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An Exploration of Causes for Delay and Cost Overruns In Construction

Projects: Case Study of Australia, Malaysia & Ghana

Article · July 2016

DOI: 10.3126/jacem.v2i0.16097

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 Journal of Advanced College of Engineering and Management, Vol. 2, 2016
Online ISSN: 2392-4853

AN EXPLORATION OF CAUSES FOR DELAY AND COST OVERRUN IN

CONSTRUCTION PROJECTS: A CASE STUDY OF AUSTRALIA, MALAYSIA &
GHANA
Raj Kapur Shah
Senior Lecturer, Department of the Built Environment, Faculty of Technology and Environment,
Liverpool John Moores University, Liverpool, L3 3AF, United Kingdom
Email Address: [Link]@[Link]
__________________________________________________________________________________
Abstract
Delay and cost overrun are the key problems of any construction projects. These issues are causing the negative impact on the
development of country economic growth and prosperity. To overcome these issues, the paper is aimed to ascertain the most
impelling factors causing the project delay and cost overrun, and highlight the possible measures so that the impact on
construction projects could be reduced. Each country’s quantitative data from past studies was selected to analyse and
recommend the effective measures. A questionnaire survey was conducted in all three case studies adopting different data
collection strategies. The main reason of selecting three case studies is to outline the comparative analysis of delay factors and
to classify these factors into different priority level of influence in project delay from country to country. The findings from
three case studies exposed that the most influential factors in Australia are (1) planning and scheduling deficiencies, (2)
methods of construction, (3) effective monitoring and feedback process, whereas in Ghana, (1) delay in payment certificates
(2) underestimating of project cost, (3) complexity and size of projects are the most influential factors. However, in Malaysia
(1) Contractor’s improper planning, (2) poor site management and (3) inadequate contractor’s experience are the most
impelling factors causing project delay and cost overrun. This paper has also analysed the average and least impact of the delay
factors causing project delay and cost overrun in those countries. The paper concludes that there are diverse groups of delay
factors from one country to another country that cause the project delay and cost overrun. It also concludes that there are
diverse measures according to the nature of delay factor are necessary to reduce the impact on project delay and cost overrun
in the construction industry in both developed and developing countries.
Keywords: Cost and time overrun, delay factors, construction industry, projects delay, and developing countries
__________________________________________________________________________________

1. Introduction

Construction delays are more likely to happen in almost all projects due to the miscommunication
between contractors, subcontractors, property owners or any other reasons. In many cases, construction
projects are delayed because of inaccurate estimate of time and project cost that was initially presented
to the clients or project owners. Delays and cost overrun are the most common problems causing delay
in the construction industry in both developed and developing countries (Enshassi, 2009). A study by
Flyvbjerg (2003) exposed that nine out of ten projects had the cost overrun from a sample of 258
companies across 20 countries and 5 continents around the world. In practice, delays occur in every
construction project and the magnitude of these delays varies significantly from project to project and
country to country (Wael et al, 2007).
Construction industry plays an important role in contributing on national economy around the world
(Takim, 2005). The construction industry also impact the rate of GDP and employment of many
countries, and for this reason, the construction industry is considered to be vital for the economic growth
of a country (Olawale, 2010), and he suggested that the construction activities have become a significant

