An Assessment of Factors that Leads to Federal Highway Projects Cost Overrun and its Significantly Impacts on South East Nigeria

Cost overruns, where actual project costs exceed initial estimations, are a pervasive global challenge in highway construction (Flyvbjerg & Cowi, 2004; Odeck, 2004; Flyvbjerg et al., 2009). This study evaluates the factors contributing to these overruns in federal highway projects in South East Nigeria, examining their repercussions on the region.A survey of 100 project personnel, selected via multistage sampling, revealed that underestimation during budgeting (\(X=2.19\)), inflation (\(X=2.28\)), and unmet project specifications (\(X=2.46\)) are primary causes. Analysis identified major contributors such as design alterations (\(X=2.72\)), material procurement challenges (\(X=2.19\)), and inadequate cost estimates (\(X=2.11\)). The impacts on the construction sector and the broader economy include increased client costs (\(X=2.40\)), reduced contractor profits (\(X=2.40\)), and project abandonment (\(X=2.48\)) (Love et al., 2011; Memon, 2011). The research also highlights potential mitigation strategies, such as using project management scheduling tools (\(X=2.68\)) and ensuring thorough pre-project planning (\(X=2.58\)).Based on these findings, it is recommended that decision-makers, including the Federal Ministry of Works and Housing, implement these strategies to improve project outcomes.