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Expert opinion on risk level for factors affecting time and cost overrun along the
project lifecycle in Malaysian Construction Projects

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International Journal of Construction Technology and Management
Vol.1, No.2, 2014; ISSN 2289 4454
Published by ZW Publisher

Expert opinion on risk level for factors affecting

time and cost overrun along the project lifecycle
in Malaysian Construction Projects
Ismaaini Ismail, Aftab Hameed Memon, Ismail Abdul Rahman
Faculty of Civil and Environmental Engineering, University Tun Hussein Onn Malaysia, Malaysia
Corresponding Author: [email protected]

Abstract—Construction projects in Malaysia are currently occurrence throughout the project life. Hence, it is very
facing a severe problem of time and cost overrun. It is critical to recognize the risk of factors and their risk on
increasing with the rapid growth in development. The time and cost overruns. This will be very helpful in taking
problem of time and cost overrun in resulted from various appropriate actions for overcoming these problems.
factors. These factors occur in construction projects at
various phases and have different level of risk which is very
essential to determine. Hence, this study is carried out II. TIME AND COST OVERRUN PROBLEM IN
through risk matrix for assessing risk level of various factors CONSTRUCTION PROJECTS
of time and cost overrun throughout the life cycle of a The sensation of a construction project is considered by
construction project. This research work involved 35 achieving the completion of projects on estimated time,
common factors of time and cost overrun identified from budget, quality, and no dispute. However, more commonly
reviewing previous studies published worldwide. For time and cost are adopted as fundamental criteria for
assessing the relatively of those factors and determining their
measuring success of a project because of their simplicity
occurrence in various phase of project lifecycle, structured
and relate between each other (Iyer and Jha, 2006). Based
interviews were conducted with 5 experts from construction
industry. Experts were asked about the occurrence and
on previous studies, time and cost overrun has been
severity level of each factor along each phase which were defined in different ways. In construction project, time and
analyzed with average index calculation and risk matrix. cost overrun is a common issue and categorized as a
The findings revealed that the factors have low and medium worldwide problem (Murray and Seif, 2013). In the study
risk on time and cost overrun during planning and design of Pai and Bharath (2013), leisurely performance of works
phase. While, in the construction phase majority of factors where activities were not stopping completely, was
have medium risks and 5 factors have a high risk on time considered as time overrun. This time overrun often results
overrun while 6 factors have a high risk on cost overrun. The in disruption of work, low productivity, delayed projects,
findings of this study give a better understanding to the cost will increase, claims of third parties, and
construction practitioners for risk level of the factors causing termination of the contract. It also results in consuming
time and cost overrun in each phase of construction projects. long construction period (Kikwasi, 2012). From
This will help the practitioners in taking proper actions for perspective of cost overrun, Park and Papadopoulou
improving construction time and cost performance. (2012) highlighted that additional expenditure than the
contract amount agreed between client and contractor
Keywords-Time Overrun, Cost Overrun, Risk Level, consumed in any project is regarded a cost overrun. It is
Project Life Cycle also named as budget increase, cost increase, or cost
growth (Love et. al. 2013).
I. INTRODUCTION
In Malaysia, various researchers have investigated time
Success of any project is highly dependent on project and cost performance issues. Memon et al (2011a)
completion within time and cost. These are key parameters conducted a case study on 30 MARA (Majlis Amanah
in measuring the behavior and success of the projects Rakyat) large projects and found that all projects has time
throughout its life cycle. Unfortunately, many projects overrun at an average of 23.74% of the contracted time
experience time and cost overrun and these issues are a period. While Memon et. al. (2014) through a survey in
common phenomenon in construction industry (Odeh and southern region of Penisular Malaysia found that for large
Battaineh, 2002). This is caused by risk of factors that projects, amount of cost overrun ranges from 5-10% of the
effect on the progress of works from beginning until the estimated cost while in small projects, it was found as 10-
final stage of construction. Therefore, it can because initial 15% of estimated cost. Another study conducted by Endut
estimates of time and cost exceed or considered as time et. al. (2009) in investigation of public and private sector
and cost overrun. These problems are occurred due to revealed that, out of 308 investigated public sectors, only
various risk factors such as accidents, price fluctuation, 20.5% of projects were completed on time and 46.8% of
inadequate materials and unfavorable weather condition as projects were completed within budget. While, in private
cited by (Zaini et. al. 2010). In Malaysia, there is lack of sector projects only 33.35% and 37.2% of 51 investigated
investigation of the risk factors and their relative projects were completed on time and cost respectively.

