CT3611 - Construction

Project Management
Assignment 3 – Project Risk Management

Samved Patel (UG180541) & Kathan Patel (UG180274)

Faculty – Prof. Devanshu Pandit
TA – Vyoma Patel
Date – 11-10-2021
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CONTENTS
Introduction _____________________________________________________________________ 3
What is Risk? _____________________________________________________________________ 3
What is Project Risk Management? _______________________________________________ 3
Why Risk Management?__________________________________________________________ 4
Who is responsible for Project Risk Management? __________________________________ 4
Type of Risk Management? _______________________________________________________ 5
Classification of Risks? ____________________________________________________________ 5
Major Steps in Risk management strategy _________________________________________ 6
Top 10 risks based on score _______________________________________________________ 6
Risk Management Strategies _____________________________________________________ 7
Conclusion ______________________________________________________________________ 7

Precast Government Hospital at Rajkot Samved Patel & Kathan Patel

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Introduction

• For this exercise, we are assigned to study the identification of different type
of risk for type of project, classifying them to respective category, assign
them probability of occurrence and impact on project. Preparing risk
assessment matrix and extract top 10 risks based on score. Provide risk
mitigation and management strategy for these 10 risks.

What is Risk?

The recognizable proof of hazard regularly begins before the undertaking is

started, and the quantity of dangers increment as the undertaking develops
through the lifecycle. At the point when a danger is recognized, it's previously
surveyed to discover the likelihood of happening, the level of effect on the
timetable, degree, cost, and quality, and afterward focused on. Hazard
occasions might affect just one or while others might affect the project in
various effect classifications. The likelihood of event, number of classes
affected and the degree (high, medium, low) to which they sway the
undertaking will be the premise for doling out the danger need. All
recognizable dangers ought to be gone into a danger register and archived
as a danger articulation.
• An uncertain event or condition that, if it occurs, has a positive or a negative
effect on a project objective.
• Exposure to the consequences of uncertainty.
• Risks are actually potential problems.

What is Project Risk Management?

• Project Risk Management includes the processes of conducting risk

management planning, identification, analysis, response planning, and
controlling risk on a project. The objectives of project risk management are
to increase the likelihood and impact of positive events and decrease the
likelihood and impact of negative events in the project.

Precast Government Hospital at Rajkot Samved Patel & Kathan Patel

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Why Risk Management?

• Inadequate or Untimely Attention to Risks Leads to;

• Time and Money Wasted on Negligible Risks
• Overstated Contingency Requirements
• Increased project costs and longer durations
• Opportunity costs to the Owner
• Understated Contingency Requirements
• Budget overruns
• Schedule overruns
• Scope reductions
• Project terminations
• Missed Risks Leading to Surprises

Who is responsible for Project Risk Management?

Project Manager has overall responsibility for managing project risk. Project
team members may be assigned specific areas of responsibility for reporting to
the project manager. Throughout all phases of the project, a specific topic of
discussion will be risk identification. The intent is to instruct the project team in
the need for risk awareness, identification, documentation, and
communication. It is the project manager’s responsibility to assist the project
team and other stakeholders with risk identification, and to document the
known and potential risks in the Risk Register. Updates to the risk register will
occur as risk factors change. Risk management will be a topic of discussion
during the regularly scheduled project meetings.

Precast Government Hospital at Rajkot Samved Patel & Kathan Patel

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Type of Risk Management?

Project Scope

Project Cost
Risk - A future event which

1.1 May happen & its

impact
Project Quality

Project Schedule

•
1.2. May not happen

Classification of Risks?

• Project Risk can be classified majorly under below listed two categories:
• Incremental risks - These risks are not major in themselves but can
accumulate to constitute a major risk.
• For example, a cost overrun in one subcontract may not in itself constitute a
risk to the project budget, but if a number of subcontracts overrun
simultaneously, due to coincidence or to some common cause, then there
may be a serious risk to the project budget. Individually, such risks may not
be serious or difficult to identify; the risk really lies in the combination of a
number of them, and the lack of recognition that these could occur
simultaneously.
• Catastrophic risks - These include risks that could be major threats to the
project performance, cost, or schedule.
• Such risks have included dependence on critical technologies that might or
might not prove to work, scale‐up of bench‐level technologies to full‐scale
operations, discovery of waste products or contamination not expected or

Precast Government Hospital at Rajkot Samved Patel & Kathan Patel

 Risk Reporting Matrix

Risk Probability Ranking Probability of Risk Event Risk Screening 5 5 10 15 20 25

