Determination of a risk management framework for the Zambian construction industry

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Shimwambwa, Sumbi Mukumba
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The University of Zambia
If the construction industry of a country is inefficient, it is difficult for any such country to see meaningful development. This is particularly true for countries that often see many of its projects abandoned. Globally projects continue to be abandoned. In Zambia, the number of projects being abandoned have been on the rise causing the Government of Zambia to lose large sums of financial resources. The study postulated that the solution to project abandonment is risk management. The study therefore sought to identify the causes, the effects of project abandonment in Zambia and to determine the extent to which risk management is incorporated in the construction industry. Further, the study sought to examine the existence of a relationship between project abandonment and risk management, and to finally develop a generic risk management framework for project stakeholders that can predict the exposure of a construction project to construction related risks. The study was a quantitative study were primary data was collected through the use of self-completing questionnaires purposively distributed to a convenient sample of 70 professionals. A response rate of 70% was obtained. The study employed quantitative methods for data analysis making use of the Relative Importance Index to rank the causes and effects of project abandonment and also Structural Equation Modelling to examine the relationship between project abandonment and risk management. The study identified that the main causes of project abandonment are financial, legal, organisational & operational risks and political risks thereby promoting pollution on project sites, lowered standards of living and unemployment. The use of risk management techniques among professionals and organisations in Zambia was found to be low to moderate with the qualitative techniques being used dominantly over the quantitative techniques. A strong relationship of (standard coefficient = 0.89) was established between project abandonment and risk management suggesting that a strengthened and holistic use of risk management techniques in managing construction projects would reduce project abandonment by 89%. Consequently, the study proposed a suitable risk management framework that makes use of pre-determined ranked risks, expert judgement and risk mapping to predict risks and manage them. Key words: Construction, Framework, Project Abandonment, Risk, Risk Management, Technique
Construction--Zambia , Risk management--Zambia , Project abandonment--Zambia