Analysis of cost and time overruns in construction projects
By: Patel, Chintan Hitesh
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Contributor(s): Chaturvedi, Himanshu.
Publisher: Pune NICMAR 2015Edition: Vol.30(2), Apr-Jun.Description: 37-50p.Subject(s): Construction Engineering and Management (CEM)Online resources: Click here
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NICMAR Journal of construction managementSummary: Cost and time overruns have become issues of serious concern in the construction industry. With the government owning most of the infrastructure projects in India, the overruns have a detrimental effect on the national economy. Several measures like e-tendering, escalation clause, etc., were introduced to bring down the overruns but the overruns continue unabated. In the present study, possible reasons for the overruns are identified and they are verified through a questionnaire survey with government engineers to identify the critical reasons for the cost and time overruns. Statistical tests used in the study involve univariate analysis wherein rankings are tested for correlation using Spearman's rank correlation technique and one tailed tests. From the study, it's concluded that the factors affecting the cost and the time overruns aren't the same, but are interdependent. While the cost overruns are due to variations in the quantities estimated and actually executed, time overruns are attributed to short time for proper bid submission, lack of commitment of project participants, poor coordination etc. Some of the critical reasons for overruns are: (i) No budgetary support for the work, (ii) Inaccurate estimation resulting in too many non-tendered items, (iii) Design and drawing not ready at the time of estimation of quantities and cost, (iv) Frequent changes (deviations) in the work.
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Cost and time overruns have become issues of serious concern in the construction industry. With the government owning most of the infrastructure projects in India, the overruns have a detrimental effect on the national economy. Several measures like e-tendering, escalation clause, etc., were introduced to bring down the overruns but the overruns continue unabated. In the present study, possible reasons for the overruns are identified and they are verified through a questionnaire survey with government engineers to identify the critical reasons for the cost and time overruns. Statistical tests used in the study involve univariate analysis wherein rankings are tested for correlation using Spearman's rank correlation technique and one tailed tests. From the study, it's concluded that the factors affecting the cost and the time overruns aren't the same, but are interdependent. While the cost overruns are due to variations in the quantities estimated and actually executed, time overruns are attributed to short time for proper bid submission, lack of commitment of project participants, poor coordination etc. Some of the critical reasons for overruns are: (i) No budgetary support for the work, (ii) Inaccurate estimation resulting in too many non-tendered items, (iii) Design and drawing not ready at the time of estimation of quantities and cost, (iv) Frequent changes (deviations) in the work.
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