CHAPTER ONE
INTRODUCTION
The present economic challenges of the country have called for optimal care in the construction project actualization. In other to achieve economic and infrastructural development in Nigeria, absolute cost control measures have to be taken in that respect. Capital projects are of immense importance to the development of any society or country. In as much as capital projects are of immense importance, its cost has overtime been a source of serious concern to the government and the Nigerian populace. The cost of projects to a very large extent depends on its initiation and execution. For a lot of capital projects to be successfully initiated and executed, its cost must be adequately controlled and effectively monitored to achieve optimal performance.
In Nigeria, the present economic challenges of the nation coupled with the insecurity challenges has resulted in many construction Projects development have failed owing to the various technical and financial hindrances of cost limit, quality and value optimization. Jagboro and Banalola (2005) wrote that the interim report of the Presidential panel on contracts at the wake of the present democratic government in Nigeria confirmed a staggering amount of over four hundred and fifty billion naira for project which can be classified as failed contracts, spanning from 1979 to 1998.The main reason for this is not far-fetched as many of the professional firms involved in project administration lack adequate management inputs in both quantitative and qualitative terms. Another reason for this high rate of projects abandonment and failed contracts in Nigeria, is that in most government projects, the mobilization fee which is given to the contractor is reimbursed to those who awarded the contract as "bribe" usually of huge sums of money and this thereby increases the cost of the project, affects the quality of job executed by the contractor and will also leave the project either unexecuted or abandoned. This is because the money meant for the project execution has been diverted into individual pockets (Osemenam, 2004).
However, the design of capital projects and other infrastructure is based on different contributors exhibiting various professional skills with a view to obtaining an optimum design solution. These inputs are based on the understanding of design and execution parameters ranging from functionality and usefulness of the capital project, aesthetics and appearance, safety of the structure, quality of workmanship, cost and financial matters and most importantly clients satisfaction with the project on completion.
The increasing economic hardship and the increasingly alarming cost of capital projects coupled with the high number of uncompleted capital projects over the years in Nigeria has been a cause of serious concern especially as it has not encouraged savings from government. The constant contract initiation and its constant lack of effective execution has regrettably has its toll on the economic development of Nigeria. These large numbers of uncompleted projects have also hindered prospective investors in all sectors of the economy. Capital projects are meant to alleviate the suffering of the populace and improve the living standard of people but its lack of completion has further increased the sufferings of Nigerians. Right from the collapse of the first republic, capital projects initiated were hardly executed. These as many would say is simply corruption and lack of the follow of due process in contract awards which has regrettably led to contract inflation and awarding these inflated contracts or projects to incompetent cronies and associates which has further aggreviated the developmental challenges in the face of this present economic challenges.
The main objective of the study is to examine the impact of cost control measures of cost control measures of capital projects on the economic situation of the country. Other specific objectives of the study are
The following research questions will be of assistance in the cause of this study
H0: Cost control measures do not significantly impact on the economic development of Nigeria.
H1: Cost control measures significantly impact on the economic development of Nigeria.
The outcome of the study would be immense importance to government in the establishment of policies that would aid effective completion and execution of projects in Nigeria. The study would help to recommend ways of improving savings from government in other to improve the economic situation of Nigeria. Finally, the study would also benefit students, researchers and educators who are interested in capital projects cost and execution.
This study on measuring the impact of cost control measures on the present economic situation in Nigeria and effective capital project execution in Nigeria
Limitation of study
Financial constraint- The lack of availability of fund tends to lower the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
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