Factors influencing cost over-run in Indian construction projects

Construction cost is the most important criteria of project success and hence the construction project performance is generally expressed in terms of cost and its variance from the budget. In spite of having extant literature, cost estimation methods, cost indices etc., construction projects rarely meet the budgeted cost. This research study focuses on the construction cost overrun and to identify the various factors that affects the construction cost performance. Based on an extensive literature review and input from industry experts, sixty eight factors that causes cost overrun were identified for investigation. Further, a structured questionnaire survey was conducted among the industry experts and the collected data has been analysed statistically. It is concluded that the factors namely scope creep, construction delays, rework and practise of awarding the contract to the lowest bidder are most significant factors for construction cost overrun in non-infrastructural Indian projects. The relative importance of the listed factors used to guide the project team in addressing the cost related risks involved in the projects. The findings are expected to bridge the gap in the current construction cost management practices.