Construction Management & Economics

doi: 10.1080/014461999371150pmid: N/A

Bon, Ranko; Birgonul, Talat; Ozdogan, Irem

doi: 10.1080/014461999371169pmid: N/A

Using the four input-output tables compiled in Turkey to date, the aim of this paper is to examine the construction sector's role in the Turkish economy and analyse its relationships with the other sectors of the national economy. Analysis results show that the share of construction in Gross National Product (GNP) and National Income (NI) tend to increase whereas the GNP share of manufacturing is relatively stable and that of services tend to increase after an abrupt decrease in 1985; backward linkage indicators and output multipliers, as well as forward linkage indicators and input multipliers of construction industry are stable; and finally, direct and total construction inputs from manufacturing show relative stability and those from services tend to increase in recent years. These findings point out the similarities between the Turkish construction industry and some advanced industrial countries (AICs) like Japan and Italy showing signs of growing ‘maturity’ of the Turkish economy.

Loosemore, Martin

doi: 10.1080/014461999371178pmid: N/A

The process of globalization is occurring in the research community as well as in the business community and it is increasingly likely that collaborative research across national boundaries will be undertaken. This paper is concerned with the problems inherent in this process. More specifically, it focuses upon data collection, conceiving it as an act of communication. Models of communication are used to investigate problems of interaction between researchers and respondents of different cultural backgrounds and to help in the identification of culturally sensitive methodological strategies. The paper concludes that current criticisms of construction management research methods, which are being presented from a global perspective, are more relevant outside a western context.

Zhai, Huaming; Russell, Jeffrey S.

doi: 10.1080/014461999371187pmid: N/A

The purpose of this paper is to describe a systematic framework of stochastic modelling and prediction of financial default risk of construction contractors. Net-worth-to-asset ratio is identified as an index for default process modelling. The default condition is defined as when the ratio becomes negative the first time. A mean-reverting dynamic model for the contractor default process is found by statistical analysis and is justified by using the theory of optimal capital structure. The stochastic modelling of default uses the time to default as the fundamental random variable. A discrete time trinomial Markov chain model is developed to assess default risk in terms of a cumulative default probability function, a default probability function, and the mean and variance of time to default. Practical examples are given to illustrate the stochastic methods. A default discriminant study on a group of contractors and publicly traded companies validates the methods, and indicates a high predictability of events of default and declines of credit rating.

Proverbs, D.G.; Holt, G.D.; Olomolaiye, P.O.

doi: 10.1080/014461999371196pmid: N/A

Research among European countries had confirmed variance in productivity rates ascribed by construction planning engineers for identical operations. Similar differences in planned construction resource/method factors also had been identified. It is hypothesized that such variance may be due to differences in contractor preference, resulting from socio-economic and corporate objective impacts. Analysis of variance and correlation tests are used to examine this hypothesis on data obtained from French, German and UK contractors. Numerous construction resource/method factors are tested for their impact on mean productivity rates for principal high rise in situ concrete construction operations. Significant productivity rate variations are identified for reinforcement fixing and formwork erection, while variance in concrete placing productivity rates are not found to be dependent upon construction resource/method factors. Contractors seeking to improve productivity might wish to consider solutions for construction resource/method decisions that have been found herein to be related to higher productivity rates and (in some cases) lower costs.

Lam, Ka Chi; Runeson, Goran

doi: 10.1080/014461999371204pmid: N/A

Some contractors predict their corporate cash flow on the basis of individual contracts without considering the relationships between the overall before-tax profit, risks, other crucial qualitative factors, or the allocation of resources within the company. Moreover, some contractors, in predicting their cash flow, focus only on the early-start progress in the project and their predictions of progress are too pessimistic, or result in the overuse of resource in order to make up for delays. In the present research a decision model is established for a contracting firm. It provides a methodical system for construction financial decision-making, and a way of solving a financial decision problem under qualitative and fuzzy circumstances. The model can be applied to the management of corporate cash flow, thereby facilitating the minimal use of resources. The information provided by the model allows the planner to eliminate excess use or idleness of resources during the scheduling of a project. Financial forecasting may also suggest the best time to invest in a new project. Four projects for a medium size construction firm in Hong Kong were employed as case studies in order to evaluate the mathematical model. The cases involve two objectives: maximize profit margin and minimize construction risk (consider in a qualitative factor). The model leads to a compromise optimal schedule that provides the contracting firm with the optimal schedule for achieving optimal profit and construction risk by making optimal use of the contractor's resources.

