1.0 BACKGROUND INFORMATION
The performance of the construction industry has a major influence on the economic, infrastructure, agricultural and technological development of a country (R. Chudley, 1995). Construction is increasingly becoming highly technical and sophisticated with high standard of quality and specification. These coupled with clients demand for value-for-money requires the efficient employment of equipment which can largely improve productivity in the construction industry.
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The general aim of every construction is to produce a structure that can provide the required functions at the most reasonable cost, within a given time frame and at the required level of quality. Mechanization is one of the ways by which these could be achieved. The fast developing construction industry now heavily depends on equipment to achieve the high demands of quality project delivery.
Equipment implies the machinery, tools (other than craftsmen’s personal tools) used in the contractor’s yard, workshop or site. Generally, equipment are introduced to contracts to increase the rate of output, reduce overall building cost, achieve high output standards often required by present day designs and specifications, eliminate heavy manual work thus reducing fatigue and carry out activities which cannot be done manually or do them more economically ( R. Chudley, 1995).
The introduction of equipment to a contract does not however necessarily result in economic savings unless the contract work is so organized that machines are fully utilized or operate for continuous periods at full capacity that is about 85% of its on-site time, their use will not be economical. To be economic, equipment must be fully utilized and not left standing idle since equipment, whether hired or owned, will have to be paid for even if it is non-productive (R. Chudley, 1995).
Heavy equipment will be needed for excavation, haulage, lifting and transportation of materials and people during the construction of a project in order to meet all the client’s specifications. Contractors stand to gain from the use of equipment in the form of increased output per employee, increased productivity from equipment leading to overall profits.
Unfortunately, performance of construction firms in the industry has been affected by several constraints with lack of access to finance arguably the most critical of these constraints. At least, it prevents contractors from procuring all necessary resources for their construction works including equipment (Eyiah A and Cook P, 2003).
It is against this background that this investigation has been conducted to find the equipment acquisition methods being used by Ghanaian contractors as well as the problems the contractors encounter when acquiring equipment for their construction.
1.1 STATEMENT OF PROBLEM
The highly technical and standardized nature of current construction designs and high demands in terms of quality coupled with often short contract durations undeniably demands the use of equipment. They play an increasingly important role in building as well as civil engineering operations and both time and a lot of money can be saved by acquiring and using them. Heavy equipment are needed for excavation, haulage, lifting and transportation of materials and people during the construction of a project thus performing an operation faster, more economically, safely and with a better quality and finish.
Notwithstanding such great achievable benefits, it requires substantial capital to procure equipment, set up plant management departments and even use the equipment. It often requires very large bank guarantees, collaterals, high interest rates on bank loans, sometimes cumbersome bureaucratic procedures to acquire funds to purchase plant or equipment. This is probably why most Ghanaian contractors still depend heavily on manual labour to execute their projects.
On large and complex projects of long durations, it may be practical to purchase plant or equipment for a specific job and resell at the end of the contract. The problem here is that fluctuations in prices on our current market may make it difficult to forecast costs with certainty.
Equipment holding firms often do not offer favorable and attractive conditions for the acquisition of equipment to encourage contractors to use equipment on the projects. Very few of the contractors can meet the required conditions before procuring most needed equipment. Again, equipment holding firms are usually found in the urban areas of our country which are almost always far away from most of the construction sites warranting high haulage costs from the plant depot.
Purchasing a plant or equipment could also tell greatly on the finances of the firm as a very large sum of money may be locked up in purchasing the plant which then has to be worked at a good utilization level to recoup investments made into it.
Finally, purchasing equipment is sound investment if there is enough work ahead to keep it fully employed. Some estimates suggest the equipment must be working regularly for three to five years to recover the capital outlay. However the situation in Ghana is that of many contractors competing for very few projects. Construction firms cannot be assured of regular projects to fully utilize their investment in equipment therefore they rather do not invest in it all or when they do, it is very minimal.
