Construction Experts’ Perception on the Causes and Effects of Cost Overruns in Johannesburg, Gauteng Province, South Africa

Engineering, Project, and Production Management

EPPM 2014 Conference Papers

Construction Experts’ Perception on the Causes and Effects of Cost Overruns in Johannesburg, Gauteng Province, South Africa

Mukuka MJ¹ , Clinton Aigbavboa², and Wellington Thwala³

¹ PhD Candidate, Department of Construction Management & Quantity Surveying, University of Johannesburg, Johannesburg, South Africa, Tel: +27-(0) 11 559 6398, Fax: +27 (0) 11 559 6639, E-mail: sirjoze2002@gmail.com
² Lecturer, Department of Construction Management & Quantity Surveying, University of Johannesburg, Johannesburg, South Africa, Tel: +27-(0) 11 559 6398, Fax: +27 (0) 11 559 6639, E-mail: caigbavboa@uj.ac.za
³ Professor, Department of Construction Management & Quantity Surveying, University of Johannesburg, Johannesburg, South Africa, Tel: +27-(0) 11 559 6398, Fax: +27 (0) 11 559 6639, E-mail: didibhukut@uj.ac.za

Abstract:The construction industry is a key sector in the development and economic growth of South Africa. However, the industry has not escaped the challenges facing other countries worldwide in terms of delivering construction projects within cost as stipulated in the contracts. This paper assesses the construction professionals’ perception on the causes of construction project cost overruns and there consequential effects in the Gauteng – South African construction industry. The data used in this paper were derived from both primary and secondary sources. The secondary data was collected via a detailed review of related literature. The primary data was collected through a well-structured questionnaire which was distributed to construction professionals, which include: Architects, quantity surveyors, civil engineers, construction mangers and project managers. Out of the 80 questionnaires sent out, 52 were received back representing a 65% response rate. Data received from the questionnaires was analysed using descriptive statistics procedures. Findings from the study revealed that contractors project inexperience, poor project management, inadequate planning, contractors inefficiency, inadequate financial provision, shortage of skilled site workers and poor workmanship are the majore causes of cost overruns. The study also revealed that increased project cost due to extension of time, projects abandonment, company/firms liability to insolvency, tying down clients capital, under-utilization of manpower resources, liability of companies or firms to bad debt and under-utilization of plants and equipment purchased for the projects are the effects should there be cost overruns during the construction process. The study contributes to the body of knowledge on the subject of the causes and the effects of construction project cost overruns in gauteng, South Africa.

Keywords:Cost overruns, construction industry, Gauteng, South Africa.