Forecasting of cost escalations in post disaster construction with special reference to tsunami rreconstruction in Sri Lanka

Abstract

Since 1999, Sri Lanka tends to be in an area prone to natural hazards. In the recent past, the biggest devastation took place on 26th December 2004 when enormous destruction to both life and property was caused by a Tsunami. It was a recorded turning point as awareness was generated on losses and its consequences to the construction industry. In this context it was thought appropriate to initiate this research to find out the effects of natural disasters on construction cost. After a comprehensive literature survey, it was observed that natural disasters have a direct relationship to construction cost increment in addition to increment in construct demand, the fuel price increment and inflation rate. A unit was proposed to quantify the natural disasters as a guide line for establishing the relationship between construction cost increment and natural disasters. The unit named “ND” and 1 ND = 10,000 damaged or destroyed houses . Statistical data analysis reveals that there is a positive and very strong relationship between natural disasters and construction cost increment (coefficient correlation is as high as 0.966). Another very significant issue is that when natural disasters take place in a particular year; the overall housing construction cost in the following year will be affected. This is because the overall reconstruction process and the time taken to constructing houses is very slow. The construction cost of houses has gone up rapidly during recent past and the trend will keep away the desire of many to own a house. The ad hoc natural disasters have contributed to skyrocketing of the construction cost of house building.