Cost overrun factors in construction industry: a case of Zimbabwe

Thabani Nyoni

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Construction cost; Construction industry; Relative Importance Index (RII); Zimbabwe (search for similar items in EconPapers)
JEL-codes: L74 (search for similar items in EconPapers)
Date: 2019-09-02
New Economics Papers: this item is included in nep-ppm
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