Analysis of interrelationships among constructs of cost overrun causes in consortium projects between construction contractors

Abstract

Cost overruns can negatively affect consortium contractors, leading to financial difficulties, reduced profits, reputation damage, and even bankruptcy. Thus, it is crucial to identify and analyze the causes of cost overruns in consortium projects between contractors. However, there has been limited research on consortium projects between contractors. This study fills a critical research gap by specifically investigating the causes of cost overruns and their interrelationships in consortium projects between contractors, a domain that is globally prevalent but has a limited empirical focus. Questionnaire surveys are used to collect data from practitioners. The study identifies thirty-three causes of cost overruns. Using Structural Equation Modeling (SEM), the study uncovers the interrelationships among eight constructs of cost overrun causes, including construction-related problems, consortium contract-related problems, management-related problems, finance-related problems, culture-related problems, dispute-related problems, legal-related problems, and external objective problems. This study provides a deep understanding of the interrelated constructs by focusing on the results of the SEM model. This not only mitigates the risk of cost overruns but also provides practical guidelines for drafting robust contracts and managing consortium projects between contractors effectively.