Construction Project Risk Research Articles

Managing Cost Risks in Oil and Gas Construction Projects: Root Causes of Cost Overruns

This study identifies and classifies the root causes (i.e., the primary precursors) of cost overruns in oil and gas construction projects. Past studies generally focused on identifying the most immediate precursors of cost overruns and failed to address the need to identify their root causes. Specific root causes are inherent in projects with certain characteristics (e.g., projects in a particular domain or sector). Accordingly, research is needed to identify various cost overrun factors and their root causes in a context-specific manner. This study used content analysis to identify 38 recurrent cost overrun factors and 11 root causes in oil and gas construction projects. The cost overrun factors were classified based on their common root causes. The Delphi method was used to verify this classification. The evidence from 12 construction projects in the oil and gas sector that had faced cost overruns was used to verify the outcome of this study. The findings of the study will assist practitioners in mitigating the risk of cost overruns in oil and gas projects and meeting their budget goals.

Occupational Health and Safety Risk Analysis in Construction Projects: A Systematic Literature Review

The construction service business world always wants the best results in every project activities carried out. One of the best desired outcomes is the timely completion of a construction project, but this is often not achieved for several reasons, one of which is occupational health and safety incidents that occurs in a construction project. Based on the background of the problem and the results of a literature review sourced from 40 journals from 2011-2021, the journals collected and reviewed discussed occupational health and safety in construction projects. Therefore, it is very necessary to implement an OHS (Occupational Health and Safety) management system during construction work. Occupational health and safety aims to create conditions that support work comfort for workers, so as to improve risk management. Using sources based on previous research, the following will identify the types of occupational safety and health risk factors that most often occur in construction work. The types of risks that will be discussed here will be divided into three types based on internal risk, external risk, and project risk. Types of risk are divided into two types, namely technical and non-technical risks. Based on data from a total of 40 studies that have been reviewed, there are 22 studies that have Project Risk as the risk that causes 76% of risk in a building construction project.

РИЗИКИ В ІНЖИНІРИНГУ БУДІВЕЛЬ: СУТНІСТЬ, ПРИЧИНИ, НАПРЯМКИ ВИРІШЕННЯ

Most construction projects carry a certain level of risk, and in order to determine and manage them, it is necessary to know their essence, causes, carefully plan the construction process and ensure the ability to quickly make the right decisions at each stage of the construction process [1]. Therefore, determining the essence of risks, their causes and effective methods of their management is extremely important to ensure the successful implementation of construction projects [3;4;5].During the construction process, several types of risk factors may arise simultaneously, in particular, an unexpected increase in the cost of construction materials, completed works, delays in meeting the deadlines of construction projects caused by the investor, contractor, environment, etc. As shown by the feedback of investors and contractors,the impact of COVID-19 on construction projects is significant, in particular, quarantine restrictions led to delays in the completion of projects and an increase in the cost of their completion.Analyzing the research data, it can be noted that construction projects regularly suffer from significant incidents, which are related to both the financial component and a large number of emergency situations. Effective construction risk management requires persistent attention to detail and training of the workforce to avoid undesirable situations during construction, including quality construction, accident prevention. International risk management standards vary widely, and there is almost always room for improvement. Infrastructure projects are becoming more and more complex and require more complex methods of control over them. When design work does not meet construction standards, the cost of repairs and associated risks can be extremely high. Therefore, insurers, contractors and clients should be interested in minimizing losses and perceive risk engineering as a way of positive contribution to the process of achieving a better result and as a result of a worthy investment in the future project.According to the PMBoK international standard, the risks of construction projects, their causes and solutions must be recorded, that is, timely response to negative risks contributes to the smooth execution of construction works without financial losses.

