A study of the challenges associated with project cost performance in Ghana

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Cost overrun does not only affect the profitability of construction projects for the contractor, it also affects the whole economy especially in public projects. Therefore, the aim of this study was to explore the challenges associated with project cost performance in Ghana. To achieve the aim, three (3) objectives were established which were to identify the causes of poor project cost performance in Ghana, to identify the challenges in achieving high project cost performance in Ghana and to identify the strategies in improving project cost performance in Ghana. Establishing the objectives led to the extensive review of literature and subsequently, developing a structured questionnaire to aid in the collection of data from the respondents. Using the snowballing sampling technique, fifty-three (53) questionnaires were retrieved out of the seventy-nine (79) distributed. The data were analyzed using the Relative Importance Index (RII). From the analysis, it was realized that contractor’s site management came out as the most significant cause of poor cost performance in the construction industry. The second ranked criterion was material and machinery. The third ranked criterion was design and documentation related factors. In the objective two, the first ranked factor was insufficient resources for cost management. The second ranked factor was poor budgeting and forecasting approach. In the third objective, the first ranked factor was proper planning cost control. The second ranked factor was competent personnel. The third tanked factor was realistic cost estimation. The forth ranked factor was effective risk management. With these findings, it was recommended that, the consultant in consultation with the client should endeavor to select an appropriate contractor for the execution of the works. The selection of an inappropriate and inexperienced contractor creates the possibility of project failure especially in terms of cost. Also, cost planning processes should be implemented at initial stages of the construction project and make sure that during the execution of the project, cost is adequately controlled. Lastly, excessive scope changes should be avoided as it has a significant impact on project cost performance.
A thesis submitted to the Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirement for the Award Degree of Master of Science.
Challenges, Project Cost Performance, Project Cost, Ghana