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9 Department of Civil Engineering, Rajamangala University of Technology
Krungthep, 2 Nanglinchee, Sathorn Tungmahamaek, 10120, Bangkok,
Thailand. E-mail: borvorn.i@rmutk.ac.th, ayudhya2003@yahoo.com 11
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15 Risks associated with the construction of international funded public projects
16 in Thailand are determined. A face-to-face interview technique was used in a
17 field survey of 120 public infrastructure projects. The interviews focused on
18 39 factors grouped into seven categories: estimator, project, competition,
19 fraudulent practices, construction, economic and political. The survey
20 revealed critical risk factors influencing success of project delivery were
21 adjustment and anchoring, delay in payments, civil disorder, political
22 instability, market conditions, influence of power groups, fluctuation in labor
23 cost and materials, project complexity, exchange rate and motivational
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24 biases. Minimal risks in international funded public projects would require
25 transparency in evaluation of estimators, familiarity in overseas
26 disbursement procedures, adequate skilled staff, selection of a competent
27 consultant and a reliable contractor.
28
29 Keywords: International risk, public work, Thailand
30
31
32 Construction organizations are vulnerable to numerous risks. It is inevitable to
33 avoid influences by surrounding environments. International funded public
34 infrastructure projects in particular are exposed to international-domestic
35 economy social and domestic political risk (Walewski and Gibson, 2003).
36 Completion of project relies on the decision making of key persons in the process
37 of analyzing risks. The decisions require expertise knowledge of the global
38 financial market and prior knowledge of national, regional and global economic
39 prospects (Yates, 2007). The strength of national economies, exchange rates and
40 currency controls are vital factors that need to be understood and taken into
41 consideration in strategic decision-making in international construction projects
42 (Kapila and Hendrickson, 2001). Similar studies have been reported in Nigeria
43 (Aibinu and Odeyinka, 2006), Vietnam (Long et al ., 2004) and Malaysia (Lim and
44 Mohamed, 2000). Thailand is still recognized by World Bank as one of several
45 South-East Asia recipient countries. Large and complex infrastructure projects
46 still need financial and assistance from international financial institutions and
2

