Risk assessment model for international construction projects considering risk interdependence using the DEMATEL method

Abstract

Given the complexity of international construction projects (ICP), risk management difficulties commonly cause cost overruns. This paper analyzes the problems of risk interdependence and subjective ratings in the application of the traditional risk assessment model in ICP. To solve the above problems, this paper proposes a risk assessment model for ICP that considers risk interdependence and obtains references from similar projects. The model applies the Decision-Making Trial and Evaluation Laboratory (DEMATEL) to determine the risk interdependence and its contribution to the overall project risk. Moreover, this model recalls the risks, probabilities, impacts, and risk events records of similar historical projects as the necessary inputs, thereby addressing the issue of subjectivity. An integrated framework is provided to identify, analyze, and prioritize ICP risks to incorporate risk interdependence into the risk management process. Finally, this paper demonstrates and validates the proposed model through a real project. The proposed model is useful for international construction companies to support project selection and bidding decisions in the early stage of ICP.