Assessment of Conditions of Contract Problems in Ethiopian Construction Industry
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Date
2011-12
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Addis Ababa University
Abstract
Construction industry is a major player in economy of any countries by generating employment
and wealth to the nations through its forward and backward linkages with other sectors. However
many projects in developing countries experienced extremely high cost overrun, time slippage and
low quality. Problems of conditions of contract in the construction sector is one of the contributing
factor among other things. As a result domestic construction management and contract
administration practices lack the necessary quality to meet its standards.
In this respect, this study tries to identify shortfalls of the local construction conditions of contract
in Ethiopia and to find out provisions that have negative implication for the development of the
sector. The research focuses on provisions related to Engineer’s power, duty and responsibility;
price adjustment; termination; claim substantiation and dispute settlement procedures; conformity
of selected clauses with Ethiopian law; understandability of contract forms and the practice of
construction management in general and contract administration in particular.
The data collection method integrated questionnaire survey, interview and desk study. Samples for
the study have been randomly selected from a clustered group of public employers, domestic
consultants, and domestic contractors who are actively participating on construction works. In this
thesis, a descriptive and inferential statistical analysis method has been used. Interpretation and
discussions were made on the basis of results from the analysis.
The study covered some selected contract provisions that have an implication to deprive the
development of the construction sector. Accordingly the research comes up with the following
conclusions. To begin with the price adjustment clauses are not sufficient to compensate the
current soaring prices. Besides, termination is not exercised as per the contract provisions where as
claim substantiation and dispute resolution lack a balance of risk favoring the employer in most
cases. In addition, another finding reveal that the civil procedure code Art. 315(2) hinders
arbitration practices for administrative contracts. Some concepts such as experienced contractor
need to be expressed in a more clear and concise manner to reduce subjectivity. Furthermore, local
contract forms lack suitability to manage construction projects efficiently. The research finally
concludes that performance of the local construction sector, construction management and contract
administration practices do not meet the standards as stipulated in contract provisions. This study
further provides recommendations on how to improve the existing prevailing situations of the local
construction sector in general and construction management practices in particular.
Key Words: Claims, Conditions of Contract, Construction Industry, Construction Management,
Construction Contracts, Contracts, Contract Administration, Contract Forms, Dispute Resolution,
Price Adjustment, Termination
Description
Keywords
Claims, Conditions of Contract, Construction Industry, Construction Management, Construction Contracts, Contracts, Contract Administration, Contract Forms, Dispute Resolution, Price Adjustment, Termination