Most Critical Factors Responsible For Cost Overruns In Nigeria Building Construction Industry

Cost overruns are major problems that face the Nigeria construction industry. Cost overruns can lead to numerous negative effects such as project delay, abandonment and poor quality delivery. It’s of high concern to those who are involved in the construction industry. This study was carried out to identify the major causes of cost overruns in Nigeria building construction industry, by means of a literature review and a questionnaire survey. A total of twenty (20) cost overrun causative factors were obtained from literature. The questionnaire survey was distributed to randomly selected respondents from a combination of clients, consultants, contractors, site-engineers, project-managers and subcontractors. In all, one hundred and forty one (141) questionnaires were distributed to randomly selected respondents (clients, consultants, contractors, site-engineers, project-managers and sub-contractors), one hundred and thirty two (132) questionnaires were returned out of which three (3) questionnaires were found incomplete and invalid. Only one hundred and twenty nine (129) questionnaires were found consistent and valid for use in this research. Relative importance index (RII) and severity index were used to carry out ranking and severity analysis. Based on the data received, six (6) most severe factors of construction cost overrun were identified as: risk and uncertainty related factors (89.5%); lack of financial power by clients (88.5%); weak regulation and control (88.2%); project fraud and corruption (82.6%); variation of prices (81.3%) and indiscriminate change in design/works (80.1%).