CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

Construction activities is older than every activities and development in Nigeria and the rest of the world; it has developed gradually through the centuries from dwelling in caves to skyscrapers and recently to more advance structures that can smartly respond to stimuli in its environment (e.g. automated doors, escalators) (Peters, 2001).

According to (Horsely et al., 2003) stated that the building process may also be grouped into three major phases: the conception/design phase, construction phase and operation or use phase.

The evolution of construction project has been stable over the years in Nigeria to meet human needs and developmental processes such as provision of infrastructure, employment and contribution to the economic growth.

 According to (Anumba et al., 2008) stated that the construction practice has also undergone a great deal of development in response to the dynamic nature of human needs and infra-structure.   However the causes and effects of projects abandonments are not just peculiar to a particular reason rather cut across several reasons (Ayodele and Alabi, 2011), and as well as creating a total dwindling effects on the values of developed properties located close and within the vicinity.

The Abandoned projects including building, Civil Engineering and heavy engineering development project like: houses, churches, schools, roads, bridges, dams, tunnels, air port, sea port etc. litter the whole Nigeria (Okon, 2012).

According to Osemenan (2007) stated that Nigeria has become the “world’s junk-yard of abandoned projects worth billions of naira and it is greatly unthinkable that Nigeria blessed with so great potentials in the construction industry can experience such magnitude of project abandonment.

According to another report by Kotangora (2003) there are about 4000 uncompleted or abandoned project belonging to the Federal Government of Nigeria with an estimated cost of above N 300 billion which will take 30 years to complete at the present execution capacity of government, also according to him this issue of abandonment been left without adequate attention for too long which is now having a multiplier effect on the construction industry in particular and the national economy as a whole.

The construction industry plays a very dominant role in the economy of any nation. A healthy economy usually experience an increase in construction activities, but in a depressed economy, the incidence of project abandonment tends to be more prevalent. According to Akinolu (2000) delays and cost overruns have “knock on” the effect on the construction industry and indeed in the whole economy. It is to this regard that the study desire to examine the economic implication of construction project abandonment to the construction industry in Nigeria.

1.2 STATEMENT OF PROBLEM

The construction industry in Nigeria has contributed significantly to the economic growth and infrastructural development in Nigeria but the rate at which projects are abandoned in most of the states in Nigeria is quiet alarming. The Abandoned projects including building, Civil Engineering and heavy engineering development project like: houses, churches, schools, roads, bridges, dams, tunnels, air port, sea port etc. litter the whole Nigeria (Okon, 2012). There are no spaces for other activities as a result of the abandoned project.

The cogent of this study is on the premise that the expected real properties and its values in Nigeria are suspected to be dwindling as a result of incessant abandonment of projects

1.3 AIM AND OBJECTIVES OF STUDY

The main aim of the research work is determine the economic implication of construction projects abandonment to the construction industry in Nigeria. Other specific objectives of the study are:

1. to determine the causes of construction project abandonment in Nigeria
2. to examine whether construction project abandonment have significant effect on the construction industry in Nigeria
3. to investigate on the factors affecting the performance of the construction sector in Nigeria
4. to proffer solution to the above problem

1.4 RESEARCH QUESTIONS

The study came up with research questions so as to ascertain the above stated objectives of the study. The research questions for the study are:

1. What are the causes of construction project abandonment in Nigeria?
2. Does construction project abandonment have significant effect on the construction industry in Nigeria?
3. What are the factors affecting the performance of the construction sector in Nigeria?

1.5 STATEMENT OF RESEARCH HYPOTHESIS

Hypothesis 1

H0: construction project abandonment has no significant effect on performance of the construction industry in Nigeria

H1: construction project abandonment has significant effect on performance of the construction industry in Nigeria

Hypothesis 2

H0: Lack of sufficient funds and government policy has no significant effect on construction project abandonment in Nigeria

H1: Lack of sufficient funds and government policy has significant effect on construction project abandonment in Nigeria

1.6 SIGNIFICANCE OF STUDY

The study on the economic implication of construction projects abandonment to the construction industry in Nigeria will be of immense benefit to the entire construction industries in Nigeria, the state government, the federal government of Nigeria and other researchers that wishes to carry out similar research on the economic implication of construction projects abandonment to the construction industry in Nigeria as the findings from the study will educate the project managers on how to tackle the challenges faced by project managers in bidding for contracts/ construction project; the findings from the study will also educate the entire construction industries on the constraints or factors affecting contractors in a construction project and finally the study will explain the causes and effect of construction project abandonment on the construction industry.

1.7 SCOPE OF STUDY

The study on the economic implication of construction projects abandonment to the construction industry in Nigeria will focus on challenges faced by project managers in bidding for contracts/ construction project, factors affecting contractors in a construction project and the effect of construction project abandonment on the construction industry from 2000-2016

1.8 LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede 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

1.9 DEFINITION OF TERMS

Cost Estimation: is the approximation of the cost of a program, project, or operation

Construction: is the process of constructing a building or infrastructure

Project Management: is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.

Project Delivery Method: is a system used by an agency or owner for organizing and financing design, construction, operations, and maintenance services for a structure or facility by entering into legal agreements with one or more entities or parties