Development Of Economic Risk Factor Matrix For Sustainable Project Construction

Abstract

Construction industry is categorized as risk rising and full of challenges. Projects encounter number of risks, which affect the project objectives such as scope, cost, time and quality. Cost is considered as driving force and major problem among risks in construction projects. Like many countries, cost overrun is also considered as significant problem in Pakistan. Hence, this research aims to identify risk factor, which could affect the economically sustainable development of construction project in Pakistan. In order to meet the objectives, a critical literature review was carried out to identify the economic risk factors. Delphi technique was used to identify the significant factors to be included in the research. The Delphi process was concluded in three rounds. Different professionals from the construction field were requested to participate in the process. Based upon the interactions, sixty six (66) economic factors were shortlisted, which were further categorized into seven (07) groups including owner/client, contractor, consultant, political and government, market, technological limitations, and natural causes. A survey questionnaire was developed which was used to obtain the feedback from industry participants. A total of 170 questionnaire were distributed and 101 were received back. The response rate remained almost 60%. Using SPSS, the reliability of the data was checked which satisfied the threshold level of significance, confirming the reliability of data to proceed further with the analysis. In order to observe the data pattern, normality test was performed which resulted in a non-parametric pattern. The perception level criteria of the respondents in a non-parametric data pattern was analyzed using Kruskal Wallis test which remained positive. Economic risk factor matrix was developed for each group level as well as overall basis for top 34 risk factors identified. Impact was categorized into three zones i.e. low, moderate, and high on the bases of their criticality. An overall matrix on the basis of top identified economic risk factors was formulated. Out of thirty four (34), ten (10) factors were observed in high zone and remaining twenty (24) factors were in moderate zone. Scatter analysis was also performed for individual group. In case of owner / client group, the range of likelihood of occurrence and magnitude of impact was 0.35 to 0.61 and 0.25 to 0.42, respectively. For contractor, it remained 0.45 to 6.5 and 0.25 to 0.40. Whereas in case of consultant, it was 0.40 to 0.60 and 0.25 to 0.35 respectively. For the remaining groups like political and government, market related, and technological limitations, it was observed as 0.45 to 0.62 and 0.22 to 0.37, 0.42 to 0.55 and 0.22 to 0.35, 0.40 to 0.56 and 0.22 to 0.30, respectively. This study helped in early better understanding and awareness of economic risk factor. The study has achieved a mile stone in development of economic risk matrix with risk criticality values which is expected to guide the project stakeholders in conducting economic risk analysis during feasibility study. Based upon these analysis, proper remedial measures would be possible for incorporation at planning and strategy level to improve and manage these barriers.