Free Time Overrun Effects On Investment Justification Plan Essay Example

PART ‘A’

It is a situation whereby a project is not completed in the time stipulated in the investment plan. It is usually brought about by some shortcomings that arise as the project establishment is continuing.ii). Time overrun influences investment decision in the following ways; labor and material shortages, availability of insufficient funds and also machine break down can bring about delay in project establishment.iii). A case study on construction projects Introduction Many construction projects have been experiencing delays due to time overrun. It has been contributed mainly by; labor and materials shortages, insufficient funds and poor coordination by contractors. When a project takes a long period than the one specified in the investment plan, the period in which the cash used will be gained will increase automatically. It can inconvenience an investor if he had used a loan to finance the investment because a bank provides a period in which its cash should be returned. In this case because of time overrun the investors collaterals will be taken by the bank. Findings According to studies done before in India by (Alwi & Hampson, 2003), it was noted that time overrun which leads to delay in construction mainly is brought are bought by poor performance by contractors who are the main coordinators. Delay will lead to an increase in investment budget because materials, for instance; building materials prices changes in accordance with the currency value. Due to this the investor will be forced to alter his budget plan. Infrastructure and Project Monitoring Department of Ministry of Statistics and program Implementation stated that by December 2012, the construction projects which were faced by time overrun were more than 44%. Conclusion Time overrun is a factor that has been the experiencing by many investors and should be dealt with effectively because it leads to unbudgeted expenses. Every individual in the investment field should consider overcoming in order to achieve the set objectives.

References

Abd. Majid, M. Z., and McCraffer, R. (1998) “Factors of non-excusable delays that influence contractor’s performance” J. Mange Eng., 14(3), 42-49.
Alwi, S., and Hampson, K. (2003) “Identifying the important causes of delays in building construction projects” The 9th East Asia-Pacific conference on structural eng. and constr., Bali, Indonesia