IMPROVING PERFORMANCE OF THE CONSTRUCTION INDUSTRY IN
DEVELOPING COUNTRIES THROUGH INTEGRATED SYSTEM FOR HUMANRESOURCES AND INFRASTRUCTURE DEVELOPMENT (ISHID)

Rajendra NIRAULA 1 and Shunji KUSAYANAGI 2ABSTRACT: This paper based on the Nepalese and Cambodian context has identified the necessityof integration of human resources and infrastructure development systems in order to efficiently
develop infrastructure in developing countries. The construction industry in Nepal and Cambodia has
not been able to deliver infrastructure development projects within the stipulated resources withrequired quality. Only several projects were completed within predetermined time and budget. The
lack of appropriate human resources and technology development was the major reason investigatedand are responsible for the poor performance of the construction industry. The industry anduniversities are working independently without evident linkage. In addition, the universities lackappropriate faculties and facilities for quality education, research and development. Industry
practitioners were complaining the quality of new graduates for not acquiring enough practical skills
and knowledge from the university education. Despite large investment of official development
assistance (ODA), there was insignificant development in the quality of human resources andtechnology required for efficient infrastructure development in the low-income developing countries
like Nepal and Cambodia. This study has developed an integrated system for human resources andinfrastructure development (ISHID) in order to develop appropriate human resources and technology
for domestic infrastructure development in developing countries. The proposed system incorporates
universities collaboration and center of excellence approach for appropriate human resources andtechnology development. Higher efficiency and output from the construction industry would beachieved if the ISHID were implemented properly.
KEYWORDS: Developing countries, human resources, infrastructure, ODA, construction industry
1. INTRODUCTION
Poor performance of the construction industry in developing countries is due to lack of technologicaland managerial capabilities [1-3]. The construction industry in the low-income developing countries
still remains in a tiny executers’ position. Cost overrun, delay and quality not meeting the standards
are common in public works in Nepal and Cambodia. Only several projects were completed within thestipulated budget and time.
Official development assistance (ODA) is the major resource for the socio-economic development indeveloping countries. Almost all public infrastructure development projects in Nepal and Cambodia
have been carried out through ODA and other bilateral assistances. The ODA has been concentrated
more on hard infrastructure development rather than appropriate human resources and technology
12Ph.D.,Center of excellence for social management systems, Kochi University of Technology, Kochi, JapanPh.D, Professor, Infrastructure system Engineering, Kochi University of Technology, Kochi, Japan1

development in developing countries. No significant amount of ODA has been utilized for improving
the quality of engineering education and technology development in developing countries especially inthe low-income developing countries like Nepal and Cambodia. Despite large investment of official
development assistance (ODA), there was insignificant development in the quality of human resources
and technology required for efficient infrastructure development in Nepal and Cambodia. This study
based on the Nepalese and Cambodian context has developed an integrated system for humanresources and infrastructure development in order to develop appropriate human resources andtechnology domestically in developing countries.
2. INFRASTRUCTURE DEVELOPMENT AND THE CONSTRUCTION INDUSTRY
Like many other developing countries, Nepal and Cambodia are still striving for basic infrastructure.
People in these countries are suffering from insufficient and poor quality of infrastructure. Less than
19 percent of the Cambodian and 15 percent of the Nepalese live in urban area. About 16 percent ofthe Cambodian and 27 percent of the Nepalese do have access to the improved sanitation. Similarly,telephone mainlines per 1000 population in Cambodia and Nepal was 3 and 16 respectively [4]. The
road length (in kilometer) per 100 square kilometer of land in Cambodia and Nepal as of 2003 wasonly 21.4 and 10.8 respectively. In addition, about 25 percent of the whole road network in Cambodia
is in good or fair condition, and many of the existing bridges have the load bearing capacity below 10
tons [5]. Many parts of the country remain isolated during the rainy season due to the lack of all
weather roads and enough bridges across rivers in Nepal and Cambodia.
Like in the Japanese construction industry, a few large contractors dominate the construction industryof Nepal and Cambodia, and the majority of the construction firms are small to medium class.
Contractors are categorized and selected on the basis of their technical and financial capability.
However, experienced and qualified manpower is not generally available even with the highest classof contractors. There are four classes of contractors (A, B, C and D) in Nepal and Cambodia. There
were 176 ‘A’, 350 ‘B’, 1500 ‘C’ and about 10,000 ‘D’ class contractors in Nepal [6]. Only about 20
percent of the highest ’A’ class construction firms are being managed by engineers. The total numberof registered civil engineers and architect working in Nepal as of July 2002 were 2,758. Almost 90
percent of the civil engineers involved in development works in Nepal were one-degree graduates [7].
2.1 PROJECT DELIVERY
The traditional, Design – Bid – Build (D-B-B), project delivery system has been widely used in public
infrastructure development. Most of the medium and large infrastructure development projects havebeen executed through international contractors and consultants. The local construction industry does
not have enough financial, technical as well as managerial capabilities for large infrastructuredevelopment projects. Time and cost overrun and inferior quality of works are the major problems in
the public infrastructure development in Nepal and Cambodia. The construction industry in Nepal andCambodia has not been able to deliver infrastructure development projects within the stipulatedresources with required quality. Only several projects were completed within predetermined time andbudget.
Literature reviews and authors’ questionnaire survey followed by interviews and field visits identified
that unfamiliarity of the construction engineers with the appropriate tolls and practices for time, costand quality management, and lack of appropriate technology were the major reasons for the poor
performance of the construction industry. 26 individuals from Cambodia and Nepal were interviewed.
The interviewees were consultants, contractors, clients’ engineers, and university teachers. It was
found that the Nepalese and Cambodian construction industry did not have appropriate humanresources and technology development system. Neither the industry was motivated nor governments
had adequately invested at the universities for research and development in order to develop
appropriate technology and human resources.

