Causes of Cost Overruns in Public Sector Construction Projects in South Africa: Fid-Bau Portal

Causes of Cost Overruns in Public Sector Construction Projects in South Africa

Khabisi, Jerminah / Aigbavboa, Clinton / Thwala, Wellington

Cost overrun is not an uncommon phenomenon in construction projects and in particular with civil engineering and infrastructure projects. South Africa has some significant projects that have experienced noteworthy cost overruns. Hence, the purpose of the study was to identify factors that influence the project cost overrun within public sector construction projects with specific reference to Gauteng Province. The primary data was collected by means of structured questionnaires which were distributed to construction professionals such as: architects, contractors, project managers, construction project manager, construction managers, quantity surveyors, and other professionals who worked on public sector construction projects. The secondary data was derived through reviewed literature. Out of 120 questionnaires sent out, 119 were received, which represented 99% response rate. Data received from the questionnaires was analyzed using descriptive statistical procedures. Findings from questionnaire survey revealed the most dominant factors as variation orders, change in scope of the project and cash flow and financial difficulties faced by contractors, delays in decision making, inadequate planning, frequent design changes, lack of coordination between parties, policy in accepting lowest tender, inaccurate time and cost estimates, errors and omissions in design, inaccurate quantity take-off, and contractors’ project inexperience. It is necessary to identify factors that may influence construction cost overruns at the start of the project in order to minimize cost overruns and to improve the cost performance on construction projects.