Between 2010 and 2016, CoST Ethiopia has applied the principles of disclosure and assurance to over 50 building, road and water infrastructure projects representing US$3.27 billion of investment. A new Aggregation Study has been published to compile, analyse and synthesise the project information disclosed and provide a comprehensive overview of the state of Ethiopian infrastructure. The Study seeks to facilitate a transition from disclosure driven by the CoST Assurance process to greater integration of disclosure into government systems.
The Aggregation Study makes a strong case for greater transparency and accountability in public infrastructure. For example, the aggregate cost overrun at the time of disclosure of projects was 17.09% – not including price escalation payment. However, the Study notes that the aggregated projects cover works from near commencement to completion status. When sampling only completed projects, the cost overrun escalates to 76.20% with the worst performance noted in water projects at a staggering 170.57% overruns. Design-related changes were often cited as the main reasons for cost overruns in infrastructure projects; the pie chart above provides a full overview of the challenge.
Similar issues were recorded in the project timeframe, with overruns of 124.43% at industry level for the completed projects sampled. In line with cost overruns, design-related changes were often cited as the cause for time overruns. However, within building projects, contractual obligations of the parties involved had the greatest impact on time overruns covering issues such as land issues, energy crisis, power and water supply, shortage of finance and budget planning, unavailability of foreign currency etc. The bar chart below provides a full breakdown of time overruns, both at industry and sub-sector levels.
The Study has gained wide radio and print media traction across outlets, including extensive follow-up from daily newspaper Addis Zemen. Furthermore, the World Bank country office in Ethiopia and the Ethiopian Construction Project Management Institute (ECPMI) have already taken the findings forward as part of their national report “Construction Contracts Expectations and Actual Performances: Gap Identification and Analysis”. The Aggregation Study will now feed into CoST Ethiopia’s disclosure and assurance strategy to foster a culture of transparency within Procuring Entities. For further information, please download the CoST Ethiopia Aggregation Study.