Determinant Factors Affecting Cost Overruns on Water/Sewerage Construction Projects: the Case of Oromia Water and Energy Bureau Projects
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Date
2023-03
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Addis Ababa University
Abstract
The construction industry in Ethiopia in general has been found to be among the main consumers of resources and energy.. Also the industry is known for carrying major infrastructure movement and accounts for major employment segment as a nation. However this massive industry has prominent problems that hinders its vibrant contribution and maintain its contribution to the society. One of the major problems the industry faces is cost overrun. It is very normal for most construction project to have cost higher than the expected budget of the project. This is one of the major project management aspects that contract administration is going through this days. Thus this study was conducted to identify the major causes of cost over run and rank their severity taking the case of Oromia Water and Energy bureau projects of water and sanitation construction works. The study used purposive sampling of taking samples of the major stakeholders of the project parties and study to the major cost overrun causes from their perspective. The project has taken samples of 60 sample representatives of major 3C (Client, consultant and Contractor) of the stakeholders involved in the project. Using the sampled 60 practitioners involved in the project, and the major factors sorted from other literature reviews, factors were sorted and ranked accordingly. The findings of this research indicate that this major 10 factors were indentified and ranked. These are underestimating time requirements, Poor project control (cost, schedule and quality), Contractual claim (extension of time), Delay in construction, Inadequate supply of raw materials and equipment by contractors, Delays between design and procurement phases, Lowest bidding procurement procedures, inflation, Design error and omissions and Inadequate preconstruction study. The ten top factors were the highest impacts on the performance of project cost overrun from the client’s, consultants’ and contractors’ perspective. In conclusion poor project and poor resource management were the significant factors for cost overrun in OWEB projects