Project Cost Control in the Nigerian Construction Industry (A Case Study Of El-Alan Construction Company Nigeria Limited)
Background of the study
Project cost controls in the Nigerian construction sector have always been under studied. On the course of executing a project, controlling the cost of these projects would help in maintaining such projects from being too capital intensive which may lead to the project being abandoned. For every project to be successfully executed, its cost must have been analyzed and the cost from start to finish noted so as to prevent unnecessary contingency spendings which may hamper the complete execution of the project. Cost control includes monitoring cost, task completion, and time. If total cost of a project at a given time is over the cost baseline, cost control measures may be necessary. Such project management actions may range from ensuring that only tasks within the scope of the work are being performed to alerting stakeholders of potential cost overruns. As a project manager, it is important, professional, and ethical to identify and report on these issues as soon as they are identified.
Organizations whether private or government owned must complete projects on budget to achieve financial objectives and save cost. Project managers applying cost control techniques effectively can ensure that projects stay within projected budgets or are allowed to exceed budgets in a controlled way for specific reasons. When an organization implements appropriate project cost controls, it reduces risk and receives the full benefits anticipated from project completion.
Controlling costs means meeting a budget that is based on cost estimates. The two components of such estimates are the scope of the work and the cost of each completed task. The project plan details the requirements for the project, which you have to translate into activities. A typical activity requires labor, materials and equipment. Once you have defined the project scope in terms of activities and divided the activity into its cost components, you can calculate cost estimates using costs from historical sources, bids, industry norms and other projects as a base.
Statement of the general problem
The increase in the number of abandoned, uncompleted and under completed projects by individuals, companies and even government has been a cause for serious concern. This high rate of abandonment has inflicted our infrastructural development negatively and may have dissuadedprospective investors from investing in our economy.
Aims and objectives of the study
The following will be our aims and objectives for undertaking this study
- To examine the level of implementation of project cost control in the Nigerian construction industry.
- To know if adherence to project cost control increases the profitability of Nigerian construction industry.
- To know if project cost control improves the Nigerian construction industry.
- To know if project cost control reduces abandonment and under completion of projects.
Significance of the study
This study will be of great importance to project managers, government, researchers and captains of industries seeing that it would unravel the implications and benefits of ensuring project cost control in the Nigerian construction industry and the economy of Nigeria at large.
Scope of the study
This study is restricted to project cost control in the Nigerian construction industry with EL-ALAN Construction Company (Nigeria) Limited as its case study.
Limitation of the study
Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
- What is the impact of project cost control on the Nigerian construction industry?
- Does project cost control enhance the quality of constructions in the Nigerian construction industry?
- What is the impact of project cost control on the infrastructural development of Nigeria?
- Is there a relationship between project cost control and economic development in Nigeria?
H0: Effective project cost control does not improve the quality of constructions in the Nigerian construction industry
H1: Effective project cost control does not improve the quality of constructions in the Nigerian construction industry
Definition of terms
- Project: A planned piece of work that is designed to find information about something, to produce something new, or to improve something.
- Cost:the amount of money that you need in other to buy, make or do something.
- Construction: the process or method of building or making something, especially roads, building, bridges etc.