Analysis of Cost Overrun Factors for Small Scale Construction Projects in Malaysia Using PLS-SEM Method

Aftab Memon and Ismail Rahman

Modern Applied Science, 2013, vol. 7, issue 8, 78

Abstract: This study investigated the effect of various factors affecting cost performance in achieving project success. Investigation was carried out with quantitative approach of questionnaire survey to understand the perception of practitioners involved in construction industry towards various factors in causing cost overrun. The targeted respondents were client, contractor, and consultant representative involved in handling small scale projects in Malaysia. A total of 54 completed responses were collected against 100 sets of questionnaire distributed. Collected questionnaires were analyzed with advance multivariate statistical approach of Partial Least Square Structural Equation Modeling (PLS-SEM). It modeled the relationship of various factors and their relative effects to cost overrun. Structural Model analysis results showed that the identified factors have overall substantial impact on cost overrun. This was assessed with convergent and discriminant validity test where R2 value for the model is 0.71 which means that 71% variance extraction is resulted from investigated factors. Further, GoF value of the model achieved is 0.70 which shows that developed structural model has substantial power in explaining the factors of cost overrun in small scale projects of Malaysia. Amongst all the factors, contractor’s site management related factors are found as most significant factors. This indicated that for achieving better cost performance in small projects, contractors are required to improve their management related to the identified factors. Beside that, these findings will benefit parties involved in managinging cost performance of small scale construction projects.

Date: 2013
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