International Journal of Civil, Structural, Environmental and Infrastructure Engineering Research and Development (IJCSEIERD) ISSN 2249-6866 Vol.

3, Issue 2, Jun 2013, 43-54 TJPRC Pvt. Ltd.

CLAIM-CAUSE RELATIONSHIP STUDY OF HIGHWAY CONSTRUCTION PROJECTS IN INDIA THROUGH FACTOR ANALYSIS
DHAVAL M. PARIKH1 & G. J. JOSHI2
1 2

Executive Director, SAI Consulting Engineers Private limited, India

Associate Professor, Civil Engineering Department, SV National Institute of Technology, Surat, Gujarat, India

ABSTRACT
Indian highway construction industry has seen a multifold increase in the spending in the development of highways in India. It has been observed that the majority of the construction contracts, due to variety of unanticipated and indefinite parameters, run into problems, giving rise to claims and disputes among its stake holders, namely, the employer, the contractor and the engineer. This paper presents the study of the claimcause relationship and its behavior from 573 claim and dispute incidents from 77 highway construction contracts in India during the period of year 2000 to 2010. Principal Component analyses were performed on the data thus collected to study their inter-relationship.

KEYWORDS: Claims, Causes of Claims, Highway Construction, Contracts, Factor Analysis, Principal Component
Analysis

INTRODUCTION
In todays context Construction is a complex process. Alluri (2004) observed that the construction industry in India since ages have been in a disorganised state. There was a time when there were simple transactions and construction contracts were routine jobs, but when engineering works of higher magnitude and of complex nature came for execution, a number of parties had to be involved increased. Though the ultimate goal of each of them is to complete the project, yet aims and path chosen to achieve this goal differs among the stake holders. Today, majority of the construction contracts, due to variety of unanticipated and indefinite parameters, run into problems, giving rise to claims and disputes among its stake holders, namely, the employer, the contractor and the engineer. Finishing a project on schedule is a difficult task to accomplish in the uncertain, complex, multiparty, and dynamic environment of construction projects (Kartam, 1999). Claim-cause behaviour study, therefore, in construction contracts, in recent times, have become very relevant and quintessential. Projects suffer due to claims and disputes, consequent time overrun and cost over run takes place, and the society as a whole is deprived of timely benefit from the project. This paper presents the study of the claim cause relationship and behavior from the various claim and dispute incidents collected by the authors especially for the highway construction contracts in India during the period of year 2000 to 2010. Principal Component analyses were performed on the data thus collected to arrive at their inter-relationship and the cause-effect impact.

HIGHWAY CONSTRUCTION SECTOR IN INDIA

Highway sector constitutes a substantial part of infrastructure in India. India has the second largest road network in the world 3.3 Million kilometers. The primary network, the National Highways (NH), has a length of about 70,500 km, to provide mobility to goods and passenger movements. Government of India (GoI) is primarily responsible for development and maintenance of NH. The secondary network of State Highways (SH) is about 135,000 km long, while the

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tertiary network comprises other district roads and village roads and has a total of about 3.1 million km primarily meant to provide accessibility. The secondary and tertiary networks are primarily the responsibility of state governments. National Highways (NHs) constituting only 2% of length, share almost 40% of the total traffic on Indian Roads. Ever-growing traffic due to accelerated growth of economy has eventually congestion on several sections of present network adversely affecting the mobility requirements. This has brought about the need to augment highway capacity to cater for this increasing traffic volume, in addition to maintaining existing facilities. In this regard, development of highways has been recognized as one of the key factors which shall have a positive impact on In dias economic growth. In 1999, national Highways Development Project (NHDP) was launched. This comprises the four or six-laning of about 13,000 km of national Highways in the country at the estimated cost of US$13 billion. The NHDP is being implemented by National Highways Authority of India (NHAI), established under the Union Ministry of Shipping, Road Transport & Highways. GoI has also provided funds for the construction and strengthening of the other roads (state highways, major district road and village roads) from a separate fund, the Central Road Fund. The government has further expanded the scope of the NHDP with a view to enhancing the socio-economic growth of the country through public private partnerships model for accelerated development of highway network. It is estimated that the total development will involve investments of about US$50 billion over the next 8-10 years. This will also attract significant amount of foreign direct investments in addition to the investment by the government.

