Critical Risk Factors of Construction Industry of Pakistan for Improving Project Outcome

The aim of this paper is to identify various risk factors faced by construction industry during execution phase of the project. Relevant published literature was studied for the identification of the risk factors and professionals from the local construction industry of Pakistan were asked to rank these risk factors as per their impact on the local projects. Qualitative risk analysis was conducted using the RII (Relative Importance Index) scores and risk scores were calculated. To improve the quality of construction key risk factors highly influencing the local construction industry of Pakistan were identified. Amongst these factors, Construction delays due to unforeseen impediments, payment delays from Client and unreasonable and inflexible decisions were the crest causes highly influencing the project outcome. The top ten risks faced at projects in Pakistan were listed, discussed and conclusions were drawn.


INTRODUCTION
C onstruction industry not only helps in improving the life style of a country by providing better infrastructure and other facilities but also plays a key responsibility in its development [1] and boosting its GDP (Gross Domestic Product) [2]. Construction projects are unique in nature and every project differs from the other in terms of complexity, design, location, stakeholders, size, etc. [3]. Construction industry is facing many problems [4]. Dynamic nature of projects [5] and their enhancing complications have highly stressed the construction industry due to involvement of extensive risk factors and these numerous risk factors if not properly identified and managed can even cause project failure [6]. Construction risks directly hamper the progress of the project and highly influence the project objectives that include budget, schedule, scope, quality, safety, sustainability and stakeholder satisfaction [7]. Of all the negative effects these risk factors have on a construction project, cost and time overruns are the most common [8].
The probability of cost and time overruns in a construction project is far greater [9] and is ranked as the most severe problem in construction industry globally [10][11]. Taking in account all the risk factors construction industry is exposed to, project risk management has been identified as an essential tool to help improve the performance of the project [6]. Risk identification and its assessment itself is a critical task and if done properly can ensure the success of any construction project [12].
After identification and understanding of the risk factors responsible for affecting project objectives and causing overruns, stakeholders can prepare better plans and have contingency amount figured out and included in the cost estimates to ensure success of the project [13]. Project Managers can improve the quality of construction by planning the project with the knowledge of key risk factors in advance.

Risk Management
In a broader aspect risk can be defined as the probability of an occurrence during the project which can affect its goals and this effect is not necessarily always negative [14]. Risks can be both opportunity and threat but most of the times risks hamper the projects in a negative way therefore only negative side of risk is given significance [15]. Risk management is a key aspect of a good project management plan [16] and in any project the most difficult task is the risk identification and its prioritization [17].
Risk management is a process that starts at the project initiation and ends at project closure and constitutes of identification and evaluation of risk factors, their mitigation and control for success of project [18].

Risk Management in Construction Industry
The number of stakeholders in a construction project is relatively higher than other industries; these stakeholders include the government, government approval agencies, owners, investors, design consultants, supervision consultants, contractors, suppliers, sub-contractors, local manufacturers and the general public being the end user.
Due to involvement of different bodies and some uncertain/unforeseen conditions and constraints construction projects are always prone to risks [23]. Lately, the research work done on risk management in construction field has significantly grown as it is now naturally believed that the projects inherit substantial amount of risks because of the numerous stakeholders involved [24]. In broader aspect, the two major stake holders having the maximum risk exposure are the contractors and the clients [25] and both the parties have their own traditional methods to cover up for these risk factors [26]. Despite of all the research being done on risk management in construction industry, only limited methods are practiced amongst which risk identification is the most commonly used method which is followed by qualitative analysis and quantitative analysis techniques [27]. Quantitative techniques are not very common as they require high quality of data and detailed information which at times is not available or easily understandable in construction projects [28] therefore, no substantial work is done after the identification of potential risk factors [29].
Moreover, in recent years the traditional risk management technique has been integrated with other industry project monitoring tools like earned value analysis to address its limitations and provide project managers with better and realistic results [30]. For instance, Narbaev and De Marco [31] proposed a framework model using s-curves for better cost forecasting using contingency management and De Marco et. al. [32] worked on forecasting nonlinear cost estimates at completion adjusted with risk contingency.
The risk factors can badly hamper the project objectives and cause overruns of both time and cost [3]. At times these risk factors can even result in complete project failure [33]. Taking in account the severity of the risks construction projects are exposed to project risk management is a vital tool and can facilitate and improve decision making [34].

RESEARCH METHODOLOGY
To Where W is the weightage ranging from very low (1) to very high (5) The responses were collected and reliability of data was checked using Cronbach Alpha test. To find the risk score of the identified risk factors the RII scores of probability and impact were multiplied and their risk score was obtained. The risk score was used to rank the identified risk factors and the top ten factors affecting the project objectives were identified and discussed.  (i) Construction delays due to unexpected obstructions.

RESULTS, ANALYSIS AND DISCUSSION
(ii) Payment delays due to client's poor and uncertain financial management.
(iv) Rework and losses due to poor planning and execution.
(v) Uncoordinated variation in project deliverables.
(vi) Conflicts, disputes and litigation between stakeholders.
(vii) Abnormal weather and climatic conditions. As Pakistani economy is weak and major fluctuation is commonly observed which results in price inflation and changes in prices of construction commodities especially bitumen, cement and steel which is a major chunk of construction projects therefore making price inflation as a critical risk factor in Pakistani industry.

CONCLUSIONS
Construction industry of Pakistan is full of uncertainties and this research has helped in ranking some key risks faced by majority of the projects being executed locally.
The results indicate that delay in construction due to This research is limited to the qualitative risk analysis as quantitative analysis of all risk factors is a difficult task.
The key purpose of this research was to identify and highlight key risk factors having major influence on the local construction industry to help Project Managers have beforehand knowledge of key risk factors of construction projects and decide regarding the response planning of these highlighted risk factors. Furthermore, it is up to the Project Manager to decide whether to do the quantitative analysis of the critical risk factors or the mitigation strategies to be adopted to avoid these risk factors.

FUTURE WORK
In the future research, it is suggested that RII scores for various construction types can be calculated to explore further avenues for improving project outcomes. However, it is further recommended that other countries may also apply this study as a reference document for their construction industry. Moreover, this study can be taken as a benchmark for country -comparative analysis.