IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/96788.html
   My bibliography  Save this paper

Cost overrun factors in construction industry: a case of Zimbabwe

Author

Listed:
  • Nyoni, Thabani

Abstract

Cost overruns (the amount of money by which actual costs exceed the initially approved costs) continue to characterize a plethora of construction projects, especially large projects. This is the reason why the hot debate in the construction industry on how to minimize cost overruns has been on for some time, especially among construction economists and engineers and yet the inability to complete construction projects within the budget remains a chronic problem worldwide. In Zimbabwe, it is now almost obvious that once a construction project has commenced; it will not be completed within the initial project budget. This study seeks to empirically determine cost overrun factors in the construction industry in Zimbabwe. From the analysis of the questionnaire, cost overrun factors were ranked using the Relative Importance Index (RII) technique. The overall results analysis indicate that poor estimation of original cost, lack of timeous reports during construction stage, corruption, construction productivity and contractual claims are amongst the top ten most important factors causing construction cost escalation. The study managed to come up with recommendations which are 7 – fold and are envisaged to help construction economists, managers and policy makers in initiating positive changes in the construction industry in Zimbabwe.

Suggested Citation

  • Nyoni, Thabani, 2019. "Cost overrun factors in construction industry: a case of Zimbabwe," MPRA Paper 96788, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:96788
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/96788/1/MPRA_paper_96788.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Swee Lean Chan & Moonseo Park, 2005. "Project cost estimation using principal component regression," Construction Management and Economics, Taylor & Francis Journals, vol. 23(3), pages 295-304.
    2. Hong Xiao & David Proverbs, 2002. "The performance of contractors in Japan, the UK and the USA: a comparative evaluation of construction cost," Construction Management and Economics, Taylor & Francis Journals, vol. 20(5), pages 425-435.
    3. Yakubu Adisa Olawale & Ming Sun, 2010. "Cost and time control of construction projects: inhibiting factors and mitigating measures in practice," Construction Management and Economics, Taylor & Francis Journals, vol. 28(5), pages 509-526.
    4. Akintola Akintoye, 2000. "Analysis of factors influencing project cost estimating practice," Construction Management and Economics, Taylor & Francis Journals, vol. 18(1), pages 77-89.
    5. Martina Kirchberger, 2018. "The role of the construction sector," WIDER Working Paper Series wp-2018-146, World Institute for Development Economic Research (UNU-WIDER).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhen Chen & Yaqi Zhao & Xia Zhou & Lin Zhang, 2020. "Investigating Critical Factors That Encourage Private Partners to Participate in Sports and Leisure Characteristic Town Public-Private Partnerships: Evidence from China," Sustainability, MDPI, vol. 12(8), pages 1-23, April.
    2. Hyeongjun Mun & Jaewook Jeong & Jaemin Jeong, 2023. "Improving the Model for Estimating the Number of Construction Workers for Apartment Construction," Sustainability, MDPI, vol. 15(9), pages 1-17, April.
    3. Wei Wang & Shoujian Zhang & Yikun Su & Xinyang Deng, 2019. "An Empirical Analysis of the Factors Affecting the Adoption and Diffusion of GBTS in the Construction Market," Sustainability, MDPI, vol. 11(6), pages 1-24, March.
    4. Smiritee Srivastava & Smiritee Srivastava, 2020. "Analysis of Various Major Contributing Factors of Cost Overrun in Construction Projects," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(9), pages 28-33, September.
    5. Petter Osmundsen & Kristin Helen Roll, 2016. "Rig Rates and Drilling Speed: Reinforcing Effects," CESifo Working Paper Series 5895, CESifo.
    6. Jin Woo Won & Wooyong Jung & Seung Heon Han & Sungmin Yun & Bonsang Koo, 2019. "What Enables a High-Risk Project to Yield High Return from a Construction Contractor’s Perspective?," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    7. Adrian Sfichi & Eduard Zadobrischi & Narcisa Sfichi & Marian Bădeliță & Mihai Medrihan, 2022. "Utility of Sharing Economy Principles in the Development of Applications Dedicated to Construction Cost Estimation," Future Internet, MDPI, vol. 15(1), pages 1-26, December.
    8. Yubo Guo & Igor Martek & Chuan Chen, 2019. "Policy Evolution in the Chinese PPP Market: The Shifting Strategies of Governmental Support Measures," Sustainability, MDPI, vol. 11(18), pages 1-24, September.
    9. Wu, Yunna & Zhang, Ting & Xu, Chuanbo & Zhang, Xiaoyu & Ke, Yiming & Chu, Han & Xu, Ruhang, 2019. "Location selection of seawater pumped hydro storage station in China based on multi-attribute decision making," Renewable Energy, Elsevier, vol. 139(C), pages 410-425.
    10. Mohanad Kamil Buniya & Idris Othman & Serdar Durdyev & Riza Yosia Sunindijo & Syuhaida Ismail & Ahmed Farouk Kineber, 2021. "Safety Program Elements in the Construction Industry: The Case of Iraq," IJERPH, MDPI, vol. 18(2), pages 1-13, January.
    11. Byung-Yun Son & Eul-Bum Lee, 2019. "Using Text Mining to Estimate Schedule Delay Risk of 13 Offshore Oil and Gas EPC Case Studies During the Bidding Process," Energies, MDPI, vol. 12(10), pages 1-25, May.
    12. Nur Fatin Syazwani Abu Bakar* & Syuhaida Ismail & Rohayah Che Amat & Serdar Durdyev, 2018. "Sustainable Construction in Malaysian Mixed Development Projects: The Barriers and Critical Success Factors," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 885-892:6.
    13. Shahab Shoar & Nicholas Chileshe, 2021. "Exploring the Causes of Design Changes in Building Construction Projects: An Interpretive Structural Modeling Approach," Sustainability, MDPI, vol. 13(17), pages 1-23, August.
    14. Wajeeha Hasnain & Urooj Pasha, 2022. "Ameliorating Performance of UAE Projects by Technological Collaboration of Construction Entities," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 4(2), pages 263-273, june.
    15. Etheldreder Trecia Koppa & Innocent Musonda & Sambo Lyson Zulu, 2023. "A Systematic Literature Review on Local Sustainability Assessment Processes for Infrastructure Development Projects in Africa," Sustainability, MDPI, vol. 15(2), pages 1-37, January.
    16. Shenzhe Jiang & Junjie Xia & Jiajun Xu & Jianye Yan, 2023. "A theory of National Development Bank: long-term investment and the agency problem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(3), pages 995-1024, October.
    17. Francisco Pinheiro Catalão & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2023. "The entanglement of time and cost deviations in public projects," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 241-272, March.
    18. Swei, Omar & Gregory, Jeremy & Kirchain, Randolph, 2017. "Construction cost estimation: A parametric approach for better estimates of expected cost and variation," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 295-305.
    19. C.G. Hart & Z. He & R. Sbragio & N. Vlahopoulos, 2012. "An advanced cost estimation methodology for engineering systems," Systems Engineering, John Wiley & Sons, vol. 15(1), pages 28-40, March.
    20. Øglend, Atle & Osmundsen, Petter & Lorentzen, Sindre, 2016. "Cost Overrun at the Norwegian Continental Shelf: The element of surprise," UiS Working Papers in Economics and Finance 2016/3, University of Stavanger.

    More about this item

    Keywords

    Construction cost; Construction industry; Relative Importance Index (RII); Zimbabwe;
    All these keywords.

    JEL classification:

    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:96788. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.