Proceedings of Malaysian Technical Universities Conference on Engineering & Technology (MUCET)

3-4 December 2013 , Kuantan, Pahang

Study of Factors Causing Time and Cost Overrun throughout

Life Cycle of Construction Project

*Ismaaini Ismail, Ismail Abdul Rahman, Aftab Hameed Memon

Faculty of Civil and Environmental Engineering, Universiti Tun Hussein Malaysia
86400 Parit Raja, Batu Pahat, Johor, Malaysia

*Corresponding email: 1is_mujahidah@yahoo.com

Abstract
This paper presents a study of factors affecting time and cost overruns throughout life cycle of construction
projects. The issues of overrun in construction are very common worldwide including Malaysia. However, no
researchers investigate this problem according to the phases of construction. Hence, this study is to classify the
overrun factors into phases of project life cycle which include planning phase, design phase, construction phase
and finishing phase. A total of 35 factors were identified based on previous studies involving a number of
different countries. These factors were classified according to degree of occurrence of each phase. Based on this
classification, it shows that most of the factors occurred in construction phase. This classification gives better
understanding amongst construction practitioners.

Keywords: Time and cost overruns, projects life cycle, construction project, Malaysia

1.0 Introduction
Construction industry is a very important industry in a country’s development and it can increase or
generate economic development of the country. A study showed that since seventies, the economic in Malaysia
has undergone rapid growth. It found that construction industry constitutes an important element of Malaysian
economy [1]. However, majority of the construction are facing problem in achieving the completion of project
within stipulated time and cost.

In other words, time and cost overrun is a common issue that frequently happens in the construction
project worldwide[2], [3], [4]. Generally, time overruns happen when a task within a project is not completed by
the time the project plan specifies. Meanwhile, cost overrun occurs when the expenses required to complete a
project exceed the amount budgeted.

Around the world, many studies showed the time and cost overrun issue is a common problem in
construction project. Like a study conducted by [1] was study on time and cost overrun in construction project in
Malaysia. A total of 308 public sectors and 51 private sectors involves in this study. The result shows
percentage of time overruns is higher compared with percentage of cost overruns but both of them facing
overrun more than 50%. For the public sector, only 20.5% of the projects completed within stipulated time and
46.8% of projects completed within the budget. Meanwhile for the private sector, only 33.35% and 37.2% of
projects completed within time and cost estimation respectively.

Besides that, MARA construction projects also facing problem in time overrun where it was found
90% of projects have experienced delay since 1984 [5]. However, no researchers investigate this problem
according to the phases of construction. Hence, this study is to classify the overrun factors into phases of project
life cycle which include planning phase, design phase, construction phase and finishing phase.

In addition, the latest issue related to time and cost overrun that happen in Malaysia is construction of
Kuala Lumpur International Airport 2, or known as KLIA2. It was targeted to open in September 2011, but he
opening was then moved to June 28 2013. Because of the delay, they expect the project to face some RM500
million in cost overruns. This problem happens due to frequent design changes in construction. Hence, this case
shows that time and cost overrun is a serious issue in construction in Malaysia.

2.0 Construction Life Cycle

According to [6], the common phases in project life cycle consists four phases which are conceptual
planning and feasibility studies, design and engineering, construction, and operation and maintenance.
Ismail, Abdul Rahman, Memon

Besides that, [7] classified the project life cycle into five phases which are feasibility phase, design
phase, construction phase, exploitation phase and dismantling phase. The first phase is feasibility phase which
consist the issues of economical, safety of workers along the construction process, technical aspects, and basic
information for the all phase in construction. The second phase is design phase which not only focused on the
design but also includes the details of project, proposing initial tests, the calculation of each element of the
structure, drawings, specifications and also estimated costs. The third is construction phase which involves two
sub-phases of the execution and inspection. In the execution phase, it includes the activities of the construction
works until the project is completed. While inspection phase involves the inspection work performed in
continuously to ensure that the construction works are carried out properly, and also assuring of safety and
environmental quality. The next phase is exploitation phase which consist activities of use and maintenance
after completion of evaluation stage. Dismantling phase is the last phase in project life cycle which involves
activities of demolishing and removing the facilities from the service depends on their use and life expectancy.

