Conference PaperPDF Available

Causes of Abandoned Construction Projects

Authors:

Abstract and Figures

Abandonment of construction projects remains a serious problem in the Malaysian construction industry. It affects not only the immediate house buyers but also other project players (e.g. client, contractors and consultants) and the general public. In some occasions, it also involves the use of public fund for the revival of abandoned projects. Despite this, there is a lack of research into this area. This paper forms part of an ongoing research investigating how to help manage the problem with the aid of information and communication technology (ICT). The paper presents the issues and impacts of abandoned construction projects in Malaysia, and the review of available literature on the causes of the problem. Subsequently, the result of an industry wide questionnaire survey involving 225 respondents on the actual causes of abandoned construction projects in this country is presented and discussed. Further analyses will be carried out and the results will be presented elsewhere.
Content may be subject to copyright.
CAUSES OF ABANDONED CONSTRUCTION PROJECTS
E.H. YAP, H.C. TAN, and F.C. CHIA
Department of Built Environment, Faculty of Engineering and Science, Universiti Tunku Abdul Rahman,
Jalan Genting Kelang, 53300 Setapak, Kuala Lumpur, Malaysia.
Abstract: Abandonment of construction projects remains a serious problem in the Malaysian
construction industry. It affects not only the immediate house buyers but also other project players (e.g.
client, contractors and consultants) and the general public. In some occasions, it also involves the use of
public fund for the revival of abandoned projects. Despite this, there is a lack of research into this area.
This paper forms part of an ongoing research investigating how to help manage the problem with the aid
of information and communication technology (ICT). The paper presents the issues and impacts of
abandoned construction projects in Malaysia, and the review of available literature on the causes of the
problem. Subsequently, the result of an industry wide questionnaire survey involving 225 respondents
on the actual causes of abandoned construction projects in this country is presented and discussed.
Further analyses will be carried out and the results will be presented elsewhere.
Keywords: Abandoned construction projects; Causes; Information and communication technology.
1 Introduction
Not all construction projects are completed on time or ahead of schedule. It is also not uncommon for construction
projects to be delayed, or in the worst scenario even abandoned due to various reasons. Abandoned project can be
defined as a project which has been 1) totally abandoned, or 2) indefinitely delayed for the purpose of this study.
Abandonment may happen at any stage of a project lifecycle and incur significant amount of loss. For a housing
project, the Ministry of Housing and Local Governments (MHLG) considers that it has been abandoned if there is
the signing of the Sales and Purchase Agreement (S&P) and inactivity at the construction site for 1 year either
after 1) the scheduled completion time, or 2) the date of the signing of S&P if the developer has collected 10
percent payment from the buyer (as cited in Khalid, 2005).
In December 2009, the Minister of Housing and Local Government revealed that there were a total of 136
abandoned housing projects involving 30,567 house buyers (Kong, 2009). The Plaza Rakyat, a RM1.5 billion mix
use project, remains abandoned even though it was scheduled to be completed in 1998 (Jayaraj, 2009). These are
some of the problems of abandoned construction projects plaguing the construction industry in Malaysia. Despite
the seriousness of the problems, there is a lack of research into this area. This paper is part of an on-going research
aimed to help manage the problem with the aid of information and communication technologies (ICT). This paper
covers a review of the existing literature on the potential causes of abandoned construction projects and the
associated issues. Then, it presents the findings from an industry wide survey involving 225 respondents on the
actual causes of abandoned projects in Malaysia. This is followed by the discussion on the result of the
questionnaire survey and further works.
2 Issues about abandoned construction projects
The abandonment of construction projects has resulted in many adverse consequences to the economy, society and
environment. Economically, it is a waste of useful resources. The consequences of abandoned projects are far
reaching as the construction industry plays a major role in the economy of a developing country like Malaysia. A
typical construction project involves many trades and participants, who are linked with other upstream and
downstream industries (Ng, 2009a). These include suppliers of construction materials, transportation companies,
manufacturers of plant and machinery, etc. If a public project is being abandoned, the economic impacts are never
directly felt by the general public as they are absorbed by the government‟s reserves. However, very often there
will be loss of opportunity for the public to benefit from the intended purposes of the projects (Bavani, 2009). For
private non-housing projects, the consequences are mainly limited to a few project players, i.e. client, contractors,
consultants, etc. Nevertheless, the affected parties may suffer devastating losses such as monetary losses, bad
reputation, and even bankruptcies.
For private housing projects, however, tens of thousands of house buyers are immediately victimised every year
(See Table 1). The impacts on the house buyers are twofold: Despite the fact that the purchased properties will not
be completed, the house buyers still have to service bank loans for the unfinished houses (NST Online, 2009; The
Star Online, 2009b) and meanwhile have to rent another house to stay (Chan, 2009; Ng, 2009a). They also suffer
losses for being unable to reap the benefit from potential property value appreciation and rental collection (Chow,
2009). Some house buyers have even been blacklisted by the banks as they fail to service their bank loans (Yip,
2009b; Yip, 2009a). Having been blacklisted, they are unable to buy another property unless they pay back their
loans (Yip, 2009b). House buyers of abandoned projects have often been left without any assistance from the
developer and have to resort to the tedious process of forming a committee to deal with the developers and the
authorities (Chan, 2009; Chow, 2009). There are some cases which have been dragged on for so long that some
owners have even passed away before plan to revive the project is in place (Chan, 2009). Although occasionally
settlements were reached between the developers and the house buyers, the settlement amount might be
disproportionate to the actual losses suffered by the house buyers (Lim, 2009; Yip, 2009b). The buyers are often
left with no choice but to reluctantly accept the settlement offered as they become financially stressed. For some
revived projects on leasehold land, owners are left with less years remaining on the lease after many years of
abandonment (The Star Online, 2009a). All these have negative effects on the image of the country in the eyes of
foreign property investors (Chang, 2009).
