21 Jun 2013
Property developers and other stakeholders can be badly burnt if they’re unsure of what to anticipate and fail to plan ahead.
Werner Franck, managing director of Vertias Project Management believes the most effective way to know what to expect and accommodate any eventuality is to hire the services of a professional project manager.
“There are a number of things that can go wrong on a construction site and most of the risk lies within the financial aspect of a development and any number of scenarios can bring a project to a halt,” he says.
He lists examples such as labour issues, including strikes and wage increases, inexperienced developers with no understanding of the hidden costs of a project and how to budget accordingly, contractors who cannot continue working due to cash flow problems and non-payment - these are all challenges that can be disastrous if not handled correctly.
Franck says as additional challenge is posed when contractors tender on a project and intend to use imported materials and technology.
“In a volatile market it is simply not possible to predict the fluctuations of the currency and by the time the project is ready to break ground, the original quote could have increased dramatically.
“Many contractors are forced to carry these costs, which is ultimately detrimental to their businesses.”
With so much at risk, contracting a project manager to assist with the project makes infinite sense.
Often a client has an idea in mind yet no concept of how to make it a reality.
The project manager is a single point of contact who is able to translate the client’s ideas into clear objectives that the rest of the team can action, he points out.
Moreover, the project manager is present on site for the entire duration of the project, while other suppliers are there at various stages of the project.
As such, it is the project manager who ensures that information is transferred, providing a clear line of communication between all parties involved.
Making use of a project manager provides for better efficiency. The project manager focuses on quality, timing and budget.
He also knows what specialists to bring on site at the correct stage of the project, controls communication and implements changes where necessary.
Think of the project as though it were a company – there is a legal aspect and a financial aspect, as well as planning and production, says Franck.
“The project manager is essentially the managing director of this company ensuring it runs smoothly and that all risks are assessed and the correct mechanisms and solutions are in place.
The Occupational Health and Safety Act (OHSA) is an important factor to consider when planning a project.
As a result of the OHSA, construction sites have become safer; however the regulations do incur additional costs due to the requirement of more stringent controls and additional equipment.
Indeed, the Act has placed more accountability on project managers, developers and contractors.
“In a sense, the OHSA has created a new profession, with the advent of health and safety consultants on site, as well as having provided education for both skilled and unskilled labour around safety issues,” says Franck.
And while he admits that the Act has made health and safety more onerous to the principal contractor with additional red tape, not to mention costs, it has also increased safety on sites, thus reducing the risks associated with projects in terms of accidents and those associated costs.
“It’s important to plan ahead for these costs in the feasibility stage of the project,” cautions Franck.
He says it’s also advisable to have a health and safety consultant on board, as he/she is best placed to understand the Act and its implications, ensuring that the project is compliant and any issues are dealt with swiftly and cost effectively.
“Ultimately, an initial cost to ensure a specialist is on board will ensure compliance with the Act at the outset and this will be more cost effective than expensive mistakes and penalties down the line.”
It can be said that all new development projects have risks, the key to mitigating these risks and managing a project efficiently and effectively, from the onset, is hiring a project manager.
So whether it is a financial matter, a labour issue, contractors or a legal aspect of the development that needs to be managed - a project manager is there to get the job done, he adds.
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