Appraisal of Risk in Construction Companies in India

IJIRST –International Journal for Innovative Research in Science & Technology| Volume 3 | Issue 04 | September 2016 ISSN (online): 2349-6010

Appraisal of Risk in Construction Companies in India Raghvendra Pratap Chauhan M. Tech. Scholar Department of Civil Engineering Sam Higginbottom Institute of Agriculture, Technology & Sciences Allahabad, India

Yogendra Kumar Kushwaha Assistant Professor Department of Civil Engineering Sam Higginbottom Institute of Agriculture, Technology & Sciences Allahabad, India

Abstract Construction projects are initiated in composite and dynamic environments enchanting consideration of high dubiety and risk, which are heighted by demanding time restraints. Construction companies have changed important over the past several years. It is a company driven initially by private bank investors; the condensation of securitized real estate business has increased acceptably. It is valuable to the numerous technical system & business management risks that often describe higher exposures than those that are traditional system. Thus risk identification need arises. Risk identification is a key to identify those risks in a construction project and manage it following with proper treatment way. Risk allocation is defined in this study as a technical technique that aims to clarify and make estimate risks to individual and property impacted upon by a construction project. The general methodology system of this study largely on the field survey questionnaire which was collected from the local area building contractors and construction firms of different sizes by internet mail or by personnel meeting with contractor. A description literature review is initially selected to identify the risk impact factors that affect based on the performance of construction industry as a whole system. The survey questionnaire is planned to probe the cross-sectional behavioral step of construction risks Construction Company. The questionnaire marked for the buffer survey was obtained by seeing the literatures in the area of construction site and risk management. This research attempts to clarify and appraise the risks and to develop a risk allocation model which the bank investors/ construction developers/ company contractors can adopt when contracting construction work done in India.

Keywords: Construction Project, Risk Identification, Types of Construction Risk, Mean of Construct _______________________________________________________________________________________________________ I.

INTRODUCTION

Construction is much the widest employer in our country (Bust et al., 2008). It has been well data documents that a big number of accidents obtain in the construction company (Bust et al., 2008; Camino et al., 2008; Gregory and Simon, 2006; Wang et al., 2006). In general society, the construction company has been express as a critical profession (Mehdi Tadayon, 2008; Niza et al., 2008). Construction objects are special and construct only once and risks management crests from a number of critical links. In joint, the value of construction change widely in terms of construction location, production work techniques, materials uses and the improve quality of the clean finished product with respect to space, material quality and work durability. Construction Managers need to clear delivery of total projects to cost, proper schedule and work performance requirement. To obtain this links identifying and managing the risks management to the project at all construction project stages from the beaming assessment of strategic ways through the procurement work, fabrication work, construction work and commissioning condition .normally, risk is a selection in an environment express than a fate. BS 6079 (British Standard Institution 1996)express risk as ‘It is the unsteadily inherent in construction plans and chances of happening that can affect the results of achieving, business work or project goals achieve’. Risk is same in all the activities in a construction project; it is only the value which similar from one way activity to another. Judging and thinking the risks of a construction project and construction planning to manage them are the most dangerous steps should be done in the construction project definition step. Risk initiating and judging were ignored. The previous record of Construction Company is very week in terms of coping with risks way, resulting in the total failure of lot of projects to join time schedules, complete targets of total budget and sometimes create the scope of construction work. As a bad result, a lot of facing is inflicted to the owner clients and company contractors of such construction projects and also to the normal public. Project joined risk management has linked uniform stream of interest in the academic literature review (Bannerman, 2008). One of the major stages in construction project risk management study is to identify and stop the potential risks (Mehdi Tadayon, 2008). scorn many scholars candidate and many practitioners organization the risk identification methods and assessment structure in projects blank attention has been solve by construction researchers to select a valuable risk assessment structure. This paper takes to address this restriction and the blank in the current literature review and provide models for finding optimal risk assessment stages. The current study is identifying on concepts of risk management techniques and will cover the linked literature on the suggest topic, collection of a survey questionnaire work and recommendation related to risk management study practices in construction company of India.

