EVALUATING REASONS FOR COST OVERRUN IN A LOW COST CONSTRUCTION PROJECT

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1 International Journal of Civil Engineering and Technology (IJCIET) Volume 9, Issue 4, April 2018, pp , Article ID: IJCIET_09_04_077 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed EVALUATING REASONS FOR COST OVERRUN IN A LOW COST CONSTRUCTION PROJECT K.Muthu Venkata Sekar M.Tech Student, SOCE, SASTRA Deemed to be University, Thanjavur, Tamilnadu, India M.Mahalakshmi Assistant Professor, SOCE, SASTRA Deemed to be University, Thanjavur, Tamilnadu, India ABSTRACT Delays in the construction industry are an universally observable fact, which impacts the construction participants. The undertaking principally spotlights on deciding the common deferment issues in the focal Tamil Nadu, contingent upon the examination of the development members to be specific the customer, expert, and the contractual worker. In light of the investigation from the writing, the survey was encircled, acquired, shortlisted, and provided to the main 50 specialist, 50 temporary workers and the wide gathering of 150 clients to think about their recognition on the reasons for postpones which are arranged into 4 bunches say Improper undertaking arranging, Design related issues, Finance related issues and Resource related issues, and are broke down utilizing the SPSS programming instruments the predominant factors and gatherings are recognized. Consequently the overwhelming components were observed to be the financial issues of the customer which influences the whole advance and the resulting configuration changes by the customer. Likewise the overwhelming gatherings were observed to be the Improper undertaking arranging and the Resource related issues which are to be appropriately overseen and arranged. Key words: cost overrun, construction delay, time overrun, critical delays. Cite this Article: K.Muthu Venkata Sekar and M.Mahalakshmi, Evaluating Reasons for Cost Overrun in A Low Cost Construction Project, International Journal of Civil Engineering and Technology, 9(4), 2018, pp INTRODUCTION 1.1. GENERAL Large scale development exercises are occurring in Indian development industry and are nearly connected with country's economy. Cost overwhelms have turned into the sign of development extends in India. It has turned into a worldwide worry among the specialists and scholarly analysts on the grounds that the development ventures are seldom finished inside editor@iaeme.com

2 Evaluating Reasons for Cost Overrun in A Low Cost Construction Project the assessed cost constrain. Cost is among the significant contemplations all through an undertaking administration life cycle and is considered as prime factor of accomplishment. In any case, it is remarkable to see extend finished inside the evaluated cost. The extent and causes behind these cost invades remain understudied. Cost is a major concern in every part of the construction project. Cost overrun is the total increased value compared to the budgeted cost. Cost overruns have become the basic factor for determining the success in the construction project. The construction activities are rarely completed within the estimated cost limit and so it has become a global concern. The cost overrun concern the quality and success of the overall nations economy. In general, cost overwhelms lessen the profitability of accessible monetary assets, edge the advancement potential and reduce the adequacy of the economy. Notwithstanding the significance and the centrality of the development segment in India, it is noticed that the proprietors, advisors, and temporary workers don't give its significance to assess the time and cost invades toward the finish of undertaking. It is in this way basic to recognize genuine reasons for time overwhelms to limit and maintain a strategic distance from delays and expanding cost in any development project. It was felt that an overview into the reasons for cost invades in the development procedures may give some understanding into their answers. It was likewise felt that it would be valuable for the examination to explore the perspectives of the contractual worker, the specialist and the customer OBJECTIVE The goal of the paper is to decide the proprietors, consultants and contractual workers observation towards the relative significance of key Time execution and Cost execution pointers in development extends with a specific end goal to assess their execution. To consider the elements that prompts cost invade in South Indian construction projects and finally rank the major factors that influence the cost overrun which helps to avoid loss in the project & gain profit for the contractors. 2. METHODOLOGY 2.1. RESEARCH STRATEGY The research of this thesis is carried out based on the literature reviews and data collected through questionnaire survey. The data collected were collected from the leading contractors and consultants in Tamil Nadu, which is a important hub for construction in south Indian construction industry. The factors that are responsible for influencing the cost overruns were collected through various literature studies RESEARCH DESIGN "Research design" intimates the strategy or relationship of intelligent examination, portraying out of an examination consider joins the difference in a course of action or technique that will control the storing up and examinations of information. This exploration has been ordered into 6 stages. The main period of the examination is to recognize the issue and goal of the investigation. At that point an arrangement has been done to set up the examination approach. The second period of the exploration incorporates gathering fundamental information from the past writing surveys. The third period of the examination is the survey outline through which incorporates statistic information of the respondent and the elements for cost invade. The fourth one is the poll conveyance through which the information has been gathered. The fifth period of the exploration incorporates information investigation and dialog. Factual editor@iaeme.com

