The main reason for this study to any goal-oriented personnel is to instil knowledge and make them understand cost overruns, delays plus risks involved in typical projects or plans of construction. According to various articles, the government is the biggest customer of the most construction industries in the most nations thus making most of the government projects to go through extensive delays thus leading to increment in cost and initial time allocated to finish the project. This type of problem was in utmost cases viewed in those types of contracts which were traditionally given whereby the contract could only be given to the lowest bidder. In most developing countries is where this type of procurement strategy is felt.
Projects completed on time shows that the type of construction industry assigned that particular job is efficient when it comes to construction. Most of the contractors are concerned with the cost, time and quality while procuring of most construction projects take place based on two parameters namely cost and time but the success of most projects are based on time as emphasized by most literature.
The division of construction takes place in three phases that are, commencement of the project, project design and construction of the project. The construction phase is the point where most project delays are experienced and it also involves many unforeseen factors. In construction, delays are considered as time overrun either when the agreed date by the parties involved is surpassed in regard to the validity of the project or failure to meet the client’s expectation on time as specified in the contract signed by both parties.
The loss of revenue caused by delays is incurred by the owner and this is experienced through lack of production amenities, reliance on current amenities and lack of rentable space. These delays some results to increment in overhead cost to the contractor due to long working period, increase in the cost of material caused by inflation and also increase in the cost of labor. The process of construction is the question of many factors which cannot be predicted and also variables which originate from numerous sources. These sources include the availability of resources, parties’ performance, ecological settings, completion of the project within the time specified is rare, other parties’ involvement and contractual relations.
The occurrence of cost and schedule overruns result due to numerous factors. In case the schedule or the project cost surpass the target put in place, compromising of client satisfaction and the funding profile no longer matches the required budget. Sometimes delays are accompanied by the and this cause a devastating impact on consultants and contractors in terms of lawsuit, suspicion, growing in accusatorial relationships, problems in cash flow, adjudication and a universal sensation of nervousness towards other stakeholders. These problems are mostly experienced in many developing countries.
Additional costs are incurred when there is a delay of the project which results from extension or acceleration. The obvious practices normally entail a percentage of the project cost as an emergency allowance to the incurred costs of the contract hence grounded to the judgement though associated costs as per the agreement and the addition of more time in most cases are the glitches between the contractor and the owner to decide whether the contractor should be permitted to claim the additional cost. Dissatisfaction to all parties involved is caused by delays in project construction and completion of the project within the budgeted cost and time is the role of project manager.
Numerous studies have been taken concerning factors which causes cost overrun and delays, and upsetting quality, wellbeing and yield and exact problems in the exact type of project and all the studies normally focuses on a definite part of project performance. This is why practitioners have to identify a common problem experienced on the past projects while taking on their construction business environment which is a good opinion.
In the year 2003 Frimpong came up with the importance of project management system which assists in managing the project effectively. Project management simply involves reinforcement of skills, tools together with technique to all activities involved in the project in order to meet the project necessities. Managing of resources, machines, materials, money, and methods used all entails project management and this helps those projects which are mismanaged which incur cost overruns and delays. There are two distinct phases in any construction project that is the preconstruction phase which is the period where the tender is awarded to the contractor and the construction phase where begin after awarding the contract up to the completion of the project. In both phases, delays and cost overrun are experienced but it majorly takes place during the construction phase.
Factors resulting to cost overrun and delay are the essential part of the most projects notwithstanding the much-shared information in project management includes;
The first factor identified as a reason behind cost overrun in the most project include design errors since the client requirements should be noted properly and the blueprint to attaining worthy technical input to project implementation which is normally charted out base on project design. A design having errors simply means an insufficient or wrong illustration of project deliverables and this leads to applying the technique wrongly in achieving results. Carrying out estimation based on design errors also lead to cost overrun and delay.
The scope change also causes cost overrun and delay. All project estimation, schedule, quality, and plans are designed based on original project cost. It means that the whole original plan will have to be reviewed in case there is any change in the project during execution, therefore, both reviewing of the budget, schedule and quality will have to be revised thus leading extension of time and more resources will be required as against the baseline. As a result of the change in the scope precious resources for the projects will be diverted to doing that were not acknowledged in the original scope of the project.
Unsuitable and insufficient procurement and defective management system also cause cost overrun and delay in the project since the contract that has not highlighted the whole project situation which may cause argument in contract system. In case the previous contact does not entirely stipulate the applicable aspects of project work, then it leads to arbitration, long period of negotiation, mitigation resulting from work change orders.
The delays and also cost overrun are also caused by project complexity which is simple terms is the project size. Like in most case, most of the big projects take a very long period of time when it comes to planning formulation and implementation period as compared to projects which are small in size. This could be brought about by the change in the cost of material, inflation, and changes in initial rate. Projects whose complexity is of high degree tend to have schedules, plans, and estimations which are multifaceted in nature and this leads to neglecting other features of project plan if not looked keenly.
