Risk in construction is fully integrated with every facets of construction life cycle. Construction risk may put a threat to an organization’s success and debar to achieve the project objectives in terms of time, cost, quality, safety and environmental sustainability.

With construction risks construction projects may experience with ill defined scope, design and constructability issues and mismanaged vendors. This leads to a clear time-cost quality gaps.

Technical Risks

• Imperfect design.
• Insufficient site investigation.
• Ambiguity over the source and accessibility of materials.
• Suitability of specifications.

Risks related to subcontractors

An item of work is separated with the following five subdivisions In the total quantity method:

• Low management competency of subcontractors

Without competent management skills, If subcontractors cannot successfully manage their resources to meet the needs from several concurrent construction sites.

The construction risks can be categorized in the following ways.

Logistical Risks

• Accessibility of resources - mainly construction equipments, spare parts, fuel and labor.
• Accessibility of adequate transportation facilities.

Construction Risks

• Indecisive production of resources.
• Weather and seasonal implications.
• Industrial relations problems.

Financial Risks

• Price rises.
• Accessibility and fluctuation in foreign exchange.
• Interruption in Payment.
• Repatriation of funds.
• Local taxes.

Political Risks

• Constraints on the accessibility and employment of expatriate staff.
• Customs and import restrictions and procedures.
• Difficulties in disposing of plant and equipment.
• Insistence on use of local firms and agents.

20 Key Risks in Construction

• Rigid project schedule
• Design variations
• Unnecessary approval procedures in administrative government departments
• Incompatible construction program planning
• Low management capability of subcontractors
• Deviations of construction programs
• High performance/quality expectations
• Insufficient program scheduling
• Variations by the client
• Imperfect approval and other documents
• Unfinished or inaccurate cost estimate
• Lack of harmonization between project participants
• Non availability of sufficient professionals and managers
• Non availability of sufficient amount of skilled labor
• Bureaucracy of government
• General safety accident occurrence
• Inadequate or insufficient site information (soil test and survey report)
• Incidence of dispute
• Price inflation of construction materials
• Serious noise pollution caused by construction