Abstract
Risks in construction projects are due to the uncertainty involved at decision making of management, manipulation of resources, tackling of constraints, implementation of quality etc. Therefore, construction projects are always a risky undertaking for all involved stakeholders (client, consultant, and contractor). The contractor as one of the stakeholder has to face maximum challenges to overcome the risk associated uncertainties. The management is essential in dealing with the potential risk exposures to the contractors. In response to these ever increasing uncertainties, in developed countries risk management was introduced as a separate new field in construction industry to manage risks effectively. However, construction industry in developing countries like Pakistan has a deprived reputation for coping with risks. With rapid advancements in the construction industry of Pakistan, many uncertainties are bound to occur. This paper highlights the major risks faced by the contractors in Pakistan. It has been observed that most of the risks faced by stakeholders in Pakistan are universal with few exceptions like political instability and price escalations. Unlike in developed countries, most of the contractor organizations in Pakistan are not adopting the risk management procedures in their organizational structure as well as during project execution. This paper also describes the effect of identified risks on schedule, scope and budget of the project through quantitative and qualitative analysis using database of two actual construction projects. These risks have been causing scope out of control, cost over budget, time over run or quality default. This research has proved that construction projects associated with un-managed risks must face obstacles in their successful completion. Hence, the construction stakeholders in Pakistan need literacy about benefits associated with effective risk management
