Impact of Risk Factors on Construction Projects’ Completion Cost in Nigeria

Abstract

Construction projects are prone to a number of risks due to their complexity, dynamic nature, capital intensive nature and involvement of  many stakeholders. These risks if left unmanaged will negatively influence the completion cost and other primary objectives of  construction projects. Numerous studies have been conducted globally to determine the potential risks that negatively impacts  construction projects; however, the risks aren’t alike across all the regions and the potential degree of impact may changes with time.  This study assessed the impact of risk factors on completion cost of construction projects in Nigeria. Data was collected using structured questionnaires administered to 192 construction practitioners using convenience sampling technique. Descriptive statistics (mean and  standard deviation) were used to analyse the data. The study found ‘inadequate cost estimate’ (MS = 4.39), ‘risk incurred due to bribery  and corruption’ (4.30), ‘increase in prices of materials’ (4.25), ‘increase in cost of labour’’ (4.11), ‘poor cash flow management’ (4.04)  ‘mistakes/errors in design’ (4.04) and ‘mistakes during construction’ to be the topmost risk factors that impact on project completion  cost. The study concludes that ‘economic’, ‘financial’ and ‘contract administration and project management’ related factors group are  those with high impact on project completion cost.