**1. Introduction**

The main evaluation dimension of the successful execution of construction projects is to examine the achievement of project objectives (time, cost, and quality) [1–3]. Previous research has elicited that construction projects experience underachievement in both developed and developing countries as a result of completion delays and cost-overruns, with resultant negative impacts experienced by all involved parties, including financial loss [4–6].

Project delay has been defined as 'the time overrun either beyond the completion date specified in the contract and the parties agreed upon for the delivery of the project, or a part of the project' [7,8]. The liability of the contract parties for construction projects delays can be classified into excusable with compensation delays, excusable without compensation delays, non-excusable delays or contractor responsible, and concurrent delays [9,10]. Construction cost overruns is the actual/final costs minus those estimated, presented as a percentage of the estimated costs [11].

Completion delays and cost-overruns typically stem from a multitude of severe risks and uncertainties [12]. Whilst an entire host of studies and research has sought to identify

**Citation:** Alshihri, S.; Al-Gahtani, K.; Almohsen, A. Risk Factors That Lead to Time and Cost Overruns of Building Projects in Saudi Arabia. *Buildings* **2022**, *12*, 902. https://doi.org/10.3390/ buildings12070902

Academic Editors: Srinath Perera, Albert P. C. Chan, Dilanthi Amaratunga, Makarand Hastak, Patrizia Lombardi, Sepani Senaratne, Xiaohua Jin and Anil Sawhney

Received: 21 May 2022 Accepted: 19 June 2022 Published: 25 June 2022

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

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risk factors in the global construction industry, they have concurred that the risk factors are different from one project to another and also depend on the country, procurement route (i.e., PPP, design-bid-build, and design and build), and the type of construction project. In addition, the top causes of cost-overruns are subject to change over time (in each decade); therefore, knowledge of them needs to be kept up to date in order to manage complexity effectively so as to avoid or minimise risks [12]. There are four different categories of construction project, namely building construction, heavy/civil construction, industrial construction, and residential construction, with the foremost accounting for the highest segment at 35–40% of construction projects [13]. Therefore, it is important to limit identifying the risk factors to a certain category of construction project that experiences almost the same issues, challenges, and risks. However, there is a lack of research on identifying the risks and categorising them according to different types of projects [14]. Recent studies focused on specific types of projects such as oil and gas [15,16], manufacturing and buildings [17], and road projects [18,19], there is a need to increase the research in identifying the risk factors in different projects types and to assess the changes in risk factors importance and probability [20]. It is important to address this research gap, because these can have potentially serious consequences, such as cost and time overruns, and can add additional pressure to construction projects [21,22]. In this context, this study addresses the following research question.

RQ: What are the risk factors adversely affecting time and cost of execution of building construction projects?

Thus, this study addresses this research gap by identifying the influential risk factors that lead to completion delay and cost overrun specific to government-funded building construction projects (i.e., government buildings, hospitals, schools, and universities) in Saudi Arabia, all of which have been subjected to a traditional type of procurement method (Standard Public Works Contract). Accordingly, the following research objectives are outlined to address the RQ:


Addressing the RQ and the above-listed objectives could achieve interesting findings which can contribute to the literature in providing the risk factors by project type, i.e., government-funded building construction projects. It can also help decision makers in better understanding the risks in construction industry during COVID-19 in order to better formulate policies and decision making with respect to Vision 2030 objectives. Furthermore, the findings can aid the managers of building construction projects in designing effective risk management strategies.

#### **2. Literature Review**

#### *2.1. Overview of Construction Industry*

Construction, in simple terms, is the process of constructing an infrastructure that requires collaboration of multiple disciplines, including architectural design management, financial and legal management, engineering and technology, logistics and procurement, sustainability, risk management, project management, etc. Types of construction can be broadly classified into industry-specific, building, and residential constructions [23]. The construction industry is considered to be one of the sustainable and continuous businesses that has been recording steady growth in recent decades. However, there are various risk factors that influence this industry, such as geopolitics, economy, resources, technology, etc. The global construction output growth in 2019 reduced to 2.7%, which was less than 2018, and such deterioration was observed in many developing countries, especially the Middle

East, while developed countries, such as the USA and Australia, have struggled to maintain growth momentum [24].

Various findings have been identified in different studies [25–28], reflecting the complexity and different influencing factors in the construction industry. It has been estimated that there will be 85% growth (USD 15.5 trillion) in construction output by 2030 (3.9% growth per annuum), out of which 57% of growth was contributed by a developed country, the US, and developing countries including India and China [26]. Faster growth is predicted in the USA (5% per annuum) compared to China, followed by India and Japan. In a report by Robinson [27], the construction market is predicted to grow by USD 8 trillion by 2030. A KPMG [25] survey revealed that only 20% of the global constructive companies were innovative, 60% were followers, and 20% were behind the curve. In addition, disparities were observed in strategies, practices, and performance of the companies', reflecting gaps in the process. Deloitte identified seven factors that can have an impact on growth in construction industry, including the following: innovation, competitive dynamics and margin improvement; internationalism, compliance, regulation, and transparency; and sustainability [28]. The findings from these studies indicate the complexity in construction industries, with there being various influencing factors, including geopolitics, environmental, technology, strategies, innovation, etc. Furthermore, the COVID-19 impact has significantly affected the construction industry, with many companies facing liquidity problems. Reduced spending and consumption capacity, operating restrictions and fear of contagion, supply chain disruptions, and lack of labour have all contributed to the impact, which have affected the sustainability of many SMEs across the globe [29]. A recent report on the construction industry predicted that smaller businesses and sub-contractors may fail rapidly; contract management can be a major issue as customers may seek to terminate or renegotiate contracts; internationalisation may become less viable as companies may reconsider the regions in which they want to operate in [30].
