Impact of Delays on Cost of Construction Project- A Cross Sectional Study of Pakistani Construction Industry

Abstract

It is widely believed that construction sector helps developing aggregate economy and reducing unemployment. Currently, Pakistan is experiencing a major transformational phase in the back drop of China-Pakistan Economic Corridor (CPEC). CPEC is valued at US$ 62 Billion. The present study is undertaken to ascertain the impact of time overrun of projects on their cost, the correlation between stakeholders and to predict the effect of delays on cost overruns. Causes of delays are identified by stakeholders of the construction industry of Pakistan. Two models for projects that had delay less and greater than 100 days are developed. Structured questionnaires and personal interviews are carried out to extract primary data for the study. Relative Importance Index (RII) was utilized for ranking of delay causes, and Pearson’s correlation to formulate correlation between causes of delays and cost of construction projects from the perspective of client, contractors and consultants. For predicting the impact of delays on cost of projects Linear Regression technique has been used. The results reveal that the causes of delay related to design, procurement and on-site has significant impact on delays. Pearson’s result indicates strong covenant between client and contractor. Whereas, there is a weak degree of association between consultant and contractor. Results from linear regression concluded that there is a significant effect of delay on cost of the project.