Chapter 6

CONCLUSIONS Conclusions Chapter 6

6.1 Achievements of aims and objectives

One of the main objectives of this research is to identify the existing system of LD

today in . The study was carried out on existing systems of compensation

for time delays of construction projects (Chapter 2). Different contract conditions

and professional views were analyzed in this context. It was revealed that existing

LD system is arbitrary and not reasonable which does not seem to be competent

enough to compensate the actual loss of the client (Table 2.1) and (Appendix - C).

Another objective of this dissertation was to suggest a fair system of LD based on

actual loss to the client. The proposed system is based on the rent lost to the client;

during the delayed period where delay is caused due to the fault of contractor

(Chapter 3). In order to arrive at a solution to the problems of existing LD system,

number of strategies were examined. To decide on the actual loss of the type of

buildings under review, the market rent was selected the best criteria. Thus the

rents were scheduled for analysis (Appendix - A).

Similarly professional views were also considered a relevant factor in the decision of

free market rent. Relevant information in this regard were collected via interviews

with professionals who are closely engaged in the relevant field and compiled (Table

3.2). The average values of rentals for each selected area derived from Rent

schedule (Appendix - A) have been summarized and scheduled (Table 3.3). The

most reasonable rentals were derived in consideration of both criteria, and finally

such rentals against each area concerned; have been summarized for easy reference

(Table 3.4). These rentals have been placed in line with average distances from base

area and scheduled accordingly (Table 3.5).

Next step of this task is to convert the above finding into LD. In doing so LD curve

was plotted using the rentals derived above (Fig 3.4). For better accuracy of the

findings those rentals were capitalized and plotted (Fig. 3.5). This curve represents

LD at different locations within the selected area. This approach was improved

further by making more redress to the client for the additional losses incurred by him. (Chapter 3). This was the main outcome of the research. However fairness of

70 Conclusions Chapter 6 this approach was checked by applying valuation principles in terms of real estate values (Chapter 4). Two relevant dates for the valuation were the scheduled date of completion and the v actual date of completion' of the project. The best method of valuation for this purpose was selected the comparison method. The rentals already derived for each location were incorporated in these valuations. In this context it was considered very important to study the capital appreciation of the five projects under review which are located in five different locations. To facilitate this task a number of interviews were held with the professionals; and results were scheduled for reference (Table 4.2). This exercise revealed that there had been minus capital appreciation in where project A is situated (Table 4.2). In contrast professional views revealed that other locations under review reflected a positive

level of appreciation. Finally professional opinion and free market rents were analyzed and capital value of two relevant dates were derived. Hence this exercise was confined to project A because negative capital appreciated reflected only in Fort area. Loss of capital value so derived (Chapter 4), was compared with LD suggested in Chapter 3. The answer was that LD under Chapter 3 in still greater than the loss of capital value on that project. This was the criterion to assess the fairness of LD under Chapter 3. In comparison with the above answers of the above two exercises, which ever is high was accepted as the most reasonable LD to compensate the client. Therefore the LD based on loss of capital value is also an equally important finding as far as this dissertation is concerned.

6.2 Summary of Findings

6.2.1 New LD System

As discussed above a system for LD was formulated in the most simple manner so that the client could use LD curve in the graphical diagram and find out the reasonable LD for the project concerned (Chapter 3).

71 Conclusions Chapter 6

6.2.2 LD in terms of real estate

In this method loss of capital value due to delay was calculated and if the value is greater than the LD under Chapter 3; the accepted LD should be the loss of capital value of real estate. In other words this is being established as a check method to the approach under chapter 3, (Chapter 4). This can also be introduced as an alternative method and as one of the important findings in the dissertation.

6.2.3 Fairness of existing LD

During investigation it was found out that the existing system of LD is not realistic and is arbitrary. Therefore it was revealed that the replacement of existing system has become an urgent need for the upliftment of the activities of the industry.

6.2.4 Necessity of further improvements of the proposed system

Study of avenues for the extensions and improvements of the proposed LD system were identified as a fulfillment of this dissertation (Chapter 5).

