PROJECT RISK MANAGEMENT PRACTICES AND CHALLENGES: THE CASE OF ADDIS ABEBA CITY ROAD CONSTRUCTION PROJECTS

Abstract

This research focus on the study of project risk management Practices and challenges on road construction Projects in Addis Ababa city. The objectives of the research are assessment of project risk management challenges, identifying the Probability of occurrence of project risk factors in Addis Ababa city road construction projects and investigating their impact on cost, time project goals their response method for each risk factor. A structured questionnaire survey comprising 47 potential risk factors was distributed to a statistically representative sample of contractors and consultants. Mean scores and ranking mechanism are used to rate the probability of occurrence of various risks and their impact on cost and time. Based on contractors and consultants view, the prevalent trend of attitudes towards project risk management challenges and risk response factor is investigated, quantified and expressed as a percentage, based on the number of respondents who selected a specific option, in relation to the total number of respondents. This research work revealed that inflation is the highest significant risk factor along with defective design and payment delays, which are ranked second and third respectively. The outcomes further show that risk avoidance, risk transfer, risk mitigation, risk acceptance and risk share are most frequently used response method for high impact risk factors. In addition the research revealed that lack of policy and procedures, lack of proper risk models, lack of practical experience, were the top three challenges faced in the implementation of project risk management practice. Generally based on the findings the research concluded that risk identification should be considered as the single most significant activity of the risk management on a project and should be tackled in a systematic way. The identification and analysis of risks, as well as the enhancement of the processes for managing road projects and the efficient use of resources, are all advantages of the risk management process. in an effort to handle uncertainty and unforeseen events efficiently and successfully complete projects, risk analysis and management are still a key component of project management for road construction project. The study recommended that, Periodic training programs offered by construction firms to technical personnel to keep them informed of the latest technology available for improving the quality level of the workforce, may yield considerable savings in time, efforts, and costs associated with the project. Having in place a well-documented procedure for risk identification and management should be a one stop solution to all threats that are likely to occur during project life cycle. Implementing effective policies and programs that increase accuracy and proper identification and management of risk can assist in risk reduction and management.