Relevance of Risk Management in the Delivery of Construction Projects in Developing Countries

Abstract

Construction projects suffers poor performance due to poor risk management in its process in developing countries. A strict set of understanding regulations must be followed during the construction process to avoid these risks. Unfortunately, it is uneasy in construction projects to completely avoid risks as they are bound to be unknown factors that arises over the course of project execution. Risk management in construction projects is inherently risky but technically complex than projects in industries. It is one of the major rules undertaken by a project manager for an effective management of a construction projects. An effective management approach to projects is required as most times risk is handled through application of contingencies or time that are not determined based on comprehensive analysis of the risks that can affect a particular project. This paper establishes the relevance of risk management in the delivery of construction projects in developing countries. It further gives an overview of performance and addresses the problem inherent in risk managements in construction projects that will allow for achieving a successful project delivery within the context of time frame, minimizing cost overruns and optimizing project quality. The paper recommends that in order to improve the chance of success in construction projects and reduce the potential risks, risk management must be an important part of the decision-making process for a construction enterprise.