CHAPTER ONE

INTRODUCTION

1.1 Background of Study

The pace of change in the construction industry has imposed additional demands on
construction project management. Risk management is a vital project management planning and
control tool for reducing uncertainty and improving decision-making. Risk cannot be avoided but
must be recognized, assessed and managed. The development of infrastructure is one of the most
important activities that can boost up the business of various industries, thereby increasing the
gross domestic product (GDP) of the country (Tipili and IIyasu, 2014). Construction projects are
always unique and risks raises from a number of different sources (Tipili and IIyasu, 2014). Risk
factors is inherent in every construction project from small to larger project running millions to
billions of naira and it is impossible for all risk to be avoided (Abba, 2008). Risk is present in all
projects irrespective of their size or sector. No project is totally free from risks. If risks are not
properly analyzed and strategies are not trained to deal with them, the project is likely to lead to
failures.
The research reported upon in this study is focused upon evaluating key risk factors
affecting building construction project in Bauchi State. The research is to evaluate the risk
factors affecting building construction project from contractor‟s perspective and at a project
level. Construction organization's efficiency and effectiveness largely depends on how managers
scan the external project environment, identify the critical factors and adapt their organizations
accordingly (Baloi, 2002).
Risk is an unavoidable component of all activities (Wang, 2002). The word risk is defined
as the possibility of something bad happening in sometime in the future: a Situation that could be
dangerous or have a bad result “in the Oxford Advance learner„s dictionary (2000) edition.
Risk is an uncertain event or set of circumstances that could occur, have an effect on the
achievement of the project objectives. It has also been stressed that construction is a risk-prone
industry, with a poor track record of coping with risks, as a result of which clients have been
enduring the agonizing outcomes of failure in the form of unnecessary delays in project

1
completion, cost overrun and sometimes failing to meet quality standards and operational
requirements (Wakjira, 2011).
Risk is defined as a threat that has an impact on the success of a project (Barber, 2005).
On the other hand, uncertainty is defined as the chance occurrence of an event where the
probability is unknown (Smith et al., 2014). Put simply, uncertainty describes a situation being
considered by decision makers that has no previous data with which to identify the probability of
its occurrence (Flanagan, 1993).
A risk is the probability of incurring misfortune or loss while, a risk factor is a factor such
as a habit or an environmental condition that pre disposes an individual to develop a particular
diseases (Collins English Dictionary and Thesaurus, 2006).
Risk and uncertainty change the actual outcome of an activity from the planned outcome
if it is negative. Both have two directions, either a positive or negative deviation on the time
frame or the budget of the construction project. Risk and uncertainty are attached to every
construction activity and to the construction parties, such as clients, consultants, contractors, sub-
contractors and suppliers. There are differences between risks and uncertainty. The word risk
originated from France, and began to be used in insurance transactions around 1830 in England.
Risk is classified under three categories, namely; known risks, known unknown, and unknown.
Known risks include minor changes to the project, known unknown risks are the predicted event
either by their probability or by the likely effect, and unknown risks are those events with
unknown probability attached to it and unknown likely effect (Smith et al., 2014).
Furthermore, (Dent, 1997) defined risk by considering the practical behavior of risk “Exposure
to the possibility of economic or financial loss or gain, physical damage or injury, or delay, as a
consequence of the uncertainty associated with pursuing a particular course of action.” Besides,
Flanagan and Norman (1993) define the risk considering the assessable of risk as measurable
uncertainty, while uncertainty is as immeasurable risk.
However, when we consider the project risk; it is defined by El-Sayegh (2007) as an “uncertain
event or condition that, if it occurs, has a positive or negative effect on at least one project
objective such as time, cost, scope, or quality." According to the definitions of risk given by the
(Dent 1997), Flanagan and Norman (1993), El-Sayegh (2007) it can be convinced that risk is
generally referred to economical or physical loss rather than gain din to measurable uncertainty,
while uncertainty is as immeasurable risk.

2
 Even, there are many definitions for the risk given by several researchers, for this research
consider the (Dent, 1997) definition as the definition for the risk. Risk is the potential for
unnecessary or negative consequences of an event or activity (Rowe, 1997), a combination of
hazard and exposure (Chicken and Posner, 1998).
Risk Management refers to the culture, processes, and structures that are directed toward
effective management of risks including potential opportunities and threats to construction
project objectives (Shofoluwe and Bogale, 2004). Risk management may be described as “a
systematic way of looking at areas of risk and consciously determining how each should be
treated. It is a management tool that aims at identifying sources of risk and uncertainty,
determining their likely hood of occurrence, their impact, and developing appropriate
management responses” (Uher, 2003). A systematic process of risk management has been
divided into risk classification, risk identification, risk analysis and risk response, where risk
response has been further divided into four actions, i.e. retention, reduction, transfer and
avoidance (Berkeley et al., 1991; Flanagan and Norman, 1993).
An effective risk management method can help to understand not only what kinds of risks
are faced, but also how to manage these risks in different phases of a project. Owing to its
increasing importance, risk management has been recognized as a necessity in most industries
today, and a set of techniques have been developed to control the influences brought by potential
risks (Schuyler, 2001; Baker and Reid, 2005). Compared with many other industries, the
construction industry is subject to more risks due to the unique features of construction activities,
such as long period, complicated processes, abominable environment, financial intensity and
dynamic organization structures (Flanagan and Norman, 1993; Akintoye and MacLeod, 1997;
Smith, 2003).
As part of a much larger project aiming to articulate and manage risks associated with
building construction projects, this project seeks to identify the potential risks factors on building
construction projects from the contractor‟s perspectives, interview with stakeholders and
reviewing of relevant literature. It has already been recognized that a clear understanding of the
risks born by each stakeholder leads to better risk allocation. The objective of this study is to
identify risk factors associated with building construction projects and find an appropriate
approach to categorize them by reviewing the relevant literature. It is of particular interest to
rank the risk factors based on their relative significance index score value for their negative

3
impact on project completion. This study is based on the assumption that by identifying the
factors both internal and external factors, determining which risk are likely to affect the project,
documenting the characteristics of each will enable the participants to better handle risk factors.
This will consequently affect the performance of the project by maximizing the result of positive
events and minimizing the consequence of the adverse effect.

1.2 Statement of the Problem

One of the challenges facing the construction industry is to manage the impact of risk on
construction project, Latham (2018) put forward that no construction project is risk free, and risk
can only be managed, minimized, shared, transferred, or accepted: it cannot be ignored. The risks
can cause losses that lead to increase in costs, time, delays and lack quality of project (simu,
2006); while project‟s objectives are most often related to time, cost, and quality. Shehu and
Sommmerville (2006) has also stressed that construction is risk-prone industry, with poor track
record of coping with risks, as a result of which client have been enduring the standard and
operational requirements.
Contemporary project management practice is characterized by late delivery, exceeded
budgets, reduced functionality and questionable quality (Williams, 2014) and while risk
management is a recognized practice that helps contractors deliver projects on schedule and
within budget (project management institute, 2000). The risk management performed in the
construction industry has traditionally been that of gut feel or series of rules-of thumb (Al- Bahar
and Crandall, 2001). Consequently, risks associated with building construction project are often
not adequately dealt with, so this study focuses on impact of risk factors on building
constructions project with the aim of minimizing the impact of risk factors on building
construction project and propose a solution to improve risk management practice.

1.3 Aim and Objectives of the Study

The aim of the study is to evaluate the impact of risk factors on building construction
projects with a view to improve risk management practices in building construction project. This
can be achieved through the following objectives:

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1) To identify risk factors associated with building construction projects.
2) To evaluate the risk factors associated with building construction project.
3) To examine the strength of the relationship between categories of risk factor associated with
building construction project.

1.4 Research Question

Based on the purpose of this study, the following research questions have been
formulated:
1) What are the risk factors associated with building construction project?
2) To what extent risk factors affect building construction project?
3) What are the relationships between the categories of risk factors associated with building
construction project?

1.5 Significance of the Study

Risk factor is an important aspect to be evaluated in building construction and as such

extensive research needs to be carried out on these factors. There are many groups inside and
outside of the building industry that will benefit from this study. Among these groups are:
owners, consultants, and contractors. Some of the benefits that this research offers include:
Provide possible improvement in risk management process; Clients will benefit tremendously by
knowing the unnecessary risk; in order to avoid or reduce the risk impact on their project.
Contractors will be aware of the negative impact of the risk factors so that to have appropriate
way to minimize, reduce, and transfer very easy since the factors are known.

1.6 Scope and Limitation of the Research

The scope of this research was limited to the impact of risk factors on building construction
project and proffering solutions on how to reduce and improve risk management in Bauchi state.
The study is limited and to be restricted to Bauchi state focusing on some randomly selected
contracting films/companies within the state. Target respondents for this study are the

5
contractors registered with Corporate Affairs Commission of Bauchi state as the contractors are
the principal actors and key players in the success of a project.

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 CHAPTER TWO
LITERATURE REVIEW

2.1. Introduction

The present chapter explains the related reviews of some past research projects either in
form of articles or journals conducted by various individuals or organizations which are based on
the impact of risk factors on building construction project in order to have an insight on what has
been done regarding risk management especially in Bauchi State. The aim is to find out the
research gap in the field of risk factors and area that needs more attention or improvement for
further studies. The study will be based on these past researches and they will serve as a
reference point for present study.

2.2 Certainty, Uncertainty, and Risk

Some researchers prefer to differentiate between risk and uncertainty, while others
believe that the words are synonymous (Flanagan, 1993). All projects are subject to risk and
uncertainty, and they could have a positive or negative impact on a project‟s success. Risk
factors could be initiated internally or externally during a project‟s lifecycle, and to succeed and
meet the project‟s objectives and aims it is necessary to identify potential risks and have a plan to
manage them (Smith, 2002).
The construction industry is enormous or complex and construction projects involve
hundred or even thousands of interacting activities, each with a cost, time, quality, and it is
burdening with more risk and uncertainties than many other industries (Flanagan and Norman
1993). In addition according to, risk and uncertainty can spoil the construction activities (Mills
2001). Therefore, it is impotant to define these concepts separately. Further, should understand to
making decisions in construction industry (Flanagan and Norman I993). According to Stoner et
al. (1995), decision-making is using during planning process to identify and selecting course of
action to deal With specific problem or to take advantage of an opportunity. Due to that,
decision- making implements under different circumstances and mainly these situations can be

7
categorize into three such as decision making in certainty, decision making in risk, and decision
making in uncertainty (Thilakarathne 2007).

2.2.1 Certainty

Certainty is the Situation where the outcomes are consistent, measurable, and accurate
from all available alternatives that can be occurred (Storner et al. 1995). Further, more according
to Kerzner (2001): there is a hundred percent accuracy for all alternatives, which can be occurred
in a particular situation, when there is a certainty to make decisions.

2.2.2 Uncertainty

Flanagan and Norman (1993) define the uncertainty as “the Situation in which there are
no historic data or previous historic relating to the Situation being considered by the decision-
makers. “Besides, Stoner et al. (1995) defines as unpredictable external conditions or lack of
information needed to establish the probability of events. According to above both definitions
and Thilakarathne‟s (2007) argument revealed that the uncertainty is the situation where,there is
no any information to predict future events based on probability and it is the worst condition in
decision making.