Lo, Wei; Krizek, Raymond J.; Hadavi, Ahmad

doi: 10.1080/014461999371213pmid: N/A

When designing a set of prequalification requirements, the first objective is to select the basic factors that are deemed appropriate to scrutinize, and the second objective is to establish the threshold for each of these factors to evaluate the capability and capacity of the bidders on a given project; together, these factors and the limits imposed on each constitute the basis for qualifying or disqualifying each of the bidders. To obtain the desired prequalification results and the consequent quality delivery of a project, both selecting the factors and determining the limits for each factor are crucial and must be given careful attention with due consideration of the prevailing environment (including market conditions, deadlines, need for technology transfer, etc.). In this study it was found that an improper design of prequalification requirements seriously affected the progress and cost of projects, provided opportunities for collusion, and encouraged the obtaining of contracts through improper practices. Based on an analysis of data from 30 Taipei Mass Rapid Transit projects, together with information gleaned from numerous interviews with contractors, consultants, and clients, it is shown that a risk-taking attitude by the Government and the establishment of relatively low prequalification requirements would be more conducive to achieving a desirable balance among (a) satisfying the schedule and sequence of contracting, (b) obtaining lower prices by an increase in competition, (c) procuring the timely delivery of a quality project, and (d) fostering the growth of local contractors.

Ranasinghe, Malik

doi: 10.1080/014461999371222pmid: N/A

Many developing countries are now attempting to finance new infrastructure projects through private sector participation. This paper outlines a methodology based on financial and risk analyses that a government or a government utility can use to analyse the viability of private sector participation in new infrastructure projects. The water supply projects in Sri Lanka are used for the case study to outline the methodology. Financial analyses of a bulk water supply project and a water distribution project are carried out to estimate subsidy percentages that are required to make the projects viable, using a model developed for the investment analysis of all types of infrastructure project. This analysis looks at four pricing options for the bulk supply project, and sixteen procurement options for the distribution project, from the view point of the utility, for three cases of non-revenue water (35% as base case, 50% and 25% as extreme cases). The risk analysis takes into account the risk and uncertainty in non-revenue water, cost and demand estimates, rate of debt and forecasts of escalation. These analyses show that the best option for the utility is to obtain both bulk supply and distribution projects through private sector participation using BOT arrangements.

Tse, Raymond Y.C.; Ho, C.W.; Ganesan, S.

doi: 10.1080/014461999371231pmid: N/A

This paper has the objective of improving on the issue of forecasting new housing construction, and highlights differences between space demand and investment demand in housing markets. Further, it indicates how these differences will affect construction decisions. The first step is to identify the factors associated with estimating residential property prices in Hong Kong, based on a demand-supply adjustment process. Specifically, this study examines the role of population growth, transaction volume, inflation and interest rate in determining house prices. Second, based on these estimations, a methodology is developed to estimate the investment demand schedule and new construction of residential property.

Gunner, John; Skitmore, Martin

doi: 10.1080/014461999371240pmid: N/A

An analysis is described of a sample of pre-bid forecasts for 181 Singapore building contracts awarded between 1980 and 1991 in comparison with previous research results in this topic. Despite the apparent contradictions that occur between findings, it is shown that such differences could be illusionary due to a general lack of reported significance levels together with, in some cases, small sample sizes. As a result it is suggested that a general commonality in outcomes may exist in the form of a single underlying variable.