International Journal of Modern Research in Engineering & Management (IJMREM)

||Volume|| 1||Issue|| 10 ||Pages|| 14-21 || November 2018|| ISSN: 2581-4540

Disputes Impact in Pakistan Construction Industry: A Comprehensive

Study of Road Development Projects
1,
Saeed Ahmed, 2, Dr. Nafees Ahmed Memon, 3, Engr. Ali Raza Khoso
4,
Syed Abdullah Shah Hashmi, 5, Dr. Aftab Hameed Memon
1,
Student M.E. (Construction Management) Civil Engg. Mehran UET Jamshoro;
2,
Professor, Civil Engg. Mehran UET, Jamshoro, 3, Lecturer, Civil Engg. Mehran UET, Jamshoro,
4,
Lecturer, Civil Engg. Balochistan UET, Khuzdar, 5, Assistant Professor, QUEST, Nawab Shah

--------------------------------------------------ABSTRACT--------------------------------------------------------
The road construction works have tendency to build strong variances among the stakeholder which involved in
projects, they can turn quickly into disputes and become difficult to resolve them. All developing countries are
increasing their economic growths, Pakistan is one of them which rapidly growing its resources spending on
construction projects effectively. Road construction disputes are one the major issues which will affect the
successful completion of the projects. This research aim to analyze the causes and impacts of disputes in roads
construction projects of Pakistan construction industry. This study is undertaken to identify the causes, impacts
and remedial measures/appropriate suggestion to overcome from disputes. The construction claims are
considered as one of the most unpleasant and disruptive event of a construction project, which will effects intern
of costs overrun, time overrun and dynamic nature of projects. This study is limited to determination of causes
and Impacts of disputes as observed by Clients, contractors and consultants working in road construction projects.
Get a path way to manage disputes from informed, selection of remedial measures. The data were collected from
respondents which are concerned in road construction, after analysis of the data, concluded that incomplete
documentation, inappropriate contract system, unrealistic price of tenders, errors in design and overstated claims
are the major Causes of disputes in construction projects. Mediation and negotiation were identified the common
desired method to manage disputes.

INDEX TERMS: Causes and Impacts of disputes, Types of disputes, Roads construction projects, Avoidance
Strategies.
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Date of Submission: Date, 10 November 2018 Date of Accepted: 13 November 2018
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I. INTRODUCTION
The improvement of any country no longer simplest rely on technologies however it also rely upon the infra-
structure. Construction industries are the strength of a developing as well as for a developed country. These are
the many complex industries within the international which contain sort of issues [1]. A construction enterprise is
sub-divided into diverse sectors consisting of roads network, building sectors, infrastructure tasks and many
others. Each kind has its own complexities which includes disputes, conflicts and claims. Disputes mostly occurs
in between client, consultant and contractor due to various issues and these issues always create a cost in various
forms like, deviations in the scope of work, typical site condition and delays in work [2]. The construction industry
of Pakistan performs as key position within the financial increase of the country, the construction industry
becomes the 2nd largest industry after the agriculture which contribute in economic growth national GDP and
labor force [3]. For the developing countries the participants have different views, talents and high level of
knowledge of the construction process in the highly risky and competitive environment. Being a complex industry,
the participants face different problem during a construction project. The stakeholders like Client, Contractor and
Engineer have different perception about the construction issues. Therefore which leads to conflicts and disputes
then the disagreement about something is inevitable [4]. Dispute is well-defined as a form of conflict which
demonstrates itself in pleasing reasonable problems. It involves clash of words over problems able to choice
through negotiation, mediation and adjudication. Which means a dispute will most in reality arise best if assert is
left out with the useful resource of one participant to the agreements. In similar manner suggested that conflict
occur in which there is an unsuitability of interest. Due to the dangers and complexities which might be naturally
inherent with construction initiatives in addition to the diverging pastimes of the parties concerned, disputes may
be taken into consideration unavoidable effects of the construction processes particularly road construction
process [5].

