Identifying the latest risk probabilities affecting construction projects in Egypt according to political and economic variables. From January 2011 to January 2013

Peer review under responsibility of Housing and Building National Research Center.

Figures & data

Table 1 Distribution of respondents’ age, working experience and highest education.

	Percent%
Age
Group 25–45	40
Group 45–55	60
Total	100
Experience
<10 years	15
⩾10 years	85
Total	100
Highest education
Bachelor	66.7
Master	23.8
Doctor	9.5
Total	100

Table 2 Identification of risks.

Rank	Risk factor	Risk classification	R (Eq. (2(2) $R=P\times I$(2) ))	Deviation/variance (Eq. (1(1) ${\chi }^2=(\text{O}-\text{E})2/\text{E}$(1) ))
1	Currency fluctuation	External	0.4857	0.2213
2	Change in taxation/new tax rates	External	0.4767	0.212
3	Change energy cost/lack of fuel	External	0.4419	0.1989
4	Safety/unsecured roads	External	0.4324	0.2017
5	Official changes	External	0.4276	0.2029
6	Workers’ strikes	Internal	0.4252	0.1974
7	Fire risk	External/Internal	0.4195	0.2135
8	Bad communications between stakeholders	Internal	0.3938	0.1791
9	Poor documentations	Internal	0.3938	0.1756
10	Poor project planning & control	Internal	0.389	0.1724
11	Owner hesitation about design	Internal	0.3795	0.1735
12	Lack of decision making	Internal	0.361	0.1729
13	Poor material management & planning	Internal	0.3457	0.161
14	Poor equipment management & planning	Internal	0.3367	0.1648
15	Poor labor planning	Internal	0.3348	0.1767
16	Replacement of consultant	Internal	0.3343	0.1776
17	Increased material waste	Internal	0.3324	0.1588
18	Force majeure	External	0.331	0.1694
19	Geo-technical risks	External	0.3252	0.1884
20	New governmental acts or legislations	External	0.3224	0.1677
21	Change in regulations	External	0.3181	0.1887
22	Permits and licenses	External/Internal	0.3171	0.1885
23	Difficulties to erect temporary facilities	External/Internal	0.3157	0.1208
24	Restrictive site conditions	External/Internal	0.311	0.1659
25	Undefined authority	Internal	0.2986	0.1505
26	Safety regulations	Internal	0.2986	0.1489
27	Shortage of project facilitates	Internal	0.2857	0.1443
28	Delay of mobilization	Internal	0.2814	0.1444
29	Delay in material delivery	External/Internal	0.279	0.1776
30	Accept delay	Internal	0.2733	0.1828
31	Fridays’ Demonstrations	External	0.2657	0.1643
32	Governmental Delay Laws	External	0.2643	0.1864
33	Improving environment quality cost	External/Internal	0.2548	0.1546
34	Import/export restrictions	External	0.2543	0.1904
35	Cash Shortage	Internal	0.251	0.1156
36	Delay of owner payments	Internal	0.2443	0.1963
37	Currency fluctuation	External	0.2276	0.1176
38	Interest rate changes	External	0.2238	0.1625
39	Funding risk	External	0.2221	0.1726
40	Improper budgeting & contingencies	Internal	0.2205	0.1399
41	Replacing imported materials with local	External/Internal	0.22	0.1235
42	Change of material prices	External	0.2167	0.1681
43	Lack of experience	Internal	0.2014	0.1461
44	Third party for supervision	Internal	0.1881	0.1203
45	Quality assurance	Internal	0.1852	0.1433
46	Incomplete design	Internal	0.1795	0.1685
47	Defective design	Internal	0.1662	0.1059
48	Complexity of design	Internal	0.1629	0.1162
49	Ambiguities, inconsistency of specifications	Internal	0.149	0.1224
50	Surveying mistakes	Internal	0.14	0.1102
51	Defective work	Internal	0.1033	0.1011
52	Shortage of approved construction drawings	Internal	0.2386	0.167
53	Construction document conflicts	Internal	0.2276	0.1176
54	Contractor understanding to project nature	Internal	0.2238	0.1625
55	Construction technology available	External/Internal	0.2221	0.1726
56	Improper construction methods	Internal	0.2205	0.1399
57	Quality control & testing methods	Internal	0.22	0.1235
58	Defective material	Internal	0.2167	0.1681
59	Material storage	Internal	0.3171	0.2085
60	Material transportation	External/Internal	0.3157	0.1208
61	Conflict between actual quantities and contract quantities	Internal	0.311	0.1959
62	Equipment storage	Internal	0.2986	0.1505
63	Equipment transportation	Internal	0.2986	0.1489

Fig. 1 Currency Price changes. Dollar VS EGP [10].

Table 3 Identifying, analyzing and classifying the top major risks due to economic and political variables.

Rank	Id of top major risk	Affecting variable		Source of risk		Risk factor/index R (Eq. (2(2) $R=P\times I$(2) ))	Deviation/variance (Eq. (1(1) ${\chi }^2=(\text{O}-\text{E})2/\text{E}$(1) ))
		Economic	Political	Internal	External
1	Currency fluctuation	√	√		√	0.49	0.2
2	Change in taxation/new tax rates	√	√		√	0.48	0.2
3	Change energy cost/lack of fuel	√	√		√	0.44	0.2
4	Safety/unsecured roads		√		√	0.43	0.2
5	Official changes		√		√	0.4276	0.2029
6	Workers’ Strikes	√	√	√		0.43	0.2
7	Fire risk		√	√	√	0.42	0.2

Table 4 Risk response strategies.

Rank	Id of top major risk	Mitigation strategy (risk response)	Action taken
1	Currency fluctuation	Exploit share enhance accept	To be negotiated in contracts or meetings of stakeholders
2	Change in taxation/new tax rates	Avoidance mitigation transfer acceptance	Provide budget margin
3	Change energy cost/lack of fuel	Mitigate transfer accept	Provide schedule/budget margin
4	Safety/unsecured roads		Assigned to a professional party
5	Official changes	Avoidance mitigation transfer acceptance	Define authority between stakeholders with a flexibility of change- Selection of qualified/experienced consultant
6	Workers’ strikes	Avoidance mitigation transfer acceptance	Provide specified contracts with labor
7	Fire risk	Avoidance mitigation transfer acceptance	Provide assurance