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1
Mohammad, Karukh Hassan, Noori Sadiq Ali, and Basira Majeed Najm. "Assessment of the Cost and Time Impact of Variation Orders on Construction Projects in Sulaimani Governorate." Journal of Engineering 27, no. 2 (February 1, 2021): 106–25. http://dx.doi.org/10.31026/j.eng.2021.02.08.
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Variation orders are an on-going phenomenon in construction and industry projects worldwide, particularly in the province of Sulaimani, where the project's damage from cost and schedule overrun because of variation orders. However, the effect on project costs and time overrun of variation order has yet to be identified. This study evaluates the impact of variation orders on the cost and time off in the Sulaimani governorate. Two hundred twenty-eight projects from various construction sectors built between 2007-2012 were adopted to calculate the contract cost and schedule overruns due to variation orders. Data analysis was applied in the study were descriptive statistics. One-way ANOVA was also applied to determine whether the overrun of project cost and schedule significantly varied depending on project type, size, duration, location, and awarded years. The findings indicated that cost overruns are very common due to variation orders. 95.6% of the projects were studied being impacted, and overrun in project cost are also huge, with 16%. Time also overruns more common than cost overruns due to the variation orders. 98.7% of the projects were studied in Sulaimani were affected by time overrun with an average of 46.3% of initial duration observed. Findings also indicated that two out of five parameters measured in the analysis had a significant correlation with project cost overruns. Three out of five considered variables correlated with construction time overruns.
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Korgaonker, M. G. "Project Management: A Survey of Current Practices and Implications." Vikalpa: The Journal for Decision Makers 12, no. 4 (October 1987): 11–28. http://dx.doi.org/10.1177/0256090919870402.
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In completing a large project there is a time overrun of the order of three years on a scheduled project duration of 3.7 years and a cost overrun of 140 per cent. Production losses are five times the cost overrun due to delay. Cost and time overruns are jeopardizing the viability of the projects themselves. M G Korgaonker reviews and analyses the Indian experience as to why there are such heavy overruns. Based on a survey of current practices in project management, he concludes that project management practices can be improved considerably. He cites instances where effective management practices have led to completion of projects as per plans. He draws implications of his analysis for the pre-investment investigation, project appraisal, organization, and implementation stages of project management.
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Aje, Olaniyi Isaac, Oluwole Alfred Olatunji, and Olanrewaju Augustine Olalusi. "Overrun causations under advance payment regimes." Built Environment Project and Asset Management 7, no. 1 (February 6, 2017): 86–98. http://dx.doi.org/10.1108/bepam-06-2015-0028.
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Purpose Evidence suggests project owners could use advance payments to prevent cost escalations. The purpose of this paper is to elicit the relationships between causations of overruns when advance payments are issued to contractors. Design/methodology/approach In total, 97 responses from a questionnaire survey were analysed. Additional data on 51 projects, completed between 2000 and 2014 under different advance payments regimes, were also obtained and analysed. Findings Project owners issue advance payments to contractors so as to avoid delays. However, statistical correlation between advance payments and overrun causations are not significant. Although cost overruns were higher in large projects than in small projects, schedule overruns were more in small projects than in large projects. Schedule overruns were caused most significantly by contractors’ site management approaches. Design and documentation issues were identified as the most prevalent cause of cost overruns. Regression models are proposed to elicit overruns when advance payments are issued. Practical implications Extant debates on project overruns in construction and project management literature are robust. Nonetheless, the study elicits considerable knowledge gaps regarding the roles of advance payments in fostering project performance. Originality/value This pioneering work indexes the relationship between advance payment and project overruns in Nigeria. It is also the first attempt to document the probability distribution of overruns in Nigeria, particularly under specific advance payment regimes.
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Saidu, Ibrahim, W. Shakantu, A. Adamu, and I. Anugwo. "A BESPOKE APPROACH FOR RELATING MATERIAL WASTE TO COST OVERRUN IN THE CONSTRUCTION INDUSTRY." Journal of Construction Business and Management 1, no. 1 (April 18, 2017): 39–52. http://dx.doi.org/10.15641/jcbm.1.1.63.
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The problems of material waste and cost overruns are common in the construction industry. These problems occur at different stages of a construction project, from planning, design to project completion. The argument on how to eliminate cost overrun has been on-going for the past 70 years as on-site wastage of materials leads to increase in the final project cost. This paper examines the relationship between the causes of material waste and those of cost overrun at the pre-contract and post-contract stages of a project. The desktop methodological approach was firstly adopted in comparing the causes of material waste and those of cost overruns from the literature, in order to determine the possible relationship. Subsequently, interviews were purposively conducted with construction professionals within Abuja, Nigeria, in order to verify the literature based information. The result reveals that all the causes of material waste also cause cost overrun at the pre-contract and the post-contract stages of a project. 96.88% and 81.81% of the causes of cost overrun also cause material waste at the pre-contract and post-contract stages respectively. Other causes which are not related are mostly, the micro-economic and macro-economic factors. These results are not different from those of the interviews conducted with professionals and summarised in the tick box. It was also found that to achieve Effective Construction Material Waste Management (ECMWM) for any construction project, material waste must be controlled at its sources and causes, and at different stages of a project. Based on these findings, it can be concluded that effective management of material waste would translate into a reduction in the level of project cost overrun. The study recommends that construction-project managers, as well as the construction practitioners should encourage the management of material-waste causes, as it has the potential to minimise cost overrun for projects.
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Ameh, Oko, and Emeka Osegbo. "Study of relationship between time overrunand productivity on construction sites." International Journal of Construction Supply Chain Management 1, no. 1 (December 31, 2011): 56–67. http://dx.doi.org/10.14424/ijcscm101011-56-67.
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The history of the construction industry worldwide is full of projects that were completed with significant time and cost overruns. In an attempt to reverse this trend, this study aims at establishing the relationship between time overrun and labour productivity on construction sites in Lagos, Nigeria. 43 technical and management staff of some medium and large construction firms based in Lagos, Nigeria were sampled and administered a questionnaire survey. The questionnaire contained 18 causes of project time overrun and 14 causes of low labour productivity which had been identified from the literature reviewed. With these a relationship between project time overrun and low labour productivity was established. Both descriptive and inferential statistics were used in analyzing the data. Results indicate that inadequate funds for the project, inadequate planning before project takeoff, inadequate tools and equipment and delay in delivery of material top the list of major causes of time overrun while the use of wrong construction methods, inadequate construction materials and inaccurate drawing/specification are the key factors causing low labour productivity on construction sites. Significant negative relationship was found between time overrun and labour productivity in construction sites in Nigeria. The study concludes by recommending that early appointment of project managers could ensure proper management of both the human and material resources that could guarantee improved productivity and ultimately save projects from time overrun.
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Eden, Colin, Fran Ackermann, and Terry Williams. "The Amoebic Growth of Project Costs." Project Management Journal 36, no. 2 (June 2005): 15–27. http://dx.doi.org/10.1177/875697280503600203.
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In the public arena, we often hear about projects that have suffered massive cost overruns. Often they are related to large public construction projects such as airports, bridges, or public buildings. Large overruns also exist in private industry. However, often these do not appear in the newspapers, so the public is not as aware of them. Of course, not all projects go badly wrong, but quite a few do, and frequently we find ourselves uncertain of the causes for such overruns. In this paper, industrial projects that overrun and overrun in a surprising manner are considered. In other words, the paper considers those many projects where the extent of the overrun is well beyond what might ever have been anticipated, even though what was going wrong within the projects was, for the most part, understood. The basis for the content of the paper (that is, the structure and lessons), are drawn from a postmortem analysis of many large projects as part of claims analysis, particularly “delay and disruption” claims for projects whose total expenditure appeared, at first look, inexplicable or surprising. The aim of the paper is to contribute to an understanding of how projects go badly wrong, when they do, and in particular to draw some lessons from this exploration that are likely to help all managers. The reasons for cost escalation are not just the responsibility of project managers.
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Asiedu, Richard Ohene, and Ebenezer Adaku. "Cost overruns of public sector construction projects: a developing country perspective." International Journal of Managing Projects in Business 13, no. 1 (May 6, 2019): 66–84. http://dx.doi.org/10.1108/ijmpb-09-2018-0177.