6.3 Further developments to the research

Main types of building in Sri Lanka are residential, commercial, industrial and offices. The first and foremost task of preparation of LD system is to identify what the loss to the client is. Therefore it is very important to decide the criteria to be adopted depending on the type and use of the building (Chapter 5).

It is suggested to study the possibilities of compensating the client in an event where any loss due to any cost overrun on the part of contractor. Similarly impact of poor quality on the economic life of the building is considered vital in this respect. This has also undoubtedly become a loss to the client in real estate terms. Therefore Conclusions Chapter 6 identification of any loss due to cost overrun and poor quality is very important and looking for new methods of compensation in this context is a vital measure towards improvement of this research.

Buildings can be divided into various types from many view points. One of the important criteria in this respect is the usage of buildings. In case of residential buildings what should be the basis of calculation of LD. Basically the loss of income may be the criteria in the determination of LD (Chapter 5). However this has to be decided subsequent to an in-depth study into the behavior of rental market and the related factors. In case of commercial buildings and industrial buildings one would argue that the actual loss from the business should be the appropriate criteria in deciding the LD. On the other hand a question arises whether mere rent is sufficient to compensate the delay? This position is subject to arguments and the best solution is proposed to be selected and adopted.

Therefore cost overrun and non-achievement of expected quality may also be indirect losses to the client. Analysis of these aspects would be an extension of this dissertation. Further methods of calculation of the loss in relation to residential, commercial and industrial buildings will definitely be a fulfillment of the broad based aims and objectives of this dissertation.

6.4 Limitation and criticism of the proposed system of LD

One of the main limitations to the proposed system will be the assumption of accuracy. Hence reliability of information such as rents, actual delay of completion of the construction project, identification of the change in economy play an important role in the accuracy of expected outcome. These limitations are uncontrollable but error can be minimized by applying various relevant techniques.

The degree of mutual understanding also has become one of the limitations in this context. For instance when there is a long delay, there should be provisions in the contract document for a mutual termination that will be a benefit for both parties. In such a way delay can be curtailed; which restricts the LD under proposed system.

73 Conclusions Chapter 6

context. For instance when there is a long delay, there should be provisions in the

contract document for a mutual termination that will be a benefit for both parties.

In such a way delay can be curtailed; which restricts the LD under proposed

system.

On the other hand parties to the contract are not ready to accept the new system of

LD because they have already adhered to the traditional system. However to

overcome this limitation, proper measures should be introduced to educate the parties concerned and to popularize the new approach. Another limitation is the

relevant date of calculation of LD. The most appropriate date of calculation of LD should be the date on which the actual delay caused. But it will be impracticable to decide on rentals at the end of the delay because at this stage client and contractor may not be in the same terms as they were at the commencement of the construction contract. Therefore the basis of rentals and method of calculation of LD (Chapter

3) should be clearly incorporated in the contract document.

The efforts of this dissertation is to protect the client's interest in the event of delays caused by the contractor. But similar losses may be caused to the contractor due to the negligence on the part of client. This aspect should also be critically analyzed and such research is greatly appreciated to enable comparisons of losses to both parties to a contract. This type of study would help to establish the concept which enunciates that "no one should be enriched at the expense of another".

74 References

References

Abeysekara, W.K.V.M., (1994). Condition of contract for minor works, their strengths and weaknesses. Construction project management national conference, Sri Lanka, pp. 86-113.

A.D.B. Publication (1987). Hand book on problems in procumbent for projects financed by A.D.B. pp. 28-79

Bittel, L.R. (1976). Right on time. MC.grow Hill Inc. New York. pp. 15 - 48

Bixson, P.J. (Dec. 1976). Property investment. Chartered Surveyor, Vol. 109(5). Chashan press Ltd. Buckingham shire, U.K. pp. 162.

Brandon, S.P. & Ferry. D.J. (1991). Cost of planning of building. BSP professional books London, Edinburgh Boston, pp. 33-79.