In another study conducted by [8], project life cycle divided into five phases consists conceptual
planning and economics phase, engineering and functional design phase, phase 3, construction and completion
of the project phase, and operation and utilization phase. Conceptual Planning and Feasibility Study involves a
few components such as analysing the concept of the project, studies of related issues of technical and economic
and identify the impact on the environment. The second phase is engineering and design and it was divided into
two main stage which are preliminary engineering and design, and detailed engineering and design. However,
both of these stages more emphasize related to architectural concepts and structure analysis to ensure each
structure follow the actual specification. For the phase III, it involves the preparation of all contract documents
by the designer for submitted to the contractor. Next, in construction phase, the execution of project started until
the project completed within the stipulated time, cost and quality. For the final phase, the operating life is
determined during the beginning of project since the developing of project's conception. Sometimes owner will
be conducting the regular maintenance for their project.

However, this study only focus on four phases in project life cycle which consists of planning phase,
design phase, construction phase and finishing phase as shown in figure below.

FINISHING PLANNING
PHASE PHASE

PHASE OF
PROJECT
LIFE
CYCLE

CONSTRUCTION DESIGN
PHASE PHASE

Figure 1: Project Life Cycle

• Planning phase: Planning phase emphasize a few things in clear approach such as the scope of project,
purpose, objectives, resources, time and cost estimation, and deliverables. This is to ensure the project
executions are in a plan, schedule and budget.
• Design phase: This phase involves preparation of detailed plan and drawings for entire project.
Designers are responsible for providing drawings according to owner requirements and any changes
can be made before it is approved.
• Construction phase: The major part of project work takes place in construction phase. This phase
consist the execution of project plan, communication between other parties, report the project progress,
and control the time, cost and quality of work.
Ismail, Abdul Rahman, Memon

• Finishing phase: Finishing phase is the concluding stage of a construction work. it involves the
finishing work for the entire structure or building either the exterior and interior of buildings to
increase their aesthetic qualities. The types of finishing work include plastering, flooring, painting,
wallpapering, and glazing.

3.0 Factors Affecting Time and Cost Overrun

There are many factors that cause time and cost overrun in construction. These factors have been identified
in previous study involving a number of different countries. In Malaysia, [9] conducted a survey on significant
causes of delay in MARA management procurement construction projects. This study was found that the
significant delay causes are cash flow and financial difficulties faced by contractors, contractors’ poor site
management and ineffective planning and scheduling by contractors.

In study by [10] was identified the causes of cost overruns which affect the cost performance of
construction projects in Pakistan. Result shows the top ten significant causes are corruption and bribery, political
interests, poor site management, delay in site mobilization, rigid attitude by consultants, extra work without
approvals, frequent changes during execution, gold platting, safety and health and limited access to job sites.

Meanwhile, in Australia [11] studied the critical factors that impacts cost performance across the design
consultants, contractors and client perspectives. This study involved three types of projects which are
construction industry, comprising residential, commercial and industrial buildings. This study was found the
five significant factors which are planning and scheduling deficiencies, methods/ techniques of construction,
effective monitoring and feedback process, complexity of design and construction and improper control over
site resource allocations

In Nigeria, [12] investigated factors that contributed time overrun in construction project. The analysis
showed funding and payment, contractor and client factors are the major factors contributed to the delay of
projects. While, [13] studied the significant factors causing cost overruns in the development of
telecommunication projects. This study involves 53 telecommunication projects in six geopolitical zones. The
result indicates that three major causes of cost overruns are lack of experience of contractors on
telecommunication projects, high cost of imported materials and fluctuation in the prices of materials.