22.2 ENGINEERING EDUCATION AND TECHNOLOGY DEVELOPMENT
Although the tertiary education is the major supplier of the skilled workforce, the universities in Nepaland Cambodia could not provide graduates enough opportunities to acquire enough practicalknowledge and skills from the university education. Theoretical knowledge imparting is the domain ofeducation system of many developing countries including Nepal and Cambodia. Lack of appropriate
teaching materials, qualified teachers and research facilities are the major problems in all level ofeducation in Nepal and Cambodia. The written examination of theoretical knowledge at the end of theacademic year is the only measure of competency of a student. Moreover, the civil engineering
education, which is supposed to contribute in improving quality of life, does not emphasize on theapplication of science and engineering knowledge to societal problem, and could not make graduatescreative and adequately prepared for the construction industry.
Unlike in the developed countries, universities in Nepal and Cambodia were not evidently engaged inresearch and development. The least developed countries including Nepal and Cambodia haveinvested a little money on education than other middle and higher income developing countries do.
The universities lack financial resource and physical facilities for research and development.
Moreover, there is no linkage and enough cooperation between the university and industries forappropriate human resources and technology development. As a result, the contribution of theuniversities in Nepal and Cambodia is limited to produce graduates equipped with theoreticalknowledge. Moreover, the construction industry has not invested for human resources and technology
development. Neither the universities nor industry has focused in technology development andinnovation. As a result, there were no significant improvement in the construction technologies inNepal and Cambodia. In addition, the civil engineering education did not significantly contribute in
the technological development and could not make the industry healthy.
3. OFFICIAL DEVELOPMENT ASSISTANCE (ODA)
Official Development Assistance (ODA) concept was adopted by Development Assistance Committee(DAC) established in 1961 in organization for economic cooperation and development (OECD)
separating ODA from “Other Official Flows” (OOF) and identifying as ODA those officialtransactions which were made with the main objective of promoting the economic and social
development of developing countries and the financial terms of which were “intended to beconcessional in character”.
ODA since its adoption has become a major resource for the socio-economic development ofdeveloping countries. Different donors have been involved in different areas of socio-economic
Gran t A id
L o an
Co n t ribut io n t o m ult ilat eral agen cies
T o t al O D A

