ISSN 2319-8885

Vol.04,Issue.13,
May-2015,
Pages:2472-2474
www.ijsetr.com

Risk Management in Small Construction Project

ALTAHER MOHAMED EIDA1, R. K. PANDEY2
1
Dept of Civil Engineering, Sam Higginbottom Institute of Agriculture, Technology & Sciences (Formerly Allahabad
Agricultural Institute), Allahabad, India.
2
Dept of Mechanical Engineering, Sam Higginbottom Institute of Agriculture, Technology & Sciences (Formerly Allahabad
Agricultural Institute), Allahabad, India.

Abstract: Risk management is a concept which becomes very popular in a number of businesses. Many companies often
establish a risk management procedure in their projects for improving the performance and increase the profits. Projects
undertaken in the construction sector are widely complex and have significant budgets, and thus reducing risks associated should
be a priority for each project manager. The questionnaire prepared for the survey was formulated by seeing the relevant literatures
in the area of construction management. This research seeks to identify the risk factors that affect the performance of construction
projects, using appropriate tools and technique and to develop a risk management framework. The responses were analyzed by
bar chart, standard variance & mean using the software of SPSS. This model enables to know the strategies that propose risk
prevention, risk relocate future suggestion. This study investigates, categorizes and evaluates the risk and develops a risk
management policies and guidelines to the company contractor which can be adopted at the construction projects site for better
and risk free construction work.

Keywords: SPSS, Construction Site, Risk Management Policies.

I. INTRODUCTION construction project) ,Tulsiani group (for group housing

Risk can be defined as an uncertain event or condition
that, if it occurs, has a positive or negative effect on a project
objective. It includes both the prevention of potential
problems and the early detection of actual problems when
they occur. Risk is unavoidable and present in every human
situation. It is present in daily lives, public and private sector
organizations. Risk management nowadays a critical factor
for successful project management, as projects are tending to
be more complex and day by day competition is increasingly
tougher. According to Chapman and Ward (1997) “All
projects involve risk – the zero-risk project is not worth
pursuing. it is best way to identify the risk and follow a
suitable management policy. It not only saves time, cost but
also life and future of the country. There are so many
researches and papers have been published time to time to
describe about risk management.
II. MATERIALS AND METHODS
Allahabad is located at 25.45°N 81.84°E in the southern
part of the Uttar Pradesh in the northern part of India at an
elevation of 98 meters (322 ft) having the population of 1.11
million according to 2011 census and stands at the
confluence of two, the Ganges and Yamuna. Over 25
companies & firms working on different infrastructural
projects, namely 1) Road construction projects 2) Group
housing project 3) Local Brick production 4) Sanitation
projects (sewage/waste disposal). The four major
construction companies are VIL limited (for road
project) , local brick factory nearby Allahabad, diplex
construction Pvt. Ltd (sewage & waste water)a questionnaire
have been conducted among the employees. When the
completed questionnaires had been collected, the data was
entered into the Statistical Package for Social Science
(SPSS). All questions and sub-questions were converted into
variables. Each answer alternative was coded using value
labels. In total, 90 variables were entered and used for the
analysis. Differentiate three main forms of content analysis –
qualitative, quantitative and structural. Despite a set of
quantitative data, a sample of 36 responses was not enough
for a deep statistical analysis. Thus, simple SPSS tools such
as descriptive statistics and custom tables were used. With
their help frequencies, means, distributions and rankings
were obtained. In order to illustrate statistical data, graphs
were constructed in Microsoft Excel. The analysis of
questionnaire data formed a basis for the interviews.
A. Questionnaire Structure and Design
The questionnaire was tested with a pilot survey for
clarity, ease of use, value of the information that could be
gathered. The questionnaire survey is divided into two parts.
The first part consists of general information like type of
company, experience, value of their project etc., and the
second part consists of the construction risk factors for
evaluation. Risk factor for this study classified into eight
categories, namely: financial risk, legal risk, management
risk, market risk, policy &political risk, technical risk,

Copyright @ 2015 IJSETR. All rights reserved.

 ALTAHER MOHAMED EIDA, R. K. PANDEY
environmental risk, social risk. Respondents are 21-30 India. Table 1, below shows the variable function chosen in
Projects, 32 % of respondents are 31-40Projects, 12 % of SPSS 16.0 Created Series.
respondents are 40 above labors so the majority of the
respondents are Project in hand are 31-40. TABLE I: The Variable Function Chosen in SPSS 16.0
Created Series
B. Risk Rating
A Likert scale of 1-5 was used in the questionnaire. A
Likert scale is a type of psychometric response scale
questionnaire, and is the most widely used scale in survey
research. When responding to a Likert questionnaire item,
respondents specify their level of agreement to a statement.
The scale is named after Rensis Likert, who published a
report describing its use. The respondents were required to
indicate the relative critically/effectiveness of each of the
probability of risk factors and their impact to the
management. Analysis of Survey Results: SPSS software
(Statistical Package of Social Studies), this software is one of
the management tool helps to analyze the 5-scale likert factor
analysis. Where Si = significance score assessed by
respondent j for risk i; a, = probability of occurrence of risk i,
assessed by respondent j; and p, = degree of impact of risk i,
assessed by respondent j. By averaging scores from all
responses, it is possible to get an average significance score
for each risk, and this average score is called the risk index
score and is used to rank among all risks. The model for the
calculation of risk index score can be written

(1)
Where RS1 = index score for risk i; and

S1 = significance score assessed by respondent j for risk I and

T=Total number of responses. To calculate S', the five scales
for o and (3, this will be converted into numerical (Likert
scale) scales.

