Identifying key risks in infrastructure projects – Case study of Cairo Festival City project in Egypt

Ain Shams Engineering Journal 10 (2019) 613–621

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Architectural Engineering

Identifying key risks in infrastructure projects – Case study of Cairo Festival City project in Egypt Laila M. Khodeir a,⇑, Mohamed Nabawy b a b

Department of Architecture Engineering, Ain Shams University, The British University in Egypt, Cairo, Egypt British University in Egypt, London South Bank University, School of Built Environment and Architecture, UK

a r t i c l e

i n f o

Article history: Received 14 April 2018 Revised 14 October 2018 Accepted 9 November 2018 Available online 23 February 2019 Keywords: Risk Management (RM) Risk Break Down Structure (RBS) Risk Register (RR) Infrastructure Projects (IP)

a b s t r a c t Infrastructure is an asset class vulnerable to high political, regulatory and execution risk. The successful delivery of infrastructure projects (IP) is challenging due to uncertain events which might appear, and which generate threats towards project activities. This paper is concerned with identifying key threats arising from the internal and external environment of stakeholder’s organization during construction of IP. The methodology of the paper includes a literature review of infrastructure challenges, followed by identification and classification of risk factors using risk breakdown structure. Furthermore, a check list analysis of key risks was performed. The ‘Cairo Festival City” project was analysed as a case study of infrastructure project. Purposive sampling was used in order to target 70 specific experts related to infrastructure projects. Finally, the paper generated a full risk register that presents identified challenges gathered from the literature as well as agreed risks which resulted from the Egyptian case study. Ó 2019 The Authors. Published by Elsevier B.V. on behalf of Faculty of Engineering, Ain Shams University. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-ncnd/4.0/).

1. Introduction The development of infrastructure is one of the most important activities that can boost up the business of various industries, thereby increasing the gross domestic product (GDP) of the country [1]. Infrastructure projects have become more complex, and larger in scale, due to the advances in technology and operations. These projects are usually outsourced to multiple contractors and sub-contractors [2]. Most IP are being over running in terms of either time or amount [3]. Uncertainty associated with human performance in construction of IP is an inevitable source of risk during the operation phase [4]. This paper presents the risk identification process as the first phase of risk management processes, where this process is considered an iterative one, where new risks may arise during the project progress, through its life cycle. The frequency of iteration and who participates varies from one case to another. The risk identification ⇑ Corresponding author at. E-mail addresses: [email protected], [email protected]. eg (L.M. Khodeir), [email protected] (M. Nabawy). Peer review under responsibility of Ain Shams University.

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process used in this paper alternatively leads to risk analysis processes, where risk factors are analysed qualitatively. Infrastructure investment involves complex risk analysis, risk allocation and risk mitigation, given the highly idiosyncratic and illiquid nature [5]. It is important to examine and identify project specific potential hazards which can cause cost overrun and delay of infrastructure projects in Egypt. It is said that 16.6% of projects always face cost overrun, 37% often suffer from cost increase, and 98% of Egyptian contractors have been delayed on delivering their project on time planned [6]. This may be done by reducing them to a detailed level, thus permits the evaluator to understand the significance of any risk and identify its origins and causes. This paper includes the analysis of a case study of Cairo festival city project in Egypt. The site of this project covers a total land area of 696 Feddans, located approximately 20 km southeast of Cairo. The project was selected since it includes the construction of different infrastructure activities at a high cost of more than $ 50 million. Thus, it was considered as a prototype project with interrelated activities, use of resources, and high budget. the project includes construction of sewage networks, irrigation networks, water networks, water tank, irrigation tank, water pump station, and sewage pump station. The degree of project uncertainty is high due to the complexity in managing construction risks. This includes risks associated with management of huge number of resources, involvement of different parties, and high technical working environment.

https://doi.org/10.1016/j.asej.2018.11.003 2090-4479/Ó 2019 The Authors. Published by Elsevier B.V. on behalf of Faculty of Engineering, Ain Shams University. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

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2. Paper methodology

3.1. Identifying key risks in infrastructure international Researches

This paper presents the first stage of risk management process, namely ‘The Risk Identification Process’. The input of the risk identification process includes risk factors impacting contractor’s objectives during construction in Egypt [7]. As illustrated in Fig. 1, risks are first gathered from the literature including papers and risk studies related to construction risks and infrastructure contexts. Risk factors are then categorized using the risk breakdown structure (RBS) technique. Furthermore, structured risks are formulated into a checklist form in order to obtain the agreement of infrastructure professionals. Experts can then agree or disagree on whether the risk has a real impact on infrastructure projects activities in Egypt or not. Respondents’ results conducted from the check list are then analysed to be able to rank the identified risks according to their percentage of agreement by professionals. By the end of the paper, a complete list of identified and agreed upon key risks will be organized as the output of this process presenting the ‘Risk Register’.

