2019 CSCE Annual Conference - Laval (Greater Montreal) Conference
Mr. Mohamed Afifi, McGill University
Dr. Ayman Nassar, German University in Cairo
Construction project risks are generally defined as the possible variations of the actual outcomes from the planned scenarios which expose the various stakeholders to monetary losses and time-wise delays. Construction projects in Egypt always experience a high level of risks and uncertainties due to their complex and dynamic environments. This, in turn, impacts projects in both time and cost and causes numerous disputes between parties. Usually, project participants in Egyptian construction projects allocate risks by aversion where owners tend to shift risks to the primary contractor, who in turn transfers them to the subcontractors. As a result of this, risks are not necessarily allocated/ re-allocated to the party that is best able to manage them efficiently and effectively. This also increases the dispute and disagreement level between project parties which consequently cause losses in both time and budget.
Accordingly, this paper appraises the need for an efficient framework that allocates project risks to the most suitable party through utilizing a systematic risk analysis approach that identifies the dominant risks in the Egyptian construction industry and evaluates their relative importance, interdependency and possible effects and frequency of occurrence.
Hence, multi-criteria decision-making techniques are used to develop a framework that mitigates the possible risks and decreases their negative effects through optimizing the project risk allocation process. Previous researches have not considered the application of MCDM and optimization techniques in the process of project risk allocation which is considered a novelty of this research.
Experts from the Egyptian construction industry were involved in several stages of the study, to assess the perceptions of various stakeholders of construction projects and to ensure and validate the public acceptance and approval of the proposed framework.
The proposed framework was tested by industry specialists and applied on Egyptian construction projects to validate its efficiency by comparison to the real situation and approach implemented.
The result of applying the developed framework on the case studies was in favor of the proposed model as it proved reduction in money losses and time-extensions due to proper allocation of the construction risks and therefore, this resulted in a declination in the dispute level between project participants.