مهم جدا جدا An empirical approach for identifying critical time ovrerun risk factors in kuwait’s construction projects

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  • 1. Journal of Economic & Administrative Sciences Vol. 24, No. 2, December 2008 (35 - 53) An Empirical Approach for Identifying Critical Time-Ovrerun Risk Factors in Kuwait’s Construction Projects Dr. Hassan Al Zubaidi Kuwait-Maastricht Business School Mr. Srour Al Otaibi Construction Team leader Ministry of Public Work Kuwait Abstract Risk identification is an integral part of overall risk management framework of projects. The risks associated with projects and their response planning differs according to the country and the sector specific environment in which they are being implemented. In this paper, the study is carried out to identify the critical risk factors causing delay in Kuwait’s building and infrastructure projects. The preparation of a preliminary list of risks and risk factors is outlined, questionnaire development and survey details are explained, and analysis of survey responses for the identification of delay risk factors in Kuwait is presented. A case study analysis with respect to time-overrun/delay of about 28 building and infrastructure projects executed in Kuwait is also presented to validate the survey results. Survey and case study results show that the frequency of time-overrun in Kuwait’s construction projects is very high. The five most critical time-overrun factors identified in Kuwait’s infrastructure and building projects are: delay in government approvals/permits, delay in preparation and approval in variation orders, client induced additional work beyond the original scope, changed engineering conditions from the contract document and decreased labor productivity due to extreme climatic conditions. All the above risk factors are rated as moderately critical to very critical in Kuwait. Introduction Availability of adequate infrastructure facilities at reasonable cost is a prerequisite for the economic development of a country. In recent decades the Middle East States in general have experienced a boom in the construction and infrastructure industry and experienced substantial growth after escalated oil prices brought cash pouring into their economies. Global economic research on Kuwait has indicated of exuberant growth for Kuwaiti economy with a Nominal GDP surge of 19.3% from 2003 to 2004, which was one of the highest in the world. (Kuwait Economic and Strategic Outlook, 2005). Robust economic conditions and increased private spending as well as a strong pick up in gross capital formation driven by several capital projects in Kuwait is anticipated to help the economy to sustain the double digit growth rate further. Along with the oil and gas sector, the civil
  • 2. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 infrastructure and services-led non-oil sector in Kuwait are also anticipated to exhibit a matching growth trends. After a recession in the late 1990s, Kuwait is rejuvenating itself for higher investment in Civil Infrastructures. It is expected that in Kuwait, for the next five years the private sector will invest up to US$8bn in the construction sector, in addition US$3bn in government investment. Most of the large-scale construction projects are operated in complex and dynamic conditions and is constantly confronted with various risks and uncertainties. Kartam et al (2001) have studied the significance/contribution of risk factors towards project delay and their preference of risk allocation among major contractors in the Kuwait’s construction industry. The significant risk factors identified are financial failure of contractors or subcontractors, defective design, and delayed dispute resolution. In a study of analyzing eight (8) Kuwaiti construction projects, Al-Sabah et al (2002) found that, arbitration tribunal awarded KD31 million on contract price of KD100 million (at 1980 price level). Many of the past construction projects executed in Kuwait had time- and cost-overrun problems (Koushki et al., 2005). Major Government contracts for construction in Kuwait are let as lump sum projects (Design-Build), which are often encountered with construction disputes resulting, claims induced delay and cost-overrun. Many of the projects exceed completion time by 100% in addition to exceeding their budget. Project Risks and their Characterization In the context of project management, Chapman et al (1983) and Perry et al (1985) have expressed risk as an exposure to economic loss