Author: Mok, Tat-fai
Title: Major cost overrun factors for mega infrastructure projects in Hong Kong
Degree: M.Sc.
Year: 1999
Subject: Construction industry -- China -- Hong Kong -- Costs
Construction industry -- China -- Hong Kong -- Cost control
Infrastructure (Economics) -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Department of Building and Real Estate
Pages: iv, 99 leaves : ill. ; 30 cm
Language: English
Abstract: During the last several years, Hong Kong has completed hundred billions worth of infrastructure projects with alleged "successfulness". They are mostly driven by the new Chep Lap Kok International Airport sited in the Lantau Island. This Study attempts to review, examine and analyze the cost managemeht for these projects. In order to obtain the shared experience and insight of the project / cost managers who actually involved in these infrastructure projects, the focus of the Study is further concentrated on the establishment of the major factors for cost overruns during post-contract stage for mega infrastructure projects exceeding HK$1 billion. Owing to the scale of the projects, it is envisaged that the cost management approach may be varied from the traditional management. A comprehensive review on the new airport and its related core projects is then conducted. Their characteristics are assimilated as below: i. Joint-venture (JV) construction companies, especially from famous and large Japanese contractors, are common. ii. Other than traditional procurements, "Design and Build" and "Build-Operate- Transfer (BOT)" contracts form the major streams of contract procurements. iii. They are all faced with tight construction schedules ranged from 3 to 5 years. iv. Both design and construction are complicated. v. Labour, materials, and sub-contractors are all in massive quantities and diversified. The above characteristics illustrate that Hong Kong construction market has been changed with more "Design and Build", BOT and JV contracts for infrastructure construction. This change would, in parallel, entail a stronger need for effective cost management. The Study further indicates the difficulties in meeting budgetary targets especially for large infrastructure projects. Cost overrun problem appears quite severe. In this connection, the Study examines in more details through literature review on concept for buildability, risk assessment and allocation, and fast tract projects, etc. The Study further concentrates on examining the contributors that have caused cost overruns for these infrastructure projects by means of a Delphi process. Delphi questionnaires were issued to a carefully selected expert panel of project managers and cost managers to solicit their ideas and experience in respect to cost overruns in their own projects. The Delphi study was successful in reaching the panel's consensus, after two rounds of questionnaires, on the following major factors that caused or would cause cost overruns at the post-contract stages: i. design changes ii. scope changes iii. financial claims iv. poor client's project management v. unforeseen site conditions vi. poor interface between contracts vii. inaccurate pre-tender estimates viii. late instructions The above findings should provide a useful guidance for the upcoming huge infrastructure or railway projects, and should encourage substantial pre-tender design completion as far as possible in order to alleviate the relatively high likelihood of subsequent post-contract cost overruns.
Rights: All rights reserved
Access: restricted access

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