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IJSRD - International Journal for Scientific Research & Development| Vol.

3, Issue 11, 2016 | ISSN (online): 2321-0613

A Critical Literature Review on Evaluation and Identification of Factors


Governing Cost of Residential Construction Project Works in Gujarat
Mehulkumar Parmar1 Prof. Jaydev Bhavsar2 Dr. Jayeshkumar Pitroda3
1
M.E. Student 2Associate Professor 3Assistant Professor
1,2,3
Department of Civil Engineering
1,2,3
B.V.M. Engineering College, Vallabh Vidyanagar, Gujarat, India
Abstract Various scholars have tried to define the factors
affecting construction cost factors (CCFs) of project for a
long time. Lists of variables have been prospered in the
literature; anyhow no common promise can be made. The
objective of this paper is on the way to develop a theoretical
framework on factors governing CCFs of residential
construction project works in major cite of the Gujarat.
Various journals in the construction field are selected to
review the previous works on construction project. Nine key
groups of autonomous variables, namely cost-related
factors, Management, Financial, Time, Governmental and
Political, Material and Equipment, Labour, Technological
and Productivity, Quality Factors, Environmental Factors
are identified as key factors for project cost. Also In
selection of factors, other local factors have been added as
recommended by native professionals.
Key words: Construction Production, Project Cost, Time,
Project Management
I. INTRODUCTION
The construction business is self-motivated in nature due to
the growing uncertainties in technology, budgets, and
development processes. Nowadays, building projects are
becoming much more complex and difficult. The project team
is facing unprecedented changes. The study of project cost
factors are considered to be a means to improve the
effectiveness of project. However the concept of project
success has remained ambiguously defined in the mind of the
construction professionals.
Various attempts were made by different researchers
to determine CCFs in construction. A number of variables
influencing project cost have been proposed. Some variables
are common to more than one list, but there is no general
agreement on the variables.
The main aim of this paper is to conduct a thorough
review on literature related to CCFs in various major
management journals. The selection of these journals was based
on the Keywords for searching were Construction
production, project cost, time, project management. As an
outcome, 32 articles were finally selected to include in this
review. The framework involves of nine main groups:

management, financial, time, governmental and political,


material and equipment, labour, technological and
productivity, quality factors, environmental factors. In this
research paper, factors affecting the performance of
construction projects in the Gujarat major cities will be
analyzed. Performance indicators are used to measure
performance in construction projects.
II. PREVIOUS RESEARCH REVIEW BASED ON IDENTIFYING
FACTORS GOVERNING COST OF CONSTRUCTION WORKS

Ahuja et al. (1985) descripted that the various significant


uncertainty variables that affect the period of an activity
while it was in progress. This, in turn, affects the project

completion time and therefore the increase in project cost.


[16]

Enno et al. (1986) discovered that India and China,


equipment were often not utilized and construction
operations were, therefore, highly labor intensive. Also, in
many countries women compose a high percentage of the
labor force. [12]
Okpala et al. (1988) determined that indicate that:
High costs can be minimized by minimizing lapses in the
management of human and material resources; despite some
slight differences, the professionals generally agreed that
shortage of materials, methods of financing and payments
for completed works, and poor contract management were
the three major reasons for high construction costs; and
price fluctuation was identified as the most important factor
responsible for the escalation of project costs.[11]
Eldin et al. (1988) regulated that more benefits
would had been gained if the constructability improvement
program had been implemented during the earlier phases of
the project, considerable benefits were still realized and
helped cost benefits. [24]
Touran et al. (1992) addressed the general
methodology for solving these problems. Also the
traditional Monte Carlo simulation technique were discussed
but were problems found. The proposed general method was
capable of predicting the variance of the total cost with good
accuracy. [4]
Teicholz et al. (1993) governed that by using
algorithmic methodology that has been tested using the data
from 121 completed construction projects, which calculates
reasonably good cost and budget forecasts above wide range
of project types and changed situations. The suggested
method compared to 2 other methods and found to be
superior in accuracy, timing, stability. The forecasting
method, sliding moving average, general in its approach and
may be useful for other situations in which predictions of
limited duration time-series data are desired.[25]
Burcu et al. (1998) said that uncontrollable risk
sources that affect the contractors risk of cost overburden.
Sources of these risks relate to factors affecting the cost
estimate and the final cost of a project and include factors
specific to the cost estimator, the project design,
construction, and the project environment. The paper
describes each of these factors in detail. [8]
Elhag et al. (1999) revealed a total of 67 effective
variables and Statistical analysis carried out to establish a
priority rating of the influencing factors, factors were
grouped into 6 categories. This study signifies a foundation
stage for a future research aiming to grow tender rice
estimation models, which utilize the cost and time attributes
assessed in this paper. [26]
Hastak et al. (2000) found that the study concisely
finds the threat factors that can disturb the management,

