AN EVALUATION OF THE PROJECT COST CONTROL IN THE NIGERIAN CONSTRUCTION INDUSTRY
1.1 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.
1.2 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 dissuaded prospective investors from investing in our economy.
1.3 Aims and objectives of the study