الملخص الإنجليزي
This research aimed to identify the most significant financial risk factors faced by contractors in
Oman's construction industry and propose strategies to eliminate or at least minimize their
occurrence and solutions to mitigate their impact. The literature review led to 50 popular financial
risk factors that are globally recognized. A presurvey study -made by the researcher- that included
seven professionals in the construction industry revealed that 46 factors are relevant to Oman's
construction industry while the rest are of the less effectiveness. The 46 factors were considered
in a field survey via a structured questionnaire, and interviews with senior contractors’
professionals after a pilot study was conducted to ensure clearness and easiness of the
questionnaire set. The questionnaire comprised of three main parts; professional information,
evaluation of the risk factors based on likelihood, and assessment of the risk factors based on the
financial impact on contractors in Oman using a Likert 5-point scale. The participant was given
the chance to select the type of project he/she is more involved in out of four types i.e. residential
and commercial, industrial and infrastructure, oil and gas, and multiple construction projects. The
questionnaire was distributed to more than 300 practitioners (clients, contractors, consultants, and
quantity surveyors) in different construction projects; residential and commercial, industrial and
infrastructure, and multiple construction projects. The valid responses were 101 and the calculated
Cronbach’s coefficient was 0.973 which shows an excellent internal consistency of the
questionnaire. The questionnaire results were analyzed using the Relative Importance Index (RII)
and concluded using the risk rating that considered the likelihood RII and impact RII of each
financial risk factor. The ranking of each significant financial risk factor from the questionnaire
was based on the risk rating that considers the likelihood and impact RIIs. After the analysis of the
questionnaire answers, face-to-face interviews with four senior professionals from the contractors'
side who have more than 20 years of experience and involved in making financial decisions were
conducted. The aim was to substantiate the findings, in-depth discuss the interpretation of the
results, and get opinions on strategies to eliminate or at least minimize occurrence and solutions
to mitigate the impact of the top ten factors in each field of the construction projects. This research
mixed-methods approach confirmed the significance of these financial risk factors and provided
additional insights based on the interviewees' extensive experience, and ranked the significance of financial risk factors based not only on their likelihood and impact but also on their priority to the contractors.
It was found that the overall top ten risk ratings of contractors’ financial risk factors in Oman's
construction industry based on the questionnaire responses from all different construction projects
are as the following order: poor schedule management (15.91), delayed payments or non-receipt
of payments (15.57), poor performance/delays in sub-contractors’ work or suppliers (15.45),
contractor’s poor financial status/ financial management (15.27), change orders during
construction (15.17), contractor’s poor site management and supervision (15.06), escalation in
material prices (14.91), poor coordination with subcontractors (14.83), inaccurate estimates
(14.76), and delay in the delivery of materials (14.63).
According to the likelihood RII from the survey results, poor schedule management factor was
ranked as the top most prevalent financial risk factor from the perspective of residential and
commercial, industrial and infrastructure, and multiple construction projects. This factor was
considered to have a lower possibility to face contractors in oil and gas construction projects as
fifth prevalent factor. Based on the impact RII, contractors’ poor financial status/financial
management appeared to be more financially burdensome on contractors as the first financial risk
factor that could affect contractors financially in all different construction projects. The
significance of both financial risk factors to the contractor was approved by the interviewed four
senior contractors as part of the first ten significant financial risk factors to the contractors in
Oman’s construction projects.
The research findings contribute to a better understanding of contractor’s financial risks in the
construction projects in Oman and offer valuable recommendations to contractors to enhance their
risk management strategies. By proactively addressing these financial risk factors, contractors can
minimize the potential financial impact and ensure the success of the project.
