Risk management framework for construction projects in developing countries

Abstract

It is important to manage the multifaceted risks associated with international construction projects, in particular in developing countries, not only to secure work but also to make profit. This research seeks to identify and evaluate these risks and their effective mitigation measures and to develop a risk management framework which the international investors/developers/contractors can adopt when contracting construction work in developing countries. A survey was conducted and twenty‐eight critical risks were identified, categorized into three (country, market and project) hierarchical levels and their criticality evaluated and ranked. For each of the identified risks, practical mitigation measures have also been proposed and evaluated. Almost all mitigation measures have been perceived by the survey respondents as effective. A risk model, named Alien Eyes' Risk Model, which shows the hierarchical levels of the risks and the influence relationship among the risks, is also proposed. Based on the findings, a qualitative risk mitigation framework was finally proposed which will benefit the risk management of construction project in developing countries.

Keywords:

• Risk management
• risk identification
• risk mitigation
• risk model
• international construction project
• developing countries

Notes

Author for correspondence. E‐mail: [email protected]

Additional information

Notes on contributors

Shou Qing Wang

Author for correspondence. E‐mail: [email protected]