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
market indicator since this industry produces more products and consume more materials than other
industries. The cost overrun is one of the critical problems and requires a lot of research studies and
exploration to minimise or reduce the delay and less variation in budget for the future projects. In some
of the developed countries, the cost overrun consequence could be more serious and the results could
sometimes exceeds 100% of the initial project estimated (Angelo, 2002). The construction industry is
one of the main sectors to stimulate and provide ingredients for the improvement of a country economy.
Therefore, it is considered that the construction has a great connection and play significant roles in the
economic growth or reactivation in all countries.
Delays are constantly occurring in road construction projects and they could causes great impact on
economic growth. It is one of the common problems that upset the construction companies in terms of
competitiveness and long term sustainable in the global market. Due to the population growth,
industrialisation and urbanisation, more roads and highways are required for the easy access to market,
economy and other vital purposes such as transportation and delivering goods and services (Mahamid,
2012). He highlights that cost is one of the major issues which has to be considered throughout the
project life cycle and it can be considered as one of the most important factors cause the project to delay
and failure if appropriate consideration is not taken into account. The issue of cost overrun in project is
attracting more researchers over the past decades and still more research are running to address the issue.
Moreover, there are many risk factors causing cost overrun in the construction industry, therefore,
researchers tend to take this issue into further scrutinise with aim of identifying the factors and their
ranking of importance. In recent study, researchers have tried to discover the reasons behind the initial
estimated and final amount, and other causes of time overrun. Morris (1987) found four key factors that
were the most likely influenced on cost overrun. These factors include design changes, poor planning,
unpredictable weather condition and the fluctuation in prices of building materials. It is important to
have in depth understanding of the outstanding issues in the construction industry. Hence, the paper
aims to provide in depth light about the existing causes of project delay and cost overrun in both
developed and developing countries, and outline the possible recommendations for controlling project
delay and cost overrun in future projects by analysing the case studies from different countries.
2. Literature Review
Kaming et al (1997) conducted a study on thirty one high rise projects in Indonesia, and the study
revealed that the cost overrun are more likely to occur than time overrun, which means that the issue of
cost is more important and common than the project delay. He found that majority of the problem
causing cost overrun are due to increase in material prices and currency inflation, whereas the delay in
time was due to inaccurate estimation, design changes, poor labour productivity, inadequate planning,
and shortages of necessary resources. Similarly, a survey was conducted by Assaf (2006) and identified
a total of fifty six main risk factors, which were more likely to cause the project delay. Delay factors
are grouped into nine major factors in terms of their level of importance to different parties. Howick et
al (2009) stated that construction projects can suffer massively in time and cost overrun because of
mainly two reasons: to gain learning for future projects, and to claim compensation from one to another
party during the project.
Moreover, a survey was conducted by Greenwood et al (2005) aimed to find the subcontractors liability
in project delay. They found that despite the level of importance of agreement between the two parties,
there is advantageous way of dealing with such delays and that could be subjected to Liquidated
Damage. The survey also found the most common method for dealing with such delay liability in
subcontract is to base damage upon proportion of main contract liquated damages (LD). The delay in

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
subcontractors delay has to be dealt with before the start of the project, by agreeing to the terms in both
sides. Having an appropriate planning scheduling can decrease a significant number of potential reasons
for project to be delayed as the scheduling gives clear indication how a project and people are
performing, since appropriate scheduling tells when an activity should be finished whereas on the other
hand, effective monitoring will ensure that particular activity finishes in its estimated time, this will
show the project is working according to the plan and the next activity will start without any delay. All
of these three important factors have to be considered and advanced procedures to be used to avoid
controlled delay.
Furthermore, a study conducted by Assaf (2006) found that any changes made by client during the
construction period would affect in progress payment by client. Other causes are improper planning and
scheduling of projects by contractor, poor site management and supervision by contractor, shortage of
labour, difficulties in financing project by contractor. This shows that changes made by client while
construction is already in progress will not only slow the progress but also affect everything that
contractors has planned for the project in terms of materials delivery schedule or any activities that were
due to finish on time. Such changes made by client could stop the work and increase project cost and
delay the delivery schedule. The cost and time overrun are the two common factors frequently occurring
within the construction projects. The past project history shows that the construction industry has vast
number of projects were completed with time and cost overrun (Amehl, 2010). In addition, Al-Momani
(1996) suggested that the actual estimated cost of project rises by up 30% by the time the project is
ready to be completed even in the most developing countries.
Noulmanee et al (1999) has investigated the causes of delay in highway construction in Thailand and
the survey result showed that the delay are caused by all parties were involved in the project, even the
main reason was due to inadequacy of sub con tractors, organisation not providing required resources,
unclear drawing and lack of communication between consultants and contractors. Noulmaneeet al (1999)
suggested that delay can be minimised by better understanding and involving all parties in the project
with good communication between them. Similarly, a survey was conducted in Lebanon by (Mezher,
1998) and he found that the owners were more wary of their financial issues, contractors were not very
keen about their relationship with other parties, and there was a lack of trust in guaranteeing and
complying with the agreement. But it was found that the poor management by consultants was key
reason of the delay. There were three main causes of cost overrun identified by (Koushki, 2005) in a
study in Kuwait, which include contractor related problems, material related problems and owners’ lack
of experience.
Ellis (2002) conducted a study to investigate main causes of delay in highway construction projects.
The study was split into two categories: excusable and non-excusable delay and found that on average
31% to 55% of all highways experienced a delay of 44% extra from the original agreed period. The
study also highlights that the delay mainly occurs more frequently in the urban areas. Similarly, Jahren
(1990) discovered that the quality of the contractor document, nature of the interpersonal relation on
the project and the policies of the contractor were key factors causing a significant impact on cost
overrun. The same investigation also exposed that a cost overrun rate from 1% to 11% are more likely
to occur on larger construction projects than smaller ones.
Moreover, a significant number of researchers have been involved in identifying causes behind the
delay in the construction projects and a lot of work has been carried to minimise such problematic issues
occurring in almost every project in every country worldwide. Six outcomes of delay were identified
by (Sambasivan, 2007) which comprise of time overrun, cost overrun, disputes, arbitration, litigation
and total abandonment. In many occasion, the delay happens due to human errors and careless attentions

