Journal of Financial Management of Property and Construction

Khandelwal, Mayank ; Khanapuri, Vivekanand

2015 Journal of Financial Management of Property and Construction

doi: 10.1108/JFMPC-02-2014-0003

Purpose – This paper aims to identify gaps and critical issues in policy framework for infrastructure debt fund (IDF) to become financially viable in the Indian context. Growth of any economy is dependent on successful implementation of infrastructure projects. However, infrastructure development is linked to availability of equity and debt funds to finance these projects. IDF is an instrument which aims at enabling financing of infrastructure. Design/methodology/approach – The exploratory research adopted is qualitative and based on secondary data related to infrastructure needs, challenges, factors influencing infrastructure financing and options available for infrastructure financing in the Indian context. It investigates the relationship between external factors, internal factors and viability of IDF and provides recommendations to policy makers to roll-out an enabling policy and regulatory environment. Findings – Findings show that issues such as entry barriers for banks, insufficient tax incentives, restrictions on type of projects to be considered for funding and meeting the expectation of low-cost funds need to be addressed so that IDFs can contribute toward funding requirement of the infrastructure sector. Research limitations/implications – IDFs have been recently introduced in India and the use of primary and secondary data has been limited. Comparison of IDF guidelines in India with guidelines for similar instruments in developed countries has been left for a later stage. Originality/value – Value of this study is that it identifies the issues in current guidelines of IDF through the understanding of the policy and regulatory framework that governs IDF. The study also makes recommendations to the government and regulators which would enable IDF to become a viable instrument.

Olatunji, Oluwole Alfred ; Sher, Willy

2015 Journal of Financial Management of Property and Construction

doi: 10.1108/JFMPC-07-2014-0011

Purpose – The purpose of this paper is to elicit the activities in geometric 3D computer-aided design (CAD) estimating. Construction estimators usually target the structural integrity of data underlying project designs while measuring quantities and developing estimates. However, there are different ways to this. There is considerable evidence to suggest substantial distinction between data structuring in geometric and parametric CAD (building information modelling). Each of these platforms also appeals to estimators in the various practice domains differently. Regardless, the developments in the use of geometric and parametric CAD for design and management purposes have been rapid. Design/methodology/approach – The study focuses on the various perspectives within the different construction business domains. Interviews, focus group discussions and direct observation methods were used to explore data on estimating activities in 3D CAD from two public organizations, two large contracting firms, two quantity surveying consulting practices, two specialist-project companies and four software development and vending firms. These involved 17 middle-top management estimators who have had extensive experience in the industry. As the activities were elicited, participants were able to ascribe relative importance to each of the activities, and these were logically compared across the different practice domains. Findings – Thirty-one activities were identified as the components of estimators’ procedures leading to reliable outcomes in estimating 3D CAD designs. Logical correlations were discussed through extant literature towards forming a centroid model which could be used for numerous industry applications, including software development, knowledge transfer between organizations, employees’ hands-on training, curriculum design for academic institutions and as a policy framework for professional institutions on estimating practice. Further areas of research were also highlighted. Originality/value – This work is an original piece. It is neither published nor under consideration elsewhere.

Konno, Yukiko

2015 Journal of Financial Management of Property and Construction

doi: 10.1108/JFMPC-07-2014-0012

Purpose – The purpose of this paper is to examine the factors that affect the discontinuance of business of start-up contractors and property companies in Japan. It will help managers of start-up contractors and property companies to effectively manage their companies. Furthermore, it will be useful for stakeholders with links to start-up companies to analyse the credit risks associated with these businesses. Design/methodology/approach – This study uses data from the Japan Finance Corporation Business Startup Panel Survey to empirically examine the factors that affect the discontinuance of business of start-up companies. A binary logit model is used as the statistical method. Utilising the resource-based view theory, this study explores the relationships between resources and company capabilities at both start-up and discontinuance of business. Findings – Start-up contractors tend to discontinue their business, as managers grow older and when a sufficient workforce cannot be found at start-up. On the other hand, start-up property companies tend to discontinue business when securing of orderers is not sufficient at start-up. Originality/value – This study analyses start-up contractors and property companies and finds that factors that affect the discontinuance of business differ across construction and property industries, with each industry facing important, sector-specific issues.

