CAUSES OF HIGH COSTS OF CONSTRUCTION IN NIGERIA

By Daniel C. Okpala1 and Anny N. Aniekwu2

ABSTRACT: This paper concerns an investigation into the causes of high

costs.of construction in Nigeria. A preliminary survey involving all the
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professionals in the construction industry identified delays and direct

cost overruns of the project as the principal factors leading to the high
cost of construction. A questionnaire was then designed incorporating
factors causing delays and cost overruns. It was distributed to engi-
neers, architects, quantify surveyors, contractors and others involved in
construction. A method of analysis was formulated and carried out
based on the profession of the respondents and on the role of the
individual in the industry (i.e., client, consultant, and contractors) and
on the nature of construction (civil works and building works). Results
indicate that: (1) High costs can be minimized by minimizing lapses in
the management of human and material resources; (2) despite some
slight differences, the professionals generally agreed that shortage of
materials, methods of financing and payments for completed works, and
poor contract management are the three major reasons for high con-
struction costs; and (3) price fluctuation was identified as the most
important factor responsible for the escalation of project costs.

INTRODUCTION

The construction processes can be divided into project conception,

project design, and project construction. Project conception is the recog-
nition of a need that can be satisfied by a physical structure. The project
design phase translates the primary concept into an expression of a spatial
form that will satisfy the client's requirements in an optimum economic
manner. Construction operations are the final phase of the three-part
process. They create the physical form that satisfies the conception and
permits the realization of the design.
The significance of the construction industry in the attainment of a
nation's quest for development and self-reliance cannot be overempha-
sized. The industry serves valuable functions in the society that vary
according to social needs. Some of the social areas in which construction
plays a vital role include housing, industry, education, and recreation.
Adekunle (1980) stated that the importance of the construction industry on
national life is further illustrated by the fact that in Nigeria, a total of N5.6
billion ($4.48 billion) of government funds was earmarked to be spent on
building/civil construction alone during the fourth National Development
Plan period of five years (N = the naira, the basic Nigerian monetary unit).
Within the same period, private sector expenditure on building construc-
tion was estimated to be N3.7 billion ($2.96 billion). (The then currency
exchange rate of $1.00 = NO.80 has been used.)
•Lect., Dept. of Civ. Engrg., Univ. of Benin, Benin City, Nigeria.
2
Lect., Dept. of Civ. Engrg., Univ. of Benin, Benin City, Nigeria.
Note. Discussion open until November 1, 1988. To extend the closing date one
month, a written request must be filed with the ASCE Manager of Journals. The
manuscript for this paper was submitted for review and possible publication on
February 5, 1987. This paper is part of the Journal of Construction Engineering and
Management, Vol. 114, No. 2, June, 1988. ©ASCE, ISSN 0733-9364/88/0002-
0233/$!.00 + $.15 per page. Paper No. 22505.

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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 The demand for more construction of all types, coupled with an ailing
national economy and a tight monetary supply, provided the construction
industry with a bigger challenge to cut costs. The problems of the high
costs of contracts in all aspects of construction constitute a stumbling
block in the path of the industry. Though their causes are often discussed,
it appears that little has been done to minimize the problems; conse-
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quently, substantial increases are observed in project costs. The principal

causes of the high costs of construction are due to delays and cost overruns
of projected costs.
It was felt that a survey into the causes of delay and cost overruns in the
construction processes might provide some insight into their solutions. It
was also felt that it would be beneficial for the study to investigate the
viewpoints of three major professionals within the industry, namely, the
engineers, the architects, and the quantity surveyors. The survey returns
were also analyzed in relation to the respondent's roles in the industry
(i.e., contractors, consultants, or clients). It was hoped that the results
obtained would generate some ideas on how to minimize delay and cost
overrun problems, and therefore enhance performance as well as generate
confidence within the construction industry.