2.2.3 Risk

The word risk is quite modern and It is coming from the French word risque in mid I7"
century to the English vocabulary (Flanagan and Norman 1993). “Risk is primarily related to
rewards; some risk should be accepted as long as they are in line With the rewards" (El-Sayegh
2007).
Risk is an unavoidable component of all activities (Wang 2003). The word risk is defined as the
possibility of something bad happening in sometime in the future: a Situation that could be
dangerous or have a bad result “in the Oxford Advance learner„s dictionary (2000).
Risk is defined as a threat that has an impact on the success of a project, (Barber, 2005).
On the other hand, uncertainty is defined as the chance occurrence of an event where the

8
probability is unknown (Smith et al., 2014). Put simply, uncertainty describes a situation being
considered by decision makers that has no previous data with which to identify the probability of
its occurrence (Flanagan, 1993).
Risk and uncertainty change the actual outcome of an activity from the planned outcome
if it is negative. Both have two directions, either a positive or negative deviation on the time
frame or the budget of the construction project. Risk and uncertainty are attached to every
construction activity and to the construction parties, such as clients, consultants, contractors, sub-
contractors and suppliers. There are differences between risks and uncertainty. The word risk
originated from France, and began to be used in insurance transactions around 1830 in England.
Risk is classified under three categories, namely; known risks, known unknown, and unknown.
Known risks include minor changes to the project, known unknown risks are the predicted event
either by their probability or by the likely effect, and unknown risks are those events with
unknown probability attached to it and unknown likely effect (Smith et al., 2014).
Furthermore, (Dent 1997) defined risk by considering the practical behavior of risk “Exposure to
the possibility of economic or financial loss or gain, physical damage or injury, or delay, as a
consequence of the uncertainty associated with pursuing a particular course of action.” Besides,
Flanagan and Norman (1993) define the risk considering the assessable of risk as measurable
uncertainty, while uncertainty is as immeasurable risk.
However, when consider the project risk; it is defined by El-Sayegh (2007) as an “uncertain
event or condition that, if it occurs, has a positive or negative effect on at least one project
objective such as time, cost, scope, or quality." According to the definitions of risk given by the
(Dent 1997), Flanagan and Norman (1993), El-Sayegh (2007) it can be convinced that risk is
generally referred to economical or physical loss rather than gain din to measurable uncertainty,
while uncertainty is as immeasurable risk.
Even, there are many definitions for the risk given by several researchers. For this research
consider the (Dent 1997) definition as the definition for the risk. Risk is the potential for
unnecessary or negative consequences of an event or activity (Rowe 1997), a combination of
hazard and exposure (Chicken and Posner 1998).
(Kolltveit 2004) has distinguished uncertainty and risk as following way: situations where having
a known probability of occurrence of outcome due to particular activity are called risk, while
uncertainty arises with the unknown outcome of event. Moreover, Stoner et al. (1995) illustrate

9
risk as a situation where the decisions made by decision makers mainly by considering
probabilities calculated using historical information in that particular incident.

(Source Stoner et al. 1995)

Figure 2.1: Decision making spectrum

2.3 Importance of Understanding Risk

Particularly, the industries, organization, and projects that are having complex structure and
technical complexity are heavily exposed to the risk (Zou et al. 2007). Furthermore construction
projects are one off endeavors with many unique futures such as long period, complicated
process, abominable environment, financial intensity and dynamic organization structure
(Flanagan and Norman 1993). (Zou et al., 2007) Risk cannot eliminate but they can be transfer
from one party to another or share among parties through contract clauses (Andi 2006).
Therefore, understanding the concept of risk and understanding the behavior of risk is very much
important to manage the risk successfully to achieve targets in every aspect where risk is related
(Flanagan and Norman 1993).

2.3.1 Impact of Risk

Following figure in the next page gives a simplified view of the risk hierarchy.

10
 (Source Flanagan and Norman 1993)
Figure 2.2 the risk Hierarchy

Impact of Risk to the General Environment

The general environment is that which affect all organizations in a given society. Therefore
according to Flanagan and Norman (1993) the impact of risk to the general environment Will be
Issue to every society aspects and It can be divided in to two parts, firstly the physical and
secondly the political, social and economic. They further argued that the risk arising from
physical environment can he identify and steps can be taken to mitigate them. However, for the
political, social, and economic only government can control the environment risk (Jamil et al.
2008).
Impact of Risk to the Market / Industry and company
The risk which is occurs countrywide or worldwide and It will cause to the market and ultimately
to the Industry (Flanagan and Norman 1993). Typically, Industry and the market contain large
number of small and companies or organizations then such kind of risk will cause to the
organizations Dent (1997).
Impact of Risk to the Project
Risk can affect productivity, performance, quality, and budget of construction project
(Kangari 1995). Moreover, Andi (2006) emphasize that, failure to adequately dealing with risk
will be cause cost and time overruns in construction projects. However, Ahamad and Azar
(2004) have given most serious effects precisely that can be occurring due to risk in construction
projects from project management point of View and it can be summarized as follows:
 Failure to keep within the cost estimate.
 Failure to achieve the required completion date.
 Failure to achieve the required quality and operational requirements.

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This research is mainly limited the study to the protect level.

2.4 Construction Risk and Risk Management

Construction risk usually “perceived as events that influence project objectives of cost,
time, and quality“(Ahamad and Azar 2004). According to Wong et al. (2004), Andi (2006), Zou
et al. (2007), Flanagan, and Norman 1993), elimination of all risks in construction projects Is
impossible. Further, it emphasizes on Significance of construction risk and risk management
approaches in construction to offload the risk consequence under following topics.

2.4.1 Why Risk in Construction

Usually construction industry continually faces With a variety of Situations involving many
unknown, unexpected, frequently undesirable, and often unpredictable Situations and factors
(Fong 1997) According to (Akintoye and Macleod 1997), these Situations are not limited to the
construction industry. Therefore, construction industry naturally exposes to risk more than other
industries and risk inherent in every construction project (Kangari 1995). Moreover, the Size and
complexity of construction projects are Increasing which adds to the risks (El Sayegh 2007).
Further, according to El Sayegh (2007) “construction projects are perceived to have more
inherent risk due to the investment of many contracting parties such as designers, contractors,
subcontractors, suppliers, etc. "Besides (Wang 2003) illustrate the construction project risk as, it
has to be operated in an environment where there are many uncertainties so that the aim will be
operate on risk. Therefore, risk relation to construction as a variable in the process of a
construction project whose variation results in uncertainty as to the final cost, duration, and
quality of the project (Akintoye and Macleod 1997). Due to these reasons, use of specific risk
management will ensure the full control to mitigate the risk in construction.

2.4.2 Risk Management

Managing risk has existed when people needed to store their harvest for future use in the
beginning of the civilization, and when people built forts and fences to protect their villages and

12
possessions. Another example is when a tradesman manages his risk when moving goods from
one place to another by having the buyer pay the seller a security deposit to be returned once the
buyer receives the merchandise in good condition, so if the tradesman faces any disasters during
his journey he receives compensation. From Babylonian times until the Age of Enlightenment,
risk was not managed systematically, but was more or less based on „gut feeling‟. However, a
more systematic methodology was seen after statisticians and theorists developed quantified
techniques for assessing risk (Douglas, 2009).
Risk management is an important part of the decision-making process in construction
project management (Tang et al., 2007), particularly regarding the project‟s integration, scope,
time, cost, quality, human resources, communications and procurement. Risk management (RM)
improves the future prospects of a project as it identifies uncertainties and probabilities (Borge,
2001); it is defined as „a system which aims to identify and quantify all risks to which the project
is exposed so that a conscious decision can be taken on how to manage the risk‟ (Zou et al.,
2007).
Effective risk management in construction requires a comparison between the potential
risk and the potential return or future profits on the project (Flanagan, 1993). According to
(Walker, 2000), Construction project management is defined as: “The planning, co-ordination
and control of a project from conception to completion (including commissioning) on behalf of a
client requiring the identification of the clients‟ objectives in terms of utility, function, quality,
time and cost, and the establishment of relationships between resources, integrating, monitoring
and controlling the contributors to the project and their outputs, and evaluating and selecting
alternatives in pursuit of the client‟s satisfaction with the project outcomes.”
In construction projects, risk and uncertainty could have either a positive or negative
outcome. Threat is a result of a negative risk and opportunity is an outcome of positive risk.
Therefore, risk does not indicate a bad thing however; it means things are uncertain (Cretu et al.,
2011).
Risk management (RM) is a form of decision making within project management (PM)
and it is an important part of the project management plan (PMP); it describes the types, sources
and impacts of potential risks in the project, in addition to which, tools and techniques will be
used in risk identification and assessment. Furthermore, risk as „the combination of the
probability of an event and its consequences‟ (Lester, 2007).

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2.4.2.1 Risk Management Process

Most construction projects experience cost and/or time overrunning. According to Cretu
et el. (2011), a study of analyzing cost was carried out on public works projects in Nigeria. The
study resulted in occurrence and the severity of cost overruns was significantly high. A round
86% of 258 projects experienced cost overrun which resulted in the actual cost being 28% higher
than the estimated cost. The major factors responsible in cost overrun are inappropriate risk
analysis. This is where during the early stage of the project, the scope of work was poorly
described and identified at the time of the developing the project budget, or affected by political
pressure where the project was delayed on purpose to serve political agendas. The concept of risk
management is completely different to that of risk assessment, although some may use the term
risk management to describe a risk assessment process (Kaplan and Garrick, 1981). Westland
(2007), defines risk management as „the process by which risks to the project are formally
identified, quantified and managed‟. At the planning and construction stage, various risk types
may start to be identified, assessed and analyzed by using the probability theory or the relative
importance index theory in order to evaluate the risks and control their influence on the
construction project (Paek, 2009).
Risk management assists in minimizing delays, and in turn reduces contractual disputes.
According to Braimah and Ndekugri (2009), one of the main findings of the existed
methodologies for analysis delays in construction projects from the perceptive of clients and
consultants was the use of simple methodologies instead of the complex one in delay analysis
although it is known for its less reliability.
The general categorization of risk in construction projects is divided into internal and
external risks. Other classifications are more detailed and consist of more specific categories,
such as political, financial, market, intellectual property, social and safety risks (Songer et al.,
1997) and (El-Sayegh, 2008). In general, risks can be identified at any stage in a project by
recording the risk details in the risk register; however, in the construction industry risks can be
identified by the probability of occurrence of an event or the actual occurrence of an event during
the construction process (Faber, 1997).
Risks can also occur due to a lack of predictability of structured outcomes or
consequences in a decision or planning situation (Hertz and Thomas, 1993). The result of an

14
estimation based on the uncertainty associated with various outcomes could be better or worse
than expected (Lifson and Shaifer, 1992). This research will adopt the more general and broad
definitions of risk management as presented by (Larson and Gray, 2011) and (Westland, 2007) in
which managing risks is the process by which risks to the project are formally identified,
quantified (assess) and managed (responses). Figure 2.3 in the next page illustrates the process of
Risk Management (RM).

Figure 2.3 Process of risk management.

Source: (Simon and Gunn, 2009), (Gray and Larson, 2003) and (March, 2001)
Figure 2.3 illustrates the three stages in the initiation of the risk management process tool. The
initiation process starts with the risk assessment phase, proceeds to risk control and ends with a

15
risk review. It is worth mentioning that there are several types of risk, for example controllable
and uncontrollable, dependent and independent risks.

2.4.2.2 Risk Assessment

Managing changes has led to the introduction of techniques for risk assessment as a
major part of the planning process. Risk assessment concentrates on quantifying identified risks
by using statistical analysis, since the identified risk in most cases can be either quantitively or
subjectively assessed factors (Lockyer and Gordon, 1996).
The risk management cycle (the risk assessment phase) can be viewed in three stages
(Smith, 2008), (Maylor, 2003) and (Zayed et al., 2008): risk identification, risk analysis and risk
response. Figure 2.4 illustrates the risk management cycle.

Figure 2.4 Risk assessments

Source :( Smith, 2008) and (Maylor, 2003)

Risk Identification
Risk identification is the first step in the risk assessment process, whereby the potential
risk factors (RF) associated with construction projects is identified and classified (Zou et al.,
2007), because, it develops the foundation for next steps; analysis and control of risk
management (Flanagan and Norman 1993). Accurate risk identification ensures all losses or gain

16
that challenge the organization or the project, then these non-identified risk will become non
manageable (Tchankova 2007).
Besides (Al-Bahar 1990), risk identification is defined as “the process of systematically
and continuously identifying, classifying, and assessing the preliminary significance of risks
associated with a construction project.”
According to Flanagan and Norman (1993) risk identification done considering the
Sauces of risk, events that are arising from that particular source of risk and effects caused by
those events it is shown in following figure 2.5.