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II. LITERATURE REVIEW

Road construction project responsibilities are complicated because of the division of obligations and
responsibilities between consultants, Clients and contractors. These construction project need the occurrence of
several high level of knowledgeable experts at site during construction [6]. The disputes creating due to lack of
access in the services, unforeseen condition of construction site, bad weather conditions and contractor’s failure
in unbalanced coordination with sub-contractor works at site, mismanagement which could affect the art to others,
the factors which leading to disputes which are delays, defects on sites, shortages of 4ms, reworks, time and cost
overrun [7]. The author analyzes that past studies in Portugal had recognized eight various types of construction
disputes each one of them covered a specific process of documentation, submission, quantification, and settlement,
in the scope of the construction legal frame.

The results show that the requirements for changes, in particular, direct changes in subtypes, indirect changes,
errors and omissions, amounted to 64% of applications filed in the surveyed construction project, and together
with deferred claims represent a total frequency of 84%. The ratio is 0.76, taking into account the requested
amount and payment [8]. Road construction projects are associated to each other in such a way that lack of
communication among participant lead them to failure. Such a failure may create disputes among the stakeholder
which are contributing in road construction projects [9]. The problems which creates disputes on road construction
project have several factors, including change in design, adverse climate condition, number of involved parties,
cost and time overrun the road construction projects are facing problems which are dividing in to six stages. These
stages are identification of disputes, notify, to examine, documentation, presentation and disputes negotiation. The
results specify that the absence of site staff awareness to proactively discover disputes, isolation or inaccessibility
of appropriate documents, and clashes which rises during owner/contractor negotiation are all serious
complications related with the procedure of disputes management [10]. In assessment to one-kind of construction
responsibilities, highway obligations are performed in a more diverse surroundings with plenty of transferring and
lots of converting conditions. This creates tendency to pain of dispute occurrences. In this variation system claims
are most effective ultimately formed into a dispute whilst party to whom it is directed rejects the claim [11].

III. AIMS OF THE RESEARCH STUDY

A critical review to the literature in the construction areas where the causes of disputes occur in road
construction projects and the disputes avoidance approaches. By identification of causes of disputes and an
effective way to manage disputes in public sector road construction projects of Pakistan

IV. RESEARCH METHODOLOGY

The research methodology, Reviews the causes of disputes, collecting the data, discusses reasons and suggesting
some appropriate measures to avoid disputes during road construction.
Road construction industry is across cutting sector
in social, political and economic welfare of the
country. This industry has to be protected and
managed well to avoid arising disputes that may
lead to social, political and economic problems in
the country.
The aim of this research to find out the causes and
impacts of disputes in the road construction
projects. Its further determining ways of reducing
or addressing such disputes, methods and
methodologies should be identified clearly how to
achieve the main aim of the study. The data
collected from the unstructured interviews and
questionnaire survey on disputes in road
construction sector and analyzed. Further the
responses from questionnaire are also discussed.
The despondence of the questionnaire concerns in
each of categories.

A) Causes of disputes.
B) Impacts of disputes.
C) Appropriate avoidance from disputes.

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Using sampling of questionnaire were sent clients’, contractors, and consultants. The total response was at 61.5%
which is significant. The most disputes occur to clients’ from contractor during construction phase.

Table 1: Shows the despondence rate of returned

S/# Respondents Sent Returned % of response

1 Clients’ 20 13 43%
2 Contractors’ 50 30 60%
3 Consultants’ 30 23 77%
4 Total 100 66 66%

Causes of Disputes (Clients’ view point)

A). Ranking of dispute causes by clients according to mean rate.

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

Table 2: Shows the causes of disputes by clients

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ

1 Ambiguities in contract documents 4.46 0.65 0.16

2 Poor communication among 3.38 0.76 0.21
participants
3 Improper supervision for 3.78 0.84 0.24
constructability, clarity and
completeness of work
4 Lack of responses in timely manner 4.07 0.94 0.23
5 Insufficient management, 4.02 0.92 0.24
coordination and supervision on site
6 Lowest contract award system for 2.99 1.01 0.27
contractor and designer
7 Lack of appointment of an expert 4.01 1.02 0.26
overall project manager
8 Inadequate tracing mechanism for 3.68 1.04 0.29
RFIS
9 lack of team spirit among the 2.32 0.86 0.38
stakeholder
Founding the results from the above Table No 2. Disagreements / ambiguities in contract documentation was
considered to be the most significant with Co-efficient of Variance (COV) of 0.16.

B). Ranking impacts of disputes by client according to mean rate.

