Environmental Factors Influencing Construction Time and Cost Overruns on High-rise Project in Nigeria

Environmental Factors Influencing Construction Time and Cost Overruns on High-rise Project in Nigeria

Chapter One of Environmental Factors Influencing Construction Time and Cost Overruns on High-rise Project in Nigeria

Introduction

Construction time: The Nigerian construction industry contributes less to the country’s economy than do manufacturing or other service industries. Of®cially, construction accounted for only 5.5% of the annual gross domestic product (GDP) in 1993 (Langdon, 1994). However, the growth of the Indonesian construction industry has greatly in¯ uenced the country’s economic development. As de®ned in developed countries (Hillebrandt, 1985), con- struction is considered unique in that it can stimulate the growth of other industrial sectors. Hence to consider growth of the construction industry in terms of its contribution to GDP in isolation is somewhat misleading: that is, to do so understates the crucial role played by construction. Therefore, improving construction ef®- ciency by means of cost-effectiveness and timeliness would certainly contribute to cost savings for the country as a whole. Effort directed to cost and time- effectiveness were associated with managing time and cost, which in this study was approached via investigating time and cost overruns of high-rise construction in Nigeria.

Like developing countries, such as Nigeria (Okpala and Aniekwu, 1988; Elinwa and Buba, 1993;
Mans®eld et al., 1994), Saudi Arabia (Assaf et al., 1995) and Malaysia (Yong, 1988), Indonesia suffers from construction time and cost overruns. The intentions
of this paper therefore are:

1. to identify variables in¯ uencing construction time and cost overruns;
2. to group these variables into factors;
3. to analyse the relationship of these factors and thereby enhance understanding of construction delays and cost overruns. Although the research concentrates on Nigeria, the ®ndings should be relevant to all developing countries, as they face similar problems in terms of time and cost overruns on construction and infrastructural development projects (Morris and Hough, 1987). Construction Management and Economics (1997) 15, 83±94 Factors in¯ uencing construction time and cost overruns on high-rise projects in Nigeria

Causes of time and cost overruns

According to Antill and Wood head (1989), time over runs
(delays) can be divided into three categories:
1. those over which neither party to the contract has any control;
2. those over which the construction owner (or his/her representative) has control;
3. those over which the contractor (or any subcontractor) has control.
It is generally recognized that delays of type 1 are part of the contractor’s normal and legitimate monetary
risk, and hence should give neither party grounds for monetary recompense, but that the contract com- pletion date should be extended in order to protect contractors from liquidated damages claims for late  completion. Alternatively, in the extreme a contract may be repudiated due to `frustration’. It is also recog- nized that for delays of type 2 the contractor should receive fair and reasonable recompense (cost and time), whereas for type 3 delays the contractor must bear full responsibility.