Why Construction Technology and

Management?
 Why Construction ?

• Construction is an enormously important

industry by which societies create most
new values;
 Why Construction ?

Transportation Energy
Infrastructure The Construction supply
Industry

Urban
development Water
supply
 Why Construction ?
• Defines, creates, and maintains the built
environment within which most other
social and economic activities take place;
• Most of mankind’s day-to-day activities
are dependent on the infrastructure
delivered by the CI
 The History of Construction
• Since ancient times, mankind has
erected some huge structures

The 6, 550, 000 t and137 The 24m and 180t Axum

m Pyramids of Khufu at The 6,400Km long China Obelisk (Before the 4th century)
Giza (Circa 2500BC) Wall (Around 668 BC)
 The Development of Construction
in Ethiopia
• Though some spectacular structures have
been erected, Ethiopia’s construction as
industry is very infant
• Ethiopian modernization started under
Menelik II
• The Ethio-Djibouti rail ways is best example
• The Construction industry is set up in
modern form During the Majesty’s era
• Established Ministry of works, BaTCoDA, IHA, etc
 Status of the Global CI
• Compared to other industries, CI is labeled as
‘conservative’
 Different arguments about the advantages and disadvantages
of its conservatism.
• Some serious critics about ‘inefficiencies’ in the
industry
 Fragmented industry
 Sequential project delivery system and adversarial supply-chain
relationship
 Inefficient HR utilization

• Known for late delivery, over budget, low

profitability, poor returns and slow up take of
new technology and management philosophies
 Characteristics of CI
• Nature of production: [usually] on site
Changing supply-chain relationship and production
site
Exposed to inclement weather condition
Proliferation of small firms
Seasonal disruption
Health and safety concerns
 Characteristics of CI
• Nature of product: large, heavy, durable,
expensive, heterogeneous, and immobile
 Demand is localized
Demand doesn’t vary extensively
Costly to abandon and rebuild
Not tenable to change in taste and fashion
 Characteristics of CI
• Demand for the product
 Demand is usually driven by ‘other’ goods and
services; not controlled by industry,
In the majority of cases, clients define
requirements before the industry provides it,
Time lags b/n demand and supply is long.
 Characteristics of CI
• Structure of industry:
 Fragmented industry (the DBB delivery mechanism)
Sequential process
Need ID Desig Bid Build
n

Client A/E Clien Contrac

t tor
Fragmented project
participants
 Proliferated with small firms
 Large uncertainty
 Stakeholders
• Definition
 Are individuals or groups who has a vested interest in the
project or its product.

• Are parties who could have a telling effect

on the success or failure of the project
 Stakeholders
• Classification
Positive Vs Negative
Direct Vs Indirect
Internal Vs External
 Major stakeholders of a
construction project
.
Indirect stakeholders’ boundary

Users
(Beneficiaries)

Contractors
Regulatory/Statutory
bodies Suppliers
Client
W o r k e r s
Direct stakeholders’ boundary
Trade Unions Financers/
Financing
Consultants institutions

The general public

 Major stakeholders of a
construction project
• Client: is the party (public or private) under
whose tutelage the project is executed
 Comes up with the investment needs