Apart from house buyers, developers, banks, land owners and government may also be the victim. For instance,
developers may suffer bad reputation and financial losses (Perumal, 2009a), banks suffer because of bad debts
(Kong, 2009), while land owners suffer because their lands are stranded (Tan and Rajendra, 2009). Government
may have to step in and public fund has to be utilised to revive abandoned construction projects (Chang, 2009).
The MHLG has to be burdened with the task of mediating between all the parties involved (Kong, 2009). When it
comes to legal battles, it incurs huge amount of expenses to all the parties involved.
Abandoned construction projects also affect the society and environment negatively. For instance, some
abandoned projects have pools of stagnant water that serve as breeding ground for mosquitoes (Bavani, 2009;
Stuart, 2009) and threaten public health. Abandoned construction projects also attract people like drug users,
criminals and vagrants to occupy the abandoned sites (Chan, 2009; Perumal, 2009b) and hence threaten public
security. Abandoned construction sites may pose danger to anyone who ventures into it particularly children who
venture into the area to play (Stuart, 2009). Abandoned construction projects affect the environment negatively as
it may be used as a rubbish dump (Bavani, 2009) and for the sludge discharged (Phuah, 2009). Also, some have
become unsightly due to becoming overgrown with undergrowth (Bavani, 2009).
Even though the problems of abandoned construction projects are far reaching, there is hitherto a lack of
research into this area. Khalid (2005), Ibrahim (2006) and Rusli (2006) have done similar researches, but they
have only focused on housing projects. Khalid (2005) has proposed to investigate the causes from an institutional
perspective. Institutions, according to Khalid (2005) are such as regulatory policies, planning system, market
aspects, and financial institutions. However there is no publication from Khalid (2005) discovered showing the
outcome of his research. Ibrahim‟s (2006) study is based on literature review, interviews and case studies;
Whereas, Rusli‟s (2006) study is based on literature review and interview with the Ministry of Housing and Local
Government. Therefore, there is a need for research that investigates the causes of abandoned projects from an
industry wide perspective facilitated by a questionnaire survey involving the key players, i.e. developers,
contractors, consultants and related bodies, covering housing and non-housing projects. This will allow for a more
comprehensive view of the problem of abandoned project in this country to be obtained.
Table 1 Statistics on abandoned housing projects
Year
Total number of abandoned housing projects (Peninsular Malaysia)
No. of projects
No. of houses
No. of buyers
Estimated Value (RM million)
2000
514
107702
68340
7524.41
2001
544
125649
80070
9496.68
2002
-
-
-
-
2003
-
-
-
-
2004
227
75356
50813
7033.08
2005
261
88410
58685
8043.00
2006
-
-
-
-
2007
-
-
-
-
2008
-
-
-
-
2009
136*
-
30567*
-
Source
Unmarked - Ministry of Housing and Local Government (HBA, 2006)
* Minister of Housing and Local Government (Kong, 2009)
3 A review of the causes of abandoned construction projects
It is found that existing literature on this subject is limited to the types of sources such as unpublished thesis,
conference papers, and particularly news articles. The types of project discussed in these sources are mainly
housing projects. This may be due to the greater number of abandoned housing project and the fact that it has
greater immediate impact to the general public than commercial (e.g. office building) and government projects.
Generally, the majority of the causes of abandoned construction projects identified from existing literature can be
categorized into four groups, i.e. 1) mismanagement, 2) unfavourable government policies, 3) inefficient public
delivery system, and 4) unfavourable economic conditions.
Mismanagement is one of the causes of abandoned housing projects given by the Minister of MHLG Kong Cho
Ha (as cited in Kong, 2009). Examples of mismanagement that may lead to abandoned housing projects are 1)
lack of proper feasibility studies (Ibrahim, 2006) particularly inaccurate market research and study (Kong, 2009),
2) unattractive marketing strategies (Ibrahim, 2006), and 3) incompetent and poor financial management by the
developers (Ibrahim, 2006). The first two of these examples are particularly concerned with the sales of house
units as important source of cash flow for housing developers. The lack of proper feasibility studies and inaccurate
market research and study may result in unsuitable project scheme to be undertaken for the prevailing market.
Therefore, a wrong decision might be made to undertake a project which is in fact less feasible than expected.
Unattractive marketing strategies may further exacerbate a less attractive scheme of project already undertaken by
a developer. Ibrahim (2006) also points out that mismanagement may happen due to the lack of experience of
developers.
Causes of abandoned housing projects related to unfavourable government policies are 1) the sell-then-build
system (Chang, 2009), 2) unavailability of Home Indemnity Insurance (Ibrahim, 2006), 3) limitation of the
jurisdiction of the Tribunal for Homebuyer Claims (Ibrahim, 2006), and 4) unfavourable planning and land policy
(Khalid, 2005). The sell-then-build system is intended to enable more houses to be built at a faster rate and a
lower price (Chen, 2007). As the name implies, houses can be sold before the houses are being built, therefore
more cash flow from the start of the construction phase and less requirement for the developers own capital. This
has enabled more developers of smaller capital to be involved in the business. However, according to Chang
(2009) having smaller developers in the housing industry is the main cause of the abandonment of housing
projects. Being small, these developers have to rely critically on their sales to meet their cash flow. The sell-then-
build system as a cause of abandoned housing projects is also supported by Former Prime Minister Abdullah
Ahmad Badawi (HBA, 2006) and the President of Federated Association of Consumer Malaysia (FOMCA) (as
cited in Khalid, 2005). Home Indemnity Insurance, as practiced in Western Australia, Australia is an insurance
policy which a builder is required by law to take out on behalf of the homeowner to assist to ensure that the house
can be finished in the event that the builder dies, disappears or becomes insolvent (Government of Western
Australia, 2008). The Tribunal for Homebuyer Claims is a channel for aggrieved homeowner to seek redress
against developers without having to go through a lengthy legal process (Chen, 2007). Contrary to Ibrahim‟s
(2006) finding, Chen (2007) claimed that the Tribunal for Homebuyer Claims has proven to be very effective. It is
however believed that how limited the jurisdiction of the Tribunal or how effective it is to help homeowners seek
redress do not cause the abandonment of housing projects as it is only relevant after housing projects have been
abandoned. In other words, it is believed that Ibrahim (2006) and Chen‟s (2007) arguments only serve to reflect
the effectiveness of the Tribunal as a remedy to already abandoned housing projects rather than being the cause of
the abandonment. As for unfavourable planning and land policy, the specific planning and land policy which is
unfavourable was not given by Khalid (2005).
