An assessment of the causes of schedule and cost overruns in South African megaprojects: A case of the critical energy sector projects of Medupi and Kusile

Authors

  • Fhumulani Tshidavhu National Department of Public Works, South Africa
  • Nthatisi Khatleli University of the Witwatersrand, South Africa

Keywords:

cost overruns, energy sector, megaprojects, schedule overruns

Abstract

Cost and schedule overruns are the most common challenges in mega construction projects around the globe, and South Africa is no different. Although comparatively small in number, megaprojects have an inordinate number of projects failing, due to budget overflow and schedule slippage. This article assessed the causes of cost and schedule overruns as well as the challenges with the implementation of critical construction mega-projects, using Kusile and Medupi energy-sector megaprojects in South Africa. Using a quantitative research method, which included a literature review and a questionnaire survey, identified the causes of schedule and cost overruns as well as the challenges militating against the project’s implementation success. Data was collected from engineers, quantity surveyors, architects, contractors, and project managers who were randomly selected from the two mega-projects, Medupi and Kusile. Data was analysed using mean score ratings and ranking. The results revealed that slow client decision-making, shortages of skilled labour, inaccurate material estimating, unforeseen ground conditions, poor material planning, changes in scope of work on-site, contractual claims, variation orders and poor site management were the major causes of schedule and cost overruns. Findings show that the top five challenges (poor site manage-ment, inadequate managerial skills, poor monitoring and control, unstable manage-ment structure, and lack of experience together with poor organisation structures) is all management and organisational related, showing that there is not enough local manage-ment and organisational expertise in South Africa to ensure the proper planning and effective implementation of energy megaprojects. This article is relevant, as it contributes to the understanding of key challenges faced by mega-projects in the context of a developing country. Specific solutions that mitigate the causes of schedule and cost overruns should be investigated in future studies. 

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Published

2020-06-29 — Updated on 2020-06-30

Issue

Section

Review articles