Editorial

Citation

Akintoye, A. and Birnie, J. (2008), "Editorial", Journal of Financial Management of Property and Construction, Vol. 13 No. 2. https://doi.org/10.1108/jfmpc.2008.37613baa.001

Editorial

Article Type: Editorial From: Journal of Financial Management of Property and Construction, Volume 13, Issue 2

The papers presented in this issue show the different ways in which research can be utilised for the benefit of those who practice in the subject areas covered by the journal.

The bridge which links academic research to its subsequent application by the various professional practitioners, construction firms, property developers and public/private clients of projects can vary in length depending on the subject matter. Papers in this issue highlight this variation. Risk management, which is now applied in areas of construction and property-development can trace its roots back to research in the academic disciplines of cognitive psychology, economics and statistics. Private Public Partnership (PPP) projects are now being used in an increasing number of countries throughout the world. Sufficient time has now elapsed to allow constructive scrutiny, through research, into the potential weaknesses in the system. This issue contains one such paper, which should prove beneficial to clients considering how to achieve the best benefit from PPP. Research which can have immediate benefit, not just to the building contractor, but, to building clients and the construction industry in general is exemplified in the paper dealing with theft from construction sites. It is hoped that the above comments will encourage researchers, that even if their work is not seen, by practitioners, as having any applied immediate use, it can sow the seeds of future practice development.

The first paper by Hlaing, Singh, Tiong and Ehrlich deals with risk perception by building contractors in Singapore, particularly at tender stage. They use the established academic base of risk management theory and practice to discover the risk identification and attitude of the contractors to differing types of risk inherent in the construction process. Through a questionnaire administered to experienced estimators they found the key ones to be financial resources of contractor, financial stability of client and cost overruns due to delays. Other risks are tabulated for the benefit of readers. The authors conclude that risk identification based on previous data, intuitive judgements and experiences are very important to the process and also that time is more important than cost in the process.

The next paper by Edwards and Holt is in an area of limited previous research, namely theft in the construction industry. The papers begin by giving a snapshot of the extent of theft, both in money and type. That it is a significant problem can be clearly seen, and one which if reduced would be of benefit not just to the industry, but, to the clients through cheaper construction. The authors point out that insurance covers much of the loss to the contractor, but of course in the end the client pays. The authors describe the use of modern technology to aid recovery of stolen material and plant. The research method used was an interpretive one based on triangulation (the method is fully explained), a well-established technique in management Science. Because of the sensitive nature of the subject, data obtained has had to be from anonymous sources. Five case studies are described and findings discussed. A potential model for use is also suggested which could be of benefit to future researchers in the subject.

The third paper by Cheung, Wong, Fung and Coffey comes from Hong Kong and considers the best method of obtaining a contractor for housing contracts in Hong Kong. Whilst the traditional method of accepting the lowest tender is still used, this method is increasingly being questioned in many countries and alternatives have been considered and used. Amongst these, one of the most popular has been that of awarding a contract based on the past performance record of a contractor. The authors use a neural network predictive model as a means of contractor selection. The specific type of model is described with the rationale for using it compared with other models. Use of the model cuts out much of the tedious trial and error, which is otherwise required in selection. Detailed results of the findings are presented. Past performance is seen as one of the best indicators for selection of a suitable contractor.

The next paper by Zou, Wang and Fang examines the ever-increasing use of PPP throughout the world. The number of projects now constructed by this procurement system permits a more balanced view of the merits/dismerits of using this approach. The paper deals principally with the latter, pointing out many pitfalls and weaknesses, which should be avoided by those contemplating using PPP. The paper discusses in detail two projects from Australia and one from China. The paper also focuses on the life cycle costs of using PPP, which are often overlooked at the initial awarding of contract stage. The authors stress the need to manage the inherent risks in the process; early identification of these being very important. This is particularly so as these projects often involve, large amounts of public money. The paper also highlights the possible need to consider political problems. For the reader the paper provides a useful guide to getting it right.

The final paper looks at cash flow in construction projects. The paper by Motawa, Kaka, and Wong aims to promote and facilitate the use of an appropriate payment system by developing a simulation and selection model, which is to the satisfaction of the contractor as well as the client. It thus builds on the philosophy of Latham that both parties should be involved from an early stage. The proposed system considers alternative payment systems, which will result in cash flows that satisfy all team members. The type of system adopted is important. The paper proposes use of a specific IT system and the rationale for its use is given. The system presented was evaluated by use with ten construction firms. The reader is taken through the various stages of the proposed system. The authors conclude that an appropriate system would result in the project teams taking more conscious and rational decisions in selecting a system.

Akintola Akintoye, Jim BirnieJoint editors