ABSTRACT

Cost escalation is ubiquitous problem especially in public projects even Pakistan Engineering council (PEC) allows the provision of' cost escalation in construction project the cost escalation is inevitable in large construction projects because of risk factors of increasing prices in construction resource. Escalation and contingency expenses include unnecessary costs due to the underestimation of the actual cost that budget amount and are considered to be risky. The cost escalation is caused because of different factors. For a successful project, it is necessary to study that factors responsible for cost escalation and after finding them necessary measures should be taken to mitigate or control them. Thus, t h is project was conducted to
reveal the factors of cost escalation. For this, data involved the perception collect ion from the construction industry experts representing Contractors, Client and Consultants involved in handling various construction projects. A total of 52 data samples collected against 200 distributed questionnaire forms were analyzed statistically using frequency analysis and weighted average value. Findings of the study revealed that top five ranked important factors are cash flow and financial difficulties faced, fluctuation in prices of construct ion materials, slow payments,
inflation and frequent design changes. ln order to control cost escalation client can play important role by ensuring the timely release of monthly bills of contractors. This would be helpful for contractors to manage the resource and work properly. Also, government should intervene to control fluctuations and control material prices.