Case Study on Risk Management in Construction
Projects
Abstract
Risk management is one of the most significant aspects of construction project planning. In large projects,
unforeseen risks such as labor shortages, material unavailability, and inflation may cause cost overruns
and schedule delays. This case study demonstrates the application of a combined Analytic Hierarchy
Process (AHP) and Risk Map framework in a housing project undertaken by MHADA at Badnera,
Amravati. The objective is to highlight risk prioritization, categorization, and mitigation strategies that
provide a structured basis for decision-making.
1. Introduction
Construction projects are highly vulnerable to risks that may result in delays, cost overruns, or
compromised quality. Traditional approaches often fail to provide a structured method for risk
management, relying instead on intuition or rule-of-thumb techniques. This case study analyzes a project
undertaken by the Maharashtra Housing and Area Development Authority (MHADA) and applies a
combined Analytic Hierarchy Process (AHP) and Risk Map framework to assess and manage risks
effectively.
2. Literature Review
Project risks have been classified by researchers in several ways: internal vs. external, controllable vs.
uncontrollable, or by origin such as financial, political, and natural causes. Existing risk management
models often rely on statistical data or simulation methods like Monte Carlo, but such data is not always
available in new or unique projects. Moreover, there has been a clear gap between risk analysis and risk
management. The Analytic Hierarchy Process (AHP) provides a structured decision-making approach,
while risk maps allow visualization of frequency and impact. Integrating these two methods addresses
the shortcomings of existing models.
Internal risks include poor planning, labor disputes, or design errors, while external risks stem from
weather, inflation, or political changes. Controllable risks can be mitigated at the planning stage, while
uncontrollable ones require adaptive responses. Current models, such as Monte Carlo simulation and
network analysis, rely heavily on historical data. However, new projects lack such data, creating a gap
between risk analysis and risk management. Integrating AHP and Risk Maps bridges this gap.
3. Methodology
The combined AHP and Risk Map framework involves:
1. Identifying risk factors through literature review and stakeholder inputs.
2. Structuring risks hierarchically and conducting pairwise comparisons using AHP to calculate
relative weights.
3. Selecting the top-ranked risks and assessing their frequency and impact through stakeholder surveys.
4. Mapping risks on a risk map to categorize them as low, moderate, high, or critical.
5. Developing appropriate mitigation strategies based on their classification.
4. Case Study Project – MHADA Housing Project
The case study focuses on a housing project by MHADA at Badnera, Amravati. The project involves
constructing 243 houses and a commercial complex at an estimated cost of ₹33.4 crore, spread across
23,864 sq.m. The project is in its pre-bidding stage with an estimated completion time of 18 months.
Data was collected from eight stakeholders, including engineers, architects, and managers, using
structured questionnaires.
Data collection involved eight stakeholders, including engineers, architects, planners, and managers.
Two questionnaires were prepared: one for AHP pairwise comparisons and another for frequency-impact
assessments. This ensured comprehensive coverage of risk factors.
5. Results and Analysis
The AHP analysis ranked the risks based on global weights. The top risks identified were:
i. Availability of construction materials
ii. Erratic weather patterns
iii. Monetary inflation
iv. Availability of skilled and unskilled workers
v. Bureaucratic delays
Subsequently, risk maps categorized these risks. Critical risks such as material availability, inflation,
labor availability, and weather patterns were recommended for continuous monitoring and proactive
control. High risks like bureaucratic delays required rotational monitoring, while low risks such as legal
and prioritization issues required minimal attention.
Other factors such as legal issues, prioritization, transport, and corruption had lower weights.
Risk Map categorization showed :-
− Critical Risks : Material availability, weather, inflation, labor, inconsistent objectives, cost of
labor
− High Risks : Bureaucratic delays
− Low Risks : Legal environment, prioritization issues, transport facilities
This highlights that the most severe risks were related to internal uncontrollable and external
uncontrollable factors.
6. Discussion
The findings emphasize the dominance of uncontrollable risks such as weather and inflation. These
cannot be eliminated but can be mitigated through adaptive measures like insurance, early procurement
contracts, and contingency planning. Material and labor availability, though partially controllable,
require effective supply chain management. Bureaucratic delays, though high-risk, can be mitigated by
proactive engagement with authorities. The framework ensures objectivity by using AHP and provides
visual clarity through Risk Maps. It also consolidates diverse stakeholder opinions, fostering consensus
in decision-making.
7. Conclusion
This case study demonstrates the effectiveness of integrating AHP with Risk Maps in construction project risk
management. The framework not only prioritizes risks but also guides managers in allocating resources to critical
areas. It ensures systematic decision-making, encourages stakeholder participation, and reduces reliance on
subjective judgments. While the method is time-consuming and dependent on stakeholder input, its structured
approach provides valuable insights for managing construction risks. Future research could explore alternative
decision-making tools and extend the framework to other project types.