Determinants of Infrastructure Project Delays and Cost Escalations: The Cases of Road and Railway Construction Projects in Ethiopia
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Date
2018-06
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Addis Ababa University
Abstract
Construction of road and rail projects to enhance social and economic activities of the country.
The number of road and rail construction projects in the country increasing time to time. These
construction projects achieve or failure of objectives measured by whether successfully completed
on time and cost or not. However, most of federal road and rail construction projects in the country
exposed to time and cost overruns. It becomes difficult to complete projects on schedule and
allocated budget. To fill the gap, the study on causes of time and cost overrun was conducted.
Questionnaire surveys together with project completion report were used. A total of 73 questionnaires
from owner, consultants and contractors were collected and secondary data of 30 (25
roads and 5 rails) construction projects completed since 2014 in federal road and rail agencies
were investigated. From the analysis it was found that 88% of road and 100% rail construction
projects suffered time performance, and 80% of road and 100% of rail projects also cost overruns.
The key time and cost overrun determinants ranked by respondents conducted through questionnaire
and interview managers and engineers who have experience of delay construction
projects from clients, contractors and consultants in purposive sampling method. From these identified
and ranked 38 determinants five top extension of time and 4 escalation of cost are selected
for discussion. Factors which affected time performance were: incomplete study prior to project
approval, poor project management and coordination, right of way issues, inaccurate forecasting
of schedule, overconfidence and interest of project stakeholders. Whereas the extremely significant
factors affecting cost performance were; inflation of material cost, scope change with change
order, incomplete study project approval, poor bill of quantity and design, and poor project performance
monitoring. Cost and time overruns of Federal road and rail projects have affected key
stakeholders in particularly and on the economy of the country generally. Time and cost overrun
added in estimated time and cost over and above initial agreed upon on set, this damages client
and contractor reputation, loss of profit and investment opportunities, inability to deliver value of
money and inefficient use of time, disposing business activities and create burden for taxpayers.
This paper finally came up with solutions towards reducing the impact of delays and cost overruns
on federal road and rail projects in Ethiopia.
Description
A thesis submitted to the Department of Public Administration and Development Management of Addis Ababa University
in partial fulfillment of the requirements for the Degree of Masters in Public Management and Policy (MPMP)
Keywords
Actual completion date and cost, project stakeholders, Time and cost overruns