Investigation of Critical Factors Influencing Cost Overrun in Highway Construction Projects

Abstract

One of the major problems which are becoming very significant and is booming worldwide in the construction industry is the problem of cost overrun. With the increase in demand to meet the need for infrastructure, the problem of cost overrun is also spreading at an alarming rate. The construction companies of India engaged in highway construction are also no longer exempted from this serious issue. The major objective of this research paper is to recognize the major causes of cost overrun in highway projects in the regions of Northern India. A broader review of literature from different sources and interactions with the experts working in highway projects was done to list down the feasible causes of cost overrun. In the next stage, a questionnaire was formulated which consisted of 35 feasible causes of cost overrun. Respondents having vast experience in the field of highway projects, participated in the survey to recognize the critical factors responsible for cost overrun. The analysis of the data was done using IBM SPSS 23 Package. The top five most critical factors causing cost overrun have been identified and discussed in this paper along with some recommendations which are useful to control cost overrun in the highway projects. The top five critical factors identified in this study are escalation in price of raw material, changes in design, conflict/lack of co-ordination between construction parties, poor financial control and constructability issues (construction under limited area, construction under traffic, right of way).