*2.3. Risk Factors Leading to Cost and Time Overruns*

Studies have identified various critical success factors for construction projects. These included time, cost, quality, safety, client's satisfaction, employees' satisfaction, cash-flow management, profitability, environment performance, learning and development, etc. [40]. However, the majority of the past research have extensively focused on the three major factors for success in construction industry, which included cost, time, and quality [41]. It has been elicited that over 70% of public construction projects in Saudi Arabia have experience delays [42]. Various risk factors and challenges explaining the time and cost overruns for these projects have been uncovered. Baghdadi and Kishk [43] identified 54 risk factors in the context of external, internal, and force majeure in aviation construction projects, which were causing duration delays as well as cost overruns. Mahamid [44], focusing on the factors affecting performance in construction projects, identified various risks, including poor communication among project participants, poor labour productivity, poor planning and scheduling, payment delays, escalation of material prices, poor labour productivity, and poor site management. Regarding the causes of disputes, Mahamid [44] identified 29 direct and 32 indirect dispute causes, of which major direct dispute causes included delay in progress payment by the owner, unrealistic contract duration times, change orders, poor quality of completed work, and labour inefficiencies. Major indirect dispute causes included inadequate contractor experience, lack of communication between the construction parties, ineffective planning and scheduling of the project by the contractor, cash problems during construction, and poor estimation practices.

Focusing on the design risks, Sha'ar et al. [45] identified unstable client requirements, lack of proper coordination between the various disciplines of the design team, awarding the contract to the lowest price regardless of the quality of services, lack of skilled and experienced human resources in the design firms, lack of skilled human resources at the construction site, delaying of due payments, lack of a specialised quality-control team, lack of professional construction management, delaying the approval of completed tasks, and deficient drawings and specifications. Various other challenges, such as those related to subcontractors, labour, machinery, availability of materials, and quality; and client-related risks such as financial issues, issues related to design documents, change in codes and regulations, scope of work, accidents on site, lack of expertise, re-designing, unqualified workforce, organisational culture, and poor contract management were identified from various studies conducted on Saudi Arabian construction industry [46–48].

Furthermore, the causes of the cost and time overruns factors differ between various projects/buildings. For instance, when comparing the delay factors between road infrastructure and building projects, a recent study [49] found that the major critical delay factors for road infrastructure projects included inadequate contractor experience and payment delays to the contractor, while the shortage of materials and financial difficulties of contractor were most salient for building projects. For tall building projects, the major causes of delay and cost overruns identified in [50] included "client's cash flow problems/delays in contractor's payment", "contractor's financial difficulties", and "poor site organization and coordination between various parties". Another study focusing on regular manufacturing and building construction [17] identified delays in progress payments, difficulties in financing the project by contractor/manufacturer, slowness in decision making, late procurement of materials, and delay in approving design documents as the major causes of cost and time overruns. In specialised construction projects, such as railways, the causes were found to be related to "Client's decision-making process and changes in control procedures", "Design errors (including ambiguities and discrepancies of details/specifications)", "Labor skills level", "Design changes by client or consultant", and "Issues regarding permissions/approvals from other stakeholders" [51]. In addition, Allahaim [14] emphasised causes and classifications as differing by project type and stakeholder, with overall cost overrun depending on the type of project: power and health projects (60% cost overruns), transport and water projects (40% cost overruns), and education projects (30% cost overruns). Aljohani et al. [52] carried out a review of the literature and identified 173 causes of cost overrun in seventeen contexts, with the main ones being frequent design change, contractors' financing, payment delay for completed work, lack of contractor experience, poor cost estimation, poor tendering documentation, and poor materials management. The authors concluded that the main causes differed from country to country, and that it would be an inaccurate method to use only the global literature to identify the causes for a specific country [14]. In contrast, Ahady et al. [53] found that most of causes of cost overruns in construction industries of development countries are similar, and the causes are different for every project. The most significant causes of cost overruns were fluctuations and increases in material price. Appendix A shows that various risk factors associated with construction projects from 17 studies [2,4,14,17,44,51,52,52–65].

Hence, the factors causing cost and time overruns may change by the types of construction projects. Therefore, there is a need to focus the research on specific building projects in the context of Saudi Arabia. Furthermore, most studies in the literature probed the causes of either cost or time overruns for the construction industry, but very few considered both. Given these gaps, it is essential that risk factors and risk management techniques in Saudi Arabia have to be studied from time to time in order to prevent any damage/losses and avoid cost and duration overruns in construction projects. Accordingly, the purpose of this study is to identify the influential risk factors that lead to completion delays and cost overruns of government-funded building construction projects in Saudi Arabia, all of which have been subjected to a traditional type of procurement method Standard Public Works Contract (SPWC).

