Critical Success Factors for Cost Overrun Minimization in Public Construction Projects in Developing Countries: The Case of Ghana

Purpose: It is widely accepted that one criterion for determining if a construction project is successful is whether it is completed within the expected budget. There have been advancements in the management of building projects throughout time; but, cost overruns remain a key concern in the construction sector internationally, particularly in emerging economies like Ghana. The study aims to answer the question, “What are the critical success factors that can assist reduce cost overruns in public-sector infrastructure projects in the Ghanaian construction industry?”

Methodology: The study used a quantitative survey method. Questionnaire was pre-tested by interviewing 15 contractors to ascertain the validity of the content. Factor analysis and multiple regression were adopted to analyse the data.

Findings: The study discovered that the critical factors that can reduce cost overruns in construction projects in Ghana are directly linked to five themes: early contractor involvement in the project planning stage, adequate funding, good project team relations, competent managers/supervisors, and project participant incentives/bonuses. This study identifies indestructible empirically measurable important success criteria for reducing cost overruns in public building projects in Ghana.

Practical implication: When well thought through from the project initiation stage to completion, these critical successes can also be used to deal with damaging economic effects such as allocative inefficiency of scarce resources, further delays, contractual disputes, claims and litigation, project failure, and total abandonment.

Originality: The uniqueness of this research resides in the fact that it is a first-of-its-kind investigation of the critical success factors for reducing cost overruns in public building projects in developing countries.