Gape & Margaret - Botswana Construction WP No. 4 - tips

the number of residential plans experienced in 1996 to 1999 are consistent withincreases in residential construction activity resulting from the Accelerated LandServicing Program. Restructuring of the Botswana Housing Corporation (BHC), asignificant (if not the largest) residential property developer in Botswana and theresulting commitment to more effective and efficient delivery of new housing mayalso have in part, contributed to increases in the number of residential plansapproved.However, the number of residential plans has not always been consistent with growthin the construction sector. For instance, in 1996, construction sector performancewas recovering while the number of building plans was lowest. This could be due tothe fact that construction activity has not necessarily been concentrated in buildingprojects or in the major centers of Gaborone, Lobatse and Francistown. This isparticularly true for non-residential construction activity, primarily led by Governmentexpenditure which has been distributed throughout the country. Construction of neweducation facilities and expansion of existing ones in the late 1990s is a case in point.Cost, time and quality are three of the performance measurement standards used.Improving cost, time and quality performance are important aspects towards acompany’s good image. An evaluation of the cost performance of public constructionprojects in Botswana (Chimwaso, 2000) concluded that there were four criticalcontributory factors to construction cost overruns. These were incomplete designs atthe time of tender, additional work at the client’s request, changes in client’s brief andlack of cost planning/monitoring (Chimwaso, 2000). According to the evaluationthree other factors that were normally ignored, but contributed to cost overruns,included delays in issuing information at the construction stage, technical omissionsat the design stage and contractual claims such as extension of project time with costclaims.An assessment of the cost performance of 10 public projects during the evaluationrevealed that 70% of projects experienced cost overruns. The major contributoryfactors were variations (or design changes), re-measurement of provisional works,contractual claims and fluctuations in the cost of labor and material. Variations wereconsidered the most significant factor. The implication of this assessment is thatvariations needs attention. The evaluation attributes design changes to insufficientplanning and suggests that improving the quality of tender documents would lessenthe problem.Construction booms also lead to increases in cost of materials and labour. Withregard to skilled labour (engineers, architects, quantity surveyors) shortages becomemore acute during boom periods and tend to increase construction costs. Short-runinput shortages may worsen cost push inflation and there is likely that private sectorneeds are crowded out (Bank of Botswana, 1999). In view of the link between publicsector projects and construction booms, (for example front loading of NationalDevelopment Plan 8 projects), and increases in inflation associated with booms,Government has to link implementation of National Development Plan projects withother macroeconomic policy objectives such as inflation control.16