All the aforementioned problems collectively contribute to the reason why most of the contractors are unable to acquire the necessary equipment for construction works and thus leaving construction in Ghana still very labour intensive.
1.2 AIMS AND OBJECTIVES
The main aim of this study is to investigate the existing equipment acquisition methods in use in the Ghanaian construction industry as well as the problems that the contractors encounter when acquiring equipment with the view to recommending better and more effective practices in the construction industry.
Specific objectives of the investigation are to:
* Find out existing equipment acquisition options used by the Ghanaian contractor.
* Identify problems faced by the Ghanaian contractor in acquiring equipment for construction works.
* Examine existing arrangements (if any) made between equipment hire and manufacturing companies and the construction companies.
* Recommending better acquisition options as well as solutions to some of the major problems the contractors face when they try to acquire equipment.
1.3 SCOPE OF WORK
A number of firms within the D1 and D2 of contractors by the Ministry of Water, Works and Housing and the Ministry of Roads and Transport in the Kumasi Metropolis will be identified, selected and studied.
The equipment items that will be covered under the study will include general equipments, earth moving, lifting, transporting and excavation equipments.
2.1 INTRODUCTION: CONSTRUCTION EQUIPMENT
Equipment plays an increasingly important role in building as well as civil engineering operations, and both time and money can be saved by the efficient use of mechanical aids. Equipment implies the machinery, tools (other than craftsmen’s personal tools) and other equipment used in the contractor’s yard, workshop or site. These may range from small hand held power tools to larger and more expensive equipment such as mechanical excavators and cranes.
The aim of any construction activity or project is to produce a structure of the right quality and standard at an optimum cost within an acceptable time frame. The use of equipment for construction becomes necessary where using manual labour will not help achieve the project’s objectives.
Generally, equipment are introduced to contracts for one of the following reasons:
* Increased production.
* Reduction in overall construction costs.
* Carry out activities which cannot be carried out by the traditional manual methods in the context of economics.
* Eliminate heavy manual work thus reducing fatigue and as a consequence increasing productivity.
* Replacing labour where there is a shortage of personnel with the necessary skills.
* Maintain the high standards required particularly in the context of structural engineering works
(R. Chudley, 1997).
2.1.2 SOME COMMON CONSTRUCTION EQUIPMENT USED DURING CONSTRUCTION.
Presented here is a brief description of some of the important construction equipment that may be used during the construction of a building project.
18.104.22.168 EARTH MOVING MACHINES
The equipment described here include the bulldozers, graders, scrappers etc that are used to move massive volumes of excavated materials during construction.
The primary earth-moving machine is the heavy-duty tractor, which when fitted with tracks to grip the ground and with a large movable blade attached in front, is called a bulldozer. The bulldozer as shown in fig 2.1 below may be used to clear brush, small trees, debris, remove boulders, and level ground. They may even be used as towing tractor or a pusher to a scrapper. They consist essentially of a track or wheel mounted power unit with a mould blade at the front. Many bulldozers have the capacity to adjust the mould blade to form an angledozer which can tilt the mould blade about a central swivel point. They become even very useful especially in civil engineering projects, which often require the moving of millions of cubic meters of earth. These bulldozers are however not appropriate for final leveling and cannot be used for loading thus requiring other equipment to load.
These are sometimes called loaders or loader shovels and primary function is to scoop up loose materials in the front mounted bucket, elevate the bucket and deposit the material into an attendant transport vehicle. Tractor shovels are driven towards the pile of loose material with the lowered bucket. The speed and the power of the machine will then enable the bucket to be filled. To increase their versatility, the tractor shovels can be fitted with a 4 in 1 bucket enabling them to carry out bulldozing, excavating, lifting and loading activities.
Like the scrapper, the tractor shovel is not suitable for work in rocks and waterlogged areas and will require a crawler tractor to work in the latter condition.
