Engineering, Technology & Applied Science Research Vol. 10, No.

1, 2020, 5247-5250 5247

Financial Mismanagement: A Leading Cause of Time

Fazal Ali Shaikh

Abstract—One important and well-known issue for the majority organizations. One of the main economic pillars of Pakistan is
of construction projects such as buildings, roads, bridges, its construction industry. Due to this, a study on the factors of
airports and many more projects all over the world is time and time and cost overrun is essential, obligatory, noteworthy, and
cost overrun. Project pricing and time period delay are also important. Factors of cost and time overrun were identified on
major issues. The current investigation is taking into particular previous projects. Thus, the main aim of this review
consideration the mega construction projects in the provinces of is to look at the components causing time and cost overrun
Pakistan, looking into various components controlling and during construction, particularly on mega projects in all
dominating time and cost overrun. A total of 29 factors were provinces of Pakistan and to identify the most important
identified from literature work and one questionnaire was
factors/causes.
designed and distributed among 160 respondents. All collected
data were analyzed by the average index method. Factors having II. TIME AND COST OVERRUN
value more than 3.6 were selected as main factors of cost and
time overrun, and five factors were revealed to surpass this There are three important components in measuring the
barrier. Time and cost overrun are of the leading financial achievement of construction projects. These components are
mismanagement issues of the economy of Pakistan. This study time, price, and quantity of the entire project. The above
will be helpful for stakeholders to control both cost and time mentioned factors are implanted during project life-cycle:
overrun in the mega construction projects of Pakistan. preparation/planning, execution, and relinquish phase. It was
not easy to assemble the necessities set up for every factor, as
Keywords-cost overrun; time overrun, Pakistan; finance nearly all contractors were unable to complete the work on
management; factors time. This results in an extra financial plan in order to carry out
project completion [12-14]. Some hazard components upset
I. INTRODUCTION project period and cost planning, for instance casualties, cost
In an emergent state such as Pakistan, numerous mega variations, short or poor materials, and bad climate
projects have been completed or are under construction with circumstances [15]. The main factors of these issues will be
the prop up from the government. Cost and time surplus had elaborated and discussed below.
provoked lags and debts, for the parties involved in many new
projects, as in numerous fresh construction projects [1]. It is A. Causes of Constructing Project’s Time Overrun
important for all parties who are concerned in the construction Changes made in designs, labor issues, scarce preparation,
of a project to finish it within the agreed time and budget and resource shortage are the most important components in a
without compromising the quality of the work [2]. The project's time overrun. For instance, the components that affect
construction industries of almost every Asian country suffer time and price in projects in Indonesia [8] are shown in Table I.
from several major drawbacks despite the rapidity of the According to [16], there are two cause categories in delaying
project development. Pakistan is one of the countries facing project construction: internal and external causes. There are
these problems. These drawbacks are low quality and four parties involved in internal causes: owners/clients,
productivity, cost surplus, low construction ravage designers, contractors, and consultants. In comparison to
administration, time overrun, and low protection achievements internal causes, the external causes include the government,
[3-6]. Cost overrun has a main burden on the whole material suppliers, and weather conditions. Table II shows the
development of a country [7]. It was discussed [8] that these factors affecting time and cost overrun according to [17]. In
factors were inadequate events for any construction project to Pakistan, it has been found that deprived place management,
be completed at the predicted price and time. Additional construction blunder, delivery delay, and requirement of goods
considerations [9-11] emphasize on different approaches of supply management were the main components creating delays
particular concerns amongst construction project partners, i.e. in construction projects [18]. Proprietors’ monetary concerns
contractors, customers, financial consultants and government are another cause of time overrun. Authors in [19] reported that
Corresponding author: Fazal Ali Shaikh
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 Engineering, Technology & Applied Science Research Vol. 10, No. 1, 2020, 5247-5250 5248

