Renuka, S M and Umarani, C (2019) Effect of critical risk factors causing cost deviation in medium sized construction projects. Journal of Construction in Developing Countries, 23(2), pp. 63-85. ISSN 1823-6499
Abstract
Risk is the outcome of an event which may be predicted on the basis of statistical probability. Construction projects have inherent risks associated with it. The main aim of this paper is to identify the critical risk factors and to propose a model to find the probability of cost deviation in medium sized construction projects. A total of 46 risk factors were shortlisted based on pilot study and experts' opinion. A questionnaire survey was conducted among 223 various construction professionals each representing one project i.e. from 223 different projects. Based on factor analysis, 46 risk factors which influence the cost deviation in construction projects were classified under nine key risk groups viz. project scope and evaluation risk, work environment risk, documentation and legal framework risk, construction and operational risk, resource productivity risk, knowledge sharing risk, site supervision risk, financial viability risk and lean construction risk. Logistic regression analysis was also carried out to develop a model to find the probability of cost deviation in construction projects. It is concluded that the risk groups such as project scope and evaluation risk, site supervision risk, knowledge sharing risk and lean construction risk are having higher influence in the cost deviation in medium sized construction projects. By setting the effective baseline of the project like estimation of original project cost and detailed project report, cost deviations in medium size construction projects can be eliminated. Detailed recommendations are also provided.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction projects; cost deviation; India; risk management |
| Index terms: | cost deviation, estimation, productivity, financial viability, factor analysis, work environment, risk management, risk factor, project scope, construction professional, logistic regression analysis, supervision, India, lean construction, knowledge sharing, documentation, project cost, survey, questionnaire, construction project |
| Subjects: | risk assessment, data collection methods, control systems, scope management, financial and cost management, knowledge management, business management, economics, management, professional development, Geography, production management, building construction, statistical analysis, environmental hazards |
| Topics: | Project Management, Geographical Context, Research Practice, Information Management, Cost Management, Business Strategy, Sustainability, Risk Management, Site Management, Organizational Design |
| Descriptive scope: | 4 PCEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here