Project Cost Control in the Nigerian Construction Industry

The construction industry being solely responsible for economic growth of the nation will base on the government’s fiscal policy and budget the formulation of its own policy plan on how to carry out development within that budget and equally give the nation a healthy developed environment. Besides, the overall aim of cost control and management is to make sure that scarce resources are utilized to the optimum benefits of the main parties to a construction contract. That means that design and execution of a project should produce maximum value for money. Given therefore, the high cost rate of money for construction resources and high interest in this dwindling, deregulated and depressed economy, it is pertinent that efficient costing should be a very strong element in project design and implementation. The economic aspects of construction are complicated by the fact that the functions of design and production are generally separated. At the design stage, the designer will usually not know the methods and equipment available to the contractor who may ultimately build the project, and who is directly responsible for the materials used, which for most buildings account for about two-thirds of the total cost of the project. This is not to suggest that the contractor has no contribution to make, but since the labour which he controls, cost only about half that of the materials, his efforts can easily be nullified by any design which makes excessive or unnecessary use of materials. This will have serious adverse effect on the project cost, its execution and completion date and may lead to delay and outright abandonment. The need to have cost data available from the earliest stages of the design has encouraged the development of methods of "cost planning" and the wider application of such techniques if cost is to become as it should be, an integral part of design. All these should be geared towards effective cost management and control as a solution to project abandonment. Management is a leading factor in any investment. Prosperity breeds mismanagement. Paradoxically, management is the single factor which forces an upturn in a recession. Management is the single factor which separates prosperity and recession. It is the resources well managed or mismanaged today that makes for tomorrow's prosperity or depression. The economic depression we are now facing is more out of mismanagement of resources than lack of resources. The key to the success of our construction investment industry is professional management. There is urgent need for innovations in the cost management of our construction resources for viable products. The vital question however is whether the Project Manager being the construction cost planner is economizing enough the variables that affect the cost of construction which are supposed to be under his control in other to bring down cost of construction to a tolerable level. This is the main focus of the study to unveil the management philosophy, practice and inputs to be affixed in evaluating and monitoring construction cost in order to reduce project abortion and abandonment, which are caused by project cost overruns.