or gain arriving from involvement in the construction process, whereas Wideman (1986) have viewed risk as an exposure to loss only. Al-Bahar (1989) characterized risk with three components: risk event, the uncertainty of the event and the potential loss or gain. In general, risks in a project can be either viewed as an opportunity for greater potential of return or as hazards or threats, which affects the goal and the economic performance of the organization that is promoting the project. It is manifested through the occurrences of various risk events. In this research, “risk” is used to indicate threat/hazard to the project from one or more events of a particular category/nature or origin, for example, Time-overrun risk. Risk Event is a specific event that could occur during the project life cycle, which has a probability of occurrence and an adverse impact on the project objectives. The key attributes of risk events are the probability of occurrence and the impact of occurrence (RAMP, 2000). A 36
  • 3. Journal of Economic & Administrative Sciences December 2008 Risk Factor is a factor, which could lead to the occurrence of one or more risk events and is characterized by the probability of occurrence. Risk factors do not affect project objectives directly but do so through risk events (indirect impact). It is assumed that the realization of respective risk factors will contribute to the risk/risk event (under which it is classified) with varying degrees of influences (Thomas et al; 2006). The research seeks to identify and evaluate the critical risk factors contributing to time-overrun in both the public and private sectors. The main hypothesis this paper is trying to test is “Is there a difference in criticality rating by different category of respondents. Research Methodology The risks associated with construction projects differ according to the country and the sector specific environment in which they are being implemented. The political, legal, economic and regulatory environments in Kuwait are different from other countries and risk management strategies carried out in other project environments may not be directly suitable for the Kuwait infrastructure and construction environment. One of the aims of this research is to identify the critical risk factors causing time-overrun in the building and infrastructure projects implemented in Kuwait. The process of identification of critical risk factors was done in two stages and summarized in Table 1. Table 1: Process of Risk Factor Identification Stage 1 Process Preparation of preliminary list of risk factors 2 Identification of critical risk factors Details  Study of literature including research papers and case study reports.  Discussions with project participants.  Unstructured interviews/discussions with project participants for consolidation of risk factors and their classification.  Content validation of list/questionnaire through locally available experts.  Questionnaire survey among senior project participants in Kuwait Construction Industry. The survey responses were statistically analysed for identifying critical risk factors. Validation of survey results through case studies A mixed approach of questionnaire survey followed by case study was used for the research (Assaf et al, 1995; Chan et al, 1997; Odeh et al, 2000; 37
  • 4. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Kartam et al, 2001; Aibinu et al, 2002). A preliminary list of various timeoverrun risk factors associated with building and infrastructure projects in general and unique to the middle east and Kuwait construction project environment was prepared based on desk based literature review and discussions with project participants of Kuwait’s construction industry. The preliminary list of risk factors causing time-overrun thus prepared was further filtered out through unstructured interviews with locally available project experts/participants. Thirty-three risk factors causing timeoverrun were short listed for including in the questionnaire. The short listed risk factors that included in the questionnaire are given in Appendix 1. Survey Approach Due to the non-availability of organized information relating to the occurrence of risk factors and risk management in Kuwait’s construction industry, a mail questionnaire survey approach was considered. This approach is well recognized and widely used in both social sciences and management research studies. In the area of construction management, many researchers have used this approach (Assaf et al, 1995; Chan