Risk management framework for construction projects in developing countries

TLDR

It is important to manage the multifaceted risks associated with international construction projects in developing countries, not only to secure work but also to make profit. The study aims to identify and evaluate risks and mitigation measures for international construction projects in developing countries, develop a risk management framework, and propose the Alien Eyes' Risk Model illustrating hierarchical risk levels and interrelationships. The authors surveyed stakeholders, identified 28 critical risks categorized into country, market, and project levels, evaluated and ranked their criticality, and proposed and assessed practical mitigation measures, culminating in the Alien Eyes' Risk Model. Respondents largely viewed the proposed mitigation measures as effective, leading to a qualitative risk mitigation framework that benefits construction projects in developing countries.

Abstract

It is important to manage the multifaceted risks associated with international construction projects, in particular in developing countries, not only to secure work but also to make profit. This research seeks to identify and evaluate these risks and their effective mitigation measures and to develop a risk management framework which the international investors/developers/contractors can adopt when contracting construction work in developing countries. A survey was conducted and twenty‐eight critical risks were identified, categorized into three (country, market and project) hierarchical levels and their criticality evaluated and ranked. For each of the identified risks, practical mitigation measures have also been proposed and evaluated. Almost all mitigation measures have been perceived by the survey respondents as effective. A risk model, named Alien Eyes' Risk Model, which shows the hierarchical levels of the risks and the influence relationship among the risks, is also proposed. Based on the findings, a qualitative risk mitigation framework was finally proposed which will benefit the risk management of construction project in developing countries.