Title

Assessment of Cost Overruns and Their Causes in Public Infrastructure Projects in Nigeria

1. Background and Rationale

Public infrastructure projects are critical to economic growth, service delivery, and social
development. Roads, bridges, airports, railways, and energy projects form the backbone of
national productivity. Yet, across Nigeria and other developing economies, these projects are
often plagued by cost overruns where final project costs substantially exceed initial budget
estimates.

These overruns not only waste scarce public resources but also delay project delivery, reduce
project quality, and undermine public trust in government spending. Multiple studies highlight
causes such as inadequate feasibility studies, poor planning, inflation, design changes, political
interference, corruption, and weak contract management.

Despite the widespread occurrence, there remains insufficient systematic, empirical assessment
of cost overruns in Nigerian public infrastructure projects. Understanding the magnitude,
patterns, and root causes is essential for improving project governance, accountability, and cost
efficiency.

2. Problem Statement

Cost overruns in Nigerian public infrastructure projects continue to threaten fiscal discipline,
public trust, and national development goals. Although anecdotal evidence and media reports
abound, there is limited academic, data-driven evidence on the extent of cost overruns and the
relative importance of their causes. Without such evidence, policymakers and professionals lack
the tools to implement effective cost control measures.
3. Aim

To critically assess the extent of cost overruns and their underlying causes in Nigerian public
infrastructure projects, with a view to developing practical recommendations for minimizing cost
escalation.

4. Objectives

1. Measure the average extent of cost overruns in selected public infrastructure projects.
2. Identify and rank the key causes of cost overruns.
3. Examine the relationship between project characteristics (type, size, duration,
procurement method) and cost overrun levels.
4. Evaluate the perspectives of stakeholders (clients, contractors, consultants) on cost
overrun causes.
5. Develop recommendations for improving cost estimation and control practices in public
infrastructure delivery.

5. Research Questions

1. What is the magnitude of cost overruns in Nigerian public infrastructure projects?

2. What are the main causes of cost overruns, and how can they be ranked by significance?
3. How do project characteristics (size, duration, procurement method) influence cost
overruns?
4. What strategies can be implemented to mitigate cost overruns in future projects?
6. Hypotheses (for quantitative analysis)

 H1: Public infrastructure projects in Nigeria have significant cost overruns relative to
original budgets.
 H2: Project size and duration are positively correlated with cost overrun levels.
 H3: Procurement method significantly influences the likelihood of cost overruns.

7. Scope

 Geographical scope: Nigeria (with focus on federal projects in transport, energy, and
public buildings).
 Project type: Major public infrastructure projects (roads, bridges, power plants, airports).
 Timeframe: Projects completed in the last 10 years for which data is available.

8. Significance of the Study

 Policy relevance: Helps government agencies improve budgetary discipline.

 Professional practice: Provides QSs and project managers with evidence-based tools for
controlling costs.
 Societal impact: Better resource utilization and increased value-for-money in public
spending.

9. Conceptual Framework (verbal)

Cost overruns are the dependent variable, influenced by a range of independent variables such
as project planning quality, procurement method, inflation, corruption, political interference,
design changes, and contractor capacity. Project characteristics (type, size, duration) are
moderating factors that shape the extent of overruns.

10. Methodology

10.1 Research Design

A mixed-methods approach combining:

 Quantitative analysis of completed projects (to measure overruns and test relationships).
 Qualitative interviews/surveys with stakeholders to identify and rank causes.

10.2 Population and Sampling

 Population: Public infrastructure projects in Nigeria completed in the last 10 years.

 Sample:
o Quantitative: At least 40–60 projects, purposively selected from Federal
Ministry of Works, State Ministries, and donor-funded projects.
o Qualitative: 15–20 professionals (QSs, project managers, government officials,
contractors).

10.3 Data Collection

 Document review: Extract initial budget, revised budgets, and final costs.
 Survey: Structured questionnaire rating importance of various causes of overruns (Likert
scale).
 Interviews: Semi-structured discussions with professionals to contextualize findings.

