External risk factors affecting construction costs

Abstract

Some risk factors can have impacts on the cost, time, and performance. Results of previous studies indicated that the external conditions are among the factors which give effect to the contractor in the completion of the project. The analysis in the study carried out by considering the conditions of the project in the last 15 years in Aceh province, divided into military conflict phase (2000-2004), post tsunami disaster rehabilitation and reconstruction phase (2005-2009), and post-rehabilitation and reconstruction phase (2010-present). This study intended to analyze the impact of external risk factors, primarily related to the impact on project costs and to investigate the influence of the risk factors and construction phases impacted the project cost. Data was collected by using a questionnaire distributed in 15 large companies qualification contractors in Aceh province. Factors analyzed consisted of socio-political, government policies, natural disasters, and monetary conditions. Data were analyzed using statistical application of severity index to measure the level of risk impact. The analysis results presented the tendency of impact on cost can generally be classified as low. There is only one variable classified as high-impact, variable ‘fuel price increases’, which appear on the military conflict and post tsunami disaster rehabilitation and reconstruction periods. The risk impact on costs from the factors and variables classified with high intensity needs a serious attention, especially when the high level impact is followed by the high frequency of occurrences.