Risk assessment for international development projects: owner's perspective.

• Online Access: http://hdl.handle.net/2047/d10019169

Risk analysis as an effective tool for planning and controlling cost and schedule has not been fully utilized in the construction industry, especially in projects implemented in the developing world. Planning techniques used in developing countries tend to be less sophisticated in prediction of risk events, forcing practitioners to react to problems as they arise, pushing performance measures like cost and schedule to finish off-target. Considering these countries' limited resources and their need for infrastructure to compete in the current global market, it becomes increasingly important to avoid missing established deadlines for major infrastructure projects. Therefore, the purpose of this research is to create a tool to facilitate and promote the use of risk assessment methodologies for owners of projects in developing countries and ensure projects finishing as predicted on-time and on-budget. The aim of this tool is to provide a step-by-step methodology that can be applied to major construction projects by practitioners with different levels of expertise. This tool incorporates learning from a statistical analysis of performance data from a sample of 89 highway projects constructed in 60 countries. The tool was developed in two steps. First, the major factors affecting highway projects were identified by a comprehensive review of project documents. Second, a methodology was developed to rank the risks affecting future projects. This was accomplished by developing a ""Risk Management Template."" The sample of projects was collected from the World Bank's project database providing a wealth of information for the study, and more importantly, providing documentation from the original estimates to the final implemented results for each project. Based on the review there are a limited number of risk factors (i.e.: 20) mainly responsible for the performance of the projects. This is a major contribution because it demonstrates that major highway projects in developing countries can be managed more effectively by focusing on a few risk factors. The creation of the ""Risk Management Template"" tool to identify and rank project risks is another major contribution of this dissertation. It provides the necessary structure owners need to select the most important risk factors to be managed. Furthermore, the developed methodology standardizes the traditionally unsystematic risk selection process.