METHODOLOGY

Initially an exploratory survey was conducted to identify the major

factors that could cause delay and cost overruns. In all, 20 people, five
architects, five civil engineers, five builders (contractors), and five quantity
surveyors, were interviewed. 20 variables that could cause delays and cost
overruns and seven other variables that could result in the escalation of
construction costs without necessarily causing delay were selected. In the
variable selection process, some variables that could influence others were
given priority.
A questionnaire incorporating these selected variables was designed and
sent to members of the professions in the construction industry. A total of
450 questionnaires were delivered by hand. A listing of the number of
responses in each of the three cities (Benin City, Port-Harcourt, and
Ibadan) is shown in Table 1. While the choice of locations was very much
limited by finance, it is strongly believed that these locations are fairly
representative of the southern part of Nigeria. Also, apart from weather
and labor supply variables, which may differ in the north, the results may
form a nearly accurate projection of what might be expected to be obtained

TABLE 1. Number of Questionnaires Distributed and Collected at Various

Locations
Percentage Percentage of
Number Number of of number total number of
Location distributed respondents distributed respondent
(1) (2) (3) (4) (5)
Benin City 220 89 41 46
Ibadan 176 76 43 40
Port-Harcourt 54 27 50 14
Total 450 192 — —
Note: Total percentage response = 192/450 x 100 = 43%.

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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 throughout the country. A total of 192 responses were received, represent-
ing about 43% of the number sent.

PRESENTATION AND ANALYSIS OF RESULTS

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The analytical procedure employed was aimed at establishing the

relative importance of the various attributes responsible for delay and cost
overruns. As indicated in the questionnaire, there are two opportunities for
a factor to be considered as making an important Contribution. These are
the responses "very important" and "important." For each question, the
percentage of respondents giving those responses is called the severity
index (Baldwin et al. 1971). In general, the severity indices for the difierent
groups examined were not the same and therefore could not be compared
directly. Instead it was used to rank the items for each group. These
rankings made it possible to cross-compare the relative importance of the
variables as seen by the difierent groups.
In order to measure the agreement in ranking between groups, a rank
agreement factor given in Eq. 5 was used for any two groups. This
represents the average absolute difierence in rank of the items (Okpala
1986).
For any two groups, let the rank of the rth item in group 1 be Rn and in
group 2 be Ra . Then the absolute difierence D, between any ranking of the
/th item by the groups would be
Di=\Rti-Ra\ (1)
where / = 1, 2, . . . , TV (2)
and there are TV items.
N
Define £>max = £ l*,i - R j i \ • • (3)
i = l •

where j = N - i + 1 (4)
as the maximum absolute difference between the rankings of all TV items by
the two groups, when the two groups are in complete disagreement (i.e., if
they ranked the items in opposite orders). For example, for five items (TV
= 5), when/ = 1 , / = 5 - /,+ 1 ' = 5; for / = 3,j = 5 - 3 + 1 = 3. Other
values are given in Table 2.
Rank agreement factor is defined as

RA = V ° ' N L (5 )

( I iRn-RfliJ
with a maximum RA: RAmax = -^— — — (6)

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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 TABLE 2. Determination of Maximum Absolute Difference in Rank and Maximum
Rank Agreement Factor for Five Items
Maximum
absolute
Ranking by Ranking by difference
group 1, group 2, in rank,
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Item *n RJI •^max

(1) (2) (3) (4)

1 1 5 4
2 ' 2 4 2
3 3 3 0
4 4 2 2
5 5 1 4
Note: Maximum rank agreement fact for five items RAn •• 4+2+2+4/5 = 12/5 = 2.4.

which increases with an increase in the number of items. The percentage

disagreement is defined as

2 l**i " * o I
PD = 100 x (7)

where j is as defined in Eq. 4.

Percentage agreement PA is
PA = 100 - RD (8)
The analysis assumed that an absolute difference in rank of two, say,
implies that the groups agreed more than when the absolute difference in
rank is three, even though for each case there was no perfect agreement.
Also the rank agreement factor can be greater than one, with a higher
factor implying greater disagreement. For 20 variables that could cause
delay and cost overruns, the maximum -RAmax = 10. A lower value of RA
implies a closer agreement between the two groups. A rank agreement
factor of zero implies perfect agreement. For the second part of the
questionnaire with seven items, complete disagreement would give RAmax
= 3.43.
Sample results of severity indices are given in Tables 3-5 for the
engineers, architects, and quantity surveyors. Rank agreement factors RA
and percentage agreement PA are given in Table 6 to cover the agreement
between: (1) Professional training; (2) role in the construction industry;
and (3) type of construction projects for delays and cost overruns. Table 7
is concerned with cost overrun variables alone.