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Purpose Cost overrun of construction projects has been a key concern for all stakeholders of projects for many decades now. Many studies have been done in the past and continue to be done currently to understand the underlying causes of construction project cost overruns. However, the empirical evidence of the causes seem not be clear due to the silo approach in understanding the causes of construction project cost overruns. The purpose of this paper is to take the debate a step forward by providing an understanding of the causes of project cost overrun from a system’s perspective, especially from a less researched environment. Design/methodology/approach Data were collected and analysed from 131 respondents who were mainly involved in construction works in public procurement entities in Ghana. A two-staged approach was employed in collecting data from the respondents. The first stage involved an interview session with key informants in the construction industry in Ghana to ascertain the detailed causes of cost overrun of construction projects. The second stage focussed on the validation of these detailed factors by a wider stakeholder group through questionnaires. Factor analysis was employed to consolidate these detailed factors into major causes of construction project cost overruns. Findings The results show that there are primarily four major causes of most public sector construction projects cost overruns. These four major causes of cost overruns are poor contract planning and supervision; change orders; weak institutional and economic environment of projects and lack of effective coordination among the contracting parties. Originality/value The study provides more insights as to the critical and major factors that underpin public sector construction projects cost overruns and more importantly provides a basis for common treatment of the multiple risk factors engendering public sector construction projects cost overruns.
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Chadee, Aaron, Salisha R. Hernandez, and Hector Martin. "The Influence of Optimism Bias on Time and Cost on Construction Projects." Emerging Science Journal 5, no. 4 (August 1, 2021): 429–42. http://dx.doi.org/10.28991/esj-2021-01287.
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The unresolved scholarly debate to curtail cost and time performances in projects has led to alternate solutions, departing from the dominant technical school of thought to include concepts from behavioural sciences. In this paper, we consider the psychological effect, namely optimism bias, as one of the root causes for delays in cost overruns on projects. The research objectives were to determine the level of bias among project participants, rank time and cost overrun causes according to the participants’ bias score and establish a mitigation strategy to curb potential delays and cost overrun impacts based on the bias scores obtained. A literature survey was conducted to determine causal factors contributing to delays and cost overruns linked to optimism bias. Through a pilot survey of three semi-structured interviews, eighty factors obtained from the literature survey were reduced to 24 critical delay and cost overrun factors relevant to Trinidad and Tobago. A questionnaire was subsequently developed seeking construction professionals to rate their bias scores based on an 11-point Likert scale. The research confirms that project planners and decision-makers exhibit moderate levels of optimism bias; however, participants lacked awareness of the impact of optimism bias on projects outcomes. Project location, environmental impacts and historic preservation, and labour disputes are the top three critical factors where project professionals displayed increased optimistic tendencies. It is proposed that contingency “time window” and reference class forecasting be implemented as control mechanisms to mitigate the impacts of time and cost overruns on projects. This research introduces a novel method to account for and measure optimism bias on construction projects. This study adds knowledge into delays and cost overruns causation and provides a foundation for future studies on quantifying psychological effects on projects and enhancing overall project management practices. Doi: 10.28991/esj-2021-01287 Full Text: PDF
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Idrees, Shehryar, and Muhammad Tariq Shafiq. "Factors for Time and Cost Overrun in Public Projects." Journal of Engineering, Project, and Production Management 11, no. 3 (May 21, 2021): 243–54. http://dx.doi.org/10.2478/jeppm-2021-0023.
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Abstract The construction industry in Pakistan is experiencing a surge in public sector projects due to major investments in infrastructure projects. Project delays and cost overrun are common features in public sector construction projects in Pakistan. Therefore, an understanding of the causes of time and cost overrun in public projects is essential. This paper investigates delay and cost overrun factors within the context of public sector projects in Pakistan. This study identifies 48 potential factors from existing literature and semi-structured interviews were used to refine the identified factors into ten categories. A questionnaire survey was used to establish a hierarchy of factors using descriptive statistics. The results showed that the major causes of time overruns in public projects were (1) legal issues, such as court stay orders, land acquisition, relocation of public facilities; (2) technical errors leading to low-quality drawings, rework, and errors at bidding stage; and (3) Poor project management. The findings of this research contribute to understanding the causes of project delays in public sector projects in Pakistan.
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Sahid, Muhammad Nur, Anto Budi Listyawan, Abdul Rochman, and Rim Dzaky Haidar Rim. "Analisis Faktor Dominan yang Mengakibatkan Pembengkakan Biaya oleh Kontraktor pada Proyek Jalan Kabupaten Wonogiri APBD Tahun 2017 dan 2018." CANTILEVER 8, no. 2 (January 28, 2020): 51–57. http://dx.doi.org/10.35139/cantilever.v8i2.8.
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The implementation of the road project in Wonogiri Regency was often different between the planning with has be held that making problem for contractor like as late work and cost overrun. Therefore, the purpose of this research is knowing what is cost overrun factors and also amount of cost overruns of the road project in Wonogiri Regency which used APBD 2017 and 2018 experienced by contractor. This research was conducted by asking questions to the contractor who worked on the road project in 2017 and 2018. The analysis of this research has using the SPSS program. Based on the analysis has been done, field regulation become dominant of cost overrun. The lack of provision of field support facilities and the limited size of the project area are the reasons why field regulation factors can be a major factor causing cost overruns on road projects in Wonogiri Regency. Based on the answers from respondents it can be concluded that the contractors who experienced a swelling cost of 1% -5% there were 44 respondents, then for the cost swelling of 6% -10% there were 28 respondents, and 11% -15% there were 2 respondents, and 16% -20% only 1 respondent.
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Asiedu, Richard Ohene, Nana Kena Frempong, and Hans Wilhelm Alfen. "Predicting likelihood of cost overrun in educational projects." Engineering, Construction and Architectural Management 24, no. 1 (January 16, 2017): 21–39. http://dx.doi.org/10.1108/ecam-06-2015-0103.
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Purpose Being able to predict the likelihood of a project to overrun its cost before the contract signing phase is crucial in developing the required mitigating measures to avert it. Known parameters that permit the timely prediction of cost overrun provide the basis for such predictions. Therefore, the purpose of this paper is to develop a model for forecasting cost overruns. Design/methodology/approach Ten predictive variables known before the contract signing phase of a project are identified. Based on a survey approach, information on 321 educational projects completed are compiled. A multiple linear regression analysis is adopted for the model development. Findings Five variables – initial contract sum, gross floor area, number of storeys, source of funds and contractors’ financial classification are observed to influence cost overruns. The model, however, yields a fairly weak coefficient of determination with a mean absolute percentage error of 30.22 and 138 per cent, respectively. Research limitations/implications The model developed focussed on data only educational projects sampled from three out of the ten administration regions in Ghana based on a purposive sampling approach. Practical implications Policy makers and construction managers working on public projects stand to gain tremendous assistance in formulating and strengthening their own in-house cost forecasting at the precontract phase based on “what if” analysis to generate various alternative predictions of cost overruns. Originality/value Considering the innate nature of cost overruns within the Ghanaian construction industry often resulting to project abandonment, this research presents a unique dimension for tackling cost overruns based on a predictive approach.
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Ling, Florence Yean Yng. "International comparison of performance of public projects." Built Environment Project and Asset Management 8, no. 3 (July 9, 2018): 281–92. http://dx.doi.org/10.1108/bepam-08-2017-0059.
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Purpose The purpose of this paper is to investigate the performance of public projects in Beijing, Hong Kong, Singapore and Sydney to uncover which areas project managers should focus on when managing public projects in different countries. Design/methodology/approach Based on the literature review, a structured questionnaire was designed to collect data of completed public projects. In total, 244 sets of data of completed public projects were collected. Findings Significant cost and schedule overruns are found in all four cities. Hong Kong’s public projects have the highest cost and schedule overruns. Singapore’s public projects have the lowest cost overrun and Beijing’s projects have the lowest schedule overrun. Public projects in all four cities recorded significantly good project quality. Research limitations/implications The findings are not easily generalizable due to the relatively small sample size in Sydney, low response rate and data being collected from only four cities. The research implication is that the plethora of project management strategies does not seem effective in preventing cost and schedule overruns in public projects. Practical implications This study found that across the four cities, there are significant cost and schedule overruns. Projects in Hong Kong perform the worst in terms of cost and schedule, when compared to Beijing, Singapore and Sydney. The implication is that more attention should be paid to managing cost and schedule, especially in Hong Kong. Originality/value The originality is that the study discovered which areas project managers should focus on when managing public projects in different countries. In laissez-faire or free market economies, more attention should be paid to managing project cost and schedule. When a country has lower transparency index, more attention should be paid to controlling project quality. Project team members should focus on delivering public projects to the highest level of quality in developed countries.