3 K.Muthu Venkata Sekar and M.Mahalakshmi Package for Social Sciences (SPSS) programming is utilized to measurable breaks down of the survey. The 6th and last period of the exploration is to finish up and detail proposals. Figure 1 Research Design 2.3. POPULATION AND SAMPLE The survey has been taken with the leading contractors, consultants and also client to know the perception of people associated with the project. About 50 samples were collected to know the exact data required for the research. The first part of the questionnaire contains the demographic characteristic of the participant and the second part contains the factors leading to cost overrun DATA COLLECTION A detailed questionnaire survey had been carried out to find the reason behind the cost overrun. Before information gathering, preparatory examination was led by meeting five experienced work force in the development business to approve the substance of survey and affirming the importance of the substance. The questionnaires prepared were than given to the experienced contractors and consultants to collect the data. The information assembled from the overview were broke down distinctly through a hierarchal appraisal of causes HIERARCHAL ASSESSMENT OF CAUSES Relative importance index is a ranking method which is used to rank the factors that are responsible for causing cost overrun. These causes were also grouped into certain category based on studies and field survey editor@iaeme.com

4 Evaluating Reasons for Cost Overrun in A Low Cost Construction Project Figure 2 Hierarchal assessment of causes 3. RESULTS AND DISCUSSIONS A total of 50 questionnaires were collected from the various contractors, clients and consultants around Thanjavur and trichy region in South India. The respondents were mostly working in the building related projects. The work experiences for most of the respondents were between 6-15 years and about 40% of them had a experience of more than 15 years. The data were analysed statistically by SPSS software RELIABILITY ANALYSIS Reliability can be likened to steadiness, consistency, or trustworthiness of an estimating apparatus. The Cronbach α coefficient is broadly received to quantify the internal consistency. The alpha esteem ranges from 0 to 1. Reliability is in low level when Cronbach α is under 0.3 and it can't be acknowledged. Dependability is in abnormal state when Cronbach's α is in excess of 0.7 where it means high state internal consistency of index table and it can be exceptionally satisfactory. The estimations of α going from 0.6 to 0.7 are additionally worthy in some past investigations. Table1 demonstrates the results of the reliability test. The reliability value we attained have a higher consistency level of Table 1 Reliability Statistics Cronbach's Alpha N of Items editor@iaeme.com

5 K.Muthu Venkata Sekar and M.Mahalakshmi 3.2. RANKING METHOD The collected data were analysed using SPSS software. The reliability test had been carried out to find the reliability of the collected data. The ranking method is used to find out the highest value through which the factors can be ranked based on their influence level RANKING OF CAUSES OF COST OVERRUN Positioning of reasons for cost overrun was surveyed in SPSS. The aftereffects of the positioning are exhibited in the beneath tables. Table 2 Rank table for Design & Document related factors DESIGN & DOCUMENTATION RELATED FACTORS FREQUENT DESIGN CHANGES 3.60 MISTAKES & ERRORS IN DESIGNING AND DOCUMENTATION 2.99 METHOD OF CONSTRUCTION 3.27 CLIENT INITIATED VARIATION IN DESIGN 2.69 INADEQUATE DATABASE 2.45 Table 3 Rank table for Construction site management related factors. CONSTRUCTION SITE MANAGEMENT RELATED FACTORS MISTAKES/ERRORS DURING CONSTRUCTION 3.10 ACCIDIENTSDURING CONSTRUCTION 2.71 LATE DELIVERY OF MATERIAL AND EQUIPMENT 2.90 ERRORS COMMITTED DURING CONSTRUCTION AT JOB SITE 3.35 INADEQUATE MONITORING AND FEEDBACK PROCESS 2.94 Table 4 Rank table for Financial related factors FINANCIAL RELATED FACTORS CASH FLOW & ECONOMIC DIFFICULTIES ENCOUNTERED BY CONTRACTOR 1.80 DELAY IN PAYMENT BY OWNER 1.96 FINANCIAL DIFFICULTIES BY OWNER 2.24 Table 5 Rank table for Project management related factors PROJECT MANAGEMENT RELATED FACTORS DELAY IN DECISION MAKING 1.89 INACCURATE QUANTITY TAKE OFF 2.17 CHANGE IN THE SCOPE OF THE PROJECT editor@iaeme.com

