Key Challenges and Opportunities to Improve Risk Assessments in the Construction Industry

Abstract

Risk management is crucial for the effective delivery of construction projects. While extensive research around the importance of risk management exists globally, limited studies have examined the effectiveness of risk assessment in general and in Egyptian construction projects in particular. Hence, this paper fills this gap by exploring current risk assessment practices through semi-structured interviews with 15 industry experts from various construction firms in Egypt. A qualitative methodology was adopted, and thematic analysis was used to identify key challenges and opportunities for improvement. The findings indicated that Egyptian firms tend to rely heavily on personal judgment rather than implementing a structured process, whereas multinational companies adopt more formalized approaches. The absence of systematic documentation on project failures further weakens the effectiveness of current risk assessment practices. Unlike previous studies that primarily used quantitative methods, this research employs a qualitative approach that provides direct insights from the industry and offers a deeper understanding of actual practices. Given the differences in risk assessment approaches between local and international companies, this study suggests that cultural and operational factors must be considered when developing structured risk management frameworks. Similar patterns have been observed in other regions, where multinational firms operating in markets such as the Middle East, Asia, and Latin America tend to implement standardized risk management protocols, while local companies often face challenges in formalizing these practices. The findings offer valuable insights for both national and multinational companies operating in the Egyptian construction sector that aim to enhance project risk management.

1. Introduction

Risk assessment, often referred to as risk analysis, is considered a fundamental component of the risk management process. It plays a pivotal role in the successful execution of construction projects. Even established standards like ISO 31000 emphasize the critical importance of risk assessment within the broader risk management process [1]. AL-Hasani [2] showed that inadequate and inaccurate risk assessment is a primary contributor to cost overruns and delays in construction projects. Similarly, Renuka [3] noted that the construction industry lags behind other sectors in terms of effective risk assessment practices. In particular, there has been minimal research dedicated to assessing and quantifying risk events within the Egyptian context [4].

A risk or uncertainty should be clearly defined before it can be effectively managed [5]. The interpretation of a risk varies across different contexts, applications, and practices [6]. A risk is defined as “the impact of uncertainty on the overall objectives” [1]. An event with a probability of zero is classified as uncertainty rather than a risk [7]. Uncertainty is an event with an undefined probability of occurrence and impact, in contrast to risk, where at least one or both of these factors are known. Without a thorough definition of risks, the effective implementation of the proper risk management process may be hindered. Risk is essentially the potential for either gain or loss, evaluated by the probability of occurrence and the impact [1]. Akintoye [8] characterized construction risk as the deviation in the project’s process, leading to uncertainties in quality, budget, and schedule. Risks can encompass uncertainties correlated with a project’s location, local regulations, weather conditions, and financial factors [9]. Consequently, risk management can help in preventing or reducing any adverse impact of risks on project objectives through the identification, assessment, and mitigation of risks [10]. This paper reports on the risk management practices in the Egyptian construction sector.

The construction industry in Egypt was ranked third (behind the tourism and communications sectors) in contributing to the Egyptian economy in 2017 [11]. Egypt’s construction sector is set to expand further, fueled by government policies, rising foreign investments, and a strong focus on infrastructure advancements. In 2024, Egypt’s construction sector experienced 5.8% growth, driven by investments from both the public and private sectors in areas such as commercial developments, transportation infrastructure, and energy projects [12]. The government is actively working to attract international construction firms to execute large-scale projects, contributing to the achievement of its strategic objectives [13]. Additionally, the construction industry’s output contributed a 10.3% increase to the Egyptian economy in 2016 compared to the previous year. Similarly to other countries, Egypt faces significant challenges with time and cost overruns in construction projects [14], with various studies indicating that 16.6% of projects experience cost overruns and 98% of contractors fail to deliver projects on time [15]. However, the extent and underlying causes of these overruns are not well understood [14], and it is crucial to identify and analyze project-specific risks that may lead to cost overruns and delays in construction projects in Egypt. Daoud [16] reported that approximately 80% of the mega-construction projects surveyed in Egypt were subject to cost overruns, with the average overrun amounting to 26.95% of the original contract value. The unique and uncertain nature of construction projects often leads to delays in their completion. Risk assessment plays a critical role in the successful execution of construction projects. However, despite its importance, there is a lack of comprehensive research aimed at assessing and quantifying risk events in Egypt [4].

The Project Management Body of Knowledge (PMBOK) defines risk management as a structured process encompassing multiple components that must be implemented consistently across the entire project lifecycle [17]. Project risk management, as an integral component of overall project management, seeks to enhance the likelihood and influence of positive outcomes while mitigating the probability and impact of adverse events within the project [18].

