Risk Management in Libyan Construction Projects During Times of Political Unrest

Abstract

This study aims to examine risk management in Libyan construction projects during periods of political unrest, measuring the frequency and severity of political, security, economic, and logistical risks, identifying effective mitigation strategies, and assessing stakeholder perceptions. Using a mixed-methods approach—including surveys of 150 construction firms, interviews with key stakeholders, and statistical analysis—the research evaluates how political instability disrupts project timelines, budgets, and safety. Findings reveal that 82% of projects face political unrest-related delays (averaging 7.2 months), while currency fluctuations contribute to the highest cost overruns (35%). Militia interference affects 68% of projects, increasing costs by 15%. Effective mitigation strategies include dollar-denominated contracts (reducing overruns by 9%), tribal negotiations (83% success rate), and modular construction (30–50% delay reduction). Stakeholder priorities diverge, with investors favoring external guarantees (e.g., World Bank insurance) and governments advocating local solutions. The study recommends that firms adopt hybrid contracts, preposition materials, and engage local communities, while Libyan authorities should streamline permitting, strengthen judicial enforcement of contracts, and implement anti-corruption measures like blockchain tendering. International partners can support political risk insurance and modular construction training. The findings underscore the need for adaptive, context-specific risk management in conflict zones, combining immediate operational adjustments with long-term institutional reforms to enhance project resilience.