An Assessment of Budget Overruns in Road Infrastructure Projects: A Case Study of Roads in Ndola

Project cost overruns in construction projects have significant and far-reaching effects, impacting financial performance, project timelines, and stakeholder relationships. Financially, cost overruns can strain budgets, and lead to additional borrowing, thereby increasing the overall project cost. The rationale of this study was to analyze the causes, effects, and mitigation strategies of project cost overruns in road construction projects in Ndola, Zambia, with the aim of identifying key factors contributing to cost overruns. A cross-section survey was used in the study, enabling quatitative statistical analysis. Primary data was gathered using a structured questionnaire consisting of closed-ended questions. STATA and the Statistical Package for the Social Sciences (SPSS) version 26 was used for data entry and statistical analysis. Road projects in Ndola frequently face cost overruns, with 58% of survey participants reporting that these overruns occur "often" and 4% stating they happen "always." A Chi-Square analysis revealed a significant relationship between participants' educational background and the frequency of cost overruns, indicating that those with higher educational qualifications, such as Master's and PhD degrees, experience fewer overruns compared to those with a Bachelor's degree. The most common cost increases reported were in the 6-10% range, primarily driven by inflation (78%), poor project management (12%), and labor costs (10%). Changes in project scope and contractor delays were also significant contributors. While time delays are less frequent, when they occur, they can lead to substantial increases in material costs, with 86% of respondents noting that extended project timelines often result in higher expenses. Additionally, changes in project design were highlighted as a critical factor in causing both cost and time overruns. The study recommends several key strategies to address the issue of cost overruns in road projects. First, there is a need to improve inflation mitigation strategies, as inflation was identified as the leading cause of cost overruns. This can be done by incorporating more accurate inflation forecasting and financial buffers into project budgets to account for rising material and labor costs. Additionally, strengthening project management practices, particularly in the areas of project planning, execution, and oversight, will be crucial in minimizing cost overruns and delays. Regular budget reviews are also necessary, as infrequent reviews were highlighted as a contributing factor to cost overruns. Risk assessment and monitoring should be prioritized by implementing continuous risk management frameworks to anticipate and mitigate potential cost overruns.