DISPUTE DATA ANALYSIS

Exhaustive and comprehensive data collection efforts were put in place to collect recently published Arbitration Awards related to the claims and disputes occurred in highway construction projects in India. A number of Government Departments, agencies (Employers) and Contractors were connected requesting them to part with the copies of the various Arbitration Awards. Besides these, a few of the prominent lawyers and practicing arbitrators were also contacted to supply copies of such awards. The information of disputes/claims for 77 contracts totalling to 573 claim cases under the highway projects implemented over a period of last 10 years (between year 2000 to 2010) in India was collected. These are highway construction projects implemented in various states of India. The information collected is in form of claims and disputes and its settlements through arbitration under Indian Arbitration and Reconciliation Act, 1996. The information of the 77 construction contracts detailing the disputes between the Employer and the contractor was studied. The construction contracts were categorized based on the construction cost and also based on the length of the highway project, and the summary is presented in Table-1 below. Table 1: Project Categorization Based on Construction Cost and Highway Length Construction Cost Up to USD 20 million USD 20 m USD 40 million USD 40 m USD 60 million >USD 60 million No. of Projects 14 23 23 17 Highway Length Up to 20 km. 20 50 km. 50 70 km. >70 km. No. of Projects 15 27 22 13

From the above table it is seen that more than 50% of the construction contracts were in the range of USD 20 to USD 60 million. As regards to the length of the projects more than 60% were having length between 20 km and 50 km.

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CLAIM-CAUSE BREAKDOWN
Study of literature reveled that attempts have been made by several researchers to identify the reasons/causes of claims. Merani (1998) comprehensively dealt with the subject matter of modern trends of Dispute Resolution in India. He categorised the types of disputes in two categories; (1) Claims by the Contractor, and (2) Claims by the Employers. The commonly pleaded reasons for the disputes by the parties were also identified and listed by him. Zaneldin (2006) collected the data on claims related to different construction projects in Abu Dhabi and Dubai and the data was analysed to discover the rankings of variety of claim types, and claim causes and their frequencies. OConnor et. al. (1993) attempted analysis for Highway projects claims, by grouping them under two categories, Damage Type and Highway Element. The analysis of the claims also extracted the Fundamental causes of claims and grouped under 8 major categories. The detailed study of the disputes occurred in the 77 construction contracts revealed that a total of 573 claims were raised by the contractors. The extracted claim-causes of the types of claims under study were then grouped under following major categories. These categories were devised based on the explanation provided against each of them. At the beginning of this classification, it was assumed that each of these claim-cause categories were mutually independent of each other. This hypothesis was put to test during the data analysis. Change in Law: The claim-causes attributable to the variety of changes in the laws were clubbed under this broad category of claim-cause. Delay in Site Handing Over: It was observed during the study of the types of claims and disputes that numerous causes attribute to delay in site handing over and resultant claims and disputes. The causes contributing to this claim-cause were grouped under this category of claim-cause. Improper Contract Management: Study revealed that many claims and disputes arose due to improper management of the contracts. This improper management was quite evident during the study of the construction contracts and arbitration awards. Further, both parties to the dispute, the Employer and the Contractor were found to be engaged in improper contract management. The claim-causes found to be contributing to improper contract management were grouped under this category. Improper Study Prior to Tendering the Contract: The study of the tender document and the existing site conditions are of prime importance prior to execution of the construction works. Typically, this activity is performed by both parties to the contract, Employer and Contractor, independent of each other. Whilst the study is initiated by the Employer prior to the formation of the tender documents, the Contractors undertakes the same after receipt of the tender documents. The study of the claims and disputes revealed that there are a number of causes which contribute to the disputes and claims due to improper study performed by the parties. Such claim-causes are considered under this category. Legal Costs: The legal costs arising out of the dispute and claim settlement are clubbed under this category of claim-cause. These legal cost invariably formed part of the claims raised by either party. Beyond the Control of the Parties: The claim-causes which are not controlled by or initiated by either party to the contract, i.e. Employer and Contractor are collated under this category. They primarily comprises of forces of nature and third party events/actions which create hindrances in project execution. In summary, based on the broad study performed on the above methodology, the following groups of claim-causes have emerged. They were termed as First Level (Level-1) claim-causes. For purposes of referencing throughout the research it was decided to annotate them with F1, F2..etc. Henceforth, they are referenced as;

