CAUSES OF ABANDONED CONSTRUCTION PROJECTS IN MALAYSIA By YAP ENG HOE A ...

187 Pages·2013·1.4 MB·English

by  Yap Eng Hoe

CAUSES OF ABANDONED CONSTRUCTION PROJECTS IN
MALAYSIA

By
YAP ENG HOE

A thesis submitted to the Department of Surveying,
Faculty of Engineering and Science,
Universiti Tunku Abdul Rahman,
in partial fulfilment of the requirements for the degree of
Master of Science in Construction Management
May 2013
This work is dedicated to Papa, Mummy, and Koko …
… for their unwavering love, unfaltering support and immense patience.
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ABSTRACT
CAUSES OF ABANDONED CONSTRUCTION PROJECTS IN
MALAYSIA
Yap Eng Hoe
Abandonment of construction projects (ACP) is considered one of the most
common and serious problems plaguing the Malaysian construction industry
given the number and the value of the projects involved. It affects not only the
immediate purchasers but also other project players and the general public.
Sometimes it also involves expending public fund to revive abandoned projects.
Yet, research is scarce on this issue; hence this research was conducted to
investigate the problems. Firstly the issues surrounding the problem and
existing literature on the causes of ACP are reviewed. Then, potential causes of
ACP are also reviewed and summarized into 41 items to be rated in an industry
wide questionnaire survey. The questionnaire also includes an open-ended
question on suggestions to solve ACP. 225 questionnaire responses were
received. Subsequently, a series of ten semi-structured interviews were
conducted to obtain detailed opinions from experienced players in the industry
concerning the causes of ACP and how to solve the problems. The
interviewees include architects, developers, property consultants, the honorary
secretary general of the National House Buyers Association etc. to ensure a
comprehensive view was obtained. Quantitative analyses include ranking of the
41 potential causes of ACP with Spearman‟s ranking correlation between
different groups of respondents, and factor analysis with Cronbach‟s α
reliability analysis. Qualitative analyses include organizing into themes the
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results of the open ended question on solving ACP and the results of the semi-
structured interviews. Discussions include interpreting the underlying factors
extracted from factor analysis in light of the qualitative results. The results
show the owner to be mainly responsible for ACP (i.e. cash flow problems,
incompetence, siphoning out of money, etc.), followed by the role of
government regulations. A risk management expert system module within BIM,
a middle ground solution between the sell-then-build and build-then-sell
schemes, and others are proposed.
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ACKNOWLEDGEMENT
First of all, I would like to thank my supervisor Dr Tan Hai Chen and
co-supervisor Dr Chia Fah Choy for their professionalism, patience and
guidance. I am very fortunate to have benefited from the convergence of each
of their unique expertise. The best parts of this thesis would not have been
possible without their inputs.
Then, I would like to thank the interviewees and the questionnaire
respondents. It is fortunate that there are people in the industry who support
research efforts and have provided quality information.
Also, the moral support of relatives and friends is important. They are
uncles, aunties, my late grandmother, cousins, housemates, colleagues at
UTAR, Facebook friends, occasional friends, and even strangers who give
words of encouragement. However, I would like to particularly mention my
roommate Eugene Yiap Chong Jin, and my buddy Ho Chun Khiang who have
provided extraordinary moral support to ease my countless episodes of
sufferings throughout the process.
Last but not least, I would to thank my father Yap Chai Boon, my late
mother Ong Siew Lan, and my elder brother Dr Yap Eng Hwa for things that
are so great, words fail me. To state it simply but inadequately, they are
affection, encouragement, patience, friendship, helping to prepare the
thousands of questionnaires, financial support, and good food.
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APPROVAL SHEET
This thesis entitled “CAUSES OF ABANDONED CONSTRUCTON
PROJECTS IN MALAYSIA” was prepared by YAP ENG HOE and
submitted as partial fulfilment of the requirements for the degree of Master of
Science in Construction Management at Universiti Tunku Abdul Rahman.

