Project delay and cost overrun is a recurring problem in our industry. Due to the level of inflation over the last decade, many projects have suffered enormous losses through hidden cost overruns. Because of the inherently catastrophic nature of it, we have decided to highlight what we believe are the most common causes of project delay and cost overrun in the Middle East.
Weak design documents:
Weak design documents and/or design errors lead to an enormous amount of modifications for conflict, interference, and collision detection. Insufficient information in design drawings often leads to the wrong application or architectural systems being employed. Over the construction phase, any attempt to correct design errors will undoubtedly take up time in the procurement of additional materials and the exploration of alternative applications. A contractor would be entitled to an extension of time (EoT) and would, therefore, have a larger margin of pricing modifications and omissions, thus resulting in delay and cost overrun.
Suggestion:
Design validation should be done by a third party in order to ensure that the design documents are error free and complete before the tender phase.
Proper design management is essential; prior to assigning an A/E consultant, the developer’s team shall be aware of the importance of reviewing the A/E consultant’s profile and his experience in similar tasks
Miscommunication between stakeholders:
Good communication with the entire design team allows room for corrections, reviews and the modifications needed to allow the project to reach its full potential of efficiency and productivity with a minimum waste of expense.
Suggestion:
Consider implementing a modern, new method of project delivery that encourages improved routes of communication, for example building information modelling or integrated project delivery. This will improve communication and allow teams to raise concerns early in the project’s life.
Poor quality of labour:
Bad work ethic and poor skills can lead to the abandonment of work and the rising costs of damages and repairs to raw materials. A complex project often requires a more skilled labour force to ensure good work ethic making it essential to select the right personnel are chosen for the job.
Suggestion:
The main contractor record should be examined rigorously, and he should be hired based on his experience in dealing with projects similar in size and complexity.
Within the contracts and specification document, implement restrictions that allow the limiting of material application to sub-contractors and the supplier’s team.
Unethical behaviour:
Some engineers or contractors raise the project price to raise their own commission. The underestimation of costs during budgeting can affect the project’s lifecycle dramatically.
Lack or absence of quality procedures:
Omission, error or misrepresentation might not be updated or coordinated properly in the cost estimation or BOQ. As a result of these errors, the estimation lacks accuracy and therefore misleads any who seeks information regarding the forecasted price of construction.
Scope change:
Developer’s design modifications and continuous growth in the vision of the project is often fickle; the vision changes which is natural, however too great a change and too often can have a detrimental effect on scheduling and cost.
Suggestion:
Work thoroughly on a feasibility study and envision the scope of work at the earliest possible stage of project development. The amount spent if this problem is tackled early is certainly far less than if it had been confronted later on. The scope of a project needs to be properly defined, documented and controlled.
Rushed Work:
The blame for this can rest on the shoulders of many. It can come down to the developer’s poor time management, their over-eagerness to cash in on a real estate boom, or unawareness of design management. A novice A/E consultant may also promise completed work by an unrealistic date. Both of these scenarios have grave repercussions for a project’s budget and schedule.
In conclusion, using proper project management practices, performance monitoring and control system can reduce or totally eliminate delay and cost overrun. Greater time spent planning and researching conducted at early stages of the design phase allows for a smoother construction phase that will move without compromising on the quality and design.