Lastly, delays and cost overruns are caused by potential factors which are found in post-execution phase which is the last phase of the project. Since it is the final phase, however, is mostly ignored by many organizations more so in multi-project environments. Documentation of the project poorly slow down client approval and failing to close the work order can permit wandering charges to be made to the project and delays. That is why the team which took part in the project should be decommissioned on time after completion of project work. Implementation of project closure phase should be done as planned to avoid to avoid delay and cost overrun by ensuring.
Time overrun is simply the extension beyond completion dates traceable to the contractors. Delays have impacts on the progress on projects impact and postponed of project activities. The actual completion date is different the expected date and the time overrun is simply the defined as time extended to complete the project neglecting the planned date. Overall delay in the project comes as a result of project activities having both internal and external cause and impact relationship.
This is simply excess of actual cost over budget and sometimes knowns as cost escalation or budget overrun. Cost overrun is simply the change in contract amount divided by the original contract award amount.
Cost Overrun=Final Contract Amount- Original Contract Amount divided by the original Contract Amount
The questionnaires were designed to assist in gauging the regularity of happening, severity and the significance of the acknowledged causes (Arkan, 2008). The distribution of questionnaire was done to consultants, contractors, and the clients. The questionnaire was designed depending on earlier literature, present construction exercise, project location and individual experience (Arkan, 2008).
The first phase included an interview and a literature. The first phase identified the causes of delay while the development of the second phase came as a result of these delays. The overall population comprises architects, public owners, and the contractors. The questionnaire was distributed at a random to contractors, clients, and architects representing dissimilar specialization in large projects (Assaf, 2010).
There will be complete compliance with the integrity and the confidentiality during and after the project completion. An undertaken will be provided to the participants in this regard during the survey process (Arkan, 2008).
Risks contained in the falsification of the data collected – Risk mitigation by increasing the scope of data collection. The management of risk of cost overruns project delivery within the budget is one of the challenges the construction industry (Eldaway, 2009)
The project construction is risky both management and in the physical implementation. This study explores the correlation of schedule performance and correlation of delay to evaluate risks associated with project construction and time overrun (Emawati, 2007). A risk related to delay in case the schedule performance index is observed is greater than the superior limit and larger than when schedule performance index is below the inferior limit. Identification of a company own risk is determinable when considering its own history and support decisions like doing corrective actions (Emawati, 2007).
Delays are a common risk and have an important impact on the managing construction projects. The image of the company is destroyed by the delays and it leads to higher costs. That is why the probability of the project to be delayed is simply higher than the probability of the project not to be delayed. These findings strengthen the Prominence of the risk controlling of delays to decrease their harm and happening (Nielsen, 2011).
Risk can be assessed whether it is low, normal and high by simply carrying out the calculations and using the SPI limit. This method is advantageous in permitting the company to come up with limits based on their personal projects (Nielsen, 2011)
There is exhaustive data available in the literature regarding preliminary information about the factors responsible for cost overruns, delays as well as the risks associated with the construction project management. Chien (2014) identified about 13 risk factors for BIM modelling requirement. Waithera (2017) indicated that the factors responsible for the cost overruns in construction factors depend on the specific case and mentioned specific factors responsible for cost overruns in Kenya high way projects. Cheng (2014) classified cost overrun factors into about 90 factors and presented them. Shehu (2014) performed the critical evaluation of the cost overruns in Malaysian construction project management scenario and indicated that the major cost overrun is due to the time delays of the project. Larsen (2015), emphasized that the factors are beyond the capabilities of the project manager. Using Radar charts for multivariate analysis, overruns associated with cost and delays in the projects are analyzed and rooted to the findings in public sector construction projects (Adam, 2017). Critical risk factors need to be estimated early in the project bidding stage itself and such estimation will provide information for better scheduling and cost of the construction projects (Renuka, 2014). The pi method is very effective in segregating the construction project risk factors and about eight major risk factors are identified in the project and an SPSS method is proposed for the sake of risk assessment in the construction projects (Renuka,2014). Analytic Hierarchy Process (AHP) is proposed for relative ranking and risk assessments in the construction projects in Lithuania (Gudiene, 2014). Successful strategy deployment (Tsiga, 2016) and execution of the project is essential for making project management a successful (Yazdani, 2014).
According to Baldwin et al (1997), the factors causing delays in other countries include the shortage of labour, subcontractor’s delays, weather conditions, adequate construction materials, delayed payment and also contractor’s defects which were experienced in Turkey. Meanwhile, in Indonesia, many projects faced delays as a result of low labour productivity, scarcity of materials, poor planning, and change orders. The lee-ways to delay in construction projects in Malaysia has been worked on in numerous papers and this is according to Abdul Kadir et al (2005), where the essential factor causing delay is the inadequate material, failing to pay suppliers on time, drawings are submitted very late, change orders, poor management of the site. In other questionnaires, Soon and Sambasivan (2007) described ten reasons including lack of experience, inadequate material, inadequate labour supply, poor management of the site, poor planning and late payment.