47 agencies (PDMO, 2011). In 2005, Thailand received an official development fund
48 from World Bank and JBIC of US$ 84.29 millions and US$ 1,956.82 millions
49 respectively. With these amounts, 88% of loan went to transportations projects,
50 5% energy projects and 4% potable water projects (PDMO, 2005). Factors
51 influencing bilateral and multilateral agencies investment decisions with
52 international capital facilities can be complex and vary significantly from region
53 to region and project to project. Han et al . (2008) reported that risk factors
54 associated with overseas construction projects could diminish project profitability.
55 Kangari and Lucas (1997) also mentioned that client communication,
56 understanding new market, avoiding local politics and supervising the diverse
57 group of professionals were major causes leading to failure in the international
58 project success. Similarly, Will and Levitt (2010) reported an increasing of
59 misunderstanding, delay and costs resulting from unfamiliar environment and
60 different institution such as regulations, norm, and cognitive-cultural belief with
61 diverse participant are critical factors. For a decade, construction practitioners
62 have introduced several conceptual frameworks of procurement (Ahmad, 1990;
63 Cheung et al ., 2003; Eriksson and Westerberg, 2010). However, contractors still
64 take a greater proportion of the risks. These risks were transferred from owner to
65 contractor, most of which would have traditionally been taken by the client
66 (Eriksson and Laan, 2007). It requires an effort and support from the legal, design
67 and construction team in order to minimize the dispute, claims and delays among
68 construction teams. It is imperative to understand the underlying such risks for
69 any corrective actions to be effective. Therefore, this research identified and
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70 evaluated the common risk factors in international funded public projects from the
71 viewpoint of construction practitioners. The severity index method was used to
72 evaluation the risk factors. Spearman’s ranking technique was employed. The
73 present’s results aim to add relevant knowledge to construction practitioner
74 concerns and decisions which affect success of project in international funded
75 public projects in Thailand.
76
77
78 In developing countries, it is likely that large projects will be from several sources,
79 since government funds are invariably inadequate. It is common practice for the
80 governments of the countries to seek aid from external sources. Construction
81 activities in developing countries such as Thailand can be affected by fluctuation
82 in foreign exchange rates, governmental exchange controls and many other risks
83 associated with undertaking work in a foreign country (Israngkura Na Ayudhya,
84 2006). The risks influence the international construction projects from the bidding
85 stage through to project completion (Ogunlana et al ., 1996; Raftery et al ., 1998;
86 Wang, 2000; Chan, 2001). These risks can be legal requirements, construction
87 systems, technology and management techniques (Dikmen et al ., 2007). By
88 concentrating on the lowest bidder offer, owner aims to tender the contractor who
89 performs the work at the lowest cost. Consequencely, this increases the risk of
90 cost and schedule growth due to a higher number of change orders (Assaf and Al-
91 Hejji, 2006; Wardani et al ., 2006). The projects that fail to meet scope, budget and
92 schedule can result in a host of impacts with serious economic, social and political
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93 ramifications. Therefore, the success of contractor can hinge on an understanding
94 of the risks associated with such projects. Dikmen and Birgonul (2004) report that
95 contractors face less difficulties when they have a more comprehensive
96 understanding of the commercial, political, construction and operations
97 uncertainties and risks with the projects. Naturally, owners tend to choose familiar
98 procurement procedure and a habit of using, regardless of any differences between
99 projects (Love et al ., 2005). However, international funded projects oblige an
100 international recognition procurement procedure. Construction practitioners of
101 recipient countries feel unconfident of how to use it and have negatives attitudes
102 towards its effect on outcomes (Tysseland, 2008). Moura (2003) reported that
103 increase of claims and disputes in public construction projects bring up negative
104 effects to project management. (Toor and Ogunlana, 2008) mentioned that lack of
105
106 resources, poor contractor management, shortage of labor, design delays, planning and scheduling deficiencies, changed orders and contractors’financial difficulties
107 are problems causing delays in major construction projects in Thailand.
108 Additional, Matijevic (2008) reported that distinctive problems that cause disputes
109 in international construction projects included negotiations, litigation with expert
110 analysis and domestic or international arbitration. Many contractors are unfamiliar
111 with risk factors in international funded projects and also lacking experiences and
112 knowledge in manage risks, which lead to failed-delivery works. Therefore,
113 construction practitioners including the owner, consultant and main contractor
114 should fully understand the risk impact that they know how to avoid risks in a
115 way that agreed completion of project can be delivered. In this study, main groups
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116 of international funded public projects risk factors were identified through the
117 extensive literature review, preliminary reports and discussions with construction
118 practitioners. The key objective of the study was to identify the risks frequently
119 occur during construction phase in owners, consultants and main contractors’
120 perspectives. The risk factors were categorized into seven main risk groups:
121 estimator-related, project-related, competition-related, fraudulent practices-related,
122 construction- related, economic-related and political-related.
123
124
125 In this study, risk factors were identified from a combination of literature review
126 and field survey. The face-to-face interview technique was used in the field
127 survey. The fifteen construction practitioners (owners, consultants, and main
128 contractors) help in identification of risks in international funded projects. The
129 purpose of the interviews was to validate a preliminary set of construction risk
130 causes gleaned from the literature and to determine from their experiences other
131 factors which cause construction dispute, delay and claim on international funded
132 projects. This phase resulted in identification of seven main risk group and thirty-
133 nine (39) risk factors. The development of questionnaire was based on the
134 literature review and experiences of construction practitioners including academic
135 lecturers. In the distribution and collection of questionnaire stage, the
136 questionnaires were dispensed to each group of the respondents: owners,
137 consultants and main contractors. The questionnaires were hand-delivered to
138 minimize low responses. Furthermore, face-to face interview technique was also
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139 used for twenty interviewees. The interviewees were randomly selected among
140 construction practitioners in related projects. The interviewees were asked to
141 provide their individual perceptions by rating each risk factor on how
142 international funded risk factors affected project performance within their projects.
143 The interviewees stated their point of views as the probability of occurrence of
144 risk and the severity of risk in the form of 5 level scale (seldom, not often,
145 moderated, often and very often) and (none severe, fairly severe, moderately
146 severe, severe and most severe) respectively. The survey resulted were analyzed
147 by using the severity index approach. Based on the responses to the survey, a
148 severity index was calculated to interpret the degree of seriousness effect of the
149 risks. This index was calculated as follows (Babbie, 2009)
150
151
Severity index ( SI )

( i

0
( 4
( a i

)( x i
) x i
)