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Alfraidi, Y., S. M. Alzahrani, M. H. H. Abdelhafez, and H. Boussabaine. "Impact of Endogenous Risk Factors on Risk Cost in PPP Projects in Saudi Arabia." Engineering, Technology & Applied Science Research 10, no. 4 (August 16, 2020): 6087–91. http://dx.doi.org/10.48084/etasr.3462.
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The formation of the Public-Private Partnership (PPP) contracts is based on the grounds that the construction, progress, operation, and investment of a project must be allocated to a private organization under a contract. The risks associated with PPP projects are usually associated with resource improvement and development as well as the long-term operation of the project. It is known that cost and time overruns are among the obvious risks faced by a project during the development phase. Cost and time overruns are major sources of monetary risk. The risk and its impact may vary at different phases during the life cycle of a PPP project. In traditional procurement, all of the monetary risks are covered by the public sector. Most of the projects delivered under traditional procurement involve a price confirmation to indicate standard cost risks. This paper aims to investigate the impact of endogenous factors on budget overrun in PPP projects in Saudi Arabia. The paper briefly illustrates the content regarding the PPP risk evaluating systems and explains the association between risk occurrences and cost overrun in the Kingdom of Saudi Arabia (KSA). The paper concludes with recommendations for future research.
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Andrić, Jelena M., Abdul-Majeed Mahamadu, Jiayuan Wang, Patrick X. W. Zou, and Ruoyu Zhong. "THE COST PERFORMANCE AND CAUSES OF OVERRUNS IN INFRASTRUCTURE DEVELOPMENT PROJECTS IN ASIA." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 25, no. 3 (March 1, 2019): 203–14. http://dx.doi.org/10.3846/jcem.2019.8646.
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Infrastructure plays a major role in the economic development of countries, especially in Asia which has experienced tremendous growth in recent years. The procurement of infrastructure continues to be characterized by cost overruns resulting in significant academic interest and theoretical propositions on the influential factors. This study contributes to this issue through adoption of pragmatic research methodology involving deterministic statistical analysis of real project data from reports as well as a qualitative analysis of these reports to unearth underlying issues from a thematic analysis. Furthermore, the study design takes a multi-country view towards establishing the role of contextual and geographical influences on cost overrun. An evaluation of 102 major infrastructure projects was performed covering railways, roadways and energy sectors in different regions in Asia. Findings reveal that differences in the propensity for cost overrun are mostly dependent on a type of infrastructure with rail projects being the most likely to overrun budget. Theoretically, propositions on the influence of project contextual factors are tested highlighting the influence of project size, project type, geographical locations, and the length of implementation period of a project as well as factors related to political, economic, strategic, and competence in infrastructure delivery which vary across countries.
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Famiyeh, Samuel, Charles Teye Amoatey, Ebenezer Adaku, and Collins Sena Agbenohevi. "Major causes of construction time and cost overruns." Journal of Engineering, Design and Technology 15, no. 2 (April 3, 2017): 181–98. http://dx.doi.org/10.1108/jedt-11-2015-0075.
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Purpose In Ghana, the duration of construction projects from inception to completion is becoming a great concern, recently, especially among clients and beneficiaries, because of the rising interest rates, inflation, development plan targets, among other factors. Hence the need to understand the causes of delays and cost overrun in the construction sector has become more important than ever. This study therefore aims to identify the major factors underlying time and cost overruns in projects related to the education sector in Ghana to proffer practical solutions in addressing them. Design/methodology/approach The study conducted a survey among clients’ consultants and representatives of the contractors working on about 60 government school projects. A relative importance index was used to determine the relative effects of the factors causing construction time and cost overruns. Findings The key factors causing construction time overrun were: financial problems, unrealistic contract durations imposed by clients, poorly defined project scope, client-initiated variations, under-estimation of project cost by consultants, poor inspection/supervision of projects by consultants. Other factors were underestimation of project complexity by contractors, poor site management, inappropriate construction methods used by contractors and delays in the issuance of permits by government agencies. Factors affecting cost overruns were financial difficulty by client, delays in payments of completed works, variations in designs, lack of communications plans, poor feasibility and project analysis, poor financial management on site and material price fluctuations. Research limitations/implications The research was limited to only the educational sector projects. Practical implications Practically, this study highlights for the construction sector the critical factors causing project time and cost overruns in Ghana. Identification of these factors provides the basis for pragmatic solutions to enhance the chances of project success. Social implications The identification and solutions to project time and cost overruns, especially for educational sector projects, contribute toward making public goods more affordable and accessible to most citizens, particularly in developing countries. Originality/value This study contributes to the debate on factors causing project time and cost overruns in the construction sector especially from a developing country’s perspective.
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Amoatey, Charles Teye, and Alfred Nii Okanta Ankrah. "Exploring critical road project delay factors in Ghana." Journal of Facilities Management 15, no. 2 (May 15, 2017): 110–27. http://dx.doi.org/10.1108/jfm-09-2016-0036.
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Purpose The purpose of this paper is to investigate the causes of road construction delays in Ghana and identify appropriate mitigation measures. Design/methodology/approach The initial approach involved an empirical analysis of 48 road projects to quantify the extent of time. This was followed by a survey of the perception of road agency and donor partner officials of the critical causes of road project delays. Findings About 70 per cent of road projects experience delays and 52 per cent experience cost overruns. The average time overrun and cost overruns of road projects in Ghana was 17 months and US$1.15m (or 22.5 per cent), respectively. The five most critical causes of road construction delays were delay in finance and payment of completed work by owner (client-related); inadequate contractor experience (contractor-related); changes in scope by the owner during construction (client-related); delay to furnish and deliver the site to the contractor (client-related); and inflexible funding allocation for project items (donor-related). Research limitations/implications The most critical constraint of this study is the fact that findings are based on only the views of industry professional experts. It may be assumed that despite using broadly used terminology to refer to the causes of project delays, the interpretations by respondents may have differed from those intended. Further research could look at the correlation between time overrun and cost overrun using principle component analysis. Practical implications The identified delay factors are not unique to the road sector. From both academic and practical perspectives, the results emphasizes on the need for a holistic and integrated risk management model for the entire construction industry in Ghana. Originality/value The paper examined the causes of road project delays in the Ghanaian context and recommended remedial measures.
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Egila, Ashem Emmanuel, Oluwaseun Abdulakeem Balogun, and Saheed Olanrewaji Yusuf. "Assessment of delay and cost-overrun in federal road construction project in Abuja." Independent Journal of Management & Production 11, no. 4 (August 1, 2020): 1184. http://dx.doi.org/10.14807/ijmp.v11i4.1065.
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Poor road infrastructure in Nigeria is a significant challenge, just like poverty, insecurity, and unemployment. The construction of road in the country is characterized by numerous challenges throughout the project life cycle. Some of these challenges are project delay and cost overrun, corruption and fraud, faulty contractual process among others. Objectives of this study are to identify factors influencing delays and cost overruns in road construction project, to rank these factors base on their impacts and importance, and to suggest conservative ways to address the future challenges that can result from delays and cost overruns of future road construction projects. The research instruments include in-depth literature review, fieldwork, questionnaire administration, and interview. Inferential statistics such as Relative importance index (RII) and Mean Value techniques were used to analyze collected data. The result of the study identified factors influencing delays and cost overruns in road construction projects as; man related, money-related, machine-related, material related, environmental-related, and method related factors. Analysis using RII and MV ranked man and money related as the highest factors for delay and cost overrun respectively. Hence, the research recommends that the Government should create an enabling environment, making suitable policy for the construction company to operate.
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Al Zadjali, Zahra A., Hamdi A. Bashir, and Ali A. Maqrashi. "Factors Causing Project Cost Overrun in the Telecommunications Industry in Oman." International Journal of Information Technology Project Management 5, no. 3 (July 2014): 84–95. http://dx.doi.org/10.4018/ijitpm.2014070105.
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Several studies have been carried out to investigate the causes of project cost overrun in different industries worldwide. This paper reports on the results of a study investigating the factors causing project cost overrun in Oman. Data required for this study were collected from 44 project engineers and managers of client and contracting companies involved in telecommunications projects. According to the analysis of results, 14 out of 37 factors are identified as major causes of project cost overrun. While most of the identified factors could affect any types of projects carried out in any country, one of the factors, namely lengthy tendering process might be unique to the projects carried out in Oman. Moreover, this study investigates the association between company size in terms of number of employees and causes of project cost overrun. The results show that there is no strong evidence to suggest that the causes of cost overrun differ significantly according to company size.
