Major construction projects globally are facing significant cost overruns and delivery claims exceeding a total value of 91 billion dollars and cumulative time extensions of 876 years, according to the sixth annual CRUX Insight report published by HKA.

The report analyzes 1,800 projects in 106 countries with a combined capital expenditure (CAPEX) value of 2.247 trillion US dollars, revealing the true financial cost and time lost due to disputed costs and overruns.

The data shows that disputed costs make up more than a third of the project's CAPEX (33.6%), on average, and claims for time extensions (EOT) also reflect extreme project difficulties, typically extending planned schedules by 67.1%.

Disputed costs averaged $100 million US dollars, more than a third of capital expenditure, and time extensions add almost 16 months or two-thirds to a typical program.

Three design-related causes – inaccurate, incomplete, and delayed designs – affected 44.8% of projects overall, more than scope changes at 38.8%. Contract interpretation disputes – affecting 19.8% of projects – were the other "top five" factor.

Just under 20% of projects suffered from poor contract management or administration (19.5%) or subcontractor and supplier interface issues (19.4%).

"Modern megaprojects are becoming increasingly complex, but the stark difficulty for the global construction and engineering industry is that the most frequent causes of claims and disputes are highly predictable and largely within the control of the contracting parties," said Renny Borhan, partner, and CEO of HKA.

There were regional differences, with design and labor deficiencies being a more significant factor in Europe and the Americas. Incorrect design topped the European rankings, disrupting nearly one in three projects (32.3%), and ranked second in America, where more than one in five projects were affected (20.4%).

Defective work was most common in European buildings, especially residential schemes (38.3%). In North America, design failures were generally more widespread in Canada (41.8%); however, cost and schedule overruns tended to be more extensive south of the border.