Risk Identification and Management in Building and Infrastructure Projects

Abstract

Building and infrastructure projects consists of extensive risks. Identification and management of risk plays an important part in projects success or failure. This study assesses the critical risk factors involved in the building and infrastructure projects. A questionnaire was prepared on the basis of a literature review and was filled by various contractors, project managers, site supervisors, and engineers. A total of 70 risk factors were identified and listed under eight categories for this research. The data for severity and frequency of each risk factor was collected through questionnaire survey. Reliability of obtained data was checked using Cronbach’s alpha. Severity and frequency of the data was analyzed using relative importance index. Risk factors were ranked according to risk impact value which was calculated using risk priority. Thirty-eight risk factors were found to be critical using normalization of risk impact values. Top ten critical risk factors identified were namely- approval and permit delays, payment delays, unpredicted changes in inflation rates, pressure to crash project duration (time constraints), design errors or design changes, contractual disputes and claims, shortage of skillful managers and professionals, bad weather conditions (continuous rainfall, snow, wind), laws and policies revising, adverse ground conditions. Factor analysis was performed on critical risk factors and it suggested to converge risk factors into three components. Risk mitigation model and guidelines are also suggested such that effect of risk can be minimized resulting in more positive outcomes. This research will help engineers, site supervisors, project managers, risk managers, construction practitioners, etc. to recognize and manage risk present in building and infrastructure projects in such a way that it has minimal negative effects on project objectives