Cost diviation in road construction projects: The case of Palestine

Ibrahim Mahamid, Amund Bruland


Abstract

This paper investigates the statistical relationship between actual and estimated cost of road construction projects using data from road construction projects awarded in the West Bank in Palestine over the years 2004–2008. The study is based on a sample of 169 road construction projects. Based on this data, regression models are developed. The findings reveal that 100% of projects suffer from cost diverge, it is found that 76% of projects have cost under estimation while 24% have cost over estimation. The discrepancy between estimated and actual cost has an average of 14.6%, ranging from -39% to 98%. The relation between the project size (length and width) and the cost diverge is discussed.

Keywords

cost; diverge; road construction; over estimation; under estimation; overrun.

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