(Source: Flanagan and Norman 1993)

Figure 2.5: Risk identification

William (1995) suggests that the strategy for identifying, controlling and allocating risks
should be formed in the early stages of the construction project lifecycle. It is useful to consider
the potential internal and external risks to the client, contractor, and project team, from the point
of view of different contractors, anticipating sources for claims or disputes. At the stage of risk
identification it is important to identify the risk source and its effect (Raftery, 1999).

Figure 2.6 Risk classifications

Source: (Flanagan, 1993)
Controllable risks are those for which the outcomes are within the control and influence
of the decision makers. Uncontrollable risks are those where the decision makers have no control
or influence over them, and they usually stem from external sources (Flanagan, 1993) and

17
(Chapman, 2001). One of the effective tools for identifying potential risks is the work breakdown
structure (WBS) which reduces the chance of missing risk event (Gray and Larson, 2003).
Work Breakdown Structure (WBS) refers to identifying activities required to deliver the
design needed to construct the project, in addition to what resources will be needed to carry out
the work (Smith, 2008) and (Maylor, 2003).
Risk identification process
Moreover, “the degree to which the identification process will Influence the effectiveness
of risk management and its contribution to the overall project management of any particular
project, is dependent on the way the steps of the process are Implemented" (Chapman 2001).
Furthermore, proper Implementation of these steps will ensure better effectiveness of
Identification process and It will guide to better understanding of risk. Moreover, the key factors
Involved in each step of the risk identification process demonstrate in figure 2.3 above. There are
six steps involved in the identification process. The following sections will discuss each step
separately (Al-Bahar 1990).
According to Highways Agency (2001) risk Identification process begins with the team
compiling the project's risk events and identification process will vary, depending on the nature
of the project and the risk management skills of the team members, but most identification
processes begin with an inspection of issues and concerns created by the project development
team. Further, these issues and concerns are able to derive from an examination of the project
description, work breakdown structure, cost estimate, design and construction schedule,
procurement plan, or general risk checklists.
Importance of risk identification
According to (Hassanein and Afify 2005) many managers believe that the principle
benefits of risk management come from the identification rather than analysis stage. Moreover,
(Afify and Hassanein 2005) argued that, for them, a great benefit comes from the discipline of
thinking through the project, understanding the potential risks, and considering possible
responses. Besides, Bajaj et al. (1997) also supported to that argument and further they printout
following causes, might occur unless otherwise use a proper risk identification process,
 Failure to keep within the cost estimate.
 Failure to achieve the required completion date.
 Failure to achieve the required quality and operational requirements.

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Risk analysis
Risk analysis is the intermediate process between risk identification and risk response.
Risk analysis techniques are grouped into qualitative and quantitative methods (Oztas and
Okmen, 2004). The potential risks are analyzed using a qualitative or quantitative method to
evaluate their potential impacts (Zou et al., 2007). Another way of defining risk analysis is
estimating what could happen if an alternative action or response were selected (Smith, 1999).
According to Gray and Larson (2003), analyzing risks could be qualitative or
quantitative. Qualitative analysis represented in experts opinion and it could carry serious errors
based on the respondents or the decision maker judgment skills. On the other hand, the
qualitative method is more reliable and it requires serious data collection and more detailed
analysis.
To identify the potential risk factors (RF) and investigate their impact on construction projects
completion, a classification that covers all types of presented potential risk factors is needed
(Tchankova, 2002).
Risk response
The risk identification and analysis process helps decision makers to make judgments
before problems occur. There are many forms of reaction to identified risks, such as risk
avoidance, risk reduction or risk transfer (Raftery, 1999). All projects are at risk to potential
problems in the form of events or factors called risks, and it is known that they influence the time
frame, budget and quality of projects(Santoso et al., 2003), however, all risks involve both
threats and opportunities (Chapman and Stephen, 2002).
As mentioned earlier, a few researchers and decision makers like to make a distinction
between uncertainty and risk. Uncertainty is not insurable and is found in situations where it is
not possible to attach a probability to the likelihood of the occurrence of a problem (Raftery,
1999), or where the uncertainty could lead to risk events, threats and opportunities (Chapman
and Stephen, 2002). Kartam and Kartam (2001), identify risk as the prediction of a project‟s
success based on the probability of uncertainties occurring.
Various paths can be followed to respond to risks, based on the degree of severity. To
avoid obstacles project objectives can be modified if the difficulties are severe enough, find
alternative methods for managing the project, increase management strength, and reduce

19
dependence of one task on another, increase resources or increase flexibility (Lockyer and
Gordon, 1996).
Larson and Gray (2011) stated that decisions must be made after identifying and
assessing risks by choosing the appropriate solution to the risk event.
Classifications to risk responses are:
 Mitigate
 Avoid
 Share
 Retain
 Transfer
Mitigating risk
There two strategies for mitigating risk:
 Reduce the occurrence probability of the event
 Reduce the impact of the risk on the project.
Risk teams usually prefer to reduce the likelihood that the risk will occur to reducing the
impact of it on the project as reducing the impact is costly (Larson and Gray, 2011).
Avoiding risk
Although all risks cannot be avoided however, some risks can be avoided before the
project launch and others can be avoided or eliminated by changing the project plan (Larson and
Gray, 2011).
Jannadi (2008) describes the avoiding risk strategy as a continuous decision process to
avoid a particular risk completely. According to (Nicholas, 2004), risks can be avoided by
minimizing project complexity, reducing quality requirements for end items or eliminating risk
activities.
Transferring risk
Passing risks to another party does not change the risk; however risk should be
transferred to the party who can best control it. One way of transferring risk is insurance, which
could be very costly for large projects. Another way of transferring risk is to add financial risk
factors to the contract bid price (Larson and Gray, 2011).

20
Sharing risk
Contractors and clients may decide to split the risk between them through a contractual
agreement. For example, each can manage the risk they can handle best. There are different types
of contractual agreement to share responsibilities towards risks (Nicholas, 2004), which are:
 Fixed-price: Contractors are almost responsible for all risks.
 Fixed-price with incentive fee: contractors accept up to 60% of the risk and the remaining
is clients‟ responsibilities.
 Cost plus incentive fee: contractors accept up to 40% of the risks and clients accept the
remaining 60%.
 Cost plus fixed fee: clients are responsible for all risks.
Retaining risk
Risk can be retained in cases where it cannot be avoided or transferred, for example
earthquake or flood. However the risk can be retained by implementing a contingency plan.
Contingency plan is defined as a substitute plan that will be applied in case risk becomes a
reality. It is considered as an action to reduce the negative impact on the project if the risk
materialise (Larson and Gray, 2011). It also refers to a legal assignment of cost of potential risk
from one party to another as in insurance (Jannadi, 2008).

2.4.2.3 Risk Control

The risk control phase comes after the risk assessment phase. The main act of risk control is
to either reduce or accept risk. Activities included in the risk control phase (Cretu et al., 2011)
are:
 Track risk on risk register
 Identify new risks
 Adjust risk responses or develop new responses strategies
 Monitor the implementation and effectiveness of the responses strategies.
To control risk, identification of specific strategy response will assist in controlling risk. For
example, in case of negative risk ( threats ) it is preferable to accept, avoid, mitigate or transfer
risk, however, if the risk is positive ( opportunity ), it is preferable to enhance, exploit or share
risk. Identification of risk responses will provide the best solution (Cretu et al., 2011).

21
 According to Smith (2002), all building construction parties carry risk at some point, and
since every project combines risk and uncertainty, contracts between parties should allocate
responsibility for risks during the project‟s life.
In this study, the overall aim is to evaluate risk factors during the building construction phase
of construction projects in the focusing on the Bauchi State. For this reason, the research will
focus on the risk assessment stage.

2.5 Properties of Project Risk

Construction projects are unique and built only once and they involve a temporary project
team that assembles from different companies, countries, cultures, etc.
Moreover, the size and complexity of construction projects Is also higher (El Sayegh 2007).
Due to the reason construction project expose to risk (Flanagan and Norman 1993). Trying to
eliminate all the risks, which are occurs in construction projects also is impossible (Wang et al.
2004).

2.5.1 General Project Risk Characterization

El Sayegh (2007) defines the project risk “as an uncertain event or condition that, if It occurs,
has a positive or negative effect on at least one project objective, such time, cost, scope or
quality, “furthermore, construction project risk can broadly classify as either objective or
subjective (Flanagan and Norman 1993)
Risks relate to rewards and some risks should accept as long as they are in line With the
rewards (Barber 2005). Due to that, every project contains some degree of risk (El-Sayegh 2007)
and risks are threats to project success (Barber 2005). Failure to adequately deal with risks has
been shown to cause cost and time overruns in construction projects (Andi, 2006).

2.5.1.1 Need of Risk Management in Construction Projects

Clients, contractors, the public, and others have suffered, because of the construction,
industry has a poor reputation in coping with risks and due to that many projects failing to meet

22
deadlines and cost targets (Edwards, I995) Besides, previous researchers (Shen, 1997), (Hillson,
2003), (Kangari, 1995). El-Sayegh, 2007 suggested that construction activities are particularly
subjected to risk. Then naturally, construction projects expose to risk.
Furthermore, that creates uncertainty in construction projects (Flanagan and Norman (1993)
Moreover according to (Hillson, 2003), risk management has been accepted as a Significant
advance to dealing with the predictable uncertainty, aiming to minimize threats and maximize
opportunities while maintaining a focus on of objectives.
Therefore, it is important to employing effective risk management techniques to deal with
risks associated variable construction activities, which are related to construction projects.
Because effective risk management will ensure project objectives including time, cost, quality,
safety and environmental sustainability (Zou et al, 2007)

2.5.1.2 Risk Management Strategies in Construction Projects

Once the risks of a project have identified and analyzed, appropriate risk response strategies
must be adopted to cope with the risk in the project implementation (Adams, 2006). The
treatment measures on each risk base on the nature and impact of the risk. Further, the main aim
is to remove as much as possible the potential negative impact and to increase the level of
control of the risks. However, the process of risk management does not aim to eliminate all risks
but to identify appropriate strategies to assist project stakeholders to manage those (Zou et al.
2007).
These strategies apply In Situations experiencing uncertainty in order to ease decision-
making regarding the project„s future. These beneficial and practicable developments have
resulted in construction practitioners becoming progressively aware of the importance of using
these techniques at various stages of a project to achieve greater project success However, there
is a significant shortfall in the available risk management techniques.

23
2.6 Contracting Parties Behavior with Project Risk

Many kinds of risk are inherent in the construction process and contractors and manage it,
owners pay for it (Kangari 1995). Further, according to Andi (2006) risk has to be shared among
contracting parties.

2.6.1 Owner’s Role and Project Risk

As the project originator, the owner is the one who determines the nature and scope of the
project (Flanagan and Norman 1993). Accordingly, the owner is the one who initially bears all of
the risks of unsatisfactory results. However, the owner also has the unique ability to transfer or
allocate these risks (Andi, 2006).
According to American Council of Engineering Companies and Associated General Contractors
of America, there are two ways owner can address the project risk as follows;
 Transfer all risk of loss to other construction project parties
 Sensible allocation and management of risk

2.6.2 Contractor’s Role and Project Risk

Contractors undertake the work necessary to produce a building or any form of construction
unit, and they are contractors, sub-contractors, suppliers, manufacturers, etc. The aim of the
contractor is to make a profit out of the project. Primarily burden of risk in construction project
falls between the contractor and client and insurers will alien entry low probability high impact
risk, such as fire or Collapse (Flanagan and Norman, 1993). Furthermore, according to Rahman
and Kumaraswany (2005) most of the construction related risk/ Technical risk is affected to the
contractor in the construction/production phase and therefore there is a need of identification of
project risk in construction protects to successfully manage them to achieve clients and
contractors objectives Within the forecasted time, budget and quality.

24
2.6.3 Consultants Role and Project Risk

Consultants are the professionals who advise to the client on the investment, the design,
cost, and contractual arrangements and all the other facets of construction project (Flanagan and
Norman 1993). Further, consultants must use their skills, experience, and Knowledge With care
to ensure the client„s interests are protected. However, consultants carry very little risk because
they only give advice, but loss that arises because of bed advice can be very Significant (Andi,
2006). Due to that consultant also has to be knowledgeable about the construction risk.

