An assessment of project variations in the construction of the Gulu logistics hub in Northern Uganda

Abstract

This study evaluates the variations encountered during the construction of the Gulu logistics hub, aiming to identify variations incurred, analyze their effects, and recommend best practices for mitigation on construction projects. The project variations mainly came about due to project value engineering during construction and additional work. There was a shortfall of 1.2 million USD in the project, and the funder/EU was unable to cover this amount. To deal with this, value engineering was used to reduce the overall deficit from 1.2 million USD to 229,057.59 USD. The remaining amount was covered by the 5% contract contingency equivalent to USD 330,929.97. This cost optimization was achieved without changing the total contract price of 8,200,444.69 USD, inclusive of VAT. The study also analyzed the total additional work, which amounted to $981.03 on the project. This amount was covered by the balance in the contingency fund ($101,872) and additional funds of $449,108.65 provided by the European Union through Trademark East Africa. The percentage increase in the contract price was 5.48%, which is less than the 15% limit for any single contract amendment according to PPDA contract regulations 2023, section 54, subsection 4. The reasons for variations in the project were related to the client and the consultant. Changes requested by the client were due to alterations in the original scope of the contract, such as the construction of a chain link, additional vehicle holding area, additional meters of cabling, and water pipes. Meanwhile, changes from the consultant were a result of oversights in scoping the works. This study emphasizes the impact of changes in project execution, particularly adjustments in project cost and timeline. The total contract price rose from USD 8,200,444.69 to USD 8,758,185.72, and the project completion date was pushed from August 21, 2021, to December 15, 2022. Despite facing challenges with variations, most project sections were completed within budget.