Cost Development Over-time at Construction Planning Phase: Empirical Evidence from Norwegian Construction Projects

Abstract

Every capital-intensive constructions project goes through various challenges throughout their project life cycle. However, one crucial challenge is to understand and trace cost development over-time at planning phase. The research aim is threefold: firstly, to identify the critical factors of cost development in the planning phase. Secondly, to investigate empirically a dyadic relationship of cost deviation over time and quantitatively chart their developments. Thirdly, to analyze the construction cost data, discuss their cost developments and identify critical projects based on their actual financial impacts. The research considers 110 projects and analyze them using qualitative and quantitative research methods. The results showed higher cost escalation in the planning phase. The research identified critical factors for cost escalations at the planning phase. The average cost escalation of 110 projects (<5%) seems good, but some projects showed large cost deviations with lower financial impacts and vice versa.

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