Assessment of Cost Influences in Rail Projects from Contractor's Perspectives


  • Mohamad Zahierruden Ismail Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, 81310 UTM Johor Bahru, Johor
  • Zuhaili Mohamad Ramly Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, 81310 UTM Johor Bahru, Johor
  • Zafira Nadia Maaz Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, 81310 UTM Johor Bahru, Johor
  • Farah Nadiah Abdul Rahim Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, 81310 UTM Johor Bahru, Johor



Construction Project Management, Construction Cost Management, Rail Projects, Structural Equation Modelling.


Rail transportation had been receiving more attention in the Government’s effort to enhance the Malaysian economy internationally. Nevertheless, rail projects involve various stakeholders, massive budgets and are susceptible to cost overrun. This paper aims to evaluate the cost influences concerned with rail projects in a developing nation from contractors’ perspectives. The existing studies lack the consideration of the correlation and relationship between the cost influences, which this paper emphasizes. The data collection was performed by distributing questionnaires to 200 cost managers which are quantity surveyors, project managers, and contract executives across the rail projects in Malaysia. The data analysis uses Statistical Package for Social Sciences Version 27 (SPSS V27) and Structural Equation Modelling (SEM). Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy showed appropriate internal consistency of the research instrument, whereas the Confirmatory Factor Analysis (CFA) showed acceptable Goodness-of-Fit Indices (GFI) within the constructs of the structural model. The SEM calibration resulted in 23 significant cost influences which were clustered into five groups of cost influences. Each of the five groups is associated with different parties in construction projects. A notable causative direction was observed in the relationship between the cost influences. Each cost influence can be connected to each project phase based on the PMBOK Guide. This study adds to the various cost management research along the project management of rail construction. It is able to contribute to the policymakers and consultants in strategizing their cost management plans which is crucial, especially in developing countries such as Malaysia. Emphasizing the critical particulars of cost management in rail projects, this paper also delivers its finding based on stakeholder and system aspects in relation to cost management, which can be referred to by any developing country.


Andrić, J. M., Wang, J., & Zhong, R. (2019). Identifying the critical risks in railway projects based on fuzzy and sensitivity analysis: A case study of Belt and Road Projects. Sustainability (Switzerland), 11(5).

Cantarelli, C. C., Flyvbjerg, B., & Buhl, S. L. (2012). Geographical Variation in Project Cost Performance: The Netherlands Versus Worldwide. Journal of Transport Geography, 24: 324–331.

Chen, S., Sutan, R., & Hisham, J. (2018). Trip characteristics as the determinants of intention to shift to rail transport among private motor vehicle users in Kuala Lumpur , Malaysia. Sustainable Cities and Society, 36(November 2017): 319 326.

Cho, E., & Kim, S. (2015). Cronbach’s Coefficient Alpha: Well Known but Poorly Understood. Organizational Research Methods, 18(2): 207–230.

Cui, C., Han, X., Zhou, Q., Xu, M., Xia, B., Skitmore, M., & Liu, Y. (2022). Impact of passengers’ perceptions of social responsibility activities on the efficacy of PPP urban rail transit projects. Cities, 130(August), 103987.

Fariq, N., & Ab Rani, N. I. (2020). Cost Risk Impact for Railway Construction Project. International Graduate Conference on Engineering, Science and Humanities (IGCESH) 2020, August, 5–9.

Flyvbjerg, B., Ansar, A., Budzier, A., Buhl, S., Cantarelli, C., Garbuio, M., Glenting, C., Holm, M. S., Lovallo, D., Lunn, D., Molin, E., Rønnest, A., Stewart, A., & van Wee, B. (2018). Five Things You Should Know About Cost Overrun. Transportation Research Part A: Policy and Practice, 118(July): 174–190.

Flyvbjerg, B., Holm, M. K. S., & Holm, M. K. S. (2004). What Causes Cost Overrun in Transport Infrastructure Projects ? 24(1): 3–18.

Hair, J. F., Babin, B. J., & Krey, N. (2017). Covariance-Based Structural Equation Modeling in the Journal of Advertising: Review and Recommendations. Rohrer College of Business Faculty Scholarship.

Hermida, R. (2015). The problem of allowing correlated errors in structural equation modeling: concerns and considerations. Computational Methods in Social Sciences, 3(1): 5–17.

Hildreth, L. (2013). Residual Analysis for Structural Equation Modeling. In Graduate Theses and Dissertations. Iowa State University Capstones, Theses and Dissertations.

Hwang, B. G., Shan, M., Zhu, L., & Lim, W. C. (2020). Cost control in megaprojects: efficacy, tools and techniques, key knowledge areas and project comparisons. International Journal of Construction Management, 20(5): 437–449.

Invernizzi, D. C., Locatelli, G., & Brookes, N. J. (2017). Cost overruns - Helping to define what they really mean. Proceedings of the Institution of Civil Engineers: Civil Engineering, 171(2): 85–90.

Ismail, M. Z., Ramly, Z. M., & Hamid, R. A. (2021). Systematic review of cost overrun research in the developed and developing countries. International Journal of Sustainable Construction Engineering and Technology, 12(1): 196–211.

