A Comparative Analysis of Performance of Domestic and Foreign Contractors : The Case of Ethiopian Federal Road Construction Projects

In Ethiopia, infrastructure, particularly road construction, has been the most essential driver of economic growth. Simultaneously, it is widely acknowledged and analysed that the domestic road construction industry is inefficient, threatening its role as a driver of the country’s economic growth. Thus, the objective of the study was to make comparative analysis of domestic and foreign contractors’ performance in Ethiopian road construction in terms of cost, time, and quality. To meet the objective of the study a document review, semi-structured interview, and focused group discussion (FGD) were used as a data collection tool. Based on analysis, the finding shows that the domestic contractors are far from being competitive in terms of cost overrun, time overrun and quality performance but it is promising progress over time. Finally, the study mainly recommends domestic contractors should be mindful of the severe competition they face from foreign firms. This necessitates the participation of both the construction industry and the government in improving the sector’s competitiveness. Local road construction firms operate in a challenging business climate. Construction companies’ ability to use internal resources such as human resources, finance, equipment and plant, marketing information, technology, and others is encouraged because it gives contractors a competitive advantage. Allocating and effectively utilising such resources enables them to accomplish many client objectives, such as completing projects on schedule, under budget, and to specified quality standards.