#### **3. Research Methodology**

For this study, the researchers adopted a cross-sectional questionnaire-based survey to identify risk factors related to government-funded building construction projects in Saudi Arabia. Figure 1 illustrates the adapted research methodology phases used to achieve the study objectives. This methodology includes four phases: the identification of initial risk factors from the literature, questionnaire design, data collection, and then data analysis.

**Figure 1.** Research methodology process.

The first phase was the identification of initial risk factors from previous literature. A comprehensive literature review was carried out to uncover the various risk factors associated with construction projects. Then, the researchers identified the risk factors that were applicable in the context of Saudi Arabia. A final list of 83 risk factors, classified into nine different groups (client-related, designer-related, consultant-related, contractor-related, labour-related, material-related, equipment-related, external risks, and force majeure), was identified to be relevant for investigation in the context of this study, as shown in Appendix B.

The second phase was the questionnaire's design. The initial questionnaire was developed based on the findings in the previous phase. All these applicable risk factors were included in the questionnaire, which was divided into three sections. The first section of the questionnaire included the participants' demographic information, while the second focused on the level to which project delays and cost overruns affect construction projects. The third section pertained to identifying which risk factors caused project delays and cost overruns by asking three sub-questions for each risk. These included the probability of occurrence (*P*) in projects based on the respondents' perspective and experience, the negative impact of the risk on project's time (*IT*), and the negative impact of the risk on project's cost (*IC*). The questionnaire used a Likert scale of five ratings (1: very low; 2: low; 3: moderate; 4: high; 5: very high) and was designed in both English and Arabic to improve the participants' ease of accessibility and understandability. The researchers conducted a pilot study to validate the prepared questionnaire by distributing it to a set of experts in the construction field. The collected comments were reviewed to develop the final questionnaire.

The third phase of study was data collection. The questionnaire link was forwarded to the experts in construction industry who have been working in relevant building construction projects using various online networks. The researchers adopted snowball sampling [66], requesting the participants to forward the survey link to their colleagues and other relevant professionals. The survey was initially forwarded to 38 experts. Snowball sampling is a more conducive and practical technique for the research scope and to overcome the obstacle of the questionnaire's length, finding the target audience, and providing high-quality information. However, because of snowball sampling, 63 responses were received. After removing eight incomplete responses, the responses from 55 participants were included in the data analysis.

The fourth phase of study was the data analysis of the survey results using MS Excel. The relative importance index (*RII*) calculated the probability of occurrence (*P*) of each risk, the impact of the risk on project's time (*IT*), and the impact of the risk on project's cost (*IC*). Risk Importance (*RI*) was used to determine the level of importance of each identified risk associated with building construction projects by multiplying the probability and impact for each in terms of project time and cost. In addition, the reliability of factor analysis was used to measure the strength of the internal consistency of the identified risk factors, and an agreement analysis test (Cronbach's alpha) was conducted to measure the strength and direction of relationship between the parties involved in this study (client, contractor, and consultant).

#### *3.1. Ranking of Risks*

To carry out data analysis, the relative importance index (*RII*) for each risk was calculated by Equation (1) for the probability of occurrence (*P*) in projects based on the respondents' perspective and experience, and for negative impact (*I*) of the risk on project's time (*IT*) and for negative impact on project's cost (*IC*), using five point Likert scales:

$$RII = \sum\_{i=0}^{n} \frac{\mathcal{W}\_i}{A \times N} = \sum\_{i=0}^{n} \frac{5n\_5 + 4n\_4 + 3n\_3 + 2n\_2 + n\_1}{5N} \tag{1}$$

where

*RII*—is the Relative Importance Index; *Wi*—is the weight given to each factor by the respondents from 1, 2, 3, 4, and 5 for very low, low, moderate, high, and very high, respectively;

*A*—is the highest weight (i.e., 5 in five-point Likert scale); *N*—is the total number of respondents for every variable.

To prioritise risks, the formula of Risk Importance (*RI*) was calculated by multiplying the probability and impact for each in terms of project time and project cost (see Equation (2)). Based on the calculations, risks were classified as "high", "moderate", or "low" importance. Risks that have an (*RI*) value equal to or greater than (0.6) were classified as "high" and were significantly important, and those between 0.6 and 0.4 were classified as "moderate" importance and less than 0.4 as "low" importance:

$$\text{Risk Impactance}; RI = P \times I \tag{2}$$

where

*RI*—is the Risk Importance to determine the level of importance of each identified risk; *P*—is the probability of risk occurrence;

*I*—is the impact of risk on time or cost.