The first step to perform the risk identification process is to gather risk factors from previous papers. Risk categories recognised after reviewing international literature relative to this study are illustrated in Table 1. The table presents four recognised risk categories which can impact international infrastructure projects cost and time. Data includes reviewed paper publishers, their corresponding categorized groups, and the percentage of authors agreement on each of the risk factors categories. The table hereby, explores the most highlighted infrastructure risk categories used globally. Fig. 2 presents a chart of the Risk Categories on the x-axis and their corresponding percentage of agreement among authors on each of the infrastructure risks category on the y-axis. Based on authors opinions, the mostly recognised risks category is considered to present the most likely risks to occur during construction of international infrastructure projects. It can be observed from the analysis regarding international literature that 80% of the Authors recognised both technical risks and project management risks as the most agreed upon infrastructure categories. Infrastructure technical risks include risk events towards infrastructure activities executed on site, whereas, project management risks are concerned with top management risks towards management of infrastructure resources and decision making. Financial risks include risks towards the availability of affordable funds to best finance contractors’ cash flow based on previously estimated budget, those risks were highlighted by 70% of the authors presented in Table 2. The least agreed upon risk according to the authors were external risks, which were presented in 40% of the reviewed literature. External risks include infrastructure risks arising from the stakeholders’ external environment that has a probability to occur and can impact successful delivery of international infrastructure construction. Table 2 also presents international infrastructure construction risks which are gathered after reviewing international infrastruc-

3. Literature review Almost all infrastructure projects are overrunning in terms of either time, amount, or even deteriorated quality of projects. Thus, identification of Infrastructure construction risk is considered to be crucial in achieving success in project delivery [8]. Risk management is a scientific approach of identifying, anticipating and minimizing the possible adverse impacts on the projects [9]. Both risk categories and risk breakdown structure are used to structure identified construction risk factors [7]. The PMBok (2017) illustrates the risk identification stage into inputs, techniques, and outputs. The inputs include risk factors conducted from papers and previous projects. Through techniques of documentation reviews and information gathering techniques (Brain Storming Sessions and/or Check list analysis), the Risk register is obtained as the main output of the risk identification process.

Inputs Gathering Data From the Literature

Risk Break Down Structure (R.B.S)

Check List Analysis

Output List of Identified Risk Factors (Risk Register)

Fig. 1. Risk Identification Process (PMBoK, 2017).

Table 1 Infrastructure recognised risks categories in international researches, Sources: [10-19]. Author

Risk Category

% Agreed

Makarand et al. (2001), Davies et al. (2001), Abbot et al. (2009), Xu et al. (2010), Dikmen et al. (2006), Hamdi (2002), Sigmund (2014), Anood (2014) Xu et al. (2010), Hamdi (2002), Anood (2014), Davies et al. (2001) Xu et al. (2010), Dikmen et al. (2006), Hamdi (2002), Ojo et al (2015), Sigmund (2014), Anood (2014) Makarand et al. (2001), Xu et al. (2010), Hamdi (2002), Ojo et al (2015), Sigmund (2014), Anood (2014), Tablish et al (2011), Dikmen et al. (2006)

Technical Risks

80

External Risks Financial Risks

40 70

Project Management Risks

80

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% Authors Agreed in Internaonal Infrastructure Researches 80%

80%

80% 70%

70% 60% 50%

40%

40% 30% 20% 10% 0% TECHNICAL RISKS

EXTERNAL RISKS

FINANCIAL RISKS

PROJECT MANAGEMENT RISKS

Fig. 2. Percentage of Agreed Authors and Infrastucture Risks Categories in International Studies.

Table 2 Infrastructure recognised risks categories in international studies, Sources: [10-19]. Author

Risk Category

Risk Factors

Code

% Agreed

Makarand et al. (2001), Xu et al. (2010), Dikmen et al. (2006), Hamdi (2002), Sigmund (2014) Makarand et al. (2001), Abbot et al. (2009), Hamdi (2002) Makarand et al. (2001), Davies et al. (2001), Xu et al. (2010), Hamdi (2002) Makarand et al. (2001), Davies et al. (2001) Davies et al. (2001), Xu et al. (2010). Dikmen et al. (2006), Hamdi (2002). Hamdi (2002), Anood (2014)

Technical Risks (IA)

Technology Changes and Complexity

IA.1

50

HR Productivity Material Selection

IA.2 IA.3

30 40

Davies et al. (2001), Hamdi (2002).

