Advance Studies In Engineering Pakistan Construction Essay

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The paper encompasses an exploratory study including interviews and group discussions with employees representing middle and senior management. Data is increased by applying the analytical tools, the descriptions of internal processes, and organizational structures, magazine articles and the web. In total forty two (42) factors were short-listed to be made part of the survey questionnaire which was done in consultation with contracting firms.

Findings

The paper provides practical understandings about the strategic risk / management analysis of construction industry of Pakistan.

Practical implications

The paper includes detailed analysis of the various factors that need to be catered for. That includes SWOT analysis of the organization and deep study of structuring of organization.

Originality/value

The paper fulfills the need of exploring the strategic risks involved and its management in the construction industry of Pakistan.

Keywords: Strategic Management, Risk Analysis.

Introduction

The construction industry in Pakistan is plagued by risks. If these risks are not dealt with satisfactorily there is a maximum probability of cost overrun, time delay and low quality, ensuing in discontent of client and public. Infrastructure projects being huge in character and involving a large amount of capital, any sort of wastage (either time, resources etc) would show the way to huge monetary losses. The losses are due to various risks coupled with such megaprojects. Hence, to reduce the losses, proficient management of a construction project is required. Application of a variety of project management techniques have to be made from the outset to the completion stage, which include managing a range of risks associated with the project in its every stage.

The basic aim of this study is to identify the various risk factors associated with the construction industry of Pakistan, which can serve as the way forward for future work in coping with up these risks. For this purpose, thorough literature review was done on concept of risk analysis and management and also expert opinions were taken to identify and assess the risk factors related to construction industry in Pakistan. In total forty two (42) factors were short-listed to be made part of the survey questionnaire which was done in consultation with contracting firms.

LITERATURE REVIEW

Project Management vis a vis Risks :

Project management is the science/art which applies skills, tools and techniques to ensure fulfillment of project activities in a way that the expectations and requirements of stakeholders are fulfilled or exceeded. It includes activities which aim to capitalize on the consequences associated with positive events and to minimize the impact of negative events. Project risk management is an integral part of the process which aims at identifying the potential risks associated with a project and responding to those risks. In general terms risk is defined as

Risk = Probability of event x Magnitude of loss/gain

Generally, risk is a choice in an situation/environment rather than a fate. BS 6079 (British Standard Institution 1996) defines risk as 'It is the uncertainty/insecurity inherent in plans and likelihood of something happening that can affect the prospects of achieving, business or project goals'. Risk may also be defined as "Unpredictability incorporations/businesses outcome variables" and uncertainty as "Unpredictability of environmental and organizational variables/variants that impact the corporations / businesses performance."

Risks and uncertainties inherent in the construction industry are more than other industries. Risk is present in all the activities in a project; it is only the amount which varies from one activity to another. The process of planning, executing and maintaining all project activities is complex and time-consuming. The whole process requires a numerous of people with diverse skill sets and the coordination of a vast amount of complex and interrelated activities. The situation is made complex by many external factors. The track record of construction industry is very poor in terms of coping with risks, resulting in the failure of many projects to meet time schedules, targets of budget and sometimes even the scope of work. As a result, a lot of suffering is inflicted to the clients and contractors of such projects and also to the general public.

Risk in the construction industry is supposed to be a combination of activities, which adversely affect the project objectives of time, cost, scope and quality. Some risks in construction processes can be easily predicted or readily identified; still some can be totally unforeseen. Risk management provides a planned/structured way of assessing and dealing with future vagueness/uncertainity. Project risk management includes the techniques/processes concerned with identifying, analyzing, and responding to risks involved in the project. It includes maximizing the results of positive events and minimizing the effects/consequences of adverse events. Construction risks can be related to technical, management, logistical, or sociopolitical aspects or can be related to natural disasters. In the domain of project management, some of the critical effects of risks are failure to achieve operational requirements and the required quality, non completion of the project within stipulated time and estimated cost.

