Modelling risk impacts on the budgeted cost of traditionally procured building projects

Risk is inherent in construction from the inception to the completion stages of a project’s life. The less information is available at the inception of a construction project, the higher the level of risks and uncertainties. Whilst it is a known fact that the risk factors inherent in a construction project are responsible for the deviation between the budgeted and actual project costs, how these risk factors combine to impact the project cost has not been investigated. This then is the concern of this study. The study identified the risk factors impacting the budgeted cost of traditionally procured building projects through a structured questionnaire survey. Using the mean ranking analysis, the significant risk factors were determined which were used in developing a risk/impact assessment model for evaluating the impacts of risk on the budgeted cost of traditionally procured building projects. The developed model shows a very good predictive ability; indicating that the model could assist in pro-actively determining the likely impacts of identified risks on the budgeted cost of traditionally procured building projects.