HAWASSA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

RESEARCH PROPOSAL ON:-PROJECT RISK MANAGEMENT

PRACTICES OF ETHIOPIAN ELECTRIC POWER CORPORATION IN
THE CASE OF HAWASSA CITY

BY:-Tsegaye Kebede

Advisor: Tariku

May, 2021
Hawassa, Ethiopia
 ACKNOWLEDGEMENTS
I would like to express my deepest gratitude to all who helped me finalize this proposal.
My special thanks go to my advisor Tariku for his priceless advice and support throughout
the whole process in this study. Last but not least, I would also like to thank all who have
helped me directly or indirectly for the success of this proposal work.

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 ABSTRACT

This study attempts to assess project risk management practices of Ethiopian electric power
corporation in the case of Hawassa city. Different literatures will be conducted to strength the
final findings. Both primary and secondary source of data will be used and after collecting these
data, the collected data will be analyzed to reach the finding of the study.

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 Table of content

Contents………………………………………………..………………………………………Page

ACKNOWLEDGEMENTS ...................................................................................................................... ii

ABSTRACT ............................................................................................................................................. iii

ACRONYMS ........................................................................................................................................... vi

CHAPTER ONE 1.INTRODUCTION ..................................................................................................... 1

1.1. Background of the study .................................................................................................................... 1

1.2. Statement of the Problem ................................................................................................................... 2

1.3. Objective of the Research .................................................................................................................. 3

1.3.1. General Objective........................................................................................................................ 3

1.3.2. Specific Objectives ..................................................................................................................... 3

1.4. Significance of the Study ................................................................................................................... 3

1.5. Scope the Study.................................................................................................................................. 3

1.6 Limitation of the study ........................................................................................................................ 4

1.7. Organization of the study ................................................................................................................... 4

CHAPTER TWO ...................................................................................................................................... 5

2. LITERATURE REVIEW ..................................................................................................................... 5

2.1. Theoretical Literature......................................................................................................................... 5

2.1.1. Definitions and Standards for Project and Project Management ................................................ 5

2.2 Empirical Literature - Best Project Management Practices & Tools ............................................ 6

CHAPTER THREE................................................................................................................................... 8

3. RESEARCH METHODOLOGY .......................................................................................................... 8

3.1. Research Design................................................................................................................................. 8

3.2. SAMPLING PROCEDURE AND SAMPLING SIZE ...................................................................... 8

3.3. Data source and collection method .................................................................................................... 8

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3.4. Data presentation and Analysis .......................................................................................................... 9

3.5. Ethical consideration .......................................................................................................................... 9

4.1 Time schedule .................................................................................................................................. 10

4.2. Budget ............................................................................................................................................. 11

REFERENCES ....................................................................................................................................... 12

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 ACRONYMS
AfDB:……………………………….African Development Bank
ANSI:……………………………….American National Standards Institute
BADEA:…………………………….Bank of Arab for Economic Development in AfricaEEP
EEPCO:……………………….…….Ethiopian Electric Power Corporation
EEU:……………………………..….Ethiopian Electric Utility
ETB:……………………………..….Ethiopian Birr
EVM:…………………………….….Earned Value Management
PM:………………………………….Project Management
PPM:……………………………..….Project Production Management
PwC:……………………………..….PricewaterhouseCoopers
SNNP:……………………..……….Southern Nations Nationalities and Peoples Region

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 CHAPTER ONE
1.INTRODUCTION
1.1. Background of the study
Project risk management practices are becoming a core competency critical to an
organization’s competitive advantage. Recent studies have shown that organizations with
established and mature risk management process are able to generate millions of dollars in
additional saving and have a distinct competitive advantage over their competitors. On the
other hand, weak project risk management practices leads to higher cost overrun, high
schedule variance, sources of distress, dispute, loss, and so on (Goodrich, 2013). A major
portion of every organization’s operating cost is spent on outside goods and services. Based on
this fact, executive management everywhere is determining that Procurement and Risks must
emerge as a core competency of all those involved in the acquisition of equipment, materials,
and services if organizations are to lower operating cost and improve productivity. On this
regard, scholars recommend strictly to follow the three major phases of the risk life cycle: Pre-
Risk, Risk Execution, and Post Award (Sriram et al., 2015). According to Goodrich (2013),
project management (PM) is the process of managing risk creation, execution and analysis to
maximize operational and financial performance at an organization, all while reducing
financial risk. On top of that, the application of the body of knowledge concerned with
principles, techniques, and tools used in planning, control, monitoring, and review of project is
to ensure the achievement of the project objective (PMI, 2013).

