Name:

Noman Majeed Shami

Roll #:
MSCM-F-19-037

2nd Semester- Final Paper

Research Title:
Qualitative Analysis of factors which cause time overrun and cost overrun in a construction
project

Subject:
Research Proposal

Submitted to:
Dr. Shahid Naveed
 Research Proposal

Title
Qualitative Analysis of factors which cause time overrun and cost overrun in a construction
project

Author:
________________________

Abstract:
Construction industry is one of the leading industries of the modern times. The contribution of
this industry to the economy made by construction industry cannot be overlooked. Construction
of a project requires a huge investment and after the accomplished of mammoth task bear fruit
which the client eat over the rest of his life. This is the reason why modern tools are being used
to optimize the design and time for the construction projects. But even with the use of such tools
the construction industry in Pakistan is consistently carrying out projects a lot more than the
initial estimate. This main purpose of this proposal is to study the reasons which are causing
projects times and cost overrun. This will outline the important factor which led to cost & time
overrun in Nai Gaj Dam Project in Dadu district. The issues caused by all three parties i.e
contractor, client and consultant will be discussed.

Key Words: Time Overrun. Cost Over Run, Nai Gaj Dam Project
Introduction:

Construction Industry is one of the leading industries in Pakistan. It creates revenue worth of
billions of rupees. It has been source of income for hundreds of thousands of workers in allover
the country. The construction industry is directly related to hundred other industry. It is the
source of national growth. Therefore, it is necessary to run this sector in the most efficient way.
Modern technology has been employed to optimize the use of time and money to achieve the
most optimal result.

The completion of project is indicated by consistent technical performance achieved within

estimated time and cost.1 Cost overrun is the one of the most frequent suffered by
construction industry of Pakistan. Cost overrun can describe as when the final cost of the
project exceeds the Original estimated cost (Avots, 1983)2]. There are various reasons for the
cost overrun. Most of the cost overrun is government parojects are due to the fluctuations in
the currency conversion rate. The escalation in the cost of items is also one of the leading
causes of cos overrun. Some other reason may include Political resistance, non-availability of
funding, bad construction strategy and technical incompetence.

Another import illness that haunts the construction industry of Pakistan is time overrun. Every
other project under taken in Pakistan especially government projects suffer from time overrun.
Time overrun is defined as the extra time required to achieve project objectives after the due
date. [3] The excessive time is required due to the delays suffered by the project. Construction
delays can be defined as executing later than meant planned or a specific period, or later than
the specified time that all the concerned parties agreed upon 4]. The main reason for time delays
in project may include strikes by workers, natural calamities, weak schedule, variation orders
etc.

The purpose of this research is to highlight the various reasons for causing cost and time
overrun in construction industry. The result of study will be scrutinize based on the available
literature. A survey questionnaire will be developed and the results will be prepared on basis of
Likert Scale for quantitative analysis.

Details of the Project for the case study are as follow:

1. Project Name: Al Hafeez Business Center

2. Location: 89B Gulberg 3 Lahore
3. Client: Al Hafeez Developers
4. Contractor: Mian Arshad Builders
5. Consultant: Unique and Riaz ur Rehman
6. Purpose of Building: Commercial Office Building
7. Basic Information Regarding Project:
 a. Total Floors: 9 Floors including 2 Basement floors
b. Total Plot Area: 4 Kanals
c. Project Start Date: March 2015
d. Scheduled completion date of project: December 17
e. Actual Completion date of Project: February 2019
f. Estimated Cost of Project: PKR 65 Crores
g. Actual completion cost of project: PKR 68.5 Crores

Scope of Research
The research will help bridge the gap which is present in the research field of smaller
commercial projects. Most of the available research is focused on the mega projects. Where as
this research will shed light on the smaller scale projects which will help the decision maker of
the project to make informed decision which will help them in saving value-able time and cost
of the project.

Literature Review
Delays in construction work is a really big problem in Pakistan. A very little research has been
carried out in this regard. Shaikh, et al.,[5] has devised a analytical procedure for inclusion of past
studies which sheds lights in client, contractor, general and resource related problems are major issues
leading to delay in construction industry. After analyzing all the factors up to some extent Haseeb, et
al.,[6] was of the view that funding issues are the most important once. However for the purpose of this
research delays in construction is divided into following categories: (Yahya Rashid et al. 2013) [7]

 Contractor Related Factors Causing Delays in Project Execution.