Chen (2007) however argues that it is inefficient public delivery system rather than unfavourable government
policies that causes the abandoned project problem. Lack of enforcement of control and monitoring by the
government as a cause of abandoned housing projects is also mentioned by Ibrahim (2006). Ibrahim (2006) states,
among others, that there should be stricter licensing for developers, better system to detect abandonment of
projects, harsher punishment for errant developers, and less bureaucracy in the approval process of housing plans.
Many sources give economic crisis or financial crisis as a cause of abandoned construction projects (e.g. Khalid,
2005; Ng, 2009b; Lim, 2009; Fernandez, 2009). Other unfavourable economic conditions that may lead to the
problem include 1) the rise of the prices of raw material such as steel and cement in 2008 (Cheah, 2008), 2)
“selfish” financial system, i.e. one that “lends an umbrella on a fine day and takes it away when it rains” (Chen,
2007), 3) higher interest charge that discourages potential home buyers to buy residential properties and reduces
the profitability of a project (Ibrahim, 2006), and 4) competition of new residential projects (Ibrahim, 2006) that
affects the sales and hence the cash flow of a project.
Apart from that, a number of sources cited financial problems as a cause of abandoned construction projects
(Khalid, 2005; Kong, 2009; Rajan, 2005; Ibrahim ,2006; Rusli, 2006; Bavani, 2009). However, it is felt that
financial problem is the combined effect of the aforementioned four groups of causes prior to being abandoned.
For instance, the lack of proper feasibility study to determine the right type of development and unattractive
marketing strategy which ultimately affects the sales and hence lead to financial problem.
It is noticed that a big proportion of the available literature (which is mainly news articles) lacks credibility and
cannot be held as conclusive findings to represent the causes of abandoned construction projects in Malaysia. In
addition, almost all of the literature available is concerning abandoned housing projects rather than a fair mix of
housing, commercial and government projects. Therefore, a more detailed research concerning abandoned
construction projects in Malaysia is necessary.
4 Questionnaire survey
The questionnaire requires the respondent to rank a list of potential causes of abandoned construction projects on
a five point Likert scale, i.e. 5 for „strongly agree‟, 4 for „agree‟, 3 for „neither agree nor disagree‟, 2 for „disagree‟,
and 1 for „strongly disagree‟. The list of potential causes of abandoned construction projects (See Table 3) is the
result of an extensive review of existing literature on factors affecting the success of projects done in an earlier
research (Yap and Tan, 2009).
A total of 2500 questionnaires were sent out, of which 225 complete responses were received. Thus the
response rate is 9 percent. Most of the questionnaires were sent out via the postal service to a mix of construction
related companies/organizations in Malaysia in 2009. The roles of the 225 respondents are summarized in Table 2.
It is found that the proportion of respondents are well distributed among the clients/owners, consultants and
contractor/supplier, except for government officials.
The analyses include the ranking of the causes of abandoned construction projects, and Spearman‟s rank
correlation to test the following null hypotheses:
H01: there is no difference of ranking of the causes of abandoned construction projects between
contractor/supplier and client/owner
H02: there is no difference of ranking of the causes of abandoned construction projects between
contractor/supplier and consultant
H03: there is no difference of ranking of the causes of abandoned construction projects between
client/owner and consultant
Table 2 Roles of 225 respondents
Roles of respondents
Proportion (%)
1) Client/Owner
28.9
2) Consultant
37.8
3) Contractor/Supplier
23.1
4) Government official
0.9
5) Others
9.3
Total
100.0
5 Findings of questionnaire survey
The ranking of the causes of abandoned construction projects is depicted in Table 3. The causes ranked 1 to 5
seem to focus on financial issues, i.e. financial difficulties faced by the owner, financial difficulties faced by the
contractor, unexpected bad economic conditions, inappropriate mode of financing project, and delays in interim
payments. This is followed by causes ranked 6 and 7, i.e. inadequate project feasibility studies and incompetent
contractors or subcontractors respectively. Subsequently, causes ranked 8 to 11 appear to focus on project
management and administration problems, i.e. project control problems, inappropriate project planning and
scheduling, bureaucracy and red tape within the project, and poor contract administration. Then this is followed
by the cause ranked 12, i.e. inexperienced client/owner. Causes ranked 13 and 19 seem related to ineffective
authorities, i.e. unfavorable government policy, and lack of cooperation from local authorities. Causes ranked 14,
15, 17, 18 and 20 appear to focus on legal and contractual matters, i.e. fraudulent practices and briberies, litigation,
lack of appropriate dispute resolution method, faulty tender process, and inappropriate contract arrangements
(traditional design-bid-build/design and build/management contracting/etc.). Cause ranked 16 is inappropriate
pricing/incentives of services rendered by contractors or consultants.