External Risks (IB)

Quality Control Sewer Location Poor planning design errors Changes in shop drawings during construction Delay in approval and preparation of shop drawings Soil Corrosively Soil Fracture Potential Unforeseen weather geotechnical condition Inflation Change in Market demand Poor public decision-making process Government corruption Unsupportive Policy Delay in contractor payment by owner Change orders Conflicting contract Management Focus Contractor Internal coordination deficiencies Excessive bureaucracy by owner organization Market Competition Labor non-availability Organization and coordination risk Inexperience of client Poor performance of subcontractors Owner slow Decision Owner interference Poor site management

IA.4 IA.5 IA.6 IA.7 IA.8 IB.1 IB.2 IB.3 IB.4 IB.5 IB.6 IB.7 IC.1 IC.2 IC.3 IC.4 ID.1 ID.2 ID.3 ID.4 ID.5 ID.6 ID.7 ID.8 ID.9 ID.10 ID.11

20 20 20 20 20 20 20 20 20 20 20 20 30 30 10 10 10 20 10 10 20 10 20 20 20 20 20

Xu et al (2010), Anood (2014)

Hamdi (2002), Dikmen et al. (2006), Xu et al (2010) Hamdi (2002), Anood (2014), Sigmund (2014) Hamdi (2002) Xu et al (2010) Makarand et al. (2001) Hamdi (2002), Makarand et al. (2001) Hamdi (2002) Xu et al. (2010) Xu et al. (2010), Dikmen et al. (2006) Xu et al. (2010) Dikmen et al. (2006), Xu et al (2010) Dikmen et al. (2006), Hamdi (2002) Hamdi (2002), Tablish et al (2011)

Financial Risks (IC)

Project Management Risks (ID)

ture studies. Based on the reviews, these risks can occur and impact international IP objectives. The table reviewed paper publishers, their corresponding recognised risks, and the percentage of authors agreement on each of the infrastructure construction risk factor. Fig. 3 presents a bar chart by which international infrastructure risk factors are illustrated on the x-axis and their corresponding percentage of authors agreement. It was observed that the key agreed risks are the technical risks, where 50% of the authors agreed that technology changes and complexity. This risk was followed by risks related to material selection with 40% agreement among authors, and human resource productivity with 30% agreement. According to 20% of the sources this was followed by external risks, which include unforeseen conditions such as poor weather, uncertain soil issues, inflation in material prices, market disruption, poor governmental decisions and support.

Regarding the key financial risks, both unsupportive policy and delay in receiving construction payments were agreed upon by 30% of the authors, whereas, the key project management risks included contractor internal coordination deficiencies, labour non-availability, inexperience of client, poor performance of subcontractors, owner slow decision, owner interference, and poor site management. 3.2. Identifying key risks in infrastructure Egyptian Researches In relation to the paper context, Egyptian specific infrastructure risk categories have further been highlighted in Table 3. The table presents four recognised risk categories which can impact Egyptian IP delivery. Data includes reviewed paper publishers, their corresponding categorized groups, and the percentage of authors agree-

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%Agreed Authors for Internaonal Infrastructure Construcon Risks

50 50

40 40 30 30

30 30 20 20 20 20 20 20 20 20 20 20 20 20

20

20

20 20 20 20 20

20 10 10 10

10 10

10

10 IA.1 IA.2 IA.3 IA.4 IA.5 IA.6 IA.7 IA.8 IB.1 IB.2 IB.3 IB.4 IB.5 IB.6 IB.7 IC.1 IC.2 IC.3 IC.4 ID.1 ID.2 ID.3 ID.4 ID.5 ID.6 ID.7 ID.8 ID.9 ID.10 ID.11

0

Fig. 3. Percentage of Agreed Authors and Infrastructure Risks in International Studies.

Table 3 Infrastructure recognised risks categories in egyptian researches, Sources: [15], [20-22]. Author

Risk Category

% Agreed

Ghada (2016), El Kholy (2015)

External factors Financial risks Projects Management Technical related

34

Hamdi (2002), Ibrahim et al (2014), El Kholy (2015), Emad (2014), Ahmed (2014) Ibrahim et al (2014), El Kholy (2015), Ghada (2016), Ahmed (2014) El Kholy (2015), Ghada (2016), Emad (2014)

83 67 50

ment. Fig. 4 presents the infrastructure risk categories on the xaxis and the corresponding % of agreed authors on the y-axis. Through exploring Egyptian literature, it has been observed that regarding national researches, the highest infrastructure risk category is considered to be the financial risks with 83% of authors agreement. Project management related risk category is followed with 67% of agreement among authors. However, 50% of authors agreed on technical related risks. The least agreed infrastructure risk category includes the external risks with 34% of agreement. In conclusion to the previous literature analysis, it is clear that risks observed from local literature sources require specific actions. For instance, in the case of managing financial risks, the selection of contractors with financial stability during execution of projects, would more likely guarantee meeting the planned budget. As for the risks related to applying efficient Project management, key stakeholders of such projects should improve knowledge within project managers towards providing optimum utilization of resources, in order to mitigate the impact of such risk. Table 4 presents national infrastructure construction risks which were gathered after reviewing their literature. Based on