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F1: Change in Law F2: Delay in Site handing over F3: Improper Contract Management F4: Improper study prior to tendering the contract F5: Legal Costs F6: Beyond the control of the parties While segregating and grouping 77 contracts using the Level-1 claim-causes, it was felt that these claim-causes

are of broad nature. Further differentiation and classification of these broad claim-causes was carried out, again by using the information available from 573 claim and dispute events from 77 contracts. The First Level claim-causes presented above are henceforth referred as Level-1 claim-causes. The further classification of the claim-causes, since they are the subsets of the First Level claim-causes (Level-1 claim-causes), was defined as Second Level (Level-2) claim-causes. The Level-2 claim-causes were given the annotations S1, S2,etc. Level1 and Level-2 claim-causes are presented in Table-2. As explained above, the analysis was structured by creating 2 level claim-cause break down. Level-1 (First Level designated as F1, F2...etc.) was created to develop macro level claim-cause structure and Level-2 (Second Level designated as S1, S2...etc.) was created to reflect more drilled down claim-cause structure. Claim-causes of Level-2 are more detailed breakdown of Level-1 Claim-causes. Table 2: Causes of Claims Causes of Claims, Level-1 and Level-2 Change in Law F4 Improper Study prior to Tendering the Contract Imposition of New Taxes S22 Improper study by the Employer Revision in Entry Tax S23 Improper study by the contractor Revision in Excise Duty S24 Change in scope by the Employer Revision in Royalty Charges on Material S25 Ambiguous Contract Clause Delay in Site Handing Over F5 Legal Costs Delay in Land Acquisition S26 Lawyer fees Delay in Removal of Encroachments S27 Cost of Arbitration Delay in Environmental/Forest Clearance Delay in Compensation Payments (RAP) F6 Beyond the Control of the Parties Employer Default S28 Natural Calamity Losses due to EOT S29 Increase in Material / Fuel Cost Increased guarantee charges S30 Strike, agitation, etc. Idling of tools, plants, manpower S31 Court intervention S32 Terrorism risk S33 Statutory Charges Improper Contract Management Derived BOQ item rate and Payment Non-BOQ item rate and Payment Delayed / Reduced Payment escalation/price adjustment Poor quality construction Poor planning of activities by the Contractor Non granting of Completion Loss of Interest Stoppage of Work by Employer

F1 S1 S2 S3 S4 F2 S5 S6 S7 S8 S9 S10 S11 S12 F3 S13 S14 S15 S16 S17 S18 S19 S20 S21

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FACTOR ANALYSIS
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. There are several methods of factor analysis, but they do not necessarily give same results (Kothari, 2004). As such, factor analysis is not a single unique method but a set of techniques. Important methods of factor analysis are; centroid methods, maximum likelihood method, and principal components (PC) method. Kothari (2004) reported that Centroid method of factor analysis was quite extensively used till about 1950 before the large capacity high-speed computers were invented. The arithmetic underlying the Maximum Livelihood method (ML method) is relatively difficult in comparison to that involved in PC method. Further, Mulaik (1972) explained that the iterative procedures are more difficult than that in PC method. Hence, ML method is generally not also used for factor analysis in practice. Out of the 3 methods of factor analysis, the Principal Component method was adopted for the data analysis under this research. Principal Components method (or simply PC method) of factor analysis, developed by H. Hotelling, seeks to maximize the sum of squared loadings of each factor extracted in turn. Accordingly, PC factor explains more variance than would the loadings obtained from any other method of factoring. PC method seeks a linear combination of variables such that the maximum variance is extracted from the variables. It then removes this variance and seeks a second linear combination which explains the maximum proportion of the remaining variance, and so on. This is called the principal axis method and results in orthogonal (uncorrelated) factors. PC method analyses total (common and unique) variance. This method of factor analysis was considered appropriate because of the limited a priori knowledge available about the number of different cluster relationships that could be expected for the data (Hair et al., 1998). The literature also indicated that PC method provided a deterministic method to group elements into meaningful subdivisions in order to overcome multi-colinearity problems in the project data. As well, it was a statistical procedure that could uncover relationships among many variables. In the context of this research the variables were the claim-causes in highway construction projects in India. In the factor analysis methods, correlations and interactions among variables are summarised into a small number of underlying factors. In other words, many variables are grouped under a few factors. The method aimed at identifying key variables or groups of variables that influenced the claim/dispute scenarios in highway construction projects. The suitability of using the PC method for the data set of this research was also established from the literature. Guidelines for the minimum sample size needed to conduct factor analysis suggested a minimum sample size of 100 to 200 observations (Guadagnoli and Velicer, 1988). Some researchers have suggested the ratio of sample size to number of variables as a criterion, with recommendations ranging from 2:1 through to 20:1. It was understood from the literature study that the larger the sample size would give better coverage of the factors extracted from the data. Tabachnick and Fidell (2001) have advised the following regarding sample size: 50 observations is very poor, 100 is poor, 200 is fair, 300 is good, 500 is very good and 1000 or more is excellent. As a rule of thumb, a bare minimum of 10 observations per variable is desirable to avoid computational difficulties. In order to facilitate the interpretation of factors, factor analysis requires the rotation of axes. The rotation procedure does not affect the goodness-of-fit of the factor solutions but serves to make the output more understandable. Three rotation techniques are in general use: varimax, equimax and quartermax. Out of these, the most popular is Kaiser's varimax algorithm, which is known to provide the best parsimonious analytical solution (Harman, 1967). This minimises

