KAUST RISK MANAGEMENT PLAN 1

King Abdullah University of Science and Technology (KAUST)

Project Risk Management Plan

by

Serif Cem Akay

University of Winnipeg PACE

KAUST RISK MANAGEMENT PLAN 2

Revision History

Rev. No. Date Revision Description Pages Modified

Rev. 0 May 06,2019 KAUST Project Risk Management Plan

KAUST RISK MANAGEMENT PLAN 3

Table of Contents
1. Project Overview.................................................................................................................4

1.1 Project Description.......................................................................................................4

1.2 Project Objectives........................................................................................................4

1.3 Project Challenges........................................................................................................5

2 Scope of Risk Management Plan (RMP).............................................................................6

3 Risk Identification...............................................................................................................7

4 Risk Categorization.............................................................................................................7

5 Risk Assessment..................................................................................................................9

5.1 Risk Probability Table..................................................................................................9

5.2 Risk Consequence Table..............................................................................................9

5.3 Risk Severity Matrix..................................................................................................10

6 Risk Scores Table..............................................................................................................11

7 Risk Response and Contingency Plan...............................................................................14

KAUST RISK MANAGEMENT PLAN 4

1. Project Overview

King Abdullah University of Science and Technology (KAUST) can be considered as a small

town, which consists of 2500 villas for university staff, 80 student dormitories, restaurants,

supermarket, gas station, schools for staff children and university buildings. This small town

was built in two years upon the order of Saudi Arabia (KSA) king, and the construction time

of the university was relatively short based on the construction industry practices. This fast

pace of the project caused quality problems which were underestimated at the time of

construction to catch up the deadline. The university management decided to renovate the

buildings in 2018. Saudi Aramco (one of the biggest companies in Saudi Arabia) became the

sponsor of this renovation project.

1.1 Project Description

The renovation of KAUST buildings will be in three phases. The first phase will be the 80

student dormitories, the second phase will include the 2500 villas, and the third phase will be

the university buildings. In all the stages, the buildings will be stripped to their shell and core

structure, and then an assessment will be made. The required reinforcements will be applied

to these buildings based on the assessments, and fine construction works will be executed

after the reinforcements.

The first phase of the project is estimated to be $400,000,000 USD, and the total construction

area is 240,000 square meters. The project duration is estimated to be twenty-four months.

1.2 Project Objectives

The objectives of the project are as follows:

 During the stripping works of the dormitories, the mechanical and electrical main

equipment will be removed carefully for reuse such as electrical panels, air conditioning
KAUST RISK MANAGEMENT PLAN 5

equipment, and heating system equipment. Utmost efforts will be given to avoid harming

the equipment, and proper storage will be provided.

 Window frames, window glasses, and doors will be deinstalled carefully. An assessment

will be made for these items, and the ones in good condition will be stored and reused.

The others will be replaced with the new ones.

 A new design will be developed based on the new shell and core structure, and on-site

design solutions will be encouraged for fast approvals.

 A detailed work schedule will be developed for groups of five buildings.

 Bill of quantities (BOQ) will be developed for progress payments and cost control.

1.3 Project Challenges

The challenges for this project are identified as follows:

 Unforeseen construction works after the stripping of the buildings.

 Material, labor and equipment resourcing are provided from overseas.

 Inside the university, there is a European way of the living environment which is a total

contradiction to KSA living style; therefore, accessibility to the university is tough. The

whole university area is surrounded by high walls, 70 km away from the city, and requires

to pass two strict checkpoints.

 KSA is very hot during summer times, and the temperature may rise to 60 to 70

Centigrade Celsius.

 Based on KSA law, works must be stopped during praying times.

 Saudi Aramco is an oil company, and its building process and procedures are rigorous,

and they are developed based on constructing oil refinery plants. The same process and

procedures will be applied to this renovation project which will delay approvals.
KAUST RISK MANAGEMENT PLAN 6

2 Scope of Risk Management Plan (RMP)

This Risk Management Plan (RMP) describes the processes used on the project to plan,

identify, assess, qualify, categorize, handle and track risks associated with the achievement of

the project requirements and goals for the KAUST project. The ultimate goal of RMP is to

increase the probability of project and activity success by focusing attention on problem areas

early and reducing the amount of costly rework in the future. For every risk, there is the

potential impact of cost overruns, schedule delays and compromises in quality and safety if

the risk occurs. Hence, risk management will be applied continuously throughout the KAUST

project life cycle and will evolve and adapt to accommodate the various project phases. In the

risk response plan table, status of the risk will be identified as potential, active and closed. For

the closed risks, contingency reserves will be returned through change orders.