5 60-99% Impact on Project Risk Level 4 4 8 12 16 20

High Impact High Impact Impact on

4 40-59% High Low Likelihood of occurnce High Likelihood of occurnce High 3 3 6 9 12 15 Project
(HILO) (HIHO)
Low Impact
Low Impact
3 20-39% Low Low Likelihood of occurnce Moderate 2 2 4 6 8 10
High Likelihood of occurnce (LIHO)
(LILO)

2 10-19% Low High Low 1 1 2 3 4 5

1 1-9% Liklihood of occurence 1 2 3 4 5

Likelihood of occurrence

Risk Register

Type of Risk Risk classification Risk Catergory Example Risk Screening Probability (A) Impact (B) Risk Score (A x B)

Catastrophic Accidents Labour Life at Risk HILO 3 5 15

Incremental Construction delays Less Labour Strength, Delay in design approval HILO 3 5 15

Catastrophic Contractor default Unable to manage equipments, Contractor declares banktrupcy HILO 1 4 4

Catastrophic Weather Heavy Rainfall, Cyclone (Taukte) HILO 1 5 5

Catastrophic Force majeure COVID-19, Influenza HILO 1 5 5

Catastrophic Strikes and work stoppages Labour Strike HILO 1 4 4

Schedule Catastrophic Environmental factors Earthquake, Flood HILO 1 5 5

Client unsatisfied by the finish of Precast Construction (Unappealing

Catastrophic Inability to accept product HILO 2 4 8
concrete finish surface, Improper raw materials)

Incremental Lack of raw materials & labour Scarcity of raw material & Labour in the region LILO 1 3 3

Delay in transpotation of equipment, Delay in assembling the quipment

Incremental Late delivery of equipment & Raw materials LILO 3 3 9
(Surface Vibrators coming late on site due to traffic)

Incremental Late start due to upstream conditions Delay in start due to bad weather conditions, Lack of Workforce HILO 3 5 15

Operational performance: productivity, efficiency, availability, Not using the euipment (Concrete mixer, Ready Mix Plant, Gantry Crane,
Incremental HILO 2 5 10
reliability Post or pre Tensioning machine) to their full capacity

Catastrophic Operational accidents, equipment failures Any Damage or failure of a equipment's component (Gantry Crane) HILO 2 4 8

Changes in owner’s need for facility OR Change of Scope from Problem in acquiring of land for development, Any political or Indian
Catastrophic HILO 2 5 10
Client Side Standard Specifications change during the project construction period

Contractor Identified a alternate method or system for doing a task that

Catastrophic Engineering changes and design development can accelerate project completion time and cut cost from the contract HILO 2 5 10
value (Also Known as " Value Engineering"))

Inadequate competition may lead to high quote price than decided by

Catastrophic Inadequate number of bidders, inadequate competition HILO 1 5 5
client and may lead to deal with L1 at contractor's cost
Scope
Incure loss to client and may reduce the scope of work for proposed
Catastrophic High bids HILO 1 5 5
project

Impact due to equipment, labour and material availability in remote areas

Catastrophic Location of project HILO 1 5 5
(Cannot make such project in Afghanistan)

May lead to disagreement from contractor's side and shall enforce the
Catastrophic Enforceability of contracts LILO 2 3 6
scope of work

Catastrophic Failure of equipment to perform to specifications Any procured equipment doesn't pass the required standard tests HILO 1 4 4

Any Precast technology successful at small scale but fails when converted
Catastrophic Scale‐up of technology from laboratory or pilot plant LILO 2 3 6
to larger scale

Client not satisfied with the quality of precast construction (Underdesigned

Catastrophic Inability to accept product HILO 2 4 8
reinforcement)

Technological Errors in calculating or estimating the operation cost of Gantry Cranes, Post
Incremental Inaccuracy of operating cost estimates HIHO 3 5 15
or Pre Tensioning machines, Bar bending Machine, etc.