Battaineh and Odeh (2002), mentioned contractor’s experience as an essential time-consuming factor in Jordan but not a similar factor in that particular country as mentioned by Sweis et al (2008). Hamzah et al (2012) listed numerous factors including delivery of materials, labour productivity, inadequate equipment, labour productivity, slow decision making and these were delays in Malaysia. Any individual can ascertain that though many different studies highlight a number of similar items as the delaying factors in Malaysian, construction project, having non-recurrent factors between dissimilar studies is normal. Differences when it comes to determining factors can be traced back to a number of inconsistencies between the studies such different methods of surveying, the number of respondents were different, the respondent’s profile was dissimilar, different statistical methods used. There are numerous papers that have identified the reasons behind construction project delays in developing countries (Eldaway, 2009).
Numerous research has been carried out to identify the root cause of cost and time overrun when dealing with the construction of projects as mentioned by Sai Murali, Reddy and Raya(2016). It is important to scrutinize and appraise the common factors causing these constraints. When construction is taking place, the responsibility of project manager is to make he or she monitors the cost and time so that at the end of it to avoid overruns for both time and cost (Eldaway, 2009).
Ramanathan and Narayanan carried out the qualitative analysis of cost overrun and time delay in designing and building of-of projects (Assaf, 2010). Projects become complicated when it involves large participants from multi-discipline, too much-specialized work, tighter schedule, huge contract values. The success of the project relies on two important parameters, that is time and cost. The study focuses on multiple designs and builds project which consists of complex risk and administered by fixed contract sum. Application of this qualitative research took place in three stages of projects for the delay in time and two aspects of cost overruns (Nielsen, 2011)
Conclusion
This paper concentrate on the reasons for the delay in project construction. The cost overrun and time has been a major problem reported by numerous project implementing projects, In the domain of risk management and construction project budget, two conclusions can be drawn. First and foremost, information for a completed project results to additional correct capital cost budget approximations. Availability of information is among the most thoughtful complications when estimating the budget and possible solution to this problem is simply allocating extra time in primary briefing stages of design so that to outline clearly the complexity and the scope of the project.
The key conclusion is that change classification may be done as the utmost risk and it ought to be made clear that it is not only a danger but if efficiently accomplished, it can turn o chance to deliver better value for money or make savings. Research to be done in future should be done while considering the monitoring of industrial risk trend to categorize budget risk and comprehend how it evolves.
References
Adam, A., Adam, A., Josephson, P. E. B., Josephson, P. E. B., Lindahl, G., & Lindahl, G. (2017). Aggregation of factors causing cost overruns and time delays in large public construction projects: Trends and implications. Engineering, Construction and Architectural Management, 24(3), 393-406. Arkan, A. (2008). Assessment of risk management in Nigeria construction company. Informa.
Assaf, A. (2010). Reasons for delays in public projects. Cambridge University Press.
Cheng, Y. M. (2014). An exploration of cost-influencing factors on construction projects. International Journal of Project Management, 32(5), 850-860.
Chien, K. F., Wu, Z. H., & Huang, S. C. (2014). Identifying and assessing critical risk factors for BIM projects: Empirical study. Automation in Construction, 45, 1-15. Doloi, F. (2003). Managing risk of the construction process. Adventure Works Press.
Eldaway, B. (2009). Economics Performance assessment for the Construction industry in the Southeastern United States. Harper & Collins.
Emawati, S. (2007). The significant factors causing delay building construction project in Malaysia. Adventure Works Press.
Nielsen, G. (2011). Quantification of delay factors using the relative importance index method for construction. Nairobi University Press.
Larsen, J. K., Shen, G. Q., Lindhard, S. M., & Brunoe, T. D. (2015). Factors affecting schedule delay cost overrun, and quality level in public construction projects. Journal of management in engineering, 32(1), 04015032.
Gudien?, N., Banaitis, A., Podvezko, V., & Banaitien?, N. (2014). Identification and evaluation of the critical success factors for construction projects in Lithuania: AHP approach. Journal of Civil Engineering and Management, 20(3), 350-359.
Renuka, S. M., Umarani, C., & Kamal, S. (2014). A review of critical risk factors in the life cycle of construction projects. Journal of Civil Engineering Research, 4(2A), 31-36.
Shehu, Z., Endut, I. R., & Akintoye, A. (2014). Factors contributing to project time and hence cost overrun in the Malaysian construction industry. Journal of Financial Management of Property and Construction, 19(1), 55-75.
Tsiga, Z. D., Emes, M., & Smith, A. (2016). Critical Success Factors for Projects in the Space Sector. The Journal of Modern Project Management, 3(3).
Yazdani-Chamzini, A. (2014). An integrated fuzzy multi-criteria group decision-making model for handling equipment selection. Journal of Civil Engineering and Management, 20(5), 660-673.
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