Managing risk is a crucial element of the project management process for both the planning

and the performance phases of the KAUST project. This RMP develops a methodology to

identify, qualify specific risks to the project, determine their consequences and associated

probability, develop and implement risk responses, and control and track risks. The risk

response strategies are explained in Table 1.

Table 1-Risk Response Strategies

Avoid Risk or risk cause should be eliminated or evaded and as best as possible to find a less impactful
alternative.
Accept Accept threats or opportunities.
Transfer Transfer threats (deflect, allocate) by shifting responsibility for the risk to a third party.
Mitigate Mitigate threats by reducing the impact of a risk and reducing the probability of its occurrence.
Responsibility for the risk is given in part to a third party and dividing the positive
Share
opportunities/outcomes for all partners involved.
Enhance Risk maximizing of key drivers to improve the impact and probability of an opportunity occuring.
Exploit Acting to ensure that the risk occurs.
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3 Risk Identification

Risks to the KAUST project are identified as follows:

 Insufficient Design
 Delays in Preparation of Submittals
 Delays in Approvals of Submittals
 Material, Labor and Equipment Resourcing
 Poor Management Coordination
 Conflicts for Additional Work Item Prices
 Conflicts between Parties
 Insufficient Technology / Skills
 Unforeseen Construction Works
 Damaging Materials and Equipment During Deinstllation and Carriage
 Inadequate Safety Measures
 Inadequate Construction Quality
 Insufficient Construction Productivity
 Delays in Payment
 Inadequate claim administration
 Poorly Tailored Contract Forms
 Supplies of Defective Materials
 Adverse Weather Conditions
 Accessibility to Site
 Cultural Work Differences

4 Risk Categorization

Four types of risk categorizations are identified for this project. These categorizations are:

 Project Management Office (PMO): Technical and Management Issues

 Site: Issues on construction site

 Financial: Monetary Issues

KAUST RISK MANAGEMENT PLAN 8

 External: Issues existing from outside factors

KAUST RISK MANAGEMENT PLAN 9

Figure 1 shows the categorization of risks.

Figure 1 Categorization of Risks

KAUST RISK MANAGEMENT PLAN 10

5 Risk Assessment

Risk level assessment is done by determining the probability of the occurrence and cost and

schedule the consequence of each risk. Consequence will consider foreseeable cumulative

impact on cost and schedule. After this assessment, the risks are prioritized to avoid or to

mitigate risks by risk response plans.

5.1 Risk Probability Table

The following risk probability levels are assessed for each risk.

Probability Risk Value Probability Description

Very Small 1 It might occur in very rare occasions
Small 2 The probability of occurrence is slim and small, but it may.
Medium 3 It might occur from time to time
Likely 4 It often occurs in similar projects
Very Likely 5 It is expected to occur in similar projects

5.2 Risk Consequence Table

When the risk occurs, the consequence table defines the risk value and consequences based on
cost and schedule.

Level Risk Value Consequence Description Schedule Cost

Consequence is negligible. Routine
Negligible 1 <3 days < $2,000
procedure.
Consequence has small effect to the
Small 2 project. Consider a response plan 3-7 days $2,000 - $4,999
and monitor periodically.
The consequences of this risk will
have a moderate impact on project
schedules or cost. Some immediate
action might be required to address
Moderate 3 8-15 days $5,000 - $10,000
risk impact, plus the development
of an contingency plan. Status of
this risk should be monitored
regularly.
The consequence will be severe
Some immediate action is required
Severe 4 to mitigate the risk, plus the 15-30 days $10,000 - $29,999
development of a comprehensive
contingency plan.
This is above the defined tolerance
level. The consequence will have a
disastrous impact on project
schedules, timeline, cost and
Disastrous 5 >30 days >$30,000
reputation & business continuity.
Comprehensive contingency plan
is required immediately to mitigate
the risk.
KAUST RISK MANAGEMENT PLAN 11

5.3 Risk Severity Matrix

A risk severity matrix determined from the Overall Consequence Level and the Risk

Probability Level provides the overall assessment of each identified risk as shown below.

Severity Score
VL(5) 5 10 15 20 25
L(4) 4 8 12 16 20
Probability

M(3) 3 6 9 12 15
S(2) 2 4 6 8 10
VS(1) 1 2 3 4 5
N(1) L(2) M(3) H(4) VH(5)
Consequence

Items with a risk severity level of 8 or greater must be entered in the KAUST project

Contingency Plan.

Moderate Severity: Yellow Color - 8 to 10 score

Severe Impact: Orange Color – 12 to 16 score

Disastrous Impact: Red Color – 20 to 25 score

KAUST RISK MANAGEMENT PLAN 12

6 Risk Scores Table

Risk scores table below shows description of risks, their triggers, risk scores, and risk zones.

