Risks affecting the performance of Ethiopian domestic road construction contractors

Figures & data

Table 1. Summary of risk events.

Identified risk events	Author
Inflation	(Wang and Chou 2003; Wiguna and Scott 2005; Goh and Abdul-Rahman 2013; Helen et al. 2015; Iqbal et al. 2015; Jaber 2015; Yoon et al. 2015; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016; Fernando et al. 2017); (Zou et al. 2007; El-Sayegh 2008; Chileshe and Yirenkyi-Fianko 2011; Emuze and Kadangwe 2014)
Poor/ defective design, including design change	(Wiguna and Scott 2005; ANDI 2006; El-Sayegh 2008; Emuze and Kadangwe 2014; Befrouei and Taghipour 2015; Iqbal et al. 2015; Jaber 2015; Yoon et al. 2015; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016); (Ekung et al. 2015; Mohammed 2016)
Delay in payments	(Wiguna and Scott 2005; ANDI 2006; El-Sayegh 2008; Chileshe and Yirenkyi-Fianko 2011; Emuze and Kadangwe 2014; Goh and Abdul-Rahman 2013; Helen et al. 2015; Iqbal et al. 2015; Yoon et al. 2015; Jayasudha and Vidivelli 2016)
Inadequate project duration	(Zou et al. 2007; El-Sayegh 2008; Goh and Abdul-Rahman 2013; Befrouei and Taghipour 2015; Jayasudha and Vidivelli 2016; Mohammed 2016)
Site safety/accident	(ANDI 2006; Gohar et al. 2012; Ekung et al. 2015; Iqbal et al. 2015; Jaber 2015; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Delay in delivery of material and equipment	(Zou et al. 2007; El-Sayegh 2008; Helen et al. 2015; Iqbal et al. 2015; Yoon et al. 2015; Jayasudha and Vidivelli 2016)
Reworks/ poor workmanship	(Wiguna and Scott 2005; ANDI 2006; Chileshe and Yirenkyi-Fianko 2011; Mahamid 2013; Helen et al. 2015)
Shortage of skilled labour	(Zou et al. 2007; El-Sayegh 2008; Emuze and Kadangwe 2014; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Shortage of unskilled labour	(El-Sayegh 2008; Chileshe and Yirenkyi-Fianko 2011; Mahamid 2013; Jaber 2015; Jayasudha and Vidivelli 2016)
Shortage of cash/ Cash flow problem	(Gohar et al. 2012; Emuze and Kadangwe 2014; Mahamid 2013; Iqbal et al. 2015; Jayasudha and Vidivelli 2016)
Unforeseen ground conditions	(Wiguna and Scott 2005; ANDI 2006; Mahamid 2013; Ekung et al. 2015; Mishra and Mishra 2016)
Delay inspection/ Delay in decision	(Befrouei and Taghipour 2015; Helen et al. 2015; Jaber 2015; Mohammed 2016)
Inadequate planning	(Zou et al. 2007; Goh and Abdul-Rahman 2013; Befrouei and Taghipour 2015; Iqbal et al. 2015; Jaber 2015)
Adverse climatic condition	(Wiguna and Scott 2005; Ekung et al. 2015; Iqbal et al. 2015; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Corruption/bribery	(Wang et al. 2004; Gohar et al. 2012; Ekung et al. 2015; Jaber 2015; Jayasudha and Vidivelli 2016)
Shortage of project managers and construction professionals	(Zou et al. 2007; El-Sayegh 2008; Helen et al. 2015; Mishra and Mishra 2016)
