CONSTRUCTION BUSINESS & PROJECT MANAGEMENT CONFERENCE 2022 · Vol. 2022, Issue 1

Key drivers of construction cost underruns and overruns during the project life cycle in South Africa

Abimbola Olukemi Windapo, Emmanuel Dele Omopariola, Idowu Albert , and Mamenoma Karen Idachaba

Keywords: Drivers of construction cost changes; cost changes; cost overrun; cost underrun; project life cycle.

Abstract

Many construction projects have experienced cost underruns with no research to investigate the drivers for the cost underruns. Hence, this study investigated the key drivers of construction cost changes in the South Africa. A quantitative method research approach was employed in obtaining data for this study. The significant finding of this study shows that inadequate project preparation and planning leads to having incomplete designs at the time of tender and unrealistic pre-contract estimates. Also, it was found that unrealistic pre-contract estimates lead to inadequate financial provisions, which may result in delayed contractor payments and in turn cause cost overruns. The study concludes that most of the causes of cost overruns emanate from actions by the client, project team, and contractor. The study also concludes that it is important for client to have a clear and comprehensive project brief at the inception stage in order to minimise variations during the construction stage, as well as allow for sufficient time for planning and scheduling of work to be done.