Premature Contract Termination of Public Building Projects in Ethiopia. Case Study of Western Oromia

Abstract or Introduction

This research identifies the causes and effects of construction contract termination in the western Oromia region. Identifying the causes and their effects on projects might prevent their failure in future contracts. However, because building projects are so complicated, their risk is also rather substantial.

Ethiopia's construction industry has contributed significantly to poverty reduction, aggregate employment expansion through small and medium firm development, and the job creation through the construction of low-cost housing in Addis Ababa, which has been replicated in other locations.

A sizable portion of the country's budget is devoted to fiscal development by financing infrastructure for educational and power development, the construction of railways and road projects that increase the road network's density, and the construction of health projects that increase access to water and sanitation infrastructure. The private sector's contribution to the value-added in a building is also considerable. The private sector invests its money in various fixed assets, including new machinery and equipment and the construction and maintenance of new structures.

Ethiopia has also announced successive public procurement reforms to adhere to decent governance principles; reform efforts have been undertaken to encourage reasonable offering for supplier selection and operational delivery of projects within budget and schedule constraints.

According to the owner's requirements and within a limited budget it was a very challenging task to achieve a virtuous result by the contractor of the project. The parties that engaged into a contract are responsible to perform and complete it according to the contract's provisions. Failure to comply with such requirements constitutes a breach of the contract, entitling the other party to an appropriate remedy under the contract.

In Ethiopia, Terminations of the project are one of the severe problems observed. In the last five years ago, about 3 to 5 projects were terminated in Burayou town municipality public projects such as; Serity Elementary School construction around Gefersa Guju Kebele, Youth center construction around Abdi Nono Kebele, whereas in the Western Oromia; Guliso Wereda G+2 Office building, Ebuntu preparatory school construction, Jimma University Agaro Compass construction, etc. were terminated projects those observed yet. Thus, the perceived problem is to be solved by concerning such issues within a current situation.