Methods for estimating risk response costs for construction investment projects

Abstract

ABSTRACT:
This study examines the concept of risk and the costs of response to risks in terms of construction investment projects. These costs are estimated based on the risk response strategies in the project risk management plan, using appropriate cost estimation methods. The more accurate estimation of risk response costs, including contingency costs, has the effect of increasing the accuracy of cost estimation in construction investment projects, giving project managers a closer and clearer view of risks for the project, thereby, help the project to be controlled in a timely and effective manner, avoiding waste, and minimizing negative risks. The proposed method can be used as another option for estimating risk response costs, contributing to increase the accuracy of the cost estimation and better integration of project management domains, such as cost management, risk management and also quality management, schedule management.

Keywords: risks in construction investment projects, risk response costs, contingency costs, risk management plan