Study of The Problems of Construction Conditions of Contract for Public Works in Ethiopia
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Date
2008-12
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Addis Ababa University
Abstract
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
Description
Keywords
Contract Problems, Financial Contract Provisions, Risk Allocation, Claims, Disputes, Contract Administration