 Client Related Factors Causing Delays in Project Execution.
 Consultant Related Factor causing delay in Project Execution
 Material Related Factors Causing Delays in Project Execution.
 Equipment Related Factors Causing Delays in Project Execution.
 Labor Related Factors Causing Delays in Project Execution.
 General Environmental Related Factors Causing Delays in Project Execution.
1. Contractor Related Factors Causing Delays in Project Execution.
Delays from the side of contractor is one of the most important factor for causing time and cost
overrun. Many studies have been conducted in this regard. According to Sambasivan and Soon
[8] following delays are most done from the contractor side:
a. Bad planning
b. Lack of work force and workability
c. Inadequate experience.
2. Client Related Factors Causing Delays in Project Execution
 Delay in the construction from the client side is usually not the issue because delay in
activity causes financial over burden on the client. The delay from the client side is
mainly observed in the government projects where there is no, one official performing
duties and the financial burden is not on a single person. In Pakistan delay from client
side may happen due to the following reason:
a. Lack of funding
b. Variation Orders
c. Design Review
d. Natural Calamities
3. Consultant Related Factor causing delay in Project Execution
Delays in the project from the client are pretty common. The process of the design
review usually takes long as there is battle between of required data for review
purposes between client and consultant and if there is no review the consultant blames
their faulty approach on the design. The staff in the consultant is also very less as
compared to it was preached at the time of award. The moral of consultant staff is
usually low as their salaries are not dispersed at appropriate times. Some of the factors
which cause delay from the consultant side are as follow [6]:
a. Inadequacy
b. Wrong site investigation
c. Slow response and inspection
4. Material Related Factors Causing Delays in Project Execution.
Delay in the construction due material is one of the most critical issues of the
construction industry in Pakistan. The shortages in the material not uncommon in
Pakistan. The nonavailability of certain building materials may cause project to slow
down or completely shut down. However this type of issue can be resolved by storing
the material in the bulk amount and taking necessary steps for the procurement of
material when it is near finish.
5. Equipment Related Factors Causing Delay in Project Execution:
This type of issue pertains to projects where there is requirement of some specialized
equipment otherwise for smaller projects this is not a big issue. But since in modern era
even a small construction requires the use of at least some specialize equipment. For
example, in Neelum Jhelum Hydropower Project, project was delayed to nonavailability
of Tunnel Boring Machine. The delays in multistorey projects where there is
requirement oof cranes, a small problem in crane may cause significant delay in
construction activities.
6. Labor Related Factors Causing Delay in Project Execution:
 Labor has come a long way in the last few years. The skilled labor is really hard to find
and if it is not found in time it cause significant delay in the project. According to Sweis,
et al., [9] less availability of skilled, semi-skilled and unskilled labor also cause delay in
the construction projects. Moreover the timely completion of the project is up to the
team undertaking the project. The unity among the labor is also one of the key features
for completing project on time. It is observed that tussles between labor and non-
availability of local labor can really slow down a project [10]
7. General Environment Related Factors Causing Delay in Project Execution:
This is the most critical type of the delay which is very common in the environment of
Pakistan. Haseeb et al. [6] iterated that most common causes of delay in construction
projects in Pakistan include natural disaster, unexpected site conditions, organizational
changes, changes in rule etc. It can be seen in the environment of Pakistan that political
issues have developed so much that the policies of one government are discontinued by
their successors.
Cost Overrun
There are many reasons for project to suffer from cost overrun. The reasons for project
suffer from cost overrun have been investigated by various scientists T.Subramani et. al.
has defined cost overrun as the difference between the actual and estimated costs as a
percentage of the estimated cost[11]. The escalation in the cost may be due to many
reasons. Few factors which may impact cost are labor, material, equipment etc. There
are two types of cost Direct or Indirect Cost. Direct Cost is directly related to the
work/activity which is being performed onsite whereas indirect cost are sum of all the
other factors which are supporting the activities on the site. For example the cost of
accommodation, vehicles, overhead staff etc. Most of the hike happens due to change
in direct cost.
Time Overrun
The successful completion of a construction project is directly related to its completion
on time. However it usually does. Construction management has developed various
tools for managing timely completion of projects but in the end it all comes down to
efficiency of labor which is usually efficient. Akhund et. al. classified the delays due to
time into two categories, Excusable & Non-Excusable [12].
Inexcusable delays are caused by Contractor and suppliers and are then charged to
contractor for causing that damage. The contractor is charged in the form of Liquidated
damages. Excusable delays are categorized into further two categories namely Non-
Compensable delays and Compensable delays. Non compensable are type of delays
which are caused by neither contractor nor client rather it is caused by some other party
 e.g. machine failure. Whereas compensable delays are either caused by client or his
authorized personnel e.g. consultant

Factors Causing Time and Cost Overrun in Construction Projects

Chitkara (2011) conducted detailed research on factors which lead to delays in construction.
Some of the factors discussed by him are: Inadequate Project formulation, Poor Planning, Lack
of proper contract planning and management & Lack of project management during execution
[13].

