Causes and Impacts of Cost Overruns, and Techniques to Improve Construction Project Performance

Aw, Tjia Tjie (2024) Causes and Impacts of Cost Overruns, and Techniques to Improve Construction Project Performance. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

Construction projects are critical to global infrastructure development and economic growth. However, the construction industry has long struggled with the widespread problem of cost overruns, which has serious consequences for all project parties. Therefore, the purpose of this research is to investigate the causes and impacts of cost overruns in construction projects, as well as to explore techniques that can enhance project performance. The research methodology involved the distribution of questionnaires to a specific target population, yielding a total of 72 responses via an online survey conducted through Google Forms. Subsequently, inferential and descriptive analyses were applied to scrutinise the collected data. Through descriptive analysis, the findings revealed a high level of agreement among respondents regarding contractor-related factors contributing to cost overruns. Furthermore, the Mann-Whitney U test showed no significant differences in the factors causing cost overruns, the impact of cost overruns on construction project performance, and the effectiveness of cost overrun mitigation techniques between two groups of respondents: those involved in cost overrun projects and those not. Nevertheless, it is important to acknowledge the limitations of this research, including time constraints, potential sampling bias, and limited depth in responses. Therefore, future studies should consider improvements, including the utilisation of Independent T-tests for significant difference comparisons, broader respondent representation, and the incorporation of mixed methods for data collection. This will ensure a more comprehensive understanding of the complex issue of cost overruns in construction projects.