Empirical Analysis of the Determinants of Construction Cost Overrun in Federal Road Projects in Nigeria

Cost overrun in federal road construction remains a significant drain on Nigeria's public infrastructure budget. This study presents an empirical analysis of the determinants of cost overrun in federal road projects across the six geopolitical zones of Nigeria. Using a positivist research philosophy and cross-sectional survey design, data were gathered from 215 quantity surveyors, road engineers, and project directors involved in federal highway projects between 2019 and 2024. Multiple regression analysis and structural equation modelling were applied to identify and quantify the relative influence of explanatory variables on cost overrun magnitude. Findings reveal that scope changes after contract award, foreign exchange volatility affecting imported equipment, contractor financial incapacity, and inadequate geotechnical investigation are the four strongest determinants, collectively explaining 61.4% of cost overrun variance. The study further establishes that projects in conflict-affected zones of the North East and North West record significantly higher overrun rates, controlling for other variables. Unlike previous descriptive studies on the subject, this research employs a national multizone dataset and structural modelling, enabling causal inferences beyond correlation. Policy implications include reform of the FERMA project approval framework, mandatory contractor financial prequalification standards, and adoption of early contractor involvement procurement for large road packages. This study makes an original empirical contribution to construction cost management scholarship in the Nigerian public infrastructure context. Keywords: cost overrun, federal road projects, structural equation modelling, determinants, Nigeria