Risk Analysis for Selected Building Projects in Addis Ababa
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Date
2017
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Addis Ababa University
Abstract
Construction is a risk prone industry. Occurrence of risks in construction could affect project objectives negatively. Involvement of risk management plan and process is the best possible way to exist in this hasty environment. This is because analysis of risks gives better understanding of risks and the resulting impact of the risks, if they occur. This enables the project management team to have a better estimate of the impacts of risks. The estimated project cost is the sum of the baseline cost and an allowance to handle the cost impact of risks (i.e. contingency). Having a realistic estimate of this allowance would mean better estimate of project cost.
The research aims to review the risk management and contingency allocation practices at selected building constructions in Addis Ababa. A structured questionnaire served as a research instrument.
The study revealed that most contractors do not practice risk management because of lack of awareness of its importance for effective project management. This finding shades light on the need of development in the structure to be used as an input for the processes of risk management for when the need arises. The study deduced development of inputs to the processes of risk management requires understanding of the perception of the individuals involved in risk management team and in general of the respective organization.
The scope of this study also includes a demonstration of risk analysis for a case study that could be a guide to the use of the developed inputs and existing methods.
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Keywords
Contingency, Risk, Risk analysis, Risk management.