CONCEPTS OF RISK ANALYSIS AND MANAGEMENT

2.1 RISK CLASSIFICATION:

The concept of risk is multi-dimensional. In the context of construction industry, the probability that a specific factor detrimental to the overall project occurs is always present. A lack of predictability related to the consequences of a planning situation and the associated uncertainty of estimated outcomes leads to the consequence that results can either be better than expected or can be worse.

Apart from the different definitions of risk, there are various/many other ways for categorizing risk for different purposes too. Some experts categorize risks in construction projects broadly/generally into external risks and internal risks while others classify risk in more detailed categories/types of political risk, financial risk, market risk, intellectual/logical property risk, social risk, safety/security risk, etc.

2.2 GENERAL TYPES OF RISKS:

Different types of risk lists are available in the literature because of the different approaches to the risk classification subject. However, the content of these lists are almost the same and all of them may be complementary in setting up a risk management system. However, general types of risks are defined as under:-

Financial risk: This factor incorporates issues or concerns associated with the budgeting/financing of the project, including the execution/implementation period and operations or equity financing.

Procurement-contractual risk: This type of risk involves concerns or issues coupled with the contractual and procurement approaches-systems-processes used for both project execution and operation.

Delivery/operation risk: This factor of risk involves concerns or issues associated with actual engineering, procurement, execution of construction, and operation of the project, including non-traditional approaches/acts such as a public owner's use of design-build contracts.

Political risk: This risk factor involves concerns or issues connected with the local, regional, and national political and regulatory situation confronting/affecing the project. This require ability to overcome the political risk of the project, including local, state, and national political opposition and code and regulatory impediments.

Economic risk: This type of risk involves issues linked with the macroeconomic impact of the project to the community and region within which it is to be situated/located.

Technology risk: This risk factor caters for the issues or concerns associated with the operational technology of the project and technologies involved in the execution procedures/methods.

Social risk: This risk factor involves issues concerning cultural and social impacts of the project to the community and region within which it is to be situated/located.

Environmental risk: This type of risk involves issues associated with the environmental problems and activities confronting the project during the project execution/operation.

2.3 RISK EXPOSURE:

Several factors can expose projects to higher than normal risk.

History: The more times a project of a similar scope/nature has been done, the greater the likelihood of success. Newer/fresh projects are riskier because the processes have not been developed/refined.

Staff expertise and experience: People will struggle to learn as they go along if the staff lacks knowledge of the subject and experience, robbing the project of time and possibly introducing errors.

Team size: With the team size, the probability of a problem arising also gets higher. For example, communications can be more complicated as the number of users/participants increases. Greater coordination is required when number of interactions among people increases.

Resource availability: The ability to responding to the problems (as they arise) enhances with availability of more resources.. For example, more budget/money affords greater ability to secure equipment or people when desired. Of course, plentiful resources do not guarantee shield/protection from risk; however they do provide the means to react to it.

Time compression: Risks are magnified if a schedule is highly compressed. Availability of more time means greater flexibility and the opportunity to mitigate or prevent the impact of errors.

Management stability: It implies unity of direction, which in turn means reaching goals. Management irritability can lead to unworkable/unrealistic scheduling and inefficient use of resources.

Complexity: The opportunity of a mistake or problem increases with sophistication level of a project.

2.4 SOURCES OF RISK:

An organization must examine many sources of risk before a decision is made. Typical risk sources on a construction project are:-

Failure to complete within the stipulated design and construction time

Failure to obtain the expected outline planning, detailed planning or building

code/ regulation approvals within the time allowed in the design program

Unforeseen adverse ground conditions delaying the project

Exceptionally inclement weather delaying the project

Strike by the labor force

Unexpected price rises for labor and materials

Failure to let to a tenant upon completion

An accident to an operative on site causing physical injury

Latent defects occurring in the structure through poor workmanship

Force majeure (flood, earthquake, etc.)

A claim from the contractor for loss and expense caused by the late production

of design details by the design team

Failure to complete the project within the client's budget allowance.

