Determination of the Contingency Values for the Construction of Water Treatment Plant Projects in Egypt

Abstract

All phases of construction projects include many risks. Those risks lead to serious cost escalation where Water Treatment Plant projects are not an exception. The Egyptian government spent around 4.44 billion Egyptian pounds on the water and sewer systems in 2014. The amount spent on Water Treatment Plants was around 35% of this sum (1.5 billion Egyptian). Water Treatment Plant Projects have significant importance due to their huge budget, tight schedules and obstacles. This leads to high level of risks in these projects. Therefore, the purpose of cost Contingency is to generate a reserve fund that is adequate to cover the ingrained risks in the project’s total budget and completion duration. Its presence removes the negative impact of unforeseen event.