Construction companies will not be allowed to take on more than six projects at a time unless they outperform the conditions and expectations stated on their contracts, if a new directive comes to force some time next year.

Drafted by officials at the Ministry of Urban Development & Construction, the directive dictates stringent guidelines for contractors taking public projects.

The directive was in the making since September, under the directorate for Construction Industry Law Framework. The draft has come about with the overall target of reducing delays on public projects and the additional costs associated with contractors biting off more than they can chew. Contractors win a number of bids but multiple projects fall behind schedule as a result of them being stretched thin.

"Contractors offer low bidding prices for projects that they can't handle," said Medina Ahmed, head of the directorate.

The directive in the making will compel project owners to check on a contractor undertaking projects to ascertain a completion rate higher than what is stated on the contract before awarding an additional project.

"The directive aims to give other contractors, especially beginners, a chance," Medina told Fortune.

Once approved, the directive will apply to the 23,000 contractors of all grades licensed, including foreign firms limited to seven projects at a time, and the state-owned Ethiopian Construction Works Corporation, one of the 335 grade-one contractors.

Industry leaders see the directive as a positive step.

Tewodros Shimeles, CEO of TABU Construction Plc, in business for a decade, believes the directive helps to avoid concentrations of projects in few hands and motivates contractors to complete projects within contract periods.

The directive "will do wonders" for smaller contractors excluded from big public projects, said Zeratsion Girmay, CEO of Bright Construction, in business for two decades.