Paper Submission: 27 November 2020
Author Notification: 7 to 10 days
Journal Publication: November 2020
Hesham Abd El Khalek , Remon Fayek Aziz , Hamada Mohamed Kamel
In the global construction market, most construction companies are willing to undertake international projects in order to maximize their profitability by taking advantage of attractive emerging markets and minimize dependence on local market. Due to the nature of construction works, there are lots of risks and uncertainties associated with the company and project conditions. Therefore, how the profitability of the project changes with occurrence of various risk events, in other words, the sensitivity of project costs to risk events, should be estimated realistically. This paper offers a comprehensive risk assessment methodology that provides a decision support tool, which can be utilized through the bidding decisions for international construction projects introducing a risk model that facilitate this assessment procedure, prioritize these projects and evaluate risk contingency value. The risk models is developed using the analytic hierarchy process (AHP) to evaluate risk factors weights (likelihood) and FUZZY LOGIC approach to evaluate risk factors impact (Risk consequences) using software aids such as EXCEL and MATLAB software. The reliability of the developed software has been tested by applications on a real construction projects. The proposed methodology and decision support tool have been proved to be reliable for the estimation of cost overrun due to risk while giving bidding decisions in international markets. Therefore, the developed model can be used to sort projects based upon risk, which facilitate company’s decision of which project can be pursued. The developed risk model is validated, which prove its robustness in risk assessment (97%) in company level and (105%) in project level. It can also be used to sort construction projects based upon its risks. The developed contingency risk model demonstrates the ability to evaluate risk contingency value by aggregating rules combining company risk index and project risk index using fuzzy logic approach and MATLAB software.
 Antonio J., Monroy A., Gema S. and Angel L., (2011). “Financial Risks in Construction Projects”. African Journal Of Business Management Vol. 5(31), Pp. 12325-12328,7 December, 2011.
 Carreño M. L., Cardona O. D. and Barbat, A. H. (2004). “Evaluation of the Risk Management Performance”. 250th Anniversary of The 1755 Lisbon Earthquake, 1technical University Of Catalonia, Barcelona, Spain.
 Deng X. And Low. (2012). “Understanding The Critical Variables Affecting The Level Of Political Risks in International Construction Projects”. KSCE Journal of Civil Engineering (2013) 17(5):895-907.
 Dias A, and Ioannou P.(1996). “Company and Project Evaluation Model for Privately Promoted Infrastructure Projects. Journal of Construction Engineering and Management, ASCE 1996; 122(1):71–82. March.
 Dikmen I, Birgonul T and Han S. (2007). “Using Fuzzy Risk Assessment to Rate Cost Overrun Risk in International Construction Projects”. International Journal of Project Management 25 (2007) 494–505.
 Enrique J., Ricardo C., Vicent E. and JerónimoA.,(2011), Analytical Hierarchical Process (AHP) As A Decision Support Tool In Water Resources Management, Journal Of Water Supply: Research And Technology—Aqua ( 60.6 ) 2011.
 Garshasb A., Mostafa A. and Abas A., (2012). “Fuzzy Adaptive Decision Making Model for Selection Balanced Risk Allocation”. International Journal of Project Management 30(2012) 511–522.
 Hyun- C., Hyo- C. And. Seo j., (2004). “Risk Assessment Methodology for Underground Construction Projects”, ASCE Journal of Construction Engineering and Management, 130, 258-272.
 Jessica M., (2014), “Pearson Correlation Coefficient: Formula, Example & Significance”. Http://EducationPortal.Com/Academy /Lesson/Pearson-CorrelationCoefficient-Formula-Example-Significance.Html#Lesson.
 John G. and Edward G. (2003). “International Project Risk Assessment: Methods, Procedures, and Critical Factors”. A Report of the Center Construction Industry Studies The University Of Texas At Austin.
 Liu Jun A, Wang Qiuzhen B, Ma Qingguo B.(2011). The Effects of Project Uncertainty and Risk Management on IS Development Project Performance”. A Vendor Perspective International Journal of Project Management 29 (2011) 923– 933.
 Lotfi A. Zadeh. (2002). “Fuzzy Logic Toolbox for Use with MATLAB, User’s Guide”.
 Ludovic V, Marle F, Bocquet J, C. (2011). “Measuring Project Complexity Using the Analytic Hierarchy Process”. International Journal of Project Management 29 (2011) 718– 727.
 Mag Malek. (2000). “An Application of Fuzzy Modeling in Construction Engineering”. International Proceedings of the 36th Annual Conference of the Associated Schools of Construction (ASC), 287-300.
 Ming W., And Hui Ch. (2003). “Risk Allocation and Risk Handling of Highway Projects In Taiwan”. Journal of Management in Engineering, Asce / April 2003.
 Prasanta D. (2002). “An Integrated Assessment Model For Cross Country Pipelines”. Environmental Impact Assessment Review, 22, (2002) 703–721.
 Pearson Correlation Coefficient Calculator.(2014), Http://Www. Socscistatistics. Com/Tests /Pearson /Default2.Aspx.
 Pearson's Correlation Coefficient, Data Analysis, 2014, Http:// Learntech.Uwe.Ac.Uk/Da/ Default. Aspx? Pageid=1442.
 Prasanta D. (2010). “Managing Project Risk Using Combined Analytic Hierarchy Process and Risk Map”. Applied Soft Computing 10 (2010) 990–1000.
 Saaty TL. The Analytic Hierarchy Process. 1980. New York: Mc graw- Hill, 1980.
 Saaty TL. Decision Making for Leaders. Belmont, California: Life Time Leaning Publications, 1985.
 Saaty TL. (1990). “How to Make a Decision: The Analytic Hierarchy Process”. European Journal of Operational Research, North-Holland 1990; 48:9±26.
 Saaty TL, Kearns KP.(1991). “Analytical Planning: The Organization of Systems”. The Analytic Hierarchy Process Series 1991; Vol. 4RWS.
 Salman A. (2003). “Study of Applying Build Operate and Transfer Bot Contractual System On Infrastructure Projects In Egypt”. PHD Thesis, Zagazig University, Faculty of Eng.
 Sou L., An C., And Chung Y. (2001). “A GA_ based Fuzzy Optimal Model for Construction Time-Cost Trade Off”. International Journal of Project Management, 19(1), 47-58.
 Wang, N., Horner and M. El-Haram. (2004). “Fuzzy Logic Approach to A Generic Elemental Whole Life Costing Model”, Twentieth Annual Conference of Association of Researchers in Construction Management, Vol. 1, 383-391, Edinburgh.
 Zayed T, Mohamed A, Jiayin P. (2008). "Assessing Risk and Uncertainty Inherent in Chinese Highway Projects Using AHP “Internal Journal of Project Management” 26 (2008) 408–419.
 Bu-Qammaz, A.S.(2007), “risk assessment of international construction projects using the analytic network process”, master of science thesis, Middle East technical university.
 Cooper D, Grey S, Raymond G and Walker P, 2007, “Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements”, John Wiley & Sons, Ltd, ISBN 0-470-02281-7.
 Zayed, T, and Chang, L. (2002). "Prototype Model for BuildOperate-Transfer Risk Assessment. Journal of Management in Engineering / January 2002 / 7.
Professor of Construction Engineering and Management, Structural Engineering Department, Faculty of Engineering, Alexandria University, Alexandria, EGYPT.
No. of Downloads: 83 | No. of Views: 127