Time overrun: - It is the phenomenon in which the project gets delayed beyond its expected completion time due to certain difficulties i.e. more time is required to finish the project than initially planned.
Causes:
- Plans, specifications etc are not received by the contractor in time.
- Adequate resources are not available on the site.
- Inadequate technical and financial management.
- Extra work has to be carried out.
- Unforeseen problems like adverse weather, natural calamities etc
- Wrong or faulty initial planning.
- Accident on site.
Cost overrun: - It is the phenomenon in which the client/contractor has to spend more money for the completion of the project than that originally estimated i.e. the project goes over budget.
Causes: -
- If the contractor does not have proper technical knowledge of the jobs, cost overrun is possible.
- If the original bid by the contractor is lower than actual project cost, cost overrun is possible
- Increase in cost of materials and labour. This is more significant in long duration projects.
- Improper management and wastage of available resources.
- Adverse weather conditions and natural calamities can damage to existing work, leading to rework and increase in cost.
- Extra items of work done.
Methods to control Overruns: -
- Identification of the overrun
- Procurement cost control
- Negotiation with the vendor
- Sourcing the materials
- Optimum utilization of resources
- Reduction in wastage
- Improvement in the method
- Increase the speed of construction
- Stock reduction
- Right sizing of the project team.
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