Hindawi Publishing Corporation

Journal of Construction Engineering

Volume 2015, Article ID 203468, 10 pages
http://dx.doi.org/10.1155/2015/203468

Research Article
Risk Determination, Prioritization,
and Classifying in Construction Project Case Study:
Gharb Tehran Commercial-Administrative Complex

Azadeh Sohrabinejad1 and Mehdi Rahimi2

1
University of Science and Technology of Iran, Unit 3, No. 59, 38th Street, Gisha Avenue, Tehran 14489 43593, Iran
2
Bordeaux University, France

Correspondence should be addressed to Azadeh Sohrabinejad; sepideh30bh@gmail.com

Received 26 May 2015; Revised 18 August 2015; Accepted 8 September 2015

Academic Editor: Eric Lui

Copyright © 2015 A. Sohrabinejad and M. Rahimi. This is an open access article distributed under the Creative Commons
Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is
properly cited.

Construction projects play an important role in infrastructure projects in developing countries. According to type, size, and
complexity of the project, the number and importance of each risk could be different and many projects cannot reach the project
goals due to exposure to multiple risks. Many papers have been published on the subject of risk management in construction
projects; unfortunately most of them have not been implemented in practical conditions. The aim of this study is to identify and
prioritize risks in construction projects. The classical approach used probability and impact for risk assessment, but these criteria do
not sufficiently address all aspects of projects risks and there might be a relationship between different criteria. This study proposes
the hierarchical dependencies between criteria. A case study of construction project is presented to illustrate performance and
usage of the proposed model. Utilizing library studies and interview with experts, managers, and specialists, decision criteria were
identified through brain storming. Risks were categorized by the experts into eleven risks. Important risks were evaluated based on
the fuzzy ANP, fuzzy DEMATEL, and fuzzy TOPSIS methods. The proposed model is more suitable than the traditional decision-
making methods in prioritizing risk concerning cost, time, and quality.

1. Introduction management. Additionally, using fuzzy technique is very

helpful to manage uncertain conditions. One of the charac-
The risk management can be defined as a process to identify, teristics of our model in this research is that all aspects of
analyze, and respond to project risks in order to enhance the projects are concerned which is very important in mega
opportunities and reduce threats affecting the objectives projects. Cost, time, and quality are the main elements of
of the project. The first step of risk management is risk
project success which should be concerned.
identification and the next steps can be risk analysis, risk
prioritization, and selecting appropriate strategy for dealing In this paper, by using fuzzy technique, we tried to present
with risks. a method to identify and prioritize project risks in the Project
Construction projects are very risky due to the amount Life Cycle of construction projects and consequently help
of money invested in them which shows the necessity of managers in decision-making. As a case study, we used a
identification of risk drivers, the level of each risk effect, construction project in the west of Tehran and based on the
intensity of the influence of the risk on the project, and the project owner request we do not disclose the company’s infor-
probability of each risk. Finally, based on these evidences, the mation. In following sections, firstly, problem statement and
appropriate action should be selected by project managers to importance of research are described. Secondly, a brief review
reduce the loss of projects. of literature in risk management, risk identification, and fuzzy
In the case that project managers encounter lots of technique is done. As our research methodology, we used
risk drivers, fuzzy technique is a suitable solution for risk ANP to define appropriate weight for each factor, DEMATEL
2 Journal of Construction Engineering

