Perceptions of Singapore construction contractors on construction risk identification

Purpose - Recent changes in corporate environment coupled with emerging challenges as a result of turbulent economy have exposed participants in the construction industry to more and more surprises in project management. As a result, the construction industry has witnessed significant changes particularly in procurement methods with clients allocating greater risks to contractors, making risk management a necessity, with organizations needing to look across the whole life of a project from inception to occupancy. To minimize or optimize all these risks, formulating an effective risk management system is a crucial challenge faced by any construction contractor. This paper aims to investigate contractors' perceptions of risk. Design/methodology/approach - The perception of risks at estimating and tendering stage was investigated through a survey among construction contractors operating in the Singapore construction industry. The preferences of risk identification procedures and techniques are observed. Factors which are dominating constraints for the implementation of risk management elements are assessed. The process of risk identification from the standpoints of contractors and their preference of various risk response strategies to reduce the likelihood of occurrence of the identified risks and their impact were evaluated. Findings - The findings from the study highlight that risk factors having great impact on the financial aspect of the project, namely lack of financial resources of the contractor, financial stability of the client and cost overruns due to delay are considered most important by contractors and that risk response methods are favored in the order of risk reduction, risk transfer, risk avoidance and risk retention. Originality/value - The findings may help construction contractors in reviewing decision factors they consider when making bidding decision at estimating and tendering stage, and also be useful for improving their risk management plan in line with important risk factors considered by the construction industry.