Revisiting Causative Factors of Project Cost Overrun in Building Construction Projects in Nigeria

Abstract The growing need for construction of all types coupled with a tight monetary supply has provided the construction industry with a big challenge to cut cost. The total cost of construction in normal circumstances is expected to be the sum of materials, labour, site overheads, eEquipment/plant, head office cost and profit but in many parts of the world particularly in Nigeria, there are other costs to be allowed for. To the end user, the added costs are passed on as higher rental/lease costs or prices. The aim of this study is to appraise the causative factors of cost overrun on building construction project in the Nigerian construction industry. This study was carried out using quantitative research method. This involved the collection of data relating to the research study through questionnaires prepared using literature search and carried out among professionals in the construction industry such as Architects, Builders, Engineers, Project Managers and Quantity Surveyors. Random sampling technique was employed in selecting the 156 respondents for the research study within the South Western region of Nigeria. Data retrieved were analysed using Percentile, Mean item Score and Kruskal-Wallis H-test. Findings revealed that additional cost (e.g. variations), poor financial control on site, contract management, previous experience of contractor, wrong estimation method are the major factors leading to cost overrun on building construction projects. The study concluded that construction projects experience cost overrun as a result of negligence in one way or the other by all the stakeholders involved in the construction process from inception to final completion.