This academic thesis tries to analyze the project management practices of the Universal
Electric Access Program (UEAP) in Ethiopia under the Ethiopian Electric Utility (EEU). The
Ethiopian Electric Utility was established in December, 2013 when the Ethiopian Electric
Power Corporation (EEPCO) was split in two companies as Ethiopian Electric Utility (EEU)
and Ethiopian Electric Power (EEP). The mission of the enterprise, as indicated in the Council
of Minister Regulation No.303/2013, is to construct and maintain electric distribution
networks, to purchase bulk electric power and sell electric energy to customers (FDRE, 2013).
The case organization in this study is the Universal Electricity Access Program (UEAP) which
was established in 2005 under the administration of the former Ethiopian Electric Power
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Corporation (EEPCO). In order to further validate the PM practices of the case company, an
investigation of one of the ongoing projects is also made. The case project is being handled by
one private contractor or which signed contractor agreement with UEAP.

1.2. Statement of the Problem

The Government of Ethiopia has embraced increasing electricity access as a pillar of its
strategy for promoting income-generating activities and social services outside major urban
centers in order to improve living standards and reduce poverty. Promoting access to
electricity is also part of its strategy to decentralize the delivery of services throughout the
country. Accordingly, the UEAP is designed to electrify most rural towns and villages over a
ten-year horizon through extension of the grid. These rural towns/villages range in size from
about 300 to 15,000 inhabitants. The initial objective of the UEAP is to electrify
approximately 50% of rural towns over five years, with a long term view to connecting
virtually all towns and villages to the grid in a ten-year horizon. Unlike this, however, many
projects under the control of UEAP have suffered in delay, cost overrun and schedule
variances.
A study conducted in 2015 showed that 28% of the delays are due to factors related to the
employer, followed by 23% to factors associated to contractors. Delay in material supply and
redesigning of plans (which the owner is supposed to avail to the risking private contractors)
accounted 17% and 12%, respectively (Meaza, 2017). In addition to this, the researcher
conducted a preliminary investigation in to the project management practices of UEAP being
applied on one of the ongoing projects handled by a private contractor (called KBC). The
agreement for this live project was made on December 24, 2010. In the agreement, both parties
agreed on the “risk commencement and completion’’ of the project and the risk
commencement date was set as fifteen days after the risk signing date and the date for
completion was agreed to be eight month from the risk commencement date. What triggered
the writer and attracted his attention was that this risk agreement is active until now; it has
been active for almost the past nine years while it was signed to be completed within eight
months’ period. From the above two facts, it can be concluded that UEAP projects are facing
poor project management (PM) practices which needs further investigation. This study tries to
assess project risk management practices of Ethiopian electric power corporation in the case of
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Hawassa city

1.3. Objective of the Research

1.3.1. General Objective
The general objective of the study is to assess to assess project risk management practices of
Ethiopian electric power corporation in the case of Hawassa city

1.3.2. Specific Objectives

The study has the following specific objectives

1. To assess the enterprise’s project risk management practices followed towards the
effective delivery of projects

2. To identify project risk management practice gaps and challenges faced by the
enterprise which contributetowards project delay, cost overruns or scope changes
3. To identify the potential project risk management practices which shall be
adopted by Hawassa city electric power cooperation for successfuldelivery of
projects at hand and in the future

1.4. Significance of the Study

Even though this study is carried out with a limited scope, it could be helpful to have an
insight on the complexity of the challenges and issues on risk management in the electricity
access program. Moreover, it can contribute as inputs for further research in this area and used
as reference for the academia, professional and researcher and those who are interested in the
area of risk administration and project management practices.

1.5. Scope the Study

The scope of this study is limited to assess to assess project risk management practices of
Ethiopian electric power corporation in the case of Hawassa city. Geographically it only
asses at Hawassa City.

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 1.6 Limitation of the study
During data collection process there will be many problems tracing and locating. These problems
are: The shortage of time and resources during data collection and doing whose research.

1.7. Organization of the study

The study is organized into five chapters. Chapter one provides a brief background to the
study, discusses statement of the problem, the research question, objective of the study,
scope and limitation and significance of the study. Chapter two presents review of related
literature followed by Chapter three which presents the research methodology in which the
research methods, data collection, the sources of data and the methods of data analysis. The
fourth chapter focuses on the presentation, analysis and interpretation of the research
findings. Finally, chapter five provides recommendations of the study.