Spearman‟s rank correlation was performed to test the hypothesis that there is difference of ranking between 1)
contractor/supplier and client/owner, 2) contractor/supplier and consultant, and 3) client/owner and consultant as
to the causes of abandoned construction projects in Malaysia. The results are shown in Table 4, and it is found that
there is significant correlation at the 1% significance level between 1) contractor/supplier and client/owner, 2)
contractor/supplier and consultant, and 3) client/owner and consultant. In addition, when government official and
„others‟ group of respondents are included into the Spearman‟s rank correlation pairwise comparison with all
other roles of project participants, it is found that all tests correlated significantly at the 1% significance level,
except for the correlation between consultant and government official which is significant at the 5% significance
level. Hence, all the three null hypotheses can be accepted concluding that the contractor/supplier, client/owner
and consultant do not perceive the causes of abandoned construction projects differently.
Table 3 Causes of abandoned construction projects ranked by 225 respondents
Causes
Mean
Ranks
Financial difficulties faced by the owner
4.3111
1
Financial difficulties faced by the contractor
4.0044
2
Unexpected bad economic conditions
3.9822
3
Inappropriate mode of financing project
3.7778
4
Delays in interim payments
3.7733
5
Inadequate project feasibility studies
3.6800
6
Incompetent contractors or subcontractors
3.4844
7
Project control problems
3.4667
8
Inappropriate project planning and scheduling
3.4311
9
Bureaucracy and red tape within the project
3.4267
10
Poor contract administration
3.4044
11
Inexperienced client/owner
3.3733
12
Unfavorable government policy
3.3378
13
Fraudulent practices and briberies
3.2000
14
Litigation
3.1956
15
Inappropriate pricing/incentives of services rendered by contractors or consultants
3.1911
16
Lack of appropriate dispute resolution method
3.1644
17
Faulty tender process
3.1378
18
Lack of cooperation from local authorities
3.1333
19
Inappropriate contract arrangements (traditional design-bid-build/design & build/management
contracting/etc.)
3.0533
20
Unclear lines of responsibility and authority
3.0267
21
Problems of communication and coordination
2.9822
22
Incompetent consultants
2.9600
23
Poor quality control
2.9556
24
Site acquisition problems
2.9467
25
Causes
Mean
Ranks
Negative impact of project towards society or environment
2.9289
26
Inappropriate risk allocation among project team members
2.9156
27
Shortage of site workers
2.8800
28
Poor relationship among project team members
2.8711
29
Unskilled/incompetent site workers
2.8622
30
Ambiguities or mistakes in scope of work, specifications or drawings
2.8222
31
Problems related to change orders/variation orders
2.8089
32
Involvement of large number of participants of project
2.6889
33
Lack of motivation of site workers
2.6756
34
Relationship between contractor and labor (industrial relation)
2.6489
35
Unavailability of materials and equipments
2.6356
36.5
Poor safety management on site
2.6356
36.5
Cultural clash among parties involved in project
2.6089
38
Unexpected location difficulty
2.5733
39
Adverse weather or acts of God
2.4711
40
Difficulty of design and construction
2.1200
41
Table 4 Spearman's ranking correlation of different roles of project participants (N = 41)
Client
/Owner
Consultant
Contractor
/Supplier
Governme-
nt official
Others
Client
/Owner
Correlation Coefficient
1.000
.904**
.936**
.367**
.930**
Sig. (1-tailed)
.
.000
.000
.009
.000
Consultant
Correlation Coefficient
.904**
1.000
.907**
.361*
.896**
Sig. (1-tailed)
.000
.
.000
.010
.000
Contractor
/Supplier
Correlation Coefficient
.936**
.907**
1.000
.393**
.943**
Sig. (1-tailed)
.000
.000
.
.005
.000
Government
official
Correlation Coefficient
.367**
.361*
.393**
1.000
.447**
Sig. (1-tailed)
.009
.010
.005
.
.002
Others
Correlation Coefficient
.930**
.896**
.943**
.447**
1.000
Sig. (1-tailed)
.000
.000
.000
.002
.
**. Correlation is significant at the 0.01 level (1-tailed).
*. Correlation is significant at the 0.05 level (1-tailed).
6 Discussions
From the results of the ranking of the causes of abandoned construction projects, it is found that causes ranked 1,
3, 6, 12, 13, and 19 correspond with the causes found in the literature, i.e. financial difficulties faced by the owner,
unexpected bad economic conditions, inadequate project feasibility studies, inexperienced client/owner,
unfavorable government policy, and lack of cooperation from local authorities. Other causes identified, which are
closely related to that found in the literature, are those ranked 2, 8, 9, 10, and 11, i.e. financial difficulties faced by
the contractor, project control problems, inappropriate project planning and scheduling, bureaucracy and red tape
within the project, and poor contract administration. A number of important causes which have not been
mentioned in previous research are also identified. These are causes ranked 4, 5, 7, 14, 15, 16, 17, 18, and 20, i.e.
inappropriate mode of financing project, delays in interim payments, incompetent contractors or subcontractors,
fraudulent practices and briberies, litigation, inappropriate pricing/incentives of services rendered by contractors
or consultants, lack of appropriate dispute resolution method, faulty tender process, and inappropriate contract
arrangements (traditional design-bid-build/design and build/management contracting/etc.).
It is found that a significant proportion of the top 20 causes of abandoned construction projects either weakly
correspond with or are not found in the literature. This research has therefore helped to shed some light onto the
causes of abandoned construction projects but at the same time also raised more questions. More research have to
be conducted as to why certain causes are ranked highly by the industry, or can the causes of abandoned
construction projects identified in this paper be simplified into fewer underlying causes. For instance, cause
ranked 2 financial difficulties faced by the contractor raises the question as to why the client/owner could not
replace the contractor once he is found to face financial difficulties. In addition, it is also not clear at this stage as
to why the financial difficulties of a contractor can ultimately lead to the abandonment of a project. Further
analyses (e.g. ANOVA and factor analysis) and interviews will be conducted to further explore the issues.
