AN ASSESSMENT OF CONSTRUCTION PROJECTS COST OVERRUNS IN THE PUBLIC SECTOR

Abstract

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.