the reviews, these risks can occur within Egyptian context and can impact the Egyptian IP objectives. The table stands on highlighting the key risk factors agreed upon by Egyptian authors. Fig. 5 presents a bar chart by which Egyptian infrastructure risk factors are illustrated on the x-axis and their corresponding % of agreement among Egyptian researchers is presented on the y-axis. Based on authors identification, the mostly recognised infrastructure risks are considered to present the most likely risks to occur in Egyptian infrastructure projects. The highest infrastructure risks can most remarkably result in failure in construction of Egyptian infrastructure projects. The most agreed upon infrastructure risk was considered to be project management related risks, which include both quantity variations and specialized subcontractor with both 84% of agreement among Egyptian authors. Project management risks were then followed with poor economic situation risks which ware proven in the studies through Egypt’s increase dependency on bank loans by both organizations and the government. In addition, Egypt is facing a problem of inflation and unstable economic situation which impacts the purchasing ability of infrastructure construction materials. The second key risks include financial related risks, which mainly include change of order, and delay in contractor payments by owner and cash flow accuracy, by which resources and costs are accurately allocated to compare to overall infrastructure construction budget. Technical risks then followed, which include consultant approval risks, owner approval risks, and subcontractor low experience risks. External risks were agreed upon by 50% of researchers. Where on one hand, the government is said to support contractors with external risks which contractors have no hand in. On the other hand, Egyptian infrastructure contractors are to account for any possible inflation in prices of resources which can have direct

% Authors Agreed in Egypan Infrastructure Projects 90 80 70 60 50 40 30 20 10 0

83 67 50 34

EXTERNAL FACTORS

FINANCIAL RISKS

PROJECTS MANAGEMENT

TECHNICAL RELATED

Fig. 4. Percentage of Agreed Authors and Infrastucture Risks Categories in Egyptian Researches.

617

L.M. Khodeir, M. Nabawy / Ain Shams Engineering Journal 10 (2019) 613–621 Table 4 Infrastructure recognised risks categories in national studies, Sources: [15], [20-22]. Author

Risk Category

Risk Factors

Code

% Agreed

Ghada (2016), El Kholy (2015)

External factors (NA)

Hamdi (2002), Ibrahim et al (2014), El Kholy (2015) Ibrahim et al (2014), El Kholy (2015), Ghada (2016) Ibrahim et al (2014), El Kholy (2015), Ahmed (2014), Emad (2014)

Financial risks (NB)

Revolutions Poor Weather Strikes Material price inflation. Risk premium support by governmental Change order Delay in contractor payment by owner Cash flow problems during construction dependency on bank loans contractor cash flow calculation, quantity variations

NA.1 NA.2 NA.3 NA.4 NA.5 NB.1 NB.2 NB.3 NC.1 NC.2 NC.3

34 34 34 50 50 67 67 67 67 67 84

procurement method hiring specialized staff specialized subcontractor training courses utilized computerized approaches contract related HR Management Consultant missing details inaccurate material estimation Consultant related Owner related subcontractor related Poor Quality Control

NC.4 NC.5 NC.6 NC.7 NC.8 NC.9 NC.10 ND.1 ND.2 ND.3 ND.4 ND.5 ND.6

34 50 84 50 34 50 50 34 17 50 50 50 34

Projects Management (NC) Hamdi (2002), Ibrahim et al (2014), El Kholy (2015), El Kholy (2015), Ghada Farouk (2016) Ibrahim et al (2014), El Kholy (2015), Ghada Farouk (2016), El Kholy (2015), Ghada Farouk (2016)

El Kholy (2015), Ghada Farouk (2016), Emad (2014) Technical related (ND)

%Agreed Authors for Naonal Infrastructure Construcon Risks 84

84 67 67 67 67 67 50 50

50

34 34 34

50

34

50 50 34

50 50 50 34

34

ND.6

ND.4

ND.5

ND.3

ND.2

ND.1

NC.10

NC.9

NC.8

NC.6

NC.7

NC.5

NC.4

NC.3

NC.1

NC.2

NB.2

NB.3

NB.1

NA.4

NA.5

NA.2

NA.3

17

NA.1

90 80 70 60 50 40 30 20 10 0

Fig. 5. Percentage of Agreed Authors and Infrastructure Risks in Egyptian Studies.

