Construction - A Risky Business
bitterness of poor quality remains long after low pricing is forgotten."
Leon M Cautillo
Keywords: construction, risk, project management, culture.
Construction - A Risky Business [P045]
The Australian construction industry is suffering from low and declining profits. This paper suggests the primary cause is a misallocation of risk within the industry. Whilst the ‘pain’ of minor problems is primarily borne by contractors, many clients are finding it impossible to escape the consequences of major problems and many of these clients are finding themselves ill prepared to manage the problems when they arise.
This paper identifies some of the factors creating risk in the Australian construction industry and suggests ways to better align risk and reward. We hypothesise, that the efficient management of risk involves both contractors and clients working together to deliver the right project for the right price, utilising modern forms of contract such as 'Collaborative Working Agreements'.
The catalyst to enable the widespread adoption of this transformation will be the development of a significant number of appropriately qualified building managers to staff both the contracting and client sides of the industry. The challenge facing CIOBA is to encourage and train the people needed to create this change.
Authors: Patrick Weaver & Richard Hyde