El-Gafy (2008) argues that risk analysis is needed in order to determine the potential impact of risks. Both qualitative and quantitative techniques are used for the risk analysis, however, qualitative approach consumes more information and there is a need to gather large amount of information compared to the quantitative approach that require lesser information. Typically, the quantitative risk analysis approach incorporates uncertainty in both numerical and graphical form. Some of the benefits of risk analysis are as follows: Minimizing management crisis

Minimizing problems within the project lifecycle

Increase the likelihood of project success.

The case study in the next section demonstrates the importance of risk management within the construction industry.

1.8: Case Study: Sydney Opera House

Sidney Opera House is a construction project that cost the State government of New South Wales approximately $102 Million. The Opera House contains approximately 1000 rooms as well as the reception hall, four restaurants, extensive foyers and bars. Typically, many of the world best-known construction companies participated in the project, and it took the government 14 years to complete the project. Before the project was completed, several project risks emanated during the project lifecycle; one of the risks was the costs escalation that drove up the construction budget. Initial budget for the Sydney Opera House construction was $7.2 Million. However, with consistent cost escalation, the final costs used to complete the project were $102 Million. The government did not envisage that there could be increase in the costs during the project life cycle; however, the government used the state lotteries to cover the costs. Apart from the costs escalation that led to the increase in project budget, other risks identified in the project was design errors and omission. In the project design, the roof was too heavy to support the columns. The issues led some part of the building to be demolished and rebuilt. While the construction was initially planned to be completed within 5 years with the costs of $7.2 Million, however, risks associated with the project escalated the project costs to $102 Million and the project approximately took 14 years to complete. Total risks identified leading to the escalation of the project costs and elongation of the project due date are:

Poor cost estimate.

Incomplete design.

Failure to keep within the cost

Failure to stick to the required due date.

Changes in project requirements and scope.

Design changes.

Pressure from stakeholders to deliver project at quicker time.

Inaccurate contract time estimate

Lack of communication among project stakeholders.

Inadequately defined responsibilities.

Insufficient skilled manpower.

Political risks. (Eid, 2007).

Without identification of risks, there will be no method to manage the risks. Based on the findings from the case study, the study provides the recommendations t for improvement.
1.9: Recommendations for Improvement

One of the best methods to manage risks in the construction project is to implement project risks plan before the implementation of the project. The risk plan should be used to identify different risks that could emanate during the project lifecycle. Identification of risks will enhance the strategy to manage the risks. Project stakeholders should categorize the risks based on their impact. The low risks should be absorbed while the risks carrying severe impact should be transferred and the method to transfer such risks is to use third party agent or insurance company.

More importantly, there is a need to implement contingency plan to describe in detail the solution to manage the risks in case the problem arises. The contingency plan should be drawn in such a way to reduce the risks to acceptable level. Additionally, there is a need to use experienced and skilled personnel in the project construction. Experienced and skilled personnel are likely to quickly identify the risks when emanated and suggest the best method to manage the risks during construction project.

2: Future Work and Conclusion

There is a need for further research on the method to manage risks in a complex construction project since experience has revealed that there are multiple risks associated with the complex project. The study explores risk identification process within the construction project and the strategy to mange these risks. The study discusses risk identification, risk management and risk analysis. The study also provides a case study to demonstrate the importance of risk management within the construction industry.