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Maniar, H. "Contingency Management in Indian Construction Projects." Journal of Construction Business and Management 4, no. 2 (December 4, 2020): 11–24. http://dx.doi.org/10.15641/jcbm.4.2.840.
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The successful completion of Indian construction projects possesses an inherent uncertainty due to the nature of the construction industry along with prevailing tepid recovery of the Indian economy, which has made it difficult for construction companies to achieve required operational and financial performance. This necessitates having accurate project cost estimation and efficient contingency management to shield unknown project risk and address cost overrun problems. Therefore, this study aims to assess the current state, the issues faced in contingency management and evaluating the effectiveness of contingency in overcoming cost overrun problems in Indian construction companies. The study preferred a quantitative approach in capturing the required data by using structured questionnaires collected from 100 Indian construction companies (of contractors, vendors/suppliers, customers, and consultants) out of 335 companies with a response rate of 29.85%. This, along with archival data analysis of 50 Indian construction projects completed between Calendar Year (CY) 2014 to 2019. The captured data were analysed using simple statistical tools like Relative Importance Index (RII), mean score, standard deviation and ranking methods to ensure relevant results aligned with research objectives. The result findings of the study revealed that 60% of Indian construction companies preferred the traditional percentage method for contingency sum percentage addition to estimated project cost (a subjective approach based on the historical project performance) which may not be adequate in overcoming cost overrun problems. Archival data analysis found that contingency consideration was effective in accommodating cost overrun problems in 9 (18%) projects out of 50 projects. The study further found that contingency was utilised in an unplanned mode and having unclear contingency forecasting strategies. Based on result findings and observations, this study concludes that contingency should be estimated based on the scientific approach in place of a subjective approach to address project risks adequately, this along contingency consideration should be an integral part of the project risk assessment and should be effectively utilised during the execution stage.
Keywords: Contingency, Cost Overruns, Indian Construction Projects, Operational and Financial Performance, Project Risk.
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Gbahabo, Paul Terna, and Oluseye Samuel Ajuwon. "Effects of Project Cost Overruns and Schedule Delays in Sub-Saharan Africa." European Journal of Interdisciplinary Studies 3, no. 2 (January 21, 2017): 46. http://dx.doi.org/10.26417/ejis.v3i2.p46-59.
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This paper provides conceptual insights on the economic impact of project cost overrun and schedule delays on infrastructure procurement in developing countries with huge infrastructure deficit in Sub-Saharan Africa. Projects cost overruns and schedule delay are a major and widespread problem in infrastructure procurement the world over. It has received a lot of attention in the recent past. However, the literature reveals that extant studies on project overruns are heavily skewed towards causative factors, with little or no attention to the effects it has on the economy as a whole. The paucity of studies on the effects of project cost overrun and schedule delay will further reinforce the imperative to reacquaint policymakers and infrastructure developers, as well as project financiers with the gravity and import of the problem for infrastructural development in particular and the wider economy in general. The study undertakes an exploratory approach drawing from a wide range of secondary information and materials obtained from policy documents, study reports and peer-reviewed articles. The findings show that cost overrun and schedule delay in infrastructure procurement can have a damaging economic effect ranging from allocative inefficiency of scarce resources, further delays, contractual disputes, claims and litigation to project failure and total abandonment. The study recommends project management capacity-building for infrastructure developers, project managers as well as a number of innovative control mechanisms such as reference class forecasting, public-private partnership and computer-aided cost estimating tools including artificial neural networks, data mining, building information modelling as well as fuzzy neural inference model, genetic algorithms, and stochastic simulation to curb the menace of the problem.
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Gb, Paul Terna, and Oluseye Samuel Ajuwon. "Effects of Project Cost Overruns and Schedule Delays in Sub-Saharan Africa." European Journal of Interdisciplinary Studies 7, no. 2 (January 21, 2017): 46. http://dx.doi.org/10.26417/ejis.v7i2.p46-59.
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This paper provides conceptual insights on the economic impact of project cost overrun and schedule delays on infrastructure procurement in developing countries with huge infrastructure deficit in Sub-Saharan Africa. Projects cost overruns and schedule delay are a major and widespread problem in infrastructure procurement the world over. It has received a lot of attention in the recent past. However, the literature reveals that extant studies on project overruns are heavily skewed towards causative factors, with little or no attention to the effects it has on the economy as a whole. The paucity of studies on the effects of project cost overrun and schedule delay will further reinforce the imperative to reacquaint policymakers and infrastructure developers, as well as project financiers with the gravity and import of the problem for infrastructural development in particular and the wider economy in general. The study undertakes an exploratory approach drawing from a wide range of secondary information and materials obtained from policy documents, study reports and peer-reviewed articles. The findings show that cost overrun and schedule delay in infrastructure procurement can have a damaging economic effect ranging from allocative inefficiency of scarce resources, further delays, contractual disputes, claims and litigation to project failure and total abandonment. The study recommends project management capacity-building for infrastructure developers, project managers as well as a number of innovative control mechanisms such as reference class forecasting, public-private partnership and computer-aided cost estimating tools including artificial neural networks, data mining, building information modelling as well as fuzzy neural inference model, genetic algorithms, and stochastic simulation to curb the menace of the problem.
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Amadi, Alolote Ibim, and Anthony Higham. "Latent geotechnical pathogens inducing cost overruns in highway projects." Journal of Financial Management of Property and Construction 22, no. 3 (November 6, 2017): 269–85. http://dx.doi.org/10.1108/jfmpc-03-2017-0008.
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Purpose This paper aims to investigate the statistical validity of geotechnical risk factors in accounting for cost overruns in highway projects. The study hypothesises that “latent pathogens” because of mismanaged geotechnical risk, which lay dormant in organisational practices of highway agencies, trigger cost overruns. Design/methodology/approach To test this hypothesis, cost and geotechnical data gathered for 61 completed highway projects, executed in the Niger Delta, recording unusually high cost overruns, along with qualitative data from 16 interviews with the project commissioners, were comprehensively analysed via regression modelling, to statistically explain recorded cost variance. Findings The results provide empirical evidence supporting a cause–effect relationship between the extent of cost overrun and key geotechnical factors. It is suggested that positive changes made in the geotechnical practices of the highway agencies will produce an expected exponential decrease in the level of cost overruns recorded in highway projects. Research limitations/implications The study is limited to explaining the propagation of unusually high cost overruns in the geologic setting of the Niger Delta region of Nigeria. As such there is a need to test the generalisability of the theory presented. Practical implications The emergent view of geotechnical practice calls for further research, necessary to align geotechnical best practice into highway project delivery in the Niger Delta region. Originality/value The study used a robust methodological approach to understanding the propagation of cost overruns in highway projects, based on a characterisation of geotechnical intricacies, which is unprecedented in cost overrun research.
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Louzolo-Kimbembé, Paul, Chrispin Pettang, and Thomas Tamo Tatiétsé. "Minimisation des surcoûts dans un contexte hors délai : cas des projets de construction dans les pays en développement." Canadian Journal of Civil Engineering 34, no. 9 (September 1, 2007): 1180–91. http://dx.doi.org/10.1139/l07-089.
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Cost overruns are frequent in the construction industry. They become greater the more the construction project is delayed. In developing countries, this situation is recurring and constitutes a significant financial problem. In a time-overrun context, our objective is to find a method that can enable us to reduce the delay while minimizing the subsequent cost overruns. We thus developed a mathematical model named CCOMTOC (construction cost optimisation model in time-overrun context). The model was tested and results reveal that the reduction of cost overruns is effective. We showed that in a time-overrun context, according to the importance of delay penalties, we obtain two distinct situations. On the basis of the reference cost calculated for a maximum compression of tasks within the normal duration, we note that, for low delay penalties, the total cost after further delays to the estimated completion time decreases as we deviate from the initial completion time. On the other hand, for relatively high delay penalties, the cost first passes by a minimum before increasing regularly during the further delays to the estimated completion time.Key words: time overrun, optimization, linear programming, time skid, delay make-up, cost overrun.
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Irfan, Muhammad, Muhammad Sohail Anwar Malik, and Syyed Sami Ul Haq Kaka Khel. "Effect of factors of organizational structure influencing nonphysical waste in road projects of developing countries." Engineering, Construction and Architectural Management 27, no. 10 (May 28, 2020): 3135–53. http://dx.doi.org/10.1108/ecam-06-2019-0327.
