A system dynamics approach to conceptualise causes of cost overrun of construction projects in developing countries

Asiedu, Richard Ohene; Ameyaw, Collins

doi:10.1108/ijbpa-05-2020-0043

Cited by 20 publications

(17 citation statements)

References 70 publications

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“…The administration of construction projects is multifarious as it involves several uncertainties related to design/specification/customer requirements/communication (Love et al , 2002). The key objective of project management is to complete the project deliverables to accomplish the set objectives, hence within budget, on time and within scope (Khattak and Mustafa, 2019; Asiedu and Ameyaw, 2020). Despite the contribution of construction projects in the growth of many countries, the literature shows that most of them fail to accomplish their expected objectives, and even in some cases, they are completely failed.…”

Section: Literature Reviewmentioning

confidence: 99%

Managing project scope creep in construction industry

Ajmal

Khan

Gunasekaran

et al. 2021

ECAM

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PurposeProject scope creep is a nightmare and nearly intolerable task. Most project managers struggle to curtail the expanse and degree of scope creep. This study examines different likely project scope creep factors associated with the construction industry projects.Design/methodology/approachAfter many brainstorming sessions with construction stakeholders, several project scope creep factors were identified. Then, a detailed survey was executed in big construction projects of the United Arab Emirates (UAE). The data were analyzed using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA).FindingsThe results derived and validated five conspicuous factors leading to project scope creep. Respectively, the highest and the lowest impact on project scope appears to be imposed by tasks/specifications and complexity/uncertainty.Practical implicationsIt offers crucial support to the project stakeholders in scrutinizing different factors that stand as hurdles to project success and allows them to seek remedies to resolve them.Originality/valueIt is among the first study in the region that identifies and validates the factors that hinder construction project success.

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Section: Literature Reviewmentioning

confidence: 99%

Managing project scope creep in construction industry

Ajmal

Khan

Gunasekaran

et al. 2021

ECAM

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“…However, the approach faces significant challenges that often derail collaboration and cooperation. PPP projects face many developmental challenges, including dynamic complexities, nonlinearities, and time delays [5][6][7][8][9]. Over the recent years, the critical concession variables (price and period) have presented significant complexities for decisions and policymakers [10][11][12].…”

Section: Introductionmentioning

confidence: 99%

Enhancing the decision-making process for public-private partnerships infrastructure projects: a socio-economic system dynamic approach

2022

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Public-private partnerships (PPP) have many critical socio-economic concession variables that need to be determined during the negotiation of the PPP contracts. However, their determination presents complexities to decision-makers due to these components’ interdependencies. Assessing the dynamic and interdependent relationships between the socio-economic concession components can enhance the development of PPP concessions. System dynamics (SD) techniques have provided a holistic system understanding of several complex structures from a holistic perspective. This paper aims to build a novel socio-economic SD model to facilitate the decision-making process for PPP projects via determining and assessing the adequate concession period, concession price (user-payment), government subsidy, and the capital structure (in the form of equity). A case study for a PPP toll-road project (I-4 Ultimate) is utilized to validate the proposed model’s results. Higher concession prices increased net present value (NPV) levels and PPP effectiveness. Simulation results showed that the variables are interdependent, and a change in the value of one variable will lead to a change in the values of the other variables. The results also showed that the concession price (user-payment) has a major influence on the concession variables. The model proposed in this study gives a holistic perspective of the complex interplay between PPP effectiveness and several socio-economic variables and is potentially valuable in facilitating and enhancing the decision-making process for PPP projects. While many scholarly discussions have been fronted on the use of system dynamics modeling in PPPs, the specific and unique combination of concession variables is the ultimate contribution of this study to the existing body of knowledge.

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“…The construction sector is believed to be a major contributor to the gross domestic product (GDP) of developed and developing countries. For instance, in Ghana, as a developing country, this industry accounted for about 12% of the overall GDP between 2010 and 2017 (Asiedu and Adaku, 2019), and this value has been asserted to be approximately 10% for developed European countries (Asiedu and Ameyaw, 2021). This industry also recruits a sizeable proportion of the workforce.…”

Section: Introductionmentioning

confidence: 99%

“…, 2016). That is to say, the available literature on this subject is replete with studies proposing various ranks for the identified causes without considering their interactions (Asiedu and Ameyaw, 2021; Durdyev, 2020). It is not still clear how the causes of cost overrun are interrelated, what the root, intermediate and immediate causes are and how identified strategies could be matched with the causes' interactions.…”

Section: Introductionmentioning

confidence: 99%

Modeling cost overrun in building construction projects using the interpretive structural modeling approach: a developing country perspective

Shoar

Yiu

Payan

et al. 2021

ECAM

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PurposeAlthough several studies have been conducted on the causes of cost overrun, they have mainly assumed that the causes of cost overrun are independent of each other, and few of them scrutinized the complex interrelationships between the causes. To fill the gap, this study aims to investigate the mutual interactions between the causes of cost overrun using interpretive structural modeling (ISM) and proposing strategies to tackle the causes considering their interactions.Design/methodology/approachCritical causes of cost overrun were identified through a comprehensive literature review. In total, 22 key causes are then refined based on the opinions of relevant experts involved in the Iranian building and construction sector. Using the nominal group technique, the causes' interactions were examined and represented via the ISM diagram. The causes were also classified using “matrix cross-reference multiplication applied to a classification (MICMAC)” technique.FindingsThe results showed that price fluctuation, claims, execution delay, delay in payment and change order positioned at the highest level of the obtained model can directly result in cost overrun, and corruption and poor contract management located at the base of the model are two major root causes of cost overruns. It was also concluded that more attention should be paid to the precontract phase of the project to address and prevent corruption and managerial issues deeply rooted in this stage.Originality/valueThe findings of this study provide a clear understanding of how different causes of cost overrun are related to each other and can ultimately assist project managers of different parties in choosing strategies to mitigate cost overrun in building construction projects.

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A system dynamics approach to conceptualise causes of cost overrun of construction projects in developing countries

Cited by 20 publications

References 70 publications

Managing project scope creep in construction industry

Managing project scope creep in construction industry

Enhancing the decision-making process for public-private partnerships infrastructure projects: a socio-economic system dynamic approach

Modeling cost overrun in building construction projects using the interpretive structural modeling approach: a developing country perspective

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