Risk management in building construction projects: contractors and Consultants perspectives

Abstract

This investigation aims at identifying the major risk factors that contribute to the possible occurrence of risk on building construction projects in Addis Ababa. Participants of the study, located in Addis Ababa, were grade one contractors and consultants. To achieve its objective, a mixed method research design approach was deployed in this study. It also implemented descriptive research design for the purpose of describing situations and facts to the research questions. Questionnaire survey was conducted for collecting data from a simple random sample of 100 people. The collected data was analyzed through Statistical Package for Social Science / IBM SPSS 24/ and the results are presented through statistical tools such as frequency tables, graphs, and charts, etc. The research findings indicated that 5 critical risk factors were identified based on an assessment of their probability of occurrence on building construction projects. These were “high inflation rate”, “delayed payment by client”, “poor resource management”, “risk of corruption”, and “economic instability” that have influence on project objectives. Financial factor was the most significant risk category recognized by participants. Hence, the two most critical possible risks identified were time overrun and cost overrun. It was also indicated that for effective risk alleviation risk transfer and reduction measures were the major strategies recognized by participants. Further investigation of opinions from the study revealed that there was lack of knowledge of risk management which needs to be improved. It was concluded that consultants and contractors as well as other stakeholders need to work in tandem to improve the environment of risk management in building construction industry.