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Cost overrun in construction projects thesis proposal

Cost overrun in construction projects thesis proposal cost occupies an

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Printed: 23, March 2015

Delay and price overruns are common in construction projects. Cost overrun means the particular tend to be pricey than planned. In construction, delay might be looked as time overrun either beyond completion date per an agreement, or past the date the parties made a decision for finding the project (Assaf Al-Hejji, 2006, p.349). The development companies are the tool by which a society achieves its goals of urban and rural development (Enshassi et al. 2006).To start with, this paper critical analysis some literature reviews. Comprehend the significant factors lead to obstruct and price overruns in construction projects.

Cost overrun in construction projects thesis proposal more police

Next, explore the overrun and delay reasons for 2012 London Olympics. Lastly, assess precisely why are really concluded between literature reviews along with the selected project.

Literature Review

A few in the projects would be the effective and efficient management plus a handful of poor management to create much delay and price overruns (Frimpong, Oluwoye Crawford, 2003). A effective project should think about time, cost and scope. In 1980s, plenty of Turkish public agencies were investigated to know the price overrun sources in public places projects. The outcomes says floating of exchange rate, material prices elevated, estimates errors and technology skills were the important thing causes of expenditure overruns (Arditi, Akan Gurdamar, 1985). Really, each project has specific figures that may determine the task cost and time. The critical thinking is showing below.

Technology Skills


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Strategy is the significance factors lead to project cost overrun or delay. In terminology, for example imperfect techniques, insufficient data, honest mistakes, natural problems in predicting the extended run, inadequate skill for forecasters, etc. (Ascher, 1978 Flyvbjerg Morris Hough, 1987 Wachs, 1990, p.286).For almost any practical example, Noulmanee along with other colleagues investigated causes of why highway construction delays in Thailand.

Cost overrun in construction projects thesis proposal with the theory from the

Consequently, primary reasons were from inadequacy of sub-contractors, organization that lacks of sufficient sources, incomplete and unclear sketches and deficiencies between consultants and contractors. Furthermore, improper planning could cause the deviation between actual cost and planned cost (Assaf, et al, 2006).additionally, when the equipments quality is low, this may lead to delay the progress.

Economic Pressure

Kaming together with his colleagues studied influencing factors on 31 high-rise projects in Indonesia and located that cost overruns occur more often and they are more serious problem than time overruns. They observed the main factors influencing cost overrun are material cost increase because of inflation, inaccurate material estimation and volume of complexity. Additionally, economic crisis also personalize the raw material cost, then enhance the whole price of project (Kaming, 2001). Furthermore, the cost-effective crisis can lead to the rate of inflation increase. Then, the cost of merchandise can also be improved. In this particular subject, the general expenditure also increases.

Uncertain Pressure

Al-Momani investigated reasons for delay in 130 public projects in Jordan. The primary reasons for delay were associated with connection between construction conditions (e.g. soil, high water table, etc.).Additionally, the completely new weather impact on construction methods. Rain can also be impact on construction activities (see appendix 1). Goods cost inflation cannot be forecasted. So the recycleables cost cannot be ensured (NAO, 2007).

Resource Management

This analysis within the respondents is including groundwater in Ghana project. Project management software software software pertains to the treating of sources, workers, machinery, capital, techniques and materials (Frimpong, et al, 2003).

The study results show the primary cause of the groundwater project construction delays and price overruns, including: agencies payment amount difficulties, poor contractor management and material procurement (Frimpong, et al, 2003) The information show 75% within the project past the original project schedule and price while only 25% within the budget and time for you to complete ((Frimpong et al, 2003, p.321). The issue arises from poor resource management (human, technical and material), for instance, poor site management and supervision by contractor, ineffective planning and scheduling of project by contractor and periodic productivity quantity of labors ((Frimpong, et al, 2003).

Poor materials cause greater construction cost in comparison with expected due to the inadequate material with the implementation phase. This is due to not enough standards for materials and management systems. Inabiility to avoid cost overruns so that you can control construction costs, causes many construction companies to fail( Aziz,2013,p.52).A effective price range technique is therefore necessary this can be accomplished through purchasing a positive price range.

Special Needs


Fishbone Diagram—Adopt to see precisely why of project cost overrun or delay.

The London 2012 Olympics and Paralympic Games

Relating To This summer time time 6, 2005, the planet Olympic Committee announced that London could host 2012 summer time time time Olympic games Games and Paralympic Games. The outlet within the Olympic Stadium in Stratford situated in london Relating To This summer time time 27, 2012, The Olympics is unquestionably an worldwide pastime, held each 4 years. The Olympics originated from ancient A vacation to a vacation in a holiday in greece, the Olympics is now offering switched in to a indication of peace and friendship. It combines the sports, education and culture generally. It’s a comprehensive, sustained, world-wide activity, but in addition a cultural distribution.

Primary stadium Wembley Stadium and Olympic Park would be the landmark in the Olympics. Nevertheless, this sport event caused the dispute. Since the large amount of exterior cost was be regard as uncommon. The particular cost was £9.3 billion, consequently, 500 million pounds greater than your allowance. Compared the particular cost with budget, the very best cost switched over four occasions (CNN, 2012 [Online]).