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www.zwgm.org International Journal of Construction Technology and Management Vol. 1 No. 1, 2014

More recently, problem of time and cost overrun issue researchers have divided PLC into several stages and
happened in construction of Kuala Lumpur International phases as shown in table 2.
Airport 2 (known as KLIA2). This project was targeted to
be opened in September 2011 but the opening is postponed TABLE II. SUMMARY OF REVIEW ON PHASES IN PLC
until May 2014. Because of the delay, project has faced the
cost overrun run of about RM500 million (Nie, 2013). Authors Year Phases in PLC
Novick 1990 1. Capital programming
This problem of time and cost overrun arise due to 2. Concept Study/Alternatives Analysis
several factors that affect the time and cost in construction. 3. Preparation of Design and Contract
Several researchers have pout efforts in revealing these Documents
4. Construction
responsible factors which were reviewed carefully. Aziz 5. Operations, Inspection, and
(2013) conducted questionnaire survey to identify the Maintenance
factors perceived to affect delay in the Egyptian 6. Repair and Rehabilitation
construction project. 99 factors causing delay was 7. Reconstruction or Replacement
determined and classified under 9 major categories. The Kartam 1996 1. Conceptual planning and feasibility
findings revealed top twenty factors based on 3 most studies
2. Design and engineering
significant factors for each group was identified as (1) 3. Construction
Contractor category : ineffective project planning and 4. Operation and maintenance.
scheduling, poor site management and supervision, poor Alshubbak et. al. 2009 1. Feasibility phase
financial control on site, (2) Equipment category: shortage 2. Design phase
of equipment, frequent equipment breakdowns, equipment 3. Construction phase
4. Exploitation phase
allocation problem, (3) Owner category: delay in progress 5. Dismantling phase.
payments, selecting inappropriate contractors, inadequate Saad 2011 1. Conceptual planning and economics
planning, (4) Project category: complexity of project, legal phase
disputes between project participants, ineffective delay 2. Engineering and functional design
penalties, (5) Design category: design changes by owner, phase
misunderstanding of owner’s requirements by design 3. Phase III (Preparing Drawings and
Specifications; Tender and Award;
engineer, design errors and omissions made by designers, Procurement)
(6) Consultant category: delay in approving major changes 4. Construction and completion of the
in scope of work by consultant, lack of consultant project phase
experience in construction projects, poor communication 5. Operation and utilization phase.
and coordination between owner and contractor, (7)
External category: different tactics patterns for bribes,
However, for this study lifecycle of projects is
sudden failures actions, global financial crisis, (8) Material
classified into four phases which consists of the planning
category: shortage of construction materials, late delivery
phase, design phase, construction phase and finishing
of materials, delay in manufacturing materials, (9) Labor
phase as illustrated in figure 1.
category: unqualified/inadequate experienced labor,
shortage of labor, and low productivity of labor.
IV. RESEARCH METHODOLOGY
Gündüz et. al. (2013) in his study of construction
industry in Turkey mentioned that the most significant This research work was done through interviewing the
factors causing delays are inadequate contractor experts of construction industry from private and
experience, ineffective project planning and scheduling, government sector. The panel which was interviewed
poor site management and supervision, design change by consisted of personnel from clients, consultants, and
owner, late delivery of materials, unreliable contractors. All the experts were given list of 35 factors
subcontractors, delay in performing inspection and testing, contributing to time and cost overrun based on table 1
unqualified workers, change orders, delay in site delivery, discussed in earlier sections. The experts rated each factors
delay in approving design documents, delay in progress for probability of occurrence and level of severity in each
payments, slowness in decision making, poor phase of project lifecycle using a scale from 1 to 5. The
communication and coordination with other parties and rating was analyzed with Average Index (AI) formula as
unexpected surface and subsurface conditions. In study of below:
Nigerian construction industry, Amu and Adesanya (2011) Average Index = ∑ (1X1 + 2X2 + 3X3 + 3X4 + 3X5) (1)
found that factors that contributed time overrun in
construction project are funding and payment, contractor N
and client factors are the major factors contributed to the Where,
delay of projects. Together with these, several published
research works in identifying time and cost overrun factors N= Number of respondents,
were reviewed which resulted in identification of 35 X = Rating scale are explained in table 3
common factors as mapped in table 1.

