Analysis of Factors Responsible for Project Cost Variation in Enugu, Nigeria

Abstract

Aim: The aim of this study is to analyze the factors responsible for the cost variation in the construction projects in Enugu, Nigeria, with a view to establishing the impacts of this factors on project delivery in the study area.  Study Design: it was a survey research, the study was effected via literature review and a well-structured questionnaire. Likewise, interviews were carried out to substantiate the findings of the questionnaire survey. Place and Duration of the Study: The study was conducted in Enugu state, Nigeria for a period of 2 years. Methodology: Being a survey research, a total of one hundred and twenty-six (126) questionnaires were distributed with one hundred and three (103) returned and adequately filled given a percentage response of 81.7%. The data collected was presented and analyzed using tables, frequency, mean score and relative importance index. The analysis was aided by a computer-based software, named Statistical Package of Social Sciences (SPSS) version 22. Results: The study found out that more than 40% of the respondents have experience cost overrun while more than 60% of the respondent attest that cost overrun occurs always most of their project. The study observed that the principal factors responsible for this overrun in construction projects in the study area are: poor contract management deficiency in prepared cost estimate and incomplete design. Furthermore, the study observed that the contractor’s desire to improve his financial condition, poor site management and Defective workmanship and availability of skilled labor and change orders/ variation are least factors that contribute to cost overrun in projects in the study area. The study established that the most common effect of cost overrun on project delivery are loss of profit (1.09), fewer returns on investment (0.86) while the least effect is higher rental/lease cost or price (0.70). Conclusion: The study concluded by recommending that proper contract management, value engineering and effective communication should maintain throughout the lifecycle of the project.