to identify network of criteria and also a supporter of ANP Nieto-Morote and Ruz-Vila used fuzzy AHP approach
method, and finally TOPSIS to rank subcriteria. for risk evaluation in their study. Based on a distributed
questionnaire, they gathered expert ideas and categorized
2. Literature Review the project risks into four groups of implementation risks,
resources risks, engineering risks, and management risks [18].
Risk is an event or a probable situation, the occurrence Rezakhani on his study used Risk Breakdown Structure (RBS)
of which can have effect on project objectives [1]. The to categorize and rate the risks [10].
occurrence of a risk may have different reasons like economic Tummala and Burchett used Work Breakdown Structure
fluctuation, financial crisis, social changes, and political (WBS) to identify project risks of high voltage transmission
issues. Also changes in stockholder relationship can be very lines and categorized all risks into six groups of finance and
effective in increasing or decreasing the risk level in projects economy, environmental and political, design, construction,
[2]. physical, and unexpected events [19].
Although every construction project has different risks, In this study, 160 common risks were collected from
there are lots of common risks among construction projects. literature review that could affect the time schedule, cost,
Every project has three main items of cost, time plan, and and quality in construction project (Appendix) [1–3, 6, 9–
quality in its objectives and related risks to them are the most 11, 15, 16, 20–25].
common risks.
The construction industry is one of the most important
criteria in a country development. Establishment of all 3. Research Methodology
infrastructures like roads, power plants, mega projects, and
so many other projects needs construction as a part of it [3]. 3.1. ANP. Just like AHP approach, Saaty also introduced
Some researchers believe that construction projects ANP method which was an extended form of AHP while
encounter risks more than other projects which are unavoid- AHP presents a framework with unidirectional hierarchical
able but manageable [4]. Numerous stakeholders, long time connections used in multicriteria decision analysis. ANP is
of production, and necessity of interactions between all a mathematical theory that can systematically overcome all
internal and external parts of a project are the main factors kinds of dependencies [26].
which increase risks in construction projects [5].
The literature review on previous studies of risk manage- 3.2. Fuzzy ANP Method. In the proposed algorithm, fuzzy
ment shows that only a few studies at least in the academic ANP (FANP) will be used to determine the degree of impor-
level of studies about construction projects risks focused tance of each of these indicators of prioritization in improve-
on it. Lack of risk management knowledge and also using ment projects. FANP is a useful method in case which
systematic approach of identification and solving the risk provides a framework for dealing with decision-making
issues in the field of construction projects are very obvious problems within which assumptions about dependencies
in previous studies [6, 7]. between criteria and alternatives are unnecessary [27]. In
There are different categories of risks. Perry and Hayes this method, pairwise comparison matrix for each row of the
categorized the risks into three main drivers, namely, sub- matrix is filled with the triangular fuzzy numbers. Also, the
contractors, consultants, and customers [2]. Cooper and amount of each parameter is calculated as a triangular fuzzy
Chapman classified the risks in two categories of primary number.
risks and secondary risks [8]. US Department of Energy
categorized the risks based on the point of risk effect
[1]. 3.3. Fuzzy DEMATEL. In this research DEMATEL technique
Abdou divided construction risks into three categories is used, too. The Decision-Making Trail and Evaluation Labo-
of financial risks, time risks, and design risks [9]. Rezakhani ratory (DEMATEL) analyzed the criteria causal relationships
defined eight accounting risks based on the questionnaire he and used diagrams to show the weights of criteria. This tech-
distributed among project experts [10]. Carr and Tah used nique was very helpful to solve the problems based on graph
hierarchical organization to categorize risks into two groups technique. Lately, researchers have found that DEMATEL
of internal and external risks [11]. Chapman categorized risks could not be useful to solve uncertainty problems. Therefore,
into four groups of environmental, industrial, customers, they suggested fuzzy DEMATEL method. The recent method,
and project [12]. Shen et al. introduced six groups of risk using fuzzy linguistic variables, solves uncertainty problems
according to the content of the risks including finance, legal, [14].
management, market, policy, and politic [13]. Chen et al.
categorized fifteen main risks of projects into three main 3.4. TOPSIS. The Technique for Order of Preference by
categories, namely, resource factors, management factors, and Similarity to Ideal Solution (TOPSIS) is a MCDM method
parent factors [14]. which evaluates 𝑚 alternatives with 𝑛 criteria. Based on
Assaf and Al-Hejji defined the project risk elements as TOPSIS concept and logic, the evaluated alternative should
effective factors in delay of projects [15]. Dickmen et al. used have the shortest distance to positive ideal solution and
cause-effect diagram to categorize risks of projects [16]. Zeng longest distance to negative ideal solution. According to this
et al. categorized the risk drivers into four groups of human, logic, the closer solutions to the positive ideal have better
raw material, instruments, and work yard [17]. ranking.
Journal of Construction Engineering 3

Risk
prioritization

Quality Cost Time

Resources Planning
Human Project Economic Legal Environmental
Partners and and Execution Design Political
resources management factors factors and social
equipment scheduling

Figure 1: Analytic network process of risks in construction project.

