RISK MANAGEMENT PRACTICES AND PERFORMANCE OF CONSTRUCTION PROJECTS IN NAIROBI CITY COUNTY GOVERNMENT, KENYA
Hilda Muthoni Mwangi - Masters of Business Administration (Project Management), Kenyatta University, Kenya
Dr. Lucy Ngugi - Lecturer, Management Science Department, Kenyatta University, Kenya
ABSTRACT
Risks in construction projects cannot be eliminated, however through proper risk management practices, the risks facing the construction projects can be minimized. Government funded projects are proclaimed to lag behind in their construction and tend to consume high costs of building and maintenance due to various factors. The study sought to establish the influence of risk management practices on performance of projects by the Nairobi City County Government, Kenya. The specific objectives wereto determine the effect of design risk management practices, legal risk management practices, construction risk management practices and contract risk management practices on performance of projects. The performance of the Nairobi county government funded construction projects was evaluated by project sustainability, consumer acceptability, timeliness and cost. The study was anchored on the following theories; agency theory and uncertainty theory. Empirical literature reviewed scholarly studies on design risk, legal risk, contract risk and construction risk management practices and their influence on performance of projects. The study used a descriptive research design. The population of study involved contractors, consultants and project engineers for 10 construction projects across the Nairobi City County. This consisted of 380 respondents involved in projects from the companies. A sample of 190 respondents was taken from the population. The primary data was collected by use of self-administered survey questionnaire. Data analysis was done by use of descriptive and inferential statistics such as frequencies, percentages, mean scores and standard deviation. A regression analysis was conducted to establish the correlation between the variables. The study revealed that the most prevalent risk management practices employed by the Nairobi City County government on construction projects were costing of projects, project designing, and dispute over land and construction. The risk management practices; legal risk management, construction risk and contract risk management were found to have an inverse relationship with the construction project performance while design risk management had a positive one. The study recommended that for the construction department and constructors to mitigate risks involved in the project implementation process there is need for proper project design, legal approval and policy requirements adherence, proper planning to ensure all resources are available to effect the construction project and proper contracting with every stakeholder being appreciated and involved in the project planning and formulation process.
