Modeling cost overrun in building construction projects using the interpretive structural modeling approach: a developing country perspective

Abstract

PurposeAlthough several studies have been conducted on the causes of cost overrun, they have mainly assumed that the causes of cost overrun are independent of each other, and few of them scrutinized the complex interrelationships between the causes. To fill the gap, this study aims to investigate the mutual interactions between the causes of cost overrun using interpretive structural modeling (ISM) and proposing strategies to tackle the causes considering their interactions.Design/methodology/approachCritical causes of cost overrun were identified through a comprehensive literature review. In total, 22 key causes are then refined based on the opinions of relevant experts involved in the Iranian building and construction sector. Using the nominal group technique, the causes' interactions were examined and represented via the ISM diagram. The causes were also classified using “matrix cross-reference multiplication applied to a classification (MICMAC)” technique.FindingsThe results showed that price fluctuation, claims, execution delay, delay in payment and change order positioned at the highest level of the obtained model can directly result in cost overrun, and corruption and poor contract management located at the base of the model are two major root causes of cost overruns. It was also concluded that more attention should be paid to the precontract phase of the project to address and prevent corruption and managerial issues deeply rooted in this stage.Originality/valueThe findings of this study provide a clear understanding of how different causes of cost overrun are related to each other and can ultimately assist project managers of different parties in choosing strategies to mitigate cost overrun in building construction projects.

Cost Overrun Gap Analysis in Construction Projects: State -of-the-Art

“…The analysis of cost overrun causes in the different years shows that cost overrun causes remain the same over the years. For example, inaccurate cost estimates, Inflation, and fluctuation of construction resources prices had been identified by [9] in 1994 and also by [10], [11], [12] in 2022 and cited by several references in between.…”

“…The cost overrun causes previously identified in Table 1 have been analyzed to rank the top five cost overrun causes based on the number of studies that cited these factors as the critical factors that lead to cost overrun. [40], [15], [41], [42], [43], [44], [45], [46], [47], [48], [49], [50], [51], [52], [53], [20], [54], [14], [55], [56], , [57], [58], [59], [60], [59], [61], [25] [62], [10], [63], [64], [65], [65], [66], [67], [11], [12], [68], [69], [70], [71], [72] [41], [15], [78], [79], [80], [81], [44], [47], [48],…”

“…[20], [55], [58], [104], [105], [106], [88], [99], [66], [107] , [12], [68], [100], [91], [70], [108] [79], [42], [81], [109], [110], [47], [45], [49], [95], [111], [54], [112], [59], [25], [87], [105], [106], [10], [65], [113], [12], [89], [100], [69], [90], [108], [75], [76]…”

“…[26], [29], [34], [77], [37], [40], [15], [79], [42], [81], [109], [110], [47], [45], [49], [95], [111], [54], [112], [87], [59], [25], [105], [106], [10], [65], [113], [12], [89], [100], [69], [90], [108], [75], [76] 35 Poor decision-making process and delay in taking decisions [114], [101], [81], [47], [49], [50], [119], [84], [87], [105], [100], [92], [75] 13 Clients' practice for tendering and awarding…”

“…There are twenty-two critical cited causes of cost overrun in construction projects that are out of the control of project stakeholders. [41], [42], [43], [44], [45], [46], [47], [48], [49], [50], [51], [52], [53], [20], [54], [14], [55], [56], , [57], [58], [59], [60], [59], [61], [25] [62], [10], [63], [64], [65], [65], [66], [67], [11], [12], [68], [69], [70], [71], [72] [27], [9], [31], [121], [34], [94], [40], [79], [110], [44], [118], [103], [117], [50],…”