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Article
Publication date: 26 July 2021

Abba Tahir Mahmud, Stephen O. Ogunlana and W.T. Hong

Extensive research towards identifying the attributable cost overrun factors globally has been conducted predominantly from a survey-oriented perspective, which disregard…

Abstract

Purpose

Extensive research towards identifying the attributable cost overrun factors globally has been conducted predominantly from a survey-oriented perspective, which disregard the contextual basis on which these triggers manifest. This study aims to explore the driving factors of cost overrun in highway projects, specific to the Nigerian context.

Design/methodology/approach

The research used a context-based approach to seek project stakeholders’ perspectives on the key drivers of cost overrun in highway projects in Nigerian. Semi-structured interviews were conducted with client, contractor and consultant organisations involved in the provision of highway infrastructure projects in Nigeria. The collected data was analysed using a developed coding framework grounded on a case study approach, principles of inductive thematic analysis and saliency analysis to identify the key drivers.

Findings

Findings from the analysis identified triggers from macroeconomic, societal, leadership and project management perspectives with synergistic relationships with each other based on prevalence and significance. Among the key triggers is a delay in work progress, political instability, adverse weather, social issues, delay in progress payment to contractors and modification of project scope. In conclusion, the triggers of cost overrun in highway projects are contextually driven by the complex nature of the project management, societal, macroeconomic and leadership triggers specific to the Nigerian context.

Research limitations/implications

The research was limited to only highway infrastructure projects in Nigeria. Furthermore, the findings are based on a small sample size, and thus, caution must be taken before applying the outcome of this study in a generalised way to other contexts.

Practical implications

Practically, the stakeholders i.e. client, contractors and consultants should acknowledge the contextual circumstances in which each of the triggers takes place, which will aid in developing pragmatic measures and make the right decisions towards addressing these triggers during any highway construction project in Nigeria and enhance the chances of project success.

Originality/value

The context-based approach applied in this study is expected to provide a new insight in understanding the triggers of cost overruns, especially in highway projects in Nigeria and indeed other developing countries with similar governance characteristics

Details

Journal of Engineering, Design and Technology , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1726-0531

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Book part
Publication date: 26 April 2017

Prince Boateng, Zhen Chen and Stephen O. Ogunlana

Abstract

Details

Megaproject Risk Analysis and Simulation
Type: Book
ISBN: 978-1-78635-830-1

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Article
Publication date: 30 December 2020

Richard Ohene Asiedu and Collins Ameyaw

This study aimed at developing and empirically testing a system dynamics causal loop (SDCL) model for investigating factors related to the risk of cost overruns

Abstract

Purpose

This 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/approach

Using data derived from the Ghanaian construction industry (GCI), a conceptual system dynamics model was hypothesised and empirically tested.

Findings

Supported 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 implications

The final SDCL model has revealed key risk components that would require standard mitigation measures in order to achieve “acceptable success” in construction projects.

Originality/value

The study presents an interactive approach for construction practitioners in developing countries to prioritise the causes of cost overruns in order to initiate quick responses.

Details

International Journal of Building Pathology and Adaptation, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-4708

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Article
Publication date: 28 May 2020

Muhammad Irfan, Muhammad Sohail Anwar Malik and Syyed Sami Ul Haq Kaka Khel

The 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…

Abstract

Purpose

The 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/approach

Factors 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.

Findings

This 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/value

A 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.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 10
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 18 September 2017

Ahmed Ebrahim Abu El-Maaty, Amr M. El-Kholy and Ahmed Yousry Akal

Modeling represents the art of translating problems from an application area into tractable mathematical formulations whose theoretical and numerical analysis provides…

Abstract

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.

Details

Engineering, Construction and Architectural Management, vol. 24 no. 5
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 3 April 2017

Samuel Famiyeh, Charles Teye Amoatey, Ebenezer Adaku and Collins Sena Agbenohevi

In Ghana, the duration of construction projects from inception to completion is becoming a great concern, recently, especially among clients and beneficiaries, because of…

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8631

Abstract

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.

Details

Journal of Engineering, Design and Technology, vol. 15 no. 2
Type: Research Article
ISSN: 1726-0531

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Article
Publication date: 31 July 2009

Adnan Enshassi, Jomah Al‐Najjar and Mohan Kumaraswamy

Delays and cost overruns are evidently frequent problems in the construction industries of many developed and developing countries. The purpose of this paper is to assess…

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5141

Abstract

Purpose

Delays and cost overruns are evidently frequent problems in the construction industries of many developed and developing countries. The purpose of this paper is to assess factors leading to time overruns (delays) and cost overruns in construction projects in the Gaza Strip. Since there appear to be additional special contributors to delays here, the relative perceptions of contractors, consultants and owners are compared, based on a listing of causal factors derived from previous studies elsewhere, together with other factors arising from special conditions in the Gaza Strip.

