An Investigation of project procurement strategies and project cost of water supply projects in Sri Lanka

Abstract

The efficient management of capital investment costs is crucial for the successful execution of construction projects, particularly in the context of water supply projects. The selection of an appropriate procurement strategy can significantly impact capital investment costs. This study investigates the procurement strategies employed in water supply projects in Sri Lanka and examines their influence on achieving value for money. To conduct this investigation, a qualitative methodology is employed, which includes an extensive review of literature, industry practices, and expert opinions. Based on the comprehensive findings, the study provides several key recommendations for future water supply projects. Firstly, the traditional procurement method (design-bid-build) is recommended for its proven effectiveness in minimizing hidden costs and facilitating thorough investigations during the pre-contract phase. In contrast, the design build method and unsolicited proposals is discouraged due to its higher costs and inherent challenges in risk management. Moreover, the study advises against the use of unsolicited proposals due to their elevated costs and their tendency to prioritize social benefits over economic viability. Instead, it suggests adopting a life- cycle costing approach, which allows for a holistic assessment of the total cost of ownership and enables the selection of cost-effective procurement strategies. By implementing these recommendations, the study aims to support industry practitioners in optimizing project outcomes, reducing cost overruns, and minimizing delays. Furthermore, it emphasizes the importance of delivering sustainable and economically viable water supply projects. The findings of this study hold significant value for both practitioners and policy makers involved in water supply projects in Sri Lanka. By utilizing the insights gained from this research, they will be able to make informed decisions and enhance the overall success of future water supply projects in the country.