Risk Prevention And Control And Construction Path Of Criminal Compliance Of Construction Engineering Corporates

The corporate compliance system, an internal control mechanism to prevent, detect and stop illegal and criminal offences within a corporate, can serve to effectively solve potential criminal compliance risks in construction projects. The construction projects are characterized by their long-term, continuous and concealed nature. In addition, the system design of construction projects is limited by many factors, including the limitation of traditional centralized administrative mode, the absence of process supervision mechanism and reciprocal motivation mechanism, the complicated setting of supervision matters, the lack of reciprocity of the motivation mechanism and the dislocation of the main body in regulatory responsibilities. Such that, numerous violations of rules and regulations, including quality-centred disputes and safety accidents, keep coming up in the construction industry in China. Under the context of the co-development of economic and legal globalization, in order to prevent and control the potential criminal compliance risks of construction engineering corporates, it is necessary to construct compliance rules centred on supervision activities, form a corporate criminal offence and compliance identification mechanism, improve the corporate criminal liability system, establish corporate obligation and rules of criminal compliance, formulate measures for the dual models of punishment and incentive, and promote the construction and implementation of the corporate compliance system of the construction industry.

The Role of Flexibility in The Construction Risk Management Prescriptiveness

Risk management in the construction industry is regarded as an important issue for the healthy development of society. In terms of the risk management process, over detailed process would be remarkably time consuming which also can be a burden of the project. the balance between the prescriptiveness and the flexibility of risk process can be considered as the vital factor for a effective risk management framework. However, flexibility is not well valued in the risk management process of many construction projects. An ideal risk management process should include both the clear prescriptiveness and the flexibility in order to minimize the negative influence of risks in construction project as well as to shorten period of process planning.

Three-Phased Risk-Management Benchmark for Internationalization of Small and Medium-Sized Construction Companies

Small and medium-sized construction companies (SMCCs) typically lack the international experience of their large counterparts. International construction projects often are more uncertain than domestic projects, which can pique SMCCs' interest or necessity for external benchmarks of best practices. This study aims to provide a three-phased risk-management benchmark framework for the internationalization of SMCCs. The first-phase benchmarking evaluates how well companies prepare to undertake business abroad and what capabilities they should improve upon based on comparative data from 41 SMCCs. The second-phase benchmarking provides risk information from 49 international subcontract projects that must be managed for SMCCs. In the last phase, the benchmark delivers subcontractor risk-response strategies through the analysis of 134 international-contractual cases. Additionally, the three illustrative cases show that the benchmark framework and metrics are quite helpful for decision-makers and SMCC practitioners in evaluating and responding to their international construction project risks.

Big data analysis model for predicting operational risk in overseas construction projects

ABSTRACT In this study, a big data analysis model was developed to predict the risks associated with overseas projects and a big data analysis technique. The risk analysis model can estimate the probability-cost interval for a planned project’s final cost by forming a probability density function and project costs through comparative analysis of data for a planned project and data for a previous similar project. This study attempted to collect a vast amount of information from the web and social networking services (SNS) in order to verify whether this information is sufficient to support the use of the web data analysis method used in this model. To this end, it was assumed that regional traffic conditions would be indicated on the web and SNS. In addition, two regions with different traffic conditions were selected, and then traffic-related keywords and words to enable assessment of traffic conditions were examined. Text information including these words was collected and the proportions of positive and negative words were analyzed. Results confirmed that two regions with different traffic conditions also had different numbers of negative words exhibited on the web.

Scoring model of risk assessment of construction projects

The article substantiates the possibility of using a scoring model to assess the risks of construction projects and real estate agencies. The problems of determining the weights of risk categories, individual risks and their factors are analyzed. Examples of using the model to solve practical problems are shown.

Risk prioritisation using fuzzy analytic network process: A case of Addis–Djibouti railway construction project

AbstractThe purpose of this paper is to develop a risk assessment model to prioritise the risks of railway construction projects. A fuzzy analytic network process (FANP) is employed to rank project risks based on the likelihood of project risks and their impact on cost and time. Fuzzy set theory is used to represent the vagueness in each expert's judgment, while ANP is used to deal with interdependence and feedback effects of risks. The data for this study was collected through literature reviews, interviews, and questionnaires. According to the study results, the right‐of‐way corresponds to the top risk that has highest impact on time and cost. Construction errors and incomplete contract details were found to rank second and third in terms of risk severity. Similarly, design changes and lack of coordination among parties are ranked fourth and fifth, respectively. The study results help practitioners and decision‐makers understand the main risks of the Ethiopian railway construction projects and take proactive actions accordingly. Furthermore, this paper can help researchers' model project risks and analyse their impact on project objectives considering uncertainty, interdependence, and feedback.

