ANALYSIS OF RISK MANAGEMENT IN CIVIL ENGINEERING PROJECTS, AKWA IBOM STATE

ABSTRACT

The analysis of risk management in civil engineering projects at Akwa Ibom state was carried out. The data used for the analysis was collected using questionnaires. The results from a questionnaire survey of risk management in the different phases of a construction project at Akwa Ibom State Nigeria are presented. The participants of the study were clients, contractors and consultants working in this state.  The involvement of these stakeholders in the project phases, their roles in the risk management process in particular and their influence on risk management were analyzed. It was shown that planning and production phases of a construction project are the most important for risk management, wherein risk identification, assessment and response take place. However, collaboration in terms of risk management between the key players is most intensive in these phases. Contractors participate more actively in the risk management process in comparison with other actors and have the largest influence on project risk management. Despite the recognised importance of the early phases in the project, this research shows a very low degree of risk management activity in the programme phase and encourages thorough risk analysis to overcome pushbacks and abandonment of projects to has potentials of enhancing economic growth and development.

TABLE OF CONTENTS

Title Page                                                                                                                    i

Declaration                                                                                                                  ii

Certification                                                                                                                iii

Dedication                                                                                                                  iv

Acknowledgments                                                                                                      v

Table of Contents                                                                                                       vii

List of Tables                                                                                                              viii

List of Figures                                                                                                             ix

Abstract                                                                                                                      x

CHAPTER ONE: INTRODUCTION

1.1       Background of Study                                                                                     1

1.2       Statement of Problem                                                                                     4

1.3       Aim and Objectives                                                                                        4

1.4       Scope of Study                                                                                               4

1.5       Justification of the Study                                                                               4

CHAPTER TWO: LITERATURE REVIEW                                                      6

2.1       Preamble                                                                                                         6

2.2.      Risk Management                                                                                           7

2.3       Maturity Models                                                                                             10

2.4       Knowledge Management                                                                                12

2.5       Construction Projects Approach                                                                     14

2.6       Concept of Risk in Construction Projects                                                      16

2.7       Risk Control in Construction Project                                                              17

2.8       The Roles of the Project’s different Phases in Risk Management                  19

CHAPTER THREE: METHODOLOGY                                                              21

3.1       Research Design                                                                                             21

3.2       Data Collection                                                                                               21

3.2.1    Choice and description of the projects                                                           21

3.2.2    Questionnaire survey                                                                                      23

3.3       Method of Analysis                                                                                        23

CHAPTER FOUR: RESULT AND DISCUSSION                                             24

4. 1      Results of the Survey                                                                                      24

4.2       Respondents                                                                                                   24

4.3       Risk Management in the Different Phases of the Project                               25

4.3.1    Risk identification process                                                                              27

4.3.2    Risk assessment process                                                                                  28

4.3.3    Risk response process                                                                                     29

4.4       Collaboration in Managing Risk and Actors’ Influence on the Risk

Management Process                                                                                      30

CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS                 33

5.1       Conclusion                                                                                                      33

5.2       Recommendation                                                                                            34

5.3 Contribution to Knowledge                                                                                  35

References

Appendix

LIST OF TABLES                        

4.1:      Knowledge of Risk Management                                                                   25

4.2:      Evaluation of Collaboration in Risk Management                                          31

4.3:      Degree of Communication of known Risks and Opportunities between

Actors in the Procurement Phase                                                                    31       

LIST OF FIGURES

4.1:      Sample Composition                                                                                                   24

4.2:      Participation in the Project Phases                                                                              26

4.3:      Importance of Risk Management in the Different Phases                                          26

4.4:      The Risk Management Systematically Processes Performed in the Project               27

4.5:      Risk Identification in the Different Phases                                                                28

4.6:      Risk assessment in the Different Phases                                                                     29

4.7:      Risk response in the Different Phases                                                                        30

4.8:      Influence of the Actors on the Risk Management Process in the Project                  32

CHAPTER 1

INTRODUCTION

1.1   BACKGROUND OF STUDY

Being a fast developing country with numerous infrastructural project, construction industry is one of the largest industry in Nigerian economy. It provides employment teeming population and contribute about 700,000 Million Naira to the GDP of the nation (NBS, 2015). As the standard of the buildings and infrastructure has a direct influence on the level of life of populace, a well-functioning construction organization is a paramount factor for the advancement of the nation. Nigerian construction industry has been criticized for increasing costs, low productivity, low quality, project delay and negligence of safety measures and processes.

Particularly, the risk management process is argued to play an important role in project and construction management and, in effect, need to be further developed so as to achieve improved efficiency in the industry. Risk management is intended to be an inherent part of construction management (Del Caño and de la Cruz, 2002; Olsson, 2007;Basaif et al., 2020; Issa et al., 2020; Koulinas et. al., 2020), where one of the significant tasks is to interpret the negative effects of the project and how to mitigate them (Anderson, 2009).

