A PAPER PRESENTED TO THE NIGERIAN SOCIETY OF ENGINEERS, IKEJA BRANCH AT THEIR MONTHLY TECHNICAL FORUM ON THURSDAY 5 FEBRUARY 2009 BY ENGR BAYO ADEOLA
1 Introduction
There are some basic fundamentals in managing projects, irrespective of the particular application areas of the project. Two of these are:
1 The Project Management Process, which includes Initiation, Planning, Execution, Monitoring & Control and Project Closure
2 Project Management Knowledge Areas, of which the Project Management Institute, PMI, identifies nine – Integration, Scope, Time, Cost, Quality, Human Resources, Communication, Risk and Procurement.
In addition to these two fundamentals, PMI also identifies five key competences required of the project manager as follows:
- Project Management Knowledge and Skills
- Application Area Knowledge and Skills
- General Management
- Project Environment, and
- Interpersonal Skills
The particular focus of this presentation is the Engineering Industry, which thus constitutes the application knowledge area. The project environment is broadly Nigeria and particularly Lagos. It is in these two contexts that new challenges in the management of engineering projects will be discussed.
2 Project & Product Life Cycle in the Engineering Industry
From the clients’ perspective, the project life cycle can be very broad and may start from concept and end with possession and operation of the facility by end users. In this respect, it is important to emphasise the difference between the facility as a project, the project life cycle of which ends when the product is delivered, and the product live cycle which is the use to which the building is put with its own characteristics. Thus, the project life cycle for a facility may vary from as short as two to three months for the simplest projects to as long as five years or more for complex projects.
The project life cycle for a building may include some or all of the following:
- The business or social basis for the project
- Feasibility studies and Concept Development
- Land acquisition
- Design
- Statutory Approvals
- Construction
- Commissioning
- Occupation & defect liability period
An integrated management company could have the capacity and capability to cover the whole spectrum identified above and may even go on to assist in the product management on completion of the project. A construction industry focused project management firm like mine would have a narrower band of focus, starting with land acquisition and ending with the defect liability period. A construction firm would have an even narrower focus and be involved only in the construction, commissioning and defect liability phases of the project.
However, irrespective of the range of focus of the particular organisation in question, all the elements of the project life cycle must be addressed, even if by some other organisation. The business or social basis for the project has its own life cycle, at the end of which the client or sponsor decides which projects are worth pursuing. This phase may lead to the feasibility phase during which more work is done to further establish the viability of the project. Usually, one of the outcomes of this phase is a preferred location for a project and a site is thus allotted or acquired. The land acquisition phase is the prerogative of the estate surveyor with its own life cycle. Next comes the design phase, where a lot of us work as consulting engineers.
3 Changing Project Delivery Landscape
3.1 Our clients are changing.
Public Infrastructures & Facilities
Government used to be the sole provider of infrastructures in the past. Most of the older projects were therefore done for ministries, parastatals and quasi government institutions.
While governments still do a lot of projects, the other sectors of the economy have started to play a critical role in the provision of infrastructures. In the telecommunication area for example, the private sector has become the dominant players and are taking increasing ownership of the infrastructures. Even in the sectors where government is still very active, the private sector is playing increasing role in the financing of such projects, and sometimes in initiating, managing and owning the facility.
The investing private sector, in particular, is playing very active role in this area. The local wing of the Muritala Muhammed Airport and the Lekki Expressway in Lagos are current examples of state infrastructures driven by the investing private sector.
Private Sector Infrastructures & Facilities
Establishment Private Sector Organisations have always owned their infrastructures, and this is still the case. It was for a long time dominated by the oil companies, and they still own a disproportionate percentage of the investment in this sector. Two developments have emerged to influence this sector. The first is the liberalisation of some industries in the economy, giving rise to new sectors in private hands. Again, the telecommunication sector is still the most prominent, but other sectors are increasingly being considered and will emerge. The second is the relative growth of the economy and the ability of businesses to own their own facilities as demonstrated by banks and insurance companies in particular. This has given rise to the recent development of private sector medium to high rise buildings
Property Developers
The investing public has also shown interest in housing development, mostly driven by banks, mortgage finance houses and even professionals in the construction industry with access to capital. Housing Estates have therefore become part of our project portfolio
The fact that there is not much work in the area of industrial infrastructures is an indication of how little attention is still being paid to manufacturing.
