International Journal of Advance Engineering and Research Development

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1 Scientific Journal of Impact Factor (SJIF): 5.71 International Journal of Advance Engineering and Research Development Volume 5, Issue 04, April e-issn (O): p-issn (P): A COMPARATIVE STUDY FOR TIME OVERRUN AND COST OVERRUN FACTORS OF CONSTRUCTION PROJECT A CASE STUDY OF ROAD PROJECTS 1 Mr. Nikhil P. Thummar, 2 Asst. Prof. Sumit Phugat 1 Parul institute of technology, Limda, Vadodara, India 2 Assistant professor in civil engg. Dept., Parul University, Limda, Vadodara, India Abstract - For any type of construction project there may be possibilities of delaying of the project or increasing in the total cost of the project due to different causes. Generally, In developing countries like India, Government projects like residential projects, roadways, railways, dams, bridges, etc. are very important for growth of the country. But sometimes the Government projects are become uneconomical and tedious for people or the construction company. And many projects experience cost overrun & time overrun and therefore exceed initial contract amount and delay of the project. This research paper describes the research on the Road Projects to study about the factors of time overrun and cost overrun. But the scope is limited for Rajkot district of Gujarat state from India. By reviewing the existing literatures on road projects of Gujarat state in India reveals the often problems with schedule delays and cost overruns. So, the purpose of this study is to identify the important causes of cost and schedule overruns in different road projects in Rajkot city of Gujarat and to suggest possible solutions for reducing such overruns of cost and time. And to validate these different factors identified by different literature reviews, some case studies of major district roads are also taken from Rajkot district of Gujarat state. These case studies are based on the quantitative approach which includes the questionnaire survey for different road projects for various parties like consultants, contractors, site engineers, etc. of the project and firms. Keywords - Schedule Delay, Cost Overrun, Literature Review, Road Project, Case Study I. INTRODUCTION The construction industry is truly the engine of national economy through which the total of physical development is achieved. For any developing country, the construction industry is the main element of the economic growth and it has a significant effect on the efficiency and productivity of other industry sectors. General public can not invest in manufacturing, agriculture, or service sectors unless the construction results of infrastructure facilities are in place. In some of the developing countries, the growth rate of construction activity outstrips that of population and of GDP (Chitkara, 2004). Generally, the success of any project is defined by accomplishing it within its specified cost, time and quality. So, we can say that cost, time, and quality are used to measure the project performance and success. According to Faridi et al. (2006) delays have an adverse impact on project success in terms of time, cost, quality and safety. The effects of construction delays are not confined to the construction industry only, but influence the overall economy of a country. To the dislike of owners, contractors and consultants, however, many projects experience extensive delays and thereby exceed initial time and cost estimates. This problem is more evident in the traditional or adversarial type of contracts in which the contract is awarded to the lowest bidder- the awarding strategy of the majority of public projects in developing countries including India. India has a road network of over 5,603,293 kilometres as on 31 st March, 2016, the second largest road network in the world after USA. At 1.70 km of roads per square kilometre of land, the quantitative density of India s road network is higher than that of Japan(0.91), the United States(0.67), and far higher than that of China(0.46), Brazil(0.18) or Russia(0.08). Adjusted for its large population, India has approximately 4.63 km of roads per 1000 people. India in its past did not allocate enough resources to build or maintain its road network. This has changed since 1995, with major efforts currently underway to modernize the country s road infrastructure. As per information gathered from Basic Road Statistics of India , Total length of national highways and expressways has 1,01,011 km and total length of state highways has 1,76,166 km. Therefore, improving construction efficiency by means of cost-effectiveness and timeliness would certainly contribute to cost savings for the country as a whole. Efforts directed to cost and time effectiveness were associated with managing time and cost, which in this study were approached via investigating time and cost overruns of road All rights Reserved 2347