7 Conclusions and further works
This paper has reviewed the issues pertaining to abandoned construction projects, i.e. adverse consequences of
abandoned construction projects to the economy, society and environment, and the lack of research into this area.
The causes of abandoned construction projects identified from existing literature mainly focus on issues
concerning mismanagement, unfavourable government policies, inefficient public delivery system, and
unfavourable economic conditions. It is found that the relevant literature available is mainly news articles which
lacks credibility and focuses mainly on abandoned housing projects. A more detailed research into abandoned
construction projects in Malaysia is therefore required. The result of an industry-wide questionnaire survey
conducted, which involved 225 respondents, revealed that the top 10 causes of abandoned construction projects in
Malaysia are: 1) financial difficulties faced by the owner, 2) financial difficulties faced by the contractor, 3)
unexpected bad economic conditions, 4) inappropriate mode of financing project, 5) delays in interim payments, 6)
inadequate project feasibility studies, 7) incompetent contractors or subcontractors, 8) project control problems, 9)
inappropriate project planning and scheduling, and 10) bureaucracy and red tape within the project. Spearman‟s
rank correlation was performed and it is found that there is a strong consensus of ranking between the different
roles of project participants on the causes of abandoned construction projects. The questionnaire survey has
helped to shed some light onto the causes of abandoned construction projects as it has identified a number of
important causes of abandoned construction projects which are not mentioned in the existing literature. Further
research will be conducted and the findings will be presented elsewhere.
References
Bavani, M. (2009, June 2). Abandoned Jelatek fire station now an eyesore. The Star Online. Retrieved December 20,
2009, from http://thestar.com.my/metro/story.asp?file=/2009/6/2/central/4024468&sec=central
Chan, L. L. (2009, August 6). Low-cost housing project abandoned after 90% completed. The Star Online. Retrieved
December 20, 2009, from http://thestar.com.my/news/story.asp?file=/2009/8/6/nation/4463859&sec=nation
Chang, K. L. (2009, November 10). It's time to switch to BTS for homes. NST Online. Retrieved December 20, 2009,
from http://www.nst.com.my/Current_News/NST/articles/19HOMEY/Article/index_html
Cheah, S. C. (2008, June 23). Signs of distress in the market. The Star Online. Retrieved October 13, 2008, from
http://biz.thestar.com.my/news/story.asp?file=/2008/6/23/business/21567102&sec=business
Chen, E. (2007). Far from being rotten. New Straits Times Property. Retrieved September 9, 2008, from
http://properties.emedia.com.my/listvp.php?propNewsID=162&CatID=V00
Chow, B. (2009, February 28). Buyers of abandoned project need help. The Star Online. Retrieved December 20, 2009,
from http://thestar.com.my/metro/story.asp?file=/2009/2/28/central/3355440&sec=central
Fernandez, C. (2009, February 13). Abandoned projects mar Seremban's image. The Star Online. Retrieved December
20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/2/13/central/3212997&sec=central
Government of Western Australia. (2008). Home indemnity insurance - Consumer Protection - Department of
Commerce. Department of Commerce, the Government of Western Australia. Retrieved March 5, 2010, from
http://www.commerce.wa.gov.au/ConsumerProtection/Content/Real_Estate/Home_building/Before_constructio
n_starts/Home_indemnity_insurance.html
HBA. (2006). More laws doesn't mean less abandoned projects. National House Buyers Association. Retrieved August
27, 2008, from http://www.hba.org.my/articles/buyer_watch/2006/more_laws.htm
Ibrahim, F. (2006). Faktor-faktor kritikal bagi pemulihan projek perumahan terbengkalai. Universiti Teknologi
Malaysia.
Jayaraj, J. (2009, May 1). Abandoned Plaza Rakyat project stands out like a sore thumb in city. The Star Online.
Retrieved June 11, 2010, from
http://thestar.com.my/metro/story.asp?file=/2009/5/1/central/3811656&sec=central
Khalid, M. S. (2005). The abandoned housing projects in Malaysia: an institutional analysis of real estate development
process. In The 2nd College of Arts & Social Sciences Postgraduate Conference. Presented at the The 2nd
College of Arts & Social Sciences Postgraduate Conference, Aberdeen.
Kong, L. (2009, December 3). Fairness for house buyers. The Star Online. Retrieved December 20, 2009, from
http://thestar.com.my/news/story.asp?file=/2009/12/3/nation/5203993&sec=nation
Lim, C. Y. (2009, November 2). New builder on the scene. The Star Online. Retrieved December 20, 2009, from
http://thestar.com.my/metro/story.asp?file=/2009/11/2/central/4981392&sec=central
Ng, A. (2009a, July 18). Grappling with abandoned projects. The Star Online. Retrieved December 20, 2009, from
http://biz.thestar.com.my/news/story.asp?file=/2009/7/18/business/3987963&sec=business
Ng, A. (2009b, November 7). CP Group shuns listing. The Star Online. Retrieved December 20, 2009, from
http://biz.thestar.com.my/news/story.asp?file=/2009/11/7/business/5046706&sec=business
NST Online. (2009, October 20). Land deal exposes flaws in Shah Alam council. NST Online. Retrieved December 20,
2009, from http://www.nst.com.my/Current_News/NST/articles/05tya/Article/
Perumal, E. (2009a, July 22). Builder seeks Hishamuddin‟s help to revive project. The Star Online. Retrieved December
20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/7/22/central/4356570&sec=central
Perumal, E. (2009b, August 1). Residents irked by abandoned flats. The Star Online. Retrieved December 20, 2009,
from http://thestar.com.my/metro/story.asp?file=/2009/8/1/central/4427852&sec=central
Phuah, K. L. (2009, December 14). Recreational pond for tourists. NST Online. Retrieved December 20, 2009, from
http://www.nst.com.my/articles/13pnd/Article/index_html
Rajan, P. (2005). Most abandoned houses in Selangor. New Straits Times. Retrieved from
http://www.hba.org.my/news/2005/1105/most.htm
Rusli, N. (2006). Salah urus risiko dalam pembangunan projek perumahan: Kajian ke atas projek perumahan
terbengkalai di Malaysia. Universiti Teknologi Malaysia.
