Search Results for « Cost Overrun »

The aim of this study is to investigate the factors that may cause overrun of the planned cost, allocated resources and scheduled time of infrastructure engineering projects in Jordan. To achieve the goal of this study, final reports of a sample of 40 public infrastructure projects implemented during the period from 2000 to 2008 were collected and analysed. The final reports were collected from the Ministry of Public Works and Housing (MPWH) of Jordan, which administers the public infrastructure projects in the capital Amman. The analysis showed that delay and cost overrun of infrastructure projects were caused by 20 factors according to the records in the collected final reports of projects. The results showed that Terrain and Weather conditions are the top factors causing completion delay and cost overrun in infrastructure projects in Jordan.

The Indian construction industry is an integral part of country's economy and its growth and a conduit for a substantial part of India's development investment.The industry plays a pivotal role in developing the country's infrastructure, a pre-requisite for high levels of economic growth.Most construction projects experience cost overrun and it put massive financial burden on the client or owner.Therefore this research was carried out to identify the causes leading to cost overrun in construction projects.Desk study along with questionnaire survey was used to identify the causes of cost overrun.A total of 30 filled questionnaires were collected from clients, consultants and contractors.The respondents were asked to rate the listed causes on the basis of probability of occurrence and severity of impact.Importance of each cause was calculated on the basis of cumulative effect of occurrence and impact.Spearman rank order correlation analysis was used to evaluate whether consensus of opinions exists between groups of respondents (client versus consultant, client versus contractor and consultant versus contractor).From the analysis of the results it was found that consensus of opinion exists between respondents on the causes of cost overrun.The results showed that, slow decision making, poor schedule management, increase in material/machine prices, poor contract management, poor design/ delay in providing design, rework due to wrong work, problems in land acquisition, wrong estimation/ estimation method, and long period between design and time of bidding/tendering are the major causes of cost overrun.The major causes as identified by this research were compared with the findings from other countries and there were fairly relevant similarities.

A commonality among state Departments of Transportation is the inability to complete projects on time and within budget. This project assessed the extent of the problem of cost overruns, time delays, and change orders associated with Indiana Department of Transportation (INDOT) construction projects, identified the reasons for such problems, and finally developed a set of recommendations aimed at their future reduction. For comparison purposes, data from other states were collected and studied using a questionnaire instrument. The analysis of the cost overrun, time delay and change order data was done using an array of statistical methods. The literature review and agency survey showed that time delays, cost overruns and change orders are generally due to factors such as design, unexpected site conditions, increases in project scope, weather conditions, and other project changes. The results of the agency survey showed that with regard to the problem of cost overruns, INDOT has an average rank compared to other states. Between 1996 and 2001, the overall rate for cost overrun amounts for INDOT projects was determined as 4.5%, and it was found that 55% of all INDOT contracts experienced cost overruns. It was determined that the average cost overrun amount and rate, as well as the contributory cost overrun factors differ by project type. The average cost overrun rates were as follows: bridge projects -- 8.1%, road construction -- 5.6%, road resurfacing -- 2.6%, traffic projects -- 5.6%, maintenance projects -- 7.5%. With regard to time delays, it was found that 12% of all INDOT contracts experience time delays, and the average delay per contract was 115 days. With regard to change orders, the study found that the dominant category of reasons for change orders is “errors and omissions”, a finding which is suggestive of possible shortcomings in current design practices The statistical analyses in the present study showed that the major factors of cost overruns, time delays, and change orders in Indiana are contract bid amount, difference between the winning bid and second bid, difference between the winning bid and the engineer’s estimate, project type and location by district. Besides helping to identify or confirm influential factors of cost overruns, time delay and change orders, the developed regression models may be used to estimate the extent of future cost overruns, time delay and change orders of any future project given its project characteristics and any available contract details. Such models can therefore