Britton, W., David, K. & Johnson, J. (1980). Modern method of valuation. Estate gezette Ltd., London.

Broakes, N. (Dec. 1977). Property development in U.K. Chartered Surveyor, Vol. 110(5). Cheshan press Ltd., Buckinghamshire, U.K. pp. 19- 21

Cadman, D. & Austini, L.(1981). Property development. E.&F.N. spon Ltd. U.S.A. pp. 27-126.

Creaves vs Bayiham Meikle and partners. (Date of court case not available.)

Davidson, A.W. (1970). Parry's valuation tables & conversion tables. Estate gazette Ltd. London.

75 References

Donnely, J.H.& Gibson, J.L. (1984). Fundamentals of management. Business publication, INC. Piano, Texas, pp. 189-215.

Duncan, A.J. (1965). Quality control & Industrial statistics. IRWIN, INC. Home wood, Illinois, U.S.A.

Gajendran, T. (1995). Facilities management. Dissertation. Department of Building Economics, Univercity of .

Gunasekara, M. (1994). Project management challenges in the local construction industry. Construction management national conference, Sri Lanka, pp. 41-48

Gunasekara, P.D.K.D. (1993). Project planning for better planning performance in construction projects. Dissertation. Department of Building Economics, University of Moratuwa.

Hanson, B.L. (1966), Quality control. Practice Hall of Pvt. Ltd. New Delhi pp. 1-256

Harris, F & MC Caffer, R.(1989). Modern construction management. 3rd Ed, B.S.P. professional books Edinburgh, Bostan, Melbourne, pp. 19-42.

Harvey, J. (1981) Urban Land Economics Mackyas of Chatham, Kent. U.K.

Hettiarachchi, J.N. (Jan/June 1997). Selection of a building site. Real estate review journal, Vol. 1. Institute of real estate and land economy, Sri Lanka, pp. 35-37

Hettiarachchi, J.N. (1994). Viability of investment in multi- storyed buildings. Construction project management conference, Sri Lanka, pp. 150- 164

76 References

Hoyle, E. (1982). Money and barking. Richard clay Ltd. London, pp. 49 - 52

I.C.T.A.D.publication No. SCA/1 (Jan. 1989). Conditions of contract for

works of building and civil engineering work. Ministry of policy planning and

implementation.

Janakie W.V.P.C. (1995). Causes and prevention for delays. Dissertation.

Department of Building Economics, University of Moratuwa.

Karunasena, A. (1968). Mathematics of valuation tables, Sri Lanka.

Lock, D. (1968). Project management. Haverhill, Suffolk,Great Britain.pp. 48.

Naganathen, S. (1981). Project planning and management. Conference on construction planning and management. Saharanpur, U.P. India.

Nicholls, J.M. (Nov. 1978). No reduction in demand. Chartered Surveyor,

Vol. Ill (4). Chesham press Ltd. Buckingham shire, U.K. PP.128

Nowel, G., Barrette, C,V. & Agostini, E.J.(Jan/Feb. 1990). International real estate journal, Vol. 17(1). East evans road, Scottsdale, Arizona, pp. 128.

Pahwa, H.P.S, (1993). Project financing. Ratampur, New Delhi, pp. 362-487.

Peter, G. (1981). Project management and construction control. Construction press, London, pp. 10- 13

Rajapaksha, R.P.S.S. (1993). Cash flow forecasting and monitoring for construction projects in Sri Lanka. Dissertation. Department of Building

Economics, University of Moratuwa.

77 References

Ratnasekara, M.G.C.W. (1995). Professional negligence and quantity surveyor's practice in Sri Lanka. Dissertation. Department of Building

Economics, university of Moratuwa.

Rent Restriction ACt No. 7 of 1972 as amended in 1980.

SliteSj E.M. (1976). Hand book of total quality assurance. Prentice Hall,

INC. Waterford, U.S.A.