et al, 1997; Odeh et al, 2000; Kartam et al, 2001; El-Dash et al, 2004; Assaf et al, 2006). Some of the advantages of mail questionnaire approaches are low cost, greater anonymity, reduction in bias and wider geographic coverage. Criteria for Risk Identification In this research, “Criticality Index CI” is used as the criteria for identifying the critical risk factors. The degree of impact of each risk factor was included in the questionnaire under the heading “significance”. As mentioned earlier, criticality of risk factor is assumed to be the combined effect of probability (frequency of occurrence) and impact (significance) of occurrence of the risk. Assaf et al, (1995) and Falqi, (2004) have used a similar criterion. Both studies had used severity/significance of risk factors and frequency of risk factors for evaluation of importance index as a function of two attributes. Survey Questionnaire The questionnaire for the survey was designed with the main objective of identifying the most critical risks factors causing time-overrun in Kuwait’s building and infrastructure projects. The preliminary questionnaire was circulated among locally available experts in the field and their suggestions with respect to contents, structure, and format were incorporated in the final questionnaire. Questions Q.1 to Q.5 were factual questions, which elicit 38
  • 5. Journal of Economic & Administrative Sciences December 2008 information from the respondents regarding their background, experience and category and also the overall time-overrun risk exposure of construction projects in Kuwait. Questions for Identification of Critical Risk Factors: Thirty-three risk factors causing time-overrun in construction projects were given in the questionnaire and respondents were asked to indicate the significance of each risk factor on a five point Likert scale, response scale ranging from “not significant” (1) to “extremely significant” (5). The questionnaire was designed to examine the respondent’s observation and judgment in determining the relative significance of risk factors. Although the degree of impact of risk factors varies from project to project, the questions were designed to elicit a general assessment of the significance of risk factors. The respondents were also asked about the frequency of occurrence of that risk factor according to their judgment and local working experience in Kuwait construction industry on a three point Likert scale, response scale ranging from “low” (1) to “high” (3). Survey Responses In order to identify critical risk factors causing time-overrun in Kuwait’s building and infrastructure construction environment, a survey was carried out among the various stakeholders: Government representatives, builder/ contractors, clients, consultants, project managers and architects. The survey was administrated during the period August 2006 to October 2006. Since the responses from clients, project managers and architects were very few in numbers; their responses were clubbed with other categories. Clients and project managers were included in contractor/ builder category whereas architects were included in the consultant’s category. Out of 100 questionnaires sent, 84 responses were received out of which 4 were incomplete and discarded. The response rate of 80 percent is considered to be very good for this kind of a mail survey. The methodology adopted for increasing the response rate was regular email and telephonic follow-ups. The reliability of the survey results is expected to be high because all the respondents are top-level experienced management officials in their organizations. The summary of the survey responses concerning category and experience is given in Table 2. The majority of the survey respondents were having very good experience in Kuwait’s construction environment. About ninety four percent of the respondents have at least 10 years of experience in the area construction projects. 39
