Asst Professor, Civil Engineering Department, B.S Abdur Rahuman University, Chennai, India
Online published on 13 February, 2014.
Cost is among the major considerations throughout the project management life cycle and can be regarded as one of the most important parameters of a project and the driving force of project success. Despite its proven importance it is not uncommon to see a construction project failing to achieve its objectives within the specified cost. Cost overrun is a very frequent phenomenon and is almost associated with nearly all projects in the construction industry. This trend is more severe in developing countries where these overruns sometimes exceed 100% of the anticipated cost of the project. This paper is attempted to identify the major cost overrun and cost escalation factors in the construction industry. A thorough literature review is done through which a number of cost overrun and escalation causes are identified in construction industry scenario. From thorough study, total fifty three (53) factors were finalized to made part of the survey questionnaire. Out of these, cost escalation factors (14) and cost overrun factors (33) and (6) material factors were to be considered. Using SPSS (statistical package of social science) tool, average indices were identified and from that critical factors were to be ranked for cost overrun. Using relative importance index, cost escalation factors were to be ranked. And also, impact of material components on cost escalation were identified through various case studies. Finally some recommendations were suggested for further research.
