Project Risk Management Practices of Construction Cost Consultants in Ghana

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The construction industry is one of the most dynamic, risky, and challenging business. However, the industry has poor reputation for managing risk, with major projects failing to meet deadlines and cost targets. This is influence greatly by variation in weather, productivity of labor and plant and quality of material. All too often, risks are either ignored or dealt with in a completely arbitrary way: simply adding 10% (percent) contingency onto the estimated cost of a project is typical. In a business as complex as construction, such an approach is often inadequate, resulting in expensive delays, litigation and even bankruptcy (Hayes et al, 1980). The study among other things, sought to assess the level of awareness of practicing cost consultants regarding modern trends in systematic risk management techniques, identity and document the risk management practices adopted in the construction industry, to investigate the key potential risk factors in the industry and also identify the distinction between theories of action and actual practices in systematic risk management in the industry. Data was gathered using interview sessions and questionaires to evaluate how risk management prescription was applied in practice in the construction industry. Respondents were selected using simple random sampling techniques. The finding suggests that, it is more characteristic of construction cost consultants in the industry to often proceed with estimating and predicting the cost of projects without any serious in-depth systematic project profiling and appraisal of risk during the project life cycle. Thus the need to do a thorough systematic risk management to address some of the potential risk imminent in the industry are often overlooked or postponed, leaving cost consultants exercising highly intuitive and subjective discretion in the management of risk during the project life cycle of most projects. The study concluded that, systematic risk management practices encourages stakeholder to critically itemize and quantity risk for eventual purposes of risk response planning, monitoring and control. Thus, instead of relying on the single value project cost estimate, proper distribution of risk is analyzed and appropriate systematic project costs allowed for. This makes the estimating process realistic because it recognizes the risk and uncertainties that exist in the venture or enterprise.
A Project Report Presented to the Department of Building Technology, College of Architecture & Planning,Kwame Nkrumah University of Science & Technology, Kumasi in Partial fulfillment for the Requirement and award of Masters Degree in Construction Management.