Cost Overrun and Financial Risk in Infrastructure Projects: An Overview

Cost overruns and financial risks are major challenges in infrastructure project management and frequently affect project performance, investment feasibility, and financial sustainability. This study aims to provide an overview of the major factors contributing to cost overruns and financial risks in infrastructure projects based on previous studies and current industry issues. The study uses a qualitative literature review approach by analyzing relevant literature related to construction management, project finance, and infrastructure development. The findings indicate that inadequate project planning, inaccurate cost estimation, design changes, project delays, cash flow instability, material price fluctuations, and weak financial governance are the dominant factors affecting project cost performance. In addition, the increasing adoption of digital technologies such as Building Information Modeling (BIM) is considered to have significant potential in improving cost control and reducing financial uncertainty. This study highlights the importance of integrating engineering management, financial planning, and risk management strategies to improve infrastructure project performance and sustainability.