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
to facts from either client or other team members of staff. Sibanyama (2012) suggested that difficulty
of establishing fair and expeditious settlement of claims depended on untimely notification, poor record
keeping, inadequate legal and factual justifications and poor presentation. It is vital for contractors to
fully understand the client’s requirements and fully commit in providing services accordingly.
Furthermore, some authors believe some of the factors causing delay or cost overrun can be classified
as understandable and other parties should understand the situation of others where they believes cost
overrun due to their inaccurate estimation. Similarly, Chan (2002) identified other reasons causing cost
overrun and classified them into 3 aspects such as owner’s control, consultant’s control, and beyond the
control. Whereas, Bramble (1987) classified major delay factors into four categories: excusable or non-
excusable delay, compensable or non-compensable delay, critical or non-critical delay, and concurrent
or non-concurrent delay. Excusable are those delay arising from the outside the control of the parties to
the project such as acts of God where an unexpected weather occurs or a strike action by labour, there
are nothing can be done about such delays. Non-excusable are those delays that one cannot have any
excuse or can provide an excuse because the delay occurred within due to careless of the contractor or
consultant for slow progress. Compensable delays are those delays where contractors and
subcontractors have legal right to get a time extension from the agreed finishing date of completion as
this occurred due to the owner’s requirement change of plan, and they’re entitled to additional financial
compensation for the cost of delay. Nonetheless, Yates (2006)suggested that non-compensable delay
occurs due to acts of God where the fault are not from any parties and therefore, the contractor is entitled
only to extension of time but not additional cost.
2.1 Factors affecting project cost and time overrun
Construction is considered as an active industry and therefore delay in the construction project has been
one of the main subjects for many researchers. Delay is one of the major risk factors for both contractors
and owners and causes difficulties within the project and then leads to cost and time overrun. Chan
(2004) highlighted that the cost overrun to be one of the most critical issue at the execution stage of the
construction project. Also stated by (Van Der Westhuzien, 2005), the presence of cost overrun can be
a reason behind the failure of a project. But not all authors agree that the failure is viewed from one
single factor but many believe there are a significant amount of factors causing the delay. However,
Morris (1987) suggetsed that there are three different measures to identify whether, the projects is
successful or not. Project should perform functionality, management of the project and performance of
the contractors during the process. In the other hand, Chan (2004) suggested that the key to a successful
project completion and deliver is correct estimation, monitoring time performance, cost performance
and the overall quality of the construction project.
2.2 Delay in the developed countries
The delay and cost overrun are also key issues in the developed countries. For example, Bourn (2003)
published a report entitled “Modernising construction” and highlighted that 70% of the UK construction
projects, which are carried out by public departments and agencies, are delayed. A research conducted
by Building Cost Information Service (UK) found that nearly 40% of the construction projects overrun
the originally agreed contract period. Similarly, a survey was carried out by Mansfield (1994) amongst
contractors, consultants and clients in Nigeria and he found a total of 16 factors causing the project
delays and cost overrun, whereas some of critical risk factors were finance arrangements for payment,
poor contract management, shortage in materials, inaccurate estimation and price fluctuation. Moreover,
Arditi (1985) conducted a survey amongst 146 organisations in Turkey and he found that the main
reasons causing the cost overrun are the increase in materials’ prices due to fast growth of Turkish