Approved by:
_______________________________
(Assistant Professor Dr Tan Hai Chen) Date:……………………...
Supervisor
Department of Surveying
Faculty of Engineering and Science
Universiti Tunku Abdul Rahman
________________________________
(Assistant Professor Dr Chia Fah Choy) Date:……………………...
Co-supervisor
Department of Surveying
Faculty of Engineering and Science
Universiti Tunku Abdul Rahman
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FACULTY OF ENGINEERING AND SCIENCE
UNIVERSITI TUNKU ABDUL RAHMAN
Date: ___________________
SUBMISSION OF THESIS
It is hereby certified that YAP ENG HOE (ID No: 07UEM08775) has
completed this thesis entitled “CAUSES OF ABANDONED
CONSTRUCTION PROJECTS IN MALAYSIA” under the supervision of
Assistant Professor Dr Tan Hai Chen (Supervisor) from the Department of
Surveying, Faculty of Engineering and Science, and Assistant Professor Dr
Chia Fah Choy (Co-Supervisor) from the Department of Surveying, Faculty of
Engineering and Science.
I understand that the University will upload softcopy of my thesis in pdf format
into UTAR Institutional Repository, which may be made accessible to UTAR
community and public.
Yours truly,
_______________________
(YAP ENG HOE)
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DECLARATION
I YAP ENG HOE hereby declare that the thesis is based on my original work
except for quotations and citations which have been duly acknowledged. I also
declare that it has not been previously or concurrently submitted for any other
degree at UTAR or other institutions.

________________
(YAP ENG HOE)
Date: _______________
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TABLE OF CONTENTS
Page
ABSTRACT iii
ACKNOWLEDGEMENT v
APPROVAL SHEET vi
SUBMISSION OF THESIS vii
DECLARATION viii
LIST OF TABLES xii
LIST OF FIGURES xiv
LIST OF ABBREVIATIONS xiv
CHAPTER
1.0 INTRODUCTION 1
1.1 Rationale for Research 3
1.2 Aim and Objectives 8
1.3 Research Methodology 8
1.4 Organisation of Chapters 10
2.0 CAUSES OF ABANDONED CONSTRUCTION
PROJECTS – A REVIEW OF THE LITERATURE 13
2.1 Causes of Abandoned Construction Projects in Malaysia 13
2.1.1 Mismanagement 14
2.1.2 Unfavourable government policies 16
2.1.3 Inefficient public delivery system 19
2.1.4 Unfavourable economic conditions 20
2.1.5 Financial problems 21
2.2 Factors Affecting the Success of Projects 21
2.2.1 Project characteristic related factors 26
2.2.2 Procurement related factors 28
2.2.3 Project management factors 32
2.2.4 Project participants related factors 36
2.2.5 External factors 43
2.2.6 Other relevant factors 46
2.3 Summary 47
3.0 RESEARCH METHODOLOGY 49
3.1 What is research? 49
3.2 Research methodology 50
3.2.1 Quantitative method 51
3.2.2 Qualitative method 53
3.2.3 Triangulated studies / mixed methods 57
3.3 Literature Review 58
3.4 Questionnaire Survey 58
3.4.1 Questionnaire design 59
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3.4.2 Sampling 59
3.5 Semi-structured Interview 62
3.6 Analysis of Data 63
3.7 Summary 64
4.0 ANALYSIS OF DATA 65
4.1 General Characteristics of Questionnaire Respondents 65
4.1.1 Experience of respondents in abandoned
construction projects 66
4.1.2 Roles of respondents in the projects 67
4.1.3 Types of the projects 68
4.1.4 How the projects were funded 69
4.2 Ranking of Causes of Abandoned Construction Projects 69
4.2.1 Ranking 70
4.2.2 Spearman‟s ranking correlation 72
4.3 Factor Analysis 77
4.3.1 Analysis considerations 77
4.3.2 Underlying factors extracted 80
4.3.3 Cronbach‟s α reliability analysis 83
4.4 Results of Open Ended Question on Solving
Abandonment of Construction Projects 84
4.4.1 General answers 86
4.4.2 Answers specific to resolving already abandoned
projects 93
4.4.3 Causes of abandoned construction projects 95
4.5 Results of Semi-structured Interviews 96
4.5.1 Causes of abandoned construction projects 98
4.5.2 Suggestions to manage or mitigate abandonment
of construction projects 113
4.6 Summary 115
5.0 DISCUSSION OF RESULTS 117
5.1 General Adequacy of Data in Complementing the Lack
of Available Literature 117
5.1.1 General adequacy of quantitative data 118
5.1.2 General adequacy of qualitative data 119
5.2 Discussion on the Ranking of Potential Causes of
Abandoned Construction Projects 119
5.3 Comparing Causes of Abandoned Construction Projects
between Results of Literature Review, Open-Ended
Question of Questionnaire and Semi-Structured
Interviews 122
5.3.1 Common points 124
5.3.2 Exclusive points 126
5.4 Interpreting the Underlying Factors Extracted From
Factor Analysis with the Results of Literature Review,
Open-Ended Question of Questionnaire and Semi-
Structured Interviews 126
5.4.1 Under-pricing of contract and disruption of
payment to contractor 127
5.4.2 Project teamwork and ethical issues 129
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