Proposal For Submission Raghavacharya

Analysis of Time and Cost Performance on Arbaminch City Irrigation Construction projects
ASSESSMENT OF TIME AND COST

PERFORMANCE ON IRRIGATION
CONSTRUCTION PROJECTS IN ARBA MINCH
CITY
MSc PROPOSAL
BY
TAMARU ASEFA
December, 2023
i Arbaminch university, December 2022.

ASSESSMENT OF TIME AND COST PERFORMANCE ON

IRRIGATION CONSTRUCTION PROJECTS IN ARBA MINCH
CITY
BY
TAMARU ASEFA
A RESEARCH PROPOSAL SUBMITTED TO THE

SCHOOL OF GRADUATE STUDIES OF ARBA MINCH
UNIVERSITY, INSTITUTE OF TECHNOLOGY,
DEPARTMENT OF CIVIL ENGINEERING IN PARTIAL
FULFILLMENT OF REQUIREMENT FOR DEGREE OF
MASTER SCIENCE IN CONSTRUCTION
TECHNOLOGY AND MANAGMENT
DECEMBER, 2023
ARBA MINCH, ETHIOPIA
ii Arbaminch university, December 2022.

ARBA MINCH UNIVERSITY

SCHOOL GRADUATE STUDIES
ADVISOR PROPOSAL APPROVAL SHEET
This is certified that the thesis entitled “An Assessment on cost and Time performance of
construction projects in Arba Minch city” has been developed by Bantayehu Tadesse
ID.PIT/026/22 under my supervision. Therefore I recommended the student’s proposal can be
presented for review and open oral presentation.
Dr. Raghva Sadacharya. (professor) ……………….. ………………………

Name of main advisor signature Date
…………………………….. ……………….. …………………..
Name of co-advisor signature Date
iii Arbaminch university, December 2022.

Table content
List of figures ................................................................................................................................... i
List of Table .................................................................................................................................... ii
List of Acronyms ........................................................................................................................... iii
Executive summary ........................................................................Error! Bookmark not defined.
CHAPTER ONE ............................................................................................................................. 1
INTRODUCTION .......................................................................................................................... 1
1.1 Background study ............................................................................................................. 1
1.2 Statement of the problem ................................................Error! Bookmark not defined.
1.3 Research questions ..........................................................Error! Bookmark not defined.
1.4 Objectives ........................................................................Error! Bookmark not defined.
1.4.1. General Objective ....................................................Error! Bookmark not defined.
1.4.2. Specific objective .....................................................Error! Bookmark not defined.
1.5 Significance of the study .................................................Error! Bookmark not defined.
1.5 Scope of the study ...........................................................Error! Bookmark not defined.
1.6 Limitation of the study ....................................................Error! Bookmark not defined.
CHAPTER TWO ............................................................................................................................ 2
LITRATURE REVIEW .................................................................................................................. 2
2.1 Introduction ...................................................................................................................... 2
2.2 Causes of Time overrun ................................................................................................... 5
2.3 Causes of cost overrun ..................................................................................................... 5
2.4 Research Literature Summary: ......................................................................................... 6
CHAPTER THREE .......................................................................Error! Bookmark not defined.
RESEARCH METHODOLOGY...................................................Error! Bookmark not defined.
3.1 Background of research study area .................................Error! Bookmark not defined.
3.2 Research Design ..............................................................Error! Bookmark not defined.
3.3 Target Population and sample size ..................................Error! Bookmark not defined.
3.3.1. Sample Size Determination: ..................................................................................... 6
3.4 Source of Data .................................................................................................................. 7
3.4.1 Primary Data ............................................................Error! Bookmark not defined.
3.4.2 Secondary Data ........................................................Error! Bookmark not defined.
iv Arbaminch university, December 2022.

3.5 Data Collection Techniques ............................................Error! Bookmark not defined.

3.6 Data presentation, Analysis and Interpretation ...............Error! Bookmark not defined.
3.6..1 Questionnaire Development and Administration.....Error! Bookmark not defined.
3.6..2 Relative Importance Index (RII) Analysis ................................................................ 7
3.6..3 Statistical Analysis .................................................................................................... 8
3.6..4 Data Analysis and Interpretation .............................................................................. 8
3.7 Ethical Considerations.....................................................Error! Bookmark not defined.
3.8 Expected output of the research ......................................Error! Bookmark not defined.
CHAPTER FOUR ..........................................................................Error! Bookmark not defined.
PROPOSED BUDGET AND WORK PLAN................................Error! Bookmark not defined.
4.1 Work plan ........................................................................Error! Bookmark not defined.
4.2 Proposed Budget .............................................................Error! Bookmark not defined.
References ....................................................................................................................................... 9
v Arbaminch university, December 2022.

