Risk Evaluation of Cost Overruns (COs) in Public Sector Construction Projects: A Fuzzy Synthetic Evaluation

In the Small Island Developing States (SIDS), public sector infrastructure projects (PSIPs) fail to both meet targeted performance metrics and deliver on the intended benefits to society. In terms of the cost performance metric, cost overruns (COs) beyond the initial contract value are more of a norm than a unique occurrence. Therefore, to ensure economic sustainability for SIDS, and value for money on PSIPs, there is a need to investigate and evaluate the risk impacts on COs. The purpose of this research was to identify and evaluate the perceived cost overrun risk factors that are within the primary project stakeholders' sphere of control, and to reduce the ongoing ambiguities that exist in the prioritization of these risks. This was achieved by extracting critical risk factors from selected comparative studies in developing countries to formulate a closed-ended questionnaire to be administered to construction professionals in Trinidad and Tobago. Thereafter, the process of fuzzy synthetic evaluation (FSE) was used to develop a risk model based on three tiers of risks: 11 critical risk factors, 3 critical risk groupings (CRGs) and an overall risk level (ORL). The results showed that the two highest-ranked critical risks were project funding problems and variations by client. The leading critical risk grouping was client-related risk (5.370), followed by professional-related risk (4.815) and physical risk (4.870). The ORL was 5.068. Based on the FSE's linguistic scaling, the CRGs and the ORL are perceived to be high risks in PSIPs. This research adds to the CO body of knowledge in primarily three ways. Firstly, the study extends the comparative assessment previously undertaken in scholarship into the context of SIDS to build on the generalizability of this context-specific phenomenon. Secondly, the FSE evaluation undertaken provides a practical tool to be promoted for use in SIDS' construction industry among practitioners to focus and prioritize the critical risks in the planning phases and improve on contemporary risk practices in the execution phases of projects. Finally, this quantitative model approach is recommended to supplement the traditional qualitative risk management practices adopted in SIDS, thus contributing towards the overall improved economic sustainability and viability of PSIPs.