Abstract
International construction joint ventures (ICJVs) have been widely used in large-scale infrastructure projects all over the world. This study aims to investigate the factors affecting adoption of ICJVs for underground rail construction projects, to identify the critical risks faced by parties that perform the projects under ICJVs, and to examine the obstacles to appropriate risk allocation among the parties under ICJVs. To achieve these objectives, an in-depth literature review was carried out and a questionnaire survey was conducted with 33 contractor firms as well. The survey results reported “sharing of project risks” as the top attractive factor of ICJVs and “differences in culture and working style” as the top negative factor. In addition, both foreign and local contractors considered “partners disagree over some conditions in contract” the most critical risk to the parties involving projects under ICJVs. While risk allocation was perceived to be very important for ICJVs, “unclear division of responsibilities and risks” and “differences in culture and working styles” could be the most significant obstacles against effective risk allocation among the parties. The findings from this study will help improve the implementation of ICJVs and provide valuable information for organizations who intend to participate in ICJVs in Singapore.
Highlights
Joint ventures (JVs), which were recognized as temporary arrangements for carrying out projects, especially major projects (Dalle, Potts 1999), have been encouraged in the Singapore construction market
The Singapore government first initiated the preferential margin scheme (PMS) in the 1980s to encourage foreign firms to form international construction joint ventures (ICJVs) with local contractors to bid for public sector projects
The objectives of this study are: (1) to investigate the factors affecting adoption of ICJVs for underground rail construction projects; (2) to identify the critical risks faced by parties that perform the projects under ICJVs; and (3) to examine the obstacles to appropriate risk allocation among the parties under ICJVs
Summary
Joint ventures (JVs), which were recognized as temporary arrangements for carrying out projects, especially major projects (Dalle, Potts 1999), have been encouraged in the Singapore construction market. The Singapore government first initiated the preferential margin scheme (PMS) in the 1980s to encourage foreign firms to form international construction joint ventures (ICJVs) with local contractors to bid for public sector projects. This scheme helped enhance the construction and management skills as well as the reputation of indigenous contractors, facilitating the development of local contractors (Kwok et al 2000). The construction of large-scale projects tends to require high-level civil engineering technologies and large amount of capital This is the case for the Mass Rapid Transit (MRT) system in Singapore (Shimizu 2008). Most ICJVs dismantled after project completion, some have sustained their operations (Ofori, Chan 2000)
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