Abstract
The construction industry is flourishing worldwide and contributes about 10% to the GDP of the world i.e. up to the tune of 4.6 Trillion US dollars. It employsalmost7%of the total employed persons and, consumes around 40% of the total energy. The Pakistani construction sector has displayed impressive growth in recent past years. The efficient road network is a key part of construction business & plays a significant role in the economic uplift of country. The overruns in costs and delays in completion of projects are very common phenomena and it has also been observed that the projects involving construction of roads also face problems of delays and cost over runs especially in developing countries. The causes of cost overruns and delays in road projects being undertaken by the premier road construction organization of Pakistan National Highway Authority (NHA) have been considered in this study. It has been done specifically in the context of impact of cause(s) determined from project report of a total of one hundred and thirty one (131) projects. The ten causative factors which we recognize as Design, Planning and Scheduling Related problems, Financial Constraint Related reasons, Social Problem Related reasons, Technical Reasons, Administrative Reasons, Scope Increase, Specification Changes, Cost Escalation Related reasons, Non-Availability of Equipment or Material and Force Majeure play a commanding role in determination of the cost and time over runs. It has also been observed that among these identified causes, the factors of Administrative Reason, Design, Planning and Scheduling Related, Technical Reasons and Force Majeure are the most significant reasons in cost and time overruns. Whereas, the Cost Escalation related reasons has the least impact on cost increase and delays. The NHA possesses a financial worth of around Rs. 36 billion and with an annual turn over amounting to Rs. 22 billion is responsible to perform road construction project in entire Pakistan and abroad do faces such problems of increase in completion cost and delays in completion time as compared to targeted project cost and duration. The study revealed that there was an increase in cost in 62% projects i.e. out of 131 road construction projects 82 Projects observed cost over runs (Table I,Fig. 1).
Keyword(s)
Cost Overruns, Delays, Road Projects, Time Overruns, Economic Model