Causes and Effects of Cost Overrun on Construction Project in Bahrain: Part 2 (PLS-SEM Path Modelling)

Abstract

In part 1 of the paper, cost overrun factors associated with the construction industry in Bahrain were identified, and risk maps were developed based on a survey and actual construction projects records. This part of the paper adopted structural equation modelling (SEM) approach to assess the effects of cost overrun factors on project cost in Bahrain. SEM is the graphical equivalent of a mathematical representation to study relationship between dependent variable to explanatory variable. SEM is regarded as extension of standardized regression modelling and is important tool to estimate the causal relationship between factors. The collected data from the questionnaire and actual projects of part 1 were modelled and analyzed using SmartPLS v3.0 software. Results showed that approximately 60% of cost overrun was influenced with the factors identified in part 1. The Global fit index (GoF) value of the developed model was 0.591, indicating that the model has enough power in explaining the relationship between identified factors and cost overrun.