Analysis
A critical look at the rank agreement factors and percentage agreement
indicates the following:
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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 TABLE 3. Engineer's Responses to Questionnaire on Basis of Percentage of
Replies Received; N = 58
Very Some Minor Not Severity
Rank Variable important Important importance importance important index
(1) (2) (3) (4) (5) (6) (7) (8)
(a) Delay and Cost Overrun Variables
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1 Shortage of materials 71 22 5 2 - 93
Financing and payment of
2 completed works 64 28 6 2 92
3 Poor contract management 48 38 6 5
—
3 86
4 Imported materials 34 43 17 6 73
5 Design changes 34 37 19 7
—
3 71
Nonadherence to conditions of
6 contract 25 40 21 11 1 67
7 Labor supply 42 23 13 17 5 65
8 Labor/management relations 28 37 18 13 4 65
9 Mistakes during construction 25 32 23 17 3 57
10 Disputes 21 34 32 13 10 55
Subcontractors and nominated
11 suppliers 12 43 30 12 3 55
12 Transportation of materials 17 37 30 12 4 54
Changes in foundation and rock
13 conditions 23 29 28 12 8 52
14 Weather 16 36 28 17 3 52
Mistakes and discrepancies in
15 documents 18 30 29 17 6 48
Negotiations and obtaining of
16 contract 17 31 31 13 8 48
Preparation and approval of
17 shop drawings 16 31 31 19 3 47
Approval of test samples of
18 materials 12 34 30 19 5 46
19 Items manufactured off-site 13 30 35 19 3 43
Inspection and testing of
20 completed portions 10 28 36 19 7 38

(b) Cost Overrun Variables

1 Price fluctuations 67 23 8 2 — 90
2 Delays 67 23 8 1 I 90
Fraudulent practices and
3 kickbacks 49 31 12 3 5 80
4 Additional work 33 46 14 5 2 79
5 Shortening of contract period 33 38 18 8 3 71
6 Inaccurate estimates 19 32 26 16 7 51
7 Insurance 6 28 36 24 6 34

1. There is very good agreement between the various professionals in

the construction industry on those factors that could cause delay and cost
overruns. However, on the factors that could escalate the cost of project
without necessarily causing delay, there is greater agreement between
architects and engineers than between the other two. Engineers and
quantity surveyors disagreed most (Tables 6 and 7). Similar works
(Baldwin et al. 1977) carried out in the United States construction industry
also indicate that engineers and architects agreed closely on those factors
that could cause delays, while the contractors disagreed most strongly with
them.
2. The response in terms of the role of the individuals in the industry
indicates a good agreement between the clients and consultants. Clients
and contractors do not seem to agree very much (60% agreement on delay
and cost overrun factors and 58% on cost overruns). This is, however, not
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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 TABLE 4. Architect's Responses to Questionnaire on Basis of Percentage of
Replies Received; N = 52
.Very Some Minor Not Severity
Rank Variable important Important importance importance important index
(D (2) (3) (4) (S) (6) (7) (8)
(a) Delay and Cost Overrun Variables
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1 Shortage of materials 66 34 - - - 100