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
inflation. The increase in inflation then made it difficult for contractors to buy materials at official prices
which they have already estimated at the beginning or prior to the project, and that also affected in
selling their products at the estimated prices. This fact was considered as the most important reason for
cost overrun. Furthermore, a shortage in resources, changes in design specification and financial
problems were the other reasons for the cost overrun and project delay. Finally, the fifth reason was
underestimation of the project cost at the time of setting the budget. Arditi (1985) ranked the main
causes for delay and cost overrun in construction projects found in Turkey as follows:
1. Increase of materials' prices
2. Fast growth of inflation
3. Inflation increase causes contractors to produce products at the agreed price.
4. Delays caused by changes in design specification and financial problems.
5. Underestimation of project cost when setting the budget of the project

2.3 Delay in the developing countries

According to Rabbani et al (2011), the most common factors that cause the construction delay in
Pakistan are external factors due to natural disaster such as earthquake and floods. Similarly, Bramble
and Callahan (2010) found that unexpected problem such as act of natural phenomenon also causes the
project delay. Other factors causing delay in Pakistan are financial payment issues, poor planning, poor
site management, lack of experience and shortage of materials and equipment. In other hand, the main
reasons for delay in Saudi Arabia are due to the lack of qualified man power in the industry (Al-Kharashi,
2009). In another study by (Sriprasert, 2000)highlighted that the main reason of project delay and cost
overrun is the lack of capability of controlling the construction processes in Thailand.
Moreover, the construction projects varies in terms of complexity in nature, location, type of contract,
communication between parties, and less experienced people in such situation can have significant risks
to project delay and cost overrun (Ahmed, 1999).In a study done by (Kaming et al, 1997) found that
contractors agreed that, the main factors causing delay and cost overrun in Indonesia are due to improper
estimation for material take-off and price inflation due to environmental restriction. Performance of
the construction project plays an important role in delay and has significant impact on the time
scheduled for the project. Ajanlekoko (1987) conducted a research in Nigeria and found that the
construction industry’s adherence to the contract schedule was very low. Similarly, a number of
researchers such as (Ogunlana, 1996;Al-Momani, 2000; Frimpong, 2003 and Chan, 1997) have carried
similar survey in their chosen country and they found that the delay in the construction projects is
inevitable depending on the geographical location and nature of the construction project.
A study was conducted by Battaineh (1999) within164 buildings and 28 highway projects constructed
in Jordan during the period of1996-1999, and he revealed that the actual completion period increased
by 160% in road construction projects and 120%in building projects compare to the initial estimated
time. This is because of the project complexity in nature and varies from one location to another location
geographically in the world and the issues of delay and cost overrun are common, particularly in the
construction projects in the developing countries. Moreover, Assaf (2006) conducted similar study in
the Saudi Arabia and he exposed that only 30% of construction projects were completed on time and
70 % project were delay whereas the cost overrun was between 10% and 30% which leaves a significant
proportion of delay in the country. This can be seen as major factors in the most developed country in
the Middle East. Past statistics showed that majority of projects are not delivered on time and in the

