IMPACT AND ASSESSMENT OF COST OVERRUN DUE TO MATERIAL COST IN CONSTRUCTION PROJECTS

The construction industry is the tool through which society goals of urban and rural development can be achieved. It has a great impact on the economy of all countries (Leibing, 2001). However, the construction process is influenced by highly changing and unexpected variables, which could result from different sources. These sources include performance of construction parties, financial issues, managerial issues, resources unavailability, and external conditions. As a result, poor performance in terms of delay and cost overrun in construction projects could occur. The construction industry and its parties are associated with high degree of risk due to the nature of construction business activities, processes, environment and organization. Risk in construction has been the object of attention because of time and cost overruns associated with construction projects (Kartam et al., 2001).