• Korean Journal of Construction Engineering and Management
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• v.25 no.3
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• pp.27-36
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• 2024

The effective control of cost overrun is a crucial issue for construction companies to secure profitability. Especially in situations where cost pressures are significant due to factors such as rising raw material prices and increased financial costs due to high-interest rate policies, cost overruns resulting from project failures have a highly detrimental impact on the profitability of construction firms. The objective of this study is to analyze the current status of cost overrun control measures adopted by construction companies using the IPA technique and provide key characteristics and implications. The IPA analysis results showed that practitioners in general contractors exhibit a high level of interest and effort regarding cost overrun while the performance level is relatively low. Nevertheless, the measures considered important to control cost overruns generally show a high tendency for execution as well. Cost overrun control measures that show high importance but low execution are primarily related to collaboration and communication sectors. To effectively control cost overruns, enhancing collaboration and communication with construction supervisors/CM, headquarters, and regulatory authorities emerged as the most urgent need. Through this study, the current status and areas for improvement regarding cost overrun control measures in general contractors can be identified. This can be valuable for deriving directions and enhancements for future cost overrun control strategy development.

• Korean Journal of Construction Engineering and Management
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• v.18 no.3
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• pp.105-116
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• 2017

In recent years, large Korean construction companies have suffered serious losses in their overseas business. Many practitioners and researchers have analyzed causes of cost overrun in these projects. However, these arguments have not been empirically verified based on acutal project cases. This study investigated cost overrun rate, contingency, allowance, predicted risk before bidding, and actual and residual risk after award in the 67 international infrastructure projects conducted by 13 large construction companies. The causes of cost overruns are derived as follows. First, they identified the possibility of cost overrun to some extent before the bidding, but did not reflect the enough risk money to bid price. In particular, this behavior was more severe in badly cost-overrun projects. Second, the causes of cost overrun were more influenced by external environmental risk than internal capability risk. However, the internal risk in badly cost-overrun projects was relatively high compared to cost-underrun projects. Third, badly cost-overrun projects failed to mitigate risk. However, cost underrun projects were affected more by low exterior risk conditions than by well mitigated risk. This study provides more informed knowledge in controlling project costs in international infrastructure projects.

• International conference on construction engineering and project management
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• 2011.02a
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• pp.38-45
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• 2011

Studies have shown that infrastructure projects have continued to experience significant delays and cost overrun over an extended period of time and no evidence of learning ever have happened [1] [2]. Various causes contribute to the bias towards overrun [3]. This study contributes to literature by developing and subsequently validating a set of hypothesized relationships between project complexity and project performance. The results show that project complexity is associated with both the magnitude and variance of overrun. Further, the extent and magnitude of the positive bias towards overrun are moderated by project complexity.

• Journal of Construction Engineering and Project Management
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• v.4 no.1
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• pp.29-36
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• 2014

Tunnelling has become a preferred method of construction for road and highway projects in countries with a lot of hilly slope geological conditions such as found in Malaysia. However the construction works of a tunnelling project are usually complicated and costly, which consequently impose great risks to the parties involved. This paper identifies the key significant risks and sub-risks for tunnelling construction projects in Malaysia through a case study. Interview has been used as the solitary means to determine the significant risks from contractor's eleven key project personnel who were directly involved in the tunnelling construction such as consultant, construction manager and tunnel engineers. The importance of the risks identified is then prioritised and ranked via the Analytic Hierarchy Process (AHP)'s pairwise comparison approach to determine their criticality towards a successful delivery of project. As a result, three key risks have been identified as significant for the tunnelling case study project, namely health and safety, cost overrun in construction and time overrun in construction. Two sub-risks each of the latter categories, which are cost underestimation and unforeseen events (cost overrun in construction) as well as plant and machinery failure and delay in material delivery (time overrun in construction), have occupied the top five overall risk ranking.

• Journal of Construction Engineering and Project Management
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• v.4 no.1
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• pp.15-28
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• 2014

Completing road construction projects within the budget and time has been a problem for the Tanzania National Roads Agency (TANROADS); and the major problem highlighted in almost all projects being inadequate design. However, the extent to which inadequate design contributes to both time and cost overruns and its causes remained under-studied. The objective of this study is therefore to determine the extent of the effect of inadequate design, its causes and remedial measures. The methodology used in this study includes reviewing recent projects completion reports, holding roundtable discussions with consultants and TANROADS officials and analyzing the information. Cost and time overruns for the reviewed projects averaged 44% and 26% respectively. Similarly, the extents to which inadequate design contributes to cost and time overruns were on average found to be 61% and 85% respectively. The overruns are predominantly related to problems that occurred during the design process. To alleviate the problem, TANROADS is advised to improve the management of design projects, enhance the process of reviewing design reports, improve the design process including introducing Road Safety Audit and geometric design manuals, and increase staff to match the work-load.

