scholarly journals Cost overruns of public sector construction projects: a developing country perspective

2019 ◽  
Vol 13 (1) ◽  
pp. 66-84 ◽  
Author(s):  
Richard Ohene Asiedu ◽  
Ebenezer Adaku
Keyword(s):  
Public Sector ◽  
Construction Projects ◽  
Public Procurement ◽  
Construction Project ◽  
Cost Overrun ◽  
Project Cost ◽  
Cost Overruns ◽  
Content Type ◽  
Interview Session ◽  
Construction Project Cost

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.

scholarly journals A BESPOKE APPROACH FOR RELATING MATERIAL WASTE TO COST OVERRUN IN THE CONSTRUCTION INDUSTRY

2017 ◽  
Vol 1 (1) ◽  
pp. 39-52
Author(s):  
Ibrahim Saidu ◽  
W Shakantu ◽  
A Adamu ◽  
I Anugwo
Keyword(s):  
Construction Industry ◽  
Construction Material ◽  
Methodological Approach ◽  
Construction Project ◽  
Project Managers ◽  
Cost Overrun ◽  
Project Cost ◽  
Cost Overruns ◽  
Project Completion ◽  
Final Project

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. 

scholarly journals Assessment of delay and cost-overrun in federal road construction project in Abuja

2020 ◽  
Vol 11 (4) ◽  
pp. 1184
Author(s):  
Ashem Emmanuel Egila ◽  
Oluwaseun Abdulakeem Balogun ◽  
Saheed Olanrewaji Yusuf
Keyword(s):  
Construction Projects ◽  
Construction Project ◽  
Road Construction ◽  
Mean Value ◽  
Cost Overrun ◽  
Related Factors ◽  
Cost Overruns ◽  
Factors Influencing ◽  
Importance Index ◽  
The Government

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.

Review of construction journals on causes of project cost overruns

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Serdar Durdyev
Keyword(s):  
Financial Management ◽  
Construction Projects ◽  
Research Output ◽  
Soil Conditions ◽  
Project Cost ◽  
Cost Overruns ◽  
Content Type ◽  
Control Factors ◽  
The Subject ◽  
Number Of Citations

PurposeThe study investigates the causes of project cost overruns (COs) that have been reported in the construction-management-related articles since 1985.Design/methodology/approachTo achieve the aim and provide recommendations to avoid project COs, 48 selected journal articles were reviewed and assessed with regard to the countries, institutions and researchers that have contributed to the subject.FindingsThe review of the articles shows that the subject has attracted a considerable attention from the researchers worldwide. However, the problem mainly occurred in developing countries and the researchers drew the attention on the resource-related, economic/financial as well as political problems. While 79 causes of COs were identified, the top ten causes of project COs, which have received the highest number of citations by the reviewed articles, were presented and discussed. These causes are: design problems and incomplete design, inaccurate estimation, poor planning, weather, poor communication, stakeholder's skill, experience and competence, financial problems/poor financial management, price fluctuations, contract management issues and ground/soil conditions.Research limitations/implicationsThe study findings have several implications, which are not only for the academic world, but also for the construction front line. For scholars, the study provides a list of project COs that the researchers in the area could benefit for their future studies. The industry practitioners could find ways to improve project cost performance by giving attention to the causative factors that are significantly affecting construction projects and investing their resources and efforts towards the most occurred ones.Originality/valueThus, this study provides insight into the research output on the subject and a checklist of COs, which is believed to provide a better understanding of significant areas requiring attention where steps should be taken to minimize or control factors causing COs in construction projects.

Validation of an integrated influential factors (IIFs) model as a panacea to curb projects completion delay in Yemen

2019 ◽  
Vol 10 (3) ◽  
pp. 793-811
Author(s):  
Najib Al-Fadhali ◽  
Dodo Mansir ◽  
Rozlin Zainal
Keyword(s):  
Construction Projects ◽  
Construction Project ◽  
Adaptive Controller ◽  
Specific Model ◽  
Influential Factors ◽  
Project Delivery ◽  
Cost Overrun ◽  
Local Conditions ◽  
Content Type ◽  
Internal Stakeholders

Purpose Influential factors attributed to causing project completion delay (PCD) differ because of prevailing variability of local conditions. Construction projects specifically in Yemen (and other developing countries) experience devastating effects of PCD which include litigation, cost overrun, arbitration, abandonment and failure. While existing works have investigated the causes and effects of PCD, not much exist on approaches to optimizing its occurrence in Yemen. In a bid to enhance the effects of PCD in Yemen, the integrated influential factors (IIFs), which is a construction-party specific model, was developed to mitigate the effects of PCD in Yemen. As a build up to the development of this model, this paper aims to validate the IIFs model with a view to foster its application to enhance PCD in construction project delivery in Yemen. Design/methodology/approach The validation of the IIFs model was done through seeking the opinions of 12 selected construction industry experts. This involved using a structured questionnaire to seek information on the sustainability of implementing the IIFs model. Findings The findings revealed that if the IIFs model is vigorously implemented, it would go a long way in curbing delay in the delivery of construction projects, making construction delivery less risky due to the effects of delay. Research limitations/implications The study is limited to only influential factors of internal stakeholders of the construction phase. Similarly, the study was only conducted in the state of Sana'a, Yemen. The implication of the adoption of the IIFs model is that it can hopefully serve as an adaptive controller to construction project delivery relative to the specific parameters and factors investigated in this study. Originality/value The IIFs model is a novel approach to optimizing PCD in Yemen specific to both the construction-phase and internal stakeholders. Existing studies on PCD in Yemen, although investigating the causes and effect of PCD, hardly proffer any approach to optimizing PCD for successful construction project delivery.