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

Table 3: Shows the impacts of disputes

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ

1 Clients reputation losses 4.37 0.50 0.117

2 Loss of profitability and possibly 4.24 0.61 0.143
occupational viability
3 Time delays and cost overrun 4.37 0.64 0.147

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 Disputes Impact in Pakistan Construction Industry…

4 Decrease of respect b/w parties 4.32 0.65 0.149

weakening of relationship and
breakdown in cooperation
5 Losses in professional reputation 4.29 0.65 0.153
6 Supplementary outlays in decision- 4.24 0.73 0.171
making and direction
7 Highly tendering price 3.01 0.75 0.262
8 Possibilities of litigation 3.10 0.74 0.289
9 Compensation for relocation of 2.99 0.94 0.280
equipment’s, labor and material
10 More complex award process and 4.02 1.07 0.321
Extended of work

Table: 3 indicate that the losses of company reputation, cost overrun and time schedule delays were found as
significant one by the respondents with the lowest co-efficient of variances 0.117.

C). Types of disputes

Table 4: Shows the types of disputes

S/# Types of Respondents Mean Standard Dev: Percentage

disputes
1 Payments 8 0.53 0.518 54.80
2 Changed 7 0.45 0.517 45.20
condition
3 Delays 12 0.84 0.377 85.60
4 Contract time 13 0.86 0.378 86.60
5 Others 6 0.45 0.516 44.20
Shows the types of disputes which are ranked as highest and lowest impact level which are delays 86.60% and
change condition 44.2%.

D). Methods of Dispute Resolutions: In client’s perspective the respondents mostly favored negotiation and
mediation as an effective methods of disputes avoidance on road construction projects. The graphical
representation of these results is shown in graph # 1 below.

Dispute Resolution method

Others
AxiMethods of disputes aviodance

Litegation
Expert determination
Arbitration
Adjudication
Negotiation
Mediation
Concilliation
0 2 4 6 8 10 12
Number of respondants

Fig 1: Shows the for most specific method of resolution

Causes of Disputes (Consultant view point)

A). Ranking of dispute causes by consultants according to mean rate

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

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 Disputes Impact in Pakistan Construction Industry…

Table 5: shows causes of disputes by consultant

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ
1 Late specification issued & 4.01 0.65 0.163
cumbersome approach
to RFIs
2 Over – design and factual 3.14 0.64 0.282
communication
3 Inadequate open and factual 4.03 0.87 0.219
communication
4 Incompleteness of drawing and 3.03 0.72 0.235
specification
5 Lack of understanding 3.20 0.65 0.248
responsibilities under designing
team
6 Design, specification, oversight and 4.02 0.95 0.252
errors or omissions resulting from
un-coordinated of Structural,
mechanical and electrical designs.

Table 5 indicate that the late information putout and unwieldy and access to the RFIs the highly significant
reason of disputes with VOV worth 0.163, and least COV worth is 0.252 of the mechanical and electrical
design.

B). Ranking impacts of disputes by consultant according to mean rate.

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

Table 6: shows the Impact of disputes

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ
1 Loss of profitability and perhaps 3.99 0.52 0.113
business viability
2 Time delays and cost 4.58 0.59 0.128
3 Additional expenses in managerial 4.53 0.52 0.114
and
Administration
4 Company reputations lessees 3.98 0.57 0.114
5 Professional’s reputation losses 3.98 0.67 0.145
6 Compensation for relocation of 4.28 0.57 0.175
equipment’s, labor and material
7 Decrease of respect b/w parties 3.42 0.74 0.212
weakening of relationship and
breakdown in cooperation
8 Chances of litigation 3.10 0.66 0.246
9 Higher tender services 2.97 0.78 0.261
10 Extended and / or more complex 3.03 1.04 0.338
award process
Table: # 6 shows that the impact of disputes regarding to consultant viewpoint the highly impact factor COV
value is 0.338 and the lowest COV value is 0.113 respectively.

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 Disputes Impact in Pakistan Construction Industry…

C). Types of disputes

Table 7: shows the Types of disputes

S/# Types of disputes Percentage

1 Payments 65.30%
2 Changed condition 75.10%
3 Delays 84.60%
4 Contract time 89.60%
5 Others 20.50%

Table # 7 shows the most significant types of disputes with the respondent rates 89.60 % the highly rates and the
20.50% is the lowest rate.

