Determinants of Project Cost Overrun for the Case of Ovid Construction in the Construction of Federal Housing Project at Gerji Site
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Date
2024-02-01
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A.A.U
Abstract
To reap the benefits of the contribution of construction, the industry needs to be handled to avoid
delays, cost overruns, or issues regarding quality. Most of the housing projects face one of the
main problems which is cost overrun during their project life cycle. Thus, this research aims to
examine the housing project constructed by OVID Construction for Federal housing corporation
project at Gerji site on the causes that contribute to cost overrun. In order to achieve the
research objectives, this research targets the participants in the project. The target population of
this study is the head quarter office found at Addis Ababa, and their respective managerial staffs
and employees. There are over 300 permanent employees on the 4 sites 93 directly related to
housing projects and 115 employees that are not directly related to housing projects constructed
by OVID construction. In this study, all directly related to housing project employees were
selected. The sample represents all parties involved in the housing project. The correlation
analysis revealed a strong positive relationship between the external environment and project
cost overrun, with a correlation coefficient of 0.951. In comparison, the influence of the client,
consultant, and contractor on the project cost overrun had lower correlation coefficients: 0.716,
0.799, and 0.498, respectively. The results indicate that these four factors, External, client,
consultant and contractor related factors account for 94.4% of the adjusted R square value
which suggests that 94.4% of cost overruns can be explained by variation in these four
predictors alone. it is vital for OVID Construction management to be aware of the potential for
cost overruns in their projects and take proactive measures to mitigate the impact of these factors.