Impact of Cost Control Techniques on Cost Overruns in Construction Projects

Construction industry plays an important role in the development of a country. The success of any project will depends on how that project can achieve its objectives in terms of cost, quality and duration. In order to achieve success in a project, it would be essential to plan that project well and have a proper monitoring mechanism in place. Cost overrun is a major problem encountered by many contractors as it makes the profit of a project less secure for the contractor in addition to causing many other problems to all the parties involved. Good cost control techniques would be essential to solve those problems. Thus, it is important to identify cost controlling techniques and their impact on cost overruns. This study was done using a questionnaire survey conducted among C1-C5 grade contractors. The data collected were analysed by converting them into quantitative values using percentage analysis and weighted score analysis. The results indicate the cost controlling practices that are in frequent use and their importance in minimizing the cost overruns in order to reduce over budget and overheads while securing anticipated profits. Finally, it is suggested that CIDA (ICTAD) should encourage contractors to use cost controlling techniques, by conducting training programs, awareness programs, etc. It is also suggested to make the use of some of ICTAD documents mandatory.