CONSTRUCTION COST CONTROL FOR ROAD PROJECTS IN THE CONTEXT OF MALAYSIAN CONTRACTORS

Abstract

Cost overrun is a common problem in the construction industry. Cost overrun occurs when the actual cost exceeds the budgeted, estimated, original, or target cost. Implementing cost control is complicated since it must evaluate many things, such as budget, project cash flow, cost performance, and others. In road construction projects, cost overrun is typical even though cost control has been practised. Road construction in Malaysia can be observed to have cost problems, and cost control practised in the industry needs to be improved. This research aims to analyse the present methods of cost control utilised by contractors in road projects and propose possible strategies to improve cost control in enhancing project cost performance. The objectives of this research are to investigate the practices of cost control in road projects by the contractors, to assess the problems encountered, and to suggest possible strategies to overcome the problems. This research employs a quantitative method by conducting a survey questionnaire as an approach to data collection. A total of 160 questionnaires were distributed to G5, G6, and G7 contractors, while only 32 questionnaires were received. However, only 27 respondents were involved in a road project. The data obtained were analysed by using Microsoft Excel. Based on the results, cost control practices in road projects include record keeping, financial reports, valuation of work in progress, work programmes, approximate quantities method, cost control at the site, and daily labour controlling. Next, the problems encountered include obtaining standard data, change of works from variation order, changes of design, instability of material prices, and inaccurate quantity take-off. Lastly, the strategies to overcome the problems include practising effective strategic planning, practising effective site management, providing detailed descriptions of Bill of Quantities (BQ), utilising cost value comparison, and ensuring the cost budget is realistic.