Risk Management in International Construction Joint Ventures

Abstract

This paper identifies the risk factors associated with international construction joint ventures (JVs) from and “integrated” perspective. The risk factors are grouped into three main groups: (1) Internal; (2) Project-specific; and (3) External. It examines the most effective mitigating measures adopted by construction professionals in managing these risks for their construction projects in East Asia. Based on an international survey of contractors, it was found that the most critical risk factors exist in the financial aspects of JVs, government policies, economic conditions, and project relationship. When entering a foreign construction market in the form of a JV, a foreign construction company could reduce its risks if it would carefully select its local partner, ensure that a good JV agreement is drafted, choose the right staff and subcontractors, establish good project relationships, and secure a fair construction contract with its client.