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The literature on what constitutes claims and disputes and their causes was examined under section 4.2. In the absence of an official database cataloguing all infrastructure-related construction disputes in Ghana, it was impossible to provide figures on prevalence. Nevertheless, the qualitative data suggested a dispute-rife sector. The study identified several regular claim events and dispute causes. A summary of information on fourteen of these events is presented in Table 7.5 below.

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Table 7.5: Claim Events and Dispute Causes (Source: Field Data) 1 Poor definition of

scope

There was often a mismatch between the Employer’s requirement and the contractor’s obligations. The statement of APC, a contract reviewer, on this issue sums up the views of interviewees. APC observed as follows:

One of the things which immediately come to mind is poor definition of the scope. That is a big issue. What happens is that the owner of a project, the government side, is unable or do not take time to state or think through the scope of projects, what in engineering is called the Employers’ requirements. What we see a lot of the time is that there is a dis-connect between that and what the contractor offers. Even if they know it, they don’t state it clearly, properly, with all the information that the contractor can then respond to. That is a big big issue. Because as a result of that, we as an independent party look at it and in our view, the Employer’s needs and the contractors’ offers do not match. We therefore have to find a way of bringing those two positions together. In our view, a lot of those could have been shortened if clearer definition of what they want is put out there.

2 Unfavourable ground conditions

This was described as a challenge which can distort everything. It affected the value of the contract, led to massive claims. Citing an on-going project as an example, CPR9 emphasized the need for thorough geo-technical investigation prior to the award of contracts. In the example above, the initial investigations failed to locate a huge rock covering a whole stretch of the civil works being undertaking. Neither the initial design nor subsequent physical inspections by the contractor revealed its existence. The contractor had given notice that the work required to remove the rock has not been priced. The Employer is reluctant to accept the situation.

3 Employer interference

Examples of Employer interference encountered included: (a) political figures requesting aspects of signed contracts to be varied without recourse to the normal contractual channels for effecting such variations; and (b) political figures instructing contractors to go onto site without detailed designs (see The Waterville Case). 4 Site possession

issues

Many major infrastructure projects affected private properties. Such properties were compulsorily acquired by the State to pave way for execution. As CPR4, CPR 9 and EP3 indicated, in most cases compensation payments for the acquired sites delay and often remained unpaid by the time the project begins. Affected persons see commencement of work as a trigger to agitate for payment. According to EP3, external funding did not cover such payments. It therefore fell to GOG to secure funds for such purposes. Predictably, such payments often suffered delays and this results in disruption of work.

CPR9 and EP 2 recounted various instances where relocation of utilities posed serious time and financial challenges to projects. In most cases, access to site was not given. For the Contractors, idling equipment and workforce, and delay causing disruption of

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work schedules made claims inevitable.

5 Delayed payment This was one of the key causes of disputes in Ghana. CPR 4 commenting on causes of disputes stated as follows:

One major problem is delay in payment especially where government of Ghana contributes to the funding; it happens that we always delay in paying our portion. Where it is wholly GOG, then that’s a major factor…we delay in paying so they bring interest on delayed payments. Sometimes, the contractors give notice and stop work. So once you pay them then they will remobilize and start the work again. So all those stand still costs will come in as claims. So that’s one major issue.

Design changes Design changes in the course of construction may be a normal feature of major projects. However when they become a regular occurrence, their impact on claim becomes visible. CPR 4, CPR8 and CPR 9 alluded to the pervasiveness of the practice in Ghana particularly with Government projects. Excessive design changes led to delays, alteration of work schedules, and request for additional resources to meet the new requirements. The consequences were claims for additional sums and extension of time (CPR9).

7 Delays These were, generally, the immediate claim triggers and were very rife.

8 Extra work The Employer often instructed contractors to execute extra work beyond what was originally agreed and this was another source of claims (EP1&CPE5).

9 Inadequate engineering studies

Most projects commenced on the basis of inadequate engineering studies. CPR4 and CPR 9 acknowledged that this situation often resulted in outright change of scope of the original project with implications for revision of rates, extension of the completion time, payment of additional overheads and claims for idle equipment etc.

10 Incomplete design

Related to the issue of inadequate engineering studies was the challenge of awarding major projects based on incomplete, outdated or non-existent designs. CPR4, for instance, admitted that sometimes they were ‘forced’ to start projects with incomplete designs.

11 Laxity in contract administration

Many issues matured into disputes due to the Employer’s laxity. This fact was confirmed byCPA4, EP2 and CPR 9.They attributed some claims made against the Employer to officials who failed to perform their roles promptly and as a result caused unnecessary delays on projects.

12 Use of traditional procurement method

After presenting lower bids to secure selection, most contractors tended to focus on aspects of the transaction which could be exploited to make up what they have lost. CPE 5 gave two examples of recently executed projects which encountered such practices. In both cases, the projects had been successfully completed. Then the contractors set out to identify issues related to the projects and then set a claim process in motion. From the interviews, many of such claims eventually resulted in disputes as

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the Employer often rejected such claims.

13 Variations Most interviewees involved in project implementation were unanimous on the issue of regular occurrence of substantial variations in Government projects.

14 Breach of contract

Wilful breach of contract was common. In response to a question on the causes of disputes, CPA1 replied, ‘Non- performance, breach of contract, you have given it to X you signed, and then you go and give it to Y. We have plenty of that. And they are suing us for breach of contract’. This was confirmed by CPA4 and other interviewees.

Where the above-listed events existed, the likely consequences were claims by contractors. Where claims based on these conditions were rejected expressly or by inference, disputes resulted (see section 4.2).