Factors Which Are Critical in Project Cost Overruns, a Case Study of Ministry of Water Resources Projects

Abstract

This study sought to identify factors contributing to project cost overruns in the Ministry of Water Resources. The policy objective of the water sector is to create an enabling environment for orderly coordinated and sustainable development of water resources including their conservation and protection. Towards this end, the Ministry has a strategy of supporting and coordinating all water projects and programmes in both rural and urban areas. Unfortunately, many of these projects are finally completed after some years, at a cost several times the original estimate. In order to achieve the objectives of this study, primary data was collected from a sample of 32 project participants. The respondents included project managers, site and office engineers, supervisors and project officers. The information sought in the study was collected by means of interviews and a self-administered questionnaire. Factors Analysis was used to analyze the data. The results of the analysis indicated that empirically five factors do emerge as the critical factors contributing to project cost overruns in the Ministry of Water Resources. They are: project Organization, Environment, Project Management, Project definition and Infrastructure and logistics. Further, suggestions as to what needs to be done in the light of the above critical factors to minimize cost overruns have been included in the summary and conclusions. They include:- • adequate personnel policy • adequate organization structure • coupling of the different decision circuits within the bureaucracy with regard to construction costs, personnel costs and general expenses. • Assessment of time, costs and quality. • External auditing. • Good communication • Environmental sensitivity • Proper project management • Complete definition of project requirements. • Provision of adequate infrastructure facilities.