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Cost overrun factors in construction industry: a case of Zimbabwe

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  • Nyoni, Thabani

Abstract

Cost overruns (the amount of money by which actual costs exceed the initially approved costs) continue to characterize a plethora of construction projects, especially large projects. This is the reason why the hot debate in the construction industry on how to minimize cost overruns has been on for some time, especially among construction economists and engineers and yet the inability to complete construction projects within the budget remains a chronic problem worldwide. In Zimbabwe, it is now almost obvious that once a construction project has commenced; it will not be completed within the initial project budget. This study seeks to empirically determine cost overrun factors in the construction industry in Zimbabwe. From the analysis of the questionnaire, cost overrun factors were ranked using the Relative Importance Index (RII) technique. The overall results analysis indicate that poor estimation of original cost, lack of timeous reports during construction stage, corruption, construction productivity and contractual claims are amongst the top ten most important factors causing construction cost escalation. The study managed to come up with recommendations which are 7 – fold and are envisaged to help construction economists, managers and policy makers in initiating positive changes in the construction industry in Zimbabwe.

Suggested Citation

  • Nyoni, Thabani, 2019. "Cost overrun factors in construction industry: a case of Zimbabwe," MPRA Paper 96788, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:96788
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    References listed on IDEAS

    as
    1. Swee Lean Chan & Moonseo Park, 2005. "Project cost estimation using principal component regression," Construction Management and Economics, Taylor & Francis Journals, vol. 23(3), pages 295-304.
    2. Hong Xiao & David Proverbs, 2002. "The performance of contractors in Japan, the UK and the USA: a comparative evaluation of construction cost," Construction Management and Economics, Taylor & Francis Journals, vol. 20(5), pages 425-435.
    3. Yakubu Adisa Olawale & Ming Sun, 2010. "Cost and time control of construction projects: inhibiting factors and mitigating measures in practice," Construction Management and Economics, Taylor & Francis Journals, vol. 28(5), pages 509-526.
    4. Martina Kirchberger, 2018. "The role of the construction sector," WIDER Working Paper Series wp-2018-146, World Institute for Development Economic Research (UNU-WIDER).
    5. Akintola Akintoye, 2000. "Analysis of factors influencing project cost estimating practice," Construction Management and Economics, Taylor & Francis Journals, vol. 18(1), pages 77-89.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Construction cost; Construction industry; Relative Importance Index (RII); Zimbabwe;
    All these keywords.

    JEL classification:

    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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