• Korean Journal of Computational Design and Engineering
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• v.8 no.4
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• pp.212-221
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• 2003

In order to reduce the lead-time and cost, the technology of rapid prototyping (RP) has been widely used. A new rapid prototyping process, transfer-type variable lamination manufacturing process by using expandable polystyrene foam (VLM-ST), has been developed to reduce building time, apparatus cost and additional post-processing. At the same time, VLM Slicer, the CAD/CAM software for VLM-ST has been developed. In this study, algorithms for accuracy improvement of VLM-ST, which include offset and overrun of a cutting path and generation of a reference shape are developed. Offset algorithm improves cutting accuracy, overrun algorithm enables the VLM-ST process to make a shape of sharp edge and reference shape generation algorithm adds additional shape which makes off-line lamination easier. In addition, proposed algorithms are applied to practical CAD models for verification.

• Korean Journal of Construction Engineering and Management
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• v.22 no.3
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• pp.52-60
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• 2021

Due to the significant size of overseas construction projects, the cost overrun has enormous impacts on the financial status of construction companies. The managers' appropriate perception and identification of key risk factors in the construction phase notably affect the performance of projects. However, the actual impacts of risk factors and local manager' s perception of them could be deviated. For this reason, we aim to compare the performance of actual cases and general opinions of responsible practitioners in terms of risk factors relevant to cost overruns in order to present a practical strategy for risk management. Firstly, factors classified from literature review were used to simulate 290 cost overruns data sets from 20 cases by introducing Monte-Carlo Simulation and were ranked by standardized coefficients through multiple regression analysis. Secondly, a survey was conducted against 42 local managers to rank their perception of impact on cost overrun with identical factors by using Stepwise Weight Assessment Ratio Analysis (SWARA). Comparison results show that conflicts such as 'conflict with subcontractors' and 'conflict with the local community' have caused excessive cost overrun. However, managers' perception of these as less significant than the actual influences and consider other risks such as 'material price fluctuation' and 'construction quality errors', as relatively serious. Therefore, education for local managers on conflict risks needs to be presented.

• Korean Journal of Construction Engineering and Management
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• v.8 no.5
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• pp.191-200
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• 2007

This paper introduces a tool for predicting potential cost overrun during project execution and for quantifying the uncertainty on the expected project cost, which is occasionally changed by the unknown effects resulted from project's complications and unforeseen environments. The model proposed in this stuff is useful in diagnosing cost performance as a project progresses and in monitoring the changes of the uncertainty as indicators for a warning signal. This model is intended for the use by project managers who forecast the change of the uncertainty and its magnitude. The paper presents a mathematical approach for modifying the costs of incomplete work packages and project cost, and quantifying reduced uncertainties at a consistent confidence level as actual cost information of an ongoing project is obtained. Furthermore, this approach addresses the effects of actual informed data of completed work packages on the re-estimates of incomplete work packages and describes the impacts on the variation of the uncertainty for the expected project cost incorporating Multivariate Probabilistic Analysis (MPA) and Bayes' Theorem. For the illustration purpose, the Introduced model has employed an example construction project. The results are analyzed to demonstrate the use of the model and illustrate its capabilities.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2014.05a
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• pp.68-69
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• 2014

Production of freeform concrete segments use various molds because of the unique shape of it unlike common concrete segments. As a result, the mold for freeform concrete segments cannot be reused. Therefor, cost overrun is occurred by needs of more time and manpower to produce the freeform concrete segments compared with common concrete segments. To prevent the cost overrun, a new production method for the freeform concrete segments is needed to develop and the requirements for it should be analyzed before. Therefor, the aim of this study is requirements analysis for production of freeform concrete segment. The requirements of production of freeform concrete segments and form for it is analyzed in this study. The result of this study would be used to suggest the new production method of freeform concrete segments.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2017.05a
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• pp.264-265
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• 2017

This paper aims to analyze relations between design errors prevented by building information modeling (BIM)-based design validation and their impacts in order to identify critical consideration factors for successfully implementing BIM-based design validation in the architecture, engineering, and construction (AEC) projects. More than 800 design errors detected by BIM-based design validation in two BIM-based projects in South Korea are categorized according to its causes and work types. The relations between causes and work types of design errors and project delay, cost overrun, low quality, and rework generation that can be caused by the errors are analyzed through conducting logistic regression. Characteristics of each design error are analyzed by conducting face-to-face interviews with practitioners in the two BIM-based projects. As the results, the impacts of design error causes on predicting project delay, cost overrun, low quality, and rework generation were the highest.