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A Critical Literature Review on Evaluation and Identification of Factors Governing Cost of Residential Construction Project Works in Gujarat
(IJSRD/Vol. 3/Issue 11/2016/028)

operational, and maintenance cost of various structures that


effect the cost-effective management. [23]
OBrien et al. (2000) Said that much of the current
basis of construction costing and control was inadequate to
task, and that new methods must be developed that more
realistically represent the needs of construction
subcontractors and suppliers to lower the project cost. [32]
Herbert et al. (2002) determined that Erection of
houses of average size comparative to the reference group
takes little effect on standing house prices except to create
some competition for residences that were achieving
relatively high prices considering their features. [30]
Iyer et al. (2005) revealed that cost performance of
project has publicized the important success, failure
attributes. The important success attributes are: effective
monitoring, feedback by the project manager & project team
members; organizing ability and link of PM with top
management; positive attitude of PM, project participants;
and Project managers technical capability. [21]
Zheng et al. (2005) found a prototype system that
had been developed in Microsoft Project for testing with a
medium-sized project. The results indicate that greater
toughness can be attained by the introduction of adaptive
weight approach, Pareto ranking, and niche formation to the
genetic algorithms based multi objective Time Cost model.
[9]

Ibrahim et al. (2007) found that ever-increasing


cost of medical treatment and the potential for lawsuits can
lead to higher insurance premiums, which in turn tend to
have a negative impact on a project. 63 factors were
identified from international literature and grouped into 12
major categories. The most important factors affecting
safety performance were safety awareness of companys top
management, safety awareness of project managers, and
safety inspections that can reduce the construction cost of
major projects. [17]
Shane et al. (2009) found the 18 cost escalation
factors those were identified through a comprehensive
literature review and verified through intense interviews
with over 20 agencies. Identification of these cost escalation
factors supports efforts to understand the causes of project
cost escalation. This understanding permits the development
of strategies, methods, and tools for better cost estimation
and cost estimating management. [19]
Ezeldin et al. (2009) discovered that study proposes
a hybrid technique that combines genetic algorithms (Gas)
with dynamic programming to solve construction projects
time-cost trade-off problems under uncertainty. Results
obtained over three runs were within 5% of each other at the
total project level. The resulting optimum schedules in all
three runs reduced overall project cost by an average of
14.4% and overall project duration by an average of 21%
obtained using MS Excel Solver. [1]
Touran et al. (2010) discovered that by using
presented model the budget that will not be exceeded given
a specific probability value. The sensitivity analysis
described helps the expert evaluate the effect of increasing
or decreasing the budget on the probability of cost overrun.
[5]

Kishore et al. (2011) determined that a fuzzy


proportional derivative model can be an effective tool to

establish trends in cash-flow availability and risk across a


group of construction projects works. [29]
Khoiry et al. (2012) governed that the main cause
that affects the housing price, graphed by distance from city
center and market conditions. [22]
Basheka et al. (2012) found that cost related factors
were the ability of the contractors to efficiently use
materials, to work as team players to manage hazardous
materials, since their mismanagement would had cost effects
and to keep the workplace clean. [7]
Dadzie et al. (2012) Said that ability of the
consultant to work as a team, creativity on the part of the
consultant in controlling cost and developing own
efficiencies so that contract sums were within budget.[18]
Jarkas et al. (2012) defined 45 factors and divided
it in 4 primary groups. That provide guidance to
construction managers for efficient utilization of the labor
force, hence assist in achieving a reasonable level of
competitiveness and cost-effective operation.[2]
Ujene et al. (2013) found that the ten groups of
direct costs variation factors and established the factors
among each group which most significantly affect direct
costs of building projects. The result of the evaluation of the
significance of the cost variation groups shows that
construction, resources, and performance factors have the
most significant effect on cost dynamics. [28]
Narbaev et al. (2013) discovered that the gompertz
model a statistically valid model and generates more
accurate cost estimate at completion estimates than those
computed by using the other models and the index-based
method. [27]
Brockman et al. (2013) initiate that the average
amount of time reported across all 41 conflict incidents was
161.25 h lost in managing conflict, with 0.5 h as the
minimum number of hours spent embroiled in a conflict and
6,000 h as the maximum number of hours lost as the result
of a conflict. The median number of hours was 5.25. The
average cost reported across all 41 conflict incidents was
7,29,683, with 1,666 as the minimum cost for an incident
and 2,44,60,519 as the maximum cost for an incident.
The median cost was equal to 19994. [20]
Jafari et al. (2013) defined that it was reasonable to
add 3% to the project contract value to cover all quality
costs in the same projects. [6]
Migliaccio et al. (2013) revealed that a cost
engineer could input the location of a project and obtain the
most accurate location adjustment factor through a mix of
interpolation and geostatistical prediction techniques. [14]
Polat et al. (2014) found that Construction
companies are profit seeking organizations and their
ultimate goal was to earn money and achieve the targeted
profit margin at the end of each undertaken project.
Achievement of this goal mainly depends on completing
projects within the anticipated budget, time, and expected
quality targets. Every construction company was negatively
affected by cost overruns, time overrun. [15]
Dharmapalan et al. (2014) regulated that the cost
connected with the estimated risk may not be just dependent
on the design. A project designed for safety may still have
worker injuries. It was estimated and expected, that the
number of injuries and victims on projects that have been