100
152 where
153 a i
= constant expressing weight given to i th response: i = 0,1,2,3,4
154 x i
= variable expressing frequency of i
155 The response for I = 0, 1, 2, 3, 4 illustrated as follows:
156 x
0
= frequency of very often response and corresponds to a
1
= 4;
157 x
1
= frequency of often response and corresponds to a
2
= 3;
158 x
2
= frequency of moderate response and corresponds to a
3
= 2;
159 x
3
= frequency of not often response and corresponds to a
2
= 1;
160 x
4
= frequency of seldom response and corresponds to a
1
= 0;
161
(1)
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162 The calculated severity index was categorized into five levels (Babbie, 2009). The
163 0-15.5% was categorized as none severe, 15.5-38.5% fairly severe, 38.5-63.5%
164 moderately severe, 63.5-88.5% severe, and 88.5-100% most severe. The severity
165 index of a category was the average severity indexes of all its related problems.
166 The results of the survey are shown in Table 4.
167
168
169 In order to measure the agreement in the quantitative ranking between different
170 groups of participant, rank agreement was used for any two groups which showed
171 the average absolute difference in the factors. The spearman’s rank correlation,
172 coefficient, r s
was used to measure the degree of agreement in the ranking of
173 owners and main contractors. The significance level was at 5%. The coefficient
174 was computed as follows:
175
176
177 r s
 1 
6 
N ( N d
2
2  1 )
178 where
179 r s
= Spearman’s rank correlation coefficient.
(2)
180 d = The difference in ranking in international funding projects, and
181 N = The number of variables, equals to 39 and 7 for all the risk factors and the
182 main risk groups of international funded projects, respectively.
183
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184 Several studies have classified the risks in international projects. The literature
185 review and the interviews with the construction practitioners in the related area of
186 study resulted in the identification of 39 common risk factors. The identified
187 problems were classified into seven main groups. The grouping of the main risks,
188 was recommended by Balio and Price (2003) in global risk classification.
189
190 Table 1 Questionnaire return rate
191 Table 2 Profiles of financial sources
192 Table 3 Comparison severity index factors in international funded projects
193 Table 4 Comparison of ranking of main risk group
194 Table 5 Ranking the ten highest risk factor agreed by construction practitioners
195 Table 6 Comparison spearman rank correlation in risks on international funded
196 projects
197 Table 7 Comparison results with other studies for source of global risks
198
199
200 The responses of the questionnaire were analyzed, organized, summarized and
201 tabulated. Preliminary data analysis of international funded risk factors involved
202 calculation of averages, measures of dispersion and severity index. Considering
203 the above-mentioned risk factors between construction practitioners, Table 1
204 presents the survey results on type of organization with their response rate. The
205 total rate of return was 64%. The owners returned questionnaire with the return
206 rate of 78% whilst domestic and international main contractor returned
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207 questionnaires with the rates of 53 and 89% respectively. The evaluation of
208 overall return rate was considered as good (Babbie, 2009). He suggested that any
209 rate of return over 50% can considerably be reported, while the overall value
210 above 60% can be mentioned as good. In Table 2 shows type and number of
211 international funded projects from where the data were collected. Comparison
212 severity factors in international funded projects and comparison of ranking of
213 main risk groups are shown in Tables 3 and 4 respectively. These profiles
214 indicated that risks in international funded projects were fairly common in
215 Thailand. The construction practitioners have different expectations and their
216 perspectives of risk in international funded projects under various sources of fund.
217 In Table 5 shows ten highest severity index factors agreed by construction
218 practitioners. Table 6 shows the comparison spearman rank correlation on risks in
219 international funded public works projects. In Table 7 shows various identified
220 international risk categories from other researchers. Based on the surveyed and the
221 severity index analyzed thereof, the following conclusion could be drawn. The
222 results from rank correlation analysis suggested from 120 cases that there were a
223 strongly disagreement between owner-consultant perception (12% agreement) on
224 main risk groups while owner-main contractor perception and consultant-main
225 contractor were rated as acceptable (43%) and disagreement (36%) respectively.
226 Ranks correlation on all risk factors were shown positive for owners and
227 consultants (42%), owners and main contractors (66%) and consultants and main
228 contractors perception (79%). However, it was found from Table 5 that
229 international funded projects affected from these seven main risk groups at
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230 average level of severity index of 62.2%. It was categorized as moderately severe
231 level. It was further found that estimator related group was rated as the highest
232 overall severity of main risk groups. It was also found that adjustment and
233 anchoring factor was the most serious risk factor that affects project performance.
234 This might be results of bureaucratic transparency and shortage of experienced
235 engineers which lead to unclear judgement that can be subject to errors, biases and
236 heuristics. Furthermore, interviewees mentioned that public owner had highly
237 bureaucracy, negative attitude, technical, managerial and organizational
238 incompetency of main contractor.
239
240
241 Table 3 shows that foundation work in the construction of the frame and the
242 enclosure, in the utilization of spaces such as method and materials and the
243 required end were common places in which estimating were errornous.
244 Interviewees mentioned factors affecting the accuracy of evaluating and
245 estimating was variability of lowest tenders, the source of cost data used in
246 estimating, the inherent error attached to the estimating technique and the in
247 suitability of cost data. Interviewees agreed that using previous cost data from
