Fahad Saud Allahaim, Li Liu
Cost overrun on infrastructure projects is widespread and represents significant financial risks to stakeholders. The large number of possible causes makes the planning and management of projects challenging. A survey of 160 project managers of infrastructure projects in Saudi Arabia was conducted to elicit the cost overrun causes. After cluster analysis, the causes were reduced to four dimensions: scope changes, market and regulatory, inadequate planning and control, and unforeseen circumstances. These four dimensions were then used to develop a risk-based cost contingency estimation model (RBCCEM) to improve the accuracy of cost forecasting and then validated using a bootstrapping approach. The accuracy of cost estimation measures was used to compare RBCCEM with fixed cost contingency (10%), reference class forecasting (RCF P50 & P90), and hybrid (it is a combination of RBCCEM & RCF P50). The comparison suggested that the RBCCEM could be more accurate as the error decreased by 10%. Therefore, by considering the actual impact of cost risk of similar projects, the results show that cost contingency was improved and the model delivered a better result compared to RCF.
@article{80f6e8d5-4d30-4cb1-99bd-3147810d9cd1,
title={Developing a risk based cost contingency},
author={Fahad Saud Allahaim and Li Liu},
year={2026},
language={en}
}TY - JOUR TI - Developing a risk based cost contingency AU - Fahad Saud Allahaim AU - Li Liu PY - 2026 LA - en ER -
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