Abstract
Cost overrun is one of the issues confronting the construction industry. Most of the construction projects in Malaysia have experienced cost overrun of 5 to 10% of the total contract sum. In examining the east Malaysia scenario, this study aims to identify the factors causing cost overrun of construction projects in Sarawak. A quantitative approach was adopted in carrying out the research. Stratified random sampling was adopted to obtain data from Grade 7 contracting companies and quantity surveying firms operating in Sarawak. Descriptive statistics (measures of central tendency) and the Relative Importance Index (RII) were used to analyze the data. The most significant factors identified were the shortage of material, lack of plant and spare parts of equipment, acceleration required by clients, change of work scope or changes in material specification by clients, mistakes during construction, fluctuation in prices of raw materials, shortage of workforce, lack of skilled labour, poor project management, poor cost control and awarding of a contract to the lowest bidders. This study complements the existing knowledge on the factors causing cost overrun in the Malaysian construction industry. Hence, clients, contractors, project managers, quantity surveyors, and other project participants will be aware of the factors considered while planning for a project.
Highlights
The construction industry contributes positively to the growth of the socio-economic status of a country, leading to the improvement of the people’s standard of living
The previous study conducted in Asian countries such as South Korea, Hong Kong, Taiwan, Sri Lanka, Vietnam, Malaysia, Singapore and other countries showed that acceleration required by the client was one of the factors causing cost overrun of project work
Most of the respondents agreed that the contract awarded to the lowest bidder would result in a cost overrun
Summary
The construction industry contributes positively to the growth of the socio-economic status of a country, leading to the improvement of the people’s standard of living. One of the major problems hampering the successful completion of most projects in the construction industry is a cost overrun. To consider a project as being successful by any construction company, Olawale and Sun [1] state that the three main elements, time, cost and quality, must be achieved. Cost overrun of construction projects is not a new issue across the construction industries and can be seen as a common issue across project sites. Flyvbjerg’s et al [3] research further shows that most of the projects in the construction industry globally are not completed within the project cost. Cost overrun of construction projects can be viewed as a global issue that requires collective efforts from all the construction industry players [4]
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