What causes cost overrun in highway strategic project in Indonesia?

Abstract

In 2016, Indonesia is concerning about the acceleration of public infrastructure projects through the existence of government strategy projects that spread across several project sectors, including in highway projects. Totally, there is a 44 highway strategic project in Indonesia and several of them are currently in Central Java. Unfortunately, as a national strategic project, even though all of these projects are prioritized in their construction process, the implementation of the national strategic projects are faced up problems especially related to high pressure from the government that has an impact to project cost even causing cost overrun including in highway strategic project. The research aim is to analyze factors causing cost overrun in highway strategic project from owner and contractor perspectives. This study is limited to a case study in Pemalang-Batang Highway Strategic Project. The analysis of the study is using Risk Breakdown Structure to identify risk factors causing cost overrun. From a total of 14 risks identify, both parties agreed to design change as the most risk factor in causing cost overrun in highway strategic project in Indonesia.