Somewhat similar to scrapers are graders which are self-propelled, wheeled machines with a long, inclined or vertically adjustable steel blade. Graders are primarily finishing equipment; they level earth already moved into position by bulldozers and scrapers. They are similar to the bulldozers in that they have a long slender adjustable mould blade, which is usually slung under the centre of the machine. The mould blade can be suitably adjusted in both the horizontal and vertical planes through an angle of 300 the latter enabling it to be used for grading sloping banks. This John Deere grader seen in Fig 2.2a below has a laser leveling unit mounted on its blade which constantly adjusts the height of the blade to ensure that the ground is made precisely flat.
The low motive power of a grader does not generally allow for use in excavations. A grader cannot load nor move spoils of significant quantity over a long distance. It is bulky in size and therefore not suitable for work in small and/or confined areas and corners.
A scraper is a machine that may be pulled by a tractor or may be self-powered and consists of a blade and a bowl or container. The bowl is lowered to cut and collect soil where site stripping and leveling operations are required involving large volume of earth. The soil may then be released so as to form an even layer of a predetermined thickness or be carried off for disposal elsewhere.
To obtain maximum efficiency, scrappers should operate downhill and as much as possible have smooth haul roads and hard surfaces broken up before scraping. Scrappers are not suitable for use in waterlogged areas and in rocky grounds. They cannot be used in loading and also would need transportation between sites.
[Microsoft Encarta 2006; R. Chudley, 1997]
These form part of the main equipment items that are often used in construction. They are primarily used to excavate as well as load different types of soil. Each different type of excavator has specific soil conditions where it works best. Below is a brief description of some of the common excavating equipment found in construction. All of them can easily be classified under one of the following categories: Multipurpose, General or Universal and Purpose Made excavators.
Multi-purpose excavators like the one shown if fig. 2.4 are fitted with a loading and excavating front bucket and a rear backactor bucket. When in operation using the backactor bucket, the machine is raised off its axels by rear mounted hydraulic outriggers or jacks and in some models by placing the front bucket on the ground.
A trencher is designed to excavate trenches at constant width with a high degree of accuracy and speed. It can cut trenches of widths between 250 and 450mm and up to 4.00m deep. It consists of a number of excavating buckets mounted on a continuous mechanism on a vertical boom. The boom is lowered into the ground to the required depth to be excavated. The spoil is then transferred along a cross conveyor to deposit the spoil along the side of the trench.
A trencher as shown in fig 2.5 is most suitable for long and deep trench excavation and it also gives a fairly accurate and clean trench width and would therefore not require further trimmings to sides of trenches it excavates.
A trencher cannot load materials it excavates and also unable to work in rock.
Skimmers are used for surface stripping and shallow excavation work up to 300mm deep where a high degree of accuracy is required. They usually requires attendant haulage vehicles to remove the spoil and they also have to be transported between sites on a low-loader.
The restricted nature of the bucket movement does not allow high output rates as compared with other over site excavating equipment. A skimmer requires a large operational area and is therefore not recommended for work in small and restricted areas.
Backactors are about the most common excavating equipment used in construction. They are suitable for trench, foundation and basement excavations especially in restricted areas. They can be used with or without attendant haulage vehicles since the spoil can be placed alongside the excavation for use in backfilling. Unlike the face shovel, they excavate by moving the bucket towards the chassis of the machine. It then raises the bucket in a tucked position to discharge the excavated material through the front open bucket. They can also be used to load hard but broken down materials. They require a low-loader transportation between sites and trenches excavated using the backactor may need other equipment for trimming to obtain desired smooth edges. Shown below in fig 2.6a and b are pictures of a John Deere and CAT backactors respectively.
The primary function of this machine is to excavate against a face or a bank above its own track or wheel level. It is suitable for clay and can be used in excavating and even rock which needs to be loosened, usually by blasting prior to the excavation. A face shovel has the added advantage of loading materials excavated into dump trucks. It can also be used extensively for relocating spoils within a given radius or short distance and for heaping spoils for future use.
