RISK DRIVERS IN MEGA-SCALE CONSTRUCTION PROJECTS: AN SEM-BASED MULTI-COUNTRY STUDY

Abstract

Gulf Cooperation Council (GCC) construction projects are delivered through complex stakeholder networks and under changing economic conditions, increasing project risk. This study develops and validates a Structural Equation Modeling (SEM) framework to examine how major risk domains influence project performance across the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain. The proposed model evaluates six major latent risk domains: External Volatility (EVOL), Commercial & Contractual Conditions (CCC), Supply-Chain Robustness (SCR), Digital Delivery Maturity (DDM), Health, Safety, and Environmental Risk (HSE), and Project-Management Capability (PMC), using multi-item Likert-scale measures. Confirmatory factor analysis verified the reliability and convergent validity of the measurement model, with Cronbach’s alpha values exceeding 0.706 and Average Variance Extracted (AVE) values above 0.641 for all constructs. The SEM results indicate acceptable model fit and strong explanatory power, with a Standardized Root Mean Square Residual (SRMR) of approximately 0.076 and an R² value near 0.84. Commercial & Contractual Conditions (CCC) emerged as the strongest direct driver of project performance. Supply-Chain Robustness (SCR) also demonstrated a substantial but borderline effect, while Digital Delivery Maturity (DDM) and Project-Management Capability (PMC) contributed modest yet meaningful improvements. In contrast, External Volatility (EVOL) and Health, Safety, and Environmental Risk (HSE) showed near-zero direct effects, indicating limited practical influence despite statistical significance. The findings provide a prioritized risk-pathway framework for GCC construction projects, demonstrating that improving contract clarity, equitable risk allocation, and supply-chain resilience can significantly enhance project cost, schedule, quality, and safety performance.