Why Do Construction Projects Cost So Much?

This infamous phenomenon isn’t only found in UK construction jobs but in construction jobs abroad as well. There are many different reasons as to why a construction project costs so. This article will look at some of the main culprits for high expenditure within the construction industry sectors.

Raw Materials

The costs involved in construction industry jobs are already high owing to the use of raw materials. The construction industry sectors use many resources that are harvested or mined first, such as steel from iron ore, timber from trees, or copper used for piping and tubing. Mining and conversion of trees is labour intensive and requires expensive equipment. Due to the large quantity of raw materials needed for large construction projects this makes for high prices to begin with.

Bad Weather

Bad weather can affect the raw material suppliers and the construction project itself. On UK construction jobs, poor weather has and does slow down a projects given timeframe. Overseas construction jobs in countries with more extreme weather than the UK perhaps have a worse time of it. But when bad weather stops play, the costs rise.   

Inaccurate Budget and schedule

If the estimated cost is unsound and an unrealistic schedule are posited from the off, the chances of unmitigated costs and an overrunning timeframe can create knock-on effects continuing through the project if not remedied. This can be seen in large construction projects where the initial cost and the predicted timeframe run over into extra years and millions in extra costs. Examples in US dollars from: https://www.statista.com/chart/3052/over-budget-construction-projects-in-comparison/

Project                                                   Over Budget

The Channel Tunnel:                                     $21.1bn
Three Gorges Dam                                        $16.1bn
Boston’s Big Dig                                            $13.4bn

The channel cost 80% more than expected. The Three Gorges Damn was originally estimated at $8.35 billion and Boston’s Big Dig eventually cost $24.3 billion. All these examples constitute a (un)planned budget not taking into account various factors the construction industry sectors should never discount.

Poor Construction and Hiring the Wrong Team

The Boston’s Big Dig had many leakages in in its tunnels due to poor workmanship and with some of the water being saltwater this caused other constructional problems such as corrosion of steel reinforcements. Subcontractor problems such as these will cause delays and use more materials, all providing greater costs for the project.

Environment and Social Problems

The Three Gorges Dam costs skyrocketed after 1.3 million people were removed from their homes in order for the dam to be built. Some of these were then moved again due to possible environmental issues affecting their new homes due to the dam. The Channel tunnel was also beset by environmental factors on the English side. Problems with wet soil stratum hindered construction on the tunnel. As dry chalk was tunnelled it allowed water to permeate and the wet chalk collapsed the dry.

Poor Administration and Management

My three examples of civil engineering are all guilty of poor administration and management. With the exception of bad weather discussed above, or other circumstances out of anyone’s control known as a ‘force majeure’, poor running of a project is usually to blame. The different disciplines of various construction industry sectors have to work together from the very beginning, from the initiation of a project down through management, contractors, subcontractors and tradesmen, to the final conclusion of the finished project.

From poor planning and execution, to poor hiring of workforce and conflicting views between project owners and construction practicality, all these things add to a construction project going over budget.

Final Thoughts on Construction Projects Costs

The cost of projects within the construction industry sectors has always been infamously high. A long-term construction project because of its length is naturally susceptible to problems. In physics, the longer something goes on for the more likely something will go wrong.

These issues with construction project costs, give a broad and general view of why the construction industry sectors costs are always high, and have focused on the bigger projects and their bigger timeframes. On smaller and less costly projects the chances of things getting out of control and over budget are less likely to happen due to a smaller and more tight-knit community of staff. If an entire workforce is capable and pulling in the same direction, only unforeseeable circumstances should be a problem.

Kelvin Brown
Maxim Recruitment Intern