Do you feel you are still in control?

How you know that you project is in need of rescue?

Construction projects are complex and rely on many different elements coming together, many different suppliers delivering products and services and specialist trades working together and overlapping to get to the finish line.

The bigger the project, the more scope for delays and difficulties, as we saw with the recently completed Malaga Metro project which took 17 years to complete. There were a number of issues to resolve over the course of this project, including the discovery of important archaeological remains along the route and due to this and many other difficult to solve issues, the project came in at double the original budget.

When delays and costs mount, relationships between the investors and the constructors become strained and finance constraints put the entire project at risk of never being completed.

If you can relate to this, and you have a project which is currently spiralling out of control, don’t despair – we can help you! Our Project Rescue team can come in and identify the key issues and blocks, make a plan for solving those issues, and work with you to get the project over the line.

However, it can be hard to know when things are going seriously wrong and when to call in project rescue experts, so in this article we’re answering your questions about this common issue.

What are the signs that things are going wrong on a project?

Failure to hit targets, or requests for more money are usually the sign that your project is in trouble, but you often won’t know this until quite a long way down the road.

Another sign that you may have a problem are that you notice that corners are being cut when you visit the site, the finishing isn’t up to standard and there are switches happening to lower quality materials. This often indicates that there’s a budget shortfall that the team are trying to deal with, but can end up with a poor final result that you won’t be happy with.

Sometimes, you will be hit with a fine, or receive an official complaint or order to stop from the Town Hall, with no warning. Only then do some people realise that the correct permits and permissions have not been obtained for the project.

Lastly, you will probably notice that communication becomes difficult and that it seems like misunderstandings are occurring, or that your team goes quiet on you. This can be a sign of bigger problems going on behind the scenes, that you need to uncover before they escalate.

You can find out more about what can go wrong with your project on our blog, or contact us to discuss if you are experiencing any of these warning signs.

How can you check that everything is progressing as it should?

If you haven’t used a project manager to plan your project from the outset and set a clear time schedule and budget, it can be hard to know if things are going wrong.

The ideal is to have a document with key milestones along the way defined and costed, so that you can catch any slippage on either time or budget and resolve it before it has a knock-on effect on other elements of the build. Unfortunately, the domino effect can really amplify a seemingly small or simple issue to making a real difference on your completion date or costs.

Our project management system requires ongoing monitoring and monthly progress checks against the schedule of works. Every month we measure performance, identify any issues and report this back to the client, as well as take action to rectify any problems.

However, if you don’t have a project manager in place that is doing this for you, there could be serious problems developing that you are not aware of. If you have any warning bells going off, or concerns about a lack of communication or transparency, we’d advise you bring in an outside party to check progress.

MDCI can perform an interim test of the status and ascertain whether the progress is as per agreements and if not, advise you on how to get back on track.

We’d recommend having this done as soon as possible, as projects go off track for a range of reasons and they can quickly impact each other and make everything worse, which makes it very difficult to resolve down the line. The trick is to minimise “contamination” by requesting a review at the earliest opportunity when you realise that things are not going to plan. The quicker we’re brought in, the sooner we can apply our tried and tested methodologies and solutions to revive the project progress.

What can I do if you’re over budget?

Sadly, it is very common for building projects to run over budget. As we showed in our blog article Why Projects go Over Budget, 9 out of 10 projects experience cost overrun and large projects have been shown to typically take 20% longer to finish than expected and are up to 80% over budget.

Going over budget can be caused by poor planning and costing, poor contracts, miscommunication and poor decision making, supply chain issues and project delays and unforeseen circumstances which are out of your control.

Much of this can be avoided with the right planning, watertight contracts and an independent project manager involved from day 1.

You want to put the right plans and people in place to protect your budget if at all possible. However, if you haven’t done this and you notice the budget is slipping or you’re being asked for payments that you weren’t expecting, you need to press pause and get in independent professionals to audit your project and check your budget health as soon as you possibly can.

Time is your friend and if you catch overspend early, you can plan to recoup this money. However, if you don’t then you may run out of money and not be able to complete the project at all.

But, even if you don’t catch it as early as you should, there are solutions out there and we can work with you to pull back budget, re-examine financing options and make smart changes to enable you to come close to your initial budget in the end.

Project Rescue in Action.

We’ve been working with two clients recently on project recue in Spain, which illustrate a few ways in which projects can go wrong and how we can help.

We were recently called by a Polish client whose constructor had abandoned his villa site – taking the advance payment with him. Sadly, the Client was unaware that for any advance payments made one should insist on a Bank Guarantee of first demand, and that the builder should be repaying in tranches during the first months of construction. This meant that he had paid 20% of the construction, without protecting himself in the contract and so getting that money back will be an uphill struggle.

We are helping him to try to get it back and advising on their legal position, but the contract which was negotiated by his architect, did not offer the protection it should. It’s important to note, that architects are not skilled in contractual law, so you need to make sure you have the right people advising you on this aspect of your project.

In another case, we were called in by a Swedish client who had invested in a refurbished villa, which was well over the promised completion time. Their constructor had missed the delivery date five times and the project was more than six months over the contracted delivery date, so they came to us for a solution.

When we analysed the situation, we found that the builder had wilfully changed and cheapened the quality of the contracted materials – making delivery of the agreed qualities and standards impossible. This situation posed a very large deception and disappointment for the owner. It is also a legal issue and we expect to have to intercede as Moderators in the first instance to see if we can help them to obtain a resolution that they can be happy with.

If not, then we will once again be called on to be an expert witness during the Court Case and legal proceedings, to try to get a fair resolution for our clients.  This will not be the first time that we will need to be part of court cases between clients and their builders, and an important lesson to anyone embarking on a construction project.

You need to try and get everything crystal clear from the outset, have watertight contracts which will protect you in case of any issues like this. We also advise on using an experienced, independent project manager to represent your interests and keep an eye on everything for you from the beginning, so that there are no nasty surprises and no need for any project rescue down the line.

Find out more about our project rescue services on our website, or contact us for more information.  

As we mentioned before, the bigger the project, the bigger the problems, costs and scope for delays. However, even a villa project is very complex and has a lot of aspects to go wrong, especially if you’ve never done anything like this before. It can actually be worse for a villa project, because clients tend to be following their heart, rather than using their head and they also tend to be self-financing, so at a real risk of running out of money and not being able to finish if they do go off-track.

Read our article which explains the Common issues when building a luxury villa in Spain to identify the pitfalls and avoid them if you’re dreaming of building your own villa in the sun.