4.0 Overrun Factors in Construction Life Cycle

The purpose of this section is to get a general view about the factors of time and cost overruns that
occurred in construction life cycle. According to table 1 below, there are 35 factors was identified from previous
studies and this factors was divided into three categories which are factors contribute to time overrun, cost
overrun, and time and cost overrun. Then, these factors was classified into four phases comprises planning,
design, construction and finishing. Only two factors that occurred along construction life cycle which consists of
the lack of communication between parties and change in the scope of the project. Meanwhile, the other factors
have occurred in different phases.
Ismail, Abdul Rahman, Memon

Table 1: Phase Occurrence of Factors

Phase
Factors References
Occurrence
Time overrun
Incompetent subcontractors C [3], [14], [15]
Schedule Delay C [16], [17], [18]
Mistakes during construction C [3], [14]
Delay Preparation and approval of drawings D [19]
Poor financial control on site C, F [15], [19]
[3], [15], [19], [20], [21], [22], [23],
Delay in progress payment by owner C
[24], [25], [26], [27], [28]
Delay payment to supplier /subcontractor C, F [22], [29], [30]
Lack of coordination between parties D, C [27], [31]
Lack of communication between parties P, D, C, F [3], [14], [27], [28]
Labour productivity C, F [14]
Shortage of technical personnel (skilled labour) C [32]
Equipment availability and failure C [14], [18], [33]
Delays in decisions making P [10], [31], [34], [35]
Cost overrun
Inadequate monitoring and control C [30]
Mistakes and Errors in design D, C [4], [36]
Incomplete design at the time of tender D
Poor design and delays in Design D [37]
Contractual claims, such as, extension of time
C [38]
with cost claims
High cost of labour C [13]
Labour absenteeism C
Fluctuation of prices of materials C [9], [13], [18], [36], [39]
Inaccurate quantity take-off C [12], [40]
Time & Cost overruns
[3], [9], [10], [14], [23], [33], [36],
Poor site management and supervision C
[40], [41], [42], [43], [44]
Inadequate planning and scheduling P, C [3], [14], [39], [43], [45]
[3], [5], [14], [27], [36], [37], [41],
Lack of experience P, D, C
[43], [44]
Inaccurate Time and Cost estimates P, D [36], [45]
Frequent design changes D, C [13], [34], [40], [46]
Cash flow and financial difficulties faced by
C, F [5], [9], [44], [46]
contractors
Financial difficulties of owner C [35], [47]
Slow information flow between parties C [4], [40], [48], [49]
Shortage of site workers C, F [5], [22], [31], [32], [43], [44]
Shortages of materials C [3], [4], [14], [18], [23], [32], [33], [50]
Late delivery of materials and equipment C, F [34], [37], [51]
Poor project management C [4], [36], [39]
Change in the scope of the project P, D,C, F [16], [19], [30], [39], [52], [53], [54]

Note:
P=Planning, D=Design, C=Construction, F=Finishing

Table 2: Frequency of factors occurred in each phases

Phase Planning Design Construction Finishing

Total 6 10 30 8
Ismail, Abdul Rahman, Memon

Table 2 shows the frequency of factors that occur in each phase of the construction life cycle. Results
showed a total of 30 factors were identified occur in the construction phase. This shows that the construction
phase is the major contributor to the problem of time and cost overrun. With recorded a total of 10 factors,
design phase is the second contributor to time and cost overrun. It was followed by finishing phase with 8
factors occurred in this phase. The last phase that contributes to problem of time and cost overrun is the
planning phase with only 6 factors.

5.0 Conclusion
By using the previous study, this study can identify the factors that occur in each phase of the project
life cycle. In overall context, only two factors occurred in all phases. Among these factors is lack of
communication between parties and change in the scope of the project. From these results, again, it is noted that
construction phase is a major contributor on time and cost overrun in construction project. The findings could
help the practitioners to gain better understanding about the factors influencing on time and cost along
construction project.

Acknowledgement

I would like to thankful to UTHM for sponsoring my study.

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