2.7 Project Risk Classification and Risk Factors Identification Regarding To Systematic
Risk Management

2.7.1 Identification of Risks Factors In Building Construction Projects

The available resources, such as the library search system for journals, conference papers
articles and books, in addition to Internet resources, were used to review and examine
information related to the topic.
Many researchers have studied potential risks in construction projects in developed and
developing countries, looking at a range of projects from small to large scale. Various studies
have considered risks relating to the three main parties in the construction industry clients,
consultants, and contractors. Others have used sub-categories of related factors, grouping
together risks based on their nature.
Table 2.1 presents recent relevant studies related to the identification of risk in construction
projects.
Table 2.1 Related literatures of risk factors
No. Author &Title Case Risk
Study Factors
1 “Risk assessment and allocation in the UAE construction UAE 42
industry”, (El Sayegh, 2008).
2 “Learning from risks: A tool for post project risk assessment”, Turkey 73
(Dikmen et al., 2008).

25
3 “Risks associated with trenching works in Saudi Arabia”, KSA 7
(Jannadi, 2008).
4 "Project risk management in Hong Kong" (Sheng 1997) Hong 8
Kong
5 “An evaluation of risk factors impacting construction cash flow UK 26
forecast”, (Odeyinka et al., 2008).
6 “Risk Management in the Chinese Construction Industry”, China 72
(Tang et al., 2007).
7 “Understanding the key risks in construction projects in China”, China 85
(Zou et al., 2007)
8 “Risk analysis in “fixed-price design–build construction Turkey 14
projects”, (Oztas and Okmen, 2004).
9 “Assessment of risks in high rise building construction in Jakarta 130
Jakarta”, (Santoso et al., 2003).
10 “The controlling influences on effective risk identification and UK 85
assessment for construction design management”, (Chapman,
2001)
11 “A systematic approach to risk management for construction”, Australia 29
(Mills, 2001).
12 Kartam et al. (2001): “Risk and its management in the Kuwaiti Kuwait 26
construction industry: a contractors perspective”
13 “Risk management trends in the Hong Kong construction Hong 25
industry: a comparison of contractors and owners perceptions”, Kong.
(Ahmed et al., 1999).
14 "Risk Factors Affecting Building Construction Projects In India 27
India" (Varun and Ajith 2018)
15 "An Evaluation of Risk Factors Affecting Building Construction India 27
Projects" (Vairamuni et al. 2016)
16 "Risk Management In Nigerian Construction Industry" (Aminu Nigeria 15
A.B 2013)

26
17 "An Investigation into Risk Factors and Preventive Measures in Nigeria 39
Building Construction Projects in Abuja FCT, Nigeria"(
Ibrahim et al. 2014 )
18 "Identification and assessment of key risk factors affecting Nigeria 38
public construction projects in Nigeria: stakeholders
perspectives" (Luka and Professor Ibrahim 2016)
19 "Evaluating the impact of risk factors on construction projects Nigeria 30
cost in Nigeria" (Luka and Sa’adiyaadiya 2014)
20 "Identification and assessment of risk factors affecting Egypt 69
construction projects" (Mohamed et al. 2015)

2.7.2. Identification of Causes of Delay in Construction Projects

After reviewing the relevant literature on risk identification and assessment, the
researcher noticed a repeated statement: risk factors lead to project delays. For this reason, the
researcher decided to review the literature related to the causes of delays in construction projects
and compare them to the studies included in table 2.1.
A comprehensive review of the relevant literature on the causes of delay was carried out.
Table 2.2 shows a summary of the most relevant literature on causes of delay in construction
projects.

Table 2.2 Related literatures on causes of delay

No Author & Title Case study Delay
causes
1 “Delays in construction projects”, (Sweis et al., 2008). Jordan 40
2 “Causes and effects of delays in construction industry”, Malaysia 28
(Sambasivan and Soon, 2007).
3 “The significant factors causing delay of building Malaysia 31
construction projects”, (Alaghbari et al., 2007)
4 “Construction Delays in Civil Engineering Projects”, Hong Kong 30

27
 (Lo et al., 2006).
5 “Causes of delay in large construction projects”, (Assaf and KSA 73
Al-hejji, 2006).
6 “Construction Delays and Their Causative Factors”, (Aibinu Nigeria 44
and Odeyinka, 2006).
7 “Delays and Cost Increases in the Construction of Private Kuwait 9
Residential Projects”, (Koushki et al., 2005).
8 “Large Construction Projects in Developing Countries”, Vietnam 59
(Long et al., 2004).
9 “Identifying The Important Causes Of Delays In Building Indonesia 31
Construction Projects”, (Sugiharto and Keith, 2003).
10 “Causes of Delay and Cost Overruns in Construction of Ghana 26
Groundwater Projects in a Developing Countries”,
(Frimpong et al., 2003).
11 “Causes of Construction Delay: Traditional Contracts”, Jordan 28
(Odeh and Battaineh, 2002).
12 “Expert System for Diagnosing Delay’s Problems in Egypt 33
Construction Projects”, (Amer, 2002).
13 “Construction Delays in Florida: An Empirical Study”, Florida in 17
(Ahmed et al., 2002). Miami

2.8 Classification of Risk Factors (RF)

Classifying risk can be done in various ways depending on the purpose. For instance,
some risks are generally categorized into internal and external risks, while others are classified in
more detail as client risk, financial risk, design risk, contractor risk, material risk, etc. (Raftery,
1999) (El-Sayegh, 2008). The categorization of the risks factors included in the previous 20
relevant studies is presented in table 2.3.

28
 Table 2.3 Categories Classifications of Risk Factors
Categories Rank
External factors related. 1
Materials related. 2
Labours and equipment‟s related. 3
Design – related 4
Financial/economical 5
Management/administrative 5
Project –related 7
Construction-related 7
Project attributes –related 9
Engineer –related 9
Environmental –related 9
Sub-contractor related 9
Supplier- related 9

By comparing the categories included in all the reviewed literature that related to the
identification of risk factors, the results (Table 2.3) show that the external category was included
in every study, and the leading six categories included in the reviewed literature were external,
materials, labour and equipment, design, financial, and management.
Table 2.4 (below) shows the categories included in the reviewed studies of causes of delay. Most
authors included the external category followed by material, labour and equipment, design, and
finance in their studies.

Table 2.4 Categories classification of causes of delay

Categories Rank
External factors related. 1
Materials related. 2
Labours and equipment‟s related. 2
Design – related 4
Financial/economical 4
Project –related 6
Construction-related 6
Engineer –related 8

29
 Environmental –related 8
Sub-contractor related 10
Supplier- related 11

In this research, the main categories were chosen based on the comparison between table
2.3 and table 2.4 and the identification of the categories included most often in previous studies.
The final categorizations are as follows:
 Management-related factors
 Design-related factors
 Financial/economic-related factors
 Materials-related factors
 Labour- and equipment-related factors
 External – related factors
The selection of the categories was based on the most often included categories in the
relevant literature.
Management category
In project management there are two major aspects: the art and the science of the project.
The art deals with the people involved in the project, while the science deals with defining and
coordinating the work to be done; for example, it involves the knowledge, understanding, and
skillful application of a project management process (Heerkens, 2001).
Design category
One of the most important requirements to minimize time delay and cost overrun is the
allocation of sufficient time and money at the design phase (Koushki et al., 2005). Design is one
of the most critical categories because its related factors were identified as key risks in
construction projects (Fereig and Kartam, 2006).
Finance category
This category includes all factors related to potential financial difficulties on the project,
such as delayed payments, cash flow problems, and external economic issues (Alaghbari et al.,
2007). Most of the studies show that the main finance-related risk factor is delayed payment for
completed work (Sweis et al., 2008) and (Aibinu and Odeyinka, 2006).

30
Material category
Project activities can be directly affected by factors related to materials, and the impact
on the total cost of any project could be significant (Manavazhi and Adhikari, 2002). Risk factors
that are related to materials include selection time, type of materials, their availability in the local
market, and all causes related to the material category. This category can have an obvious effect
on delays and increases in cost.
Labour and equipment category
Labour risk factors are related to manpower problems, such as the shortage of available
workforce and the presence of unskilled labour; whereas factors related to equipment refer to the
availability, reliability and quality of the equipment (Sweis et al., 2008)
External category
External risks are usually ranked low and do not play a major role in the delay of the
project (Sugiharto and Keith, 2003). Most of the studies show that external risks, including
weather and site conditions, have the lowest impact on the completion of a project (Alaghbari et
al., 2007).

31
 CHAPTER THREE
METHODOLOGY

3.1. Introduction

This chapter describes in detail the research design, population of the study, targeted sample
population, sampling technique, research instruments, in addition to the method of data
collection and analysis techniques.

3.2. Research Design

The study was carried out using a mixed-method approach of design that used both
qualitative and quantitative methods of data collection. To achieve the research aim and
objectives the research was divided into three stages. The first stage present a comprehensive
review of the related literature on the project risk management and in-depth view on risk and
impact of risk. The second stage reviewed the relevant studies of research into risk identification
and assessment, in addition to the causes of delay in construction projects in developed and
developing countries. The third stage was the conducting of semi-structured interviews with
professionals in order to evaluate and verify the risk factors (RF) to be measured; a well-
structured questionnaire was administered to relevant and appropriate professional in contractor
firms to serve the research aim. The quantitative data was analyzed using Microsoft excel 2007
and the results are presented using pie chart and histogram.

3.3 Population of the Study

Population is defined as „units (people, employee or members) that have the chance to be
included in the survey sample‟ (Groves et al., 2009). The research populations in Bauchi State
were contractors firms/companies listed under Bauchi State Corporate Affairs Commission
(CAC).

32
3.3.1 Targeted Sample Population of the Study
The goal of sampling is to create a selection that is representative of the population it is
drawn from. It is essential to provide a targeted sample of the whole population in order to
generalize the findings of the research.
The target sample is drawn from the population and is usually a small fraction (Groves et
al., 2009). (Baker, 1997), found that a sample size of 20 or more can produce a reliable
conclusion. Numerous formula types are presented to determine sample size. However,
calculating the sample size with known population for this research was based on a formula
presented by (Michael Slovin 1960).
In this research study, the sample size was of 42 from a population of 47 using Slovin‟s
formula. When it is not possible to study an entire population a smaller sample is taken using a
random sampling technique. Slovin's formula allows a researcher to sample the population with a
desired degree of accuracy. It gives the researcher an idea of how large his sample size needs to
be to ensure a reasonable accuracy of results. (Michael Slovin 1960)
If a sample is taken from a population, a formula must be used to take into account
confidence levels and margins of error. When taking statistical samples, sometimes a lot is
known about a population, sometimes a little and sometimes nothing at all.

Slovin's formula is written as:

n = N / (1 + Ne2)

Equation 3.1
While:

n = Number of samples, N = Total population, e = Error tolerance

To use the formula, first figure out what you want your error of tolerance to be. To this
extent, the researcher was happy with a confidence level of 95 percent (giving a margin error of
0.05). Here it is decided that we are happy with a margin of error of 0.05. Using Slovin's
formula, it would be required to survey n = N / (1 + Ne^2) people:

Sample size calculation: 47/ (1 + 47 (0.05* 0.05) = 42.06

33
3.4. Questionnaire Distribution

The minimum sample size (n) needed was calculated by applying equation 3.1. Based on
the calculations presented in section 3.3.1 the minimum targeted samples of the Bauchi
constructor‟s populations are shown in table 3.1.

3.4.1. Bauchi State Questionnaire Distribution

Table 3.1 (in the next page) illustrates the breakdown of the population targeted sample of
Bauchi State.

Table 3.1 Bauchi State questionnaire distribution breakdowns

Bauchi State Contractors
Population 47
Targeted sample 42

As mentioned earlier in section 3.3., the Bauchi State contractor‟s population consists of
firms/companies that are registered under the Bauchi State Corporate Affairs Commission
(CAC). In order to obtain the minimum responses necessary from each party, a simple
calculation was applied to work out the number of questionnaires that should be distributed to
the population; this is represented as the targeted sample, as explained in section 3.4.
In table 3.1, Bauchi State questionnaire distribution breakdown indicates that a minimum of
42 responses is necessary, which means that approximately 89.36% of the contractors‟
population must respond in order to be able to generalize the results of the study on the
population as a whole.