Catastrophic Use of new or unproved technology Any new and non-certified or non-proven Pre cast Technology HILO 2 5 10

Contractor's managerial experience is cruicial for managing the site and

Catastrophic Managerial experience activities getting conducted on site.(Managing Raw materials availability LILO 1 5 5
on site, managing equipment availability on site)

If the Site condition requires gantry crane of 100 tonnes but the procured
Catastrophic Mismatch of technology and project conditions LILO 1 5 5
gantry crane is of 50 tonnes

Catastrophic Competitive factors compared to economic projections Reducution in impact value due to construction of new adjoing hospital LILO 1 5 5

Threat of ruining project due to fluctutation of cost of material, equipment

Catastrophic Construction cost increases HILO 2 4 8
and duties if any

Contractor unavailable to cover the monthly repayments and unable to

Catastrophic Costs of borrowing money HILO 1 4 4
afford to repay the amount with interest

Catastrophic Economic and business conditions Recession in global market HILO 1 4 4

Cost

Catastrophic Inflation Inflation in raw material cost (Steel, cement) or Rise in Labour wages LILO 3 3 9

Due to poor quality of work by contractor it may increase overhead

Incremental Maintenance costs higher than expected LILO 1 3 3
charges and results into extra cost in maintenance

Incremental Operating costs higher than expected Increase in rent of equipement or fuel cost HILO 1 5 5

If the contractor terminates due to financial standings may lead to incure

Catastrophic Cost of Termination the remaining charges and payments to Sub-contractors and suplliers if HILO 1 5 5
any and the securities along with payment shall be forfeited by client
Mandatory Approval of funding authority/ agency (JICA, ADB) for any
Catastrophic Availability of third‐party, non-recourse financing change in scope of work, missing any targeted milestone, termination of LILO 1 3 3
contract.

Amendment of new taxes, duties or policies which may impact the

Incremental External influences: delays, changes HILO 1 4 4
progress of project and demanding for instant implecation
External
The project is unable to generate the income as envisaged in economic
Incremental Reduced patronage of the facility HILO 2 4 8
feasibility

Governmnet bodies not approving design as their standards are not met
Catastrophic Regulatory or legal challenges HILO 2 5 10
by the design

Incremental Site conditions Less favourable site condition shall lead to during-construction challenges HILO 2 4 8

May lead to compromise on quality & productivity during pre-cast

Catastrophic Unavailability of skilled labour HILO 1 4 4
construction

May incure loss to contractor and might lead to delays (improper tying of
Catastrophic Poor quality of construction; failure to meet specifications HILO 1 5 5
reinforcement, formwork failure)

Incremental Pre-cast connection issues Errors observed during joinery of elements LILO 1 3 3

Incremental Pre or Post tensioning issues Development of cracks in modules may occur due to over tensioning HILO 1 5 5

Labours life in risk due to use of heavy machinery like gantry crane. May
Catastrophic Handling HILO 3 5 15
also damage the component while execution/ shifting

Incremental Unseasonal Rain - LILO 1 2 2

Incremental Incomplete Survey - HILO 3 5 15

Catastrophic Political Issues Change in Government political parties during-construction phase HILO 2 5 10
Construction

Incremental Transportation Propoer method used for trasnportation HILO 1 5 5

Fall of prefabricated elements such as girders, shear walls while lifting may
Incremental Crashing of Precast Elements cause serious damages to the elements HILO 2 4 8
and can be harmful to the workers around.

Unsafe work practices, unethical workplace behaviour, and ignorant

Incremental Negligence by Workers attitude of the labourer may lead to serious LILO 2 3 6
accidents on site, and loss of life and resources may occur.

Improper and Inadequate use of PPE may lead to injuries and can cause
fatalities to the construction professionals
Incremental Failure to use recommended PPE HILO 2 3 6
due to falling from a height, struck by an object, contact with hazardous
substances, electrocution.

These incidents occur during the lifting of goods and prefabricated

elements with the help of hoists and cranes
Incremental Dismantling of Hooks and Wire Ropes LILO 1 3 3
and can lead to serious consequences due to unexpected falling of the
goods and elements from a height.
Accidents on site can happen due to negligence and miscommunication
amongst the hoist & crane operator and
Incremental Operation of Hoists and Tracks without proper Communication HILO 1 4 4
the instructor causing damage to the lifted goods and can prove injurious
to the working personnel around them.

