Project Cost Management

Projects consume costly resources that need to be managed to ensure that their outturn costs are within the intended budget. It is common to find references in the literature to projects across the globe that overrun their costs. Project cost management involves the costing of resources needed to complete project activities and developing an understanding of the factors that affect these costs. In this chapter, project cost management is deemed to comprise four steps: cost planning, cost estimating, budgeting, and cost control. A review of the literature found that factors that cause cost overruns are prevalent in developing countries. Developing country factors that may necessitate a different approach to project cost management have been evaluated as comprising project and organization forces (procurement arrangements, project management competencies, and productivity), sector/industry forces (country-level cost benchmarking indices and construction industry standards and policies), country/economic forces (public institutions, corruption, and inflation rate), and global forces (international cost and ethics standards, global initiatives, and conventions). These forces and their associated factors help to explain the project environment in developing countries and what should be considered when managing project costs in those countries. Future trends in project cost management in developing countries are considered as comprising the influence of Construction Industry 4.0 transformations, and carbon accounting and costing practices on project cost management. Some directions for future research in project cost management in developing countries are proposed.