Risk management in international construction joint ventures in Egypt

• Main Author: Soliman, Manar Mohamed AbdElMoneim Ibrahim
• Other Authors: Smith, Nigel ; Moodley, Krisen
• Published: University of Leeds 2014
• Subjects: 624
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.638866

Egypt is a developing country and the construction sector has a significant impact on GDP. The development and competitiveness of the Egyptian construction sector in local and international markets are affected by many risk factors. To overcome these risks, some joint ventures are arranged between the Egyptian and the International companies. These joint ventures needs studying to understand the risks and the changes, which are inherent in these companies, and the projects that they execute. Positioning this research to introduce the risk factors to address the risks associated with the joint ventures in Egyptian construction market. This research taken place before 25 January 2011 when the Egyptian revolution began, deposing President Mubarak. Since then many changes have faced the Egyptian and international companies and have created risks in the political and economic situation. Some of project contracts were examined to find out the risk environment faced by joint ventures. In addition, the research established a theoretical model to identify those risk factors for International construction joint ventures in Egypt based on the collection and analysis of quantitative data collected through questionnaires. The research investigated risk management process in the business of joint ventures in which a number of new risk factors identified for the Egyptian construction market, which can be added to the existing factors that noted from the literature review. The main contribution of this research is the identification of the risk factors in three levels, which are; the country, the joint venture company and the project specific levels. The top risks of the country level are: Different applicable law, Currency Exchange, Equipment Availability, Government act, and regulations; for the joint venture level are: Financial capability, Connections with the host government, Strategic complementary; and for the project specific level are: materials; location of the project; sub- contractor capacity. Considering these risk factors facilitates clear decision making in arranging joint ventures in Egypt. Moreover, it mitigates the potential of these risks to occur.