2.5 SOURCES OF RISK:

The effects of risks are quoted from as:-

Failure to keep within the cost budget/forecast/estimate/tender

Failure to achieve the required completion date

Failure to achieve the required quality

Failure of the project to meet the required operation needs

Failure of the project safety requirement

2.6 RISK MANAGEMENT SYSTEM:

Risk management is an orderly and formal procedure of methodically/systematically identifying, analyzing and responding to risks throughout the execution/operation of a project to obtain the optimum degree of risk mitigation, elimination or control. It aims to identify the potential risks as early as possible and manage them for preventing the harmful effects of the risks to the project aims. Risk Management Process consists of the following steps :-

Risk identification

Risk assessment

Risk evaluation

Risk mitigation

Contingency estimate

Decision making

Control and monitoring

The Risk Management Process (RMP) is defined as "a systematic framework to enumerate and assess the consequences and the likelihood of their occurrences of all potential risk factors associated with a given project". The framework of RMP is illustrated in Figure 2.2

Figure.2.1 The Risk Management Process

2.7 OVERVIEW OF RISK MANAGEMENT:

Risk identification and its quantification are sometimes treated as a single course/process, and the combined process maybe called risk assessment or risk analysis. Risk response development is sometimes called risk mitigation or risk response planning. Risk response development and risk response control are at times treated as a single process, and the combined process may be called risk management (PMI 1996).

Project Risk Management incorporates the procedures/processes concerned with identifying, analyzing, and responding to project risk. It includes enhancing/maximizing the outcomes of positive events and reducing/minimizing the results/consequences of adverse or negative events.

2.8 RESPONSE TO RISK:

Classically risk response strategies are categorized in five types: accepting, avoiding, monitoring, transferring, and mitigating the risk.

Accepting the Risk: It means, understand the risk, its consequences/penalties, and probability, and choose to do nothing about it. The project team will react whenever the risk occurs.

Avoid the Risk: This could be done by choosing not to do part of the project. This deletion of a specific part of the project could affect more than the project-the business risk could also be affected.

Monitor the Risk and Prepare Contingency Plans: It could be done by choosing some predictive indicators to watch as the risk point in a project comes closer. Contingency plans are substitute/alternative courses of action set up in advance before the risk event occurs.

Transfer the Risk: Many large projects acquire insurances for a range of risks, varying from theft to fire. This effectively transferres risk to the insurance company in that, if a disaster should occur, the insurance company will pay for it.

Mitigate the Risk: It is a process of reaction/response to the risk after impact affects the project. Mitigation incorporates nearly all the measures the project team can take to overcome risks from the project operation/environment.

2.9 ADVANTAGES OF RISK MANAGEMENT:

Following are the advantages of risk management:-

Less uncertainty

Achievement of objectives

Shareholders' reliability

Reduction of capital cost

Creation of value

Research Methodology

The methodology adopted in this paper is given below:

Study of literature related to Risk Management

Preparation of Questionnaire.

Site visit to construction project sites.

Personnel interviews with in-charges and managers vis a vis collection of data from site.

Questionnaire survey.

Analyzing the Questionnaire.

Conclusions, recommendations and suggestions for future study.

Method of Surveying

The survey questionnaire forms the basis of this study which was collected from the local building contractors by personnel meeting through which 42 risk factors were identified and categorized into nine groups and respondents were asked to rate these risk factors according to their severity level. Initially an in depth literature review was conducted to identify the risk factors/types that affect the performance of construction industry as a whole.

Physical

(Group 1)

Occurrence of accidents because of poor safety procedures

Supplies of defective materials

Varied labor and equipment productivity

Environmental

(Group 2)

Environmental factors (floods, earthquakes,…, etc.)

Difficulty to access the site (very far, settlements)

Adverse weather conditions

Design

(Group 3)

Defective design (incorrect)

Not coordinated design (structural, mechanical, electrical, etc.)

