Factors Affecting Adherence to Cost Estimates: A Survey of Construction Projects of Kenya National Highways Authority

Abstract

In the construction industry worldwide, failure to adhere to cost estimates is prevalent especially during the implementation of the construction projects. Although there have been improvements in the management of construction projects over the years, the problem of cost escalation is still a critical issue in the construction industry. Adherence to cost estimates is a phenomenon that if given attention can play a key role in reducing the occurrence of cost escalation. However, past research has established that adherence to cost estimates has never been honoured in most construction projects especially in road infrastructures, hence leading to a negative impact on the cost estimates of the relevant projects. The study sought to objectively solve the problem of nonadherence to cost estimates in construction projects undertaken by Kenya National Highways Authority on behalf of the Kenyan government and suggest how such occurrences can be reduced through the employment of identified factors that determine the success. The objective of the study was to examine the factors that affect adherence to cost estimates in the implementation of construction projects by Kenya National Highways Authority. By considering these factors and the implementing the recommendations raised by this study, the stakeholders will enabled to stick to the pre-determined cost estimates thus easing the burden that could have been placed on the taxpayers. This research carried out a literature review which helped in establishing factors affecting adherence to cost estimates in construction projects. The methodology used was a census survey of the employees, top management, consultants, and contactors who were actively working for and on behalf of the Kenya National Highways Authority. The study revealed that there was a significant relationship between design variations and adherence to cost estimates in construction projects in Kenya. The significant aspects identified for this factor were ground conditions, unrealistic initial requirements and specifications and by extension planning. The study also found that there is a substantial relationship between contractors’ experience and adherence to cost estimates in the construction industry in Kenya. Even though a good number of the respondents attested that the contractor International Journal of Social Sciences and Entrepreneurship Vol.1, Issue 11, 2014 http://www.ijsse.org ISSN 2307-6305 Page | 2 was well versed with construction projects, poor distribution of labour and poor site management were found to be of grave concern. Important aspects of adequate technical and managerial skills were found to be worthy Communication skills were found to be another crucial recipe for adherence to cost estimates. Lastly the study found that most construction organisations rarely consider such principles which should include employment of highly qualified contractor, thorough survey and initial assessment of the project site, definition of specification and requirements of the project. All these are rarely considered. The authorities must therefore have in place a cost management plan, cost performance baseline and do all that appertains design variations and contractors experience to help in adherence to the cost estimates.