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
agreed budgeted cost at tender stage in the construction industry. The next section describes about the
research methodology adopted in the study.
3. Research methodology
There are different approaches to conduct research but the qualitative and quantitative are common,
which are used regularly and widely in the build environment sector for analyse purposes. Therefore
the research approach adopted in the study is a quantitative approach in order to identify the causes of
delay and cost overrun so that the impact from these causes could be reduced by taking proactive actions.
Punch (2005) suggested that research approach depends on the research questions prepared for the study,
whereas Rea (2012) explained that there is no better approach to a quantitative research study than a
survey for collecting information amongst large population. The quantitative data from the case studies
using tables, graphs and figures is helpful to examine and interpret them more effectively.
The quantitative approach is used in the study, which is based on the secondary data and this was
collected from the past publications for further analysis. In this approach, mainly a survey was
conducted by designing a questionnaire and distributing them to the targeted respondents randomly
before collecting and analysing them to draw the findings from the survey. The purpose of using case
study is to get in depth understanding with their data that and explore the data for further analysis so
that a comparative analysis of their similarities and the uniqueness of each project could be presented.
There are many causes for the cost overrun and delay in construction industry and different areas could
possibly have different reasons of delay, therefore, it’s important to understand causes of delay around
the world. Analysing their data assists to provide a better understanding of the reasons of delay and a
suitable recommendation for future project and different scenarios. This is also helpful to identify the
possible measures in order to reduce the impact of delay and to give something to be considered for the
upcoming events. Therefore, the analysed data gathered from secondary sources to be used as
quantitative data for acquiring further understanding of the dilemma and directing to a better path.
4. Case studies and data mining
For comparative analysis and illustrating the findings, three case studies from construction projects
were selected from Australia, Malaysia and Ghana respectively taking into account the both developed
and developing countries around the world. Each country has uniqueness in dealing with construction
and businesses, therefore, many countries have different reasons causing the project delay and cost
overrun. Hence, identifying causes of delay in each country separately augment better understanding
for future warning and pro-active actions to be undertaken in future project. Analysing different
countries around world also provide a vision to see which factors are common and why such factors are
ranked as the highest threat in delaying the construction projects and cost overrun. The delays in road
construction project have brought the attention to the community to why such incident always occurs
and why time estimated by consultant does not meets the deadline. Since this is one of the most common
and frequent problem in the construction industry, many researchers have studied and discussed for
decades but the delays still happens in almost every construction project. The delay could have different
reasons as for the project various from project sizes, locations and the scope of the projects. Some of
the project happens to be late for few days and some could be delayed for years from the estimated time.
Many researchers have studied this problem within the construction industry but it is vital to identify
all possible causes of delay in order to bring a solution to reduce the impact from delay in the future
construction projects.

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
4.1 Delay and cost overrun: A case study of Australia
An investigation was carried in Australia about cost overrun and failures in construction project
management. The purpose of this research was to get a clear understanding of the current performances
regarding the cost and management issues and can obtain clue about the critical factors having impact
on the cost overrun in the construction industry. The methods was used questionnaire survey, the aim
of this method was to obtain some data from consultants, and contractors, who have experience in
construction. Over 160 responses from clients, consultants, and contractors were selected based on their
background, experience and active participation in the construction industry. Clients, consultants and
contractors play key role in a construction project and the non-excusable types of delay are usually
related to the inaccuracy of their responsibilities, therefore, it is extremely important to interview them
and investigate their responses and analyse them to give a better understanding and to determine from
their experience what are factors causing project delay and cost overrun in the construction projects.
General information about the respondents who participated in the survey is shown in Table 1 below.

Table 1 General information of respondent and questionnaire (Source: Doloi, 2013)

Field of Respondents Experience Respondents Project Respondents
work (%) (years) (%) budget ($m) (%)
Clients 25 <1 2 <5 2
Consultants 31 1-5 16 5-25 8
Contactors 44 5-10 36 25-75 20
>10 46 75-150 59
>150 11
Findings:
The total numbers of 100 out of 160 responses were collected from clients, consultants and contractors
in Australian construction industry. The table above represents their responds in respect to their career
history and the size of the project they are involved in terms of budgets. The table shows that almost
half, 46% had at least 10 year or above experience and only 2% had less than one year experience in
the construction industry which means over half 52% have at least 1 to 10 year experience. The last
column in the table shows the percentage of budgets which can be found that the budgets between $75
to $150m tops the table with 59% and only 2% are less than $5m and the second highest 20% in the
range of $25 to $75m, whereas 11% of the respondents shows their budget were over $150m.
Data analysis:
There are many ways in analysing the collected research data. The researcher have used Relative
Importance Weight (RIW) technique for ranking the critical factors since it is widely used in
quantitative analysing, particularly in build environment (Chan, 1997). The researcher organised
questionnaire in the form of importance scale, by asking contributors to tick columns which indicates
its relative importance of each of the cause construction in terms of contestant expressing the weight
(5 = very low, 4 = low, 3 = medium, 2 = high and 1 = very high). The RIW score is a useful measure of
the relative positioning of a particular attribute perceived by the respondents on the raw dataset (Chan,
1997). The RIW method was used in this research is as follows:
∑5𝑖=1 𝑎𝑖𝑛𝑖
𝑅𝐼𝑊 = 𝑥 100
∑𝑁
𝑗=1 𝑥𝑗

