Construction Project Risk Management Objective Research Paper

Download this Research Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Research Paper:

"Brainstorming, scenario planning, and expert interviews is the tools highway engineers commonly use in routine engineering and construction management tasks." (U.S. Department f Transportation 2007 P. 2). Table 3 reveals the summary of the tools and technique in the risk identification process.

Table 3: Risk identification tools and techniques




Project description

Work breakdown structure (WBS)

Cost estimate

Construction schedule

Procurement plan

Team issues and concerns

Historic data


Final project reports

Risk response plans

Organized lessons learned

Published commercial databases

Academic studies


Scenario planning

Expert interviews

Nominal group methods

Delphi methods

Crawford slip methods

Influence or risk diagramming

1.7: Risk analysis

Risk analysis is the process of identifying and quantification risk factors as well as estimating the likelihood of the impact of the risks in the construction lifecycle. 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).

The cost escalation and increase in the time to complete the Sidney Opera House project reveal that risk identification is very critical in the risk management in the construction project. 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.


BurtonShAw-Gunn, a.(2009). Risk and Financial Management in Construction. Asghate. UK.

Dey, P.K. (2002). Project Risk Management: A Combined Analytic Hierarchy Process and Decision Tree Approach. Cost Engineering.44(3):13-26.

Eid, K. (2007). Risk Anaysis Case Study. Article Base.

El-Gafy, M. (2008). Risk Analysis for Design-Build…[continue]

Cite This Research Paper:

"Construction Project Risk Management Objective" (2012, May 02) Retrieved December 2, 2016, from

"Construction Project Risk Management Objective" 02 May 2012. Web.2 December. 2016. <>

"Construction Project Risk Management Objective", 02 May 2012, Accessed.2 December. 2016,

Other Documents Pertaining To This Topic

  • Construction Project Risk Management Risk

    5.4: Accept Bullring team accepted some risks; however, the company developed the effective cost and schedule strategies to manage these risks. For example, the company allotted sufficient fund to militate against risks associated with the project costs and schedule. Table 2 presents the compressive list all the risks deemed to affect the outcome of the Bullring project. Table 2: Associated Risks on the Project Cost Related Risks: Index Scores Tight project schedule 0.67 Design variations 0.49 Project variations from

  • Project Risk Management Manage Project

    The project manager should at all times be present to monitor and ensure that it's the correct mixing of materials being done, it's the right quality of material being used, and it's the right amount of time being given to the treatment process in the different construction phases. In the event that this is not observed, and the building is erected, there's a high probability that the building will

  • Construction Project Management the Focus

    (in its turn, the financial environment must be understood with reference to the wider economic situation.) Cost control is the activity which compares cost performance against the cost plan, adjusting one or the other dynamically by reference to the changing circumstances in the project's financial environment. (Hughes, 1991, p.1) 2. Time Control -. Timing is influenced by many environmental factors, but the client's attitude to the timing of the project

  • Risk Management in British Hedge Funds

    Risk Management in Hedge Funds A research of how dissimilar hedge fund managers identify and achieve risk The most vital lesson in expressions of Hedge Fund Management comes from the inadequate name of this kind

  • Project Management Discussion Questions Project Portfolio Management...

    Project Management: Discussion Questions Project portfolio management is designed as a way to minimize the 'ad hoc' nature of the way in which most portfolios are constructed. "As its name implies, project portfolio management groups projects so they can be managed as a portfolio, much as an investor would manage his stocks, bonds and mutual funds….the obvious benefit of project portfolio management is that it gives executives a bird's-eye view of

  • Managing Building Construction Projects in

    Inexcusable delay - these postponements outcome from a contractor's own fault or his subcontractors or substantial dealers Table 3-1 the Most Important Delay Factors According to Contractors Type Delay factor Rank Scheduling Preparation and approval of shop drawings 1 Financing Delays in contractors progress payment by owner 2 Changes Design change by owner during construction 2 Material Delay in the special manufacture out side of Saudi Arabia 4 Financing Owners cash problems during construction 5 Contractual relationship Slowness of owner's decision making process 6 Material Slow delivery of construction material 7 Changes Design errors made by designers 7 Scheduling Waiting for

  • Risk Management and Activation of

    The other criteria to be used in the selection of the institutions of higher learning are their length of existence and size. Data collection plans Data is to be collected using questionnaires and triangulation is to be used in the process. This means that both qualitative and quantitative techniques of data collection are to be used in order to increase the chances of getting valid results (Jick, 1979). The following sources of

Read Full Research Paper
Copyright 2016 . All Rights Reserved