Common Factors of Cost Escalation in Construction Industry of Pakistan
Cost escalation is a ubiquitous problem, especially in Government organizations. Though bigger projects encompass escalation cost, in smaller projects, it is generally ignored. Several internal and external factors are responsible for the undesirably increased cost of a project. Among them some are tangible, and some are intangible. The scope of this study is to highlight most common remittable and non-remittable factors responsible for cost escalations. Thirty most common factors responsible were listed. A survey was done in order to have the stakeholder’s opinion on identifying the most common factors. Out of 102 generally identified escalating factors, 30 factors were shortlisted based on literature and initial study. Participants responded on a 1 to 5 Likert’s scale. Out of 200 distributed questionnaires, 52 reliable set of questionnaires were selected for data analysis. Clients, consultants, and constructors were selected from different projects like roads, structure, public amenities etc. Minimum threshold to participate in the survey was that a respondent must had at least a Diploma or Bachelor’s degree in the field of civil engineering. Results highlighted that financial problems, slow payments, and inflation are the top-ranked identified factors responsible for cost escalation in the construction industry of Pakistan. The weighted average of all factors ranges between 0.355 and 0.688, having 0.668, 0.629 and 0.625 for the top three factors.
Keywords:cost escalation, stakeholders, construction industry, Pakistan
Y. S. W. Broto, T. J. W. Adi, E. Suryani, J. W. Soetjipto, “Project Cost Escalation Prediction Models Based on System Dynamic Approach”, Third International Conference on Civil Engineering Research, Surabaya, Indonesia, August 1-2, 2017
M. Muya, C. Kaliba, B. Sichombo, W. Shakantu, “Cost Escalation, Schedule Overruns and Quality Shortfalls on Construction Projects: The Case of Zambia”, International Journal of Construction Management, Vol. 13, No. 1, pp. 53-68, 2013 DOI: https://doi.org/10.1080/15623599.2013.10773205
C. Kaliba, M. Muya, K. Mumba, “Cost Escalation and Schedule Delays in Road Construction Projects in Zambia”, International Journal of Project Management, Vol. 27, No. 5, pp. 522-531, 2009 DOI: https://doi.org/10.1016/j.ijproman.2008.07.003
N. Z. Muhammad, A. Keyvanfar, M. Z. A. Majid, A. Shafaghat, A. M. Magana, S. Balubaid, “Assessment of Cost Escalation factors for Building and Civil Engineering Projects in Nigerian Construction Industry: a Multiple Regression Approach”, Jurnal Teknologi, Vol. 74, No. 4, pp. 85-91, 2015 DOI: https://doi.org/10.11113/jt.v74.4614
M. Abas, S. B. Khattak, R. Akhtar, I. Ahmad, M. Ullah, I. U. Haq, “Identification of Factors Affecting Cost Performance of Construction Projects”, Technical Journal, University of Engineering and Technology (UET) Taxila Pakistan, Vol. 21, No. 1, pp. 72-78, 2016
N. Ejaz, I. Ali, M. F. Tahir, “Assesment of Delays and Cost Overruns during Construction Projects in Pakistan”, available at: http://dl.lib.mrt.ac.lk/handle/123/9431, 2013
B. Flyvbjerg, M. K. S. Holm, S. L. Buhl, “What Causes Cost Overrun in Transport Infrastructure Projects?”, Transport Reviews, Vol. 24, No. 1, pp. 3-18, 2004 DOI: https://doi.org/10.1080/0144164032000080494a
N. Al-Hazim, Z. A. Salem, “Delay and Cost Overrun in Road Construction Projects in Jordan”, International Journal of Engineering and Technology, Vol. 4, No. 2, pp. 288-293, 2015 DOI: https://doi.org/10.14419/ijet.v4i2.4409
P. Jadhav, D. Desai, A. Gupta, “Analysis of Construction Cost Overrun Causes by Contractor’s View”, Imperial Journal of Interdisciplinary Research, Vol. 2, No. 8, pp. 908-910, 2016
H. A. Vu, J. Wang, L. Min, S. H. Mai, “Research on Cost Overrun Risk of Construction Phase of Vietnam Highway International Contracting Project”, Scientific Research Publishing, Vol. 8, pp. 86-98, 2016 DOI: https://doi.org/10.4236/eng.2016.83011
D. Bhatia, E. M. R. Apte, “Schedule Overrun and Cost Overrun in the Construction of Private Residential Construction Project: Case Study of Pune India”, International Journal of Technical Research and Applications, Vol. 4, No. 2, pp. 174-177, 2016
A. Haruna, S. U. Kunya, M. Mohammad, “Factors Affecting the Contractor’s Cost Overrun of Building Project in Kano State, Nigeria”, Journal of Multidisciplinary Engineering Science and Technology, Vol. 3, No. 1, pp. 3648-3652, 2016
I. Mahamid, A. Bruland, “Cost Overrun Causes in Road Construction Projects: Consultants Perspective”, 2nd International Conference on Construction and Project Management, Singapore, September 16-18, 2011
A. Alhomidan, “Factors Affecting Cost Overrun in Road Construction Projects in Saudi Arabia”, International Journal of Civil and Environmental Engineering, Vol. 13, No. 3, pp. 1-4, 2013
A. Ebrahim, A. Y. Akal, “Modeling Schedule Overrun and Cost Escalation Percentages of Highway using Fuzzy Approach”, Engineering, Construction and Architectural Management, Vol. 24, No. 5, pp. 809-827, 2017 DOI: https://doi.org/10.1108/ECAM-03-2016-0084
M. A. Akhund, T. H. Ali, N. A. Memon, S. H. Khahro, “Causal Attributes of Cost Overrun In Construction Projects of Pakistan”, International Journal of Civil Engineering and Technology, Vol. 8, No. 6, pp. 477-483, 2017
D. S. Tejale, S. D. Khandekar, J. R. Patil, “Analysis of construction project cost overrun by statistical method”, International Journal of Advanced Research in Computer Science and Management Studies, Vol. 3, No. 5, pp. 349-355, 2015
S. Durdyev, S. Ismail, N. A. Bakar, “Factors causing cost overruns in construction of residential projects: case study of Turkey”, International Journal of Science and Management, Vol. 1, No. 1, pp. 3-12, 2012
K. Knight, A. R. Fayek, “A preliminary study of the factors affecting the cost escalation of construction projects”, Canadian journal of Civil Engineering, Vol. 27, No. 1, pp. 73-83, 2000 DOI: https://doi.org/10.1139/l99-057
M. A. Akhund, A. R. Khoso, A. A. Pathan, H. U. Imad, F. Siddiqui, “Risk Attributes, Influencing the Time and Cost Overrun in Joint Venture Construction Projects of Pakistan”, Engineering, Technology & Applied Science Research, Vol. 8, No. 4, pp. 3260-3264, 2018 DOI: https://doi.org/10.48084/etasr.2203
How to Cite
MetricsAbstract Views: 987
PDF Downloads: 438
Authors who publish with this journal agree to the following terms:
- Authors retain the copyright and grant the journal the right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) after its publication in ETASR with an acknowledgement of its initial publication in this journal.