Abstract
Cost overrun in construction projects is a common issue affecting project performance. After a review of the literature, a list of 39 cost overrun attributes were gathered and presented in a survey. The survey was distributed online to construction professionals. 101 complete responses were received and analyzed by importance index, frequency index, cost index, frequency adjusted cost index, Spearman’s rank correlation, student’s t-test, risk assessment and factor analysis. The results of the survey revealed that the main causes of cost overrun in construction industry include inaccurate cost estimation, improper planning and scheduling, unrealistic contract duration and requirements, frequent changes to the scope of work, frequent design changes, inadequate labor/skill availability, inflation on costs of machinery, labor, material and transportation.
Highlights
Cost has its proven significance as the key factor for any project success
The survey was distributed to various experts in the field of construction industry. 101 respondents evaluated the 39 cost overrun attributes based on importance (The cost overrun factor importance for a construction project), frequency (How often the attribute is implemented or considered) and the impact on cost (The extent of direct impact on project’s cost overrun)
This study focused on identifying the influential cost overrun attributes affecting construction industry
Summary
Cost has its proven significance as the key factor for any project success. A completed project may not be considered as a successful endeavor unless it falls within the cost limitations applied to it. It is very common to have a construction project that fails to achieve its specified cost goals. A lot of research has been performed to identify cost overrun attributes to improve the overall the construction industry performance (Azhar et al 2008; Elchaig et al 2005). This study was conducted to identify and rank the major causes of cost overrun in construction sector and to compare responses obtained from professionals who work in various segments of the construction industry. Assessing the risk perception of cost overrun through importance rating
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