Analysis of the Main Causes of Cost Overruns in Construction Industry in Developing Countries and the UK

Abstract

Cost overruns problem is still a critical issue despite many improvements are being made in the management of construction projects. Therefore, this research aims to identify the main causes of cost overruns in construction industry in developing countries and to make a critical analysis with the ones in the United Kingdom. In addition, some existing studies regarding cost estimation and cost overruns have been reviewed by the authors. In order to carry that out, in this research the authors used a secondary data collection such as books, journals, international standard and some Internet information through few search engines, like Google scholar, Science direct, Emerald Insight etc. Besides that, a qualitative research method has been used to review considerable number of books, articles, website, journals etc. In the findings, it has been concluded that the major common causes of cost overruns in construction projects in developing countries and in the United Kingdom were: change in design, inflation, increasing of the material’s price, project complexity, change in the project scope and inadequate contract and procurement method. The reasons behind each of these factors and how to minimize them have been critically explained.