2 1.1 Research Problem Project completing on time and within the expected cost are considered the most important factors of successful projects, which help to decrease problems for all parties and give another opportunity to construct other projects. Most construction projects are exposed to delay to the extent that it may extend to the double period of time specialized for that project, causing loss of project's profit, increasing cost and leading to technical and managerial problems between project's parties. Cost overruns is also considered another a big problem, which hinders project's progress, since it decreases the contractor profit leading to huge losses leaving the project in a big trouble. Generally, construction projects have troubles with construction methods and administration as well as limitation of resources, budget and time. The critical problems are failure to complete the projects on schedule and budget. In recent years, experiencing time and cost overrun is common in most of the construction projects. 1.2 Cost Overrun In Projects Cost overrun is a very common phenomenon that almost associated with nearly most of the projects in construction industry. It is more severe in developing countries where these overruns sometimes go beyond 50% of the expected cost of the project. It is common to see a construction project failing to reach its objectives within the predicted cost. Cost overrun is the major factor for losses or no-profit in the project for the contractor or other parties. 1.3 Time Overrun In Projects Schedule delay is one of the most usual, significant and serious problems which impact the time factor in the construction projects. Even with technological advances and getting better understanding of project management by project managers, time overrun is a critical factor which affects the construction project negatively. There are different reasons for delay in the projects. It is required for a detailed appraisal to recognize the delay factors and choose accurate and right actions to reduce the adverse impact of delays on the duration of the projects. II. AIM & OBJECTIVES OF THE STUDY 2.1 Research Aim The aim of this research is to assess factors which are influencing time and cost overruns on construction of road projects. 2.2 Research Objectives To identify the factors and reasons causing schedule overruns for road construction projects. To find the most important factors that affect construction time, cost and quality of works. Forwarding recommendations to minimize or to avoid cost overrun & time overrun; and hence to reduce its consequential effects on other construction projects. III. LITERATURE REVIEW As the construction industry continues to grow in size, so do planning and budgeting problems. This is because it is common for projects not to be completed on time and within the initial project budget. There are quite a number of examples at the national and international scene. Most of the construction projects in developing countries have had problems with time and cost overruns and this has caused a lot of concern. Because of construction delays and cost overruns, less and less work is performed and increase in construction budgets. Time and cost overruns occur in most construction projects and the magnitude varies considerably from project to project. So it is essential to define the actual causes of time and cost overruns in order to minimize and avoid the delays and increasing cost in any construction project. Delays are incidents that impact a project s progress and postpone project activities, delay causing incidents may include weather delays, unavailability of resources, design delays, etc. In general, project delays occur as a result of project activities that have both external and internal cause and effect relationship (Vidalis et al 2002). Cost overrun is defined as the positive difference between the final or actual cost of a construction project at completion and the contract amount agreed by the client and the contractor during signing of the contract. 3.1 Major Causes Of Time And Cost Overrun Based on analysis from literature reviews, the factors which are affecting the construction project are mainly categorized into nine different categories which are given as follow: 1. Contractor Related Factors 2. Consultant Related Factors 3. Design Related Factors 4. Equipment Related All rights Reserved 2348

3 5. Labour Related Factors 6. Material Related Factors 7. Owner Related Factors 8. Project Related Factors 9. Externality Related Factors These above factors are main factors causing time overrun and cost overrun in different road construction projects, which includes other minor categorized factors. There are various methods to identify the importance of the factors which factor affects most and which factor affects least on the project which are given as below: 1) Relative Importance Index (RII) Technique 2) Importance Index (IMPI) Technique 3) Frequency Index 4) Severity Index By using these methods we can also identify the loss of time and cost in exact percentage. And from these we can do planning for the future projects as per results in the past. IV. RESEARCH METHODOLOGY 4.1 Research Design "Research design" refers to the plan or organization of scientific investigation, designing of a research study involves the development of a plan or strategy that will guide the collection and analyses of data (Poilt and Hungler, 1985). This research consists of five phases; the first one is the proposal for identifying and defining the problems and establishment of the objectives of the study. The second phase of the research includes literature review. Literatures of time and cost overruns in construction projects were reviewed. The third phase of the research included a methodology of the thesis. The fourth phase of the research includes result and discussion. In this phase the result of desk study and questionnaires will be discussed. The last phase of the research includes the conclusions and recommendations. 4.2 Site Data Collection This study requires the full information about the case study project. It includes the various plans of the road projects, tender details, contract documents, correspondence letters, project reports, payment certificates, etc. And the most importantly estimated time and estimated cost which is used to compare with actual time and actual cost at the end of the project. Proper monitoring of the construction project also requires for proper survey data. Regular site visits and monthly progress reports are useful to identify the factors causing time overrun and cost overrun. 4.3 Methodology used in This Study This study is based on the case study analysis. So, it requires proper monitoring and analysis of the construction project. The data has been collected by interviewing the officials of the construction industry. The study has been broadly undertaken as follows: Identify the projects for the case study of time and cost overruns. Studied all the available plans, estimates, schedules and work procedures in detail and collected all the relevant data about the project. Find out different factors causing cost and schedule overruns in the construction projects using literature review. Examined the reasons for the overruns through proper monitoring and surveying the site of the project and interviewing the people related to the project. Analyzed the data obtained from the survey and compare with the estimated and actual schedules and budget to understand the causes and implications of overruns. Compare the factors identified by case study of the project and the factors identified by literature review. And listed out all the shortcomings. Make final conclusion and suggest possible remedial solutions for other road All rights Reserved 2349

