RISK IDENTIFICATION AND ALLOCATION OF SINGAPORE CONSTRUCTION JOINT VENTURE PROJECTS WITH DEVELOPING COUNTRIES

Abstract

As a result of globalization in the construction sector, the Singapore government has encouraged local construction companies to seek new business opportunities overseas, especially in the Asia-Pacific Region. With the emerging markets of the developing countries, joint venture with these countries has been increasingly popular despite its complexity and high risks involved. Hence, this has enabled Singapore construction companies to venture into foreign markets which were restricted to foreigners previously. The objective of this research study is to identify and recommend appropriate allocation strategies to deal with the potential risks that Singapore construction companies may encounter when they establish joint venture with developing countries, with emphasis on those risks in the high criticality range. From the extensive literature review, case studies of Singapore joint venture with developing countries and information gathered from the questionnaire survey and interviews, the drivers, barriers, success and failure factors were identified. Hypotheses are being used to validate the significance of the various success and failure factors as well as the drivers and barriers of joint venture formation. A comparison of the criticality of risks between building and infrastructure projects was conducted whereby political and financial risks were ranked as the most critical risks for both groups. Furthermore, resource cost fluctuation and economic risks were similarly classified under the high criticality range for building projects. There were several limitations faced in this research. Although a number of construction companies chose not to participate in the survey because of various reasons, the number of valid responses received was significant enough for the data analysis. Nevertheless, the risks identified in this research study and the allocation strategies presented will be useful to construction companies in Singapore. Recommendations proposed can be used as a guide to have better risk identification and allocation so as to enhance the probability of successful joint ventures with developing countries.