impact on the infrastructure construction cost. The least infrastructure risk agreed among Egyptian infrastructure researchers was the inaccurate estimation of materials quantity. That is because most of the Egyptian contractors are likely to hire highly skilled and well-educated human resources. Moreover, quantities estimation is revised consequently in office and on site. Infrastructure risk, however, is still likely to occur and cause an impact due to possible HR errors. 3.3. Risk break down structure Risk Breakdown Structure provides means for the project manager and risk manager to organize the risks being addressed or tracked. The Risk Breakdown Structure (RBS) is considered a ‘‘hierarchically organized depiction of the identified project risks arranged by risk category”, [7]. The Project Management Institute (PMI) has a team working on a practice standard for risk management, this team has identified the effective tool of risk breakdown structure (RBS). Coding the information enables the researcher to easily compare the information per main category and subcategory [20]. The RBS shall help the risk management team to

understand, and therefore will identify and assess the risk, where risk categories provide a structure that ensures the comprehensive process of systematically identifying risks to a consistent level of detail and contributes to the effectiveness and quality of risk process identification. Table 5 presents the review for identified infrastructure execution risks and their corresponding number of agreed authors conducted from infrastructure execution risks in international and Egyptian literature. Fig. 3, shows the percentage of agreed authors and infrastructure risks in international studies, Fig. 4 illustrating a bar chart regarding the percentage of agreement among authors on and infrastructure risks in Egyptian researches, and Fig. 5 which presents the overall infrastructure risks identified from the literature review which forms a combination between researchers’ infrastructure execution risk studies. Furthermore, the technique of questionnaire is applied on categorized risk factors recognised in Fig. 6. Risk Breakdown Structure (RBS), which is used in this study, collects risk factors as illustrated in Fig. 7. These risk categories include technical risks, project management risks, financial risks, environmental risks and external risks. Collected risk factors are

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L.M. Khodeir, M. Nabawy / Ain Shams Engineering Journal 10 (2019) 613–621 Table 5 Identified International, Egyptian, and Authors Infrastructure Construction Risks.

Authors Idenfied Infrastructure Construcon Risks

Technical Risks

External Risks

NC.9

NC.7

NC.5

NC.3

NC.1

ID.8

ID.10

ID.4

Financial Risks

ID.6

ID.2

NB.3

IC.3

NB.1

IC.1

NA.4

IB.7

NA.2

IB.3

IB.5

IB.1

ND.5

ND.3

ND.1

IA.5

IA.7

IA.1

IA.3

90 80 70 60 50 40 30 20 10 0

Project Management Risks

Fig. 6. Authors Identified Infrastructure Construction Risks.

Infrastructure Projects RBS A Technical Risks

B

C

D

Project Management Risk

Financial

Environmental Risk

Risk

E Organizaonal Risk

F External Risks

Fig. 7. Risk Break Down Structure used in this study, Authors.

further classified based on these risk categories. Fig. 6 illustrates the paper’s risk breakdown structure (RBS) which applies international and national authors’ experience to best suit the construction of infrastructure projects in Egypt. The developed (RBS) consists of both: Internal Risks (technical risks, project management risks, financial risks, environmental risks, and organizational risks) and External Risks. Internal risks represent the risks of construction activities constructed by an infrastructure contractor’s organization. On the other hand, external risks are risks external to the constructed infrastructure environment.

to provide a major urban node within Cairo, recognizable from within the overall community. The project includes the construction of Utility area including water and irrigation tanks, water pump station, and sewage pump station. The project also includes construction of infrastructure networks including underground water supply network, irrigation network, and sewerage network. The constructed infrastructure serves a mixed development, including residential areas, commercial/retail areas, school, hospital and similar service facilities all constructed within the boundaries of Cairo Festival City Project.

4. Analysis of case study

4.2. Application of questionnaire

4.1. Background of the case study

In order to perform the technique of checklist analysis, risk factors collected were first categorized according to their RBS presented in Fig. 6. Each infrastructure risk category explores a list of infrastructure risk factors which has an impact on cost and/or time of infrastructure projects construction in Egypt. Each risk category was given a code, consequently, risk factors were coded based on these categories. Thus, risk factors are tabulated according to their Risk Breakdown Structure (RBS). Risk factors and their categories were then formulated into the questionnaire that was distributed among 70 construction experts during the construction of Cairo Festival City infrastructure activities. 50 personnel responded to the questionnaire and thus obtaining a response rate of 72 percent. A participant’s opinion that agrees or disagrees with the risk will affect cost and/or time of

Aiming at undergoing a comprehensive analysis of key risks allocated in IP, a prototype case study project was selected in order to stand on the status of risks in IP in Egypt. The analysis of the project was based on collecting data through both, survey questionnaire and direct observation, since the research team of this paper was taking part of the execution of the project. The risk identification questionnaire was distributed among a sample of 70 personnel. The selected case study of Cairo Festival City project is situated within Zone 15 in relation to the site wide works of the New Cairo City. The site covers a total land area of 696 Feddans, located approximately 20 km northeast of Cairo. The project objective is