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 CHAPTER TWO
2. LITERATURE REVIEW
2.1. Theoretical Literature
2.1.1. Definitions and Standards for Project and Project Management

In order to understand project management, one must begin with the definition of a project.
According to Harold (2009), a project can be considered to be any series of activities and
tasks that:

 Have a specific objective to be completed within certain specifications

 Have defined start and end dates

 Have funding limits (if applicable)

 Consume human and nonhuman resources

 Are multifunctional (i.e., cut across several functional lines)

Project management on the other hand involves five process groups of project initiation,
planning,executing, monitoring & evaluation and project closing. It further explains project
management is accomplished through the appropriate application and integration of the 47
logically grouped project management processes, which are categorized into five Process
Groups. These five Process Groups are:

 Initiating,

 Planning,

 Executing,

 Monitoring and Controlling, and

 Closing.

In practice, managing a project typically includes, but is not limited to:

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  Identifying requirements;

 Addressing the various needs, concerns, and expectations of the stakeholders in

planningand executing the project;

 Setting up, maintaining, and carrying out communications among stakeholders

that areactive, effective, and collaborative in nature;

 Managing stakeholders towards meeting project requirements and creating

projectdeliverables;

 Balancing the competing project constraints, which include, but are not limited to:

• Scope,

• Quality,

• Schedule,

• Budget,

• Resources, and

• Risks.

The specific project circumstances will influence the constraints on which the project
manager needs to focus and require effective application and management of appropriate
project management processes.

2.2 Empirical Literature - Best Project Management Practices & Tools

To be competitive in today’s world, in any industry, organizations are dealing with
unprecedented change driven by factors such as the pace of change, the shifts in global
economic power, generational changes, the digital economy and the emergence of global
players disrupting traditional sectors. Speed, quality, prioritization, discipline and
adaptability are all key qualities that will engage customers and other stakeholders to use
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products or services and build lasting relationships (PwC, 2018).

In the backdrop of these changes, traditional project management methodologies are often no
longer considered effective in being responsive to a customer’s changing needs. To succeed in
an environment with shifting demands, a business needs to be adaptive and agile – even more
considering the changing environment we are working in and which has increased the risk of
projects not producing expected benefits, teams failing to deliver on time, within budget or to
expected quality standards, or outcomes not meeting stakeholder objectives.

In 2007, PwC invited senior executives and practitioners to participate in their first Global
project management survey. The survey’s main objective was to identify current trends in
project risk management, and pinpoint the characteristics of project risk management that are
applied on higher-performing projects.

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 CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1. Research Design
This research will use a qualitative research approach which is suitable to study complex
research problems that cannot be explored in isolation from their human and social context
(Creswell, 2013). It is the preferred method for an in-depth exploration of a complex
phenomenon such as project risk management practices where the boundaries between the
phenomenon and its context are not always clear (Yin, 2014).

3.2. SAMPLING PROCEDURE AND SAMPLING SIZE

The study considered the whole staff of the case enterprise (with positions related to electric
distribution construction works) as a target population for the study. That is, all of Hawassa
city staff in the position of technical expert and above will be considered for the survey for
which the structured questionnaire will be designed, distributed and filled by these respondents
to collect the primary data.

3.3. Data source and collection method

The researcher will use both primary and secondary data sources. The primary data will be
collected through structured questionnaire and interview. The structured questionnaire will be
developed in order to capture the project risk management practices of the case company
based on opinions of senior management, project managers, project supervisors and technical
experts. While developing the questionnaire sufficient reference will be made to empirical
researches in the literature for benchmarking. The questionnaire survey method is adopted
because it is usually cheap, easy to administer to a large number of respondents, and normally
gets more consistent and reliable results.

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 3.4. Data presentation and Analysis
Then quantitative data will be analyzed using advanced excel and presented in the form of
figures, graphs, bar and pie charts etc. Analysis and interpretation of data results will be
conducted using percentage comparisons, calculation of averages and frequencies.

3.5. Ethical consideration

In doing any research, there is an ethical responsibility to do the work honestly and with
integrity. The basic principle of ethical research is to preserve and protect the human
dignity and rights of all subjects involved in a research project (Leedy and Ormrod, 2010).
In this regard, the researcher will assure that the respondents’ information is confidential
and will use only for the study purpose.

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 4.1 Time schedule

2021
No Item
April may June July August
2019
July May
Jun
Over all progress

Topic Selection &

1 Modification

2 Proposal writing

3 Reviewing Literature

4 Proposal Presentation

5 Data collection & Analysis

8 Submission of Draft Report

9 Final Report & Presentation

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 4.2. Budget

No Item Estimated item in Unit cost (ETB( Total cost (ETB(

pieces
1 Paper 200 0.50 100
2 Printing 550 1.50 825
3 Pen Pen 5 5 25.00
4 Transportation 180
5 Laminating 15 10 150

6 Flash disk and CD 2 200 200

7 Website 0.25 500
TOTAL 2070

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