An assessment on critical risk factors for chinese engineering firms in Ghana

Abstract

Construction is one of the main strongholds for development in every country. Its risk assessment is very vital and of prime priority. It is a procedure of fixed assets formation for the economy and an effective construction project determines and expresses economic power and social influence at the national and international front. The objective of the research is basically to identify and establish the most critical aspects of risk factors that influences many of these Chinese engineering firms in Africa. It explores general risks that Chinese engineering firms normally face and have to deal with when embarking on projects in Africa. It also gives a case study on Ghana and subsequently identifies and adopts risk assessment methods to ameliorate and improve safety at various construction sites. By the adoption of questionnaire surveys and statistical analyses in Ghana, being the country used as a case study, risks encountered by Chinese Engineering Firms (CEF) in Africa were identified, assessed and ranked. The study revealed that loss incurred due to political changes, loss due to rise in fuel prices and poor communications between clients were among the highly ranked risks. Among the average risks were increase of material price, cost increase and material shortage. The least encountered risks were breach of contract by project partner and loss due to fluctuation of interest rate. The research findings help to enlighten and outline various risk factors to the Chinese firms who are making their way into Africa for developmental projects and gives pragmatic steps to reduce these risks and ameliorate safety in Construction by the Chinese Engineering Firms (CEF) and other stakeholders. It was found that the critical risk factors for Chinese construction companies in Ghana are technical, political, market and language risks. These findings may also be useful to other firms in Asia and those from different continents since some of the risk factors examined are more general in nature. © 2014 Springer-Verlag Berlin Heidelberg.