ANALYSIS OF PROJECT OVER-RUNS IN THE INDIAN CONSTRUCTION INDUSTRY

Abstract

Construction is a dynamic industry that constantly faces uncertainties in its varied processes, technology, and budgets. Cost and time are fundamental components for any construction project. There is a need to identify the weak areas and bring in an improvement within the functioning framework of the industry. Project over-runs is observed as one of the most frequently occurring issues in construction projects worldwide and require a closer look to make it more predictable and controllable. This study aims at addressing the issues existing in the Indian industry with a focus on NCR region and comparing it with German system as one of the Best practices in the world. The research is carried out by studying the existing system, project and contract structure, national codes and guidelines. Furthermore, case studies have been done in the prevailing industry in NCR to understand the practical concerns and problems that exist, through surveys and interviews. Parallel case studies have been conducted in Germany through surveys and interviews gaining first hand information and insight into the German processes and structures. Furthermore, adopting better procedures and strategies from the German system, some modifications have been proposed for Indian scenario. Attempts have been made to analyze the data through Cross-case and Earned Value Analyses and arrive at certain derivations. Cross-case analyses deals with the success factors in a project that are largely not present in the Indian scenario that could have prevented or reduced over-runs, versus the factors that are present in a German scenario that prevent over-runs to a greater degree. EVA Analyses aims at deriving the prevailing trends in the industry with regard to over-runs. Identifying the major problems and loopholes prevailing at various stages of a project and arriving at certain controllable and uncontrollable factors affecting project overruns and ranking their impact, the study concludes with laying emphasis on the concerns of underestimation, cost inaccuracy, managing escalation and change management. It concludes with proposing Guidelines for Indian Scenario, developing a Scenariobased Model and attempting to validate the model on the case examples studied with a further attempt to sub-classify the scenarios based on design, planning and execution parameters.