Risk No. Risk Identification Risk Description Risk Risk Trigger Risk Risk Risk Risk
Category Probabilit Impact Score Zone
y

PMO-001 Insufficient Design Design mistakes PMO Lack of design 2 4 8 Yellow

specifications
knowledge or
unintentional,
careless mistakes
PMO-002 Delays in Preparation of Documents to be PMO Insufficient 2 4 8 Yellow
Submittals submitted to the workforce
Sponsor for
approval
PMO-003 Delays in Approvals of Approvals of the PMO Sponsor's detail 3 4 12 Orange
Submittals submittals from the review
Sponsor

PMO-004 Material, Labor and Difficulty in PMO Procedures and 2 4 8 Yellow

Equipment Resourcing obtaining resources regulations of the
country
KAUST RISK MANAGEMENT PLAN 13

Risk No. Risk Identification Risk Description Risk Risk Trigger Risk Risk Risk Risk
Category Probabilit Impact Score Zone
y

PMO-005 Poor Management Lack of PMO Poor 2 4 8 Yellow

Coordination Communication communication
between project
team members
PMO-006 Conflicts for Additional Negotiation with the PMO Disagreement on 4 5 20 Red
Work Item Prices Sponsor for prices
additional work
prices

PMO-007 Conflicts between The disagreement of PMO Disagreement 3 4 12 Orange

Parties issues related to the
project

S-001 Insufficient Lack of Site Not able to obtain 3 4 12 Orange

Technology / Skills technological the required
equipment and resources
skilled labor

S-002 Unforeseen Poor assessment of Site Bad assessment 2 4 8 Yellow

Construction Works the buildings
S-003 Damaging Materials and Deinstallation of re- Site Unspecialized 4 5 20 Red
Equipment During usable materials workers
Deinstllation and
Carriage
S-004 Inadequate Safety Health and safety Site Injuries 5 5 25 Red
Measures rules on
construction site
KAUST RISK MANAGEMENT PLAN 14

Risk No. Risk Identification Risk Description Risk Risk Trigger Risk Risk Risk Risk
Category Probabilit Impact Score Zone
y

S-005 Inadequate Construction Poor construction Site Poor skilled labor 3 4 12 Orange
Quality quality

S-006 Insufficient Construction works Site Poor labor 3 4 12 Orange

Construction are behind the work productivity
Productivity schedule

F-001 Delays in Payment Progress payment Financial Delay of the 3 3 9 Yellow

delays from the sponsor 's review
Sponsor of the documents
F-002 Inadequate claim Poor management Financial Poor 2 4 8 Yellow
administration of the claim process communication
F-003 Poorly Tailored Insufficient project Financial Misunderstanding 2 4 8 Yellow
Contract Forms scope of project scope

E-001 Supplies of Defective Damaged materials External Poor packing 3 4 12 Orange

Materials from the vendors

E-002 Adverse Weather Sand storms External Sudden changes in 5 4 20 Red

Conditions temperatures

E-003 Accessibility to Site Long worker queues External Strict security 4 5 20 Red
at the control gates controls
KAUST RISK MANAGEMENT PLAN 15

Risk No. Risk Identification Risk Description Risk Risk Trigger Risk Risk Risk Risk
Category Probabilit Impact Score Zone
y

E-004 Cultural Work Diverse work External Different 5 2 10 Yellow

Differences environment nationalities
workforce
KAUST RISK MANAGEMENT PLAN 16

7 Risk Response and Contingency Plan

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Potentia PMO-001 Insufficient PMO Yellow Schedule Mitigate * Add buffer * Work overtime to Design
l Design time to the work rectify the design Manager
schedule for * Ask the assistance
design and do of the Sponsor for
not reveal to fast approval
project team
* Control of the
design
* Approval of
the Sponsor
Potentia PMO-002 Delays in PMO Yellow Schedule Mitigate * Provide * Work overtime Project
KAUST RISK MANAGEMENT PLAN 17

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
l Preparation of sufficient * Request the Manager
Submittals workforce Sponsor assistance
for approval if
necessary
Potentia PMO-003 Delays in PMO Orange Schedule Mitigate * Communicate * If the delay Document
l Approvals of and remind exceeds the Control
Submittals Sponsor on a Sponsor's Department,
regular basis for contractual Project
the approvals obligations, write an manager
official letter to the
Sponsor for time
claim for each day
of delay
KAUST RISK MANAGEMENT PLAN 18