3.5. Data Collection Instrument. Data were collected through Literature review helped us to find out 160 risks within
questionnaires and interviews. The present study uses below past studies (see Table 4). In order to collect the opinion
method for data collecting: of experts, a questionnaire has been prepared getting the
probability of occurrence for each risk. Moreover, the expert
(1) Expert interviews.
has been asked if the questionnaire is comprehensive and
(2) Field study (questionnaire). if there is a risk that projects are dealing with and was not
(3) Literature review. mentioned in the questionnaire. After collecting comments,
a new list of risks has been developed. The results of this
Four questionnaires were used for data collecting contained:
questionnaire have been compiled and analyzed and based
identifying risk questionnaire, paired comparisons based
on the responses another questionnaire has been developed,
on fuzzy ANP, fuzzy DEMATEL questionnaire, and fuzzy
which was mailed back to the experts. The experts were asked
TOPSIS questionnaire. The result of the reliability measured
again to leave comments, give suggestions, and answer the
with Cronbach’s alpha in risk identification questionnaire
questions. The responses to this second questionnaire were
was 𝛼 = 0.963. Questionnaires are generally accepted as
compiled and analyzed when a consensus has been reached
reliable when Cronbach’s alpha is higher than 0.7. In other
on risks and a list of 67 risks in eleven groups was prepared
questionnaires, compatibility is measured.
as per Figure 1.
Research population contains five project teams and
ANP method can solve dependency issues and feedback
each team consists of a project manager, technical expert,
relations among multiple criteria. Thus, this study applies the
deputy executive, project office manager, execution super-
DEMATEL to establish the correlation between the mutual
visor, and financial manager. For paired comparisons, ten
effects of the criteria and alternatives (group of risks) and uses
experienced experts specializing in the construction industry
ANP to determine the weight of each group of the risks. The
were selected.
research processes and architecture are shown in Figure 2.
For finding the interrelations between different criteria,
4. Case Study experts were asked to indicate the degree of direct influence
of all criteria and alternatives. An average matrix was derived
After about three years, Gharb Tehran Commercial- through the mean of the same criteria in the various direct
Administrative Complex had only five percent progress. The matrices of the experts Table 1.
inability of the company to handle the risks causes delays in For normalizing the average matrix, the following for-
the project. Therefore, it is necessary to establish a system for mula was used:
the identification and management of the risks which helps
the company to find out efficient solutions against different
kinds of risks.
Literature review and using Delphi technique for inter- 𝑧̃𝑖𝑗 𝑙𝑖𝑗󸀠 𝑚𝑖𝑗󸀠 𝑢𝑖𝑗󸀠
̃𝑖𝑗 =
𝐻 =( , , ) = (𝑙𝑖𝑗󸀠󸀠 , 𝑚𝑖𝑗󸀠󸀠 , 𝑢𝑖𝑗󸀠󸀠 ) ,
viewing and gathering data from fourteen experts within 𝑟 𝑟 𝑟 𝑟
their domain of risk expertise and a minimum of ten years (1)
of experience in construction projects led us to identify risks 𝑛
in this research. Experts have recommended sixty-seven risks 𝑟 = max ( ∑ 𝑢𝑖𝑗 ) .
1≤𝑖≤𝑛
which are divided into eleven groups. 𝑗=1
4 Journal of Construction Engineering

Construction projects risk

Environmental Economic Project Planning and Human Resources and

Legal factors Political Design Execution Partners
and social factors management scheduling resources equipment

Delays in Investment Environmental Losing Inefficient Human resources Equipment

Strike Sanction Nonqualified Interference by
resolving problems instability experienced planning turnover
disputes designers performance the owner
staffs
Change in Currency Deviations Change in Estimation/ Lack of Delay of
Rules changes negotiation War Design changes between spec. managerial Machine failure
change rate planning errors specialists consultants
trend and methods
implementation Not to assign
Ambiguity in Delays in Economical Governmental Wrong time plan Supplying spare
Hurry in design tasks to Delay in
the rules payments instability changes Inappropriate prediction parts problems
experienced decision-making
material and
Change in instruments staff (owner)
Environmental Lack of Lack of
Payment delay governmental Misdesign
risks moderator Inappropriate machines and Delay in
rules Project closure project team equipment payment to
Unstable Contractors contractors
security Legal disputes financial Delay in design Inappropriate
situation failures Permits and Changes in Challenges
goals and between
licenses materials during
objectives stakeholders
Inflation construction
Natural disasters definitions
Delayed, Lack of
incomplete, and consultant
Rush at auction Materials quality knowledge on
incorrect reviews
terms and
conditions
Events during Lack of materials
execution Method of
tendering and
Delays in Delay in material vendor selection
executive plan supply
confirmation Poor
communication
Damage to
property and between project
persons parties

Lack of
Landslides mediators to
solve problems

Contractors
delay

Contractors
mismanagement

Weak workshop
management

Contractors lack
of experience

Contractor
financial power

Figure 2: Risk Breakdown Structure for construction projects.

Table 1: Average matrix of interrelations of criteria.

