Implementing risk assessment and management practices by construction firms

NicholasChileshe
Dr Nicholas Chileshe is affiliated to the School of Natural and Built Environments, University of South Australia, City East Campus, Adelaide, South Australia 5001, Australia

Perception of barriers to implementing risk assessment and management practices by construction professionals in Tanzania

By Dr. Nicholas Chileshe and Dr. Geraldine John Kikwasi; 

Risks in undertaking construction projects include those from internal and those from external environments. The identification of the risks as is their management is critical to successful implementation of infrastructure projects. Successful implementation of f construction organizations risk management and assessment practices largely termed as RAMP by construction organizations can help them implement necessary strategies to mitigating the risks.

Several barriers affect implementation of RAMP by construction professionals and firms in Tanzania. Knowledge on the barriers can boost the identification and managing of the risks in the construction sector.

Benefits of risk management and assessment practices

Revamping of the construction industry in Tanzania is important since it contributes about 7% of GDP (the industry has already enjoyed a growth of 8 per cent over the past five years). Many projects still experience massive cost overruns and delays, which can effectively be removed through implementation of risk management and assessment practices. Research also shows that Sub-Saharan construction firms that do not adopt risk assessment and management practices and techniques as part of managing their projects, struggle through cost overruns and projects running behind schedule. Thus adoption of these practices is linked to increasing efficiencies, profitability and removing related inconveniences.

Questions to be answered

In light of the foregoing, a number of questions need to be asked to be in a position to explore barriers for successful implementation of risk assessment and management practices in Tanzania.

So what is the level of risk assessment and management practices awareness among the Tanzanian construction stakeholders? Can the barriers to the usage and implementation of RAMP be assessed? Can solutions to these barriers be proposed thereby, leading to the attainment of the Millennium Development Goal (MDG)?

Construction industry faces many challenges in relation to construction project management  

Tanzania construction industry is struggling through poor project performance characterized by lack of trained professionals as it over relies on foreign firms to train indigenous professionals, contractors and consultants in undertaking big projects.

Poor project management has also been found to cause delays and disruptions in undertaking construction projects in the country. Performance of these projects is also a factor of this poor management of projects. Researchers have also found neglect of risk management issues in the Tanzania construction industry. Foreign contractors dominate construction operational environment in Tanzania and these foreigners come with a competitive advantage over local contractors. This is in relation to skills, training, competencies, and human resources development (HRD) practices.

Why is Tanzania construction industry not adopting RAMP?

Lack of familiarity with risk assessment and management techniques among contractors is a historical factor in implementation of them. Still, implementation of these practices is still inundated by lack of training and skills development. Nevertheless, Tanzania does not stand out from the rest of the countries in the world in relation to failure in adopting risk management practices – developed nations are also being affected according to a late research in 2013.

While the Tanzanian construction industry has been characterized by lack of expertise in risk management, clients still wanted to see unambiguous evidence and risk calculations. Still, ongoing construction projects lack related data enough to track risk trends and the industry is still characterized by lack of formal risk control strategies, ineffective monitoring and inappropriate risk allocation, among others. Other researchers have found issues such as complexity of analytical tools, lack of potential benefits for risk assessment, lack of governmental legislation, lack of manpower & time for the related undertakings.

Chileshe and Kikwasi find that the biggest barrier implementation of risk management practices in the country is lack of awareness of the practices among both contractors and clients. Risk management concepts are still new in Tanzania. Other factors include “lack of information” – which could be explained by the fact that consultants were not themselves being exposed to risks and thus cannot obviously engage in risk control procedures.

Tanzania construction sector still must overcome lack of experience in these practices, lack of coordination among involved parties. This, together with lack of information and experience are connected to education, knowledge management and procurement practices.

In the ranking of barriers, Chileshe and Kikwasi find that “awareness of risk management processes”, “lack of experience”, and “lack of information” scored 1, 2, 3 positions respectively.

Dr Nicholas Chileshe: School of Natural and Built Environments, University of South Australia, City East Campus, Adelaide, South Australia 5001, Australia

Dr Geraldine John Kikwasi is from the Department of Construction Management, School of Construction Economics and Management, Ardhi University, Dar-es-Salaam, Tanzania

 

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