Here is the abstract of the first paper I ever wrote, thanks to Will for his excellent guidance and training.
The price of risk in construction projects
Samuel Laryea
Department of Building Technology, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
Will Hughes
School of Construction Management and Engineering, University of Reading, PO Box 219, Reading, UK
Construction projects are risky. However, in practice, contractors may be unable or unwilling to make appropriate allowances for the risk. Formal risk models that contractors can incorporate into the bidding process have proliferated in recent years but they are not used in practice. Introducing more models may, therefore, not necessarily help. A better understanding is needed of how contractors arrive at a price, and how that price is influenced by the apportionment of risk. This question is the starting point for an ethnographic investigation into how contractors price risks. The purpose is to develop a model for assessing risk and opportunity in construction projects for the purpose of contingency allocation in a risk and reward sense. As risks can be spread, the price of building up a contingency will generally be smaller than the impact of a risk. Price of risk is smaller than the impact of risk.
Keywords: contractors, contingency, risk apportionment, risk assessment, tendering.
REFERENCE:
Laryea, S. and Hughes, W. (2006) The price of risk in construction projects. In: Boyd, D (Ed) Procs 22nd Annual ARCOM Conference, 4-6 September 2006, Birmingham, UK, Association of Researchers in Construction Management, 553-561.
About Me
- Samuel Laryea
- Johannesburg, Guateng, South Africa
- I am a Senior Lecturer in the School of Construction Economics and Management at University of the Witwatersrand, South Africa. In the past, I have been a Lecturer in the School of Construction Management and Engineering at the University of Reading, UK (2010-12); and also a Post-Doctoral Academic Fellow (2009) and Graduate Teaching Assistant (2008). I completed my PhD at University of Reading in Dec 2008 on the relationship between risk and price in tendering. Prior to transferring to Reading in Jan 2008, I was an MPhil/PhD student at KNUST, Ghana (2004-07). I gained my undergraduate degree in Building Technology from Kwame Nkrumah University of Science and Technology (KNUST), Ghana in 1998-2002. During school days, my peers elected me to serve in several leadership positions including SRC President at KNUST. From 1994-96, I attended Suhum Sec. Tech. School after basic education at schools in Ghana and Nigeria. I did my National Service with the Fanteakwa District Assembly in 2002-03. After that, I worked at the Development Office of KNUST until I started my PhD in 2004. I am a co-organiser for the WABER Conference and an author of 30+ research publications.
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