List of figures
Figure 1, Arba Minch Map, Southern Ethiopians Region, Ethiopia……………………………..11
Figure 2, Designed Research methodologies…………………………………………………….12
i Arbaminch university, December 2022.

List of Table
Table 4.1 Time table for various activities………………………………………………………17
Table 4.2 proposed budget breaks down…………………………………………………………18
ii Arbaminch university, December 2022.

List of Acronyms
AA………………………………………………Addis Ababa
AC………………………………………………Arbaminch City
ACBCPs…………………………………….......Arba Minch City Building Construction Projects
iii Arbaminch university, December 2022.

CHAPTER ONE
INTRODUCTION
1.1 Background study
Ethiopian construction industry (ECI) has become vast in recent years to follow up the growing
economy of Ethiopia. Because of these reasons the recent ECI projects are very complex and
technology in world is also modern. To come up the demand of new construction projects,
Ethiopia needs multinational construction companies and good numbers of national construction
organizations also. To realize the dreams of Ethiopia, Ethiopia has invited multinational
companies like china communication construction companies and some companies from
Netherland. Ethiopian construction industry (ECI) is big; it is involving multibillion investments
which are major portion of Ethiopian economy. But it is also true from bellow mentioned some
researchers that time and cost overrun is happening which is major drawback in construction
industry and wants to study carefully to progress and top up with Ethiopian growth.
Construction industry (CI) is an imperative industry that plays a dynamic role in the socio-
economic progression of a country. Economically, it contributes a major improvement in the
overall GDP of a country. It also improves the quality of life by providing the necessary
infrastructure such as roads, hospitals, schools and other basic and enhanced facilities. Hence, it
is fundamentally crucial to make construction projects completed successfully within time,
budget and expected quality (Negalign Nigatu, 2020), However, being a complex, fragmented
and schedule driven industry. It always faces chronic problems such as low quality and
productivity, cost overrun, time overrun, construction waste and others. Of these, cost and time
overrun is a severe problem (Olawale and Sun, 2010) because it affects the overall development
of any country. According to Chitkara, (2009) some of the developing countries, the growth rate
of construction activity outstrips that of population and of GDP. In ECI percentage of GDP
amounts to 3%, considerably lower than the sub-Saharan average of 6% (MoWUD, 2006).
According to Fetene Nega (2008), the development of the construction industry in Ethiopia is
slow; it plays a key role in the development of the national economy. The critical problems are
inability to complete the projects on schedule, low quality work and cost overrun. Most (if not
all), construction projects experience time overrun and cost overruns during their execution
phase. Tadele Mulgeta (2018), studied Cost, time, and quality are used to measure the project
1 Arbaminch university, December 2022.

performance and success that means the Success of a project is defined by accomplishing it
within specified cost, time and quality.
CI always faces chronic problems such as low quality and productivity, cost overrun, time
overrun, construction waste and others. Of these, cost and time overrun is a severe problem
because it affects the overall development of any country.
But all constructions found in the town faced time and cost overrun problems up to now. These
problems affect growth and development of the city for many years ago. Various researches done
to solve this problem from CI of the city but it need further recent studies to give the correct
remedial measures.
TER TWO
LITRATURE REVIEW
2.1 Introduction
Cost overrun can be defined as when the project objectives are not achieved within estimated
budget (Avots, 1983). Cost overrun is the excess of actual cost over budget. Cost overrun is the
ratio of contract amount to the original contract award amount. In construction, delay could be
defined as the time over run either beyond completion date specified in a contract, or beyond the
date that the parties agreed upon for delivery of a project (Tadele Mulgeta, 2018).
Construction cost overrun is defined as the difference between forecasted and actual construction
costs. Every construction company can be affected by cost overrun (Lee, 2008). In construction,
delay can be defined as the time over run, slipping over its planned schedule either beyond the
date that the parties agreed upon for delivery of a project, or beyond completion date specified in
a contract and it usual problem in construction projects (M. Abubeker J., 2015).
The study by Tadele Mulgeta (2018), was tried to assess the effects of some dominant time and
cost overrun factors in Addis Ababa Univesity Building Projects. The researcher reviewed six
project documents to assess their cost and find if there were variations between the planned and
actual costs. According to this actual project document showed that there were average 46% of
time overrun and 25% of cost overrun within the projects. The findings indicate that the major
causes for project Time overrun were improper planning and poor scope definition, poor
communication in project stakeholders, owner’s interference and slow decision, the contractors’
and consultants’ experiences and poor contract management and quality assurance or control and
the major causes for the project cost overrun were Change in foreign rate, contractual claims,

