Causes and Effects of Contract Termination in Public Building Construction Projects: A Case of Addis Ababa Housing Development Corporation, Ethiopia

Abstract

Construction termination is an obstacle to a sustainable industry. Ethiopia also facing the problem since many construction projects are implementing. From those projects, projects executed by Addis Ababa Housing Development Corporation is one of the main projects in the country, and facing this big problem, identifying the Cause of contract termination and its effect is the way to minimize early contract termination. This research aims to identify the causes and effects of project contract termination and to develop a conceptual framework to minimize project termination in Addis Ababa Housing Development Corporation. The study used both qualitative and quantitative data gathered from primary as well as secondary sources through questionnaires, group discussions, and document reviews. A purposive sampling of respondents from the stakeholders involved in the project was selected. Collected data edited and analyzed using Statistical Package for the Social Sciences and Excel. The result ranks by Relative Importance Index value. The main causes of early project contact termination are Price fluctuation, Financial Difficulties Failure to Pay Workers, Delay in progress/failure to meet the project schedule, Poor site management, and supervision, and Fail to deliver material on time the main effects of contact project termination are Delay of project completion, Increase in the final cost of the project/ increased costs to complete the remainder/, Time overrun, Breaking the relationship among parties/ create dispute/, Impact on external parties who expecting service and Loss of future income /lost profit/. This study could provide important study results for Addis Ababa housing development Corporation, contractors, consultants, and policymakers.