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Potentia PMO-004 Material, PMO Yellow Schedule Mitigate * Work with * Contact other Human
l Labor and and Cost people who have project managers of Resources
Equipment expertise the company for Manager,
Resourcing * Identify the available resources Procurement
resources during * Contact pre- Manager
the planning identified sub-
stage contractors
Potentia PMO-005 Poor PMO Yellow Schedule Mitigate * Prepare a * Request an Project
l Management and/or communication immediate meeting Manager
Coordination Cost management
plan
* Regular
meetings
KAUST RISK MANAGEMENT PLAN 19

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Potentia PMO-006 Conflicts for PMO Red Schedule Mitigate * Earn the trust * If possible, make Commercial
l Additional and/or of the Sponsor compromises Manager,
Work Item Cost * Prepare change * If necessary, go to Contract
Prices order documents mediation Manager,
with sufficient * Try to avoid Project
justifications litigations Manager
Potentia PMO-007 Conflicts PMO Orange Schedule Mitigate * Good * If possible, make Project
l between and/or communication compromises Manager
Parties Cost * Integrity * If necessary, go to
mediation
* Try to avoid
litigations
Potentia S-001 Insufficient Site Orange Schedule Transfer * Outsource to * Contact pre- Procurement
KAUST RISK MANAGEMENT PLAN 20

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
l Technology / and/or parties that have identified sub- Manager,
Skills Cost the technology contractors Construction
and skills. * Contact other Manager
project managers for
available resources
Potentia S-002 Unforeseen Site Yellow Schedule Mitigate * Regular * Plan the works to Construction
l Construction and/or walkthrus be executed and Manager
Works Cost assess the time/cost
impact
Potentia S-003 Damaging Site Red Schedule Transfer * Outsource to * Order the Construction
l Materials and and/or specialized sub- damaged goods Manager
Equipment Cost contractors immediately
During
KAUST RISK MANAGEMENT PLAN 21

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Deinstallation
and Carriage
Potentia S-004 Inadequate Site Red Schedule Mitigate * Health and * 24/7 doctor and HSE
l Safety and/or Safety Training nurse on site Manager
Measures Cost (HSE) * 24/7 ambulance on Construction
* HSE signs site manager
* HSE constant
controls
Potentia S-005 Inadequate Site Orange Schedule Mitigate * Provide skilled * Re-do the work Construction
l Construction and/or labor with the desired Manager
Quality Cost * Daily control quality
of works
* Award system
KAUST RISK MANAGEMENT PLAN 22

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
to labors for
good quality of
work
Potentia S-006 Insufficient Site Orange Schedule Mitigate * Provide award * Work overtime to Construction
l Construction system tp cover delays Manager
Productivity workers * Replace workers
with the productive
ones
Potentia F-001 Delays in Financial Yellow Cost Mitigate * Get pre- * Ask for the Project
l Payment approval of the assistance of the Manager
Sponsor before Sponsor Commercial
formal Manager
submission
KAUST RISK MANAGEMENT PLAN 23

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Potentia F-002 Inadequate Financial Yellow Cost Mitigate * Pre-approval * Ask for a meeting Project
l claim of the Sponsor to clarify issues Manager
administration before formal
submission
Potentia F-003 Poorly Financial Yellow Schedule Mitigate * Kick-off * Amendment of the Contract
l Tailored and/or meeting contract manager,
Contract Cost Project
Forms Manager
Potentia E-001 Supplies of External Orange Schedule Mitigate * Warn vendors * If possible, acquire Procurement
l Defective for proper material as soon as Manager
Materials packing possible
* Put penalty * If not possible, ask
clauses on for immediate
KAUST RISK MANAGEMENT PLAN 24

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
contracts for the replacement and
damaged items assess delay.
Potentia E-002 Adverse External Red Schedule Mitigate *Track weather * Stop work and Construction
l Weather reports and plan work overtime to Manager
Conditions site work compensate the loss
accordingly of delay
Potentia E-003 Accessibility External Red Schedule Mitigate * Provide * Work overtime to Human
l to Site transportation to compensate the Resources
gates 2 hours delay Manager
earlier than the
start of the work
Potentia E-004 Cultural Work External Yellow Schedule Mitigate * Provide * Put disciplinary Human
l Differences and/or cultural action in case of Resources
KAUST RISK MANAGEMENT PLAN 25

The Risk No. Risk Risk Risk Primary Risk Risk Response Contingency Plan Risk Owner
below Identification Category Zone Risk Strategy Plan
tables Impact
shows Area
the risk
strategie
s, risk
response
plan,
continge
ncy plan
and
assigned
responsi
ble
persons
to
risks.Sta
tus
Cost awareness cultural assault Manager
training