Studying Construction Resource Factors Affecting Cost Overrun in Construction Projects in Palestine رسالة ماجستير

Abstract

The construction industry plays a vital role in driving economic growth by contributing to infrastructure development, generating economic activity, and creating job opportunities. Its influence extends to various related industries, serving as a key indicator of a country's economic health. However, the construction industry faces challenges worldwide, particularly in developing countries. The Palestinian construction industry, like others, grapples with issues such as construction cost overruns, which not only affect the industry itself but also impede progress in other areas. Managing construction resources is identified as a key factor influencing costs. This research aims to investigate the resource-related factors that contribute to cost overruns in the Palestinian construction industry. The primary objectives include investigating the extent of cost overruns in construction projects, assessing the importance of resource-related factors contributing to these overruns, gauging the significance of each factor from the viewpoint of stakeholders (contractors, consultants, and owners), and determining their effects on the Palestinian construction industry. A structured questionnaire survey was designed to collect primary data to assess the importance of resource-related factors contributing to these overruns and their effects. The research population were obtained through a stratified sampling method, randomly selecting participants, which includes contractors, consultants, and owners as the primary stakeholders involved in construction projects. The distributed questionnaires were 195, while the total number of completed returned questionnaires were 154 questionnaires, with a response rate of 79 %. The questionnaire was divided into three sections, the first part capturing general information about respondents, the second delved into the resource-related factors affecting the cost overruns, the selection of these factors was based on reviewing of literatures and prior studies focusing on similar subjects, and the third discussed the effects of cost overruns. Different data analysis techniques were employed, including simple statistical approaches like as correlation coefficients ranks, Spearman's correlation scale, One-Way ANOVA for variance analysis, and Bonferroni analysis for comparing means and identifying significant differences. VI The researches findings highlight a dominant presence of small to medium-sized enterprises in the Palestinian construction industry, and highlights the common occurrence of cost overruns in construction projects, with 46.8% of companies experiencing overruns in the 20-40% range and 30.5% facing even higher overruns more than 40%. The top five resource-related factors leading to cost overrun in Palestinian construction projects were: the availability of skilled labors, availability of equipment, labors productivity, financial difficulties of contractor and cash flow, inaccurate cost estimate, respectively. Moreover, results reveal that the top important effects were: losses in contractor and owner profits, delays in construction projects and loss of contractor reputation, respectively. Moreover, the study offers practical implications and essential recommendations for contractors, consultants, and owners aimed at preventing and mitigating cost overruns in construction projects.