Assessment of Factors Determining Textile Project Distress: The case of Else Addis Industrial plc
No Thumbnail Available
Date
2018-08-26
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
This study investigated the determining factors that contribute for project distressed and the
measure taken to recover the project from failing. The study aimed at examining factors affecting
project performance that related with project distress, investigating the contributed factor from
project management and project financer, Identifying rehabilitation mechanisms to reduce the
level of distress and enhance project recovery. The study adopted a descriptive research method.
The descriptive research design helped in observing the relationship between project
management specific factors and prevalence of default on loan recovery ; project financer
specific factor and the prevalence of default on loan recovery; external factors and the
prevalence of default on loan recovery ; default on loan recovery and project distress. The study
utilized the interview to obtain relevant information from Elsi Addis Industrial plc and
Development Bank of Ethiopia representatives. The sampling technique used was judgmental
sampling technique which endeavors to get an example of components in light of the judgment of
the researcher. The data from the interviews were analyzed using a qualitative approach. The
study revealed that lack of prudent due diligence assessment , weak project appraisal practice
and owners equity requirements, poor communication management , delay on disbursement of
the loan , Stringent procedure of the Bank in utilization of loan were from Financer specific
whereas the project management specific include factors related with triple constraints
connected with cost overrun , schedule delay , scope creep as well as project sponsors ethical
issues , and poor communication culture are categorized as project management specific . As
external factor Currency fluctuations, Environmental conditions, Customers and Suppliers issues
are the most determinant factors for Elsi Addis Industrial project distress. The study concludes
that defaulting on loan repayment negatively affects a project successful performance , it is
recommended that the management of financer banks should develop strategies to reduce level
of default on loan recovery and project distress by performing prudent project sponsors
identification on large project credit financing .
Description
Keywords
Distressed project, Else Addis Industrial Development Plc, Textile industry, Credit financing