6 Evaluating Reasons for Cost Overrun in A Low Cost Construction Project Table 6 Rank table for Human Resources related factors HUMAN RESOURCE RELATED FACTORS AVAILABILITY AND SUPPLIES OF LABOUR AND MATERIAL Mean Rank 2.73 HIGH COST OF LABOUR 3.39 SHORTAGE OF SITE WORKERS 3.39 SHORTAGE OF TECHNICAL PERSONNEL 2.77 LOWER LABOUR PRODUCTIVITY 2.71 Table 7 Rank table for non-human resources related factors NON-HUMAN RESOURCE RELATED FACTORS UNEXPECTED WEATHER CONDITION 2.64 SHORTAGE OF MATERIAL 2.51 PRICE HIKE OF MATERIAL 2.69 EQUIPMENT AVAILABILITY AND FAILURE CONCLUSION This research explored the basic factors that influence cost execution crosswise over both the preconstruction and construction process. Around 95% of the respondents agree that the cost overrun occurs in most of their construction project. This will also affect the profit and success of the construction industry. The major factors that were found to influence the cost overrun are price hike of materials, cash flow and economic difficulties of the owner, frequent design changes and delay in payment by owner. The initial agreement problems play a vital role in this issue. When constructing low budget buildings the contractor doesn't properly quote the total final value of the project. They add the additional work and other material cost only when the project proceeds further. This makes the client to be in a confused state about the project cost. Material problems, financial related problems and design related problems are major area which have to concentrated more when taking up the project. Locally available materials can be used to control cost overrun. Standardized design practices, proper financial management, efficient resource planning and management proves to be reduce the cost excess. The price hike of materials can be minimized by using locally available materials. REFERENCE [1] Veera Vijay. Divi and Sundara Kumar. P, Analysing Delay Factors In Indian Affecting Construction Projects, International Journal of Civil Engineering and Technology (IJCIET). Vol 8, Issue 4, [2] Andrew Shing Tao Chang., Reasons for cost and schedule increase for engineering design projects, Journal of management in engineering,vol. 18: 29-36, Issue 1,Jan [3] S.Shanmugapriya and Dr. K Subramanian, Investigation of Significant factors influencing Time and Cost overrun in Indian construction Projects, International Journal of Emerging Technology and Advanced Engineering. Vol. 3: , Issue 10, Oct editor@iaeme.com

7 K.Muthu Venkata Sekar and M.Mahalakshmi [4] Hemanta Doloi., Cost overruns and failure in Project Management: Understanding the roles of key stakeholders in Construction projects, Journal of Construction Engineering and Management. Vol 139: , Issue 3, Mar [5] Savita Sharma and Pradeep K Goyal, Cost overrun factors and project cost risk assessment in construction industry- A state of art review, International Journal of Civil Engineering. Vol 3: , Issue 3, May [6] Pankaj P. Bhangale, Analysis of Time and Cost Overrun To Key Success of High-Rise Commercial Building Project - A Case Study, International Journal of Civil Engineering and Technology, 7(4), pp , [7] S. Ramanathan and V. Rathinakumar., Analysis of Risk Factors in Small, Medium & Large Construction Projects, International Journal of Civil Engineering and Technology, 8(4), [8] G. Siva Subramani, S. Manikanda Prabhu and Sumpa Dey, Identifying the Factors Causing Time Overrun in Construction Projects in Chennai and Suggesting for Possible Solutions, International Journal of Civil Engineering and Technology, 7(6), pp , [9] Jamal M. Assbeihat, Factors Affecting Delays on Private Construction Projects, International Journal of Civil Engineering and Technology, 7(2), pp , [10] Mayank Kumar Singh, Shumank Deep and Rajeev Banerjee, Risk Management in Construction Projects as Per Indian Scenario, International Journal of Civil Engineering and Technology, 8(3), 2017, pp , editor@iaeme.com