Despite the vast research on risk management in general and the risk assessment process in particular, as well as its application in construction projects, many companies in Egypt still struggle to adopt a structured and effective approach to implementing risk assessment in their projects. Ibrahim [19] highlighted the necessity of enhancing risk management and assessment practices and knowledge in Egypt. Similarly, Marzouk [20] underscored the importance of developing a structured risk management and assessment framework to facilitate a more proactive approach in construction projects. Additionally, Soliman [21] investigated risk management in international joint venture projects in Egypt, noting a lack of research on risk assessment in such projects. He also observed that most existing frameworks follow similar processes without significant improvements over time. Collectively, these studies emphasize the need for a more comprehensive understanding of risk assessment and suggest that integrating additional tools could help bridge this gap. Egypt’s population continues to grow annually and is projected to reach 120 million by 2050, prompting the government to accelerate the implementation of various projects and developments across multiple cities and regions. However, the lack of a structured risk management and assessment framework has been a significant challenge, hindering many contractors from successfully achieving their objectives and, in some cases, leading to financial instability and bankruptcy [19].

Given the limited research on risk assessment in Egypt’s construction sector, this study aims to investigate current risk assessment practices, building on the recommendations of previous studies to further explore this critical area. The objective is to generate insights that can enhance risk assessment processes in Egypt and in other countries with similar industry conditions. The following sections review the existing literature on risk assessment at both global and national levels, outline the research methodology, present the study’s findings, and provide a comprehensive discussion of the results.

2. Literature Review

Risk assessment according to ISO 31000 is the process of risk identification, analysis, and evaluation [1]. Risk assessment plays a vital role in construction projects, helping to plan for any anticipated problems that could affect the successful delivery of the project. While recognizing risks is crucial, the importance of risk assessment lies in providing decision-makers with the essential measurements and evaluations of risks and uncertainties. Kankare [22] agreed that the risk assessment process initiates with the identification of threats, followed by analysis and evaluation. Several approaches are available for conducting risk assessments, including cost–benefit analysis, computer simulations, probabilistic methods, multi-criteria decision-making, and sensitivity analysis, among others [23]. Additionally, Ahmadi [24] noted that over the past decades, numerous risk assessment methods have been introduced and embraced by practitioners and researchers in the construction sector, including Fault Tree (FT), Monte Carlo simulation, risk matrix, and Failure Mode and Effects Analysis (FMEA).

Risk assessment can be conducted through both quantitative and qualitative methods. The qualitative evaluation of risks relies heavily on the expertise of team members, while the quantitative approach is more centered on gauging the impact of risks on the project’s objectives. The incorrect estimation of a project’s goals, accompanied by insufficient and poor risk assessment, can lead to significant problems and undesirable circumstances in the project [25]. While the experience of managers and project participants may help reduce the occurrence of initial risks, it cannot prevent risks from arising in the project over the long term. Projects should not solely depend on personal judgment but should instead develop plans and assessments based on historical data and statistical information [26]. Prior experience and historical data are crucial for making decisions regarding unknown risks and uncertainties. In situations where there is inadequate information and details, risk managers may rely on the opinion of experts to identify and assess risks [27]. Although there are many tools and methods that are commonly used for the risk assessment of construction projects, several authors highlighted their limitations. Khodier [28] mentioned that formal methods of risk assessment are hardly ever utilized due to a lack of knowledge, and there are uncertainties about the appropriateness of such methods for construction activities. The absence of familiarity with risk assessment and management practices will have significant limitations. As a result, construction projects often fail, businesses face ongoing challenges, many risks turn into real problems, and opportunities are frequently missed.

Comparable issues in risk assessment and management practices have been documented across various countries and regions. In Latin America, for example, Alberti [29] utilized fuzzy set theory to evaluate construction risks in megaprojects, revealing a continued reliance on subjective judgment due to vague and insufficient formal procedures. Similarly, in the Middle East, studies on the construction sector in Yemen have shown that risk management often remains informal and reactive, primarily due to constrained resources and limited technical training [30]. In Southeast Asia, Le [31] reported that construction projects in Vietnam frequently encounter delays and cost overruns due to inadequately structured risk management frameworks and insufficient stakeholder involvement. These international examples highlight that the reliance on personal judgment and the absence of systematic risk assessment and management approaches are not unique to Egypt but rather a part of a broader pattern observed in developing regions.

Risk Management and Assessment in Egypt

Most prior research on Egypt has primarily concentrated on the general limitations of risk management, rather than specifically addressing risk assessment. Therefore, this section provides a summary of these studies, with a greater emphasis on understanding the significance of the risk assessment phase within the risk management process.

The construction sector in Egypt is experiencing a rapid evolution in terms of competition and complexity, which has resulted in an increased exposure to various financial and technical risks. Transparency and subjectivity were the main issues faced by managers when dealing with risks and complex situations. Recently, there has been substantial progress in the management of construction workers. Nonetheless, projects are still susceptible to various unforeseen events, particularly in developing nations. Hamed [32] asserted that the current practices of risk management in Egypt, particularly those used by small- and medium-sized companies, deviate substantially from the practical applications and standards of risk management (e.g., ISO 31000, Committee of Sponsoring Organizations “COSO”). In 2019, Khodeir [15] presented a study about the risk identification of infrastructure projects employing a real commercial project in Egypt as a case study. They highlighted the necessity of qualitative methods to efficiently rank and prioritize risks. Nabawy [33] stated that many researchers who have delved into the risk management of construction projects suggested the need for ongoing improvements of risk management knowledge to guide contractors in effectively addressing and dealing with risks. Reviewing the context of risk management can be highly effective for authors to address insightfully the effective ways of dealing with risks. Such a comprehensive investigation helps in understanding the current gaps, areas of improvement, and strategies to enhance the risk management domains. Nabawy [33] developed a conceptual framework particularly tailored for the risk management of mega-housing projects within Egypt. The framework was underpinned by the principles of ISO 31000, encompassing risk identification, evaluation, response, and monitoring. Ghaffar [18] emphasized the critical role of risk assessment within the broader risk management process, highlighting a significant gap in the methodologies currently employed for risk assessment in sustainable development projects in Egypt.

