Project cost overruns and risk allocation in public funded projects in Malaysia

• Published in: Proceedings of the 37th Annual ARCOM Conference, ARCOM 2021
• Main Author: Shahrin F.; Mahmood K.; Hassan F.
• Format: Conference paper
• Language: English
• Published: Association of Researchers in Construction Management 2021
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85118439799&partnerID=40&md5=9485fa56a5dc119e4da7af113ab50875

Over budgeting is a recurring issue in projects. One of the main issues of over budgets is the mismanagement of risks. Risks and uncertainty should have been established, quantified and included in the cost limit of a project. Recognising the challenges of COVID posed to the current economy, it is ever more crucial for public clients to ensure the facilities are delivered with added value by eliminating the inefficient expenditure and delays, which affects the value delivery to end user. Although there are many approaches in studying cost overruns in projects, this study aims to uncover the factors driving the cost overruns and its relation towards the risks. This paper will report the first stage findings of on-going research. A total of 14 public facility projects, all delivered through traditional procurement were selected, unpacked, and analysed. The cost/m2 of each project were then compared to client's developed cost plan at the selected project stage, including further investigation for factors driving the cost changes. The study revealed that most of over budgeting were contributed to misallocation of risk. Lacked quantification and identification of risk caused over budgets and delays. Traditional procurement allow certainty but less innovative platform for contractor and client to collaborate. © 2021 Proceedings of the 37th Annual ARCOM Conference, ARCOM 2021. All Rights Reserved.