Risk and Vulnerability Assessment for International Contractors

Abstract

Despite substantial performance challenges, the Indian construction market remains an attractive destination for foreign contractors. These contractors face various interdependent risks and vulnerabilities, adversely affecting their projects. Therefore, it is necessary to assess the influence of these factors on the project performance. This study systematically analyzes and evaluates these risks and vulnerabilities and their impact on project performance. Through collaboration with Indian firms, the study identifies the prevalence of risk attributes in the Indian construction market and assesses their latent properties using factor analysis. Additionally, it identifies the risk paths influencing overall project performance and evaluates the impact of vulnerabilities. Findings reveal that poor site management, poor subcontractor performance, and client bureaucracy are the most significant risks for foreign contractors. Moreover, the path model indicates that adverse host country conditions, subcontractor incompetency, and project complexity have the highest influence on the project’s performance. This study enhances knowledge by identifying risk paths and vulnerabilities affecting foreign contractors in India. The study contributes to a deeper understanding of the risk landscape for foreign construction companies planning to enter or currently operating in India. It offers practical recommendations to manage the risks efficiently. Construction companies can enhance their project performance and risk management strategies by adopting the identified mitigation measures.