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the number of variables with high loadings on factors, thus causing the factor loadings of each variable to be more clearly differentiated. An important decision is the determination of the number of factors to be extracted for which several guidelines are available. One of the most common is the minimum eigenvalue criterion. Essentially this method involved taking the principal components of all the variables, ranking their eigenvalues from highest to lowest, then the number of eigenvalue greater than one is selected as the criteria for the number of factors included in the analysis. The scree plot of eigenvalues against the number of factors is also used as part of this process. This plot is used as a cut-off point to support the adoption of the desired number of factors (Velicer and Jackson, 1990). Several pre-tests are available to measure the sample characteristics necessary for successful factor analysis. One is the Kaiser Meyer Olkins test (KMO) for sampling adequacy. KMO values vary from 0 to 1.0 and values closer to 1 are better. An overall KMO should be 0.60 or higher to develop successful factor analysis (Hutcheson and Sofroniou, 1999). KMO test was performed during the analysis. Another test is the Bartlett Test of Sphericity, which checks if the sample was randomly drawn from a population in which the correlation matrix was an identity matrix. This uses the determinant of the correlation matrix to tests the null hypothesis that the correlation matrix is an identity matrix using a chi-square approximation and is particularly relevant when dealing with a relatively small sample of data (<100) and with a relatively large number of variables (>10). The Bartlett test sets up a chi-square approximation to determine whether the developed correlation matrix is an identical matrix in the analysis. In summary, the suitability of the PC method was established as explained herein above, and the analysis of data on disputes/claims events using Principal Component (PC) analysis was carried out to determine possible reduction in the dimension of data. This application was made on the claim-causes for both Level-1 and Level-2 to arrive at correlated components. The Principle Component Analysis was carried out using SPSS software. The analysis was carried out to determine the possible reduction in the dimension of data. This application was made on the claim-causes for both Level-1 and Level-2. Further, at the time of categorization of the claim-causes in two level structure the assumption was that these claim-causes are independent of each other. This assumption was put to test during this stage of the research.

PRINCIPLE COMPONENT ANALYSIS FOR LEVEL-1

This analysis was performed to explore the possibility of developing the correlation among the claim-causes, in this case F1 to F6 (level-1 claim-causes). It was derived from the analysis that six Level-1 claim-causes can be converted into 3 components covering 77.6% of the data. From the plot of eigen value (scree plot) it was observed that three components have eigen value greater than one. Further, Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy test and Bartlett's Test of sphericity tests were also performed on the data and it was observed that the significant value (pvalue) is 0.000< 0.05. This shows that Principal Component analysis is valid for the data. Rotated Component Matrix extracted from the analysis establishes the correlation between the claim-causes. It can be derived that Component 1 consists of the claim-causes F4 and F3; similarly Component 2 consists of claim-causes F5 and F2; and Component 3 consists of claim-causes F1 and F6. From the correlation matrix derived through the analysis, it was observed that the cause F4 and F3; F5 and F2; and F1 and F6 are positively correlated causes. The following Table-3 shows the components and also demonstrates the correlation as derived from this analysis. That is, increase in one cause implies increase in the other correlated cause. Correlated claim-causes for Level-1 are named as First Level Component (FLC). In the present case three components are defined as FLC1, FLC2 and FLC3.

