Risk Management in Construction Projects

Abstract

Risk management is an important field of construction industry and has gained more importance internationally due to the latest researches carried out on a large scale. However, this relatively new field requires more attention to bring some benefit. Construction projects are facing a number of risks which have negative effects on project objects such as time, cost and quality. This study is based on findings of a questionnaire-based survey on risk management in construction projects in Pakistan, reporting the significance of different type of risk, ultimate responsibility for them and the effectiveness of some most common risk management techniques practiced in the industry. Two types of risk management techniques were considered: preventive techniques which can be used before the start of a project to manage risks that are anticipated during the project execution; and remedial techniques that are used during the execution phase once a risk has already occurred. The study revealed that financial issues for projects, accidents on site and defective design are the most significant risks affecting most of construction projects. As further reported, the contractor is responsible for management of most risks occurring at sites during the implementation phase, such as issues related to subcontractors, labour, machinery, availability of materials and quality, while the client is responsible for the risks such as financial issues, issues related to design documents, changes in codes and regulations, and scope of work. Further reported results of the analysis demonstrate that the production of proper schedule by getting updated data of the project and guidance from previous similar projects are the most effective preventive risk management techniques while close supervision and coordination within projects are the most effective remedial risk management techniques. It may be concluded that the most significant risks must be managed with greater effort to reduce/eliminate their effects on the project. As the study concludes, preparation of a proper schedule and good coordination during the implementation stage are very important as they may help project managers to focus on critical areas for better management of projects in Pakistan.

A Hybrid MCDM Technique for Risk Management in Construction Projects

“…Taylan et al [15] proposed hybrid methodologies combining fuzzy AHP and fuzzy TOPSIS and applied the relative importance index method to prioritise the project risks based on the data obtained. Iqbal et al [9] considered two types of risk management technique during project execution, viz. preventive techniques (to manage risk before the start of the project) and remedial techniques (after occurrence of the risk).…”

“…[16] Design risk, payment delay risk, funding risk, quality risk, labour dispute risks, natural disaster risk, exchange rate fluctuation risk, political instability, site condition risks, insurance inadequacy risk. [9] Technical risks, organisational risks, socio-political risks, environmental risks, financial risks. [6] Inflation (economic) risk, environmental and geological risk, design risk, construction delay risk, inadequate managerial skills risk, resource risk.…”

“…In comparison to other sectors, construction projects encounter more risks due to uncertainties occurring because of various construction practices, working conditions, mixed cultures and political conditions between host and home countries [9][10][11][12]. Thus, in this scenario, risk management can be considered a vital part of the decision-making process in construction projects.…”

“…Thus, a survey on risk mitigation strategies is performed, based on the recent works [9,23,43], to alleviate construction projects risks. Based on the above considerations, this paper also develops an extended version of the MABAC methodology in an uncertain and incomplete decision environment, in order to evaluate risk mitigation strategies in construction based projects.…”

Risk Assessment of China’s Overseas Oil Refining Investment Using a Fuzzy-Grey Comprehensive Evaluation Method

“…This refers to the odds of engineering quality deviation from the expectation due to the limitation in the ground condition and subjective causes of the construction team during the building process of the refinery [36].…”