Predicting implementation cost contingencies for residential construction projects in flood-prone areas

• Published in: International journal of managing projects in business 2019-12, Vol.12 (4), p.1097-1119
• Main Authors: Van, Sang Quang, Le-Hoai, Long, Dang, Chau Ngoc
• Format: Article
• Language: English
• Subjects: Budgets; Climate change; Construction costs; Cost estimates; Expected values; Floods; Neural networks; Project management; Regression analysis; Sea level; Success; Sustainable development
• ISSN: 1753-8378; 1753-8386
• DOI: 10.1108/IJMPB-04-2018-0071

Purpose The purpose of this paper is to predict implementation cost contingencies for residential construction projects in flood-prone areas, where floods with storms frequently cause serious damage and problems for people. Design/methodology/approach Expert interviews are conducted to identify the study variables. Based on bills of quantities and project documents, historical data on residential construction projects in flood-prone areas are collected. Pearson correlation analysis is first used to check the correlations among the study variables. To overcome multicollinearity, principal component analysis is used. Then, stepwise multiple regression analysis is used to develop the cost prediction model. Finally, non-parametric bootstrap method is used to develop range estimation of the implementation cost. Findings A list of project-related variables, which could significantly affect implementation costs of residential construction projects in flood-prone areas, is identified. A model, which is developed based on an integration of principle component analysis and regression analysis, is robust. Regarding range estimation, 10, 50 and 90 percent cost estimates, which could provide information about the uncertainty levels in the estimates, are established. Furthermore, implementation cost contingencies which could show information about the variability in the estimates are determined for example case projects. Such information could be critical to cost-related management of residential construction projects in flood-prone areas. Originality/value This study attempts to predict implementation cost contingencies for residential construction projects in flood-prone areas using non-parametric bootstrap method. Such contingencies could be useful for project cost budgeting and/or effective cost management.