Causes of Delay and Cost Overrun in Malaysian Construction Industry

Abstract

The construction industry in Malaysia drives the economic growth and development of the country. However, the industry is plagued with delays and cost overrun which transforms what should have been successful projects to projects incurring additional costs, disagreements, litigation and in some cases abandonment of projects. This research studied the causes of delays and cost overrun in the industry and ranked them according to their perceived importance to the contractors, with a view to establishing those to be addressed by the contractors. Online questionnaires were used for data collection for this research. A total of 69 responses were analysed using principal component analysis (PCA) (factor analysis) to identify the main causes. The result of the analysis showed that delay in preparation of design document, poor schedule and control of time, delay in delivery of material to site, lack of knowledge about the different defined execution methods, shortage of labour and material in market, and changes in scope of work were the main causes of delay and cost overrun. The identified causes if properly addressed would reduce the rate of delays and cost overrun in construction projects, thus enhancing the economic growth and development of the country.

An assessment of the causes of schedule and cost overruns in South African megaprojects: A case of the critical energy sector projects of Medupi and Kusile

“…In Malaysia, the main causes of cost overruns and delays in building construction projects are poor scheduling and control of time; delays in the preparation of design documents; ineffective communication between stakeholders; changes in laws and regulations; low labour productivity; lack of knowledge in executing methods (Tahir, Haron, Alias & Diugwu, 2017: 1); contractor's financial problems that result in the shortage of construction materials on-site; owner's financial problems and slowness in decisionmaking; consultant's poor supervision and delays in issuing instructions, and external factors such as materials shortage and poor site condition (Musa, 2012: 5).…”

“…The results in Table 4 show that these factors could contribute to project implementation sluggishness in South Africa. A study by Tahir et al (2017: 3) indicated that the project teams' slow rate in making decisions is one of the causes of delay that could contribute to project implementation sluggishness. The issues identified in this instance are indicative of project management teams that are either overwhelmed or not sufficiently knowledgeable.…”

“…The top five challenges are management and organisational related, showing that there is not enough local management and organisational expertise in South Africa to ensure the proper planning and effective implementation of energy megaprojects. One essential and critical issue in successful implementation is the management and organisation of megaprojects (Söderlund et al, 2018: 9) Since these projects are critical to the economy, adequate planning for their implementation should have been carried out (Tahir et al, 2017). With MS = 6.24, respondents agreed that shortage of skilled labour; poor material planning, and delayed payment to contractors/ consultants, which relates to personnel, material and financial issues, is challenging for the successful implementation of energy megaprojects in South Africa.…”

Impact of Construction Delay-Controlling Parameters on Project Schedule: DEMATEL-System Dynamics Modeling Approach

“…The quest to assuage the threat of a construction delay, coupled with its negative effects, has necessitated myriads of investigations over the years, which are predominantly directed towards identifying factors responsible for this monumental problem. Tahir et al (2019), for example, investigated the causes of a delay and cost overrun in Malaysian construction projects, while Gardezi et al (2014) investigated time extension factors in the Pakistani construction industry. The study results show key delay factors, such as law and order situation, design changes, and improper availability of funds with the client.…”

“…, India, Iran, Malaysia, New Zealand, Nigeria, Norway, Turkey, the UK, and KazakhstanAmeh and Osegbo (2011),Kazaz et al (2012),Aziz (2013),Desai and Bhatt (2013),Gascuena et al (2011),Hickson and Ellis (2014),Lessing et al (2017),Moradi et al (2017), European Commission (2018),Karthik and Rao (2018),Zidane and Andersen (2018),Hossain et al (2019),Tahir et al (2019),Ardila and Francis (2020…”