Financial Mismanagement: A Leading Cause of Time and Cost Overrun in Mega Construction Projects in Pakistan

Cost overruns are a global challenge to successfully completing construction projects. Cost overrun has a substantial impact resulting in most construction projects failing to be completed. Several factors have contributed significantly to the industry's decline. The factors were discovered in the literature, assessed, and applied to the construction industry in Pakistan. This study scrutinized and identified the relationships between the factors causing cost overruns in the Pakistani construction industry using the Partial Least Squares Structural Equation Modelling (PLS-SEM) approach. The structural model was created and tested with Smart-PLS software using data from a questionnaire survey of 131 construction practitioners. Six constructs were used to categorise the factors. The model identifies 21 critical factors in Pakistani construction projects, with resource management ranking first. Contract management issues can also contribute significantly to project cost overruns. Model assessment results indicate that the developed model has a substantial power of explaining the factors of cost performance while R2 value showed that 45.7% variance is explained by the model. The model developed model will serve as a jumping-off point for academics, researchers, and practitioners in developing a cost-control system. It is suggested that establishing an efficient and effective contract management protocol among stakeholders throughout the design and supervision stages is extremely beneficial for improving project cost performance and significantly reducing time overruns.

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“…Mistakes and Errors in design [34]; [48]; [44]; [42]; [46]; [47] DPM04C Delay in Design [42]; [53]; [21]; [52]; [47]; [57];…”

Section: Dpm02cmentioning

confidence: 99%

Structural model of cost overrun factors affecting Pakistani construction projects

Memon

Soomro

et al. 2023

Mehran Univ. res. j. eng. technol.

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“…Questionnaire arbitration is a good approach for professionals to see if the questionnaire is measuring what they want to measure [19]. According to the arbitration, the questionnaire was submitted to a group of contracting experts in funding of residential complexes projects.…”

Section: Questionnaire Arbitrationmentioning

confidence: 99%

Evaluating the Efficiency of Finance Methods in Residential Complex Projects in Iraq

Khameesa

altaay

2022

Eng. Technol. Appl. Sci. Res.

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Financial funding of a construction firm plays an important role in all aspects of the process development. It has been noted that financial crises have a direct impact on the construction industry. The Iraqi government, whether locally or globally, has faced a severe shortage of financing which has resulted in incomplete projects. Due to the financial crisis that Iraq went through which led to the suspension of many residential complex projects and the difficulty of the use of public financing methods, we researched the private financing (public-private partnership) methods instead of public financing methods in residential complex projects implementation. This study verified the financial problems and the factors that relate to the possibility of their occurrence with the use of a questionnaire that was designed and distributed to professionals in the field. Arbitration of the questionnaire, pilot study, questionnaire distribution, and statistical tests were conducted. The T-test (paired samples T-test) was used to find out if there are differences between the public and private financing methods. The results showed that the private financing (public-private partnership) methods, under the current conditions in Iraq, are better than the public financing methods.

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“…Firm policies, project policies, and poor collaboration of parties are not very important for cost overrun. Shaikh [9] identified five main factors as common in causing time and cost overrun in megaprojects in Pakistan. These main factors are financial issues, weather conditions, political approach, design changes, and owner interference.…”

Section: Literature Reviewmentioning

confidence: 99%

Adaptation of a Cost Overrun Risk Prediction Model to the Type of Construction Facility

Plebankiewicz

Wieczorek

2020

Symmetry

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To assess the risk of project cost overrun, it is necessary to consider large amounts of symmetric and asymmetric data. This paper proposes a cost overrun risk prediction model, the structure of which is based on the fuzzy inference model of Mamdani. The model consists of numerous inputs and one output (multi-input-single-output (MISO)), based on processes running consecutively in three blocks (the fuzzy block, the interference block, and the block of sharpening the representative output value). The input variables of the model include the share of element costs in the building costs (SE), predicted changes in the number of works (WC), and expected changes in the unit price (PC). For the input variable SE, it is proposed to adjust the fuzzy set shapes to the type of building object. Single-family residential buildings, multi-family residential buildings, office buildings, highways, expressways, and sports fields were analyzed. The initial variable is the value of the risk of exceeding the costs of a given element of a construction investment project (R). In all, 27 rules were assumed in the interference block. Considering the possibility of applying sharpening methods in the cost overrun risk prediction model, the following defuzzification methods were investigated: the first of maxima, middle of maxima, and last of maxima method, the center of gravity method, and the bisector area method. Considering the advantages and disadvantages, the authors assumed that the correct and basic defuzzification method in the cost overrun risk prediction model was the center of gravity method. In order to check the correctness of the assumption made at the stage of designing the rule database, result diagrams were generated for the relationships between the variable (R) and the input variables of individual types of buildings. The results obtained confirm the correctness of the assumed assumptions and allow to consider the input variable (SE), adjusted individually to the model for each type of construction object, as crucial in the context of the impact on the output value of the output variable (R).

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Financial Mismanagement: A Leading Cause of Time and Cost Overrun in Mega Construction Projects in Pakistan

Cited by 18 publications

References 15 publications

Structural model of cost overrun factors affecting Pakistani construction projects

Structural model of cost overrun factors affecting Pakistani construction projects

Evaluating the Efficiency of Finance Methods in Residential Complex Projects in Iraq

Adaptation of a Cost Overrun Risk Prediction Model to the Type of Construction Facility

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