Effects of Infrastructure Project Cost Overruns and Schedule Delays in Sub-Saharan Africa

11th International Conference on Social Sciences Helsinki, 20-21 January 2017 Proceedings Volume II, ISBN 9786069318591

21 Pages Posted: 10 May 2017 Last revised: 11 May 2017

See all articles by Paul Gbahabo

Paul Gbahabo

Stellenbosch University - Business School (USB)

Ajuwon Oluseye Samuel

Stellenbosch University - Business School

Date Written: January 7, 2017

Abstract

This paper provides conceptual insights on the economic impact of project cost overruns and schedule delays on infrastructure procurement in developing countries with weak institutions such as those in Sub-Saharan Africa. Project cost overruns and schedule delays are a major and widespread problem in infrastructure procurement the world over that has received a lot of attention in the recent past. However, a critical review of the literature reveals that extant studies on project overruns are heavily skewed towards causative factors, with little or no attention to the effects it has on the economy as a whole. The paucity of studies on the effects of project cost overruns and schedule delays further reinforces the imperative to reacquaint policymakers and infrastructure developers, as well as project financiers with the gravity and import of the problem for infrastructural development in particular and the wider economy in general. The study undertakes an exploratory approach drawing from a wide range of theoretical and empirical literature obtained from policy documents, study reports and peer-reviewed articles. The findings shows that cost overrun and schedule delay in infrastructure procurement can have a damaging economic effect ranging from productive inefficiency of scarce resources, further delays, contractual disputes, claims and litigation to project failure and total abandonment. The study recommends project management capacity-building for infrastructure developers, project managers as well as a number of innovative control mechanisms such as reference class forecasting, public-private partnership and computer-aided cost estimating tools including artificial neural networks, data mining, building information modelling as well as fuzzy neural inference model, genetic algorithms, and stochastic simulation to curb the menace of the phenomenon.

Keywords: Effects Infrastructure Project Cost Overruns and Schedule delay Sub-Saharan Africa

Suggested Citation

Gbahabo, Paul and Samuel, Ajuwon Oluseye, Effects of Infrastructure Project Cost Overruns and Schedule Delays in Sub-Saharan Africa (January 7, 2017). 11th International Conference on Social Sciences Helsinki, 20-21 January 2017 Proceedings Volume II, ISBN 9786069318591, Available at SSRN: https://ssrn.com/abstract=2965029

Paul Gbahabo (Contact Author)

Stellenbosch University - Business School (USB) ( email )

Carl Cronjé Drive
CAPE TOWN, Cape Town 7535
South Africa

Ajuwon Oluseye Samuel

Stellenbosch University - Business School ( email )

Carl Cronjé Drive
Bellville, Cape Town 7530
South Africa

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