All rights reserved by www.ijirst.org

111

Appraisal of Risk in Construction Companies in India (IJIRST/ Volume 3 / Issue 04/ 021)

II. CONCEPT OF RISK Risk is a multi-facet concept. In the concept of construction industry, it could be the share hood of the occurrence of a exact event/factor or contribution of events/section which occur during the whole work of construction to the solution of the construction project a lack of predictability about framework result or consolidation in a decision making or project planning situation, the endorsement associated with estimates of results – there is a chance that outcome could be good than expected as well as unused than expected etc. In connected to the different definitions of risk, there are following ways for distribution risk for different purposes too. Some distribution risks in construction projects broadly into external risks management and internal risks while others classify risk in more detailed categories of political risk management, financial risk management, market risk value, intellectual property type risk, social risk techniques, safety risk management, etc. The analyze of the risks techniques seems to based upon whether the construction project is local (domestic) or international. The internal risks are relevant to all projects irrespective of whether they are national or international. International construction projects tend to be subjected to the external construction risk such as unawareness of the social conditions of the project, economic way and political scenarios, unknown formalities and new procedural formalities, regulative structure and legal governing authority, etc. construction Risk is inherent and more difficult to deal with, and this needs a proper construction management structure both of theoretical meanings and practical meanings. Important improvement to project management feedback may be obtained from absorbing the process of risk management. The steps of vulnerability to risk that a firms is faced with are large-ranging and similar from one firm to another. This vulnerability could be the risk of business failure, the risk of construction project financial losses, the occurrences of big construction accidents, default of business associates scheme and quarrel and organization risks. It is considerable to understand and signify the risks as early as possible, so that adjustable strategy can be followed to striating particular risks or to convert them to minimize any likely negative or dishonor aspect they may have. The risk management strategy process starts with the initial identification of the relevant way and potential risks associated with the construction project management. It is of acceptable significant since the work of risk analysis and response risk management may only be performed on identified potential risks management. Risk analysis and evaluation is the urgent process between risk identification and risk management.

It incorporates uncertainty in a quantitative manner and qualitative manner to judge the potential impact of risk management.

The selection should generally concentrate on risks with high probabilities sector, high financial consequences system or combinations thereof which yield a substantial financial impact factor.

Once the risks of a project have been signified and analyzed, an approximate method of reacting risk must be adopted. Within a structure of risk construction management, construction contractors also should decide how to solve or handle each risk and solution suitable risk treatment strategies measure or mitigation measures. These palliation measures are generally depend on the nature and potential work of the risk. The main sustainable is to remove as much as possible the potential impact factor and to increase the level of control of risk in construction work. More the control of one palliation measure on one risk, the more effective the count of risk the process of construction risk management does not aim to left completely all risks from a construction project. Its objective is to develop an organized structure to aid decision makers to solve the risks, peculiarly the critical ones, efficaciously and efficiently.

Risks can be described as business type, technical type, or operational type. A technical risk analysis is the inability to construct the product that will satisfy needs. An operational risk technique is the unfitness of the customer to work with core team members of his team. Risks are either considerable or unacceptable. A considerable risk is one that negatively disturbs a task on the non-critical path. An inconsiderable risk is one that negatively regards the critical path. Risks are either short term or long term. A short-term risk has an urgent impact, such as changing the needs for a deliverable. A long-term risk management has an good impact sometime in the distant future, such as launching a product without adequate testing. Risks are represented as either manageable or unmanageable. A manageable risk management is one you can live with, such as a small requirement change. An unmanageable risk management is impossible to reconcile, such as a vast turnover of core team members. Risk factors for this study are signified into eight categories follows.  Construction work risk  Design work risk  Environmental controlling risk  Financial risk segment  Management planning risk  Political approach risk  Procurement core risk  Sub-Contractors workability risk  Over Technology risk III. METHODOLOGY The cosmopolitan methodological analysis of this study relies hard on the construction survey questionnaire which will be collected from the local area building company contractors of different sizes by mail or by personnel face to face meeting. A thorough out literature review was at first conducted to signify the risk factors that treat the performance of Construction

All rights reserved by www.ijirst.org

112

Appraisal of Risk in Construction Companies in India (IJIRST/ Volume 3 / Issue 04/ 021)

Company as a whole. This study has carry the more general risk and broad definition of risk as presented by feg et al (2001) on China’s construction work joint hazards and more risk factors mention from other literature. Also some interviews with industrial practicing were conducted to produce to check effectuality of survey questionnaires. After receiving the answer a model is exploited to observing the risk management. The final step is to create a structure for risk appraisal.

IV. QUESTIONNAIRE SURVEY The construction companies require to joined risk as an integral type of their construction project management. Decision devising such as risk appraisal in construction projects is very significant in the construction management. The recognition and appraisal of project risk are the critical operation for projecting success. This study influences the key factors of risk in Construction Company. A total of 48 factors influencing risks in construction are dissected through buffer survey which joined experts of academic sector(Professors), governmental sectors and construction company were interviewed, and 23 examine criteria were obtained as the central factor by interviewed experts. This access provides a more efficient, exact and unionized decision support tool.

V. FACTORS INFLUENCING RISK CONSTRUCTION RISK        

problems between labours Changing duty in construction activity Non availability of general resources updating of design Availability of medical camp for labours Change in no of quantities of work In Time work permissions for executing work fixed Proper Safety of workers Design Risk

   

Late changes of design in drawing from client side Will the level of details of design work delivered by the owner affect over all construction time?