Ibrahim [19] highlighted the importance of improving risk management practices in Egypt. In another study, Nabawy [34] emphasized the significance of improving contractors’ experience and comprehension of risk management in Egypt. Similarly, Marzouk [20], on the other hand, underlined the extreme necessity of developing a framework for risk management to enable construction parties to proactively identify risks and ultimately improve the adopted practices of risk management. Soliman [21] carried out a study regarding the risk management of international joint ventures in Egypt. The author highlighted the scarcity of research pertaining to the risk assessment of joint venture projects, and most of the used frameworks remained outdated and similar. All of these studies pointed out the necessity for further understanding of risk assessment and addressing the possible tools to fill this knowledge gap.

Construction projects in Egypt encounter a wide range of risks. One of the significant challenges faced in the country is the scarcity of formal standards for risk management [35]. Thus, various researchers pointed out the challenges and limitations of risk management in Egypt [26,28,35,36,37]. These limitations are mainly due to the absence of a formal process to bridge the gap between the theoretical aspects and the practical implementation of risk management. Soliman [21] stated that Egyptian companies lack the practice of maintaining historical information and data from previous projects. In addition, some construction firms indicate the utilization of risk management in their proposals, yet they completely fail to implement it within the execution stage. Therefore, adopting a formal risk assessment provides a well-structured approach for construction companies in Egypt and aids stakeholders and project managers in making informed decisions. Daoud [16] stated that there is a heavy reliance on the subjective opinion of construction professionals when assessing risks in the Egyptian construction sector. This necessitates the need for systematic practices to estimate the major risks in construction projects to avoid time and cost overruns.

Despite previous studies emphasizing the importance of early risk assessment to management and control risks, there remains a lack of formal risk assessment practices in Egypt. Numerous studies have focused on risk management in general; however, there is a notable lack of research specifically on risk assessment within the construction industry in Egypt that reports on the understanding and perspectives of contractors.

3. Methodology

The literature review highlighted the need to enhance the current state of risk assessment in general and in Egypt in particular. This study examined the existing risk assessment practices within Egypt’s construction sector, understanding the pivotal role that effective risk assessment plays in the success of this industry. However, before proposing any methodology, it is essential to first evaluate the current state of risk assessment and determine the extent to which formalized practices and processes are being implemented. To achieve this, a comprehensive review of the existing literature was conducted to assess the status of risk management and assessment in Egypt, as documented in previous studies. Based on the insights gathered, Figure 1 presents a flowchart outlining the research methodology adopted in this study.

This study employs an exploratory approach to examine and understand the current practices and status of risk assessment within the construction industry. Grounded in an interpretivist philosophical perspective, the research highlighted the significance of understanding social phenomena within their specific contexts [38]. Interpretivism enables the exploration of subjective meanings and individual interpretations, providing a comprehensive understanding of complex social and organizational dynamics. By adopting this philosophical stance, this study gains deeper insights into contextual factors, including cross-cultural influences and the underlying drivers of industry practices, through the collection and analysis of qualitative data.

3.1. Analytical Framework

The analytical framework of this study is grounded in a comprehensive literature review on risk assessment, highlighting a significant gap in research specifically addressing this context. The review revealed both the scarcity of in-depth studies on risk assessment within Egypt’s construction sector and several critical limitations in current practices. These include the lack of systematic risk assessment implementation, inadequate stakeholder training and awareness, and an overreliance on individual judgment rather than standardized methodologies. To gain a thorough understanding of these limitations, a detailed literature review was conducted to identify key factors affecting the efficiency of risk assessment in construction projects, as summarized in Figure 2.

The framework consists of three main stages:

Risk Identification: This is the initial step in the risk management process, where potential risks that could affect the construction project are recognized. It involves gathering information from various sources, including expert opinions, site investigations, stakeholder interviews, and document analysis.

Risk Assessment: Once identified, risks are assessed in terms of their likelihood and potential impact. This stage involves qualitative and/or quantitative techniques to prioritize risks and understand their implications for the project’s objectives.

Risk Evaluation: The final stage involves comparing the assessed risks against risk criteria (such as cost, time, or quality) to determine their acceptability and the need for treatment or mitigation.

The risk identification and assessment are impacted by a range of factors that influence the accuracy, reliability, and objectivity of the risk assessment process. They include the following:

Experience: The practitioner’s prior exposure to similar projects and risks;

Judgment: The use of subjective reasoning and intuition in assessing risk severity and probability;

Formal Process: the extent to which standardized procedures or tools are used in the assessment process;

Culture of Work: The organizational environment, including openness to risk discussion and communication practices;

Historical Records: The availability and use of past project data to inform current assessments.