The anticipated total price of policing and offering security outdoors the venue is £455million (NAO, 2012, p.24). Noisy . 2007, Jowell has pointed out that security spending should think about about 30 % within the total budget within the Olympic. Consequently, the safety cost occupies an essential position.


Economic pressure

Economic elements affected 2012 London Olympics. In addition, Because of the impact within the European debt crisis, Britain’s crisis worries hard to eliminate ( Arghyrou Kontonikas, 2012, p.662). The euro zone tough economy could be a direct effect on the economy within the Uk upset the established intend to raise the budget within the British Government (Kara Nelson, 2003). The best problem presently affecting United kingdom companies may be the appreciation within the pound within the euro, the British EU countries export commodity prices rise, greatly influenced the Uk export and economic outlook. Inflation will exacerbate the development rate within the cost. Overall, the rate of inflation between 2005 and 2012 which was elevated (Appendix 5).

Uncertain pressure

The primary areas of uncertainty that remain would be the impact of construction cost inflation (NAO, 2007, p.7). During this project, cost inflation cannot be forecasted. Raw material cost has elevated. Steel is considered because the materials broadly in construction. This Year london Olympics project, steel because the fundamental material, plenty of steel was purchased by LOCOG. Which was the big spending. However, in 2005, the cost index of steel was 129.. Next, the cost index ongoing to develop. Within the finish of 2011, the figure has demonstrated up at 191.7 (EEF, 2011, [Online]). The cost of materials is floating. It is really an uncertain factor. Rising material prices, the acquisition cost remains greater than most initial estimate. Therefore, which will unquestionably enhance the expenses of in regards to the Olympics (Appendix6 7).

Special requirement s

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Olympic Game is considered because the import sport event. Its needs are particularly. With the Olympics you will observe 12,000 police officials accountable for taking proper care of law and order, in situation of inadequate policemen or emergencies, you will observe more police officials business areas become redeployed to help these expenses is not incorporated within the budget (NAO,2007). Additionally, LOCOG ended up being promote sustainable development and eco-friendly Olympic games (British Embassy Tokyo, japan, japan, japan, n. d.). Almost stadiums facilities were created of Dow jones johnson manley materials, likes stadium seats. These components could to reduce the finish result on atmosphere (Lower. d. [Online]). To own Olympic goals the sustainable development. Unsurprisingly, the price of Dow jones johnson manley materials has elevated.

Economic pressure, uncertain pressure and special requirement have arrived on the scene to affect concerning this project budget forecasting. However, technique skills and resource management didn’t show this project.


While using literature review along with the 2012 London Olympics, situation studies, it may be concluded, caused project cost overruns or time-out for many reasons. During this report, developing a fishbone diagram, showing 5 major aspects. London Olympic games combined situation analysis, economic factors, uncertainties and special needs are the same theory within the fishbone. Technology and resource management didn’t can be found in this project. Inflation, material cost fluctuations and weather changes will heighten the development cost. Particularly, the Olympic games security jobs are special is essential, such special needs have to be satisfied. In contrast, this can heighten the price. So, the Olympic ended up being estimate the mistake as opposed to deliberate lie. London Olympic games was the truly effective though it past the estimate. However, these 4 elements is extremely suggested to return project budget to prevent underestimate minimizing losses.

Arditi, D. Akan, G.T. Gurdamar,S.(1985) Cost overruns in public places projects. Worldwide Journal of Project Management Software Software Software, 3, (4), 218-224.

Arghyrou M.G. Kontonikas A. (2012) The EMU sovereign-debt crisis: Fundamentals, expectations and contagion, Journal of Worldwide Markets, Institutions and money, 22, (4), 658-677

Assaf, S. A. Al-Hejji,S. (2006) Reasons for delay in large construction projects, Worldwide Journal of Project Management Software Software Software, 24, (4), 349-357.

Aziz, R.F.(2013) Factors causing cost variation for constructing wastewater projects in Egypt, Alexandria Engineering Journal, 52, (1), 51-66.

British Embassy Tokyo, japan, japan, japan (n.d.) London 2012 and Sustainability – the first ‘green’ Games [Online], supplied by: ukinjapan.fco.gov.united kingdom/en/visiting-the-united kingdom/london-2012-olympic games/sustainability/[Utilized: 01.03.13].

CNN (2012) London 2012 Olympic games Bill Set to enhance Again, Report States [Online], Supplied by: edition.cnn.com/2012/03/09/sport/olympic games-london-cost-rise [Utilized: 25.02.13].

Nagarajan, K. (2004) Project Management Software Software Software, India: Modern Worldwide Limited.

Frimpong, Y. Oluwoye, J. Crawford, L. (2003) Reasons for delay and price overruns in construction of groundwater projects within the developing countries Ghana as being a situation study, Worldwide Journal of Project Management Software Software Software, 21, (5), 321-326.

Mahamid, I. (2013) Connection between project’s physical characteristics on cost deviation in road construction, Journal of King Saud College – Engineering Sciences, 25, (1), 81-88.

Nation Audit Office (2012)

Nation Audit Office (2007) Your allowance for the London 2012 Olympic and Paralympic Games, United kingdom: Nation Audit Office.

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Kara, A. Nelson, E. (2003) The Exchange Rate and Inflation within the United kingdom, Scottish Journal of Political Economy, 50, (5), 585-608.

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