Face shovels like the one shown in fig. 2.7 above usually require attendant haulage vehicles for the removal of the spoil and a low-loader transportation between sites most especially in developed areas. They are also not suitable for deep excavations.
22.214.171.124 TRANSPORTING EQUIPMENT
These are mainly used for the transportation of personnel, materials, machines and equipment from one site to the other or from one location to the other within a relatively large site. They range from conventional saloon car to the large low loader lorries designed to transport other items of builders equipment between construction sites and the equipment yard or depot.
These transport vehicles range from the small two person plus a limited amount of materials to the large vans with purpose designed bodies such as those designed to carry sheets of glass. The vans can be supplied with an uncovered tipping or non-tipping container mounted behind the passenger cab for use as a ‘pick-up’ truck.
Lorries which are usually referred to as haul vehicles are available as road or site only vehicles. The road haulage vehicles have to comply with all the requirements of the concerning vehicle usage which among other requirements limits size and axle loads. The site only vehicles are not so restricted and can be designed to carry two to three times the axle load allowed on the public highways. They are also designed to withstand the rough terrain encountered on many construction sites.
Lorries specifically designed for the transportation of large items of equipment are called low loaders and are usually fitted with integral or removal ramps to facilitate loading equipment onto the carrier platform.
These can range from a simple framed cabin which can be placed in the container of a small lorry or pick-up truck to a conventional bus or coach. These vans can also be designed to carry a limited number of seated passengers by having fixed or removable seating together with windows fitted in the van sides thus giving the vehicle a dual function.
Dumpers are used for horizontal transportation of materials ranging from aggregates to wet concrete on and off construction sites generally by means of an integral tipping skip.
Highways dumpers or dumper trucks are similar but larger design and can be used to carry materials such as excavated spoil along the roads. A wide range of dumpers are available with variuos carrying capacities with hydraulic control for either a side, front or elevted tipping. They are designed to traverse rough terrain but they are not desinged to carry passengers. Shown above in fig. 2.8a and 2.8b are shown a standard site dumper and a dumper truck respectively.
These are used for horizontal and limited vertical transportation of mterials positioned on pallets or banded together such as brick packs. They are generally suitable for construction sites where the building height does not exceed three storeys. They are available in three basic forms namely staright mast, overhead and telescopic boom (shown in fig. 2.9a-c) with various height, reach and lifting capacities.
Hoists are designed for vertical transportation of materials, passengers or both. Material hoists are usually mobile and they can be dismantled, folded onto the chassis and moved to another position or site under their own power or towed by a haulage vehicle.
Passenger hoists are designed to carry passenger passengers although they most can be capable of carrying the load of passengers as well as materials.
Cranes are lifting devices designed to raise materials by means of rope operation and move the load horizontally. Crane types can range from simple rope and pulley to complex tower cranes but most can be placed within one of three groups namely: static (operate from a fixed position), mobile (operating position can be changed by cran under its own power) and tower (can be operated from a fixed position or rail mounted to become mobile) cranes.
Several forms of cranes can be identified. Some of these are listed below:
* Self propelled cranes
* Lorry Mounted cranes
* Track mounted cranes
* Gantry/Portal cranes
* Tower cranes
Below in fig. 2.10 is shown the different types of cranes used in the construction industry.
126.96.36.199 Concreting equipment
these equipment perhaps fall among the group of equipment that may be readily found on most constrction sites since concrete usually forms a large propotion of the materials used in construction.Concreting equipment can simply as classified under the following headings: mixing, transportation and placing.
These are used in mixing concrete especially in large volumes. Apart from the very large output mixers most concrete mixers in general use have a rotating drum designed to produce concrete without segregation of the mix.