Improper specifications of project delay and incomplete design Environmental Risk

  

Impact of weather condition on completion of project should be late Pollution by construction waste are major factor Procedure to facilitate construction waste cleanup or disposal use good techniques Financial Risk

   

Delay from clients side Increment for staff benefits and satisfaction Unprecedented price in raw materials in market Fluctuations in Estimated finance than expected money Management Risk

     

text file and action directed as per agreement for mitigation of risk Project team discussions on risk study Use of WBS and project milepost to help key out project risks Time for planning should be must Loosing of critical staff at crucial point of construction Clear Documented process for identifying project risks on running site Political Risk

  

Pressure from state local political party Local bodies (political/rowdies) compelling to use their resources Union Issue on running project Procurement Risk



Temporary demand of increase in price of materials and man

All rights reserved by www.ijirst.org

113

Appraisal of Risk in Construction Companies in India (IJIRST/ Volume 3 / Issue 04/ 021)

 

Specialized labour for fixation/Installation work Is there a chance of procurement team to know the sales chart of client?

Sub-Contractors Risk

  

Time to time Chances of sub-contractor walk out Delay in work execution of sub-contractor Revision of price yearly Technology Risk

  

Knowledge on equipment’s and tools Service for not working equipment’s time to time Loss of data or software/hardware of computer VI. RESULT AND DISCUSSION

The table 1 below has the consolidated factors of risk ie 28 out of 42 has been shortlisted due to its occurrence. Most of the risk comes under management problems and construction.

Table – 1 Settle Risk Rating After Survey Factors Project team discussions on risk Revision of price Time for planning Disputes between labours Safety of workers Use of WBS and project milestones to help identify project risk Knowledge on Equipments.

Service for damaged equipments.

Specialized labour for fixation/Installation Unrecedented price in raw materials Hardiness of camp for labours Loss of data or software/hardware of computer.

Temporary demand of increase in price of materials Delay from clients Non Availability of Resources Pressure form any political party Union Issue Loosing of critical staff at crucial point of construction

Min 2 1.5 2 2 1.0 2 1 1 1.5 1.1 1.5 1 1 1 1 1 1 1

Max 5 4 5 4 5 4 4 5 5 5 5 5 5 5 5 5 5 5

Mean 3.88 3.81 3.42 2 3.88 3.87 3.32 3.21 3.87 3.67 3.57 3.32 3.31 3.87 3.86 2.88 2.72 2.70

The above table shows the priority of risk in Construction Company. The mention is as follows Technology, Management department, Procurement, Environmental, Financial, Construction, Sub-contractor, Political and Design Risks.

VII. CONCLUSION The construction companies require to joined risk as an integral type of their construction project management. Decision devising such as risk appraisal in construction projects is very significant in the construction management. The recognition and appraisal of project risk are the critical operation for projecting success. This study influences the key factors of risk in Construction Company. A total of 48 factors influencing risks in construction are dissected through buffer survey which joined experts of academic sector(Professors), governmental sectors and construction company were interviewed, and 23 examine criteria were obtained as the central factor by interviewed experts. This access provides a more efficient, exact and unionized decision support tool.

REFERENCES [1] [2] [3] [4] [5]

Yu-Pung Hsu, 2010, “The application of Fuzzy Delphi Method and Fuzzy AHP in lubricant regenerative technology selection” Expert Systems with Applications 37 (2010) 419–425.

Tarnon. A “Construction Risk Modelling and Assessment: Insights from a Literature Review”,The Built & Human Environment Review, Volume 4, Special Issue 1, 2011.

BARAK A. Samani, 2012, “A Fuzzy Systematic Approach to Construction Risk Analysis”Journal of Risk Analysis and Crisis Response, Vol. 2, No. 4 (December 2012), 275-284.

P. perazahni 2012, “A Review of Fuzzy Risk Assessment Models For Construction Projects” Slovak University Of Technology.

Mehdi .B. Tadayon, 2012, “An Assessment of Risk Identification in Large Construction Projects in Iran” Journal of Construction in Developing Countries, Supp. 1, 57–69, 2012.

All rights reserved by www.ijirst.org

114

Appraisal of Risk in Construction Companies in India (IJIRST/ Volume 3 / Issue 04/ 021) [6] [7]

Akbar .N. Etebarian, et.al “The application of Fuzzy Delphi Method (FDM) and Fuzzy Analytic Hierarchy Process (FAHP) for Evaluating Marine Casualties”, Recent Advances in Computer Science and Applications.

Samaneh Zolfagharian, Danish ali et.al, 2011, “Risk Assessment of Common Construction Hazards among Different Countries” Sixth International Conference on Construction in the 21st Century (CITC-VI).

All rights reserved by www.ijirst.org

115