High-interest rate	(Wang, et al. 2004; Iqbal et al. 2015; Jayasudha and Vidivelli 2016; Fernando et al. 2017)
Financial failure	(Chileshe and Yirenkyi-Fianko 2011; Goh and Abdul-Rahman 2013; Mishra and Mishra 2016; Mohammed 2016)
Low margin of profit due to high competition	(Zou et al. 2007; Emuze and Kadangwe 2014; Jayasudha and Vidivelli 2016; Mohammed 2016)
Poor communications among the parties in the contract	(Mahamid 2013; Jayasudha and Vidivelli 2016; Mohammed 2016)
Unfair decision on cost and/ or time claims	(ANDI 2006; Zou et al. 2007; El-Sayegh 2008; Mohammed 2016)
Change in Legislations	(Wang et al. 2004; Ekung et al. 2015; Jaber 2015; Jayasudha and Vidivelli 2016)
Delay in Possession of Site (ROW)	(Wang et al. 2004; Zou et al. 2007; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Variations (inadequately compensated)	(Wiguna and Scott 2005; Zou et al. 2007; Goh and Abdul-Rahman 2013; Jayasudha and Vidivelli 2016)
Inaccurate contract quantities (increase or decrease)	(Zou et al. 2007; Emuze and Kadangwe 2014; Jayasudha and Vidivelli 2016)
Labour dispute and strike	(Wang et al. 2004; Mahamid 2013; Jayasudha and Vidivelli 2016)
Delay in resolving contractual issues (claims and dispute, etc.)	(ANDI 2006; El-Sayegh 2008; Mohammed 2016)
Shortage of material	(Iqbal et al. 2015; Mishra and Mishra 2016; Fernando et al. 2017)
Lack of access to foreign currency	(Emuze and Kadangwe 2014; Jayasudha and Vidivelli 2016; Fernando et al. 2017)
Supply of low quality/defective materials	(ANDI 2006; Helen et al. 2015; Iqbal et al. 2015)
Low labour productivity	(Wiguna and Scott 2005; ANDI 2006; Jayasudha and Vidivelli 2016)
Low equipment productivity	(Wiguna and Scott 2005; ANDI 2006; Mohammed 2016)
Shortage of equipment	(Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Frequent breakdown of equipment	(Befrouei and Taghipour 2015; Jayasudha and Vidivelli 2016)
poor commitment and coordination in contractors’ teams	(Helen et al. 2015; Mishra and Mishra 2016)
Turnover of Contractor’s project management staff	(Jayasudha and and Vidivelli 2016; Mohammed 2016)
Unavailability of local construction materials	(Emuze and Kadangwe 2014; Mahamid 2013)
High competition in the bid	(Mahamid 2013; Jayasudha and Vidivelli 2016)
Vandalism/damage on contractors’ properties	(Befrouei and Taghipour 2015; Jayasudha and Vidivelli 2016)
Pollution/contamination	(Zou et al. 2007; Jayasudha and Vidivelli 2016)
Natural disaster (landslide, flood)	(Ekung et al. 2015; Jayasudha and Vidivelli 2016)
Theft	(Befrouei and Taghipour 2015; Jayasudha and Vidivelli 2016)
High tax rate	(Jayasudha and Vidivelli 2016)
Wastage of materials (site)	(Jayasudha and Vidivelli 2016)
Inadequate compensation for costs incurred due to changes in legislation	(Zou et al. 2007)
Stoppage of work by local government	(Mohammed 2016)
Ecological damage	(ANDI 2006)

