Exploring the Properties of Cost Overrun Risk Propagation Network (Corpn) for Promoting Cost Management

Abstract

Construction cost overrun chronically plagues contractors. To address the issue, numerous studies have explored cost overrun risks (CORs). Nevertheless, their methods of identifying risk relationship are susceptible to experts’ experience. In addition, they fail to unearth the relationship structure information and analyze the risk propagation effect. To fill these gaps, this paper intends to propose a methodology that integrates the engineering case analysis and complex network theory, so as to obtain a stable relationship structure and reveal its inherent property. First, 52 CORs and 158 risk paths are extracted from 156 engineering cases, followed by the establishment of a cost overrun risk propagation network (CORPN). Finally, the statistical properties of CORPN are explored. The results indicate that CORPN presents the topological property of heterogeneity. A large number of risk paths can be blocked through preventing the CORs with large total degree, like delay in construction period and engineering quantity increase. Meanwhile, CORPN shows the small-world property. The efficiency of risk propagation can be reduced through preventing the CORs with high betweenness centrality, such as lack of technical skill and experience. These findings contribute to the formulation of beforehand strategies that promote the cost management.

Prediction of Cost Overrun Risk in Construction Projects

“…According to [6], the key causes of cost overruns were the increasing cost of resources (construction materials, equipment, and labor), construction works, changes in design specifications, land acquisition and resettlement, and changes in currency exchange. Chen and Hu [13] identified the following main reasons of cost overruns: Delay in construction period, engineering quantity increase, and lack of technical skill and experience. Controlling them can effectively prevent risk propagation to avoid the cost overrun.…”

Study on the Mechanism of Safety Risk Propagation in Subway Construction Projects

“…Infectious disease models in communication dynamics models are often used to study the propagation mechanism of risk, and standard infectious disease models include the susceptible-infected (SI) model, susceptible-infected-susceptible (SIS) model, susceptible-infected-recovered (SIR) model and susceptible-exposed-infected-recovered (SEIR) model [23]. Based on various considerations, numerous researchers have improved the classic models mentioned above, and their applications have been gradually extended from the medical field to other fields, such as opinion communication [24] and engineering risk [25]. Tchavdar presented and applied a method for resolving an Adaptive Susceptible-Infected-Removed (A-SIR) epidemic model with time-varying propagation and removal rates of COVID-19 in Latin America [26].…”

Risk Causation Model to Capture and Transfer Knowledge in International Construction Projects

“…The first type of researches utilized a collection of statistical techniques such as structural equation modeling (Niu et al, 2019;Viswanathan et al, 2020), factor analysis (Chang et al, 2018b;Li et al, 2020), and network analysis (Chen et al, 2019), with the aim of identifying the major risks and their propagation mode in international construction projects. For example, Chen et al (2019) extracted 52 cost overrun risks and 158 risk paths from the repository with 156 engineering cases and established a cost overrun risk propagation network. Chang et al (2018b) noted 14 significant political risk paths using the repository with 264 valid cases conducted by Chinese contractors.…”

“…The third component "Risk Path" is cited from related literature (Chang et al, 2018b;Charkhakan & Heravi, 2018;Chen et al, 2019;Eybpoosh et al, 2011;Liu et al, 2016) to illustrate the propagation chain of potential risks. Risk path consists of sources, events, and consequences, indicating three stages of risk occurrence, such as "design problems -increase in work quantity -cost overrun".…”