Effect of Schedule Delays and Cost Overrun on Construction Project

EFFECT OF SCHEDULE
DELAYS AND COST
OVERRUN ON
CONSTRUCTION PROJECT

ABSTRACT
Cost overrun and schedule delay highly affect the construction project. The aim of the
dissertation is to identify the relation between the cost overrun and schedule delay and measure
their impact on construction project. To understand the impact, researcher explain the views of
different author in respect to the research topic, impact of cost overrun and schedule delay, and
the various measures to resolve the issues. The quantitative and qualitative data are selected to
gather the information regarding the project and identify the methods to resolve the issues. SPSS
tool is used to explain the correlation between the cost overrun and schedule delay. The selection
of 20 contractors as sample help to understand the interrelation of schedule delay and cost
overrun in deeper sense. The study recommends different methods to minimize the impact of
cost overrun and schedule delay. It also suggests various techniques to manage the activities and
prepare proper plan to improve the performance of the labour. It used the reliability test to
explain that whether the research is reliable or not for the further use by the researcher, scholar
and constructor. The finding from the study exposed the various factor which affect the schedule
delay such as interference of outside agencies, labour strike, limited resources, poor
management, error in planning, poor site management etc. The research explains that there are
various factors which make impact of construction project, and they are differed from country to
country and one project to another project. Conclusion and recommendation of the study
explains the different factors of schedule delay and suggest the appropriate methods to overcome
their impact on construction project.

ACKNOWLEDGEMENT
I would like to express my sincere gratitude to the professor who help me to select the research
topic and encourage me to invest my whole time in the project to complete it with the efficiency
and effectiveness. I also thank to my friends, scholar who help me to conduct the project
effectively and collect the data by getting the consent of different contractors. Last but not least I
would like to thank my family who support me in these project by providing the proper
resources.

TABLE OF CONTENTS
ABSTRACT....................................................................................................................................2
ACKNOWLEDGEMENT...............................................................................................................3
CHAPTER 1: INTRODUCTION....................................................................................................1
Background of the study...........................................................................................................1
Aims and Objectives..................................................................................................................2
Questions....................................................................................................................................2
Hypothesis..................................................................................................................................3
Rationale of study......................................................................................................................3
Scope of study.............................................................................................................................3
Significance of study..................................................................................................................3
Structure of study......................................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................5
Labour strike................................................................................................................................9
Error in plan...............................................................................................................................11
Intervention by outside agencies...............................................................................................12
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................16
CHAPTER 4: DATA ANALYSIS................................................................................................25
Discussion.................................................................................................................................37
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................44
Conclusion................................................................................................................................44
Recommendations....................................................................................................................46
REFERENCES..............................................................................................................................48
APPENDIX....................................................................................................................................53
Questionnaire........................................................................................................................................53
Table 1Variable table.....................................................................................................................25
Table 2Model summary table........................................................................................................25
Table 3ANOVA table....................................................................................................................26
Table 4Coefficient table................................................................................................................26

Table 5Correlation table................................................................................................................27
Table 6 Variables considered for analysis.....................................................................................28
Table 7Model summary.................................................................................................................28
Table 8ANOVA table....................................................................................................................29
Table 9Coefficient table................................................................................................................29
Table 10Variables used for analysis..............................................................................................30
Table 11Model summary...............................................................................................................30
Table 12ANOVA table..................................................................................................................30
Table 13Coefficient table..............................................................................................................31
Table 14Variables used for analysis..............................................................................................32
Table 15Model summary...............................................................................................................32
Table 16ANOVA table..................................................................................................................32
Table 17Coefficient table..............................................................................................................33
Table 18Variable entered for analysis...........................................................................................34
Table 19Model summary table......................................................................................................34
Table 20ANOVA table..................................................................................................................34
Table 21Coefficient table..............................................................................................................35
Table 22Variables entered.............................................................................................................35
Table 23Model summary table......................................................................................................36
Table 24ANOVA table..................................................................................................................36
Table 25Cofficient table................................................................................................................37