Stuart, M. (2009, March 31). Abandoned project poses risks. The Star Online. Retrieved December 20, 2009, from
http://thestar.com.my/metro/story.asp?file=/2009/3/31/central/3568336&sec=central
Tan, C., & Rajendra, E. (2009, November 12). Selangor releases „secret‟ documents to the public. The Star Online.
Retrieved December 20, 2009, from
http://thestar.com.my/news/story.asp?file=/2009/11/12/parliament/5096611&sec=parliament
The Star Online. (2009a, July 4). Penang trying to solve abandoned project issue. The Star Online. Retrieved December
20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/7/4/north/4220746&sec=north
The Star Online. (2009b, August 12). Taman Daya residents want land titles. The Star Online. Retrieved December 20,
2009, from http://thestar.com.my/metro/story.asp?file=/2009/8/12/central/4450841&sec=central
Yap, E. H., & Tan, H. C. (2009). Abandoned projects in Malaysia - a preliminary study of the causes. In 2nd
Construction Industry Research Achievement International Conference (CIRAIC 2009). Presented at the 2nd
Construction Industry Research Achievement International Conference (CIRAIC 2009), Kuala Lumpur.
Yip, Y. T. (2009a, March 3). Kayu Ara needs an urgent facelift. The Star Online. Retrieved December 20, 2009, from
http://thestar.com.my/metro/story.asp?file=/2009/3/3/central/3370657&sec=central
Yip, Y. T. (2009b, March 11). Double blow for businessman. The Star Online. Retrieved December 20, 2009, from
http://thestar.com.my/metro/story.asp?file=/2009/3/11/central/3427511&sec=central
... According to Brook (2004), disparities between bills of quantities, drawings and specifications are associated with tender documents. Twumasi-Ampofo et al. (2014) and Yap et al. (2010) attest to the fact that the non-completion or abandonment of public projects results in wastage of public funds. In the case of Malaysia, Yap et al. (2010) emphasized the huge loss incurred from using public funds to revive abandoned projects. ...
... Twumasi-Ampofo et al. (2014) and Yap et al. (2010) attest to the fact that the non-completion or abandonment of public projects results in wastage of public funds. In the case of Malaysia, Yap et al. (2010) emphasized the huge loss incurred from using public funds to revive abandoned projects. Accordingly, a study by Damoah (2015) provided evidence of the effect of corruption in government projects as a major cause of project failure in Ghana. ...
... These have probably been weighted highly because the respondents must have considered these issues carefully due to the impact it has on the achievement of VfM. According to Yap et al. (2010), a project is considered abandoned if it is deserted or has been indefinitely delayed. Economically, this is a wasteful use of resources, especially with the cost of Identifying the latent shortcomings reviving such projects. ...
Article
Purpose The non-achievement of projects of best value remains a perennial problem within the construction industry. This paper aims to identify the latent shortcomings affecting the achievement of value for money (VfM) within the Ghanaian construction industry. Design/methodology/approach From a comprehensive literature review and pilot survey, 18 variables responsible for the non-achievement of VfM were identified. Through purposive and snowballing sampling techniques, a questionnaire was administered to the target professionals. Factor analysis was used to establish the latent shortcomings underlying the same dimensions of VfM achievement in the Ghanaian construction industry. Findings A total of six components were identified and explained as external factors; institutional culture and policy constraints; technical and decision-making factors; human-related factors and accountability and transparency constraints. The relative importance index was used in analysing the strategies to addressing the shortcomings. Social implications The prevalent situation of poorly delivered projects and the continuous campaign for VfM necessitated the need for a study into explaining the latent shortcomings in achieving VfM within the Ghanaian construction industry. It is recommended that governments give VfM in public projects serious attention. This would help to reduce the overall cost of construction projects without compromising quality. When VfM is taken seriously, governments can save more money and undertake more projects as well as gain public acceptance in terms of transparency and accountability. Originality/value This study has set the pace for further research in the VfM analysis by identifying the latent shortcoming, which other developing countries can emulate.
... The issue of injustice faced by the house buyers has been further expound by (Yap et al., 2010) that house buyers are the immediate victims in the event of abandoned projects. This is because the house buyers bear the business risk that is supposed to be borne by the developers, they (i.e. ...
... In addition, the house buyers are denied the benefits of potential property value appreciation and rental collection. Other aspect of injustice that contributes to abandoned project is high interest rate which affects the sales and cash flow of the project (Yap et al., 2010). ...
Article
Full-text available
Home is a basicnecessity for everyone. However, one of the major issues affecting the construction industry in Malaysia today is that of abandoned housing projects. This issue has caused sufferings to the individuals and society. Several reasons have been cited for the abandoned housing projects, which include the debt financing structure, lack of justice and fairness, and weak regulatory system. The issues of the Islamic banking debt-based home financing products have remained prominent. There are also other issues such as role of the authority in addressing the situations. This study used mixed method of surveys and interviews in determining the perceptions of stakeholders regarding abandoned housing projects in Malaysia. The outcome of study highlights various prospects of mitigating the problem of abandoned housing projects. The findings show that the main cause of abandoned housing project from the interview with the relevant stakeholders is still due to insufficient legal provisions and protection to avoid and prevent abandonment of the housing projects, which is consistent with the previous studies.
