Post contract risk analysis for chinese contractors in malaysia under one belt one road initiative

Abstract

Under the One Belt One Road Initiative, more and more Chinese contractors are taking part in international projects. Malaysia is one of the investment hotspot and competition center due to its critical geopolitical importance and stability of economic development. This thesis studied Malaysia’s role in the OBOR initiative, and the status of Chinese contractors in Malaysia construction industry. Divide risks into two categories, Horizontal Risks for risks that emanate from the macroenvironment, and Vertical Risks for risks related to a project life cycle. This thesis took an in-depth case study of Exchange 106 Project to review the Horizonal Risks and Vertical Risks at post-contract stage. The Project has achieved even surpassed the technical, quality and HSE target, with schedule target within control, but cost overrun. Political risk is the top alert for Chinese contractors and can be fatal to a project’s success/failure. The industry’s over-dependence on foreign workers contributes to skilled worker shortage. Payment has been the most disputed issue in Malaysia construction industry and would arise serious cash flow problem to the contractors. Last but not least, Chinese contractors need to improve the ability for systemic claim management.