Studying the Reasons for Delay and Cost Overrun in Construction Projects: The Case of Iran
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Abstract
Undesirable delays in construction projects impose excessive costs and precipitate exacerbated durations. Investigating Iran, a developing Middle Eastern country, this paper focuses on the reasons for construction project delays. We conducted several interviews with owners, contractors, consultants, industry experts and regulatory bodies to accurately ascertain specific delay factors. Based on the results of our industry surveys, a statistical model was developed to quantitatively determine each delay factor's importance in construction project management. The statistical model categorises the delay factors under four major classes and determines the most significant delay factors in each class: owner defects, contractor defects, consultant defects and law, regulation and other general defects. The most significant delay factors in the owner defects category are lack of attention to inflation and inefficient budgeting schedule. In the contractor defects category, the most significant delay factors are inaccurate budgeting and resource planning, weak cash flow and inaccurate pricing and bidding. As for the consultant defects delay factors such as inaccurate first draft and inaccuracies in technical documents have the most contribution to the defects. On the other hand, outdated standard mandatory items in cost lists, outdated mandatory terms in contracts and weak governmental budgeting are the most important delay factors in the law, regulation and other general defects. Moreover, regression models demonstrate that a significant difference exists between the initial and final project duration and cost. According to the models, the average delay per year is 5.9 months and the overall cost overrun is 15.4%. Our findings can be useful in at least two ways: first, resolving the root causes of particularly important delay factors would significantly streamline project performance and second, the regression models could assist project managers and companies with revising initial timelines and estimated costs. This study does not consider all types of construction projects in Iran: the scope is limited to certain types of private and publicly funded projects as will be described. The data for this study has been gathered through a detailed questionnaire survey.
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