3.2. Data Collection

The research method was selected to effectively achieve the primary objective: gaining a comprehensive understanding of the current state of risk assessment in Egypt’s construction industry while identifying the prevailing methods and cultural influences shaping these practices. Given this study’s nature, an in-depth exploration of experts’ insights and perspectives on risk assessment was essential, along with an examination of potential areas for improvement. This approach ensures a well-rounded understanding rooted in practical expertise and real-world applications. Interviews have been widely employed as a data collection method in construction research, particularly in the domains of risk management and assessment.

Interviews were conducted to collect essential information on the principles and methods of risk management and assessment applied within Egypt’s construction industry. In Egypt, construction firms are classified based on their size and the financial scale of their completed projects. To ensure a diverse representation, employees and experts from Class A, B, and C contractors were invited to participate in this study, representing organizations involved in large-scale projects across various cities. Participants had an average of 11 years of experience in the Egyptian construction sector. To maintain confidentiality, respondents were assured that their personal information would not be disclosed. All interviews were conducted in person, with an average duration of 47 min.

The interviews were structured into three main sections: The first focused on the respondent’s professional background and experiences, the second examined the current state of risk assessment practices in Egypt and the methods employed, and the third explored potential improvements to these practices.

Table 1. Information about the participants and their current positions.

Interview No.	Construction Company	Years of Experience	Roles	Company
Interview 1	Company A	More than 15	Internal Risk Audit	Private
Interview 2	Company B	8 years	Control Team Leader	Private
Interview 3	Company C	More than 15	Construction Manager	Public
Interview 4	Company D	More than 15	Deputy Project Manager	International
Interview 5	Company E	6 years	Control Engineer	Private
Interview 6	Company F	More than 15	Contract and Risk Manager	Private
Interview 7	Company G	More than 15	Projects Manager	Private
Interview 8	Company H	14 years	Project Manager	Public
Interview 9	Company I	10 years	Contracts Manager	Private
Interview 10	Company J	9 years	Construction Manager	Private
Interview 11	Company K	7 years	Control Team Leader	Private
Interview 12	Company L	10 years	Cost Control Manager	Private
Interview 13	Company F	13 years	Control Manager	Public
Interview 14	Company M	More than 15	Risk Manager	International
Interview 15	Company A	7 years	Construction Manager	Private

summarizes the participants’ companies and their current positions. This study employed saturation sampling, a non-probability sampling method that allows data collection to conclude once recurring patterns and themes emerge. The decision to use this method aligned with this study’s objective of exploring the current state of risk assessment in Egypt. Data collection was discontinued once the repetition of similar information and trends was observed, likely reflecting the standardized practices and work cultures adopted by most local contractors in risk assessment.

To enhance credibility and transparency in the interviews, a systematic approach was thoroughly followed. This process involved defining clear research objectives, selecting participants with relevant expertise, and obtaining informed consent to maintain ethical standards. Transparency was further reinforced through precise data collection methods, including audio recording interviews with participants’ consent to ensure accuracy. Additionally, post-interview validation was conducted by allowing participants to review transcripts and confirm that their perspectives were accurately captured, thereby strengthening the reliability of the findings.

Interviews were chosen as the primary data collection method to effectively achieve the study’s objectives. Given the exploratory nature of the research and its focus on assessing the current state of risk assessment in Egypt, interviews provided valuable insights from industry experts. While the sample size may be considered relatively small, potentially limiting the generalizability of the findings [38], however, recurring themes and consistent discussions among participants indicated that data saturation had been reached, justifying the conclusion of the data collection process.

Efforts were made to ensure diversity within the sample. Participants were selected to represent a variety of company sizes, including both large- and mid-sized firms that are involved in major infrastructure and mega-construction projects across Egypt. Moreover, the interviewees held a range of professional roles, such as project managers and construction managers, each with substantial experience and decision-making responsibilities within their organizations.

However, this study does recognize the potential limitations of using interviews as a data collection tool. Since interviews rely on participants’ interpretations and perceptions, there is a potential for bias or misunderstanding. To reduce these limitations, the questions were carefully designed to obtain practical insights rather than broad, generalized opinions. Moreover, a diverse sample of contractors and roles was selected to ensure varied perspectives. As a result, while the insights generated are rich and contextually grounded, the generalizability of such results is limited. The insights drawn are therefore positioned as context-specific but will also offer valuable implications for similar project settings or regions with comparable construction industry dynamics. The interview protocol emphasized confidentiality and utilized open-ended questions to encourage reflective responses.

3.3. Data Analysis

The analysis of the collected interview data focused on evaluating the current state of risk assessment in Egypt and determining the extent to which contractors implement formal procedures and practices. Interview recordings were instrumental in facilitating a thorough analysis, allowing the ability to generate transcripts and identify coding patterns. The recorded interviews were first transcribed to support the translation process from Arabic to English, ensuring clarity and consistency in the data interpretation.

Thematic analysis is recognized as a widely applicable method for analyzing qualitative data. In this study, the analysis process started with a thorough review of the transcription, accompanied by note-taking to gain a deeper understanding while simultaneously listening to the recording for additional context. The researcher highlighted portions of the text that were deemed significant and carried meaningful insights.