Nature of construction project cultures in the public sector: case studies in Sri Lanka

2018 ◽  
Vol 8 (5) ◽  
pp. 557-568 ◽  
Author(s):  
Aparna Samaraweera ◽  
Sepani Senaratne ◽  
Y.G. Sandanayake
Keyword(s):  
Public Sector ◽  
Case Studies ◽  
Construction Projects ◽  
Construction Project ◽  
Content Type ◽  
The Public ◽  
Research Findings ◽  
Project Participants ◽  
Project Culture ◽  
Project Objectives

Purpose Cultural differences cause conflicts amongst construction project participants, deterring the success of projects. Understanding such different cultural manifestations could help the removal of the misunderstandings amongst sub-cultural groups and removal of formal irrationalities deterring the progress of construction projects. The purpose of this paper is to explore the nature of project cultures in the public sector construction projects. Design/methodology/approach An exploratory case study was selected as the research strategy to achieve the research aim. Three public sector building construction projects were used as case studies. Nine semi-structured interviews and observation of two progress review meetings per case were used for data collection. Findings As per the research findings, contractors believed that construction project culture emerged and transferred through continuous interactions and socialisations with time. Consultants believed that culture was emerged focusing on clearly defined project objectives. In addition, all members assumed that project members at high authority levels were contributing more for the emergence and transfer of cultural aspects. Levels of culture and power existed within the public sector project culture as clients with the highest power, consultants the next and contractors with the least power. Public sector project culture was not leader centred. Shared behavioural norms were not much popular in project culture. Highly differentiated behavioural norms, demonstrating clear professional sub-cultures for the client, contractor and consultant, were available. Originality/value The research findings are helpful to construction project managers to enhance the level of motivation, productivity, commitment, continuous interactions and socialisations of project participants and to avoid any negative outcomes in behaviours.

scholarly journals Causes of Costs Overrun in Road Construction Project in Oman

2021 ◽  
Vol 10 (3) ◽  
Author(s):  
Osama Salim Al Adawi ◽  
Hussin Yahia
Keyword(s):  
Construction Projects ◽  
Negative Impact ◽  
Construction Project ◽  
Road Construction ◽  
Developed Countries ◽  
Critical Issue ◽  
Cost Overrun ◽  
Cost Overruns ◽  
Road Projects ◽  
And Performance

Cost overrun is a common phenomenon in construction projects of any country, be it in developing or developed countries. This issue is a critical issue that impacts a project's success. It, therefore, needs serious attention from all the participants in the construction project to keep the projects in safe mode, to be completed within its limited cost, time, and performance. Cost overrun has a negative impact on construction project performance, which is because the construction industry is vast and complex. Any difficulty occurring during the project's life cycle leads to other problems in various parts of the project. Studies by many researchers’ cost overruns by literature review, and according to their studies suggested the most cost overrun causes. The aim of this study is to identify the most critical factors leading to cost overruns on road projects in Oman, and then provide suggestions to resolve them.

AN ASSESSMENT OF CONSTRUCTION PROJECTS COST OVERRUNS IN THE PUBLIC SECTOR

2016 ◽  
Vol 3 (2) ◽  
Author(s):  
Jerminah Khabisi ◽  
Clinton Aigbavboa ◽  
Wellington Thwala
Keyword(s):  
Public Sector ◽  
Construction Projects ◽  
Secondary Data ◽  
Primary Data ◽  
Specific Reference ◽  
Cost Overrun ◽  
Cost Overruns ◽  
Design Changes ◽  
Response Rate Data ◽  
High Level

The purpose of this study was to identify factors that influence project cost overrun within public sector construction projects with specific reference to Gauteng Province of South Africa. The primary data was collected by means of structured questionnaires which were distributed to practicing construction professionals who are engaged in various dimension in public sector construction projects. The secondary data was derived through reviewed literature. Out of 120 questionnaires sent out, 119 were received, which represented 99% response rate. Data received from the questionnaires was analyzed using descriptive statistical procedures. Findings from questionnaire survey revealed that the most dominant factors of cost overruns in public sector project include: variation orders, change in scope of the project, cash flow and financial difficulties faced by contractors, delays in decision making by professional consultants representing the clients, inadequate planning, frequent design changes, lack of coordination between parties, amongst others. The study thus revealed that it is necessary to identify factors that influence construction cost overruns at the start of the project in order to minimize cost overruns and to improve the cost performance on public sector construction projects. This is because of the high level of accountability necessary required for the management of tax payers money.

A system dynamics approach to conceptualise causes of cost overrun of construction projects in developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard Ohene Asiedu ◽  
Collins Ameyaw
Keyword(s):  
Developing Countries ◽  
System Dynamics ◽  
Construction Projects ◽  
Mitigation Measures ◽  
Conceptual System ◽  
Cost Overrun ◽  
Interactive Approach ◽  
Cost Overruns ◽  
Content Type ◽  
Using Data

PurposeThis study aimed at developing and empirically testing a system dynamics causal loop (SDCL) model for investigating factors related to the risk of cost overruns, associated with the performance of construction projects in developing countries.Design/methodology/approachUsing data derived from the Ghanaian construction industry (GCI), a conceptual system dynamics model was hypothesised and empirically tested.FindingsSupported by empirical evidence, the study established that the low technical capacity of consultants is the underlying cause of cost overruns in government projects. There is a strong proof of the relationship between the results of the SDCL model and poor contract planning and supervision, change orders, competence of the project team and the lack of effective coordination amongst the contractual parties.Practical implicationsThe final SDCL model has revealed key risk components that would require standard mitigation measures in order to achieve “acceptable success” in construction projects.Originality/valueThe study presents an interactive approach for construction practitioners in developing countries to prioritise the causes of cost overruns in order to initiate quick responses.

Sign in / Sign up

Export Citation Format

Share Document