The IUP Journal of Management Research
Risk Factors Causing Cost Overrun in Highway Construction Projects

Article Details
Pub. Date : July, 2020
Product Name : The IUP Journal of Management Research
Product Type : Article
Product Code : IJMR072020
Author Name : Rajput B, Agarwal A and Yadav S
Availability : YES
Subject/Domain : Arts & Humanities
Download Format : PDF Format
No. of Pages : 16



Highway construction projects are associated with various risks. It is compulsory for highway project stakeholders to include project risk management in their project plans to avoid time and cost overrun. The main objective of this paper is to improve the performance of highway construction projects by determining the most critical risk factors influencing their cost. A total of 29 risk factors leading to cost overrun were identified from the literature. These factors were used to develop a questionnaire which was sent to construction engineers working on highway construction projects. From the analysis, 12 factors, viz., improper planning, delay in land acquisition, delay in project approval and permits, delay in making progressive payments, inaccurate cost estimate, delay in inspections, corruption at different levels, price increase of materials, shortage of equipment, machinery and tools, shortage of skilled manpower, frequent breakdown of equipment, and difficulties in financing, were identified as critical risk factors causing cost overrun in highway construction projects. The result of this study will help project stakeholders to develop strategies to mitigate the adverse effects of such risks and improve their performance.


Indian construction industry makes significant contribution to the national economy. The Indian construction industry continues to grow in size with huge investments in different sectors. Unfortunately, cost overrun and delay are the major issues faced by most Indian infrastructure projects (Singh, 2010). According to the Ministry of Statistics and Program Implementation (MOSPI) data, published in March 2017, of the total 1,231 projects above 150 cr, 327 projects were delayed. Out of these 327 projects, 122 projects are highway projects (Jacob et al., 2017). Highway


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