Snowdon, M. (1977). Management engineering projects. Butter worth,

London, pp. 6-108

Stephen, N.& Brooks, N.P. (1981) . The practice of estate agency. Estate gazette Ltd. London, pp. 117- 168

Tamilchevan, R. (1993). Compensation for the loss of productivity in construction projects. Dissertation. Department of Building Economics,

University of Moratuwa.

Udamulla, T. (1998). Introduction to building construction industry.

Fundamentals of real estate. Sri Jayawardenepura University, pp. 37- 45

Udayanjeewa, W.M.U.P. (1994/1995). Managing risk. Quantity Surveyor,

Department of Building economics, University of Moratuwa. pp. 87-88

Weddikkara, C. (1997). Course hand out Department of Building Economics,

University of Moratuwa.

Weerakoon, A.W.C. (1997). The effects of leadership style of construction manager on project performance. Dissertation. Department of Building

Economics, University of Moratuwa.

78 References

Wickremarachchi, N. Real estate valuation, Fundamentals of Real Estate

Journal, Sri Jayawardenapura University, . pp. 60-71. Rent Schedule Appendix - A

Rent Schedule

1= E S

8 K m

Floo r < Distanc e Locatio n fa £ * Descriptio n

World trade First 64 Ultra Modern type Office 162.50 0 Center Building Colombo 01 Seventh 418 -do- 162.50 0

• Ninth 874 -do- 162.50 0

Seventeenth 418 -do- 137.00 0

Eighteenth 874 -do- 162.00 0 (This assessment is recenfly done by Govt. Valuers). Social Service dept. D.S. G.F. -- Average Building 68.00 3.5 Senanayaka Mawatha, . Y.M.B.A. Building G.F. -- New office building 87.50 3.5 Borella. 153, G.F. Modern New office building 110.00 Dharmapala First -- (Average) 2.5 Mawatha Colombo 03. Postal Dept. G.F. } 137.50 1M Cross First } Street Second} 2400 Office building 68.75 1 Pettah. Third } (Average) Asst. No.73 Modern type new office W.D.A. G.F. 518 building 137.50 2 Ramanayaka Mawatha, Colombo 02. Asst. No. 108 W.D.A. First 364 -do- 137.50 2 Ramanayaka Mawatha, Colombo 02. Cool Air G.F. 400 Modern type office Garden, building (Not very new) , 137.50 1 Office of First 400 Company Registrar D.R. Wijewardena Mawatha. 156, Blondina G.F. Courts, First 900 New building 125.00 3.5 Borella, Second Colombo 08. Dharmapala Mawatha, -- -- - 125.00 2.5 Ceylinco Office. Colombo 03. (APPENDIX - A)

80 Rent Schedule Appendix - A

s o i t in n 2 Ratem K m Locati c Floo r F.A.( m Descri f wee k Distan c

Merchant's Tower Sixth 600 Ultra 165.00 Bank of Ceylon modern (Average 2 Colombo 03. Seventh 600 new Expected office Rent) building Valuation Dept. Colombo City office Road Colombo 10. Second -- Average 100.00 2.5 building Asst. No.435/3 Modern Kularatna Mawatha G.F. 18 type 110.00 2.5 Maradana. office building Seprime Trading Co. Modern Maradana. type 100.00 2.5 office building Asst. No. 297 Modern -- -- type 100.00 2.5 Colombo 02. Office building Asst. No. 90 Galle Road G.F. -- Office 137.50 1.5 building

•*

>

(APPENDIX - A)

81 Project Details Appendix - B

Project Details PROJECT - A

(a) Location Colombo Fort

(b) Description Ultra modern fifteen storyed building

(c) Floor Area 31000 Sq. m.

(d) , Limitation on LD Nil

(e) Agreed LD Rs. 400,000.00 per day

(f) Contract Sum Rs. 3250,000,000.00

(g) Calculated LD under Propose System (For first week) Rs. 4960,000.00

(h) LD per day Rs. 708,571.00

(i) Proposed LD - Present LD (Per day) Rs. 308,571.00

PROJECT - B

(a) Location Galle Road, Kollupitiya.