Thematic analysis was employed to analyze the interview data, following Braun’s [39] six-phase approach. After transcribing the interviews, an initial round of open coding was conducted. This involved carefully reading each transcript and generating descriptive labels for meaningful data segments. Examples of initial codes include terms such as “unclear responsibilities,” “poor documentation,” “lack of formal assessment,” and “dependence on past experience.” The data were segmented into manageable portions, and through the analysis of the established analytical framework, relevant codes and themes were identified and developed. This ensured that the themes remained distinct and comprehensively captured the essential elements of the data [39].

To support the analysis, Nvivo 12 software was used. NVivo (Version 15.0.0.12, Lumivero, Burlington, MA, USA) is a software tool for qualitative data analysis, developed to assist researchers in organizing, analyzing, and deriving insights from qualitative data. It facilitates thematic analysis by enabling the identification of patterns, themes, and relationships within the data. Nvivo was chosen due to its intuitive interface, powerful coding functionality, and advanced visualization tools (e.g., word clouds, code trees, and matrix queries), which helped identify patterns across the dataset.

One of Nvivo analysis tools is known as “word cloud”. The word cloud was proven to be highly useful in illustrating the most frequently used words by the participants. In this case, the prevalent words were assessment, risk projects, risks, and management. Nevertheless, there are other words with paramount importance, including process, database, cost, and formal process, as shown in Figure 3. This guided the authors in effectively and simply developing patterns and themes. An extra advantage lies in obtaining quick and intuitive insights about the key ideas in the interviews and properly grasping the focus of the content and discussions.

The other visualization tool used on Nvivo is known as “Word Tree”. Overall, it is useful in enhancing the capability of analyzing and interpreting qualitative data using a hierarchical illustration of phrases and words. Patterns can be identified by analyzing the relationships between topics and the recurrence of key themes. Differences and similarities were detected between various categories and segments of data using the word tree. Hence, it was easier to comprehend sophisticated patterns and interconnections. The relationship among words offers another insight to potentially develop research questions and hypotheses. Figure 4 shows a word tree example for the word “process”, which indicates the use of a formal and standard process for risk management and assessment.

4. Findings

The findings of this research were organized into distinct themes and patterns derived from the interviews. Each theme indicates a noteworthy implication about the prevailing status of risk assessment in Egypt.

4.1. Risk Assessment Process

There is no general agreement about the optimal phase for the execution of risk assessment within construction projects in Egypt. Interviewees 1, 3, and 12 emphasized the absence of risk assessment prior to the project’s commencement, advocating for a reactive approach to risks as they arise during the project. According to interviewees 1, 2, 4, and 7, contractors sometimes tend to employ risk assessment only for mega-projects and prior to the tender stage. Two construction firms had a well-established and underpinned risk assessment plan and completed a full risk register before the tender stage (companies 1 and 4). According to interviewee 9, “usually, it is done during the tender, a team will do the work breakdown structure and estimate the cost of every activity, this is combined with discussions about potential risks”. Nonetheless, the prevailing opinion among respondents is that risk assessment is deemed critical primarily by international companies operating in Egypt or when undertaking a new mega-project.

At present, the adopted risk assessment process is unclear and lacks organization to the extent that no single company shares similar risk management processes. Interview respondents clearly affirmed this, as they distinctly indicated the lack of established procedures to adhere to when evaluating risks in construction projects. Several even argued that only a few large firms formulate a structured risk management plan (4, 6, 7, and 9). Additionally, according to interviewee 8, in certain instances, different departments within a single organization employ diverse methods to evaluate risks and construct a risk register. Notably, only a single company exhibited a robust and clearly defined risk management process (Company 4). This particular company originates from Greece, and its precise risk assessment methodology is consistently applied across all of its divisions. The individual working for this company mentioned that the lack of a formal process results in undesired and unanticipated problems in the project. The rate of delays, cost overruns, poor quality, etc., can all be linked to the improper implementation of risk assessment. According to interviewee 3, “I mean many companies either those I worked for or the current one faced liquidated damages from the owner due to delays”. Certain companies (i.e., companies 6, 8, 10, and 14) possess a risk register that is unfortunately disregarded and left unused. This highlights the need for practitioners to undertake further enhancements in this regard, aiming to establish a properly structured and standardized risk management process.

4.2. Culture of Work

Altering the work culture constitutes one of the most intricate processes within the construction industry of developing nations. According to interviewee 11, “it is very difficult to change the culture of work and introduce new ways if the old ones are working. However, the old ones are not working because people still not considering the need for proper risk management”. On the other hand, respondent (15) encouraged the importance of adopting new methods and approaches to enhance the current performance of the construction sector.

