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The impact that project cost and project time overrun has on the financial performance of the operating unit: a case study of the Eskom KwaZulu-Natal Operating Unit.

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2017

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Abstract

High costs and poor time management is a common challenge faced by many organisations when executing projects. This result in project cost and project time overrun and in the end the organisation suffers great financial loss. Many organisations are focused on ensuring their projects are executed and completed within the allocated budget and set timelines. This study is aimed at establishing the factors that contribute to project cost and time overrun at Eskom KZN Operating Unit. Furthermore this study will look at the impact of project costs and time overrun on the financial performance of the Operating Unit. This process will assist the Unit by making recommendations on processes to be followed in order for projects to be completed within budget and on time. The research analysed the factors contributing to project cost and time overrun, provided an insight into the reasons behind it and explored possible ways to reduce it. The data was obtained through a questionnaire that was emailed to a population of 140, all of whom are employees at Eskom KZN Operating Unit. According to 77.9% of the respondents, design changes during the execution phase were the largest contributing factor to project cost and time overrun in the Operating Unit. The results indicated that a project manager must have knowledge and skills on decision making, planning, communication, time management and project execution for a project to succeed. It is recommended that a project schedule is created from the time a project is raised and maintained till the project is closed. The project manager must ensure that each activity in the project is identified with its costing and duration.

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Masters Degree. University of KwaZulu-Natal, Durban.

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