Jaafar, A. R. (2018). Malaysia’s Road Infrasture Development. The Daily Engineering & Construction News, 3.

Kline, R. B. (2016). Principles and Practice ofStructural Equation Modeling (4th Edition). The Guilford Press.

Lee Yuk, P. (2009, November 6). RM6bil Ipoh-Rawang track plan has cost overrun reaching RM1.14bil. The Star.

Liu, S., Yao, E., & Yamamoto, T. (2018). Does Urban Rail Transit Discourage People from Owning and Using Cars? Evidence from Beijing, China. Journal of Advanced Transportation, 2018.

Love, P. E. D., Ahiaga-Dagbui, D. D., & Irani, Z. (2016). Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation. Transportation Research Part A: Policy and Practice, 92: 184–194.

Love, P. E. D., Zhou, J., Edwards, D. J., Irani, Z., & Sing, C. P. (2017). Off The Rails: The Cost Performance of Infrastructure Rail Projects. Transportation Research Part A: Policy and Practice, 99: 14–29.

Massey, A., & Miller, S. J. (2016). Tests of Hypotheses Using Statistics. Mathematics Department, Brown University, Providence, RI 2912, 1–32.

Mesbah, M., Sahraei, M., Soltanpour, A., & Habibian, M. (2022). Perceived service quality based on passenger and trip characteristics: A structural equation modeling approach. Journal of Rail Transport Planning and Management, 23(August 2021): 100340.

Ministry of Economic Affairs. (2018). Mid-term Review of the Eleventh Malaysia Plan 2016-2020.

Narayanan, S., Kure, A. M., & Palaniappan, S. (2019). Study on Time and Cost Overruns in Mega Infrastructure Projects in India. Journal of The Institution of Engineers (India): Series A, 100(1): 139–145.

Niu, Y., Li, H., Ye, K., Mahmoudi, A., & Deng, X. (2022). Determinants of Coopetition Relationships in International Joint Ventures for High-Speed Rail Projects. KSCE Journal of Civil Engineering, 26(5): 2036–2057.

Olawale, Y. A., & Sun, M. (2010). Cost and Time Control of Construction Projects: Inhibiting Factors and Mitigating Measures in Practice. International Journal of Project Management, 28(5): 509–526.

Olawale, Y., & Sun, M. (2015). Construction project control in the UK: Current practice, existing problems and recommendations for future improvement. International Journal of Project Management, 33(3): 623–637.

Park, Y. I., & Papadopoulou, T. C. (2012). Causes of Cost Overruns in Transport Infrastructure Projects in Asia: Their Significance and Relationship with Project Size. Built Environment Project and Asset Management, 2(2): 195–216.

PMBOK Guide. (2021). A Guide to the Project Management Body of Knowledge (the PMBOK Guide) (6th ed.). Project Management Institute.

Rahman, N. A. A., & Abdullah, Y. A. (2016). Theorizing the Concept of Urban Public Transportation Institutional Framework in Malaysia. MATEC Web of Conferences, 66: 1–6.

Sadullah, M., Ghazali, M., & Rashid, A. (2018). Critical success factors in a public–private partnership highway project in Malaysia: Ampang–Kuala Lumpur elevated highway. Proceedings of Institution of Civil Engineers: Management, Procurement and Law, 170(6): 234–242.

Shaaban, K., & Hassan, H. M. (2014). Modeling significant factors affecting Commuters’ perspectives and propensity to use the new proposed metro service in Doha. Canadian Journal of Civil Engineering, 41(12): 1054–1064.

Shehu, Z., Endut, I. R., Akintoye, A., & Holt, G. D. (2014). Cost overrun in the Malaysian construction industry projects: A deeper insight. International Journal of Project Management, 32(8): 1471–1480.

Tabachnick, B., Fidell, L., & Ullman, J. (2019). Using multivariate statistics. MA: Pearson.

Tee Lin, S. (2012). PDP to bear MRT cost overruns of over 15%. The Star.

The Sun Daily. (2015). AG’s Report 2015: ERL Extension from KLIA to KLIA2 incurred a RM29m budget overrun.

Ullah, K., Abdullah, A. H., Nagapan, S., Suhoo, S., & Khan, M. S. (2017). Theoretical Framework of the Causes of Construction Time and Cost Overruns. IOP Conference Series: Materials Science and Engineering, 271(1).

Vaske, J. J., Beaman, J., & Sponarski, C. C. (2017). Rethinking Internal Consistency in Cronbach’s Alpha. Leisure Sciences, 39(2): 163–173.

Yan, H. ., H. E, L., C., G., F., Z., & W., T. (2019). Critical success criteria for programs in China: Construction companies’ per- spectives. Journal of Management Engineering, 35 (1): 04. /(ASCE)ME.1943-5479.0000659.




How to Cite

Ismail, M. Z., Mohamad Ramly, Z., Maaz, Z. N., & Abdul Rahim, F. N. (2023). Assessment of Cost Influences in Rail Projects from Contractor’s Perspectives. International Journal of Built Environment and Sustainability, 11(1), 75–84.