IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 2 NO. 1 2016

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ANALYSIS AND MANAGEMENT OF PROJECT RISKS: A SURVEY OF INDIGENOUS CONTRACTORS IN NIGERIAN CONSTRUCTION INDUSTRY

Akinola Victoria O

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Abstract

Construction projects are capital intensive and risk laden; and contractors only make use of intuition or guess work in allocating contingencies for the presumed project risks. Hence this paper identifies the risk associated with construction projects with a view to assess the means of analysing and managing the inherent risks adopted by indigenous contractors in Nigeria. The paper adopted questionnaire survey on the targeted population of indigenous contractors operating in Lagos State under the umbrella of FOCI using simple random sampling technique. The questionnaire was structured to obtain information on category of risks associated with construction project, the techniques adopted for risk analysis and the measure of controlling or managing the inherent risks. The data collected were analysed using weighted mean, mean interval score (MIS), and multiple regression analysis. The hypothesis was analysed using regression model. The analysed data shows that financial and economic risk, delay risk and contractual and legal risk were prominent among the major risks associated with construction project. The techniques adopted by indigenous contractors in analysing project risks are Delphi Method, Influencing diagram and Portfolio theory while the mechanism of risk managing measures are Prediction, Specialization and Control measures. The regression model indicated a significant and positive relationship between risk managing measures and risk analytical techniques with coefficient ranging from 0.425 to 0.775. The paper concluded that indigenous contractors should adopt Monte-Carlo simulation and Latin-Hyper-Cube sampling that is mathematical oriented to analyse project risks rather than delegating the assessment to third party who are not conversant with the various variables of risk factors on construction projects and recommend that the combination of three measures of managing risks should be adopted in order to pre-empt the unpredictable natur

keywords:

Construction project; Analytical techniques; Risk management; Managing measures

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