Delays and Cost Overruns Causes During Construction of Palm Oil Refinery Projects

Civil and Environmental Engineering Department, Universiti Teknologi PETRONAS, 32610 Seri Iskandar, Perak, Malaysia.

^* Corresponding author: wesam.alaloul@utp.edu.my

Abstract

Delays and cost overruns are obviously common problems in the construction industry in several developed and developing nations. The purpose of this study is to identify factors cause delays and cost overruns in the construction of palm oil refinery projects in Malaysia. A questionnaire survey of a randomly selected sample was filled by 89 respondents. The questionnaire included 179 factors which classified into 13 groups. The degree of importance of the delays and cost overrun factors were evaluated and ranked by importance degree, based on the viewpoints of stakeholders. The data was analytically investigated by descriptive statistic methods and Relative Important Index (RII). The results of RII showed that Delays in subcontractor’s work, Lack of subcontractor skill, and Poor/inadequate planning and scheduling with RII 0.78, 0.77, and 0.75, respectively, are the most important causes. These causes represent the baseline margin for project management of palm oil refinery construction and development. According to these results, it is suggested that: project client should collaborate with contractors and simplify payments procedures to mitigate delays; coordinate continuously and enhance the association among project stakeholders are obligatory in order to improve the project performance.