Risks affecting the performance of Ethiopian domestic road construction contractors

The government of Ethiopia has been attempting to enhance the capacity of domestic contractors engaged in the road sector. However, their performance is still a matter of concern. The aim of this paper is, therefore, to identify and quantify the risk events that have potential impact on the performance of Ethiopian domestic contractors (EDCs) working in federal road construction projects. Forty-seven events were identified through an in-depth literature review and were categorized under three main groups: (i) business environment, (ii) construction and (iii) site related events. A questionnaire survey was conducted amongst contractors, consultants and the client (Ethiopian Roads Authority) to rank the considered risk events in terms of the probability of occurrence of each event and severity of their impact. The study results outlined the ten most significant risks affecting the performance of EDCs namely., shortage of finance, inadequate planning, lack of access to foreign currency, delay in possession of site (ROW), frequent breakdown of equipment, delay in delivery of material and equipment, poor cash/ financial failure, inflation, delay in payments and poor commitment and coordination within contractors’ team. The findings will be helpful to domestic construction firms and the government of Ethiopian in devising suitable risk treatment strategies.