Dissertation Topic: Effect of schedule delays and cost overrun on construction project
CHAPTER 1: INTRODUCTION
Background of the study
Project denotes series of related task which reflects sequence and series of activities on
the basis of time. Construction project is referred to organised process of constructing,
refurbishing, renovating infrastructure and structure of building. A standard construction project
has five life cycle phases which comprise initiation, planning, execution, monitoring and
performance and closure. Schedule delay in construction project is the main area of concern as it
is related to time, cost, labour management (Dinakar, 2014). Delays in construction delay impact
synch of project specifically with reference to cost but also reputation of company involved in
certain project.
The major causes of delay in schedule of project are due to changes in design, poor
labour productivity, shortages of resources, inadequate planning. Apart from this major cause
schedule delay in construction are because of changes in user, uncertain whether condition,
condition of site, increase in quality, economic conditions, plan of designer and late deliveries.
There are different types of schedule delay like Non- Excusable days which includes strike for
work, uncertain events like, surges, quakes and flames (Amusan, Dosunmu and Joshua, 2017).
These are controlled event in construction project and therefore knowns as forgivable deferrals.
This type of delay is also caused due to changes initiated by proprietor and blunders in design
plans, structure of details and documents. Further, it can be said that compliance with legislative
requirement also play essential role in minimizing delay in schedule of project because it is the
aspect which restrict execution of project activities. Apart from this, there are non-excusable
type of delays which are known as non\reasonable deferrals. For example, delay in assessment
and accommodation of sub-materials of construction (Owolabi and et.al., 2014). Moreover, non-
reasonable deferrals in project are because of poor coordination, late execution of providers and
subcontractors and because of reluctance.
Apparently, delay in project are because of time which is part of basic delay arise due to
inappropriate time management or due to undertaking of conveyance date. Compensable and
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simultaneous delay are other concerns of incurring risk in construction projects like, additional
expenses or due to cost, calendar delay and excessive time consumption in specialized
investigation (Larsen and et.al., 2015). The major incurring factor because of project delay in
construction project is cost. Incurring cost of project due to delay impacts interrelationship and
management between clients and companies.
Cost overrun is increase in cost because of unexpected changes in project. Cost overrun
in construction project mainly arise due to improper planning of contractors, poor site
management, inadequate experience and financial resources. Changes in budget o project is the
critical factor which impacts reputation and project planning and resources of both contractor
and client. Cost overrun effects stakeholders of project that is client, contractor, employees, etc.
Further, it leads to less return on investment and also impact confidence of client. Also, incurring
cost of project reflects loss of profit to contractor because it directly increases cost and time of
every scheduled activity. On the other hand, it is identified cost over of construction project
effects supplementary agreement, budget shortfall, reputation of consultant increase labour cost,
poor coordination, and delay in time inadequacy of funds and delay in construction. Thus, the
present research will help in outlining effects of delay in schedule and cost overrun of
construction project. Also, the study will be focused on deriving interrelationship of delay in
schedule and increase in cost.
Aims and Objectives
Aim
“To analyse the effect of schedule delays and cost overrun on a construction project and their
interrelationship”.
Objectives
 To analyse the impact of delays in schedule and cost overrun on a construction project.
 To find the relationship between schedule delays and cost overrun
Questions
 What are the effects of cost overrun and scheduled delays on a construction project?
 Is there any relationship between the schedule delays and cost overrun?
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Hypothesis
H0: Schedule delay and cost overrun are directly proportional
H1: The more the delay takes place, the cost associated with the project will become more
Rationale of study
The motive behind conducting this study is to outline cost estimation and execution of planning
of people involved in particular construction project. The study will help in deriving reasons and
frequency of delay in schedule of construction project which is necessary to gain insight over
impact of delay. The study is for academic and personal interest and therefore the information
will be based on academic articles and statistical analysis. Further, the rationale behind choosing
this topic of research is to outline significant impact of cost overrun on profitability of project. In
accordance with different researches, it is been identified that over construction proved to be
delay and show upward increase in cost contribution (Henjewele, Sun and Fewings, 2014).
However, the delay in project activities a is not planned and therefore the research will helpful in
finding out schedule delay with regard to work and increase in cost with regard to planned
budget.
Scope of study
Scope of research is based on two aspects that is delay in schedule and cost overrun for
construction project. The keywords of research will be budget, contractor, client, cost plan,
labour cost, calendar delay, time consumption, additional expenses, etc. Scope of study is limited
to construction project and in current of cost which can be also because of delay. In accordance
with research it stated that most of the construction projects of country undergo cost and time
overruns (Liu and et.al., 2017). Further, the study will also help in developing statistical analysis
over responsible factors and interventions for schedule delay.
Significance of study
The research topic is important with respect to knowledge management over the factors
which leads to delay in schedule and incur cost in construction projects. Further, it will help in
finding out relationship between cost overrun and schedule delays. The study will help in gaining
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