Risk Management in the Construction Industry of Pakistan

Abstract

Risk management is relatively new field in the construction industry of Pakistan and lacks in research but is gaining prominence gradually due to increased construction activity and competitiveness. This study is based on survey of risk management in the construction industry of Pakistan and reports the findings of importance of risks, their current management techniques, the existing status of risk management systems of the organizations and barriers to effective risk management from the perspective of key stakeholders. The results reveal that: financial and economic factors followed by quality are the most important risks and the industry generally relies upon avoiding or transferring the risks. Results indicate that the risk management system and practices of most of the organizations are reactive, semi permanent, informal and unstructured with no or very little committed resources to deal with risks. Nonetheless, the outcome of interviews indicates that there is awareness about the risk management and a desire to learn from the past mistakes. Study concludes that the major barriers to effective risk management are lack of formal risk management system and lack of mechanism for joint risk management by the parties. Insights and discussions are given in the analysis which is valuable to planners, project managers, supervisors and other stakeholders by reviewing their projects and taking remedial measures where appropriate. This research can be used in exploring mechanism for joint risk management by prospective stakeholders.