Assessment Of Cost And Time Overrun In Addis Djibouti Railway Project

Transportation is the back bone of a nation’s economic activities. Mass transit systemrnlike rail systems shall be constructed for efficient transportation. The railway connectingrnEthiopia with Djibouti was a meter gauge line opened in 1917. A new line contract wasrnawarded to China Civil Engineering Construction Corporation rn(CCECCrn) and ChinarnRailway Engineering Corporation rn(CRECrn) having double track for the first 115 Km fromrnAddis Ababa to Adama, and single track for the remaining 600Km to Djibouti. The hugerninvestment in the project and import export importance of the line were a case forrnevaluating the presence and cause of cost and time overrun.rnSince time overrun has a high attribute to cost overrun, in this thesis the time and costrnoverruns of the project had been assessed. This research assessed the effect ofrnamendment on cost overrun and the increased out goings of the foreign currency.rnQuestionnaire survey has been conducted on a total of 28 respondents from client,rncontractors and client representative to model the cause factors of project overrun usingrnPartial Least Square rn(PLSrn) approach via SmartplsV3 software package, to assess the costrnand time management practice of the project and rank the major impacts of cost and timernoverrun using Relative Importance Index rn(RIIrn). In addition, a detailed archival documentrnreview was conducted to get the actual essence of cost and time overrun of the project.rnFindings of the research shows that, Project Management and Contract Administrationrnrelated factors rn(PMCARrn) are the most significant construct or group of factors causingrncost and time overrun. Following PMCAR, Financial and Time Management relatedrnfactors affects cost overrun, while Contractor’s Site Management related factors rn(CSMRrn)rnaffect time overrun respectively. Delayed compensation payments, drainage of foreignrncurrency and lost economical contribution of the project in terms of Time value ofrnmoney were main impacts of Cost and Time overrun of the Addis-Djibouti railwayrnproject. Power supply issues and design changes were the most significant factors whichrnexposed the project to time overrun. Unfinalyzed feasibility study brought manyrnamendments and cost overrun to the three EPC contracts of the project.

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