Assessment of effectiveness of the effectiveness of the construction cost management process for public projects: a case of MNRT project in Tanzania.

Abstract

Universally, ensuring an effective construction cost management process is a persistent challenge, regardless of the advancement of technologies in cost planning and control. An effective cost management process highly depends on adequate cost planning and control to ensure that allocated funds are utilized efficiently to complete the project. However, many construction projects are characterized by inadequate cost planning and control, which leads to poor cost performance in most developing countries like Tanzania. This research project, therefore, aimed at assessing the effectiveness of the construction cost management process in public projects a case of MNRT project in Tanzania. A retrospective case study approach was used to determine cost planning techniques and control measures employed in the project. In this study, a detailed cost planning technique was used for cost planning and found that it was adequate and effective cost planning management. The effectiveness of this cost planning was attributed to the presence of clear scope, complete and clear drawings, complete and adequate specifications, and adherence to Standard Methods of Measurements (SMM). Different control measures were identified and used which included change management, value engineering, forecasting as well as communications. The cost control measures applied were inadequate and hence ineffective because in this project, the project was completed with an extra cost of Tshs. 881,213,086.26 excluding the planned contingency of Tshs. 546,584,744.12. This is an increase of about 5.37 % to the total planned approved project cost. In this case, the construction cost management process was found to be ineffective which was mainly contributed by design changes and implementation of new items which were not considered in the original design. In this project, the regulatory requirements factor had the least effect on the changes in the cost of the project. Although the cost planning process was deemed effective, however, the Cost Performance Index (CPI) was found to be 0.95, indicating an ineffective cost management process this was due to failure to effectively control the project costs during the implementation. Therefore, it can be concluded that the MNRT Project cost management process was ineffective and led to the project's additional cost to the project. It is recommended that a robust monitoring mechanism, regular and timely cost reviews, and time-to-time project fore-cast were needed to be applied to ensure an effective cost management process. Advanced cost management software or tools to streamline the monitoring and control process were required. The clients should always stick to the original approved construction design to avoid continuous changes in project scope and cost