Risk Analysis in Private Building Projects: A Pilot Study in Chile

A proper identification, assessment, and allocation of risks are essential for reducing the likelihood of time and cost overruns. Aiming for lowering the overall cost of claims and disputes, this study aims for the identification, assessment, and allocation of the risks in private building projects in Chile. Based on a thorough examination of the literature, reveals 104 risks that are organized into four categories and eleven subcategories. The allocation, probability, and impact of these risk variables were estimated by experts consulted through questionnaires. Results show that delays in approval/permits, delays in decision-making, poor design, equipment problems, planning deficiencies, poorly trained skilled labor, unclear contract clauses and conditions, late design changes, competition, resource availability, and unrealistic baseline scheduling are the top-ranked risk factors. The study’s respondents’ recommendations regarding the risk allocation were compared with the contractual risk allocation in the projects analyzed unraveling that over 50% of the most critical risks had disparities between contractual allocation and respondents’ recommendations. The study’s findings are useful for assisting practitioners in allocating risks to those stakeholders who are better equipped to evaluate, manage, and control those risks. The risks can be prioritized for response planning using the generated risk priority.