248 projects where quantity surveyors had experiences and using single source of cost
249 data was likely to improve the accuracy of cost estimates. Furthermore, a common
250 issue that often arose during the interview sessions was motivational biases when
251 superiors and subordinated. Many times subordinated were afraid to speak their
252 opinions out of fear of contradicting or embarrassing their bosses, which could
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253 negatively affect their position or future prospects within organization. Similarly,
254 author witnessed numerous instances where expert consultants are unwilling to
255 challenge the assumptions of their clients for fear of jeopardizing current or future
256 work.
257
258
259
260
It was found from the construction practitioners that engineering and construction complexities caused by project’s location or early design work led to internal
261 coordination errors between project components. Internal coordination errors
262 caused conflicts and problems between persons involved in the planning and
263 design of a project. Due to the overall scope vagueness , the accumulation of many
264 minor scopes changes to increased. While individual scope changes had only
265 minimal cost effects, the accumulation of these minor changes, which were often
266 not essential to the intended function of the facility, could result in a significant
267 cost increase over time. However, projects seem to often grow naturally as the
268 project progresses from inception through development to construction.
269
270
271 Construction practitioners admitted to worry on the threat of new entrants and
272 bargaining power of buyers and suppliers. The interest of construction companies
273 in cost-cutting increased because of the decreasing profit margins or fees for this
274 kind of contract. The advent of increasing competition prompted construction
275 companies to seek greater equity-risk sharing by alliances in construction industry.
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276 This allowed financially stable construction firms to expand into new markets.
277 Market conditions could affect the costs of a project, particularly large projects.
278 The interviewees mentioned that the size of the project affected competition for a
279 project and the number of bidders that government agencies received for the work.
280 Inaccurate assessment of the market conditions could lead to incorrect project cost
281 estimation. Similarly, several researchers have been found that changing market
282 conditions during the development of a project can reduce the number of bidders,
283 affect the available labor force, or result in increased commodity prices, all of
284 which can disrupt the project schedule and budget (Chang, 2002; Woodrow
285 Wilson Bridge, 2002; Pearl, 2004).
286
287
288 Construction practitioners mentioned that there were still fraudulent practices in
289 construction projects. It could be listed down from false application for the
290 payment, change order manipulation, billing for work not performed, diverting
291 purchases, non-payment of subcontractors and material suppliers to theft of
292 equipment/tools. Fraud could be committed by contractor employees, owner
293 employees, contractors, subcontractors, consultants and participants in successful
294 and unsuccessful projects. This kind of fraudulent practices can damage the
295 construction cost and performance of the project. The construction practitioners
296 also mentioned that it was inevitably to eliminate any kind of fraudulent practices
297 even though frequent checking and further tighten monitoring policies were
298 implemented. Additional to large and/or complexity of projects, the inter-
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299 relationship between the various parties to the contract and events was often
300 uncertain. In many cases, involved persons working on a project disagreed on
301 discussed matters. This made it easier to blame other participants for problems. It
302 created a reason to pay a bribe, as decisions on cause and effect and their cost
303 consequences could have enormous impact. However, the interviewees mentioned
304 that influential factors which caused fraudulent practice might rise from
305 understaffing or ineffective, internal audit functions. Even if companies had
306 proper controls, these may not be effective if there had not been enough qualified
307 people to manage them.
308
309
310 As shown in Table 4, the construction related risk group was ranked at 7 th
, 2 nd
,
311 and 6 th
place by the owners, consultants and main contractors respectively. Within
312 this group, delay in payments factor was highest severity compared with other
313 factors in the same group. The impact to construction performance was rated as
314 severe level. With regard to delay in payment factor, interviewees stressed that
315 disbursement of procedure in Thailand had to comply with Bank of Thailand rules
316 and regulations which might not be suitable and workable considering oversea
317 rules and regulations. Therefore, there might be difficulties in bringing the
318 performance of disbursement as it was stated in the contract agreement.
319 Experiencing in disbursement procedure was also one of the important factors
320 which had influence on improving the performance of disbursement procedures.
321 Nonetheless, the performance of disbursement of project should be kept as
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322 contract written. This is a result of prevention in fearing of conspiracy and
323 generosity theory from public thought and awareness. In engineering aspect,
324 interviewees mentioned that unexpected site conditions were unanticipated
325 occurrences that were not controllable by government authority. Unforeseen
326 geological conditions were major problems for project cost overruns. It affected
327 excavation, compaction, and structure foundations. Thus, resulting in the need for
328 special mitigation work. Utilities were also often present that were not described
329 or were described incorrectly on existing drawings. The interviewees mentioned
330 that a main contractor usually subcontract work to other contractors who would do
331 the work for less than what the owner paid to the main contractor. This payment
332 difference results in that subcontractor adopting cheap and poor quality work