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
A survey conducted by Doloi (2013) using a questionnaire survey and found48 attributes/factors were
identified associated to client, consultant and contractor causing poor performance management in
construction industry in Australia (for details of factors see appendix-A). This study was aimed to find
what causes influence on cost performance. It was revealed that planning and scheduling were ranked
at number 1 of the list making it the most critical factor causing poor performance. The second and third
factors are methods/techniques of construction process and effective monitoring/feedback process
which seem all three factors are related with the proper management. The two factors ranked in the
middle of the table are delay in subcontractors’ project and lower labour productivity. The list of most
significant factors casing delay and cost overrun were listed that need to be considered in a construction
project (see appendix-A).
4.2 Delay and cost overrun: A case study of Ghana
Construction industry in Ghana plays an important role of providing and boosting country economy
according to Ghana Statistical Service in 2007. The construction industry contributed in the national
economy was 8.5% of GDP. Any construction projects being subjected to delay can have significant
impact on the overall income of the project, therefore, it is vital to ensure the construction industry is
performing well and brings good service to the government and business sectors. As Ghana is planning
to immense their economy in order to become a middle income nation which was due by 2015 and their
recent discovery in oil fields in the commercial quantities boost the target. Governments across the
world are investing a vast amount of money in identifying a solution for eliminating or minimising the
impacts from factors that causing project cost and time overrun in the construction projects.
Findings:
A study was carried out in order to identify major factors causing delay in building construction projects
in Ghana. The researcher used questionnaire survey approach in identifying and understanding the
reasons behind the delay in construction industry and perceptions of the three main parties who play
main roles in this industry so that possible ways in minimising the impact on delay and project cost
variation could be identified. The researcher believed the delay is one of the major problems facing in
Ghana and this issue is growing since the delay is happening in regular basis in Ghanaian construction
industry. Therefore, the research found a gap in this study. But the gap still exists in many construction
projects worldwide, where appropriate planning has been undertaken to ensure the project would be
finished on time and within budgeted cost but unluckily the delay is happening in almost every project
and consequently overrun the project cost.
Table 2: (Source: Fugar, 2010)
Respondents Questionnaire Responses Percentage of
distributed returned responses
Client 55 37 67%
Consultants 55 39 71%
Contractors 55 54 98%
Total 165 130 79%

