Effect of schedule delays and cost overrun on construction project

Dissertation Title: Effect of schedule delays and cost overrun on
construction project
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With the exception of those parts in which it is stated to the contrary, this dissertation is
solely my own work, it has not been submitted (in whole or in part) for any degree at this or
any other, academic or professional institution.
Signature: Abhinav Singh Patel
Date:
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Signature: Abhinav Singh Patel Date:
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EFFECT OF SCHEDULE
DELAYS AND COST
OVERRUN ON
CONSTRUCTION PROJECT
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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.
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ACKNOWLEDGEMENT
I would like to express my sincere gratitude to the professor Dr. George Blumberg 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 this project
by providing the proper resources.
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TABLE OF CONTENTS
ABSTRACT...............................................................................................................................2
ACKNOWLEDGEMENT.........................................................................................................3
CHAPTER 1: INTRODUCTION..............................................................................................5
Background of the study.................................................................................... 5
Aims and Objectives........................................................................................... 6
Questions........................................................................................................... 6
Hypothesis.......................................................................................................... 7
Rationale of study............................................................................................... 7
Scope of study.................................................................................................... 7
Significance of study.......................................................................................... 7
Structure of study............................................................................................... 8
CHAPTER 2: LITERATURE REVIEW...................................................................................9
Labour strike.................................................................................................... 11
Error in plan...................................................................................................... 13
Intervention by outside agencies......................................................................14
CHAPTER 3: RESEARCH METHODOLOGY.....................................................................17
Research Type.................................................................................................. 17
Research Approach........................................................................................... 18
Research Philosophy......................................................................................... 19
Sampling.......................................................................................................... 19
Data collection.................................................................................................. 20
Data Analysis.................................................................................................... 21
Research Limitation.......................................................................................... 21
Ethical Consideration........................................................................................ 22
Reliability and Validity...................................................................................... 23
CHAPTER 4: DATA ANALYSIS...........................................................................................24
Discussion........................................................................................................ 34
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS.............................................39
Conclusion........................................................................................................ 39
Recommendations............................................................................................ 41
REFERENCES.........................................................................................................................42
APPENDIX..............................................................................................................................46
Questionnaire................................................................................................... 46
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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 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 cos 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,
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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, 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 identify impact of labour strike on project cost.
• To identify impact of intervention of outside agency on project schedule delay and
cost.
• To identify impact of changes initiated by project owner on project cost.
Questions
• What is the impact of labour strike on project cost?
• What is the impact of intervention of outside agency on project schedule delay
and cost?
• What is the impact of changes initiated by project owner on project cost?
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
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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 appropriate understanding over topic because it is specific to only two variables and
their possible impact in projects. The research is important as it will promote knowledge over
different elements which causes delay in schedule of project and causes budget overrun and
impacts consistency and planning of construction project (Safapour, Kermanshachi and
Ramaji, 2018).
Structure of study
Chapter 1 Introduction: The chapter provides brief over aspects of research that is aim,
objectives, question and hypothesis. The aim of present research to outline effect and
interrelationship of schedule deal and cost over run on construction project. In accordance
with outline of this chapter it can be said that null hypothesis of study states that schedule
delay and cost overrun of project are directly proportional. However, alternative hypothesis
of study states that more the delay takes place, the cost associated with the project will
become more. This section of research helped in gaining understanding over different
perspective which needs to be researched for drawing appropriate findings.
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