Park, Y I and Papadopoulou, T C (2012) Causes of cost overruns in transport infrastructure projects in Asia: Their significance and relationship with project size. Built Environment Project and Asset Management, 2(2), pp. 195-216. ISSN 2044-124X
Abstract
Purpose: One of the world's largest construction markets is in Asia where construction activity is boosted by investment on transport infrastructure. This paper aims to identify and analyse causes of cost overruns in transport infrastructure projects in Asia and assess their importance and statistical relationship with project size. Design/methodology/approach: The paper pursues the following objectives. First, it identifies factors contributing to cost overruns. Second, using case data and regression analysis, it establishes the statistical relationship between project size and cost overruns. Third, it analyses questionnaire data to rank causes of cost overruns according to their frequency, severity and significance. Last, the paper identifies contract types mostly associated with cost escalation. Findings: The findings confirm a moderate correlation between cost overruns and one indicator of project size. Awarding contracts to the lowest bidder is identified as the most significant cause of cost overruns. Lump-sum contracts were found to have the greatest influence on the occurrence of cost overruns. Research limitations/implications: Stratified sampling would allow the evaluation of how cost overruns are perceived by different professional groups. Further research can focus on measures for the prevention of cost overruns. Originality/value: The causes of cost overruns have been at the focal point of research however, most studies consider cost overruns in specific Asian countries. Moreover, transport infrastructure projects have received little attention or been underrepresented in datasets comprising general construction projects. The paper seeks to fill this gap by carrying out in-depth investigation of cost overruns in transport infrastructure in the broader context of Asia.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Asia; construction industry; cost overruns; cost performance; costs; transport infrastructure |
| Index terms: | construction activity, transport infrastructure, cost overrun, methodology, bidder, Asia, construction project, sampling, questionnaire, investigation, prevention, construction industry, dataset, cost escalation, construction market, cost performance, regression analysis |
| Subjects: | statistical analysis, industry analysis, infrastructure and transport systems, data management, market analysis, financial risk, production management, research methods, economics, financial and cost management, regions and continents, bidding, construction operations, data collection methods |
| Topics: | Digital Applications, Site Management, Cost Management, Research Practice, Geographical Context, Project Management, Engineering Principles, 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