Critical risk factors, external risk factors and performance of building projects in Kenya: a case of Nairobi County

Abstract

The construction sector provides immense benefits to the public due to employment opportunities it offers both directly and indirectly. Globally, the need for infrastructure is based on the rising levels of the population, thus increasing the demand for necessities such as housing. Building projects in Kenya continue to experience poor performance with regard to schedule delays, cost overruns, and poor quality. The general objective for this study was to investigate the influence of critical risk factors on the performance of building projects in Nairobi City County. The specific objectives were to establish the effect of management risk factors, technical risk factors, financial risk factors, and human resource risk factors on the performance of building projects in Nairobi City County. Further, the study sought to assess the moderating effect of external factors on the relationship between critical risk factors and the performance of building projects in Nairobi City County. The target population of this study was all the registered construction projects in Nairobi County as per the National Construction Authority database in the year 2021, totalling 698 projects. A representative sample was calculated using the Yamane formula, giving 253 building projects that were used in data collection. Primary data was collected through a semi-structured questionnaire that was physically and virtually administered to respondents. The findings showed that management risk factors, technical risk factors and financial risk factors had a statistically significant effect on the performance of building projects in Nairobi City County. However, the variable on human resource risk factors did not have a statistically significant effect on the performance of building projects in Nairobi City County. The external factors were found to have a moderating effect on the relationship between the performance of building projects and the identified independent variables in this study. The research recommended the development of policies to streamline the adoption and application of risk management strategies in construction projects to reduce potential damage and losses accompanied by any failures. Further, increasing awareness of the need to adopt risk management as a prerequisite for construction projects through capacity building of involved players will significantly enhance the building construction sector. The expected beneficiaries of this study include contracting firms in the construction industry, construction professionals, policy makers, government and the academic community.