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PurposeThe purpose of this research is to rank the most significant factors of organizational structure that can reduce time and cost overruns (nonphysical waste) in road projects of the developing countries. Additionally, the effect of factors of organizational structure on nonphysical waste in road projects is also measured.Design/methodology/approachFactors of organizational structure causing time and cost overrun are extracted through a content analysis of the published literature. Moreover, a questionnaire survey is carried out involving 128 professionals to assess the effect of organizational structure factors on time and cost overrun. Finally, to obtain a more objective evaluation, relative importance index and regression analysis techniques are utilized, and the most severe factors influencing time and cost overrun are indicated.FindingsThis study found out that top management support and procurement procedures are the most significant factors influencing time and cost overruns in road projects of the developing countries.Originality/valueA small number of studies have been conducted to investigate the effect of factors of organizational structure on time and cost overrun in the construction industry. And even more, its relation with respect to road projects of the developing countries is limited. This research highlights the effect of most significant factors of organizational structure that influence the nonphysical waste in road projects of the developing countries. Therefore, this study adds to the body of knowledge by recommending that all the stakeholders of construction project should pay close attention toward these factors to control the enigma of time and cost overrun. It might also prove helpful, if implemented to its full extent, in all the road construction activities undertaken.
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Herrera, Rodrigo F., Omar Sánchez, Karen Castañeda, and Hernán Porras. "Cost Overrun Causative Factors in Road Infrastructure Projects: A Frequency and Importance Analysis." Applied Sciences 10, no. 16 (August 9, 2020): 5506. http://dx.doi.org/10.3390/app10165506.
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Road infrastructure projects are essential for a country’s economic and social development. Due to the magnitude, the projects are associated with considerable economic investments that in the case of failure can seriously affect regions’ economies. Despite the importance, roads from different countries are affected by cost overruns, hence, it is essential to identify and analyze the causative factors to focus the search for mitigation solutions. There are several studies focused on the cost factors identification, however, studies are lacking that synthesize and analyze the frequency and importance with which the factors have been reported to obtain a phenomenon overview. Therefore, this paper focuses on analyzing the frequency and importance with which cost overrun factors are reported in road projects. The research method consisted of a systematic review compound of five principal stages: (1) question formulation; (2) searching of relevant documents; (3) document selection; (4) evidence collection, analysis and synthesis; and (5) results’ report. Thirty-eight cost overrun factors were identified and classified into 14 categories. According to the Influence Index, the five most important and frequent cost overrun factors were: (1) failures in design, (2) price variation of materials, (3) inadequate project planning, (4) project scope changes, and (5) design changes.
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Othman, I., Nasir Shafiq, and M. F. Nuruddin. "Time Overrun in Construction Project." IOP Conference Series: Materials Science and Engineering 291 (December 2017): 012016. http://dx.doi.org/10.1088/1757-899x/291/1/012016.
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Chadee, Aaron Anil, Xsitaaz Twinkle Chadee, Indrajit Ray, Abrahams Mwasha, and Hector Hugh Martin. "When Parallel Schools of Thought Fail to Converge: The Case of Cost Overruns in Project Management." Buildings 11, no. 8 (July 27, 2021): 321. http://dx.doi.org/10.3390/buildings11080321.
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This paper investigates the conflicting and contrasting views between two prominent schools of thought (SOT), the conventional project management empirical school and the incoming behavioural and psychological sciences, to explain the cost overrun phenomenon in transportation infrastructure projects. Although theories within these SOTs seem to coexist and are used interchangeably, there exists a widening knowledge gap that leads to conflicting and contrasting ideological views. In this paper, we contend that there is a lack of a cross-fertilisation mechanism to fuse and co-join contemporary theories on cost overruns. This has led to the encapsulation and fragmented adhocracy in theory building. Utilising a critical review approach, this study proposes the concepts of ideological distancing and encapsulation between “empiricism” and “behavioural” SOTs as the focus of analyses for understanding the root causes of cost overruns in project studies. The study showed that the extant debate on cost overruns is limited and divergent, effectively contributing to the problem of continued expansion and non-convergence of theories that maintain parallel identities. This creates a space for inquiry, reflecting, theorising, and debating for the convergence of SOTs on cost overrun research and theories on what can be deemed project knowledge. This paper contributes to extant project studies by identifying the need for convergence and co-joining theories with different epistemes through causal linkages. Consequently, this will improve the public sector’s infrastructure policymaking by exposing the theoretical limitations of the current ad hoc manner and application of project management concepts based on the project professionals’ bounded decision-making rationalities.
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Paraskevopoulou, Chrysothemis, and Georgios Boutsis. "Cost Overruns in Tunnelling Projects: Investigating the Impact of Geological and Geotechnical Uncertainty Using Case Studies." Infrastructures 5, no. 9 (September 8, 2020): 73. http://dx.doi.org/10.3390/infrastructures5090073.
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Tunnelling projects seldom meet the initial budget requirements. Commonly, these types of projects suffer from cost overruns, which subsequently lead to project delivery delays mainly due to unsuccessful ground investigation as specified in the literature. The presented work scrutinises the effect of ground investigation in cost overruns. More specifically, various cost figures (total cost, construction cost, tunnel cost) are analysed for two case studies i) the Channel tunnel in the UK and ii) the Olmos Tunnel in Peru. Clayton’s relation between ground investigation and the construction cost is utilised and further investigated. In the Channel tunnel, the main problems faced led to a cost overrun of 78% for the total cost, 66% for the construction cost and 77% for the tunnelling cost. In the Olmos tunnel, two main geological scenarios are analysed and the construction cost overrun is calculated at 9.6% and 6.7%. Drawing on the conclusions, this research work proves that ground investigation can be one of the major factors influencing the tunnel cost.
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Karami, Hamidreza, and Oluwole Alfred Olatunji. "Critical overrun causations in marine projects." Engineering, Construction and Architectural Management 27, no. 7 (April 19, 2020): 1579–94. http://dx.doi.org/10.1108/ecam-09-2019-0477.
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PurposeDelay causations in infrastructure projects are well reported in normative literature. However, very little is known regarding the environment-related causations which can assist in developing mitigation strategies. This study aims to examine critical causations of overruns in marine construction projects.Design/methodology/approachA total of 73 delay factors, grouped into 16 themes, were identified from literature. Data relating to the significance of each factor were collected through a questionnaire survey administered to 151 respondents. A total number of 126 valid responses were retrieved. Reductionist methodology was used to identify the statistical significance of each delay causation.FindingsAll 73 variables analysed in the study are significant, including communication issues amongst stakeholders, inadequate planning, safety issues, deficient technical instructions and inappropriate management approaches. Others include design and construction issues, issues with project organisational structures, political and cultural factors, environmental uncertainties and complexity in resource management. The study also found estimation errors, owner's attitude, financial issues, delay in approval processes, construction strategies and unavailability of appropriate technologies for the work as influencing factors. These findings are consistent with earlier studies on other forms of projects, but they further confirm that they are very relevant to marine projects.Research limitations/implicationsDue to the diversity of marine projects, overrun factors are likely to manifest in different ways in varying project circumstances. In addition, economics, technologies and local legislation often influence project situations differently.Practical implicationsThe implications of these findings will assist in growing the practicality of scheduling and contract administration theories in marine projects. Although delay causations that have been reported in normative literature are relevant to marine construction, however, some of the causations are more severe in marine projects. It is important that planners and project stakeholders are mindful of this such that they can develop their expectations to tolerate variability rather than trade impracticable blames.Originality/valueDetermining delay factors specific to marine construction projects assists stakeholders and project management community in developing dedicated strategies applicable in scheduling to prevent and correct obstructions caused by overruns. Since projects are different in types and sizes, delay observations cannot be generalised.
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Asiedu, Richard Ohene, Nana Kena Frempong, and Gabriel Nani. "Parametric time overrun estimation of building projects." Journal of Financial Management of Property and Construction 21, no. 3 (November 7, 2016): 253–68. http://dx.doi.org/10.1108/jfmpc-10-2015-0037.
