Identification of Critical Factors Leading to Cost Overrun in Building Projects Based on Literature Research

EasyChair Preprint 10437

Abstract

The construction industry trendy many developing countries, including Pakistan, requires significant investment, and budget overruns are a communal problem. The construction sector in Pakistan is facing significant challenges related to cost overruns, which are affecting all stakeholders involved in government-funded building construction projects. To recognize the precarious causes of cost overruns, a literature review was conducted, and the results of a survey in developed countries were analyzed. The main causes of cost overruns in building construction projects in developed nations were discovered to be poor planning, inaccurate project cost estimation, high resource costs, a skilled labor shortage, high construction material prices, high land prices, contractor financial difficulties, owner delays in making progress payments for completed works, contracts given to the lowest bidder, change orders during construction, and ineffective project management. The two biggest risk factors for budget overruns during construction were change orders and contracts chosen by the lowest bidder. To achieve sustainable development in the construction industry in Pakistan, effective management of client, contractor, and labor-related risks is essential. The goal of this literature review is to analyze the most critical factors influencing to cost overruns in building projects. The literature focuses on articles published in highly reputable journals within the last decade.

Keyphrases: Building projects, Cost overrun, Critical factors, developing countries

@booklet{EasyChair:10437,
  author    = {Muhammad Hamza Zahoor and Naffesa Shaheen and Majid Ali},
  title     = {Identification of Critical Factors Leading to Cost Overrun in Building Projects Based on Literature Research},
  howpublished = {EasyChair Preprint 10437},
  year      = {EasyChair, 2023}}