Risk Factors That Lead to Time and Cost Overruns of Building Projects in Saudi Arabia

Rapid transformation across all sectors through Saudi Arabia's vision 2030 initiatives led to an increase in construction activities. However, the construction industry has been already facing huge cost and time overruns, affecting all stakeholders. The aim of this study is to identify and explore the influential risk factors that lead to completion delays and cost overruns of government-funded building construction projects in Saudi Arabia, all of which have been subjected to a traditional type of procurement method (Standard Public Works Contract). The literature examined in this study identified a total of 83 risk factors, which have been grouped into nine categories. A questionnaire-based survey was conducted to determine the participants' perspectives on the degree of probability of occurrence (P) of each risk and its potential impact on a project in terms of time (IT) and cost (IC). The questionnaire survey was distributed to 200 experts and professionals associated with Saudi building construction projects, which were grouped into four categories: clients, designers, consultants, and contractors. Fifty-five acceptable questionnaires were returned and analysed. The relative importance index (RII), and Risk Importance (RI) were used to identify the most influential risk factors, and an agreement test was conducted. The results of the survey revealed that the most significant risks factors contributing to the delay of building construction projects' completion are contractor's financial difficulties, owner's delay in making progress payments for completed works, contracts awarded to the lowest bidder, change orders during construction, ineffective project planning and scheduling by the contractor, shortage of manpower, and contractor's poor site management and supervision. In addition, change orders during construction and contracts awarded to the lowest bidder are the most significant risks factors of exceeding budgets. Based on the results, it is concluded that for achieving sustainable development, client, contractor, and labour-related risks must be effectively managed.

Automated summary

Saudi Arabia's vision 2030 initiatives have prompted a rapid transformation across all sectors, particularly the construction industry. However, the industry is facing significant cost and time overruns, impacting all stakeholders. This study aims to identify and explore the influential risk factors in government-funded building construction projects in Saudi Arabia, which have experienced delays and cost overruns under a traditional procurement method. A survey was conducted among 200 experts and professionals, and the results revealed the most significant risk factors contributing to project delays and budget overruns.