SHAH ALAM HOSPITAL BACKGROUND

- 300 hospital beds and 14 areas of specialist care

- 210 medical staffs, 60 specialists and 1276 staffs

- The much-delayed project was first awarded to Sunshine Fleet Sdn Bhd at a cost of
RM482.6mil under a three-year contract between 2007 and 2010.
- The company, however, only managed to complete 27% of the project at a cost of
RM139.9mil before its contract was terminated in September 2010.
- The project was then revived and awarded to Gadang Engineering (M) Sdn Bhd in 2011,
at a cost of RM410.87mil.
- Although the hospital was supposed to be completed in October 2014, it was extended
for another year.
- Gadang had applied for an extension twice and only finished work on Tuesday due to
having to spend time rectifying the initial work by Sunshine Fleet.
- The cost overrun was RM 68.25 million

Possible reasons for delay of construction:

i) Inexperience of Project Leader

Inexperience of the leader of a project can mean that any aspect of it could be inadvertently
mismanaged, including the budget. While it is true that there is a first time for every
undertaking, a project leader who is new to the responsibilities of the position may encounter
more hurdles than one who is well-versed in seeing a project through from inception to
completion. Neophyte project leaders require more guidance and oversight throughout the
process, or at the very least, a mentor who can be trusted to give prudent and objective advice.
ii) Human Error

Human error ranges from an omitted or misplaced decimal point on a balance sheet to the
wrong equipment or supplies being ordered. No matter what form it may take, mistakes can be
costly. Most forms of human error can be mitigated by taking a moment to verify documents,
orders and double-checking any changes as they occur.
 iii) Lack of Foresight

Poor planning is responsible for most budget shortfalls. Simply put, when fewer funds than
necessary are allocated for a project, it is a certainty that more money will be needed to see the
project through to completion. Not understanding what is required financially for an
undertaking, from salaries to overhead costs, can lead to running out of funds in the early
stages.

iv) Design issues

Each construction project can be summed up in 3 phases that represent all the activities
required to finish the project from day one until the very last day of the project. In short,
these phases are:

-Design

-Execution

-Post-construction maintenance and operation

This stage can be a real threat to the timeline of the project as its problems mostly get
discovered in the execution phase. No matter how well the design is revised or reviewed, the
execution phase shows you exactly what’s wrong with the design. It might actually be
discovered in a very harsh way where you, for example, construct a concrete element and then
see it collapse or deform within days from its construction.

v) Economical changes

If any country was subjected to an economic collapse or its currency value has changed, all the
construction projects will be affected in so many ways, one of them is “delay”.

Due to the surprising change in the price of everything, the project cash flow becomes dull and
no longer represents the true valued/budgeted cost per time. This immediately drops a massive
effect on the project’s timeline making it double or triple the original duration (maybe put the
project on hold or even exterminate it) unless both the contractor and the owner can
find/afford a financial solution to the catastrophe.

If such a solution is unreachable, the owner must commit to a change in the project’s duration
and grant the contractor an extension of time.