Cost Performance for Residential Building Projects

Abstract

The construction industry is one of the main sectors that play basic role in the urban and rural development of a society. It provides important ingredients for the development of an economy. However, many construction projects experience extensive cost overrun. This study is conducted to: (1) reveal the magnitude and direction of cost overrun in building construction projects implemented in the West Bank - Palestine over the years 2013 to 2018, (2) develop prediction models for predicting project cost overrun based on the contract price value, (3) identify the causes of cost overrun in building construction contracts in the West Bank – Palestine, (4) test the importance of cost overrun causes from consultants and contractors’ perspective. To achieve the study objectives, two methods are followed: (1) Field data collection for 102 building construction projects implemented in the West Bank during the period 2013 and 2018, (2) A questionnaire survey was conducted to identify and rank cost overrun causes from the perspectives of contractors and consultants. The findings reveal that100% of projects suffer from cost overrun with average of 34.58%, ranging from 15% to about 88%. The results show that cost overruns for building projects increased with contract prices. The questionnaire survey reveals that the top five cost overrun causes from combined view are: experience in contracts, insufficient time for estimate, incomplete drawings, materials’ price fluctuation, and political situation. It is hoped that the findings will guide efforts to improve the performance of construction industry in Palestine and other developing countries.