Risk management in building projects in Palestine: contractors’ perspective

Abstract

The construction industry is widely associated with a high degree of risk and uncertainty due to the nature of its operating environment. This research study seeks to identify and evaluate key risk factors and their preventive and mitigating measures in building projects in Palestine. It also seeks to investigate the severity and allocation of each identified risk factor according to the contractors' perspective. A questionnaire survey was conducted and a total of forty-four critical risk factors were identified and categorized into nine groups. Research findings identify financial failure of the contractor to be the most important risk factor followed closely by two factors namely, working in dangerous areas and border closure. The results also indicate that close supervision is seen as the most effective risk mitigating method. The paper recommends that contracting companies should identify and adequately quantify project risk factors. Adding a risk premium to quotation and time estimation has to be supported by governmental owner organizations and other agencies in the local construction sector. Training courses should also be provided to construction professionals on how to deal with and minimize risks in building projects.