  • 6. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Table 2: Distribution of Respondents by Category and Experience Experience in Construction Projects, in years Total Category Government Engineers Builders/ Contractors Consultants Total (%) > 20 15-19 10-14 5-9 <5 5 7 10 3 0 17 7 3 1 0 21 5 0 0 1 43 (54%) 19 (24%) 13 (16%) 4 (5%) 1 (1%) (%) 25 (31%) 28 (35%) 27 (34%) 80 (100%) Time-Over run in Kuwait’s Construction Projects Respondents of the survey were asked to evaluate the overall timeoverrun risk exposure of construction projects in Kuwait. The responses to Q.4 “How often have time-overrun problems occurred in the projects you have undertaken in Kuwait?” were statistically analyzed and summarized in Table 3, which shows that the percentage of time-overrun in Kuwait’s construction projects is ranging from 20-80%. Table 3: Frequency of Time-overrun in Kuwait’s Construction Projects Percentage of Projects Category < 20% 20-50% 50-80% 80-100% Government Engineers 3 10 12 0 Builders/ Contractors 11 8 7 2 Consultants 12 10 3 2 26 (32.5) 28 (35) 22 (27.5) 4 (5) Total (%) About 93% of the respondents to Q.5 “Which type of construction projects undertaken in Kuwait has had the highest case of time-overrun problems?” stated that government projects executed in Kuwait have the highest time-overrun problems. The remaining 6% mentioned private developers’ projects. 40
  • 7. Journal of Economic & Administrative Sciences December 2008 Identification of Critical Risk Factors The survey responses were stored in a database and the SPSS software was used to perform the statistical analysis. For the purpose of this research the responses were sorted based on category of respondents (Government Engineers, Builders/Contractors and Consultants). Based on the significance rating and frequency rating on each risk factor, the average score of the Significance Index (SI) and Frequency Index (FI) was calculated for the combined as well as for each category of respondents. The average scores of SI and FI were calculated for each risk factor by the following formulae: 5 5 (1) SI i 1 S i Pi / i 1 Pi FI 3 j 1 F j Pj / 3 j 1 (2) Pj where Si is the significance weight (1, 2, 3, 4 or 5) assigned to option i Pi is the number of participants who responded to option i Fj is the frequency weight (1, 2 or 3) assigned to option j Pj is the number of participants who responded to option j The calculation of the criticality index (CI) was determined through two steps; first, identifying the score for every possible answer as shown in the Table 4. Table 4: Significance-Frequency Combination Matrix Frequency (F) 1 Significance (S) 3 1 2 3 4 5 1 2 3 4 5 2 2 4 6 7 9 3 6 8 10 11 Since the weight of significance was considered on a 5-point scale whereas that of frequency was considered on a 3-point scale, the score of integrating S and F will run from 1 to 11. The Criticality index (CI) for each cause was calculated as follows: 15 CI F )k P k / 15 1 P k , (3) k 1( S k where (S F )k is the conjunction (1, 2, …., or 11) in the matrix shown in Table 4 and Pk is the number of participants who responded to option k. 41
  • 8. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Based on the criticality rating of each category of respondents, the mean criticality index was evaluated for each risk factor. Analysis of Variance (ANOVA) using the F-test was carried out to compare the mean criticality rating among different categories of respondents (Mendenhall, 1971; Levin and Rubin, 1998). In the ANOVA F-test, the samples are assumed to have been randomly selected from the population in an independent manner. The population is assumed to be normally distributed. Moderate departure from these assumptions will not seriously affect the properties of the test (Mendenhall, 1971). Overall F-tests only determine whether any significant difference exists among the means. For cases where the F-test is statistically significant, the Post-Hoc Tukey HSD test was carried out. This test compares sets of two means at a time in order to determine specifically, where the significant difference lies. The Spearman’s rank correlation technique was also used to compare the risk criticality ranking of the three different categories of respondents. This technique is widely used in various psychological, socioeconomic and complex environmental problems to measure the association between two ranked variables. Identification of Critical Time-overrun Risk Factors: Survey Results The mean criticality index (CI) for each time-overrun risk factor was calculated based on the rating given by the government engineers, builders/contractors and consultants and are summarized in Appendix 2. One-way ANOVA F-tests (2- tailed) were carried out for each risk factor and showed that there was a high degree of agreement in risk criticality rating (at 0.05 significance level) for the majority of the time-overrun risk factors except TO.4 (Client induced additional work beyond the original scope) and TO.27 (Inadequate design team experience). Post-Hoc Tukey HSD tests were carried out for the TO.4 and TO.27 risk factors. The results appear in Table 5, which reveals