III. PROJECT LIFE CYCLE (PLC)

Project life cycle is a procedure of accomplishing the
project from beginning until the completion. Various

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www.zwgm.org International Journal of Construction Technology and Management Vol. 1 No. 1, 2014

TABLE I MAPPING THE FACTORS OF TIME AND COST

OVERRUN

 Creation of a  Provide detailed  Implementation of the  To enhance their

detailed project plan drawings of the project plan. service and aesthetic
(scope of project, project (architectural  Monitor the progress qualities for exterior
resources plan, and engineering of work. and interior finishing
financial plan, drawings).  Control the time, cost of buildings and
quality plan and risk and quality of work. structures.
plan).

TABLE IV Project Life Cycle

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www.zwgm.org International Journal of Construction Technology and Management Vol. 1 No. 1, 2014

TABLE III. RATING SCALE TABLE IV DEMOGRAPHY OF RESPONDENTS

Parameter Probability of Occurrence Level of Severity
X1 Not occur No Significant Exper- Category of
Qualificat-
X2 Slightly occur Slightly Significant Respondent ience Organizati- Position
ion
X3 Moderately occur Moderately Significant (years) on
X4 Often occur Very Significant Contractor Degree 21-30 Private Engineer
X5 Very often occur Extremely Significant
Consultant Degree 21-30 Private Engineer

Based on the probability of occurrence and severity Client Degree 11-20 Government Engineer
level of the factors, risk of each factor was calculate using Deputy
Client Master 21-30 Government
risk matrix as adopted from Mahamid (2011). director
31 Deputy
Client Degree Government
above director

Table 4 shows that all the respondents have worked

experience for more than ten years in handling the projects.
In terms of educational qualification, majority of
respondents are holding engineering degree. Three of the
respondents are from government organization and the rest
are engaged in a private organization. This confirms that
the respondents selected in this study work competent
enough for data collection.
Table 5 shows that the investigated factors have low
and medium risk on time and cost overrun during planning
TABLE V Risk Matrix (SoruceL Mahamid, 2011) and design phase. While, in the construction phase
majority of factors have medium risks and 5 factors have a
high risk on time overrun while 6 factors have a high risk
From figure 2, it can be seen that the risk matrix is a on cost overrun. The factors having high risk on time
5x5 matrix with probability of occurrence ranging from 1 overrun are poor site management and supervision,
to 5 along horizontal axis and level of severity also ranging incompetent subcontractors, schedule delay, inadequate
from 1 to 5 along vertical axis. Further, the risk matrix is planning & scheduling and delay payment to supplier
classified into various zones represented with different /subcontractor. The factors having high risk on cost
colour where; overrun in this phase are poor site management &
supervision, incompetent subcontractors, schedule delay,
 Green colour indicated that the factors falling in
inadequate planning & scheduling, incomplete design at
this zone have low level which may be ignored.
the time of tender, and delay payment to supplier
 Yellow colour highlights that the factors falling in /subcontractor. In the finishing phase most of factors have
this zone have moderate level of risk. This means moderate risk and only 1 factor i.e. schedule delay have a
that these factors need some consideration and high risk on project time. The summary of the results of
slightly action. risk classification is presented in table 6.
 Red colour shows that the factors in this zone
have high risk and must be considered critical. TABLE IV DEMOGRAPHY OF RESPONDENTS
Those must be given high priority and serious
action must be taken to solve those factors. Time Cost
Phase
Low Moderate High Low Moderate High
V. RESULT AND DISCUSSION Planning 26 9 0 29 6 0
This study was carried out through interviewing the Design 27 8 0 30 5 0
selected experts from construction industry. In this process
of interviews, a total of five respondents including three Construction 1 29 5 4 25 6
from the client’s representative, one from contractor, one Finishing 6 28 1 6 29 0
from consultant were involved. The demography showing
their factual characteristics i.e. qualification, experience of
respondents, category of organizations and working
position is presented in table 4.

