*Article* **Influence of the Construction Risks on the Cost and Duration of a Project**

**Azariy Lapidus, Dmitriy Topchiy, Tatyana Kuzmina \* and Otari Chapidze**

Department of Technology and Organization of Construction Production, Moscow State University of Civil Engineering (National Research University) (MGSU), 26 Yaroslavskoe Shosse, 129337 Moscow, Russia; lapidusaa@mgsu.ru (A.L.); topchiydv@mgsu.ru (D.T.); cod95@inbox.ru (O.C.)

**\*** Correspondence: kuzminatk@mgsu.ru

**Abstract:** Recent years have witnessed active construction of multi-storey residential buildings. The scale of construction, its timing and limitations in financing contribute to the emergence of risk factors affecting the key parameters of cost and duration of projects. The purpose of this research is to develop the most effective mathematical model to reveal, study and estimate in a timely manner the influence of risk factors on stable implementation of a construction project during its life cycle. The mathematical model of the study is based on the theory of fuzzy sets, including 25 rules used to estimate the influence of a risk factor. An expert survey of leading specialists in the construction industry was performed and risk factors distributed over the stages of the life cycle were listed. Risk factors affecting the sustainability of the life cycle of a multi-storey residential building were identified and ranked. The result of the study shows that the application of the mathematical model will significantly increase the success of construction projects by identifying the critical risk factors in the phases of their life cycle. Since the proposed model is relatively new in Russia, it should be considered as a starting point for a new assessment of the impact of risk factors on projects. The methodology can be improved, and many aspects are still to be analyzed.

**Keywords:** life cycle; risk factor; risk; project; fuzzy logic

**1. Introduction**

One of the priorities of each state is to provide affordable, comfortable and safe housing for its citizens. Currently, the purchase of residential real estate requires large financial investments and, in most cases, is associated with multi-year credits (mortgages) and interest-bearing loans. When buying houses for years, possibly for life, people pay special attention to the aesthetics of the building, the comfortable layout and the view from the window, the availability of parking spaces, infrastructure, and the environmental friendliness and safety of the residential area.

In recent years the volume of construction of multi-storey residence buildings with individual architectural and constructive solutions has been growing rapidly. For example, in Russia about 90 million square meters of residential space have been commissioned annually in the last 5 years. [1] The uniqueness of the adopted volume-planning and constructive solutions, the use of new technologies, the scale of construction, the large number of parties involved, tight deadlines and limited funding contribute to the risks affecting the implementation of such projects [2].

The study of project risk factors in recent years has had a vital role in the construction industry, and hundreds of factors have been identified [3,4], affecting the parameters of the cost and duration of a project. Works by Fahimeh Allahi, Lucia Cassettari and Muhammad Saiful Islam note that the cost of a project due to the influence of a factor can increase by up to 20%, and the duration of large construction projects can grow by up to 30% [5,6] Many authors have determined the project risk concept in different ways. Risks may have both positive and negative impacts, affecting the life cycle of a project [7–10]. Risk is closely

**Citation:** Lapidus, A.; Topchiy, D.; Kuzmina, T.; Chapidze, O. Influence of the Construction Risks on the Cost and Duration of a Project. *Buildings* **2022**, *12*, 484. https://doi.org/ 10.3390/buildings12040484

Academic Editor: Srinath Perera

Received: 2 March 2022 Accepted: 11 April 2022 Published: 14 April 2022

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related to the state of uncertainty, but it is fair to say that in most cases it has a negative impact on the project parameters [11]. There are many risk factors at all stages of the life cycle of a project: organizational, technological, technical, and economic [12,13]. In addition to organizational and technical complexities, managers take into account a growing number of additional parameters, including environmental and social ones. In such circumstances, it is important to understand the real practice of risk analysis and, above all, to assess the risk-driving factors at each stage of the life cycle of the construction project. Nowadays the theme of risks in the construction industry is a relevant and priority issue, and the vector of research in this area should be aimed at developing methods to reduce factors affecting the occurrence of risks in the life cycle of a project and achieve the required technical and economic performance.

However, the Russian Federation still lacks any model of the life cycle of a construction project with the technical risk factors included at each stage of construction, whereas complete and up-to-date documentation may contribute to mitigation of technical, industrial and natural risks.

Taking this into account, this research was focused on selected stages of the life cycle of a construction project exposed to risk factors in the construction of multi-storey residential buildings. As a result of an extensive study of scientific and technical literature, the authors identified, grouped and systematized life cycle risk factors by stages. The description of studies of the stages of the life cycle of a construction project in which the risks occurred, and the systematization of risk factors by project cycle, are presented in more detail in the articles [12,14–17]. Each stage was assigned a risk factor, which in turn enabled the assignment of an identification number to the risk factor and subsequent assessment and control. In addition, the authors chose the expert assessment method to determine the weights of the assessed parameters of risk factors in the absence of statistical data on the above topic of the study. Experts were required to assess risk factors on a five-point scale of probability of risk occurrence, as well as the impact of risks on the cost and duration of the construction project.

