Analysing the perceptions of UK building contractors on the contributors to the cost of construction plant theft

Abstract

Purpose

The purpose of this paper is to consider the significance of the sources of cost of construction plant theft identified in previous studies and derive rates which can enhance proper estimation of the cost of plant theft to the construction industry. The direct and indirect costs of plant theft include replacement cost (new‐for‐old/depreciated), emergency cost, hire replacement cost, productivity loss, increased labour cost, loss of goodwill, administration cost, increased insurance premium and social cost.

Design/methodology/approach

The cost‐contribution of these various sources was studied, using a structured questionnaire which was administered to building contractors in the UK construction industry, to measure their opinions of the frequency and severity of the contribution of the sources to the cost of construction plant theft. The questionnaires were administered to 220 companies and 51 of them were fully completed, representing 23.1 per cent of the original sample. The responses were analysed using descriptive and inferential statistics to derive the probabilities of sources contributing to the cost of plant theft.

Findings

The results of the analysis show that the rates of contribution to the cost of plant theft varies significantly between the sources, with “loss of output” and “increased insurance premium” ranking as the top‐two costs of plant theft in the UK construction industry. The rates derived in this study can be used by contractors to reasonably estimate the cost of plant theft, especially when there is need to justify the adoption of measures that can mitigate plant theft.

Originality/value

This study generated rates of contribution by factors which contribute to the overall cost of theft of construction plant in the UK. These rates can provide a more reliable estimate of the cost of plant theft than current estimations which vary significantly.

Citation

Fadiya, O.O., Georgakis, P., Chinyio, E. and Akadiri, P. (2013), "Analysing the perceptions of UK building contractors on the contributors to the cost of construction plant theft", Journal of Financial Management of Property and Construction, Vol. 18 No. 2, pp. 128-141. https://doi.org/10.1108/JFMPC-10-2012-0039