significant differences between Consultants and Government Engineers. The criticality ratings of TO.4 and TO.27 risk factors for Consultants were lower in comparison to others. The high degree of agreement on risk factor criticality rating and ranking (except two risk factors) shows that the respondents have a common understanding of the risks in Kuwait construction project environment and the reliability of their ratings are likely to be high. Since the criticality rating of different categories of respondents were not significantly different for thirty one risk factors out of thirty three, the critical time-overrun risk factors for Kuwait were identified based on the combined rating of all categories. The risk ranking based on criticality index (CI) is given in Appendix 3. 42
  • 9. Journal of Economic & Administrative Sciences December 2008 Table 5: Multiple Comparisons (Tukey HSD) Risk Factor Dependent Variables (I) Mean Std. diff. Error Significance (J) TO.4 Consultants Contractors/Builders Consultants Govt. Engineers Govt. Engineers Builders/Contractors TO.27 Consultants Builders/Contractors Consultants Govt. Engineers Govt. Engineers Builders/Contractors * S ignificant at the 0.05 level 3.11 3.39 0.28 1.70 3.82 2.12 1.14 1.17 1.16 1.13 1.17 1.16 0.021* 0.013* 0.969 0.296 0.004* 0.66 There is also a high correlation among different categories of respondents in overall ranking of different risk factors. The spearman’s rank correlation for risk factor criticality is also considered. The results show that there is relatively good agreement between each two categories in ranking timeoverrun risk factors with the highest degree of agreement (0.87) between Government Engineers and consultants, while the lowest degree of agreement is between Builders and consultants (0.81). Such a relatively high agreement demonstrates the reliability of the results. Based on the risk criticality index analysis, most critical time-overrun risk factors in Kuwait’s construction projects identified are given in Table 6, which also gives the results of similar analyses for significance as well as frequency of occurrence of critical risk factors in Kuwait. The five highest rankings are “Delay in government approvals/permits related to project”, “Delay in preparation and approval in variation orders”, “Client induced additional work beyond the original scope”, “Changed engineering conditions from the contract document”, “Decreased labor productivity due to extreme climatic conditions”. Among these five most critical time-overrun risk factors, the values of the criticality index (CI) of first three risk factors are around 8-8.75 whereas the values for the fourth and fifth factors are around 6.5. Since the highest possible criticality index in the adopted scale is 11, the range 6 to 8.75 can be treated as moderately to very critical risk factors. None of the time-overrun risk factors are in the range of extremely critical in Kuwait. The values of the relative criticality index for the five most critical risk factors are shown in Figure 1. 43
  • 10. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Table 6: The Most Critical Time-overrun Risk Factors in Kuwait Risk Factor No. TO.29 TO.11 TO.4 TO.2 TO.30 Significance Frequency Rank Rank Risk Factor Delay in Government approvals/permits related to project Delay in preparation and approval in variation orders Client induced additional work beyond the original scope Changed engineering conditions from the contract document Decreased labor productivity due to extreme climatic conditions Criticality Rank 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 Figure 1: Criticality Index of Most Critical Time-overrun Risk Factors The most critical problem identified is “Delay in government approvals/permits related to project”. This is a global problem especially for 44
  • 11. Journal of Economic & Administrative Sciences December 2008 infrastructure construction projects. Depending on the type of projects, the clearance/approval required from government agencies can adversely affect the completion time. Careful observations of most critical time-overrun risk factors reveal that all project stakeholders are equally responsible for project delay. Government delay, delay in variation orders, additional works beyond scope are client induced risk factors. Contractors with proper planning and scheduling can better address problems related to change engineering condition and labor productivity issues. Though earlier studies in some other Middle East counties and Kuwait identified