Risk Management And Implementation Of Capital Projects In Nairobi City County, Kenya.

ABSTRACT

Implementation of capital projects is in line with Nairobi City County’s aim to contribute to the national and county priorities of infrastructure-led economic development. To be able to drive sustainable economic growth, Nairobi City County government develops an annual development plan that is meant to outline the priority projects. The annual development plan at the same time acts as a basis for its medium-term budgeting and spending for capital projects to be implemented and guides the county government to plan and fulfil the services it is assigned. According to Roads, Public Works & Transport Sector, Working Group Report, Medium Term Expenditure Framework Budget for The Period 2017/18-2019/20, some capital projects were identified by the Nairobi City County Government. The projects were to be implemented and resources were committed for construction, improvement, and maintenance of roads and drainage to provide an effective, efficient and safe transport system for people, goods and services. The need for appropriate and effective project management control tools to deliver capital projects successfully, on time, within budget, and to the correct quality, is fundamental. The use of risk management methods in an efficient manner for management of risk needs to be conducted continuously at all the stages of the project lifecycle to better project performance. The primary objective of this research study was on risk management and implementation of the capital projects in Nairobi City County, Kenya. Lliterature review evaluates three theories; Competence Theory, Decision Theory and Stakeholder Theory, which are relevant to the study in the context of project implementation. An empirical review of project implementation is also discussed including studies done by other researchers. The research design for the study was quantitative research. The target population for the study was taken from the 82 capital projects (Appendix III) being implemented in Nairobi City County, Kenya and comprised 254 professionals composed of Project Managers, Consulting Engineers, Contractors, Government Agencies representatives and the Nairobi City County representatives involved with the implementation of the capital projects in Nairobi City County, Kenya. Stratified random sampling was used. Yamane’s (1967) formula was used to determine the sample size. The formula was used to calculate the sample size because of its relevance to studies where probability sampling is used and found to be 155 respondents out of a target population of 254. Data were collected using questionnaires that were distributed physically to the respondents. The results from the filled questionnaires were analysed using descriptive and inferential statistics and presented using tables and figures. 102 respondents out of the 155 sample respondents filled-in and returned the questionnaires making a response rate of 65.81%. From the findings, a majority of the respondents did not know about risk management in project implementation. The findings indicate that among the five independent variables, political risk had the strongest factors that determine effective project implementation of capital projects in Nairobi City County, followed closely by social risks. In conclusion, the research project identified an ineffective level of risk management practices in capital project implementation in Nairobi City County, Kenya because the risk management practices were informal. The researcher recommends that project managers should develop mitigation and control plans as early in the life cycle of a project as possible to be best prepared. Suggestion for further research on the risks that affect capital project implementation should be undertaken, research on the development of a risk management model and an equitable risk allocation mechanism for the construction industry is recommended, and researchers should consider researching risk mitigation strategies for projects under implementation.