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www.zwgm.org International Journal of Construction Technology and Management Vol. 1 No. 1, 2014

cooperation which made data collection easier. Further,

Aftab Hameed Memon is thankful to the Quaid-e-Awam
TABLE VI RISK LEVEL OF THE FACTORS
PLANNING DESIGN CONSTRUCTION FINISHING
No Factors
RT RC RT RC RT RC RT RC
1 Poor site management and supervision 3.2 3.2 3.2 3.6 10.9 9.6 7.8 8.4
2 Incompetent subcontractors 3.6 3.6 4.8 4.8 9.6 7.8 6.8 6.2
3 Schedule delay 3.2 3.2 4.7 3.2 12.2 10.2 9.6 9.0
4 Inadequate planning and scheduling 5.3 4.8 6.2 5.3 10.2 8.3 8.4 8.4
5 Lack of experience 5.2 4.8 6.7 5.8 7.8 7.8 7.3 7.3
6 Inaccurate time and cost estimates 3.2 3.2 3.6 4.0 6.7 7.2 7.2 6.7
7 Mistakes during construction 2.9 2.9 2.9 2.9 9.0 9.0 9.0 8.4
8 Inadequate monitoring and control 3.2 3.2 3.2 3.6 7.8 6.7 5.8 5.8
9 Frequent design changes 4.8 4.0 4.4 4.4 7.3 6.2 4.8 4.8
10 Mistakes and errors in design 3.2 3.2 4.0 4.0 6.8 7.3 6.2 6.2
11 Incomplete design at the time of tender 3.6 3.2 4.4 4.0 6.2 7.0 3.8 3.5
12 Poor design and delays in Design 4.0 3.2 4.4 4.8 7.3 6.8 5.3 5.3
13 Delay Preparation and approval of drawings 2.9 3.6 2.9 3.6 4.8 4.0 4.8 4.8
14 Cash flow and financial difficulties faced by contractors 2.9 2.9 3.6 3.6 9.0 6.6 6.2 5.3
15 Poor financial control on site 4.0 3.6 3.2 3.2 5.3 5.3 5.3 5.3
16 Financial difficulties of owner 4.4 3.6 3.2 3.6 7.3 6.2 6.2 6.2
17 Delay in progress payment by owner 3.2 3.6 3.2 3.2 7.8 6.7 4.8 4.8
18 Delay payment to supplier /subcontractor 2.9 3.2 3.2 3.6 9.6 7.7 5.8 5.3
19 Contractual claims, such as, extension of time with cost claims 3.2 3.6 3.2 3.6 7.8 7.3 4.0 4.8
20 Lack of coordination between parties 4.4 4.4 6.2 5.2 8.4 7.2 6.2 5.8
21 Slow information flow between parties 5.3 4.8 4.4 4.4 4.8 5.3 5.3 4.8
22 Lack of communication between parties 6.2 6.2 5.3 5.3 6.2 6.2 5.3 5.3
23 Labour productivity 3.2 3.2 4.8 4.0 5.3 5.8 4.8 5.3
24 Shortage of site workers 2.9 3.2 3.2 3.6 5.3 5.3 4.8 4.8
25 Shortage of technical personnel (skilled labour) 2.9 3.6 4.0 3.6 7.8 7.2 4.3 4.3
26 High cost of labour 3.6 4.0 3.6 3.6 4.4 3.6 3.6 3.2
27 Labour absenteeism 3.2 3.2 3.2 3.2 4.8 3.6 3.6 2.9
28 Fluctuation of prices of materials 3.2 3.2 2.9 3.6 2.9 2.9 4.0 3.6
29 Shortages of materials 3.2 3.2 2.9 3.6 5.8 5.8 4.8 4.0
30 Late delivery of materials and equipment 3.6 3.2 2.9 3.2 7.8 5.7 4.4 4.4
31 Equipment availability and failure 3.2 3.2 2.9 2.9 5.3 5.3 4.0 4.0
32 Poor project management 3.6 3.6 2.6 2.9 9.0 7.8 6.2 6.2
33 Change in the scope of the project 7.8 6.7 6.8 4.7 7.8 6.8 5.3 5.3
34 Delays in decisions making 5.8 4.8 5.8 5.3 7.8 6.2 5.7 5.3
35 Inaccurate quantity take-off 3.2 3.2 2.9 3.6 6.7 6.7 4.4 5.2
University of Engineering, Science and Technology
also for granting permission to carryout research work at
VI. CONCLUSION Universiti Tun Hussein Onn Malaysia.
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