Editor's Note | Introduction | Literature Review 
Methods and Data | Results | Conclusions | References

Results

As outlined in Section 2, risk factors on construction projects can be split into two major groups:

1. Internal risks, which fall within the control of clients, consultants and contractors.
2. External risks, which include risk elements that are not in the control of key stakeholders.

The potential risk sub-factors were adapted from studies by Chapman and Ward[25], Tah and Carr[32], Perera et al.[40], Pinto et al.[51], Baloi and Price[63], Kartam and Kartam[66], Lahdenperä[67], Majamaa et al.[68], Mbachu and Nkado[69], Mitkus and Trinkūnienė[70], and Yang et al.[71].

In order to illustrate the respondents' opinions regarding the importance of analysed risk factors, an average was calculated for each factor. Next, the Kendall coefficient of concordance W[72,73] was calculated to test the reliability of the responses, and significance testing was based on the Chi-square distribution at the 1% significance level. The W coefficients were calculated for each defined group of risk factors created by the analysis perspectives.

In both surveys, the respondents agree as regards the external risks impact and probability. The respondents agree as regards the external risks impact, what can be judged by values W=0.183; χ²=34.7 (α=0.01), in the first survey; W=0.10; χ²=12.4 (α=0.01), in the second survey. The identified external risks according to their potential effect on construction project objectives were ranked. In the first survey, the top three important external risks identified are:

1. Natural forces;
2. Inflation and interest rate;
3. Fiscal policy.

In the second survey, the top three important external risks identified are:

1. Fiscal policy;
2. Natural forces;
3. Political controls.

Probability assessment of risks of the external project constrains is reflected in Figure 1. Impact assessment of risks of the external project constrains is reflected in Figure 2.

The risk management perceivers are the project participants, and a contractor is any entity which has the power to influence project decision making directly. Related to experience, only 11% of the respondents affirmed that they have experience in risk management. Most of them are project manager and have more than 15 years' experience; it proofs that the relationship between risk perception and experience of respondents. And even 34% of the respondents affirmed that they have no experience in risk management, while 55% of the respondents affirmed that they do not have enough experience in risk management. And 97% of the respondents answered that risks must be managed at the early stages of the construction project.

Figure 1. Probability assessment of external project risks

Figure 2. Impact assessment of external project risks

In terms of the sources and providers of the data and information required in the risk analysis, the most frequently used technique is experiential or documented knowledge analysis with 92% of the respondents' agreement in the first survey, and 93% of the respondents' agreement in the second survey (Figure 3). And the project documentation reviews, project team brainstorming, and analysis of other information resources are frequently used in the risk assessment.

Comparison between the two surveys in terms of risk analysis showed a decrease in reviews of project documentation, from 63% in the first survey to 47% in the second survey, as well as greater use of experts' judgement, from 26% in the first survey to 43% in the second survey, and project team brain-storming, from 45% in the first survey to 53% in the second survey, in the risk assessment.

Figure 3. Risk analysis practices in construction projects

Figure 4. Risk response techniques employed for construction projects

In terms of the risk response tools and techniques, the most frequently used tool is performance bonds and warranties with 95% of the respondents' agreement in the first survey, and 77% of the respondents' agreement in the second survey (Figure 4). And the some resource reservation, insurance, and risk transference to another project party are frequently used risk response techniques.

Comparison between the two surveys in terms of risk response tools and techniques showed a decrease of performance bond and warranties, from 95% in the first survey to 77% in the second survey, and resource reservation, from 61% in the first survey to 50% in the latter survey; as well as greater use of risk transference to another party, from 50% in the first survey to 53% in the second survey, and insurance, from 55% in the first survey to 57% in the latter survey, for the risk responses.

In last survey (2010-2011), the respondents agree as regards the project level risks impact, what can be judged by values W=0.54; χ²=51.3 (α=0.01). As regards the assessment of the project level risks probability, respondents also agree what can be judged by values W=0.51; χ²=48.5 (α=0.01). The identified project level risks according to their potential effect on construction project objectives were ranked. The top three important categories of internal risks identified are:

1. Construction risks;
2. Design risks;
3. Project management risks.

Overall assessment of risks of the internal project risks is reflected in Figure 5. Risk priority is utilized during response planning and risk monitoring. It is critical to understand the priority for each risk as it allows the project team to properly understand the relative importance of each risk.

Figure 5. Assessment of project level risk categories

The next table (Table 1 below) shows that the controllable risk sources as identified in the study could be further broken down into seven sub-categories, namely: design risks, external risks, environmental risks, organizational risks, project management risks, right of way risks, and construction risks, all of which fall within the control of the project team.

Table 1. Risk categories

Risk Management - Current Issues and Challenges

Figure 6. Risk matrix

Once the risks and probabilities are determined, the risk score can be calculated. Risk score is detailed in Table 1. The probability and impact matrix (Figure 6) illustrates a risk rating assignment for individual risk factors in the identified risks categories. The risk matrix shows the combination of impact and probability that in turn yield a risk priority (shown by the red, yellow, and green colour). Qualitative risk analysis can lead to further analysis in quantitative risk analysis or directly to risk response planning.

Twenty risk factors were established to be significant under the internal risks categories. Under the design risk category, design errors/omissions and design process delays were the most frequently mentioned risk factors attributed to the contractors. Under the project management risk category, scheduling errors and failure to comply with contractual quality requirements were the most frequently mentioned risk factors. Under the construction risk category, construction cost overruns and technology changes were the most frequently mentioned risk factors attributed to the contractors.

Respondents believed that these risk events are responsible for poor quality of work, delays and associated losses. Risks with high impact and high probability, such as D₁ (design errors and omissions), C₁ (construction cost overruns), and PM₂ (scheduling errors, contractor delays) are required further analysis, including quantification, and aggressive risk management.

Methods and Data

Conclusions

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