from consultant’s opinion, unskilled or lack of management ignored are suspension in transmission of data to the builders
and the dearth of expert’s acquaintance and skills were the during project suspensions, practical deterioration during the
main reasons for time and price overrun. design period, obligation demands, customary constructive
design advancement at the beginning of construction,
TABLE I. COMPONENTS AFFECTING COST AND TIME uncertainty by the probing team in giving final results,
MANAGEMENT [8] limitations in estimate deviations and extra work, breaching
Time and cost controls Time controls Cost controls and failures of bulk materials, etc. The main events that affect
Environment restrictions Buildability Material prices cost are changes in climate, inflation on prices, inexact material
Knowledge of project site Labor output Precise quantity assessment, complications and difficulties of the scheme,
Accurate prediction Level of planning Lift-off builder’s incapability to understand the environmental issues,
Material estimated Project and lack of knowledge of the ruling set of laws [8]. Moreover,
Equipment production rate
accuracy experience
Equipment availability Material availability Type
authors in [21] studied the budget overrun components in
Weather conditions Technicians precision community subdivision schemes establishing that the rise in
Experience of local Availability of trained cost was caused by incompetent original assessments, design
regulations labor delays, modification in opportunities, and inaccuracies. They
Project restrictions pointed ten major components causing cost overrun of building
projects:
TABLE II. COMPONENTS AFFECTING COST AND TIME
MANAGEMENT [17]
• Construction setback due to limited scheme preparation,
setting up and execution at the starting phase.
Category Factors
Financial issues of finished work • Inconsistency and unreliability of the suppliers of unrefined
Owner interruptions resources including types of equipment etc.
Delay in taking decisions
Owner • Modifications of the scheme’s capacity.
Unrealistic imposed contract duration
Selection of sub-contractor
Poor planning • Release of money, overseas exchange, and elements linked
Improper planning by incomplete accessories.
Construction method
Subcontractor • Judgments made by the establishment and breakdown of
Contractor Site management precise regulating departments’ and sections.
Inexperienced contractor
Mistakes during construction
• Incorrect and unsuitable location.
Financial issues faced by contractor • Technical lack of skill and ability and penniless managerial
Material shortage
Materials Material specification changes
composition.
Delay in the supply of material • Labor instability.
Labor productivity
Labor-Equipment Labor supply • Natural calamities.
Equipment failure
Contract management • Lack of experience in finding technical consultants,
Delay for approval of work insufficiency of distant association accords.
Consultant Quality control
Document preparation Authors in [22] reported 26 components of cost overrun
Poor supervision during the edifice of underground water projects in Ghana,
Contractual relationships
Disputes collected from consumers, contractors, and consultants. From
Communication gap the approach of contractors and consultants, the top factor that
Weather effects increased cost was difficulties in getting monthly expenditure
External Other site problems
from agencies. On the other hand, the owners’ perception of the
Changes in regularity
project was that contractor management was the most
important component affecting cost. In spite of the difference
B. Effects of Construction Project’s Cost Overrun
between their viewpoints, they all have agreed upon the
Authors in [8, 19, 20] reported the following components in ranking of these factors.
cost surplus: design modifications, unskilled and unfinished
preparation, doubtful climate conditions, and abnormality and III. METHODOLOGY
deviation in the cost of project resources. In addition to this, a This study considers the quantitative process toward
listing of serious factors like incomplete design at the tendering assessing the project manager’s approach over the components
phase, design alterations at the request of the proprietor, lack of affecting time and cost overrun in building projects. The
money for the setting up and supervising at the beginning after designed questionnaire was established on the recognized
the contract signing, defective besmirch and location settings, components towards reaching the major ones which affect time
alterations made during construction, transportation charges and price overrun for building projects as in [8]. The
owing to place locality, and lack of cost information at the questionnaire provided every participant the chance to spot
development stage. Other critical factors which are usually those variables which he/she thought as probable to add to cost

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 Engineering, Technology & Applied Science Research Vol. 10, No. 1, 2020, 5247-5250 5249

overrun in a Likert scale ranging from Strongly Agree to A total of 11 factors had a mean value larger than 3.6 and
Strongly Disagree. Afterwards, on an ordinal scale consisting were identified as dominant. From Table V we can see that
of High (3), Medium (2), or Low (1), the members graded the “Financial problems faced by contractor” was found as the
density of recurrence of every factor. In this study, the mean main critical factor.
value was calculated of each factor and factors having a mean
value of more than 3.6 were identified as dominant factors of V. CONCLUSION
cost and time overrun in mega projects in Pakistan. The initial discussion in the research work at hand involved
a literature study considering construction time overrun and
IV. RESULTS AND DISCUSSION cost overrun. Twenty-nine factors of time and cost overrun in
As mentioned above, a questionnaire was circulated for the mega projects were recognized from the literature review. The
evaluation of cost and time overrun in mega projects of dominant factors of cost and time overrun were acknowledged.
Pakistan. In total, 160 questionnaires were handed over to Eleven factors were identified as dominant for each category.
project managers, construction managers, and engineers with a Five main factors were found to be common in causing time
75% response rate of 120 answered questionnaires which and cost overrun in mega projects of Pakistan. These identified
deemed adequate because it satisfies the minimum sample main factors are financial issues, weather conditions, political
requirement for the population [23]. The respondents were approach, design changes, and owner interference. This work is
highly qualified and experienced. expected to offer an improved approach in conveying
construction projects by minimizing the most important reasons
TABLE III. RESPONSE SUMMARY of cost and time overrun and will also help financial
Questions Total Percentage
management in construction projects of Pakistan.
Distributed 160 100%
Response rate
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