Causes of cost overruns in building construction projects in Asian countries; Iran as a case study

Abstract

PurposeCost overruns have been identified as the most significant challenge for construction sector stakeholders. Like many developing countries, the Iranian construction industry suffers from poor cost performance. So, the current research aims to investigate the causes of cost overrun in Iranian construction projects. This paper also reviews the findings of similar studies conducted in several Asian countries.Design/methodology/approachThis paper includes a literature review and a quantitative method with a questionnaire survey. The review is limited to the studies investigating the causes of cost overrun in an Asian country in the last decade. Moreover, the current research was conducted through a questionnaire prepared based on 43 common factors identified through the literature review. The required data were gathered from the representatives involved in handling construction activities in Iran. The collected data were analyzed based on relative importance index (RII), using the SPSS software package.FindingsThe results showed that poor site management, improper planning, fluctuation of prices of materials, lack of experience, and poor economic condition are the critical reasons for cost overrun in Iranian construction projects. The findings also indicated that among the studies conducted in Asian countries, the first three factors have the highest frequency.Originality/valueThis paper highlighted most studies concerning the cost overrun factors in construction projects in different Asian countries in recent years. Up-to-date knowledge helps to understand the complexity of this field in various periods and therefore minimizes the risk of cost overrun. This research can also be used as a benchmark for further studies to clarify similar issues in other developing countries.

Risk-supported case-based reasoning approach for cost overrun estimation of water-related projects using machine learning

“…The construction industry plays a crucial role in the macroeconomic stabilization in developing countries (Noorzai, 2022;Parchami Jalal et al, 2021). While the completion of projects in the planned duration and cost can achieve this success, cost overrun is one of the main obstacles to infrastructure projects reaching the predetermined objectives (Amini et al, 2022). Flyvbjerg (2009) states the cost overrun in infrastructure projects is between 20.4 and 44.7%.…”

“…Previously, several studies have identified causes of cost overruns and ranked them with different approaches. These studies were carried out in various sections of Iran's construction industry, such as buildings (Amini et al, 2022), mega hospitals (Balali et al, 2020), and urban construction projects (Heravi and Mohammadian, 2021). Therefore, the authors conducted a study into cost overruns in Iranian water-related projects, considering the existing gap.…”

“…Previously, several studies have identified causes of cost overruns and ranked them with different approaches. These studies were carried out in various sections of Iran's construction industry, such as buildings (Amini et al. , 2022), mega hospitals (Balali et al.…”

“…The authors noted the superiority of the algorithm used over the conventional model. Also, Amini et al. (2022) ranked crucial cases of cost overruns in Iran's construction industry using the questionnaire method.…”

“…The authors noted the superiority of the algorithm used over the conventional model. Also, Amini et al (2022) ranked crucial cases of cost overruns in Iran's construction industry using the questionnaire method. They identified the factors caused by poor management and planning, poor economic conditions, and lack of sufficient experience as the main reason.…”