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project are shown in Fig. 8. These risks although applied to the Cairo Festival city, however, they relied on the findings of literature sources either nationally or internationally. Thus, considering Egyptian experts’ opinions on gathered infrastructure risks is said to accurately identify the most reliable risks of the execution of infrastructure projects in Egypt. Fig. 8 illustrates each of infrastructure risk factors and their corresponding codes. The total number of agreed participants, as well as the risk factor agreed percentage. Experts’ opinions are categorized into: most agreed infrastructure risks, agreed group of infrastructure risks, and the least agreed infrastructure risks. Regarding the group of most agreed infrastructure risks, pipe networks installation stands to be the most, with more than 89% of agreement. This risk is related to the technical infrastructure risk category and includes high complexity and the need of experienced workers, where in order to install pipes, correct sizes are to be delivered on site first, which needs good quality control skills. Even installation requires the right crane for raising, maneuvering, and lowering the pipes. Human resource expertise includes surveyors and workers to fix pipes in the best place. Most agreed infrastructure risks also include consultant material approval, late delivery of materials as a supplier possible issue, and inefficient quality control on supervision on executed activities including concrete, formworks, reinforcement fixing, cutting, and placing manholes. Agreed infrastructure risks include important infrastructure risks which are not agreed by most of the Egyptian experts. Despite

sewage networks construction was taken into consideration. In addition, project party responsible for risk occurrence was identified. 4.3. Checklist technique The Sample shown in Table 6 presents hundred and fifty-seven risk factors and their corresponding categories. The objective of this checklist is to obtain the key fifty risk factors to be analysed qualitatively. Each risk category is given a code by which risk factors are sorted according to their risk breakdown structure (RBS). The codes used in this paper are as follows: A- Technical Risks, B- Project management risks, C- Financial risks, D- Environmental risks, E- Organizational risks and F- External Risks. The evaluation column reflects opinion of the participant wither agrees or disagrees with the importance of each risk. Risk factors can occur during construction of infrastructure projects in Egypt, thus answering the question ‘‘Does it lead to a risk?” column reflects the severity of risk in case it occurs. The last comments column allows the participant to add further information. Such information may include the party responsible for this risk factor and its impact on cost and/or time. 4.4. Check list analysis According to the respondents of the research questionnaire, the most and least agreed upon risks that occurred in the case study

Table 6 Sample of distributed questionnaire. Code

Risk Factors

A A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12

Technical quality performance risk Technology changes Poor Water Insulation Application Delay in Material Approval Late Delivery of Material to Site Inefficient Quality control Incorrect Sewer location Poorly Installed Sewers Shortage of construction equipment’s Unsuitable Soil Filled Around Sewers Wrongly Installed Sewer size Delivery Problems in Sewer pipe length Inadequate quality control checks

Evaluation p ( /x) p p p p p p p p p p p p p

Does it lead to a risk?

Impacted Objective (Cost/Time)

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

EXPERTS OPINION IN IDENDENTIFYING INFRASTRUCTURE RISKS

64.6 31 INCOMPLETE DRAWINGS

70.8 34

35

35

75 36

64.6

F7

31

UNFORESEEN WEATHER

A15

CHANGE IN REGULATIONS

PERSONNEL TRAINING

A14

64.6

COMPLEXITY IN EXECUTION

C15

AGREED RISKS

31

OWNER FINANCING

B15

CLIENT ATTITUDE

64.6 31

MATERIAL UNAVAILABILITY

C12

64.6

70.8 34

CASH FLOW PROBLEMS

A7

31

85.4 41 INSTALLED OF MANHOLES

A5

INEXPERIENCE OF CLIENT

85.4 41 INEFFICIENT (QC)

A4

72.9

85.4 41 LATE DELIVERY OF MATERIALS

A3

MOST AGREED RISKS

72.9

87.5 42

A6

Agreed %

MATERIAL APPROVAL

PIPES INSTALLATION

43

89.6

Total No. agreed

F9

F10

F20

F22

LEAST AGREED RISKS

Fig. 8. Identified Infrastructure Risks based on Experts Opinions.

