Authors: 1Isaac Kofi Yornu | 2David Ackah, PhD.
1Procurement Department, Accra Technical University
2Ghana Campus, Business University of Costa Rica
The Construction Industry is embedded with risky situations that affect construction projects and therefore requires systematic processing to achieve project objectives and ensure business sustainability. In achieving project and business objectives, Contractors usually experiment many techniques and management practices in addressing construction risk. This study aims to assess the risk management practices of Ghanaian Contractors towards typical construction project risk factors. The risk factors (RF) were identified and their severity on construction projects assessed. The study investigated the relative use of various risk management practices and the popularity of available analysis techniques. The objectives of this research have been achieved through a questionnaire survey, which was used for data collection and the SPSS and relative importance index were employed for analysis. The results of analyzing the 41 questionnaires that were received from contractor respondents concluded that 41 out of the 42 listed risk factors were overwhelmingly identified as risk factors that significantly affect construction projects in Ghana, with the exception being „Lower work quality in presence of time constraints‟. The most important risk factors that affect construction projects based on the assessed severity are: Inflation, Delayed payments on contract, Difference in actual quantities and the executed quantities, Defective design and Poor safety procedures. The study findings show that contractors mostly refer to previous and ongoing similar projects for accurate program as the most effective used method for risk prevention. Close supervision of subordinates have also been found to be the most used remedial method in addressing risk factors in construction. The results however discovered that Contractors do not utilize risk analysis techniques but resort to the use of comparison of projects for the purposes of analysis. The results of this study recommended that there should be a compensation mechanism in place to mitigate or offset the impact of this risk on the financial wellbeing of the Contractor. The payment regime for executed contracts should be streamlined to offer financial stability to Contractors. The Contractor should be involved with a competent designer in the design process of projects to prevent situations where defective designs are passed to the Contractor. Contracting firms should utilize computerized approaches used for risk analysis and evaluation. Contractors should work on training their personnel to properly apply risk management principles.
Keywords: Project Management, Project Risk Management, Project Execution, Project Management Practices