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135

A Critical Literature Review on Evaluation and Identification of Factors Governing Cost of Residential Construction Project Works in Gujarat
(IJSRD/Vol. 3/Issue 11/2016/028)

designed for safety will be less and the cost can be reduced.
[31]

Enshassi et al. (2014) analyzed that the 51 factors


considered in study conclude that the main 10 factors
affecting the accuracy of cost estimation are: location of the
project, segmentation of Gaza strip and limitation of
movements between areas, political situation and Gaza strip
closure, financial status of the owner, increase of unit cost of
construction materials, tender currency, experience of
consultant engineer, number of competitors, clarity of
information before execution and clarity of project
drawings. [3]
Blomberg et al. (2014) found and presented 5
themes that influence cost premiums in public sector,
specifically MILCON, construction based on a case study,
expert surveys, and interviews. Case study demonstrated
that internal policies can cause a 46,73,19,650 or 27%
project cost difference. [10]
Heravi et al. (2014) regulated by conducting 77
structured interviews on 60 mass-housing projects, the most
common quality-related activities and components of quality
costs were specified. And by using the developed model, the
optimum level of COQ was estimated as 7.4% of the total
project cost. The results indicated that the average potential
quality cost savings in projects was approximately 10% of
the total project cost. [13]

F. Labour:
Four factors were identified from the previous work as:
Unskilled Personnel/Labour, Absenteeism/Strikes/Turnover
Rate of Labour, Availability of Labour, and Improper
Selection of Labour.
G. Technological and Productivity:
Five factors were introduced by authors as: Design
Problems, Risk Factors, Project Complexity, Construction
Method, and Degree of Repetition of Units.
H. Quality Factors:
Eight factors were identified from the previous work as:
Rework Cost, Durability, Constructability, Workman Ship,
Unclear Technical Specification, Delay in Inspection &
Test, Expertise in Constructions, Number of Amenities.
I. Environmental Factors:
Four factors were identified from the previous work as: Area
of Construction Work, Weather Conditions, Natural
Calamities, and Social Environment of Region.
After classifying these factors, an integrated
framework for assessing the factors affecting cost of
construction project works was developed, which contained
main 9 groups containing different 54 factors. This
framework, shown in figure 1, shall be used for future
research work.

III. CONCLUSION
After the studies of literatures, papers, journals etc. about 54
factors identified and classified them in 9 different groups as
follows:
A. Management:
Eight factors were identified from the previous work as:
Improper Planning, Inappropriate Cost Estimation,
Inadequate Safety Measures, Unclear Project Scope, Cost
Overruns, Communication Gapes, Experience and Skills of
Project Manager, Crisis Management.
B. Financial:
Seven Factors were identified from the Previous Work As:
Investment, Payment to Parties, Profit Margins, Interests,
Market Conditions, Land Question Cost, Methods of
Payments.
C. Time:
Six factors were identified from the previous work as: Delay
in Progress Work, Frequent Change in Order, Delay in
Decision Making, Past Experience of Engineer/Supervisor,
Estimated Project Duration, and Delay Due to Disputes.
D. Governmental and Political:
Four factors were identified from the previous work as:
Bribe, Government Policy of Housing, Approval
Procedures, Legal Documentation.
E. Material and Equipment:
Eight factors were identified from the previous work as:
Late Material Delivery, Equipment Mechanization, Waste of
Materials, Thefts on Site, Price Escalation, Transportation,
Functional Obsolescence of Equipment, Procurement Cost
of Material, Labour and Equipment.

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A Critical Literature Review on Evaluation and Identification of Factors Governing Cost of Residential Construction Project Works in Gujarat
(IJSRD/Vol. 3/Issue 11/2016/028)

REFERENCES

Fig. 2: Integrated Framework for Assessing Factors


Governing Cost of Construction Project Works.
ACKNOWLEDGMENT
The Authors thankfully acknowledge to Dr. C. L. Patel
Chairman CharutarVidyaMandal, Er.V.M.Patel Hon.Jt.
Secretary, Charutar Vidya Mandal, Dr. F.S.Umrigar,
Principal, B.V.M. Engineering College, Dr. L.B.Zala, Head
and Professor, Civil Engineering Department, Prof. J. J.
Bhavsar, Associate Professor and PG coordinator, Civil
Engineering Department, Dr. J. R. Pitroda, Assistant
Professor, Civil Engineering Department, B.V.M.
Engineering College, Vallabh Vidyanagar, Gujarat, India for
their motivations and infrastructural support to carry out this
research.

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