Assessing the Impact of Cost Overrun Causes in Transmission Lines Construction Projects
Hai Thanh Pham, Truong-Van Luu, Soo-Yong Kim, Duc-Thinh Vien
Abstract
Infrastructure projects are very essential in societies today because they enable the uninterrupted flow of goods, services, and information across any country. Although much research has been done to investigate cost overrun in different infrastructure projects such as transport, bridge, power plant, road, or even petroleum; little is known about what factors cause the most significant cost overrun in transmission lines construction projects. In order to fill this literature gap, the current study is aimed at identifying main cost overrun factors in these projects. A literature review is first conducted to capture causes of cost overrun in the construction industry. A survey questionnaire is then designed to collect data from transmission lines projects in Vietnam. Factor analysis is applied and seven factors of construction cost overrun are extracted including: risks, resources, incompetence of parties, firm policies, project policies, poor collaboration of parties, and components, transportation and machinery cost. A regression model is subsequently developed to assess the impact level of these seven factors on cost overrun. It is concluded that risks, resources, incompetence of parties, and components, transportation and machinery cost are the four main causes of cost overrun in transmission lines projects while the remaining factors are found to have no impact. The paper ends by pointing out limitations of the study and providing some suggestions for future research.