RISK IDENTIFICATION AND ASSESSMENT IN CONSTRUCTION PROJECTS

Abstract

The construction industry is a place of uncertainty, complexity and constant change, impacting project cost, time, quality and safety. Construction projects face many financial, technical, managerial, contractual, safety and external risks that can have a significant impact on project performance if not identified and assessed properly. The purpose of this study is to identify the major risks that are faced in construction projects, assess the probability and severity of the risks, discuss the methods that are used to identify and assess the risks and prioritize the most important risk factors in the construction industry. The quantitative research method was employed and a questionnaire survey was conducted with construction professionals such as project managers, engineers, contractors, consultants and other industry practitioners. The data were analysed with the Statistical Package for the Social Sciences (SPSS). The descriptive statistics such as frequency and percentage distribution were used for analysing the respondents' profile and the mean score analysis and Relative Importance Index (RII) were used to rank the critical risk factors. Furthermore, probability–impact analysis was used to assess the impact of the risks identified, following the common approach in construction management research. The results show that the most important risks to project performance are inflation, rising material costs, poor planning and scheduling, slow client payments, design errors and omissions, and accidents and injuries on the construction site. The study also shows that in practice, risk identification and assessment is mainly based on personal experience, site meetings, checklists and expert judgement, while formal analytical risk assessment techniques are used less. The study emphasizes the importance of a more systematic and structured risk management process, which combines analytical assessment methods with practical experience from the industry to enhance the performance of projects and decision making in the construction industry.

Keywords- Construction industry, risk identification, risk assessment, project risk, probability-impact analysis, Relative Importance Index (RII), inflation, material price increase.