Table 2. Risk event taxonomy.

Risk categories	Author (s)
Internal and external risks	(PMI 2013; Yoon et al. 2015; Jayasudha and Vidivelli 2016; Mishra and Mishra 2016)
Financial, Time, Physical, Personnel, Design & Technical, contractual, Political & regulatory, and Safety	(Goh and Abdul-Rahman 2013)
contractor, owner, shared and undecided	(ANDI 2006; Iqbal et al. 2015)
External and Site Condition Risk; Economic and Financial Risks; Technical and Contractual Risks; and Managerial Risks	(Wiguna and Scott 2005)
Project characteristic, labour and material related, contractual relationship, project procedures, external environment, clients’ related, consultants related and contractors’ related factors	(Helen et al. 2015)
Financial, Legal, Management, market, political and security, technical, environmental, and social-related factors.	(Jaber 2015)
Design, physical, logistics, legal, environmental, management, cultural, financial, construction and political	(Kishan et al. 2014)
Cost, time, quality, environment and security	(Befrouei and Taghipour 2015)

Figure 1. Categories of risk events.

Table 3. Risk events by category.

Risk event	Description	Risk event	Description
	1. Business environment events		2.2. Events related to contractors management competence
	1.1. Macro economy related events	RE24	Inadequate planning
RE01	Inflation	RE25	Delay in delivery of material and equipment
RE02	High-interest rate	RE26	Wastage of materials (site)
RE03	Lack of access to foreign currency	RE27	Supply of low quality/ defective materials
RE04	High tax rate	RE28	Frequent breakdown of equipment
	1.2. Resource related events	RE29	poor commitment and coordination within the Contractors’ team
RE05	Shortage of project managers and construction professionals	RE30	Turnover of Contractor’s project management staff
RE06	Shortage of skilled labor	RE31	Financial failure
RE07	Shortage of equipment		2.3. Technology related events
RE08	Shortage of material	RE32	Reworks/ poor workmanship
RE09	Shortage of cash/ Cash flow problem	RE33	Low labor productivity
	1.3. Market and competition related events	RE34	Low equipment productivity
RE10	High competition in bids		3. Construction Site Condition Related
RE11	Low margin of profit due to high competition		3.. physical related events
	1.4. Laws and regulations related events	RE35	Shortage of unskilled labor
RE12	Change in legislations	RE36	Unavailability of construction materials
RE13	Inadequate compensation for costs incurred due to changes in legislation	RE37	Unforeseen ground conditions
	2. Construction related events	RE38	Adverse climatic condition
	2.1. Contract administration related events	RE39	Site safety/accident
RE14	Delay in Possession of Site (ROW)	RE40	Labor dispute and strike
RE15	Poor communications among the parties in the contract	RE41	Stoppage of work by local government
RE16	Poor/ defective design	RE42	Natural disaster (landslide, flood)
RE17	Inaccurate contract quantities (increase or decrease)	RE43	Corruption/ bribery
RE18	Inadequately compensated variation orders	RE44	Theft
RE19	Inadequate project duration	RE45	Vandalism/ damage on contractors’ properties
RE20	Delay inspection/ Poor supervision		3.2. Social and environment related events
RE21	Delay in claims and dispute resolution	RE46	Pollution/ contamination
RE22	Unfair decision on cost and/ or time claims	RE47	Ecological damage
RE23	Delay in payments

Figure 2. Research Framework [Authors’].

Table 4. Breakdown of responses received.

Respondents group	Number approached	Questionnaires sent	Replies	Return rate
Contractor (CNT)	85	72	31	43.1%
Consultant (CNS)	120	100	59	59.0%
Client (CLT)	83	76	47	61.8%
Total	288	248	137	55.2%

Table 5. Respondents by experience.

Experience (years)	5 to 10	10 to 15	15 to 20	>20
Number of respondents	42	57	18	20
Proportion (%)	30.7%	41.6%	13.1%	14.6%

Table 6. Respondents by position.

Contractor			Consultant			Client
	No.	%age		No.	%age		No.	%age
Technical Manager	3	9.7%	General Manager	7	11.7%	Director	9	19.2%
Project Manager	24	77.4%	Resident Engineer	44	75.0%	Team Leader	19	40.4%
Claims Expert	4	12.9%	Deputy Resident Engineer	7	11.7%	Project Engineer	19	40.4%
			Claims Expert	1	1.7%
Total	31	100%		59	100%		37	100%

Table 7. Results of Relative Importance Index (RII) and ranks.