Design/methodology/approach

A survey of a randomly selected samples yielded responses from 66 contractors, 27 consultants, and 31 owners. The survey included 110 delay factors/causes which were grouped into 12 major groups. The same survey also included 42 cost overrun factors. The level of importance of the delays and cost overrun factors were measured and ranked by their importance indexes, according to the perspectives of contractors, consultants, and owners.

Findings

There seems to be a general agreement between contractors, consultants and owners regarding causes of delays and cost overruns. The main four causes of time delays included strikes and border closures, material‐related factors, lack of materials in markets, and delays in materials delivery to the site. Additionally, the main three causes for cost overruns included price fluctuations of construction materials, contractor delays in material and equipment delivery, and inflation.

Originality/value

The outcome of this paper will assist owners, contractors, and consultants in understanding the reasons for delays and cost overruns, thus eliminating or minimizing these causes. This could be achieved by better management of the projects and by finding new methods for storing the critical materials from the beginning of the project. Furthermore, the local government is advised to initiate legislation to overcome problems arising from monopolies in the supply of construction materials.

Details

Journal of Financial Management of Property and Construction, vol. 14 no. 2
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 16 November 2012

Young‐Ill Park and Theopisti C. Papadopoulou

One of the world's largest construction markets is in Asia where construction activity is boosted by investment on transport infrastructure. This paper aims to identify…

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3645

Abstract

Purpose

One of the world's largest construction markets is in Asia where construction activity is boosted by investment on transport infrastructure. This paper aims to identify and analyse causes of cost overruns in transport infrastructure projects in Asia and assess their importance and statistical relationship with project size.

Design/methodology/approach

The paper pursues the following objectives. First, it identifies factors contributing to cost overruns. Second, using case data and regression analysis, it establishes the statistical relationship between project size and cost overruns. Third, it analyses questionnaire data to rank causes of cost overruns according to their frequency, severity and significance. Last, the paper identifies contract types mostly associated with cost escalation.

Findings

The findings confirm a moderate correlation between cost overruns and one indicator of project size. Awarding contracts to the lowest bidder is identified as the most significant cause of cost overruns. Lump‐sum contracts were found to have the greatest influence on the occurrence of cost overruns.

Research limitations/implications

Stratified sampling would allow the evaluation of how cost overruns are perceived by different professional groups. Further research can focus on measures for the prevention of cost overruns.

Originality/value

The causes of cost overruns have been at the focal point of research however, most studies consider cost overruns in specific Asian countries. Moreover, transport infrastructure projects have received little attention or been underrepresented in datasets comprising general construction projects. The paper seeks to fill this gap by carrying out in‐depth investigation of cost overruns in transport infrastructure in the broader context of Asia.

Details

Built Environment Project and Asset Management, vol. 2 no. 2
Type: Research Article
ISSN: 2044-124X

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Article
Publication date: 10 November 2020

Bertram I. Steininger, Martin Groth and Brigitte L. Weber

We investigate causes for the cost overrun and delay of the railway project Stuttgart 21. Besides, we try to forecast the actual costs and completion date at an early stage.

Abstract

Purpose

We investigate causes for the cost overrun and delay of the railway project Stuttgart 21. Besides, we try to forecast the actual costs and completion date at an early stage.

Design/methodology/approach

The results of exploratory research show the causes for the cost overrun and delay of Stuttgart 21; we compare our findings with other railway projects. To estimate the costs at an early stage, the reference class forecasting (RCF) model is applied; to estimate the time, we apply an OLS regression.

Findings

We find that the following causes are relevant for the cost overrun and delay of Stuttgart 21: scope changes, geological conditions, high risk-taking propensity, extended implementation, price overshoot, conflict of interests and lack of citizens' participation. The current estimated costs are within our 95% confidence interval based on RCF; our time forecast underestimates or substantially overestimates the duration actually required.

Research limitations/implications

A limitation of our approach is the low number of comparable projects which are available.

Practical implications

The use of hyperbolic function or stepwise exponential discount function can help to give a clearer picture of the costs and benefits. The straightforward use of the RFC for costs and OLS for time should motivate more decision-makers to estimate the actual costs and time which are necessary in the light of the rising demand for democratic participation amongst citizens.

Social implications

More realistic estimates can help to reduce the significant distortion at the beginning of infrastructure projects.

Originality/value

We are among the first who use the RCF to estimate the costs in Germany. Furthermore, the hyperbolic discounting function is added as a further theoretical explanation for cost underestimation.

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 13 May 2019

Richard Ohene Asiedu and Ebenezer Adaku

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…

Abstract

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.

Details

International Journal of Managing Projects in Business, vol. 13 no. 1
Type: Research Article
ISSN: 1753-8378

Keywords

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