Samved - Schedule, Scope, technological and cost risk

Kathan - External & Construction risk
 Top 10 prioritised risk management and mitigation

Type of Risk Risk Catergory Mitigation Contingency Risk Score (A x B)

•
Compulsory use of safety gears during on-site for the labours
•
Daily safety meetings
•
Reduce the amount of night work
•
Reflective or highly visible clothing
•
Regular and frequent breaks
Accidents •Training employees to deal with situations 15
•
Clear signage to warn of danger
that might occur
•
Introduce a warm-up or calisthenics exercise
•
Avoid sunlight to minimize fatigue
•
Practice defensive driving/parking/backing up
•
Being aware of worker diets; encouraging healthy eating
•
Project Planning
•
Procurement of equipment & material before due date
•
Setting & reaching the milestones on or before time
•
M inimizing the design errors
•Include contigency time in schedules to
Construction delays •
Provide accurate estimates 15
handle likely delays
•
M anaging materials more efficiently
•
Streamline approvals
Schedule •
Clarification of project scope
•
Preparation for weather delays

•
M inimizing construction delays and blockers
•
Improving your management methods
•
Having a detailed project plan in MS Project •Include contigency time in schedules to
Late start due to upstream conditions 15
•
Assigning clear roles and responsibilities handle likely delays
•
Scheduling contractors far in advance
•
Establishing clear communication between parties

• Ensuring efficient and effective communication between all levels

of the construction business.
• Communicating with workers regarding the most optimal start
times, locations, and the order of tasks. •Maintaining idle or underutilized
Operational performance: productivity, efficiency, availability, reliability • Project managers can make an extra step by recording equipment that can be used in the event of 10
productivity levels and time tracking. equipmet failure
• Regular check-ins with workers are useful for keeping everyone on
a construction site up to date.
• Adopting mobile technology

•
Limit the scope of change and define a basic process •Include contigency time in schedules to
•
Creating structured approach for defining, evaluating, and handle likely delays
Changes in owner’s need for facility OR Change of Scope from Client Side 10
approving the preliminary scope of work •Contigency budget set aside to manage
•
Understand project completion the impact of risks

Scope •
Defining, documenting, and communicating a structured
approach for requesting, evaluating, and approving change •Include contigency time in schedules to
requests. handle likely delays
Engineering changes and design development 10
•
Creating a work breakdown structure •Contigency budget set aside to manage
•
Continuously managing the change the impact of risks
•
Using project management software

•
Using Historical Data
•
Having Someone Else Estimate •Developing Capabilities that can be used
•
Estimate in Ranges, or Build in Time for Delays when risk occurs
Inaccuracy of operating cost estimates 15
•
Using Three-Point Estimations •Contigency budget set aside to manage
•
Calculating the Fudge Ratio the impact of risks
•
Estimating During the Low Point of the Day
Technological
•
Explaining the value gained from the new technology
•
Using different training styles
•Maintaining idle or underutilized
•
Creating a knowledge center
Use of new or unproved technology equipment that can be used in the event of 10
•
Guiding agents so they experience early wins
unproven technology
•
Introducing new tech to early adopters first
•
Offering ongoing support

•
Only operators who have been extensively trained and tested
should operate the crane, and their competency should be •Traing the labour to aVoid the risk
demonstrated before any actual work begins. •Double check the procedure
Handling 15
•
On the ground, workers must keep a safe distance from the crane •Employment of supecialized sub-
and the products being lifted. contractor
Construction •
To avoid mishaps, barricade the crane's swing radius.

•
Choose the best method for collecting of survey •Planning additional time for survey
Incomplete Survey 15
•
Timely check for surveys •Training staff for such risk
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not adequately characterized, dependence on single suppliers or sources

of critical equipment, etc.

Major Steps in Risk management strategy

• Risk Identification
• Risk responsibilities
• Risk assessment
• Risk Response
• Risk mitigation
• Risk contingency
• Tracking & Reporting

Top 10 risks based on score

i) Schedule
1) Accidents
2) Construction delays
3) Late delivery of equipment & raw materials
4) Operational performance: productivity, efficiency, availability, reliability
ii) Scope
5) Changes in owner’s need for facility OR Change of Scope from Client Side
6) Engineering changes and design development
iii) Technological
7) Inaccuracy of operational cost estimates
8) Use of new or unproved technology
iv) Construction
9) Handling
10) Incomplete Survey

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Risk Management Strategies

Exploit

Enhance
Risk Management Strategy Positive Risks
Share

Accept

Avoid

Transfer
Negative Risks
Mitigate

Accept

Conclusion

The yield of the exercise, are understanding

1. Identification of different types of risks
2. Categorizing different type of risks
3. Making risk mitigation plans/ steps
4. Developing Risk management plan
5. Classifying different type of risk based on occurrence and impact

Precast Government Hospital at Rajkot Samved Patel & Kathan Patel