Construction cost overrun is a major problem faced by the construction industry globally and it needsserious attention to alleviate. Cost overrun is a result of one or combination of several causes which are veryimportant to identify for effective cost performance. Current methodologies focusing on the identification of causesdoes not give the insight of underlying relationships between the causes. Hence, this study focused on studying thefundamental relationship between factors of cost overrun using Partial Least Square-SEM method. This is anadvanced multivariate analysis technique for estimating and analyzing causal relationships in path models. Datacollection was carried out with structured questionnaire survey amongst contractors involving in large constructionprojects in Malaysia. Hierarchal model for assessing causative factors and cost overrun was developed and analyzedusing Smart PLS software of SEM and it was found that contractor's site management related factors had strongeffect on cost overrun. The calculated Global Fit (GoF) Index of model was 0.405, which indicates that thedeveloped model had substantial explaining power to represent the Malaysia construction industry focused of largeconstruction projects. Hence, improvement in contractor's site management is the critical requirement to controlconstruction cost overrun.Keywords: Construction
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