Study on Potential Cost Reduction Mechanisms in 20/80 Condominium Building Projects in Addis Ababa

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Date

2018-10

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Publisher

AAU

Abstract

In construction industry the main objective of project control is to ensure that projects are completed on time, within budget and quality. In Ethiopia, building construction industry there are many problems associated with quality, time and cost of project. Cost is the main concern for contracting parties and end user. Ethiopian condominium housing program is designed with the objective of reducing the overall cost of buildings. However, there are arguments on condominium housing projects being implemented whether it addresses the desired cost reduction or not. On the other hand, reduction of cost of construction is very important for all contracting parties and end user. The main objective of this study is to investigate potential cost reduction mechanisms on 20/80 condominium building construction sites. The study was conducted by selecting two 20/80 condominium building project sites and it presents the current practices of contractors, consultants and client, who are working in 20/80 condominium building projects, related with cost of project and some issues related to potential cost reduction mechanisms. The practice of 54 general and building contractors, 8 consultants and 8 client representatives were investigated via site observation and interviews. Furthermore, the existing practices related to potential cost reduction mechanisms and cost influencing factors were assessed as part of fulfilling the objectives of this thesis. The result of study showed that delay of construction activities, market conditions, method of procurement, site overheads, productivity of labor, resource and service availability, labor cost, project program, the nature of the site and cost of design are the major ten factors that affect cost of project. In addition, the study indicated that more than 50% of the contractors were not checking their performance regularly and frequently. The case study results on the construction sites also indicated that most of the contractors have poor materials handling and management problems, do not apply metal shoring and scaffolding and ready-mix concrete. Furthermore, most of the contractors use poor quality formworks and the partially prefabricated building components were of poor quality and are exposed to wastage. On the contrary the study indicated that, checking performance daily and regularly, good materials handling and management practice, using prefabricated building components and using metal shoring and scaffoldings instead of eucalyptus wood shoring and scaffoldings can reduce construction time and unnecessary expenses. In addition, using ready mix concrete reduces construction time and wastage of concrete making materials and improves quality of concrete, which as a result reduces construction project cost. Furthermore, constructing by using good quality formworks will make the concrete to have good surface finish which as result reduces cement plastering and cost of project.

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Keywords

Cost, Cost Influencing Factors, Potential Cost Reduction Mechanisms

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