Why Road Projects Exceed Budgets: An Evidence-Based Model from Egypt’s Road Sector

The study by researchers at Benha University shows that cost overruns in Egyptian road projects are mainly caused by unclear project scope, poor planning, low-quality materials, and quantity changes, most of which originate before construction begins. It introduces a strong regression-based model that helps governments predict realistic cost contingencies at the pre-tender stage and improve public infrastructure spending efficiency.

The study Using Factor Analysis and Regression Technique to Predict Cost Overrun in Road Network Construction Projects was conducted by researchers from the Faculty of Engineering at Shoubra, Benha University, Egypt, a public academic institution actively engaged in applied research on national infrastructure challenges. The authors situate their work within Egypt’s large-scale road expansion efforts under the National Road Project, where persistent cost overruns have raised concerns about public spending efficiency. Rather than treating overruns as isolated technical failures, the study frames them as a systemic governance and planning problem that can be addressed through better early-stage decision-making by government agencies as project owners.

Why Cost Overruns Persist in Road Projects

Road construction projects in Egypt, much like those in many developing countries, frequently exceed their approved budgets and timelines. The paper explains that this is not due to a single cause but to a combination of weak scope definition, inadequate planning, financial uncertainty, poor coordination, and institutional interference. While international research has long identified similar problems elsewhere, the authors argue that Egypt lacks context-specific, data-backed tools that allow decision-makers to predict cost risks before construction begins. This gap often leads to underestimating contingencies during budgeting, leaving governments exposed to escalating costs once projects are underway.

How the Study Was Conducted

To understand the real drivers of cost overruns, the researchers designed a detailed questionnaire based on global literature and interviews with senior road construction professionals in Egypt. The survey covered 56 potential cost overrun factors and was completed by highly experienced practitioners, including project managers, construction managers, and departmental directors. The study then applied a combination of statistical techniques, the Relative Importance Index, factor analysis, and regression analysis, to move beyond simple rankings and uncover deeper relationships between variables. This approach allowed the authors to reduce complex, overlapping issues into a smaller number of meaningful categories while maintaining strong statistical reliability.

Key Factors Driving Cost Overruns

The analysis identified five major groups of factors that together explain most cost overruns in Egyptian road projects. The most important group relates to unclear project scope, including frequent design changes, vague scope definitions, poor verification of contract documents, unexpected site conditions, coordination failures, low-quality materials, and weak workmanship. These issues alone account for nearly one-third of total cost variation, highlighting how early-stage ambiguity creates cascading problems during construction.

The second group involves poor project planning, such as inaccurate cost estimates, failure to account for inflation, weak management skills, delayed dispute resolution, poor communication, and low productivity. Financial and external risks form the third group, including foreign currency shortages, force majeure events, schedule pressure, weak project programming, and contractor funding problems. The fourth group focuses on inefficient site management, particularly political interference, objections from local authorities, quantity increases, and unforeseen soil conditions. The final group covers firm-level policies, mainly tax increases and vendor delays, which affect procurement and material availability.

From Diagnosis to Prediction

A major contribution of the study is its move from identifying problems to predicting their impact. Using regression analysis, the authors developed a model that explains about 98 percent of cost overruns across the surveyed projects. The strongest predictors were poor-quality material supply, unclear scope of work, and quantity increases, followed by delayed dispute resolution, poor workmanship, inadequate contract verification, weak coordination, and inaccurate cost estimates. Importantly, most of these factors are controllable by the government during the pre-tender and planning stages.

The study concludes that cost overruns are largely decided before construction begins, not during execution. By improving scope clarity, strengthening planning, verifying contracts more rigorously, and using the proposed model to set realistic contingencies, governments can significantly reduce financial risk. Although based on Egyptian data, the framework is designed to be transferable to other African and developing countries facing similar institutional and economic conditions, making it a practical tool for more sustainable and accountable infrastructure development.