Leatty Shanghai: A Construction Project

Background There is a building boom in residential, commercial and institutional buildings all over China. The country is currently using 54 per cent of the world’s production of concrete and 36 per cent of its supply of steel. Predictions suggest that this building boom will continue for at least the next 20 years.

Leatty, a major property developer, has already been involved in several projects in China. The company’s latest project, in Shanghai, aims to create a new generation of buildings based on low energy consumption, comfort and environmental protection using the most advanced technologies in the world. The project includes a three-phase housing development, as well as a shopping and leisure centre. The team is multinational, with the developer based in Canada, the architects in Germany and the multinational team of structural engineers and contractors in Shanghai.

The completion of the first phase was due 12 months after the start date. The team are now nine months into the work, and conservative estimates suggest that the project is 16 per cent over budget and two months behind schedule. A new project manager has been called in to rescue the troubled project.

Construction Phase One Milestones Dates Demolition and site- preparation start date Nov 1 Building excavation start date Dec 15 Foundations completion Feb 9 Underground parking complete Mar6 Phase 1 external steel structure complete June26

The World Clock Meeting Planner: Toronto Berlin Shanghai Mon 12:00 Mon 18:00 Tuesday 00:00 Mon 15:00 Mon 21:00 Tue 3:00

Report DELAYS TO THE CONSTRUCTION PHASE The following information has been collected by the company to try and detect the major causes of the delay that the Leatty Shanghai building project is currently facing:

Summary of Findings

Redesign Initial work was delayed by design reviews on the part of the developer. The architect’s redesigned plans took over three weeks to reach the contractor. Construction finally got underway on 21 January. Theses late design changes also delayed delivery of structural steel for the project.

Road works Further delays were caused by the lack of access to the site. Government road building work meant that larger equipment could not reach the site until late December, and this held up the start of the site excavation.

Building contractors One sub-contractor responsible for the foundation work was unable to comply with the new start date. Two main issues arose: they were having financial difficulties, and there was slippage on another project they were involved with, which meant they did not have the manpower or equipment necessary to start the work.

Suppliers Because the foundations were not going to be ready on schedule, the building contractors postponed steel delivery. Indeed, on-time delivery of the steel would have caused a storage problem. Since the demand for structural steel in China far outstrips the supply at the moment, the knock-on effect has been an increase in the cost of steel and delays in delivery, which has also added to project costs.

Weather conditions Building work was planned on a 24-hour schedule. However, there was a heatwave for part of the summer months, which hampered efforts to work around the clock.

Relationships between the client, contractors and consultants Their views are displayed on the following page.