Most small batch mixers are of tilting drum type with outputs up to 200 lit/batch. They are generally hand loaded which makes the quality control of successive mixes difficult to regulate.Medium batch mixers can achieve outputs up to about 750lit/batch and may be designed with a tilting drum mixer or as a non-tilting drum mixer with a reversable drum. These mixers usually have integral weight bacthing loading hoppers, scrapper shovels and water tank thus giving better qualtity control than the small batch mixers.
The pictures shown in fig. 2.11 and 2.12 are the very common 10/7 concrete mixer and 6m3 capacity ready mix concrete machine.
EQUIPMENT FOR TRANSPORTING CONCRETE.
Wheel barrows are the most common form of transporting concrete in small volumes. However for large volumes of up to about 600 litres, dumpers are more appropriate. Ready mixed concrete trucks are used to transport mixed concrete of volumes between 4-6m3 from a mixing equipment or depot to the site. Discharge can be direct into placing position via a chute or into some form of site dumper such as a dumper, crane skip or dumper.
After placing concrete in its formwork, excavated area or mould, the concrete must be properly worked around any insets or reinforcement and finally compacting the concrete to the required consolidation. This can be done to some degree satisfaction using tamping boards or rods but most appropritely using vibrators.
Poker vibrators consist of a hollow steel tube casing in which is a rotating impellar which generates vibrations as its heard comes into contact with the casing.
[Microsoft Encarta 2006; R. Chudley, 1997]
2.2 EQUIPMENT ACQUISITION
Generally, a construction company has two options in acquiring equipment: it may either own machinery and equipment or hire it. Management must decide early on whether the equipment needed on site is to be hired or purchased outright, if it is not already available within the company. ‘Purchasing equipment is sound investment if there is enough work ahead to keep it fully employed. Some estimates suggest the equipment must be working regularly for three to five years to recover the capital outlay’ [J.E. Johnston, 1981]. The decision to purchase will invariably have important financial consequences for the firm, since considerable capital sums will be locked up in plant, which must then be operated at an economic utilization level to produce a profitable rate of return on the investment .In recent years however, the growth of the independent equipment hire sector of the construction industry has greatly facilitated this latter option and approximately 50-60% of equipment presently used on projects is hired. Many firms however prefer to hire only those items of equipment which are required to meet peak demand or specialized duties [F. Harris and R. McCaffer, 2001].
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2.2.1 ECONOMIC CONSIDERATIONS
The introduction of equipment to a project does not necessarily result in economic savings since extra temporary site works such as road works, foundations, hard standings and anchorages may have to be provided at a cost which may be in excess of the savings made by using the equipment. The site layout and circulation may have to be planned around equipment positions and accommodation. The full advantage of employing the equipment can only be realized if the equipment is well managed, both on and off the site, and this requires a thorough understanding of the economic aspects of using equipment and vehicles. For example, a crane will become expensive if the design does not allow a fairly continuous programme of work whilst it is on the site.
To be economic, plant must be fully utilized and not left standing idle since equipment, whether hired or owned, will have to be paid for even if it is non-productive. Full utilisation of equipment is usually considered to be in the region of 85% of on site time, thus making an allowance for routine daily and planned maintenance which needs to be carried out to avoid as far as practicable equipment breakdowns which could disrupt the construction programme. Many pieces of equipment work in conjunction with other items of equipment such as excavators and their attendant haulage vehicles therefore a correct balance of such equipment items must be obtained to achieve an economic result (R. Chudley, 1995; R.E Calvert et al, 1996).
2.2.3 EQUIPMENT POLICY
188.8.131.52 OWN ALL EQUIPMENT
The policy practiced by many enterprises is to purchase, or lease long term, most of the equipment needs and thereby provide availability at all times, with the added advantage of the prestige attached to demonstrating the use of owned equipment. However, much capital will be locked up in the equipment, which must become capable of generating a sufficient rate of return. A major disadvantage of this strategy is the problem of maintaining adequate levels of utilisation. Equipment holdings are usually built up to service a growing demand, and will become a heavy liability in the case of an economic recession. Any available work may then subsequently need to be undertaken to sustain the fleet, since equipment cannot easily be sold in a declining market.