... The issue of injustice faced by the house buyers has been further expound by (Yap et al., 2010) that house buyers are the immediate victims in the event of abandoned projects. This is because the house buyers bear the business risk that is supposed to be borne by the developers, they (i.e. ...
... In addition, the house buyers are denied the benefits of potential property value appreciation and rental collection. Other aspect of injustice that contributes to abandoned project is high interest rate which affects the sales and cash flow of the project (Yap et al., 2010). ...
Conference Paper
Abstract Home is a basic necessity for everyone. However, one of the major issues affecting the construction industry in Malaysia today is that of abandoned housing projects (AHPs). This issue has caused sufferings to the individuals and society. Several reasons have been cited for the AHPs which include the debt financing structure, lack of justice and fairness, and weak regulatory system. The issues of the Islamic banking debt based home financing products have remained prominent. There are also other issues such as role of the authority in addressing the situations. This study used mixed method of surveys and interviews in determining the perceptions of stakeholders regarding AHPs. The outcome of study highlights various prospects of mitigating the problem of abandoned housing projects. Keywords: Debt financing, Justice and Fairness, Regulatory framework, Diminishing partnership and, Abandoned housing projects
... At global level, in the construction industry, the problem of abandoned projects occurs. Abandoned Projects may be defined as When the project is going well, but it's stopped for some reason, hence, it is a waste of land, funds and negatively effect on the environment citizens [1]. The incomplete / abandoned construction projects have a negative impact on the total value of the real estate and reduce the esthetics of the neighborhoods [2]. ...
Article
Full-text available
The Iraqi construction sector is facing complex issues and a number of problems. Abandoned construction projects are considered one of the most common and serious problems in the construction industry in Iraq due to a lack of funding, which reflected by exceeding the time limit for completion of the projects. The number and value of the projects involved are usually large. reconstruction, maintenance, and operation of unfinished projects in Iraq require better coordination between these issues, and the country’s other affairs, this goal, cannot be accomplished unless the project is financing in the most successful way. This study aims to use the analytic hierarchy process (AHP)technique to select the appropriate type of the Public-Private Partnership (PPP) contracts to finance abandoned projects in Iraq. using a questionnaire survey to select the most significant criteria for choosing an appropriate financing approach for the abandoned project. The reliability of the questionnaire is achieved, by using the Cronbach Alpha calculated by SPSS software (Version 26). The results obtained illustrate the final weight of the Build, Operate and Transfer (BOT) contract from AHP is 0.261 is the best type of the (PPP) contracts in the alternatives suggested to finance the project.
... This is not fair as it will incur additional cost to the home buyers. Yap et al. (2010) also argue that developers normally take less measure to prevent the abandoned housing projects. Therefore, home buyers face with the denial of potential value appreciation and rental collection. ...
Article
Full-text available
The issues of abandoned housing projects are not new in Malaysia. Without proper measures to tackle, they will continue to haunt home buyers. This study examines responses of 328 customersobtained by means of self-administered questionnaires. Four variables namely lack of justice and equity, methods of computing and pricing, nature of contract and lack of legal and governance were used as variables. The results indicated that all the hypothesized relationships are supported. Of these, the nature of contract was found to be the main cause of the problem. The results contributes to the scanty empirical research in this area. It also benefits managers of Islamic banks to address issues that are affectingabandoned housing projects in Malaysia.
... This matter could be due to various reasons, such as financial difficulties faced by the owner, unexpected bad economic conditions, inadequate project feasibility studies, unfavourable policy and lack of cooperation from local authorities (Yap, 2010). Nonetheless, a mode of governance is suggested to be a significant factor in the stagnation of brownfield development (Blokhuis, 2008;Liu et al., 2017). ...
Article
Full-text available
Brownfield development has become one of the sectors to be emphasised imperatively due to emerging greenfield scarcity throughout Malaysia. A brownfield site may have real or perceived contamination issues that require intervention to revive for beneficial use. As of to-date, there is still a number of brownfield sites in Iskandar Malaysia, albeit brownfield revival projects, via planning and policy measures, have been carried out over the years. In this light, a mode of governance is suggested to be a significant factor in the stagnation and success of brownfield development. Therefore, this paper aims to revisit the urban governance modes of brownfield development in Iskandar Malaysia, with a focus on commercial brownfield development. Specifically, two objectives are highlighted in this paper: (i) to assess the site-level success of completed brownfield developments, namely the Paradigm Mall, Skudai and the Danga City Mall, Johor Bahru; and based on the assessment outcomes, it is then (ii) to identify an efficient and suitable mode of governance for commercial use brownfield development. A measuring tool and an indexing scheme to screen brownfield sites were employed alternately. Results show that the Paradigm Mall achieved a higher site-level success compared to the Danga City Mall. Under this light, compared to the corporatist mode of governance, the clientelistic mode of governance with a material objective is highly in relation to a better success of commercial use brownfield development in the background of Iskandar Malaysia. These findings offer valuable messages and insights to practitioners, particularly local policy-makers, that an often-neglected governance mode approach is essential in determining the brownfield development outcome.
