University of Cape Town
6. Results and Findings
6.1Profile of Respondents
The profile of the respondents for the survey is presented in Table 1.
36 B. S. Waziri/ Journal of Construction Business and Management (2018) 2(1). 33-40 Table 1: Profile of Respondents
Characteristics Frequency Percent Category of Respondent
Government Concessionaire Developers Lenders
24 21 19 22
27.91 24.42 22.09 25.58 Educational Qualification
High School Diploma
University Degree/HND Master/ PhD
0 18 51 17
0.00 20.93 59.30 19.70 Work Experience
Less than 5 years 5 to 10 years 11 to 15 years 16 to 20 years Greater than 20 years
11 16 19 24 16
12.79 18.60 22.09 27.90 18.60 Position
Managing Director Principal officer Senior Personnel Others
21 25 28 12
24.42 29.01 32.56 13.95 Designated Profession
Engineering Architecture Quantity Surveying Building
Estate Surveying Others
19 16 12 17 12 10
22.09 18.60 13.95 19.76 13.95 11.63
The demographic profile of the respondents revealed that 27.9% of the survey participants are from government establishments whereas 24.42%, 22.09% and 25.58% are from the offices of concessionaires, developers and lenders respectively. The profile further revealed that most of the respondents (59%) are first degree holders and 19% either have a Masters or PhD degree. The results also show that the majority of the respondents occupy management positions as either principal, deputy directors or directors in their organisations. These results indicate that the information obtained from these categories of respondents can be considered adequate.
6.2Risk Factors of BOT
The results of Mean Item Scores of risk factors are presented in Table 2. The results indicated that changes in government policy which falls under the political risk factor is ranked first which is followed by unfavorable business environment, project company default, time performance risk and cost performance risk. The factors considered to have the least risk are an outbreak of hostilities, strong public opposition and inclement weather.
. Table 2: Mean Item Score of Risk Factors
S/No Risk Factors MIS MD Rank
1 Change in government policy 4.3953 0.7658 1
2 Unfavourable general business environment 4.2093 0.5797 2
3 Project company default 4.2093 0.5797 3
4 Time performance risk 4.1279 0.4983 4
5 Cost performance risk 4.0814 0.4518 5
6 Excessive development cost 4.0581 0.4286 6
7 Instability in government 4.0116 0.3821 7
8 Failure to raise finance for the project 4.0116 0.3821 7
9 Lack of experience in handling the project 3.8837 0.2542 8
10 Termination of concession 3.8721 0.2425 9
11 Changes in project specifications 3.7558 0.1262 10
12 Quality performance risk 3.7326 0.1030 11
13 Variation 3.7326 0.1030 11
14 Force majeure 3.7326 0.1030 11
15 Inflation risk 3.7093 0.0797 12
16 Currency risk 3.7093 0.0797 12
17 Lack of integrity in the tendering process 3.6977 0.0681 12
18 Change in economic policies 3.6628 0.0332 13
19 Production target slippage 3.6047 0.0249 14
20 Default by concessionaire 3.6047 0.0249 14
21 Nonexistence of legal and regulatory system 3.6047 0.0249 14
22 Delays in design approval 3.6047 0.0249 14
23 Foreign exchange 3.5930 0.0365 15
24 Changes in general legislation affecting the project 3.5930 0.0365 14
25 Resources risk 3.5814 0.0482 16
26 Error in operation and maintenance cost estimate 3.5814 0.0482 16
27 Changes in design during construction 3.5814 0.0482 16
B. S. Waziri/ Journal of Construction Business and Management (2018) 2(1). 33-40 37
28 Lack of commitment to concession contract 3.5698 0.0598 17
29 Adverse action of the government 3.5465 0.0831 18
30 Lack of expertise 3.5465 0.0831 18
31 Delay in feasibility study 3.5349 0.0947 19
32 Changes in demand for the facility over concession period 3.4767 0.1528 20
33 Complicated negotiations 3.4535 0.1761 21
34 Labor risk 3.4419 0.1877 22
35 Delay in settling claims 3.4302 0.1993 23
36 Flaws in contractual documentation 3.3953 0.2342 24
37 Unfavorable local conditions 3.3953 0.2342 25
38 Expensive and lengthy tendering process 3.3605 0.2691 26
39 Material unavailability 3.2791 0.3505 27
40 Labor shortage 3.2209 0.4086 38
41 Unavailability of quality personnel to operate facility 3.1628 0.4668 29
42 Inappropriate operating methods 3.1628 0.4668 30
43 Outbreak of hostilities (wars, riots and terrorism) 3.1163 0.5133 31
44 Strong public opposition 2.9651 0.6645 32
45 Inclement weather 2.9535 0.6761 33
6.3Pareto Analysis
To develop the Pareto chart, the cumulative percentages from the mean scores were calculated and presented in Table 3. The risk factors were assigned the codes (RF) for the 45 factors investigated. The factors were arranged in
descending order as required by the principle of Pareto analysis to compute the cumulative percentage for constructing the cumulative frequency curve (Haughey, 2014).