that delayed payment and working capital shortage is a potential reason for time-overrun, such problems are not very critical in Kuwait now. The survey result reveals that “social and cultural problems (TO.24)” and “Accidents during construction (TO.25)” are the least critical time-overrun factors in Kuwait. Risk Factors Identification - Case Study Approach In order to continue the survey based criticality assessment, twenty eight infrastructure and Building projects executed in Kuwait were studied for actual time-overrun occurrence and the major contributing risk factors. The case study analysis revealed that 23 out of the 28 projects had time-overrun problems. The case study results substantiated the survey findings of frequent time problems of Kuwait’s building and infrastructure projects. The average time-overrun in Kuwait’s projects (calculated from the case study) is 38%. In case of Management & Operation of Um-El haiman STP project, the time-overrun recorded was 174%, which is the maximum among all projects studied. One of the main objectives of the case study research was to check how far the critical risk factors (identified through the survey research) have adversely affected the projects. The percentages of projects incurring timeoverrun with their critical risk factors are summarized in Table 7. The most critical time-overrun factors like “delay in government approvals/permits related to project (TO.29)”, “delay in preparation and approval in variation orders (TO.11)”, “client induced additional work beyond the original scope (TO.4)” and “changed engineering conditions from the contract document (TO.2)” were major time-overrun reasons for the majority of projects. More than 65% of projects had time-overrun due to above problems. However, in contrary to the survey results, “decreased labor productivity due to extreme climatic conditions (TO.30)” was not a major time-overrun issue in Kuwait. Only 9% of projects studied had extreme climatic conditions as a reason for delay. “Third party delays (TO.33)” and 45
  • 12. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 “insufficient information of constructability (TO.3)” have delayed about 30% and 39% of the projects. Table 7: Occurrence of Time- overrun Risk Factors in Kuwait’s Projects Time-overrun Risk Factors Delay in Government approvals/permits related to project Delay in preparation and approval in variation orders Client induced additional work beyond the original scope Changed engineering conditions from the contract document Decreased labor productivity due to extreme climatic conditions Third party delays * Insufficient information of constructability * * Additional critical risk factors % of projects incurring Time-overrun 78 74 87 65 9 39 30 Conclusions In comparison to private and corporate body projects, government projects executed in Kuwait have the highest time-overrun problems. On an average, about 20-50% projects executed in Kuwait have time-overrun problems. There is a high degree of agreement on criticality ratings among various respondents for all risk factors causing time-overrun in construction projects executed in Kuwait. There is a significant difference in risk criticality rating between the government engineers and the consultants with respect to two time-overrun risk factors: “Client induced additional work beyond the original scope” and “Inadequate design team experience”. The five most critical time-overrun risk factors in Kuwait’s construction projects are: “Delay in Government approvals/permits related to project”, “Delay in preparation and approval in variation orders”, “Client induced additional work beyond the original scope”, “Changed engineering conditions from the contract document”, and “Decreased labor productivity due to extreme climatic conditions”. Client induced additional work beyond the original scope and subsequent design changes can lead to time-overrun and in turn cost-overrun. Such risk factors will ultimately end up in aggressive claims by the contractor. All the short-listed time-overrun risk factors can be treated as moderately critical to very critical risk factors. None of the time-overrun risk factors is in the range of extremely critical in Kuwait. 46
