By Emmie V. Abadilla
Construction project management is big business in the Philippines, especially under the current administration’s infrastructure program.
But because its importance is not well understood, it often comes in too late – after the feasibility study, master planning and design stages, when proponents could have saved more, in terms of time and cost.
“Local real estate industry players are apprehensive about using project management for the entire life cycle of their development,” stressed Lloyd Wallace, head of Manila-based project management firm Pure Projects International. “When they do, it is tied to a construction start date or a limited scope when the urgency of solving problems overwhelms the staff.”
The success of a project depends on both the developer and the project management service provider. The latter covers everything from master planning, sourcing of land, defining and assessing chosen products, procurement strategies, qualifying and appointing design teams and contractors, supervising the construction phases and handover of the fully completed work.
“We are the driving force that bring the stakeholders together, ensuring that the team delivers their set obligations and commitments,” he pointed out.
Unfortunately, Filipino firms are reluctant to tap project management teams because of the cost, Wallace admitted. “Decision makers are very conscious of keeping all costs to a minimum and often haven’t budgeted for such expenses. They see hiring a Project Management firm as an added expense that could be avoided and an easy way to save money.”
The cost of project management services vary from country to country, from one per cent of the project cost, upwards, depending on state policies, size of the project, location and a number of factors.
An added setback in the local scene is the fact that “the scale of transparency and sharing of information (in terms of time targets and budgets) is a challenge in the Philippines.”
Here, “consultancy fees can be lower than the regional averages, especially for those servicing established developers. With lower wages and high levels of competition, you have cheaper alternatives for services.” But that can translate to poor quality of work and delays later.
“Trying to save on a small percentage up front may lead to a project costing more or bringing inferior quality products to the market on time,” Wallace warned.
Over the years, his project management firm has delivered public and private projects of all sizes in various segments of the property sector.
“Construction is a big contributor to the local economy. With the current growth forecasts in the Philippines, there are significant opportunities for both individuals and companies to assist the developers to build their vision,” he explained.
“Once the big names realize their goals of developing townships and secondary cities, smaller developers and even new entrepreneurs will follow. This robust growth, underpinned by suitably planned infrastructure spending is indeed a reflection of the current economy and is good news for the country as a whole.”