This paper investigated cost overruns and delays in Qatari public construction projects. An extensive review of regional and international publications was conducted to get a better understanding of the problem and the various methodologies that were used to analyze it. The data that was collected from Qatar public work authority ASHGHAL included 122 public road, building, and drainage projects. ANOVA method was used for data analysis and inference. A regression analysis was also conducted to establish the relationships between project contract prices and cost overruns and to develop prediction models for estimating cost overruns. Two linear regression models were developed for predicting cost overruns for building and drainage public projects, respectively. Cost overruns for building projects increased with contract prices. On the other hand, cost overruns for drainage projects decreased with increasing contract prices. A significant effort was spent in collecting data on cost overruns and delays in public construction projects. However, data confidentiality did allow the collection of enough data to ensure the robustness of the developed regression prediction models.

Many variables have an impact upon construction time and cost overruns in Indonesia. A questionnaire survey was undertaken of project managers working on high-rise construction projects in two Indonesian cities: Jakarta and Yogyakarta. The variables identified were ranked according to their perceived importance and frequencies of occurrence. Inflationary increases in material cost, inaccurate material estimating and project complexity are the main causes of cost overruns. The predominant causes of delay are design changes, poor labour productivity and inadequate planning. Using factor analysis techniques, delay and cost overrun variables were grouped into factors, and their relationships analysed. Although Indonesia specific, the results reflect construction management problems common to developing countries.

Major restructuring including commercialisation of the water authorities in Australia during the past several decades has resulted in the loss of much valuable information on dam infrastructure costs. This paper sets out to provide an Australian perspective on dam costs and dam cost overruns, examine patterns of dam costs and cost overruns, and develop a good predictor of costs and cost overruns for the Australian situation. Several cost metrics, dam costs and related data, were collated for 98 dams constructed across Australia since 1888. Dam costs, operation and maintenance (O&M) costs, and construction overrun costs were related to independent variables including dam site terrain characteristics and catchment and climate attributes. Each metric was related through multiple regression to mainly physical and climate attributes associated with the dam. Multiple correlation coefficients account for between 50% and 80% of the variance in the dependent variable. The exceedance range (defined as 75% exceedance to 25% exceedance) of final dam costs (2016 AUD) (98 dams) is from $393 per ML of reservoir storage to $2040 per ML. Annual O&M costs (33 dams), expressed as a % of final dam cost, varies from 0.14% to 0.35%, though these O&M costs do not include major upgrades. The results of this study of Australian dams are in keeping with international studies that have found the estimated costs of large infrastructure projects are systematically biased downwards. In this study the median and mean cost overruns (40 dams), expressed as a percentage of the dam cost estimated immediately prior to construction, are 49% and 120% respectively with the smallest and largest cost overrun values being −48% and 825% respectively. Based on the available data dam cost overruns appear to be more prevalent in sedimentary rock than hard rock (e.g. igneous and metamorphic rocks) settings. The strong likelihood of dam cost overruns occurring has implications to forecasted benefit-cost ratios, and supports assertions that large dam cost and contingency estimates should be checked at pre-feasibility and feasibility stages by an independent organisation and by persons highly experienced in dam design, construction and costing.

Results from the first statistically significant study of the causes of cost escalation in transport infrastructure projects are presented. The study is based on a sample of 258 rail, bridge, tunnel and road projects worth US$90 billion. The focus is on the dependence of cost escalation on: (1) the length of the project‐implementation phase, (2) the size of the project and (3) the type of project ownership. First, it was found, with very high statistical significance, that cost escalation was strongly dependent on the length of the implementation phase. The policy implications are clear: decision‐makers and planners should be highly concerned about delays and long implementation phases because they translate into risks of substantial cost escalations. Second, projects have grown larger over time, and for bridges and tunnels larger projects have larger percentage cost escalations. Finally, by comparing the cost escalation for three types of project ownership—private, state‐owned enterprise and other public ownership—it was shown that the oft‐seen claim that public ownership is problematic and private ownership effective in curbing cost escalation is an oversimplification. The type of accountability appears to matter more to cost escalation than type of ownership.