Financing and payment of
2 completed works 52 5 5 90
38
16 3
—
3 Poor contract management 42 •39 — 81
4 Imported materials 39 16 13 73
34
16
—
5 Design changes 21 43 18 65
—
Subcontractors and nominated
6 suppliers 13 50 26 5 8 63
7 Labor supply 24 37 8 29 2 61
Nonadherence to conditions of
8 contract 16 37 26 18 3 53
9 Mistakes during construction 24 29 31 16 — 53
10 32 18 52
Transportation of materials 18 34 —
Mistakes and discrepancies in
11 contract documents 18 32 34 18 50
—
Preparation and approval of
12 shop drawings 13 37 34 11 5 50
Changes in foundation and rock
13 conditions 13 34 37 16 ^- 47
14 Disputes 21 24 21 26 8 45
15 Labor/management relations 13 32 37 16 2 45
16 Approval of test samples 11 32 34 21 2 43
Negotiations and obtaining of
17 contract 16 26 37 16 5 42
Inspection and testing of
18 completed portion 8 32 34 21 5 40
19 Items manufactured off-site 8 26 23 31 2 34
20 Weather 16 16 29 29 10 32

{b) Cost Overrun Variables

1 Price fluctuations 68 32 — — 100
2 Delays 61 21 10 5 3 82
Fraudulent practices and
3 kickbacks 55 27 16 2 82
—
4 Additional work 39 42 16 — 3 81
5 Inaccurate estimates 26 45 21 5 3 71
6 Shortening of contract period 5 . 37 32 23 3 42
7 Insurance 26 34 22 18 28
—

unexpected since there are always accusations and counter-accusations

between the two, as to whom is responsible for delays and cost escala-
tions.
3. The three most important items as agreed by the three professions
are: (1) Shortage of materials; (2) finance and payment for completed
works; and (3) poor contract management. Shortage of materials may
result from any or all of the following:
(1) Absence of adequate statistics on the material availability;
(2) fluctuation in the availability of some construction materials;
(3) very long average waiting time and uncertainty in the delivery of
ordered materials; and
(4) shortage of funds to procure materials and inadequacy in trans-
portation.
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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 TABLE 5. Quantity Surveyor's Responses to Questionnaire on Basis of Percentage
of Replies Received; TV = 46
Very Some Minor Not Severity
Rank Variable important Important importance importance important index
(D (2) (3) (4) (5) (6) (7) (8)
(a) Delay and Cost Overrun Variables
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Financing and payment of

1 completed works 85 7 4 4
30 8 4
— 92
2 Shortage of materials 58 — 88
3 Poor contract management 61 27 8 . 4 88
Design changes 27 46
—
12 15
4 — 73
Subcontractors and nominated
5 suppliers 42 27 19 8 4 69
6 Labor/management relations 39 23 19 15 4 68
7 Imported materials 27 31 26 3 3 62
8 Mistakes during construction 12 46 23 12 7 58
9 Disputes 15 42 23 12 8 57
10 Labor supply 39 15 12 19 15 54
Nonadherence to conditions of
11 contract 27 23 27 12 11 50
Mistakes and discrepancies in
12 contract documents 23 23 27 23 4 46
Transportation of materials and
13 equipment 15 31 23 19 12 46
Preparation and approval of
14 shop drawings 4 38 35 12 11 42
Changes in foundation and rock
15 conditions 4 35 35 15 11 39
Negotiations and obtaining of
16 contract 8 31 19 28 15 39
17 Items manufactured off-site 19 20 31 19 11 39
Inspection and testing of
18 completed portions 19 20 23 23 15 39
19 Weather 8 27 31 27 7 35
Approval of test samples of
20 materials 4 31 31 23 11 35

(b) Cost Overrun Variables

1 Price fluctuations 65 31 4 96
2 Additional work 42 42 12 4 — 84
3 Delays 58 23 1 4 4 81
4 Inaccurate estimates 50 31 8 7 4 81
Fraudulent practices and
5 kickbacks 65 15 4 8 8 80
6 Shortening of contract period 19 20 27 15 19 39
7 Insurance — _J 12 34 27 27 12

These are a direct reflection of the weaknesses of a society with a high

level of dependence on imported materials and technology. It is also a
result of the tendency for professionals to design without adequate
information and knowledge not only on the availability of materials they
recommend but also as to their performance in the environment for which
it is being recommended.
Delays due to shortages of material is often used by contractors as an
excuse for not honoring contract deadlines. In some cases, amendments on
agreed rates and completion times become necessary after such delays,
with all the attendant implications. This problem can be helped if profes-
sionals are more prudent in their design and more knowledgeable in
material availability and usage. In the United States, for instance, the
design team is aware of and familiar with building products and modern
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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 TABLE 6. Cross-Comparison of Relative Importance of Items Responsible for
Delays and Cost Overruns
Rank
agreement Percentage
Groups factor agreement
(1) (2) (3)
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Engineers and architects 2.30 77

