Causes of delay and cost overruns
in Nigerian construction projects.
Typically, contract cost overruns
are associated with technical errors in design or estimating; decision-making incompetence, doubt based on the risk of foul play; dishonesty and disenchantment; and even corruption.
Does the percentage of HSI words within the document coincide with unforeseen cost overruns
, performance breaches, and schedule slippages?
The firms' quarrel is over who gets to foot the bill for delays, cost overruns
and alleged quality concerns.
Market participants had questioned whether Sinopec would proceed with its 8-billion cubic metres of gas a year CTG plant in the remote northwestern region of Xinjiang after two pilot projects owned by state-run Datang International Power became a government restructuring target due to cost overruns
and poor management.
With this type of contract, the borrower typically pays for change orders out of pocket and the builder is responsible for covering cost overruns
. Construction projects may also use a cost-plus contract based on the budgeted costs, plus an additional amount to cover the contractors' profit.
The consortium blames poor planning for the cost overruns
. Panama says the company is responsible for any unforeseen costs.
Reina, "Megaprojects need more study up front to avoid cost overruns
," 2002, http://flyvbjerg.plan.aau.dk/ News%20in%20English/ENR%20Costlies%20150702.pdf.
Parsons would pay half of any additional cost overruns
that exceed $530 million but are less than $550 million.
The study also showed that time and cost overruns
have positive correlation among them and both are inversely related to the quality.
Starting next year, energy firms would be able to write off only 22 per cent of their investment costs from the special energy tax, down from 30 per cent earlier, increasing the financial risk of delays and cost overruns
. "We must increase the industry's cost-consciousness," Prime Minister Jens Stoltenberg told a news conference.