Time and Cost Overruns on Large Projects: Understanding the Root Cause

Abstract

Time and cost overruns are a persistent problem on large projects despite apparent progress of the project management profession. This article reports on findings from research carried out on large projects in South Africa to find the root cause of this phenomenon. The article begins by investigating the existing theories on the causes of time and cost overruns followed by empirical investigation using case studies. The results showed that time and cost overruns on large projects originated from the external environment which in turn affected the organisation and the project environments. The root cause was found to be a lack of project-specific experience by the project team, external and organisational decisions in the past, community resistance and pressure on the project team and scope change drive from stakeholders. From the results, it is proposed that an effective strategy to reduce time and cost overruns should involve not only the management of the project environment but also the organisation and external environments. The article adds knowledge to the overrun causation theory and management of large projects.