Structural modelling of cost overrun factors in construction industry

Construction industry contributes significantly in improving socio-economic growth of a country. However, this industry usually faces chronic problems such as time overrun, cost overrun, poor quality and others. Of all these, cost overrun is a major problem that occurs globally including Malaysia. Cost overrun is resulted from various factors which are essential to identify for improving cost performance in construction project. Hence, this study focused on identifying and modelling the factors of cost overrun for construction projects in Malaysia. Data collection was done through structured questionnaire, which was designed based on 78 factors found from the literature. Qualitative pilot study was done based on the opinions of 15 experts in the construction industry to improve the questionnaire by reducing the factors to 58. The questionnaire survey was carried out among clients, consultants and contractors. A total of 231 questionnaires were collected of which 213 responses were found valid. Partial Least Square Structural Equation (PLS-SEM) model was developed based on 8 categories/constructs generated through factor analysis test and found that Global Fit Index (GOF) of the model to be 0.37. The findings from the model indicate that all the 8 categories have significant effect on the cost overrun. The most significant category is contractor's site management related issues with path co-efficient value of 0.448. The developed model was validated statistically (using power analysis and predictive relevancy) and through interviewing 21 experienced practitioners. Statistical validation tests showed that the developed model had achieved substantial power in explaining cost overrun problem. All the experts agreed with the factors and also categories of the model have significant impact to cost overrun

Inhibiting Factors of Cost Performance in UAE Construction Projects

UAE construction industry frequently faces poor cost performance which commonly known as cost overrun problem. This problem is resulted from several factors and it is important to identify these cost overrun factors in order to avoid and minimize it. Hence, this paper focused on determined the relevancy of factors affecting cost performance in construction projects of UAE. Through a review of past research works conducted globally, 27 factors of cost overrun were listed and used for developing a structured questionnaire. A survey was conducted with 33 practitioners from client, consultant and contractors organizations involved in handling construction projects in UAE. The respondents were requested to state their perception regarding the relevancy of each of the factors that was perceived in context with cost overrun issue using 5-points Likert scale. The responses were analysed using average index method and the results found that all the 27 factors are relevant with construction industry of UAE in causing cost overrun. These factors can be used for further investigation to uncover critical problems of cost overrun

Ranking of the Factors Causing Cost Overrun in Infrastructural Projects of UAE

Achieving completion of the projects within stipulated cost is the fundamental requirement of any client involved in construction projects. Especially when the projects are funded by government with the revenue generated from public where it supposed to produce more development with less investment. Unfortunately, many of the construction projects fail in meeting this basic criteria globally including UAE. Hence, this study drew attention to the factors responsible for cost overrun in construction of infrastructure projects in UAE. Data was collected through structured questionnaire survey from practitioners representing the client, consultant and contractors firms involved in infrastructure projects of UAE. Investigation involved 27 common factors categorized in three groups as design & planning related factors, management related factors and resource related factors. With the statistical analysis of 59 completed survey forms, it was revealed that lack of coordination at design phase, uncompleted design on the tender's time and frequent design changes are top 3 factors in design and planning group while in management group top 3 factors causing cost overrun are poor supervision and timely instruction from contractor, contractual claims (ex. extension of time with cost claims) and poor site management. Contractor's financial constraints, poor labour productivity and resource deficiency and shortage of technical personnel (skilled labour) are reported as major resource related factor causing cost overrun in infrastructural projects of UAE. The practitioner should work out for controlling these factors to complete the projects within the stipulated cost and avoid cost overrun

