Document Title: Causes of cost overruns, Solutions to cost overruns

Paper code: 13040

Causes of cost overruns, Solutions to cost overruns

Introduction

The aim of this study is to investigate the factors that cause overrun of the planned cost, as well allocated resources.  In the future practical salutations should be developed to overcome these critical factors for future infrastructure projects. This document will consider a case study of a constructions project in Uganda.

Simply put, a cost overrun is known as budget overrun or cost increase. Cost is the budgeted expenditure, which the client has agreed to commit for creating/acquiring the desired construction facility (Subramani and Kavitha, 2019).Cost overrun is defined as the difference between the actual and estimated costs as a percentage of the estimated cost, with all costs calculated in constant prices. Actual costs are defined as the accounted costs actually spent, as determined at the time of project completion. Estimated costs are defined as the budgeted or forecasted costs at the time of project approval, which are typically similar to costs presented in the business case for a project (Alinaitwe and 2013). These cost elements include labor costs, material costs, plant and machinery costs, administration costs and other expenses.

Keeping projects within estimated costs and schedules requires sound strategies, good practices, and careful judgment (Plebankiewicz, 2018). To the dislike of owners, contractors and consultants, however, many projects experience extensive delays and thereby exceed initial time and cost estimates. Thus, it is important to study these cost overruns factors and to avoid them for maximum benefits and returns from a project.