Time Cost Quality

Time (0.000, 0.000, 0.000) (0.175, 0.425, 0.675) (0.675, 0.925, 1.000)
Cost (0.150, 0.400, 0.650) (0.000, 0.000, 0.000) (0.650, 0.900, 1.000)
Quality (0.325, 0.575, 0.825) (0.625, 0.875, 1.000) (0.000, 0.000, 0.000)

After calculating above matrix, total relation matrix was upper limit of the triangular fuzzy number related to the
computed by the following formula: matrix 𝐻:
𝑛
𝑇 = lim (𝐻 ̃2 ⊕ ⋅ ⋅ ⋅ ⊕ 𝐻
̃1 ⊕ 𝐻 ̃𝑘 ) . (2) 𝐷 ̃𝑖 ) = [ ∑𝑇
̃ = (𝐷 ̃𝑖𝑗 ] ,
𝑘 → +∞ 𝑛×1
𝑗=1
[ ]𝑛×1 (4)
Each cell of the matrix is a triangular fuzzy number calculated 𝑛
as follows: ̃ = (𝑅
𝑅 ̃𝑖𝑗 ]
̃ 𝑖 ) = [∑𝑇 .
1×𝑛
𝑖=1 1×𝑛
−1
[𝑙𝑖𝑗𝑡 ] = 𝐻𝑙 × (1 − 𝐻𝑙 ) , ̃ 𝑖 shows the row sum of 𝑖th row of matrix 𝑇 and shows the
𝑅
−1 sum of direct and indirect effects of the criteria on the other
[𝑚𝑖𝑗𝑡 ] = 𝐻𝑚 × (1 − 𝐻𝑚 ) , (3) ̃𝑖 similarly shows the column sum of 𝑗th column of
criteria. 𝐷
−1
matrix 𝑇 and shows the sum of direct and indirect effects that
[𝑢𝑖𝑗𝑡 ] = 𝐻𝑢 × (1 − 𝐻𝑢 ) . criterion 𝑗 has received from the other criteria. In addition,
when 𝑖 = 𝑗 (i.e., the sum of the row and column aggregates),
In these formulas 𝐼 is unit matrix; 𝐻𝑙 , 𝐻𝑚 , and 𝐻𝑢 are 𝑛 × 𝑛 (𝑅 ̃𝑖 ) provides an index of the strength of influences given
̃𝑖 + 𝐷
matrix. 𝐻𝑙 , 𝐻𝑚 , and 𝐻𝑢 are lower limit, medium value, and and received. It means that (𝑅 ̃𝑖 + 𝐷̃𝑖 ) shows the degree of
Journal of Construction Engineering 5

1.0 In this paper, Gogus and Boucher technique have been

0.8 Time used to calculate compatibility. In this method, for investi-
0.6 gating the compatibility of two matrices (mean number and
0.4 fuzzy number range), each fuzzy matrix should be deviated
0.2 into two matrices. First matrix contains medium value 𝐴𝑚 =
Effect