Proposing a new function for evaluation of the financial risk of construction projects using Monte Carlo method: Application on Iranian construction industry

In this paper, the financial risk of construction projects is investigated. This process is carried out by proposing a new function based on three design variables, i.e. Cost List (CL), Material Cost (MC) and Final estimation Cost (FC). Deviations of these parameters are evaluated in ten years period, from 2004 to 2014. In the next step, distribution function and their relative parameters (mean and standard deviation) are determined. The efficiency of the proposed function is verified using the Monte Carlo simulation approach. The proposed simulation process has an ability to evaluate the economic conditions of construction projects. Moreover, the suggested procedure helps to evaluate the financial risk with suitable accuracy. • New function is proposed for determining financial risk of construction projects. • Final Cost, Material Cost and Cost List are used to formulate performance function. • The Monte-Carlo method is used for numerical simulating three design variables. • The proposed function is suitable for modeling different financial uncertainties. • The proposed procedure could be used for construction projects in other countries.

Key Design Issues in the Construction Project: Conceptual and Detailed Design Review Phases

The Malaysian construction industry is among the highest ranked industries that contributes to accident and fatality rates. The Guidelines on Occupational Safety and Health in Construction Industry (Management) (OSHCIM) has introduced guidelines for design risk reduction in the construction industry. It involves determining root causes and mitigating the risk by control of the causation of accidents. The objective of this study is to identify the key design issues during the conceptual and detailed design review phases in the construction project. Although some of the design considerations have already been proposed by the OSCHIM guidelines, however, further implementation need to be diverse and versatile by considering the current design practices that are already being practiced by the industry practitioners. The methodology of this research involves document reviews, and a questionnaire survey that was used to collect answers from respondents in the construction industry. According to the results, the key design issues in the conceptual phase involve the site condition, environmental influences, ground or ground water condition, existing structure, demolition, services, adjacent to major infrastructure, traffic disruption, access for works, adjacent to other properties and projects, and site restriction. Moreover, those found in the detailed phase involve the mechanized construction system, installation of prefabrication components, ease of process, structural opening, edge line, fall hazard, accident prevention, layout optimization, ease of activities, permanent safety features, provision of access, and fall hazard. However, it is the duty of the construction industry practitioners to make sure that all other design issues are also included into their construction project risk analysis. As proposed by the OSHCIM guidelines, the review of design risks in the construction project should consider safety in all the stages: during construction, operation, maintenance, modification, and demolition. Construction Industry Development Board (CIDB)

BIM Adoption in Managing Construction Risks Amongst Malaysian Quantity Surveyors: Current Practice and Challenges

Building Information Modelling (BIM) is a technology that has received an impetus within theconstruction industry worldwide. It has also triggered a new approach of working in quantity surveying practice,replacing the conventional methods. In term of managing risks, BIM potentially detects conflicts during visualization process at the design phase, subsequently reduces possible costs risk at the pre-construction phase.However, there are few issues to be dealt with by the construction players in integrating BIM to manage risks in construction projects such as lack of experience and skilled individuals in an organization, lack of awarenessamongst project stakeholders and the fragmented nature of the construction industry. These issues somewhathinder the technology to be implemented effectively and contribute towards the slow development of BIM in theconstruction industry in Malaysia. Therefore, this study aims to explore the adoption of BIM technology in managing construction risks amongst Malaysian Quantity Surveyors by investigating the current practice andidentifying its challenges. Data were collected using a questionnaire survey and the survey results were analyzed adopting descriptive analysis and Average Index by using SPSS. It was found that the current adoption of BIMtechnology in managing construction risks amongst Malaysian Quantity Surveyors is still at the low level of implementation, despite having high level of awareness on BIM usage in the construction industry. The findingsconfirmed that the challenges to adopt BIM are related to the upgrade of hardware to match with new technology,lack of clear and specific BIM guidelines, provision of BIM training for employees and high cost for newtechnology. The results should direct to the Malaysian Quantity Surveyors to be BIM-ready in improving thenumber of Quantity Surveyors of becoming experts in BIM technology to manage risks in construction projects.

