ANALYSIS OF THE IMPACT OF FEASIBILITY/VIABILITY STUDY ON CAPITAL PROJECT DEVELOPMENT.A CASE STUDY OF OWERRI,
IMO STATE, NIGERIA.
PREPARED BY: OLALEYE TEMITOPE AJOKE
TABLE OF CONTENT
Research Problem Statement
Significance Of The Study
Scope Of Study
Definition O F Terms
2. Literature Review
2.1 Theoritical Framework
2.2 The Nigerian Construction Industry
2.3 Concept Ofconstruction Project
2.4 Types Of Project
2.5 Clients In Building Construction Project
2.6 The Importance Of Feasibility And Viability Appraisals
3. Research Methodology
1 Research Design
3.2 Population Of The Study
3.3 Sample And Sampling Technique
3.4 Research Instrument
3.5 Validation Of Instrument
3.6 Method Of Data Analysis
4. Chapter Four
Data Analysis And Interpretation Of Results
4.2 Research Questionnaire
4.3 Analysis Of Research Questionnaire
The field of development appraisal has been a source that remains unchanged to the surveyors and developers. Other participant in the development process such as construction specialists, planners and architects development was ignored as though is now changing. Government and other stakeholders attempt to extract developer and landowner contributions in other to contribute to affordable housing, public services and infrastructure, as though critical attention is now paid to the feasibility and viability of a development proposal.
Therefore, the theory, application and outputs from development appraisal are under intense examination from a wide range of users.
1.2 RESEARCH OBJECTIVES
To analyze the feasibility and viability appraisal techniques used by Contractors of capital projects in Owerri Urban.
To determine the rate of usage and awareness of formal feasibility and viability appraisal techniques by Contractors in Owerri Urban.
To determine the significance of impact of feasibility and viability appraisals on the development of capital projects in Owerri Urban.
1.3 RESEARCH QUESTIONS
What are the effects of feasibility and viability appraisal on the development of capital projects?
What are the techniques used by capital project contractors in Owerri Urban in terms of feasibility and viability appraisal?
How do you gather information about newer feasibility and viability appraisal techniques and strategies to be applied in your on-going projects?
1.4 RESEARCH HYPOTHESIS
Ho: There is no meaningful relationship between feasibility study and the performance of contractors.
Hi: There is meaningful relationship between feasibility study and the performance of contractors.
Ho: Feasibility study improves the quality produce in capital projects.
Hi: Feasibility study does not improve the quality produce in capital projects.
1.5 RESEARCH PROBLEM STATEMENT
Globally, the overall procedure of formal feasibility and viability appraisal techniques used by contractors and developers often reach its highest in project failures, incessant claims for variations, huge financial losses and sometimes brings discomfort for people who came to enjoy themselves at these recreational centres. (Allan et al, 2007). This situation is more practiced in redevelopment projects due to unavoidable problems of unexpected additional work, much requirements and scope management issues, project funding not aligned with project plans, delay, structural failure, cost overrun, etc
1.6 SIGNIFICANCE OF THE STUDY
The study also gives a clear insight into the various impacts of feasibility and viability appraisal methods on the development of recreation properties in Owerri.
However, The findings and recommendations of the researcher will help in building a strong and better appraisal technique and strategies for Capital Project developers in Owerri state.
1.7 SCOPE OF STUDY
This research focuses mainly on the impact of feasibility and viability appraisal on the development of capital projects in Owerri urban. Results and recommendations may not be used to generalize other Cities in Nigeria, as the researcher could not cover a wider scope due to financial
1.8 DEFINITION O F TERMS
Definitions of terms serve as the dictionary of this research. The terms are defined to enable the reader understand the research more clearly.
Appraisal: It is an estimate or an opinion fixing the price for something. In this work, the terms appraisal, evaluation and analysis have been used interchangeably.
Feasibility:Erikson (2002) defined feasibility as an evaluation and analysis of the potential of the proposed project which is based on extensive investigation and research to give full comfort to the decisions makers.
Viability: According to Simmons (2007), Viable or viability is the ability of a thing (a living organism, an artificial system, an idea, etc.) to maintain itself or recover its potentialities.
Capital Project: this refers to long term investment requiring relatively large sums to acquire, develop, improve, and to maintain.
CHAPTER TWOLITERATURE REVIEW
2.1 THEORITICAL FRAMEWORK
Theoretical framework for the study is based on cost-benefit analysis of a construction project.
The economic feasibility study of a project is an estimate of the potential profitability of that project, or a study that measures the expected benefits from a certain project relative to its cost (Johnson and McCarthy, 2001; Wong et al., 1999). Examples of construction projects include highways, tunnels, bridges, water mains, dams, sewage systems, water treatment plants, power generation plants and pipeline networks. Infrastructure projects can be classified as large construction projects that utilize vast amount of resources in terms of money, materials, labor, equipment and time (Salman et al., 2007; Kulkarni et al., 2004; Morley, 2002).
2.2 THE NIGERIAN CONSTRUCTION INDUSTRY
In Nigeria, like most developing countries, the construction industry plays a dominant role in the economic activities of the country. According to Olowo – Okere (1988) the construction industry accounts for about 60 percent of the Nation’s capital investment and 30 percent of the Gross Domestic Product (G.D.P)
According to Nwosu, (2003), approximately two-thirds of the value of fixed capital produced in Nigeria each year emanates from the construction industry.
CONCEPT OFCONSTRUCTION PROJECT
A project in business and science is typically defined as a collaborative enterprise, frequently involving research or design that is carefully planned to achieve a particular aim.
2.4 TYPES OF PROJECT
Business implementation projects
2.5 CLIENTS IN BUILDING CONSTRUCTION PROJECT
A. PRIVATE CLIENT
Private clients are sole traders or domestic clients who would like to have a house building altered, extended or maintained. They enter into private agreements with a builder to undertake the work.
A commercial client is a factory or business that needs to undertake building works in order to produce a product or process. For example, a fast-food company need an outlet usually has to be built quickly, and to be maintenance free and adaptable.
PUBLIC LIMITED COMPANIES
2.6 THE IMPORTANCE OF FEASIBILITY AND VIABILITY APPRAISALS
According to Ezeanyagu (1991:1) he stated that the purpose of the project analysis is to achieve this end by making as sure as the circumstances permit that the project is technically sound, that it will provide a reasonable economic, and where appropriate, financial returns, that its objectives cannot be achieved in some less costly way and that it fits in with the overall objectives of the organization. According Opara (1991:26) submits that feasibility studies highlight the potential difficulties one might encounter in the implementation of a project. Hence, corrective measure could then be adopted.
CHAPTER THREERESEARCH METHODOLOGY
3.1 RESEARCH DESIGN
The survey research design is adopted in this study using a descriptive survey in which various risk management practices among quantity surveyors will be examined.
3.2 POPULATION OF THE STUDY
The population of study covers quantity surveyors duely registered in Owerri Municipal, Imo state.
3.3 SAMPLE AND SAMPLING TECHNIQUE
In carrying out this research, simple random sampling was carried out. The researcher made use of fifty (50) randomly selected quantity surveyors in Owerri, Imo state.
3.4 RESEARCH INSTRUMENT
In order to get the necessary information, a questionnaire was constructed for respondents. Section A, the introductory part, was used to obtain data about the respondents. Section B, has questions that are designed to obtain information about the variables, with response choices of “YES” or “NO”.