Pr. Idea

Land Capital
 Major stakeholders of a
construction project
• Client:
[Usually] provides the infrastructure needed
Takes care of some of the legal constraints &
permits
Leases the project’s execution
Major public clients in Ethiopia;
 Roads (ERA & its regional counterparts)
 Housing (IUHDPO, MoE, MoH, etc)
 Energy (EEPCo)
 Water sector (MoWR)
 Major stakeholders of a
construction project
• Consultants: are professional bodies who
design the project
 Change the clients project idea into economic and
constructable artifact
Make sure that design satisfies requirements
[Usually] prepare BoQ and contract documents
If assigned to supervise:
 Look after proper execution of project
 Certify payment certificates
 Issue provisional and final acceptance certificate
 Major stakeholders of a
construction project
• Contactors: is the party that changes the
drawings and specification made by the
A/E into a physical structure
Provides the resources needed to execute the
project
Executes the project according to plan
Monitors project execution
Rectifies defects
 Major stakeholders of a
construction project
• Statutory bodies: are government bodies
that looks after the project’s compliance
with the general public’s interest
Prepare a general development scheme and make
sure that the project satisfies that
Look after the safety, legal, commercial etc issues
associated with the project
Look into the environmental, cultural, social etc
effect that the project induces
The major regolatory bodies in the sector are
 MoWUD, Municipalities,The ERA, The MoWR
 Major stakeholders of a
construction project
• Suppliers: are parties that supply the varies materials,
equipments and services needed for the project
• Financers/Financial institutions: are institutions like
banks, insurances, pension agencies etc who could
provide loan services for the project
• Works in the industry: are professionals, occupationals
or unskilled laborers who earn their living from working in
the industry or its supply chain.
• Trade (labor) unions: are unions of the working class that
look after unfair treatment of workers (like payment
issues, firing issues) as well as issues related to
occupational health and safety
 Major stakeholders of a
construction project
• Project product users: are parties who may be
using the end product of the project
• The general public: are communities of the
locality, the general society of a country or
even the globe who may have a vested
interest in the project
• Other sectors: are sectors which could have
interest in the process or product on the
construction project
Managing this various stakeholders effectively, whose interest may even
contradict, is very crucial for a success of any project
 Importance of construction
• Construction constitutes about 10% GDP
of many economics; about 30% of
developing countries
• 111million employment worldwide
• Often is used as an economy regulator
due to its multiplier effect
 Importance of construction:
Ethiopia
• Defines, develops and maintains the built
environment where other activities take place
• In Ethiopia, construction consumes about 58%
of the countries budget
• Provides the second largest work opportunity
(next to Agriculture)
• In the current fiscal year, only road sector
budget is about 13% (5.6 billion) of the countries
total budget
 Major works in construction

Construction

Buildings and related

Infrastructure works
works

Water Resource
Civil work in
Transportation Energy & Mining Development
Communication
works
 Major works in construction:
Ethiopia
Sector Major outputs
Road sector (RSDPI &II) Upgrading, maintaining (of existing) and
1995-2005 construction of new roads. So far, built
and upgraded about 78,564Kms of roads
Power sector The electrification program based on
(Power SDP) generation and transmission of power,
Built huge hydropower projects to move
the nation from rationed power supply to
the verge of power exporter
Water works sector Many irrigation, sanitation &water supply
projects across the country
Housing/building sector Huge number of housing units and
(IUHDP) institutional (such as UCBP) buildings
being build
Private sector Vibrant private involvement with many
 Major works in construction:
Ethiopia
Sector Forecasts
Road sector 106106Km road upgrading,
(RSDP III) 2005/6- maintenance, construction at
2009/10 estimated cost of Birr 43.16 Billn
Power sector Huge hydropower projects still under
(Power SDP) construction. To name a few Tekeze
(2.132 Billion), Gojeb (1.524Billion)
Water works The still running irrigation schemes
sector would cost the nation more than 21
billion when complete in 2010
Housing/building To build about 400,000 housing units in
sector the coming five years
(IUHDP)
 Major challenges of the industry:
Ethiopia
• Considerable components of the industry’s
activities are being implemented by international
companies (contractors, suppliers, consultants
etc)
– Reason
• Local firms lack capital (equipment and machineries),
financial, institutional (managerial, experience reputation,
etc), human (competency and capability), etc resources to
satisfy financers’ requirements
– Effect on the industry
• Lost opportunity to build capacity of local firms
• Lose in business and job opportunities for citizens
• Siphoning of in hard currency
 Major challenges of the industry:
Ethiopia
• Most of the projects delivered have failed under
the conventional project success criteria of being
delivered on time, on budget and to the standard
and quality required
• Reasons:
– Incapable industry (capacity and competency) as seen from
quite various aspects
– Various unprofessional (particularly in terms of systems and
managerial) and non ethical practices
• Effect on the industry
– Lost opportunity to improve and grow
– Huge impact on the country’s already constrained resource
– Necessity to maintain infrastructure before their due period etc
 Why govern and standardize
construction?
• All above characteristics of the industry
• The importance and hugeness of the
industry indicates that
• The industry is fundamental in shaping society’s
way of life and economic benefits
• Standardizations and Regulations to:
– Create transparency,
– Facilitate development
– Uniformity/order
What do CoTM professionals do to
alleviate these challenges?