Delay and Cost Overrun Risks in Sudanese Construction Projects: QuantitativeApproach

Abstract

It is quite observed and frequently iterated in the risk literature that construction projects are prone to various and interrelated risks. Risks that span over a wide spectrum such as delays, cost overrun, safety, design, construction, environmental, weathering, legal and operational risks. Delays and cost overruns are considered among the leading threat risks that a project can experience and suffer. Quantifying those risks is intricate due to the complex and interrelated nature of construction projects and risks encountered over them. Isolating and quantifying the effect of those risks (delays and cost overruns), apart from the overall interacted effect of other risks, is an important performance indicator. Moreover, it can serve as a useful predictive and proactive tool for Sudanese construction project management professionals in formulating risk response plans. In order to achieve such a goal, special circumstances and conditions shall hold valid. Conditions as holding still the key other risks that are expected to affect the overall project risk interaction. The aim of this paper is to develop predictive models in order to quantify the magnitude of delays and cost overruns. This is sought by incorporating non-probabilityreadily accessible sample (n=19) of solely-steady funding, defined scope, contractual time frame and cost projects. This is meant to isolate (as much as practical) other than delays and cost over runs risk factors. To achieve the stated goal, regression statistical techniques and Monte Carlo simulation are utilized using Minitab, SPSS and @risk softwares. Comparison between the results obtained by the Monte Carlo simulation and the actual finish durations and costs was conducted. It was found that the uniform distribution is the best fit for the actual project durations and Pareto distribution for the actual cost. It was also found that there is a significant difference between the actual and contractual durations, which resulted in significantly large delays. In the author opinion this is can be attributed to one or collateral of the scenarios of owner imposed contractual time frame, non-compensable time extensions, changes and variations, contract miss-management and lack of accurate project scope definition.