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
Discussions:
The researcher has used the Relative Importance Index (RII) to identify top critical factors causing the
delay. The questionnaire was prepared and sent to the three main categories: client, consultant and
contractors in the form of the importance scale by indicating to tick a column of the relative importance
of each cause of delay. A total number of 165 questionnaires were distributed, as shown in the table but
response rate was 79% (only 130 response were received) and use these responses for analyse. Each
response represents importance in terms of (4 = very important, 3 = important, 2 = somewhat important
and 1 = not important).
The survey results showed in table (for details see appendix-B) that a total of 32 possible cause of delay
were identified. The results showed that “delay in honouring payment certificates” are the top most
delay factors and they have all agreed this factors as a prime cause of delay. The issue of late payment
is very common in non-developed countries. Another study in Malaysian construction industry also
justify that the impact of the late or non-payment to contractors result the delay in the progress of the
project or they might force to abandon the project. Therefore, paying everyone involved in the project
on time could improve the chance of project finishing on time.
The second factor “underestimation of cost of projects” was highly ranked by client, whereas,
consultants have ranked this at their number 3 in their importance factor (see appendix-B). In contrast,
contractors have only ranked this issue at number 5, which could be the reason that contractors are those
to estimate cost and therefore they don’t want to blame themselves for it. And again the same case
applies to the third ranked factor which is the “underestimation of complexity of projects”, which
consultants ranked at number 3 and at number 8 by contractors because they don’t want this factor to
be in the higher ranks. The mid table factors (see appendix-B) are “poor design and breakdown of
equipment”. This reflects that Ghana doesn’t seem to be facing any major problem with construction
design planning which means the place where this factor is ranked as a good place considering other
factors. The least factor to cause delay in Ghana was shown in the table (appendix-B) was “Public
holidays”, the fact that this does not impact on the delay due to the acknowledgement of the holidays
before hands. However, when an agreement is done between parties, the public holiday has already
been considered and time is considered to be longer, therefore, public holidays can’t be an issue or an
excuse when a construction is delayed.
4.3 Delay and cost overrun: A case study of Malaysia
The cost and time overrun is a global issue and it is happening in every part of the world and every
country but yet the problem still exists and happens for various reasons. In 1991, Malaysian Government
introduced a vision for a strong and better industrialisation in economy. The proposed vision was called
“Malaysian Vision 2020”, by defining a clear path for making Malaysia one of the developed nations.
The main purpose of this vision was to transform the country into competitive and dynamic resilient by
the year 2020. Ever since the construction industry sector play a significant role since this industry can
provide better contribution in national economy and GDP growth. Therefore, construction industry has
to be very effective in terms of delivering project on time without vitiating any loss and the industry
must perform appropriate, and finally the country must compete with other developed nations in the
world with aim of accomplishing the vision and mission. The construction industry has developed in
Malaysia, but just like many other countries in the world but the projects are facing major loss from
time and cost overrun. To better understand this matter and find a solution, a questionnaire survey was
undertaken to find out what are the project facing with cost performance to be analysed and looked at.
Findings:

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
In this case, the researcher has also used Relative Importance Index (RII) method to identify their
importance of causes and effect of delay factors, which is also used by Kometa (1994). The
questionnaire was send to three groups (clients, consultants and contractors) who play main roles in
construction projects. The same method was also used in Ghanaian construction industry survey, where
the scale is used ranging from 1 being not important and 5 very important. The (RII) was used to identify
which cause are the most significant causes by ranking them into their RII importance values. A total
number of 150 respondents participated in the survey in which ten were identified the most effective
factors causing delay and cost overrun from the list of 20 (Soon, 2007). The top 10 most important
factors, which found from the survey in Malaysia construction industry, are as follows:
1. Contractor’s improper planning
2. Contractor’s poor site management
3. Inadequate contractor experience
4. Inadequate client’s finance and payments for completed work
5. Problems with subcontractors
6. Shortage in material
7. Labour supply
8. Equipment availability and failure
9. Lack of communication between parties
10. Mistakes during the construction stage
Discussions:
From survey results, it clear that the primary reason for the delay is the lack of appropriate planning in
the construction project followed by poor site management. What can also be seen is that the pressure
is more on contractor than clients or consultants. This could be the result due to the fact they want to
blame other people responsible for the delay. In contract, the contractor is also blaming subcontractors
which confirm the communication between the parties is not in a professional way and each want to
blame each other for delay. Contractors seem to have insufficient experience within the industry which
could cause the project to perform well and could slow the progress as a result of it. The fourth most
critical factor is “Inadequate client’s finance and payments for completed work” which is vital in any
construction project because late payment always slow the progress or could make them to abandon the
project. In other cases, where the project is completed and the payment’s still due, the company can
lose its reputation and make it harder for other to cooperate with them in the future.
4.4 Outcomes from three case studies
The available data and information acquired from the past studies illustrates that the key factors of
causing the project delay varies from one country to another country. For example, in Ghana the most
critical factor and threat to the project delay is the delay in payment which could have significant impact
on the project progress and its performance in terms of quality and services. In contrast, Australia and
Malaysia share the most of critical factors are similar. For example, the lack of planning and scheduling
by contractors would affect the estimated targets within the agreed budget and the consequences of this
could result in project delay and cost overrun. The 2nd most factored causes placed in Ghanaian ranking
is underestimation of the project cost, This factor is more frequent in the undeveloped country or a
country in the process of developing in the construction industry and the reason for underestimating the
cost is might be due to the price inflation in the country or lack unavailability of materials and time

