Comparative analysis of cost performance in contracted projects with internally done projects in Tanzania: the case of Tanzania Electric Supply Company Limited

Projects within TANESCO can either be executed internally or by contractors. A target of zero cost development in projects has been set by TANESCO as the performance measure. It was observed that in TANESCO there is no clear understanding in cost management, especially between projects which are contracted and those internally done. According to project completion reports a number of projects done within TANESCO have indicated to exceed the budget while others have performed below the budget. This dissertation aims at comparing the project cost performances between contracted and internally done projects within TANESCO in terms of mean cost development and to provide recommendations to TANESCO for improving cost performance in order to meet a target. Project cost data from 75 projects, consisting of 32 contracted projects and 43 internally done projects were collected and analysed using SPSS tools. The findings revealed that contracted projects performs within the targets set by TANESCO, while the mean cost development for internally done projects is significantly less than the set target which imply cost overestimation. Recommendations were made for TANESCO to improve project cost performance include; advocate the practice of ex-post evaluation, conduct capacity building on project cost management to staff involved in projects, formulate stringent policy for reallocation of funds budgeted for projects, and use appropriate tools and techniques in project cost management.