DeterminantsofCostandTimeOverrunsUnderCynhydroConstructionGedo Fincha-LemlemRoadConstructionProjects

Abstract

The road construction sector in the Gedo-Fincha-Lemlem road construction projects area is mainly driven by the need to reduce traffic jamming as well as the attractiveness of the country. The study was aimed to identify factors affecting cost and time overrun in CYNHYDRO road construction projects of Gedo-Fincha-Lemlem West Shoa area. The study used both qualitative and quantitative data collected from primary and secondary sources with well-trained data collectors using pre tested semi structured questionnaire, observation and interview. Using census methods 72 contractors, 10 clients and 30 consultants were selected. Descriptive statistics was used to analyze data using SPSS version 23 software. The study result shows that after distributing the questionnaire for professionals who had experience in road construction projects in Gedo-Fincha-Lemlem road construction projects, sufficient responses were collected with a response rate of more than 80%, which was well above the minimum requirement to conduct an analysis. The data was classified into three groups according to the type of respondents: client, contractor and consultant. From the data retrieved in each group, severity, frequency and importance indices were calculated. The most important causes of the project delays identified by the survey, and based on overall results, were: contractor’s cash flow problems, improper planning, delay in performing inspection by consultants, poor site management, natural disasters, change in drawings, contract management, labor supply, quality assurance, incomplete drawings, low productivity of labors, in appropriate design, incompetent project team, inaccurate cost estimation, incapable inspectors, unforeseen site condition, slow equipment movement. Likewise, the clients highly ranked contractor’s difficulties in financing the project, contractor’s cash flow problems, Inflation and poor site supervision, and weather condition, unrealistic contract duration and requirements and payments delay by owner” as the main causes of project cost and time overrun. Similarly Consultants ranked absence of consultant’s site staff, contract management, legal issues, test and inspection of time and quality assurance as the main factors that causes delay and cost overrun. The categories of indices of each group were determined by taking the average of the frequency, severity and important indices of the variables under the group in question. The results of the material categories showed the greatest source in project delay as it was highly ranked by all parties. The slowdown of global economy, the fluctuation of currency exchange rate for imported material and inflation of materials challenge the clients, contractors and consultants to complete projects within scheduled time and budget. Generally there are many factors contributing for time and cost overrun of road construction projects and it is better if concerned stakeholders government, contractors and other stakeholders works collaboratively to solve problems of road constructions cost and time overruns because of it is hindering country’s economy