10.4 Variables and Measures

 Dependent variable: Cost overrun = (Final Cost – Initial Budget) / Initial Budget ×
100%.
  Independent variables: Causes (inadequate feasibility studies, inflation, corruption,
political interference, poor design, delays, etc.).
 Moderators: Project size (value), duration, procurement method.

10.5 Data Analysis

 Descriptive statistics: Mean, median, standard deviation of overruns.

 Inferential statistics:
o t-tests/ANOVA to compare overruns by project type/procurement method.
o Regression analysis to test influence of project size/duration on overruns.
 Ranking analysis: Relative Importance Index (RII) to rank causes of overruns.
 Qualitative analysis: Thematic coding of interviews to provide deeper insight.

10.6 Reliability and Validity

 Pilot test survey instrument.

 Triangulation of data sources (documents + surveys + interviews).
 Cross-checking project cost figures with official reports.

10.7 Ethical Considerations

 Institutional ethical clearance.

 Anonymization of project and participant data.
 Informed consent for interviews.

11. Delimitations and Limitations

 Focus on Nigerian public projects; may not generalize to private sector.

 Access to reliable cost data may be limited due to political sensitivity.
 Causes identified are based on stakeholder perceptions, which may involve bias.
12. Expected Outcomes

 Quantified evidence of average cost overruns in Nigerian infrastructure.

 Ranked list of primary causes of overruns.
 Clear relationships between project characteristics and overrun levels.
 Practical recommendations for policymakers and practitioners.

13. Work Plan / Timeline

Phase Activities Duration

Proposal & Ethics Approval & instrument 4–6 weeks
design
Pilot Study Test instruments 2 weeks
Data Collection Project documents + surveys 6–8 weeks
Quantitative Analysis Statistical tests 4 weeks
Qualitative Collection Interviews 3 weeks
Qualitative Analysis Coding & triangulation 3 weeks
Report Writing Draft & finalize proposal 4–6 weeks

14. Budget

 Transport & field visits: ₦200,000

 Research assistants: ₦250,000
 Data collection/printing: ₦100,000
 Transcription & software: ₦150,000
 Miscellaneous (10%): ₦80,000
Total: ₦780,000
15. Chapter Outline

1. Introduction
2. Literature Review
3. Methodology
4. Data Presentation and Analysis
5. Discussion of Findings
6. Conclusions and Recommendations
Questionnaire 2: Assessment of Cost Overruns
and Their Causes in Public Infrastructure
Projects
Section A: Demographics

1. Name of Organization (Optional): ___________________

2. Type of Organization:

o Government Agency/Ministry

o Consultant (QS/Engineer/Architect)

o Contractor

o Project Manager
3. Years of Experience in Public Infrastructure Projects:

o < 5 years

o 5–10 years

o 11–20 years

o Above 20 years
4. Professional Role: ___________________

Section B: Extent of Cost Overruns

5. Based on your experience, how often do public infrastructure projects exceed their
original budget?

o Very Frequently

o Frequently
 o Occasionally

o Rarely

o Never
6. On average, what is the typical percentage increase in cost for public projects you’ve
worked on?

o 0–10%

o 11–20%

o 21–30%

o 31–50%

o Above 50%

Section C: Causes of Cost Overruns

7. Rate the following causes of cost overruns according to their significance (1 = Not
Significant, 5 = Very Significant):
o Inaccurate initial cost estimates
o Inflation and price fluctuations
o Inadequate feasibility studies
o Design errors/changes
o Poor project planning
o Contractor-related problems (delays, underperformance)
o Political interference
o Corruption and mismanagement
o Delay in payments
o Procurement method used
o Inadequate supervision/monitoring
8. Which procurement method do you think is most prone to cost overruns?

o Traditional (Design–Bid–Build)

o Design–Build
 o Public–Private Partnership (PPP)

o Others: ___________

Section D: Effects of Cost Overruns

9. In your view, what are the major effects of cost overruns on public infrastructure
projects? (Tick all that apply)

o Project abandonment

o Reduced project quality

o Loss of public trust

o Extended completion time

o Increased debt burden on government

Section E: Open-ended

10. What do you consider the single biggest cause of cost overruns in Nigeria?
11. What strategies or reforms would you recommend to reduce cost overruns in public
projects?