9. Constructing the market

STAGE 9
CONSTRUCTING THE MARKET

Constructing infrastructure and facilities is likely to be a familiar task for the rural engineer and planner. However, with market development there are some differences that need to be taken into consideration.

Both the market users and the financiers are probably totally unfamiliar with the formal steps involved with the construction process. They need to be kept informed and the process needs to be clearly explained to them. This can be done through regular meetings with the market committee. This is particularly important if there are cost over-runs or the works are significantly delayed because of bad weather or hold-ups in the supply of materials.

A major risk at the construction stage is that the process is interfered with. An impartial system of inviting and reviewing tenders is essential. It is equally important to ensure that only essential changes are made during the construction process, as this is likely to have substantial cost implications. Of particular importance is that the contractor should only receive site instructions and variation orders from the engineer, not from the client or market users.

J. Tracey-White

Two views of the Monggar market, Bhutan - the upper view shows the project during construction and the lower upon completion.

J. Tracey-White

Any design changes need to be carefully explained to the users. To the engineer they may not seem important, but to the user they may have a major impact on how they operate the facilities. Examples include introducing changes in levels that effect handling produce on trolleys or changes in heights that cause obstructions to head loading of produce.

Step 9.1
Obtain consents and agree on the financing

It is necessary to work out a way of consulting both the market users and the decision-makers. The most convenient method is usually to hold a meeting for those most affected. The final site plan, building and infrastructure designs and the overall budget estimate should be presented. Although complete agreement from all those present at the meeting is unlikely, a general consensus should be obtained.

Formal consents. A number of consents or approvals may need to be obtained before the development can proceed, including:

• planning consent;

• building and public health approval; and

• environmental consents.

Sources of finance. Ideally, a rural market should be self-financed from fees and charges. However, the initial capital requirement is always a problem. All possible sources of funding should be explored, including:

• the budget of a particular government department, such as the agriculture department;

• special government grants, such as those sometimes available for small-business promotion and environmental improvements;

• a joint venture with private enterprise, such as the existing market traders (as individuals or groups), or through leasing the whole or part of a site to private entrepreneurs, while still maintaining some control over fees charged;

• cost sharing with a donor, government department or private enterprise. In this case part of the revenues generated by the market may be used to finance other social facilities. Cost sharing can take the form of capital contributions or other forms of equity, such as the provision of land; and

• self-help schemes, which involve traders providing their individual stalls. However, such arrangements would not be expected to cover overall infrastructure costs.

It is important to ensure that the cost estimates are realistic so that adequate finance is obtained. If tenders are higher than the estimate and the funds allocated, this is likely to result in delays in implementation or even cancellation of construction.

Step 9.2
Prepare tender documents and tender the works

Preparing tender documents. After the source of financing is confirmed the final tender documents can be prepared. These include final drawings, specifications, bills of quantities and the conditions of contract.

A formal contractual arrangement with one or more private contractors is likely to be the easiest and most rapid approach to implementation. However, such contractors may not be available in remote rural areas and it may be necessary to employ labour directly.

Inviting tenders. Procedures for inviting tenders for construction works and for equipment are normally well laid down by governments. The process usually involves advertising in local newspapers. In drawing up a list of potential contractors allowance must be made for local conditions, such as:

• the type and scale of works;

• grading or the class of contractor (based on technical competence, capital and financial performance and availability of resources);

• government procurement procedures, such as the minimum number of tenders to be submitted; and

• policies regarding the use of open tenders or for selecting, pre-qualifying or targeting particular types of contractors.

Evaluation of tenders. Tender evaluation procedures are generally well established and usually involve tender review panels appointed by local government. The remoteness of rural markets is often a problem in that few tenders may be obtained and the experience of contractors may not cover the range of works required for a market. The most experienced local contractors are often those who are used to constructing roads, and their building experience may be limited. This may necessitate the provision of special training for both the contractors and their skilled and unskilled labour.

Step 9.3
Let construction and equipment contracts, supervise construction and monitor implementation

Contract conditions. There are usually standard conditions of contract available for letting contracts for the supply of equipment and construction services. However, the engineer needs to ensure that employment methods used by the contractors are fair and conform to government standards. Issues that must be addressed include defining:

• labour standards, maximum working hours, occupational health and safety requirements;

• social security provision and insurance, minimum age levels, mode of payment, recruitment and productivity agreements;

• methods for setting out the works and monitoring the quality of work, maintaining minimum technical standards; and

• valuation of works and frequency of payment.

Supervision. Day-to-day supervision of a contract is the responsibility of a local rural engineer or an appointed consultant.

Step 9.4
Confirm practical completion and evaluate the works

Snagging. The last step is to confirm that the construction works are complete and that all the equipment has been acquired. It is normal practice that at the end of the construction period (practical completion) a “snagging list” is drawn up that specifies any outstanding or incomplete works. This refers only to problems related to the contract and cannot be used to introduce new requirements, which were not foreseen before construction started.

The list should be drawn up by the engineer in collaboration with the market committee, to ensure that all their concerns have been fully addressed. The contractor should make good these snags before the penultimate payment is made. After completion, a period of 6 to 12 months is usually specified in the contract documents (called a “defects liability period”) during which other defects should be made good. After this period the final payment to the contractor can be made.

Testing equipment. Prior to the practical completion, it may be necessary to commission or test installations and equipment, such as:

• water supply pumps;

• septic tanks;

• lighting installations; and

• weighing equipment.

Evaluation. Evaluation of a market’s impact after completion is important. It enables an assessment to be made of the market’s social and economic impact and whether resources have been correctly utilized. It also provides an indication of what adjustment should be made in the design of future markets.

Individual small-scale market improvements probably need to be evaluated using only simple indicators, such as the total area improved, the number of stalls created and total number of traders using the new facilities.

For larger-scale programmes, the expansion of market trading activities could also be evaluated. This will require ongoing monitoring during the first few years of the market’s operations. Certain indicators may be used to assess the project’s effectiveness.

These include:

• increased trade in the market, measured by market turnover (tonnes);

• whether users believe that there is a reduction in produce losses;

• increased number of farmers and traders using the market facilities;

• increased market revenues; and

• improved market maintenance and management.

Construction of a privately built market in Lao People’s Democratic Republic.

A. Shepherd