Factors causing cost variation for constructing wastewater projects in Egypt

Abstract

Cost is one of the major considerations throughout the project management life cycle and can be regarded as one of the most important parameters of a project and the driving force of project success. Despite its proven importance, it is common to see a construction project failing to achieve its objectives within the specific cost. Cost variation is a very frequent phenomenon and is almost associated with nearly constructing all wastewater projects. Maintaining steady cost projection on wastewater projects had been recently an issue of serious concern, both to the client and project contractors. Cost deviation from initial cost plan had been prevalent on construction sites. However, little or no effort has been made to curtail the phenomenon, this research work attempts to identify, investigate and rank factors perceived to affect cost variation in the Egyptian wastewater projects with respect to their relative importance so as to proffer possible ways of coping with this phenomenon. To achieve this objective, author invited practitioners and experts, comprising a statistically representative sample, to participate in a structured questionnaire survey. Brain storming was taken into consideration, through which a number of cost variation factors were identified for constructing wastewater projects. Totally 52 factors were short-listed to be made part of the questionnaire survey and the survey was conducted with experts and representatives from private, public and local general construction firms. The data were analyzed using Relative Importance Index, ranking and simple percentages. It was analytically discovered that factors such as: (1) Lowest bidding procurement method; (2) Additional work; (3) Bureaucracy in bidding/tendering method; (4) Wrong method of cost estimation; and (5) Funding problems were critical for causing cost variation, while (1) Inaccurate cost estimation; (2) Mode of financing and payment for completed work; (3) Unexpected ground conditions; (4) Inflation; and (5) Fluctuation in prices of raw materials are also responsible. The study concluded with recommending, ensuring adequate and available source of finance, allocating sufficient time and funding the design phase while cost estimators should be aware of the problems, but must not allow to deflect them from their primary tasks, which must always use all data and time available to produce the best possible estimate, improve owner’s project management procedures, material bulk purchase, establishing fraudulent system of individual accountability to discourage stealing and other related vices, adequate planning by breaking project planning into short term achievable goals, medium term planning and long term planning, and through estimation process for projects cost calculations, with vigilant planning, keeping in view trends of inflation and depreciation factors, construction cost variation trends in wastewater projects with lead to smoother implementation and achievement of desired cost control. Also, this paper serves as a guide and reference for contractors and construction managers for more effective management in constructing wastewater projects to achieve a competitive level of quality and a cost effective project.