Engineers and quantity surveyors 2.28 78
Architects and quantity surveyors 2.30 77
Clients and consultants 2.30 77
Clients and contractors 4.05 59.5
Contractors and consultants 3.70 63
Building projects and civil
engineering works 2.85 71.5

TABLE 7. Cross-Comparison of Relative Importance of Items Responsible for Cost

Overruns
Rank
agreement Percentage
Groups factor agreement
(1) (2) (3)
Engineers and architects 0.29 92
Engineers and quantity surveyors 1.14 67
Architects and quantity surveyors 0.86 75
Clients and consultants 0.86 75
Clients and contractors 1.43 58
Contractors and consultants 0.86 75
Building projects and civil
engineering works 0.43 88

construction techniques, which enables projects to be built quickly (Gray

and Flanagan 1984). These building products are also readily available in
that country and can be obtained with a minimum average waiting time.
This has been found to drastically reduce the construction period and is
consequently a major factor in reducing cost overruns.
The problem of finance and payment for completed works is ranked
second. This is a systemic factor that is a result of the prevalent culture.
Contractual arrangements in use in Nigeria are based on the promise that
a client has sufficient financial resources to undertake a project and that the
contractor has the necessary expertise to accept the project. This premise
does not hold true in Nigeria. The biggest customer of the construction
industry in most developing countries is the government. It is also the
worst offender, perhaps due to the relative instability of many third-world
governments and the outright irresponsibility of many administrators.
Although the contractual arrangements provide for legal redress, it is not
always feasible or expedient for the contractor to take his client to court,
since he depends to some extent on his client's good will for subsequent
jobs (Parker 1972). In contrast, in the United States, the construction
industry is dominated by the private-sector client who demands high levels

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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 of performance in speed and costs (Gray and Flanagan 1984). As a result,
contractors are placed in a stronger position to demand terms in their favor
once efficiency is guaranteed. They are also better prepared psychologi-
cally to take their clients to court if the need arises since their personal
relationship does not affect their ability to obtain subsequent commissions.
Poor contract management, which was ranked third, results principally
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from a lack of awareness on the part of the contractor. Project manage-

ment entails planning, coordinating, and controlling all aspects of the work
and can lead to a significant improvement in productivity without neces-
sarily increasing input. However, the average Nigerian contractor is a
small-scale organization, fairly ignorant in recent research breakthroughs
in both material technology and management techniques. He is also limited
in manpower and has unreliable credit facilities.
Adequate contract management is very important since most other
variables result from the lapses in the management of the contract by either
the client or the contractor. The fact that all the professions ranked it third
implies that though there is much awareness of this factor, its implications
are not fully understood or appreciated. Poor contract management can
produce deficiencies in the contractor's plan, cost control, and overall site
management and could be due to any combination of the following: (1) A
lack of adequate experience and training at the senior management level
and inadequate technical manpower; (2) a very low level of productivity;
(3) inadequate finances for short- and long-term purposes; and (4) an
absence of specialization.
Studies have shown (Parker 1972) that productivity can be improved by
as much as 60% without any increase in input. Thus the importance of
good management cannot be overemphasized. The principle of fast-
tracking, which has gained wide currency in the U.S. construction
industry, emphasizes a rapid rate of delivery projects. It involves the
overlapping of the design and construction phases, contrary to the tradi-
tional method. Fast-track construction makes use of professional construc-
tion managers stemming from a realization that the complexity of the
overlap between design and construction is such that it must be managed
properly to achieve efficient performance. This results in high performance
levels in both speed and costs (Gray and Flanagan 1984). With the present
level of experience and technical manpower in the Nigerian construction
industry, coupled with a very low productivity as a result of the prevailing
culture, i.e., the attitude toward work, it is not likely that the principle of
fast-tracking will be feasible soon in this country.
It is recognized in the United States (Nahapiet and Nahapiet 1985) that
there is not just one set of contractual arrangement. Rather, it is known
that the most appropriate arrangement depends on the particular circum-
stances of the client and the project. Such is not the case in Nigeria. Most
of the projects are executed under the traditional lump-sum arrangement,
irrespective of the prevailing circumstances. The situation is further
worsened by the fact that the government is the largest client of the
construction industry and often its representatives consider personal gains
more important than the efficient execution of the project.
Other variables identified as significant in causing delay and cost overrun
include imported materials, design changes, labor supply, and nonadher-
ence to the conditions of the contract.
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J. Constr. Eng. Manage., 1988, 114(2): 233-244