3.5. Samplings Technique

Simple random sampling has been used because the researcher considers this to give a true
picture of the results and hence not being biased. Simple Random Sampling It is the basic
probability sampling technique and all other methods are variations of simple random method. It

34
can be defined as the method of sampling which provides every element in the population an
equal and known chance of being selected in the sample. The sample consists of contractors in a
diverse field of construction firms/companies.

3.6 Research Instrument

The research instrument used in gathering information for this study was self-design
questionnaire and semi structured interview. The questionnaire contained two parts, the part one
is the personal information of the respondents and part two involve questions that will answer the
research objectives.

3.7. Method of Data Collection

A survey can be define as the method, process or technique of collecting or obtaining data
from people in a short time, and it could be a descriptive or exploratory survey, or a combination
of the two (Fink and Kosecoff, 1995) and (McNeil, 1990).
There are various methods of data collection, and the selection of a method depends on the
nature of the investigation, the availability and the type of data (Naoum, 2007). In order to gather
the required information about building construction risk factors in the Bauchi State, a dynamic
approach was needed. Two approaches to primary data collection were adopted: exploratory
interviews followed by a questionnaire.

3.7.1. Literature Based Data

The investigation began by reviewing the relevant literature to collect the primary data and
in order to determine the gaps in research related to the proposed topic, and to critically review
the issues related to the study. The literature review stage also helped to identify the related
factors, and their classification helped to determine the most appropriate techniques to be applied
in order to achieve the research aim.

35
3.7.2. Semi-Structured Interviews (Qualitative Approach)
The most appropriate way to collect data from the very beginning, without depending on
questionnaires developed by other researchers, is to collect data using face-to-face interaction
with the practitioners (Belson, 1991). Creswell (2009) stated that qualitative study helps in
collecting data from face-to-face interaction with participants who have experienced the
problems in the field or on site; it also assists in collecting data from multiple sources, such as
interviews and documents, then reviewing all the data to make sense of it and organize it.
In designing the interview questions several aspects were taken in consideration, such as the
exact information it was necessary to gather, and what type of questions – open or closed –
would best serve the purpose of the interview (Belson, 1996). Furthermore, sending information
to respondents ahead of time with an assurance of confidentiality was another way of improving
the interview process (Bradburn and Sudman, 1991). The main purpose of asking questions in
interviews is to extract information from specific people and transmit it to others (Sudman and
Bradburn, 1999).
A semi-structured interview was designed and conducted face-to-face with interviewees
who have a relationship with risk management in the construction sector of Bauchi State. The
essential reason for conducting semi-structured interviews was to identify the risk factors (RF) in
the building construction phase of building construction projects in Bauchi State.
Four face-to-face interviews were conducted in Bauchi State. The interviewees were: one
specialist engineer from the Ministry of Works Bauchi; two specialist builders from the Ministry
of works Bauchi; three contractors in Bauchi local government. The interviews lasted up to an
hour. Interviews should last between sixty and ninety minutes, but sixty minutes is preferable
because neither interviewer nor interviewee lose their concentration (Laforest, 2009).
Following the exploratory interviews, figure 3.1 (in the next page) illustrates the process of
evaluating the risk factors in the research.

36
 Figure 3.1 Process of risk factors (RF) evaluation

128 risk factors (RF) extracted from the literature review and practitioners introduced one
new risk factor, bringing the total to 129 risk factors. Practitioners excluded 74 risk and a final
list of 55 risks factors were agreed to be measured.

3.7.2.1. The Process of Conducting the Interview

The aim of the interview is to take a more in-depth look at the risk factors (RF) affecting
building construction projects during the building construction phase, and to help in designing
the questionnaire which will assess the negative impact of these factors on project completion.
To meet the objectives of the interview, the process was divided into two stages as follows:

37
Stage I
Exploratory interviews were conducted with industry professionals (practitioners) to
develop a robust questionnaire that would bring clarity to the research aim. Practitioners are
people who have a greater degree of knowledge, experience and skills than the general
population (Flanagan, 1993).
Semi-structured interviews (face-to-face) were conducted with a mix of consultants,
contractors and certified project management specialists working in the Bauchi State
construction sectors.
In the first exploratory interview the researcher presented 128 risk factors (RF) extracted
from the literature review. The practitioners introduced one new risk factor related to the finance
category that was not previously included “Cash flow plan analysis” bringing the total to 129
risk factors (RF). Subsequently, seventy-four risk factors were excluded and the valid finalized
list of fifty-five Risk Factors (RF) was divided into six categories and it was agreed that they
would be used in the questionnaire, as shown in figure 3.1. Afterwards, the questionnaire was
refined to take into account the valuable insight and contribution of the practitioners, and
seventy-four risk factors were excluded for the following reasons:
Irrelevance: this research is limited to the investigation of the risk factors (RF) during the
building construction phase of the building construction projects in private organizations not
during different construction phase. Several risk factors (RF) were deemed to be related to
different construction phase or related to public organizations and so were not within the scope
of this study as the practitioners believed.
Repetitiveness: several studies were conducted and similar factors were described in different
words. Such repeated factors were eliminated.
The final fifty-five risk factors were classified into six categories based on their source:
Management, Design, Finance, Materials, Labour and equipment, and External factors.
Stage II
After detailed discussion, the finalized questionnaire was considered to be appropriate and
relevant to the real life issues faced by the clients, consultants and contractors (CCCs) within the
building construction sector of Bauchi State.

38
3.7.2.2. Data Analysis of Semi-Structured Interviews
Several techniques were applied to analyze the data from the semi-structured interviews.
The first step was to examine the notes taken during the interviews (transcribe), then
categorize the information extracted from the interviews by identifying the risk factors to be
measured and classified based on their nature and source then checking the coding procedure and
transcripts.
3.7.3. Questionnaire Survey (Quantitative Approach)
(Kindrick, 2003) stated that the format of a risk assessment questionnaire should be
reviewed to select only the risks relevant to the type of project, with simple responses offered.
The researcher focused on Bauchi State, and the questionnaire was designed to suit the local
environment and bring out the key local issues faced by the clients, consultants and contractors
(CCCs) during the building construction phase.
The following stages describe the designing of the questionnaire:
Stage I
A comprehensive list of 128 risk factors (RF) was developed based on the reviewed
literature, and these risks were grouped into six categories according to their sources and nature.
At this stage, a final list of identified risks was formed for Stage II.
Stage II
The approved questionnaire design consists of two sections. The first section gathers the
respondent‟s personal details in case any follow-up is necessary, followed by the actual
questionnaire, which measures the participant‟s perception of the impact of risk factors (RF) on
building project completion using a five-point Likert Scale.

3.8. Method of Data Analysis (Statistical Analysis)

3.8.1. Statistical Analysis

After examining the accuracy of the data by checking the frequency and descriptive
statistics using software (Ms. excel 2007), the data was analyzed using the following test..

39
3.8.2. Relative Importance Index

The first stage of the data analysis is to rank the risk factors (RF) according to their relative
importance index (RII) based on their negative impact on project completion from the
perspective of the respondents.
The relative importance index (RII) is calculated using the following equation (Ghosh and
Jintanapakanont, 2004), (Azis, 2012) and (Braimah and Ndekugri, 2008) :

Importance index = ∑ (a x)*100/5

Equation 3.2 Importance index

Where: X=n/N

Where:
a = constant representing the weighting given to each response
1 (no effect)
2 (medium effect)
3 (moderate effect)
4 (high effect)
5 (extensive effect)
n = frequency of responses
N = total number of responses
The weight average was calculated for risk factor then divided by 5, which is the upper scale of
the Likert-scale measurement.

40
3.8.3. Spearman Rank Correlation Coefficient (R) Test

The collected data is normally distributed, randomly obtained and independent from each
other. These sets of parameters led to the use of the spearman rank correlation coefficient (r) test
to assess if there is correlation between two factors or more, or not at all. The test results range
usually fall between zero where no relationship between two variables and one which represent
the perfect relationship (Pallant, 2005).
However, the actual scale is between -1 to +1. When r = +1 that implies a positive
correlation which means there is a strong association between the variables. For example, when
one variable increases, the other variable increases. On the other hand, if r = -1 or nearby that
implies an inverse correlation, which means when one variable increases the other variable
decreases. The strength of the degree of association between variables is classified as (Pallant,
2004):
r = 0.1 to r = 0.29 or = - 0.1 to r = - 0.29 (Small).
r = 0.3 to r = 0.49 or = - 0.3 to r = - 0.49 (Medium).
r = 0.5 to r = 1.00 or = - 0.5 to r = - 1.00 (High))

r= 1 - (6∑D2)/ (N3-N)
Equation 3.3
Where:
∑D2= Total of squares of the diff. between ranks
N= is the number of bivariate (x, y) values
r = coefficient of rank correlation

41
 CHAPTER FOUR
ANALYSIS AND FINDINGS

4.1. Introduction

The purpose of this chapter was to explain and analyze the collected data. Several methods
and equations have been used, as mentioned earlier in Chapter 3:
 General statistical analysis
 Relative importance index (RII)
 Spearman rank correlation coefficient (r)
This chapter is divided into three stages: stage I – general statistical analysis for the
collected data, which presents the breakdown of the questionnaire and response rate, in addition
to the respondents‟ personal information. And stage II – Bauchi State general response analysis.
This includes the ranking of the presented risk factors (RF) in each category. Stage III - show the
relationship between categories of risk factors.

4.2. Questionnaire Distribution Breakdown and Response Rates

Table 4.1 (below) illustrates the construction industry population in Bauchi State and the
questionnaire distribution breakdown.

Table 4.1 Questionnaire distribution breakdown

Bauchi State Contractors
Population 47
Questionnaires distributed 42
Usable responses 35
Response rate 56.45%

The Bauchi state population of contractors was 47 and42questionnaires were distributed

and 35 usable responses were obtained. A total of 42 questionnaire sets were distributed, of

42
which 35 valid responses with a rate of 56.45% were received back. The respondents were
registered contractors firm under corporate affairs commission of Bauchi state.

4.2.1. Respondents’ Personal Information

After ensuring that the obtained responses are reliable, the data is ready to be processed.
The first section of the questionnaire asked for the participants‟ details, such as the participants‟
name and contact information in case it was necessary to get in touch with them in future. This
was followed by questions about the respondents‟ professional experience, and was divided
based on the Civil Service Commission (CSC) regulation of the professional: consultant (17
years‟ experience and above), specialist (9-17 years‟ experience), engineers and other
professionals (3-8 years‟ experience), and trainee (0-2 years‟ experience) (CSC, 2001). Table 4.2
shows the breakdown of participants based on their years of experience.

Bauchi State
Years of work experience Frequency Percentage of valid returns
17 + 7 21.3%
9-16 10 27.7%
3-8 14 40.4%
0-2 4 10.6%
Total 35 100%

Bauchi State results shows that majority (40.4%) of the respondent had working
experience of 3 to 8 years in construction industry while 10.6% of the respondents had working
experience of 0 to 2 years. 27.7% of the respondents had working experience of 9 to 16 and
21.3% of the respondent had a working experience of more than 17 years.

43
4.3. The Relative Importance Index (RII) Of Factors within Categories - Bauchi State

The fifty-five risk factors (RF) were coded with reference letters to simplify the
presentation and reading of the results. The following category tables show the coding of the risk
factors (RF).