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Table 3: Components and Correlation (Level-1) Component FLC1 FLC2 FLC3 Correlation F4: Improper study prior to tendering the contract F3: Improper Contract Management F5: Legal Costs F2: Delay in Site handing over F1: Change in Law F6: Beyond the control of the parties Correlation Coefficient 0.875 0.855 0.916 0.803 0.866 0.846

The Component Score matrix as derived through the analysis is presented in Table-4 below. The component score coefficients are presented in the table. This is used to generate the score of the component from the entry of the causes in the component. Table 4: Component Score Coefficient Matrix First Level Component (FLC) 1 2 3 F1 -0.106 0.024 0.594 F2 0.093 0.508 -0.035 F3 0.527 -0.066 0.034 F4 0.562 -0.102 -0.085 F5 -0.203 0.664 0.032 F6 0.046 -0.019 0.563

The score equation for each component is arrived as follows: FLC1 = -0.106F1 + 0.093F2 + 0.527F3 + 0.562F4 - 0.203F5 + 0.046F6 FLC2 = 0.024F1 + 0.508F2 0.066F3 0.102F4 + 0.664F5 0.019F6 FLC3 = 0.594F1 -0.035F2 + 0.034F3 - 0.085F4 + 0. 032F5 + 0.563F6 In general, the score equation for a component can be expressed as under: n Component Score, FLCk = i Fi i=1

Where, FLCk = Score of k component, k = 1 to n i = component score coefficient for ith factor Fi = Level-1 claim-causes While arriving at the claim cause breakdown, the underlying assumption was that the claim causes at Level-1 are independent of each other. This was derived based on the very nature of each of the Level 1 claim-causes. However, the PC analysis has demonstrated here that a correlation does exist among them. The correlation as was generated using this statistical analysis among six Level-1 claim-causes is depicted in Table 3. This essentially means that if one desires, these six claim-causes can be grouped into 3 components. The PC analysis further explained that these 3 components can explain 77.6% variance in the dataset.

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PRINCIPLE COMPONENT ANALYSIS FOR LEVEL-2

This analysis is performed to explore the possibility of developing the correlation among the claim-causes, in this case S1 to S33 (Level-2 claim-causes). From the correlation matrix derived through the analysis, it was observed that the 33 nos. of Level-2 claim-causes can be converted into 13 nos of components. These components for Level-2 are named as Second Level Components (SLC). In the present case components are defined as SLC1 to SLC13. It was also derived from that analysis that 78.9% of total variance is explained by these thirteen components. 33 Level-2 claim-causes can therefore be converted into 13 components covering 78.9% of the data spread. It was also seen from the plot of eigen value (scree plot), in which 13 components have eigen value greater than one. Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy Test and Bartlett's Test of Sphericity tests were also performed on the data and it was observed that the significant value (P-value) is 0.000< 0.05. This shows that Principal Component analysis is valid for the data. Rotated Component Matrix establishes the correlation between the Level-2 claim-causes. Components consist of one to several claim-causes of Level-2. It was observed that the variables which are loading high on Second Level Component-1 have low loadings on Second Level Components 2 to 13. Likewise, those loading high on a Component have low loadings on the remaining Components. This is close to being an ideal situation. In case a variable is found to be loading high on more than one components, it would just be best to drop that variable from the analysis, and carry out revision in the analysis. PC components of Level-2 claim-causes along with the correlation as derived from this analysis are presented in Table-5 below: Table 5: Components and Correlation (Level-2) Component Correlation S9: Employer Default S14: Non-BOQ item rate and Payment S17: Poor quality construction S18: Poor planning of activities by the Contractor S20: Loss of Interest S12: Idling of tools, plants, manpower S11: Increased guarantee charges S27: Cost of Arbitration S10: Losses due to EOT S32: Terrorism risk S2: Revision in Entry Tax S4: Revision in Royalty Charges on Material S33: Statutory Charges S24: Change in scope by the Employer S15: Delayed / Reduced Payment S23: Improper study by the contractor S25: Ambiguous Contract Clause S19: Non granting of Completion S1: Imposition of New Taxes S21: Stoppage of Work by Employer S31: Court intervention S6: Delay in Removal of Encroachments S30: Strike, agitation, etc. S5: Delay in Land Acquisition S16: escalation/price adjustment S29: Increase in Material / Fuel Cost S28: Natural Calamity S13: Derived BOQ item rate and Payment S22: Improper study by the Employer S3: Revision in Excise Duty Correlation Coefficient 0.781 0.67 0.631 0.586 0.563 0.873 0.846 0.654 0.642 0.839 0.8 0.67 0.934 0.836 0.492 0.919 0.767 0.779 0.779 0.91 0.732 0.454 0.877 0.777 0.799 0.892 0.823 0.65 0.816 0.921

