Stakeholders’ Perception on Critical Cost Variation Factors in Malaysian Building Projects

Samiullah Sohu,Ahsan Ali Buriro,Abd Halid Abdullah,Sasitharan Nagapan,Kaleemullah Kaleemullah

doi:10.28991/cej-03091140

Abstract

Effective cost management is one of the prime requirements for successful completion of construction projects. However, deviation from initially planned cost had been prevalent in construction projects. Cost variation has become a frequent phenomenon in construction projects and Malaysian building projects has no exclusion. This paper aims to establish the critical factors instigating cost variation in Malaysian building projects. Extensive literature review and field survey were two main methods for conducting this study. 34 factors causing cost variation were identified through deep literature review. A questionnaire survey based on identified factors, was carried out among construction stakeholders: clients, consultants and contractors involved in handling of building projects in Malaysia. The collected data was analyzed using SPSS V22 software, which enabled the ranking of factors based on their Mean Value. The results of the survey indicated that (1) fluctuation in cost of materials, (2) improper planning, (3) Incompetent main contractors, (4) poor site management, (5) and client financial problems were top five critical factors causing cost variation in building projects. The inferences drawn in this study can serve as a guide lines for construction stakeholders to achieve effective cost management in building projects.

Highlights

A construction project is regarded as successful, when it is completed within budget, before the due dates, and in accordance with the stakeholder’s specification and requirements
Literature review confirms that construction projects in both developed and developing projects are affected by cost variation
3) In order to check the relevancy of design questionnaire to Malaysian building project, pilot test was performed. 10 exports working in Malaysian building projects were participated in pilot test

Summary

Introduction

A construction project is regarded as successful, when it is completed within budget, before the due dates, and in accordance with the stakeholder’s specification and requirements. Despite the importance of cost for successful completion of construction projects, cost variation or cost increase is one of the main problem in construction industry and it is associated with majority of the construction projects [1]. Cost increase is the variance between initially planned cost and the final cost of a construction project at completion [2]. Aziz [4] cited that a construction project experience 33% increase in cost on average at the time of completion. Cost variation in construction projects is a global phenomenon, and it is common in both developed and developing countries. Literature review confirms that construction projects in both developed and developing projects are affected by cost variation. The severity and occurrence of cost increase is more common in developing countries [5]

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