Cost Optimization in Building Construction Projects with Special Reference to Kathmandu Valley of Nepal

Cost optimization is a process that should be carried out throughout the construction period to ensure that the cost of the project is within an allotted budget. Time and cost are the two most significant factors in any construction project. Cost increases with the time of construction. The objective of this study was to find out the factors that contribute to the optimization of construction costs in building construction projects in Nepal. The study was conducted during the period from April 2019 to September 2020. Field observation, in-depth interviews, focus group discussions and questionnaire surveys were the major tools for the investigation of this study. The findings were analyzed in nine categories: project related factors, design related factors, owner related factors, consultant related factors, contractor related factors, material related factors, labor related factors, equipment related factors, and external factors. The study found some key factors related to time and cost overrun, optimizing cost of construction and the strategies to optimize project costs. The most important strategy to optimize the construction cost are effective cost planning and control, development of proper monitoring and tracking system, sound working environment, recording daily work progress, using time cost trade off, follow plan-do-check-act quality policy, hire skilled labor and effective supervision. The study suggests that constructability and value engineering principles should be adopted in construction projects.