  • 13. Journal of Economic & Administrative Sciences December 2008 There was a fair degree of agreement between survey based risk assessment and the actual risk impact in construction projects examined through the case study. The average time-overrun in Kuwait’s project (calculated from the case study) is 38%. Limitations & Scope for Further Work The scope of the present work was limited to specific risks, i.e., timeoverrun risks. The research can be extended for other construction related risk categories like cost-overrun, political risks, legal risks, financial risk, etc. The risk identification study carried out for building and infrastructure projects in Kuwait can be extended and or focused on specific infrastructure sectors like power, ports, telecommunication, etc. 47
  • 14. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 References Aibinu, A. A. and Jagboro, G. O (2002) “The Effects of Construction Delays on Project Delivery in Nigerian Construction Industry”, International Journal of Project Management, 20, 593-599. Al-Bahar, J. F. (1989) “Risk Management in Construction Projects: A Systemic Analytical Approach for Contractors”, PhD Thesis, University of California, Berkeley, 1989. Al-Sabah, S. J, S. M. Fereig and D. J. Hoare (2002) “Construction Claims: Result from Major Tribunal Findings in Kuwait”, The journal of Chartered Institute of Arbitrators, 68 (1), February. Assef, S.A. and S. Al-Hejji (2006) “Causes of Delay in Large Construction Projects”, International Journal of Project Management, 24, 349-357. Assaf, S. A., M. Al-Khalil, and Al-Hazmi (1995) “Causes of Delay in Large Construction Building Projects”, Journal of Management in Engineering, March-April, 45-50. Chan, D. W. M. and M. M. Kumaraswamy (1997) “A Comparative Study of Causes of Time-overrun in Hong Kong Construction Projects”, International Journal of Project Management, 15(1), 55-63. Chapman, C. B. and D. F. Cooper (1983) “Risk analysis: testing some prejudices”. European Journal of Operational Research, 14, 238-247. EI- Dadh, K. and M. A. Monem (2004) “Potential Risks in Civil Infrastructure Projects in Egypt”. Proceedings of III IPMA-ICEC International Expert Seminar, Bilbao, Spain, 6-8 October 2004. Falki, I. I. (2004) “Delay in Project Completion: A Comparative Study of Construction Delay Factors in Saudi Arabia and the United Kingdom”. Master Thesis, Heriot-Watt University. Kartam, N. A. and S. A. Kartam (2001) “Risk and its management in the Kuwaiti Construction Industry: a Contractors Perspective, Project Management”, International Journal of Project Management, 19, 325335. Koushki, P. A. and K. Al Rashid , N. Kartam (2005) “Delays and cost increases in the construction of private residential projects in Kuwait”, Construction Management & Economics, Volume 23, Number 3. Kuwait Economic and Strategic Outlook-VIII (2005), Global Investment House (KSCC), December. Levin, I. R. and D. S. Rubin (1998) “Data Analysis for Management”, Prentice Hall of India Pvt. Ltd., New Delhi, 1998. Mendenhall, W. (1971) “Introduction to Probability and Statistics” (3rd Ed.), Duxbury Press, Belmount, California , 1971. 48
  • 15. Journal of Economic & Administrative Sciences December 2008 Odeh, A. M. and H. T Battaineh (2002) “Causes of Construction Delays: Traditional Contracts”, International Journal of Project Management, 20, 67-73. Perry, J. G. and R. W. Hayes (1985) “Risk and its management in construction projects.” Proceedings of the Institute of Civil Engineering, 78(1), 499-521. RAMP. (2000) “Risk Analysis and Management of Projects”, Thomas Telford Publishing, London, 2000. Thomas, A. V., S. N. Kalidindi and L. S. Ganesh (2006) “Modelling and Assessment of Critical Risks in BOT Road Projects.” Construction Management and Economics, 24, 407-424. Wideman, R. M. (1986) “Risk management”. Project Management Journal, 9, 20-26 49
  • 16. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Appendix 1: Risk Factors Causing Time-Overrun Risk Factor No. TO.1 TO.2 TO.3 TO.4 TO.5 TO.6 TO.7 TO.8 TO.9 TO.10 TO.11 TO.12 TO.13 TO.14 TO.15 TO.16 TO.17 TO.18 TO.19 TO.20 TO.21 TO.22 TO.23 TO.24 TO.25 TO.26 TO.27 TO.28 TO.29 TO.30 TO.31 TO.32 TO.33 Time-overrun Risk factors Unrealistic design development periods Changed engineering conditions from the contract document Insufficient information of constructability Client induced additional work beyond the original scope Rework due to errors/omissions during construction (quantity & quality) Error in the estimated activity completion time Noncompliance with conditions of contract Delay in contractors payment of completing work Consultant/Engineer driven frequent changes in design and materials Lack of co-ordination between design team and contractor Delay in preparation and approval in variation orders Unplanned Maintenance of Plant & Machinery Lack of construction experience of client Capacity