(b) Description Multi- storyed Ultra modernoffice building

(c) Floor Area 25000 Sq. m.

(d) Limitation on LD Up to 10% of contract sum.

(e) Agreed LD Rs. 450,000.00 per day

(f) Contract Sum Rs. 501,000,000.00

(g) Calculated LD under Propose System (For first week) Rs. 3,750,000.00

(h) LD per day Rs.535,714.00

(i) Proposed LD - Present LD (Per day) Rs.85,714.00 (APPENDIX - B)

82 Project Details Appendix - B

PROJECT -C

(a) Location Union Place

(b) Description Multi - storyed Ultra modern type building

(c) Floor Area 16322 Sq. M.

(d) Limitation on LD Up to 5 % of contract sum

(e) Agreed LD Rs. 75,914.00 per day

(f) Contract Sum Rs. 142,339,339.00

(g) Calculated LD under Propose System (For first week) Rs. 2,040,250.00

(h) LD per day Rs. 291,464.00

(i) Proposed LD - Present LD (Per day) Rs. 215,550.00

PROJECT D

(a) Location De Seram place, Colombo 10

(b) Description Multi -storyed modern type building

(c) Floor Area 4896 Sq. m.

(d) Limitation on LD Up to 10% of contract sum.

(e) Agreed LD Rs. 18,780.00 per day

(f) Contract Sum Rs.75,119,759.00

(g) Calculated LD under Propose System (For first week) Rs.51 4,080.00

(h) LD per day Rs.73,440.00

(i) Proposed LD - Present LD (Per day) - Rs.54,660.00 (APPENDIX - B)

83 Project Details Appendix -

PROJECT - E

(a) Location Borella, Colombo 08.

(b) Description Multi -storyed modern building

(c) Floor Area 1500 Sq. M.

(d) Limitation on LD Up to 5 % of contract sum

(e) ' Agreed LD Rs. 17,500.00 per day

(f) Contract Sum Rs.70,000,000.00

(g) Calculated LD under Propose System (Forfirst week) Rs. 135,000.00

(h) LD per day Rs. 19,285.00

(i) Proposed LD - Present LD (Per day) Rs.1785.00

(APPENDIX - B)

84 Professionals Opinion on Existing and Proposed LD Appendix - C

Professional Opinion on Existing and Proposed LD

Existing LD Person s Person s Intervie w Intervie w Professio n Professio n Res . Lo w Unrs . Hig h L D Shoul d L D Shoul d b e b e Reason s fo r Reason s fo r Curren t Curren t Basi s Basi s dela y dela y

'/lOOO tO '/4000 1 Cost/Cons - y y - L.T.C. Cont. of C.S. r Q.S. - y y - L.T.C. -do- Com. 3 Eng. - y y - L.O.B. A.A. Cont. 4 Q.S. - y y - A.L. Not constant Consultant Viooo to '/4000 5 Cost/cons. - y y - L.O.R. Cont. of C.S. 6 Q.S. - y y - L.O.R. A.A. Cont. Viooo to '/4000 7 Arch - y y - A.L. Cont. of C.S. 8 Q.S. - y y - L.O.B. -do- Cont. 9 Q.S. - y - L.T.C. Not constant Consultant cont. 89% Percentage 11 89 100 - - - consultant 11%

Cost/ Cons. - Cost Consultant L.O.B. - Loss of business

Q.S. - Quantity surveyor A.L. - Actual Loss

Eng. - Engineer L.O.R. - Loss of rent Arch. - Architect A.A. - Agreed Amount

Res. - Reasonable C.S. - Contract Sum

Unrs. - Unreasonable Cont. - Contractor

L.T.C. - Loss to Client

(Appendix - C)

85 Questionnaire -1 Appendix - D

Questionnaire - 1

Time Overrun and Liquidated damages

The Details furnished below will be used for the purpose of this project and will not be disclosed or used for any purpose other than this dissertation. However, the information in Part A will not be incorporated in the report.