Strategic Management Indicators for Sustainable Road Traffic Management

Human is very critical and important asset of any nation. Human security is the prime need. Also, at organizational level, the business success depends on the human efficiency. Hence, strategic management is very important to achieve effective performance. This paper assessed various indicators and attributes of strategic management. However, the limitation of this study was to focus on strategic management used in traffic management used by public security sector of Abu Dhabi. Evaluation involved 29 common attributes of strategic management identified from literature. These were categorized into five indicators as learning & training; traffic setting; emergency response; road engineering & vehicle safety; and strategies being enforced. Analysis of the data collected through Questionnaire survey with officials involved in traffic management was done with mean score method. Results of the analysis showed that review and develop a driver training program and licensing mechanism is the top ranked attribute in the domain of learning & training. The respondents highlighted effective traffic control in pedestrian and cyclist safety areas and seatbelts as very useful in the indicator traffic setting. Top indicators in the indicator emergency response are development of effective systems for geographical positioning of traffic accidents, and spreading a culture of prioritising emergency vehicles in emergency situations. Develop an integrated traffic safety management system (ITSMS) is the most useful attribute related to road engineering & vehicle safety indicator. While in the indicator strategies being enforced, the respondents mentioned that the attribute at top rank is developing smart traffic settings to minimize the accidents

SIGNIFICANT INDICATORS OF LOW COST HOUSING DEMAND: COMPARISON BETWEEN RESULTS OBTAINED FROM PRINCIPAL COMPONENT ANALYSIS, BACK ELIMINATION AND REGRESSION ANALYSIS METHODS

This paper has reported comparison between Principal Component Analysis (PCA), Back Elimination Method (BEM) and Regression Method. These techniques were applied by using statistical software package SPSS 13.0. For the purpose of comparison, all the methods were tested on nine prime indicators of low cost housing demand which include population growth, birth rate, mortality rate, inflation rate, unemployment rate, GDP (gross domestic product), housing stock, household income and poverty rate. Data for the indicators was obtained from ministry of housing for low cost housing demand in Gombak District. From analysis it was found that PCA method had identified three significant indicators for low cost housing demand that is GDP/Capita in Selangor, housing stock and mortality baby rate. BEM had identified four significant indicators that is inflation rate, GDP/Capita in Selangor, Poverty Rate and Housing Stock. While, regression method identified only one significant indicator that is poverty rate. From these findings it can be concluded that BEM is the best method in determining significant indicators as compared to PCA and regression method. These finding will help the researcher in adopting suitable method for determining significant indicators in any field

Preliminary Study on Causative Factors Leading to Construction Cost Overrun

 Cost is the fundamental component for any construction project. However, cost overrun is observed as one of the most frequently occurring issues in construction projects worldwide and need to be studied more to alleviate this issue in the future. This trend is more severe in developing countries where these overruns sometimes exceeds 100% of the anticipated cost of the project.   Like other countries, construction industry in Malaysia is also facing a lot of challenges such as the delay to complete the project in time, the expenditure exceeding the budget, the building defects and over dependent of foreign workers. The ultimate effects of project delay also results in exceeding cost. This leads to serious need of addressing the critical issue of construction cost overrun. To avoid construction cost overrun, very first and most important step is to identify and understand the causes and factors responsible for that. Hence, this paper is aimed to identify various factors responsible for construction cost overrun. Through a comprehensive study of literature review, common factors causing cost overrun resulting in identification of 78 factors were mapped in frequency table. A questionnaire survey and interviews were carried out amongst selected experienced personnel for expert opinion to identify the significant factors causing cost overrun in Malaysia. Five respondents were selected from each of the respondents groups including client, consultant and contractor. The questionnaire responses were analyzed by average index method, which resulted in identification of 59 common factors causing construction cost overrun in Malaysia. Results show that poor design & delays in Design, unrealistic contract duration & requirements imposed, lack of experience, late delivery of materials & equipment, relationship between management & labour, delay preparation & approval of drawings, inadequate planning & scheduling, poor site management & supervision and mistakes during construction were most common and significant factors causing cost overrun in Malaysian construction industry as perceived by experts.&nbsp

Identifying causes of construction waste - case of central region of Peninsular Malaysia

