MANAGING COST ESCALATION. THE CASE OF GRADE ONE MARINE SHIPYARD

Abstract

This research is aimed at determining the factors that lead towards escalation of costs in a local shipyard, namely Grade One Marine Shipyard (GOMS) of Lumut, Perak. The study examined the extent to provide improvement plans to help mitigate cost escalations. This research is however limited within the scope of the particular shipyard. Constraints in collecting data was the primary reason to limit the research to only one shipyard. The data would have been different from other local shipyards due to each shipyard’s uniqueness. The researcher distributed a total of 30 questionnaires to the workers of GOMS. The questions were divided into four sections that constituted of the demographical background, management of shipbuilding, cost and profit, and safety at workplace. The findings of the research indicate material procurement as the main contributory factor to cost escalation in the shipbuilding process of the shipyard. The facilities for the shipbuilding process, such as related machineries and equipment, have also been identified as a factor that leads towards overall cost escalation.