Part A

1. Name Date

2. Designation

3. Official Address

4. Nature of work undertaken

(1). Project Management

(2). Consultancy

(3). Other Questionnaire -1 Appendix - D

Part B

1. What are the common factors you think that would course time overrun

in construction project in Sri Lanka.

a.

c.

d.

e.

2. In your opinion who is the most responsible party for time overrun in a

construction project.

a. Client - %

b. Consultant - %

c. Contractor - %

d. Others - %

Please explain reasons for your answer.

3. Please list delays caused to projects in which you were engaged or

known to you.

Delay Reason for LD Reasonable Project Basic of LD Yes No delay Yes No

(APPENDIX - D)

87 Questionnaire - 1 Appendix - D

Please give reason for your answer above.

Any Suggestions to improve the existing LD system used in Sri Lanka.

Who should determine the contract period and what should be the basis of it?

Do you suggest any guidelines to calculate actual delay of a construction project fair by both parties to the contract ?

Do you agree that client should be compensated for the actual loss caused to him due to time overrun ?

Yes No

If your answer is "No" please give alternative method of compensation, and explain why ?

(APPENDIX - D) Questionnaire - 2 Appendix - E

Questionnaire - 2

Derivation of relevant rent for modern office buildings

The Details furnished below will be used for the purpose of this project and will not be disclosed or used for any purpose other than this report. However, the information in Part A will not be incorporated in the report.

Part A

1. Name Date

4. Designation

5. Official Address

4. Nature of work attending

(a). Valuation of real estate (b). Rental Assessment (c). Rating Valuations (d). Others - Specify

Part B

1. Is there a stability in the rental market today, in Sri Lanka.

Yes No

2. Please give reason for your above answer.

(APPENDIX - E)

89 Questionnaire - 2 Appendix - E

What are the factors that determine a rent for an ultra modern office building in the city of Colombo ?

To what extent Sri Lankan economy influences rental market of the country ?

What method do you recommend to arrive at the free market rent for an office building ?

a. Comparison b. Investment

c. Contractors Test d. Others specify

1 Please give reasons for your answer ?

Could you give some rental comparisons for modern office buildings in Fort, Kollupitiya, Union Place, Maradana, Borella ?

( APPENDIX - E)

90 Questionnaire - 2 Appendix - E

7. From your experience can you suggest most appropriate rents for Ultra

modern office buildings in the following areas.

Area Rent/m2/PM Description

Fort Modern office building

Kollupitiya Modern office building

Union Place Modern office building

Maradana Modern office building

Borella Modern office building

8. Do you think how long this pattern of rentals will be constant in the

above areas ?

9. Would assessment of compensation on rent be realistic under valuation

principles ?

Yes No

10. Please give reasons for your above answer.

(APPENDIX - E)

91 Appendix - F Questionnaire - 3

Questionnaire - 3

Assessment of Capital Application

The Details furnished below will be used for the purpose of this project and will not be disclosed or used for any purpose other than this dissertation. However, the information in Part A will not be incorporated in the report.

Part A

1. Name Date

6. Designation

7. Official Address

4. Nature of work attending

(a). Project Management

(b). Valuation of real estate

(c). Rating Assessments

(d). Others - Specify

(APPENDIX - F)

92 Questionnaire - 3 Appendix - F

Part B

Specified Area under review -

(a) Fort

(b) Kollupitiya

, (c) Union Place

(d) Maradana

(e) Borella

1. Is there a stability in the rental market today, in Sri Lanka.

Yes No

Please comment on your decision

2. Generally, what are the factors affecting the real estate market within the

specified

areas ?

a.

b.

c.

d.

e.

(APPENDIX - F)

93 Questionnaire - 3 Appendix - F

3. Do you think that there is a capital appreciation in the property market

today ?

Yes No

3.1 Are there any deviations to your decision above regarding a specified

area.

Yes No

3.2. Please explain your decision above.

4. Please give your opinion on capital appreciation of real estate during

last two years.