Risk event	Contractor		Consultant		Client		Weighted average
	RII	Rank	RII	Rank	RII	Rank	RII	Rank
RE09	0.853	4	0.815	1	0.812	1	0.822	1
RE24	0.964	1	0.767	2	0.747	6	0.804	2
RE03	0.860	3	0.759	4	0.771	3	0.785	3
RE14	0.888	2	0.697	7	0.774	2	0.766	4
RE28	0.821	5	0.748	5	0.750	5	0.765	5
RE25	0.751	6	0.724	6	0.770	4	0.746	6
RE31	0.680	11	0.764	3	0.730	7	0.734	7
RE01	0.739	7	0.660	8	0.640	8	0.670	8
RE23	0.655	14	0.633	10	0.616	11	0.632	9
RE29	0.575	23	0.630	12	0.624	10	0.616	10
RE11	0.664	12	0.650	9	0.518	22	0.608	11
RE16	0.699	8	0.589	14	0.570	14	0.607	12
RE17	0.665	11	0.608	13	0.558	15	0.604	13
RE10	0.664	13	0.632	11	0.512	23	0.598	14
R07	0.596	17	0.561	18	0.626	9	0.591	15
RE34	0.572	24	0.578	16	0.610	12	0.588	16
RE33	0.588	20	0.561	17	0.605	13	0.582	17
RE30	0.593	18	0.583	15	0.526	20	0.566	18
R19	0.623	15	0.501	21	0.530	19	0.538	19
RE05	0.577	22	0.511	20	0.535	18	0.534	20
RE32	0.533	26	0.513	19	0.556	16	0.533	21
RE21	0.696	11	0.483	22	0.489	26	0.532	22
RE08	0.589	19	0.474	23	0.551	17	0.526	23
RE15	0.587	21	0.456	25	0.413	31	0.470	24
RE38	0.467	31	0.429	27	0.510	25	0.465	25
RE06	0.497	28	0.396	30	0.519	21	0.461	26
RE20	0.539	25	0.377	34	0.512	24	0.460	27
RE26	0.489	30	0.415	29	0.478	27	0.453	28
RE37	0.441	33	0.462	24	0.414	30	0.441	29
RE22	0.619	16	0.428	28	0.343	40	0.440	30
RE02	0.493	29	0.431	26	0.400	32	0.434	31
RE18	0.525	27	0.390	31	0.350	38	0.406	32
RE27	0.408	36	0.380	33	0.429	33	0.403	33
RE36	0.417	35	0.368	35	0.390	37	0.387	34
RE04	0.432	34	0.340	37	0.380	34	0.374	35
RE43	0.452	32	0.381	32	0.313	41	0.373	36
RE39	0.408	37	0.330	38	0.377	30	0.364	37
RE41	0.355	43	0.299	41	0.424	29	0.354	38
RE47	0.360	42	0.342	36	0.348	39	0.348	39
RE46	0.351	44	0.328	39	0.361	36	0.344	40
RE35	0.392	39	0.249	45	0.358	35	0.318	41
RE44	0.399	38	0.310	40	0.245	47	0.307	42
RE13	0.388	40	0.292	42	0.254	46	0.300	43
RE40	0.363	41	0.275	43	0.277	43	0.295	44
RE42	0.316	47	0.258	44	0.310	42	0.289	45
RE45	0.345	45	0.248	46	0.270	44	0.277	46
RE12	0.329	46	0.243	47	0.263	45	0.269	47

Table 8. Top 10 significant risk events.

Risk events	Contractor		Consultant		Client		Weighted aver.
	RII	Rank	RII	Rank	RII	Rank	RII	Rank
Shortage of finance/Cash flow problem	0.853	4	0.815	1	0.812	1	0.822	1
Inadequate planning	0.964	1	0.767	2	0.747	6	0.804	2
Lack of access to foreign currency	0.860	3	0.759	4	0.771	3	0.785	3
Delay in Possession of Site (ROW)	0.888	2	0.697	7	0.774	2	0.766	4
Frequent breakdown of equipment	0.821	5	0.748	5	0.750	5	0.765	5
Delay in delivery of material and equipment	0.751	6	0.724	6	0.770	4	0.746	6
Financial failure	0.680	11	0.764	3	0.730	7	0.734	7
Inflation	0.739	7	0.660	8	0.640	8	0.670	8
Delay in payments	0.655	14	0.633	10	0.616	11	0.632	9
Poor commitment and coordination within Contractors’ teams	0.575	23	0.630	12	0.624	10	0.616	10

Table 9. ANOVA.

Source of variation	Sum of squares	Df	Mean square	F	P-value	F crit
Between groups	0.14	2	0.07	2.66	0.07	3.06
Within groups	3.60	138	0.03
Total	3.74	140

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