0.0 11 11.5 12 12.5 13 13.5 [𝑎𝑖𝑗𝑚 ] and second matrix contains geometric mean of the
−0.2 Cost
high and low numbers of triangular fuzzy numbers 𝐴𝑔 =
−0.4
−0.6 Quality √𝑎𝑖𝑗𝑢 ⋅ 𝑎𝑖𝑗𝑙 .
−0.8 Weight vector matrix is calculated as follows:
−1.0
1 𝑛 𝑎𝑖𝑗𝑚
Figure 3: DEMATEL cause-effect diagram for criteria. 𝑤𝑚 = [𝑤𝑖𝑚 ] 𝑤𝑖𝑚 = ∑ 𝑛 ,
𝑛 𝑗=1 ∑𝑖=1 𝑎𝑖𝑗𝑚
(5)
𝑔 𝑔 𝑔 1 𝑛 √𝑎𝑖𝑗𝑢 ⋅ 𝑎𝑖𝑗𝑙
1.5
𝑤 = [𝑤𝑖 ] 𝑤𝑖 = ∑ 𝑛 .
Political 𝑛 𝑗=1 ∑𝑖=1 √𝑎𝑖𝑗𝑢 ⋅ 𝑎𝑖𝑗𝑙
1.0
Economic factors
Largest eigenvalues for any matrix are calculated by using the
0.5 Legal factors
Partners
following formulas:
Design
Human resources
0.0 1 2 3 Resources 4 5 6 1 𝑛 𝑛 𝑤𝑗𝑚
and equipment Project
management 𝜆𝑚
max = ∑ ∑ 𝑎𝑖𝑗𝑚 ( 𝑚 ) ,
−0.5 Planning and Execution 𝑛 𝑖=1 𝑗=1 𝑤𝑖
scheduling Environmental
and social (6)
−1.0 1 𝑛 𝑛 𝑤𝑗𝑚
𝜆𝑚
max = ∑ ∑ 𝑎𝑖𝑗𝑚 ( 𝑚 ) .
−1.5 𝑛 𝑖=1 𝑗=1 𝑤𝑖
Figure 4: DEMATEL cause-effect diagram for group of risks. And then the compatibility of each matrix is calculated by the
following formulas:
(𝜆𝑚max − 𝑛)
̃𝑖 − 𝐷
̃𝑖 ) is CI𝑚 = ,
the central role that factor 𝑖 plays in the problem. If (𝑅 (𝑛 − 1)
̃ ̃𝑖 )
positive, then factor 𝑖 is affecting other factors, and if (𝑅𝑖 − 𝐷 (7)
is negative, then factor 𝑖 is being influenced by other factors. 𝑔 (𝜆𝑔 − 𝑛)
CI = max .
Cause-effect diagram is drawn after defuzzification of the (𝑛 − 1)
fuzzy number 𝑅 ̃𝑖 + 𝐷̃𝑖 , 𝑅
̃𝑖 − 𝐷
̃𝑖 .
To calculate the incompatibility rate (CR), the following
Figure 3 illustrates the importance (the horizontal axis) equation is used:
and influence and effect (vertical axis) on each criterion. As
seen in the diagram, time is effective and quality and cost are CI𝑔
CR𝑔 = ,
influential. RI𝑔
Similarly, causal relationship between eleven groups of (8)
CI𝑚
𝑚
risks in construction projects is determined by using fuzzy CR = 𝑚 .
DEMATEL technique. RI
As seen in Figure 4, the criteria of political, legal factors, The result will be compared with 0.1 threshold. If both of these
design, financial, partners, and staffing are at the top of indexes were less than 0.1, fuzzy matrix is incompatible. The
the axis. Therefore, these factors are more influential than amount of CR should be lower than 0.1.
other factors. In other words, these are the cause. On the For finding out the indexes’ weight, fuzzy ANP statistical
other hand, project management, resources and equipment, method will be used. According to super matrix, four steps
planning and implementation, and social environment are at have been released for calculating the components’ weight.
the bottom of the diagram. Among these factors, the most In the first step, geometrical mean of respondents’ pair
influential was criteria of political and social environment comparisons about criteria is calculated. Then in the second
factors that had the greatest influence. step eigenvector must be calculated. For calculating eigenvec-
In the next step, the fuzzy ANP method is used to tor of all summed pair comparisons tables, logarithm method
determine the relative weights of a set of the evaluation of minimum square roots will be used as
criteria and obtaining the weight of eleven groups of risks. In
1/𝑛
order to achieve the purpose of this research, experts were (∏𝑛𝑗=1 𝑎𝑘𝑗
𝑠
)
asked for pairwise comparison between criteria that could 𝑤𝑘𝑠 = 1/𝑛
, 𝑠 ∈ {𝑙, 𝑚, 𝑢} ,
illuminate the amount of vitality/impact. The relative vitality ∑𝑛𝑖=1 (∏𝑛𝑗=1 𝑎𝑖𝑗𝑚 ) (9)
quality can be resolved utilizing a scale of fuzzy numbers to
speak to equivalent significance to great critics. ̃𝑘 = (𝑤𝑘𝑙 , 𝑤𝑘𝑚 , 𝑤𝑘𝑢 )
𝑤 𝑘 = 1, 2, 3, . . . , 𝑛.
6 Journal of Construction Engineering

Table 2: Matrix of final weights of the group of risks.

Group of risks Fuzzy weight Final relative weight Rank

Economic factors (0.0059, 0.1122, 4.5749) 0.1084 1
Project management (0.0059, 0.1134, 4.5680) 0.1084 2
Partners (0.0061, 0.1089, 4.2552) 0.1012 3
Execution (0.0047, 0.0969, 4.1197) 0.0972 4
Human resource (0.0047, 0.0969, 4.1197) 0.0970 5
Political (0.0038, 0.0820, 3.7043) 0.0870 6
Legal factors (0.0036, 0.0816, 3.6879) 0.0866 7
Environmental and social (0.0032, 0.0753, 3.5225) 0.0825 8
Resources and equipment (0.0029, 0.0722, 3.4371) 0.0804 9
Planning and scheduling (0.0023, 0.0657, 3.2821) 0.0765 10
Design (0.0026, 0.0657, 3.2078) 0.0749 11