333 practice to generate certain profits. Subcontractors normally reused old timber till
334 it was worn-out instead of replacing it. This often resulted in such problems as
335 concrete bulging and honeycombed concrete. However, the interviewees admitted
336 that saving materials cost was considered an effective way to cut cost in Thailand
337 practice. There was also lack of supervision from the main contractor to different
338 levels of subcontractors, which was the main cause for the non-compliance in
339 performing quality work and specification. As the number of subcontracting layer
340 increased, limited profit could be gained for the subcontractor who actually did
341 the work.
342
343
344
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345
346 It was found from Table 4 that economic related risk group affected to the
347 construction performance at fairly severe level. It was ranked as 4 th
, 5 th
, and 6 th
348 place by the main contractors, consultants and owners respectively. Medium size
349 construction companies with a short economic position would be greater affected
350 by foreign currency changes. It further caused loss in expected future cash flow.
351 However, a rise in the exchange rate would contribute to further falls in
352 construction costs as it was likely that cuts in public capital construction projects
353 would not be compensated by improvement in the commercial construction sector.
354 This would cause the sector to lag behind any improvement in the general
355 economy. The interviewees also mentioned that market conditions could affect the
356 costs of a project, particularly large and complex infrastructure projects.
357 Additionally, inaccurate assessment of the market conditions could further lead to
358 incorrect project cost estimation. Changing market conditions during the
359 development of a project could reduce the number of bidders. Inflation caused the
360 price of commodities and services to increase which affected to owners and main
361 contractors liabilities in a short-medium term. The financial expertise’
362 interviewees also admitted that during Hamburger crisis in 2008, the inflation
363 added cost to a project. This situation initially had an impact on the debtors’
364 ability to make mortgage loan payments under real estate purchase agreements,
365 and then the impact spread to the financial sector. Inflation adversely affected to
366 the project performance. It was further found that the interviewees have various
367 views regarding how inflation should be accounted for in the project estimates and
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368 in budgets by funding sources. Similar results were found by Arditi et al . (1985)
369 and Akinci and Fischer (1998). However, there was no ground to support on type
370 of currency used affecting the performance of inspection.
371
372
373 It found from Table 4 that owners, consultants and main contractors’ perspective
374 on severity ranked this related risk group as 5 th
, 7 th
, and 4 th
place. While, political
375 instability and civil disorder factor was among the two highly concern factor in
376 political related risk group.
Civil disorder for new constitution or agitation for
377 higher wages by construction workers might lead to a delay in the delivery of
378 projects. It often experienced that inflation and an increased in the interest rate
379 were the causes of agitation for higher wages. This caused the non-availability of
380 transportation and the closure of the site by a protest-action group. Construction
381 practitioners mentioned to influence of power groups and government relation
382 factor that put political and diplomatic pressure on the competition on bidding,
383 procurement types and procedures. A joint venture with financial donor’s
384 construction company was more likely to gain possibility to suspect tender results
385 to be pre-determined. Regarding labor restriction, one of the frequently violation
386 of labor standard was unqualified labor and illegal oversea workers. This was the
387 result of a shortage of skilled labor and legal oversea workers in chain
388 subcontractor level. The subcontractor who actually would do the work, the
389 payment from the owner was so significantly deduced to the level that could not
390 cover the necessary materials and qualified or legal labor cost. Therefore, the
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391 subcontractor employed cheap labors and poor materials, resulting in the poor
392 quality of work and further time spent on correction of unacceptable work done.
393
394
395 In Table 7 showed the sources of global risk factors from previous researchers. It
396 can be categorized into technical, managerial, resource, productivity, design,
397 payment, client and subcontractor, estimator related, design related, competition
398 related, fraudulent practices related, construction related, economic related and
399 political related risk. With a questionnaire survey of construction practitioners, the
400 results showed that the major cause of project performance in international funded
401 projects was adjustment and anchoring, delay in payments, civil disorder, political
402 instability, market conditions, influence of power groups, fluctuation in labor cost
403 and materials, project complexity, exchange rate and motivational biases.
404 However, there were differing perceptions among interviewees. Based on their
405 viewpoints in each survey, the degree of seriousness of each risk is varied by
406 many influences, especially, those from those involved in the project. Therefore,
407 construction practitioners must refrains currently prevalent adversarial attitudes
408 and shift to more cooperative and partnering methods in order to minimize and
409 mitigate risks in construction projects.
410
411
412
413
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414
415 This study overviews the risk factors in the construction industry which is hoped
416 to raise construction practitioners’ awareness. Mainly, this study categorized the
417 risks into seven main related groups which were related to estimator, project,
418 competition, fraudulent practices, construction, economic and political. The
419 identified results showed that all the three groups of respondents generally agreed
420 that out of a total of 39 factors the top ten risk factors arranged in descending
421 order of severity were:
422
423
424
425
426
427
428
429
430
431

