Study of The Problems of Construction Conditions of Contract for Public Works in Ethiopia

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Addis Ababa University


Construction industry in developing countries is reported to be insufficiently developed to meet the national development objectives and demands. Literatures show that construction projects are often subjected to long delays and increased costs. In these countries, the public sector is the main employer of the sector and most formally constituted contractors and consultants rely on the public sector for work. From the many other inter-related problems, use of inappropriate and inequitable contract conditions is one of the problems of the industry for lack of any appreciable development. The objective of this study is to identify drawbacks and shortcomings of the local construction conditions of contract adopted for public works in Ethiopia and to find out provisions that have negative implication for the development of the sector. The study focuses on provisions related to finance, risk allocation, claim substantiation & dispute settlement procedures, and the practice of contract administration. Questionnaire and interview survey together with desk study provide the main strategy for data collection methods. Samples for the study have been randomly selected from public employers, domestic consultants, and domestic contractors who are actively participating on public construction works. In this thesis, a descriptive statistical method has been used for the analysis of the data that provides a general overview of the results in that some kind of interpretations and discussions are made on the results. The study has determined the potential contract provisions that hinder the development of the sector and the findings of the study reveal that: the financial provisions adopted for public works are not suitable and need much further improvement; the risk allocation between public employers and domestic contractors need to address price escalation and unforeseeable shortage of materials fairly; the claim substantiation & dispute settlement procedure should adopt modern methods and practices; and contract administration practices & attitudes should be improved. This study further provides recommendations on how to improve the existing situations. Key Words: Contract Problems, Financial Contract Provisions, Risk Allocation, Claims, Disputes, Contract Administration



Contract Problems, Financial Contract Provisions, Risk Allocation, Claims, Disputes, Contract Administration