Cost Overruns on Federal Capital Territory Authority Road Construction Projects

Abstract

The pervasiveness of cost overruns on construction projects has been an issue of great concern. Many studies have been carried out worldwide to address the problem. However, there is dearth of literature on Nigerian road construction projects cost overruns. This study focused on determining the extent of cost overruns on Federal Capital Territory Authority (FCTA)road construction projects and identifying the most significant of the causes. The study used questionnaire survey, interviews and examination of road construction documents to obtain data. Measure of discrepancy, relative index and thematic analysis were used for the data analysis. The study revealed different causes of cost overruns for the different methods employed. Analysis of the questionnaire survey data showed that inflation, fluctuation of prices, exchange rate, government related issues like changes in policies, and variation were the 5 most significant causes of road construction projects’ cost overruns. Examination of construction documents however showed that delays in payment, design changes, and unforeseen ground conditions were the main contributory causes. Yet, interview responses indicated that cost overruns on road construction projects occur due to many diverse reasons. It was therefore concluded that different road projects have different challenges and experience different magnitude of cost overruns that result from various reasons. Therefore, findings on one road are not always applicable to other roads.

Keywords: Cost Overruns, Management, Nigeria, Road Construction Projects, PLS-SEM