Inaccurate quantities

Lack of consistency between bill of quantities, drawings and specifications

Rush design

Design

Logistics

(Group 4)

Unavailable labor, materials and equipment

Undefined scope of working

High competition in bids

Inaccurate project program

Poor communications between the home and field offices (contractor side)

Inflation

Financial

(Group 5)

Delayed payments on contract

Financial failure of the contractor

Unmanaged cash flow

Exchange rate fluctuation

Monopolizing of materials due to closure and other unexpected political conditions

Legal

(Group 6)

Difficulty to get permits

Ambiguity of work legislations

Legal disputes during the construction phase among the parties of the contract

Delayed disputes resolutions

No specialized arbitrators to help settle fast

Construction

(Group 7)

Gaps between the Implementation and the specifications due to misunderstanding of drawings and specifications

Undocumented change orders

Lower work quality in presence of time constraints

Design changes

Actual quantities differ from the contract quantities

Political

(Group 8)

Segmentation

Working at hot (dangerous) areas (close to IDF positions)

New governmental acts or legislations

Unstable security circumstances (Invasions)

Political

Management

(Group 9)

Ambiguous planning due to project complexity

Resource management

Changes in management ways

Information unavailability (include uncertainty)

Management

Table 1. Risk factors included in the questionnaire

The response to each statement was divided into two groups: risk severity based on owners' observations and judgments, and risk allocation. For risk severity, owner's respondents were required to rank each risk on a scale from 1 to 10 by considering its contributions to project delays. Rank 1 was assigned to a risk that caused the lowest contribution to delay while rank 10 was allotted to a risk that caused the highest contribution to delay. The rank range of 1 to 3 denotes not significant risks; 4 to 7 indicates significant risks, and 8 to 10 shows very high significant risks. For risk allocation, the respondents were asked to select the party actually taking the risk from one of the following five options: contractor, owner, shared (contractor and owner).

Assessment of feedback from questionnaire survey was made, on the basis of which recommendations are suggested.

Questionnaire Results

Physical group (Group 1)

Physical Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Occurrence of accidents because of poor safety procedures

8.1

72%

3%

22%

3%

Supplies of defective materials

6.3

69%

6%

25%

0%

Varied labor and equipment productivity

5.2

80%

0%

13%

7%

Table 2: Physical group risks ranking

Conclusions

A survey result indicates that owners are more concerned about safety measures in construction projects. They paid less attention to defect material supplies, and less concerned about variation in productivity.

For risk allocation, majority of the respondents believed that the contractors are in a better position to control physical group risk factor issues.

Environmental group (Group 2)

Environmental Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Difficulty to access the site (very far, settlements)

7.9

34%

3%

59%

4%

Environmental factors

5.6

0%

0%

85%

15%

Adverse weather conditions

5.2

0%

0%

75%

25%

Table 3: Environmental group risks ranking

Conclusions

Response received regarding environmental group risk factor shows that the owners have little concern about weather conditions, but they are worried about site accessibility. Respondents were undecided about the risks of Environmental factors and adverse weather conditions, which is normal point of view as these risks are out of control. Contractors and owners should share such risks.

Design group (Group 3)

Design Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Awarding the design to unqualified designers

9.3

0%

91%

9%

0%

Defective design (incorrect)

8.1

19%

63%

15%

3%

Inaccurate quantities

7.7

41%

44%

13%

2%

Lack of consistency between bill of quantities, drawings and specifications

7.0

37%

42%

16%

5%

Rush design

6.6

0

84%

16%

0%

Not coordinated design (structural, mechanical, electrical, etc.)

6.4

25%

59%

13%

3%

Table 4: Design group risks ranking

Conclusions

Awarding the design to unqualified designers considered as the severe risk factor as per survey results. Second most severe risk is the defective design while not coordinated design is the least severe risk factor.

