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How can construction projects be effectively managed to avoid going over budget, especially considering the uncertainties such as unforeseen conditions underground during excavation? For those who ha

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Diana Keesiga Kampala, 102, Uganda
Lessons learned executing projects on budget.

How can construction projects be effectively managed to avoid going over budget, especially considering the uncertainties such as unforeseen conditions underground during excavation? For those who have successfully managed contracts within the budget constraints, what strategies or practices did you employ? Did you incorporate a contingency sum?
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Thomas Walenta Global Project Economy Expert Hackenheim, Germany
Diana,

think budget overruns are very common, especially in construction.
So I would not try to avoid them but develop strategies to deal with them.
Good transparent risk management is such a strategy. If you can show the risks and even estimate the cost related to it (potential damage, mitigation cost), you already prepared stakeholders. Underground conditions are such risks.
Another strategy would be to secure additional funding before it is needed. Then you are in control.

In the end, your job is to make stakeholders feel safe and secure. Transparency and being in control will contribute to trust in you.
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1 reply by Diana Keesiga
Dec 11, 2023 11:20 AM
Diana Keesiga
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Great! Thank you so much for this!
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Diana -

Early monitoring and control are important, especially because CPI won't change significantly on large capital projects once you have spent about 20% of your budget.

Exploring areas of uncertainty as proactively as possible and/or tackling the riskiest portions of the work up front can also reduce cost variances.

Kiron
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1 reply by Diana Keesiga
Dec 11, 2023 11:22 AM
Diana Keesiga
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Thank you for you thoughts and guidance. Much appreciated.
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Diana Keesiga Kampala, 102, Uganda
Dec 10, 2023 5:34 AM
Replying to Thomas Walenta
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Diana,

think budget overruns are very common, especially in construction.
So I would not try to avoid them but develop strategies to deal with them.
Good transparent risk management is such a strategy. If you can show the risks and even estimate the cost related to it (potential damage, mitigation cost), you already prepared stakeholders. Underground conditions are such risks.
Another strategy would be to secure additional funding before it is needed. Then you are in control.

In the end, your job is to make stakeholders feel safe and secure. Transparency and being in control will contribute to trust in you.
Great! Thank you so much for this!
avatar
Diana Keesiga Kampala, 102, Uganda
Dec 10, 2023 12:51 PM
Replying to Kiron Bondale
...
Diana -

Early monitoring and control are important, especially because CPI won't change significantly on large capital projects once you have spent about 20% of your budget.

Exploring areas of uncertainty as proactively as possible and/or tackling the riskiest portions of the work up front can also reduce cost variances.

Kiron
Thank you for you thoughts and guidance. Much appreciated.

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