Wiguna, I P A and Scott, S (2005) Nature of the critical risk factors affecting project performance in Indonesian building contracts. In: Khosrowshahi, F (ed.) Proceedings of 21st Annual ARCOM Conference, 7-9 September 2005, London, UK.
Abstract
Project delay and cost overrun are recognised as the most common problems faced by contractors. The primary aim of the study reported in this paper was to collect information to allow the critical risk factors causing construction time and cost in building projects in Indonesia to be determined. The study was predominantly based on interviews with project managers using a structured questionnaire, which was designed to assess risk levels in terms of time and cost. It consisted of four risk factors in each of four major risk categories giving sixteen risk factors in all. A total of 22 building projects under construction in East Java and Bali provinces were surveyed. The respondents were asked to assess the probability that risks would occur, estimate the impact on cost and time if the risks did occur using a five point scale and consider the weight of risk importance using pair-wise comparison. The results showed the critical risks affecting both project time and cost perceived by the building contractors were similar. They were: high inflation/increased material price, design change by owner, defective design, weather conditions, delayed payments on contracts and defective construction work. A common theme amongst the critical risks identified appears to be that most of them cannot be controlled or managed by the contractors.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | building project; cost overrun; critical risk; delay; risk assessment |
| Index terms: | cost overrun, design change, owner, interview, Indonesia, building contractor, building contract, project manager, estimate, weather, construction time, project delay, risk assessment, inflation, construction work, questionnaire, project performance, risk factor |
| Subjects: | Geography, financial risk, project management theory and practice, project controls, sociology, environmental hazards, profession, data collection methods, contract type, air quality, practitioner, operations management, contractual arrangements, economic analysis, financial and cost management |
| Topics: | Roles and Professions, Stakeholder Management, Sustainability, Procurement, Business Strategy, Cost Management, Research Practice, Project Management, Geographical Context, Time Control |
| Descriptive scope: | 4 PCEA |
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