Assessment of Factors Affecting Cost Overrun of Road Construction Projects, The case of Ethiopian Construction Works Corporation, Transport Infrastructure Construction Sector

In Ethiopian, under a government regulatory body, i.e. Ethiopian Roads Authority, number of road construction projects is increasing from time to time. However, it becomes difficult to complete projects in the allocated budget. Cost overrun is one of the major problems of road construction projects undertook by Ethiopian Construction Works Corporation, Transport Infrastructure Construction Sector. This research was carried out to assess and rank the severity of major factors that cause cost overrun during construction projects in the Corporation. Questionnaire surveys together with desk study were used to collect data on time and cost overrun. A total of 82 responsescomprising 32 clients, 38 contractors and 12 consultants were collected and a desk study of 7 completed road construction projects in Ethiopia were investigated. The data was subjected to descriptive statistical analysis and subsequently mean scores were determined to rank factors level of severity. From the study it was found that except one which was completed under estimated budget, the majority of road construction projects finished with severe cost overrun. The rate of cost overrun ranges from a minimum of 14.85 % to the maximum of 37.32% of the work executed and certified amount. The study identified 31 causes of cost overrun for the case of Ethiopian Construction Works Corporation, Transport Infrastructure Construction Sector. The most important causes of cost overrun were found to be ineffective way of management of Material and Machinery resources at project (3.56), Skill of Site Management Crew (3.53), wrong method of System/Approach employed to manage site activities (3.44), contract management (Inadequate knowledge and skills of Project Management and Contract Administration teams) (3.43) and Design errors (3.4) are the five most important factors affecting cost of construction projects. It is likely that these findings will help focus on very significant factors to improve the construction performance of the Corporation in the future.