3.2 Procurement Methods
Design – Bid – Build
The design – bid – build is the traditional and familiar method of project procurement. In this method, the client engages consultants who prepare the designs, invite contractors to build, and the selected contractor builds the facility. The client finances the project through any of the financing options available to him, but the project is not involved with the financing mechanism, just invoicing and receiving payments.
In this option, the design engineer has responsibilities for the correctness of designs and supervision of the works to ensure compliance.
Design & Build
The involvement of the private sector in infrastructure provision is now changing this very clean approach. The first major change is the effort to reduce risks on the project through the process of design and build. In the design – bid – build, the design is considered as the property of the client, and any errors, omissions or inadequate specifications are considered as the liability of the client for which the contractor can make claims. In the design and build option, the design is considered the property of the contractor and any errors, omissions or inadequate specifications are considered the responsibility of the contractor, in addition to his traditional construction responsibility.
This method has grown significantly in recent years and engineers need to be aware and know how to respond. In it, the responsibility of the supervising consultants becomes that of ensuring that minimum standards are met, that the contractor is implementing what he has designed, and that what has been designed will meet the client’s requirements and professional standards.
Build Operate & Transfer (BOT)
In this option, the responsibility of the contractor goes beyond the construction of the facility. He is also required to run the facility before transferring it to the client. The contractor is thus usually involved in process selection and must necessarily take responsibility for designs and construction work.
An example of this is when the contractor is required to construct and commission water or wastewater treatment plants for a period of 3 to 12 months before handing such over to the client. It is also common in electrical generation plants where an essential part of the contract requires the operation and training of personnel as part of the contract.
The project team then would involve designers, manufacturers, contractors and operators of facilities. The engineer would need to have competences in design, evaluation of equipment selection, supervision of works, and management of facilities.
Build Own Operate & Transfer (BOOT)
In this option, the contractor takes even more responsibility. In addition to the technical and managerial requirements of designing, construction and operating the facility, he also takes responsibility for the raising of finance and financial management of the facility to make profit. The Muritala Muhammed domestic terminal and the Lekki expressway are contracted along these terms.
3.3 Vehicles for Delivering Projects
There are three broad vehicles for delivering projects along the scope described above, and the three of them are being used.
Government Direct Contracts
Government direct contracts are mostly design – bid – build contracts and are the ones with which we are most familiar. They may, however, also come as design and build as well as BOT in specialised sectors where operations are critical to the delivery of the facility. BOOT is not usually a government direct contract project as it involves the transfer of ownership to a third party.
Private Sector Contracts
Private sector contracts may be any of the four above. The most common, however, is also the design – bid – build.
Private – Public – Partnership
This is a more recent project delivery vehicle in which the government and a private sector company jointly own the project. The government investment sometimes is limited to land, the value of which is converted to equity. Often it extends beyond this to include design services already executed by the government, licences obtained and similar project assets. It may also extend to include direct cash investment. The private sector company, on the other hand, mostly brings cash, technical know-how and management
4 Roles of Engineers in the New Landscape
Design – Bid – Build
In this option, the engineer continues to play his traditional role either as a consultant or a contractor. His technical and managerial challenges are to be better at what he already does. Most engineers are pre-occupied with the building sub-sector of the construction industry. It must, however, be remembered that there are several other sectors including water supply, waste management, roads and highways, rural electrification, transportation, etc. Penetrating these markets require us to broaden our technical competences as well as improve our managerial abilities.
Design & Build
In design and build, the design and construction skills are still required. Usually, some project description documents to properly capture the client’s requirements are necessary. These may be limited to simple specifications for simple projects, to relatively complex designs for complex projects. The design and build options thus still has opportunities for the client’s engineer.
The responsibilities of the client’s engineer do not end with defining the client’s requirements, it goes on to the verification of the contractor designs as having met these requirements, and the supervision of the works to ensure quality and compliance.
However, a new opportunity opens to the engineer in being able to offer design services to the contractor. In this respect, he is not working as an independent designer for the client, but as part of the project delivery team of the contractor. This allows him to take full advantage of the contractor managerial and technical assets and optimise the designs for maximum efficiency and effectiveness.
