Cost Control Using Earned Value Analysis for Industrial Constructions in Addis Ababa
In light of the Ethiopian Government's efforts to develop and expand the country's industrial sector, various industrial projects are being constructed all over the country. In this regard, the construction industry is playing a very significant role in providing industrial buildings and associated accommodations in the large industries underway. Sufficed to mention that a major portion of the investments pouring into industrial development is attributed to industrial buildings and infrastructure. The investment made by governmental and non-governmental stakeholders into this sector is a large amount of capital that needs to be utilized in an effective and efficient system to achieve the best possible outcome. However, the trends observed in most construction projects are contrary to this, consuming extra time and budget but resulting in unsatisfactory quality. The reason for this, among other issues, is the lack of reliable project cost control techniques. Earned Value Analysis is a technique used to evaluate and monitor project performance and forecast future trends using planned value, actual value and earned value of work performed. The study was conducted on the cost control techniques employed in the construction of industrial construction projects in Addis Ababa. It aimed to identify the major earned value parameters in cost control, to determine cost performance indicators used in earned value analysis, and to predict future cost performance and estimates using earned value analysis supported by an excel spreadsheet model for industrial construction projects in Addis Ababa. The methodology used was a quantitative research approach, mainly through evaluating the primary project data and analyzing findings using excel spreadsheets and manual approaches. The research is a type of case study on the Bole Lemi Industrial Zone Development Phase II project and Revamping of Powder Plant Civil Works project. It analyzed the data from the projects using the excel spreadsheet to determine the performance and forecast parameter results and interpreted their meanings for each project. The findings show that the excel spreadsheet model for EVA is a simple and reliable method that showed a mostly similar result with that of manual calculation. The conclusions drawn from the research are EVMS is a better method than the traditional cost control used in these projects. It is not a complex concept but rather simple and easily understandable. It can resolve many of the problems related to cost and time overruns. Project managers are encouraged to adapt these models to their projects. However, due to poor cost accounting and data recording methods EVM is not implemented in industrial construction projects in Addis Ababa.