Construction waste becomes a global issue facing by practitioners and researchers around the world. Waste can affects success of construction project significantly. More specifically, it has major impact on construction cost, construction time, productivity and sustainability aspects. This paper aims to identify various factors causing construction waste in Malaysia. Study was carried out through structured questionnaire focusing three major parties (i.e. clients, consultants and contractors) involved in construction project. Data was analyzed with Statistical Software Package SPSS. Reliability of data was found as 0.917 which showed that data collected was highly reliable. The calculation of Mean Rank of the construction waste causes found that the 5 key causes are Poor site management and supervision, Lack of experience, inadequate planning and scheduling, Mistakes and errors in design and finally Mistakes during construction. Spearman correlation analysis showed that Mistakes during construction was highly correlated with Rework (with 0.829 correlation value) and Slow information flow between parties (with a value of 0.60) and vice versa. Through identifying the causes and its correlation of the construction waste it gives better understanding to the construction community for future construction projects which benefit not only in term of economy but also the environment

Assessing the Effects of Construction Delays on MARA Large Projects

Construction industry in Malaysia is facing a serious issue of construction delay causing a significant amount of time over run and cost over run. Various studies have addressed the issue of construction delay, however, most of studies focused on identifying causes of delay. Less attention has been paid of assessing effects of construction delay. Hence this study is aimed to assess effects of construction delay on MARA large projects. Investigation approach for study includes the site study of 30 MARA  large projects selected from various areas of Malaysia and structured questionnaire survey among client, consultant and contractor personnel’s. It is important to note that 90% of MARA projects are experiencing time overrun. Data was analyzed with statistical analysis  to calculate rank of the effects of delays and correlation with spearman formula to identify the interrelationship between attributes of effects. Results showed that time over-run and cost over-run are most significant effects of delay on MARA construction projects. Time over-run has high degree of correlation with cost over-run and moderate degree of correlation with disputes

Identifying Causes of Construction Waste – Case of Central Region of Peninsula Malaysia

Construction waste becomes a global issue facing by practitioners and researchers around the world. Waste can affects success of construction project significantly. More specifically, it has major impact on construction cost, construction time, productivity and sustainability aspects. This paper aims to identify various factors causing construction waste in Malaysia. Study was carried out through structured questionnaire focusing three major parties (i.e. clients, consultants and contractors) involved in construction project. Data was analyzed with Statistical Software Package SPSS. Reliability of data was found as 0.917 which showed that data collected was highly reliable. The calculation of Mean Rank of the construction waste causes found that the 5 key causes are Poor site management and supervision, Lack of experience, inadequate planning and scheduling, Mistakes and errors in design and finally Mistakes during construction. Spearman correlation analysis showed that Mistakes during construction was highly correlated with Rework (with 0.829 correlation value) and Slow information flow between parties (with a value of 0.60) and vice versa. Through identifying the causes and its correlation of the construction waste it gives better understanding to the construction community for future construction projects which benefit not only in term of economy but also the environment

Factors Affecting Construction Cost in Mara Large Construction Project: Perspective of Project Management Consultant

Project cost is one of the most important criteria of success of project and is of high concern to those who are involved in the construction industry. However, studies show that rarely projects are complete within stipulated budget. This study is focusing on identification of significant causes affecting construction cost in MARA large projects. This paper presents the results of a questionnaire survey conducted among the personnel of Project Management Consultant (PMC). Data was analyzed with statistical tools to determine the rank of factors affecting construction cost. It is concluded that cash flow and financial difficulties faced by contractors, contractor's poor site management and supervision, inadequate contractor experience, shortage of site workers, incorrect planning and scheduling by contractors are most severe factors while changes in scope of project and frequent design changes are least affecting factors on construction cost. Spearman correlation analysis showed that incorrect planning and scheduling by contractor has strong positive relationship with contractor’s poor site management and supervision, inadequate experience of contractors has strong positive relationship with incorrect planning and scheduling; and contractor’s poor site management and supervision, changes in scope of project has strong positive relationship with frequent design changes; and vice versa