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Purpose Time overruns are commonplace within the construction industry. These result in deception because project managers critically assess the economic and financial viability of a project before implementation. Forecasting the likelihood of time overruns will not only lead to a reconsideration on the decision to build but also help put in place the necessary control measures – exactly what this research achieved. Design/methodology/approach The paper argues that rather than depending on the critical failure factors that are unknown at the pre-contract stage to forecast the likelihood of occurrence, it will be more useful to rely on project attributes that are known before contract signing. A multiple linear regression analysis is used for the model development based on ten independent variables. Findings About 86.6 per cent of all the projects experienced time overruns. The mean time overrun is 106.5 per cent. Initial contract sum, initial duration, gross floor area, contractor class D2K2, competitive tendering, sole sourcing and single-storey buildings explained about 44.7 per cent of the variations within time overruns, with a mean absolute percentage error of 60.7 per cent. Research limitations/implications The predictive accuracy of the model can, in practice, be tested after the completion of a project by comparing the actual project schedule with the planned schedule. Any disparity in the expected outputs should result in a reassessment of the significant independent variables to improve the forecasting abilities of the model. Practical implications The model is expected to be very useful at the pre-contract stage when detailed designs are unavailable. As a decision support system, it will help the practitioners and decision-makers make informed decisions while minimizing the time and resources spent to arrive at these decisions. Originality/value This research presents a unique opportunity to forecast the likelihood of time overruns within the building sector based on project attributes that are known before the contract-signing phase.
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Shehu, Zayyana, Gary D. Holt, Intan R. Endut, and Akintola Akintoye. "Analysis of characteristics affecting completion time for Malaysian construction projects." Built Environment Project and Asset Management 5, no. 1 (February 2, 2015): 52–68. http://dx.doi.org/10.1108/bepam-10-2013-0056.
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Purpose – Construction projects within Malaysia are plagued by time overruns that can transform what should have been successful projects, into those incurring additional costs, disagreements, litigation and in some cases abandonment. To help better understand this problem, the purpose of this paper is to investigate Malaysian project characteristics in relation to time overruns. Design/methodology/approach – In total, 150 Malaysian quantity-surveying organisations provided data relating to recent projects they have worked on. Project characteristics considered in analysis are new build and refurbishment, public and private sectors, procurement methods used, nature of projects and tendering methods. Findings – Public sector projects were found more prone to overruns than those in the private sector; refurbishment projects experienced better time performance than new build; construction management demonstrated better time performance than design-build or traditional procurement; and infrastructure projects/negotiated tendering, performed better than selective/open tendering, respectively. The study also developed a linear model to predict project duration, based on contract period. Research limitations/implications – The study adds a geographically specific detailed analysis to the extant literature of project performance generally and to that of time overruns more specifically. Practical implications – Findings provide stakeholders with information that may help mitigate the frequency of project delays among construction projects, especially in Malaysia. Originality/value – The analysis and modelling of time overrun in relation to Malaysian project characteristics in this way is novel.
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M.karim, Karukh Hassan, Noori Ali, and Basira Majeed. "The Causes of Variation Orders and Their Effects on Cost and Time of Projects in Sulaimani Governorate." Kurdistan Journal of Applied Research 5, no. 1 (June 30, 2020): 218–35. http://dx.doi.org/10.24017/science.2020.1.16.
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Variation orders are a permanent phenomenon in the construction of projects and industries around the world, and particularly in the province of Sulaymaniyah. Where construction industries suffer from variation orders. It includes an amendment of the initial scope of work as in the awarded contract. This study analyses the causes of variation orders and their effects on cost and time of projects in Sulaimani governorate. This study involves a questionnaire survey to selected 36 causes and 10 effects of variation orders from the perspective of owner, design consultant, and contractors. A total of 223 completed questionnaire sets were returned out of 270 questionnaires distributed among the practitioners. Then the data was analyzed statistically. Also, 40 projects at different construction sectors that constructed during 2007-2013 were investigated by calculating cost and time overrun because of variation orders. The results showed that in Sulaimani governorate the most effective causes of variation orders are owner's financial problems, preparing typical design for different districts, errors and omission in design, desired profitability of contractor and lack of adequate or appropriate site before design stage to construct of project. On the other hand of impacts of variations, the study discovered that top five effects of variation orders on the projects are: schedule overrun, cost overrun, productivity degradation, dispute between contract stockholders and payment delay. Also, all projects affected by cost and time overruns at average of 20 percent of cost and 65.4 percent of time of project.
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Liu, Huimin, Canhui Jiang, Yan Liu, Marcel Hertogh, and Xue Lyu. "Optimism Bias Evaluation and Decision-Making Risk Forecast on Bridge Project Cost Based on Reference Class Forecasting: Evidence from China." Sustainability 10, no. 11 (October 31, 2018): 3981. http://dx.doi.org/10.3390/su10113981.
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The high uncertainty of megaproject results in increasing complexity in the decision-making and ultimately leads to different degrees of cost overrun and project delays. One of the critical reasons for cost overrun and delay is the optimism bias of decision makers. Although the previous literature has analyzed the cost overrun distribution of bridges, roads and other infrastructure projects, there is still a lack of research on how to make more reasonable decisions according to the cost overrun risk and cost-benefit theory by considering the expectation of cost overrun. Therefore, this paper firstly measures optimism bias by conducting the field research and interviews regarding over 30 long bridges in China. On the basis of the optimism bias measure, a decision-making risk model of bridge projects with the expectation of cost overrun has been built. Then the paper takes Hangzhou Bay Bridge as an example to discuss the influence of cost overrun predication, implicit benefits and the project’s operation time on NPV results. Moreover, the probability of project unbuildability risk under different degrees of cost optimism bias has also been discussed. Finally, suggestions for risk forecast are provided for decision-makers to make more objective and comprehensive judgments.
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Shehu, Zayyana, Intan R. Endut, and Akintola Akintoye. "Factors contributing to project time and hence cost overrun in the Malaysian construction industry." Journal of Financial Management of Property and Construction 19, no. 1 (April 7, 2014): 55–75. http://dx.doi.org/10.1108/jfmpc-04-2013-0009.
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Purpose – The delivery of construction projects in Malaysia is plagued by time overruns, which turns what should have been successful projects into those incurring additional costs, or money-losing ventures; as well as leading to various other unexpected negative effects and faute de mieux situations. The purpose of this research is to assess those factors leading to time overrun in Malaysian construction projects. The perceptions of public and private sectors, contractors, clients, and consultants are compared relative to a list of factors derived from the review of extant literature in project delay. Design/methodology/approach – The research data were collected through an industry-wide questionnaire survey circulated across the Malaysian construction industry. The research develops a list of 84 time overrun factors. Responses were collected from 49 clients, 51 contractors, and 105 consultants, to explore and analyse the major factors that are responsible for causing time overrun based on sectors (public and private), organisations (clients, contractors and consultants) and professional roles. Findings – Project delays beyond contract dates are predominantly caused by contractors and are usually associated with financial factors. “Cash flow problems faced by the contractors” was found the major factor, which contributed to project delays, whereas “storage on site” was seen as the least significant factor. Practical implications – It is noteworthy that the findings in this research have a regional focus; it is, therefore, suggested that readers from other sections of the world exercise caution in applying the findings. As it is believed that every construction industry has its nature, culture and regulations, these factors can change as a result of such differences. Originality/value – This research provides stakeholders with information on factors, which, if properly understood, can make project delays less likely.
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Roslan, Nadzirah, Noor Yasmin Zainun, and Aftab Hameed Memon. "Relevancy of Factors and Mitigation Measures in Controlling Time and Cost Overrun towards Malaysian Environment." Applied Mechanics and Materials 773-774 (July 2015): 1007–11. http://dx.doi.org/10.4028/www.scientific.net/amm.773-774.1007.
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Construction projects are facing time and cost overrun globally. Since, this problem occurs due to various factors, hence for achieving successful construction projects, it is very important to control the responsible factors causing time and cost overrun. This study assessed the relevancy for each mitigation measures in relation with causative factors of time and cost overrun in Malaysian construction projects. A total of 56 mitigation measures were identified and correlated with the critical factors of time and cost overrun which were categorized into four phases of project life cycle. Data collection was done by conducting structured interviews amongst the experienced practitioners of the southern regions of Peninsular Malaysia.
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Sohu, Samiullah, Abd Halid Abdullah, Sasitharan Nagapan, Ashfaque Ahmed Jhatial, and Muhammed Tahir. "Contributing Cost Variation Factors in Highway Projects." Civil Engineering Journal 4, no. 8 (August 26, 2018): 1793. http://dx.doi.org/10.28991/cej-03091115.
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Cost overrun is known as when the final cost of any project surpasses the sectioned cost of the project at the floating of tender. Cost overrun or cost variation overrun is the main problem in the construction of highway projects in Sindh Province of Pakistan. To attain the main objective of the research a literature review was conducted and 64 general factors of cost overrun were found in construction industry. A questionnaire was developed and distributed among 28 well experienced experts having maximum experience in construction of building projects. Gathered data was analyzed by method of average index. Results shows that main and causative factors of cost variation were financial and cash issues faced by owner, slow information between parties, change in price of material, delay of design, poor site management, payment and financial issues problem faced by the contractor and delay in decision making. This research can help petitioners of highway projects to overcome these main and causative factors of cost.