SLC1

SLC2

SLC3

SLC4 SLC5 SLC6 SLC7 SLC8 SLC9 SLC10 SLC11 SLC12 SLC13

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The Component Score matrix was derived from the PC method analysis. The component score coefficients for each of the SLC were used to generate the score equation for each of SLC. The score equation is generically presented as follows: p Component Score (SLCp) = j Sj j=1 Where, SLCp = Score of p component, j = 1 to p; j = component score coefficient for jth factor; Sj = Level-2 claim-causes Using the values of j from the following Table -6 and value of the causes in the above equation, the score of each component can be worked out and score equations for each SLC can be obtained. Table 6: Component Score Coefficient Matrix
1 -0.088 -0.014 -0.019 0.003 -0.074 0.108 0.268 -0.037 -0.153 0.02 -0.209 0.213 0.054 -0.002 0.312 0.247 -0.022 0.248 -0.057 -0.063 -0.011 0.039 -0.101 0.045 0.103 -0.044 -0.006 0.001 -0.028 -0.124 2 0.06 0.013 0.011 0.007 -0.007 -0.038 -0.037 0.233 0.409 0.381 -0.013 -0.018 -0.003 -0.015 -0.043 -0.045 0.008 0.039 -0.016 -0.047 -0.009 -0.032 -0.012 0.262 -0.033 0.021 0.046 0.038 0.003 -0.021 3 0.144 0.356 0.006 0.291 -0.018 0.071 -0.018 0.071 -0.01 -0.034 -0.043 0.001 0.097 0.068 0.072 -0.101 -0.121 -0.056 -0.035 -0.045 0 -0.04 -0.094 0.049 0.038 0.001 0.016 -0.046 0.4 -0.009 4 -0.046 0.049 0.03 -0.031 0.107 -0.077 -0.051 0.038 -0.06 -0.026 0.029 -0.012 0.193 -0.035 -0.132 0.008 -0.009 -0.018 0.033 -0.038 0.065 0.4 -0.092 0.028 -0.017 -0.059 -0.062 -0.006 -0.031 0.518 5 0.023 -0.047 0.017 0.081 -0.015 0.174 0.081 -0.025 -0.026 -0.029 -0.03 -0.049 -0.093 0.104 0.035 -0.048 0.048 -0.091 -0.071 -0.007 0.477 0.003 0.466 0.118 -0.014 0.034 0.03 0 -0.063 -0.016 Second Level Component (SLC) 6 7 8 9 0.485 0.035 0.03 0.006 -0.118 0.039 0.023 0.103 -0.003 -0.06 0.013 -0.007 0.093 -0.045 -0.055 -0.206 0.026 -0.002 0.442 -0.065 -0.062 0.197 -0.011 -0.223 0.082 0.02 -0.022 -0.169 -0.038 0.095 -0.013 0.033 0.124 0.013 0.035 0.008 0.036 -0.032 0.057 0.05 0.142 -0.003 0.079 0.091 0.028 0.047 0.047 0.155 0.064 0.022 -0.02 0.135 -0.048 0.056 -0.014 0.546 -0.171 -0.106 0.236 -0.08 0.112 -0.002 -0.084 -0.039 0.478 -0.022 0.01 -0.103 -0.238 -0.046 -0.137 0.216 0.004 0.586 0.037 0.123 0.018 -0.071 -0.047 0.004 0.002 -0.043 0.006 -0.022 0.009 -0.002 -0.049 -0.003 0.096 -0.016 0.035 0.302 -0.074 -0.053 -0.061 -0.169 -0.085 0.01 -0.03 -0.023 -0.016 -0.033 -0.017 -0.011 0.036 0.064 0.554 0.037 0.063 0.438 0.008 0.017 0.018 -0.072 0.036 0.099 -0.051 0.014 0.038 -0.035 10 0.073 -0.064 -0.044 0.16 0.175 -0.046 0.064 -0.147 0.092 0.024 0.065 -0.083 0.194 -0.023 -0.096 -0.12 -0.078 0.163 -0.118 0.094 -0.014 -0.059 0.096 0.064 -0.127 0.626 -0.129 0.219 -0.045 -0.064 11 0.026 0.027 0.044 -0.019 -0.002 0.04 0.121 -0.028 0.005 -0.125 0.486 0.115 -0.014 0.048 -0.14 -0.197 0.03 -0.06 0 0.007 -0.001 -0.049 -0.078 0.2 0.562 -0.038 0.05 -0.027 0.011 0.045 12 -0.053 0.024 0.029 -0.096 0.044 0.239 0.009 0.308 -0.054 -0.075 0.211 -0.031 0.009 0.02 0.036 -0.076 0.047 -0.131 0.043 0.618 0.011 0.037 -0.078 -0.117 -0.13 0.079 -0.116 -0.284 0.003 -0.091 13 -0.23 0.14 0.805 -0.055 -0.046 -0.145 0.037 0.051 0.003 0.047 0.048 -0.003 -0.088 -0.039 0.009 -0.036 0.225 0.008 -0.134 0.029 0 0.024 0.092 -0.079 0.025 -0.04 0.049 0.197 -0.08 0.065

