ASSESSMENT OF CONSTRUCTION RISK MANAGEMENT PRACTICES: A CASE OF HIGH-RISE BUILDING CONSTRUCTION IN ADDIS ABABA

Abstract

Construction projects, including high-rise building projects, are faced with a high level of uncertainty and risks and results in schedule delays or cost overruns and reduction in quality of products. Therefore, to overcome project risks strategic risk management practices should be adopted by all stakeholders through identifying sources of uncertainty, analyzing them, and creating managerial responses to achieve project objectives. In Addis Ababa, the number of building construction projects is increasing from time to time. However, it becomes difficult to complete projects within the planned time, cost, and quality expectations. One of the primary reasons for this situation is that risks are not being managed to a fair extent. Therefore, the aim of this research is to assess risk management practices on high-rise building projects in Addis Ababa city. To achieve the goal the research data were collected from both primary and secondary sources. The primary data was collected using questionnaire and interviews. The secondary data was collected from literature reviews. The collected data was analyzed using SPSS and Microsoft Excel tools. RII (relative importance index) was applied to rank the probability and impact of major risk factors. From the results of the analysis of 64 identified risk factors that have the highest probability of occurrence and impact on high-rise building projects in terms of cost, time, and quality, the top five were identified with a high RII value. Those were inflation with (RII 0.759), Exchange rate fluctuation with (RII 0.716), Design changes in different stages with (RII 0.640), Lack of consistency between bill of quantities, drawings and specifications) with (RII 0.634), Inadequate design, details, and specification with (RII 0.611). In this study also 21 barriers that hinder risk management implementation were identified and the top five of them were discussed in detail. Thus, the top five barriers that hinder risk management implementation of building construction in the study area were lack of knowledge and information, lack of practical experience, lack of guidelines on the standard procedure of managing risk, Lack of formal risk management, and Lack of political, financial stability. Furthermore, based on the findings of this study the researcher recommended the top five favorable measures that can support the improvement of risk management practices in construction projects (early identification of potential risks, training on risk management, timely communication, organizational structure, and information technology).