THE SIGNIFICANT RISKS IN SMALL SCALE CONSTRUCTION PROJECTS

Nur Sharkila Binti Muhammad Shukri1, Kong Sio Kah2, Yong Yoong Kee3

1-3INTI International University

1nursharkila_88@yahoo.com

2siokah.kong@newinti.edu.my

3yoongkee.yong@newinti.edu.my

 

ABSTRACT 

Construction risks are the major consideration for planning and execution of construction projects. The risks management is crucial for project success. Every construction project is unique thus the risks exist are different from one another. Construction industry plays important role in economic growth of the country and the failure of which in dealing with the risks will slow down the growth of the economy. The industry is fragmented with numerous small scale projects thus it is imperative to identify the significant risks in small scale projects. This is to ensure effective management of the risks which is crucial for better economic growth. This study identifies the significant risks in small scale construction projects based on contractors’ perspectives. The literature review reveals that there are various risks exist in the industry such as the risks due to human factor (clients, design team, contractors, sub-contractors and suppliers), physical aspects, economic factor, law and political issues as well as environmental concerns. Questionnaires were sent to thirty one (31) contractors and sub-contractors of small scale projects to collect views on the topic. The research findings discovered that the most significant risks are human factors. Such risks include delay in progress payments by the clients (Likert Scale Mean Score 4.9), insufficient information from designers (Likert Scale Mean Score 4.71), incompetent contractors (Likert Scale Mean Score 4.48), unsafe work practice by subcontractors (Likert Scale Mean Score 3.9) and poor building materials supplied by suppliers (Likert Scale Mean Score 3.77). The next significant risk is the physical aspect mainly shortage of building materials in the industry (Likert Scale Mean Score 3.74). It is followed by the risks of economy such as increase in taxation and import duty (Likert Scale Mean Score 3.68) followed by the risk due to law and political issue (Likert Scale Mean Score 3.68). The least significant risk stems from environmental issue such as ecological damage (Likert Scale Mean Score 1.77).

Vol.1, 2016 (9)