Identifying Factors Influencing Time and Cost Overruns in Public Construction Projects in Bhutan

Abstract

Construction industries worldwide are impacted by time and cost overruns, resulting in significant financial loss and failure to complete projects on time. Clients, contractors, and consultants can plan properly for public construction projects if they have a better understanding of cost and time overruns. The Construction Development Board (now Bhutan Construction and Transport Authority) is the lead agency regulating and overseeing the government construction projects in Bhutan. However, in recent four years, from July 2017 to June 2021, about 50% of the total 2111 government construction projects experienced time and cost overruns, and the total financial loss was Nu. 2,578.86 million. Therefore, study was designed to examine the factors causing delays and cost escalations in the construction project implemented by government during the financial year July 2017 to June 2021. Thus, this study explores identifying factors influencing time and cost overruns to avoid time delays and financial losses. The primary data was collected through the questionnaire survey from engineers of 20 Dzongkhags and 4 Thromdes. The secondary data was collected from the CDB's annual reports, the Construction Association of Bhutan (CAB), and the National Statistics Bureau (NSB). The data was analyzed using the descriptive statistics method, and the relative importance index (RII) was calculated to rank the factors identified from literature reviews. The research results show that financial issue was the critical factor causing delays and cost escalation in the government construction project in Bhutan. Followed by the issue of delays and cost overruns due to shortage of local construction materials, inadequate experience of the contractor, poor site planning, shortage of skilled workers, unrealistic schedule, design change, contractual issues, and project manager competence.