Table 4.3 Risk factors (RF) with assigned reference letters

Management-related RF Reference Letter
Q01 - Decision making process M01
Q02 - Communication and coordination between parties(clients, M02
consultants and contractors)
Q03 - Unclear responsibility M03
Q04 - Availability of capable representatives M04
Q05 - Postponement of work (held orders) M05
Q06 - Issuance of instructions M06
Q07 - Availability of project management team members (experience) M07
Q08 - Information dissemination M08
Q09 - Site mobilization and delay in site handover M09
Q10 – Contractor’s experience M10
Q11 - Availability of competent subcontractors / suppliers M11
Q12 - Rework due to errors during construction M12
Q13 - Availability of disputes and claims – comprehensive dispute M13
resolution
Q14 - Conflicts in subcontractor’s schedule in execution of project M14
Q15 - Delays in subcontractor’s work M15
Q16 - Unsatisfactory work of contractor M16
Q17 - Delay in approving major changes in the scope of the work M17
Q18 - Long wait for approval of tests and inspection M18
Q19 - Quality assurance / control M19
Q20 - Excessive use of contractors / subcontractors M20

44
Q21 - Unreasonable risk allocation M21
Q22 - Frequent change of subcontractors because of their inefficient M22
work
Q23 – Revising / approving design documents, shop drawings and M23
sample materials
Design -related RF
Q24 - Design team experience D01
Q25 - Complexity of project design D02
Q26 - Confusing requirements D03
Q27 - Design modifications D04
Q28 - Data collection and survey before design D05
Q29 - Complete documents and drawings of projects D06
Q30 - Producing design modification documents D07
Q31 - Clarity of details in drawings D08
Q32 - Excessive change order D09
Finance-related RF
Q33 - Payment for completed work F01
Q34 - Financing project by contractor /client F02
Q35 - Cash flow plan analysis F03
Q36 - Cost estimation accuracy F04
Material-related RF
Q37 - Quality of materials (below standard) MAT01
Q38 - Availability of construction materials in market MAT02
Q39 - Change in material types and specifications during construction MAT03
Q40 - Material delivery MAT04
Q41 - Manufacturing of special building materials MAT05
Q42 - Material supplier problems MAT06
Q43 - Material waste handling MAT07
Q44 - Compliance of material to specification. MAT08
L&E-related RF

45
Q45 - Labour performance / productivity L&E01
Q46 - Equipment availability L&E02
Q47 - Productivity and efficiency of equipment L&E03
Q48 - Labour and management relations L&E04
Q49 - Necessity of skills L&E05
Q50 - Labour strikes and disputes L&E06
External-related RF
Q51 - Site’s topography is changed after design EXT01
Q52 - Civil disturbances EXT02
Q53 - Problems with neighbors EXT03
Q54 - Government permits EXT04
Q55 - Changes in regulations EXT05

4.3.1. Negative Impact of Management-Related Risk Factors

Question one of the questionnaire was intended to assess the negative impact of
Management-related risk factors (RF) on project completion. Twenty-three risk factors (RF)
were presented to evaluate respondents‟ points of view on the impact of these factors. The
responses to the negative impact of these factors are demonstrated as a percentage in figure 4.1.

EXTENSIVE NO EFFECT
8% 6%
SIGNIFICANT
22%
NO EFFECT
MINIMAL
31% MINIMAL
MODERATE
MODERATE
33% SIGNIFICANT
EXTENSIVE

Figure 4.1 Responses to the impact of Management-related RF (%) – Bauchi State.

46
 Figure 4.1 indicates that the majority of the surveyed sample, 30% (22+8%), believe that
the related risk factors to the management category have significant to extensive impact on
projects completion. On the other hand, 37% (31%+6%) of the surveyed sample believe it has
minimal to no effect negative impact. The remaining percentage of 33% considered the
Management-related risk factors have a moderate impact on project completion.
Table 4.4 below shows the participants‟ overall responses to the impact of the Management-
related risk factors (RF), the respective percentage of their responses, and their rankings based on
the RII scores.

Table 4.4 Management – related RF. Ranking and responses percentage – Bauchi State
Negative Impact Level
Management 0% 25% 50% 75% 100% RII Rank
RF
M01 7 4 6 13 5 62.86 4
M02 9 4 4 10 8 62.29 5
M03 10 4 10 4 7 56.57 18
M04 9 7 8 7 4 54.29 22
M05 10 5 3 8 9 60.57 7
M06 7 7 6 10 5 59.43 10
M07 9 6 4 11 5 58.29 15
M08 8 10 6 2 9 56.57 18
M09 8 8 8 5 6 56 20
M10 4 10 4 11 6 62.87 3
M11 6 10 8 7 4 56 20
M12 7 9 6 7 6 57.71 16
M13 7 4 10 9 5 60.57 6
M14 6 11 4 7 7 58.86 11
M15 9 5 8 6 7 58.30 14
M16 8 6 7 6 8 60 8
M17 4 7 9 8 7 64 2
M18 5 7 10 9 4 60 8
M19 7 5 12 8 3 57.14 17
M20 15 4 5 3 8 51.43 23
M21 12 5 9 1 8 53.14 22
M22 6 10 4 10 5 58.85 13
M23 6 8 3 6 12 65.71 1

47
 As demonstrated in table 4.4, the highest risk factor is M23 – „Revising / approving design
documents, shop drawings and sample materials‟ – with an RII score of 65.71, and the lowest
factor is M20 – „Excessive contractors / subcontractors‟ – with an RII score of 51.43.
The leading five management-related risk factors (RF) that have a negative impact on
project completion in construction projects in Bauchi state are:
 Revising / approving design documents, shop drawings and sample materials.
 Delay in approving major changes in the scope of the work.
 Contractor‟s experience
 Decision-making process
 Communication and coordination between parties (clients, consultants and contractors)

4.3.2. Negative Impact of Design-Related Risk Factors

Question two of the questionnaire was intended to assess the negative impact of Design-
related risk factors on project completion. Nine risk factors were presented to evaluate
respondents‟ points of view on the impact of these factors.
Figure 4.2 illustrates participants‟ responses to the negative impact of Design-related risk
factors (RF) by percentage.

EXTENSIVE NO EFFECT
5% MINIMAL
SIGNIFICANT 12%
28%
22%
NO EFFECT
MINIMAL
MODERATE
MODERATE
33% SIGNIFICANT
EXTENSIVE

Figure 4.2 Responses to the impact of Design-related RF (%) – Bauchi State

48
 Figure 4.2 show that 34% (22% + 12%) of the surveyed sample believe that design-related
factors have a significant or extensive negative impact on project completion. On the other hand,
33% (28% + 5%) consider that the negative impact is minimal to none, and the remaining 33%
believe that design-related RF have a moderate effect on project completion.
Table 4.5 presents the percentage of responses to the impact of design-related RF on project
completion. Mean scores and RII values were used to rank the Risk Factors (RF).

Table 4.5 Design – related RF. ranking and responses percentage - Bauchi State
Negative Impact Level
Design RF RII Rank
0% 25% 50% 75% 100% 62.28 4
D01 5 8 9 4 9 62.28 4
D02 7 6 13 3 6 57.14 8
D03 7 6 13 3 6 57.13 9
D04 4 7 8 13 3 62.29 3
D05 3 4 13 11 4 65.14 1
D06 5 5 7 13 5 64.57 2
D07 4 9 8 11 3 60 7
D08 6 4 9 14 2 61.12 6
D09 6 4 9 14 2 61.16 5

Table 4.5 shows the ranking of the Design-related RF. The highest risk factor is D05 –
„Data collection and survey before design‟ – with an RII score of 65.14 and the lowest is D03 –
„Confusing requirements‟ – with an RII score of 57.13.
The leading Design-related risk factors (RF) that have a negative impact on project completion in
construction projects in Bauchi State are:
 Data collection and survey before design
 Complete documents and drawings of projects.
 Design modifications.
 Design team experience.
 Excessive change order

49
4.3.3. Negative Impact of Finance-Related Risk Factors

Question three in the questionnaire dealt with finance-related RF and consisted of four risk
factors that were presented to the participants in order to measure their responses.
Figure 4.3 (below) illustrates the participants‟ responses to the negative impact of finance-
related RF by percentage.

EXTENSIVE NO EFFECT MINIMAL

SIGNIFICANT 12% 7%
24%
22%
NO EFFECT
MINIMAL
MODERATE
MODERATE
35% SIGNIFICANT
EXTENSIVE

Figure 4.3 Responses to the impact of Finance-related RF (%) – Bauchi State

Figure 4.3 indicates that that 34% (22% + 12%) of the surveyed sample believe that design-
related factors have a significant or extensive impact on project completion. On the other hand,
31% (24% + 7%) consider that their impact is minimal to none, and the remaining 35% believe
that design-related RF have a moderate impact on project completion.
Table 4.6 presents the percentage of responses to the impact of finance-related RF on
project completion. Mean scores were used to rank the risk factors.

Table 4.6 Finance –related RF. Ranking and responses percentage – Bauchi State
Negative Impact Level
Finance RF 0% 25% 50% 75% 100% RII Rank

F01 3 14 6 7 5 58.29 4

50
 F02 8 5 3 13 6 62.29 2
F03 9 5 7 7 7 58.86 3
F04 6 7 4 6 12 66.29 1

As can be seen from the table above, F04 – „Cost estimation accuracy‟ – has the highest
impact with an RII score of 66.29, and F01 – „Payment for completed work‟ – has the lowest
impact on project completion with an RII score of 58.29.
The Finance-related risk factors (RF) were arranged in descending order, as follows:
 Cost estimation accuracy.
 Financing project by contractor/client
 Cash flow plan analysis
 Payment for completed work

4.3.4. Negative Impact of Material-Related Risk Factors

Question four in the questionnaire examined the views of the representative sample on the
negative impact of Material-related risk factors (RF). Figure 4.4 (below) illustrates the
participants‟ responses by percentage.

EXTENSIVE NO EFFECT
11% 8%
SIGNIFICANT
20%
NO EFFECT
MINIMAL
MINIMAL
30%
MODERATE
MODERATE
31% SIGNIFICANT
EXTENSIVE

Figure 4.4 Responses to the impact of Material-related RF (%) – Bauchi State

51
 Figure 4.4 show that 31% (20% + 11%) of the surveyed sample believe that material-related
factors have a significant or extensive negative impact on project completion. On the other hand,
38% (30% + 8%) consider that the negative impact is minimal or none and the remaining 31%
believe that Material-related risk factors (RF) have a moderate effect on project completion.
Table 4.7 presents the ranking of the material - related factors, RII scores and the responses
percentage for each factor.

Table 4.7 Material – related RF. Ranking and responses percentage – Bauchi State
Negative Impact Level.
Material RF 0% 25% 50% 75% 100% RII Rank

MAT01 10 5 8 2 10 58.29 6
MAT02 6 4 12 6 7 62.29 2
MAT03 5 6 10 11 3 60.57 5
MAT04 6 7 5 7 10 64.57 1
MAT05 4 8 12 4 7 61.12 4
MAT06 7 5 6 13 4 61.14 3
MAT07 16 4 5 8 2 46.29 8
MAT08 4 12 7 7 5 58.29 6

The factor with the highest negative impact in the Material-related category is MAT04 –
„Material delivery‟ – with an RII score of 64.57, and the lowest is MAT07 – „Material waste
handling‟ – with an RII score of 46.29. The leading five Material-related risk factors (RF) are:
 Material delivery.
 Availability of construction materials in market.
 Material supplier problems.
 Manufacturing special building materials.
 Change in material types and specifications during construction.

52
4.3.5. Negative Impact of Labour and Equipment-Related Risk Factors

Question five of the questionnaire dealt with labour and equipment-related (L&E) RF. This
category contains six risk factors. Figure 4.5 (below) illustrates the responses to the negative
impact of labour and equipment-related (L&E) to project completion as a percentage.

EXTENSIVE NO EFFECT
10% 10%
SIGNIFICANT
17%
NO EFFECT
MINIMAL MINIMAL
30%
MODERATE
MODERATE
33% SIGNIFICANT
EXTENSIVE

Figure 4.5 Responses to the impact of L&E-related RF (%) – Bauchi State

It can be seen from the data in figure 4.5 that 27% (17% + 10%) of the surveyed sample
believe that L&E-related risk factors have an extensive or significant negative impact on project
completion. On the other hand, 40% (30% + 10%) of the respondents consider that their effect is
minimal to none, and the remaining 33% believe that L&E-related RF had a moderate negative
impact on the completion of projects.