The authors applied fuzzy set theory, fuzzy logic and the Dempster-Shafer theory (DS), which allowed establishing the relationship between the results and obtaining a model of risk factors at the considered stages. To assess the impact of risk factors on the construction project it was necessary not only to allocate risk to the right stage and conduct an expert evaluation of the risk factor, but also to process mathematically the results in order to determine the degree of influence and the probability of the impact of factors on such parameters as cost and duration.

As a result, a model showing the factors of risk occurrence at the life cycle stages of a multi-storey residential building construction project was developed, which allows timely assessment of the level of possible risks and their impact on the cost and duration. The results of the study make it possible to model and assess risks in an attempt to investigate real, favorable ways of development at each stage of the life cycle of the construction project, including by mitigating or timely eliminating the risk factors.

The contribution of this article to the construction industry can be described at several levels. The first level is a literature review in which the main direction is residential buildings, risk factors, the life cycle of buildings and structures, mathematical models for analyzing research data are studied. At the second level, an improved life cycle model for a multi-storey residential building in a cramped building is presented and factors are considered and analyzed through mathematical models. At the third level, based on the analysis of the selected mathematical models, critical risks are determined in real time, and the dependences of time and cost are shown.

This approach allows the reader to form a comprehensive structure of the object and quickly predict the integrity of the object's life cycle in the time interval.

#### **2. Literature Review**

Understanding the risk scenarios of complex projects is an important step towards achieving the expected level of accuracy in contingencies. This section briefly discusses some relevant research related to understanding the risk scenarios of complex projects in different parts of the world.

The cost of building a residential building is very dynamic and changeable [18]. Price fluctuations may be related to the prices of building materials, human resources and other costs used in construction. This economic uncertainty can have a serious impact on business, especially on long-term projects [18]. To minimize the risk of uncertainty of investment costs for the construction of a residential building, it is necessary to predict the cost of building a residential building.

Compared to classical risk assessment methods, the modified Fuzzy Bayesizan Belief Network (FBBN) system has certain advantages for risk assessment in an uncertain and complex project environment because it shows risk cause-and-effect networks more efficiently. This helps understanding of the root causes of cost overrun risks and requires significantly less probabilistic data to obtain information from experts, which not only saves time and effort for data collection, but also reduces the computational load on the model compared to the widely used FBBN models [19].

Project management plays a big role, project management is now appearing in many organizations, and this trend is constantly growing. However, in today's dynamic environment, the success of such projects is influenced not only by the level of the project management method and the quality of the management team, but the success of the project can also be supported by effective risk management [20,21]. Risk and uncertainty are an integral part of project management [22]. If risk management can be integrated into an organization and used effectively, certain benefits and resource savings can be obtained [23–25]. Risk management also plays a key role in terms of the sustainability of a construction company [26].

It is also worth noting that the choice of the appropriate method of project implementation is one of the most important management decisions, since it has a direct impact on the success of the project and affects key performance indicators such as cost, quality, schedule and safety.

#### **3. Methods**

#### *3.1. Data Sourcing*

The first stage of the research method involved an extensive review of the scientific literature, focusing on risks in the design and construction of residence buildings, as well as an analysis of already built facilities with identified factors that impact the parameters of duration and cost.

The first stage was not limited only to collecting data on risk factors, since the purpose of the study is related to the residential building life cycle. More importantly, the aim here is to identify risk factors and assign them to each stage of the multi-storey residence building life cycle.

The selected risk factors were analyzed and divided into risk groups, as well as assigned to the stages of the project's life cycle. Figure 1 presents the construction project's life cycle, taking into account risk factors [12]. This model contains all the stages of the life cycle of an object. The essence of this model is that it contains all the risk factors considered in this work. The risks are divided into groups and correlated to the stages. The selection of these factors was carried out by analyzing the scientific literature and studying the objects of analogues, in the documentation of which the quality department recorded the risks that arose at the stage of work.

**Figure 1.** Object life cycle model with risk factors included.

Moreover, this model was complemented by the method of expert assessment, given that it allows determining which risk factor parameters have the most significant impact on the multi-storey residential building life cycle.

The method utilized here consisted of an expert assessment of the proposed risk factors for a 20-storey residence building in Moscow. The experts were required to assess the risk factors on a five-point scale Likert scale of risk occurrence probability, impact on cost, and impact on duration.

The most dangerous stages in the life cycle of a building object are:


Expert examination was conducted among the specialists of the construction industry; 60 experts took part in the selection in accordance with the requirements of competencies for an expert, and the number of experts was determined by the proposed method of Ruposov V.L. [27,28].

Basic requirements:

• Academic degree or academic qualification.


The expert's questionnaire is shown in Supplementary Materials Expert questionnaire. As a result of the analysis of the expert assessment, weight indicators of the estimated risk factor parameters were determined.
