RISK MANAGEMENT IN PUBLIC SECTOR CONSTRUCTION PROJECTS

Abstract

Every construction project requires risk management by default, even to comply with health and safety standards and regulatory requirements. Although there may be oodles of risks in a construction project, knowing what these risks are, and managing them effectively with professional skill could mean the difference between success and failure of the project. And public sector construction projects are not exception to this. This study investigates how risks are managed in public construction projects. To this end, research data were sourced from stakeholders of public construction projects using both structured and self-administered questionnaires. Field data analysis using simple statistical tools involving percentage, mean and measures of dispersion indicated that, public organizations neither possess any officially established teams nor any officially approved risk assessment approaches to manage risks in the execution of public construction projects. Suffice to say that, public organizations predominantly manage construction risks by ‘rule of thumb’. The analysis further revealed that, most ‘big name’ construction firms that handle public construction projects are also in possession of neither risk management teams nor specific construction risk assessment approaches in handling construction risks. To accord ‘construction risk management’ the prominence it deserves in public bureaucracies, the study recommended among others, (i) The establishment of Risk Department/Units in those public organizations, Departments and Authorities that oversee public construction projects, (ii) That, Capabilities to manage ‘construction risks’ be accorded high priority in the appointment of contractors in public construction projects, and (iii) Statutory Risk Agency to be established at every level of the government to synchronize construction risk allocation, sharing and transfer between public organizations and their construction contractors.