Capital Capital Location Remarks Appreciation Depreciation

< Fort

Kollupitiya

Union Place

Maradana

Borella

(APPENDIX - F)

94 Persons Interviewed Appendix - G

PERSONS INTERVIEWED

Questionnaire 1

Name Designation & Official Address 1. Mr. P.R.N. Fernando D.G.M. (Constancy) State Engineering Corporation Colombo 02. 2. ' Mr. R.G. Ranathunga Quantity Surveyor State Engineering Corporation Colombo 02. 3. Mr. S.M.V. Aruna Kumara Deputy Chief Engineer C.W.E.,D.R. Wijewardena Mawatha Colombo 10. 4. Mr. Shantha Fernando Quantity Surveyor Access Tower Project Colombo. 5. Mr. N.M. Jayathilaka Manager (Premises) Insurance Corporation Vauxhall Street, Colombo 02. 6. Mr. S. Weerasingha Quantity Surveyor Zublen (Central Bank Project) Colombo 01. 7. Mr. H. Ranasingha Architech State Engineering Corporation Colombo 02. 8. Mr. E.J. Ranajaya Quantity Surveyor State Engineering Corporation Colombo 02. 9. Mr. G.A. Ranaweera Technical Officer Civil Aviation Katunayaka. 10. Mr. Mahinda Gunawardena Quantity Surveyor LINK Engineering Colombo 02. 11. Mr. H.D. Chandrasena Consultant Borella, Colombo 08. (Former AGM Constancy, S.E.C Colombo 02)

(APPENDIX - G)

95 Persons Interviewed Appendix - H

PERSONS INTERVIEWED

Questionnaire - 2

Name Designation & Official Address (A) Mr. V.M.S. Jayasiri Valuation Officer City Office, Valuation Department Maradana. (B) Mr. E.M.. Wickramanayaka Asst. Valuer City Office, Valuation Department Colombo 10. (C) Mr. P. Shanthirasekaran Senior Asst. Valuer State Valuation Department Maradana. (D) Mr. V.C. Udugampola Manager(Assets) C.W.E. Vauxhall Street Colombo 02. (E) Mr. B.T.P. Guruge Asst. Valuer State Valuation Department Maradana. (F) Mr. H.T.J.N. Fernando Valuation Officer State mortgage and Investment Bank Colombo 03. (G) Mr. M.B.R. Gunapala Valuation Officer State Valuation Department Colombo 10. (H) Mr. N.M. Jayathilaka Manager (Premises) Insurance Corporation Vauxhall Street, Colombo 02. (I) Mr. G.H.K. Wickramatilaka Chief Valuation Officer State Mortgage & Investment Bank Colombo 03. (J) Mr. L. Palihakkara Asst. Valuation Officer State Mortgage & Investment Bank Colombo 03. (K) Mr. J.K.T. Fonseka Valuation Officer State Valuation Department Maradana. (L) Mr. P.K.Y. Perera Senior Lecturer (Dept. of Estate management & Valuation) Sri Jayawardenapura University.

(APPENDIX - H)

96 Persons Interviewed Appendix - J

4.-

PERSONS INTERVIEWED

Questionnaire - 3

Name Designation & Official Address (M) Mr. V.M.S. Jayasiri Valuation Officer

• State Valuation Department Colombo 10. (N) Mr. R. Wickremanayaka Asst. Valuer State Valuation Department Colombo 10. (0) Mr. P. Shanthirasekaran Senior Asst. Valuer State Valuation Department Colombo 10. (P) Mr. Udugampola Manager (Premises) C.W.E Vauxhall Street, Colombo 02. (Q) Mr. B.T.P. Guruge Asst. Valuer State Valuation Department Colombo 10. (R) Mr. H.T.J.N. Fernando Valuation Officer State Valuation Department Colombo 10. (S) Mr. M.B.R. Gunapala Valuation Officer State Valuation Department Colombo 10. (T) Mr. G.H.K. Wickrematilaka Chief Valuation Officer State Mortgage and Investment Bank Colombo 03. (U) Mr. D.L. Palihakkara Asst. Valuation Officer State Mortgage and Investment Bank Colombo 03. (V) Mr. G.K.T. Fonseka Valuation Officer State Valuation Department Colombo 10.