Certain construction companies lean toward adopting a reactive approach, which involves addressing problems after they have materialized rather than embracing a proactive approach that efficiently mitigates risks (companies 2, 3, 7, 8, 10, and 12). This challenge is aggravated by communication gaps and a deficiency in effective collaboration among team members. According to one of the respondents, while parties occasionally meet to discuss project risks, the effectiveness of this practice remains limited. “They do engage in contract negotiations with the owner and allocate risks from an early stage; however, the process is often vague and lacks consistency across different projects,” stated interviewee 12. On the other hand, respondent (9) claimed that companies avoid any additional expenses that promote new methods for risk assessment, “The reason for companies to neglect tools and methods of risk assessment is mainly due to the additional expenses that they have to pay to get software programs or to get experts in this field”. Interviewee 6 shared similar thoughts by confirming the shortage of competent users in this field who are able to take the correct actions after developing a fully comprehensive risk assessment. According to respondent 12, large companies may tend to assess risks before their projects, but small- and medium-sized companies completely neglect them.

The prevailing work culture often emphasizes assigning blame and transferring risks instead of actively resolving them (interviewee 7). When a risk is transferred from the owner to the contractor, the contractor assumes responsibility for managing that risk, including any associated costs or consequences. Construction firms demonstrate an adequate understanding of the principles of risk management and assessment. However, even though risks are assessed in some construction projects, the corresponding documentation is widely seen as inadequate and insignificant. Respondent (11) argued that construction companies are not considering the importance of risk assessment and prefer to follow the exact processes and approaches. “I think the major problem is the lack of accurate and understandable process. It is normally done in a very random way”.

4.3. Record Keeping

Among the different companies included in the data collection, only two firms possessed thorough and inherently organized risk registers (1 and 4). The majority of interview participants (except 1 and 4) asserted that a risk assessment database is non-existent, boldly stating that no construction company in Egypt presently maintains a record of risks in a database. Interviewee 2 stated that “there is no documentation, but we learn from previous projects using the knowledge and experience of members in the company. Once the project is completed, most of the documents that the company keeps are related to the design and the contract”. The primary documents routinely stored encompass those associated with specifications, contracts, and design. Respondent (13) highlighted that the predominant documents typically kept consist of communications exchanged between parties solely for future reference. These may entail signed receipts and project specifications. On the other hand, interviewee 10 claimed that around 90% of documents are being kept but are completely ignored and abandoned. An additional participant (1) suggested the compilation of all insights acquired from past projects into a database, serving as a guiding resource for stakeholders in their upcoming projects. Every threat encountered during the project should be meticulously documented and archived within the database. This database must encompass the cost implications of previous problems, and the content must be comprehensive and informative; this was well suggested by interviewee (1). Furthermore, one of the respondents (8) highlighted the continuous pursuit of acquiring lessons learned documents from prior projects, which, unfortunately, remained unfulfilled. This perspective is shared by another participant, who proposed that a database could be a valuable resource for utilizing lessons learned from previous projects (6).

4.4. Potential Improvements

A key suggested enhancement in the context of risk assessment in Egypt is the establishment of a structured and formalized process. This process is strongly focused on learning from past mistakes and prior project experiences: “I believe we need more case studies, such as showing failures in previous projects especially actual figures” (interviewee 7). The participant suggested that understanding the financial implications of risks on the project’s overall cost is correlated with deriving lessons from previous projects. Interviewee 2 had similar thoughts, demonstrating the significance of understanding risks faced in prior projects: “We need lessons learned from previous projects because it can be crucial moving forward and knowing what you might be facing in the project”.

5. Discussion

This study examined the current state of risk assessment practices in Egypt, with the intent of identifying opportunities for enhancing existing methodologies and processes of risk assessment in the construction sector in general. Contractual conflicts were one of the main causes of issues between owners and contractors [40]. The number of construction claims in Egypt has been rising, becoming a time-consuming and costly aspect of construction projects [41]. Few projects in Egypt are completed on time and within budget, with time and cost overruns becoming a defining characteristic of the construction sector. However, the extent and root causes of these overruns remain poorly understood [42]. Time overrun was considered one of the major problems faced in the construction sector in Egypt [42]. Furthermore, Raghib [43] reported cost deviations in many high-rise building projects in Egypt. Quality, cost, and time issues, along with poor performance, have also been reported in highway projects within the same country. Muhammad [44] noted a significant deviation of projects in Egypt from their primary objectives of cost, duration, and quality.

During the interviews about the risk assessment of construction projects in Egypt, a range of remarks, constraints, and deficiencies was determined. Although the literature underlines the importance of risk assessment for the successful delivery of construction projects [9,10], interview findings reveal a lesser reliance on risk assessment in construction projects in Egypt. Nevertheless, statistics indicate that the construction sector in Egypt continues to face various challenges, highlighting the potential significance of risk assessment for driving improvements in this industry. Following the analysis of the findings and themes generated from the interviews, it was determined that the major factors affecting risk assessment applications in construction projects in Egypt are personal judgement, formal process, culture of work, and cost implications, as shown in Figure 4.

