Impact of Cost Fluctuation of Major Consruction Materials on The Project Cost in The Case of Ethiopian Roads Administration
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Date
2024-12-19
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AAU
Abstract
The aim of this study was to ascertain the potential impact of large construction material pricing fluctuations on the projects of the Ethiopian Roads Administration (ERA). Both qualitative and quantitative data were collected using a descriptive and explanatory study technique. Primary data were collected using questionnaires and interview guideline, while secondary data were obtained from eight projects with five years of data (60 months) via contractor's payment certificates and progress reports. The respondents were Ethiopian Road Administration Engineers, Consultants, and Contractors working on the eight projects listed. Only 60 of the 70 questionnaires that were distributed for this study's study region were accurately filled out and returned, yielding an 86% response rate. While quantitative data was analysed using statistics analysis, which included computations of mean and percentage as well as inferential analysis (multivariate as well as basic regression and correlation processes), qualitative data was analysed using content analysis. In situations where the connections were clear-cut, simple linear regression was able to effectively illustrate the relationship between the two variables. Since the materials used in the road projects are in large quantity, a rise in fuel prices could have an impact on the overall cost of road construction projects due to higher equipment and material transportation expenses. In addition, bitumen prices have fluctuated over time, with higher figures showing up in certain projects. Additionally, there are variations in the quantity of work that is subject to price adjustments; the majority of ERA projects experience delays and necessitate extending deadlines. Contractors may file claims for price increases that exceed their expectations of the price adjustment if they are granted additional time to complete their projects. Ultimately, it was found that fuel, steel, cement, and bitumen all had positive and significant effects on project cost. According to the study's findings, although material costs have not risen consistently over time, they have usually done so to the degree that they can significantly affect the overall cost of road construction projects. Based on the data, this study came to the conclusion that bitumen, steel, cement, and fuel had a favourable and significant impact on project cost. This study suggests that planning, monitor