Logistics group (Group 4)

Logistics Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

High competition in bids

6.7

53%

20%

22%

5%

Unavailable labor, materials and equipment

6.6

97%

0%

3%

0%

Inaccurate project program

6.3

69%

3%

25%

3%

Poor communications between the home and field offices (contractor side)

5.8

77%

9%

9%

5%

Undefined scope of working

4.9

44%

22%

26%

8%

Table 5: Logistics group risks ranking

Conclusions

Data shows that owners considered that contractors should bear the risks of:

• Labor and materials unavailability (97% response rate)

• Inaccurate project program (69% response rate)

• Poor communication between contractors' teams (77% response rate)

It should be the contractor's responsibility to make sure that labor and materials are available to execute the works. Unlike owners, it is believed that it should be a shared responsibility to put an accurate program to properly manage the projects tasks. Contractors should be able to control the communication process among their teams.

Financial group (Group 5)

Financial Group Risks

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Financial failure of the contractor

6.7

81%

6%

6%

7%

Inflation

6.0

38%

24%

38%

0%

Monopolizing of materials due to closure and other unexpected political conditions

5.5

53%

3%

44%

0%

Unmanaged cash flow

5.3

71%

13%

9%

7%

Delayed payments on contract

4.9

3%

81%

16%

0%

Exchange rate fluctuation

4.3

44%

22%

34%

0%

Table 6: Financial group risks ranking

Conclusions

Data indicates that the respondents considered contractor's financial failure the most important risk with severity level 6.7. The next important is the risk of inflation with severity level 6.0, monopoly and unmanaged cash flow risks were the third and the fourth respectively and so on. Owners worried about failure but they did not about delayed payments and exchange rate fluctuation. In other words, owners concerned about not stopping the works.

Results of the survey shows that owners accepted to bear the risk of delayed payment with response rate 81%. Owners considered that the contractor should be responsible about its failure and about managing its cash flow. Unfortunately, owners appeared not to share risks of inflation, exchange rate fluctuation or monopoly, while these risks should best be shared between owners and contractors by including contract clauses that define the required parameters and conditions for sharing. These are risks where each party may be able to manage it better under different circumstances and could be specified in the contract.

Legal group (Group 6)

Legal Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Delayed disputes resolutions

6.4

0%

9%

88%

3%

No specialized arbitrators to help settle fast

6.0

3%

25%

72%

0%

Legal disputes during the construction phase among the parties of the contract

5.1

4%

9%

84%

3%

Ambiguity of work legislations

4.5

25%

28%

34%

13%

Difficulty to get permits

4.0

41%

28%

31%

0%

Table 7 Legal group risks ranking

Conclusions

Results shown in Table 7 illustrate the ranks of legal group risks. Respondents considered the risk of delayed dispute resolution one of the highest risks. Actually, owners have a less realistic view to the legal risks than contractors. Owners are less concerned about legal issues than contractors, which could raise more disputes and increase the delay in resolving these disputes.

For risk allocation, owners preferred to share the following risks with contractors:

• Legal disputes during construction phase ( response rate 84%)

• Delayed disputes resolutions (response rate 88%)

• Arbitrators' absence (response rate 72%)

Construction group (Group 7)

Legal Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Rush bidding

6.2

13%

74%

13%

0%

Lower work quality in presence of time constraints

5.8

66%

9%

25%

0%

Gaps between the implementation and the specification due to misunderstanding of drawings and specifications

5.6

34%

28%

38%

0%

Actual quantities differ from the contract quantities

5.2

22%

39%

39%

0%

Design changes

4.7

6

66%

28%

0%

Undocumented change orders

4.4

53%

9%

38%

0%

Table 8 Construction group risks ranking

Conclusions

It is evident from the above rating that the respondents did not give high weights to the factors mentioned in construction group. They considered rush bidding is more severe than other factors.

