Cost overruns in construction refer to a situation where the actual cost of a construction project exceeds the initial estimated cost or budget. This can happen due to various factors such as changes in the scope of work, unforeseen circumstances, poor planning, or mismanagement.
Cost overruns can have significant consequences for a construction project, including delays, quality issues, disputes between parties, and even project cancellation. They can also have a significant financial impact on the project stakeholders, including the owner, contractor, and subcontractors.
To avoid cost overruns, it is crucial to conduct thorough cost estimating and planning before starting the project, identify and manage potential risks, and establish effective communication and collaboration between all project stakeholders. Additionally, implementing effective project management practices such as regular progress monitoring, cost tracking, and contingency planning can help to minimize the risk of cost overruns.