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Al-Hazim, Nabil, and Zaydoun Abusalem. "Delay and cost overrun in road construction projects in Jordan." International Journal of Engineering & Technology 4, no. 2 (April 2, 2015): 288. http://dx.doi.org/10.14419/ijet.v4i2.4409.
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This study aims to identify the most important factors that cause delay in road construction projects in Jordan, which results in cost and time overrun allocated for this type of engineering projects and cause critical problems for both the developer and the contractor. The gap between the cost at completion and that originally estimated, known as cost overrun, can be regarded as one of the most important parameters reflecting the success of projects. In the public sector, money spent on project change orders results in increased construction time which in return reduces the number and size of the projects that can be completed during any given fiscal year. To achieve this goal, the documents and the final reports for several sample projects implemented over the years 2000 to 2008 were analyzed. All the projects were administered by the same organization taken from Jordan Ministry of Rural and Public Works. The results of this study can assist highway officials in their design, planning, scheduling and projects completions so that necessary actions can be taken to control these overruns in future projects. The study showed that 19 factors might cause delays of road construction projects as defined through a detailed literature review. The analysis of the study indicated that the top causes affecting time and cost overrun in road construction projects in Jordan are Terrain and Weather conditions.
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Afzal, Farman, Shao Yunfei, Muhammad Sajid, and Fahim Afzal. "Integrated priority decision index for risk assessment in chaos: cost overruns in transport projects." Engineering, Construction and Architectural Management 27, no. 4 (October 24, 2019): 825–49. http://dx.doi.org/10.1108/ecam-02-2019-0079.
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Purpose Cost overrun is inherent to project chaos, which is one of the key drivers of project failure. The purpose of this paper is to explore the critical elements of complexity-risk interdependency for cost-chaos in the construction management domain by utilizing a multi-criteria decision model. Design/methodology/approach A total of 12 complexity and 60 risk attributes are initially identified from the literature and using expert’s judgements. For the development of a structured hierarchy of key complexity and risk drivers, a real-time Delphi process is adopted for recording and evaluating the responses from experts. Afterwards, a pair-wise comparison using analytical network processing is performed to measure complexity-risk interdependencies against cost alternatives. Findings The findings of the integrated priority decision index (IPDI) suggest that uncertainties related to contingency and escalation costs are the main sources of cost overrun in project drift, along with the key elements such as “the use of innovative technology,” “multiple contracts,” “low advance payment,” “change in design,” “unclear specifications” and “the lack of experience” appear to be more significant to chaos in complexity-risk interdependency network. Research limitations/implications This study did not address the uncertainty and vulnerability exit in the judgment process, therefore, this framework can be extended using fuzzy logic to better evaluate the significance of cost-chaos drivers. Practical implications These results may assist the management of cost overrun to avoid chaos in a project. The proposed model can be applied within project risk management practices to make better-informed technical decisions in the early phases of the project life cycle where uncertainty is high. Originality/value This research addresses the importance of cost overruns as a source of project chaos in dynamic systems where projects reach the edge of chaos and progress stops. A new IPDI index contributes toward evaluating the severity of complexity and risk and their interdependencies which create cost-chaos in infrastructure transport projects.
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De Marco, Alberto, and Timur Narbaev. "Factors of Schedule and Cost Performance of Tunnel Construction Megaprojects." Open Civil Engineering Journal 15, no. 1 (April 13, 2021): 38–49. http://dx.doi.org/10.2174/1874149502115010038.
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Aims: This study illustrates the main factors that influence the cost overruns and schedule delays of tunnel construction megaprojects. Objective: An empirical analysis was carried out based on a dataset collected from a number of recent tunnel megaprojects worldwide. Methods: Analyses of variances and regression analyses were conducted to infer statistical significance and understand the relationships that exist between cost overruns, time delays and variables of context, technical, and governance characteristics of the sample projects. Results: The most significant factors are those related to the complexity of infrastructure and the type of contracting system used to deliver the project. In particular, some technical characteristics pertinent to the size of the tunnel reveal to be influencing factors of both schedule delay and cost overrun, while the usage of a traditional contracting mechanism is likely to impact the cost overrun. The type of infrastructure, region, ownership, and funding scheme are not found to be statistically significant determinants of cost and time performance. Conclusion: This analysis reaffirms that the size and complexity are important factors of typical low performance of tunnel construction megaprojects. The results of this study can be used for strategic design and planning by decision-makers, project managers and designers.
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Roumeissa, Salhi. "Impact of Delay on Cost Overrun in Construction Projects in Algeria." European Journal of Interdisciplinary Studies 5, no. 2 (May 31, 2019): 25. http://dx.doi.org/10.26417/ejis-2019.v5i2-281.
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Project success is the ultimate goal of the various project stackeholders (Salhi.R 2018). Asuccessful project means that the project is completed on time, within the agreed budget and according to the contract specifications. Delay is one of the most reccuring problems in construction project in Algeria, and it is considered as the main cause of cost overrun, time overrun, disput and claims.The objective of this paper is to mesure the impact of schedule delay on cost overrun, using the simple linear regression method and the coefficient of correlation. The proposed model can be used by practitioners as predictive mesure to address possible cost overrun.
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Roumeissa, Salhi. "Impact of Delay on Cost Overrun in Construction Projects in Algeria." European Journal of Interdisciplinary Studies 5, no. 2 (May 31, 2019): 25. http://dx.doi.org/10.26417/ejis.v5i2.p25-30.
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Project success is the ultimate goal of the various project stackeholders (Salhi.R 2018). Asuccessful project means that the project is completed on time, within the agreed budget and according to the contract specifications. Delay is one of the most reccuring problems in construction project in Algeria, and it is considered as the main cause of cost overrun, time overrun, disput and claims.The objective of this paper is to mesure the impact of schedule delay on cost overrun, using the simple linear regression method and the coefficient of correlation. The proposed model can be used by practitioners as predictive mesure to address possible cost overrun.
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DERAKHSHANALAVIJEH, Roya, and Jose Manuel Cardoso TEIXEIRA. "COST OVERRUN IN CONSTRUCTION PROJECTS IN DEVELOPING COUNTRIES, GAS-OIL INDUSTRY OF IRAN AS A CASE STUDY." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 23, no. 1 (July 13, 2016): 125–36. http://dx.doi.org/10.3846/13923730.2014.992467.
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Cost overrun in construction projects is a common issue affecting project performance, and Gas-Oil construction projects in Iran are no exception. This paper presents the results of a questionnaire conducted to identify and evaluate the relative importance of the significant factors contributing to the Gas-Oil construction industry of Iran as a case study for developing countries. The survey respondents included project owners, contractors and consultants involved in Iranian Gas-Oil construction projects. The results of the survey revealed that the main causes of cost overrun in this industry include inaccurate cost estimations, improper planning, frequent design changes, inadequate labour/skill availability, inflation of costs of machinery, labour, raw material and transportation prices. The first three factors are the project consultants’ responsibility and the appointment of qualified consultants and personnel training are strongly recommended to alleviate cost overrun. The paper also reviews and compares findings of a set of similar researches in a number of developing countries.
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Afzal, Farman, Shao Yunfei, Danish Junaid, and Muhammad Shehzad Hanif. "Cost-risk contingency framework for managing cost overrun in metropolitan projects: using fuzzy-AHP and simulation." International Journal of Managing Projects in Business 13, no. 5 (May 15, 2020): 1121–39. http://dx.doi.org/10.1108/ijmpb-07-2019-0175.
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PurposeRisk analysis plays a vital role in controlling and managing cost overruns in complex construction projects, particularly where uncertainty is high. This study attempts to address an important issue of cost overrun that encountered by metropolitan rapid transit projects in relation to the significance of risk involved under high uncertainty.Design/methodology/approachIn order to solve cost overrun problems in metropolitan transit projects and facilitate the decision-makers for effective future budgeting, a cost-risk contingency framework has been designed using fuzzy logic, analytical hierarchy process and Monte Carlo simulation.FindingsInitially, a hierarchical breakdown structure of important complexity-driven risk factors has been conceptualized herein using relative importance index. Later, a proposed cost-risk contingency framework has investigated the expected total construction cost in order to consider the additional budgeted cost required to mitigate the risk consequences for particular project activity. The results of cost-risk analysis imply that poor design issues, an increase in material prices and delays in relocating facilities show higher dependency and increase the risk of cost overrun in metropolitan transit projects.Practical implicationsThe findings and implication for project managers could possibly be achieved by assuming the proposed cost-risk contingency framework under high uncertainty of cost found in this research. Furthermore, this procedure may be used by experts from other engineering domains by replacing and considering the complex relationship between complexity-risk factors.Originality/valueThis study contributes to the body of knowledge by providing a practical contingency model to identify and evaluate the additional risk cost required to compute total construction cost for getting stability in future budgeting.