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197901977million US $12000

Figure 1: Japan’s ODA (1977-2002)3

development in developing countries. Among others the USA and Japan are the largest donors todeveloping countries. However, this paper is focused on Japan’s ODA, as it occupies the largest
amount of assistance in some Asian and African countries including Nepal and Cambodia. Moreover,Japan’s ODA to the least developed countries (LDCs) contains considerable amount of grants aid
inclusive of technical cooperation as shown in Figure 1 [8]. Like many other developing countries,
Nepal and Cambodia have been very much benefited from Japan’s ODA and Japan is the largest donor
to these countries. However, the main activities of Japan’s ODA seemed to be hard infrastructuredevelopment along with inefficient human resource development. For instance, all grant aids
excluding technical cooperation under Japan’s ODA in 1994-2001 to Nepal was used in hard
infrastructure development in which as much as 3 percent was utilized in educational infrastructure
related activities-- materials and equipment for the construction of primary schools. Similarly, lessthan 1 percent of the grant aids to Cambodia in the same period was used in human resource
development scholarship [9]. Further, all grant aid projects have been executed by donor’s own
consultants and contractors. Human resource development and technology transfer were not the major
elements in grant aid projects. Acceptance of trainees mostly from executing agencies of developing
countries and dispatch of the Japanese experts in technical cooperation scheme were the only meansfor human resource development program in ODA. However, Japan’s ODA had not been utilized toimprove the quality of higher education and technology development in these countries.
3.1 HUMAN RESOURCES AND TECHNOLOGY DEVELOPMENT UNDER JAPAN’S ODA
Human resources and technology development under Japan’s ODA consists of the dispatch of theJapanese experts and volunteers, acceptance of the trainees from developing countries, providingequipment and materials to facilitate technology transfer. Human resource development cost under theJapan’s ODA was very high compared to the government expenditure on education in the least
developed countries. Typically, it was found that the training cost per trainee under Japan’s ODA was140 times higher than that of the government expenditure per student in higher education in Nepal.
Only few people had opportunities to be trained. The training for a few people from the clients’organization could not improve the overall skill level of the construction engineers due to the inflow ofhundreds of untrained engineers in the construction industry. There is no horizontal flow of humanresources and diffusion of technology across the implementing and executing agencies in the existingbureaucratic system. Human resource if trained and technology if developed in an agency is limited
within its own boundary and vertically flowed down if not died out. In addition, there were no evident
activities for technology development in the recipient countries. In order to efficiently utilize ODA toproduce appropriate human resources and technologies for infrastructure development in the recipient(ODA receiving) countries, an integrated system has been developed which is described below.
4. INTEGRATED SYSTEM FOR HUMAN RESOURCES AND INFRASTRUCTURE
DEVELOPMENT
Integrated human resources and infrastructure development system developed in this study
incorporates research and development functions of university in cooperation with lending agencies(donors) and university/industry from the donors’ countries to produce appropriate human resource
and technology required for infrastructure development in the recipient countries. This system consistsof universities collaboration and center of excellence approaches. The schematic diagram of theintegrated system is shown in Figure 2.
Since universities/colleges/institutes from Nepal and Cambodia were lack of competent faculties andfacilities, universities collaboration in the proposed system (ISHID) is intended to provide theopportunities for the faculties from the recipient countries to pursue higher studies and advanced
research in order to address the industrial needs. For instance, Institute of Technology of Cambodia(ITC) could not deliver enough education/training on concrete technology and management due to thelack of faculties. In addition, the Cambodian construction industry was also deprived of enough human4

resources in concrete technology and management for efficient execution and technology development.
Universities collaboration between Kochi University of Technology (KUT), Japan and ITC, Cambodia
designed and implemented under this study provided 2 faculties from ITC to pursue doctoral study on
concrete technology and management. The KUT-ITC collaboration also includes the transfer of seedtechnology for high strength prestressed concrete product development to the ITC. Further to theeducational/research opportunities and transfer of the seed technology at ITC, the collaboration willcontinue, as designed in the ISHID model, to establish a center of excellence for education andresearch (COE&R), a non-profit making entity, for appropriate construction engineers and technology
development in Cambodia. The center will be engaged in providing training for practitioners,

Figure 2. Model of Integrated System for Human Resources and Infrastructure Development

5internship for graduates, and developing technology and/or products to the development projects.
Consequently, the present KUT-ITC collaboration will enable ITC able to improve the quality ofeducation in concrete technology and management, and to develop high strength prestressed concrete
technology to facilitate the bridge rehabilitation projects in Cambodia. The income/saving from theprofessional service, and supply of the technology and product would enable universities be selffinanced and able to continue to deliver quality education and develop technology at reasonable cost.
It was calculated that at least 10 times more people could be trained with the same resources currently
using in Japan’s ODA if the local faculties were trained and provided opportunities to participate in
the industrial activities. The increase in the quality of education and training for moreengineers/technicians would continuously improve the overall skill level of the construction engineers.
For instance, with the equal resources, the new system (ISHID) would increase skill level of theNepalese civil engineers in 2010 by 0.5% more than that of the existing Japan’s ODA system. The
increase in skill level of the construction engineers and availability of technology in the local industry
would significantly increase the output from the construction industry. This can be shown from theCobb-douglas production function. Thus, enhancing the capacity of the faculties and improving thefacilities at the universities would enable recipient countries to produce industrial need oriented humanresources and technology domestically. Thus the proposed integrated system would improve theperformance of the construction industry by improving the skill level of the construction engineers andmaking available the required technologies for the infrastructure development.
5. CONCLUSION
The construction industry in Nepal and Cambodia could not deliver projects on time with required
quality due to lack of appropriate human resources and technologies. The universities and industry
were working independently without evident linkage and cooperation. In addition, ODA is moreconcentrated on hard infrastructure development rather than human resources and technology
development in recipient countries.
The industrial need oriented universities collaboration and center of excellence approaches would
enable local universities in developing countries able to contribute the industry to appropriate humanresources and technology development. Integrated system proposed in this study would utilize ODA
more efficiently than the existing system does. At least 10 times more people could be trained andrequired technology for construction, management and material production could be developed locallyif the proposed integrated system for human resources and infrastructure development wereimplemented. The rise in skill level of the construction engineers and technological development for
construction, management and materials production would improve the performance of theconstruction industry, and consequently higher output could be expected.
6.

REFERENCES

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