Risk Management of Cost Overrun: (An Empirical Evaluation of Contributory Variables)
Abstract
Housing projects are highly susceptible to inherent risk arising due to cost overrun. The research using public sector housing projects in Port Harcourt metropolis, situate in Niger Delta Region of Nigeria, and the statistical tool of regression analyzed the elements of cost overrun that contributed to risk. Research findings established as follows: (i) The parameters of fluctuation costs, variation costs, loss and expense claims, impacted significantly on cost overrun, recording R-Square values of 94%, 97% and 26% respectively. (ii) The combined influence of fluctuation cost, variation cost loss and expense claims also impacted significantly on cost overrun, indicating Rsquare value of almost 100%. The research concludes that cost overrun, necessitated by the tested parameters variables can lead to risk. The research recommends that the appraisals of risk elements necessitated by the observed parameters should be an integral part of risk management programme, which explores the benefits of alternative procurement options, that allocates risk
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