184.108.40.206 HIRE ALL EQUIPMENT
Many specialist hire/rental firms offer the supply of equipment now on the open market. To take advantage of this facility avoids both the responsibility of maintenance and the tying up of capital. The equipment may be hired for a specified period and often times the equipment operator also is provided by the equipment supplier.
The main disadvantage of hiring is that the hire rate depends on market forces and suppliers are largely beyond the control of the hire, except for limited negotiation between competing firms.
220.127.116.11 A COMBINATION OF HIRE AND OWN
A mixed policy of owning and hiring equipment may be the preferred option. For example, regularly required items might be purchased and hiring adopted only to smooth out demand (Edwards D.J, 2003).
F.T. Edum-Fotwe (1990) writes that serious consideration should also be given to the extent to which the equipment is to be operated before an acquisition decision is made. He outlines the following factors concerning the level of operation of a equipment:
1. Acquire equipment new and operate to a down value and sell it.
2. Acquire second-hand equipment and operate to scrap value.
3. Acquire equipment new and operate to scrap value.
4. Acquire a second-hand equipment and operate to a down value and resell.
2.2.4 FINANCING OF EQUIPMENT
A firm, having decided to buy a equipment instead of hiring, has the following methods of paying for the equipment.
1. Cash or outright purchase
2. Hire Purchase
3. Credit Sales
18.104.22.168 CASH OR OUTRIGHT PURCHASE
When using this option, the buyer pays cash or immediately at the time of purchase, thereby providing tangible asset on the balance sheet. Obviously, this option is only possible if cash is available and therefore presupposes that profits have been built up from investors such as shareholder, bank loans, etc. Also, some large or technically unusual contracts sometimes include monies to permit the contractor to purchase the necessary equipment at the start of the project [F. Harris and R. McCaffer, 2001].
R. Chudley, 1997 simply identifies some of the advantages of outright purchase as:
1. Equipment availability is totally within the control of the contractor.
2. Hourly cost of equipment is generally less than hired equipment.
3. Owner has choice of costing method used.
J.E. Johnston, 1981 however advices that besides the purchase price of a equipment, consideration should be given to the following points:
1. Capital outlay and interest charges
2. The cost of maintenance and repairs
3. The cost of transporting equipment between sites
4. Insurance premium and
5. Standing time on site.
When examining the need to own equipment, the following points must be considered:
1. Will the item of equipment generate sufficient turnover to provide an adequate rate of return on the capital employed?
2. Is ownership of the equipment, rather than obtaining it by some other method, absolutely necessary for the business?
3. Is outright purchase the only way of acquiring the equipment? [F. Harris and R. McCaffer, 2001]
22.214.171.124.1 COST OF OWNING AN EQUIPMENT
The cost of owning and operating construction equipment is affected by factors such as the cost of the equipment delivered to the owner, the severity of the conditions under which it is used, the cares with which the owner maintains and repairs it and the demand for used equipment when it is sold which will affect the salvage value. In his report, ‘Effects of equipment breakdown on civil and building construction works’, Markus S. Clarke (2001) identified the costs involved in owning and operating equipment as:
When a unit of equipment is placed in operation, it begins to wear out. Regardless of the care in maintaining and repairing it, the equipment will wear out or become obsolete and has to be replaced. The owner of the equipment has to provide a reserve fund to replace it when it is worn out. Where the contractor fails to include an appropriate allowance for depreciation of his equipment in his estimate, there will be no funds available to replace the equipment when they become aged or obsolete.
ii. Maintenance and repairs
The cost of maintenance and repairs varies considerably with the type of equipment, the service to which it is assigned and the care it receives. The annual costs of maintenance and repairs is expressed as a percentage of the annual cost of depreciation or independent of depreciation and it must also be sufficient to cover the cost of keeping the equipment operating.
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