Results of above table shows that owners allocate onto themselves the risks of :

• Rush bidding (74%)

• Design changes (66%)

Political group (Group 8)

Political Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Working at hot (dangerous) areas

7.0

6%

3%

63%

28%

Closure

6.7

6%

9%

63%

22%

New governmental acts or legislations

5.4

6%

16%

69%

9%

Unstable security circumstances (Invasions)

5.4

0%

22%

63%

15%

Table 9 Political group risks ranking

Conclusions

Respondents have given high importance to the risks of working at dangerous areas and closure. New legislations and unstable sanctuary conditions risks were medium risks. For risk allocation owners prefer to share the political risks with contractors. Political risks are out of control and should to be shared. Risks of political uncertainties should be equally applied to both parties of a contract.

Management group (Group 9)

Management Group Risk factors

Severity (1-10)

Risk Allocation Response Rate

Contractors

Owner

Shared (Contractors & Owners)

Undecided

Ambiguous planning due to project complexity

6.3

38%

19%

43%

0%

Poor communication between involved parties

6.1

19%

0%

81%

0%

Information unavailability (include uncertainty)

5.6

41%

18%

41%

0%

Resource management

4.9

81%

3%

16%

0%

Changes in management ways

4.7

59%

16%

25%

0%

Table 10 Management group risks ranking

Conclusion

Table 10 illustrates that ambiguous planning and poor communication risks are the most important risks in management group. Other management risks are considered with medium importance. Owners allocated resource management and changes in management ways risks onto contactors . Owners considered the poor communications risk should be shared with (81% responses). This consideration is sensible, since it is contractors' and owners' responsibility to maintain a good level of communication.

Overall risk significance and allocation, owners' perspective

Ser No

Ris Factor

Severity Level

1.

Awarding the design to unqualified designers

9.3

2.

Defective design (incorrect)

8.1

3.

Occurrence of accidents because of poor safety procedures

8.1

4.

Difficulty to access the site (very far, settlements)

7.9

5.

Inaccurate quantities

7.7

6.

Lack of consistency between bill of quantities, drawings and specifications

7.0

7.

Working at hot (dangerous) areas

7.0

8.

High competition in bids

6.7

9.

Closure

6.7

10.

Rush design

6.6

11.

Unavailable labor, materials and equipment

6.6

12.

Not coordinated design (structural, mechanical, electrical, etc.)

6.4

13.

Delayed disputes resolutions

6.4

14.

Supplies of defective materials

6.3

15.

Ambiguous planning due to project complexity

6.3

16.

Inaccurate project program

6.3

17.

Rush bidding

6.2

18.

Poor communication between involved parties

6.1

19.

Inflation

6.0

20.

No specialized arbitrators to help settle fast

6.0

21.

Poor communications between the home and field offices (contractor side)

5.8

22.

Lower work quality in presence of time constraints

5.8

23.

Information unavailability (include uncertainty)

5.6

24.

Gaps between the implementation and the specification due to misunderstanding of drawings and specifications

5.6

25.

Environmental factors

5.6

26.

Monopolizing of materials due to closure and other unexpected political conditions

5.5

27.

New governmental acts or legislations

5.4

28.

Unstable security circumstances (Invasions)

5.4

29.

Unmanaged cash flow

5.3

30.

Varied labor and equipment productivity

5.2

31.

Adverse weather conditions

5.2

32.

Actual quantities differ from the contract quantities

5.2

33.

Legal disputes during the construction phase among the parties of the contract

5.1

34.

Undefined scope of working

4.9

35.

Delayed payments on contract

4.9

36.

Resource management

4.9

37.

Design changes

4.7

38.

Changes in management ways

4.7

39.

Ambiguity of work legislations

4.5

40.

Undocumented change orders

4.4

41.

Exchange rate fluctuation

4.3

42.

Difficulty to get permits

4.0

Table 11 Risk factor rating

Table 11 shows all risk factors included in the questionnaire ranked in descending order according to their severity level from the owners' perspective. The result shows that owners consider awarding the design to unqualified designer to be the most important construction risk. It was followed by defective design. The least important risk, from the owners' perspective is the risk of difficulty to get permits, with a rating of 4.0 followed by the risk of exchange rate fluctuation with a rating of 4.3. The results show that owners considered only (16%) of the risk factors as highly important risks and (84%) of them as medium risks.

