Cost is among the major considerations throughout the project management lifecycle. Despite its proven importance it is not uncommon to see a construction project failing to achieve its objectives within the specified cost. Cost overrun is a very frequent phenomenon and is almost associated with nearly all projects in the construction industry. This trend is more severe in developing countries where these overruns sometimes exceed 100% of the anticipated cost of the project.
In Pakistan, construction sector is an important sector although not working to its full potential but still of prime significance to the country. Growth in this sector is critical for growth in national income as it is among the largest sectors that generates employment within the country as well as a key driver for economic development of Pakistan.
Results indicated that the majority of cost overrun factors (88%) lie in medium severity impact zone (with a rating between 5 to 7.5 out of 10), signifying that major attention needs to be given to these factors as they collectively cause considerable cost overrun. Fluctuation in prices of raw materials, unstable cost of manufactured materials, high cost of machineries, lowest bidding procurement procedures, inappropriate methods of cost estimation and unsupportive government policies are some of the factors.
Major recommendations include: stabilising cost of materials, increasing supply of materials and machinery, more involved cost estimation processes, vigilant project planning, close observance and documentation of cost variation trends in the sector and the country.
IKRAM RANA
Lahore