A Risk Control Model For The Execution Of Construction In Public Housing Sector Projects In Trinidad And Tobago

A Risk Control Model For The Execution Of Construction In Public Housing Sector Projects In Trinidad And Tobago

Name

Research Papers submitted XXXXXXXXXXXXXX in partial fulfillment of the requirements for the degree of

Doctor of Construction/Project Management

Tutor XXXXXXXXXXXXXXXXX

Department of Construction/Project Management

Date

Copyright © 2012

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All Rights Reserved

Introduction

Trinidad and Tobago is an archipelagic state that is located in south of Caribbean. The state is one of the developed nations when it comes to housing and infrastructure. Housing sector and mostly in the three mayor cities of Trinidad and Tobago do range from apartments that are luxurious. The buildings also have got waterfronts and build with high class ceramics. There are other buildings that lack indoor plumbing as well as enough access to motor vehicle parking’s. The housing development corporation of Trinidad and Tobago was in the past faced with procurement scandal that involved some malpractices in its rules, regulations and procedures on award of tenders[1]. A commission of enquiry was formed to investigate all procurement practices in the housing and construction sectors whereby it gave its report recommending that, a procurement process in the construction sector should be fair and free. Integrity as well as transparency in the process should be properly ensured at very highest levels. Tender rules, procedures, regulations as well as processes of the successful contractor in all procurement practices related to construction contracts should be in compliance with the rules and regulations of the housing development corporation body of the Trinidad and Tobago and the same processes should be applied in other contracts with similar contracts[2]. A model on risk analysis should be carried out effectively to control cost overruns as well as other economic trends that may arise in the future. Risk analysis model on utilization of costs and minimizing contractual claims in the housing sector should be strategically structured.

Literature review

Risk analysis model helps to curb any malpractices in the housing and construction sector. In the practices of procurement, it should be carried out efficiently to prevent any corrupt deals from interfering with the process of procurement practices. The model also helps in utilizing costs and minimizing economical trends as well as contractual claims and variations. If procurement of the materials of the public construction sector is interfered with corrupt dealings then there is possibility of illegal matters arising in future. Fraud in tendering can also be witnessed and this if discovered can lead cancellation of building contract that was on the process. Trinidad and Tobago was affected by the procurement scandal involving tenders in the public construction field. This led to formation of a commission of enquiry to investigate all malpractices that were involved in the process. [3]

A clear stated policy on public procurement processes should be developed and those in authority maintain its efficiency in effectiveness to ensure that any malpractices that may bring illegal measures are prevented. A model of risks should be structured to prevent any misusage of funds and other costs[4]. Risks should also be taken effectively after proper planning to ensure that all developments of infrastructure in Trinidad and Tobago succeed without any downfall. The impact of using prime costs on the nominated suppliers as well as contractors in public sector contracts should be controlled.[5] There should be also control over all the prime cost sums and provisional sums at all sectors related to construction, housing projects as well as infrastructure in Trinidad and Tobago. An issue of uncompleted designs, poor administration and supervision, design variations and poor management of resources, costs as well as delivery of housing and building projects led to rise of contractual claims in the state of Trinidad and Tobago[6]. The state should draw an effective administration and supervision model of the projects whereby all employees part of the contract will understand who to report to. This will make communication easier and everyone will be able to understand his or her own duties well. A strategy on the management of funds should be developed and be adhered to by all staff responsible for financial matters[7]. Mismanagement of the project costs and poor delivery can result to malpractices in the process of the construction contracts and this later may lead to rise of contractual claims that can make the state using more other resources to defend itself over the legal case[8].

The state of Trinidad and Tobago should come up with a good consideration plan on the performance of the local contractors and construction consultant’s as well international contractors and consultants. Tendering of those contractors should be carried upon good performance[9]. The consideration of quality work and low cost should be strictly ensured when the state is awarding the construction contracts[10]. Awarding tender to a company that develops infrastructure of poor quality after completion of the project may also bring contractual claims in the future[11]. A strategic model on local and international tendering should be clearly structured to prevent any contractual malpractices from interfering with the projects after completion. In 2009, the housing sector of the Trinidad and Tobago state was hit by a corruption scandal due to use of turnkey approach and which is commonly referred to as design build approach in delivering housing projects on the public sector[12]. This approach was used with an intention of moving from traditional and old designs of tender approaches. There were claims of some malpractices been involved in the process of using the turnkey approach and which also led to rise of contractual claims and later was one of the main aspects that was been investigated by the commission of enquiry[13]. The public sector on housing should consider using an approach of tendering that is suitable for the project concerned and all legal aspects and requirements on tendering should be considered by the industry employer and the client. The issue of cost overruns, work delays and workmanship that was so defective on construction projects also led to contractual claims in Trinidad and Tobago[14]. Some contractors use workmanship in their projects and if the personnel are not well trained on the work they are carrying on, this can lead poor quality projects. The government of the state should have come up with a risk analysis model on control of the finances to control any cost overruns[15]. It should also not take risks by awarding tenders to contractors who may not seem to come up with quality projects irrespective of their low costs[16]. The state can also improve the public housing sector by developing risk analysis model that combats any existence of price gouging as well high profiteering. This, if ensured will control any rise of contractual claims from the public[17].

In the procurement process of the public construction projects, the state should ensure that the taxpayers get adequate value for money. Any housing project that may not lead to or add value of money to the public sector should be avoided since it can bring contractual claims in the future. A risk analysis model should be carried out to determine the costs that will be used in the construction project and compare it with the value of the project to the state as well as to the general public[18]. The government of Trinidad and Tobago should also come up with a strategic risk analysis model on the control of the projects delivery and achievable standard of workmanship. The analysis should structure on how quality workmanship of the highest standard will be maintained and achieved as well as how projects will be delivered. This is to prevent any arising risks due to failure to deliver or poor workmanship[19].

The procurement process of the housing and construction sector should be exercised in an environment that is free from corruption and where fair competition is ensured to the satisfaction of all bodies involved. High integrity as well as transparency in the award of contract tenders should also be ensured because it helps to prevent contractual matters arising from other contracting bodies, the public or from any other body[20]. The government of Trinidad and Tobago was affected by the project of clever heights development houses whereby some procurement malpractices were found between the housing development authority and the company called NH international limited[21].

The tender rules, procedures, regulations as well as processes of the successful contractor should be in compliance with the rules and regulations of the housing development corporation body of the Trinidad and Tobago and the same processes should be applied in other contracts with similar contracts. Variance that may exist between price that was negotiated and the actual price for the contract should be compared and if any malpractices which may contribute to such variances should be brought forward before the start of the project[22]. Developing a risk analysis model that provides metrics for effective utilization of construction costs will help in implementation and improvement of various public housing projects as well as minimization of contractual claims and arising of variation changes that can affect housing projects in Trinidad and Tobago.

Conclusion

The state of Trinidad and Tobago is one of the wealthiest states on infrastructure. The housing and construction sector was hit by a procurement scandal after the housing development corporation awarded a tender to NH international company on the construction of 408 houses (clever heights development project) whereby some processes were found to be full of malpractices therefore leading to formation of enquiry for further investigation to the matter[23]. The commi.............