Implication of construction contract termination for infrastructural development in Ekiti State Local Government Areas, Nigeria

Abstract

Local Government Areas are the third tier of government in Nigeria and the closest to the people. The Local Government Areas are charged with the responsibility of delivering the dividend of democracy to meet the fundamental needs of the local community through the provision of infrastructural facilities. This study assessed the causes and effects of the termination of construction contracts in the 16 Local Government Areas in Ekiti State, Nigeria. The exploratory research design was employed with a purposive sampling of construction project contracts awarded in the Local Government Areas of Ekiti State, Nigeria between 2006 and 2015. A structured questionnaire in Likert’s scale was used for data collection and with a response rate of 90%. Data were analysed using Spearman’s rank correlation coefficient (r), Percentages and Importance Index Rate (I.I.R.). Results show that Lack of continuity, design error, lack of fund by the local government council, failure of prompt payment, change of executive leadership were among identified factors responsible for contract termination in the study area. The implication of contract termination from the data analysis include delayed completion, abandonment of the project, variance in final cost and cost overrun, change in the quality of the project when completed due climatic effect. It is concluded the rate of construction contract termination in LGAs in Ekiti state is approximately 1 in 5, these terminations are due to project related, political and administrative factors respectively. It therefore recommended that there is need for concerted effort to reduce the rate of construction contract termination in LGAs in the state. There is also need to formulate policies to mitigate the effect of change in government on construction contracts and to ensure that contracts terminated are promptly re-awarded to avoid delay and abandonment. This will afford the people at the grassroots to effectively enjoy the benefits of these infrastructural facilities.

Keywords: Contract termination, Local Government Areas, Infrastructure, Ekiti-State, Nigeria