Contract risk allocation in Saudi Arabian construction projects

Abstract

Risk is the variation in the possible outcomes that exist in nature in a given situation. Risk involves a lot of uncertainties right at the conceptual stage of any construction project and therefore the expectation to allocate them sensibly and amicably is quite high among the contracting parties. Failure to adequately deal with risks has been shown to cause cost and time overruns in construction projects. The research work carried out here targets the allocation of contract risk in Saudi Arabian construction projects alongside assessing the significance of those risks. Data was collected through a survey questionnaire by distributing accordingly to construction experts and results showed that risk allocation is not the same in general perspective as in practice. In Practice higher percentage of risks got allocated to contractors and the figures show only 2 risks were allocated to owners and 14 to contractors out of the 36 risks, while the remaining were either shared or undecided. As far as risk importance is concerned, Poor quality of work received the highest importance while Corruption and bribes received least importance.