| Abstract: | Construction is a risk prone industry. Occurrence of risks in construction could affect project
objectives negatively. Involvement of risk management plan and process is the best possible way
to exist in this hasty environment. This is because analysis of risks gives better understanding of
risks and the resulting impact of the risks, if they occur. This enables the project management
team to have a better estimate of the impacts of risks. The estimated project cost is the sum of the
baseline cost and an allowance to handle the cost impact of risks (i.e. contingency). Having a
realistic estimate of this allowance would mean better estimate of project cost. This study focuses
on the practice and challenges of risk management within the construction sector, specifically
analyzing high-rise building projects in Bole sub-city, Addis Ababa. The research identifies key
shortcomings in the implementation of risk management strategies, which have negatively
affected project objectives. It highlights that while some studies have explored the practical
aspects of risk management, there is a notable gap concerning the specific risk factors affecting
project outcomes and the corresponding mitigation strategies. The research employs an
exploratory design to analyze risk management practices among Grade-1 construction
companies. Both quantitative and qualitative data collection techniques, including
questionnaires distributed to industry professionals. The findings reveal that the primary
challenges in risk management include insufficient resources, lack of training, and inadequate
risk identification processes. Data analysis indicates that a significant portion of construction
firms recognize the importance of risk management but often lack dedicated departments to
manage these aspects effectively. The study identifies critical risk factors such as high inflation,
delayed payments, poor resource management, and economic instability, all of which frequently
contribute to project delays and cost overruns. The research concludes with recommendations
for enhancing risk management practices to improve project delivery in the Ethiopian
construction sector. |