4 V. CASE STUDY Some case studies of major district roads are taken from Rajkot city of India. Details of different case studies are given as below: 5.1 Details of Case Study-I Sr. No. Name Details 1 Project Name Widening and Expansion of Rajkot Kalawad Road 2 Client Name R & B Division, Rajkot 3 Contractor Name G.V. Sutariya Construction Company 4 Planned Start Date 10 - Jan Planned Finish Date 10 - Jan Actual Start Date 10 - Jan Actual Finish Date 22 - Feb Delay in days 43 days 9 Planned Cost Rs Actual Cost Rs Increased Cost Rs Details of Case Study-II Sr. No. Name Details 1 Project Name 150 feet Ring Road in Rajkot 2 Client Name Rajkot Urban Development Authority 3 Contractor Name Classic Infrastructure Pvt. Ltd. 4 Planned Start Date 08 - Feb Planned Finish Date 08 - July Actual Start Date 14 - Feb Actual Finish Date 21 - Sep Delay in days 74 days 9 Planned Cost Rs Actual Cost Rs Increased Cost Rs VI. RESULTS AND DISCUSSIONS Based on results of case study analysis, the different factors causing time and cost overrun are identified and validated by proper survey method. The factors influencing schedule overrun and cost overrun are discussed as below. 6.1 Factors Affecting Time Overrun 1) Change orders 2) Weather conditions 3) Delay to deliver the site (Right of way problem) 4) Equipment availability and failure 5) Quality of equipment and raw materials 6) Waiting for tests and inspection 7) Slow decision making by consultants 8) Inadequate contractor experience 9) Subcontractors 10) Mistakes during construction 11) Lack of experience on the part of the consultant 12) Lack of communication between the All rights Reserved 2350

5 6.2 Factors Affecting Cost Overrun 1) Slow site clearance 2) Fluctuations in the cost of materials 3) Lack of experience of technical consultants 4) Unpredictable weather conditions 5) Quality of equipment and raw materials 6) Cost of variation orders 7) Availability of labor 8) Labor productivity 9) Delays in issuing information to the contractor during construction stage 10) Lack of cost planning/monitoring during pre and post contract stages 11) Equipment availability and failure VII. CONCLUSION This study about identifying the factors affecting planned schedule and planned cost of the road projects in the area of Rajkot district in India and validating these time and cost overrun factors by proper questionnaire survey method. These factors can be used to make schedule for next phase of the project or any other future project related to construction project of roadwork. And by this study we can easily implement the planning for the project by using minimum risk with knowledge of time overrun and cost overrun factors. VIII. REFERENCES [1] Anant Narayan Shete, Vaibhav Durwas Kothawade, An Analysis of Cost Overruns and Time Overruns of Construction Projects in India International Journal of Engineering Trends and Technology (IJETT) Volume 41, Issue 1, November 2016 [2] Santoshkumarprajapati, Rakesh Gupta, MukeshPandey, Causes and Effects of Cost Overrun On Construction Projects in Madhya Pradesh IJEDR- Volume 4, Issue 2, 2016 [3] Mr.Salim S. Mulla, Prof. Ashish P. Waghmare, A Study of Factors Caused for Time &Cost Overruns in Construction Project & their Remedial Measures ISSN : , Vol. 5, Issue 1, ( Part -6) January 2015 [4] Chan,D.W.M and Kumaraswamy, M.M(1996), A comparative study of causes of time overruns in Hong Kong construction projects International Journal of project Management, vol 15(1), pp [5] Frimpong,Y., Oluwoye,J., and Crawford, L. (2003). Causes of delays and cost overruns in construction of groundwater projects in a developing countries; Ghana as a case study. Int. J. Project Management, vol 21, pp [6] Aftab Hameed Memon and Ismail Abdul Rahman, Preliminary study on causative factors leading to construction cost overruns International journal of construction engineering and management vol 2, issue, 2011 [7] Olawale, Y.A. Asif, Cost and time control practice of construction projects in the UK. The Pursuit of effective management control university of the West of England, 2010 [8] Jomah Mohammed Al-Najjar, A Thesis of Factors Influencing Time and Cost Overruns on Construction Projects in Arab countries for Degree of Master of Science in Civil Engineering Construction Management, April-2008 [9] ChangizAhbab, A Thesis of An Investigation on Time and Cost Overrun in Construction Projects for the degree of M.Sc. in Civil Engineering in Eastern Mediterranean University, January-2012 [10] Susana GamezArsila, A Thesis Of Avoiding Cost Overrun In Construction Projects In United Kingdom, All rights Reserved 2351