5.1. Assessing Risks Based on Personal Judgment

One key observation highlighted in this study was the presence of subjectivity in the risk assessment process, similar to the same conclusion highlighted by previous studies [16,21]. In construction projects, personal judgment refers to the subjective evaluation of potential risks based on an individual’s knowledge, experience, intuition, and expertise. It often involves relying on personal insights to identify, assess, and prioritize risks, particularly in the absence of comprehensive data or formalized tools. Inconsistencies in risk assessment can arise due to the subjective viewpoints of the team members involved. Nevertheless, respondents demonstrated an awareness of risk assessment and recognized its importance within the construction sector. They often depend on their expertise and personal judgment to address issues, with limited utilization of risk assessment tools or software programs. In Egypt, those responsible for managing risks rely on the subjective viewpoints and judgments of professionals to identify risks, as highlighted by previous studies [11,45]. This reliance on expert opinion is not unique to Egypt, as evidenced by similar observations in other countries [27]. Risk assessment methods and practices in the construction sector in Egypt need further attention and development [18]. One potential improvement is the utilization of qualitative risk assessment methods, as suggested by Khodeir [15], due to their ease of use and efficacy. In comparison, regardless of the size of the construction company, respondents indicated that companies remained highly dependent on personal experience when managing construction risks.

While cultural resistance plays a role in the continued reliance on personal judgment for risk assessment, additional underlying factors contribute to this practice. Many organizations face resource constraints, including limited access to specialized risk management software and tools [6]. Furthermore, there is often a lack of structured training programs aimed at building technical capacity in systematic risk assessment. In some cases, reliance on past experience is reinforced by the absence of formal guidelines or standardized procedures. These factors collectively hinder the adoption of more data-driven and collaborative approaches to risk assessment.

5.2. Formal Process of Risk Assessment

This study revealed the absence of a well-defined and organized process for conducting risk assessment. The current process is vague and lacks a foundation in scientific and theoretical principles. Typically, it is carried out in a rather unorganized manner. While numerous engineers possess knowledge of various risk assessment techniques, these methods often lack practical application in real-world projects. Despite numerous researchers highlighting this limitation extensively [32,33], it continues to persist as the primary cause of subpar performance in risk assessment. Among the 15 companies involved in the interviews, only a single company possessed a thoroughly developed database for risk management (company 4). This could be related to the lack of effective formal standards for risk management, as discussed in the literature [35]. Furthermore, there are cases in which different departments are adopting diverse approaches to risk management (interviewee 14). Othman [45] has strongly supported this point, stating that contractors need to adopt a well-structured methodology for risk assessment to avoid delays and cost overruns in construction projects. This need arises due to the current ambiguous and inconsistent processes being used by both large- and medium-sized companies. This may be attributed to the absence of a formalized process that all departments and individuals must adhere to. However, further investigation is required to fully understand this attitude.

Considering the various challenges and threats confronting the Egyptian construction industry, important questions are raised about the lack of a formalized risk assessment process that addresses these issues effectively. Risk assessment plays a crucial role in proactively identifying and evaluating risks to mitigate their impact on key project objectives (i.e., cost, time, and quality). In Egypt, there is a strong demand for a standardized risk framework that provides clear guidelines for risk criteria, processes, responsibilities, and roles. This issue is particularly noticeable among local Egyptian construction companies, in contrast to international firms, which have well-defined processes for risk assessment.

5.3. Cost Implications

Cost implication in the context of risk assessment in construction projects refers to the potential financial consequences or impacts associated with identified risks. According to the findings, understanding cost implications is critical for effective risk management, as it enables stakeholders to anticipate financial pressures and allocate resources efficiently. One way to persuade construction stakeholders to embrace change and adopt risk assessment methodologies involves presenting strategies for reducing costs. Should the newly proposed approach demonstrate the potential to cut additional project expenses, stakeholders will actively promote and ensure its adoption. On the other hand, they show limited interest in comprehending the impact and probability of risks, but they exhibit a strong desire to visualize and grasp the cost implications.

5.4. Culture of Work

Regardless of their size, construction firms represented in this study (except 1 and 4) tend to adhere to a consistent work culture, often without adjusting to the ongoing changes in construction sector technologies and methodologies. This was clearly mentioned by Nabawy [33], who demonstrated the paramount importance of continuously improving risk management knowledge and practices in Egypt. Soliman [21] emphasized the enduring strategy adopted by companies, characterized by maintaining a consistent work culture and displaying resistance to change. The prevailing work culture among participants may rely on addressing risks as they emerge, with the expectation that any disputes between construction parties can be resolved without critically impacting the project. A detailed examination and analysis of the Egyptian construction sector, which includes insights from participants representing different companies, raises numerous questions. The potential for utilizing well-structured and data-driven methodologies for risk assessment remains underdeveloped due to the prevailing work culture within the industry. Further investigations are necessary to understand the resistance to change in the construction sector in Egypt and whether professional parties are disinterested in employing formal risk assessment practices.

5.5. Policy Relevance and Implications

Improved risk assessment through tools like FMEA can influence public policy, regulation, and construction standards, particularly in developing countries such as Egypt. The construction sector in these regions often faces systemic challenges, such as limited integration of risk management practices into early project planning. By embedding a systematic and proactive risk assessment framework, such as FMEA, into national construction regulations and procurement guidelines, policymakers can foster a shift from reactive to preventive risk strategies.