Table 4.8 illustrates the rank of L&E-related factors, RII scores and responses percentage
for each factor.

Table 4.8 L&E – related RF. Ranking and responses percentage – Bauchi State
Negative Impact Level
L&E RF 0% 25% 50% 75% 100% RII Rank

53
 L&E01 5 8 11 6 5 58.86 2
L&E02 5 12 4 9 5 58.29 3
L&E03 6 9 6 11 3 57.71 4
L&E04 8 7 7 9 4 56.57 5
L&E05 7 2 16 6 4 58.89 1
L&E06 6 14 6 2 7 54.29 6

Table 4.8 reveals that that the leading negative factor in the L&E category is L&E05 –
„Necessity of skills‟ – with an RII score of 58.89, and the factor with the lowest negative impact
on the completion of projects is L&E06 – „Labour strikes and disputes‟ – with an RII score of
54.29.
According to table 4.8, the leading Labour and equipment (L&E) - related risk factors (RF)
are:
 Necessity of skills.
 Labour performance / productivity.
 Equipment availability.
 Productivity and efficiency of equipment.
 Labour and management relations.

4.3.6. Negative Impact of External-Related Risk Factors

Question six in the questionnaire was intended to measure the negative impact of External–
related risk factors (RF) on project completion from the participants‟ point of view. Figure 4.6
(below) shows the responses to external RF impact on projects as a percentage.

54
 EXTENSIVE NO EFFECT
11% 13%
SIGNIFICANT
19%
NO EFFECT

MINIMAL MINIMAL
28% MODERATE
MODERATE
29% SIGNIFICANT
EXTENSIVE

Figure 4.6 Responses to the impact of External-related RF (%) – Bauchi State

As illustrated in figure 4.6, 30% (19% + 11%) of the participants believe that external risk
factors have a significant or extensive negative impact. However, 41% (13% + 28%) feel that
their effect is minimal to none, and the remaining 29% believe that external risk factors have a
moderate negative impact.
Table 4.9 (below) shows the responses percentage to the five External-related risk factors
(RF), with their rankings based on the RII scores.

Table 4.9 External – related RF. Ranking and responses percentage – Bauchi State
Negative Impact Level
External RF RII Rank
0% 25% 50% 75% 100%
EXT01 5 7 7 10 6 62.86 1
EXT02 9 6 11 7 2 52.57 4
EXT03 11 8 6 7 3 50.29 5
EXT04 6 8 8 8 5 58.86 3
EXT05 10 5 4 8 8 59.43 2

55
 As mentioned as aforesaid, external – related risk factors were ranked as having the lowest
impact amongst all the categories. However, the impact of the factors within the category itself is
ranked in table 4.9. The leading External-related risk factors (RF) are:
 Site‟s topography is changed after design.
 Changes in regulations.
 Government permits.
 Civil disturbances.
 Problems with neighbors.

4.4. Bauchi State- Overall Rankings and Responsibilities

The overall survey results for Bauchi State rankings are shown below in table 4.10.

Table 4.10 Bauchi State ranking

Reference RII Rank Reference RII Rank
Letter Letter
M01 62.86 8 D06 64.57 4
M02 62.29 10 D07 60.00 22
M03 56.57 44 D08 61.12 17
M04 54.29 49 D09 61.16 15
M05 60.57 20 F01 58.29 34
M06 59.43 25 F02 62.29 10
M07 58.29 34 F03 58.86 28
M08 56.57 44 F04 66.29 1
M09 56 47 MAT01 58.29 34
M10 62.87 7 MAT02 62.29 10
M11 56 47 MAT03 60.57 20
M12 57.71 39 MAT04 64.57 4
M13 60.58 19 MAT05 61.12 17
M14 58.86 28 MAT06 61.14 16
M15 58.30 33 MAT07 46.29 55
M16 60.00 22 MAT08 58.29 34
M17 64.00 6 L&E01 58.86 28
M18 60.00 22 L&E02 58.29 34
M19 57.14 41 L&E03 57.71 39

56
 M20 51.43 53 L&E04 56.57 44
M21 53.14 51 L&E05 58.89 27
M22 58.86 28 L&E06 54.29 49
M23 65.71 2 EXT01 62.86 8
D01 62.28 14 EXT02 52.57 52
D02 57.14 41 EXT03 50.29 54
D03 57.13 43 EXT04 58.86 28
D04 62.29 10 EXT05 59.43 25
D05 65.14 3

Table 4.10 shows the overall rankings for the negative impact of each of the fifty-five risk
factors (RF) based on the relative importance index (RII) scores.
The leading five risk factors (RF) in the Bauchi State construction environment are:
 Cost estimation accuracy;
 Revising / approving design documents, shop drawings and sample materials;
 Data collection and survey before design;
 Material delivery; & complete documents and drawings of projects.
Table 4.11 (below) shows the leading risk factors (RF) in the Bauchi State construction
environment with their rankings based on RII scores.

Table 4.11 Leading RF in Bauchi State

Reference Letter RII Rank
F04 66.21 1
M23 65.71 2
D05 65.14 3
MAT04 & D06 64.57 4
M17 64.00 6

4.5. Bauchi State Ranking of Categories

Figure 4.7 shows the Relative Importance Index (RII) of the participants‟ responses to the
negative impact of each category on project completion in Bauchi.

57
 Table 4.12 Categories ranking based on mean scores-Bauchi State
RF Categories RII Rank
Finance 61.43 1
Design 61.21 2
Material 59.07 3
Management 58.76 4
Labour and equipment 57.43 5
External 56.80 6

As can be seen, Finance-related risk factors have the highest negative impact on project
completion (61.43) and External- related risk factors have the lowest (56.80). Table 4.12, shows
the ranking of Risk Factors categories by their negative impact on project completion.

4.6. Bauchi State Category Correlations

The spearman rank correlation coefficient (r) test was applied to carry out an in-depth
investigation into the correlations between risk categories in the Bauchi State construction
environment. Since the formula is used to calculate the relationship between two categories, the
categories were organized using the idea of experimental probability as illustrated below.

Table 4.13 shows a table used for correlation of risk factors

RC M D F MAT L&E EXT
M M.M M.D M.F M.MAT M.L&E M.EXT
D D.M D.D D.F D.MAT D.L&E D.EXT
F F.M F.D F.F F.MAT F.L&E F.EXT
MAT MAT.M MAT.D MAT.F MAT.MAT MAT.L&E MAT.EXT
L&E L&E.M L&E.D L&E.F L&E.MAT L&E. L&E L&E.EXT
EXT EXT.M EXT.D EXT.F EXT.MAT EXT.L&E EXT. EXT.

Figure 4.8 (below) illustrates the correlation between categories. As mentioned in section
(3.10.7), the strength of the relationship between two categories is high if (0.5 < r <1.0).

58
 1.2

0.8

0.6
Magement
0.4 Design
Finance
0.2
Material
0 Labour & Equipt
M D F MAT L&E EXT
External
Magement 1 0.659 0.674 0.725 0.745 0.598
Design 0.659 1 0.609 0.724 0.661 0.653
Finance 0.674 0.609 1 0.559 0.673 0.581
Material 0.725 0.724 0.559 1 0.745 0.578
Labour & Equipt 0.745 0.661 0.673 0.745 1 0.654
External 0.598 0.653 0.581 0.578 0.654 1

Figure 4.8 Bauchi State- Spearman rank correlations values

Figure 4.7 indicates that the strongest correlation between all the categories is between
management and labour and equipment, and between materials and labour and equipment. The
weakest correlation is between finance and materials, but it is still considered strong as r = 0.559.

4.7 Discussion of Result

Based on findings of this study, a total of fifty-five risk factors (RF) were grouped under six
categories, namely: management, design, finance, material, labour and equipment, and external
risk factors. The leading risk factor in the Bauchi state construction environment was in the
finance category – „Cost estimation accuracy‟. 34% of the surveyed sample believes that Finance
related risk factors (RF) have a significant or extensive negative impact. A Management - related
risk factor – „Revising / approving design documents, shop drawings and sample materials‟ –
was ranked second, and 30% of the surveyed sample agree that Management - related factors

59
have a significant or extensive negative impact on project completion, two factors from the
design category „Data collection and survey before design‟ and „Complete documents and
drawings of projects‟ – were ranked third and fifth respectively. 34% of the surveyed sample
believes that Design - related risk factors have a significant or extensive negative impact on
project completion. The fourth highest risk factor – „Material delivery‟ – is in the materials
category. 31% of the surveyed sample thinks that Material - related factors have a significant or
extensive negative impact on project completion. Finally, the risk factors (RF) were grouped into
six categories. Bauchi ranked the finance category highest, followed by design, material,
management and labour and equipment. However, the external category was ranked last.
The spearman rank correlation coefficient (r) test was applied to examine the direction and
strength of the relationships between categories. The results showed a significant correlation
between all categories in Bauchi state. The strongest positive correlation in the Bauchi state data
was between management and L&E (r = 0.745) and between materials and L&E (r = 0.745). The
weakest correlation was between finance and materials (r = 0.559). The overall results show that
all correlations between categories are significant, as a correlation is considered strong when it is
between 0.5 – 1.0.

60
 CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

Base on the findings in this research the researcher finally conclude on the followings:
 The finance category has the highest negative impact on construction projects during the
construction phase.
 The external category has the lowest negative impact on construction projects during the
construction phase.
 The labour and equipment category has a strong positive correlation with the other
categories.

5.2 Recommendations

Considering all facts above discussed and identified, the cost, time and quality achievement
of the building construction projects are effected by several risk factors, which are uncontrollable
or unforeseeable by the parties to the contract at the initial stage. All those risk factors cannot be
eliminated completely and the best would be to minimize the occurrence and impact to the
project objectives by implementing proper mitigation process from initial stage with proper
coordination among parties.
Studying the relationship between categories and the correlation between risk factors (RF)
formed a solid foundation to design a standard risk management model for construction projects
in the construction phase and it can assist in decision-making about risk management for
companies interested in working in Bauchi state.
In general, the future researcher can benefit from the result of the research by launching it
as the basic foundation towards designing conceptual standard risk management model for
managing risk factors related to the building construction phase of the construction projects in
the Bauchi state, and also can be of great important for researchers and students who may want
to conduct research related to risk factors.
Based on the findings of this study, the following recommendations are made:

61
1. Identify the risks and assess their negative impact on the project and priorities them based on
the relative importance index values.
2. Identify moderate risks to minimize by taking immediate management action and identify
significant risks with extensive impact for risk management plan action.
3. Maintain good communications between construction parties (clients, consultants, and
contractors).
4. Allocating risks can minimize the impact.
5. Be certain that construction parties are aware of their responsibilities.
6. Minimize risks to contractors at the designing stage.
7. Financial assessment is significant. The result of the research shows that finance related risk
factors (cost estimation accuracy and cash flow analysis) are the leading factors that have
significant impact on construction project in Bauchi state. A special attention need to be taken.

62
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 Appendix A
Practioners semi structure interview
ABUBAKAR TAFAWA BALEWA UNIVERSITY BAUCHI

Dear Sir,
I have the pleasure to introduce myself as a undergraduate student from Quantity survey
department at Abubakar Tafawa Balewa University and currently working on a research related
to impact of risk factors on building construction project in Bauchi state.
The goal of the study is to identify the risks in building construction industry in Bauchi state,
classify them according to their nature and sources, rank them and correlate between the
categories.
The questionnaire might take 20-25 minutes to be completed. All the answers given in this form
will be held strictly confidential and will be used entirely for my research work.
Thank you very much in advance for your valuable time spent answering the attached
questionnaire.
Yours Sincerely;
Ali Abubakar Audu
0816159361
aliabubakaraudu1996@gmail.com

70
 Appendix A (1)
Evaluation of Management-related risk factors
No. Management Risk Factors Accept Adjust Reject
1 Lack of strategic management
2 Slowness in decision making process
3 Unrealistic contract duration imposed
4 Lack of capable representatives
5 poor contract management
6 Poor communication and coordination between parties
7 Improper project feasibility study
8 Inadequate review
9 Unclear responsibility
10 Lack of experience in the construction business

11 Late in revising and approving design documents

12 Delay in approving shop drawings and sample materials
13 Delay in work approval
14 Improper planning and scheduling
15 Postponement of work
16 Late issuance of instruction
17 Inadequate supervision and project management assistance.
18 Poor information dissemination
19 Slow and delay in site mobilization
20 Unavailability of incentives for contractor for finishing ahead
of schedule
21 Inadequate contractor experiences.
22 Inadequate modern equipment‟s
23 In accurate time estimation
24 In accurate cost estimation
25 Lack of competent subcontractors/suppliers
26 Improper monitoring and control
27 Incompetent project team
No. Management risk factors (cont'd) Accept Adjust Reject
28 Sever overtime
29 Inadequacy of site inspections
30 Poor site management and supervision.
31 Conflicts in sub-contractors schedule in Execution of project.
32 Lack of necessary skills
33 Inexperienced personnel
34 Insufficient number of staffs
35 Subcontractors Problems
36 Rework due to errors during construction.

