Among those areas one of the critical problems is
low profit margin under financial area, which more affect to motivation of the construction industry
in Sri Lanka. Also inadequate technology knowledge under Construction Knowledge, unnecessary
wastage under resource area, poor storage ,insufficient handling and utilization of construction
material under management & coordination area .Some motivators whish are suggested previous
sections can eliminated problems in to some level in construction industry of Sri Lanka.

32
6.0 REFERENCES

1) W. D. Thwala, M. J.Phaladi, University of Johannesburg, Department of construction

management and Quantity surveying, Johannesburg South Africa.“An exploratory study of problem
facing small contractors in the North West province of South Africa

2) G. Ofori, Department of building, National university of Singapore. “Challenge of construction

industry in developing countries; lesson from various country”, bdgofori@nus.edu.sg.

3) Department of construction management and quantity surveying, University of Johannesburg,

Johannesburg South Africa.“Problem facing small and medium size contractors in Swaziland.

4) Nayanthara De Silva, R. W. D. W. C. A. B. Rajakaruna, K. A. T. N. Bandara, Department of

Building Economics, University of Moratuwa.“Challenges faced by the construction industry in Sri
Lanka: perspective of clients and contractors”.

5) B.SC.ENG, C.ENG, MIE (S.L), G.B.N. Wimalasooriya, university of Moratuwa.“Problem faced

by contractors in achieving excellence in the Sri Lanka construction industry”

6) S. M. S. Samarakoon, Department of Civil Engineering, University of Moratuwa, Degree of

Master of Business Administration in project management , 2009. “Causes and Effect in medium
scale Building construction in Sri Lanka”, Supervised by Dr. L. L Ekanayake.

7) Chan, J.K.W., Cheung, R., and Tam, C.M. (2005). Monitoring financial health of contractors
at the aftermath of Asian economic turmoil: a case study in Hong Kong. Construction
Management and Economics,

8) Muya, M., Price, A.D.F., Edum-Fotwe, F.T. (2006). Overview of funding for construction
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9) Annual Report of central bank (2012)

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