Measures to Mitigate Causative Factors of Budget Overrun in Malaysian Building Projects

Abstract

Completion of a construction within planned budget is one of the main criteria of project success. However, budget overrun has become a recurring phenomenon in construction industry, which can result in multiple negative effects such as loss of economy, disputes among construction stakeholders, project abandonment, and drop in construction activities. This study aims to identify factors causing budget overrun in Malaysian Building projects and then to establish mitigation measures for the identified significant causative factors. Literature review, questionnaire survey and interviews were used in this study. Detailed literature review results in identification of 28 causative factors of budget overrun. The significant causative factors of budget overrun in building projects in Malaysia were investigated through a questionnaire survey of 83 contractors, 57 clients and 40 owners. The feedback of questionnaire survey was analyzed statistically. It was revealed that the significant causative factors of budget overrun include improper planning, variation in materials price, poor site management, lack of communication between parties, frequent design changes, incompetent contractors, mistakes during construction, shortage of site workers, delay in material procurement, and low speed of decisions making. After questionnaire survey, interviews with 16 construction experts were carried out in order to develop mitigation measures for the top ten significant causative factors. Based on semi-structured interviews, a list of mitigation measures for each of the top ten significant causative factors were derived. The findings of this study can be useful for construction practitioners in controlling budget overrun and to achieve project success.

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