Advances in Consumer Research
Issue 2 : 1624-1641
Original Article
A Fuzzy AHP Approach to Evaluating Contract Risk in Power Transmission Projects
 ,
1
G L Bajaj Institute of Management and Research, Greater Noida, India.
2
CG Power and Industrial Solutions India.
Abstract

Risk assessment in Engineering Procurement Construction (EPC) contract management is crucial for understanding potential vulnerabilities and mitigating uncertainties in project execution. The study examines contract risk management in power transmission (PT_ projects, to identify and rank the factors that influence contract-related risks. A fuzzy Analytical Hierarchical Process(AHP) was applied to evaluate, normalize and prioritize the relative importance of these factors across the entire project cycle. Subsequently, Interpretive Structural Modeling (ISM) and MICMAC analysis were employed to establish a structural model and assess the driving and dependence power of the factors. The factors were identified through an extensive literature review and consultation with 75 experts from PT projects in India, representing diverse domains of PT project execution, including academicians, contract management specialists, project managers, financial analysts, risk management consultants, site engineers, overseeing power transmission projects. Their combined experience provided a comprehensive and practice-driven perspective on contract risk assessment. The analysis revealed that financial risk constitutes the most critical risk factor in PT contract management, exerting the highest influence across the project life cycle.  The study further establishes the hierarchical structure of interrelated risks and their dependency patterns, offering a nuanced understanding of contractual vulnerabilities in PT projects. By elucidating the impact of various risks, the study provides valuable insight into reducing project uncertainties and establishes a preferred framework for effective contract risk management in PT projects. The derived preference structure can guide EPC firms, utilities, and the regulatory bodies in strengthening governance and decision-making in PT projects

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