Factors Affecting Project Cost Management of Large Commercial Building Projects in Ghana

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Date
November, 2019.
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Abstract
It is not far-fetched that the building construction industry is inextricably intertwined with the competitive positioning of a nation. Unfortunately, however, project cost is affected by diverse factors that often have detrimental effect on the quality, duration and profitability of building construction projects if not efficiently managed. Meanwhile, at the heart of a successful and profitable building construction project is efficient cost, time and quality management. This research work, therefore, sought to analyze the cost management practices of large commercial building projects in Ghana and recommend holistic and efficient project cost management measures to ensure optimal quality, cost efficiency and profitability of building construction projects. Using the Purposive Sampling approach and administering of questionnaires, the research considered the two senior Project Managers and Quantity Surveyors, in addition to 1No. Construction Manager and 1No. Senior Engineer from 7No. construction firms. The Statistical Package for Social Sciences (SPSS) Software and Excel Spreadsheet were used to analyze the survey data, qualified with frequencies, cross-tabulations and graphs. The relative importance index (RII) of project cost management practices and factors affecting project cost management were calculated and ranked. The study revealed that the building construction industry in Ghana is a complex interrelated system of several players with apt academic credentials, profound experience and youthful and exuberant workforce. Project cost management practices of large commercial building construction projects in Ghana are technically limited in scope and not coordinated in real time between and among the stakeholders involved. The major project cost management practices remain unit costing, cash flow forecasting, tender budgeting, elemental costing and planning, financial cost reporting, working budget adjustment, works programming and record keeping. The factors affecting the project cost estimates of large commercial building projects in Ghana emanates from weak internal structures than external factors; including underestimation of project cost, building material price fluctuations, ineffective project planning practices, and poor building design and changes. To rectify this menace, it is advised that building construction firms should adopt and apply the following project cost management strategies and modeling system in order to optimize their cost management efficiencies; identify critical cost centers along the project value chain, set cost performance targets, identify factors that affect project cost centers, assess cost implications on the entire project, diagnose results, recommend solutions and install an enterprise information system.
Description
A Thesis Submitted to the Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, Kumasi in fulfilment partial of the requirements for the Award Degree of Master of Science in Project Management,
Keywords
Project Cost Management,, Commercial Building,, Construction Project
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