AVOIDING COST OVERRUN IN PUBLIC BUILDING CONSTRUCTION PROJECTS IN TANZANIA

ARE MITIGATION MEASURES EFFECTIVE?

Abstract

Cost overrun has negative impacts on building construction projects. These include delays, conflicts, abandonment or suspension and failure to get value for money. Despite previous studies suggesting various cost overrun mitigation measures, building construction projects still experience cost overruns. This study investigated the effectiveness of cost overrun mitigation measures adopted in public building construction projects in Tanzania. The study examined 75 completed projects in Dar es Salaam city using questionnaires to the clients, consultants and contractors involved in the projects. Descriptive statistics revealed that the five most used cost overrun mitigation measures are: ensuring capital availability before starting a project, ensuring the project manager or client limits design changes, selecting a contractor without considering only the cost and time offered but also experience, financial capacity, technical capacity and expertise, evaluating the work regularly and adopting clear information and communication channels. By using Spearman rank correlation, the effective mitigation measure was to ensure the project manager or client limits design changes. It was further established that having a design manager to manage the design change process is not an effective measure. The study concluded that effective mitigation measures are associated with addressing the root causes of cost overruns in a specific project.

 

Keywords: Building projects, Cost overrun, Construction industry, Mitigation measures