Implementation of Project Risk Management to Reduce Time Delays and Cost Overruns in Medium-Scale Construction Projects
Keywords:
Project Risk Management , Construction Performance , Cost Overrun , Schedule Delay , Medium-Scale ProjectsAbstract
Purpose: This study aims to examine the extent to which the implementation of project risk management (PRM) influences time and cost performance in medium-scale construction projects. While formal risk management frameworks are widely acknowledged, their empirical impact on performance metrics particularly within the underexplored mid-tier construction sector remains insufficiently documented, especially in emerging economies such as Indonesia.
Subjects and Methods: The research adopts a quantitative explanatory design using data collected from five anonymized infrastructure projects executed between 2021 and 2023. Each project falls within the Indonesian Ministry of Public Works’ classification of medium-scale (IDR 10–100 billion). Key variables include planned vs. actual duration and cost, percentage deviations, and a composite score of PRM implementation across risk identification, analysis, planning, and monitoring dimensions. Data analysis employed descriptive statistics and Pearson correlation to assess the relationship between PRM implementation and project performance outcomes.
Results: The findings reveal a strong negative correlation between the level of PRM implementation and deviations in both project time (r = –0.78, p < 0.01) and cost (r = –0.72, p < 0.01). Projects with high PRM maturity demonstrated greater schedule discipline and cost containment, while those with lower PRM scores experienced significant overruns. These results empirically validate the premise that structured risk management serves as a key driver of project predictability and performance stability.
Conclusions: The study concludes that effective PRM implementation is not merely a technical add-on but a strategic governance mechanism that enables construction firms to mitigate uncertainty, safeguard resources, and align execution with project objectives. As construction environments become increasingly volatile, embedding risk management into project culture, processes, and leadership accountability is essential for sustainable delivery.
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