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
variation could also change materials prices. However, in Malaysia and Australia, poor site management
and ineffective construction techniques are ranked as 2nd most influential factor for delaying the project.
One of the common factors shared in both Ghana and Malaysia, which ranked in 3rd place, is the lack
of contractor’s experience in the construction industry and underestimation of the complexity of the
project. In general, these two factors are related to one another in terms of improper management of
project. The project manager must be someone having experience in similar industry to forecast possible
causes from beginning to the end of a construction project in terms of dealing with all aspects including
subcontractors and owner and to deal with it in appropriate manners when arise any such incidents. If
someone with sufficient experience is appointed to be the project manager for a project, they are more
like to organise better by analysing the complexity of the project with aim of accomplishing them in the
efficient way. In contrast, 3rd ranked factor in Australia is related to the poor site management. What
Malaysia is also lacking behind the developed countries is the insufficient payment from the client and
payment after the work is completed, but Australia must be handing work to someone with adequate
experience in construction industry in order to find an appropriate way of handling complex design.
Whereas Ghanaian government needs to find an easy way of accessing credit from bank as delay in
payment in that country is ranked number influence of factors causing delay.
5. Conclusions and recommendations
In conclusion, it is found that the questionnaire survey was adopted as an effective approach to collect
research data and understand the inquiries of delay in the construction projects in both developed and
developing countries. The survey results highlighted that the most critical factors causing delay and
cost overrun were ranked from the most to least influential factors using RII method. The study also
exposed that some delay factors are more critical than others in regards to the geographical location and
political impacts from the government to the local and international contractors, consultants and clients.

Moreover, the project delay is still happening and will continue to happen in the construction for various
known and unknown reasons such as unexpected factors, bankruptcy from client, change order in design
and specification during the construction period due to reasons of political pressure, price fluctuation,
adverse weather conditions and change of circumstances with projects manager in result of forcing
him/her to leave or sack before completing the assigned job. However, time and cost overrun may not
be prevented entirely but the evolving new technology like BIM, new methods and past experience
could be used to reduce the impact from recognised risk factors, particularly in the undeveloped and
developing countries. Finally, the paper concludes that it is important to evaluate the critical delay
factors and take necessary proactive actions at early stage of project and before preparing the execution
plan so that the project delay and the cost overrun could be minimised in future construction projects.
The top three critical factors found in three different countries are shown below that could be useful
when analysing the delay and cost overrun in future projects.

Table 3
S.N. Australia Malaysia Ghana
1 Planning and scheduling Contractor’s improper Delay in payment
deficiencies, planning certificates
2 Methods of construction, Contractor’s poor site Underestimating of
management project cost,

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
 3 Effective ways of Inadequate contractor Underestimating the
monitoring & feedback experience complexity of projects

The paper suggests that the most impending factors, highlighted in table 3 need to be considered
carefully and analysed in depth before starting a construction project so that the impact due to delay
and cost overrun could be minimised in advance. Following are the key recommendations for the design
and the execution stages of a construction project.

1. Proper planning and scheduling throughout the construction project

2. Effective programming in order to keep track of each activity and its time of delivery
3. Material price’s must be checked regularly before/after estimation and before purchase
4. Estimation of cost and design must not be undertaken easily
5. Use effective methods to visualise the overall project view such as (BIM technology)
6. Establishing appropriate communication with all parties (collaborative BIM)
7. Ensure labour and contractors are paid on time and ensure site health and safety
8. Monitoring the work is essential but motivating the team is important for a successful
project
9. Weather condition should be checked and monitored in advance
10. Regular meetings with subcontractors and suppliers

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jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana
 Appendix-A (Source: Doloi, 2013)

Appendix-B (Source: Fugar, 2010)

jacem, Vol. 2, 2016 An Exploration of Causes for Delay and Cost Overruns in Construction Projects: Case Study of Australia, Malaysia & Ghana

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