Identifying factors causing cost overrun of the construction projects in India

Abstract

Delay and cost overrun are common phenomena in projects worldwide. However, these are especially severe in developing countries. In India as per MOSPI report, 235 projects out of 410 were severely affected cost overrun due to certain factors. A short questionnaire was conducted with 15 prominent factors responsible for cost overrun and forwarded to 190 constructional professionals across India. Total 85 responses were received and it was analyzed using various statistical tools such as analysis of variance (ANOVA) and factor analysis tool using SPSS. In this study, top three factors affecting cost overruns were identified such as price escalation of raw material, delay in planned activity and lack of co-ordination between construction parties which could be significantly responsible for cost overnun of construction project in India. Factor analysis method was also carried out to group the factors into three components of overall questionnaire. These components, such as client control component, project management component, and contractor control component, would be useful to the various parties involved in the construction activities. This paper also provides suggestive frameworks which have been framed after discussing with large number of construction professionals or expert.

Stakeholders’ Perception on Critical Cost Variation Factors in Malaysian Building Projects

“…Comparison among the studies showed that main causative factors of cost variation in this study and the study of Wanjari et al [16] is same i.e Fluctuations in cost of materials. The main factors of cost variation in the study of Kim et al [15] and Allahaim et al [18] is additional work and market changes respectively.…”

“…The main factors of cost variation in the study of Kim et al [15] and Allahaim et al [18] is additional work and market changes respectively. Planning related factor in ranked 2 nd in both this study and the study of Wanjari et al [16]. Design related causative factors of cost variation is more frequent in the study of Allahaim et al [18] while none of the top five factors is related to design in this study and Kim et al [15].…”

“…Design related causative factors of cost variation is more frequent in the study of Allahaim et al [18] while none of the top five factors is related to design in this study and Kim et al [15]. However, Regular changes in design is ranked 5 th in the study of Wanjari et al [16].…”

“…In India, Wanjari et al [16] assessed the factors that cause variation in cost of construction projects. Based on the 85 valid response from construction practitioners, the significant factors affecting project cost were: poor coordination between construction stakeholders, additional work, mistakes in design, incomplete tender documents, and poor relationship between management and labours.…”

“…The top five causative factors from this survey were compared with different previous studies as shown in Table 4. The study of Kim et al [15] in Vietnam , Wanjari et al [16] in India, and Allahaim et al [18] in Saudi Arabia were selected for comparison. The methodology of these studies might be different, the comparison is worthful to understand the causative factors of cost variation in different countries.…”