EVALUATION OF FACTORS AFFECTING CONSTRUCTION COST PERFORMANCE IN CONSTRUCTION SITES IN AWKA

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The growing need for construction of all types coupled with a tight monetary supply has provided the construction industry with a big challenge to cut cost. Nigerian construction industry is faced with problem of cost overrun. Ogun semi and Jagboro (2006) in their work

titled �Time-cost modeling for building projects in Nigeria, noted that one of the most serious problems the Nigeria construction industry is faced with, is the project cost overrun, with attendant consequence of completing projects at sums higher than the initial sum. Therefore, working with realistic project estimate is necessary at the outset of a project work, which would eliminate uncertainty and as well provide a plat form for project success (Flanagan et al, 1999). Cost overrun however is not limited to Nigeria context is of international concern, this was illustrated in the research carried out by Chan and Kumaraswamy (2006), in Australia, it was found out that seven-eighths of building contractors surveyed in the late

1960�s were completed after scheduled completing while in Hong Kong 70% of building projects were delayed and completed at cost higher than initial budgeted cost. Al-kahil and Al-chafly (1999) established in a study carried out by them in 1995 in Sandi Arabia on contractors and consultants that 33% of all their project undertaken were subjected to cost and time overrun while consultants were subjected to cost and time overrun while consultants admitted that 84% of project under their supervisor experienced cost overrun.

However, Dissanayaka and Kumaraswamy (1999) opined that Time, Cost, Quality target as well as project satisfaction tend to be most important key to measure the overall performance of a project work. Furthermore, various research works have also indicated that most project records cost or time overrun during their tenure of execution. (Odusami and Olusanya, 2000).

(Mbachu and Olaoye 1989; Madewsley et al 2004); opined that 51percent of average delay

were experienced yearly which culminates in cost overrun, certain factors are responsible for this, to this end however this study attempts at investigating such factors and proffer solution to the pandemic. The scope of this research work shall be limited to building construction sites within the selected area in Awka, Anambra State Nigeria

1.2 STATEMENT OF THE PROBLEM

The demand for more construction of all types, coupled with tight monetary supply has provided the construction industry with a big challenge to cut costs (Mbachu & Nkado, 2004). The problem of high contract costs of all aspects of construction is becoming obvious. Consequently, substantial increases are being observed in projects. This substantial increase has brought about loss of client confidence in consultants, added investment risks, inability to deliver value to clients, and disinvestment in the construction industry (Mbachu & Nkado, 2004).

Maintaining steady cost projection on construction projects had been until recently an issue of serious concern, both to the client and project contractors in Awka, Anambra State. Cost deviation from initial Cost plan, had been prevalent on Construction sites. However, little or no efforts has made to curtail the phenomenon (Mbachu & Olaoye, 1989).

It is against this background that this research work attempt to study the factors that are affecting construction costs performance in construction sites, so as to identify them and proffer possible ways of tackling the menace in Awka construction sites.

1.3 RESEARCH AIM AND OBJECTIVES

The aim of the study is to evaluate the factors affecting construction cost in Nigeria and proffer solutions to how construction cost can be minimized.

The objectives of the study are as follows:

i. To identify the factors affecting construction cost in constructing sites in Awka.

ii. To identify the effect of the factors affecting construction cost in construction sites in Awka.

iii. To proffer solutions on how to minimize construction cost in Nigeria.

1.4 RESEARCH QUESTIONS

This study sought answers to the following research questions:

i. What are the factors affecting construction cost in constructing sites in Awka?

ii. What are the effect of the factors affecting construction costs in construction sites in Awka?

iii. What is the solution to minimize the cost of construction in construction sites in Awka?

1.5 Significance of the study

An assessment of the study is of the following importance;

1. Would enable clients, Contractors and consultants give an economic approach to construction work.

2. Would be able to identify the dominating factors leading to high construction cost in Awka.

3. The application of the solutions preferred to minimizing construction cost.

4. Would restore client�s confidence in consultants.

5. Reduce investment risks, and generally boost the validity and sustainability of the industry.

1.7 SCOPE AND DELIMITATIONS

The scope of this research is limited to evaluation of essential factors affecting construction

cost and proffering solutions on how to reduce construction cost in Awka. The study is

limited to projects in the Awka metropolis of Nigeria because there is easy access of

information in the Awka metropolis by the researcher. Target respondents for this study are

the principal actors in the construction industry namely: the clients, the consultants and the contractors.

1.8 STUDY AREA

The area of this study is Awka. Awka is the capital of Anambra State, Nigeria with an estimated population of 301,657 as of 2006 Nigerian census. The city is located about 400 miles east of Lagos in the centre of the densely populated Igbo heartland in southeastern Nigeria.

The West-East Federal highway link s Lagos, Benin City, Asaba, Onitsha, and Enugu to Awka and several local roads link it to other important towns such as Ekwulobia, Agulu, Enugwu-Ukwu, Abagana and Nnewi.

Strategically, Awka is located midway between two major cities in Northern Igboland, Onitsha and Enugu which has informed its choice as an administrative center for the colonial authorities and today as a base for the Anambra State government. Egbokhare, Francis O.;