A Study on Construction Contract Risk Management Practices in Ethiopian Building Construction Projects
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2014-12
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Abstract
This research deals with the study of construction contract risk management practices in Ethiopian building construction projects. The objectives of the research were to identify the level of use of construction contract risk management techniques in Ethiopian building projects, to test the level of awareness of different contractual parties involved in Ethiopian building construction projects and to study the effect of different areas and causes of risk in meeting project objectives.
Different literatures were assessed to show that risk management is a very important management process that helps in making projects successful. Questionnaire survey was performed on different randomly selected building construction companies in Ethiopia to observe their awareness and how they deal with risks in their projects.
The research finding indicated that most of the parties involved in the Ethiopian building construction projects have heard of the concept of risk management but lack adequate knowledge about the principles of the risk management. The common excuse given for not incorporating risk management techniques in projects was lack of awareness about their significance. The methods used to deal with risk in the Ethiopian building construction projects were found to be highly dependent on individual’s judgment and past experience. Poor contract management was found to be one of the major causes of risk which has a high probability of occurrence and a high level of impact on project objectives. It was also observed that most building constructions in Ethiopia are not completed in conformity to their original plan, i.e. they usually sustain delay, cost overrun or quality problems. Majority of the parties involved in Ethiopian building construction projects believe that the effect of risk on project objectives can be greatly minimized if construction contract risk management techniques are used.
Keywords: Building, Construction, Risk, Contract, Management, Project and Objectives.
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Keywords
Building, Construction, Risk, Contract, Management, Project and Objectives