Causes of Cost Overrun In Construction

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70 citations0/0 files storedIOSR Journal of Engineering

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Construction Project Management and Performance BIM and Construction Integration Value Engineering and Management

Abstract

The Indian construction industry is an integral part of country's economy and its growth and a conduit for a substantial part of India's development investment.The industry plays a pivotal role in developing the country's infrastructure, a pre-requisite for high levels of economic growth.Most construction projects experience cost overrun and it put massive financial burden on the client or owner.Therefore this research was carried out to identify the causes leading to cost overrun in construction projects.Desk study along with questionnaire survey was used to identify the causes of cost overrun.A total of 30 filled questionnaires were collected from clients, consultants and contractors.The respondents were asked to rate the listed causes on the basis of probability of occurrence and severity of impact.Importance of each cause was calculated on the basis of cumulative effect of occurrence and impact.Spearman rank order correlation analysis was used to evaluate whether consensus of opinions exists between groups of respondents (client versus consultant, client versus contractor and consultant versus contractor).From the analysis of the results it was found that consensus of opinion exists between respondents on the causes of cost overrun.The results showed that, slow decision making, poor schedule management, increase in material/machine prices, poor contract management, poor design/ delay in providing design, rework due to wrong work, problems in land acquisition, wrong estimation/ estimation method, and long period between design and time of bidding/tendering are the major causes of cost overrun.The major causes as identified by this research were compared with the findings from other countries and there were fairly relevant similarities.

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References

2003Calculating, Interpreting, And Reporting Cronbach’s Alpha Reliability Coefficient For Likert-Type Scales 2004What Causes Cost Overrun in Transport Infrastructure Projects?2002The effects of construction delays on project delivery in Nigerian construction industry 2008Delay and cost overruns in Vietnam large construction projects: A comparison with other selected countries 2010Cost and time control of construction projects: inhibiting factors and mitigating measures in practice 2012Cost Overruns and Failure in Project Management: Understanding the Roles of Key Stakeholders in Construction Projects 2010Evaluation of Risk Factors Leading to Cost Overrun in Delivery of Highway Construction Projects 1988Causes of High Costs of Construction in Nigeria

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