Aclear well-defined scope of work and planning strategy should have been in place before tendering and agreeing to the contracts. In addition, a cost estimation should havebeen conducted. Instead, the cost of the projectwas grossly underestimated, which led to the initial budget being overrun. Because there were no contingency plans in place, when the project encountered problems, they had to be dealt with then, which was chaotic. Theproject failed to meet expectations, leading to additional costs.
Poor execution caused negative reviews by the media andhurt the company’s reputation. The lack ofsustainability was pronounced, as the thishappened to be the first ever project of that size inthe world not to have a car park. The project was rushed, the construction plan was completely unsuitable, and the costhighly underestimated. ConclusionCost overruns and late completion arecommon in the construction sector as conducted. This paper has discussed thecommon causes of the problem and what measures can be taken to avoid therecurrence on other projects. Accordingly, twoconstruction projects have been analysed to identify the failures in sticking the initial costs, and what can be done to mitigate these problems on future projects.
In my opinion,lack of planning plays the biggest role in failureto stick to budget, which then leads to latecompletion. The planning of the project shouldbe controlled and managed adequately. Everymember of the project should perform to a satisfactory level, as any failure in that regard could lead to a dominoeffect and cause the project to fall back.
Risk is another significant factor andpossibly the most challenging to manage, as nomatter how defined the scope is, there is a likelihoodof some risk and uncertainty. Therefore, risk and the possibility of unforeseen circumstances should alwaysbe considered when planning. This will preventdelays and overruns in theproject. Cost estimation should be checked thoroughly by experiencedpersonnel to eliminate chances of underestimating prior to tendering.
It is importantto invest more time initially in the designing and planning, as this will compensate for possible delaysin the later phases of the project. If theproject starts to get delayed in the later stages,it is likely to result in an overrun, with the MillenniumDome being a prime example. Sometimes changes in the project shouldnot be seen as a threat. If the project ismanaged effectively, these modifications can beseen as an opportunity to bring the project under budget or bring the projectback on track to the time-scale initially set. All the parties have a major role toplay in the project.
The client should ensure that all funds and payment are available whennecessary, that the scope of work is welldefined and accurate, and that a deadline has been set,but with allowance for unanticipated delays. The contractor shouldemploy reliable and dependable subcontractors interms of quality of work and timely completion.In addition, the project should be offered withcost estimates and not the minimum tender to get thejob. The contractor should have relevant experience working on projects of that size and a good managementplan.