Jackson, S (2002) Project cost overruns and risk management. In: Greenwood, D (ed.) Proceedings of 18th Annual ARCOM Conference, 2-4 September 2002, Northumbria, UK.
Abstract
The construction industry has a reputation for delivering projects over budget. This research identifies actual project examples illustrating the problem of cost overruns. Results of a questionnaire survey present perceptions of the main reasons why building construction projects sometimes exceed the initial budget estimate. The paper reviews how the construction industry is responding to the challenge of accurate budgeting. In the domain of facility capital cost budgets and risk management, two key conclusions are made. Firstly, that complete design information leads to more accurate budget estimates. Secondly, that client driven design change is the greatest risk. Clients are the key drivers of change and they must therefore take a look at themselves before blaming the industry for being inefficient.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | design change; design information; cost overrun; risk management |
| Index terms: | capital cost, building construction, design change, cost overrun, survey, overrun, budgeting, project cost, risk management, questionnaire, estimate, construction industry |
| Subjects: | contractual arrangements, financial and cost management, data collection methods, risk assessment, project controls, building construction, industry analysis, financial management, economics, accounting and finance |
| Topics: | Time Control, Business Strategy, Cost Management, Research Practice, Risk Management, Construction Technology, Procurement |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here