Causes of cost overrun in construction budget

During the lockdown, people tend to have constructive ideas since they are not working. Some embark on construction but this can be riddled with challenges such as cost overrun, a common occurrence in construction. Ultimately, we all want the best finish and, therefore, many are forced to incur the extra unplanned costs.

Nasser Sserunjogi, an engineer with Peak Engineering Solutions Limited, says that it is important to know the likely causes of the cost overrun so that you can look out for them while building because some clients think engineers overestimate the budget, which is not true.

“The bad thing about cost overrun is that sometimes it happens when you cannot ignore it and it becomes hard to convince your boss when you need extra money,” he says.

The common causes of cost overrun include:

Weather

Sserunjogi says that weather is one of the main causes of cost overrun during construction. Extreme weather beyond human control can result in serious damages on your structure which  may necessitate demolition or more work.

“Sometimes people plan without considering the possibility of weather changes and they end up having cost overrun. You can start constructing during the dry season not knowing that you bought (a plot) in a wetland which is affected by floods,” he says.

He adds that every area has specific weather issues but you have to first do research on how to contain that natural disaster in case it happens. 

Omissions in design

Sserunjogi says that error in designs can also lead to cost overrun when the client is not sure of what they want, the engineer may end up making several errors in the design and to re-do it may increase costs.

“If you fail to identify the error when it is still early,  it means you will have frequent changes in plan and general design because both parties have to be content with what is going to be done,” he says

Mr. Sserunjogi adds that clients who fail to consult experts in time tend to have issues because they keep changing their plans according to the new ideas they have developed and this affects the engineer if he has already implemented the plan.  

Poor communication

Lack of communication between the client, contractor and consultant also results in cost overrun: Work cannot be done in time when one party is not active.

“Poor communication delays work and when you fail to reach an agreement it means that more time will be consumed to finish a certain project and thus more money because the engineer will spend more time on one thing,” he says.

Sserunjogi adds that poor communication leads to delays in decision making. At a certain point when both parties are not at par, work will be delayed.

Inadequate planning

He says that some people start constructing when they are not well prepared and they end up making mistakes in their plans.

“It’s advisable to plan well before starting the construction process because some stages of construction should not need to delayed and you may find that the weather is not favourable to leave your structure at certain stages,” he says

Mr Sserunjogi says that you may incur more costs especially when the timeframe is not favourable. When you plan, you get to know what is needed and look for money in time instead of rushing and making mistakes along the way.

Poor site management

Sserunjogi says that if you do not supervise your project well, you may end up having cost overrun because the main aspects which keep the construction process on track such as design integrity, equipment condition, and quality control will not exist.

“If there is poor management, personalities clash just as often as a project’s site changes unexpectedly and this also affects the process totally, even if both sides maintain a professional relationship, some projects are just too large to keep up with every site change and news may travel too slowly across departments which means (the project) time (line) will extend,” he says.