Background of the Study

In a construction project, achieving the project completion within a specified time without affecting
the budget, safety and quality is a major criterion of the success of a project. However, it is inevitable that
challenges will occur throughout the course of the project and this challenges will later result to a delay.
According to Prajyot Gandhak and Syed Sabihuddin, delay is defined as the slowing down of work without
stopping construction entirely and that can lead to time overrun beyond the date that the parties have
agreed upon for the delivery of the project. Delays are entirely shouldered by the contractors and when
such delay occur, unexpected costs or cost overruns will suddenly appear.
Cost overruns vary significantly from the scale of the project. Cost overrun will result to a much
higher percentage for bigger projects compared to the smaller ones. Researchers around the globe was
intrigued to cost overrun from transportation, structural and even in ground water projects.
According to a study conducted by Pickrell on 1990 for the US Department of Transportation
covering the US rail transit projects with a total value of US$24.5 billion. The cost overrun for eight if the
projects was calculated to be 61%. Another study covered by the Auditor General of Sweden on 1994 about
15 road and rail projects, revealed that the average cost overrun of eight road projects was 86%.
Other studies was about the causes of the cost overrun.From the study conducted by Serdar
Durdev, Syuhaida Ismail and Nooh Abu Bakar about construction of residential projects on 2012, they
found that Improper planning was ranked as the most important cost overrun factor, followed by Inaccurate
project cost estimation, high cost of needed resources, lack of skilled work force, price of construction
materials.
The understanding of cost overrun makes a difference in the reduction of the causes of cost
overruns. Therefore it is important to create a study that can give awareness and provide a theoretical
solution to reduce the appearance of the cost overruns.

Statement of the problem

While the main goal of a construction industry is the completion of the project within specified time
and budget, cost overrun will be inevitably present in any type of project that is why cost overrun carries a
big treat and must be studied more to gain possible actions in near future.
Cost overrun in construction is a worldwide phenomenon, and its effects are normally a source of
friction between owners, project managers and contractors (Creedy et al., 2010) so it is wise to say that the
result of the contract sum is not guaranteed to be the end total cost of the project. And even if the work is
ordered based on fixed price, measurements related to provisional work, adjustment of prime cost and
provisional sums and variation orders will still occur (Chimwaso, 2001).
There are several factors that are responsible for these cost overruns. But as it was stated by
George Jarfas (2010) that there is no single cause for cost and schedule overruns on construction and
engineering projects. Still being knowledgeable about this to come up with different kinds of solution in
different factors that will surely arise will pose a great advantage to the effectiveness of the projects course.