Is cost-overrun in construction, a status-quo?

Saksham Bhutani , Marketing Head at Indshine

December 25, 2019

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The infrastructure industry is the backbone for the growth of the economy of any country. Oil & Gas, roads, water systems, airports, railways, and telecommunications are essential services that drive economic activity. As per the Mordor Intelligence report, the current infrastructure spending at the global level is USD 4.3 trillion.

However, there’s always a high inherent risk factor of late or non-completion, running over budget and/or non-compliance with requirements involved in the majority of construction projects. According to a study from KPMG, only 31% of all projects came within 10% of the budget in the past 3 years.

Although there are a couple of the causes of cost overruns in construction projects, we will examine on Management issue. “Management issues' here refers to interrelated communications between multiple stakeholders that are design teams, clients, consultants, contractors, and project management teams, typically involved in construction projects.

"Servicios de Ingeniería", a technology firm based in Mexico, specializes in providing topography, mapping, and engineering services to the Construction, Mining, and Oil & Gas Industry, as well as in helping stakeholders align through drones.

Project Details

VHC construction group was building Oil and Gas Station, warehouse, and concrete plants in 17.51 acres of land and have invited "Servicios de Ingeniería” for the topographic survey and planning solutions for the same in Cabo San Lucas, Mexico.

construction site of gas station with land boundary marking

Challenge

VHC group knew that even with accurate structural designs, the project could still experience overruns if the management isn’t aware of the project’s progress. Also, communication channels between the stakeholders were limited, as they were not using any project management software.

Adding to the problem statement was the location of the participants. As in, the Client, Consultants, and Architects were located in different locations of the world. While the owner of the company was operating from Spain, consultant “SEI” from Mexico, half of their architecture team was in Montana USA, and another half in LA, USA.

Approach

Aurelio Acosta, founder of “Servicios de Ingeniería,” initiated the work by highlighting official limits/boundaries of ownership on software followed by tracing the same on-field using GPS/ GNSS equipment. Now, since the boundaries were clearly demarcated, the next step was to survey the whole area of interest with laser 3d technology. This served as a baseline survey for the VHC group to start construction.

Now, the crucial part was to deliver progress monitoring to enable:

  1. The design team to know whether the as-built construction is as per the standard and approved designs.
  2. The VHC group to stick to the timeline of construction.

Drones have been treated as the best tools for Project Monitoring, and hence, Acosta insisted on using the same for this project. They used DJI Phantom 4 drone and Agisoft Photoscan (photogrammetric processing software) to generate high-resolution drone maps, including Digital Surface Models and Orthomosaics. The report highlights the process; they followed for the collection and processing of drone images.

Since there was a need of a single point of truth among all stakeholders. Indshine tool was used wherein - the layer panel highlights the satellite and drone images while the annotation panel specifies the VHC properties.

This project is a classic example of how the combination of "drone and satellite maps overlaid with AutoCAD files'' can help the architects/engineering teams that are sitting in different corners of the world in creating structural designs.

The following picture highlights the process followed:

Roadmap of project monitoring

Summary

The combination of drone maps (every 3 months), satellite maps with Indshine tool assured that there are no gaps in design and as-built structure. Acosta helped in establishing communication channels between the stakeholders by introducing drones and democratizing the drone information through the right tools. This helped to save 6 months from the scheduled timeline.

Acosta explains - Indshine has the feature of adding collaborators in the project so that they contribute their observations, make modifications and add information. This feeds the project and is given an efficient and real-time follow-up, helping to make decisions in a faster and more efficient way, reducing the time and total costs of the project.

Many times stakeholders believe that the best solution for handling bad management is to simply increase the size/change of the management team. However, this might not be the best solution. For increasing transparency, about the stages of the project, drone information turned out as a single point of truth in contrast to conventional administration.


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