The third step is formation of eigenvector’s matrixes; these As the fourth step, the fuzzy positive ideal solution (FPIS)
matrixes include eigenvectors obtained from pair compar- and fuzzy negative ideal solution (FNIS) should be computed
isons of the second step. by using the following formulas:
The fourth step is calculation of final weights of the
levels Table 2. In order to calculate final weight of each level’s 𝐴+ = (̃V1∗ , ̃V2∗ , . . . , ̃V𝑛∗ ) ,
∗ (12)
component, 𝑊𝑖 = 𝑊𝑖𝑖 × 𝑊𝑖(𝑖−1) × 𝑊𝑖−1 .
𝐴− = (̃V1− , ̃V2− , . . . , ̃V𝑛− ) .
5. Prioritizing Risk Using Fuzzy In the fifth step, the distance of each alternative from FPIS
TOPSIS Technique and FNIS should be calculated as follows:
𝑛
In the previous section, eleven groups of construction risk 𝑑𝑖∗ = ∑ 𝑑 (̃V𝑖𝑗 − ̃V𝑗∗ ) 𝑖 = 1, 2, . . . , 𝑚,
priorities were set. This section aims to rank risks among 𝑗=1
eleven groups of risks with conflicting criteria including time, (13)
𝑛
cost, and quality which can help managers and decision
makers to find solutions. 𝑑𝑖− = ∑ 𝑑 (̃V𝑖𝑗 − ̃V𝑗− ) 𝑖 = 1, 2, . . . , 𝑚.
𝑗=1
First, experts’ opinions were collected. Because of the
verbal expressions, their opinions were ambiguous. In order In the next step, the closeness coefficient (CC𝑖 ) of each
to use them, it is better to convert these expressions into fuzzy alternative should be calculated:
numbers. Decision matrix is created.
In the next step, the fuzzy decision matrix should be 𝑑𝑖−
CC𝑖 = 𝑖 = 1, 2, . . . , 𝑚. (14)
normalized. The raw data were normalized utilizing linear 𝑑𝑖∗ + 𝑑𝑖−
scale transformation to bring the different criteria scales into
an analogous scale. The normalized fuzzy decision matrix is CC𝑖 represents the distances to the fuzzy positive ideal
calculated by the following formula: solution 𝐴+ and the fuzzy negative ideal solution 𝐴− simulta-
neously.
𝑎𝑖𝑗 𝑏𝑖𝑗 𝑐𝑖𝑗 In the final step, the final list of responses for each
𝑟̃𝑖𝑗 = ( , , ) 𝑗 ∈ 𝐵, important risk would be prepared by ranking the different
𝑐𝑗∗ 𝑐𝑗∗ 𝑐𝑗∗
alternatives according to the closeness to coefficient CC𝑖 in
𝑐𝑗∗ = max 𝑐𝑖𝑗 if 𝑗 ∈ 𝐵, decreasing order. The best alternative is the closest to the FPIS
(10) and the farthest from the FNIS.
𝑎𝑗− 𝑎𝑗− 𝑐𝑎𝑗− The result has been shown in Table 3.
𝑟̃𝑖𝑗 = ( , , ) 𝑗 ∈ 𝐶,
𝑐𝑖𝑗 𝑏𝑖𝑗 𝑐𝑖𝑗
6. Conclusion
𝑎𝑗− = min 𝑎𝑖𝑗 if 𝑗 ∈ 𝐶.
The main objective of this research was identifying construc-
Then, the weighted normalized matrix should be computed. tion project risks and also developing a method to prioritize
The weighted normalized value 𝑉 is calculated by the follow- the risks. As all companies have limited resources to manage
ing formula: and solve all the risks, the prioritization of the risks is
unavoidable. Assignment of resources to manage risks should
̃V𝑖𝑗 = 𝑟̃𝑖𝑗 ⋅ 𝑤
̃𝑗 𝑖 = 1, 2, . . . , 𝑚, 𝑗 = 1, 2, . . . , 𝑛. (11) be done based on the priorities and from the top of the list.
As the classic approach to prioritize and manage risks
In this paper, experts’ opinions were given equal weight. of projects, only probability and effect of each risk are
 Table 3: Risk prioritization for construction projects.
Prioritization of risk group 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Contractors
Economic Annual budget Currency Economical Investment
1 Inflation financial
factors revision change rate instability problems
failures
Not to assign Inappropriate
Change in Losing
Project Inappropriate tasks to goals and
2 managerial experienced Rush at auction
management project team experienced objectives
Journal of Construction Engineering