Adjustment and anchoring

Delay in payments

Civil disorder

Political instability

Market conditions

Influence of power groups

Fluctuation in labor cost and materials

Project complexity

Exchange rate

Motivational biases
432 The results (Table 5) showed that the owners, consultants and main contractors all
433 agreed that estimator related group was the most severe which affected
434 construction performance. Competition related group was considered the second
435 most severe in international funded public projects followed by project related
436 group, economic related group, construction related group, political related group
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437 and fraudulent practices related groups. The accumulated risk experiences among
438 construction practitioners have clearly pointed to transparency in evaluation of
439 estimator as a main contributing factor to causes a great concern of success of
440 international funded public projects. Addition, delay in payment which attributed
441 to an efficiency of the staff involved in the payment procedure. This might be a
442 close link between disbursement procedure of each fund and working culture of
443 each country. Nonetheless, there was no evident to analyze and conclude.
444 However, shortage of staff was mentioned during interview that caused an
445 overload to their staffs which affected their performance. The author hopes this
446 paper is a useful reference to the project team in managing conflicts, delay,
447 dispute and cost overruns for future international funded public projects in
448 Thailand.
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450
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25

557 Table 1. Questionnaire return rate
558
Organization
Owner
Number of questionnaires
Sent Filled
50 41
Main contractor (Domestic)
Main contractor (International)
Consultant
Total
50
30
50
180
34
27
32
132
559
560
561
Percentage return
78
53
89
44
64
26

562 Table 2. Profiles of financial sources
Classification
Bridges
Buildings
Express way
Highways
Underground railways
Water irrigations
Total
Type of funds
563
Total
ADB 1 IBRD 2 JBIC 3
14 - 4
564
18
565
- 7
-
5
14
12
566
14
567
12
-
10
36
17
-
5
29
13
12
7
55
42
568
12
569
22
570
120
571
572
573 Note :
574 1 = Asian Development Bank
575 2 = International Bank for Reconstruction and Development
576
577
3 = Japan Bank for International Cooperation
27