Ahmadu, Hassan Adaviriku ; Ibrahim, Yahaya Makarfi ; Ibrahim, Ahmed Doko ; Abdullahi, Muhammed

2015 Journal of Financial Management of Property and Construction

doi: 10.1108/JFMPC-02-2014-0004

Purpose – This paper aims to develop a multivariate model that will be applicable to the Nigeria construction industry. Design/methodology/approach – A self-administered questionnaire survey was used to source information on project scope factors and qualitative factors considered in the study. Principal component regression was used for data analysis and model development, using SPSS 16.0 for windows, while T-test was used for model testing and validation. Findings – The study found that delay in progress payment by owner, lateness in revising and approving design document by owner, delay in delivering the site to the contractor by the owner, change order by owner during construction, complexity of project design, poor site management and supervision by contractors, and rain effect on construction activities are qualitative/non-project scope factors with good predictive abilities. Research limitations/implications – Cost, gross floor area and number of floors were the only quantitative/project scope factors considered in the study. The developed models therefore do not account for any variation in duration which may arise from other project scope factors, such as location, procurement route and type of contract. Originality/value – The qualitative factors which emerged as predictors in the derived models increased the accuracy of the models. The models developed therefore serve as useful construction time prediction tools for both consultancy firms and contractor organizations in the Nigerian construction industry.

Elazouni, Ashraf ; Alghazi, Anas ; Selim, Shokri Z.

2015 Journal of Financial Management of Property and Construction

doi: 10.1108/JFMPC-07-2014-0013

Purpose – The purpose of this paper is to compare the performance of the genetic algorithm (GA), simulate annealing (SA) and shuffled frog-leaping algorithm (SFLA) in solving discrete versus continuous-variable optimization problems of the finance-based scheduling. This involves the minimization of the project duration and consequently the time-related cost components of construction contractors including overheads, finance costs and delay penalties. Design/methodology/approach – The meta-heuristics of the GA, SA and SFLA have been implemented to solve non-deterministic polynomial-time hard (NP-hard) finance-based scheduling problem employing the objective of minimizing the project duration. The traditional problem of generating unfeasible solutions in scheduling problems is adequately tackled in the implementations of the meta-heuristics in this paper. Findings – The obtained results indicated that the SA outperformed the SFLA and GA in terms of the quality of solutions as well as the computational cost based on the small-size networks of 30 activities, whereas it exhibited the least total duration based on the large-size networks of 120 and 210 activities after prolonged processing time. Research limitations/implications – From researchers’ perspective, finance-based scheduling is one of the few domain problems which can be formulated as discrete and continuous-variable optimization problems and, thus, can be used by researchers as a test bed to give more insight into the performance of new developments of meta-heuristics in solving discrete and continuous-variable optimization problems. Practical implications – Finance-based scheduling discrete-variable optimization problem is of high relevance to the practitioners, as it allows schedulers to devise finance-feasible schedules of minimum duration. The minimization of project duration is focal for the minimization of time-related cost components of construction contractors including overheads, finance costs and delay penalties. Moreover, planning for the expedient project completion is a major time-management aspect of construction contractors towards the achievement of the objective of client satisfaction through the expedient delivery of the completed project for clients to start reaping the anticipated benefits. Social implications – Planning for the expedient project completion is a major time-management aspect of construction contractors towards the achievement of the objective of client satisfaction. Originality/value – SFLA represents a relatively recent meta-heuristic that proved to be promising, based on its limited number of applications in the literature. This paper is to implement SFLA to solve the discrete-variable optimization problem of the finance-based scheduling and assess its performance by comparing its results against those of the GA and SA.