Management of Risk Involved in Construction Sector

Abstract

The major requirement of every construction project is meeting client’s need of cost, quality and time. However, the construction industry is flooded with risks more than any other industry due to the fact that they are present in every activity from design to completion. These risks need to be controlled early or else face the possibility of cost overruns, time delays and poor-quality work etc., leading to displeasure of client and public. Although risk management in construction projects is a very important issue in terms of the firms operating in the construction sector, it has not yet gained clarity and prevalence in our country. Within the scope of this research, the aim of this research is to introduce the risk management system as a concept and to classify the risk in construction projects and to demonstrate the risk management techniques. Risk management system is a cyclic process. In the monitoring and control phase of applied risk responding strategies, some of the risks will be eliminated or reduced, some of unforeseen risks will appear and analysis steps will be realized again. At the end of the project, determination of to what degree project aims and targets have been reached and documentation of risk management system after evaluation regarding to the project will enable the company to use project risk management system more effectively and usefully in the projects undertaken later. Therefore, it is highly important for our country’s firms in construction industry to give necessary significance to project risk management idea and system and to consider them as a basic function of the projects for permanence of their enterprise existence.