Study on Labor Based Contracts in Ethiopian Construction Industry; The Case of BC3 And Above Selected Building Contractors Around Addis Ababa
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Date
2019-09
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Addis Ababa University
Abstract
The construction industry in Ethiopia is faced with a lot of challenges ranging from project
inception to hand over one of the main challenge in the execution of construction projects is
construction method of delivery and an ever increasing project undertakings of labor-only
contract and direct labor contract. This study therefore compares the performance of labor-only
and directly employed contracts in Addis Ababa .Present construction projects in general are
becoming highly capital intensive.
In recent years, the application of labor-based methods with employing equipment’s in building
construction has been initiated due to its assumed economic advantages for owners. However,
there are inevitable doubts, especially among engineers and project planners, as to the feasibility
of the labor-based methods. Whether it would be possible to apply these methods without
sacrificing quality standards, what effect they might have on the pace of construction, what
additional strains they might place on scarce managerial resources, and of course, what the
comparative cost would be.
This labor based construction approach gained popularity late last century because it was seen as
a clever way to cut costs. Many property owners naively believed that project management was a
straightforward exercise they could do in their spare time, and this enabled them to avoid paying
the margin to the builder that he would otherwise receive for performing this function.
The study focused on Addis Ababa region labor based construction projects and contracts, for
this study questioners and interviews were conducted as well as results and discussions based on
the scientific analysis were drawn based on the analysis and observed data.
The results show that, therefore, recommends that the use of the labor-only procurement system
should be encouraged among construction participants trying to achieve small construction
projects within the available budget. However, care must be taken while adopting this
procurement option for high capital and very technical projects. Because these projects might
need well skilled man power, Since Controlling, quality of construction materials and risk
associated with the construction projects is very hard to manage for large projects.
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Keywords
Labor base contract, project management, Outsourcing, Subcontracting, Employment, Regulation, ILO, WB, AD, AAIIDCP