Claims in Ethiopian Construction Industry
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Date
2003-02
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Addis Ababa University
Abstract
Claim in general term is defined as a demand or request for some thing, which one has right to
have. In the context of this thesis claim means a demand by a contractor for extension of time
or for an extra payment of an item or items of work carried out by him on behave of employer
for which a readily identifiable amount can not be ascertained under the term of contract. The
right of entitlement for a contractor to his intention depends on the provision of condition of
contract on which the contracting parties depend for their agreement. These conditions could
be FIDIC, BaTCoDA, ICE or others. The conditions of contract provide specific clauses for
making and settlement of claims for extra cost and for grant of extension of time.
In Ethiopian construction industry, claims are normally inevitable because of the traditional
project procurement system widely practiced in the country. Moreover, majority of local
construction organizations manage their construction projects by employing engineers who
have little or no training on construction project management. This results in improper claim
administration. In addition to the complexity of projects being undertaken, these days, the
type of project procurement system and improper claim administration raises more problems.
For instance, among 15 completed projects studied during the thesis work, project delay up to
500 % of its contractual time and cost increase of greater than 80 % of its contractual sum
were encountered. The main causes for these problems are thought to be the improper project
management and claim administration.
Therefore, the research is aimed to describe the general nature of claims and to identify the
type of claims widely raised by local contractors.
In addition the thesis is expected to create awareness with the major construction parties i.e.
contractors, owners and consultants about the level and significance of claims in Ethiopian
construction industry. Even though, there are many bases on which claims may be raised
legally, claims that are based on contractual provisions are emphasized in this research work.
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Contractual claims in the industry can be raised due to variations, breach of contract from
contractor(s) or employer(s) side, delay/disruption and third party.
The thesis is mainly devoted to identify the main causes of claims in Ethiopian construction
industry, among the aforesaid types of claims. For this purpose different data collection
techniques like constructive interviewing and questionnaires were designed and utilized.
Conclusions and recommendations are forwarded based upon statistical analysis of data
collected during the study period.
For the sake of comparisons of the experience of local contractors and foreign (international)
contractors in processing claims, case studies were conducted.
The cases are: Lalibela to Sekota rural road project undertaken by local contractor called SUR
construction Share Company, Sodao to Chida access road project undertaken by international
(foreign) contractor called Salini construttori S.P.A and the 500 special housing project
undertaken by international (foreign) contractor called C.M.C-di- Ravenna. The detail
analyses of the case studies along with copies of questionnaires are annexed in the appendix
of the thesis.
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Industry