Abstract:
The construction industry is an investment-led sector in which nations have highest stake. Price
fluctuations in public building construction projects are growing source of concern owing to
deliverables of projects guaranteed facilities such as offices, universities, collages, hospitals, and
other public structures to address societal development. Construction projects under Southern
region of Ethiopia, Wolaita zone are significantly affected by price fluctuation. On a large scale
Price fluctuation affect owners, clients, contractors, and the project itself. In this study the main
causing factor of price fluctuation and its effect, management practices to minimize the effect and
price adjustment clauses are identified and evaluated. Models are developed to show the
relationship among variables. The study employed a descriptive survey design. In this study, the
questioner survey, case study, and group discussion are used as data collection methods. Data
were analyzed using descriptive statistics and ranked considering the relative importance index,
by the statistical package for social science (SPSS) 20, and excel software. The reliability of data
was tested by Creon bach’s alpha and proved reliable. Based on the finding Cost of materials
change, Market conditions, Change to project schedule, Changes in design and Changes in the
currency exchange rate are the most significant factors that cause price fluctuation on public
building projects. Wherever issues with price fluctuation in public building projects are not
resolved, Schedule / time overrun/, dispute among stakeholders and termination of the project are
encountered as the pricing fluctuations' effects on public building projects. Hence; Value
Engineering for Substitute Materials, Regular cost monitoring throughout the project/finance and
quality audit and Consider locally available material in design are identified as best management
practice to lessen adverse effect of price fluctuation. Furthermore, Client unwillingness to honor
price adjustment clauses, Project cost variation and Computation time for payment certificates
are the challenges to implement price adjustment clause. This study is beneficial to construction
stakeholders (clients, contractors, and consultants), encouraging them to cooperate and apply the
management practices to minimize the effect of price fluctuation.
