Understanding the dynamics of cost overrun triggers in highway infrastructure projects in Nigeria: a systems thinking modelling approach

Abstract

Purpose

Empirical evidence suggests that many triggers influence poor cost performance in highway projects, whereas previous studies about the cost overrun triggers stem from a positivist standpoint supported by conventional statistical techniques, thus disregarding the sophisticated interactions and overall dynamics of the triggers. This study contends for a paradigm shift in investigating and understanding cost overrun triggers by adopting a holistic perspective through the lens of system thinking. This study aims to contend for a paradigm shift in investigating and understanding cost overrun triggers by adopting a holistic perspective through the lens of system thinking.

Design/methodology/approach

Semi-structured interviews with industry stakeholders in Nigeria were conducted buttressed by textual data from literature sources and project documents. Data analysis based on a developed data compatible coding framework and causal relations from textual data sources was used to develop a causal loop diagram depicting the interactions of the triggers which were validated by experts.

Findings

The analysis of the causal loop diagrams (CLDs) allowed identification of action points used to suggest changes for improved cost-effective highway project delivery. Among the suggested interventions are ensuring the provision of adequate funding prior to contract award will result in timely delivery of projects and indeed delivering key projects at the contractual agreed budget. This can be achieved through ensuring strict adherence to the provisions of Section 4 (2) (b) of the Nigerian Public Procurement Act, 2007 which stipulates that no contract should be awarded if funds are not available from the onset.

Research limitations/implications

The study was limited to only highway infrastructure projects in Nigeria and as such caution must be taken before using the outcome of the study to other context within Nigeria and beyond.

Practical implications

From a practical point of view, the causal model demonstrates that this study is capable of being used to make pragmatic decisions regarding policy leverages about improving cost performance in highway projects provision in the Nigerian highway infrastructure sector of the construction industry. Moreover, it will aid a clear understanding of the key influencing triggers of cost overrun by the relevant stakeholders within the highway sector of the industry.

Originality/value

The hybrid-based approach applied in the development of CLDs in this study is expected to provide new insight into understanding the linkages, interactions, feedbacks and processes among the key cost overrun triggers and suggesting leverages for cost performance improvement within the philosophy of system thinking.

Citation

Mahmud, A.T., Ogunlana, S.O. and Hong, W.T. (2022), "Understanding the dynamics of cost overrun triggers in highway infrastructure projects in Nigeria: a systems thinking modelling approach", Journal of Financial Management of Property and Construction, Vol. 27 No. 1, pp. 29-56. https://doi.org/10.1108/JFMPC-07-2020-0051