71
37 Disputes and Claims (Lack of comprehensive dispute
resolution).
38 Mistake during construction
39 Improper construction methods implemented
40 Different attitude between the consultant and contractors
41 Conflicts b/w contractor and other parties (consultant and
owner).
42 Spend some time to find sub-contractors company who is
appropriate for each task.
43 Delays in sub-contractors work.
44 Inadequate contractor‟s work.
45 Poor qualification of the contractor‟s technical staff.
46 Poor Contract Management and Unrealistic Scheduling.
47 Shortage of Training.
48 Controlling decision-making mechanism

49 Long wait for approval of tests and inspection.

50 Delay in approving major changes in the scope of work.

51 Quality assurance/control.
52 Slow response
53 Lack of involvement through project life.
54 Frequent change of sub-contractors because of their
inefficient work.
55 Major disputes and negotiations during construction
56 Excessive contractors/subcontractors
57 Inappropriate type of contracts used
58 Unreasonable risk allocation
59 Mistakes and discrepancies in contract documents.
60 Inflexibility (rigidity) of consultant

Please add any comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________________________________________

72
 Appendix A (2)
Evaluation of Design-related risk factors
No. Design Risk Factors Accept Adjust Reject
61 Insufficient data collection and survey before design.
62 Design Modifications.
63 Incomplete drawing
64 Unclear and inadequate details in drawings
65 Inadequate design-team experience
66 Misunderstanding of requirements
67 Decision during Development Stage
68 Lack of standardization design
69 Impractical design.
70 Changes in Drawings
71 Confusing requirements
72 Excessive change order
73 Change orders during construction
74 Incomplete Documents
75 Changes in Specifications
76 Variation orders
77 Delays in producing design documents.
78 Complexity of project design.
Please add any comments:
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________________:__________________
______________________________________________________________________________
___________________________________________

73
 Appendix A (3)
Evaluation of Finance -related risk factors
No. Finance Risk Factors Accept Adjust Reject
79 Financial difficulties
80 payment of competed work
81 Delay in progress payments
82 Difficulties in financing project by
contractor/clients
83 Timing of availability funds does not match cash
flow forecast
84 Labour cost is higher than predicted
85 Incomplete cost plan
86 Inflation
87 Delay payments of completed work
88 Slow payment by owners due to dispute
89 Financial problems due to errors in estimating
90 Loss due to default of contractor, subcontractor,
supplier or owner
91 Material cost is higher than predicted

Please add any comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________

74
 Appendix A (4)
Evaluation of Material-related risk factors
No. Material Risk Factors Accept Adjust Reject
92 Quality of material (Below standard)
93 Material damage during transportation
94 Material damage during storage
95 Material procurement (escalation of material prices).
96 Shortage of construction materials in market.
97 Changes in material types and specifications during
construction.
98 Delay in material delivery
99 Delay in manufacturing special building materials
100 Noncompliance of material to specification
101 Materials suppliers problems
102 Proposed material are not proved
103 Material waste
104 Late in selection of finishing material due to availability of
many types in the market.

Please add any comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________

75
 Appendix A (5)
Evaluation of Labour and equipment-related risk factors
No Labour and Equipment Risk Factors Accept Adjust Reject
105 Lack of skilled labour
106 Lack of labour
107 Labour low productivity
108 Frequent job change by skilled labour
109 Unable to understand drawings
110 Strike and labour disputes
111 Lack of high-technology mechanical equipment.(insufficient
technology)
112 Inadequate, Inappropriate and old equipment
113 Need to import from another country
114 Equipment Breakdown
115 High maintenance cost
116 Unavailability of spare parts or cost is high
117 Poor technical performances
118 Low productivity and efficiency of equipment.
119 Equipment availability (Shortage of equipment).

Please add any comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________________________________________________________

76
 Appendix A (6)
Evaluation of External-related risk factors
No. External Risk Factors Accept Adjust Reject
120 Site‟s topography is changed after design
121 Changes in regulations
122 Labour dispute and strikes
123 Civil disturbances
124 Problems with neighbours
125 Regulations and Laws of Municipality
126 Building Permits Approval
127 Slow government permits
128 Site conditions

Please add any comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________

77
 Appendix A (7)
Identification and Categorization of risk factors
Management Factors
1 - Decision making process
2 - Communication and coordination between parties (clients, consultants and contractors)
3 - Unclear responsibility
4 - Availability of capable representatives
5 - Postponement of work (held orders)
6 - Issuance of instructions
7 - Availability of project management team members (experience)
8 - Information dissemination
9 - Site mobilisation and delay in site handover
10 – Contractor‟s experience
11 - Availability of competent subcontractors / suppliers
12 - Rework due to errors during construction
13 - Availability of disputes and claims – comprehensive dispute resolution
14 - Conflicts in subcontractor‟s schedule in execution of project
15 - Delays in subcontractor‟s work
16 - Unsatisfactory work of contractor
Q17 - Delay in approving major changes in the scope of the work
18 - Long wait for approval of tests and inspection
19 - Quality assurance / control
20 - Excessive use of contractors / subcontractors
21 - Unreasonable risk allocation
22 - Frequent change of subcontractors because of their inefficient work
23 – Revising / approving design documents, shop drawings and sample materials

78
 Design Factors
24 - Design team experience
25 - Complexity of project design
26 - Confusing requirements
27 - Design modifications
28 - Data collection and survey before design
29 - Complete documents and drawings of projects
30 - Producing design modification documents
31 - Clarity of details in drawings
32 - Excessive change order
Finance Factors
33 - Payment for completed work
34 - Financing project by contractor /client
35 - Cash flow plan analysis
36 - Cost estimation accuracy
Material factors
37 - Quality of materials (below standard)
38 - Availability of construction materials in market
39 - Change in material types and specifications during construction
40 - Material delivery
41 - Manufacturing of special building materials
42 - Material supplier problems
43 - Material waste handling
44 - Compliance of material to specification.
Labours & Equipment’s
45 - Labour performance / productivity
46 - Equipment availability
47 - Productivity and efficiency of equipment
48 - Labour and management relations
49 - Necessity of skills

79
50 - Labour strikes and disputes External Factors
51 - Site‟s topography is changed after design
52 - Civil disturbances
53 - Problems with neighbours
54 - Government permits
55 - Changes in regulations

80
 Appendix B
Questionnaire
ABUBAKAR TAFAWA BALEWA UNIVERSITY BAUCHI

Dear Sir/Madam,
One of the partial requirements for the Degree in Quantity Survey in Abubakar Tafawa Balewa
University Bauchi is to complete my research on investigating the construction environment
specifically on risks associated to Building construction projects in Bauchi State, for which I am
carrying out a field study related to the subject.
The work includes a field survey to be filled for a selected number of companies/firms. Your
company/firms have been chosen, among others, based on a scientific preference adopted in the
research methodology.
The purpose of this survey is to identify the negative impact level of each potential risk factor
from your point of view.
The collected data and information through this questionnaire will represent one of the main
sources for my research work and its finding. Your response, therefore, is highly appreciated.
Data given in this questionnaire will be treated with the utmost confidentiality. It will be
recorded for statistical purposes and will be used for scientific research only. The questionnaire
will take not more than 20 minutes and your input will be a valuable contribution towards this
research. Please feel free to contact me if you need any clarification or to request that the survey
be collected.
Thank you very much in advance.
Yours Sincerely
Ali Abubakar Audu
08161593613
aliabubakaraudu1996@gmail.com

81
Section I: Personal information
This questionnaire is intended to collect information from construction contractors on Impact of
Risk Factors on Building Construction project in Bauchi State.
Everything you tell us will remain completely private and confidential.
Please select the appropriate option by ticking)) √ the right box.
Name Respondent (Optional): ..................................................................................................
Name of Construction Firm/Company: .................................................................................
Location of the Firm: ....................................................................................................
E-mail: ....................................................................................................
Gender: Male Female
Profession:
Architect
Quantity Survey
Builder
Project Manager
Other Specify..................................................................................
Years of Experience:
17 years and above 9–7 3-8 0-2 Others specify..........
Academic Qualification:
Mtec./MSc. Btech/Bsc. H.nd Other specify......................

82
1- The purpose of this part is to identify management related risk factors impact on the project
completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box. The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

Management Factors 1 2 3 4 5
1 - Decision making process
2 - Communication and coordination between parties
(clients, consultants and contractors)
3 - Unclear responsibility
4 - Availability of capable representatives
5 - Postponement of work (held orders)
6 - Issuance of instructions
7 - Availability of project management team members
(experience)
8 - Information dissemination
9 - Site mobilisation and delay in site handover
10 – Contractor‟s experience
11 - Availability of competent subcontractors / suppliers
12 - Rework due to errors during construction
13 - Availability of disputes and claims – comprehensive
dispute resolution
14 - Conflicts in subcontractor‟s schedule in execution of
project
15 - Delays in subcontractor‟s work
16 - Unsatisfactory work of contractor
Q17 - Delay in approving major changes in the scope of the
work
18 - Long wait for approval of tests and inspection
19 - Quality assurance / control
20 - Excessive use of contractors / subcontractors
21 - Unreasonable risk allocation
22 - Frequent change of subcontractors because of their
inefficient work

83
23 – Revising / approving design documents, shop drawings
and sample materials

84
2- The purpose of this part is to identify Design -related Risk factors impact on the project
completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box.
The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

Design Factors 1 2 3 4 5
24 - Design team experience
25 - Complexity of project design
26 - Confusing requirements
27 - Design modifications
28 - Data collection and survey before design
29 - Complete documents and drawings of projects
30 - Producing design modification documents
31 - Clarity of details in drawings
32 - Excessive change order

85
3- The purpose of this part is to identify Finance-related risk factors impact on the project
completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box.
The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

Finance Factors 1 2 3 4 5
33 - Payment for completed work
34 - Financing project by contractor /client
35 - Cash flow plan analysis
36 - Cost estimation accuracy

86
4- The purpose of this part is to identify Material-related risk factors impact on the project
completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box.
The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

Material factors 1 2 3 4 5
37 - Quality of materials (below standard)
38 - Availability of construction materials in market
39 - Change in material types and specifications during
construction
40 - Material delivery
41 - Manufacturing of special building materials
42 - Material supplier problems
43 - Material waste handling
44 - Compliance of material to specification.

87
5- The purpose of this part is to identify Labours & Equipment‟s -related factors impact on the
project completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box.
The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

Labours & Equipment’s 1 2 3 4 5

45 - Labour performance / productivity
46 - Equipment availability
47 - Productivity and efficiency of equipment
48 - Labour and management relations
49 - Necessity of skills
50 - Labour strikes and disputes

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6- The purpose of this part is to identify External-related risk factors impact on the project
completion.
Please select the appropriate impact level of each risk factor from your viewpoint by tick scale))
√ the right box.
The negative impact scale
1 2 3 4 5

0% 25% 50% 75% 100%

No effect Minimum Moderate Significant Extensive

External Factors 1 2 3 4 5
51 - Site‟s topography is changed after design
52 - Civil disturbances
53 - Problems with neighbors
54 - Government permits
55 - Changes in regulations

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