The application of FMEA not only supports more resilient project planning but also contributes to the standardization of risk documentation, the prioritization of failure modes, and the development of mitigation protocols. This can inform regulatory bodies to update or refine construction codes and safety benchmarks. Furthermore, the development of a digital FMEA tool tailored to local contexts can serve as a scalable and accessible mechanism for both public authorities and private stakeholders. It enhances transparency and supports data-driven decision-making. The framework can also aid in aligning Egypt’s construction standards with international benchmarks, which is particularly important in the context of foreign and regional investments.

A practical implementation roadmap can be proposed for the Egyptian context. The first step involves reducing the reliance on personal judgment by introducing awareness campaigns and targeted training programs that build capacity in structured risk management, especially for small- and medium-sized firms. Next, the adoption of standardized practices can be facilitated through simplified, context-appropriate risk assessment tools and templates. To address the cultural challenges associated with risk processes, efforts must be made to align risk practices with organizational values. Finally, the perception of risk assessment as a financial burden can be countered by communicating its long-term cost-saving potential, using real-world case studies that demonstrate improved project performance through effective risk management.

Risk assessment in Egypt’s construction sector faces challenges such as reliance on personal judgment, lack of formalized processes, cost concerns, and cultural resistance to change. Many firms rely on subjective evaluations rather than structured methodologies, leading to inconsistencies. Additionally, the absence of standardized frameworks and digital risk management tools hinders efficiency. However, opportunities exist to improve risk assessment by adopting structured frameworks, digital tools, and industry-wide training programs. To enhance risk management, it is recommended to adopt digital tools such as Building Information Modeling (BIM), Primavera Risk Analysis, and Active Risk Manager (ARM). In the Egyptian context, while digital adoption is growing, challenges such as the need for skilled personnel and initial costs must be addressed. A phased implementation approach, including training and incentives, could help overcome these barriers and promote the wider use of these technologies. Demonstrating the financial benefits of formal risk management can encourage adoption, while integrating risk assessment into corporate policies can help overcome cultural resistance. These improvements can enhance project outcomes and reduce uncertainties in the industry. These findings also point to a clear trade-off between flexibility and standard rules in how risks are managed. According to the represented construction firms, relying on personal judgment allows teams to react quickly to unexpected issues and fill in for missing systems or guidelines. However, this flexibility can also lead to unclear decisions, inconsistent results, and difficulty in tracking errors. This reflects similar debates in other disciplines, such as accounting, where excessive flexibility can be either beneficial or detrimental depending on its application [46]. Cultural habits, such as informal communication and weak documentation, also play a role in how decisions are made. These factors need to be considered when designing better and more practical risk management processes for the local industry.

6. Conclusions

This study has contributed to the body of knowledge by highlighting critical gaps in risk assessment practices within the construction sector and proposing a structured framework to enhance risk management practices. A key finding was the reliance on personal judgment in risk assessment, leading to inconsistencies and inefficiencies in decision-making. This study also revealed the absence of a formalized risk assessment process in many companies, which hinders systematic risk identification and mitigation efforts. The findings highlighted a prevailing reliance on personal judgment among participants when managing risk. This tendency appears to be related to several interrelated factors. Firstly, the absence of enforced regulatory frameworks mandating structured risk assessment methodologies allows for informal practices to persist. Secondly, many firms operate with limited technical capacity or training in systematic tools, which further discourages formal adoption. This evidence aligns with the prior literature suggesting that, in regions where institutional support is lacking, intuitive and experience-based decision-making often substitutes for structured frameworks. While such informal approaches may offer flexibility, they can also introduce inconsistency. The results underscore the need to promote the integration of formalized risk assessment protocols tailored to local conditions.

Furthermore, the research emphasized the cost implications of ineffective risk management and the resistance to adopting structured risk assessment methodologies due to entrenched work cultures. By addressing these gaps, this study provides valuable insights that can support the development of standardized risk assessment frameworks tailored to the construction sector in Egypt.

Despite its contributions, this research has certain limitations. This study primarily relied on qualitative data gathered through interviews, which, while providing in-depth insights, may be subject to biases and limited generalizability. Additionally, the proposed framework was not extensively tested across different company sizes and project types, which could impact its applicability in varying construction environments.

Future research should focus on refining and validating the proposed risk assessment framework through empirical testing in real-world construction projects. Expanding the scope to include quantitative assessments and integrating emerging technologies, such as artificial intelligence and big data analytics, could further enhance risk prediction and management capabilities. Additionally, investigating strategies to foster a culture of proactive risk management and overcoming resistance to change would be essential for ensuring the successful adoption of standardized risk assessment methodologies in the Egyptian construction industry.

The primary challenges associated with risk assessment applications include reliance on personal judgment, the absence of formalized processes, cost considerations, and cultural resistance to change. While these challenges hinder the efficiency of risk assessment, there remains a significant opportunity for improvement through the adoption of structured frameworks, digital tools, and comprehensive training programs. The findings of this study, which identify key factors influencing risk assessment in Egypt, are also highly relevant to international companies seeking to enhance their risk management practices.

By understanding these factors, global firms can better adapt their risk assessment strategies to align with the unique characteristics of Egypt’s construction industry. This knowledge enables them to navigate cultural, regulatory, and operational challenges more effectively, facilitating informed decision-making and enhancing project success.