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that, this group of infrastructure risks has an agreed range of 70% to 75% of the experts surveyed. The most risk agreed upon by 75% of the professionals was cash flow deficiencies, this could be clear in light of the fact that if the contractor’s cash flow is biased it will be possibly hard for contractors to cope with the estimated infrastructure project budget. Complexity with execution is agreed upon within 71% of the experts, where infrastructure is said to be more complex than other construction industry. The construction industry in Egypt in particular faces a lot of complexity, regarding expertise, management of resources, use of equipment’s, and safety issues. In the case of Cairo Festival City, during the execution of sewage networks, it took a lot of time to just lift the pipe from the tractor using the crane and belt. It also took more than the estimated time by workers to maneuver the sewage pipe and lower it on the soil bedding resulting in cost and time overrun. Although the activity of tunnel footings started, the beams construction was put on hold for a long time till projects water and irrigation pipes were laid between the tunnel footings. Material unavailability was agreed upon by 73% of experts, where according to the project specifications the contractor had to produce a high-quality fair-face water tanks concrete walls. The contractor was forced to import forms from UAE to cope with the requirements. It took a lot of time and an increased cost. Design drawing mistakes were an infrastructure risk agreed upon by 65% of the experts, it caused delay in producing the shop drawings before execution. This risk was clear in different occasions during construction of the project. The contractor received mistakes in design reinforcement for water tank sump foundation which took a while for the contractor to redesign it in shop drawings. The least group of agreed infrastructure risks includes client related issues. These include client attitude and inexperience, where the client should be more cooperative and must support efficient communication in order to improve the infrastructure project performance. In addition, the client must avoid continuous moving of contractor human resources and equipment’s from one place to another for either instant prioritized area or external visits. 5. Research findings 5.1. Findings of key identified infrastructure risks It is noticed that identified infrastructure risk factors obtained from the national literature, international literature, and case study are interrelated. Through both reviews and case study work, several categories infrastructure risks were explored and examined in order to identify infrastructure construction risks in Egypt. On one hand, technical infrastructure risks were agreed upon by 80%

of the international researchers, approved by 50% of Egyptian researchers, and identified by most of the Egyptian experts working within Egyptian infrastructure projects. On the other hand, a range of 71% to 91% of Egyptian experts identified technical risks as the main impacting factor on infrastructure completion time and/or cost, thus, technical infrastructure risks must be properly defined and managed before starting the execution process in Egypt. Strongly related results were also clear regarding both project management risks and financial risks. Experts agreed on identifying these risks with a range of 73% to 75% of agreement as key risks. This goes with the Egyptian researchers agreed percentages of 67% on projects management risks and 83% for financial risks. Researches regarding international projects also agree closely with a percentage of 80% regarding project management risks and 70% regarding financial risks. These results highlight the importance of maintaining a good financial management of risks regarding contractor’s cash flow and payments, improved management of human resources, materials management, and efficient decision making. It was recognised that external infrastructure risks were the least infrastructure risks agreed upon by international researchers, Egyptian researchers, and infrastructure Egyptian experts. However, 65% of Egyptian infrastructure experts agreed that external risks can impact Egyptian infrastructure projects completion time and cost. This urges Egyptian infrastructure contractors to account for any external risks which are agreed upon by Egyptian infrastructure experts. External risks can arise from the external construction environment and can directly impact infrastructure activities. Events including unforeseen weather conditions, inflation, rise in materials’ prices, and political instability, are all external forces recognised within the Egyptian construction context. 5.2. Generic findings: Risk identification output The primary output from risk identification process is the initial entry into the risk register. The risk register ultimately contains the outcomes of the other risk processes as they are conducted, resulting in an increase in the level and the type of information contained in the risk register. Table 7 represents the risk register of each risk factor and its corresponding code. Risk factors are considered to be threats, as shown after being agreed on by sewage network projects expert participants. Each categorized group is also indicated corresponding to each risk factor. The risk register, as an output of risk identification process, is used as an input into risk analysis phase.

Table 7 Risk register for infrastructure projects in Egypt, Authors. Risk code

O/T

Risk Title

Risk Category

A6 A3 A4 A5 A7 A10 A11 A1 A9 B3 B5 A2 A8 A16 A17

T T T T T T T T T T T T T T T

Incorrect Sewer location during construction Delay in Material Approval Late Delivery of Material to Site Inefficient Quality control Poorly Installed Sewers Wrongly Installed Sewer size Delivery Problems in Sewer pipe length Technology changes Unsuitable Soil Filled Around Sewers Inadequate supervision system Low subcontractor performance Poor Water Insulation Application on Site Shortage of construction equipments Poor subcontractor’s performance Shortage of construction materials

Technical Risks Technical Risks Technical Risks Technical Risks Technical Risks Technical Risks Technical Risks Technical Risks Technical Risks Project Management Risk Project Management Risk Technical Risks Technical Risks Technical Risks Technical Risks

