Successful Delivery of Infrastructural Projects: Epistemic Overview of Cost Risk and Uncertainties

Abstract: The process of decision making and risk analysis are essential tasks along the construction project cycle. Over the years, construction practitioners and researchers have used various methods, tools and techniques to evaluate risk and assist in making more concise decisions. Most practitioners, however, rely on their expert judgment, past experience, intuition, acquired and accumulated knowledge and gut feelings to make decisions. Aleatory (natural, heterogeneity and stochasticity) and epistemic (subjective, ignorance) are the two major types of uncertainties observed in natural sciences. Practitioners traditionally deal with aleatory uncertainty through probabilistic analysis based on historical data (frequentist approach); and epistemic uncertainty, on the other hand, handled through the Bayesian approach which has limitations since it requires a priori assumption. This paper reports the application of the DST (Dempster Shafer Theory) of evidence to determine the most critical risk factors affecting project cost contingencies using their epistemic probabilities of occurrence. The paper further discuses how these factors can be managed to enhance successful delivery of infrastructural projects. It uses the mixed methodology, with data gathered through structured questionnaires distributed to construction clients, contractors, professionals and experts in the built environment. The research revealed that design risk, financial risk and economic risk were most important cost risk categorizations. In particular, scope changes, incomplete scope definition, incomplete design, changes in specification, micro and macroeconomic indicators and delayed payment problems were identified as the most important risk factors to be considered during the cost contingency estimation process, hence successful delivery of infrastructura