D). Methods of Dispute Resolutions: In the consultant perspective the respondents mostly favored negotiation
and mediation as an effective methods of disputes avoidance on road construction projects. The graphical
representation of these results is shown in graph # 2 below.

Dispute Resolution method

Others
AxiMethods of disputes aviodance

Litegation
Expert determination
Arbitration
Adjudication
Negotiation
Mediation
Concilliation
0 2 4 6 8 10 12 14 16 18 20
Number of respondants

Fig 2: Shows the for most specific method of resolution

Causes of Disputes (Contractor viewpoint).

A). Ranking of dispute causes by contractor according to mean rate.

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

Table 8: shows causes of disputes by contractor

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ
1 Inadequate contract system, 3.99 0.84 0.203
supervision and coordination
2 Reluctance to seek clarification 4.21 0.88 0.213
4 Lack of plans, specification to 4.23 1.02 0.586
execute the work and change scope
of work.
5 Lack of CPM Scheduling and 4.32 0.98 0.582
improper updating new
requirements
6 Delay or suspension of work of 3.98 1.14 0.286
works
7 Inappropriate practice of BOQ 3.01 0.87 0.423

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 Disputes Impact in Pakistan Construction Industry…

Table: 8 indicate that the late information putout and unwieldy and access to the RFIs the highly significant
reason of disputes with COV worth 0.203, and least COV worth is 0.423 of the mechanical and electrical
design.

B). Ranking impacts of disputes by contractor according to mean rate.

5. Very often, 4. Often, 3. Average, 2. Rare, 1. Very Rare

Table 9: shows the Impact of disputes

S/# Disputes causes Mean S / deviation Co-efficient of

µ Ꝍ variances
µ/Ꝍ
1 Company reputations lessees 3.98 0.65 0.117
2 Additional expenses in managerial and 4.22 0.62 0.148
Administration
3 Loss of invested principal amount 3.89 0.98 0.241
4 Decrease of respect b/w parties 3.78 0.75 0.145
weakening of relationship and
breakdown in cooperation
5 Professional’s reputation losses 3.89 0.65 0.169
6 Cost and time overrun 3.98 0.85 0.981
7 Compensation for relocation of 4.01 0.65 0.350
equipment’s, labor and material
8 Chances of litigation 1.99 0.97 0.352
Table. # 9 shows that the impact of disputes regarding to contractor viewpoint the highly impact factor COV
value is 0.435 and the lowest COV value is 0.128 respectively.

C). Types of disputes

Table 9: Shows the types of disputes

S/# Types of disputes Percentage

1 Payments 95.50%
2 Changed condition 80.75%
3 Delays 84.60%
4 Contract time 89.60%
5 Others 15.20%
Table # 7 shows the most significant types of disputes with the respondent highest rates 95.50 % and the 15.20%
is the lowest rate.

D). Methods of Dispute Resolutions: In the contractors perspective the respondents mostly favored negotiation
and mediation as an effective methods of disputes avoidance on road construction projects. The graphical
representation of these results is shown in graph # 3 below.

Dispute Resolution method

AxiMethods of disputes

Litegation
Arbitration
aviodance

Negotiation
Concilliation
0 5 10 15 20 25 30
Number of respondants

Fig 2: Shows the for most specific method of resolution

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 Disputes Impact in Pakistan Construction Industry…

V. CONCLUSIONS
In this research study a deeply review of the literature is carried out to identified the general area of causes of
disputes in road construction sector and disputes remedial measures approaches, in Pakistan construction industry.
As in the analysis of results indicated the key causes of disputes in road construction projects. Therefore these are
ranked as in the viewpoint of Clients, Contractor, and consultant, these are the most important stakeholder in any
projects which have been successfully completed. Furthermore the most significant causes of disputes and their
impact were found in road construction sector. The current practices of dispute are describe in Pakistan
construction industry, to avoid/ addressed or resolve disputes. Mediation and negotiation is measured the most
significant one which represented 85.5% and 85.32% of the respondent’s responses. In this research study the
most significant causes of disputes and their impact have been recognized after by using all parties concerned in
the road construction projects, further this study will help in identification and prevention of disputes during road
construction sectors.

IX. ACKNOWLEDGEMNTS
Authors are thankful to Mehran University of Engineering & Technology Jamshoro for providing necessary
resources for carrying this research work.
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