Faktor-Faktor Risiko Terhadap Keterlambatan Proyek Konstruksi di Wilayah Denpasar, Bali

The construction projects are always faced with the possibility of risk problems. The rapid development in the Denpasar area is in line with the many construction projects, especially buildings such as hotel construction, construction of new school buildings, etc. For construction projects in Denpasar, risk control is necessary. In this regard, it is necessary to research the Analysis of Risk Factors. This study aimed to determine the dominant risk factors causing construction project delays, mitigation and risk ownership of the dominant risk factors. This research used the quantitative descriptive analysis method. The measuring instrument of this study used a questionnaire and interviews with contractor respondents. Based on the results, the dominant risk analysis was labor risk with an average frequency value of 13.70 and 17.13 consequences. The dominant question from the labor risk variable was the low productivity of the workforce due to lack of experience with a frequency percentage of 46.67% who answered rarely and 53.33% who often answered. In comparison, the percentage of consequences was 70.00% answered big and 30.00% answered very largely. Risk response that can be done is to recruit new workers and place them according to their skills. The study's ownership of risk was the contractor due to the contractor's error in employing workers in the field.

Methodological approaches to the construction of a risk structure model for investment construction projects in the field of occupational safety and health

Investment construction projects are implemented under constant changes, which forces managers to assess the uncertainty and risks they generate, to manage changes in their own activities and activities of construction organizations. The article describes the main methodological approaches to the development of a model of risks of investment construction projects in the field of labor safety and protection. The approach is based on the method of quantitative assessment depending on the level of processes being evaluated and data characterizing these processes. The proposed concept will make it possible to develop an algorithm and a computational and analytical model for the subsequent automation of the process of quantitative assessment of risks and the dynamics of their change on the basis of the information-digital system. For example, the Corporate Occupational Safety Management System, developed and used by NIPIGAZ JSC to manage occupational safety processes, ensure industrial and fire safety, environmental protection, will make it possible to put into practice the methods of predictive and operational risk analysis, increasing the efficiency of the investment construction project.

Integrated Approach to Construction Risk Management: Cost Implications

Managing risk in construction projects has proven to be a challenge for many project managers and stakeholders involved in projects. The lack of a systematic approach and standardized processes are key factors influencing improper risk management techniques. This research introduces a new model to evaluate and assess risk in terms of cost impact, utilizing a fuzzy Monte Carlo simulation approach for the first time. The method consists of ranking the top risks using a fuzzy logic system utilized in an objective manner by setting criteria for experts to rank the risk based on cost impact and probability to reduce human biases, then evaluating their cost impact through a Monte Carlo simulation both pre- and postmitigation. This work proposes a new strategy to elicit risk for construction projects based on risk cost impact, project type, project location, project contract type, and project delivery method. Based on the findings, implementation of a risk mitigation response plan can decrease the project cost remarkably. This model proved to be beneficial in forecasting risk impact when executed on a commercial construction project in California. This model can be applied as a general tool for risk mitigation processes for the construction industry.

From Risk Matrices to Risk Networks in Construction Projects

Risk management is considered as a vital process contributing to the successful outcome of a complex construction project in terms of achieving the associated project objectives. The widely used industrial practice in managing construction project risks is to assign probability and impact values to each risk and to map risks on a risk matrix. The main criticism of this practice relates to ignoring complex interdependencies between risks and using point estimates for probability and impact values. Furthermore, risks mapped on a matrix are deemed to influence a specific objective and there is a challenge involved in aggregating the impact of risks across multiple (conflicting) project objectives. Utilizing a data-driven Bayesian Belief Network methodology, in this paper we introduce a new process where the risks mapped on a risk matrix corresponding to each project objective are aggregated and modeled as a risk network, and a holistic impact of each risk is captured across the network by means of new risk metrics. The proposed methodology is demonstrated through a real application. The results specific to the two ranking schemes (assuming independence/interdependence of risks) are found to be negatively correlated, which substantiates the importance of utilizing an interdependency-based risk management process.

