Editorial
Cameron and Hare identify activities common to both project management and the management of health and safety (H&S) to integrate the two more effectively. Eight existing tools were developed to incorporate H&S issues: a responsibility chart; an option evaluation chart; hazard workshops; information on drawings; red‐amber‐green lists; milestones on programmes; and a design change control process. Industry validation interviews found the tools to be an effective way of incorporating the management of H&S within general project planning. The importance of this is that those responsible for the management and planning of construction projects can now incorporate H&S matters as an integral part of their work rather than as an add‐on to be done by H&S personnel. The authors also argue that safety specific paperwork can also be reduced. The findings have informed the UK's Health and Safety Executive in their revision of safety regulations which now require less separate H&S paperwork and place greater emphases on the act of integrated planning.
Although contractors experience the problem of deciding appropriate allowances for risk in construction projects, they rarely use the formal risk analysis models that have proliferated in recent years when pricing a bid. Some studies have elicited reasons for the low take‐up of risk models by contractors. However, none has gone as far as examining what contractors actually do when they put a bid together. Using unstructured interviews and documentary analysis, Laryea and Hughes investigate how contractors take account of risks when calculating their bids for construction work. This was compared to propositions in 60+ analytical risk models that were examined and classified. The major differences highlighted between theory and practice can inform future developments to support contractors in pricing their work.
On assessing the financial viability of BOT projects under conditions of uncertainty, practitioners face the difficult task of selecting the appropriate stochastic model for analysing project risk variables. Greenfield (or new development) BOT projects are particularly challenging for project risk stochastic modeling because project analysts can only collect a limited amount of direct information on critical sources of project uncertainty. Chiara and Garvin present a novel and simple family of stochastic models that can be used to represent BOT analysts' subjective perceptions of how the uncertainty associated with risk evolves over the project life. Moreover, the models are capable of capturing two properties that characterize some Greenfield BOT risk variables: the "increasing uncertainty property", i.e. uncertainty is growing over time, and the "learning property", i.e. uncertainty growth is confined by the learning of relevant information that will be revealed during the project operational period. The work shows that neglecting these properties can produce misleading results. The authors illustrate the application of their models to financial risk analysis of a Greenfield BOT toll road project. Academics and practitioners can easily extend the paper's findings to any Greenfield BOT project.
Social capital is the capital that is embedded in social relations between individuals. Styhre explores how this is playing a central role in anchoring collectively shared knowledge in construction companies. Drawing on a case study of a Swedish rock construction company, Styhre examines how knowledge is always a matter of collective social accomplishments and agreements. Seen like this, knowledge is more than "brute facts" or "empirically verified truths". It is also derived from close collaboration between individuals or professional groups. The results of this analysis mean that managers and leaders in the construction industry need to pay attention to social relations in the workplace since well‐functioning relations are of great importance in milieus (e.g., the construction industry) characterized by close collaborations and continuous sharing of information. That is, leadership work is just as much about creating a stimulating and open climate as it is about dealing with various conventional issues and concerns.
Jaillon and Poon examine the sustainable construction aspects of adopting prefabrication in high‐rise buildings located in dense urban environments such as Hong Kong. The authors show that the environmental, economic and social benefits of using prefabrication are significant when compared to conventional construction methods. Their measure of building performance includes reductions in construction time, in waste generation on‐site, in labour requirement on‐site and accident rate. Their case studies demonstrate that using prefabrication in building projects results in significantly improved performance when compared to conventional construction techniques. The use of prefabrication also contributed to higher quality controls of the construction products at the factory and improved health and safety on construction sites. These results can help building professionals understand and acknowledge the benefits of prefabrication. The authors show that a wider use of prefabrication techniques could contribute to a more environmentally responsible building industry and help in achieving sustainable construction in dense urban environments.
Contractor performance bonds are credit extensions that require a premium to compensate for the various risks undertaken by the bond provider. Contractor performance guarantees with risky collateral are specific bonding instruments popular in some Asian countries. Huang proposes a pricing model for these specific instruments on the basis of the credit default swap (CDS) pricing approach. The model incorporates both contractor default probability and the recovery risk of collateral. It also allows for explicit specification of bonding parameters such as the promised amount of payment in the event of default. The application of the proposed model looks promising because the estimated premium rates can effectively distinguish financially distressed construction firms from normal ones.
Damnjanovic, Duthie and Waller investigate the strategic effects of network interconnectivity in the development of toll road projects. They show that managerial flexibility extends beyond simply project‐specific actions. This flexibility should include network recourse actions, for example, the option of expanding the capacity on the feeder routes in the surrounding network after the initial uncertainty in the origin‐destination demand is resolved. The authors present two bi‐level stochastic programs to compare and contrast the optimal development actions, both with and without consideration of network recourse. Application of these models to a simplified network allows for a closed‐form solution and demonstrates the value of considering network flexibility when making project investment decisions. The authors indicate that network recourse is of particular importance for (a) greenfield projects because of the high demand uncertainty and (b) long‐term concession projects because the surrounding network structure is bound to be altered over time resulting in changes in the traffic flows and the project's competitive position.
Li, Guo, Skibniewski and Skitmore present an application of integrating Virtual prototyping (VP) technology and the IKEA business model (IKEA Model) to improve construction process management. The IKEA model entails the self assembly of furniture by its customers through following a 3D step‐by‐step instruction, without the need of on‐site project supervision/management. Through the use of VP technology, the lean production process engaged in the IKEA model is studied and implemented in a real‐life construction project. Specifically, based on the analysis of the IKEA model, the authors show how the IKEA model can be applied to optimize construction processes and simplify management activities. A case study is analysed to demonstrate the improvement of construction process management through using the VP‐IKEA approach.