A study on factors causing cost overrun of construction projects in Sarawak, Malaysia

Abstract

Cost overrun is one of the issues confronting the construction industry. Most of the construction projects in Malaysia have experienced cost overrun of 5 to 10% of the total contract sum. In examining the east Malaysia scenario, this study aims to identify the factors causing cost overrun of construction projects in Sarawak. A quantitative approach was adopted in carrying out the research. Stratified random sampling was adopted to obtain data from Grade 7 contracting companies and quantity surveying firms operating in Sarawak. Descriptive statistics (measures of central tendency) and the Relative Importance Index (RII) were used to analyze the data. The most significant factors identified were the shortage of material, lack of plant and spare parts of equipment, acceleration required by clients, change of work scope or changes in material specification by clients, mistakes during construction, fluctuation in prices of raw materials, shortage of workforce, lack of skilled labour, poor project management, poor cost control and awarding of a contract to the lowest bidders. This study complements the existing knowledge on the factors causing cost overrun in the Malaysian construction industry. Hence, clients, contractors, project managers, quantity surveyors, and other project participants will be aware of the factors considered while planning for a project.