This is a very important key method for effective project management (Price and Baloi, 2003; Holsomback and Perera, 2005; Pinto and Alali, 2009). Risk management as generally defined, is the method of identifying and evaluating risks and implementing ideas to reduce them to an appropriate extent (Tohidi et al., 2011). The main aim of project Risk management is to define, evaluate and manage the risk for effective and timely project delivery.

Overall, risk management procedure involves the following major steps: Risk planning; Risk identification; Risk assessment (both qualitative and quantitative); (4) Risk analysis; Risk response; Risk monitoring, and Recording the risk management process (ISO 31.000, 2009; Baloi and Price, 2003). In the construction industry, risk management studies have considerably grown in the past four decades.

(Forbes et al., 2008), as construction projects are subject to risk during their execution (Schieg, 2006; El-Sayegh, 2008). Project risk are analyzed from two different points of view. First, is the project owner (Volm and Bryde, 2009), and then the contractors on the other side (Baloi and Price, 2003).

The construction industry is subject to more risk and uncertainty than any other industry. Most of the key players experience risks in cost and time over runs and many times fail to meet quality standards and operational requirements. Therefore the need to increase the understanding of risk management (.Dhivya and Prabu, 2019). The construction industry consistently ranks amongst the highest contributors to global gross domestic product, as well as, amongst the most corrupt. Corruption aslo inflicts significant risk on construction activities, and overall economic development (Hosseini et al., 2020). Nawadays in construction projects risk management is considered to be a very main managerial process for accomplishment of completing the project within the financial aspects and within the time period (Shaik et al., 2019).

Probability is a measurable phase of uncertainty, for which we are capable to estimate the prevalence likelihood and the measurement of damage. The danger is assumed as a deviation from the preferred level. It can be nice or, which most frequently happens, it can be negative. Therefore, the dangers evaluation is so vital for assignment decision and coordination of development work. The chance evaluation is viewed as the evaluation of damaging occasions even at the stage of planning and programming of a development project. This evaluation enriches the decision making system and presents extra arguments, which assist to choose the choicest variant of a building task the use of the Multi Aspects approach (Naveen  and Deepan, 2020). Risks in construction projects are dynamic in nature and hence should be considered as a complex interrelated system rather than a set of separate individual factors (Etemadinia and Tavakolan, 2021).  For proper management, it is necessary to undertake a thorough project risk assessment prior to construction (Serrano-Gomez and Munoz-Hernandez, 2019). Before planning and managing risks to reduce the causes of severe risks associated with construction, it is very important to conduct an evaluation first. Aspects related to risk are convoluted in several steps from design to planning to project fulfillment (Ariyanto et al., 2020).

Mega projects (MP) require efficient and mandatory management of risks during their construction. Therefore, it is crucial to identify any possible deviations towards meeting their objectives. Such deviation forced MP to be delivered behind schedule and over budget. According references, MP does not require only qualitative analysis but requires an accurate quantitative analysis based on knowledge and practice (Nabawy and Khodeir, 2020).

The methods used for project risk management are based on quantitative risk analysis, but these approaches do not incorporate experience acquired from previous projects which might be required in tackling a new one. Forbes et al., (2008) inferred that construction industries have used only a limited number of risk management approaches over time since not all techniques are suitable for every situation (Skitmore, 2004).The whole aim of this research is to analyze risk in the various phases of construction project.

The specific objective through which the major objective would be achieved are: to analyse how risks are shared and managed in various procurement options and to develop recommendations, which contribute to more effective risk management in construction projects especially in Nigeria.

1.2   STATEMENT OF PROBLEM

Lack of or insufficient risk analysis led to project abandonment, delays in project and even structural failure. Ajaokuta steel company Construction is a very interesting example of projects that have gone wrong. The project has lasted for over six decades and apparently have been abandoned. Proper risk analysis was not done and that is the result. Risk analysis is not only limited to curbing injury but also to drastically reduce the chance of abandoning project which in turn results to economic waste.

1.3   AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to analyze risks at various stages of construction projects. The specific objectives of this study were to;

i.  analyze how risks in Civil Engineering projects.

ii. develop guidelines that will lead to better risk management in construction projects.

1.4   SCOPE OF STUDY

The study area is limited to Uyo in Akwa Ibom State of Nigeria and the questionnaire will help in collection of necessary data.

1.5   JUSTIFICATION OF THE STUDY

The findings of this study will first allow a company or contractor to establish a holistic method of risk management centered on best practices. Second, the efficacy of this role will be enhanced along with the realization of new projects.

Proper and thorough risk analysis of projects especially public project is key to a successful and hitch-free project. It is believed that such project should crystallize a blueprint that would minimize injuries, structural collapse and project abandonment associated with improper risk analysis. This would in no small measures lead to growth and development of the nation's economy.

This will also be a step in the right direction in keying into Nigerian current proposition on easy of doing business, because improper risk analysis affect the easy of doing construction business.

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