III. RESULT AND DISCUSSION IV. SUMMARY AND CONCLUSION

As far as the contractor is concerned shortage of skillful
workers has the maximum risk rating and other risks which
have maximum risk rating are time constraint, subcontractor
related problems, project delay, and improper verification of
contract documents, and competition from other companies.
For the construction companies, time constraint has the
maximum risk rating and other risks which have maximum
risk rating shortage of 3and budgeting, and loss due to
fluctuation of inflation rate. The least risk rating is
environmental risk, social risk, relation with government
departments, local protectionism and industrial disputes and
problem from near project. Now the point to be noted about
the data generated from survey, so in brief the data analysis
reveals that 8% respondent are directors, 48% of the
respondents are vice directors,12% of the respondents are
project manager,32% respondents are site engineers of work
experience 3-5 years. So majority are site engineers. Another
survey reveals the result about the labors which plays an
important role in the execution of any civil engineering
projects. 8 % respondents are of 50-60 age group and in the
category of skilled labors. 32% labors are of 35-45 age group
and 8% are 75 and above. Survey also reveals that 12%
respondents companies are 10 projects or below in hand,
20% companies have 21-30 projects in hand and only 12%
companies have 30-40 projects running in different parts of
International Journal of Scientific Engineering and Technology Research
Volume.04, IssueNo.13, May-2015, Pages: 2472-2474
 The absence of trained local manpower in the survey,
mean value calculated (3.56) and Standard Deviation
value (1.758).
 Agreed upon technical specification are not realized
mean value is (3.28) and Standard Deviation value
(1.696).
 Providing special cadre is abided mean value
calculated (3.24) and Standard Deviation value
(1.615).
 The absence of training centers for local manpower
mean value is (3.32) and Standard Deviation value
(1.600).
 Long distance between the project site and resources
mean value calculated (3.08) and Standard Deviation
value (1.706).
 Meeting should be conducted periodically to ensure
the labor provided for the work is good.
 Proper training should be allotted for the labors.
 Proper supervision should be given from the
management.
 The proper supervision should be taken care from the
Management during the work in progress.
 Weakly once work progress report should be
submitted to know the work is done under the proper
specifications.
 Risk Management in Small Construction Project
 The person should have the proper record
maintenance.
 Work progress record to be checked for the
maintenance of proper specification.
 The site engineers and supervisors are responsible for
the training of labors.
 Supervision for the implementation of workers after
the training.
 Night time shifting is allowed because there will be
reduction of traffic rate.
 Day and night work should be helpful for the
construction of bridges.
V. RECOMMENDATIONS
Possible For the sub-contractors some 50% finance has to
be given for their work, during the work 30% of finance
should be given for the work in progress. After finishing,
inspection should be taken care for full settlement of cash.
 The proper record maintenance every week for the
payment of labors.
 This factor should be taken care during the financial
budgeting.
 This will not be controlled unless the effective record
should be maintained.
 The shift duty should be helpful for the weak remitting.
 The purpose of this thesis was to determine perceived
risks of bridge construction projects of such parties
involved in it as consultants, contractors to determine
difference in perceived risks of contractors, consultants.
 Objects of the thesis were bridge construction projects
data was collected by means of questionnaire
administration to an interview with respondents
consisting of Directors, Vice Directors, Site Engineers
and Project managers.
 Data collected was subjected to 5scale Impact Grid with
Scores of Risk. Those scores were the used to
determine difference in perceived risks of Directors,
Vice Directors, Site Engineers and Project managers
which was then analyzed by using the software of SPSS
using the formulas of ANOVA test and t-test.
 Results of risk analysis of construction time indicated
that, according to the highest risk was poor
performance of sub contractors.
 According to contractor, it was due to under or
unskilled workers. It was due to difficulty in obtaining
workers directly onsite.
 Contracting documents to be legally registered.
 Contracting duration must be specified with adjustment
in case of natural calamity.
 Payment mode to be specified based on progress or
duration Specification or Dimension changes to be
recorded in register.
 Disputes and Errors to be solved with record proofs.
 Meeting conducting periodically.
 Insurance on Equipment, Machineries and Manpower
to be pre-determined Political and Local issues to be
solved by whom must be Pre-determined.
 Delaying payment to Workers will affect the progress.
 Do not delay or reduce the wages based on financial
difficulties of contractor.
International Journal of Scientific Engineering and Technology Research
Volume.04, IssueNo.13, May-2015, Pages: 2472-2474
 Incentives or Bonus from profit will enthusiast the
workers
 Increment based on experience or efficiency will lead
the workers to retain.
 Technical skilled person to be execute the work.
 Highly technically experienced person to be
administrate the project.
 Sufficient technical information’s to be provided in the
drawings and documents
 Necessary technical trainings to be provide to the
workers
 High tech technology equipment and machineries to be
used to get fast and accuracy.
 Do not awarded the work to inadequate experienced
contractor.
VI. REFERENCES
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Management in Construction" International Journal of
Project Management (Mar 1997), Vol.15, No.l, pp.31-38.
[2]J.H.M.Tah and V.Carr "Knowledge Based Approach to
Construction Project Risk Management "Journal of
Computing in Civil Engineering (July 2002)", Vol. 15, pp 43-
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[3]Alfredo Del cano, P.E and M.Pilar de la Cruz, P.E
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[4]Florence Yean Yng Ling and Linda Hoi "Risk faced by
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[5]Seon-Gyoo Kim, Jae-Jun Kim "A Risk Threshold
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[10]Kajsa Simu,The Construction Site Manager’s Impact on
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[11]http://civilengineerblog.com/risks-construction-projects/.