FACTORS AFFECTING TIME AND COST OVERRUN OF THE ADDIS ABABA DISTRIBUTION REHABILITATION AND UPGRADING PROJECT: THE CASE OF ETHIOPIAN ELECTRIC UTILITY

Abstract

One of the most common problems in the infrastructure project is delay. Delay could be defined as the time overrun either beyond the contract date or beyond the date that the parties agreed upon for delivery of project outcomes. Delays which could have a negative effect on projects in terms of performance and cost, can be caused by several factors such as owners, contractors, consultants, Labor and supply of material. Therefore, identifying cause of delay, responsible parties which contributed for major causes and proposing minimizing strategies is required to be achieved. In this study quantitative method of research approach was used to capture quantitative data and mainly open ended questionnaires were developed and distributed for data collection purpose to identify the major causes of delay and cost overrun in the project selected. A total of 65 questionnaires were distributed and 48 of them were filled and returned by stakeholders involved. In addition, a short discussion was made with the project manager on the project’s current status, challenges faced and actions taken to bring the project back to track during its life cycle. Data collected were analyzed using SPSS software and ranking of the mean score of major causes using relative importance index (RII) was adopted to identify the most important factors which contributed to the delay and cost overrun. Moreover, variance analysis using SPI and CPI was performed to evaluate the performance efficiency of the project and it was revealed that the project lagged behind the schedule and utilized above budget compared with contract amount. The analyzed data and desk-study, showed that this project experienced a time delay of more than 400% and cost overrun of 4.39%. Unrealistic project duration, cost under estimation, slowness in decision making by the owner, change in scope of the work and frequent design change were found to be the top factors that contributed to time and cost overrun.