 On factors that could cause cost overruns without necessarily causing
delay, price fluctuation was identified as the most important factor by the
architects, engineers, and quantity surveys, as is clearly shown by the
severity indices on Tables 3-5. This obvious choice is not unconnected
with the general high and unstable inflationary trend in the country. This
inflationary trend is probably due to demand exceeding supply, accentu-
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ated by the creation of an artificial scarcity of goods. Fluctuation in prices

affects the price of raw materials, labor, and other ancillary materials and
services.
A national solution to this problem would effectively minimize cost
overruns. These unpredictable inflationary trends are not readily observed
in most developed countries and may have aided in the near accurate
projection of construction costs in such areas.
Architects and engineers ranked delay second, while fraudulent prac-
tices and kickbacks came third. Quantity surveyors ranked the two factors
as third and fifth, respectively (Tables 3-5). However, the severity indices
for the three groups were between 80-84, which are quite high and close,
thus indicating the importance of the two variables. It is also interesting to
note that contractors ranked delay fourth with a severity index of 74, while
clients ranked it first with a severity index of 95. This result exposes a
possible bias by individuals, depending on their role in the construction
industry. The contractor who is involved with the actual process of
delaying the job could not agree that delay is responsible for the cost
overruns; instead he sees fluctuations in prices. Of course, he is entitled to
claim the price increase as the most important.
A factor that emerged clearly as not very important, and is of interest, is
weather, since it is the only natural factor in the questionnaire. This has
severity indices of 32-52 and is ranked 14, 20, and 19 by engineers,
architects and quantity surveyors, respectively, and ranked 17, 11, and 14
by clients, contractors, and consultants, respectively. The very low
ranking of this factor by all groups implies that most of the problems in the
construction industry are human problems. Solutions to these nonnatural
problems would minimize delay and cost overruns. This natural problem
was, however, identified as being among the three most important factors
causing delay in the United States (Baldwin et al. 1972), where construc-
tion in winter is almost brought to a standstill. The quantitative effect of
this variable in the U.S. construction industry is not available to the
writers.
The attribute identified as the least important in causing cost overrun is
insurance, as shown by all professions (Tables 3-5). This indicates the very
low awareness of the use of insurance schemes in the construction
industry. This may need to be corrected. Further works, intended to find
solutions to these problems, are being carried out.
Other deductions from the survey can be summarized as:

1. Dispute was ranked as follows: engineers = 10, architects = 14, and

quantity surveyors = 9. This is probably because quantity surveyors and
engineers, who are less involved in the contractual arrangement, are more
objective in assessing the effects of disputes on cost than the architects.
2. Contractors, who are relatively more affected when there is a delay in
contract negotiations, felt strongly about it, while the clients do not
242

J. Constr. Eng. Manage., 1988, 114(2): 233-244

 perceive contract negotiation as a major delay factor (ranking is contrac-
tors 9, client 16).
3. Clients believe that nonadherence to the conditions of the contract
contributes much to delay and cost overrun in the construction industry
(ranking = 6), while the contractors, who are actually the partners,
disagreed, probably in defense of their jobs (ranking = 13). This point and
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that given in entry 3 raises the question of the genuineness of the efforts to
solve these problems. If individuals are more interested in protecting their
own interests than in the overall strength of the industry, then delay and
cost overrun may be difficult to minimize.
4. Clients and consultants who choose and prepare the contract docu-
ments seem unwilling to accept that mistakes in the document could cause
delay and cost overrun, while those who execute the provisions of these
documents feel differently (rankings: clients = 20, consultants = 16, and
contractors = 7).