additional work at owner’s request, design change, quality of materials, cost under estimation
and insufficient funds were very significant factors that increase the project cost.. This study is
done only on public building construction projects found in Addis Ababa at Addis Ababa
University and it did not study interrelationship between different factors studied in the research
with success of the project.
According to W. Engidawork (2021) in his study ‘Cost and time performance analysis on
construction projects in Addis Ababa: A comparative study on selected local and foreign Real
Estate Developers’ most of foreign contractors have showed a better construction cost and time
performance on their last two to three real estate developing projects. They compare projects
completed within a range of budgeted cost and planed time to a 50% of cost and time increment,
78.6% of foreign and 74.3% of local contractors have finished their projects with in this range of
cost increment. And 92.9% of foreign and 56.4% of local contractors have finished their projects
with in the mentioned range of time increase than planned. Engidawork study scope
encompasses comparison of local and foreign contractors on building construction projects found
in Addis Ababa city.
Study by Fetene Nega (2008), identifies causes and effects of cost overrun on public building
construction projects in Ethiopia. From the results it was found that 67 out of 70 public building
construction projects suffered cost overrun. The research states that the rate of cost overrun
ranges from a minimum of 0% to the maximum of 126% of the contract amount for individual
projects. In this research it was found that the rate of cost overrun decreases with the increase in
contract amount. But it does not compare these results with private building construction
projects. The Fetene Nega study concentrates only on public building construction projects found
in Ethiopia and that too deals with only cost overrun.
Study by Nesru Serani and Tadele Wodaje (2020) identifies The Causes and Effects of Delay of
Building Construction in Ethiopia, Southern Nation Nationalities of People Region in Gurage
Zone (Case of Wolkite Town). The research analysis result showed that the top 10 (ten) causes
of delay of BCP by relative importance index (RII%) were economic condition (inflation,
currency), fluctuation in price of material, time overrun of the project, slow decision making,
improper planning, lack of finance to fund the project completion, preparing incomplete bill of
quantity, delay in approval of payment, shortage of material, and change in drawing and design

respectively. But it does not investigate the effect of cost overrun on time performance of the
project.
Studies by Talukhaba A.A (1988) on time and cost performance of construction projects in
Nairobi have been found Methods of tendering, variations and delayed payments to be
significant factors cause cost and time overrun in construction project performance. The study
further has demonstrated that time and cost performance is influenced by conditions associated
with different types of clients. The factors which are significant in time and cost overruns are
found to be associated with different types of clients in varying magnitudes such that in a
situation where the time and cost performance is poorest, the factors are dominant. The
government has been found to be the poorest in project management, followed by the private
sector. But the research did not address the adverse impact of some newly emerging challenges
and causes of construction projects’ delay as a result of rapid change in the dynamics of the
population growth in recent years. For instance, he did not consider the material, labor-,
equipment, financial, government authorities, and social and economic-related factors despite
their adverse impact on influencing projects’ time performance.
Study on Quantification of the Influence of Factors Causing Time and Cost Overruns in
Tanzanian Construction Projects by Daniela D.Ndunguru et al. (2020) identified that Tanzania
suffers problems of cost and time overruns in the construction business. Many factors are
contributing to the cost and time overruns in Tanzania construction projects. The results from the
research explained that unexpected inflation/material escalation, adverse effect of weather, lack
of proper communication and coordination between parties, inadequate production of raw
material, late in certification and payment of completed work, technical incompetence and poor
organization structure and additional works/changes by the client are the most predominant
causes of time and cost overrun of Tanzanian construction project. But the research did not
address the adverse impact of some newly emerging challenges and causes of construction
projects’ delay as a result of rapid change in the dynamics of the population growth in recent
years like Talukhaba A.A (1988) and also it did not study interrelationship between different
factors studied in the research.
According to Oboirien M. Ohiomah (2019) study in Nigeria found that the significant cost
influencing factors in Nigerian construction industry were the inexperience of the contract