problem of Contractor (handling many sites at a time) Shortage and slow delivery of construction materials Shortage of skilled labour in Kuwait Working capital shortage of contractor Selection of improper project delivery system (Design-build/turnkey…) Shortage of utilities at site Conflict between Contractor and subcontractors Joint ownership problems of project Improper scheduling/sequencing of project Legal disputes between project participants Social and cultural problems Accidents during construction Inappropriate organizational structure to link project participants Inadequate design team experience Periodic regulatory changes Delay in Government approvals/permits related to project Decreased labor productivity due to extreme climatic conditions Inadequate contractor experience Change in standards and specifications Third party delays 50
  • 17. Journal of Economic & Administrative Sciences December 2008 Appendix 2: Risk Factor Criticality Rating for Time-Overruns Risk Factors Government Engineers Builders/ Contractors Consultants ANOVA Combined CI SD CI SD CI SD F Sig. CI SD TO.1 7.20 4.11 6.32 2.98 5.78 2.91 1.18 0.31 6.41 3.36 TO.2 8.08 5.07 6.18 4.24 5.48 4.60 2.17 0.12 6.54 4.70 TO.3 6.44 3.75 6.14 4.41 4.11 3.12 2.95 0.06 5.55 3.90 TO.4 9.24 4.22 8.96 4.37 5.85 4.04 5.33 0.01* 8.00 4.44 TO.5 5.36 3.72 4.43 3.23 4.26 3.81 0.70 0.50 4.66 3.57 TO.6 6.64 4.40 5.46 4.10 5.22 4.17 0.83 0.44 5.75 4.21 TO.7 6.32 3.65 4.71 3.23 4.11 2.79 3.22 0.05 5.01 3.32 TO.8 5.20 4.10 4.61 3.36 4.07 4.03 0.56 0.57 4.61 3.81 TO.9 4.72 4.26 4.86 3.97 3.19 3.21 1.58 0.21 4.25 3.86 TO.10 6.40 4.22 6.18 4.44 4.81 4.02 1.09 0.34 5.79 4.24 TO.11 9.08 4.29 9.25 4.46 7.04 4.30 2.16 0.12 8.45 4.42 TO.12 4.68 3.70 3.00 2.39 3.37 2.57 2.38 0.10 3.65 2.97 TO.13 6.04 4.38 4.07 3.21 4.93 3.91 1.74 0.18 4.98 3.88 TO.14 6.56 4.05 4.61 3.30 5.30 4.33 1.68 0.19 5.45 3.94 TO.15 5.80 4.07 5.14 3.44 4.37 3.54 0.98 0.38 5.09 3.68 TO.16 6.84 5.19 4.89 3.90 5.37 4.40 1.32 0.27 5.66 4.52 TO.17 5.32 4.48 4.57 3.54 3.96 3.46 0.81 0.45 4.60 3.82 TO.18 3.72 3.23 3.71 2.57 3.67 2.47 0.00 1.00 3.70 2.73 TO.19 3.44 3.08 3.11 2.36 3.89 3.50 0.47 0.63 3.48 2.99 TO.20 6.68 4.71 4.18 3.40 5.30 4.45 2.34 0.10 5.34 4.28 TO.21 6.00 4.57 4.14 2.99 4.26 3.40 2.06 0.13 4.76 3.73 TO.22 7.28 3.39 6.04 3.49 5.15 3.03 2.71 0.07 6.13 3.38 TO.23 4.56 3.87 3.11 1.99 3.41 2.58 1.84 0.17 3.66 2.91 TO.24 2.00 1.47 1.82 1.12 1.67 0.88 0.52 0.59 1.83 1.17 TO.25 3.00 2.89 2.29 1.38 2.78 2.47 0.67 0.51 2.68 2.30 TO.26 4.52 3.69 4.36 3.14 3.48 2.91 0.78 0.46 4.11 3.24 TO.27 8.12 4.85 6.00 3.93 4.30 3.82 5.37 0.01* 6.09 4.43 TO.28 3.92 2.98 4.00 2.80 3.33 2.90 0.43 0.65 3.75 2.87 TO.29 9.64 3.68 8.07 3.98 8.67 4.12 1.06 0.35 8.76 3.94 TO.30 6.32 3.29 6.32 3.17 6.74 4.18 0.12 0.88 6.46 3.54 TO.31 7.20 4.19 6.00 3.70 5.74 3.13 1.15 0.32 6.29 3.69 TO.32 5.24 4.22 3.71 2.65 3.00 2.79 3.18 0.05 3.95 3.35 TO.33 5.32 3.46 4.71 3.47 4.96 4.37 0.17 0.84 4.99 3.76 * Significant at the 0.05 level SD: Standard Deviation 51
  • 18. Dr. Hassan Al Zubaiadi, Mr. Srour Al Otaibi December 2008 Appendix 3: Time-overrun Risk Factors’ Ranking Based on Criticality Risk Factors Government Eng. Builders/Contractors Consultants Combined CI Rank CI Rank CI Rank CI Rank TO.1 7.20 7 6.32 4 5.78 5 6.41 6 TO.2 8.08 5 6.18 6 5.48 7 6.54 4 TO.3 6.44 13 6.14 8 4.11 20 5.55 13 TO.4 9.24 2 8.96 2 5.85 4 8.00 3 TO.5 5.36 20 4.43 21 4.26 18 4.66 21 TO.6 6.64 11 5.46 12 5.22 11 5.75 11 TO.7 6.32 15 4.71 16 4.11 21 5.01 17 TO.8 5.20 24 4.61 18 4.07 22 4.61 22 TO.9 4.72 25 4.86 15 3.19 30 4.25 24 TO.10 6.40 14 6.18 7 4.81 15 5.79 10 TO.11 9.08 3 9.25 1 7.04 2 8.45 2 TO.12 4.68 26 3.00 31 3.37 28 3.65 30 TO.13 6.04 17 4.07 25 4.93 14 4.98 19 TO.14 6.56 12 4.61 19 5.30 9 5.45 14 TO.15 5.80 19 5.14 13 4.37 16 5.09 16 TO.16 6.84 9 4.89 14 5.37 8 5.66 12 TO.17 5.32 21 4.57 20 3.96 23 4.60 23 TO.18 3.72 30 3.71 27 3.67 25 3.70 28 TO.19 3.44 31 3.11 29 3.89 24 3.48 31 TO.20 6.68 10 4.18 23 5.30 10 5.34 15 TO.21 6.00 18 4.14 24 4.26 19 4.76 20 TO.22 7.28 6 6.04 9 5.15 12 6.13 8 TO.23 4.56 27 3.11 30 3.41 27 3.66 29 TO.24 2.00 33 1.82 33 1.67 33 1.83 33 TO.25 3.00 32 2.29 32 2.78 32 2.68 32 TO.26 4.52 28 4.36 22 3.48 26 4.11 25 TO.27 8.12 4 6.00 10 4.30 17 6.09 9 TO.28 3.92 29 4.00 26 3.33 29 3.75 27 TO.29 9.64 1 8.07 3 8.67 1 8.76 1 TO.30 6.32 16 6.32 5 6.74 3 6.46 5 TO.31 7.20 8 6.00 11 5.74 6 6.29 7 TO.32 5.24 23 3.71 28 3.00 31 3.95 26 TO.33 5.32 22 4.71 17 4.96 13 4.99 18 52
  • 19. Journal of Economic & Administrative Sciences December 2008 28 53
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