Article
Full-text available
Recently, many construction projects in Iraq have been either incomplete or abandoned, with negative implications for stakeholders, the economy, and the environment. The research methodology in this study adopts to Identify the reasons for the abandonment of construction projects in Iraq and arranging them corresponding to the viewpoint of three superiors (owners, consultants, contractors) of the construction project. A literature review on abandoned construction projects was carried out and interviews were conducted for a range of experts in the sector of the building environment in Iraq. As a result, the questionnaire consisted of 41 causes of abandoned construction projects in Iraq. the causes are grouped into six-item. A field survey was conducted using the Relative Importance Index (RII) to rate these causes from the perspective of the owner, contractor, and consultant. 85 forms are the total number of questionnaires distributed, representing 30 for owners, 20 for contractors, and 35 for consultants. The results concluded that the causes of abandoned projects related to time, finance, and resources are in the first, second, and third places, with a total RII equal to 78, 76.3, and 75.8, respectively.
Conference Paper
Full-text available
Abandoned project has been a critical issue in Malaysia that haunts many parties with the house buyers as the primary victim. The Ministry of Housing and Local Government (MHLG) (cited in HBA, 2006) reported that there were 88410 abandoned housing projects in 2005 affecting 58685 buyers with a total value of RM8043 million. The abandonment of projects is a waste of useful resources and an obstruction to progress. The impacts of abandonment of projects are far reaching. It affects not only the immediate house buyers, but also other project players (e.g. client, contractors and consultants), other businesses in the construction industry, and the general public. However, there is hitherto a lack of research into this problem in spite of its impacts. This paper presents a review of existing literature on the negative factors that impact on the success of projects, a review on existing literature on the causes of abandoned projects, and an overview of the overall research framework towards developing an Early Warning System (EWS) to manage the problems of abandoned projects.
Article
Risk and uncertainty can potentially damage construction project. Hence, risk management is an important part in construction companies’ decision making process. It’s very useful for the parties involved in construction industry. This study reviews the housing industry and risk involved with a particular reference to housing. Housing industry which is a part of construction industry is also exposed to various form of risk that may affect the project throughout the life cycle of the project. As abandoned projects can cause loss to customers, this study also reviews statistics on abandoned housing project in Malaysia. The interviews have been carried out and data have been collected from the Ministry of Local Government and Housing. The data includes the categories of abandoned project and factors that lead to the abandonment of the projects. The data was summarised using simple statistical methods. The finding of the study indicates that financial was the main risk in housing development. The study also highlights other significant risks upon which the findings of the study will provide a basis for strategies to minimise risks in housing projects.
Article
The presence of abandoned housing project in Malaysia has present anxiety to various party including Federal Government and buyers. The Malaysian economy has grown 6.2% as announced by Bank Negara in its 2005 Annual Report, despite a faster rate and strong growth apparently abandoned housing project continues to be a bane of the industry, albeit on the declining. Expectation at this time is to minimize the number of abandoned housing projects to propel Malaysia into developed status as articulated in Vision 2020. This paper describes a study on factors causing the abandonment of housing projects and has been conducted based on literature review , interview with the top management in the relevant parties involved and case study. Its is aimed to identify root causes that lead to housing project abandonment, the strategy that had been taken, and the advantages and disadvantages of the existing practice as well as to propose enhancement to the present approach. The finding revealed that incompetent and poor financial management of the developers, financial difficulties as a result of inadequate cash flow, lack of feasibilities studies, competition of new residential projects, inattractive marketing strategies, inexperineced developers, higher financing cost and critical material shortage are categorised as important factors affecting abandoned housing project. Beside the said factors and analysis on the present strategies and practice, abandoned housing project is still exist due to several undisclosed causes such as lack of enforcement for control and monitoring, limtitation of juridisction as well as unavailability of Home Indemnity Insurance. These had caused the revival of abandoned housing project to be hold back. At the end of the study a recommendation has been proposed and it is expected that it will able to be used for improving the present approach of reviving abandoned housing project by taking into consideration the undisclosed root causes.
The abandoned housing projects in Malaysia: an institutional analysis of real estate development process
  • M S Khalid
Khalid, M. S. (2005). The abandoned housing projects in Malaysia: an institutional analysis of real estate development process. In The 2nd College of Arts & Social Sciences Postgraduate Conference. Presented at the The 2nd College of Arts & Social Sciences Postgraduate Conference, Aberdeen.
Abandoned Plaza Rakyat project stands out like a sore thumb in city. The Star Online
  • J Jayaraj
Jayaraj, J. (2009, May 1). Abandoned Plaza Rakyat project stands out like a sore thumb in city. The Star Online. Retrieved June 11, 2010, from http://thestar.com.my/metro/story.asp?file=/2009/5/1/central/3811656&sec=central
Abandoned project poses risks. The Star Online
  • M Stuart
Stuart, M. (2009, March 31). Abandoned project poses risks. The Star Online. Retrieved December 20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/3/31/central/3568336&sec=central
Low-cost housing project abandoned after 90% completed. The Star Online
  • L L Chan
Chan, L. L. (2009, August 6). Low-cost housing project abandoned after 90% completed. The Star Online. Retrieved December 20, 2009, from http://thestar.com.my/news/story.asp?file=/2009/8/6/nation/4463859&sec=nation
Kayu Ara needs an urgent facelift. The Star Online
  • Y T Yip
Yip, Y. T. (2009a, March 3). Kayu Ara needs an urgent facelift. The Star Online. Retrieved December 20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/3/3/central/3370657&sec=central
Residents irked by abandoned flats. The Star Online
  • E Perumal
Perumal, E. (2009b, August 1). Residents irked by abandoned flats. The Star Online. Retrieved December 20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/8/1/central/4427852&sec=central
Buyers of abandoned project need help. The Star Online
  • B Chow
Chow, B. (2009, February 28). Buyers of abandoned project need help. The Star Online. Retrieved December 20, 2009, from http://thestar.com.my/metro/story.asp?file=/2009/2/28/central/3355440&sec=central