manager, payment delays to main contractors, unstable foreign exchange, variations to works,
and corrupt practices and time influencing factors were include design errors, cash flow
problems, payment delays to main contractors, contractors’ improper contract knowledge, and
delay in building plans and approval. The research results show that these factors are between
50.56% - 55.00% of factors in both cost and time constructs in Tanzanian construction industry.
Like Talukhaba A.A (1988) and Daniela D.Ndunguru et al. (2020) this study also did not
address the adverse impact of some newly emerging challenges and causes of construction
projects’ delay as a result of rapid change in the dynamics of the population growth in recent
years.
2.2 Causes of Time overrun

Study by Tadele Mulgeta (2022), identified some causes of time overrun on Addis Ababa
building construction projects, that are Improper planning and scheduling, Poor scope definition ,
Poor communication among the stakeholders and Owner’s interference and slow decision.
According to Nesru Serani and Tadele wodaje (2020), also some causes of time over run on
building construction projects were identified such as Economic condition (inflation
andcurrency), Fluctuation in price of material, Slow decision making, and Improper planning,
2.3 Causes of cost overrun

Study by Tadele Mulgeta (2022), identified some causes of cost overrun on Addis Ababa
building construction projects, that are Under financing, Unfeasible Cost Estimates, Prolonged
Project Schedule: and Lack of Backup Plan.
According to Fetene Nega (2008), also some causes of cost overrun on Addis Ababa building
construction projects were identified, such as Inflation or increase in the cost of construction
materials, Poor planning and coordination, Change orders due to enhancement required by
clients and Excess quantity during construction.

2.4 Research Literature Summary:

The study by Tadele Mulgeta (2018) tried to assess the effects of some dominant time and cost
overrun factors but scope is limited to Addis Ababa Univesity Building Projects. Engidawork W.
(2021) has studied on Cost and Time performance analysis on construction projects in Addis
Ababa and concluded that most of foreign contractors have showed a better construction cost and
time performance on their last two to three real estate developing projects. Study by Fetene Nega
(2008), found that the rate of cost overrun decreases with the increase in contract amount. Nesru
Serani and Tadele Wodaje (2020) in their study identified top ten Causes of Delay of Building
Construction in Ethiopia, Southern Nation Nationalities of People Region in Gurage Zone (Case
of Wolkite Town) and their effects on project scheduled time. Time and Cost overrun is a
general issue hampering most of the African continent is evident from Talukhaba 1988 Nairobi,
Oboirien M. Ohiomah 2019 in Nigeria and Daniela D.Ndunguru et al. (2020) in Tanzania
studies.
3.3.1. Sample Size Determination:

To determine the sample size of the study the formula mentioned bellow is important:-
Where:-
n= desired sample size (for the population>10,000)
Z=standard normal deviate; usually set at 1.96(or a~2), which correspond to 95% confidence
level. Here are the z-scores for the most common confidence levels:
90% – Z score = 1.645
95% – Z score = 1.96
99% – Z score = 2.576
p=proportion in the target population estimated to have a particular characteristics. If there is no
reasonable estimate, use 50% (i.e 0.5)
q=1-p (proportion in the target population not having the particular characteristics)
d= degree of accuracy required, usually set at 0.05 level ( occasionally at 2.0) also called margin
of error.

1.6452 ∗ 0.5 ∗ 0.5

𝑛=
0.52
From this calculation the desired sample size become 164.
3.1 Source of Data
Where;-
k =represents the number of items in the measure

𝜎²𝑦𝑖 = the variance associated with each item i
𝜎²𝑦 = the variance associated with the total scores (y = ∑𝑘𝑖=1 𝑦𝑖 )
3.6..1 Relative Importance Index (RII) Analysis

❖ Calculation of RII: The Relative Importance Index (RII) will be calculated to rank the
factors identified in the questionnaire. This will involve calculating the average score of
each factor and its relative importance compared to other factors.
The RII is calculated in the following way:
1. Rank cases on each of the variables
2. For tied ranks and for categorical variables, assign the mean rank
3. Divide the ranks by the sample size, creating a value ranging from 0 to 1
Where;- Wi- Weight assigned to each factor

Si= Score given by respondents for each factor
N- Number of respondent
M- Number of points on the scale
❖ Factor Analysis: RII scores will be analyzed to identify the most critical factors
contributing to time and cost overruns in construction projects.

