Analysis of Factors Affecting Cost and Time Overruns in Construction Projects

Abstract

Cost overrun and delay in projects is a foremost challenge associated with nearly all projects in the construction industry. Inclination of construction projects towards overruns is because of risk and uncertainties involved in these projects. In developing countries, this problem is more severe as in some projects cost and time exceed double the amount than anticipated [1]. Construction plays an important role in economic growth of a country and also considered as largest generator of employment opportunities. Despite of its importance in development of a country, it has to face many challenges. In construction industry, a project is considered as successful if it meets both the criteria of budget and deadline [2]. Construction projects that fail to meet these criteria will have to face losses in terms of cost and time. To complete the project within budget and deadline, generally quality of project delivered is sacrificed. The major reason for these overruns is the lack of knowledge regarding the factors affecting cost and time. A construction project mainly consists of two major phases, namely pre-construction phase and construction phase. There is a need of applying risk management process in both the stages of the project. Both the stages play an important role in successful completion of project objectives. First stage is mainly about planning, scheduling, deciding budget, etc. Pre-construction is considered an important stage if managed precisely ensures more profits and less uncertainties [3]. Second stage consists of implementation of the things that was planned and scheduled in first stage with continuous monitoring and controlling.