Analysis of Overturns in Real Estate Project Using Artificial Network

Abstract

Cost overrun is one of the most important problem that encounter Real Estate projects success, since it reduces the contractor’s profit and sometimes lead to enormous losses. Cost overruns occur in every real estate project while the magnitude varies significantly from project to project. Throughout this research we tried to gather and analyze the main factors which cause cost overruns in real estate projects such as the factors determining percentage overrun include the financial condition of the owner ,the cash flow of the contractor, material cost increase, competition at tender stage, the project size, delays in design approval, quantity variations, the detailed degree of the drawings used for estimating the budget, , material estimate accuracy, quality requirements being hard to reach, location of the project with respect to vendors, time needed for decisions to be made, the client’s characteristics, unknown geological conditions, ignorance and lack of knowledge of the parties, incompatible advanced payment, the prequalification of the contractor, workload in the project, the contract type , whether the parties agreed on dispute settlement procedure or not, whether the site was properly managed or not , the adequacy of the equipment used in the project, the adequacy of the safety procedures followed, the effectiveness of the planning and scheduling , the availability of equipment, shortage of labors, whether the labors used were skilled or not, the adequacy of the method of construction, the decreased productivity of labors and equipment, the availability of cost control engineers assigned for the project. The objectives were achieved through valid questionnaire survey conducted in contracted companies, consultants, owners.