Risk Assessment and Contingency Allocation on Ethiopian Federal Road Projects
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Date
2016-06
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Addis Ababa University
Abstract
Road construction projects are subjected to substantial risks. This study highlights the risks
associated with road construction projects from Client represented by Ethiopian Road Authority
(ERA) and local contractors‟ perspective. One hundred nineteen risks are identified through
detail literature review. A questionnaire is then developed to solicit the opinion of construction
professionals (ERA experts and local contractors) as to the probability and impact of those risks,
in addition to their proper allocation. Eighteen surveys were completed and used in the analysis.
The analysis is carried out using fuzzy interval arithmetic and α-cut method to address both
objective and subjective opinions considered in the ranking of risks, using linguistic terms,
horizontal membership function estimation and triangular best fit approximation. The priority of
each risk is calculated by multiplying the probability with the impact for each risk.
The results indicate that the top five significant risks from local contractors‟ perspective are
currency exchange risks/Lack of currency, corruption and lack of respect for law, change in
scope of work, shortage of equipment at site, equipment frequently out of order or damaged,
whereas, shortage of equipment at site, theft on site, accident and injuries, lack of personal
training and management support, equipment frequently out of order or damaged are the top
most significance risk among client. Furthermore, local contractors and the client are not in the
same level of agreement on the risk ranking.
The top risks discussed clearly indicate where the stakeholders should put much effort in and
allocate proper contingencies. Nevertheless, risk management plan is an ongoing effort that
cannot stop after a risk assessment or the setting of contingency, it must comprise a decision
support system for proper risk mitigation strategy and management plan that should be
incorporated in the project execution plan.
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Keywords
Federal Road Projects, Risk Assessment, Contingency Allocation