Assessment on Prolongation Cost Estimation Practice for Road Construction Projects in Ethiopia
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Date
2014-10
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Addis Ababa University
Abstract
Road construction projects in Ethiopia are used to encounter considerable time and cost overruns
when compared with their planned values. And, one of the main factors for cost overrun is found
to be prolongation cost. Besides, in handling the prolongation cost claim, it can remain unsettled
due to the calculation and presentation of damages, even after entitlement to recover additional
compensation.
Having this, the research assess the problems in relation to justifying time delay, data recording
and documentations, suitability of conditions of contract and methods of estimation in
prolongation cost claim administration. So that; it identifies and understand gaps (problems and
challenges) in estimating prolongation cost in road construction projects.
To address the problems, a questionnaire was designed and distributed to contractors, consultants
and employers participating in road construction sector. To supplement the questionnaire, a desk
study was conducted on prolongation cost claim documents.
Consequently; analysis of data are processed using simple statistical approach, examining,
tabulating and categorizing based on the chosen measurement scale. And, Likert’s scale was used
to gauge the potential factors, together with, Kendall coefficient of concordance (W) to test
correlation among the parties.
As a result, the findings show that; incomplete recording and documentation, unclear estimation
methods and contractual provision are the main problems in justifying time delay and estimation
of prolongation cost compensation. The practice of data collection and documentation becomes a
problem due to lack of competent and experienced professionals and lack of awareness.
Estimation technique currently used is found out to be actual cost records. Where, there is lack of
documents to estimate head office overhead, the Direct Method is found to be suitable with %age
mark up for HOOH set in the contract for current road construction projects situation in Ethiopia.
PPA condition of contract needs improvement to handle prolongation cost estimation and claim,
while FIDIC condition of contract is known to be good to administer prolongation cost issues.
So that the research implies the administration practice in prolongation cost claim needs a look in
relation to data collection and documentation, local conditions of contract and adopt suitable
estimation formula that harmonize the current situation.
Key Words: Prolongation cost, Acceleration, Inefficiency and Conditions of Contract
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Keywords
Prolongation cost, Acceleration, Inefficiency and Conditions of Contract