(APPENDIX - J)

97 Calculation of Liquidated & Ascertained Damages... Appendix - K

Calculation of Liquidated & Ascertained Damages Typical Format

CONTRACT

CLIENT

CONSULTANT

COSTS/WEK

1. SUPERVISORY STAFF (Current Rates)

• Architect :

Estimate hrs/wk x time charge

ofRs /hr Rs.

• Quantity Surveyor

Estimated hrs/wk x time charge

ofRs /hr Rs.

• Consultants (as above for each one) . Rs.

• Clerk of works

Weekly Salary (= Yearly 152) Rs.

Total (1) Rs.

(APPENDIX - K)

98 Calculation of Liquidated & Ascertained Damages... Appendix - K

2. ADDITIONAL COST (Current Rates)

• Rent and/ or rates and/ or charges for present premises Rs.

• Rent and/ or rates and/ or charges for alternative premises Rs.

• Charges for equipment Rs.

• Movement of equipment Rs.

• Additional and/or continuing and/ or substitute staff Rs.

• Movement of staff (including travel expenses) Rs.

• Any site charges which are the responsibility of the client Rs.

• Extra payments to direct employed trades Rs.

• Insurance Rs.

Total (2) Rs.

Source - Janakie 1995

99 Calculation of Liquidated & Ascertained Damages... Appendix - K

E A.7 Cont. d

INEREST

COSTS/WEEK

interest payable on estimated capital expended up to the control completion date, but from which no benefit is delivered. Estimated expenditure taken as 80% of contract sum and fees.

Architect's fees (90%)** Rs.

Quantity surveyor's fee (90%)** Rs.

Consultant's fee (90%)** Rs.

Salary of clerk of works (Rs./wk x contract period) Rs.

Interest charges of current rate of per cent.

Interest therefore

= 80% capital expended x interest

52 Rs.

Total (3) Rs.

It is essential that all costs are additional i.e. they would not be incurred if the contract were completed on the contract completion date the headings given are examples only, every job is different.

Professional fees are taken as 90% of total because some professional work remains to be done after practical completion.

(APPENDIX - K)

100 Responsible Parties for Delays Appendix - L

Responsible Parties for Delays

RESPONSE CONSULTA CONTRA ACADEMIC No RESPONSIBLE CLIENT NT CTOR S PARTY (02 NOS.) (04 NOS.) (06 NOS.) (03 NOS) 1 Client * * * 2 Consultant ***** *** 3 Contractor ** *** *** ** Beyond the control of * * 4' the above parties

NOTE: Some interviewees had given more than one response.

Source - Janakie 1995

(APPENDIX - L)

101 Prevention of Delays Appendix - M

Prevention of Delays

CONSULTANT

• Organizing frequent Progress meeting • Proper documentation • On time drawings, Instruction, specification • Complete information • Proper consideration • Lesser variation • Careful contractor selection • Specify common materials in the market • Certification on time • Timely approval • Fixing reasonable time target

CONTRACTOR CLIENT

Timely procurement of Sufficient labor plant and materials • Sufficient cash flow Proper programming • Timely payment Careful bidding Planned variations Prevention of • Giving notices on time • nominated Obtain approvals Delays sub contractors Request further • Better co-operation information • Giving Procession Joint measurement of site on time Better co- operation • Minimum Proper site organization interruption Efficient controlling to the contractor's Sufficient cash flow program Adequate communication Early commencement Refer historical data

OTHER

• Liquidated damages • Bonus for early completion • Timely allocation of budget • Appoint a project manager

Source - Janakie 1995

(APPENDIX - M)

102 Time performance of individual project Appendix N

TIME PERFORMANCE OF INDIVIDUAL PROJECT

• 25

157.14 • 77.42 I 200 I 75 I 25 • 77.27 • 276

100 200 300 400 500 600 700 800 % Time overrun

Source - Janakie 1995

(Appendix - N)

103