Cost overruns in the delivery of Highway Construction Projects in Ghana

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Date
2015-04-28
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Abstract
Infrastructure development, and for that matter the construction of roads, serve as inputs for other sectors of a country’s economy and are therefore used to stimulate growth and development in a nation. Infrastructure development therefore plays a vital role in the economic growth of a country. This role of infrastructure development in ensuring economic growth is however being defeated by increasing cost overruns in project delivery across the world. The phenomenon of project cost overruns is very widespread in developing countries (Mahamid and Dmaidi 2013), Ghana not being an exception. The effects of construction project cost overruns are a source of friction especially between government owners, consultants, and contractors in terms of project cost variation subsequent to the owner’s decision to build (Creedy et al. 2010). Highway construction projects are particularly affected by cost overruns, with actual costs on average being 28% higher than estimated (Flyvbjerg et al. 2003). There have been several researches in countries the world over to identify the factors that lead to cost overruns in infrastructure projects and to look for ways to reduce the incidents of the problem. However, as a result of differences in the socio-economic and political maturity levels, the causative factors and therefore the remedies differ from country to country. The research sought to identify and assess the critical risk factors leading to highway construction cost overruns in Ghana from the points of view of the owner. The five top ranked critical risk factors identified are; use of line diagrams for highway construction projects, lack of adequate designs before contract award, underestimation of quantities in Bills of Quantities (BOQ), delay in payment for certified work done, inadequate contingency allowance in BOQ . A common theme amongst the critical risk factors identified is that most of them are client-related. This means that they can be better controlled or managed by the client or owner.
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A project report submitted to the Department of Building Technology in partial fulfilment of the award of Master of Science in Construction Management,
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