L.M. Khodeir, M. Nabawy / Ain Shams Engineering Journal 10 (2019) 613–621

6. Conclusion The paper highlighted the first stage of the risk management process which is the risk identification. A total of hundred and fifty-seven risk factors have been elaborated. The literature review formed the input of the process including risk factors related to the construction of infra structure projects in Egypt. The analysis of Cairo Festival City IP through questionnaire and observation results represent the percentage of the total number of participants who agreed upon risk factors. Based on the experts’ response, risk factors were ranked according to most agreed percentages. Thus, the key important risk factors which have the greater impact on infrastructure project objectives were recognized. Finally, the paper highlights the risk register as the output of the process. Risk register clearly reflects the results obtained from these checklists. These results include all approved risk factors and their corresponding group category arranged according to the risk breakdown structure. Furthermore, risk register is used as the input of the second process in risk management, which is a qualitative risk analysis process. Finally, the authors of this paper recommend to perform a further step in an upcoming research that include the application of a qualitative risk analysis on each of the identified key risks in this paper. Where qualitative risk analysis, namely, classifying risks according their probability of occurrence and their impact on projects constraints, shall help to validate the results of this paper. Thus this could produce a verified list register that could be applicable to IP in Egypt. References [1] Kannan Aravind, Vairamuni T, Mahadevan G. A review on critical risk factors affecting building construction projects. SSRG Int J Civ Eng – (ICRTCETM-2017) – Special Issue, ISSN: 2348 – 8352; 2017. [2] Sebastiaan Staats. Interface Management in multidisciplinary infrastructure project development, diminishing integration issues across contractual boundaries in a Systems Engineering environment. MSc, Thesis. Construction Management and Engineering, Delft University of Technology, Faculty of Civil Engineering and Geosciences; 2014. [3] Koirala Madhav Prasad. Contribution of risk factors for infrastructure development of Nepal. Am J Civil Eng 2017;5(3):124–31. [4] FIDIC. Sustainable Infrastructure. FIDIC State of the World Report; 2012. [5] Ghada Badawi, Nawawy. A model for evaluation of delays in construction projects. Int J Innovat Res Sci Eng Technol 2016;5(3). [6] Annual Report. The World Bank; 2015 file:///C:/Users/Ibrah/Downloads/ WBAnnualReport2015EN.pdf. [7] Marzouk Mohamed M, El Kherbawy Ahmed A, Mostafa. Factors influencing sub-contractors’ selection in construction projects. HBRC J 2013;9:150–8. [8] A Guide to the Project Management Body of Knowledge Book; 2017, Ed. (6). [9] Koirala MP. ‘Risk in Housing and Real Estate Construction Project Study in Nepal’. A thesis submitted to the Singhania University, PhD Thesis; 2012. [10] Makarand H. Risk factors affecting management and maintenance cost of urban infrastructure. J Infrastruct Syst 2001;7(2):67–76. [11] Davies JP. Factors influencing the structural deterioration and collapse of rigid sewer pipes. Urban Water J 2001;3:73–89. [12] Abbot. Productivity and efficiency in the water industry. Utilities Policy J 2009;17:233–44. [13] Xu. Developing a risk assessment model for PPP projects in China. Autom Constr J 2010;19:929–43. [14] Dikmen I, Birgonul M, Han S. Using fuzzy risk assessment to rate cost overrun risk in international construction projects. Int J Project Manage 2007;25:494–505.

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Dr. Laila Khodeir, an Associate Professor of Architecture and Management in the British university in Egypt and at Ain Shams University , a certified Project Management Professional (PMP) from the PMI, a Green Classroom Professional from the LEED association and the Principle Investigator of the Interactive Sustainable Child Development Center (ISCDC) Research Project has been graduated from Ain Shams University in 2002. Her Master’s Degree in 2005 focused on ‘‘Social Sustainability”, namely” The Impact of Local Communities on Eco-lodge Design Criteria”. Whereas, her PHD in 2010 focused on a newly emerging discipline in Egypt at that time, which is ‘‘Facility Management”. Since then, the research work of Dr. Laila has focused generally on Facility Management, Construction Project Management and the application of Management as a broad term in teaching Architecture. Up to date, She has published more that 45 papers either in peer reviewed journals, or in international conferences. In addition to publishing three book chapters, and acting as a reviewer in a number of national and international journals, JOC Journal of Construction, South Africa and Ain Shams Engineering Journal, Elsevier, Science Direct. Dr. Laila has acted as an external examiner to master students in Cape Peninsula University of Technology, South Africa, in addition to IUSD post graduate students in Ain Shams University in Egypt. She has shared in supervising more that 45 Masters, PHDs and dissertations either at Ain Shams University and the British University in Egypt. Dr. Laila joined the British University in Egypt (BUE) in 2014, since then she was involved in teaching up – to-date courses in a variety or correlated disciplines; Building Services and Sustainable Design, Building Construction and Management, Project Management and Architecture Design, Human resource and Lean Construction management.

Mohamed Ahmed Nabawy Mohamed Ibrahim Mohamed Ahmed Nabawy is an assistant lecturer in the faculty of Engineering at the BUE. He is a PhD candidate in London South bank University, UK. Mohamed obtained his MSc degree from the Arab Academy for Science, Technology and Maritime Transport. His research focuses on Risk Management in construction projects, and in Mega Real estate projects as well.