Skip to main content
SpringerLink
Log in

Identifying factors causing cost overrun of the construction projects in India

  • Published:
Sādhanā Aims and scope Submit manuscript

Abstract

Delay and cost overrun are common phenomena in projects worldwide. However, these are especially severe in developing countries. In India as per MOSPI report, 235 projects out of 410 were severely affected cost overrun due to certain factors. A short questionnaire was conducted with 15 prominent factors responsible for cost overrun and forwarded to 190 constructional professionals across India. Total 85 responses were received and it was analyzed using various statistical tools such as analysis of variance (ANOVA) and factor analysis tool using SPSS. In this study, top three factors affecting cost overruns were identified such as price escalation of raw material, delay in planned activity and lack of co-ordination between construction parties which could be significantly responsible for cost overnun of construction project in India. Factor analysis method was also carried out to group the factors into three components of overall questionnaire. These components, such as client control component, project management component, and contractor control component, would be useful to the various parties involved in the construction activities. This paper also provides suggestive frameworks which have been framed after discussing with large number of construction professionals or expert.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3
Figure 4

Similar content being viewed by others

References

  1. Avotos I 1983 Cost-relevance analysis for overrun control. Int. J. Project Manag. 1(3): 142–148. Available at: http://www.sciencedirect.com/science/article/pii/0263786383900182 [Accessed January 14, 2016]

  2. MOSPI 2014 Infrastructure Statistics

  3. Durdyev S, Ismail S and Bakar N A 2012 Factors causing cost overruns in construction of residential projects: Case study of Turkey. Int. J. Sci. Manag. 1(1): 3–12

    Google Scholar 

  4. KPMG 2013 Study on project schedule and cost overruns. PMI-KPMG

  5. Frimpong Y, Oluwoye J and Crawford L 2003 Causes of delay and cost overruns in construction of groundwater projects in a developing countries; Ghana as a case study. Int. J. Project Manag. 21: 321–326

  6. Kaliba C, Muya M and Mumba K 2009 Cost escalation and schedule delays in road construction projects in Zambia. Int. J. Project Manag. 27: 522–531

  7. Kaming P F et al 1997 Factors influencing construction time and cost overruns on high-rise projects in Indonesia. Constr. Manag. Econom. 15: 83–94

    Article  Google Scholar 

  8. Moura H P, Teixeira J C and Pires B 2007 Dealing with cost and time in the Portuguese Construction Industry

  9. Azhar N, Farooqui R U and Ahmed S M 2008 Cost overrun factors in construction industry of Pakistan. First International Conference on Construction In Developing Countries (ICCIDC–I) “Advancing and Integrating Construction Education, Research & Practice” August 4–5, 2008, Karachi, Pakistan, pp. 499–508

  10. Azhar N, Farooqui R U and Ahmed S M 2008 Cost Overrun Factors In Construction Industry of Pakistan. Advancing and Integrating Construction Eduction Research & Practice, (1st International Conference on Construction in Developing Countries, Karachi, Pakistan).

  11. Abdullah M R, Azis A A A and Rahman I A 2011 Potential effects on large mara construction projects due to construction delay. Int. J. Integrated Eng. (Issue on Civil and Environmental Engineering)

  12. Harisweni 2007 The framework for minimizing construction time and cost overruns in padang and pekanbaru, Indonesia. University of Teknologi Malaysia

    Google Scholar 

  13. Dissanayaka S M and Kumaraswamy M M 1998 Comparing contributors to time and cost performance in building projects. Build. Environ. 34(1): 31–42

    Article  Google Scholar 

  14. Aziz R F 2013 Factors causing cost variation for constructing wastewater projects in Egypt. Alexandria Eng. J. 52: 51–66

  15. Rahman I A, Memon A H and Karim A T A 2013a Relationship between factors of construction resources affecting project cost. Modern Appl. Sci. 7(1): 67–75

  16. Koushki P A, Al-Rashid K and Kartam N 2005 Delays and cost increases in the construction of private residential projects in Kuwait. Constr. Manag. Econom. 23: 285–294

    Article  Google Scholar 

  17. Le-Hoai L, Lee Y D and Lee J Y 2008 Delay and cost overruns in Vietnam large construction projects: A comparison with other selected countries. KSCE J. Civil Eng. 12(6): 367–377

  18. Olawale Y A and Sun M 2010 Cost and time control of construction projects: Inhibiting factors and mitigating measures in practice. Constr. Manag. Econom. 28: 509–526

    Article  Google Scholar 

  19. Kinnear P R and Gray C D 1994 SPSS for windows made simple-release 10. Psychology Press Limited

  20. Norusis 1994 SPSS Advanced Statistics 6.1. Prentice Hall PTR

  21. Kim J and Mueller C W 1978 Factor analysis statistical methods and practical issues. Eric M Usl., SAGE Publication Inc.

  22. Rahman I A, Memon A H and Karim A T A 2013b. Significant factors causing cost overruns in large construction projects in Malaysia. J. Appl. Sci. 13(2): 286–293

  23. Eshofonie B and Patience F 2008 Factors affecting cost of construction in Nigeria presented to the department of building university of Lagos Akoka, Lagos in partial fufilment of the requirements for the award of masters in construction management

  24. Ameh O J, Soyingbe A A and Odusami K T 2010 Significant factors causing cost overruns in telecommunication projects in Nigeria. J. Constr. Develop. Countries 15(2): 49–67

    Google Scholar 

  25. Sharma S and Goyal P K 2014 Cost overrun factors and project cost risk assessment in construction industry—A state of the art review. Int. Acad. Sci. Eng. Technol. ISSN(P): 2

  26. Omoregie A and Radford D Infrastructure delays and cost escalation: Causes and effects in Nigeria

  27. Rosenfeld Y 2014 Root-cause analysis of construction-cost overruns. J. Constr. Eng. Manag. (DOI:10.1061/(ASCE)CO.1943-7862.0000789. © 2013 American Society of Civil Engineers.)

  28. Mansfield N, Ugwu O and Doran T 1994 Causes of delay and cost overruns in Nigerian construction projects. Int. J. Project Manag. 12(4): 254–260

    Article  Google Scholar 

  29. Doloi H 2013 Cost overruns and failure in project management: Understanding the roles of key stakeholders in construction projects. J. Constr. Eng. Manag. DOI:10.10(© 2013 American Society of Civil Engineers. CE)

  30. Cheng Y-M 2014 An exploration into cost-influencing factors on construction projects. Int. J. Project Manag. 32: 850–860.

    Article  Google Scholar 

  31. Shanmugapriya S and Subramanian K 2013 Investigation of significant factors influencing time and cost overruns in Indian Construction Projects. Int. J. Emerging Technol. Adv. Eng. www.ijetae.com. ISO Certified Journal, 9001(10)

  32. Okpala D C and Aniekwu A N 1988 Causes of high costs of construction in Nigeria. J. Constr. Eng. Manag. 114: 233–244

Download references

Author information

Authors and Affiliations

  1. Department of Civil Engineering, Visvesvaraya National Institute of Technology, Nagpur, 440010, India

    Swapnil P Wanjari & Gaurav Dobariya

Authors
  1. Swapnil P Wanjari
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Gaurav Dobariya
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Swapnil P Wanjari.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Wanjari, S.P., Dobariya, G. Identifying factors causing cost overrun of the construction projects in India. Sādhanā 41, 679–693 (2016). https://doi.org/10.1007/s12046-016-0498-3

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12046-016-0498-3

Keywords

Search

Navigation