3.6..2 Statistical Analysis

❖ Student's t-Test: The responses obtained from different groups (e.g., project managers,
contractors) will be compared using the student's t-test to determine if there are
statistically significant differences in their perceptions of the factors contributing to time
and cost overruns. The formula is:-
The t-test can be used to determine if the means of two groups are significantly different
from one another.
3.6..3 Data Analysis and Interpretation

❖ Quantitative Analysis: Statistical software (e.g., SPSS, RII) will be used to analyze the
collected data, calculate RII, and conduct t-tests to examine the significance of
differences in perceptions between respondent groups.
❖ Report Writing: The findings will be presented in a comprehensive report, outlining the
identified factors contributing to time and cost overruns, their relative importance,
statistical analysis results, and recommendations for addressing key issues.

References
1) Arba Minch town, Ethiopia: driving forces and challenges
2) Arba Minch Town Administration (AMTA). (2014). Town wide short report written in its
50th year’s anniversary. Arba Minch, unpublished document
3) Avots I. (1983). Cost-relevance analysis for overrun control. International Journal of
Project Management, 1, 142-148
4) Chitkara, K. K. (2009). Construction project management–Planning, scheduling and
controlling. New Delhi: Tata McGraw-Hill Publishing Company Limited.
5) FetenNega, F., (2008), Causes and Effects of Cost Overrun on Public Building
Construction Projects in Ethiopia. Master Thesis, Addis Ababa University, Civil
Engineering Department, Addis Ababa, Ethiopia
6) Lee J K, 2008). Delay and cost overruns in Vietnam large construction projects: A
comparison with other selected countries. KSCE Journal of Civil Engineering, 12(6),
367-377
7) Ministry of Work and Urban Development (MoWUD).(2006).Urban development policy.
Addis Ababa
8) Ndunguru, D. D., Niyonyungu, F., & Yang, X. F. (2020). Quantification of the Influence
of Factors Causing Time and Cost Overruns in Tanzanian Construction Projects, Open
Journal of Business and Management, 8, 2133-2147.
https://doi.org/10.4236/ojbm.2020.85130

9) Negalign Nigatu O. (2020), Determinants of Cost Overrun on Public Building

Construction Projects: A Case of Gamo Zone Arba Minch Town; Southern Region,
Ethiopia, Master thesis, Wolaita Sodo University, Department of Accounting and
Finance, Wolaita Sodo, Ethiopia.
10)

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Analysis of Time and Cost Performance on Arbaminch City Irrigation Construction projects

ASSESSMENT OF TIME AND COST

i Arbaminch university, December 2022.

ASSESSMENT OF TIME AND COST PERFORMANCE ON

A RESEARCH PROPOSAL SUBMITTED TO THE

ii Arbaminch university, December 2022.

ARBA MINCH UNIVERSITY

Dr. Raghva Sadacharya. (professor) ……………….. ………………………

iii Arbaminch university, December 2022.

iv Arbaminch university, December 2022.

3.5 Data Collection Techniques ............................................Error! Bookmark not defined.

v Arbaminch university, December 2022.

i Arbaminch university, December 2022.

ii Arbaminch university, December 2022.

iii Arbaminch university, December 2022.

1 Arbaminch university, December 2022.

2 Arbaminch university, December 2022.

3 Arbaminch university, December 2022.

4 Arbaminch university, December 2022.

2.2 Causes of Time overrun

2.3 Causes of cost overrun

5 Arbaminch university, December 2022.

2.4 Research Literature Summary:

3.3.1. Sample Size Determination:

6 Arbaminch university, December 2022.

1.6452 ∗ 0.5 ∗ 0.5

k =represents the number of items in the measure

3.6..1 Relative Importance Index (RII) Analysis

Where;- Wi- Weight assigned to each factor

7 Arbaminch university, December 2022.

3.6..2 Statistical Analysis

3.6..3 Data Analysis and Interpretation

8 Arbaminch university, December 2022.

9 Arbaminch university, December 2022.

9) Negalign Nigatu O. (2020), Determinants of Cost Overrun on Public Building

10 Arbaminch university, December 2022.

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