methods staffs
staff definitions
Lack of
Delay in Method of Poor commu- Lack of
Delay in Challenges consultant Weak Contractors Contractor
Interference Delay of decision- tendering nication mediators Contractors Contractors
3 Partners payment to between knowledge on workshop lack of financial
by the owner consultants making and vendor between to solve delay mismanagement
contractors stakeholders terms and management experience power
(owner) selection project parties problems
conditions
Damage
Delays in Delayed, Deviations
Events Inappropriate to
executive incomplete, Project Permits and between spec. Environmental
4 Execution during material and property Landslides
plan and incorrect closure licenses and instability
execution instruments and
confirmation reviews implementation
persons
Human
Human Lack of
5 resources
resources specialists
turnover
Change in
Governmental governmen-
6 Political Sanction War
changes tal
rules
Change in Delays in
Legal Delays in Lack of
7 Legal factors negotiation resolving
disputes payments moderator
trend disputes
Environmental Rules Ambiguity in Environmental
8 Strike
and social changes the rules risks
Changes in Lack of
Delay in Supplying
Resources and materials machines Equipment Materials Machine Lack of
9 material spare parts
equipment during and performance quality failure materials
supply problems
construction equipment
Estimation/ Wrong time
Planning and Inefficient
10 planning plan
scheduling planning
errors prediction
Delay in Design Hurry in Nonqualified
11 Design Misdesign
design changes design designers
7
8 Journal of Construction Engineering

Table 4: All project risks categorization gathered from literature review.

Environmental and social Legal factors Economic factors

(i) Inflation
(i) Disputes
(ii) Investment
(i) Brutality (1) Delays in the analysis of disputes
(iii) Changing currency value
(ii) Assaults (2) Legal disputes between the
(iv) Economic instability
(iii) Neglect stakeholders involved in the
(v) Changing rules and standards
(iv) Seasonal work construction project
(vi) Contractor financial failure
(v) Unstable security situation (3) Lack of mediators to accelerate
(vii) Unmanaged cash flow
(vi) Environmental pollution solving of dispute
(viii) Consulting cost
(vii) Incorrect or incomplete (ii) Contracts
(ix) Political interruptions
environmental analysis (1) Delays in payment
(x) Market situation
(2) Ambiguities in the contract
(xi) Work law ambiguities
Political Design Execution
(i) Delays in executive plan confirmation
(ii) Available resources
(iii) Events
(iv) Bad design
(i) Nonqualified designer (v) Deviations between spec. and
(ii) Incorrect choice of raw materials implementation
(i) New government legislation or (iii) The need for design based on (vi) Incorrect size and values
new rules exceptions (vii) The complexity of the project
(ii) Exchange rate fluctuations (iv) Errors in estimating/scheduling implementation
(iii) Monopoly of raw materials due to the (v) Out-of-date documents for design (viii) Difficulty in accessing the project yard
unexpected political conditions (vi) Complexity of design phase of (ix) The difference between the actual values
(iv) Internal and external politics project with the values in the contract
(v) War (vii) Duplication (x) Poor weather conditions
(vi) The influence of pressure groups and (viii) Design changes (xi) Installation of equipment
lobbying by interest groups (ix) Inconsistency between registry of (xii) Permits and licenses
(vii) Sanction values, design, and specifications (xiii) Surface and subsurface water condition
(x) Hurry in design (xiv) Implementation method
(xi) Changes in process of works (xv) Events during execution
(xvi) Delayed, incomplete, and incorrect
reviews
(xvii) Contradiction of cost, time, scope,
and qualitative objectives
Unexpected and nonpreventable events Project management Contract
(i) Losing experienced staffs
(ii) Change in managerial methods
(i) Changing priorities in existing programs
(iii) Not to assign tasks to experienced
(ii) Changes in the budget for the financial
(i) Flood staff
year
(ii) Fire (iv) Many projects to manage
(iii) Late changes requested by shareholders
(iii) Earthquake (v) Inappropriate project team
(iv) New shareholders
(iv) Lightning (vi) Mismanagement of contracts
(v) Cheating
(vii) Rush at auction
(vi) Ambiguity of planning
(viii) Commands to change without
document
Planning and scheduling Human resources Resources and Equipment
(i) Machinery failure
(i) Conflicting goals of cost, time, quality,
(ii) Machinery performance
and scope
(iii) Spare parts supply
(ii) Uncertain constraints and lack of
(i) Supplying manpower (iv) Low quality equipment
planning
(ii) Efficiency of manpower (v) Theft of equipment
(iii) Estimation/planning errors
(iii) Lack of specialists (vi) Lack of access to machinery or
(iv) Wrong time plan prediction
(iv) Human resources turnover equipment
(vi) Weaknesses in project definition and
(vii) Lack of materials
ultimate performance
(viii) Delay in supplying materials
(vii) Lack of specialized staff
(ix) Theft of materials
Journal of Construction Engineering 9

Table 4: Continued.

