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.

Keywords:

• risk
• assessment
• construction

JEL Classification:

• D81
• L74

Additional information

Notes on contributors

Shahid Iqbal

Shahid IQBAL is a PhD student of Civil Engineering at the Faculty of Materials Science and Technology, Technical University of Freiberg, Germany. He received his MS in Construction Engineering and Management from the School of Civil and Environmental Engineering, National University of Sciences and Technology, Islamabad, Pakistan in 2011 and BE in Civil Engineering from the same university in 2006. He worked at Telenor Pakistan from 2006 to 2012 as the Team Leader of civil works where he managed site design and different running projects. He is a member of the Pakistani Engineering Council, Islamabad and a Registered Engineer since 2008. Currently, he is conducting a research study on self compacting concrete, light weight concrete and fibre reinforced concrete.

Rafiq M. Choudhry

Rafiq M. CHOUDHRY, Prof. Dr, Professor of Construction Engineering and Management, Civil and Environment Engineering, College of Engineering, King Faisal University, Al-Hafuf, Al-Ahsa, Saudi Arabia and formerly, Professor & Head, Dept. of CE&M, NUST. He is a visiting faculty member of Bauhaus University Weimar, Germany. He edited a book (ISBN 7-302-13236-4) titled “Global Unity for Safety and Health in Construction”. He was the guest editor of a Science Direct journal (ISSN 0925-7535), Safety Science, on “Construction Safety”. He has published 63 papers in refereed journals and conferences. He is a licensed professional civil engineer in the Pakistani Engineering Council, Islamabad. He has extensive professional expertise in construction industry for managing projects and for teaching in project management, construction management, construction safety, risk management, claims and disputes resolution, and PM training.

Klaus Holschemacher

Klaus HOLSCHEMACHER, Prof. Dr-Ing., Dean of the Faculty of Civil Engineering at HTWK Leipzig, Germany and Professor for Structural Concrete. In 2013, Prof. Holschemacher received the honour doctor degree of the South West State University Kursk, Russia. He has published more than 200 scientific papers. Research interests: high performance concrete, fibre reinforced concrete, timber concrete composite, on-line monitoring, sustainability and more.

Ahsan Ali

Ahsan ALI, Eng., is a PhD student at the Faculty of Material Science & Technology, TU Freiberg, Germany. He was awarded a Bachelor's degree in Civil Engineering from Mehran University of Engineering & Technology (MUET), Pakistan and MS in Structural Engineering from the National University of Sciences & Technology (NUST), Pakistan. Besides his job as an Assistant Professor at Quaid-e-Awam University of Engineering, Science and Technolgy (QUCEST), Pakistan, Engr., Ahsan Ali has also experience of more than two years as a structural engineer with a consultant firm. His research interests include behaviour of reinforced concrete and structural elements of fibre reinforced concrete. He is registered as a professional engineer with the Pakistani Engineering Council.

Jolanta Tamošaitienė

Jolanta TAMOŠAITIENĖ, Assoc. Prof. Dr, a Vice-Dean of the Civil Engineering Faculty and employee of the Dept. of Construction Technology and Management at Vilnius Gediminas Technical University, Lithuania. Since 2013, she is a member of the Editorial Board of the Journal of Engineering, Project, and Production Management; since 2011; she is a member of the Editorial Board of the journal Technological and Economic Development of Economy. Since 2009, she is a member of EURO Working Group OR in Sustainable Development and Civil Engineering, EWG-ORSDCE. She has published 50 scientific papers. Research interests: many miscellaneous management areas (enterprise, construction project, etc.), risk assessment, construction project administration, building life-cycle, construction technology and organisation, decision-making and grey system theory, decision making (DM), statistics, optimization, strategies, game theory, intelligent support system, sustainable development: developing of alternative construction processes, economic and other aspects, sustainable development challenges for business and management in construction enterprises, environmental impact processes, etc.