Risk Management in Building Projects: Owners’ Perspective

Adnan Enshassi, Jaser Abu Mosa

Abstract


The construction industry is a key activity in any economy, it influences and is influenced by the gross domestic product of any country. The construction sector is one of the key economic sectors and is the main force motivating the Palestinian national economy. Construction is a risky industry with uncertainties due to many external and internal factors that influence the construction process. The aim of this paper is to identify the severity and allocation of each identified risk factor according to the owners perspectives. A survey was conducted and forty four critical risk factors were identified and categorized into nine groups. The findings of this research showed that owners in the Gaza Strip have considered awarding the design to unqualified designer to be the most important risk factor followed by defective design and occurrence of accidents because of poor safety procedures. The results indicated that close supervision would be the effective mitigative method. It is recommended that 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. Training programs should be arranged to advance managerial and financial practices to explain the internal and external risk factors affecting the construction industry and to initiate the proper ways to deal with such factors. Keywords: Risk management, risk identification, risk allocation, risk mitigation, construction.

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