Factors of Housing Construction Project Termination: The Case of Ethiopian Sugar Industry Group
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Date
2026-10-01
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Addis Ababa University
Abstract
Despite playing a significant role in the economic development of a country, the construction industry is still facing challenges. As one of the undertakings in the construction industry, construction project is facing challenges. Construction project termination is one of the critical challenges affecting the construction industry efficiency and sustainability, often resulting in significant losses. Construction Project Termination is a serious challenge in developing economies, leading to significant financial losses, project delays and reduced organizational performance. However, there is little empirical evidence on the underlying factors of contract termination and its organizational impacts in the Ethiopian context. This study fills this gap by examining the factors of housing construction project termination and its implications on stakeholders. The research adopts a qualitative research methodology employing a case study type of qualitative research design. Primary data was gathered through semi-structured interviews with clients, contractors and consultant’s representative involved in selected terminated projects. Secondary data was obtained through review of six terminated construction project cases. Qualitative data is examined through thematic analysis using software atlas.ti. Triangulation of findings is made to ensure validity and reliability. The finding of the study reveal that contract termination is a multidimensional issue resulting from the cumulative effect of various interconnected factors, rather than being caused by a single isolated problem. The most dominant factors as per the finding of interview and case study was the delayed payments by the employer. Case study identified poor performance of the contractor as a major contributing factor, but stakeholder interviews prioritized it lower, highlighting differences in stakeholder perspectives. Also, escalation of construction material prices is recognized in both sources as a major financial pressure contributing to disputes and termination. Decision making problem of the employer and refusal for price adjustment by the employer is identified as a critical factor by the interviewee. The major impacts of termination on the client are delay of the public service and financial loss, whereas the identified major impacts of termination on the contractor are financial losses and reputational damage. While the application of qualitative approach as a beginner researcher presented challenges in terms of data analysis and interpretation, the study serves as an initial exploration of the issue and provides a foundational understanding for experienced researcher to further explore the findings of this research and refine the conclusions. To reduce the frequency of contract terminations, the study recommends improving financial management process, contractor selection processes, contract administration and decision-making processes, and mechanisms for institutional learning.
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Keywords
Contract termination, Factors, Organizational Impacts, Financial management, Contract administration