S1 S2 S3 S4 S5 S6 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S27 S28 S29 S30 S31 S32 S33

While arriving at the claim cause breakdown, the underlying assumption was that the claim causes at Level-2 are independent of each other, since they are derived from the supposedly independent Level-1 claim causes. However, the PC analysis has demonstrated here that a correlation does exist among Level-2 claim-causes. The correlation as was generated using this statistical analysis among thirty three Level-2 claim-causes is depicted in Table 5 above. This essentially means that if one desires, these thirty three claim-causes can be grouped into thirteen components. The PC analysis further explained that these thirteen components can explain 78.9% variance in the dataset.

CONCLUSIONS
A review of 3 components of PC Analysis for Level-1 claim-causes as presented in Table-3 above and also the review of the 13 components groupings of PC Analysis for Level-2 claim-causes as presented in Table-5 above, lead to the

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conclusion that no common factor component names were developed in the principal component analysis that could be allocated to the individual component groups so as to allow consistency in purpose of the group of factors. The study of the Level-1 claim-causes included in each of First Level Component in the PC analysis of Level-1 claim-causes demonstrates that these claim-causes have no correlation among them and hence, they are perhaps not the best examples of component portraying commonality with each other. Similarly, the study of the Level-2 claim-causes included in each of Second Level Component in the analysis of Level-2 claim-causes demonstrates that these factors have no correlation among them either. There appeared to be no evidence of strong correlations within any of the 13 SLC, even after rotation. This was particularly evidenced by the diversity associated with each of the principal components. The assumption at the beginning of the PC method analysis was that the claim-causes identified under Level-1 and Level-2 are independent of each other. Even though the statistical analysis showed the formation of components, the varied nature of claim-causes were grouped under principal components as demonstrated. The hypothesis of the claimcauses being independent of each other, thus, holds. It can also be interpreted that the claim-causes grouped under each of the Components (FLC and SLC) would perhaps yield similar impact on the claim/dispute occurrences. In other words, even though the claim-causes grouped under each Component are not correlated to each other, each will have similar impact on the claim/dispute occurrences. Similarly, each Component will have its own unique impact on the claim/dispute occurrences. The study of cause-effect can be carried out using the Components (FLC and SLC) derived from the PC analysis instead of considering each claimcause separately. The study using Components would perhaps yield the same results as if it was carried out using individual claim-causes.

ACKNOWLEDGEMENTS
The authors would like to convey a special thank you to Prof. M. N. Patel, Statistical Department of Gujarat University for facilitating and helping the statistical analysis using SPSS.

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