There are many risks in construction as technical risk, financial risk, logistics risk so managers need to understand the project. Analyze and manage risks in construction is very important for project management. This help to avoid or limit risks in construction projects.
The construction risks can be broadly grouped under the following categories:
. Financial Risks
* Availability and fluctuation in foreign exchange.
* Delay in Payment.
* Repatriation of funds.
* Local taxes.
. Logistical Risks
* Availability of resources – particularly construction equipments, spare parts, fuel and labor.
* Availability of sufficient transportation facilities.
. Technical Risks
* Incomplete design.
* Inadequate site investigation.
* Uncertainty over the source and availability of materials.
* Appropriateness of specifications.
. Political Risks
* Constraints on the availability and employment of expatriate staff.
* Customs and import restrictions and procedures.
* Difficulties in disposing of plant and equipment.
* Insistence on use of local firms and agents.
. Construction Risks
* Uncertain productivity of resources.
* Weather and seasonal implications.
* Industrial relations problems.