578 Table 3. Comparison severity index factors in international funded projects
Risk factors
Owner Consultant Main contractor
SI (%) Rank SI (%) Rank SI (%) Rank
Estimator related group
Motivational biases
Adjustment and anchoring
Incentives
Cognitive
Project related group
Project complexity
Scope vagueness
Project size
Project type
Competition related group
Contractor policies
Need for job
Market conditions
Number of bidders 74.0
Fraudulent practices related group
Corruption
Fraudulent practices
Theft
61.5
63.3
65.2
59.6
66.3
64.6
79.6
51.0
61.9
64.2
70.0
62.3
60.2
72.3
16
1
35
21
17
6
5
20
25
2
23
19
14
27
11
66.5
81.0
63.1
62.1
64.8
64.0
54.8
61.0
59.2
60.0
72.3
65.6
51.5
57.5
56.0
9
1
15
16
12
13
30
20
24
23
4
10
33
26
29
66.0
75.2
68.1
64.6
12
3
8
16
65.8
69.0
50.0
56.3
66.7
54.4
53.1
64.2
67.9
65.6
57.3
13
7
33
27
11
30
31
17
9
14
24
28

Collusion among contractors
Construction related group
Geological conditions
Unexpected site conditions
Weather conditions
Accessibility
Client-generated
Subcontractor-generated
Delay in payments
Economic related group
Price fluctuations
Inflation
Exchange rate
Interest rates
Political related group
Political instability
Political system
Nature of the firm's operation
Civil disorder
Influence of power groups
Labor restrictions
Fluctuation in labor cost and
17
8
19
5
36
37
21
27
3
6
32
7
22
31
34
2
28
18
25
61.7
66.9
61.3
60.6
57.3
71.7
43.1
38.1
75.4
69.4
51.5
68.5
60.2
51.9
50.0
78.5
56.3
61.5
58.3
24
17
28
7
36
37
22
32
4
9
15
13
31
34
33
2
30
28
26
60.8
64.0
59.0
61.7
57.3
69.4
44.0
41.3
72.5
67.1
64.8
65.8
58.1
51.9
52.1
74.2
58.5
59.4
59.8
20
10
26
4
36
37
20
32
2
6
35
5
22
28
25
1
23
17
21
63.8
67.7
56.7
63.5
52.7
73.3
40.8
37.3
78.8
70.2
45.2
70.8
59.4
55.2
56.9
80.0
57.9
64.0
61.7
29

579 materials
Change in taxation
Supply of local materials
Government relations
580
581
582
66.7
68.5
66.0
10
8
12
65.4
49.4
63.8
11
35
14
54.8
48.3
64.8
30
34
15
30

583 Table 4. Comparison of ranking of main risk group
584
Main risk group
Estimator related group
Project related group
Competition related group
Owner Rank Consultant Rank Main contractor Rank
63.7 3 68.2 1 68.5 1
65.3
67.5
2
1
61.1
64.3
4
3
61.0
62.2
5
2
Fraudulent practices related group
Construction related group
Economic related group
62.7 4 56.7 6
59.1
60.5
7
6
59.5
61.5
2
5
Political related group
Means
62.6
63.1
5 59.6
61.6
7
60.1
62.1
60.2
58.4
61.8
7
3
6
4
585
31

586
587
588
Table 5. Ranking the ten highest risk factor agreed by construction practitioners
Risk factor Severity index (%) Impacted
Adjustment and anchoring
Delay in payments
Civil disorder
Political instability
Market conditions
Influence of power groups
Fluctuation in labor cost and materials
Project complexity
Exchange rate
Motivational biases
78.6
77.6
75.6
71.4
70.4
68.9
68.4
66.3
66.2
65.7
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
Moderately severe
589
590
32

591
592
593
Table 6. Comparison spearman rank correlation in risks on international funded projects.
Correlation Spearman rank correlation coefficient
Owner-Consultant
Owner-Main contractor
Consultant-Main contractor
Main risk groups
0.12
0.43
0.36
All risk factors
0.42
0.66
0.79
594 Correlation is signification at the 0.5 level of significant
595
596
33

597 Table 7. Comparison results with other studies for source of global risks.
Adnan (2008)
Dikmen and Birgonul (2006)
Balio and Price (2003)
Miller and Lessard (2001)
Bing et al . (1999)
He (1995)
Internal risk, project-specific risk, external risk
Technical risk, managerial risk, resource risk, productivity risk, design risk, payment risk, client risk and subcontractor risk
Estimator related, design related, competition related, fraudulent practices related, construction related, economic related and political related
Completion risks (technical, construction and operational) Market related risks (demand, financial and supply) and Institutional risks (regulatory, social acceptability and sovereign)
Internal risk factors, Project-specific risk factors and external risk factors
Nation/region risk, Construction industry risk and,
Company and Project risk
598
599
600
34