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Mathew, Anue Marry, and Neena S. Lal. "Identification of risk factors leading to cost and time overrun in B-O-T projects." Sustainability, Agri, Food and Environmental Research 10, no. 1 (March 12, 2021): 10. http://dx.doi.org/10.7770/safer-v10n1-art2466.
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As infrastructural investments are vital in developing countries, it’ll not solely facilitate to foster the economic growth of a nation, however it’ll additionally act as a platform within which new kinds of partnership and collaboration may be developed. The developments of BOT have attracted participation of native and foreign non-public sector capitalist to secure funding and to deliver projects on time, within the budget and to the desired specifications. There are many complexities in projects because of the variety of factors in project’s trend and also the dependence of project primarily on national factors. Because of these complexities and their long-term operation, the projects meet with uncertainty and numerous risks. Effective risk management methods and good managerial skills are required in guaranteeing the success of the project. In recent years, due to substantial increase in the amount of construction companies along with the changes in the government administrations, the construction projects are exposed to cost and time overrun and has huge impact on the progress of works within the industry. Although, the sector is considered to be a key driver of economic growth, time and cost overruns threaten to limit the sector’s potential to help achieve the desired growth and ensure efficient capital expenditure.
Keywords—BOT, cost overrun, delays, risk
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Seddeeq, Abdulaziz Bin, Sadi Assaf, Abdullatif Abdallah, and Mohammad A. Hassanain. "Time and Cost Overrun in the Saudi Arabian Oil and Gas Construction Industry." Buildings 9, no. 2 (February 8, 2019): 41. http://dx.doi.org/10.3390/buildings9020041.
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Many construction projects exceed time and budget. The Saudi Arabian construction projects are not an exception to this phenomenon. However, the causes of time and cost overrun of Saudi Arabian oil and gas construction projects have never been studied. Thus, this paper endeavors to investigate the main causes of time and cost overrun in Saudi Arabian oil and gas construction projects. Thirty-eight causes of time and cost overrun were identified through the literature and an interview. Responses from 48 professionals based in the Eastern Province of Saudi Arabia were obtained. The respondents were solicited to evaluate the significance of the causes, which were then ranked and a test of agreement was conducted. All survey participants agreed that the five major causes of time and cost overrun, combined, were found to be “changing of design and scope by client during construction”, “poor planning and scheduling of project”, “design errors”, “Inadequate comprehension of scope of work at the bidding stage”, and “underestimating of cost and schedules/overestimating of benefits”. On the other hand, the major cause of time overrun was found to be “changing of design and scope by client during construction”. Finally, the major cause of cost overrun was found to be “underestimating of cost and schedules/overestimating of benefits”, respectively. The findings of this study will be beneficial to project stakeholders who must operate in an industry that is highly sensitive. The findings will also facilitate organizations planning to conduct construction projects in the Saudi Arabian oil and gas industry.
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Leach, Larry. "Schedule and Cost Buffer Sizing: How to Account for the Bias between Project Performance and Your Model." Project Management Journal 34, no. 2 (June 2003): 34–47. http://dx.doi.org/10.1177/875697280303400205.
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Bias in project performance causes schedule and cost to overrun baseline estimates (your model). Bias is the onesided tendency of actual schedule or cost to overrun the model. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) and supporting literature recommend estimating the variability for all project time and cost estimates, and sizing appropriate schedule or cost buffers (also known as contingency or management reserve) using Monte-Carlo analysis or PERT. This paper describes a number of sources of bias in performance of projects to schedule and cost estimates, and provides recommendations to size buffers that ensure your projects come in under your baseline schedule and budget.
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Shaikh, F. A. "Financial Mismanagement: A Leading Cause of Time and Cost Overrun in Mega Construction Projects in Pakistan." Engineering, Technology & Applied Science Research 10, no. 1 (February 3, 2020): 5247–50. http://dx.doi.org/10.48084/etasr.3271.
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One important and well-known issue for the majority of construction projects such as buildings, roads, bridges, airports and many more projects all over the world is time and cost overrun. Project pricing and time period delay are also major issues. The current investigation is taking into consideration the mega construction projects in the provinces of Pakistan, looking into various components controlling and dominating time and cost overrun. A total of 29 factors were identified from literature work and one questionnaire was designed and distributed among 160 respondents. All collected data were analyzed by the average index method. Factors having value more than 3.6 were selected as main factors of cost and time overrun, and five factors were revealed to surpass this barrier. Time and cost overrun are of the leading financial mismanagement issues of the economy of Pakistan. This study will be helpful for stakeholders to control both cost and time overrun in the mega construction projects of Pakistan.
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Abu El-Maaty, Ahmed Ebrahim, Amr M. El-Kholy, and Ahmed Yousry Akal. "Modeling schedule overrun and cost escalation percentages of highway projects using fuzzy approach." Engineering, Construction and Architectural Management 24, no. 5 (September 18, 2017): 809–27. http://dx.doi.org/10.1108/ecam-03-2016-0084.
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Purpose Modeling represents the art of translating problems from an application area into tractable mathematical formulations whose theoretical and numerical analysis provides insight, answers and guidance useful for the originating application. The purpose of this paper is to determine the causal causes of schedule overrun and cost escalation of highway projects in Egypt in order to be used as independents variables in mathematical models for predicting the percentages of schedule overrun and cost escalation of such projects in Egypt. Design/methodology/approach A survey of a randomly selected samples yielded responses from 40 owners, 15 consultants and 56 contractors. The survey includes 38 schedule overrun factors and 26 cost escalation factors. The effectiveness degree of the identified factors has been identified by the triangle fuzzy approach. Findings The results of the survey show that “contractor’s technical staff is insufficient and ineligible to accomplish the project” is the most important cause of schedule overrun, while the major cause of cost escalation is inadequate preparation of the project concerning planning and execution. Originality/value The main contribution of this study is predicting the percentages of schedule overrun and cost escalation of highway projects in Egypt. Through the application of the linear regression analysis method and statistical fuzzy theory, four predictive models have been developed and it has been noted that the linear regression-based model shows prediction accuracy better than statistical fuzzy-based model in predicting percentages of schedule overrun and cost escalation.
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Abusafiya, Hedaya A. M., and Saad M. A. Suliman. "Causes and Effects of Cost Overrun on Construction Project in Bahrain: Part I (Ranking of Cost Overrun Factors and Risk Mapping)." Modern Applied Science 11, no. 7 (May 27, 2017): 20. http://dx.doi.org/10.5539/mas.v11n7p20.
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Cost performance is one of the basic criteria for measuring construction project success. Despite its proven importance it is not uncommon to see a construction project failing to achieve its objectives within the specified cost. The paper attempts to identify the major causes of cost overrun in Bahrain construction sector, and to assess the effect of these causes on cost overrun. A list of these causes was collected through an extensive literature review, historical construction projects records and expert opinions. In total 45 factors were short-listed to be made part of questionnaire used in a survey conducted with representatives from local contracting, consulting, and client firms. Findings are presented in form of tables that classify cost overrun factors, and their ranking. The overall results showed that frequent design changes, mistakes during construction, and schedule delay were considered as the most important factors of cost overrun causes in Bahrain construction industry.
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Soomro, F. A., M. J. Memon, A. F. Chandio, S. Sohu, and R. Soomro. "Causes of Time Overrun in Construction of Building Projects in Pakistan." Engineering, Technology & Applied Science Research 9, no. 1 (February 16, 2019): 3762–64. http://dx.doi.org/10.48084/etasr.2449.
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Time overrun in construction projects is a very serious issue in developed countries. The main object of this research is to find the main causes of time overrun in the construction of building project and its possible mitigation measures. Quantitative approach was adopted in this research to achieve object and RIW (relative importance weight) approach was used for collecting data. Financial issues faced by the contractor, contractor’s inexperience, weather impacts, late delivery of material, mistakes in design, shortage of skilled labor, incompetent subcontractor and mistakes in time estimation were identified as main causes of time overrun in construction projects and possible mitigation measures were also proposed from experts. This research will help in giving awareness to stakeholders to narrow down the factors of time overrun in construction projects in Pakistan.