Keywords: risk assessment, risk management, construction, project, analytic hierarchy process, decision-making.

The construction industry, perhaps more than any other, is exposed to a number of risks which adversely affect the project objectives (scope, time, cost, quality). As a result, risk management is reasonably considered as a major element of construction management. The literature on risk management in construction is quite extensive. Existing research efforts have mainly focused on risk identification while others have been directed to the analysis of risk generating factors and conditions. These investigations, however, are rather limited to a descriptive and partial correlation between risks and influencing factors and have not led to the development of generally applicable methods and tools for practical use.

The present study aims to develop a system for risk assessment in construction projects. In particular, a two-dimensional formulation is developed that relates a number of risks with a number of influencing factors that contribute to risk emergence. Further, weights are assigned to describe the degree of influence between factors and risks. A multi-criteria model is used to provide quantitative assessment of the magnitude of individual risks, risk categories and overall project risk at the level of each success factor and for all factors collectively. The system is used to reveal the main risk-generating factors of the construction process, to provide risk assessment for a specific project based on its characteristics and the deployment conditions, and to allow the user to analyze the effectiveness of certain risk-reduction measures.

Based on extensive literature review and information collected by construction practitioners, a number of important risks were identified. They are classified in the following categories: political risks, economic risks, legal risks, technical-construction risks, construction related risks, environmental risks, natural risks. A number of risk influencing factors were also identified. The analytic hierarchy process (AHP) method was used to determine the relative importance among risk categories, risks within each category, and the influencing factor's contribution to particular risks. This investigation has led to the development of multi-variable decision models that calculate the expected magnitude of individual risks, based on the degree of project exposure to the influencing factors and the contribution of these factors to risks. Single risks are then aggregated at a risk group level and ultimately at a project level providing an overall project risk assessment. The above models for individual and overall risk assessment have been implemented in Microsoft Excel.

The system was applied to an actual construction project, in particular the construction of three classroom buildings. To apply the system, project participants were asked to appraise the degree of project exposure to each of the risk influencing factors. The results indicated that "infeasible project elements" and "resource cost changes" are the most significant risks associated with the particular project.

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