Most and least important risk categories as per owner's perspective

Importance

Risk

High

(Most Important ranked first)

Awarding the design to unqualified designers

Defective design (incorrect)

Occurrence of accidents because of poor safety procedures

Difficulty to access the site

Inaccurate quantities

Low

(least important ranked first)

Difficulty to get permits

Exchange rate fluctuations

Undocumented change order

Ambiguity of work legislations

Table 12 Most and least important risk categories as per owner's perspective

Allocation

Allocation

Risk Description

Contractors

Occurrence of accidents because of poor safety procedures

Supplies of defective materials

Varied labor and equipment productivity

High competition in bids

Unavailable labor, materials and equipment

Inaccurate project program

Poor communications between the home and field offices (contractor side)

Undefined scope of working

Financial failure of the contractor

Monopolizing of materials due to closure and other unexpected political conditions

Unmanaged cash flow

Exchange rate fluctuation

Difficulty to get permits

Lower work quality in presence of time constraints

Undocumented change orders

Resource management

Changes in management ways

Owner

Awarding the design to unqualified designers

Defective design (incorrect)

Inaccurate quantities

Lack of consistency between bill of quantities, drawings and specifications

Rush design

Not coordinated design (structural, mechanical, electrical, etc.)

Delayed payments on contract

Rush bidding

Design changes

Shared

Difficulty to access the site (very far, settlements)

Environmental factors

Adverse weather conditions

Inflation

Delayed disputes resolutions

No specialized arbitrators to help settle fast

Legal disputes during the construction phase among the parties of the contract

Gaps between the implementation and the specification due to misunderstanding of drawings and specifications

Working at hot (dangerous) areas

Closure

New governmental acts or legislations

Unstable security circumstances (Invasions)

Table 13 Risk allocation, owner's perspective

Allocation of risk factors included in the questionnaire is appeared in Table 13, owners have allocated seventeen risks onto contractors, that means -from owners' perspective- contractors should be responsible for (44%) of the risk factors, they have allocated nine risks onto themselves, i.e. owners accepted to bear only (23%) of the risk factors, and considered twelve risks as shared risks, specifically, owners appeared ready to share (32%) of the risk factors with contractors.

Conclusions

The findings from the survey indicate that formal risk analysis and management techniques are rarely employed by Pakistani construction industry

The perception of risk by contractors and consultants is mostly based on their intuition and experience. Insufficient knowledge and experience of analysis techniques and the difficulty of finding the probability distribution for risk in practice results in time and cost overrun problems.

The reasons provided by the companies for not using risk analysis techniques are:-

The majority of risks is subjective and is related to contracts or construction processes. These risks are better dealt on the basis of previous experience.

The respondents have revealed that these practices cause the problems of delays, low quality and low productivity in projects

The companies are unfamiliar with techniques of risk management.

The degree of sophistication involved in the techniques is unwarranted if compared with project size.

Recommendations

Following recommendations have been drawn through this study

Tenders should be awarded to accurate estimated cost and not necessarily to the lowest bidder. This could take the edge of high competition in bids and reduce risks' consequences by providing more profit margins for contractors.

Close supervision with subordinates is another way for minimizing abortive work.

Increase working hours and increase manpower and equipment were recommended by owners which mean that owners believe that driving more effort could enhance the contractor's performance, since construction projects generally include many labor-intensive operations. In fact, as pointed out before, shortage of manpower in subcontractors' firms is one of the most serious risks to project delays. Therefore, increasing the work hours normally speeds up progress subject to the availability of materials and supervisors, physical constraints of the site, and construction sequence.

Majority of contractors and construction managers in Pakistani construction industry are unaware of formal risk management techniques. In light of this finding, it is imperative to educate these professionals about risk management, and thus a formal and informal system of risk management training needs to be developed

Annexure A

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.