Design engineers with flare and skills in construction can have opportunity to use and improve these skills, similarly, construction engineers with design skills can put this to use. Leadership of the project can rest with either the design or the construction engineer.
A broader skill set is therefore required of the engineer in the design and build environment. The designer can no longer rely on his design skills only; neither can the contractor rely on his construction skills only.
One of the challenges in this approach is that the design engineer becomes significantly less visible, and the construction aspects are more visible and better appreciated.
Build Operate & Transfer
The challenges of the build operate and transfer systems are more complex than the design and build. In both the design –bid – build and design and build systems, the operational requirements are totally the responsibility of the client. In the build, operate and transfer, however, the fitness for purpose component of quality evaluation becomes very important. Complex projects such as airports, railway stations, refineries and power stations therefore usually have strong components of operational requirements.
More engineering opportunities emerge from this requirement. In addition to design and construction engineers, facilities managers’ inputs are always critical to the project. Indeed, the operations phase is the manifestation of the quality of the project.
Coordination, integration and flexibility are critical skills required to thrive in this field.
Design Life Cycle
The design phase of an engineering project may be outlined as follows:
- Preparation of clients’ brief
- Concept design
- Preliminary design
- Final design
- Tendering
- Appointment of Contractor
- Statutory Approvals
- Appointment of Subcontractors
- Construction supervision
- Commissioning of project
- Defects Liability Period
Construction Life Cycle
- Tendering and negotiation
- Award of Contract
- Construction
- Practical completion & Commissioning
- Defects liability period
Design & Build Life Cycle
- Preparation of clients’ brief
- Appointment of concept/preliminary design consultants
- Concept/preliminary design
- Tendering
- Final design & Construction Bid Proposal
- Appointment of Contractor
- Statutory Approvals
- Detailed Design & Construction
- Commissioning of project
- Defects Liability Period
Build, Operate & Transfer Life Cycle
- Preparation of clients’ brief
- Prepare Concept Design
- Invite Expression of Interest in BOT
- Tendering
- Design, Construction & Operations Bid Proposal
- Appointment of Contractor
- Preliminary & Final Designs
- Statutory Approvals
- Detailed Design & Construction
- Operations
- Disengage & Hand-Over
Build, Own, Operate & Transfer Life Cycle
- Preparation of clients’ brief
- Prepare Preliminary Concept Design
- Invite Expression of Interest in BOOT
- Tendering
- Design, Construction, Operations & Ownership Bid Proposal
- Appointment of Contractor
- Design
- Statutory Approvals
- Detailed Design & Construction
- Operations
- Disengage & Hand-Over
Conclusion
I was given the freedom to choose a topic bordering on engineering entrepreneurship or management that would be of great benefit to the members of NSE. Freedom is not always desired or good. In my own case, it took me a while to choose a topic.
I have looked at the prevailing project procurement environment and the new challenges to the engineer. I am not sure whether this is management or entrepreneurship, but the management challenges are clearly different from our present comfort zone, and there are great opportunities for entrepreneurship in these new approaches.
Consulting firms must re-evaluate their strategies to be able to play actively in the market place. Our clients’ profiles are changing, the methods of procurement are changing, and the operational requirements are changing. Unless we change with them appropriately, we will be marginalised.
Changing with them requires that we acquire new skills, particularly management, business and entrepreneurship skills.
I read a quotation whose author I don’t remember:
‘There are three types of people:
Those who make things happen
Those who watch things happen, &
Those who don’t have a clue what is going on
Don’t be caught among the last group.
Bayo Adeola, February 2009

The monies spent so far on the power sector ought to have provided not just 10,000 MW of additional power, but also concomitant benefits to economic output that should have delivered a 6 six-fold increase of GDP from the current levels of about $160 billion to about $1 trillion dollars based on the observation that about $3 of output is generated per kWh of power available. $1 trillion of GDP would correspond to a GDP per capita of about $6,500 – similar to that of a middle level transitional economy like Malaysia ($6,200). We must therefore not count our losses not just in terms of the monies embezzled and wasted on the power sector, but also in terms of the opportunities lost.