Development of a New Technique for Safety Risk Assessment in Construction Projects Based on Fuzzy Analytic Hierarchy Process

This study follows the fuzzy analytic hierarchy process to develop a semiquantitative technique to assess the safety risk of construction projects based on effective parameters affecting the probability and severity rates. Various studies targeting safety risk assessment in construction projects together with their research characteristics were investigated. In the second step, the initial structure of risk assessment was designed based on a semiquantitative technique of safety risk assessment. In the third step, a three-round Delphi method was employed, and an expert panel comprising 41 project managers and senior authorities of construction projects determined the existing components of the two factors of risk probability and severity. Finally, the weights of the components of risk probability and severity were determined so that their roles in determining the level of final risk could be specified. The normalized weights of probability and severity factors for calculating the semiquantitative safety were 0.48296 and 0.51704, respectively. Moreover, the incident probability factor included the four components of technical inspection, human reliability, incident learning, and hazard detection, with the following weights, respectively: 0.303, 0.364, 0.088, and 0.245. The incident severity factor included the four components of human injury, financial loss, operational interruption, and reputation damage, with the following weights, respectively: 0.369, 0.233, 0.191, and 0.207. The utilization of this technique can help reduce the risk of occupational incidents in construction projects.

Risk analysis of construction of administration projects using Bayesian networks

PurposeThis paper aims to enlighten the importance of the risk management process which is considered as a major procedure to effectively handle the potential inherent risks in the construction industry. However, most traditional risk analysis techniques are based on theories that deal with each risk factor as an independent, which does not take into consideration the causal relationships between risk factors.Design/methodology/approachThis study aspires to identify the overall risk of the administrative construction projects in Egypt and to recognize the most influencing risk factors through the project life cycle by using Bayesian belief networks (BBN). Through a review of the literature, 27 risk factors were identified and categorized as the most common risk factors in the construction industry. A structured questionnaire was performed to estimate the probability and severity of these risks. Through site visits and interviews with experts in the construction field, 200 valid questionnaires were collected. A risk analysis model was developed using BBNs, then the applicability of this model was verified using a case study in Egypt.FindingsHowever, the outcome showed that critical risks that manipulate administrative construction projects in Egypt were corruption and bribery, contractor financial difficulties, force majeure, damage to the structure and defective material installation.Practical implicationsThe proposed study presents the possibilities available to the project parties to obtain a better forecast of the project objectives, including the project duration, total project cost and the target quality by examining the causal relationships between project risks and project objectives.Originality/valueThis study aspires to identify the overall risk of the administrative construction projects in Egypt and to recognize the most influencing risk factors through the project life cycle by using BBNs.

Risk management in construction projects in Somalia

These days, risk management and analysis are serious issues in the effective management of construction projects, because construction projects are likely to be very dynamic, productive, diverse and increasingly competitive. Risk management helps project parties such as clients, contractors and vendors/suppliers to meet their obligations to reduce negative impacts on their works. The outcomes of the risk management method include the analysis and detection of risks, the creation of building project management systems and the efficient use of resources. The aim of this article is to find out how the Somalian construction companies see the value of construction project risks and how to manage it by dispatching a questionnaire. The total questions of the questionnaire are seventeen questions and were distributed by various participants such as clients, contractors and designers. The findings show that in the implementation of risk management techniques, the Somalian construction industry varies greatly from building companies in foreign countries. The contractor needs to consider risk obligations, dynamics of risk incidents, risk tolerance and risk control skills to handle the risks effectively and efficiently. Due to the insufficiency of experience in the attitude of Somalian entrepreneurs towards risk management is very hard to change. However, as a component of their project management, the construction companies must include risk analysis in projects. The application of risk management in Somalian construction companies is small to moderate, with little difference between organizations' types, sizes and risk tolerances and individual respondents' experience.

RESOURCE UTILIZATION ANALYSIS OF HIGHWAY PROJECTS USING ARENA

The construction sector is a significant contributor to the Gross Domestic Product of a developing country. Infrastructure improvement plays a vital role in this wherein highway construction is a dynamic sector requiring proper planning and scheduling multiple resources. Appropriate integration among various associated stakeholders is essential for a project’s success, aided by supply chain management. Resource planning is one of the basic concepts in supply chain management, with material and equipment management being the critical area. The main objective of this study is to develop a conceptual supply chain simulation model using ARENA, to analyze the equipment idling and utilization rate, keeping inter-arrival time for dispatch, the number of equipment, and working hours as constant. This model employs the real-time ‘best fit’ material utilization data as input. Material utilization data collected from 62 construction projects are analyzed to arrive at a ‘best fit’ probability distribution. This study’s conceptual supply chain simulation model helps formulate suitable material and equipment delivery plans to lessen risk in construction projects.