EVALUATION OF THE MAGNITUDE OF COST OVERRUN IN PUBLIC AND PRIVATE BUILDING PROJECTS IN NIGERIA
Publication Date : 01/02/2008
Evaluation of cost overruns in public and private building projects in Nigeria was carried out to ascertain where the adverse effects of cost overruns in public building projects and private building projects are weighing more on the national economy. Cost overrun in a project can be defined as the arithmetic difference between the final or actual cost and the budgeted cost of the project where the final or actual cost of the project is higher than the budgeted cost for the project. Data on budgeted or initial costs and actual or final costs were collected from 150 building projects comprising of 105 public projects and 45 private projects. Numbers of projects without cost overruns and those with cost overruns were determined and expressed as a percentage of the numbers of projects in each category. For the projects with cost overruns, the overruns were also expressed as a percentage of the initial or budgeted costs. Discrete ranges of cost overruns were set to determine the magnitude of cost overruns. Results for the public building projects and the private building projects were compared. From the comparison it is concluded that there is no appreciable difference in the frequency of cost overruns in public and private building projects; the magnitudes of cost overruns in public building projects are higher than the magnitudes of cost overruns in the private building projects. It is recommended that both public and private building projects be given serious and equal attentions in actions taken to check the adverse effects of cost overruns on national development and growth of the economy.
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