Table 3: Cumulative Percentages of Risk Factors
Code Risk Factors MIS Count % of Total Cumulative
Percent
RF1 Change in government policy 4.3953 2.6973 2.6973
RF2 Unfavorable general business environment 4.2093 2.5831 5.2804
RF3 Project company default 4.2093 2.5831 7.8635
RF4 Time performance risk 4.1279 2.5332 10.3967
RF5 Cost performance risk 4.0814 2.5046 12.9013
RF6 Excessive development cost 4.0581 2.4903 15.3917
RF7 Instability in government 4.0116 2.4618 17.8535
RF8 Failure to raise finance for the project 4.0116 2.4618 20.3153
RF9 Lack of experience in handling the project 3.8837 2.3833 22.6986
RF10 Termination of concession 3.8721 2.3762 25.0748
RF11 Changes in project specifications 3.7558 2.3048 27.3796
RF12 Quality performance risk 3.7326 2.2906 29.6702
RF13 Variation 3.7326 2.2906 31.9608
RF14 Force majeure 3.7326 2.2906 34.2514
RF15 Inflation risk 3.7093 2.2763 36.5277
RF16 Currency risk 3.7093 2.2763 38.8040
RF17 Lack of integrity in the tendering process 3.6977 2.2692 41.0732
RF18 Change in economic policies 3.6628 2.2478 43.3209
RF19 Production target slippage 3.6047 2.2121 45.5330
RF20 Default by concessionaire 3.6047 2.2121 47.7451
RF21 Nonexistence of legal and regulatory system 3.6047 2.2121 49.9572
RF22 Delays in design approval 3.6047 2.2121 52.1693
RF23 Foreign exchange 3.593 2.2049 54.3743
RF24 Changes in general legislation affecting the project 3.593 2.2049 56.5792
RF25 Resources risk 3.5814 2.1978 58.7770
RF26 Error in operation and maintenance cost estimate 3.5814 2.1978 60.9748
RF27 Changes in design during construction 3.5814 2.1978 63.1726
RF28 Lack of commitment to concession contract 3.5698 2.1907 65.3633
RF29 Adverse action of the government 3.5465 2.1764 67.5397
RF30 Lack of expertise 3.5465 2.1764 69.7160
RF31 Delay in feasibility study 3.5349 2.1693 71.8853
RF32 Changes in demand for the facility over concession period 3.4767 2.1336 74.0189
RF33 Complicated negotiations 3.4535 2.1193 76.1382
38 B. S. Waziri/ Journal of Construction Business and Management (2018) 2(1). 33-40
RF34 Labor risk 3.4419 2.1122 78.2504
RF35 Delay in settling claims 3.4302 2.1050 80.3554
RF36 Flaws in contractual documentation 3.3953 2.0836 82.4390
RF37 Unfavorable local conditions 3.3953 2.0836 84.5226
RF38 Expensive and lengthy tendering process 3.3605 2.0622 86.5848
RF39 Material unavailability 3.2791 2.0123 88.5971
RF40 Labor shortage 3.2209 1.9766 90.5737
RF41 Unavailability of quality personnel to operate facility 3.1628 1.9409 92.5146
RF42 Inappropriate operating methods 3.1628 1.9409 94.4555
RF43 Outbreak of hostilities (wars, riots and terrorism) 3.1163 1.9124 96.3679
RF44 Strong public opposition 2.9651 1.8196 98.1875
RF45 Inclement weather 2.9535 1.8125 100.00
The Pareto chart presented in Figure 1 was constructed using the cumulative percentage counts of the risk factors based on the procedure outlined by Haughey (2014). The
broken line on the chart separates the vital few (top 20%) from the trivial many (80%).
Figure 1 Pareto Chart of Risk Factors
From the Pareto chart, the nine highest risk factors are established to be the vital few (20%). These factors are a change in government policy, unfavorable general business environment, project company default, time performance risk, cost performance risk, excessive development cost, instability in government, failure to raise finance for the project and lack of experience in handling the project.