Use of contingency to control the cost overrun in Sri Lankan high-rise building projects.

Abstract

Cost overruns are commonly encountered in construction projects worldwide, and they are especially recognized in Sri Lankan high-rise building projects. The study focuses on effectively allocating contingencies amidst the uncertainties encountered in these efforts. Contingency allocation in Sri Lanka appears to be theoretically well-founded but is limited in practical implementation. This research aims to address this issue by accurately allocating contingencies in these projects, taking into account the uncertainties they face. Although contingency allocation has a solid theoretical foundation, its practical application seems to be limited, particularly in Sri Lanka. A mixed-method research approach was adopted. The results of the study highlight the primary reasons for cost overruns in high-rise building projects, including fluctuations in material costs, poor project management and planning, and construction delays. The previous study also reveals that despite the availability of other methods, percentage allocation remains the most commonly used technique for determining contingency in the industry .The study identified a lack of understanding and regulatory support for modern contingency methods, recommending accurate cost estimation and effective measures to control cost overruns in high-rise construction projects. Addressing these challenges suggests seminars, workshops, and industry-specific modules at universities in Sri Lanka.