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Cost Risk Analysis In Construction

2083 Words9 Pages

Cost risk analysis in construction projects
N.Hari Raghavan, M.TECH; C.Venkatasubramanian, Ph.D.
Abstract
Cost, time, risks and availability of funds are the key factors in any construction project. Project managers are prone to face various risk factors that affect project cost and time duration of the project. This paper concentrates on the effect of risks on the overall cost of the construction projects. Questionnaire was prepared considering various risk factors that are associated with construction process. Risk factors were identified by conducting in person interviews with project managers and technical experts. The questionnaire survey was compared with a case study of a residential project. Survey results indicated that the design …show more content…

Transport: Traffic rules and crowded roads make this area inaccessible during day time. Time restriction: Working hours in Chennai are restricted between 8.00am to 10.00pm. Project cost: The estimated cost of this project is around sixty six lakh.
Data regarding the additional costs incurred in the project due to the various risk factors were obtained through the engineers working the project. Certain data couldn’t be quantified and such data were shown as rough amounts as accepted the engineers. The work schedule of the residential project is shown in Figure 1.
Figure 1. Construction schedule of the residential project Table 3. Survey results comparison with the costs incurred in the residential project
Top five risk factors Additional costs incurred
Inadequate design 8 lakh
Financial failure of contractor 6 lakh
Inadequate site investigation 5.5 …show more content…

By conducting risk analysis of projects, the cost of the projects can be controlled. The guidelines provided with this research work will help the engineers and designers involved in construction projects to mitigate the effect of risks on project cost. Results of the questionnaire survey provided the top five risk factors which were inadequate design, financial failure of contractor, inadequate site investigation, fatalities and political instability. The study shows that all the risk factors are interrelated and need to be handled by good construction

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