ICRAM-1: Model for International Construction Risk Assessment

TLDR

The paper introduces ICRAM‑1, a model to assess risk for international construction projects. ICRAM‑1 evaluates risk indicators at macro, market, and project levels through a structured, quantitative framework that can be applied to specific foreign construction projects. The analysis identifies high‑risk indicators and quantifies how country and market environments influence overall project risk.

Abstract

This paper presents a risk assessment model for international construction projects. The International Construction Risk Assessment Model (ICRAM-1) assists the user in evaluating the potential risk involved in expanding operations in an international market by analyzing risk at the macro (or country environment), market, and project levels. The paper discusses some of the existing models for country risk assessment, presents potential risk indicators at the macro, market, and project levels, and explains the ICRAM-1 methodology through an applied example. The ICRAM-1 provides a structured approach for evaluating the risk indicators involved in an international construction operation and is designed to examine a specific project in a foreign country. It can be used as a tool to quantify the risk involved in an international construction investment as one of the preliminary steps in project evaluation. Four main results are obtained from the ICRAM-1 analysis: (1) High-risk indicators; (2) impact of country environment on a specific project; (3) impact of market environment on a specific project; and (4) overall project risk.