Risk mitigation model for addressing contractual claims risk in civil infrastructure projects in South Africa

Abstract

The risks arising from contractual claims in the civil engineering construction industry in South Africa are a concern. Currently, there are no risk mitigation models available for managers to help reduce such risks. A theoretical risk mitigation model was developed from the literature and validated through partial least squares structural equation modelling (PLS-SEM), using primary questionnaire data obtained from 166 respondents drawn from a pool of South African construction industry professionals, including project directors, project managers, supervisors, consultants, and contractors. The descriptive results indicate significant patterns, trends, and distributions of the variables across the three constructs in the study. The PLS-SEM results indicate that factors causing contractual claims risk in civil infrastructure projects have a significant relation to the impact of risk occurrence on these projects, influencing the strategies to be implemented to mitigate such risks. The PLS-SEM results also indicate a significant direct relation between the factors causing contractual claims risk and the strategies to be implemented to mitigate risks, thus implying that the holistic adaptation of the PLS-SEM (risk mitigation model) by construction industry professionals in South Africa should reduce contractual claims risk in civil infrastructure projects. The findings serve as a valuable guide not only to construction industry professionals but also to government agencies such as the Department of Public Works and Infrastructure.