Owners Contractors Consultants

(i) Delay in payments to contractors (i) Small contractors
(i) Lack of consultant knowledge about
(ii) Owner interference (ii) Lack of contractors experience
contract
(iii) Owner’s delay in decision-making (iii) Workshop mismanagement
(ii) Delay in the approval of executive plans
(iv) Methods of contractor selection (iv) Inefficient planning
(iii) Quality control/assurance
(v) Unsuitable forecast period for project (v) Contractor financial power
(iv) Expectations for approval tests and
implementation (vi) Errors during execution
investigations
(vi) Change in project tasks (vii) Contractors delays
(v) Consultants delays
(vii) Owner’s administrative bureaucracy (viii) Contractors mismanagement
Stakeholders relationships Procurement management Risk management
(i) Inattention to risks
(ii) Deficiency of people involved in risk
(i) Limited time management
(ii) Underestimation of requirements (iii) Lack of training
(iii) Overestimation of requirements (iv) Lack of cooperation among team
(iv) Misinterpretation of requirements members
(i) Conflict between stakeholders
(v) Insufficient budget (v) Lack of control and complexity of
(vi) Mismanagement of risks changes
(vii) Dishonesty and unethical (vi) Lack of knowledge
relationship (vii) Weak relationship between project
stakeholders
(viii) Unavailability of information
Quality management Project initiation risks Control
(i) Unsuitable estimation of customers
(i) Low quality due to limited timeframe (ii) Unsuitable estimation of
(i) Lack of integrity in control of different
(ii) Quality of equipment customer’s requirements
areas
(iii) Manpower productivity (iii) Vague definition and constant
(ii) Delays in reporting and identifying the
(iv) Raw material changes in the project
corrective control
(v) Construction (iv) Choosing high risk lands
(iii) Lack of coordination between the
(vi) Design (v) Unsuitable marketing
control and implementation
(vii) Mapping (vi) Unsuitable feasibility study
(iv) Different levels of control
(viii) Laboratory (vii) The lack of a precise definition of
the project

concerned, but using these two elements is not sufficient and financial risks and project management risks were of the most
cannot cover all aspects of risk management. Additionally, importance.
the above-mentioned items also cannot handle the relation Reducing financial risk in our project needs integrated
between different risk drivers. Choosing AHP method to and quantitative management of finance with focus on
prioritize the risks is a way to overcome the limitations of the economic risks which can have an effective role in reducing
classic method. total risk of project.
As discussed before, managing our case study in west of Project management risk is another important risk
Tehran due to high levels of investment on it requires using among our priorities which mainly happens due to the lack of
advanced level of risk management. Cost, time, and quality appropriate experience of the people involved in the project
were three main items on which managers mostly focus to or unsuitable controlling of the human resources. Suggested
control the projects, but risk management by itself should be solutions to reduce this risk are increasing the knowledge
noticed as a factor that affects other items. Accordingly, to level of the human resources, internal and external train-
finalize the project and meet predefined objectives in cost, ing, hiring experienced human resources, establishment of
time, and quality, risk management should be concerned par- project management software, defining rules and responsibil-
allel with other objectives. Identification and prioritization of ities of the people, and routine reporting from the system. In
risks in this project can be useful as a managerial toolkit to this study, all risks are considered during life cycle of project.
reduce project failures. For further study, the ranking of risks from the perspective
In this project also risks of Project Life Cycle have been of the employer, contractor, and consultant will be proposed.
identified and shared with project experts in the mentioned Additionally, giving weight to experts and using statistical
company; then all gathered ideas and solutions were shared methods for prioritization of risks are recommended.
with project managers to reduce project costs.
These results help managers to focus on the most impor- Appendix
tant risks and problems. Based on the prioritization results
by experts ideas, from all the 11 groups of identified risks, See Table 4.
10 Journal of Construction Engineering

Conflict of Interests [18] A. Nieto-Morote and F. Ruz-Vila, “A fuzzy approach to con-

struction project risk assessment,” International Journal of
The authors declare that there is no conflict of interests Project Management, vol. 29, no. 2, pp. 220–231, 2011.
regarding the publication of this paper. [19] V. M. R. Tummala and J. F. Burchett, “Applying a Risk Manage-
ment Process (RMP) to manage cost risk for an EHV transmis-
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