The most important factors which causes the delay in construction project are as follow:

1. Financial difficulties of owner

2. Unrealistic contract duration requirement
3. Owner interference
4. Delay in progress payment by owner
5. Delay in decision making
6. Change in the scope of the project
7. Delay in shop drawings and sample materials
8. Poor communication and coordination between parties
9. Slowness in decision making process.
10. Suspension of work
11. 5 Inflexibility of consultants
12. 6 Late in reviewing and approving
13. Design documentary by the consultants
14. Conflicts between consultants and design engineers
15. Absence of consultants at site
16. Delay to finish and deliver the site work to the contractor
17. Change orders during construction by the owners
18. Financial problems (delayed Payments, financial difficulties, and economic problems).
 19. Contract modifications (replace and add new works to the project; change in
specification
20. Lack of consultant’s site staff Experience (managerial and supervisory personnel)
21. Supervision too late and slowness in making decisions.
22. Unavailability of incentives for Contractor for finishing ahead of schedule

(Memon et. Al.[14], Akhund et. Al.[12])

Research Methodology

Assumption:

After thorough research it is established that above 22 factors act as control point for the
research. The whole research will revolve around them and scores will be awarded on these
points.

Hypothesis
How these points will affect the progress of work and the time and cost overrun in Al Hafeez
Business Center.

Research Approach
The inductive research approach method will be used in this project.

Research Method

The research will utilize a mixture of both qualitative and quantitative approach. Qualitative
approach is be established with thorough research and literature review. For the purpose of
quantitate approach a proforma will be developed under the supervision of supervisor and will
be got filled by PEC registered consultants and contractors.

Sampling Size

To perform the research effectively about 30 firms will be engaged. The consultant and
contractor firms who has performed mega as well as small projects will be approached. The
research pool will be as wider as possible to create the research more and more diverse.

Likert scale from 1 to 5 (Not Significant – Extremely Significant) will be developed and the data
will be analyzed using Statistical Software Package SPSS using frequency and Average Index (AI)
will be employed

Data Analysis
The results will be analyzed using formula taken from Memon, A.H et al [15] which is iterate
below:

Where X is weight given by each individual in each category. The higher the value of AI more
will be it weightage.

Proposed Timeline:

SR # Description Date: From Date: To

1 Literature Review 15-March-20 15-May-20
2 Submission and 16-May- 20 31-May-20
Approval of
Research Proposal
3 Approval of 1-June-20 30-June-20
Questionnaire
Format
4 Survey 1-July-20 15-July-20
5 Data 16-July-20 15-Sep-20
Analysis ,Conclusion
& Defense of Paper

Conclusion:

Time and cost overrun is a big problem for the construction industry. It does not matter if the
project is a mega project for small scale project its has to suffer from cost and time overrun the
factors highlighted in this research contribute majorly towards the the delay of the project
however after conducting this research we will have a clear picture of which factors cause more
damage to the project progress this research will be helpful for the consultant and the
contractor. They can use this research and find out the problems and rectify them in advance.

Recommendations

This research has tried to cover as many as the factor is possible however if more crime was
planted more literature review would have been done which have which had led to More
refined research. The future researchers may use this research as a base line and launch a more
concise strike.
Reference:

1. Yaw Firmpong, Jacob Oluwoye and Lynn Crawford, 2003, “Causes of Delays and Cost
overrun in construction of groundwater projects in a developing countries; Ghanna as a
case study”, Pergamon, p.1
2. Avots, I. (1983). Cost-Relevance Analysis for Overrun Control. International Journal of
Project Management, Vol.1 No.3, 142-148
3. S.B. Mohan and K.S. Al Gahtani (2006). “Current Delay analysis: Techniques &
Improvement”. Cost Engineering, VOl:8, No:9, pp 12-21, 2006.
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