Abstract
The risk attributes in construction project is one of the widely published topics, yet there is no or little investigation whether or not risks associated with construction phase propagate over operational phase. As operation phase of the PPP projects is significantly long compared to the construction phase, understanding the impact of time and cost related construction risks over operation phase is quite important. In this research, risk attributes associated with the PPP procurement method have been identified across three dimensions, time, cost and operational performance. A questionnaire survey was used for collecting data in seven major PPP projects in Australia. Based on standard statistical methods and factor analysis, a number of key risk factors influencing time, cost and operational performance have been extracted. The research revealed that site conditions and design complexity is one of the most critical risk attribute influencing time performance in projects. Similarly, market dynamics is the most critical attribute influencing both construction cost and operational performance in PPP projects. Based on regression modeling, partner's dispute was found to be a good determinant of time and cost performance. Technical obsolescence has significant impacts on the operational performance of PPP projects. It was revealed that the design complexity, financial structure and government policy are the three main common factors affecting risks across time, cost and operational performance in PPP projects. It is anticipated that the findings will impact the construction firms for improving the front-end risk management capability for efficient positioning within the competitive business environment.
Highlights
Risk management is a topic area that interests most industry sectors and in the construction industry
It was revealed that the design complexity, financial structure and government policy are the three main factors affecting risks across time, cost and operational performance in PPP projects. These findings show that some of the usual construction related risks propagate through the project network in a PPP project and impact on long-term operation over the post-construction phase
The focus of this research was predominately on the quantification of risks associated with cost, time and operational performance in PPP projects and to developing an understanding on the crossovers in the complex project network
Summary
Risk management is a topic area that interests most industry sectors and in the construction industry. The current risk management processes are significantly inadequate in managing risks associated with issues such as selection of procurement routes, contractual arrangements, management of stakeholders, organisational complexity and operational performance and de-investment decisions (PMBOK, 2008). A contemporary risk management framework must be able to deal with every increasing complexity with bigger stakes and Understanding Impacts of Time and Cost Related Construction Risks on Operational. In the capital intensive construction industry, the consequences of unidentified or unmanaged risks in project execution can have significantly adverse impact on the operational performance. While a stringent risk management practice over project execution potentially result in effective project delivery, risks associated with the selection of project procurement greatly influence the final project outcomes (Baker et al, 1999). Risks associated with the selection of an appropriate procurement route should be effectively managed for achieving long run success in projects
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