Analysis on the basis of type of construction indicates the following:

1. Imported materials are more crucial to building projects (ranking = 4)

than civil works (ranking = 6). This is probably because more materials are
imported for building works. It could also mean that delay in importing
civil engineering materials may only hold up a section of the work (in, say,
a road project), while others are still able to progress.
2. Design changes affect building projects more than civil works. This,
again, is probably because while the design changes are being contem-
plated in some parts of civil works, construction in other parts may
continue, while in building, design changes tend to stop all works,
especially if it is not at the foundation level.
3. Labor supply affects civil works more than building works probably
due to a shortage of specialized craftsmen.
4. Subcontractors were found to contribute more to delay in building
works than civil projects. This may be because they are not often used in
civil works, and where used, delay caused by such subcontractors may not
necessarily affect other areas in the construction.
5. On the whole, however, the rank agreement factor of 2.85 and
percentage agreement of 72% for the delay and cost overrun factors and
the RA of 0.43 and percentage agreement of 88% for the cost overrun
factors alone between those in civil works and those in building works
indicate a good agreement. Thus the factors considered affect both projects
fairly equally.

CONCLUSIONS

The following conclusions can be made from the work reported on delay
and cost overrun:

1. Despite some differences in viewpoints held by each profession, there

are areas of agreement among them. All the groups felt that a shortage of
materials, financing, and payments for completed works and poor contract
management are the three major causes of delay and cost overrun. On
factors that could cause cost overruns without necessarily causing delay,
243

J. Constr. Eng. Manage., 1988, 114(2): 233-244

 price flunctuations, delay, and fraudulent practices were identified as the
three most important factors.
2. The rankings of all the items by the three professions are fairly similar
as may be seen from the low ranking agreement factors and the high
percentage agreement.
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The data indicate that delay and cost overruns can be minimized. This is
clear from the fact that the three most important factors mentioned on each
problem are due to human inefficiency and thus removable to a great
extent. Good management strategies would perhaps affect this situation
positively more than any other remedies and can have both short- and
long-term effects.
The study has presented the subjective results of three important groups
in the construction industry, and therefore should not be taken as an
absolute statement of the true causes of delay and cost overrun. However,
it is hoped that the results may have contributed to the debate in this area.

APPENDIX I. REFERENCES

Adekunle, L. T. (1980). "Rising cost of building construction." Shelter for

Nigerians, Institute of Architects, Seminar report, Aku Omokhodion, ed.,
Tropical Publications Nigeria, Ltd., Nigeria.
Baldwin, J. R., et al. (1971). "Causes of delay in the construction industry." /.
Const/: Div., ASCE, 97 (C02), 177-187.
Gray, C , and Flanagan, R. (,1984). "U.S. productivity and fast tracking starts on
the drawing board." /. Constr. Mgmt. Econom., 2(2), 133-144.
Nahapiet, H., and Nahapiet, J. (1985). "A comparison of contractual arrangements
for building projects." J. Constr. Mgmt. Econom., 3(3), 217-231.
Okpala, D. C. (1986). "Causes of delay and cost over-run in the construction
industry." CENSER Seminar series, May.
Parker, D. (1972). "The problem of the maintenance engineer." Management for
engineers, E. G. Semler, ed., Chartered Institute of Mechanical Engineers
Publications, London, U.K., 126-129.

APPENDIX II. NOTATION

The following symbols are used in this paper:

D = absolute difference in rank;

N = number of items;
n = number of respondents;
PA = percentage agreement;
PD = percentage disagreement;
R = rank of item; and
RA = rank agreement factor.

Subscripts
/ = rth item;
j = jth item; and
max = maximum.

244

J. Constr. Eng. Manage., 1988, 114(2): 233-244