Cost Overruns and Failure inConstruction Projects

Abstract

Construction projects are facing a greater number of uncertainties and more severe risks, which could cause much bigger losses than in the past, therefore, undertake of identification the factors that influence the cost overruns are indispensable. Resources of construction projects including the man, money, methods, machines, materials, and the market, all of these resources need to be arranged so that the project resources can be used effectively and efficiently or optimally. The purpose of this study was to identify the factors that cause the cost overruns in construction projects. Based on the results of the identification of the factors that cause the cost overrun on the implementation of construction project obtained several factors: estimated costs (X1), implementation and working relationships (X2), and the project documents (X3). I. Introduction In the implementation of projects, often projects experiencing cost overruns. Therefore, the project financing is the primary consideration, as usually involves a large number and vulnerable to the risk of project failure. Therefore, the implementation of construction projects requires a good project management, which aims to avoid or minimize project risks that may occur, including the risk of cost overrun and delay in execution time. A project will be successful if in accordance with the cost or budget has been planned, on time, and within specifications. Thus, a much-needed level of expertise, knowledge and experience that high in estimating the cost of the project until the project's cash flow management during the implementation stage, expertise in coordinating project resources, and project control are good so there is no cost overrun that could harm the